GaWC Research Bulletin 346

This Research Bulletin has been published in L'Architecture d'Aujourd'hui, 378, June-July 2010, 56-61 (special issue MVRDV Architects), Paris, under the title 'We need Archinomics'.

Please refer to the published version when quoting the paper.

(Z)

The Need for Archinomics

R. Wall ^*

Today, the architectural tradition of locally based, blue-print planning is being increasingly destabilized by the irreversible processes of globalization (Graham and Marvin 2002). In this way, architecture, which is still ‘centred in old traditions of permanence,' is being ‘irrevocably destabilized in cities marked by economic networks, massive infrastructures, and growing estrangement' (Sassen 2003). Hence, Tafuri's prediction (1973) that architecture would someday be swamped by capitalism has become a harsh reality! The impact of exogenous forces on cities is clearly epitomized by the current financial crisis, revealing the precarious interdependence of global economics and urban development. For instance, Dubai's recent crash relates to the fact that it is the most globally integrated of the Gulf cities, and hereby vulnerable to world economic instability (Wall 2010). In this light, an uneasy uncertainty has settled upon the architectural professions, as they have lost their previously established ability (and credibility), to control the forces which now impact upon cities. Therefore, if planners still aim to effectively and qualitatively improve urban environments, it is important that the profession evolves - where planners cease to be ‘helpless puppets of the institutions they inhabit' (Harvey 2006), and avoid the vested interests of those trumpeting that no alternative exists to our current world. This requires architects to confront the ‘massiveness of the urban experience', and go ‘beyond notions of high-tech architecture, virtual spaces, simulacra, theme parks, and materialities of power' (Sassen 2003). Architects should embrace the paradox of the globally connected, but locally disconnected urban landscape, and hereby develop cities as integral components of a world city network (Amin and Graham 1999). Furthermore, because cities are increasingly unpredictable, blue-print type planning should be avoided (Neuman 1998), and instead a new planning must be developed that intervenes at strategic points and scales of the urban system (Portugali 2000) - points at the intersection of social, economic or physical networks. It concerns interventions at the border between complexity and order, where architects mediate between global forces of economic production and the local ideals of the production of space (Lefebvre 2003). This requires a reflexive, adaptive planning, which is hyper-aware of its multi-scalar context, and which can effectively accommodate rapid changes in the world economy! In this context, architecture should not be simply the product of economic activity, but should form an important determinant and regulator of economic flows within and between cities.

In 1972, the economist Stephen Hymer foresaw that the hierarchical division of world cities would increasingly correspond to the organizational structure of multinational corporations, from headquarters to production plants. Because multinationals centralize high-level decision making, advanced production, and high-profit functions in only a few global cities, the majority of the world's cities are confined to lower levels of economic activity, and hence different forces of urban development. Today, multinationals increasingly determine the fate of cities (Alderson and Beckfield 2004), through the provision of financing, jobs, knowledge, technology, human capital and infrastructure. This is confirmed in my earlier studies, which show that a strong coherence exists between the urban development levels (place) of cities across the world, and their share of global corporate investments (network). Simply speaking, the more connected a city is, the higher its level of urban development in the sense of economical performance and quality of life, e.g. city product, technical achievement, technological innovation and physical development. However, this is a ‘circular relationship', which also means that the higher the urban performance of a city, the higher will be its socio-economic connectedness to other cities. The networks in my research concern ‘foreign direct investments' (FDI), which are investments from one firm into another foreign firm, with the incentive of gaining a degree of control over that firm's operations. These investments are fundamental to global urban development, and are controlled by a relatively limited number of firms. In fact, only the top 500 multinationals in 2004, accounted for 90% of global FDI and 50% of world trade (Rugman 2005), effectively boosting urban development and accelerating the speculative construction of space. Furthermore, the fact that after the mid-1980s, FDI grew much faster than trade, and today claims a huge share of global GDP, suggests that it has become the primary mechanism of the global economy, and hence impacts strongly on the process of urbanization. In fact, as a whole, today's share of urban infrastructure in total FDI stocks globally, is approximately 10%, compared to only 2% in 1990 (World Investment report 2008).

