Schema della sezione

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    Introduzione

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    Introduction to Economic Geography

    Economic Geography represents the study of the location, distribution and spatial organization of economic activities across the Earth. 

    In today’s highly competitive economy, many companies, firms and organizations are aware that understanding geography, possibly through mapping, can represent a competitive strategic advantage. Significant cost savings and profit opportunities can result from the understanding of the geographic context of activities such as sales and marketing, distribution and logistics, as well as competitor activity. 

    The course examines the way in which individuals and enterprises organize their economic activities in space and the extent to which society recognizes the socio-economic impacts of such activities across space and uses its institutions to influence these interdependencies and impacts.

    The course is focused on how geographic and economic conditions affect the products, industries, commerce and resources in a variety of regions. The course tackles the concepts, theories, and methodologies used by geographers to analyze economic change. 

    An overview of the course, of the resources available and textbook is provided.


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    1 - Geography and Economic Geography

    Geography and Economic Geography

    Geography (today) is the science of interpretation of the organized space

    It studies the issues connected to:

    1) Localisation (= precise spatial position of objects within a particular area of Hearth’s surface)

    2) Human – environment relationship

    3) Regions and identification of the distinctive characters of particular partitions of space


    Role of geography. Supply:

    1) Positional information on the exact position of events; 

    2) Environmental information on quality of particular areas;

    3) Optimization = finding the ‘best’ position for things and the ‘best’ use of areas

    Economic Geography focuses on:

    1) the knowledge of the geographical space (as an index of human and natural evolutions) and on the management of space (as an index of the social, political and economical evolutions)

    Also it focuses on: 

    2) the processes of management of production of goods and services in cities and space (more in general).

    Anderson W. P. (2012)

    Economic geographers study and attempt to explain the spatial configuration of economic activities, including the production of goods and services, their transfer from one economic agent to another and their transformation into utility by consumers. The spatial configuration, which includes both the pattern of activities on the map and the relationships between activities occurring in different places, is the outcome of a vast number of distinct but interrelated decisions made by firms, households, governments and a variety of other private and public institutions. 


    Spatial interaction

    the easiest way to understand the relations between different places.

    The non-availability of a product in one place is a sufficient condition to generate a movement towards another place where it is available

    The presence of two or more places specialized in the production of different goods / services will set an interaction between them



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    2 – Location theories: the Von Thunen Model

    This section deals with the use of models in Economic Geography and particularly Location Theories.

    Models are adapted to different kinds of activities. 

    The starting points are similar and goes from simplified models to more complex ones.

    Common Hypothesis – generally a common starting point for the different models:

    1. Homogeneity and isotropy of space
      (no differences in morphology of space; no transport asymmetries; ecc.)
    2. Fertility of land is homogeneous – if a rent exists,  it depends on transport costs based on distance
    3. Perfect competition (same price throughout the market; freedom of movements of factors of production; no transport costs)

    The father of location theory is renown as John Heinrich Von Thunen (Jever, Oldemburg – East Germany 1783 - 1850). In 1826 he wrote ‘The isolated state’ in which he stated that differences in the cost of producing agricultural products depended on the differences in land location and therefore on the distance of the producing areas to the market.

    Von Thunen’s theory opposed David Ricardo’s one in which differences in the cost of producing agricultural products result from utilization of land of different quality.

    In 1826 he wrote "The isolated state" in which he studied the  effects of a unique urban central market on the distribution of cultivations in a homogeneous space.

    Von Thunen circular model was then used later as the basis for an exam on urban rent in Urban Geography


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    3 – Location theories: Central Place Theory

    The central place theory deals with the number, size and location of human settlements in an urban system. After having analyzed the spatial distribution of agricultural activities (Von Thunen model) and industries (Weber), central place theory focuses on cities as market places and therefore better respond to the logic of the service sector.

    The Central Place Theory started with a German geographer, Walter Christaller (1933), who analyzed the spatial distribution of centres in Southern Germany, trying to understand the evolution of urban settlements and their spacing in relation to each other. In particular he looked for some ‘rules’ determining size, number and distribution of towns. His ideal model foreseen the spacing of cities and their market areas in regular patterns, showing hexagonal structures and different levels.  Of course we do not spot hexagons drawn on the ground nor the market areas appear regular ones.  However Christaller’s theory was interesting as he combined different elements together.

    Christaller:

    -  considered some extremely simplified hypotheses concerning space as already seen in other location theories (i.e., homogeneous space, even distribution of resources and population, etc.).

    - Introduced the concept of hierarchy in (urban) centres. That means that some centres can be higher in a hierarchical rank by providing goods and services rarer than those offered by other centres. Using a simplifying example, every municipality holds a primary school that therefore serves a limited space (a neighborhood) while few municipalities host universities, that consequently attract people from a wider distance

    - consider economic elements into a geographical framework.  In particular, as many elements are (theoretically) constant in his basic assumptions, the geographical distance (or the cost for covering the geographical distance) can be expressed as a price of the good that a consumers search for. In that sense the ‘traditional’ micro-economical demand curve can be rotated and ‘spatialised’ and therefore represented in the geographical space.

