Global Cities

GE TCW
[ The Contemporary World ]
 Introduction
• The ways globalization impacts on local life is
nowhere more visible than in the global city

– The global city is the physical/spatial and geographic

playground of the globalizing forces

– Where global flows of people, capital, and ideas are

most evident
 Learning Outcomes
• At the end of this lesson, learners are expected to:

1. Define global city;

2. Identify the features or characteristics of global cities;
3. Explain the role of global cities in the globalization
process; and
4. Discuss the challenges facing global cities
 Defining Global City
• Global City

– An urban center that enjoys significant competitive

advantage and that serves as a hub within a globalized
economic system (Graig Charnock)

• Competitive advantage – a condition or circumstance that puts

the city in a favorable or superior business position
 Defining Global City
• Global Cities

– Are the “command centers” (according to sociologist

Saskia Sassen) of the global economy
• Emphasizes that the criteria for global city are primarily
economic
• “The more globalized the economy becomes, the higher the
agglomeration [or grouping] of central functions in a relatively
few sites” [that is, global cities]
 Defining Global City
– For definitions with primarily economic criteria, these
criteria usually include:
• Manufacturing agglomerations (although, now
moving away from global cities and placed outside
them, normally in slum-ridden megacities of the Third
World)

• Financial services – provided by investment banks,

insurance companies, credit card companies, stock
brokerages
 Defining Global City

• Other ‘productive services’ such as information

technology, law and accountancy

• Now, compared in the past, global cities stop making

things and switch to handling and shifting money and
ideas
 Defining Global City
• Apart from economic areas, others focus on other
criteria for global cities:

– Cultural innovation and ability to attract tourists (Sharon

Zukin)

– Geopolitical power, education hubs, creative industries

(e.g. fashion, arts)
 Defining Global City
• To others, cities which represent brain hubs are the
most important 21st century cities

– There is concentration of innovative people, with good human

ecosystems for cutting-edge businesses (Economist Enrico
Moretti)

– The continuation of success of Western economies hinges on

knowledge economy: creation of new ideas, technologies and
products
 Defining Global City

– To Moretti, the most important cities are not primarily

financial hubs but thriving hubs of digital innovation

– Compared with “struggling cities”: those with low

human capital base – with low proportion of college
graduates in the entire urban population
 Defining Global City
• The existence of global cities challenge state-centric
perspective of political economy that the state
dominates in economic affairs

– Global cities have more interconnectedness with other

cities and across a transnational field of action than with
national economy

– They are de-linked or disembedded from their national

economies
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions
• A.T. Kearney Global Consulting’s Global Cities Index

• Business Activity (headquarters, services firms,

capital markets value, number of international
conferences, value of goods through ports and
airports)
• Human Capital (size of foreign born population,
quality of universities, number of international
schools, international student population, number of
residents with college degrees)
• Information Exchange (accessibility of major TV news
channels, Internet presence (basically number of
search hits), number of international news bureaus,
censorship, and broadband subscriber rate)
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions

• A.T. Kearney Global Consulting’s Global Cities Index

• Cultural Experience (number of sporting event,

museums, performing arts venues, culinary
establishments, international visitors, and sister
city relationships).
• Political Engagement (number of embassies and
consulates, think tanks, international
organizations, political conferences)
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions

• 2014
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions
• Institute for Urban Strategies’ Global Power City
Index
• Economy (Market Attractiveness, Economic
Vitality, Business Environment, Regulations and
Risk)
• Research and Development (Research
Background, Readiness for Accepting and
Supporting Researchers, Research Achievement)
• Cultural Interaction (Trendsetting Potential,
Accommodation Environment, Resources of
Attracting Visitors, Dining and Shopping, Volume
of Interaction)
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions

• Institute for Urban Strategies’ Global Power City

Index

• Livability (Working Environment, Cost of Living,

Security and Safety, Life Support Functions)
• Environment (Ecology, Pollution, Natural
Environment)
• Accessibility (International Transportation
Infrastructure, Inner City Transportation
Infrastructure)
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions

