Knowledge Economy: Spatial Approaches

by

Sami Moisio

• LAST REVIEWED: 26 May 2023
• LAST MODIFIED: 26 May 2023
• DOI: 10.1093/obo/9780199874002-0262

Introduction

Knowledge economy can be defined in several ways. It is abstract yet concrete, a thing and a process, structured by practices and structuring societal practices, imagined and material, economic and political, theorized and experienced. As a scholarly abstraction, it has been debated under many rubrics, such as knowledge-based economy, intangible economy, knowledge capitalism, learning economy, cognitive capitalism, new economy, information economy, and creative economy. The knowledge economy is nonetheless customarily used to denote the socio-spatial organization of late capitalism since 1980s. In this context, knowledge and creativity are highlighted in the economic production process at the expense of physical resources and manual labor. The knowledge economy has been extensively studied from the perspective of social sciences. The emergence of thematic journals such as the Journal of the Knowledge Economy indicates at least a gradual institutionalization of the knowledge economy as an interdisciplinary field of study. The geographical literature on the knowledge economy includes two main and partly overlapping strands. Economic geographical literature conceptualizes the knowledge economy as both spatial innovation systems and as knowledge creation and transfer. A critical political economy approach, in turn, examines the knowledge economy as connected to urban transformation, the state, and geopolitics.

General Overviews

Scholarly work on the knowledge economy emerged in the midst of industrial decline and the rise of service economies in the 1970s. Bell 1973 uses the terms post-industrial society and knowledge society in order to conceptualize the new context in which automation and technology were having increasingly notable impact on people’s work and society and in which “theoretical knowledge” and human capital were central as sources of innovation and policy formation. Bell’s work has shaped geographical writings on postindustrial and creative cities. Reich 1991 highlights the role of high-skilled, well-paid, and globally oriented “symbolic analysts” in the reorganization capitalism in the 1990s. In a similar vein, Florida 2002 highlights the role of “creative class” in post-Fordism. The development towards knowledge economy has also been associated with the emergence of new flexible forms of production in Europe, North America, and, later, in Asia. Harvey 1990 examines the shift from the so-called Atlantic Fordism to a new political-economic epoch of growth (and crisis), which is characterized by the entanglement of ideas, technology, innovations, human capital, and space, as well as by the increasing power of large corporations and hypermobile capital in the colonialization of localities. Castells 1996, in turn, uses the term informationalization to point out how the application of knowledge upon knowledge itself had by the 1990s become the primary source of productivity and a backbone of both the new economy and network society. The knowledge economy is often discussed as a source of economic growth. Romer 1990, a key representative of the so-called endogenous growth theory, argues that innovations and new technologies depend on the number of people seeking out these and how hard they are actually looking for them. Here, knowledge is treated as an asset for growth that is not subject to finite restrictions or diminishing returns like other assets such as real estate. As such, the knowledge economy is understood as a system of growth that brings together human capital, R&D, and technological change. According to works such as Peters 2010 and Sum and Jessop 2013, the knowledge economy signals the growing role of knowledge compared with factors such as natural resources, physical capital, and low-skill labor. Here, the key aspect in the generation of economic value is the valorization of the general intellect in the form of knowledge-intensive commodities. Knowledge, in its different forms, becomes a key driver of economic growth, economic competitiveness, wealth generation, and job creation across the private, public, and third sectors. As a result, most economic sectors tend to become more knowledge intensive. Scott 2008 conceptualizes the new economic condition as cognitive-cultural capitalism.

• Bell, Daniel. The Coming of Postindustrial Society: A Venture in Social Forecasting. New York: Basic Books, 1973.

  In this book, Bell argues that the societal structure is rapidly changing, given technological development and the rise of what he calls “theoretical knowledge.” This latter term seeks to capture the rising societal significance of intellectual property (copyrights, patents, etc.) in the capitalist economy.

