space

Space is a fundamental category of EE, because >networks always show spatial structures which result from the impossibility of simultaneous existence of actors at same places. In traditional analysis, space is mostly reduced to field of gradients of transport costs. However, since networks are distributed in space, every spatial interaction between >actors is also influenced by network effects in the dimensions of >communication and >perception. This is especially true for boundaries between networks resulting from >culture, limited reach of >institutions and competing sources of >power. In empirical analyses of spatial interactions, this becomes obvious in sometimes large differences in the role of measurable transport costs for international market structure.

Most fundamentally, this can be linked with uncertainty and ignorance about synchronic facts in spatial distance, such that actors have no full and reliable knowledge of circumstances at other places. This necessary state of uncertainty resulting from spatial constraints to human perception and communication leads to the emergence of a dualism between local >knowledge and global (generic, systemic) knowledge. Hence, there is a formal equivalence with Arrow's >impossibility theorem on action in >time. That is, optimization of action in space is not possible, because given ignorance about many distant facts, we would need to know about these to be able to optimize our action in space, in particular to determine when to stop investment into further search for information in space. This is contradicts our starting assumption. By necessity space, therefore, is an important aspect of entrepreneurial action under uncertainty.

This spatial impossibility theorem explains why there is a strong role of non-economic factors in spatial dynamics, which results into the singularity of "places" in space. For example, >innovation systems and industrial districts may evolve because of idiosyncratic causes and may show an enduring impact of history and culture, commonly analyzed with the concept of "embeddedness". In general, >order always has a strong spatial dimension, which is reflected in the continuing importance of spatial units like nations or regions for the economic process.

Finally, space is an important aspects of the environment of the economy and, hence, of the >production process. Many environmental problems depend on the occurrence of certain spatial patterns, especially in terms of concentration and diffusion of substances. The resulting dynamics of natural and technological interdependencies frequently show non-linear dynamics, which poses special challenges to human action.

Basic References

Space has long been a neglected dimension also by evolutionary economists. However, in recent years geographers adopted many evolutionary viewpoints, so that their results can be easily integrated into the EE framework.
For a survey, see
Boschma, R.A./Lambooy, J.G. (1999): Evolutionary Economics and Economic Geography, in: Journal of Evolutionary Economics, Vol. 9, S. 411-429.
The present author did some research on spatial problems in the theory of international trade:
Herrmann-Pillath, Carsten (2000): Indeterminacy of International Trade: Methodological Reflections on the Impact of Non-Economic Determinants on the Direction of Trade and Absolute Advantage, in: Aussenwirtschaft, 55. Jg. Heft II, Zürich: Rüegger, S. 251-289.
There are many many web-resources on space by geographers and related fields, as for example, mostly connected with specific phenomena like industrial districts:
Krumme's site

Semantic Field
singularity   network
time   space
innovation system