Geography Reference
In-Depth Information
proximity to major urban centres. Meanwhile, within Europe, invest-
ment capital and information have become more concentrated in capital
cities and large urban centres during the very decades in which advances
in technology and deregulation trends have rendered both factors more
mobile (Rodríguez-Pose 1998a). As discussed above, the reasons for this
appear to be that urban areas are increasingly seen to be sources of pro-
ductivity growth (Ciccone and Hall 1996; Fingleton 2003b) due to their
role in facilitating the production of knowledge, human capital interaction
(Berry and Glaeser 2005) and the generation of innovations (Acs 2002;
Carlino et al. 2007). A doubling of city size is associated with a productiv-
ity increase of some 3‒8 per cent (Rosenthal and Strange 2004), such that
moving from a city of 50,000 to one of 5 million is predicted to increase
productivity by more than 50 per cent (Venables 2006). As such, being in
close proximity to one-another appears to becoming ever-more important
for an increasing number of people, and in particular, for people whose
activities contain a high degree of knowledge or skills.
The result of all of these changes is that while between-country inequal-
ity has been falling over the last three or four decades (e.g., Crafts 2004),
within-country inequality has actually been increasing since the 1980s
(e.g., Fagerberg and Verspagen 1996; Fagerberg et al. 1997; Caniëls
2000; Brakman and van Marrewijk 2008; Rodríguez-Pose and Crescenzi
2008). Allied with the fact that the rate of convergence among advanced
economies has slowed down since the 1980s (e.g., Greunz 2003; Cappelen
et al. 2003), the outcome of the increasing importance of urban areas is
that economic convergence at a continental scale coexists in many cases
with increasing divergence at sub-national local and regional scales. The
three broad sets of evidence briefly presented here all imply that in many
contexts spatial transactions costs have increased and that spatial proxim-
ity has been complemented by various forms of proximity channelled by
different networks: thus, in many cases the world seems to have become
steeper
, rather than flatter.
7.4
THE CURVED, SPIKY, AND UNEVEN WORLD
A careful assessment of the variety of evidence available to us supports
the argument that the outcome of two opposing trends will actually be
different in different situations. Different types of changes in transactions
costs have tended to take place in different types of sectors, activities and
contexts, and there are regularities to the pattern of these changes.
As discussed above, taking a broad view of spatial transactions costs it
appears that the latter have fallen for most goods and services, allowing
