ABSTRACT
This chapter takes a look at the evolution of manufacturing industries in Pécs, a shrinking regional centre in Southern Hungary. Industrialisation and de-industrialisation processes are considered in the context of the city’s peripheral geographic position, and its aspirations to abandon its mining and industrial heritage in favour of becoming a cultural city. The chapter contests the reality of these plans, drawing attention to how a simplified understanding of economic restructuring encourages the formation of “hidden sectors”, important secondary and tertiary activities which can get caught in vicious circles of decline, policy neglect and network disintegration. It examines the transformation of the city’s industries, and the divergent evolutionary patterns they form in a city characterised by industrial decline. FDI-based, endogenous and knowledge-based industries are examined, along with the institutional background which influences their evolution, and gives rise to hidden sectors. The chapter aims to highlight the importance of diversified industrial structures, the relevance of localities, and the role institutions play in influencing the future of manufacturing in the post-transition era.
