The impact of the global financial crisis on global cities

Shifting importance of leading global cities?

Hausarbeit (Hauptseminar), 2013

23 Seiten, Note: 2


Table of Content

1. Introduction

2. Global Cities - Key Concepts
2.1 Key Concept - John Friedmann’s “World City”
2.2 Key Concept - Saskia Sassen’s “Global City”

3. Methodology - The interlocking network model

4. The global financial crisis
4.1 Financialization
4.2 Finacialization and the global financial crisis

5. The crisis and its impacts on global cities
5.1 Global cities in the global space-economy
5.2 Global cities before and after the global financial crisis
5.2.1 Survey on the basis of the FCI
5.2.2 Survey on the basis of the BCI

6. Shifting of leading global cities? - A conclusion

7. References

1. Introduction

In times of intensifying globalization processes and interweaving of the global economy, it is very interesting to find out, what are the actors or places where these processes are controlled. Are there any important places which have key functions to command and control? Many scientists are gone further into this question, and many concepts appeared to find out these centres of commanding and controlling. The most popular concept is the global city concept by Saskia Sassen. But for the most part, all concepts assume that there must exist some centres or cities, which include functions to control the world economy. And if there are such centres, are there any centres which are more important than others and are there any forms of hierarchies? Thus are there any processes which lead to a shift within the hierarchies like the global financial crisis?

This paper seeks to answer these questions, especially if there is a shift of the leadership of global cities from predominant centres before and after the crisis.

2. Global Cities - Key Concepts

The intensifying processes of globalization in economic, labour organisation and communication fields, necessitates centralized functions of management. A transnational bundling of these fields requires a practical place of location, the so-called “global city”, or as Bronger quotes Feagin & Smith:

„World Cities are the anchorage points which keep the capitalistic world economy together.“ (Feagin & Smith, in Bronger, 2011)

The „global city“-term is not a new one especially when associated with the term „world city“, because both terms are used similarly. So it is not astonishing that there is a variety of definitions. (view table in Bronger, 2011: 332 f.)

To sum up the criteria for a “global city” shown in this table (view table in Bronger, 2011: 332 f.) one can say that “global cities” are centres of politics, economics, communication, culture and science. Furthermore these cities are important anchorage points for traffic, transport and trading (e.g. “global cities” are places for important harbours and international airports), but the emphasis lies on economics. With headquarters of transnational corporations they are control centres within the organisation of the global economy. As enmeshed in the global economy, transnational economical acting in these cities has an impact on the global economy. Another aspect is the population size. “Global cities” cannot be defined just by the population growth but some say that one has to comprise the population size like Kiuchi (1959), Birkenhauer (1982), Heineberg (1989) or Juchelka (1996). In contrast, “Megacities” for example can just defined by population size. At a glance, “global cities“ are international centres and hubs of a transnational organised and capitalistic economy, cultural and intellectual mediators between the continents - in contrast to megacities which act as national centres.”

2.1 Key Concept - John Friedmann’s “World City”

The concept of the world city goes back to two texts written by John Friedmann and Goetz Wolff in 1982 and by Friedmann in 1986. They elaborate “the rise of a global urban network in the context of a major geographical transformation of the capitalist world- economy” (Derudder et al., 2012: 74). As already mentioned above and acknowledged by Friedmann, this transformation demands for “a number of command posts in order to function” (Derudder et al., 2012: 74) and in the world city concept, world cities are presumed to be the “geographical emanation of these command posts” (Derudder et al., 2012: 74). As perhaps expected, Central Business Districts are not the “territorial basis” (Derudder et al., 2012: 74) for the world city. In terms of the world city concept, a city is a “spatially integrated economic and social system” in the space of a pre-existing location. (Derudder et al., 2012: 74)

Friedmanns work was built upon Frobel et al.’s New International Division of Labour (1980) and the “role of international financial centres on global space economy” (1981). (LEE et al., 2012: 335) But Friedmann’s work is principally based on Wallerstein’s analysis on world-systems. In his work, Wallerstein emanates from a capitalistic system that contains “hierarchical and spatial inequality of distribution” (Derudder et al., 2012: 74). The inequalities are results of a concentration of monopolized and high-profit production in core areas. And the spatial inequality is distinguished by the division of labour which reflects in the cityscape as a “tripolar system consisting of core, semiperipheral and peripheral zones” (Derudder et al., 2012: 74).

The intention to frame the world city concept was to prescind “from the role of territorial states in the reproduction of this spatial inequality” (Derudder et al., 2012: 74). In addition, as Mann (1986) and Dogshon (1998) mentioned, it comes along that the world- economy is not territorially managed, but more radially. Economic and political power of core territories is arranged by “well-defined routeways” which connect control centres.

