Introduction

In recent years, conceptualizations such as "local development systems”, "valorisation of endogenous potential”, "embedded local knowledge”, "local public goods” and "place-based policy approaches” have been renewed in the academic literature.

A fundamental factor has played a significant role in boosting the rele­vance of the local development approach: the change in economic, social and cultural relations as part of the globalization process. The aforemen­tioned theoretical and empirical approaches stand in stark contrast to visions of the "end of geography” (O'Brien, 1992), the "flat world” (a level play­ing field where all individuals are empowered and better off - Friedman, 2005) and falling global inequality (Wilson and Dragusanu, 2008). In con­trast, others point to strong evidence of increasing polarization due to convergence clubs at both high and low levels of income (McCann, 2008; Rodriguez-Pose and Crescenzi, 2008). In other words, the search for solid competitiveness in the global market ascribe ‘a greater salience to place, since firms, governments, and the public come to identify the specificity of localities (their workforce, entrepreneurs, administrations, and amenities) as an element for deriving competitive advantage' (Amin and Thrift, 1994, pp.

Considering the relevance of the human development (HD) paradigm within the global debate and agenda on development and well-being, it seems surprising that its synergies with the local development literature have rarely been framed together in theoretical models. For instance, consider the complexity of territorial multi-stakeholder and multilevel development processes,¹ and their socio-economic impacts in terms of people's capabili­ties, or the role of individual and collective agency in the evolution of the local societies that agents are embedded in.

The objective of this chapter, therefore, is to explore how to integrate local development approaches and the HD paradigm, focusing on those territorial “enabling” or “disabling” factors that affect local systems' evo­lutionary trajectories, and their effect on firms' enhancement and people's well-being.

The reader should note that a distinction is drawn between people's capa­bilities, on the one hand, and the capabilities of firms' or organizations', on the other. Following Sen, people's capabilities reflect the achievable functionings to live the kind of life they have reason to value (Sen, 1999). Here, the capabilities of firms refer to their opportunities to reach the objec­tives they pursue, in order to avoid conceptual overlaps with the business literature on firms' technological and dynamic capabilities (see for instance von Tunzelmann, 2009).

The chapter is divided into six sections, including this introduction. In the second section, the chapter presents a brief review of the Capability Approach (CA) and the local development perspective, highlighting their centrality in enriching the current international debate on development and well-being, as well as the unexplored synergies that overlap between the respective core conceptualizations.

These arguments pave the way to advance a systematic integration of the two perspectives in the third section, based on the core idea that development at the territorial level can be seen as a process of enabling the local system to function in order to facilitate the expansion of the real freedoms that people enjoy in an integrated and sustainable manner.

The fourth section discusses the structural elements of analysis with reference to the notion of “Sustainable Human Development (SHD) at the local level”, and the fifth section clarifies four central, but controversial, arguments supporting the perspective advanced, in order to underline the starting point for future refinement and debate.

The chapter concludes by emphasizing the importance of disentangling the combination of different elements - stakeholders, resources, barriers, institutions, political spaces and willingness - that shape the evolution of territorial development patterns. It also sets the scene for the discussion of an innovative interpretative framework in the Chapter 2. Appendix 1.1, at the end of this chapter, illustrates a potential approach to frame and measure trajectories of SHD at the local level.

1.2