Hamburg, a global city? A case study on Hamburg’s producer services and cultural industries

Table of contents

I. Abstract

II. List of tables

III. List of figures

III. List of abbreviations

1. Introduction

2. Theoretical Framework
2.1. Global City and World City Research
2.2. Economic features
2.2.1. World Cities
2.2.2. Global Cities
2.3 Global Cities and culture
2.4. Working definition and research questions

3. Methodology
3.1. Research design
3.2. Data collection
3.3 Method of data analysis and operationalization
3.4 Concluding remarks

4. Analysis
4.1 SWOT-analysis of the producer service sector
4.2. How global is Hamburg’s producer service sector?
4.3. From analysing the local corporate service sector to its global connectivity
4.4. SWOT-analysis of the cultural economy
4.5. How global is Hamburg’s cultural economy?
4.6. From analysing the cultural economy in Hamburg to its global connectivity
4.7. The corporate service sector and the cultural economy compared

5. Conclusion

6. Recommended action

7. Limitations and further research

8. List of References

9. Appendix

I. Abstract

This bachelor thesis examines a city’s interlinkage in the globalizing processes and aims at answering the research question: To what extent can Hamburg be qualified as a Global City in terms of its localization of global producer services and cultural industries? Global cities are defined as local nodes of the corporate service sector and the cultural economy, which are associated in a global network. Following this, an in-depth analysis of Hamburg’s performance on the economic and cultural dimension will be provided in order to clarify its global city status. It will be innovative in two respects: Firstly, it will provide an incorporation of both dimensions (economic and culture) into its analysis in order to provide a more comprehensive and less biased estimate of a metropolis’ global city status, a practice that has not been conducted in the literature so far. Secondly, it will apply this dualistic approach to the city of Hamburg. Even though it is the second largest city in Germany (according to population numbers), Hamburg has not yet been subject of detailed investigation by global city researcher. In a SWOT-analysis the strength, weaknesses, opportunities and threats of the producer service sector and the cultural economy are outlined in order to determine their basic situation; the sectors’ integration in the global networks are discussed mainly on basis of the Globalization and World Cities Studies Research Network (GaWC) dataset and the data generated by Kratke (2010). By linking the local conditions with the global perspective on both sectors, the not fully developed functional status of Hamburg as a global city becomes clear; it is a global city ‘in the second row’. Derived from this finding, recommendations for a better involvement in the global networks are provided.

Key words: Global cities, producer services, cultural industries, Hamburg, Globalization and World Cities Research Network

II. List of tables

Table 1: The world city and global city concept, based on Derudder, De Vos, and Witlox (2012)

Table 2: Conceptualizing the Global City

Table 3: Operationalizing Global Cities

Table 4: Location of multinational corporate service providers in Hamburg, based on GaWC (2002)

Table 5: Hamburg’s link to other cities based on the location of multinational service providers, based on P. J. Taylor and Walker (2002)

Table 6: Overall global network connectivity of German cities in 2008, based on Hoyler (2011)

Table 7: Adjusted global network connectivity and relative connectivity change 2000-2008, based on Hoyler (2011)

Table 8: Location of global media enterprises in German cities, based on Kratke (2010)

Table 9: Location of multinational advertisement businesses in Hamburg, based on GaWC (2002)

III. List of figures

Figure 1: Research methodology structure

Figure 2: Total Gross Value Added and employment in business, financial, insurance and real estate services in selected German cities (2011), based on DeStatis (2015) and Parnreiter (2015)

Figure 3: Share of the cultural economy in total employment in percentage and employed persons in the cultural economy in total in 2008, based on Nitt-Drießelmann, Stiller, and Wedemaier (2012)

Figure 4: Official marketing for the gamecity: Hamburg (Ingame, 2013)

Figure 5: ‘Weather map’ of the creative milieus in Hamburg. High pressure areas (H) are creative milieus and low pressure areas (T) are districts with low cultural activities (Overmayer, 2010)

Figure 6: The Münzviertel – Active district development in Hamburg-Mitte (Stadtteilinitiative Qartierstreffen Münzviertel, 2015)

