Changing spaces of knowledge-based business services in Hungary

Abstract

Recently, the process of networking and knowledge production in business services has been widely discussed in the context of the liberalisation of the services’ market in the EU, and of the integration of the emerging economies into international flows resulting in changing spatial division of labour, thus shaping an increasingly diverse geography of business knowledge in Europe. Although information technologies support the spread of business knowledge, proximity and accessibility ‘still matters’ due to the significance of personal contacts in knowledge-based activities, moreover, in new market economies, to the low level of adoption of ICT in rural areas and the uneven development of infrastructure. Therefore, the spectrum and quality of business services available in smaller (lower-rank) service centres conditioned local/regional economic development, by linking local markets and agents to interregional (international) flows in new market economies. In this paper, the flow of business-related information and knowledge shall be put in the focus, as an aspect and a source of uneven development and dependence in new market economies, under Neoliberal capitalism. The geographical scope of the following analysis embraces Hungarian cities and towns as business service centres, highlighting how non-metropolitan urban centres (thus, local economies outside the Budapest region) grew increasingly dependent on the capital city-centred knowledge and information flows, how such centres were highly differentiated by the erosion of local basis for information-based activities, moreover, how this process was reinforced by national as well as by EU-policies, reproducing uneven development and backwardness in peripheral regions of a new market economy.