GaWC Research Bulletin 138

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This Research Bulletin has been published in Local Economy, 19 (3), (2004), 298-302.


Please refer to the published version when quoting the paper.


Understanding London in a New Century

P.J. Taylor

Buck, N., Gordon, I., Hall, P., Harloe, M., and Kleinman, M. (2002) Working Capital: Life and Labour in Contemporary London, London: Routledge, pp. 408 (ISBN 0-415-27831-3, ISBN 0-415-27932-1(pbk))

Ellis, E., Hirmis, A., and Spilsbury, M. (2002) How London Works: London's Economy and London's Markets, London: Kogan Page, pp. 184 (ISBN 0-7494-3784-70);

Hamnett, C. (2003) Unequal City: London in a Global Era, London: Routledge, pp.292 (ISBN 0-415-31730-4 (hbk), ISBN 0-415-31731-2 (pbk))

London is one of the most researched and written about places in the world. So do we need another three books on this city? The answer is yes, not because we can never get enough on this most fascinating of locales, but because good new books are always required to address ever-changing contexts. And this is the case for these books: as well as phenomenal changes occurring in the city itself, the world in which the city operates is undergoing critical restructuring, and the theories and concepts we use to make sense of all this change are themselves subject to fundamental rethinking. These three changes - broadly covered by the terms such as world or global city, globalization and post-industrial, and network society and post-disciplinarity - are all invoked in these new books to good effect.

My particular penchant for evaluating how the books inform the changes centres on Castells' (2001) idea that the global city is not just a place, it is a process. By this he means that the city exists as part of a wider network of flows that create it, reproduce it, and therefore define it. This notion transcends the contemporary city, it has always been the case: it is part of the nature of cities (Taylor, 2004). And yet, this is not how books about London usually treat their subject: place rules. For instance, in his acclaimed 'biography' of London, Ackroyd (2000, 254) identifies 'a true Londoner' as someone 'who could not or would not operate outside his own territory' (i.e. London). Thus it is not a surprise that he finds no room in his 822 pages to mention the importance of Hansa merchants for the commercial networking of London in the late Middle Ages. (A biography of an individual is all about their inter-personal relations; equivalent inter-city relational thinking does not seem to apply to this 'city biography'.) However, in the current context of transnational 'spaces of flows' we might expect the idea of London as process to begin to impinge on the dominance of considering London to be just a place. Hence, my test for understanding London in the new century is that we get a real sense of London as process as well as place. For reasons of academic tradition, this is a severe test but not, I think, an unreasonable one for a city all three books agree is today a key centre of the world economy.

The three books under review are very different with overlapping but nevertheless diverse audiences in mind. Working Capital is the product of the ESRC "Cities: Competitiveness and Cohesion" research programme. It is a major research report that aspires to be in the tradition of past landmark studies of London (the subtitle makes this clear). It is expressly a social science text by five 'heavyweight' London intellectuals who wish to see their academic ideas applied to practical-policy needs. How London Works is much more modest: it is for the 'non-expert reader', a general introduction to London's economy written by economist 'practitioners' working for the Training and Enterprise Councils in London. It provides basic empirical information on, and interpretation of, current economic forces for an informed debate on the long-term future of the city. Unequal City is an impressive textbook by a leading authority on London that will be essential reading for students of London and world cities in general. It is a detailed case study of a leading city within the framework of the world city literature. Comparing these books is therefore not straightforward: Working Capital is by far the most comprehensive both in topics and range of theories deployed, How London Works is a refreshing cut straight to the key economic questions facing the city, and Unequal City provides a logical progression from the city's material base through to its landscape outcomes. I have chosen to tackle this variety using geohistorical engagements; I find the books are very similar in their treatment of time and quite dissimilar in their treatments of space.