III. List of abbreviations

Abbildung in dieser Leseprobe nicht enthalten

1. Introduction

‘The most important cities are those that connect the global with the local in that they operate as places in which daily activity patterns, trade in goods and services, information and communication networks and corporate-control networks come together’ (Burger, Van der Kaap, & Wall, 2013, p. 7)

Today, more than 50% of the earth’s population lives in cities, resulting in an ongoing concentration of economic and cultural activities in fewer locations. These processes in metropolises are pushed by globalizing forces that affect cities and their citizens. ‘Globalization can be thought of as a process (or set of processes) which embodies a transformation of the spatial organization of social relations and transactions – assessed in terms oftheir extensity, intensity, velocity and impact – generating transcontinental or interregional flows and networks of activity, interaction, and the existence of power’ (Held, McGrew, Goldblatt, & Perraton, 1999, p. 19). These networks of interaction do not only involve individuals and multinational corporations, but also cities. As Löw, Steets, and Stoetzer (2008) outline, the Global City Model regards cities as crucial part of a world-spanning system of competing locations. Thereby, the globalizing forces concentrate in a limited number of metropolises. Cities on similar hierarchical levels (and not on different hierarchical levels) are analyzed. Those cities resemble each other in their integration into the international division of labor and are interlinked in a global functional and spatial network. The emerging city network is more and more seceded from the regional and national context (Löw et al., 2008). Within this network, global cities conduct a control function due to their agglomeration of finance and communication structures. In the context of a globalizing economy, a system of cities is developing. These cities are commonly thought of as the centers of the globalizing economy. The concept developed in the context of urban studies and human geography and was shaped by Saskia Sassen’s popular writings on urban sociology, according to which New York, London and Paris are regarded as the ideal-typical global cities (Sassen, 2001). The related term world city introduced by John Friedmann and Goetz Wolff (1982) is often used as a synonym but has different features. In addition, various indices and rankings try to measure metropolises’ global city stats. The most famous is the Globalization and World City Research Network (GaWC), a study group of scientists from different universities that developed a hierarchy of global cities. They examined 562 cities’ integration into the global city network, among them Hamburg. The study is starting point for a great part global city literature and of outstanding reputations and is basis for this research as well (see for example Hoyler (2002), Taylor (2011), Beaverstock (2011)). Further examples are the global power city index by the Institute for Urban Strategies at The Mori Memorial Foundation in Tokyo or the global city competitiveness index, published by The Economist Group.

By comparing Sassen’s (2001) and Friedmann’s (1986) ideal type global/ world cities and the results drawn from the indices’ and rankings’ top lists of cities, an intersection of the core global cities in the hierarchy (led by London, Paris, New York) becomes visible. But there are differences regarding the location of cities slightly under theses major global cities (P. J. Taylor, 2012). Nevertheless, all cities are affected by the globalizing forces, the competition between its locations and the possible gains of co-operations, regardless of their total size (Scott, 2001). Over the years critical voices have been raised, saying that the traditional finance-economic oriented approach of research, introduced by Friedmann (1986) and Sassen (2001) and performed by the GaWC, is not sufficient in determining global cities; the corresponding conception bias needs to be compensated (Bourdieu, 1985; Samers, 2002). Kratke (2001, 2006, 2010; 2004) introduced culture as a new dimension, which supplements the conventional economic centred discussion about global cities.

Regarding Germany, one of the strongest economies in the world and with a great export-orientation, only Frankfurt/ Main and Berlin have been subject to specific global city research (Beaverstock, Hoyler, Pain, & Tylor, 2005; Hoyler & Pain, 2002; Kratke, 2001). Hamburg, as the second largest city has not been discussed in global city research comprehensively but it has been considered in the context of global commodity chains and port-related services (Hesse, 2006; Jacobs, Ducruet, & P., 2010; Parnreiter, 2015; Verhetsel & Sel, 2009). As the idiom ‘Hamburg, das Tor zur Welt’ (Hamburg, the gateway to the world) indicates, the Hanseatic city in Northern Europe with its world-famous port might be a crucial node in the global system of competing locations, too. Nevertheless, Hamburg is neither the political centre of Germany (which is Berlin), nor its financial centre (this role takes Frankfurt/Main). But is it a crucial node for the global economy and culture? In order to answer this issue systematically, this bachelor thesis aims at answering the following research question:

To what extent can Hamburg be qualified as a Global City in terms of its economy and culture?

