Re-thinking ‘peripherality’ in the context of a knowledge-intensive, service-dominated economy

Mike Crone*

*Corresponding author for this work

Research output: Chapter in Book/Report/Conference proceedingChapter

16 Citations (Scopus)

Abstract

There has been a long-standing interest in peripherality and its economic implications among policy-makers in the European Union (e.g. Keeble et al., 1988; European Commission, 2001). This mainly conceptual chapter aims to re-consider the meaning and implications of peripherality in the context of a contemporary European economy where service activities have become more important and competition is said to have become more knowledge-based. It seeks to assess the consequences of recent changes in the realms of business, work, travel and technology for the predicament of regions traditionally regarded as ‘peripheral’, and for the competitiveness of the firms in these regions. In doing so, it brings together two areas of literature that have been hitherto disconnected, namely research on peripherality and peripheral regions and research on the spatiality of knowledge-intensive business services (KIBS) - a group of activities that epitomise key aspects of the contemporary knowledge-intensive, service-dominated economy. This is a novel line of inquiry because previous research on (economic aspects of) peripherality in Europe has tended to overlook ‘tradable’ service sectors, and because prior research on KIBS has typically focused on ‘core’ and densely populated urban economies, whilst neglecting more peripheral economies and the service firms located therein (Hermelin and Rusten, 2007). An underlying premise of this chapter is that the shift towards a more knowledge-intensive, service-dominated economy necessitates a re-appraisal of the meaning and implications of ‘peripherality’. Established (economic) understandings of peripherality have tended to focus on the fact that firms in peripheral regions are disadvantaged by higher (distance and time-related) costs associated with the transportation of physical goods (e.g. raw materials, agricultural produce or manufactures) to core European markets (e.g. Keeble et al., 1982; Keeble et al., 1988). However, the continuing relevance of this work must be questioned as a result of changes in economic structure - notably the ‘rise of services’ - and also because of improvements in transportation (e.g. better road and rail infrastructure, declining transport costs, and the rise of air travel) and, possibly, advances in information and communication technologies (ICT) (Copus, 2001). In fact, these various changes have led some economists to call for a wholesale re-appraisal of industrial location theory due to dramatic changes in the spatial transaction costs facing modern firms (McCann and Shepherd, 2003; Glaeser and Kohlhase, 2004). Thus, taking the example of KIBS activities, it is pertinent to ask: in what ‘sense’ should a location now be regarded as peripheral? Which places should be considered part of the periphery? And what competitive disadvantages (and advantages) does a peripheral location confer on individual firms/actors? These questions have clear policy relevance. For example, policy-makers in Europe’s ‘north-western periphery’ (e.g. Northern Ireland, Irish Republic) have shown increasing interest in ‘tradable services’ as they struggle to reposition their economies in the face of international economic and corporate restructuring (Enterprise Ireland, 2008; DETI, 2009) but they need to develop a better understanding of the possibilities and limitations for KIBS development in their regions. As a first step in attempting to address some of the issues outlined above, this chapter starts by reviewing the meaning and prior usage of the term of ‘peripherality’ - particularly in relation to economic development - and by articulating a multi-dimensional understanding of the concept. The meaning and implications of peripherality in the specific context of knowledge-intensive business services (KIBS) is then explored and reconsidered. The tradability of services, recent work on ‘temporary geographical proximity’ and the potential role of virtual accessibility (via ICT) are all discussed before a tentative continuum of peripherality in KIBS is proposed. The chapter concludes by outlining some themes for future research on peripherality and KIBS.

Original languageEnglish
Title of host publicationRegional Development in Northern Europe
Subtitle of host publicationPeripherality, Marginality and Border Issues
PublisherTaylor and Francis - Balkema
Pages49-64
Number of pages16
ISBN (Electronic)9781136461323
ISBN (Print)9780415601535
DOIs
Publication statusPublished - 01 Jan 2012
Externally publishedYes

ASJC Scopus subject areas

  • Economics, Econometrics and Finance(all)
  • Business, Management and Accounting(all)

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