The manual or intellectual work which is one of the factors of production. Labour intensive companies seek to find more profitable locations for their activities across the globe. The European Union project (CIT2–CT2004–001695) reports that this delocalization trend has its greatest impact on ‘intermediate’ countries (such as Greece) which face competition from advanced economies on quality, and from developing countries, on price. S. S. Barney (2001) suggests that China may only be able to maintain its comparative advantages in labour-intensive manufacturing by moving production from eastern coastal regions, where labour costs have risen, to the cheaper western regions.

Sanyal and Menon (2005) Econ. Dev. & Cult. Changes 53, 4 find that labour disputes have had detrimental effects on the location of new investment in India. Herod (2002, ESRC Seminar on Geographies of the New Economy) argues that the ‘threat of capital flight has allowed corporations to play workers against each other, [undermining their] bargaining power’, and Lambert (2005) J. Indus. Relations 47, 3 documents the demise of organized labour in Australia.

The labour market is the mechanism whereby labour is exchanged for material reward. R. Johnston et al. (2000) argue that all labour markets are territorially constituted, the results of the relationships between home, residential setting and workplace, and between production and reproduction, and that the geographical scales over which they operate have become increasingly intertwined and interactive. R. Martin (with P. Morrison, ed. 2003), argues that ‘there is no such thing as the national labour market, instead a mosaic of local and regional markets’; thus, segmented labour market theory sees the labour market as composed of self-contained sub-markets. Sunley and Martin (2002, ESRC) show that the UK government’s schemes for tackling youth unemployment have varied significantly across different parts of the country, depending on local labour markets, and Gordon (1995) TIBG 20, 2 focuses on the significance of labour market segmentation for migration conditions.

Monastinotis (2007) Area 39, 3 presents a set of labour market flexibility indicators for the UK. Bande and Karanassou (2006) ersa06 show that the degree of labour market flexibility differs between high and low unemployment regions.