This research is conducted in order to locate the city of Hamburg in the network of global cities. The more it qualifies as a global city, the higher its value as a strategic node in the global networks of the economy and culture. Being such a crucial node shows a location’s importance in the global economy and culture and its competitiveness vis-à-vis other cities. A city like Hamburg, that utilizes the opportunities that arise in the context of globalizing forces, such as the location of multinational companies, is likely to profit from the new geographical order of markets (Friedmann, 1986). Analyzing Hamburg’s position in the global networks means analyzing its position in the competition among the best sites in the world and its future opportunities to play a leading role. Or to put it in the words of Kratke ‘Many European metropoles [amongst them Hamburg] would like to be classified as global cities in order to enhance their reputation in the framework of interurban competition’(2010, p. 1777). Thereby, chances to climb up in the hierarchy of global cities are revealed and threats to its position are outlined. The city of Hamburg is none of those cities that are labeled as ideal type global cities by the scholars in this field of research, like Sassen (2001) and Friedmann (1986), and is not discussed in all of the above named rankings and indices. Nevertheless and due to its importance as one of the German major economic hubs and its port related function as an international gateway (Porter et al., 2009), it can be expected that Hamburg plays not a leading role (next to New York, London and Tokyo), but has a relevant role in the global economic networks. Furthermore it is expected that Hamburg’s culture is overshadowed by cities like Berlin, which are magnets for creativity and multiculturalism and have not such an industrial base as Hamburg has (J. Taylor, 1999). The focus of this research is on two dimensions: the economy, as the classical point of analysis in urban studies, and the culture, which gained centre stage in the last years. The theoretical approaches by John Friedmann’s (1986) World City Hypothesis and Saskia Sassen’s (2001) Global City Model are basis for the economic dimension of the analysis, while the analysis of the cultural dimension relies on Kratke’s (2010) Global Media Cities. Thus, it is a theory applying approach of research, which assigns theoretical models to the case of Hamburg. In a first step, Hamburg’s economy and culture are investigated in a SWOT-analysis in order to gain insights into their strengths, weaknesses, opportunities and threats. For this purpose, public reports from the Hamburg chamber of commerce are studied among others. This builds the groundwork for the city’s ability to be active on global markets and to link to global circuits, which is the second step in the analysis. The data on Hamburg’s quality as a global city are, then, generated from empirical studies conducted by the GaWC (2002) and by Kratke (2010). In summary, the thesis is innovative in two respects: Firstly, it provides an incorporation of both dimensions (economic and culture) into its analysis in order to provide a more comprehensive and less biased estimate of a metropolis’ global city status. Secondly, it will apply this dualistic approach to the case of Hamburg, which was not object to distinctive global city analysis, yet. In chapter two, the theoretical frameworks are discussed, which are only briefly covered in this introduction. A detailed description of the used methodology can be found in chapter three. The SWOT-analysis of Hamburg’s economy and culture is presented in the fourth chapter, which is followed by the investigation of Hamburg’s interlinkage into the global economic and cultural networks. In the concluding section, chapter number five, the most important findings are summarized. Recommendations for a prosperous development of the city of Hamburg as an attractive site for economy and culture given are given in section six and finally, limitations of this thesis are indicated in the seventh chapter.

2. Theoretical Framework

The second part of this thesis is intended to provide the reader with the conceptual background, on which the following analysis is build on. Therefore, the relevant models on the global city concept are identified in the form of a literature review in order to determine the features of global cities. These features are essential parts of the analysis on Hamburg’s integration into the global city network. Due to the dualistic approach, the theoretical frameworks for both dimensions are outlined and discussed. At first, the basics of world city and global city research are introduced. Following this, each of them is illustrated separately. Then, the role of culture in global city research is discussed. After the conceptualization, a working definition on global cities is given and the research question is further redefined in correspondence with the given theory.

