This Research Bulletin has been published in Geographica Polonica, 82 (2), (2009), 45-55.
Please refer to the published version when quoting the paper.
Two decades have elapsed since momentous events of 1989-1990, which have dramatically altered the political and economic scene in East and Central Europe. This is a period of sufficient length to enable some critical reflections to be made concerning the recent trends. A confrontation of expectations and predictions pertaining to the evolution of national urban systems and the position of the region's major cities, as expressed at the beginning of that period with current developments often brings notable observations. One preliminary assessment is that that the European urban system has not yet reached a state of a long-term equilibrium, as its individual components, as well as linkage patterns remain in constant movement.
In the early 1990s fundamental questions were posed concerning the role of the leading cities in East and Central Europe, while the search for and recognition of their relative positions was resembling a game of bridge. In particular, with respect to the so-called gateway city functions it was hypothesized that some of these cities would permanently assume the key roles. The interdependence of Berlin, Vienna, Warsaw, Prague and Budapest was defined in terms of their mutual competition rather than co-operation and functional complementarity (see, for example: Hall 1990, Musil 1995). The positions of these cities were also interpreted in the context of their national urban systems. In this respect it was assumed that due to strong polycentricity of both German and Polish urban systems, the functional structure of Berlin and Warsaw should be characterized by far-reaching analogies (see: Domanski 1999). This, however, similarly to many other hypotheses formulated in the 1990s, has not been fully confirmed. The functional profiles of the two cities evolve in response to a number of changing external conditions, and it is difficult to predict when these structures reach a relatively stable development stage.
In the present paper an attempt is made to answer the question of whether Berlin's functional profile tends towards a clear specialization, and, at the same time, if and how this specialization complies with earlier expectations. The definition of Berlin's functional profile seems to be a relevant issue from the perspective of Warsaw and its search for effective functional specialization. Taking into consideration such indicators as macroeconomic structure, level of income and configuration of the two national urban systems, there seems to be an inspiring research problem of whether Warsaw's position in Poland, as defined by its functional specialization, should correspond to the one held by Berlin in Germany.
Berlin's starting position of 1990
Many words were devoted to Berlin's metropolitan status, its historical stages and changes. In early decades of the 20 th century, especially during the period of 1920 – 1933, Berlin developed from an industrial and administrative center to a glittering, glamorous World City, where modern industry and science were supplemented by the richness of arts and culture, entertainment and tourism (Zimm 1990). After the Nazis came to power all the inspirational and vivid aspects of the metropolis were dismantled, and Berlin turned into a center of war, hatred and devastation propaganda. The years following the war brought the final loss of metropolitan functions; the destroyed city was divided and, after 1949 assigned to two different states founded on alternative social, political and economic systems. Serving in one part as an isolated bridgehead of Western Germany, and in the other as the capital city of the German Democratic Republic, Berlin witnessed its integrity consequently weakened and eventually destroyed.(for a concise diagnosis see: Zimm 1990).
In the beginning of the 1990s, after the fall of the Iron Curtain and “The Wall”, it was an open question which direction Berlin would take on its way to (re)establishing) its position. That question was tackled by Knigge (1990) who in a considerable detail drew trends of that time, and analyzed the structure of Berlin's economy, in particular the economy of West Berlin which to a great extent had been shaped by subventions policy. Due to structural weaknesses, relatively low efficiency and the loss of key segments of industrial and service sectors (such as research and product development, finance and marketing) to the advantage of large West German cities, the quality of Berlin's labor market had consequently been lowered. As Knigge puts it: “in no other industrial city in Germany (was) the proportion of educated, highly-qualified workers as low as in Berlin, while the share of persons with university degrees employed in the industrial sector (was) for example less than half of that in Munich” (p. 97-98). In a further section of his paper Knigge explained how spatial economic structure of West Berlin differed from that found in the large urban agglomerations of the Federal Republic of Germany. Such processes as suburbanization, concentration of decision-making functions in the inner city and relocation of production, and in general routine industrial operations to the hinterland, were namely not taking place. Still, the city had some advantages on its part. The educational level of the population was quite high owing to the well developed university system, and research infrastructure was generally available. This applied, among others, to scientific and technical information which, however, was not effectively utilized.
