ABSTRACT

This chapter provides the notions of interaction in the advanced services and conceptualizes the dynamics of economic spaces in a knowledge-based economy. Interaction in knowledge-based economies differs from our notions of commodity-based interaction. E. L. Ullman's triad is still applicable to ordinary commodities. However, the spatial range of knowledge-intensive services has significantly increased in the Internet era. Clustering of economic activities is one of the most prominent phenomena in the knowledge-based economy. Clustering of the software industry, venture capital, advanced financial services, producer services, etc. can be clearly identified in the global space economy. The development of Information and Communication Technologies (ICT) has significantly increased the transferability of services in the knowledge-based economy, strengthening both globalization and localization forces. The chapter ends with examples of changing spatial interaction and organizational dynamics in Korea. The improvement of transferability and knowledge genesis made possible the development of virtual innovation networks in the peripheral area in Korea.