Global Cities of the future

Dependence of the cities on the Global Network

MAITREYI YELLAPRAGADA
12AR60R21

Contents

Abstract3 1. Introduction4 2. Global Cities4

2.1 2.2 2.3 2.4 Background Characteristics of Global City Impact of Globalisation and Urbanisation on transforming Cities Ranking of Cities

3. Global City Organising Hypothesis9 4. Dependence of Cities on the Global Network..10 5. Inclusive Approach to Global Cities.10 6. Role of Urban Local Bodies in the Global Scenario..11
7. Conclusions...12

References

The Future of Cities

Abstract In todays scenario, the cities world over are focusing on the need to strengthen their economic and administrative policies based on the emergence of technology and its future in dominating the functioning of the cities. It is the cities which are home to almost 50% of the population and economy generators. For a long time now, we have witnessed the changing faces of cities but in the 21st century, we can observe a vast change in the idea of cities and the manner in which they are linked within themselves and to other cities as well. This term paper topic concerns the dependence of various activities on the global network. It discussed the impact of globalization and urbanization in transforming the cities to the way they are today. The transforming hierarchy of the cities, the urban local bodies and the activities based on the global quotient of the cities is also discussed. The need for an Inclusive Planning Approach engaged by the government is also discussed to encourage equal participation in the city functioning and to discourage economic and socio-spatial inequality which is a negative result of the growth of global cities.

1. Introduction
In todays global era, we visualize cities as a web, where there is continuous transfer of information, data, and finance. It is a world where the fiscal impacts in one part of the world are experienced even by the remotest corners of the world. An interesting comparison stated in the book The Urban Elite, highlights how the world is not flat and is instead a landscape of peaks and valleys, and in real world it is the global cities which are the peaks. It can be visualized a worldwide network of cities which act as a platform for performing various functions.

2. Global Cities

Global cities today, have a very important role to be played in the Global Economic Scenario. The concept was originally derived from the fact that globalization has largely affected certain geographical locations situated at strategic areas such that a definite hierarchical pattern is visible based on the importance of the system in terms of the finance and trade. Global cities are complex entities, as the linkages binding a city have a direct and tangible effect on the global affairs through socio-economic means.

2.1 Background
The use of the term, global city, was popularized by sociologist Saskia Sassen in her 1991 work, The Global City: New York, London, Tokyo. Prior to which, in 1886, the term world city was used to describe cities that control a disproportionate amount of global trade and finance. Patrick Geddes also used the term "world city" later in 1915. A Global city is defined as a city which acts as a focus for world finance and trade flows. Twenty-five cities effectively control almost all the world's financial transactions, and New York, London, and Tokyo are at the top of the hierarchy (N. Thrift and R. Martin 1994). Global cities are also marked by large-scale in-migration and increasing income and occupational polarization. S. Sassen (1991) argues that global cities witness large-scale immigration because migration to rich countries is partly due to the flow of investment into poorer countries, as services such as law, accountancy, management, and financial consulting, cause immigration through the demand for low-paid jobs. The downside of the Global cities are the increasing disparities in income and occupation because of increased earnings along with inequality, together with sharply inflated prices for business inputs, commercial space, and labor. Immigrants and other ethnic minorities cannot afford the lifestyle and have the purchasing parity to survive in a global city. Thus, they seek necessary goods from low-cost immigrant-run shops this has led to gentrification of certain city areas and also seeded the growth of the migrant population in global cities. This has led to an expansion of small-scale producers that compete with large stores and supermarkets.

2.2 Characteristics of a Global city

The global cities are associated with speed as a term for measurement. Speed in terms of the communication, the transactions, and the faster the people and the capital moves. Migration - young people moving towards a certain city in search of opportunities. Centers where most businesses are done, and where human capital meets, information is exchanged, cultures experienced and policies formulated. Though cities continued to operate as central nodes of world trade and imperialist expansion throughout the nineteenth and twentieth centuries (Arrighi, 1994; King, 1990a), the geography of inter-urban networks was largely included within the geography of state territories (Taylor, 1995). According to Friedmann, a world hierarchy was created since the early 70s. Over time, this world hierarchy began to be based on the growing economies and their favorable geographical locations. This led to the establishment of a strong relation between economy and the growing hierarchy.