    Christaller’s Theory was quite static and did not allow to combine different urban functions. However the theory was modified by other authors to include more realistic situations.

    Loesch.

    Loesch in particular modified the central place theory in order to allow multiple functions to be present in one place. That lead to specifying the conditions for developing the idea of a metropolitan area, concentrating different functions and activities and acting as an element of attraction for the surrounding area.  Loesch’s Theory was focused on the ‘city effect’ or the fact that cities are something different than just ‘settlements’ and that by concentrating functions will make them more important than surrounding centres.


    Isard.

    Isard introduced further modifications to the Central Place Theory, ‘distorting’ the regularity of hexagonal patterns with the introduction of a uneven distribution of population and therefore differentiated population densities (obviously in urban areas) and a different ‘spiderweb’ network drawn by major transport infrastructures connecting cities.

    References

    Christaller, Walter. Die zentralen Orte in Suddeutschland. Jena: Gustav Fischer, 1933. (Translated (in part), by Charlisle W. Baskin, as Central Places in Southern Germany. Prentice Hall, 1966.

    Christaller, Walter, How I discovered the Theory of Central Places: A Report about the Origin of Central Places. in: English, P. W. and R. C. Mayfield, eds., Man Space and Environment. Oxford Univ. Press, 1972, pp.601–610.

    Berry, Brian J. L. and Chauncy D. Harris, Walter Christaller: An Appreciation, Geographical Review LX (1), 1970, pp.116–9.

    Heilbrun, James. Urban Economics and Public Policy, 3rd Edition. New York: St. Martin's Press, 1987

    Von Boventer, Edwin. Walter Christaller's Central Places and Peripheral Areas: The Central Place Theory in Retrospect, Journal of Regional Science. Vol.9, 1969, 117–24.

    Preston, R. E., The Dynamic Component of Christaller's Central Place Theory and the Theme of Change in his Research, The Canadian Geographer, vol.27, 1983, pp.4–16.

    Losch, August, The Nature of Economic Regions, Southern Economic Journal, Vol. 5, No. 1, July 1938, pp. 71–78.



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    4 - Geography of Transport

    Transport and location

    The transport system can be conceptualized as the set of relationships between nodes, networks and the demand. These relationships involve locations spatially expressing this demand, flows between them and infrastructures designed to handle these flows. All the components of a transport system are designed to facilitate the movements of passengers, freight and information, either as separate or joint components.

    Demand. A derived function for the movement of people, freight and information for a variety of socioeconomic activities.
    Nodes. Where movements are originating, ending and transiting (intermediacy); points of entry or exit in a transport system. They vary according to the geographical scale being considered ranging from local nodes (such as a subway station) to global nodes (such as port or airport terminals).
    Networks. Composed of a set of linkages expressing the connectivity between places and the capacity to handle passenger or cargo volumes.
    Locations. Nodes where demand is expressed as an origin, destination or point of transit. The level of spatial accumulation of socioeconomic activities (production and consumption) jointly defines demand and where this demand is taking place.
    Flows. The amount of traffic over a network composed of nodes and linkages. This is jointly a function of the demand and the capacity of the linkages to support them.
    Infrastructures. The conveyances such as roads and terminals expressing the physical reality of a network and designed to handle a demand with specific volume and frequency characteristics. Facilities enabling access to a network are jointly characterized by their centrality and the linkages that radiate from them.

    Simplified hypotheses on transport: transport costs proportional to distance:
    Weber (minimum transport cost)
    Von Thunen (location rent)
    Real world: transport costs hold a fixed loading component, a fixed unloading component and costs varying in a less than proportional way to travel’s length.
    Economies of scale
    Different weight of distance for different transport modes:
    Road 
    Railway 
    Water/Air

    References

    Rodrigue J.P., Comtois P., Slack B. The Geography of Transport System (latest Edition), Routledge

    https://transportgeography.org/media/e-book/


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    5 - Industry and Space

    Location of industrial activities

    Industrialization is an essential aspects of World Economic Growth
    I industrial revolution
    England (XVIII – start XIX Century ).
    Steam machine (James Watt, 1783).
    Coale; iron; textiles
    New organization of labour (it substitute the ‘makers’ model)
    Countryside – City movements and migrations
    II industrial revolution
    End XIX Century -  Beginining of XX century
    Coal -> Oil, hidroelectrig energy
    New industries, new locations, new markets, new products. Series production. Fordism
    III industrial revolution
    End of XX century – To-date
    Hi tech: electronics, robotics, telecommunication, bio-tech