The main reason for referring here extensively to Knigge's contribution is, however, his in-depth analysis of the development potential of Berlin based on its functional structure. Knigge stressed that future development path was mostly dependent on political decisions concerning the capital city function. This has proved to be a fully correct, even if somewhat evident assumption. At the same time, he focused on two areas that seemed not to be directly linked with political solutions. Firstly, as Knigge presumed, while overcoming its isolated situation, Berlin would follow the development path of other large urban agglomerations. Secondly, he anticipated an enormous increase of external demand that would arise after opening the borders, and, from which Berlin would profit to a great extent. This would bring about far-reaching consequences for the evolution of Berlin's functional profile, which are given below.
The next ten years brought a distinct revision of some of the above expectations. This resulted primarily from an overestimation of the importance of two issues raised in the early 1990s. The fist one was connected with consequences of the return of national capital functions to Berlin, which, as it turned out, has not shaken the German settlement structure in the sense of a fundamental functional redistribution. At the same time, the major cities of East and Central Europe, in particular the capital cities, have managed to surmount the structural and functional gaps between them and West European cities, to an extent an existence of an intermediary – a vanguard or an intervening center is not necessary. Moreover, the assumption according to which there was enough space for one major gateway city only in this part of Europe, turned out to be a miscalculation.
Evaluations of the state and development potential, as elaborated around the turn of the centuries and the early 2000's have brought a revision of the radical scenarios concerning the position of Berlin in the German urban system. Both the dream of the “global city” performance, and the pessimistic variant of decline have proved unrealistic. One of the evaluations (Korcelli-Olejniczak 2004, 2007) was that Berlin had experienced a quicker advancement on an international level, i.e. in the urban system of Central and Eastern Europe than within its national urban system. The position of Berlin vis-à-vis other large German cities, save for its capital city functions, had not changed significantly since 1991. Berlin succeeded in profiting from its privileged position of a divided double-city situated astride the boundary between two different political systems by maintaining and enriching its imposing cultural potential, and, by becoming a centre of culture, as well as off-culture. Hence in the category of ‘production and reproduction' functions (Bourne 1997) Berlin was considered to win global, or at least transnational importance in the cultural functions, and, a national importance with respect to science and education.
Furthermore, Kujath (2005) pointed to R&D as a major component of the development potential of Berlin. Notwithstanding a deep decline in manufacturing, a number of new service sector activities were identified in Berlin, based on the growing importance of knowledge as a production factor. Kujath found out that knowledge-intensive business activities were growing faster than all other branches of economy, when measured by both employment number and gross value added. While characterizing Berlin's functional specialization, Kujath distinguished the following activities as the core of the city's economic potential: transportation technologies, medical and biological technologies, R&D intensive industries, software development, cultural production and producer services in general. As he wrote, "Berlin (was) among the 15 leading urban regions for scientific research and technological achievements in Europe, and a leading European region for cultural production" (Kujath 2005: 121).
Berlin's functional profile according to employment and investment trends
It may now be interesting to confront the above evaluations and expectations with some recent research, as well as with the results of an analysis based on employment and investment statistics. The framework of the analysis rests on the assumption that an attempt at defining or redefining a city functional profile requires an identification of those sectors which are, on the one hand, representative for the city, and, on the other, show a progressive development trend. The representativeness and progressive character of activities constitute two preconditions for defining a given activity as a component of the city's regional specialization or, to put it differently, its functional profile.
The attempt at identifying these sectors which fulfill both criteria has been carried out in the course of a rather simple analysis:
LCn = SBn ÷ SGn × 100;
where S stands for share, G for Germany, B for Berlin, and n is the individual section.
The calculation has brought the following results (see Table 1):
Table 1: Location coefficient trends for Berlin. Source: own elaboration according to SIC index. Data obtained from Amt für Statistik Berlin-Brandenburg.
The location coefficient is a measure which shows the functional position of a city against the national average, and can therefore be interpreted as an expression of the city specialization. In this case it is assumed that values considerably above 100 are treated as significant.
In order to define Berlin's specialization profile in the first step those activities were identified which had the highest LC in the final year (2008) of the analysis. The calculation shows that sections G-P, standing for service activities lie slightly above the average for Germany, which again for such a prominent city as Berlin is not very high. The sections which stand out positively in the present analysis are: E (electricity, gas and water supply –LC 150), H (services related to tourism, such as hotels, motels, restaurants, camping fields, student and youth hostels, bars, cafeterias and other gastronomic facilities -LC 143), K (real estate service, organization and sale, activities of real estate agencies, IT services: consulting data bases, science, R&D activities, investment and management consulting, market research, urban planning, advertisement, other business services and activities) –LC 143), L (public administration and national security, social care, law and jurisdiction activities, activities connected with public order and security LC-147), O (other community, social and personal service activities, including activities connected with labor unions, business-, profession-, political, religious and employers organizations, recreation, culture and sports activities, cultural institutions: theaters, museums, libraries, archives – LC 166) and P (private households with employed persons LC-156).
