Dynamics of Economic Spaces in the Global Knowledge-based Economy

Theory and East Asian Cases

Sam Park

• Publisher: Routledge
• Year: 2014
• Print ISBN: 9780367869458
• eBook ISBN: 9781317808541
• Topic: Business
• Subtopic: Business General
• Index: Business

This book addresses how economic spaces dynamically change within the context of the global knowledge-based economy. Specifically, it centers the discussion on integrated views of understanding and conceptualizing dynamic changes of global economy under the global megatrends of globalization, knowledge-based economy, information society, service world, climate change, and population aging. Focusing on East Asia, especially on Korea, it deals with case studies regarding the processes and patterns of these global dynamics, looking at economic spaces of various spatial scales and types of economic actors.

This book develops a theoretical model for understanding and analysing the dynamics of economic spaces that are being reshaped within the larger global economy. It also emphasizes the analysis of empirical studies at the level of firm, region, and state by considering an evolutionary perspective over time. In developing its theoretical framework, this book examines regional resilience, intangible assets, service innovation, path dependence, and other notions related to the evolution of economic spaces, and incorporates these elements into real-world case studies.

The integrated theoretical framework examined here contributes a new perspective on spatial disparities in the global economy. An integral model of service innovation; the integration of path dependence and regional resilience; the interaction between firm and region for the accumulation of intangible assets; and the roles of governments and global firms: these are all essential to understanding the dynamics of economic spaces in East Asia. The theoretical model and case studies in this book suggest policy implications for developing countries, especially in the Asian and African regions, with regard to regional development and innovation policies.

1 Introduction

Background and objectives of the book

Economic spaces are an expression of economic institutions in society as well as spatial processes and forms of economic practices. Economic spaces are analyzed in terms of the relationships and networks created among different economic agents, such as nation states, firms, institutions, organizations, local authorities, trade unions, and consumers. New spatial processes and forms of economic practices have evolved in the global society during the last two decades with the development of a knowledge-based economy in relation to the techno–economic paradigm shift. Economic spaces cannot be organized by only a single criterion of economic rationality. The processes of shaping economic spaces have become diverse over time and in regions. The changes in economic spaces have been well recognized during the last quarter of a century at various spatial scales through the emergence of the following: “new industrial spaces” (Scott, 1988) or “sticky places in a slippery space” (Markusen, 1996), shift of the economic gravity center (Park, 1997), development of spatial innovation systems (Oinas and Malecki, 1999), diverse clusters (e.g. temporary and virtual clusters) (Park, 2005; Torre, 2008; Bathelt and Glückler, 2011), and the global financial market (Clark and Wójcik, 2007). These changes are closely related to techno–economic paradigm shifts that have distinctive characteristics in production, business, and innovation systems. Spatial dynamics have been reinforced with the development of information and communication technology (ICT) and a knowledge-based economy in the twenty-first century. In the next twenty years, climate change and the progress of an aging society will surely affect the reshaping of economic spaces in the global society. This condition suggests that new theoretical frameworks for understanding new economic spaces are necessary.

Freeman and Perez (1988) categorized technological changes into incremental innovations, radical innovations, new technological systems, and techno–economic paradigms. Among these types of technological changes, techno–economic paradigms have the most significant and widest impact on the society and economy. New techno–economic paradigms evolve from a down-swing phase of the previous Kondratieff wave and include various new product and process innovations, which in turn form new industries (Freeman, 1987; Hayter, 1997). Moreover, changes in techno–economic paradigms result in corresponding changes in major industrial and infrastructure innovations, the source of productivity improvements, and business organizations. This model of techno-economic paradigms indicates that the most recent shift in the paradigms is related to the development of ICT.

Different spatial processes have occurred with the development of ICT and the Internet. Many high-technology start-ups and spin-offs are clustered in large metropolitan regions, even in newly industrialized or developed countries. Likewise, new knowledge-based industries and services have developed in these regions in recent years. Virtual or nonspatial clusters within the electronic network continue to evolve beyond spatial clustering in the Internet era. However, the effects of the ICT revolution on economic spaces are complex and take multiple forms.

A great paradox has been observed in the speculation on the spatial impact of ICT because of the existence of tacit knowledge that cannot be traded through the Internet and smart innovation space. On one hand, the rapid development of ICT in the last decade, particularly the rapid increase in the number of Internet users, has been considered an important impetus for reducing spatial disparities and promoting the even development of economic activities over space. On the other hand, many geographical studies have revealed that spatial proximity and the nodality of cities retain their importance in economic development, although communication has improved and the economy has become globalized with the development of ICT (Florida, 1995, 2002c; Gertler, 1995; Malecki, 2002; Zook, 2002; Rutten and Boekema, 2007; Karlsson, 2008). Along with the development of the Internet, the creation of knowledge for innovation and the flow of knowledge, information, and materials are critical for the dynamics of economic spaces. The Internet infrastructure, knowledge-intensive manpower, innovation clusters and networks, and the “cluster of wants” are not evenly distributed over space and thus become important factors in the reorganization of economic spaces (Park, 2004b).

