Industrial restructuring and labour dynamics beyond metropolitan spaces: Understanding uneven development through path change in small towns in the era of multiple transitions

This paper addresses the complex causal mechanisms of socio-spatial transitions and regional inequalities. We placed the industrial restructuring of small towns in the focus to grasp the transformative impact of productive capital and state agency on labour mobility and incomes in peripheral regions. We consider small towns as laboratories of peripheral industrialisation in the accumulation regime which unfolded after the global financial crisis, and discuss how technological change, postcrisis institutional fixes and local processes intersected, entailing not only diverse development paths, but new patterns of social inequalities and fragmentation in Central and Eastern Europe. We adopted a geographical political economic approach and mobilised Doreen Massey’s place concept to relate the social transformation in small towns to macro-scale processes of capital accumulation. The key argument is that in the post-crisis institutional fix, small towns emerged as important scenes to job-making and mobilising labour assets, and such processes had unintended consequences. In this paper, we highlight two powerful outcomes, i.e. (i) new patterns of inequalities within the small town network and also in urban-rural relations; moreover (ii), the reproduction of multiple external dependencies (peripherality) of non-metropolitan spaces. The argumentation rests on the statistical analysis of socio-economic indicators of 168 small towns (each of 5-30 thousand inhabitants) in the pre- and post-financial crisis (2001–2022) periods. The spatial focus is on Hungary, where the rapid and thorough centralisation of power to take control over local resources entailed a radical shift in geographical patterns and also in the agency of local economic restructuring. The statistical analysis highlights the structural changes in local labour markets and commuting patterns, income inequalities and population dynamics at a local scale; in this way, we can get a more fine-grained understanding how place-making through peripheral industrialisation and socio-spatial inequalities are related.