It has to be pointed out that the location coefficient does not necessarily express the actual dimension of functional specialization. This is due to the fact that, in some cases, the share of employed in a particular section in Berlin is actually low, although still higher in comparison with the average for Germany as a whole. In the present analysis this leads to the elimination of section E, were the quotas are as low as: 0,9% for Berlin, 0,6% for Germany; and section P, were the share is 1,4% for Berlin and 0,9% for Germany. Conversely, there are also sections in which the LC for Berlin is lower than in those listed earlier, but in terms of the share in total employment they have experienced a considerable growth since 1991 (sections M: education and N: health care and social work). In section M the employment share has grown by 2.1; and in section N by 3.2 percentage points. In both sections the LC lies above 110. The activities identified via this procedure can be defined as representative for Berlin. The progressive character of these functions has been investigated by comparing trends, i.e. the changes in values of the location coefficient. Among sections H, K, L, O, M and N fully positive trends were observed in sections H (tourism)and M (education), whereas values for section O (culture, sports, recreation) fluctuated, while sustaining a high level. Section L (public administration) has witnessed only a slight decrease since the year 2000 (the peak in the year 2000 was as high as 151), similarly as section K (real estate, science, R&D), which has experienced a decrease since 1995, but the differences are small and the coefficient values remain high. This also reflects the situation in activities connected with health care and social work (N), were the coefficient has been more or less stable since 1991.
Another indicator which indirectly, but rather precisely describes the evolution of the functional structure are the investment input values in the respective sections of the economy. Therefore, the respective data for Berlin were compared with the average for Germany. The comparison pertained to all sections for which the data were available. In particular, the focus was put on the six sections identified on the basis of the LC analysis as representative and considerably progressive (Table 2).
Table 2: Investment outputs according to the SIC index in Berlin and in Germany. Source: own elaboration based on data obtained from Amt für Statistik Berlin-Brandenburg.
The comparison shows that with respect to the six identified sections only in those related to education, culture, health and social work the share of investment inputs in Berlin exceeds at most stages the respective share for Germany. The other sections which score high in the comparison are those connected with construction, transportation, storage and communication (media), as well as financial services. For those sections an index analogous to the location coefficient was calculated. The results are presented in Figure 1.
Figure 1: Investment index for Berlin related to sections with positive allocation ratios. Source: own calculation based on data obtained from Amt für Statistik Berlin-Brandenburg.
As it can be observed, the structure of investment outlays does not seem to quite follow the employment structure; moreover it does not seem to react to, nor have an direct influence on the growth of employment in particular sections. It can, however, be assumed that sections M, N and O are those that show positive indicators both with respect to employment and the investment structure. This could as well lead to the conclusion that they constitute by far the most representative, progressive and sustained segments of Berlin's economy.
At this point it is useful to confront the results with findings presented by Stein (2009) in a recent paper on Berlin's specialization profile. The paper concerns the question whether the development potential, as identified for the purpose of urban policy (Enquetekommission 2005) could indeed be treated as the city's specialization, and, therefore, would the support and promotion of these fields lead to a general growth of employment and income.
Stein's analysis was based on comparison of the shares of employed in a number of professions identified according to the German “Classification of Professions” (KldB 1988). The professions were selected in line with the development fields identified by the Enquete-Commission and the Berlin Senate (2005) and pertained to: science, culture, health sector, as well as communication and transportation. Additionally, the author investigated employment in professions connected with functions that are specific for a large city, i.e. managerial positions, jobs in banking and financial services, law, investment and business consulting. At the same time, the paper presents an alternative classification of activities concerning the latter fields, which are defined as ‘transaction activities', and introduces another, a more functional approach in interpreting data concerning these professions and activities.
In the course of the analysis the location coefficient was calculated by Stein for 320 professions in the selected fields, with the total of 985 000 employed in Berlin in 2007. The comparison shows that there were 103 jobs with an LC above 100, i.e. the share in Berlin was higher than the average in Germany, which included 36 professions with the LC above 150, and 18 with the LC above 200. The professions were mainly related to activities connected with culture, science and transportation. The regional specialization was by far the highest for professions linked with cultural activities (LC >218,7). These include artists, musicians, drawers, painters, translators, photographs, publishers etc.
The second place is occupied by the so called ‘health economy sector'. Although the share of employed in this sector is the highest among the four selected fields, the regional specialization in these activities is not as high as that concerning culture.
