Recent policy discourse on the dynamics of regional development has centred on growing levels of uneven development - the patchwork economy - and the importance of local competitiveness as a driver of growth. In this paper,we examine both of these issues in the context of the state's regional capital cities. Drawing on recent work in endogenous growth theory, we explore the extent to which differential employment growth across regional Western Australia can be accounted for by changes in the prevailing economic structures of localities, as opposed to local competitive effects. To test the relative significance of economic structure and local competitiveness we utilise conventional shift-share decompositions of employment growth. We then consider the implications of the results for regional policy, arguing that a focus on local competitiveness is important, though needs to be understood in the context of both macro-economic processes and the wider structure of the settlement system.