This Research Bulletin has been published in M Pak (ed) (2004) Cities in Transition. Ljubljana: Department of Geography, University of Ljubljana, pp. 183-193.
The concept of Tel Aviv as a world city was established by Kellerman in 1993, emphasizing the existence of "leading economic functions typical of the late 20th century: high tech industries and a modern service economy". He credits Knight and Gappert (1984) for including Tel Aviv, for the first time, among those cities in the world, which, according to Forbes of July 1983, "are the respective homes of two or more corporations that achieved substantial annual sales.". While Kellerman refers to Tel Aviv as a world city in broad terms, this paper extends the notion of Tel Aviv as a world city in evolution, using more recent world city research that has established a wider range of indicators to list a city as having a world city status. For example, Beaverstock, et al. (1999) includes Tel Aviv with 23 other cities that were mentioned at least once as world cities by 15 references of world city literature. In their own research they named Tel Aviv, having two out of four 'global' advanced producer services (accountancy and advertising), among the group of cities (also including Athens, Dublin, Helsinki, New Delhi, Philadelphia, Rio De Janeiro, and Vienna) strongly evincing 'world-ness' (Beaverstock et al., 1999).
This paper draws on the author's observations of the dynamics of change in greater Tel Aviv since the first half of the 1990s. It re-examines the world city attributes of Tel Aviv established in the mid 1990s, using recent 'world city-ness' elements cited by recent world city literature. Tel Aviv,1 whose 2.6 million population, accounted for 44% of Israel's total in 2000, has been Israel's primate urban agglomeration since the 1920s (Reichmann 1972). Since the late 1980s it has evolved into the hard core of Israel's post-industrial globally oriented economy, its post-modern physical ambience and its social and cultural lifestyle. Among the issues to be raised is why Tel Aviv, geopolitically located at a frontier of its own region, hence at a spatial 'dead end' of the global economy, has successfully acquired world city attributes. But first the following questions must be addressed: What do we mean by 'world city-ness', and what are the main attributes of a world city? Is there a link between a post-industrial globally oriented environment and 'world city-ness', and what are the essentials of such an environment? What are the 'going global' processes of MENA2 and what is the nature of its 'wannabe world cities' described by Stanley (2001) that could be applied to Tel Aviv?
In a direct reference to Tel Aviv, the following five questions are addressed:
The following discussion draws on a variety of resources. They include background literature on the evolution of Tel Aviv; a few empirical survey data compiled by the author and his students since the mid 1990s; official statistics published by Israel's Central Bureau of Statistics and other agencies. In addition, and because the process through which Tel Aviv has been going global is relatively new and is still ongoing, up-to-date information was assembled from contemporary media sources, primarily the economic sections of daily newspapers and carefully evaluated internet sites.
ATTRIBUTES OF A 'WORLD CITY'
What is 'world city-ness' and what are the key elements of a world city? In the late 1990s world city literature challenged old established attributes that in the past had qualified a city for that status. Leading the process were Beaverstock et al. (1999; 2000) along with other members of GaWC study group. Their main argument was that the definition of 'city world-ness' should replace the existing paradigm of 'attributes without relations' by one that views a world city as an element of 'world cities in a network society'. Beaverstock and his associates (2000) blamed the old paradigm for emphasizing the individual city, alone or in comparison with other cities. It depicted a world city as having one or a combination of the following attributes5 its nature was cosmopolitan and it was a center of a corporate economy. It was a center of command and control which, along with other such centers, had initiated the creation of the 'international division of labor'. It acted as a major financial /banking center,6 and had an agglomeration of advanced producer services, in some cases also serving as an important financial center. London, Tokyo and New York headed a world city hierarchy defined by this attribute. It was a 'privileged site' for reflexivity rooted in its specialized manufacturing and producer services knowledge and learning structures as defined by Storper (1997) who cited Hollywood as an example.
A point of departure for the paradigm of 'world cities in a network' is Castells's (1996) 'network society', the arena of the informational economy [global] 'space of flows'. The 'network paradigm' was designed by Beaverstock and his colleagues (1999; 2000) on the basis of global office location strategies of four leading producing services: accountancy, advertising, banking/finance, and commercial law. A worldwide sample7 compiled a list of 55 world cities ranked into three groups by the number and importance of their leading producing services (Table 1): Prime or Alpha (10 cities); Major or Beta (10 cities); and Minor or Gamma (35 cities). Tel Aviv is on the Gamma level in two of its services, accountancy and advertising (Beaverstock, et al., 1999). However its final rank was the fourth group of cities, which showed relatively strong evidence of [future] world city formation.
