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he new economy economic inequalities are increasing spatially the new economy generally characterized by globalization increasing use of information and communications technology the growth of knowledge goods and feminization has enabled economic geographers to study social and spatial divisions caused by the rising new economy including the emerging digital divide the new economic geographies consist of primarily service based sectors of the economy that use innovative technology such as industries where people rely on computers and the internet within these is a switch from manufacturing based economies to the digital economy in these sectors competition makes technological changes robust these high technology sectors rely heavily on interpersonal relationships and trust as developing things like software is very different from other kinds of industrial manufacturing it requires intense levels of cooperation between many different people as well as the use of tacit knowledge as a result of cooperation becoming a necessity there is a clustering in the high tech new economy of many firms diane perrons 9 argues that in anglo american literature the new economy geography consists of two distinct types new economic geography 1 neg1 is characterized by sophisticated spatial modelling it seeks to explain uneven development and the emergence of industrial clusters it does so through the exploration of linkages between centripetal and centrifugal forces especially those of economies of scale new economic geography 2 neg2 also seeks to explain the apparently paradoxical emergence of industrial clusters in a contemporary context however it emphasizes relational social and contextual aspects of economic behaviour particularly the importance of tacit knowledge the main difference between these two types is neg2 s emphasis on aspects of economic behaviour that neg1 considers intangible both new economic geographies acknowledge transport costs the importance of knowledge in a new economy possible effects of externalities and endogenous processes that generate increases in productivity the two also share a focus on the firm as the most important unit and on growth rather than development of regions as a result the actual impact of clusters on a region is given far less attention relative to the focus on clustering of related activities in a region however the focus on the firm as the main entity of significance hinders the discussion of new economic geography it limits the discussion in a national and global context and confines it to a smaller scale context it also places limits on the nature of the firm s activities and their position within the global value chain further work done by bjorn asheim 2001 and gernot grabher 2002 challenges the idea of the firm through action research approaches and mapping organizational forms and their linkages in short the focus on the firm in new economic geographies is undertheorized in neg1 and undercontextualized in neg2 which limits the discussion of its impact on spatial economic development spatial divisions within these arising new economic geographies are apparent in the form of the digital divide as a result of regions attracting talented workers instead of developing skills at a local level see creative class for further reading despite increasing inter connectivity through developing information communication technologies the contemporary world is still defined through its widening social and spatial divisions most of which are increasingly gendered danny quah explains these spatial divisions through the characteristics of knowledge goods in the new economy goods defined by their infinite expansibility weightlessness and nonrivalry social divisions are expressed through new spatial segregation that illustrates spatial sorting by income ethnicity abilities needs and lifestyle preferences employment segregation is evidence by the overrepresentation of women and ethnic minorities in lower paid service sector jobs these divisions in the new economy are much more difficult to overcome as a result of few clear pathways of progression to higher skilled work influence of geography on economic history edit this section includes a list of general references but lacks sufficient corresponding inline citations please help improve this section by introducing more precise citations march 2026 learn how and when to remove this message the study of geography in terms of how it has shaped or impacted on the settlement location of resources trade routes shows how geography has shaped economic history one of the reasons why interactions between geographic characteristics and economic activity can be convoluted is because the said characteristics are the primary cause by which the emergence or decline of civilizations transportation and trade edit in the past rivers and water ways have remained critical transport channels in the nile river one of the first civilization icons of egypt benefited from transport of goods and farming similarly it proliferated economic unification across the entire china with its influence on yangtze river the present is still true for a river like the mississippi in order to efficiently transport products meanwhile geographical hindrances which include deserts mountains among others make trade challenging sahara desert needed some trade routes that were strictly depended on the oases while himalayas separated some places like tibet however there are some well developed mountain passes which play an essential role in the commercial experience for example khyber pass agriculture and the climate edit climate too plays a very important role in determining the pace of economic development the results also indicated that the level of productivity in agriculturally dominated regions was higher where the weather was moderate for instance the mediterranean environment creates employment in the southern europe through the promotion of the sale of olive oil and wines on the other hand in desert region creativity in matters concerning the use of water as a resource is well hammered when there is no innovation in the use of water historical background edit historically geography has influenced whether some parts of the world are indeed capable of supporting civilization at any one point in time colonial powers during the period of exploration were able to take advantages of the geographical opportunities while the initial farm based