Geography Reference
In-Depth Information
However, new trends are clearly emerging with respect to the com-
bined importance of MNEs and developing and transition economies.
The increasing role in R&D played by the foreign affiliates of MNEs, on
the one hand, and the growing attractiveness of developing countries as
locations for MNE foreign affiliates, on the other, have sharply acceler-
ated their pace in the last decade. These trends undoubtedly represent
favourable opportunities for developing economies in order to improve
and upgrade their competencies and capabilities, and their capacity to
accumulate knowledge and technological assets. However, the distinc-
tion between winner and losers at the global level is likely to be further
exacerbated by these new drifts (e.g., Verspagen and Schoenmakers 2004;
Athreye and Cantwell 2007; Zhao 2006; Cantwell 2009). Following the
arguments provided in previous chapters on the growing interactions
between knowledge and geography, the economies within the developing
world who are most likely to be winners and see a remarkable increase in
their knowledge assets are those where agglomeration economies favour
the formation and growth of cities-regions which are well connected and
integrated with the rest of the global economy. The global firms located in
these core cities-regions will increasingly reap the economic rents associ-
ated with their knowledge assets via genuinely global production, commu-
nication and financial networks (Coleman 1996; Cohen 1998; Zook 2005),
thereby generating further connectivity and knowledge spillovers. The
location behaviour of MNEs firms is therefore critical, and the local actors
- firms and other organizations - which are already embedded in leading
centres and regions of the developing and emerging world are those which
will achieve the major returns from globalization along with the MNEs.
8.2
DEVELOPING ECONOMIES AND
KNOWLEDGE-RELATED MNE INVESTMENT
In terms of the emerging economic geography of the twenty-first century,
we see in this topic that there is now a growing polarization between dif-
ferent types of activities. Knowledge-intensive activities are increasingly
being located in high agglomeration city-regions. Low-skill, routine,
and low value-added activities are being increasingly spatially dispersed
across the world, and this dispersion is particularly noticeable in terms
of shifts away from developed economies to developing and transition
economies. On the other hand, as we have already seen through the exam-
ples discussed in Chapters 4 and 5, many knowledge-intensive activities
are also becoming increasingly localized and concentrated in particular
types of localities (Revilla Diez and Berger 2005). These localities can be