    Spatial distribution and location of industries:
    Inserting a manufacturing firm in a given territory is important in terms of the spatial reorganization of:
    Demographic component; 
    Urban structure; 
    Other economic activities;
    Network of flows and traffic; 
    Political- social rules.
    Industrial geography: where and why industries in a given territory
    => location as a process of setting and industry. It is important to examine:
    Factors of industrial location;
    ‘geography’ of production factors;
    Location theory

    Industry clusters (Industrial districts)
    Industry clusters are geographic concentrations of competing, complementary, or interdependent firms and industries that do business with each other and/or have common needs for talent, technology, and  infrastructure. 
    The firms included in the cluster may be both competitive and cooperative. They may compete directly with some members of the cluster, purchase inputs from other cluster members, and rely on the services of other cluster firms in the operation of their business.
    Industry clusters are dynamic entities. They may change as the industries within them change or as external conditions change
    An important characteristic of clusters is that they are centered on firms that sell outside the local, state, or even national market
    Clusters may include government, nonprofit organizations, educational institutions, and other infrastructure and service providers whose presence is key to the strength of the cluster.
    An industry cluster is an interconnected group of industries and firms. It differs from trade associations, which may have a narrower membership and focus. 
    A trade association, for example, may include the  members of a single industry and focus entirely on lobbying. By contrast clusters are agglomerations of  regional industries and interdependent firms that are key to the success of the industry in the state. 
    Organized industry clusters contribute broadly to the well-being of the region by addressing workforce recruitment and training issues, developing needed infrastructure, and establishing research and training  programs at universities and technical colleges, to name a few.

    Marshall (1920) identified the firm’s external economies, although internal to the district, the basic foundations' of the distrcts’ (or local labor systems)  competitiveness.. 
    The spatial aggregation of several firms, each one operating in full technical and organizational efficiency, related in terms of production and distribution processes, determines a particular efficency condition for the overall economic system. 
    Economical advantages:
    Reduction of production costs; 
    Reduction of transaction costs; 
    Innovative and incremental dynamics settings. 
    The environment allows an organization based on a non-hierarchical order. The spontaneous and self propelling  character in producing external economies seems to originate from evolutionary stability and by the convergence of a set of socio-economical, institutional and manufacturing.

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    5 bis- Location Theory - Weber Model of Industrial Location

    Location theory


    Weber’s Theory of industrial location 
    Space is characterized by:
    Uniform interest rate;
    Uniform production costs, wages, rents;
    Uniform and proportional to distance unitary transport costs;
    Resources consisting of:
    Localized materials (mine resources)
    Ubiquitous materials (water)
    Losing weight materials (raw material’s weight is only partially reflected into the final product)
    Net materials (raw material’s weight is totally reflected into the final product)
    The model is aimed at identifying the place where to locate a firm / plant minimizing costs related to places
    =>
    Raw material places
    Energy places
    Market / consumption places


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    6 - Geography of Population

    Population Geography


    Population Geography is concerned by the spatial aspects of population:

    1- Simple description of the location of the population.

    2- Explanation of its spatial pattern and distribution.

    3- Geographical analysis (processes such as urbanization and migration).

    The 20th Century experienced a huge growth of the world’s population, almost exponential from the 1920s until today. Population was multiplied by three and around 80-85 million persons are added each year.

    60 million new urbanites are added per year, with an urban population is now 2.6 billion, of which 1.7 billions are in developing countries. More than 65% of the global population is thus living in developing economies.

    The Explosion of the World’s Population.

     Living conditions are improving in a number of areas, notably in newly industrialized economies. Insufficient to improve the welfare of the bulk of the world’s population.  Paradox in developing countries: Population growth monitoring is essential in these areas. They have the least resources available to undertake such a process.


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    7 - Urban Geography

    Urban Geography

    Our society is an urbanized society.

    The world as we know it is urban and getting increasingly urbanized.

    Since 1950, the world urban population has more than doubled. In 1999, half of the world’s population of 6 billions lived in urban areas. 75% were in developing economies. The majority of economic activities are taking place in cities and they represent dominant attributes of the human landscape.

    Cities are difficult to define. A common element is represented by concentration.

    Different criteria could be considered:

    Topographic – construction (= concentration of buildings)

    Demographic (= concentration of inhabitants) - I.e., urban population in centres > 2.000 inhabitants

    Economic (= concentration of activities)

    Quantity and quality of concentration: 
    different activities and different from agriculture, extra-urban demand

     

    Functional definition:

    Aggregation of people to better realise some activities
    (activity = a function of the city);

    Cities as rare, non ubiquitous in the geographical space produce functions over a service  area


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    8 - Exam test examples

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    7bis - Seminars

    1. Seminar by Maurizio Zugna, consultant "Coffee, supply chain, wealth distribution and global challenges"


    2. Seminar by Dott. Salvatore Dore "Student entrepreneurship and innovation in University"