Geography Reference
In-Depth Information
benefited from the possibilities of geographic dispersal associated with
these technologies are often sectors which are not specifically trading in
information. For example, advanced communications and control tech-
nologies have been widely applied to the management of supply chains,
to production and inventory scheduling control systems, and to logistics
and distribution operations. The types of firms which particularly benefit
from these technologies are those requiring the precise coordination of
complex networks of production and distribution operations across large
geographical distances, such as the 'flagship' MNEs (Ernst 2002a, b) con-
trolling GPNs.
Comprehensive evidence across both countries and time pointing
towards falling spatial transactions costs associated with the increased
usage of information technology usage comes from Ioannides et al. (2007).
They find that the increasing use of information and communications
technologies over time generally allows for an increased dispersion of
activities across space, thereby making city sizes more uniform. It appears
therefore that the impacts of falling information shipment costs have been
widely felt across a broad range of sectors.
Evidence for falling spatial shipment costs is also mirrored in the case of
firms involved in the movement of physical goods and commodities across
space. Transportation technologies have improved dramatically over
recent years. Examples of this include the rapid growth in roll-on roll-off
trucking technology, sophisticated gains in containerization technology
and capacity, rapid-turnaround shipping, and the increased speed and
efficiency of air transport technologies (McCann 2008). Trade in parts and
components now accounts for around 30 per cent of world manufacturing
trade, and the share of imports to total inputs for US goods producing
sectors has doubled to 18 per cent over the last two decades (Venables
2006). All of these technological developments would imply that the cost
of moving goods and commodities across space has fallen significantly
over recent years. Indeed Glaeser and Kohlhase (2004) suggest that the
costs of transportation for goods fell by as much as 95 per cent during
the twentieth century. Currently, over 80 per cent of US shipments occur
in industries where transport costs are less than 4 per cent of the total
value (Glaeser and Kohlhase 2004). However, whether this is primarily
due to technology or markets is not entirely clear. Evidence from France
(Combes and Lafourcade 2005) suggests that most of the transport cost
reductions of the last three decades appear to be primarily due to deregula-
tion within the transport industries, rather than to technological changes.
These various observations all point to falls in the costs of both trans-
mitting information and moving goods across space. According to the
'flat world' logic seen in Chapter 6, falling spatial shipment costs lead to
