Policy Article

Internet, Adjustment of Firms and the Spatial Division of Labor

Paper presented at the 42nd Congress of the European Regional Science Association (ERSA) “From Industry to Advanced Services – Perspectives of European Metropolitan Regions” in Dortmund 27-31 August 2002. University of Dortmund: Congress CD-ROM.

There is a growing body of literature on the impact of the Internet as an innovative transaction and networking technique on requirements of organizational change within enterprises, on sectoral differences of E-commerce affinity and penetration, and on country-specific development trends in the New Economy. Research on the spatial impact of E-commerce so far focuses on locational patterns of New Economy firms proper. However, it can be expected that also E-commerce solutions in old economy-firms will substantially alter the economic geography of production and co-operation, because E-commerce will lower spatial transactions costs and has the potential to make distance less relevant for a variety of economic transactions. The spatial impact may run quite along the lines which the well-known telematics debate in the 1980s predicted, i.e. with simultaneously occurring processes of concentration and deconcentration at various layers of the value added chain. The paper aims at discussing elements of a conceptual approach for evaluating these spatial effects of E-commerce activities on locational patterns in the old economy by identifying suitable proxy indicators from existing evidence, such as connectivity to IT-infrastructures, sectoral differences in B2B solutions, market (de-)concentration processes, or functional changes of employment structures of cities.

Authors

Rüdiger Soltwedel