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Revolution of proximity: new chance for the Russian economic geography?
Alexander Pelyasov
Professor, Head of Center for the Arctic and Northern economies under the Council for the Study of Productive Forces (SOPS), Chairman of the Russian section of the ERSA (European Regional Science Association),

Nadezhda Zamyatina
Leading researcher, Faculty of Geography, Lomonosov Moscow State University


Logic of our lecture
· What is proximity? - Not distance. Not location! · Predecessors · Proximity in the contemporary network communicative age · Why is it so revolutionary? · Can we measure proximity? · Types of proximity and its influence on the territorial structure · Potential of proximity for the development of economic geography


What is proximity?
Proximity=communication + networking space
Two logics of common geographical studies (by B. Rodoman) "Landscape logic" The interaction of objects in the same place "Subject logic" The interaction of objects in different places

Physical proximity

Social, institutional, organizational, cognitive proximity

Binary logic of proximity card: To enter or not to enter! To connect or to disconnect!


Predecessor-1: von Thunen
Distance from the center establishes specialization

· Proximity from the angle of potential of interaction: the closer to the center, the more intense interaction · Concentric circles in the agricultural landscape

· Proximity of the town center as the decisive factor in the allocation of land for industrial, commercial, and residential purposes


Predecessor-2: Alfred Marshall (1890) Agglomeration effect

The advantages of enterprises of being close to each other This benefit gained by proximity originated from the spatial division of labour and from the effects of localized spillovers: industrial districts Predecessor-3: T.Hagerstrand (1967) proximity relations in the generation of the new technology, diffusion of innovation

Black box of the proximity externalities is not open


The conceptual development of proximity (R.Capello, 2014)


Essence of contemporary revolution
· · Transportation costs are generally declining. It sounds like the role of distance is diminishing. ICT technologies create new realities of the "flat world", when everybody can connect everybody easily in the virtual world.

· Does this mean the "death of geography"? · Does this mean the "death of geography"?
· But not! Simultaneously the role of social, cultural, institutional factors (heterogenous assets), that counted "equal" and homogenous before, is increasing. First of all these factors influence human communication, collective learning process. Innovation critically depend upon tacit knowledge, and it is connected with personal communication. Space and geography matter again but now as the platform of interaction by participants of innovative process. And proximity of all kinds actively influence (+-) this interaction. It is owing to proximity that geography does not die under the knowledge era. It again counts in this new space of flows and human interaction. Through proximity geography can keep the position in the mainstream of sciences studying human communication as the key driver of contemporary economic knowledge-based development

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Proximity dimensions
French school: Andre Torre, Frederic Wallet FIRM Geographical (locational) and organized (deliberately) proximity Sources: philosophical traditions of Foucault, Derrida, Bourdieu French theory of communication Temporal proximity as communicationdependent Proximity and conflict resolution Dutch school: Ron Boschma, Mark Thissen NETWORK Geographical, cognitive, organizational, institutional, and social proximity. Social proximity and social networks, reduction of transaction costs Stress in shortage of space


Proximity lens in regional studies
· Proximity relations in firms' strategies in terms of interaction and partnership strongly vary depending on the size of the firms, the maturity of their technology or their technological level (from low to high tech), their place in the value chain, their degree of specialization. (F) French biotechnology firms - temporary geographical proximity play an important role in preventing and resolving conflicts between innovators in cooperative projects (F) Proximity in industrial clusters: more process and less product innovation (F) Proximity helps firms to survive in heterogenous clusters, but not in homogenous (I) All forms of proximity have a positive effect on M&A deals. Geographical proximity is an important driver of M&A partnering (D) Scientific collaboration networks: geographical proximity is more important for collaboration between academic and non-academic organizations than for academic collaboration. Geographical proximity is a way of overcoming institutional differences between organizations (D) Geographical versus technological proximity in patent citations (Aus)

