Industrial Production Networks and Small Towns: A Case Study from Algeria

Abstract

This paper investigates the conditions and consequences of integrating small towns into industrial production networks. It is based on empirical research conducted in Algeria, a hydrocarbon-dependent rentier economy characterized by significant regional inequalities and the political aims of economic diversification and spatial rebalancing. Elaborating the case study of a state-owned cement factory in the small town of Sigus, the research provides insights into the multiple roles of the state in shaping production network integration and the characteristics of small towns as economic locations. The methodology combines secondary data and information with primary research based on semi-structured interviews. It reveals the importance of a multi-scalar regional framework in production network integration, whereby national factors played a key role due to the centralized Algerian state, the state-owned character of the investing company, and the shortcomings of the small town’s local environment. It emphasizes the contradictory impacts of production network integration in economic, social, and environmental terms, primarily on a local level. These contradictions underscore the necessity for critical evaluations to maximize the benefits of production network integration while mitigating its adverse effects. They also call for the more consistent involvement of the local community in similar economic development decisions. Notably, this research contributes significantly to the existing body of literature by addressing the underexplored topic of integrating small towns into production networks within the Algerian context. Doing so offers a more nuanced understanding of the particular economic, social, and environmental dynamics at play in these locations, thereby enriching the discourse on economic development strategies for small towns in rentier economies like Algeria.

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