The Role Of Proximity In Automotive Technology Supply Chain

Abstract

This essay is divided into the following sections: in section 1.1, we briefly argue that the auto industry is a compelling case for studying regional economic development and economic geography precisely because it generates large numbers of high-quality jobs, and forges tight linkages to production and jobs in upstream and downstream sectors. In section 2, we present the issues of production and place more systematically. Having established the importance of the issue of production and place in this introduction, we move on to frame the debate by defining two types of “space” over which public and private authorities have jurisdiction, and across which production and its attendant jobs are (re)located. We further define four types of proximity: geographic, organizational, cultural, and electronic, that plausibly contribute to the success of economic development. These kinds of proximity offer varied incentives and disincentives for industrial agglomeration, and therefore inspire competition between nations, states and regions for the location of production and jobs. Also in section 2, we introduce two issues that have remained largely unexplored in the literature on regional economic development and economic geography: the strategic interaction between and among firms and public authorities, and the question of production technology development and sourcing.