Oedzge Atzema, Ton van Rietbergen, Jan Lambooy and Sjef van Hoof - Dynamics in economic geography

1 Application possibilities for economic geography

In this context it is relevant to mention Richard Florida, author of The Rise of the Creative Class (2002). Since manufacturing was increasingly relocated from the Western world to low-wage countries, his argument was that crea tivity was becoming the main driving force behind economic growth (we will expand on this in Chapter 7). The rise of the Internet prompted O’Brien (1992) to predict the demise of geography. After all, if distance is no longer an issue, how can geography pos sibly have anything left to offer? Books like the provocatively titled The World is Flat by Thomas Friedmann (2005) seemed to confirm the picture painted by O’Brien. However, in his inaugural address, Robert Kloosterman, Professor of Economic Geography and Planning at the University of Amsterdam, cited The Economist to illustrate why this picture is flawed. ‘Distance is dying, but geography, it seems, is alive and kicking’ (Kloosterman 2001). Six years earlier, The Economist had proclaimed that distance was no longer relevant as a factor limiting economic activity. Whether the world becoming a smaller place will cause the demise of geog raphy is a matter of intense debate. In an article entitled ‘Prisoner of Geog raphy,’ in 2002 the authoritative American journal Foreign Policy recognized that the significance of geographic factors may be underestimated in efforts to explain national differences in wealth, concluding that ‘In the academic arena economic geography is no longer taboo. It is only a matter of time before the discipline becomes acceptable in broader circles.’ In the article, Ricardo Haus mann, Professor of Economic Development at Harvard University, stated that ‘Tropical, landlocked nations may never enjoy access to the markets and new technologies, they need to flourish in the global economy.’ In his Physio-eco nomics (2001, p. 8), Philip Parker went a step further, concluding that distance to the equator is highly predictive (R2 = 70%) of the wealth of a nation − a connection that has proven increasingly powerful over the years. Certainly the statistical connection between latitude and wealth is many times stronger than the one between religion and wealth, as put forward by many other researchers including Max Weber. However, it is unwise to rely entirely on location and climate factors when seeking explanations for differences in wealth, as it would reek of the old geo graphical determinism. The link between climate and economy is better seen as indirect than direct. Regions at the same latitude can differ vastly in terms of natural conditions (coastal locations, gulf streams etc.) as well as political and institutional circumstances. In other words, though climate and loca tion undeniably play significant roles in explaining differences, they are by no means all-determining, as we saw earlier from the example of Switzerland.

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