The common story is encapsulated by the use made by all three books of employment statistics. The basic transformation of London from mid to late twentieth century is told through massively declining numbers of industrial jobs coupled with massively increasing service jobs. How London Works provides a straightforward description under the title 'structure and change' (chapter 1) concluding it is 'not the same economy' today as found 20 years ago. Starting with London's growing productivity (jobless growth) and concluding with its growing wages relative to the rest of the country, it is shown how London now has one of the strongest economies in Europe with international leadership in finance, business services and creative industries. But this is a success story with a downside: the wages of lower earners are not rising as rapidly as high earners leading to an increased income gap exacerbated by continuing pockets of high unemployment. Such findings are grist to the mill of Hamnett in Unequal City in which he tells to same story as the 'remaking of London' within the framework of the world cities literature. He emphasises the changing role of London in the world economy and shows how this impinges on other features of London's changes. In particular he engages critically with world city theses on social polarization and gentrification and uses his case study to undermine what he sees as unwarranted generalizations in the literature. The most impressive treatment of these changes is to be found, however, in Working Capital in which the story is told under the title 'complex business' (chapter 3) and the arguments draw explicitly on theories of how firms use London. The purpose is to carry out the difficult task of assessing London's economic competitiveness and this is evaluated through consideration of global city functions, capital city functions, knowledge-based activities, and the cultural industries. Perhaps inevitable given this book's provenance, it is here that we find the most satisfactory understanding of recent economic change and what this means for London today. One thing all three books do agree on is that it is the economy that is the driving force behind the recent transformation of London; the coincidence of accelerating change and Thatcherism in the 1980s is seen as politics enabling rather than determining the transformation. This materialist thesis is irresistible to all these authors, justly so.

Materiality brings us to space and great diversity among the books. Differences in treatments of space fall into two categories. First, there is the question of spatially defining what we mean by London. This seemingly simple 'where' question is actually about how we conceptualise cities: what sort of social phenomenon are cities? Second, there is the question of relations between spatial structure and social activities. Again this leads into further intellectual territory: do cities compete and if so how? Both questions are vital to understanding London in the twenty first century.

London exists administratively as Greater London with its Assembly and Mayor. Although the latter are both very new, this geography of 'official London', was actually defined by politicians in the 1960s. Given the transformations previously described and the fact that these were economically driven, it would seem highly unlikely that this 'old political place' is a suitable definition of contemporary London. Thus in How London Works, chapter 2 on 'Economic Geography' begins with the simple argument that 'economics does not follow administrative boundaries' (p. 31). However it is Working Capital that has the most complete discussion of defining London in its chapter 2 entitled 'Spaces and People'. These authors make the case for a functional definition of London exploring the notion of which areas 'belong' to London. They use the London Metropolitan Region, incorporating 'a web of commuter links to London' (p. 19) which adds an outer ring of towns and suburbs to the Greater London area. However, their choice is pragmatic - this is a place defined by 1960s statisticians - and they admit that their approach ultimately produces 'fuzzy' solutions. Thus 'there is more than one London (p. 87), outer towns are 'half-London' (p. 88), and the intriguing idea that 'London is now bigger than London' (p. 88). This might appear to provide good reason to revert to using official London with its indisputable firm boundaries. And this is what Unequal London does: in this text Hamnett begins with a discussion of London that treats its definition as wholly unproblematic, 'London' elides into 'Greater London'. Hamnett's first figure is a simple administrative map of Greater London (p. 3) that contrasts with the first map in Working Capital which shows complex patterns of commuter flows within and without Greater London.

The neater solution does have an important practical advantage in terms of availability of official statistics over time that can be used to show both spatial and temporal changes. Hamnett uses this to good effect, but having decided upon their larger definition, Working Capital shows many equivalent patterns at the larger scale. The key point is whether using official London is merely convenient, whether it misses out important features that are London today, and whether it predisposes a very 'place-limited' view of London. Since Hamnett, curiously, never justifies his use of official London, I am inclined to answer yes to all three of these queries. For instance, in How London Works there is a chapter entitled 'Commuters and Residents' (chapter 4) while Unequal London deals only with 'London's housing market' (chapter 6) which is about changing housing tenures but without any reference to commuting. Thus in the latter book it appears that over one million people are part of London during the day but become 'non-Londoners' when they return home in the evening! This partial treatment of London extends to missing key features of contemporary London such as its airports: given the restricted geography we would not expect Unequal London to mention London Gatwick, London Luton or London Stansted airports but omitting any reference to London Heathrow, which is in Greater London, is rather odd. In contrast, How London Works treats the city as 'the leading international gateway of Europe' (p. 30) and devotes a section to the 'Heathrow hub' (pp. 42-7). Curiously, transport features only marginally in Working Capital.