Here, core territories do not mean territorial states but a hierarchy of centres like world cities. And as Taylor notes, the modern world-system is defined by its networks and world cities are the nodes in such networks of power and dominance. Some other forms of command and control are performed in world cities, like geopolitical and ideological control. But for all explanations, one has to consider the most important variable, namely the economy. Thereby, the focus lies on “corporate headquarters and international financial institutions and agencies” (Derudder et al., 2012: 75).

2.2 Key Concept - Saskia Sassen’s “Global City”

The global city concept is well known and was developed by Saskia Sassen As it sounds from the world city concept, centrality plays also an important role in the global city concept. The focus is on the “functional centrality in the global economy” (Derudder et al., 2012: 75), whereat here the focus is on the “attraction of producer service firms to major cities that offer knowledge-rich and technology-enabled environments” (Derudder et al., 2012: 75). Producer service complexes emerged in the 1980s and 1990s as such firms moved afterwards their global clients. These complexes stand at the roots of the global city-formation. This contains “a shift of attention to the advanced servicing of worldwide production” (Derudder et al., 2012: 75). So, the focus shifts to the exercising of global control. The essential for organizing the world economy is power. According to Sassen, producer service firms with their “transnational, city-centred spatial strategies” (Derudder et al., 2012: 75) created a network with installed offices in “major cities in most or all world regions” (Derudder et al., 2012: 75). With this network of offices, there are connections between the service complexes of the cities. There is a fading to a ”formation of transnational urban systems” and this affords “a new geography of centrality” (Derudder et al., 2012: 75). The functional centrality of these global cities becomes more and more disconnected from their proximate surroundings or their national economies. Here, Sassen decides to study the “core dynamics” (Derudder et al., 2012: 76) and less the city as the built environment.

illustration not visible in this excerpt

Tab.1: Principles of Friedmann’s and Sassen’s concepts, source: Derudder et al., 2012: 76

Tab.1 gives an overview of the key principles of the world city concept and the global city concept. Friedmann focuses on the whole metropolitan region, Sassen on the traditional Central Business District. Friedmann considers these kind of cities as “centres of dominance and power” (Derudder et al., 2012: 76) and Sassen as “production centres for the inputs that constitute the capability for global control” (Derudder et al., 2012: 76). So, there arise different perspectives on the cities as anchorage points of transnational networks relating to the cities functions, their key agents, the structure of the networks and the territorial bases. (Derudder et al., 2012: 76)

3. Methodology - The interlocking network model

When we speak about global cities, we also speak about these cities under globalization dynamics. And if we think about a network where global cities are connected with each other, then the idea of relations between these cities within a network arises. To analyse these relations between cities we need a method. But what method could be used to explain or illustrate relations between cities within a network and what’s important, what value to differentiate the degree of relationship within the network?

There are about 50 types to illustrate inter-city relations. Peter J. Taylor introduces his interlocking network model or world city analysis. In his analysis which derives from Jacobs’ (1969) ideas he, like Jacobs did, comes from the idea that “cities come in groups and need each other” (Derudder et al., 2012: 53). That means that network relations are horizontal rather than vertical. Taylors’ theoretical background derives from Sassen’s global city concept. According to Sassen, many service firms followed their clients. The outcome of this was that they built up and invested in a network office around the globe.

And “it is the work done in these office networks that defines today’s world city network” (Derudder et al., 2012: 53). That means that with the everyday work in these offices, the cities are economically connected. Furthermore, the development of telematics and “interpersonal links ‘interlock’ cities through advanced producer servicing” (Derudder et al., 2012: 53). But to measure flows “of inter-city business interlocking” (Derudder et al., 2012: 53) with appropriate data is not possible. According to Taylor, the only solution is an indirect measuring of these flows (Derudder et al., 2012: 53).

Taylor developed the interlocking model with three formulas. First, one measures the nodal size of a city a. Here, means the nodal size.

There are n service firms given which have offices in m cities and there is the service value where i stands for the activity of a firm and j for the city where this activity takes place. Within this formula, one measures “the quantity of flows between two cities generated by a firm” (Derudder et al., 2012: 54). To define the network activity of a city or rather to sum up all inter-city products for all firms in one city with all other cities inside the network, one needs the following formula:

Here, stands for the network connectivity of city a. And as already mentioned above, “cities come in groups and need each other” (Derudder et al. 2012: 53). So, here we can measure the relation between city a to all cities in the network. But to facilitate comparisons, Taylor developed a third formula where network connectivity turns out to be “proportions of the highest connectivity recorded” (Derudder et al., 2012: 54): / Thereby, means the highest connectivity measure and stands for the city a ’s proportion of . (Derudder et al., 2012: 54)


Ende der Leseprobe aus 23 Seiten


The impact of the global financial crisis on global cities
Shifting importance of leading global cities?
Universität Hamburg  (Geographie)
Spatial Dimensions of the Global Crisis
ISBN (eBook)
ISBN (Buch)
1690 KB
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Philipp Gimpel (Autor), 2013, The impact of the global financial crisis on global cities, München, GRIN Verlag,


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