GaWC Research Bulletin 394

This Research Bulletin has been published in V. Desai and R. Potter (eds) (2014) The Companion to Development Studies, 3rd ed., London: Routledge, pp. 291-295.

Please refer to the published version when quoting the paper.

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Global Cities and the Production of Uneven Development

C. Parnreiter^*

Introduction

Global or world city research is essential for development studies for at least two reasons. It provides critical insights on how and from where economic globalization is organized and contributes thereby to a more comprehensive understanding of the processes through which uneven development is produced and sustained. Secondly, the global city paradigm’s nuanced account on the geographies of globalization and, in particular, of global economic governance helps to correct all too simple notions of a clear-cut North-South power divide.

THE Global city paradigm

The global city paradigm emerged with the writings of John Friedmann (1986) and Saskia Sassen (1991), whose principal interest were to explore and to theorize the new geography of the world economy which has came forward with globalization processes. The approach denotes two key functions of world or global cities: they provide connectivity for geographically dispersed production units and are therefore ‘the "basing points" in the spatial organization and articulation of production and markets’ (Friedmann 1986: 71), and they serve as locations for the governance of cross-border economic activities, wherefore they are ‘highly concentrated command points’ (Sassen 2001: 3), from where the world economy is managed and controlled.

A main innovation in global city research is the shift of attention from formal power functions as exercised by corporate headquarters to ‘the production of those inputs that constitute the capability for global control’ (Sassen 2001: 6). Drawing on the literature on producer services, Sassen maintains that a global city’s function in the management and the governance of global operations of firms derives from the existence of sizeable clusters of (globalized) producer service firms, because these services accommodate a demand that emerges from organizational needs of companies with global operations. From this follows that each global city constitutes, as Brown et al. (2010) and Parnreiter (2010) maintain, a node for numerous commodity chains, while all commodity chains run through global cities seeking core-labor processes such as producer services.

A German corporation, for example, that invests in Mexico to produce for the U.S. market needs the support of financial, law or accountancy professionals in order to get things right in a foreign environment. Because access to tacit knowledge is critical in getting acquaint with local modi operandi, service providers such as Deutsche Bank, Baker & McKenzie or KPMG cannot serve the global operations of their clients from headquarters in Frankfurt, Chicago or Toronto. They have created a global network of offices to support their clients, because, as the chief knowledge officer of a global accountancy firms in Mexico City puts it, ‘you have to be here, you have to have the relations with the entrepreneurs, you have to be in the chambers, (…) you have to be at the cocktails’. Local offices of global producer service firms are, however, not only indispensable to make the global production line run, they also exercise influence on how commodity chains are governed. Given the complexity of doing business in different markets involving different jurisdictions, budgets, languages and cultures, global headquarters of TNCs rely in their decision-making on the counseling of both their subsidiaries’ regional headquarters and of producer service firms. A lawyer at the Mexico City office of a global law firm affirms that ‘the partners of the (law) firm, they have conferences with the clients to plan a deal, to structure a deal. … I do believe that the one who makes the strategy, it’s the partners of the law firm’ (both quotes in Parnreiter 2010: 45f).

In sum: Because cross-border business needs worldwide networks of producer service firms in order to be conducted smoothly, the places, where these firms establish their offices, obtain a high centrality in the world economy. Moreover, since global city-formation is a result of the emergence of intra-firm and inter-city networks of producer service firms, the global city itself is a function of a network: ‘there is no such entity as a single global city’ (Sassen 2001: 348). Yet, one of the most powerful critiques of the early global city research was that this conceptualization was not backed by relational data on the supposed city-to-city flows. In order to overcome this flaw and to substantiate the notion of a ‘world city network’ (Taylor 2004; et al. 2010), the Globalization and World Cities Research Network (GaWC) was founded.

the world according to GaWC

Using initially data of 100 global producer service firms with offices in 315 cities around the world, and expanding the data-base recently to 2,000 firms in 525 cities (Taylor et al. 2010), GaWC developed an ‘interlocking network model’ to come to terms with the intra-firm and inter-city flows that establish the world city network. Acting on the assumption that the larger and the more important an office in a particular city is, the more flows of information, capital, people, etc. to other cities it will generate, the ‘interlocking network model’ allows for estimating service flows between cities, which then are expressed as their connectivity values. The most recent account sees London and New York as the best connected cities, followed by Hong Kong, Paris, Singapore, Tokyo, Shanghai, Chicago and Dubai (see figure 1).

Figure 1: Alpha World Cities, 2010

Two things are striking about the world city network. Firstly, it is much bigger than the network of headquarter cities, which emerges from the locations of the main offices of the world’s biggest corporations. While about half of the revenues of the Fortune ‘Global 500’ companies are made by corporations headquartered in only 20 cities, GaWC’s list of the ‘Alpha world cities’, which are characterized as ‘very important world cities that link major economic regions and states into the world economy’, comprised 47 cities (GaWC 2011). From this difference in the network size and from the assumption, that producer service firms exercise command functions for global commodity chains follows, secondly, a more decentralized geography of economic governance. Figure 1 shows that many ‘Third World’ cities are on the map of ‘Alpha world cities’. In fact, a third of these best connected global cities are located in middle income countries, with Asia being particularly well linked. Considering the complete list of Alpha, Beta and Gamma world cities, all ‘Third World’ megacities (except Dhaka) are included (GaWC 2011), what contradicts notions that (big) cities in poorer countries are economically insignificant or even parasitic. This finding also challenges postcolonial urban studies’ complaints that global city research drops cities in poorer countries ‘off the map’ of urban studies (Robinson 2006) – Mexico City, Johannesburg or Mumbai are on the map not only of global production, but also of global economic management and governance.

