Geography Reference
In-Depth Information
will never be totally convertible in codified and standardized information.
In other words, as many scholars have argued, the distribution of knowl-
edge between tacit and codified knowledge has not really changed. It is
true that tacit knowledge is still needed to use codified and standardized
information (e.g., Lundvall and Johnson 1994; Senker 1995; Steinmueller
1995a; Dosi 1996; Cowan and Foray 1997). If the new technologies are
adding up to the codified knowledge base, there must also be an addi-
tion to the tacit knowledge base by which economic actors are able to use
the new codified knowledge (Cowan and Foray 1997). It follows that the
acquisition and transmission of larger, more various and more complex
bits of knowledge require greater levels of absorption capacity, capabili-
ties and skills.
As such, for many knowledge-intensive activities, the required frequency
of face-to-face interaction has increased over recent years (Gaspar and
Glaeser 1998; Storper and Venables 2004; McCann 2007, 2008), because
the time (opportunity) costs associated with not having face-to-face
contact have increased with the quantity, variety and complexity of the
knowledge and information produced. The outcome is that the optimized
frequency of interaction across space will have increased (Rietveld and
Vickerman 2004) for many knowledge-intensive sectors, thereby raising
the level of spatial transactions costs for any given distance over which
communication takes place (McCann 2007b). The increased importance
of face-to-face contact is also manifested in terms of the development of
customized products or services. Lower transport costs can be shown to
imply that firms increasingly switch to the production of higher quality
customized goods (Duranton and Storper 2008), whose sensitivity to dis-
tance is greater than for standardized products. This is because the cost
of providing a given level of service quality becomes higher with distance
(Duranton and Storper 2008). Spatial transactions costs as a whole will
therefore have increased because of the rising importance of transacting
knowledge via face-to-face contact, even though the spatial shipment costs
of information may have fallen. This argument is also consistent with the
point made by Glaeser and Kohlhase (2004) that while the costs of moving
goods have fallen dramatically, the costs of moving people have not.
7.3
PROXIMITY, CONNECTIVITY AND URBAN
GROWTH
The arguments above imply that, from a theoretical point of view, even
though spatial shipment costs have fallen, the relative advantages of
proximity and accessibility, as well as the disadvantages associated with
