The World Bank’s Special Session at Third Global Conference on Economic Geography

June 29, 2011, COEX, Seoul, Korea

Masahisa Fujita Konan University / Kyoto University / RIETI

Source: The Economist, January 1st 2005

Culture and Diversity in Knowledge Culture and Diversity in Knowledge CreationCreation

The Story of the Tower of Babel The Story of the Tower of Babel RevisitedRevisited

2

globalization ofthe world economy

Development ofBrain Power Society（知識創造社会）

The major reorganization ofGlobal economic ・ political ・ social systems(globalization / regionalization / localization)

Revolutionary development in ICTand Transport Technology

Development of the Brain Power Society since the late 20th century

1. Introduction

3

a comprehensive theory of spatial economics

in the Brain Power Society

dual linkages

incorporating

E-linkages: linkages through the production and transaction of (traditional) goods and services (the New Economic Geography)

K-linkages: linkages through the creation and transfer of “knowledge” · ideas · information

weak microfoundation

The World Factory

advanced productionInnovation

andculture

Brain Power Society 4

+ stronger brain-power network　　 and cultural interactions

a World Center for

Transforming the East Asia From the World Factory

to the Brain Power Society

efficient production network

5

Source: The Kyoto University Museum

2. Interacting Cultures

AC538: mission from Baekje ( 百済 )introducing Buddism to Nara ( 奈良 ) /Japan

海柘榴市　壁画

Source: http://www.asuka-tobira.com/syotokutaishi/bukkyodenrai.htm

6

AC607: construction of Horyu-ji Temple in Nara(the oldest original wooden building in the world)

under 金剛重光 and other two carpenters from 百済

Source: Wikipedia

金剛組（ Kongo Construction Company ） in Narathe oldest existing company in the world

7

AERA 2009.6.8

3. Interacting Pop-cultures

Gal Industrial Gal Industrial RevolutionRevolution

8

9

SHIBUYA 109

The Sanctuaryof

Gal Fashion

120 small shops

9 million customers annually

10

11

China version Korean version

AKB48

13

AERA 2010.05.03-10

14

15AERA2010.05.03-10

16AERA2010.05.03-10

出所： http://community.pia.jp/hanryu/2011/05/20110516-01.html

Charity Campaign in Osaka for Japanese Quake and Tsunami

12 韓流 Groups: 東方神起、 2PM 、 FTISLAND ・・・

17

18

The fundamental resources in the Brain Power Society

Individual Brain Power （頭脳・知識）

Diversity in people ・ brains （人材・知識） in the society

Diversity in cultures among different regions

Synergy through the heterogeneouspeople ・ brains

Synergy through the heterogeneouscultures

4. Why are culture and diversity important for innovation?

19

in the cooperative process of K-creationthe key factor:

diversity of people

Common knowledge

iK jK

C

differential Kdifferential K(individual K)

new ideas through the encounter of heterogeneous people and culture

ijD jiD

20

抵 个 渚 葛 亮”

With three ordinary persons together,splendid ideas will come out.

“ 三　个　 　皮　匠、臭、

세　명이　모이면　문수보살의　지혜가　생긴다 !

21

“With three ordinary persons together,splendid ideas will come out.”

After three ordinary persons meeting for threeyears, no splendid ideas will come out.

Is it true in the long-run?

Common knowledge

iKjK

C

differential Kdifferential K(individual K)

ijD jiD

22How to resolve this fundamental problem?

close cooperation ofheterogeneous K-workers

antinomy

in the short-run in the long-run

throughclose communicationssynergy

Common knowledge

heterogeneity

synergy

(e.g. “nominication” in Japan)

Hint: The Story of the Tower of Babel

23

Source: The Economist, January 1st 2005

Engraving The Confusion of Tongues by Gustave Doré (1865), who based his conception on the Minaret of Samarra

The Tower of Babel

Source: Wikipedia

5. Culture and Diversity The Story of the Tower of Babel revisited

24

a united humanity, speaking single language

people getting too uppity, challenging God

God confounded their language,and scattered them upon the face of all the Earth(expulsion from the paradise of effortless communication)

Question: Was it a punishment, or blessing in disguise?

multilingual / multicultural world （多言語／多文化社会）

The Story of The Tower of Babel (Chapter 11 of the Book of Genesis)

space / distance

barrierfor

interactions

creating diversityin local knowledge / culture

net effectsin

knowledge creation? 25

26

Inter-regionalK-interactionsintra

interactionsregionA

regionB

iK jK

ijC

lKkK

klCAji , Blk ,

iK lK

ilC

intrainteractions

Ai Bj

(N persons) (N persons)

6. A two-region model: Culture and Diversity

27

This paper

introducing two regions

Knowledge Creation as a Square DanceOn the Hilbert Cube

International Economic Review 49, 2008, 1251-1295

Culture and Diversity in Knowledge CreationMarcus Berliant and Masahisa Fujita, April 2011

RIETI Discussion Paper: http://www.rieti.go.jp/en/publications/summary/11040034.html

28

Production of new ideas / patents (at a given time)

1iii na

“new ideas”produced

per unit of time

%Explicit-K(patentable)

Tacit-K (kept alone)

① in isolation (person i)

Patents(public information)

iKsize of

29

1

% Explicit-K

Tacit-K

shared by i and j

CommonKnowledge

2

1

2

1

)()()(2

dji

cij

dijij nnna

iK jK

where the weight on the common-K ( ) 10

Differential Kof person j

Differential Kof person i

Patents(public inf.)