The old international division was based upon raw materials production in the periphery and industrial manufacturing in the core. The manufacturing industries were relocated to semi-peripheral and peripheral states in search of inexpensive sources of labor power. In addition to the deindustrialization of many core industrial cities, this global market for production sites has also entailed an increasing spatial concentration of business services and other administrativecoordination functions within the predominant urban centers of the core and semiperiphery. Thus, they transformed into upper-tier cities and since then have become major nodes of decision making, financial planning and control within globally dispersed commodity chains and, therefore, the central basing points for the worldwide activities (Cohen, 1981; Feagin and Smith, 1989). Thus, Global cities can be broadly characterized under four factors.

2.2.1
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Economic characteristics

Contribute significant financial output to the city or region or the nation's GDP. Serve as corporate headquarter site for many multi-nationals, financial institutions and organizations etc including the stock exchanges which influence the world market. Provide a variety of international financial services, like banking, accountancy, and marketing. Have a higher cost of living.

2.2.2
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Political characteristics

Active influence and participation in international events and world affairs. Hosting headquarters for international organizations such as the United Nations (New York City), the World Bank (Washington, D.C), or NATO (Brussels). A large population of the municipality or agglomeration. Diverse demographic constituencies. Quality of life standards. Expatriate communities (Migrated population of diverse ethnic groups).

2.2.3
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Cultural characteristics

Renowned cultural institutions such as notable museums and galleries, notable opera, major ballet companies, orchestras, notable film centres and theatre centres. A lively cultural scene. A strong sporting community, including major sports facilities. Educational institutions with renowned universities, and international student attendance, and research facilities. Sites of pilgrimage for world religions. Cities containing World Heritage Sites of historical and cultural significance Historical significance of the city.

2.2.4
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Infrastructural characteristics

An advanced transportation system that includes several highways or a large mass transit network offering multiple modes of transportation, Extensive mass transit systems, international airport that serves as an established hub for several international airlines. An advanced communications infrastructure on which modern trans-national corporations rely, such as fiberoptics, Wi-Fi networks, cellular phone services, and other high-speed lines of communications. Super-specialty Healthcare facilities. Prominent skylines/skyscrapers.

This intensified the urban concentration of global capital flows has been further enabled through the development of new informational technologies, closely tied to the agglomeration economies of cities, that accelerate communication and coordination on a global scale (Castells, 1989)

2.3 Impact of Globalisation and Urbanisation in transforming cities

The concept of global/information cities is relatively old. It gained significance in the 1960s and 70s when the concept of wired city emerged as the prominent feature of the post-industrial societies.1 It started as state-of-the-art cable television networks that could handle 40 channels have now turned into developments with virtually unlimited transmission capacity being available at a very low cost as a result of globalization and the rapid leap in technological advancement. Globalisation, as defined by Albrow in 1990 refers to all the processes by which the people from all over the world are incorporated into a single world society, i.e the global society. It is the process of international integration arising from the interchange of world views, products, ideas, and other aspects of culture. Globalisation has had to major impacts: 1. Integration of economies, societies and culture. 2. Denationalization (change from state to private ownership) of economies and culture, transfer of power and influence from national states to global markets. This led to Global growth of cities based on the GDP of the nation. It has created a virtual domain that influences the life of an individual more than the physical geographic conditions. But, it is not only rapid globalization but also urbanization which is influencing our cities and transforming the way of life. According to the U.N., 2008 marked the first year when more of the world's people live in cities than in rural areas. And in order to understand how globalization and urbanization affect a large scale of issues, from international politics to corporate behavior, the management consulting firm A.T. Kearney teamed up with the Chicago Council on Global Affairs and Foreign Policy magazine to conduct a major study of the world's cities to rank cities according to how "global" they are. Cities often provide the most reliable indication of regional success. Cities also are continuing to evolve as millions more people leave rural areas in search of work and freedom. The emerging trend can also help in understanding as to why businesses choose headquarters in places that can present considerable cost disadvantages. In locations where real estate prices and taxes are among the by high quality of life, the prevalence of multidisciplinary academic and scientific research, and other cultural dimensions is visible.

