Alex Martelli commented:
> It's not just _foreign_ companies -- regional clustering of all kinds > of > business activities is a much more widespread phenomenon. Although I'm > not sure he was the first to research the subject, Tjalling Koopmans, > as > part of his lifework on normative economics for which he won the Nobel > Prize 30 years ago, published a crucial essay on the subject about 50 > years ago (sorry, can't recall the exact date!) focusing on > _indivisibilities_, leading for example to transportation costs, and to > increasing returns with increasing scale. Today, Paul Krugman is > probably the best-known name in this specific field (he's also a > well-known popularizer and polemist, but his specifically-scientific > work in economics has mostly remained in this field). > > > China right now)? According to standard economics it should > > not happen - what's the point of getting into this overpriced > > city if elsewhere in this country you can find just as good > > conditions for business. > > Because you can't. "Standard" economics, in the sense of what you > might > have studied in college 25 years ago if that was your major, is quite > able to account for that if you treat spatial variables as exogenous to > the model; Krugman's breakthroughs (and most following work, from what > I > can tell -- but economics is just a hobby for me, so I hardly have time > to keep up with the literature, sigh!) have to do with making them > endogenous. > > Exogenous is fine if you're looking at the decision a single firm, the > N+1 - th to set up shop in (say) a city, faces, given decisions already > taken by other N firms in the same sector. > > The firm's production processes have inputs and outputs, coming from > other firms and (generally, with the exception of the last "layer" of > retailers etc) going to other firms. Say that the main potential > buyers > for your firm's products are firms X, Y and Z, whose locations all > "happen to be" (that's the "exogenous" part) in the Q quarter of town. > So, all your competitors have their locations in or near Q, too. Where > are you going to set up your location? Rents are higher in Q than > somewhere out in the boondocks -- but being in Q has obvious > advantages: > your salespeople will be very well-placed to shuttle between X, Y, Z > and > your offices, often with your designers along so they can impress the > buyers or get their specs for competitive bidding, etc, etc. At some > points, the competition for rents in quarter Q will start driving some > experimenters elsewhere, but they may not necessarily thrive in those > other locations. If, whatever industry you're in, you can strongly > benefit from working closely with customers, then quarter Q will be > where many firms making the same products end up (supply-side > clustering). > > Now consider a new company Z set up to compete with X, Y and Z. Where > will THEY set up shop? Quarter Q has the strong advantage of offering > many experienced suppliers nearby -- and in many industries there are > benefits in working closely with suppliers, too (even just to easily > have them compete hard for your business...). So, there are easily > appreciated exogenous models to explain demand-side clustering, too. > > That's how you end up with a Holliwood, a Silicon Valley, a Milan (for > high-quality fashion and industrial design), even, say, on a lesser > scale, a Valenza Po or an Arezzo for jewelry. Ancient European cities > offer a zillion examples, with streets and quarters named after the > trades or professions that were most clustered there -- of course, > there > are many other auxiliary factors related to the fact that people often > _like_ to associate with others of the same trade (according to Adam > Smith, generally to plot some damage to the general public;-), but > supply-side and demand-side, at least for a simpler exogenous model, > are > plenty. > > Say that it's the 18th century (after the corporations' power to stop > "foreign" competition from nearby towns had basically waned), you're a > hat-maker from Firenze, and for whatever reason you need to move > yourself and your business to Bologna. If all the best hat-makers' > workshops and shops are clustered around Piazza dell'Orologio, where > are > YOU going to set up shop? Rents in that piazza are high, BUT - that's > where people who want to buy new hats will come strolling to look at > the > displays, compare prices, and generally shop. That's close to where > felt-makers are, since they sell to other hat-makers. Should your > business soon flourish, so you'll need to hire a worker, that's where > you can soon meet all the local workers, relaxing with a glass of wine > at the local osteria after work, and start getting acquainted with > everybody, etc, etc... Right, and distribution in general is "clumpy"; i.e. one doesn't find the spatial distribution of people to be uniform (unless at saturation!) I'm decades behind on economics research, but I remember modeling clustering based on mass and distance (the gravity model). On a decision making basis there seems to be an aspect of it that is binary: (0) either give in to gravity and gain shared advantage as part of a massive object, or (1) choose an alternate "location" far enough away not to be much affected by the force of the massive objects, and try to build "mass" there. I suspect Python is a (1) in that regard, but I may be wrong. Gravity as a model of technology adoption appeals to me as I've been thinking about cosmology a fair bit, and I have grave suspicions that much of the universe's dark (and green) matter is in Redmond. Eric Pederson http://www.songzilla.blogspot.com ::::::::::::::::::::::::::::::::::: domainNot="@something.com" domainIs=domainNot.replace("s","z") ePrefix="".join([chr(ord(x)+1) for x in "do"]) mailMeAt=ePrefix+domainIs ::::::::::::::::::::::::::::::::::: -- http://mail.python.org/mailman/listinfo/python-list
