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New innovation and industrial policies contributes to the development of an informal economy and have increased collaborative processes across sectors and social spheres within regions. This paper addresses the role of regional leadership in the informal economy. By themselves, network processes increase complexity and create a series of uncertainties that differ from processes that are steered through the hierarchical procedures of public bureaucracy or regulated through the judicial and competitive mechanisms of the market. These collaborative and steering challenges must be addressed by regions that seek to succeed with their development efforts. Empirical findings show us that relatively similar regions do not respond in a uniform fashion to the challenges raised by network based development processes. This paper argues that regional leadership anchored in representative democracy can reduce some of the uncertainties and complexities of network based regional innovation policies, increase sustainability and long term effectiveness, as well as strengthen local democracy.
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