GaWC Project 2

The Geographical Scope of London as a World City: A Relational Study

Funded by ESRC (1997-1998)

Grant Holders: P.J. Taylor and J.V. Beaverstock

Research Associate: R.G. Smith

[Results and Media Coverage]

In the last decade and a half the 'world city hypothesis', and the related concept of 'global city', have provided an exciting alternative framework for understanding contemporary global change (see for example, Friedmann and Wolff, 1982; Friedmann, 1986, 1995; Knox, 1995; Knox and Taylor, 1995; Feagin and Smith, 1987; Sassen, 1996; Smith and Timberlake, 1995a). Instead of a focus on familiar international patterns portrayed on the political map of states, a fresh perspective on the world is posited that emphasises processes. We are invited to transpose our fundamental image of the world from boundaries defining mosaics to nodes organising flows. This new way of thinking about the world is consistent with the trans-state basis of globalization theories which goes a long way to account for its current popularity.

This study investigates one of the most important of these nodes or world cities, London, in terms of its relationship to other world cities. Hence we accept the general model of the world-economy as a network of flows and transactions but we recognise the existence of serious limitations in existing formulations of this approach. In particular we emphasise the need to focus upon relations between cities; by proposing 'a relational study' we aim to make a general theoretical point about world city studies in addition to increasing our knowledge of London as a world city.

A paradox of world city research: the relative neglect of relations

There is curious paradox in the literature on world cities: whereas the essence of world cities is their relations one to another, researchers have generally not focused on this aspect of their being. This can be illustrated by the two seminal works in this literature, that of John Friedmann (1986), creator of the 'world city hypothesis', and Saskia Sassen (1991) who identifies London, New York and Tokyo as the famous triad of 'global cities'.

Friedmann (1991) has provided a complex of ideas under the rubric of a set of 'hypotheses' in which he argues that the new international division of labour is organised through a class of cities designated 'world cities'. These cities act as 'control centres' for world capital accumulation and this activity is translated into specific internal economic and social structures, notably class polarisation, that constitute the particular nature of the contemporary world city. Friedmann (1986) posits a hierarchy among his world cities which has been widely quoted because of its pedagogic value. Since London shares a place at the top of this global urban hierarchy, we are particularly interested in how the hierarchy is specified and what it means to be in the top rung. But for all its heuristic value, Friedmann's hypothesis is particularly weak on this. He admits the hierarchy is 'complex' because of the tendency for many world cities to have particular biases in specialised functions, but nevertheless creates a subjective a priori typology of levels. The problems are clear when we look at the changes he makes to the hierarchy over time: his discussion of entry and exit might be termed 'casual empiricism' with no firm grounding on evidence of world city mechanisms. Where his approach has attracted detailed empirical analysis by others, it has often taken the form of measuring the attributes of world cities and then ranking them in numerous tables (see for example, Cohen, 1981; Brotchie et al 1995, Daniels, 1993; Drennan, 1996; London Planning Advisory Committee, 1991; Lyons and Salmon, 1995; Nijman, 1996; Noyelle, 1989; Sassen, 1994a, 1994b, 1995). But to rank is not to define a hierarchy. The latter implies relations between constituent elements, data on attributes can only provide a very weak indication of such links.

A key problem that has been discovered in attempts to define a world hierarchy of cities is the fact that several relatively small cities in Europe (for example, Amsterdam and Zurich) have a disproportionate influence in the world (see Shacker, 1994; Meijer, 1993). Without going into the historical reasons for this, we can note that Friedmann's (1986) identification of complexity in his hierarchy hardly does justice to the European situation. Here, unlike the unified political space of the USA in which he writes, city specialisations combined with numerous national capitals produce an urban pattern that is not obviously hierarchical at all. On most indicators London is the most important city in Europe but in relational terms how is it connected to other European cities and does that make it the apex of a hierarchy? We simply do not know the answer. In Friedmann's (1986) work London is first designated a core primate city and then a global financial articulator. The latter description combines a broad geographical scope with a narrow functional role. To make sense of this we must view London as one of a class of three, with New York and Tokyo, which constitute Sassen's (1991) global cities.

