Dynamics in economic geography 2e druk - Ton van Rietbergen, Sierdjan Koster

1.4 | Industry and environment

the connections can also be of a more sociocultural nature, such as sponsoring local clubs and charities or taking on responsibilities in the interest of the sustainable de velopment of the immediate environment. Each company views the regional environment from its own perspective. For businesses, environment, in the spatial sense of the word, appears to be a flexible concept. The expansion of the European union will have less impact on a small bakery with a regional reach than on a multinational like Philips. Changes in EU legislation on the transport of goods may not affect a service provider, but will im pact an international haulage company. The significance of these types of spatial factors also varies per company. Agricultural businesses are strongly affected by en vironmental legislation, but the same rules and regulations are far removed from the world of an optician at a local shopping centre. In other words, not only is the scale important on which the relationship plays out, but also the nature of the rela tionship. However diverse regional factors are, they are increasingly becoming less local ized and more globalized. The growth of globalization is demonstrated by a wide range of indicators. For many years, trade has been outgrowing production while international investments are growing even faster. According to Friedman (2005), the symbol of this new age is the internet. Rather than the amassing of nuclear pow er that typified the Cold War period (often symbolically represented by Albert Ein stein’s E=mc 2 ), the current age of total globalization is governed by Moore’s Law, which says the performance of computer chips doubles every two years while the price is reduced by half. During the Cold War, everything revolved ideologically around the people who held the reins of capitalism, as Karl Marx and John May nard Keynes each pointed out in their own words. Friedman’s ideas about the pres ent age correspond with those of Austrian economist Joseph Schumpeter, a strong proponent of continuous renewal, with innovation replacing tradition. Or, to use a sports analogy, the Cold War was a wrestling match where everyone circled around everyone else but no one got hurt, whereas globalization is a high-jump competi tion. For years, athletes jumped face forward after a straight approach, but when Dick Fosbury introduced the Fosbury Flop, clearing the bar in a supine position af ter a curved, sideways approach, this instantly made him Olympic champion at the 1968 Games in Mexico. Although athletes have continued to perfect the technique, they have never looked back and no one jumps the old way anymore. Friedman views this kind of ‘creative destruction’, a term borrowed from Schumpeter, as the most typical characteristic of a globalizing world. The trend towards ever-increasing globalization also implies geographic con sequences. The Cold War was dominated by strained relations between the United States and the Soviet Union. Today, in addition to the traditional balance in power between nation-states, we are dealing with relations between nation-states and fi nancial markets. The 2008 financial crisis, also known as the Credit Crunch, high lighted the strong interdependence of financial markets globally and the extent to which the actions of banks and other financial institutions can influence national

19