The reason such a paradox exists in the spatial manifestation of the effect of ICT on economic spaces is closely related to the disparity that exists in physical space. The social, material, and environmental conditions of physical space are unevenly distributed. Linguistic, cultural, and institutional differences exist over physical space. Significant variations are also present in the characteristics of local labor markets, culture, and social relations in physical space. The disparities that exist in the physical space of the real world significantly affect the spatial manifestation of electronic space because electronic space is intrinsically embedded in physical space. Furthermore, differences in local cultures, institutions, and labor markets in physical space have a significant impact on innovations in the knowledge-based economy. Although physical and electronic spaces differ significantly, the two are complementary in the process of economic space. Therefore, the ICT infrastructure cannot be separated from the social, political, economic, and cultural context in which the technological infrastructure is embedded. The intrinsic nature of the embedding of electronic space in physical space causes the local characteristics to affect electronic space and results in the continuous importance of physical place and space even in the era of digital convergence.

The complexity resulting from the megatrends of the global knowledge-based information economy in economic spaces has caused the emergence of diverse processes of the change in economic spaces that are different from the previous ones. Various possibilities can result in new forms of industrial clusters, city regions, global networks, global organization of firms, and global systems of innovation. We are living in continuously reshaping economic spaces in which physical and electronic spaces are interlinked. The processes that produce new economic spaces are important in understanding the global economy and in clarifying the dynamics of economic spaces in the global knowledge-based economy. Considering the reshaping and dynamic spatial changes, this book focuses on the development of frameworks and theories that explain the dynamics of economic spaces with the aim of ameliorating spatial disparities in the global knowledge-based economy.

The major objectives and contributions of this book can be summarized in four aspects. First, the book attempts to develop an integrated theory to explain the dynamics of economic spaces in the global knowledge-based economy. New and diverse processes and forms of the organization of economic spaces exist in the global knowledge-based economy. Accordingly, complex economic spaces can be viewed as a global jigsaw puzzle of the organization of economic activities (Vertova, 2006). A considerable number of studies have dealt with the theories on the special forms of economic spaces, such as cultural and relational turns. In addition, contrasting approaches to the study of economic spaces between economics and economic geography have been regarded as “geographical economics” or “new economic geography” by economists with emphasis on space focusing on economic rationality. Although theoretical approaches on the organization of economic spaces in the field of economic geography have a long history, most of them deal with only a segment in terms of the spatial and temporal aspects of economic spaces and cannot fully explain the complex and dynamic realities of such spaces. The integrated theoretical framework contributes to the understanding of spatial disparities in the global economy and to the establishment of future policies for regional development.

Second, the book emphasizes the analysis of empirical studies that focus on East Asian countries, particularly Korea. As suggested by Peter Dicken (2006), both theories and empirical studies on economic spaces should avoid ethnocentrism that is characteristic of most economic geographical studies as it tends to be embedded in Western industrialized countries. Most spatial theories and case studies in the last century have focused on Western countries. Asian countries are currently experiencing profound changes in economic spaces and emerging diverse forms of networks, clusters, global relations, and city regions since the introduction of the Internet and digital convergence in the last two decades. Case studies in East Asian countries can complement Western-oriented studies and will surely contribute to understanding reshaping global economic spaces as a whole.

Third, the book considers the evolutionary processes in the dynamics of economic spaces at various spatial scales. Economic spaces evolve over time through dynamic processes, such as path creation, path dependency, restructuring, or stagnation with lock-in. These dynamic processes are not limited to the local area. As globalization progresses, the processes in economic spaces and the emergence of new forms of economic spaces extend beyond local and national boundaries over time. However, most network and cluster studies have focused on the local level within national boundaries at certain points in time. Although the agglomeration phenomenon is a local characteristic, the impact of global econo...

Table of contents

• Cover
• Half Title
• Title Page
• Copyright Page
• Table of Contents
• List of figures
• List of tables
• Preface
• Acknowledgments
• 1 Introduction
• 2 Dynamics of economic spaces
• 3 Integral model of service innovation
• 4 Path dependence, regional resilience, and the evolution of the regional economy
• 5 Global megatrends and spatial economic inequality in East Asia
• 6 Interaction between corporate and urban systems for the accumulation of intangible assets
• 7 Evolution of the industrial cluster and policy: the case of Gumi City, Korea
• 8 Restructuring, innovation, and the global networks of Samsung
• 9 Future perspectives for the dynamics of East Asian economic spaces and policy implications
• Index