② in meeting of two persons in the same region ( )Aji ,

③ in meeting of two persons in the different region ( )BjAi ,

2

1

2

1

)()()(2

dji

cij

dijij nnna 10

30

linearly homogenous K-production function normalization

dijn c

ijn djin

ij

dijd

ijn

nm ij

cijc

ijn

nm

dji

cij

dij

ij nnnn iK jK

ji

djid

jin

nm

the share ofeach component

:

ddji

dijji mmmnn when (symmetric K-structure)

)(1

)()21(2 1

d

d

dd

i

ij

mgm

mm

n

a

the normalizedK-production

function

:

where the share of differential knowledgedm

m J mS mB

m I

m

IJ

g(m)

g(m)

B

0 0.5

31

symmetric case: mmm dji

dij

i

ij

n

a 2

K-productivity AjAi ,when

whenBjAi ,

Productivity in intra- and interregional K-interaction

=

2

1

the Bliss Point

the share ofdifferential K

:

m J m*aut mS mB

m I

m

IJα

g(m)

g(m)

B

0 0.5

32

i

ij

n

a 2

K-productivity AjAi ,when

whenBjAi ,

the equilibriumat

the Paradise

(2N people)

Before the expulsion from the Paradise of effortless communication

22

1C

= =

2

1

the share ofdifferential K

:

g (m)

g (m)

B

m0

IJα

m J m*aut

m I

0.5mS mB

mdAB

33

K-productivity AjAi ,when

whenBjAi ,

Phase 1: Just after the expulsion (2N N in A, N in B)

34

K-productivity

AjAi ,when

whenBjAi ,

)()()( autdAB

d mgmgmgPhase 2: with inter-regional interactions,

g (m)

g (m)

B

m0

I

m J m*aut

m I

0.5mS mB

mdAA m d

AB

Jα

35

After the Confusion of Tongues

Inter-regionalK-interactionsintra

interactions

regionA

regionB

iK jK

ijC

lKkK

klCAji , Blk ,

iK lK

ilC

intrainteractions

Ai Bj

( = the proportion of time for intra-interactions)

1

(N persons) (N persons)

0 0.5

36

J

I

B

mJm

autm

)(mg

)(mg

Im

K-productivity

AjAi ,when

whenBjAi ,

iA

Sdij

jBjAj

mm

,

Sd mm Phase 3: staying at and (The New Eden)(achieving a high K-productivity through diverse cultures)

BdAB mm

iB

Bdij

jBjAj

mm

,

The New Eden

the originalParadise

37

0.05

0.10

0.15

0.20

0.25

0.30

0.35

0.40

0.45

0.50

0.55

0.05 0.10 0.15 0.20 0.25 0.30 0.35 0.40 0.45 0.500

g(m)

g(m)

mSg( ) mBg( )

m*autg( )

m*aut mS mB

m

An Example of the New Eden ( )100,32,245.0,606.0,0~ * NNCC

K growth rateat the New Eden

K growth rateat the autarky

= 2.97

38

Tentative Conclusion about The Story of The Tower of Babel

Expulsion from the paradise of effortless communication

Multilingual / multicultural world （多言語／多文化社会）

Was it a punishment, or a blessing in disguise?

Answer: It could have been a blessing in disguise.

戦 後 高度成長期 転換期

ハイテク産業

経 済 環 境 の 漸 次 的 な 変 化

I T革 命

グローバリゼーションアメリカ一極集中中 国 の 成 長

Post WWⅡ

high growth transition

high-tech growth IT revolution

globalization

7. Why is Japan in long stagnation ?

Capitalism with mass-production

Brain Power Society39

日本の一人当たりGDP：OECD内ランキング

17位

15位

11位

9位

7位

3位

8位

4位

2位3位

4位

6位

4位3位

5位

8位9位

12位

15位

18位19位18位

14位

3位 3位

19位

11位

4位3位

7位

0位

5位

10位

15位

20位

1970

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

2004

2005

2006

2007

2008 年

順位

出所：OECD Factbook 2010: Economic, Environmental and Social Statistics および内閣府 http://www.esri.cao.go.jp/jp/sna/h20-kaku/percapita.pdf

