Proximity in Production Networks

Abstract

In a context of decreasing transport costs, quasiubiquity of quality infrastructure and the increasing importance of non-material flows, transport infra-structure appears to be less important as a location factor for industry. However, the globalization of markets and the restructuring of production systems lead to an increased role for transportation in industrial strategies. The traditional framework dealing with transportation mainly as a cost thus becomes less relevant for understanding the spatial dynamics of industry. The framework developed in this article divides production into transformation and circulation activities. Interactions between the transformation process and its environment of resources, suppliers, customers and other producers form a system of circulation of goods, information and knowledge. Transportation thus becomes a particular set of techniques of interaction in the space-time grid. The spatial dimension is introduced, not through the idea of mere spatial propinquity as a determinant of production networks, but through the concept of organizational proximity and its spatial and circulatory dimensions. The circulatory dimension of proximity describes rapid, reliable and well adapted circulation of goods and information as well as the efficient mobilization of external resources, especially of non-traded, specific resources. This dimension of proximity thus includes more than geographical accessibility. Its determinants are as much the infrastructure as a generic resource for circulation as the organization and the degree of control of flows of goods, information and people.