Towards a geography of intermediaries

In part, the origin of this theme issue rests in the view that, as the social division of labor has developed and as production has evolved, the economy has become ever more ‘roundabout’ in nature (Young, 1928). However, this theme issue also goes further to explore the ways in which, rather than simply adding ever greater complexity to the pattern of economic activity or increasing the layers through which we make sense of it, the roundabout nature of production also strongly implies an economy in which an influential set of actors, practices, and even industries can no longer be adequately captured through our long-standing frameworks of industrial and occupational classification. The central interest of the papers in this theme issue is the question of intermediation and its role in enabling and shaping the roundabout nature of the economy. Intermediation is, by conventional definition, a relational term and the papers that follow seek to ‘unpack’ the ways in which we might define, theorize, and study the practice of intermediation.

Producers and consumers of goods and services have long served as the staple traditional units that frame the study of economic geography. Those interests and organizations that mediate between them have occupied a rather more marginal role. The interest in producer or business services has been one exception to this in which the emergence of intermediaries presages the formation of important new industries and professions. These activities, in turn, commonly make a significant contribution to the productivity and innovative performance of a wide range of established industries (Den Hertog, 2000; Howells, 2006; Rantisi, 2014; Wood, 1986). In many other cases, the actors and activities that play intermediary roles have remained largely in the shadows and bypassed by the literature.

Both the place and role of intermediaries and our understanding of them is an uneven one within the economic landscape. Intermediation – in the form of brokering between parties – is particularly important within the financial industries (Allen and Santomero, 1998; French, 2000; Sinclair, 1994), driving much of the financialization that characterizes contemporary social and economic life. In other instances, intermediation is interpreted as a simple reflection of the stubborn existence of information asymmetries between parties or market failures (Casson, 1997). In some spheres of the economy – for example, the cultural industries celebrated by Bourdieu (1984) – the position of intermediaries seems particularly precarious and open to question. Yet curiously the reputational capital emphasized by Bourdieu appears as one important and common element in the community building by intermediaries across different segments of the economy. Regardless of the paths they follow, intermediaries can play a key role in what Callon et al. (2002) term the ‘economy of qualities’ of commodities or the ‘politics of the product’, whether in the form of material products, services, ‘culture’ or even place. As is clear from the papers that follow the qualities negotiated by intermediaries include the ethical and political reputation of commodities, whether in the form of agricultural products, manufactured goods, or locations.

The role of intermediaries in constructing places or locations is at the center of concern in the Phelps and Wood (2018a) contribution. In this case, the practice of location decision-making on the part of the individual firm has spawned an industry and profession dedicated to the task of location decision consulting. In this instance, the intermediary role between firm and the communities seeking capital investment is provided by the location consultant who serves to fill the information gap between them. As all three papers indicate, the intermediary role can involve far more than the simple exchange of information. Whether in the case of the Sino-African trade examined by Haugen (2018), the agricultural clusters studied by Clarke et al. (2018), or the marketing of communities brokered by location consultants (Phelps and Wood, 2018a) the political nature of intermediation is clear.

Intermediation and the interests that broker relationships have their own particular economic geographies. The combination of fixed capital investments and the variable nature of place promotion generates an uneven geography to the very business of location consulting, as individuals and practices broker between large multilocational firms and the communities seeking to attract their investment. Haugen’s (2018) paper similarly highlights the ways in which intermediaries can effectively serve to couple and de-couple particular geographic locations and sites. In establishing their presence in Guangzhou, China, African brokers have effectively served to undermine Hong Kong’s long-standing role as an intermediate location – providing further intriguing evidence of the relationship between intermediaries, processes of intermediation and the rise and fall of intermediate or ‘interplaces’ (Phelps, 2017). Clarke et al. (2018) similarly highlight how intermediaries have played a crucial role in enabling the export links of certain agricultural producers in Peru and Colombia.

