Geography Reference
In-Depth Information
integration in which the potential 'home market effects' increase, these
arguments also imply that the major cities and regions within such inte-
grated areas will become even more important, as they are at the same
time repositories of knowledge, capabilities and networks. Thus, in the
presence of agglomeration economies, the creation of transnational areas
of economic integration within which trade barriers are reduced further
increases the unevenness and spikiness of the spatial economy.
Similar arguments also hold for labour. For people who are mobile,
migration to such centres increases employment opportunities. In particu-
lar, the technological, institutional and organizational changes associated
with the recent phase of globalization have actually increased the ability
of highly skilled individuals to move between locations in order to reap the
rewards of their human capital. Most of these human capital movements
are directed towards the dominant cities or regions (COL 2007c), which
benefit disproportionately from such inflows relative to other localities.
Therefore, a rapidly widening income gap between high- and low-skilled
individuals has already emerged within advanced economies (Scheve and
Slaughter 2007), and this is also reflected in greater interregional dispari-
ties within countries (Fagerberg and Verspagen 1996, 2002; Fagerberg et
al. 1997; Dunford and Smith 2000; Brakman and van Marrewijk 2008).
Similarly, what is taking place within countries is also taking place
between them. It is well documented that the gap between the wealthiest
and poorest countries has steadily increased over the last centuries: 250
years ago the difference in GDP per head between the richest and the
poorest countries in the world was about 5:1, while today it is approxi-
mately 400:1 (Landes 1998). Most of these inequality increases have taken
place during the periods in which shipping costs have fallen at the fastest
rates and global trade has increased at the fastest rates (Venables 2006).
Moreover, inequality between richer and poorer countries has actually
increased at an even faster rate over the last two decades (Leamer 2007),
as international migration increases. Once again, individual earning power
and increasing migration is associated with the increasing unevenness and
spikiness of the global economy.
These complex transactions costs relationships have direct analogies
in terms of the spatial-industrial typologies in the knowledge taxonomies
discussed in Chapter 5. The transactions costs relationships best captured
by the industrial complex model most closely reflect the standardized and
routinized activities discussed in this chapter. Where activities or transac-
tions can be decomposed into any form of routine, system, framework,
blueprint or template, then these activities can most easily be defined and
standardized, and therefore also most easily safeguarded and controlled
via legal and contractual means. As we have just seen, over recent years the