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THE POLICY CONCEPT: THE "NEW PARADIGM OF EU REGIONAL POLICY" OR PLACE-BASED POLICY (Fabrizio Barca, 2010) ­ Proximity-based approach
Objectives · reducing persistent underutilization of potential (inefficiency) · reducing persistent social exclusion Unit of intervention · places or functional regions, set through the policy process

1. The case for EU cohesion policy

Rationale = market and government failures · appropriate institutions fail to be chosen by the local elite · institutions have a strong inertia · high uncertainty on efficient agglomeration patterns calls for verifiable public action
Instruments · supply of bundles of integrated public goods and services · triggering institutional change Method · external intervention through conditional grants · eliciting and aggregating local information and preferences


Dialectics in proximity
Positive role · Exchange of tacit knowledge in innovation process · Trust. Transaction cost reduction · Source of positive externalities in urban agglomerations, clusters, and industrial districts · Reduce risks and uncertainties Negative role
· Too much proximity can create lock-ins in innovation process · Competition for resources · Spillovers of secret information


What is the advantage of proximity theory? It allows to measure and compare the strength of different factors facilitating the interaction of objects Is it difficult to measure? NO!
Distance, km

Different types of proximity factors facilitating objects to interact Physical (sometimes called "geographical ") proximity: the short distance

The simple way to measure: the case of inter-firm connections in German video game industry (by R. Boschma, P.-A. Balland and M. de Vaan)

Social proximity: social networks Organizational proximity: the affiliation to the same company Institutional proximity: the operation under the same laws and traditions Cognitive proximity: the operation in the same professional field

The number of previous contacts Participation to the same group of firms (yes or no) The location in the same country (yes or no) Product of one kind (yes or no)

The most important is organizational proximity, than cognitive, social and physical (geographical) proximity


How do we measure proximity in Russia (the case of migrations from the Arctic cities) The workflow: The base of youth migration was collected The gravity model was used to explain the migration flows (MIG = POP1 · POP2/DIST2). The model was transformed to take economic and administrative factors into the account The majority of flows are explained by the model BUT Some of large flows are not explained!

The excess of the actual migration over estimated is due to the influence of social and organizational proximity
(confirmed by a series of interviews in Arctic cities)

MIG = 10a0 · POPa1 · DISTa2 · 10 · 10 a5 · CEN · COST a6 · WAGEa7

3 · REG

· 10

4 · CAP

·

POP ­ population, DIST ­ distance, REG ­ belongs to the same region, CEN ­ is region center or not, CAP ­ is capital city or not, COST ­ cost of flats (per m2), WAGE ­ average wage . Technical details: A. Yashunsky


Case 1. The role of social proximity Why relatively small city of Belgorod (384 thousand residents) became so attractive for migrants from the Arctic?
Settlement of youth migrants from Noyabrsk

To the Arctic From the Arctic

Case 2. The role of cultural proximity Different cultures have different systems of proximity forces. Old Arctic residents in Norilsk feel that S.-Petersburg is closer. Newcomers feel differently
What city is closer to Your heart?
Group Total, % Old residents, % St.-Petersburg is closer 36,2 Moscow is closer 22,1

37,1 29,0

21,4 21,0

Interviews show that this is due to social proximity. A lot of Ukrainians moved to the North of Russia in searching of jobs. After some years of Arctic work they move back to the South but not to their Ukrainian home but to the NEAREST to the Ukrainian boarder Russian city. So Belgorod concentrates Ukrainian migrants willing to live in Russia close to Ukraine

New migrants, %

Announcement in Norilsk


How do different types of proximity work? The case of physical proximity

The most important field to study physical proximity are the small spatial objects generating innovations: clusters, small industrials regions ("Becattini regions"), region innovative systems, urban agglomerations Physical proximity is very important in tacit knowledge Why? diffusion. So it became one of the main factor of innovation process
The localised character of knowledge transmission is explained by the fact that "knowledge traverses corridors and streets more easily than continents and oceans" (M. Feldman, 1994).