The penetration of foreign capital through inter-urban competition is said to generate urban growth faster than previous forms of industrialization. This has led to today's ‘entrepreneurial city', in which the city is not only ‘structure' but also ‘agent', generating urban growth by pursuing dynamic competitive advantages to capture mobile capital flows and fix this in place. In its absorption of FDI, the entrepreneurial city aims to construct new types of urban space, for producing, serving, working, consuming, etc. For these reasons, FDI forms the essential data used in my research, and specifically concerns investments between Fortune 100 global multinationals (2005) and their thousands of subsidiaries. This has led to a database of almost 10 000 global investments, in 2,259 unique cities worldwide (figure 1). The network has been visualized by means of GIS, and represents approximately 50% of the global GDP of all OECD countries (2005). It shows that 82% of these investments take place ‘between' cities that are distant from each other, while only 19% takes place ‘within' their municipal boundaries (Wall 2009), which confirms that nowadays cities obtain significance by what flows between them, rather than what is fixed within them. Similarly, it shows that only 17% of the observed cities carry headquarter connections - in which New York, Paris, Tokyo and London together claim 25% of the total. It is therefore not surprising that these well developed, powerful cities hold the world's largest financial stock markets. On the other hand, it shows that subsidiary firm connections are dispersed over all 2,259 cities (Wall 2010), revealing the immense global control of multinationals. These findings empirically confirm Hymer's suppositions as described earlier. Furthermore, the map shows that the spatial distribution of today's multinational network is clearly disproportionate, polarized into three core regions, namely North America, Europe and Asia Pacific. For instance, particularly Africa proves to be marginalized, claiming a mere 1% of all corporate investments.

Figure 1: Geographic information systems (GIS) map of 9,243 major corporate investments between 2,259 unique cities of the world (2005). The white nodes represent correlations between aggregate investments and urban performance. (Source: Wall 2009).

Based on this analysis, I argue that cities today are strongly affected by external, seemingly invisible activities, and that if the architectural profession aims to effectively reinstate itself within our globalizing world, it seriously needs to accommodate knowledge of these forces into practice. This means going beyond the merely theoretical and rhetorical acceptance of this condition, by exploring and absorbing alternative forms of knowledge, methods and techniques. In this context, it is surprising how little interdisciplinary exchange exists between the spatial science and spatial design professions. It appears that an undiscovered territory exists; in which researchers and planners can mutually contribute to a more effective urban development. Although my research covers only a part of the requirements for future city development, it does validate the extreme interdependence that exists between cities. Hence, if network assets are as important as territorial assets, then as much knowledge of a city's external linkages needs to be acquired, as traditionally understood on a city's internal properties. This means the development of socio-economic programs which strengthen a city's existing ties, or which activate novel economic ties to new cities, improving the city's relative degree of competition. In this light, a ‘planning geopolitics' is imaginable! This requires an understanding of intercity connections and how these lead to the distribution of societal functions. Making a rough, tentative addition to Sullivan's original phrase, it means that ‘form follows function follows flows'. To achieve this type of intervention, multidisciplinary approaches are required - in this case between architecture and economics. Economics is a social science, which essentially studies how people functionally and spatially interact with each other to survive, and the impact of this on the world's (limited) resources. Driven by profit maximization, the world economy forms a seemingly indifferent, self-organized process, largely benefiting a handful of individuals. Planning, on the other hand, serves as a device to crystallize economic processes into the production of urban space, while simultaneously propagating the intention of accommodating more than individualistic economic interests. This in contrast to most architects that nowadays still generally conform to the apathetic procession of the world economy, eagerly converting capitalist assignments into compliant materializations, like office towers, business centres and commercial parks, giving very little consideration to the impact of their activities and whether alternatives exists to their economic compliance. In this sense, it is evident that urbanity has clearly fractured, and where architecture has indeed been swamped by the convolutions of capitalism.