2.4 Ranking of Global cities

The main reason behind the growth of most global cities can be identified as the service sector that serve and control transnational capital such as banking, accounting, financial management, business laws, advertising, consulting, insurance, etc. In order to comprehend the level of impact due to urbanization and globalization on the prominent cities across the world, a Global Cities Index was first released in 2008. Various cities were judged on five key dimensions that ranked them as global cities. The five dimensions being, Business Activity (Weightage: 30%) Human Capital (Weightage: 30%) Information Exchange (Weightage: 15%) Cultural Experience (Weightage: 15%) Political Engagement (Weightage: 10%) Out of 65 cities, New Delhi and Mumbai ranked 45 and 46 respectively, whereas New York and London continue to dominate the globe as per the 2010 rankings. New Delhi which was previously at 41 fell to 45 whereas Mumbai which was at 49 rose to 46.

The comparison of the rankings indicate that more cities have now become more global over the time span between 2008 and 2010 and particularly the mid-level cities which are bridging the gap between the higher level cities and the cities at the tail-end which are joining the league of the mid-level cities.

3. Global City Organising Hypothesis 2

There are seven hypotheses which were put forth by Saskia Sassen in her work The Global City, introducing a concept . Through these hypotheses she tried to organize and theorize the global city model. The geographic dispersal of economic activities that marks globalization, along with the integration of such activities, is an important factor leading to the growth and importance of central corporate functions. The more dispersed a firm's operations across different countries, the more complex its central functions become. The complex central functions are the then outsourced by headquarters of large global firms. That is they buy a share of their central functions from highly specialized service firmsaccounting, legal, public relations, programming, telecommunications, and other such services. These specialized service firms which are engaged in the complex and globalized markets are subject to agglomeration economies. The complexity of the services they need to produce, the uncertainty of the markets they are involved with either directly or through the headquarters for which they are producing the services, and the growing importance of speed in all these transactions, is a mix of conditions that constitutes a new agglomeration dynamic. The mix of firms, talents, and expertise from a broad range of specialized fields makes a certain type of urban environment function as an information center. The more the headquarters outsource their most complex functions, it is much easier for them to opt for any location, because less work actually done in the headquarters. This highlights the fact that the key sector specifying the distinctive production advantages of global cities is the highly specialized and networked services sector. there are likely to be multiple locational options for such headquarters. The specialized service firms need to provide a global service which reflects as a global network which has led to strengthening of cross border city-to-city transactions and networks. Along with the growth of global markets for finance and specialized services, there is a need for transnational servicing networks due to sharp increases in international investment. This indicates the reduced role of the government in the regulation of the international economic activity, and the rising significance of other private institutions and organisations on the global markets. Also what we observe is that economic status of these cities is disconnected from the hinterlands. A large number of business centers have significant only due to their transnational networks. A global city cannot exist as a single entity.

The increasing number of high-level professionals and high profit making specialized service firms has resulted in spatial and socio-economic inequality. The growing informalization of a range of economic activities which are in demand is visible due to high cost of living and associated factors. These activities have lesser-profits in comparison to the firms providing specialized functions.

4. Dependence of cities on the Global Network

The above hypotheses highlighted the certain factors which have a direct or indirect implication on the way in which cities depend on the Global Network. A new system of territorial centralization is developed at the various levels of the hierarchy the global, national, state and the local. This amplifies the top-down relationship between the various levels. Thus, it is evident that the Urban Local Bodies are connected to the global network either directly or indirectly. Firms with global presence and geographically distributed economic activities are involved with different legal and accounting systems across the globe. When cities involve with such firms, they are directed to a system with different foreign linkages for services. The concept of centrality has changed drastically and is no longer a simple relation like the CDB and the other surrounding districts. The relation is now more complex with multiple CBDs located internationally arranged and inter-connected due to technological and economic change. The centrality of a city in the context of global process makes it a favourable location for various transnational economic and political activities. Thus a city which is characteristic of a global city with a favorable location has more chances of flourishing economically as against other cities.