Sassen's (1991, 1994a, 1996) work is important for carefully specifying the nature of global cities. Although changes in international banking and finance have been vital in the emergence of her triad, they are more than mere finance centres. For Sassen (1991) finance has become part of advanced producer services that typify global cities as post-industrial production sites. This is not the same as Friedmann's (1986) original idea of world cities as general 'command centre' since concentration of corporate headquarters is not part of the defining characteristic of these top three world cities. But Sassen's (1991, 1994a, 1994b) analysis is weakest when she comes to consider the question of a global hierarchy. Although her discussion is about transactions between cities her data consists of attributes: more lists ranking cities plus comparing the 'big three' combined versus 'the rest'. Again, this is simply not the way to find out whether the triad really does constitute the apex of a new global hierarchy. Overall Sassen provides a valuable comparative study of global cities, with notable findings on parallel changes between New York, London and Tokyo, but has very little to offer for understanding relations between cities. This is particularly serious in the case of London with its ambiguous role vis a vis other European cities; the most curious feature of Sassen's work (1996 excepted) is the neglect of the effects developments in the European Union may have on London and the urban hierarchy in Europe.

Finally, the reason we have concentrated our literature critique on the seminal work of Friedmann and Sassen is because, as the foundation research, it has set the general tone of world city research generating serious relative neglect of relational data.

Relational data: transaction flows and organizational connections

There is a simple explanation for the predominance of attribute over relational data in world city studies: the difficulty in obtaining the latter. Most data collection agencies focus upon attribute data, both because of its general ease of collection and because most demands seem to favour this form of information. This is the reason research on world city relations typically rely on city attributes as surrogates for real inter-city linkages. But not all studies have done so. There are two types of data that have been used to measure inter-city linkages directly: transaction flows and organizational connections.

Smith and Timberlake (1995b) have constructed a typology of inter-city linkages based upon the form (human, material, information) and function (economic, political, cultural and social) of flows. Twelve types are identified but the authors have to admit that they constitute little more than a 'wish list' for world city research since data is simple not available. The problem is that official data on flows is between countries and not cities and private data on flows is notoriously difficult to get hold of. The major exception is air traffic and a global city hierarchy has been produced from such data (Keeling, 1995; O'Connor, 1995) but this turns out to be a very crude measure of world city linkages. London emerges at the centre of the world airline network but this says very little about its role as a global city in relation to the defining economic characteristics discussed above. There is much work to be done exploring sources for new flow data between cities but this is not the route we take here.

Data on the organizational structure of the firms carrying out the advanced service production is a much more fertile line of research at this time. This relates to the new economic geography of services which has focused on the recent growth of producer services, and within them, financial services (eg. Corbridge, Martin and Thrift, 1994; Daniels, 1991, 1993, 1996; Thrift and Leyshon, 1996) Different firms and sectors of producer services have different organizational approaches to inter-city linkages - branches, associations, etc., - but they are relatively easy to discover from company reports and professional directories. Although this does not provide data on the actual transactions of companies, it does reveal their geographical strategies as prime agents in the making of contemporary world cities, or international financial centres (see for example, Coakley, 1992; Budd, 1995; Pryke and Lee, 1995; Thrift and Leyshon, 1994). Typical uses of such data are the pioneering works of David Meyer (1986) on how Latin American have stronger ties to the USA than between each other, Peter Daniels (1986) comparative analysis of foreign banks in New York and London, and Nigel Thrift (1987) on 'international financial centres' using foreign banks in London and selected London companies' international networks. More recently such data have been used to explore hierarchical systems of cities, for example: ó hUallacháin (1994) uses foreign banks in US cities to define the global scope of six of them, Lynch and Meyer (1992) use law firm branching patterns to suggest a hierarchy among US world cities, and Daniels, Van Dinteren and Monnoyer (1992) uses consultancy services to construct a urban hierarchy in Western Europe. Clearly, here we have a potent type of data to solve the deficiency of relational studies in world city research.

