GaWC Project 22

Moscow as a World City: Globalization and Urban Restructuring

Study in cooperation with the Institute of Geography, Russian Academy of Sciences and AME (Amsterdam Study Centre for the Metropolitan Environment) (2002-2003)

Researcher: Olga Gritsai

[Results]

For centuries Moscow has played an important role in the international arena. It was one of the two capital cities of the Russian empire, the capital of the orthodox world, the Soviet capital and lately the dominant political center of the socialist block. It has always concentrated big economic, political and cultural power and was closely linked with the other major world centers. Globalization and systemic reforms of the 1990s initiated new processes, which changed both the national and international role of Moscow and reconfigured its intra-urban geography. Currently in world cities research Moscow is located among the "beta world cities", which means a high activity of transnational capital and concentration of business services (BS) supporting this activity. Given the fact that only 15 years ago international capital was hardly welcomed to the Soviet capital and BS practically did not exist, this looks like a really radical change.

The aim of this project is to analyze the structural shifts initiated by the globalization and growth of BS in Moscow, and the city’s changing role in national and international urban networks.

The major research objectives:

1. To evaluate the share of BS in the economic structure of Moscow and the dynamics of its growth; to reveal the attitude of the local government about the priorities of urban transformation.
2. To develop a GIS on the BS location pattern within the city, to study its dynamics, to reveal and explain their clusters.
3. To collect data on the foreign-owned BS companies, with a special emphasis on those from the international top 100, which are represented in Moscow.
4. To analyze the activity of the international BS companies in Moscow (their links with clients and other BS firms, spatial strategy, location preferences) as compared to the domestic firms.
5. To study the labour market providing the personnel for BS growth in Moscow and to measure the social consequences of the international companies’ presence in the city economy.

Background and past findings on the topic

Previous studies on the topic showed that in the middle of the 1990s Moscow, as a leader of reforms and transformation in Russia and the major national innovative focus, was concentrating up to 30-60% of national employment in BS. This resulted in a growing structural gap between Moscow and the province (Gritsai, 1996; 1997a,d). At the same time, in spite of the "elitarization" of its economic structure and employment in BS growing from practically zero in 1990 to 8-10% in 1995, it still could not be compared with the largest world cities like London and New York.

The process of spatial concentration was clearly present at the intra-urban level as well, with the central area of the city strongly dominating in the BS locations (Gritsai, 1997b,c). This was explained by the economic structure of the Russian capital, the imprints of Soviet urbanization, including the lack of real suburbanization, the development of the housing and office market and the social attractivity of different city areas. My research proved the "spiral" transformation of the urban landscape in Moscow and the reproduction of the basic historical gradients and functional zones in new forms. New post-industrial activities, important for the changing capital city profile of Moscow, tended to concentrate mostly in the areas, which have been for centuries more prestigeous and attractive for the new developments of the time. Clusters of BS in general did not coincide with governmental quarters or commercial and cultural zones, while more common was the combination of business activities with residential functions.

The analysis of social changes in Russia related to the BS developments revealed that their patterns in transitional economies can not always be explained by the well-known theories, biased as they are to the experience of the advanced Western economies. In many cases, a different political and socio-economic background or another, historically and socially different context, modify the form of manifestation of certain processes and their impacts. For Russia such modifying factors are a tradition of strongly centralized state power, decision-making and innovation, the imprint of Soviet urbanization, the character of the built environment, a different origin of certain BS sectors, the structure of the labour market, a generally different social structure of the population (the underdevelopment of the middle class) and varying criteria of success (Gritsai, 2000).

This newly designed project is supposed to reveal the changes in the BS sector, which happened since 1995, to identify the most recent concentration/deconcentration trends, to conduct a more profound research on the international BS companies and to pay more attention to the social aspects of BS developments.

Data and methodology

The analysis of structural shifts will be conducted on the basis of statistical data from different sources (Russian federal and regional statistical services, data collections of non-Russian research centers and international organizations).

An electronic data set from the Moscow Statistical Bureau will provide the possibility to develop a GIS on BS locations and to study the dynamics of business services clusters at the intra-urban level.

Semi-structured interviews and questionnaires will enable me to compare the activity of national and international BS companies and to examine the social impact of the BS firms for the city of Moscow.

Results

There are several findings, which this research can produce.

1) The expectation is that the share of BS employment and its impact on the city economy is high enough to consider it as one of the most dynamic sectors, resulting in economic and social restructuring. Nevertheless, the importance of this sector is still strongly underestimated by the city authorities and the national government. The BS activities are completely lost within the obsolete structure of the Russian statistics, the very notion of BS is hardly used in urban planning or by the city officials. The ambitious declarations of turning Moscow into a global city, used by the city government have very little connection with the existing concepts of global cities and are aimed generally at the promotion of private business.

2) It is likely to find out that the formation of BS clusters within the city still follows the concentration trend, which means that the central part of the city is hardly giving up positions to the more peripheral areas. It may be expected that generally the deconcentration of economic activity within Moscow and its suburbs will be a much slower process than in the large western cities, due to the recent (and relatively chaotic) introduction of the market mechanisms and their conflict with the inertia of the post-socialist city.

3) We may arrive at one of two possible conclusions about the activity and organizational links of the international BS companies, located in Moscow. First, we may find out that they provide their services mostly for foreign capital and are more linked with headquarters and regional offices elsewhere in the developed world than with the local economy. In this case the hypothesis would be that Moscow, in spite of its geopolitical ambitions, still fails to perform as a real global city with important gateway functions for Eastern Europe or the post-Soviet space. Second, we may find that international companies are relatively well integrated into the national economy, compete with the large national BS firms for spheres of influence and really serve as regional articulators of the world economy for a large hinterland. In this case, Moscow is more likely to develop into a real world city with the further BS growth followed by the transformation of related sectors of the city economy, including the housing market and the cultural sphere.

4) The quick development of the BS sectors, especially the growing number of international companies, have created a new segment of the labour market – a social group which may be defined either as new Russian yuppies, or as Moscow BoBo (in the Western literature – "bohemian bourgeoisie"). This group of middle class, occupied in the new business sector, is characterized by a certain lifestyle of their own with a recently developed cultural network, which makes a noticable imprint on the geography of the city. This research will help to understand the essential features of this new social phenomenon (unusually age-specific in the case of Moscow) and to analyze its impact on the growing social polarization.

References

Gritsai, O., 1996. Postindustrial shifts in Moscow: the global city concept and economic restructuring. Izvestija RAN, ser.geograficheskaja, 5, p.90-97 (in Russian).

Gritsai, O., 1997(a). Moscow under globalization and transition: paths of economic restructuring. Urban Geography, 18, 2, 155-165.

Gritsai O., 1997(b). Economic transformation and local urban restructuring in Moscow . Russian Regional Research Group, Working Paper Series, Number 11. The University of Birmingham.

Gritsai O., 1997(c). Business services and restructuring of urban space in Moscow . GeoJournal, August, .42/ 4, 365-376.

Gritsai O., 1997(d). Economic restructuring of Moscow in the international context. GeoJournal, August, 42/4, 341-347.

Gritsai, O., 2000. Applying Western theories to non-Western societies: business services in transitional economies. Paper, presented for a conference "Brokers of Capital and Knowledge: Producer Services and Social mobility in Asia". Amsterdam, May 2000.(in progress, a book in 2002).