Counter to the view of intermediaries as neutral and passive elements and interests bridging between interests and locations, the three papers highlight the active role of intermediaries in shaping the economic landscape. The global connections highlighted in the papers make clear reference to work in the global production network (GPN) tradition and attention to the role of intermediaries in attaching meaning and value to commodities certainly suggests that they have a crucial role to play in shaping the economic development opportunities that accompany incorporation into GPNs (Hesse, 2010; Coe and Yeung, 2015). In the moments of intermediation, the agents involved can play an active role in what Callon et al. (2002) term the ‘economy of qualities’. These intermediaries’ place in shaping the ‘politics of the product’ applies whether that product takes material form, the provision of a service or even the places to which those activities are attached. The qualities negotiated by intermediaries include the ethical and political reputation of the commodities they broker. It follows that in mediating the continual attachment, detachment, and reattachment of meaning to commodities (Lury, 2010), intermediaries can enable and accelerate circulation within the global economy.

The roundaboutness that we find in the market has an interesting parallel in the policy sphere (Majone, 1989). Yet rarely has discussion of the role of intermediaries been integrated across the private–public ‘divide’. This is despite the fact that intermediaries can play a crucial role in blurring the boundaries between the two. Argument, evidence, and persuasion on the part of policy intermediaries have been key contributory factors in ‘fast’ policy transfer (Peck, 2002). And while much of the interest and emphasis of a large and expanding literature has been on the political dynamics of policy, the economic aspects and implications are hardly of lesser significance. The fact that consultants of various sorts play a central part in generating a market for and benefit from much of this policy mobility (Prince, 2012) is indicative of the value of economic opportunities associated with the ever more roundabout nature of the policy process. Once again, intermediaries play a key role in shaping the creation and diffusion of uniform standards and practices whether in the form of ‘organic’ products, quality assurance of manufactured goods, or the ‘best practices’ for successfully attracting capital investment.

There are then important questions concerning how to interpret the role and impact of intermediaries in shaping the economy, economic relationships, and the economic development prospects of the places involved. The purpose of the theme issue is to suggest that the presence and effect of intermediaries is now sufficiently pervasive to warrant consideration of a number of crucial questions concerning their presence and their role in producing the contemporary landscape of economic activity. The three papers that follow draw together matters that are commonly scattered across various specialized fields of inquiry within geography and allied social sciences, economics, and business studies. Each paper speaks to the economic aspects of market and policy intermediaries and to the theoretical and empirical convergence between them.

The three papers also serve to highlight a number of questions and concerns that will likely provide further food for thought. Here, we draw attention to five particular questions. First, what role do intermediaries play in shaping the evolution of economies? While this might be taken as a question for empirical investigation it quickly raises a second question of how we might best explain the presence of intermediaries? The work on intermediaries is scattered across disciplines and subfields and consequently there is no single, shared theoretical vantage point from which to start. Each of the three papers reports on empirical work and we would suggest that theoretically grounded research provides the most suitable means to evaluate and adjudicate between the different explanatory frames. Thirdly, what are the geographical implications of intermediation? The stitching together of the global economy – from Peru to the European Union or from South China to West Africa – is by no means automatic and seamless and yet, as we suggest (Phelps and Wood, 2018a), attention to intermediaries adds a further insight into determining which places are plugged into the global economic map and which are not. The fourth question concerns how intermediaries and intermediary roles have varied historically? While attention to intermediaries has grown in recent times they have long played a role in enabling, and arguably orchestrating, the trade and exchange linkages that constitute global economies and empires. From the Hong Kong and Shanghai Banking Corporation, to the integration of colonial empires (Magee and Thompson, 2010; Jones, 2005), to the mediation of foreign direct investment (Phelps and Wood, 2018b; Sellar et al., 2017) the process is a continually evolving one in which the geographies are continually made and remade. Are intermediaries an enduring or an ephemeral feature of the ever-changing division of labor in economy and society? Our use of the terms ‘mediating’, ‘brokering’, and ‘orchestrating’ highlights a fifth and final question. In short, how much power do intermediaries have in shaping the economic, political, and ethical value of the products, artifacts, and places that they touch? For us this is a deeply political question that concerns not simply the political and cultural dynamics of intermediaries but the value attached to their contribution to economic life.

The papers in this theme issues suggest that the questions and concerns raised by the study of intermediaries are always likely to encompass a range of activities, a variety of geographical sites and scales and a range of different political and institutional contexts. In bringing them together we trust that the papers provide one means of prompting further work and perhaps moving towards a research agenda for the study of economic intermediaries and their place and significance in shaping the geographies of economic life.