The field of science was divided into two areas: research & development, and human and social sciences & teaching. This field occupied the third place among the selected activities. A high location coefficient was found first of all with respect to the second area.
The index for the fourth field-transportation was not especially high. Among all jobs in this field, rail transportation was particularly highly represented.
Stein also attempted to analyze the job structure of Berlin using the category of so-called transaction activities, which are defined as all activities which require highly specialized skills and are based on the coordination of exchange, or transfer between economic actors, either private persons or organizations. The contemporary literature of the subject often describes the functional structure and position of a metropolis on the basis of its performance in transaction activities. In this case the employment structure was evaluated with respect to these logics. The analysis has shown that the general specialization index for transaction activities was relatively high (LC 156,6); still some jobs belonging to this category were underrepresented. This considered mostly business and financial services, which gives poor evidence of a limited scope of the city's managerial functions. The professions, among those related to transaction activities described as Berlin's regional specialization on the basis of the location coefficient were: real estate agents, auctioneers, specialists in publishing, bookselling and marketing, organization of congresses and fairs. The plane of interaction of the sectoral and functional evaluation had shown the dominance of activities connected with culture, whereas science had occupied the second place. The most profound example is the position of Berlin with regard to transaction activities in the publishing business. With its 141 specialist journals Berlin is known to occupy the first place among the German metropolitan centers.
Fuzzy but stable specialization
When confronting the evidence concerning the earlier development stages with the results of the current analyses it seems obvious that Berlin is developing a regional specialization, i.e. has actually been developing one since the beginning of the 1990s. Its profile is, however, somewhat fuzzy, meaning that the performance of some functions, although treated as part of the city's potential, does not find reflection in its national-wide position. This may be due to the fact that reaching the German average is already extremely demanding, as there are many urban regions with either clear and narrow, or clear and wide functional specializations throughout the country. An interesting phenomenon is that values of the location coefficient have not experienced dramatic changes after the transfer of capital city functions to Berlin, and that they have remained in a certain balance since 1991. This proves that Berlin has in a way become assimilated within the overall functional development in Germany, and that it secures an important position in those fields which have originally been identified as its development potential. At the same time, there is no defined single activity, or group of activities which show a tendency to actually dominate the functional profile of Berlin. Moreover, it is characteristic that the functions identified as representative and progressive remain in quite stable relations with respect to each other.
The employment trends analysis and the investment outlays statistics have shown that the most representative, progressive, and at the same time sustained in their evolution are sectors related to such activities as education, health and social work, as well as other community, social and personal service activities: those, connected with labor unions, social-, business-, professional-, political, religious and employers organizations, recreation, culture and sports activities, the functioning of cultural institutions: theaters, museums, libraries, archives. Additionally, positive trends can also be observed in activities assigned to section K, which encompasses science, R&D and businesses associated with the real estate market. Stein's analysis of Berlin's specialization in transactional activities shows additionally that the city's functional profile builds also upon those sectors which lie on the interface between culture and science and their transfer, i.e., where resources are sold, rented, presented, processed or converted. These concern tourism, the art of exhibition, publishing, auctioning, organization of congresses and cultural venues. This also concerns young creative industries, and knowledge-intensive business activities.
Summing up, it seems more and more visible that, although fluctuations within the functional system are present, there appear to be dissipative structures present circulating quite near to an equilibrium position. It occurs that Berlin's regional specialization, and the position of the city in its national urban system have reached a state of semi-balance, which does not leave much space for dramatic change. The capital-city functions, and the role of a cultural global-city, backed up by some creative transactional activities, give Berlin a considerably stable position in Germany, as well as in Europe. This, however, does not imply that there is even a slight tendency towards its growing dominance in the national dimension.
