Geography Reference
In-Depth Information
instantaneously with people who possess the same communication devices. Hence
the increasing concentration of so many knowledge-based activities in a limited
number of cities and regions means that the process cannot be space-less, although
the imperatives for the spatial intensification differ for different knowledge-based
activities.
In the case of corporate headquarters and producer-services, which are the ser-
vices needed to support and improve production, from finance, lawyers, advertisers,
to designers etc, there seems little doubt that the need for proximity to similar busi-
nesses, power sources and the presence of agglomeration economies are some of
the vital factors in accounting for what is increasingly described as their '
locational
stickiness'
in a limited number of big cities (Lever
2002
). The concentration of cor-
porate headquarters is a result of the pressing need for the face-to-face contact and
tacit knowledge exchanges between decision-makers in these offices and their vari-
ous associates in banking and legal services. Many of these large centres are also the
places where government decision-makers and regulators are located, again allow-
ing quick and personal contact. However, Marshall's (
1916
) original discussion of
the importance of the agglomeration economies concept is now normally split into
three:
economies of scale
, relating to cost savings per unit in individual firms as size
of output rises;
localization economies
that refer to the cost savings and advantages
that apply to all firms in an industry in an area, such as through a specialized work-
force; and in the case of
urbanization economies
to all firms in an area, providing
cost savings from the presence of the overhead capital of the city or region. The
latter are often publically provided goods, ranging from roads, major transit termi-
nals, especially airport hubs, through police, leisure, education and health services
to modern high speed communication facilities, as well as the private sector provi-
sion of houses, stores, etc. These are all part of what Lambooy (
2002
) described as
the
selective city environment
—of institutions, markets and spatial structures—that
complement the
entrepreneurial capabilities
, in the cognitive, innovative and orga-
nizational abilities, that help create new knowledge. If these facilities did not exist,
the firms would have to provide them, adding substantially to their costs of opera-
tion. In many developing countries firms have to create or improve this missing or
poor infrastructure—such as power generators, health facilities, adequate roads and
transit terminals etc—which adds to their costs, since even their limited facilities
have not kept pace with population growth. In addition, the largest centres in most
countries do have the
information-gathering services
, including media centres, that
are attracted to the hubs of transport and communication, and have far more of
the
amenities
—from restaurants, theatres and leisure facilities produced by market
demand—making them magnets for the wealthy and upwardly mobile. All of these
features make them attractive locations for knowledge workers, a point emphasized
in the Creative Cities discussion (Chap. 10).
Although it has proved relatively easy to understand the locational patterns of
corporate headquarters, it has proved more difficult to explain the spatial associa-
tions of inventive and innovative activity in general. Not only is there no adequate
theory to explain how innovations develop, but also it has proved difficult to pre-
dict either successful innovations, or to define the personality types of successful
