Economic Geography and Its Impact on the Regional Developments in Europe - Coursework Example

Economic geography and its impact on the regional developments in Europe The paper attempts to discuss Economic Geography and how its application influences regional development in Europe. Its history, its types and applications in certain European countries and the impact of its application on those nations are main points of discussion here. Economic geography explores the reasons and results of the uneven economic within and in between various regions. It deals with the location, dispersal and spatial organization of different economic activities throughout the world. It is a fusion of the implications of the knowledge of both geography and economics. Its main usage lies in providing explanations for growth and prosperity of a particular region and also for crisis and decline in prosperity wherever these are manifested. Economic geographers find out the key geographic factors that shape the economy of a particular region. (Aoyama, Murphy& Hanson, 2010, p. 1) History in brief Previously, the shape of the economy of a region was mainly dependent on agriculture. So, the climate and natural resources of a particular region along with labor supply were the key factors for the development of that region. With the advent of industrialization, the geography of the industries and the firms became the main factor. Production processes, wages, skills of labor, technology, innovation and also role of the government to promote industrialization determined the success of the companies and hence the economic growth of that region. Though natural endowments are always important, still focus today, is also on social endowments like knowledge, institutions, culture and networks. (Aoyama, Murphy& Hanson, 2010, pp.1-2) Economic Geography has an extended history and has emerged from the contribution of various disciplines like regional science, geographical influence, economic sociology, urban studies etc. Some state that the origin of economic geography is intensely linked to British colonialism. In order to understand and improvise the trade routes and means of transportation, the study of commercial geography became essential. While others state that the Germanic location theories of Heinrich Von Thunen and Alfred Weber led to the development of economic geography. Considering the geographical endowments and natural assets, location modeling was aimed to develop optimal location patterns for most effective functioning of the companies and regions. Along with this Alfred Marshall, an eminent British economist highlighted the significance of the economies of scale in the success of industrialization. Agglomerations and mergers are still the main area of research in economic geography. Also there are economic geography are given various other lineages. (Aoyama, Murphy& Hanson, 2010, pp. 2-3) Economic development of Europe Europe’s economic structure is changing at a fast pace in many directions and this change has become more prominent in the last 10- 20 years. West of Europe is becoming more integrated, while Central and Eastern Europe (CEE) are on the path of transition to market from plan. Also, the fast developing east-west market interactions and the European Union policies are the key drivers in the development of its economy. All these have unleashed such economic forces that have left an everlasting mark on the continent. Just as these changes indicate benefits, these also imply adjustment costs that that are not distributed equally between areas, social groups etc. Consequently, this is a matter of concern for places and their people who are not yet prepared to deal with the reality. (Gorzelak, Maier &Petrakos, 2013, ch. 1) Case Study and Analysis The five nations of Hungary, Slovenia, Romania, Bulgaria, Estonia, in the border regions of Europe reflect quite a contrast of economic geography. The economic developments as well as the geographic attributes of these countries vary. Hungary and Slovenia are comparatively more advanced than the other three. That is because these are in close proximity to the core countries of Western Europe. If the geographical locations of these countries are looked into, it will be found that Estonia is in northern Europe sharing a border with the nation of Finland. Hungary is in Central Europe sharing a border with Austria. Slovenia and Bulgaria are in southern Europe sharing their borders with Italy, Austria and Greece respectively. Romania does not have any common border with EU-15. So, for Hungary and Slovenia, two ways trading of agricultural products, food, forestry products, became more easy and profitable with the core countries of Italy, Austria etc. (Traistaru, Nijkamp &Resmini, 2003, p. 406) Next on a broader perspective, if the period of transition is considered, a sharp change in the trends of foreign trade can be noted, for Central and East European countries. In 1985, fewer than 20 percent of the total exports of these nations went to the nations of the EU-15. In 1996, around 60 percent of their exports went to the EU-15 and almost similar amount was imported from the Union. As a result, both in Central and Eastern European nations, western regions became location wise more advantageous than eastern regions, in general. Hence the performance of the labor markets also tends to be superior in the western regions of the nations. This is very evident in Hungary and Slovakia. Data reveals that foreign direct investments (FDI) majorly went to the capital cities, prominent urban regions and western regions sharing borders with the EU-15. Also better transport links with the markets of EU-15 and better skilled labor helped in the development and in the reduction of unemployment in the western countries. (Gorzelak, Maier &Petrakos, 2013). A very interesting example within Europe which reflects the impact of economic geography is discussed below. Mushroom is a big business in Europe. The city of Milano itself started selling about 100 metric tons of mushrooms every year since 1919. According to 2005 data, Italy alone imported 54 557 metric tons of mushrooms and exported 5 487 metric tons. The biggest mushroom producers in Europe were Netherlands, France,Poland and Spain, at that time comprising of 20% of the mushroom production of the world. More than twenty three of forty six European countries have legislations pertaining to the consumption and commercialization of mushrooms. Now, mostly nations with