Tacit knowledge and the economic geography of context, or The undefinable tacitness of being (there)

Abstract

Within economic geography and industrial economics, interest in the concept of tacit knowledge has grown steadily in recent years. Nelson and Winter helped revive this interest in the work of Michael Polanyi by using the idea of tacit knowledge to inform their analysis of routines and evolutionary dynamics of technological change. More recently, the concept has received closer scrutiny. This paper offers a further contribution to this project by offering a critical analysis of the prevailing implicit and explicit economic geographies of tacit knowledge, focusing on the relationship between tacit knowledge and institutions. While much of the innovation literature focuses on a single question – can tacit knowledge be effectively shared over long distances – the paper argues that this issue cannot be properly addressed without considering a broader range of related questions. It highlights three tacit knowledge problems which, together, provide a more complete view of this issue. First, how is tacit knowledge produced? Second, how do firms find and appropriate tacit knowledge? Third, how is tacit knowledge reproduced or shared – that is, how does tacit knowledge promote social learning processes, and must the participants be geographically proximate in order for effective learning to occur? The paper revisits Michael Polanyi's original conception of tacit knowledge, showing it to be limited by its experiential and cognitive emphasis, with insufficient attention devoted to the role and origins of social context. Alternatively, the paper argues that one cannot sort out the geography of tacit knowledge without inquiring into the foundations of context and culture, and the institutional underpinnings of economic activity, taking the work of another Polanyi – Karl – as the logical starting point.