The competitiveness of firms and regions - 'Ubiquitification' and the importance of localized learning

In traditional location theory there is a distinction between factors of pr oduction for which the costs differ significantly between locations, on the one hand, and production inputs which are in practice available everywhere at more or less the same cost (i.e. so-called ubiquities) on the other. In this article, we discuss the process whereby some previously important l ocation factors are actively converted into ubiquities. With an admittedly rather horrendous term, we label this process 'ubiquitification'. It is arg ued that ubiquitification is the outcome of the ongoing globalization proce ss as well as of a process whereby former tacit knowledge gradually becomes codified. Ubiquitification tends to undermine the competitiveness of firms in the hig h-cost areas of the world. When international markets are opened up and whe n knowledge of the latest production technologies and organizational design s become globally available, firms in low-cost areas become more competitiv e. In a knowledge-based economy, as a consequence, firms in high-cost areas must either shield some valuable pieces of knowledge from becoming globall y accessible, or be able to create, acquire, accumulate and utilize codifia ble knowledge a little faster than their cost-wise more favourably located competitors. Focusing on learning processes, the article maintains that most firms learn from close interaction with suppliers, customers and rivals. Furthermore, processes of knowledge creation are strongly influenced by specific localiz ed capabilities such as resources, institutions, social and cultural struct ures.