The spatial organization of production: An input-output perspective

Imagine an economy divided into n regions; as this economy grows and develops, what can be said about the way in which production changes? The input-output system of accounts-and more extensive versions of social accounting systems-provides a useful framework for examining the spatial organization of production. In this paper, several new concepts using input-output tables and their associated models are introduced in an attempt to aid this understanding. Within each economy, a fundamental economic structure (FES) is presumed to exist. The FES is comprised of a set of interactions that have the characteristics of predictability and analytical importance. The FES provides the basis for the development of a taxonomy of economies and thus the potential for describing the space-time (evolution) of the economic system. The evolution may be described by reference to a field of influence associated with change in single elements, whole rows or columns in the input-output table of the economy. These ideas are then linked with the processes of innovation diffusion through the productive system and innovation adoption in the consumption system. The presence of innovations thus provides a competitive environment and the locus of change within the system. The synergistic effects of changes in the productive and consumption components may be realized in a multiregional setting. The framework proposed provides a rich, conceptual and analytical organization for capturing system-wide effects of changes in the spatial organization of production. Potential links with the concept of a spatial multiplier, the role of industrial organization and the possibilities of spatial switching and reswitching (a la Sraffa) are also considered.