communities were found to be developed in the fertile crescent sea channels connected continents for the primary aim of the acquisition of resources in the atlantic slave trade contemporary consequences edit geographical barriers continue to impact the economic outcomes in the contemporary era maritime trade benefits countries that are bordering the ocean but the cost of transport is comparatively higher in the landlocked countries despite the influence technology has exerted on geographic constraints it is possible to weigh in on the future course that our future economic plans are to take through gaining an understanding of geography s far reaching implications how geographical features impact economic activity study com akter asma sultana sadia the impact of geographic surroundings on economic growth a panel data approach pdf report working paper series vol 1615 bangladesh bank lewis robert lombardo nick 27 october 2016 economic historical geography oxford bibliographies doi 10 1093 obo 9780199874002 0146 gallup john luke sachs jeffrey d mellinger andrew d 1999 geography and economic development international regional science review 22 2 179 232 doi 10 1177 016001799761012334 gallup john luke sachs jeffrey d mellinger andrew d march 1999 geography and economic development report cid working paper vol 1 harvard center for international development thisse jacques françois 26 september 2011 geographical economics a historical perspective recherches économiques de louvain 77 2 141 168 doi 10 3917 rel 772 0141 issn 0770 4518 wolfe a b 1930 reviewed work environmental basis of social geography c c huntington f a carlson the american economic review 20 4 703 705 see also edit business cluster creative class cultural geography cultural geography cultural economics cultural psychology environmental determinism development geography gravity model of trade geography and wealth location theory land economics new economy regional science retail geography rural economics spatial analysis tobler s first law of geography tobler s second law of geography urban economics weber problem economic geography journal founded and published quarterly at clark university since 1925 journal of economic geography published by oxford university press since 2001 10 references edit clark gordon l feldman maryann p gertler meric s williams kate 10 july 2003 the oxford handbook of economic geography oup oxford isbn 978 0 19 925083 7 from s n durlauf and l e blume ed 2008 the new palgrave dictionary of economics 2nd edition new economic geography by anthony j venables abstract archived 30 august 2016 at the wayback machine regional development geography of by jeffrey d sachs and gordon mccord abstract archived 30 august 2016 at the wayback machine gravity models by pierre philippe combes abstract archived 15 may 2011 at the wayback machine location theory by jacques françois thisse abstract spatial economics by gilles duranton abstract archived 29 august 2016 at the wayback machine urban agglomeration by william c strange abstract systems of cities by j vernon henderson abstract urban growth by yannis m ioannides and esteban rossi hansberg abstract archived 16 may 2013 at the wayback machine steven brakman harry garretsen charles van marrewijk an introduction to geographical economics 1 2 keasbey lindley m 1901 the study of economic geography political science quarterly 16 1 79 95 doi 10 2307 2140442 issn 0032 3195 jstor 2140442 archived from the original on 9 february 2022 retrieved 9 february 2022 braha dan stacey blake bar yam yaneer 2011 corporate competition a self organized network pdf social networks 33 3 219 230 arxiv 1107 0539 bibcode 2011arxiv1107 0539b doi 10 1016 j socnet 2011 05 004 s2cid 1249348 archived from the original pdf on 13 june 2018 retrieved 16 february 2014 boschma ron frenken koen 2006 why is economic geography not an evolutionary science towards an evolutionary economic geography pdf journal of economic geography 6 3 273 302 doi 10 1093 jeg lbi022 schoenberger e 2001 corporate autobiographies the narrative strategies of corporate strategists journal of economic geography 1 3 277 98 doi 10 1093 jeg 1 3 277 yeung henry w c kelly phillip 2007 economic geography a contemporary introduction john wiley sons perrons diane 2004 understanding social and spatial divisions in the new economy new media clusters and the digital divide economic geography 80 1 45 61 doi 10 1111 j 1944 8287 2004 tb00228 x s2cid 144632958 journal of economic geography further reading edit barnes t j peck j sheppard e tickell a eds 2004 reading economic geography oxford blackwell doi 10 1002 9780470755716 isbn 978 0 470 75571 6 combes p p mayer t thisse j t 2008 economic geography the integration of regions and nations princeton princeton university press isbn 978 0 691 13942 5 dicken p 2003 global shift reshaping the global economic map in the 21st century 4th ed new york guilford isbn 978 1 57230 907 4 oclc 51581289 lee r wills j 1997 geographies of economies london arnold isbn 978 0 340 67717 9 oclc 36103703 massey d 1984 spatial divisions of labour social structures and the structure of production london macmillan isbn 978 0 333 21498 5 oclc 12585885 peck j 1996 work place the social regulation of labor markets new york guilford isbn 978 1 57230 044 6 oclc 1468223929 peck j 2001 workfare states new york guilford isbn 978 1 57230 635 6 oclc 45556166 tóth g kincses á nagy z 2014 european spatial structure lap lambert academic publishing doi 10 13140 2 1 1560 2247 isbn 978 3 659 64559 4 external links edit wikimedia commons has media related to economic geography scientific journals tijdschrift voor economische en sociale geografie tesg published by the royal dutch geographical society knag since 1948 zeitschrift für wirtschaftsgeographie the german journal of economic geography published since 1956 other econgeo network social and spatial inequalities links to related articles v t e sub fields of and approaches to human geography sub fields behavioral cognitive critical cultural animal children s economic agricultural cyber development financial histo economic labor marketing retail theoretical economic transport language linguistics music vernacular moral psychological emotional neo sexuality religion food health historical palaeo imagined internet political critical geopolitics electoral geopolitics strategic military population settlement regional urban music transport social tourism tropical approaches 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