“Spatial” relationships? Towards a re-conceptualisation of embeddedness

The concept of embeddedness has gained much prominence in economic geography over the last decade, as much work has been done on the social and organisational foundations of economic activities and regional development. Unlike the original conceptualisations, however, embeddedness is mostly conceived of as a 'spatial' concept related to the local and regional levels of analysis. By re-visiting the early literature on embeddedness – in particular the seminal work of Karl Polanyi and Mark Granovetter-and critically engaging with what I will call an 'over-territorialised' concept, a different view on the fundamental categories of embeddedness is proposed. This re-conceptualisation then is illustrated using the post-structuralist metaphor of a rhizome to interpret the notion of embeddedness and its applicability on different geographical scales. Within economic geography research of the last decade, a growing emphasis has been put upon the social nature of economic processes and their manifestation in space. As a large body of recent literature, in particular about regional development, shows (cf., institutionalist and evolutionary perspectives have gained prominence in the analysis of regional and economic development. Parallel to and gradually superseding alternative approaches, for instance Krugman's (1991) " geographical economics "-based on endogenous growth theory-or the " California School " around Storper and Scott-more concerned with material linkages and transaction costs-this strand of work rather focuses on the social and cultural foundations of economic systems. The shift of theoretical perspectives led to a controversial discussion about the 'cultural turn' in economic geography and its implications for the future of the discipline (cf. One of the central notions in this intellectual tradition, introduced into economic geography in the early 1990's (cf. Dicken and Thrift, 1992; Grabher, 1993) and now widely used, is the concept of the " embeddedness " of economic action into wider institutional and social frameworks. Referring back to the work of Karl Polanyi (1944), and borrowing heavily from the economic sociologist Mark Granovetter (1973; 1985), geographers have theorised and used the concept from a distinct spatial point of view, namely to explain – in addition to economic theories of transaction costs and agglomeration economies – the evolution and economic success of regions built by locally clustered networks of firms. Varyingly named industrial districts, creative milieus, learning regions or local knowledge communities, many studies in the new regionalism tradition pay attention almost exclusively to the local and regional systems of economic and social relations, 1 arguing that the 'local' …