The question of why the transformation of London has been so economically successful is related to its spatial structure in both Working Capital and How London Works. The former has a very good summary of the 'competitiveness debate' quoting Porter (1990) arguing for the importance of economic clustering creating real assets in competitive places in contrast to Krugman's (1995) counter that it is only firms that compete. However, both positions agree that clustering is an important asset whether for firms or cities. In How London Works Porter (1990) is invoked (p. 60) although the authors appear to agree with an uncited Krugman (p.86). The importance of economic clustering for London has been confirmed by Taylor et al. (2003). But this spatial topic is not directly broached in Unequal City: Hamnett refers to Thrift's (1994) work on the importance of local information (epistemic communities) and therefore the continuing necessity for face-to-face communication but this process is not discussed further. Instead, Unequal City is tied into the world cities literature: specifically as the book's first 'underlying proposition' (p. 4) that London as a world or global city 'exercises a leading role in the organisation and control of the world's economy, trade and financial flows' (p. 5). However, despite this explicit invocation of flows, the book reproduces the oft-noted weakness of the world city literature for its actual neglect of flows (e.g. Taylor 2004). Thus a picture of London as a centre of global spaces of flows is latent in Hamnett's treatment of London's new economy but his describing it as 'from industrial to post-industrial city' (p. 21) does locate a space of place firmly above spaces of flows. Similarly, although Working Capital includes the importance of 'internationalization' as one its 5 basic research questions (p. 15) its treatment is relatively sparse and with little on actual flows (pp. 110-14, 360-4). Thus, it is the more general text written by economic practitioners that provides the best sense of London within a global space of flows. In its chapter on 'international competitiveness' (chapter 3), How London Works London is depicted as 'competing' with New York, Tokyo, Frankfurt and Paris for headquarter functions, the former three also for global financial and business services, with New York, Paris and Boston for innovation and universities, with Paris, New York, Rome, Venice and Prague for tourism and culture, with Paris, New York and Milan for shopping, with Brussels, Edinburgh and Cardiff in government, and with Amsterdam, Paris and Frankfurt for transport. Regrettably, neither of the other two books, for all their good points, come even close to providing any equivalent global comparisons. However, in none of these books is there any notion that cities cooperate as well as compete (Beaverstock et al., 2002)

The results of my test are both unequivocal and somewhat surprising. It is only the general text written by economist practitioners that begins to adequately set London within the context of transnational and global spaces of flows. Our geography authors seem to be burdened by the weight of the place tradition, so much so that despite their supposed 'spatial expertise', they are seemingly incapable of appreciating London as process. Of course, because of the argument around which this review essay has been woven, some of the excellent material in Working Capital and Unequal City, especially on the internal features of London, are under-valued above. How important is my neglect will depend upon readers' opinions on the salience of my test for understanding twenty first century cities.


Ackroyd, P. (2000) London. The Biography. London: Chatto and Windus

Beaverstock, J. V., Hoyler, M., Pain, K. and Taylor, P. J. (2001) Comparing London and Frankfurt as World Cities: a Relational Study of Contemporary Urban Change. London: Anglo-German Foundation for the Study of Industrial Society

Castells, M. (2001) The Rise of Network Society. Oxford: Blackwell

Krugman, P. (1995) Development, Geography and Economic Theory. Cambridge, MA: MIT Press

Porter, M. (1990) The Competitive Advantage of Nations. New York: Free Press

Taylor, P. J. (2004) World City Network: a Global Urban Analysis. London and New York: Routledge

Taylor, P. J., Beaverstock, J. V., Cook, G., Pandit N. and Pain, K. (2003) Financial Services Clustering and its Significance for London. London: Corporation of London

Thrift, N. J. (1994) 'On the social and cultural determinants of international financial centres: the case of the City of London', in S. Corbridge, N. Thrift and R. Martin (eds) Money, Power and Space. Oxford: Blackwell

Edited and posted on the web on 15th April 2004

Note: This Research Bulletin has been published in Local Economy, 19 (3), (2004), 298-302