Geography Reference
In-Depth Information
labelled as knowledge-regions, as they are characterized by high levels
of knowledge assets, such as human capital, skills and R&D. Following
the arguments in this topic, the types of localities which are increasingly
attractive for knowledge-intensive activities tend to be those economically
diverse regions with a high potential for the exploitation of technologi-
cal complementarities, and which are also highly connected in the global
transportation and communication networks. Knowledge assets, global
connectivity, and knowledge-related foreign investment are increasingly
co-determined, and some of the emerging economies from the develop-
ing and transition countries are also now becoming beneficiaries of these
processes. At a global scale, the long term result of these trends ought to be
that emerging countries in general will play a much more important role in
the global economy of the twenty-first century than they did in the previ-
ous one (Lucas 2000). At the same time, however, these arguments also
imply that not all emerging countries will benefit from these globalization
trends and that there will be increasing differences between the winners
and losers amongst the developing and transition economies (e.g., Athreye
and Cantwell 2007; Leamer 2007; Fagerberg and Srholec 2008; McCann
2008; Ernst 2010; Fifarek and Veloso 2010). Those which are most likely
to benefit from globalization will be the countries containing the regions
which most closely resemble the global city-regions. These new emerg-
ing locations will increase their knowledge assets markedly vis-à-vis both
other more peripheral regions within the same national borders and also
relative to other developing economies without such features. Regions
lacking these knowledge assets will increasingly be left behind to specialize
only in the production of low value-added activities.
In order to understand the current and future role of MNEs in globali-
zation, the arguments in this topic point to an ever-increasing importance
of the interactions between knowledge and geography. The global cities
literature along with the literatures on global production networks and
value chains discussed in the previous chapter are ways of identifying these
interactions, but other forms of evidence can also be brought to bear on
these issues. For example, we can use R&D expenditure as a proxy for the
process of knowledge creation. As was highlighted in Chapter 4, although
R&D functions are now mainly seen as only part of a wider innovation
process, it still remains true that they gain in importance as technological
progress becomes more complex. As MNEs on average show relatively
higher levels of accumulated competencies, skills and organizational
expertise, they tend to be much more research-intensive than other firms
(Cantwell 1991). Thus, R&D is a useful tool for uncovering the role of
multinationals in the global development of knowledge.
At the same time, as is also shown by the figures reported in Chapter 1,