2.1. Global City and World City Research

In urban studies, there are two options in analyzing major cities: The demographic tradition characterizes cities according to their population, and the functional tradition evaluates a location’s integration into the global system of competing and cooperating cities. The latter will be the focus of this thesis and can be divided into four research areas (Löw et al., 2008). The basics for the modern global city science was laid by Geddes (1915), Hall (1966) and Hymer (1972), who worked towards a hierarchy of cities based on their socio-economic interlocking (Acuto, 2011). The second research focus sees global cities (here called World Cities) as centers of control over the flow of capital around the globe. Therefore Cohen (1981), Friedmann and Wolff (1982) and Friedmann (1986) are the first who set cities in the context of the globalizing economy and multinational companies (Engelhard, 2005). A third explanation provides Saskia Sassen (2001) with her Global City Model, according to which cities are sites for the production of professional corporate services. A fourth important area in global city studies builds the empirical research conducted by the Globalization and World Cities Study Group and Network (GaWC), which aims at identifying the external links (and thus the integration) of major cities into the global economy by analysing the location of multinational corporate service companies, and is therefore in line with Sassen’s (2001) theoretical model.

2.2. Economic features

his conceptual analysis is built on the literature overview provided above, which gave the four approaches in contemporary global city literature. Two of them, the World City Hypothesis by Friedmann (1986) and the Global City Model by Sassen (2001) turned out to be the most commonly used concepts in this field of urban studies (Derudder et al., 2012). Despite the fact that Friedmann uses the label world city and not global city, his model is worth to be studied because they are very close to each other and used interchangeably in parts of the literature. Nevertheless, a clear conceptualization and brief comparison for both is provided in order to come to a well founded conclusion which model is the best for the purpose of studying the global city status of Hamburg.

2.2.1. World Cities

The World City concept was introduced by Friedmann (1986) and Friedmann and Wolff (1982) and defines a world city as a control node in the transnational network of global capital flows. The concept builds upon seven interrelated hypotheses (based on Gerhard (2004):

(1) The geographical transition into a capitalist world economy with its dispersion of production and new division of labor leades to structural changes in cities.
(2) The global capital utilizes major cities within the new geographical order of production and markets. Links between these cities are manifested in a hierarchy of world cities.
(3) The control function of world cities appears in the characteristics of production and labor market.
(4) International capital is concentrated and agglomerated in these prime locations.
(5) World cities attract migrants from all over the world.
(6) The downside of the capitalist economy can be observed in world cities’ geographical and social polarization.
(7) The growth of world cities leads to social costs that exceed most cities’ budgets.

For the empirical application of his model, Friedmann (1986) defines criteria that characterize world cities: They are site for headquarters of multinational corporations, they constitute important financial centres, and major transportation hubs, they are site of international institutions and show a rapid growth of professional corporate services, they are centres of industrial production and host large populations.

2.2.2. Global Cities

As Gerhard (2004) outlines, the World City research went through several stages of development since the 1980’s and focalizes on the economic dimension. Thereby Saskia Sassen’s Global City model can be seen as a continuation of the Friedmann’s world cities that incorporate the economic changes in the late 1980s and 1990s (Hoyler, 2004). The main argument presented in her popular book is that globalization leads to two apparently mutually exclusive trends: dispersal and concentration. In the last decades production and manufacturing were strewn about the whole globe. In order to control the decentralised activities of producing and selling abroad and manage the emerging global corporate networks, new highly specialized financial and producer services were in need. Thus the global economic order shifted towards this new sector, the producer services. Firms providing these services tend to establish in clusters in a few cities. These strategic nodes of service production are characterized by concentrated property and economic control (Engelhard, 2005). Sassen (2001) defines a global city as a strategic production node which is location to corporate services. These firms link cities through intra-firm communications and offices, which build up a network of cities.

It becomes clear that both theories analyze contemporary major economic centers and their global network according to the location of multinational firms (Derudder et al., 2012). However, Friedmann’s focus lies on centers of dominance and power established by transnational companies, while Sassen concentrates on corporate service providers that produce the essential inputs for global control (see Table 1). In this thesis, Sassen’s model is used because it constitutes a more realistic image of the reality. Despite Friedmann’s work having undisputed significance, it is written in the context of the mid 80’s where the economic situation was different to the contemporary events.

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Table 1: The world city and global city concept, based on Derudder et al. (2012)

By reviewing the crucial approaches as presented above, the conception bias towards financial-economic characteristics of urban research becomes visible (Bourdieu, 1985; Samers, 2002). Therefore scholars started to think about other dimensions of the global city concept. Kratke (2010) raised a new issue: the production of culture and the location of the media industry, which supplements Sassen’s theory and the empirical research conducted by the GaWC. His main idea is that the cultural economy is essential for the globalization of cities, a sector that agglomerates in local nodes and operates in global networks similar to professional corporate service firms.

