GaWC Project 32

The Global Connectivity of US Cities: A Study of its Importance and Policy Relevance for 'Lower-level' Cities

Funded by The Brookings Institution (Center on Urban and Metropolitan Policy) (2003)

Grant Holders: Rob Lang and Peter Taylor at the Metropolitan Institute, Virginia Tech

Research Assistants: to be appointed

[Results and Media Coverage]

1. INTRODUCTION: BASIC QUESTIONS

There is a long tradition of research on globalization of business services in the field of metropolitan studies that has included many descriptions of a US city hierarchy. In recent years, and largely separated from this research, a large globalization literature has developed on world cities wherein New York, in particular, but also Chicago and Los Angeles, feature as global and/or world cities. This research proposal will bring these two metropolitan research fields together and answer two key questions. The first question is: How have the processes of globalization in business services, which have created world cities, affected the US urban hierarchy? The second question is: How has globalization affected the lower tiers of the US urban hierarchy and, specifically, are the new processes reordering the relative importance of US cities? Answers to these questions will have important public policy implications, especially for economic development.

2. CITIES IN GLOBALIZATION

Models of national urban hierarchies were devised to describe inter-city relations before the contemporary information technology era. However, the combining of technologies in communications and computing has led to a situation in which the nature of spatial organization is being transformed. With these new technologies flows of information/knowledge/ideas/directions/data/co-ordination, etc. do not have to be ordered in spatial hierarchies because geographical distance is no longer an impediment. For instance, a business project in China led by firms in, say, Seattle or Atlanta may be organized through Hong Kong or Shanghai without any need to connect through New York as a ‘global city’ or Los Angeles as ‘Pacific Rim world city’. The overall result of such processes is to replace urban hierarchies by much more complex global spaces of flows.

World cities are defined in this study as ‘global service centers’ that provide international financial and business services through specific labor market processes. The advanced producer firms (e.g. in accountancy and in law) provide these services through their worldwide networks of offices. It is through intra-firm connections in devising ‘seamless’ global services for clients that ‘global service firms’ link cities together in a world city network. Specifically this is an ‘interlocking network’ in which the service firms and their labor market practices are the ‘interlockers’ creating a worldwide network of global service centers (Taylor 2001). The world city network is an amalgam of the worldwide office networks of financial and business service firms.

3. MEASURING GLOBAL NETWORK CONNECTIVITY

The Globalization and World Cities Study Group (or GaWC) developed the data used in this analysis. GaWC is the leading research group studying inter-city relations on a global scale. Operating as a virtual center and originating from Loughborough University (UK), it is now also part of the Metropolitan Institute at Virginia Tech. This world city network model has been operationalized through a global project funded by the Economic and Social Research Council. Data on office networks have been collected for 100 global service firms over 315 cities across all continents – for a detailed description of the data collection, see Taylor et al. (2002). A 100 x 315 matrix has been produced for the year 2000 showing the importance of each city for the global office strategy of each firm. From such information one can determine a city’s connectivity with other cities and thereby derive measures of global network connectivity for each city (Taylor et al. 2002). In this exercise London is the most connected city with New York a very close second. To ease interpretation, network connectivity for all cities are computed as proportions of the highest (London’s) connectivity.

Turning to US cities, there are 26 that feature in the top 150 connected cities throughout the world (See Table 1). These range from New York at the top to Cincinnati at the bottom. The final column shows eight strata of US cities as they relate to global service provision. The strata have been provided with preliminary brief descriptions. The top two strata are well known from the world cities literature and require little discussion. Cities in strata C and strata D also feature in some world city literature usually identified in terms of specialist functional or regional roles. Cities in strata E through H, on the other hand, are rarely mentioned as world cities even though they are all connected into the world city network. They have been tentatively identified as regional centers with global connections.

For the most part this ranking of US cities is consistent with current thinking on the ordering of cities. However there are some possible anomalies. For instance, the very low ranking of Phoenix, one of the fastest growing cities in the US, is surprising. This city would commonly be viewed as equivalent in importance to at least the cities in strata F. Similarly; the rapid recent developments of Charlotte’s economic service base seem not to be fully reflected in the table. These few incongruities imply that that there is more to understanding the importance of US cities than just their worldwide standing as global service centers.

