The Evolution of Economies

Transcription

1 38: 280 Economic Geography Unit IV The Evolution of Economies Outline 4.1 (Regional) Economic Development 4.2 Innovation and Geography 4.3 Techno-Economic Paradigms 4.4 The Geography of Innovation 4.5 Inequality [X] 1

2 4.1 (Regional) Economic Development Two key domains: Income distribution e.g. Globalization and inequality, growth and development Environment ie. Sustainable Development e.g. Energy consumption Income Distribution: Growth and Development Growth vs. Development Economic Growth: GDP, GNP, etc. total vs. per capita Economic Development: qualitative change; market integration e.g. economies of scale and scope e.g. shift in capital/labour composition e.g. change in employment/economic structure 2

3 Total vs. Per Capita GNP Country Total GNP (US$) Per Capita GNP (US$) Canada $567B $20,710 Spain $546B $13,970 China $546B $ data, (from Hanink, table 11.1) Economic Growth Total vs. Per Capita 2 problems with per capita measures necessary use of common currency differences in local currency s relative value -> Purchasing Power Parity still insensitive to differences in economiccultural patterns and practices 2 problems with Growth : growth as virtuous method of valuation 3

4 Per Capita GNP vs. PPP (Hanink, fig. 11.1) The Big Mac Index, July 2011 source: The Economist 4

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6 (Regional) Development as Market Integration Sectoral Shifts in Employment Structure 6

7 Human Development Index Human Development Index 7

8 Technology as indicated by Labour and Energy Efficiency (Hanink, fig.11.5) 8

9 4.2 Innovation and Geography Role of innovation shaping geography of economic activity Role of geography inducing innovation The geography of innovative activity 4.2 Innovation and Geography Big question: how do economies evolve (temporally and spatially), and what role does innovation play in this process? 3 tendencies arising from innovation-led evolution of economies: i. Path dependency ii. Cycles of boom and bust iii. Unevenness, differentiating effect 9

10 4.2 Innovation and Geography Innovation as a social process Invention Innovation Imitation Product life cycles R&D Diffusion and adaptation Product maturity Decline Figure 3.1 Idealized S-Shaped (life-cycle) Model of Innovation Diffusion 10

11 4.2 Innovation and Geography Institutional context and this evolves Innovation Systems Complex of formal and informal, regional and national institutions (networks) National interest, basis for competitiveness Public and private investment public good, disseminate knowledge profit, knowledge is proprietary 11

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13 4.2 Innovation and Geography Institutional supports: Education system ICT infrastructure Patent/copyright laws (intellectual property) Social values, trust, etc. (informal institutions) 4.3 Techno-Economic Paradigms Kondratieff Long Waves of Development (50-60 year intervals) Inter-related set of technologies - raw materials, energy, products, infrastructure - and supporting institutions 13

14 4.3 Techno-Economic Paradigms The Nature of Capitalism (Fundamentals) Profit, and Constant Growth Exploitation of Labour ( Extraction of Surplus ) Dynamic (technologically and organizationally) Contradictions The main contradiction: Overaccumulation Tendency to Crisis 14

15 4.3 Techno-Economic Paradigms Ways Out of Crisis Devaluation Macro-economic management Temporal displacement Spatial displacement spatial switching of a) market or b) production or spatio-temporal displacement Transformation of Production System Techno-Economic Paradigm 4.3 Techno-Economic Paradigms Driven by innovation: Incremental Major Radical TEPs as configurations of technology, industry, and infrastructure TEPs as configurations of technology, economy, and institutions 15

16 4.3 Techno-Economic Paradigms Technology: Key factor industries Carrier branches Infrastructure Newly emerging industries Productivity principles (esp. labour) Regulation National technology leaders Perez s general model of TEP evolution 16

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18 4.3 Techno-Economic Paradigms Most Recent Transformation of Production System: (from) Fordism / Taylorism (to) Post-Fordism Flexible Specialization Lean Production Neo-Artisanal Production many alternatives 4.3 Techno-Economic Paradigms The Crisis of the 1970s: Oil shocks Labour unions Falling demand for capital goods Reduced profits Inflation + Stagnation = Stagflation Foreign competition Currency exchange rate fluctuations Indebtedness of LDCs Social welfare Technological substitutions Political volatility 18

19 Post-Fordist Transformation of Production System What s new geography and production Vertical disintegration Traded and untraded interdependencies Relational assets New labour processes? More varied output: customization International deregulation (trade, finance, capital and labour mobility) New Economic Spaces 19

20 Examples Lenscrafting Sheet materials cutting New/Digital media sector Artisans Within the Capitalist Social Division of Labour Production Chain Integrated Disintegrated Consumption Chain Integrated Disintegrated Traditional Artisan Quasi-Artisan within a Capitalist Firm Independent Decentralization Dependent Decentralization 20

21 Sheet Materials Cutting Firms in the GTA Computer Animation Firms in the GTA 21

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24 4.4 The Geography of Innovation Innovation Systems: Mix of institutions, policies, and infrastructures that support the creation and diffusion of innovations. 24

25 4.4 The Geography of Innovation National Innovation Systems Government support Military Government research Trade protectionism Education/research funding Tax incentives Immigration policy 4.4 The Geography of Innovation National Innovation Systems Government support Public private linkages R&D spending Patents Knowledge production and dissemination 25

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27 4.4 The Geography of Innovation Local Innovation Systems City-centred Universities Incubators 27