The global city paradigm allows, thus, for a more inclusive comprehension of the role of cities in the global South in the world economy, because it helps to grasp the multiple hinges or intermediaries between the few global headquarter cities and the countless cities where production for the world market is carried out. Globalization is neither like an oil slick that indifferently covers the whole world, nor is it exclusively controlled from a handful of ‘supercities’. Rather, it is organized and governed from multiple places, including many global cities in poorer countries. Moreover, because all cities are unavoidably integrated into commodity chains, and because all commodity chains run through global cities, I contend that the ramifications upon which the world city network is built reach cities the world economy’s remotest hinterlands.

Global cities and the production of uneven development

In his conceptualization of the ‘development of underdevelopment’, André Gunder Frank suggested a spatialized model of how uneven development is organized. He delineated the Latin American city as a bridgehead for the interests of the dominant centres of the world economy, arguing that ‘(j)ust as the colonial and national capital (…) become the satellite of the Iberian (and later of other) metropoles of the world economic system, this satellite immediately becomes a colonial and then a national metropolis with respect to the productive sectors and population of the interior. (…) Thus, a whole chain of constellations of metropoles and satellites relates all parts of the whole system from its metropolitan center in Europe or the United States to the farest outpost in the Latin American countryside. (…) we find that each of the satellites (…) serves as an instrument to suck capital or economic surplus out of its own satellites and to channel part of this surplus to the world metropolis of which all are satellites’ (Frank 1969: 6).

Obviously, this very lucid account of the role of cities in the making of uneven development matches perfectly up with key ideas of the global city paradigm developed two decades later. Frank’s depiction also corresponds with Immanuel Wallerstein’s (1983: 30) notion that core-ness in the world-system results from specific places’ capability to attract many global commodity chains: ‘(C)ommodity chains have not been random in their geographical directions. … they have been centripetal in form. Their points of origin have been manifold, but their points of destination have tended to converge in a few areas. That is to say, they have tended to move from the peripheries of the capitalist world-economy to the centers or cores’. Thus, while both Frank and Wallerstein suggest that the transfer of resources from peripheries to the cores is organized along commodity chains, Frank additionally emphasizes that this transfer of resources is managed from cities along these chains. These ideas have recently led some authors to suggest an integration of global city and global commodity chains research (Derudder/Witlox 2010) because, as Brown et al. (2010: 29) sustain, the ‘creation and (unequal) distribution of value along commodity chains is organized in and governed from world cities’.

The production of uneven development is therefore based on innumerable connections between cities with different functions in commodity chains. While in many places production for the world market is carried out by people who are by and large restricted to being rule-keepers, there are also places from which the rule-makers – or the ‘masters of the universe’, as Tom Wolfe has called the professionals of the finance industries in his novel ‘Bonfire of the Vanities’ – operate. It is a main merit of the global city paradigm to emphasize this distinction, and not to blur it by suggesting a shift of attention to ‘how “global” economic processes affect all cities’ (Robinson 2006: 102). Concerned with the ‘the practice of global control’ (Sassen 2001: 6), global city research provides insights into the geography of the making of power asymmetries. These insights allow for a comprehension of uneven development that goes beyond overgeneralized notions of the powerful ‘global North’ vs. the powerless ‘global South’. Cities in poorer countries are not only ‘affected’ by uneven globalization, they are involved into its production. Mexico City, for example, is, through hosting of many global producer service firms, a critical node for the functioning of myriad global commodity chains and thus a node from where the ‘development of underdevelopment’ is managed and governed.

REFERENCES

Brown, E./ Derudder, B./ Pelupessy, W./ Taylor, P./ Witlox F. (2010): World City Networks and Global Commodity Chains: towards a world-systems' integration. In: Global Networks 10, 1, 12-34.

Derudder, B./F. Witlox (eds) (2010): Commodity chains and world cities. New York: JohnWiley & Sons.

Frank, A. G. (1969): Latin America: Underdevelopment or Revolution: Essays on the Development of Underdevelopment and the Immediate Enemy, New York: Monthly Review Press.

Friedmann, J. (1986): The World City Hypothesis. In: Development and Change 17, 69-83.

GaWC (2011): The World According to GaWC 2010. Online: http://www.lboro.ac.uk/gawc/world2010t.html

Parnreiter, C. (2010): Global cities in Global Commodity Chains: exploring the role of Mexico City in the geography of global economic governance. In: Global Networks 10, 1, 35-53.

Robinson, J. (2006): Ordinary Cities: Between Modernity and Development, London: Routledge.

Sassen, S. (2001): The Global City. New York, London, Tokyo, Princeton: Princeton University Press.

Taylor, P. (2004): World City Network. A global urban analysis, London: Routledge.

Taylor, P./ Ni, P./ Derudder, B./ Hoyler, M./ Huang, J./ Witlox, F. (eds.) (2010): Global Urban Analysis. A Survey of Cities in Globalization, Earthscan Publications Ltd.

Wallerstein, I. (1983): Historical Capitalism, London: Verso.

NOTES

^* Christof Parnreiter, Department of Geography, University of Hamburg, Germany, email: christof.parnreiter@uni-hamburg.de