4. BELOW WORLD CITY PROCESSES

The financial and business services offered by cities are provided at different geographical scales of provision. The findings reported above reflect just one scale of provision, the global. As well as global service firms each of the cities will have firms in each service sector that offer just local, regional or national scale services. A law firm in Cincinnati, for instance, might offer its clients a national service with offices in New York, Los Angeles and Washington, DC.

Thus every city has a portfolio of financial and business services that can be divided into different geographical reaches. For some cities there will be relatively high numbers of firms that provide only local-level (no offices outside the local city and its suburbs) service provisions, in other cities there will be relatively high provision of regional services (e.g in the South East or Mid-West) by firms with offices in towns and cities across the encompassing region. The point is that the services provided in each city will have a different mix of provision at different scales and all that Table 1 shows is global provision. It might well be, for instance, that financial and business service provision in Phoenix is relatively larger than implied by Table 1 but that it is focused upon local and regional provision.

In order to relate world city processes to the US urban hierarchy it is necessary to study sub-global processes in relation to known global processes.

5. PROJECT AIMS AND OBJECTIVES

There are two complementary aims:

1. To investigate leading US cities to ascertain the relative importance of global service provision in relation to other scales of service activity.
2. To enhance understanding of how globalization processes operate differently across US cities in order to consider what this means for urban economic development policies.

   To convert these aims into a manageable research project, the investigation is structured as follows.

   1. Economic sectors. For comparative purposes the only service sectors in the global study are accounting, advertising, banking/finance, insurance, law, and management consultancy. However, within this set three services are covered: advertising, banking/finance and law. These represent a range of different types of service provision. In addition, local service provision for which there will inevitably be large numbers of small firms, is not considered. Thus the project will focus upon extra-city-region service provision only.
   2. Cities. Cities are selected from the different levels in Table 1: from the bottom upwards – Phoenix, Charlotte, St Louis and Seattle. Thus the focus is on cities that are not normally viewed as world cities. The cities are also chosen to cover a range of different US regions.

   The operational framework of this proposed research covers three service sectors and four cities. The framework will help:

   1. Create an inventory of extra-city advertising, banking/finance, and law and firms in each of the four cities. This will lead to enumeration of the total population of the study.
   2. Ascertain the geographical scope of the firms identified in a) so as to classify them as regional, national, international or global in the distribution of their office networks. This will lead to a geographical classification of firms to be used subsequently.
   3. Measure the relative importance of the different geographical scales to the service portfolio of the four cities. This will lead to extension of current connectivity studies.
   4. Provide a reasoned assessment of the financial and business service sector in each city’s contemporary economic developmen

6. METHODOLOGY

The study will involve comprehensive data collection of firms in each sector in each city. Lists of firms located in a city will be available from the Book of Lists. With such lists the geographical scope will be found by a variety of means including use of firm’s websites and other firm materials. This is basically a ‘scavenging’ method that uses any reliable sources to provide information on location of offices.

For each extra-city service firm a list of offices will be created to facilitate geographical scope classification. This will enable the service portfolio of each city to be analyzed in terms of the scopes of its provisions.

Finally, there will be one interview with a policy official, in each of the four cities, to discuss and evaluate the meanings of the results for the city’s policy making. The point is to move the policy debate beyond the tendency to associate understanding globalization processes with emulating "success stories"–the world economy will never consist of many "mini-New Yorks." Rather, globalization is a bundle of many complex processes within which they are and will be many different niches for cities to succeed in.

References

Taylor, P J (2001) ‘Specification of the world city network’, Geographical Analysis 33, 181-94

Taylor, P J, Catalano, G and Walker, D R F (2002) ‘Measurement of the world city network’, Urban Studies 39, 2367-76

Table 1: A Ranking of US Cities within the World City Network

For results of this project, see Research Report U.S. Cities in the 'World City Network'.

Media Coverage:

St. Louis Post-Dispatch 23 February 2005 (1), St. Louis Post-Dispatch 23 February 2005 (2), Boston Herald 23 February 2005, Campaign for Sensible Growth (Illinois) 24 February 2005, The Daily Free Press (Boston) 28 February 2005, Atlanta Business Chronicle 4 March 2005, 11Alive (Atlanta) 8 March 2005, The Arizona Republic 8 March 2005, Government Technology's Public CIO Magazine 17 March 2005, San Antonio Express-News 20 May 2007