Idea of the differentiation of codified and tacit knowledge (K. Polanyi, 1958)

The result: the role of physical proximity in the modern world Despite "the death of distance epoch" the knowledgebased industries and creative capital based industries are still organized in closely-located sets within clusters, agglomerations, etc.

The differences in city agglomeration studies: Soviet/Russian tradition: focus on transportation and settlement forms American/European tradition: focus on economic effects (transaction costs) for economic subjects located close to each other (e.g. the effects of proximity)


How does the physical proximity work: why the majority of Altai bio-pharmaceutical cluster are concentrated in Biysk?
The connections betw een the fi rms of Altai bio-pharmaceutical cluster located in the city of Biysk
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1991

Altai b io -p h armaceu tical clu ster to tal n u mb er o f fi rms
36

35 23 26 28

35

35

35

2008 2 009 2010 2011 2012 2013 2014 2015



Th e n u m b e r o f fir m s lo c a t e d i n t h e c i t y o f Bi y s k - 2 1

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The result s of physical proximity Physical proximity to the old industrial platform Availab of profe sionals having experie in the relevan field

The advantages derived from the physical proximity factors for the new fi rm 1. The opportunity to rent/buy special facilities, equipment 2. The opportunity to use the common networks of suppliers

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1965




« " "» «»

The city of Biysk

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ility 1. Access to tacit s - knowledge (innovations "in the heads" by M. Feldman) which nce simplifying the usage of non-standard, innovative t technologies 2. Simplification of staff recruitment 1. The opportunity to use the scientific potential of the university 2. Social capital (alumni)

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Non-manufac turing organiz ations Indus trial enterpris es founded before 1991 Indus trial enterpris es founded in 1991 or later
The usage of material and technical base of the parent firm Flow of staff from the parent firm Contracts

Family connections Alumni Financing Patent

Physical proximity to the university


How do the social proximity works?

Advantages derived from proximity 1. For emigrants Due to social proximity with the partners in their former homelands Chinese or Indian residents of Silicon valley could enter the markets in China and India easier than American-born people 2. For former homelands Due to social proximity to emigrants in Silicon Valley China and India get: The size of bubbles corresponds to the proportion of -Capitals business relationships established by Silicon Valleybased immigrant entrepreneurs in the region -New technologies


Cognitive proximity vs physical proximity: Which distance matters?
How to measure knowledge flows? Papers "Paper trails" (citations) Internet sites Hyperlinks The hyperlinks to the MSU sites are the most important for many Russian university sites. But...

M SU

The core of the outlink network between EU universities (G. Heimeriks, P. Van den Besselaar)

The two-way meaningful connections between Internetsites of Russian universities (N. Zamyatina, P. Utkov)

Original method of Thelwall, Mike. A Research and Institutional Size Based Model for National University Web Site Interlinking // Journal of Documentation. 2002, 58(6). Pp 683-694.


Cognitive proximity vs physical proximity: Which distance matters?
How to measure knowledge flows? Papers "Paper trails" (citations) Internet sites Hyperlinks ... there are also the two-way meaningful connections

mai.ru vsu.ru bsu.edu urfu.ru/ usu.ru/ tpu.ru sfedu.ru ssau.rususu.aca.rutsu.ru sfu-kras.ru nsu.ru istu.edu isu.ru

The core of the outlink network between EU universities (G. Heimeriks, P. Van den Besselaar)

The two-way meaningful connections between Internetsites of Russian universities (N. Zamyatina, P. Utkov)

Original method of Thelwall, Mike. A Research and Institutional Size Based Model for National University Web Site Interlinking // Journal of Documentation. 2002, 58(6). Pp 683-694.


Proximity processes need new instruments of region analysis: the traditional for economic geography tools of regional statistics could not catch them


Proximity-based approach and contemporary research in economic geography

· Endogenous regional economic growth and proximity · Economic clusters, local industrial systems and proximity (F2F communication) · New industrial districts and proximity relations · Social networks and proximity · Place-based policy and proximity · Innovation process, tacit knowledge, and proximity · Project-based approach and temporary proximity


Thank You!

"The distance is big but our hearts are close"