• 2019
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions

• The Economist Intelligence Unit’s Global City

Competitiveness Index

• Economic Strength (Nominal GDP, per capita GDP, % of

households with economic consumption > $14,000/yr,
real GDP growth rate, regional market integration)
• Human Capital (population growth, working age
population, entrepreneurship and risk taking mindset,
quality of education, quality of healthcare, hiring of
foreign nationals)
• Institutional Effectiveness (electoral process and
pluralism, local government fiscal autonomy, taxation,
rule of law, government effectiveness)
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions

• The Economist Intelligence Unit’s Global City

Competitiveness Index

• Financial Maturity (breadth and depth of

financial cluster)
• Global Appeal (Fortune 500 companies,
frequency of international flights, international
conferences and conventions, leadership in
higher education, renowned think tanks)
• Physical Capital (physical nfrastructure quality,
public transport quality, telecom quality)
 Case Study 1: Various Criteria for Global Cities used by
Consulting Firms, Think Tanks, and Research Institutions

• 2012
 Defining Global City
• Early research identifies London, New York, and
Tokyo as global cities

– With time, research has been completed on emerging

global cities outside of the three above: Amsterdam,
Frankfurt, Houston, Los Angeles, Mexico City, Paris, São
Paolo, Sydney, and Zurich

• Based on those lists, what do global cities share in

common?
 Features of Global Cities
• Highly concentrated global organizational command
points
– 10 big companies based in New York:
1.IBM
2.Deloitte
3.PepsiCo
4.JPMorgan Chase
5.PricewaterhouseCoopers
 Features of Global Cities

6.Citi
7.Verizon
8.ABM Industries
9.Pfizer
10.Standard Chartered USA
 Features of Global Cities
• Central command points for production and
marketing of products and innovations
– 10 big companies in Japan, some of which are well
known production companies:
1. Toyota Motor Corporation
2. SoftBank Group
3. Mitsubishi UFJ Financial Group
4. Nippon Telegraph and Telephone
5. Japan Post Holdings
 Features of Global Cities

6. Sumitomo Mitsui Financial Group

7. Sony Corporation
8. Honda Motor Company
9. Mitsubishi Corporation
10. Mizuho Financial Group
 Features of Global Cities
• Vital spots for specialized service firms and finance
– Top consulting firms based in London:
 Features of Global Cities
• Concentration of cultural and geopolitical power,
education hubs
 Features of Global Cities
• Home of creative industries, such as arts, fashion,
and design
– Paris: Fashion Capital
 Role of Global Cities in the Globalization
Process
• While global cities are products of globalization,
they have been producers of globalization

– They help shape global economy, politics and society

– Global cities help produce and accelerate capital flows,

attract labor and technological upgradation
Role of Global Cities in the Globalization
Process
– Richard Longworth: “Global cities run the world.”

• “Their banks and markets finance the global economy. Their

corporate headquarters and global business services make the
decisions that shape that economy. Their universities train the
global citizens of the future, while their researchers imagine
that future. Global communications radiate from global cities.
These cities have the finest orchestras and museums, the best
restaurants, the latest fads. Global culture throbs to the
magnetic beat of global cities.”
 Role of Global Cities in the Globalization
Process
• Global cities house major global governance
institutions and host important political gatherings
and events

• Global cities are educational and cultural hubs,

attracting people of different social backgrounds
 Challenges Facing Global Cities
• Class conflict

– Global cities have segmented labor markets in which

employees of key industries enjoy well-paid and
consumerist lifestyles while a lower stratum of workers
have less well-paid, more precarious, and less attractive
positions within the urban economy

– Income polarization
 Challenges Facing Global Cities
• Ethnic conflict

– As global cities attract more people of different cultural

or ethnic backgrounds, marginal and mutually exclusive
communities are formed

– Lack of common identity because of cultural diversity

 Challenges Facing Global Cities
• Ethnic conflict

– High levels of dynamism are incompatible with durable

and sustained activities necessary for community
building

– Community is sacrificed in favor of a network

 Challenges Facing Global Cities
• Competition with other cities

– Global cities are locked into competition with one

another to command increasing resources and to attract
capital

– To successfully compete, local governments have been

keen to promote their cities as global
 Challenges Facing Global Cities
• Competition with other cities

– Such cities have been marketed as “entrepreneurial”

centres, sites of innovation in the knowledge economy,
and as being rich with cultural capital

– Such cities also regularly compete to host world events

of considerable prestige that present further economic
opportunities, such as the Olympic Games.
 Case Study 2.
Competition in Hosting Olympics