Berlin's regional specialization building and its implications for Warsaw – concluding remarks
As it has been suggested in the beginning of the present paper, observation of the evolution of Berlin's functional profile can be useful when trying to answer the question of whether Warsaw should develop a functional specialization, if it still has not clearly developed one, and whether this specialization should in any way react, respond or correspond to Berlin's economic profile. Another question is if Warsaw's position should toutes proportions gardees, be analogous to that of Berlin in Germany. At the same time, it is to be stressed, that functional evolution of the German capital can in no way to be treated as an expression of a growing interdependence of the two cities. Recent analyses show that this occurs to a lesser extent than it was during the 1990s, and, to a considerably smaller degree than it had been anticipated. Also, in the light of the recent trends, the issue of Berlin's dominance over the Polish urban system, including Warsaw, seems to be a closed one. Nonetheless, the geographical proximity, the (one-way) connectivity of the Polish economy with its German counterpart, the historical parallels, as well as policentricity of the Polish and German urban systems always allow for a comparison, and a closer look onto the development of the other city.Warsaw's functional profile seems to be less stable than that of the German capital. The city has been redefining its development potential a few times during the last decades, setting focus on either economic or non-economic functions, the performance of which constitutes its raison'd'étre in both the national and international dimension (see: Development Strategy for the City of Warsaw 2005). Considering Warsaw's strong and, by all means, leading position in the Polish urban system, confirmed by economic data and urban rankings, in particular with respect to economic and decision-making functions (Sleszynski 2007), it is justified to assume that the city should not necessarily strive at a narrowly defined functional specialization. By taking advantage of its internal position, and a high degree of closure of symbolic functions within boundaries of national urban systems, Warsaw should strengthen it, and while overcoming its structural weaknesses, develop a optimally wide and flexible functional structure which would lead to a growth of its location coefficients in both economic and non-economic sectors. This conclusion indirectly results from tracing changes in Warsaw's employment profile, as well as from the observation of Berlin in its national and European urban context. The question should, however, be investigated thoroughly via analysis of trends in Warsaw's regional specialization.
Bourne L. S., 1997, Polarities of structure and change in urban systems: a Canadian example, Geojournal 43.4, Kluwer Academic Publishers, The Netherlands, pp. 339-349
Development Strategy for the City of Warsaw until 2020, 2005 Urzad Miasta Stolecznego Warszawy, Warszawa
Domanski R., (Ed.), The changing map of Europe. The Trajectory Berlin- Poznan-Warsaw, Friedrich Ebert Stiftung, Warszawa
Enquete-Kommission, 2005, Eine Zukunft für Berlin, Abgeordnetenhaus Berlin, Drucksache 15/4000
Hall P. 1990, Europe after 1992, Urban Challenges, Statens offentliga utredninger, Stockholm, pp. 179-185
Hauptstadt Berlin, 1995, 1996, W. Süß (Ed.), Vol. 1, 2, 3, Verlag Berlin
KldB, 1988, Klassifizierung der Berufe. Systematisches und Alphabetisches Verzeichnis der Berufsbenennungen. Bundesanstalt für Arbeit, Nürnberg
Knigge R., 1990, Stärken und Schwächen der Wirtschaftsstandortes Berlin (West) (in:) Stadtforschung in Ost und West. Perspektiven und Möglichkeiten der Kooperation der großen Zentren in Europa, Beiträge 116, Akademie für Raumforschung und Landesplanung, Hannover, pp. 96-102
Korcelli-Olejniczak E., 2004, Funkcje metropolitalne Warszawy w latach 1990-2002. Wspólzaleznosc pozycji w systemie miast Europy Srodkowej, Prace Geograficzne nr 198, IGiPZ PAN, Warszawa
Korcelli-Olejniczak, E., 2007, Berlin and Warsaw: in search of a new role in the European urban system, Journal of Housing and the Built Environment, Springer Verlag, The Netherlands
Kujath H.J., 2005, Restructuring of the Metropolitan Region of Berlin-Brandenburg: Economic Trends and Political Answers, Geographia Polonica, Vol. 78, No. 1, IGiPZ PAN, Warszawa
Musil, J., 1995. The potentials and limits of Prague. Questions In perspective, (in:) Citta capitali dell'Europa centrale: politiche e strategie urbane nel nuovo spazio europeo. Edited by M. Demarie. pp. 177-213. Fondazione Giovanni Agnelli, Torino
Sleszynski P., 2007, Gospodarcze funkcje kontrolne w przestrzeni Polski, Prace Geograficzne nr 213, IgiPZ PAN, Warszawa
Stein R., 2009, Besondere und allgemeine metropolitane Spezialisierungen in Berlin : Kultur und Wissenschaft, Koordination und Transaktion, Raumforschung und Raumordnung, No 4/2009, Carl Neumanns Verlag, Akademie für Raumforschung und Landesplanung, Hannover
Zimm A., 1990, Die metropolitane Entwicklung Berlins (in:) Stadtforschung in Ost und West. Perspektiven und Möglichkeiten der Kooperation der großen Zentren in Europa, Beiträge 116, Akademie für Raumforschung und Landesplanung, Hannover, pp. 13-21
Note: This Research Bulletin has been published in Geographica Polonica, 82 (2), (2009), 45-55