Japanese ranking in terms of per capita GDP among OECD countries

18th 19th

2nd

40

順位 国名 1993

1 Japan 35,008

2 Switzerland 34,698

3 Luxemburg 34,697

4 Norway 27,147

5 Denmark 27,101

6 United States 25,374

7 Germany 24,691

8 Austria 23,983

9 Sweden 22,944

10 Iceland 22,786

11 Netherlands 22,112

12 Belgium 21,993

13 France 21,897

14 Canada 19,340

15 Australia 17,609

16 Italy 17,413

17 Finland 17,229

18United

Kingdom16,675

19 Ireland 14,234

20 Spain 12,986

21 New Zealand 12,315

22 Greece 8,851

23 Portugal 8,649

24 Korea 8,194

25 Mexico 4,592

26 Hungary 3,824

27Czech

Republic3,598

28 Turkey 3,033

29 Slovakia 2,511

30 Poland 2,392

順位 国名 2002

1 Luxemburg 50,444

2 Norway 41,824

3 Switzerland 38,308

4 United States 35,945

5 Denmark 32,323

6 Ireland 31,120

7 Japan 30,837

8 Iceland 30,345

9 Sweden 27,279

10 Netherlands 27,243

11 United Kingdom 26,605

12 Finland 26,008 13 Australia 25,560 14 Germany 24,446 15 France 24,388 16 Belgium 24,305 17 Canada 23,465 18 Australia 21,768 19 Italy 21,061 20 Spain 16,494

21 New Zealand 15,513

22 Portugal 12,343

23 Greece 12,217

24 Korea 11,570

25 Czech Republic 7,346

26 Hungary 6,552

27 Mexico 6,300

28 Poland 5,128

29 Slovakia 4,537

30 Turkey 2,621

Per capita GDP ranking for OECD countries ($US)

出所： 内閣府 http://www.esri.cao.go.jp/jp/sna/h20-kaku/percapita.pdf

順位 国名 2008

1 Luxemburg 117,967

2 Norway 94,763

3 Switzerland 64,885

4 Denmark 62,054

5 Ireland 59,944

6 Netherlands 53,094

7 Iceland 52,568

8 Sweden 51,954

9 Finland 50,931

10 Austria 49,527

11 Australia 48,049

12 United States 47,186

13 Belgium 47,151

14 Canada 44,950

15 France 44,550

16 Germany 44,519

17United

Kingdom43,237

18 Italy 38,455

19 Japan 38,371

20 Spain 34,971

21 Greece 31,174

22 New Zealand 29,693

23 Portugal 22,929

24Czech

Republic20,719

25 Korea 19,115

26 Slovakia 17,566

27 Hungary 15,363

28 Poland 13,861

29 Turkey 10,270

30 Mexico 10,183

順位 国名 2006

1 Luxemburg 79,565

2 Norway 63,961

3 Iceland 55,517

4 Switzerland 50,469

5 Ireland 48,289

6 Denmark 47,716

7 United States 41,574

8 Sweden 39,535

9 Netherlands 38,577

10United Kingdom

37,310

11 Finland 37,276 12 Austria 37,216 13 Australia 36,592 14 Japan 35,650 15 Belgium 35,585 16 France 35,150 17 Canada 35,073 18 Germany 33,703 19 Italy 30,341 20 New Zealand 27,146

21 Spain 26,150

22 Greece 20,252

23 Portugal 17,474

24 Korea 16,470

25 Czech Republic 12,133

26 Hungary 10,931

27 Slovakia 8,778

28 Poland 7,854

29 Mexico 7,176

30 Turkey 4,954

41

42

Opening of Shinkan-sen in 1964

Tokyo overconcentration Tokyo mono-culture

Japan and Regions

Source: The ECONOMIST June 11th 2011

43

Decentralization

Brain Power Runaissance

regional diversity

industriesR&Dculture

the Age of Brain Power Society

44

Source: http://www.kampoo.com/map/south_korea_map_dosigundo_japanese.pdf45

High-speed Railway in China

Source: International Herald Tribune June 23th 2011

46

4747

achieving East Asian Renaissance together based on diversity

contributing to the World Development

48August Lösch in 1935(15 October 1906 – 30 May 1945)

If everything occurred at the same time there would be no development. If everything existed in the same place there could be no particularity. Only space make possible the particular, which then unfolds in time.

Only because we are not equally near to everything; only because everything does not rush in upon us at once; only because our world is restricted, for every individual, for his people, and for mankind as a whole, can we, in our finiteness, endure at all. - - -

Space creates and protects us in this limitation. Particularity is the price of our existence. - - -

Epilogue. On Space

8. Closing words borrowed from Lösch(1940) Die Raümliche Ordnung der Wirtschaft

감사합니다謝 謝

Thanks