My research shows that the coherence between economic density and the development of cities can be precisely measured and that the economy can be spatially visualized at different levels. One can zoom into any city, and observe which firms and investments are essential to it, and to which firms in other cities they are connected. Furthermore, through econometrics, a city's competitors can be derived and strategies developed that can give a city a leading edge in future. By analyzing urban performance indicators in relation to intercity investments, the interdependence of the global and local can be defined. The data can be aggregated at national or supra-regional levels, which give planners added insight into large scale developments. In my current research, a detailed dataset of ten years of global investments is being collected. From this, the evolution of the network can be explored, and econometric estimations can be made of the networks future. Nonetheless, it is important that this methodology serves merely as a useful tool. It is useful, in that it visualizes the invisible economic forces that impact on our world. It is useful, in that it can estimate the probability of the future network - through which growth or shrinkage of cities can be approximated, and the impact of this on city development. But, as with all probabilistic models, it cannot guarantee results, nor can it independently envision urban futures (Taleb 2007). Instead, it serves to provide us with a condition of hyper-awareness, on which to base future decisions. This leads to my last point. What kind of world, and what kind of economy do we want? Because the map shows how uneven the global economy is, and that the majority of the world is marginalized, it makes us wonder about the bearing of today's economy and urbanity! Do we continue to blindly trade and build, without direction? Are we (just) executers or visionaries? If the economy is left to its own devices, then it is likely that not much will change. Therefore, it is imaginable that economics and architecture begin to overlap. Where economics is useful at explaining how the world system works, it generally is incompetent in questioning whether this is the world we want to live in and at offering alternatives. Where architecture is useful at envisioning future cities, it is mostly ineffective at founding these visions in thorough scientific research and thinking beyond the local context. But surely the effective development of cities in a globalizing world requires the synthesis of these skills? Therefore, to end, I will post a tentative hypothesis for what I call Archinomics:

“To effectively develop cities within our globalizing world, a strong overlap between the disciplines of architecture and economics is needed, in which hyper-information and hyper-imagination mutually develop. This should primarily concern how relative developments ‘between' cities coincide with developments ‘within' cities”.

REFERENCES

Alderson AS, Beckfield J, 2004, Power and Position in the World City System, American Journal of Sociology 109, pp. 811 – 851.

Graham S, Marvin S, 2002, Splintering Urbanism: Networked Infrastructures, Technological Mobilities and the Urban Condition. Routledge, London.

Harvey D, 2000, Spaces of Hope, Berkeley CA: University of California Press

Lefebvre H, 2003, The Urban Revolution, Minnesota University Press.

Neuman M, 1998, Does Planning Need the Plan, Journal of the American Planning Association, Chicago, IL

Portugali J, 2000, Self-Organization and the City, Springer-Verlag, Berlin Heidelberg

Rugman A, 2005, The Regional Multinationals, Cambridge University Press, Cambridge.

Sassen S, 2003, Navigators for a Landscape of Estrangement. Berlage Institute Report 6/7, Episode Publishers.

Tafuri M, 1973, Progetto e Utopia: Architettura e Sviluppo Capitalistico. Laterza, Bari.

Taleb N N, 2007, The Black Swan: The impact of the Highly Improbable, London, Penguin Books.

Wall R S, 2010, Gulfworld: corporate profiles and networks of Gulf cities, in Al Manakh 2, OMA, Archis/Volume and Pink Tank.

Wall R S, 2009, Netscape: cities and global corporate networks. Rotterdam: Haveka. (http://repub.eur.nl/resource/pub_16013/index.html).

Wall R S, Knaap G A v.d., 2010, Centrality and structure within contemporary worldwide corporate networks, Economic Geography (forthcoming).

World Investment Report 2008: Transnational Corporations and the Infrastructure Challenge.

NOTES

^* Ronald Wall, Erasmus School of Economics, Department of Applied Economics, Erasmus University Rotterdam. Email: wall@few.eur.nl

Ronald Wall is an architect and holds a doctorate in economic geography. He has worked for MVRDV, OMA, Erasmus University Rotterdam and The Dutch Organization of Scientific Research (NWO). Between 2001 and 2009 he has been professor in architecture at the Berlage Institute. He is currently researcher at the Faculty of Applied Economics, Erasmus University, and the Institute of Housing and Urban Studies (IHS).