Aims and objectives

In a footnote to his study of international financial centres Thrift (1987) claims to be 'unpacking' Friedmann's world city concept. In this study we attempt a 'repacking', that is to say we are concerned to treat the idea of world city as a whole Hence although we are proposing research that follows a path developed by the new economic geography of services with producer services as the subject of study, world cities (as represented by London) remain the object (or aim) of study.

AIMS:

(i) To reorientate the study of world cities and their inter-connections through a simple illustration of the necessity and benefits of a relational approach.

 (ii) To develop a unique set of data that covers all or most of the producer services of a single dominant world city and which defines its geographical scope. This part of the project is directly related to Loughborough University's "Global Observatory" which acts as a 'clearing house' for trans-state data on the World Wide Web.

 (iii) To describe the way in which London is situated as a world city in terms of its geographical scope particularly as it relates to other European world cities.

OBJECTIVES:

 (i) To map the external relations of London companies by sectors of advanced producer services.

(ii) To derive overall indices of connectedness between London and other world cities from (i).

(iii) To compare each sector with the overall indices in terms of surpluses and deficits to see what relative geographical biases they reveal (e.g. European, North Atlantic, post-imperial, Pacific).

 (iv) To map the origins of foreign companies with organization relations in London by sectors of advanced producer services.

 (v) To derive overall indices of connectedness between London and other world cities from (iv).

 (vi) To compare each sector with the overall indices in terms of surpluses and deficits to see what relative geographical biases they reveal.

 (vii) To explore London's position in a possibility global hierarchy through examination of the pattern of 'unequal exchange' between London and other world cities in terms of numbers of firms 'branching' into and out from London.

Data requirements

All the data we require is publicly available in official business and professional directories. We will use the following: The City Directory; The Bankers Almanac; The Stock Exchange Companies Directory; International Bankers Directory; Advertisers Annual; Directory of Management Consultancys; Directory of Chartered Accountancy Firms in E&W (ICAEW); Directory of Information Brokers and Consultants; International Trade Fairs and Conferences Directory; Crawfords Directory of City Connections; Directory of European Business; The International Law List; UNCTC Directory of the World's Largest Service Companies; Chambers & Partners' Directory (International Law Firms). As and when necessary, this initial data will be supplemented by information in trade journals (e.g. Accountancy, The Banker, Investors Chronicle, Campaign, Advertising Age, International Accounting Bulletin) and materials held in the libraries and information offices of professional bodies (e.g. Institute of Chartered Accountants for England and Wales; The Chartered Institute of Bankers; British Merchant Banking and Securities Houses Association; The Advertising Association).

Work plan

What we have proposed is a modest empirical study as part of a larger theoretical agenda. Executing the task we have set ourselves will primarily be the responsibility of a research associate over a period of one year. The work will be divided into two tasks: (i) data collection through both using Loughborough University's inter-library loan service and visiting the copyright library at Boston Spa to record information directly from the latest directories (this will involve use of a lap-top computer); and (ii) data organization, mapping and writing up the findings. The latter will not involve any sophisticated analysis, the emphasis at this stage is on data presentation, computing special indices and constructing simple typologies. Preliminary investigations using old directories suggest the first task will take six months to complete. We envisage a work plan where the first three months are devoted to data collection, the next six months are shared equally between the two specified tasks, and the last three months are spent writing up.

Output

There will be three outputs from this study:

(i) The research will disseminated through the usual academic channels as conference presentations and publications in peer group reviewed journals.

 (ii) The research will act as a springboard to further work within the broader theoretical rationale; extending the data to other European cities and exploring alternative forms of relational data are at the top of our next agenda but both will be tempered by our findings here.

 (iii) The research has practical strategic value for London and those who make it a world city; in particular it goes beyond the emphasis on internal structures and comparisons by ranking which dominate planning consultant's reports.

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