• Castells, Manuel. The Rise of the Network Society. Oxford: Blackwell, 1996.

  In this famous book, Castells examines “informationalism” as a pervasive process wherein the societal and cultural forms of industrial capitalism are replaced by new social formations. Importantly from a spatial perspective, Castells argues that the new information age is founded on global networks that link states, institutions, and individuals in different tapestries. Differentiation between those who are and those who are not part of the most crucial value-adding networks of informational capitalism characterizes informational capitalism.

• Florida, Richard. The Rise of the Creative Class. New York: Basic Books, 2002.

  In this contribution, Florida famously argues that the growing role of “creativity” in the economy is a driving force of societal transformation in the United States and beyond. Florida describes a post-industrial society in which the “creative class”, found in a variety of fields, ranging from engineering to theater, biotech to architecture, becomes a crucial factor in inter-firm and inter-spatial competition.

• Harvey, David. The Condition of Postmodernity. Oxford: Blackwell, 1990.

  In this political-economic inquiry into postmodernism as a historical condition in capitalism, Harvey interrogates the shift from Fordism to post-Fordism, or what he calls flexible accumulation and its cultural foundations, including the “image producing industry.” Harvey argues that increasingly mobile capital and associated corporate power are “annihilating” space through time, and in doing colonializing local spaces and experience. Harvey’s contribution highlights the importance of corporate power in the shaping of the knowledge economy as a spatial regime of accumulation.

• Peters, Michael A. “Three Forms of the Knowledge Economy: Learning, Creativity and Openness.” British Journal of Educational Studies 58 (2010): 67–88.

  DOI: 10.1080/00071000903516452

  In this paper, Peters singles out three economic forms and associated discourses of the knowledge economy. He argues that the so-called learning economy, the creative economy, and the open knowledge economy are overlapping yet partly different and competing discourses that constitute the knowledge economy as a distinguishable economic domain.

• Reich, Robert B. The Work of Nations: Preparing Ourselves for 21st-Century Capitalism. New York: Knopf, 1991.

  Reich underlines the importance of high-skilled labor and their human capital in the increasingly borderless knowledge economy, which challenges the coherence of the nation-state as a territorial community. These individuals work and live in a new global space that becomes a source of effective communication and innovations. Accordingly, the shift from high-volume to high-value production in the advanced nation-states calls for creative specialists such as engineers, attorneys, scientists, executives, journalists, and consultants with extensive skills and education.

• Romer, Paul M. “Endogenous Technological Change.” Journal of Political Economy 98 (1990): S71–S102.

  DOI: 10.1086/261725

  In this article, Romer offers his take on what creates economic growth in post-Fordism. Romer highlights the sheer importance of entrepreneurship, innovation, knowledge, and technology in generating economic growth and prosperity, and in so doing challenges the view of exogenous growth theory. This is a classical text with significant policy impact.

• Scott, Allen. Social Economy of the Metropolis: Cognitive-Cultural Capitalism and the Global Resurgence of Cities. New York: Oxford University Press, 2008.

  DOI: 10.1093/acprof:oso/9780199549306.001.0001

  In this book, Scott discusses urban theory in the context of the knowledge economy. One of the key arguments is that cities in the twenty-first century are centers of creative economic activity, and that the concept of cognitive-cultural capitalism—as an entanglement of social and economic life (in sectors ranging from media to fashion) played out through the arena of urban space—can be used to disclose some of the key societal processes of late capitalism.

• Sum, Ngai-Ling, and Bob Jessop. Towards a Cultural Political Economy: Putting Culture in Its Place in Political Economy. Cheltenham, UK: Edward Elgar, 2013.

  This book offers an analysis of the knowledge economy from the perspective of cultural political economy. It highlights the ways in which the response to the crisis of Atlantic Fordism in the advanced industrial states prompted new economic and political imaginaries, which partly constituted the knowledge economy as an actually existing and materially uneven regime of capital accumulation and mode of regulation.