5. Inclusive Approach to Global Cities

The hypothesis discussed earlier laid emphasis on certain facts that are a negative implication of the growth of the global cities. What is evident is a growing inequality which is expressed both spatially and in the socio-economic pattern.

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The benefits of the growth of these cities pertain to only a smaller section. The concentration of growth only to certain localities has created a large divide. The hinterlands are ignored and all developmental activities are concentrated only to the regions which are a part of the global network. This triggers a need for adopting an inclusive approach in planning the cities which can engage and include all sections of the population. The approach focuses on diverting the benefits of the global network over a larger framework such that the economic growth is stable and equitably distributed. In such a scenario, it is essential to adopt a holistic methodology which integrates all aspects of planning to evolve a city of the future and full of opportunities.

6. Role of Urban Local Bodies in the Global Scenario

Cities and local governments face multiple challenges. The Global Network has made it complicated for Cities and local governments to make quick decisions on complex issues. This calls for developing a tool that can cope with the process of speedy decision making of complex issues in the modern global economy. It also involves issues faced by the local government to work in collaboration with the increasing network of partners and stakeholders across various sectors and locations both at national and global level. In order to be dependent and remain as a component of the global network, cities and local governments have to a. Implement strategies that can make them capable enough to compete for business investment, retail and attract visitors. b. Develop an ideal leadership in the ULB which can guide their economies during times of financial crisis. c. A city brand that can be acquired on the basis of the cities historical and cultural significance d. The officials and local government to learn from other cities and find solutions to relevant issues.

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e. Implementing appropriate policies, which will maximise investment for those capitals which have a higher priority in the vision, while optimizing the investment in those sections which have a lesser priority. f. Making citizens and their needs the first priority and decide on prioritizing functions that can effectively improve the quality of life of the citizens and simultaneously gather profits and make the ULBs more efficient. g. Adopt newer methodologies like sharing of services across the organizational boundaries. Such approaches can lead to optimization and efficient mobilization of resources. h. A major role of the ULB would be to attain the ability to engage in itself in the arena of global governance within a sphere of overlapping authorities that follows a holistic approach in governance.

7. Conclusions
Globalisation and Urbanisation in association with the rapid advancement in telecommunications have contributed to the formulation of a network that translates beyond territorial locations with massive concentrations of resources. Over the centuries, cities have been at the crossroads of major, often worldwide, processes. But today, the intensity, complexity and global expanse of these networks has become very large to an extent to which significant portions of economies have now transformed themselves into a system where the connectivity can be established with an astonishing speed over large geographies. The large extent of the network expanse has triggered the need for Local Government bodies to interfere in the regulation of these networks in purview of the global economic system which in turn influences the local system and the economy. Being a component of the global system is beneficial in terms of the economic generation and the scope of trade of local materials in the global market. Yet, the global network has an despicable consequence of unequal spatial and economic distribution of resources across a region. In such a scenario, the Urban Local Bodies can incorporate an inclusive approach that caters to all segment of the society. Through this holistic approach, the Local governments can aim to succeed in developing the global city at par with the standards by making their presence extensive in the economic progress of the city and by the attempts to maximize investments in the region.

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References

W. H. Dutton, j. G. Blumler and K. L. Kraemer, Continuity and change in conceptions of the wired city, in Wired Cities (C. K. Hall, 1986); W. H. Dutton, Wired cities and nations: a perspective on future developments in telecommunications, paper presented at the IRIS Conference, 1984. The Global City Introducing a concept by Saskia Sassen, University of Chicago Global cities, glocal states: global city formation and state tertorial restructuring in contemporary Europe Neil Brenner Department of Political Science, University of Chicago Future Information Cities, Antony Newstead The Urban Elite, A T Kearney Seizing the day, The impact of the global financial crisis on cities and local public services Global Cities: Gorillas in our Midst, Michele Acuto URBAN ENCOUNTERS, Juxtapositions of Difference and the Communicative Interface of Global Cities http://www.answers.com/topic/global-city Locating cities on global circuits, Saskia Sassen http://www.businessweek.com/stories/2008-10-29/the-worlds-most-globalcitiesbusinessweek-business-news-stock-market-and-financial-advice

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