The debate about the effects of globalisation on cities is controversial. On the one
hand, scientists and journalists predicted “the end of the city” due to technological
change, especially in the area of telecommunications – implying that an increased
number of home-workers and the possibilities of video-conferences would make
calm suburbs or rural areas more attractive in comparison to a grid-locked and expensive
downtown area.1 Yet, whenever the abstract idea of globalisation is illustrated
in newspapers or TV, it is not a suburb or the green hills of Fife that are
shown. Rather, symbols of globalisation like Manhattan or Tokyo look more like
Ridley Scott’s “Nighttown” in Bladerunner. In contrast to the prediction of declining
cities, globalisation seems to boost the growth of cities in a way that many scientists
– influenced by the ideas of Alfred Marshall and Joseph Schumpeter started to write
about “global cities”, “world-cities” or “global city-regions”. Leamer/Storper called
global cities the “big winners” of the Internet Age.2 But what are exactly the effects
of globalisation on the functions and economy of cities? In order to examine these
effects, it is useful to address two questions: (1) why do firms choose cities as a location
in general? (section 2.1); and (2) how does globalisation affect this reasoning?
(section 2.2). Section 3 summarises the results.
Table of Contents
1 Introduction
2 GLOBALISATION AND CITIES
2.1 AGGLOMERATION AND DEAGGLOMERATION ECONOMICS
2.2 EFFECTS OF GLOBALISATION ON CITIES
2.2.1 GLOBALISATION AND AGGLOMERATION
2.2.2 GLOBALISATION AND DEAGGLOMERATION
3 SUMMARY
Objectives and Topics
This essay examines how the process of globalisation influences the functional and economic roles of cities, specifically addressing why firms choose cities as locations and how globalisation modifies these locational decisions through centripetal and centrifugal forces.
- The economic drivers of urban agglomeration and deagglomeration.
- The impact of firm-level functional disintegration on urban spatial structures.
- The necessity of flexibility and innovation in modern globalised industries.
- The geographical consequences of decoupling innovative core activities from repetitive production.
- The shift in urban economies towards high-skilled sectors versus the relocation of routine production.
Excerpt from the Book
2.2.1 Globalisation and Agglomeration
From the point of view of firms, globalisation is both an opportunity and a challenge. Integration in world markets implies both bigger markets and fiercer competition. In order to trace the effects of globalisation on the spatial location of firms, it is useful to distinguish several different functional sectors of firms: (1) Research and Development, innovation and prototype fabrication, (2) skilled fabrication in branch plants, (3) semi-skilled, large-scale assembly and testing work, and (4) customisation of devices, aftersales maintenance and technical support. The analysis will show that the effects of globalisation on each of these functional sectors are different. Most importantly, globalisation requires and enables companies to split the functional sectors of the firm and locate them in different locational surroundings.
Summary of Chapters
1 Introduction: This chapter introduces the debate surrounding the future of cities in the age of globalisation and outlines the two core questions regarding firm location decisions and the impact of globalisation on these patterns.
2 GLOBALISATION AND CITIES: This section investigates the economic theory behind city growth, explaining the tension between centripetal forces (agglomeration) and centrifugal forces (deagglomeration) in the context of global market integration.
2.1 AGGLOMERATION AND DEAGGLOMERATION ECONOMICS: This chapter details the classical economic advantages of agglomeration, such as labour market pooling, access to intermediate inputs, and technological spillovers, while contrasting them with the costs of urban congestion and rent.
2.2 EFFECTS OF GLOBALISATION ON CITIES: This chapter analyzes how globalisation forces firms to adopt flexible production strategies and the subsequent impact on the spatial organization of high-skill versus low-skill sectors.
2.2.1 GLOBALISATION AND AGGLOMERATION: This section focuses on the "innovation premium," arguing that firms needing high-level knowledge and skilled labour remain clustered in urban centres despite higher costs.
2.2.2 GLOBALISATION AND DEAGGLOMERATION: This section discusses the "deskilling" of work and the standardisation of production, which enables firms to relocate repetitive tasks to cheaper, non-urban areas.
3 SUMMARY: This chapter synthesizes the findings, confirming that while cities lose routine production sectors to non-urban areas, they solidify their role as hubs for innovative core activities.
Keywords
Globalisation, Agglomeration, Deagglomeration, Global Cities, Economic Geography, Innovation, Vertical Disintegration, Labour Market Pooling, Knowledge Spillovers, Transaction Costs, Urban Economics, Industrial Clusters, Functional Sectors, Deskilling, Flexibility.
Frequently Asked Questions
What is the primary focus of this essay?
The essay explores the relationship between globalisation and the economic function of cities, specifically how changes in global markets alter the ways firms distribute their operations geographically.
What are the central themes discussed in the paper?
The paper focuses on economic geography, the theory of urban agglomeration, the functional disintegration of firms, and the shifting locational logic for different types of corporate activities.
What is the main research question?
The research asks why firms choose cities as locations in general and how the pressures of globalisation—such as competition, the need for flexibility, and technological change—influence these spatial decisions.
Which scientific methodology is used?
The author employs a microeconomic analytical framework to explain urban development, relying on the analysis of firm incentives and the division of labour across different functional sectors.
What is covered in the main section of the paper?
The main section examines the forces of agglomeration (such as labour pooling and knowledge spillovers) and deagglomeration (such as standardisation and cost-seeking behaviour), and applies these to current trends in corporate restructuring.
Which keywords define this work?
Key terms include Globalisation, Agglomeration, Deagglomeration, Innovation, Vertical Disintegration, and Economic Geography.
How does the "innovation premium" affect city growth?
The innovation premium necessitates high-level knowledge sharing and face-to-face interaction, which compels firms in high-tech and innovative sectors to cluster in global cities despite high costs.
What is meant by the "deskilling of work" in the context of deagglomeration?
It refers to the process where production processes become standardised and routinised, reducing the need for an innovative environment and allowing firms to move these operations to locations with cheaper, less skilled labour.
- Citation du texte
- Ansgar Baums (Auteur), 2005, Effects of Globalisation on City Regions, Munich, GRIN Verlag, https://www.grin.com/document/38958
