Abstract
According to Lester Thurow at MIT, advanced countries are shifting from capitalism based on mass production of commodities to the brain power society in which creation of knowledge and information using brain power plays the central role (Thurow 1996). The concept of brain power society is essentially the same as that of the C-society advocated by Åke Andersson who maintains that advanced countries are leaving the industrial society (with its reliance on simplicity of production and products and the heavy use of natural resources and energy) and entering the C-society with and increasing reliance on creativity, communication capacity, and complexity of products (Andersson 1985). In this paper, the term “brain power society” is synonymous with the “C-society” of Åke Andersson. The ultimate concern of this paper is the further development of the New Economic Geography (NEG) towards a more comprehensive theory of geographical economics in the age of brain power society, in which the dynamics of the spatial economy arise from the dual linkages in the economic and knowledge fields. Before elaborating this ultimate objective, let me explain briefly what is the so-called the New Economic Geography.
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Notes
- 1.
- 2.
This hypothesis is not entirely new, of course. For, e.g., Zipf (1949) conjectured that the changing spatial configuration of economic activities was the outcome of the two sets of centripetal (unifying) and centrifugal (diversifying) forces.
- 3.
See those articles reviewed in Fujita and Mori (2005).
- 4.
Here, “common knowledge” represents simply the short expression of “the knowledge in common” or “mutual knowledge”. It is not the term used in game theory.
- 5.
See Berliant and Fujita (2007) for the further elaboration of the following model.
- 6.
For simplicity, we employ a deterministic framework. It seems possible to add stochastic elements to the model, but at the cost of complexity. It should also be possible to employ the law of large numbers to a more basic stochastic framework to obtain equivalent results.
- 7.
In an earlier version of this paper, Berliant and Fujita (2004, available at http://econpapers.hhs.se/paper/wpawuwpga/0401004.htm), we have worked out the details of the model with both knowledge creation and transfer when there are only two persons, and found no essential difference in the results. However, in the N person case, it is necessary to keep track of more details of who knows which ideas, and thus the model becomes very complex. This extension is left to future work.
- 8.
See Berliant and Fujita (2007, Sect. 4.6) for a more general form of joint knowledge creation.
- 9.
Given that the focus of this paper is on knowledge creation rather than production, we use the simplest possible form for the production function.
- 10.
For details of the analyses in the rest of this paper, see Berliant and Fujita (2007).
- 11.
For the determination \( \hat{m} \), see Berliant and Fujita (2007).
- 12.
Here, it is natural ask why the optimal group size in knowledge production is four. Actually, using a more general functional form of joint knowledge production, Berliant and Fujita (2007) shown that when differential knowledge is relatively more important than common knowledge in knowledge production, the optimal group size is larger.
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Acknowledgments
The author is grateful to the three anonymous referees and to David Batten, Åke Andersson and other participants in the workshop on “Innovation, Dynamic Regions and Regional Dynamics” for valuable comments on the earlier drafts of this paper. The author is also grateful for Grants Aid for Scientific Research Grants S 13851002 and A 18203016 from the Japanese Ministry of Education and Science.
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Fujita, M. (2009). Dynamics of Innovation Fields with Endogenous Heterogeneity of People. In: Karlsson, C., Andersson, A., Cheshire, P., Stough, R. (eds) New Directions in Regional Economic Development. Advances in Spatial Science. Springer, Berlin, Heidelberg. https://doi.org/10.1007/978-3-642-01017-0_4
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