What really goes on in Silicon Valley? Spatial clustering and dispersal in modular production networks

Abstract

Is the geographic trajectory of capitalism toward spatial clustering or dispersal? Recent theoretical work in the stream of ‘relational’ economic geography includes several dynamic elements that increase the importance of spatial clustering over time. This paper develops the concept of ‘modular production networks’ to show that spatial clustering and dispersal can be compatible, mutually reinforcing trends. Modular production networks encompass nodes of tacit activity linked through the exchange of codified information to create global-scale production systems. In places like Silicon Valley, industry participants rely on the benefits of proximity to help build and manage global-scale production networks.