The progression of the service economy is radically transforming the spatial logic underlying the formation of cities and regions. These have long been driven and shaped by the dynamics of goods-producing sectors, at least since the advent of the capitalist economies. The growing share of the service sectors in heavily industrialized countries has captured the attention of geographers since the 1980s. Yet, many of the theories that inform economic geographic research still assume the goods-producing sectors as the main driver of the economy. In addition some economic geographers focus exclusively on the information industry as the next leading industry, simply replacing the position once occupied by major goods-producing sectors. This paper, taking a separate view, argues that we have thus far underestimated the far more fundamental impact of services which, unlike goods, cannot be stored or transported on geographic inquires. The emergence of the service economy must first of all be contextualized as part of the post-20th century system that has followed the 19th century system (liberal and imperial capitalism until WWI), and the 20th century system (from WWI until the 1980s). The idea of the “spatial organization theory”, proposed in this paper, offers a conceptual basis to explain the historical transitions as the transformation of interactive dynamics among income-earning (production), consumption, and social opportunities, which make up the basis of human lives. In short, the emergence of the service economy is implicated in the shift in the relative significance of these opportunities, particularly from the income-earning to the consumption opportunities. Seen this way, the issues of consumption gain a renewed importance in economic geography. Our inquiries must explicitly move beyond the geography of production to the geography of production and consumption, which may be better described as the geography of economic circulations.
This paper emphasizes the importance of considering ‘time' when we explain about the location of service industries. The ‘time' which we must consider has two aspects. First, the most important feature of services in economic geography is that service products cannot be stored. This also means that service products cannot be transport. Such features bring a need to access in order to use and consume services to us. But our time-geographical ‘Capability Constrains', which limit the activities of individuals through their own physical capabilities, defines our temporal and spatial boundaries.This is the first reason why we need to consider ‘time'. The second reason is closely related to the development of service industries. The service industry has been developed due to increasing levels of income levels associated with economic growth. When the income level rises, the service that was once completely self-sufficient is now externalized, and a service industry is established. Demand for services industry established by increasing income levels will further expand due to continued increasing income levels. This also becomes a factor in the specialization, advancement and diversification of the services. Such dynamic perspectives are also necessary when we explain about the development of service industries. Without the consideration of ‘time' like this, we cannot understand the accumulation of service industries in cities, especially large cities. Because the temporal and spatial boundaries are defined by ‘Capability Constraints', service industries have located in a central places where population has aggregated.This is due to location advantages found in central places. With the rising income level, people who seek diversified services agglomerate further, population accumulation accelerates, and service accumulation accelerates. Consideration about time, therefore, is indispensable to the economic geography of the service industry.
Transactions for services requiring personal contact are not just an “economic exchange,” but also a “social exchange” deeply rooted in social and cultural relations. This article explores the opportunities offered by service consumption for Japanese expatriates living temporarily with their families in Bangkok, Thailand. Because explicit cultural and social differences exist between expatriatriates' host and home countries, the fundamental feature comprising the “social exchange” aspect of their service consumption can be described more clearly compared to the case of services consumed in the home country. Due to the “cognitive distance” between expatriates and their host country, expatriates often develop a need for niche services never before imagined in the host society ― for example, cram schools for expatriates' children and beauty salons catering to expatriates' specific tastes and aesthetics. The higher the number of Japanese expatriates, the greater the quantitative demand for such service. This in turn helps attract new Japanese entrepreneurs who consider themselves competitive service providers in the host society. Drawing on experience gained in Japan, these entrepreneurs can provide services according to the standard of their home country at an inexpensively price in keeping with the local market. Consequently, a new “market place” for expatriates emerges within an “environmental bubble” which may become a feature of expatriates' existence in the host society. Under these circumstances, expatriates are able to enjoy many kinds of services. Service users and providers are located close to each other because the relationships between them are bounded by time-space constraints. It is apparent that not only cognitive distance, but also the very nature of services (i.e., they cannot be stored or transported in response to geographically distant inquiries) are essential factors spurring the emergence of the environmental bubble. To demonstrate this process in detail, this article considers the Japanese expatriate community in Bangkok, the largest Japansse community in the world outside Japan.
This paper introduces the emergent body of economic geographic literature on “diverse economies” most prominently fostered by J.K. Gibson-Graham, and uses this perspective to engage in conversation with the theoretical inquiry into the service economy advanced by Kazunobu Kato. Rather than simply assuming the mounting importance of services, relative to primary and secondary industries, in heavily industrialized economies from its quantitative growth alone, Kato has been able to articulate the far-reaching significance of a service-oriented economy for theoretical inquiries in economic geography, which are still heavily influenced by the logic of goods-producing sectors. In particular, the author focuses focuses on the intriguing implication of Kato's work that the growing importance of services may facilitate resistance to market fundamentalist, or neoliberal, globalization. The diverse economies literature also aims to counter such economic globalization by redefining the meaning of “the economy” and by recognizing the process of subjectivization of economic actors. Thus, there appears to be fertile ground for critical engagement between the two bodies of literature. This paper argues that, building on the arguments advanced by Kato, it is essential that non capitalist-market activities be seen as a legitimate subject of economic geographic inquiry. Also, an assessment of such a mid-range theory as Kato's spatial organization (kukanteki soshikika) theory must always involve the awareness of its limitations as well as its strengths. One of such limitations, in the authorʼs view, is that Kato's theory has an implicit emphasis on regional formation rather than regional sustainability. Furthermore, Kato's arguments about empirical research on the service economy demand that we pay close attention to the agency of research subjects, even at the level of the conceptual framing. The diverse economies perspectives further develop this point. Finally, this paper addresses the potential concern that the diverse economies perspectives may regress economic geography to a “mere” theory of subject formation. This paper finds the most significant difference between Kato's work and Gibson-Graham's work lies in an epistemological difference between the former's focus on “dominance” and the latter's on “difference.” This contrast can be the basis for fertile debate and conversation since there is a basic agreement on the problems of market fundamentalist globalization.