a Germanic-speaking people (Dutch, English, German) do not usually have specific mushroom guidelines or legislation. Austria is one exception. Here comes the influence of the neighbor country Italy. Italy has been gathering, selling and marketing mushrooms to Austria and this geographical proximity has resulted in the emergence and boom of this trade between these two nations. Also this has triggered the formation of mushroom legislation in Austria. Also the strong historical bond between Austria and Northern Italy could be another reason for the development of this trade (Ursula, Stefanie, Armin, Pierre-Arthur, Gabriel & Philippe, 2013, pp. 3-9). Western European countries comprising of Romanic-speaking inhabitants (France, Italy, Portugal, Spain) and majority of Eastern European countries with Slavic speaking people (Belarus, Poland, Russia, Slovakia, Ukraine, countries from former-Yugoslavia) contain mushroom law system or guidelines. Thus, as mentioned earlier, along with geographic factors, factors like culture etc also are responsible for the shaping up of economy of any particular region (Ursula, Stefanie, Armin, Pierre-Arthur, Gabriel & Philippe, 2013, pp. 3-9). The tourism industry has become a very vibrant, dynamic, special network of production and consumption. It has also caught the attention of the economic geographers. The development of the tourism sector in Third Italy (Province of Rimini) is a striking reflection of economic geography. A major share of the hotels in this area is owned by individual families and also some in partnership with outside investors. Both men and women take active participation in this industry here. Both consider this sector as a major source of income for themselves. The hotel owners are constantly in the lookout for betterment of their business and hence are getting actively involved in networking. They are joining various district and community organizations and individuals who are committed to the development of tourism in this province. Various attractive marketing packages for target customers are being designed positioning the key advantages of this district. Just as mentioned earlier that economic geography is also encompassing factors like networks, labor, government policies shaping the economy of a region, here also apart from excellent business networking and initiatives, the role of the state is worth mentioning. The government here is providing full support to flourish tourism. It has set up three training institutes to coach new candidates in the right way, in the areas of hospitality and tourism. Also for the existing employees an approach of “continuing- education” is taken up by the government. People are trained to become logistic managers, interpreters, computer technicians, etc keeping in mind each and every specific need of the tourists. (Debbage & Loannides, 1998, p. 266- 270) Also, the province of Rimini is situated in the center of Third Italy. This also gave a cutting edge for the development of successful tourism in this province. Third Italy has already been vey successful in small-firm manufacturing through a combination of government intervention, private entrepreneurship and business networking. Thus the tourism industry in Rimini also imbibed and implemented the same successful combination and flourished. Also, the success of the manufacturing industry in the Third Italy helped to financially back up the tourism in this region. Thus location wise advantage if any, plays a very significant role in shaping up the economy of a particular region. (Debbage & Loannides, 1998, p. 266- 270) Concluding Remarks Debate about the significance of distance and space, in shaping up of economy has always been there. In the time of commercial geography, importance was given to the infrastructures of transportations and trade patterns. Then there was the location theory which mainly gave importance to distance or location and uneven distribution of people or resources were not taken into consideration. Over time various such theories and arguments were put forward to exactly pin point the geographic factors shaping up the economy. Some even pointed out the technological advancement like telecommunication is making place and space irrelevant. Again some have pointed out that success of places depend on how they are connected to the wider world. They have pointed out that FDI connects far places by intra-firm investments in branch plants. (Barnes, Peck, Sheppard & Tickell, 2008, p. 331). However with the advent of years and more research, several other factors have also become integral determinants of economic geography. Right from the beginning, it involved multiple and even contradictory theories and methodologies. However, questions about the main factors of the recent economic growth in China and that of relative decline in USA, about the poverty found in regions of London, Tokyo, New York or about the cropping up of the huge slums in the suburbs of Calcutta can be addressed by this subject very effectively. (Aoyama, Murphy& Hanson, 2010, p. 1-3) Compared to the way it was looked at thirty years ago, as quite a backwater in the field of economics, today economic geography and its applications are at a point of rapid growth and immense interest. (Clark, Gertler, Feldman, 2003, p.3) References Aoyama, Y., Murphy, J., & Hanson, S. (2010). Key Concepts in Economic Geography. London: SAGE Publications Ltd Gorzelak, G., Maier, G., & Petrakos, G. (2013). Integration and Transition in Europe: The Economic Geography of Interaction. London: Routledge Traistaru,I., Nijkamp, P., & Resmini, L. (2003). The Emerging Economic Geography in EU Accession Countries. Ashgate Publishing, Ltd Debbage, K., & Ioannides, D. (1998). The Economic Geography of the Tourist Industry. London: Routledge Barnes, T., Peck, J., Sheppard, E., & Tickell, A. (2008). Reading Economic Geography. John Wiley & Sons Clark,G., Gertler,M., & Feldman , M. (2003) . The Oxford Handbook of Economic Geography . Oxford: Oxford University Press Ursula, P., Stefanie, S., Armin, M., Pierre-Arthur, M., Gabriel, M., & Philippe , S. (2013). Mycophilic or Mycophobic? Legislation and Guidelines on Wild Mushroom Commerce Reveal Different Consumption Behaviour in European Countries. PLoS ONE, Vol. 8, No.5, 1-10, retrieved on February 02, 2014 from: http://web.a.ebscohost.com/ehost/detail?vid=3&sid=976ec68d-97d1-4e99-814b-6ebb150ab39a%40sessionmgr4001&hid=4104&bdata=JnNpdGU9ZWhvc3QtbGl2ZQ%3d%3d#db=aph&AN=88376313 Read More