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To a large extent, the recent interest in the geographic distribution of economic activity marks a return to earlier times. Both of the two primary disciplines – economics and sociology – that inform the study of strategy began with explicit consideration of the importance of geography. On the economics side, one need only look as far as the classical economist Adam Smith, whose seminal work on the Wealth of Nations (1776) sought to explain why some nations had grown more prosperous than others. As most recall, this inquiry led him to develop his theories regarding the importance of the division of labor in improving productivity (though less well known, the third book discusses a variety of legal and social factors, presaging the arguments of institutional economists and sociologists).
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