Today, much attention is paid to understanding the importance and variety of economic activities in terms of clustering and proximity. In the book Economic Geography, Coe et al. (2018) raise a solid discussion of how transnational organizations develop their plans addressing such geographical issues as location, place, and territory. Chapter 12 is devoted to evaluating the proximity if different economic activities and exploring sociocultural and economic forces within the existing clusters. This chapter is divided into several meaningful parts, and the sixth section is about the specifics of rethinking proximity. In the current paper, a summary of Chapter 12.6 will be developed to explain the conditions under which proximity could be rethought and the outcomes that become critical for the establishment of effective economic relationships.
Globalization impact is observed in numerous information technologies, and spatial proximity may be reconsidered in three ways: clusters as open nodes, a variety of proximity types, and temporalities of clustering processes. In its general sense, proximity defines interactions that exist between various economic elements in their spatial and organizational nature. According to Coe et al. (2013), spatial proximity is the identification of people who are in the same place and at the same time with the intention to initiate their socioeconomic interactions. The authors aim to learn the connection between changes caused by globalization, new communication options, and spatial proximity and introduce new types and concepts to ensure the success of most economic activities.
The first step offered in this section is to focus on the concentration of activities in specific places and define the worth of special decentralization. Coe et al. (2013) admit that information may be acquired from several production systems, and the task of society is to develop trust and never forget about innovations within the chosen industry. In this case, clusters become a core of tacit knowledge and sociability and a means of control in corporate interactions. The examples are taken from the experiences of financial centers in London and New York. Instead of using clusters within a local context, it is recommended to think about them as a part of a global network. As such, collaboration is improved, new processes are initiated, and the already established infrastructures are able to grow.
The second step in interpreting economic and geographical clusters is to enlarge the number of proximity types that enhance proper functioning in the sphere of the economy. Coe et al. (2013) elaborate on four new types, namely institutional, cultural, organizational, and relational. Using the example of the German economy and its relationship with the European Union, institutional proximity is a type of connection where legal and institutional frameworks are related to facilitating knowledge exchange. The work of Irish and Chinese diasporas properly explains the idea of cultural proximity when nearness may result from a particular cultural or linguistic heritage (Coe et al., 2013). Organizational proximity is based on written codes and oral rules in terms of which activities and service transactions are performed and partnerships are developed. Finally, one of the most ambiguous but interesting types is relational proximity, which reveals the significance of interpersonal relationships even if they are supported distantly. Face-to-face interactions may be developed in different ways, depending on people’s attitudes toward a certain situation and available communication technologies. All these forms of proximity are integral due to the variety of purposes they can fulfill.
The third step for implementing successful changes in clustering processes is to admit temporalities. In other words, Coe et al. (2013) try to analyze several organizations and the duration of their existence. Today, there are many temporary projects within the frames of which people are gathered and complete certain tasks. As soon as the work is done, a team is dismissed, and its member can join other projects. Thus, some interactions are properly planned and strategic, while others are spontaneous or accidental (Coe et al., 2013). However, timeframes should not define the quality of work, and employees pay attention to other factors like global events, knowledge exchange, and location. To explain the relationship between productivity and time production, the authors mention the example of the Vancouver film and television industry and the possibility of varying tasks and partnerships (Coe et al., 2013). On the one hand, this business is self-contained with a number of independent projects and a unique vision. On the other hand, any work in this industry depends on multiple global networks that co-exist within the same platform.
In total, the chosen part of Chapter 12 in the book proves the rationality of rethinking proximity in the economy. The forces that promote clustering in economic activities are never permanent, and it is necessary to unite knowledge and skills and follow a clear plan. Spatial proximity is important to many economic processes, and the newly identified types of connections between organizations help connect clusters and facilitate role performance. Sometimes, these relationships create additional challenges when practical knowledge is limited. However, proximity rethinking is a beneficial tie in business and economic activities in most cases.
Reference
Coe, N. M., Kelly, P. F., & Yeung, H. W. C. (2013). Economic geography: A contemporary introduction (2nd ed.). Wiley.