2.3 Global Cities and culture

Following this, a limitation of the global city analysis to the location of professional producer service firms will deliver a biased picture of location’s global city quality. Without a doubt, culture and cities are closely connected. More precisely, the creative industry contributes to the competitiveness of cities to a great extent by triggering growth processes. Today, it ranges among the most promising sectors, a trend that will continue in the near future. John Florida (2008) outlines three requirements for cities to attract the creative: the presence of human capital (knowledge), technological capacity and development (innovation), and social acceptance of differentiation (openness). Pratt states that ‘culture figures as a significant […] aspect of the debates about global cities’ (2012, p. 265) and determines the conceptual and empiric relationship between the cultural economy and the global city, which has been marginalized by Friedmann (1986); Friedmann and Wolff (1982) and Sassen (2001). As Pratt (2012) argues, cultural activities become more important in place marketing and place branding and for the purpose of attracting foreign direct investment. Thus, the model of producer services building strategic nodes is complemented by the cultural economy. Knox (2002) puts it similar by defining global cities as ‘sites of the most leading global markets, […] sites of clusters of specialized, high-order business services, […] sites of the most powerful and internationally influential media organizations […] and culture industries’.

But there are divergent positions about where specifically to locate the cultural economy. Some researchers argue for an inclusion of the design and adverting industry into the corporate service sector (Beaverstock, Smith, Taylor, Walker, & Lorimer, 2000; Kratke & Taylor, 2004). But Sassen (2001) and Pratt (2012) emphasize the distinctive nature of the cultural industry and prefer to separate the corporate service sector and the culture and media industry. Due to the ‘different office geographies’ of the producer service sector and the cultural economy (P. J. Taylor & Walker, 2002, p. 34), both are examined separately in this thesis. The most important theoretical contributions come from Kratke (2006, 2010; 2004), who sees the cultural economy as a key driver of the globalization of cities and therefore uses the term global media city. Thereby, he defines the media city as a centre of cultural and media activities at different geographical levels, like nodes in a network.

2.4. Working definition and research questions

By reviewing the theory, it becomes clear that a simple analysis of Hamburg’s economy in light of Sassen’s Global City model is not sufficient for defining its global city status. It must be combined with the global media city model, adding culture as a second dimension. As a working definition for this thesis, global cities are seen as local nodes of the corporate service sector and cultural economy, which are associated in a global network. This is a minimal definition of the concept and identifies only those attributes necessary for the purpose of this research, but may impose a loss in resonance of the concept. Consequently, the research question needs to be further redefined. The economic dimension can be narrowed to the location of global producer service providers in Hamburg which is in accordance with Sassen’s (2001) Global City Model; while the cultural dimension refers to the location of companies belonging to the culture economy, following Kratke’s (2010) research (see Table 2). Therefore, the emerging specification of the research question for this thesis is:

To what extent can Hamburg be qualified as a Global City in terms of its localization of global producer services and cultural industries?

In order to answer the main research question it is worth discussing the following sub-questions, which guide this thesis:

1. How are the producer service sector and the cultural economy in Hamburg positioned? What are their strengths and weaknesses, opportunities and threats?

The first sub-question gives insights into the overall situation of the two sectors and provides the basis for analyzing their global interconnectedness. Several public reports and scientific writings are examined in terms of their content. Results are structured according to strengths and weaknesses that are conditioned by the sectors’ actors, and the emerging opportunities and possible threats, which are caused externally by other actors or trends. A more detailed explanation on this SWOT-analysis can be found in the subsequent methodology section.

2. To what extent are Hamburg’s producer service sector and the cultural economy integrated into a global network?

The second sub-question is at the core of this research and intends to discuss the producer service’s and cultural economy’s connectivity to the global networks, thus, their function as nodes in the global service provider and cultural economy nexus. The empirical research conducted by Kratke (2010) is used to examine Hamburg’s cultural globality, while the producer services’ global integration is assessed on basis of the city’s network connectivity derived from the GaWC.

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Table 2: Conceptualizing the Global City