Stanley's (2001) alternative regional model for MENA broadened the scope of the world city network paradigm in three main elements. But his most significant input to the Tel Aviv case was his 'going global' regional model. This helped to explain why Tel Aviv has moved in a different direction, namely that of a world city at the frontier of its own region and as a cul-de-sac in the global economy. Stanley's foremost notion is that a region like MENA should not be organized at the nation state level, but around and through its cities, embedded and linked into broader networks of exchange and flows: city hinterlands, city dyads,8 and city systems. Next is a proposition to extend world city-ness attributes to include, in addition to the narrow list of command and service sectors, other sectors such as 'creative service industries'.9 Last, but the most important in terms of the mechanism through which a city might attain world city-ness qualities, is the vital role of an agency. Stanley (2001) contended that cities and systems of cities develop, and are enhanced, empowered, or modified through initiatives taken by agencies, the actors10 operating within the local power networks with the aim of modifying the position of their own city or subset of cities in it. In our case an agency's main objective is cities that are 'going global', known as 'wannabe' [world] cities. The 'agency' model differs from Friedmann and Sassen's deterministic 'new world order', emphasizing the role of global economic forces and capital investments in the producer's service sector in creating world city status. The agency model is a grassroots one, in which agency actors help develop a range of policies and actions designed to upgrade the status of their own city within its own network (Stanley, 2001).
Sassen (2001) supports Stanley's regional model and in so doing has added an extra explanation for Tel Aviv's frontier, cul-de-sac location. Sassen's main argument is that the roles played by nation states in cross border flows has changed significantly because of privatization, deregulation, increased participation of national economic actors in global markets, and the entry of foreign firms into the national economic milieu. Consequently, and because of improved connectivity, firms and their overseas outlets are now more firmly engaged in cross-border transactions in the form of investments, alliances among financial markets, and international labor markets for specialized service workers and professionals. Global cities or those with global functions have become the anchoring network of places with multiple cross-border activities. Through these evolving 'global circuits' that cut across borders, one can better perceive globalization with the purpose of identifying the complex organizational frameworks that are both partly de-territorialized and partly spatially concentrated in cities (Sassen, 2001). Needless to say Tel Aviv does not enjoy multiple cross-border activities with its own neighbors.
To sum up, a world city besides having large population size and being functionally and spatially allied, through loose cross-border links or through a global linkage system, with a larger network of cities, ought to exhibit most of the attributes named under the paradigm of 'attributes without relations'. The main ones are a cosmopolitan ambience and a liberal life style; a site of top multinational command and control centers alongside advanced producers' service firms and major financial institutions; an array of 'creative service industries'. A city having world status needs an up-to-date infrastructure including an international airport, information and communications systems, a web of social and cultural institutions and of cultural and other community services and facilities, and a range of trendy consumer services (Goldberg and Davis, 1988). Equally important is that its public, particularly its agency actors, should initiate consistent strategies and policies aimed at accommodating new innovative opportunities and consequential circumstances (Goldberg and Davis, 1988; Hall, 1991; Harvey, 1989). They should do everything necessary to reduce the widening social disparities, so common in world cities (Stegman and Turner, 1996), and, by adopting an appropriate policy of 'thinking globally, acting locally' (Gappert, 1989), to narrow the gap between globalization strategies and local needs and aspirations.
The role of an R&D intensive high-tech industry with globally reach as a prerequisite for a world city status has not yet been fully established (Kipnis, 1996) leaving the question of how high-tech activity might act as a vital growth pole in a world city context. Yet thanks to information technology, allowing a spatial divide between management and production, the productive segments have geographically dispersed to create a 'global factory' whose sites are found along a continuum stretching from a nearby metropolitan fringe location to remote developing countries. The 'quinary' decision-making and control sector of [high-tech] industries has moved to central-city 'front office' locations, usually favoring a CBD site (Gottmann, 1983; Hartshorn, 1992; Sassen, 1991; Wood, 1974). This prime site allows management to maintain strong linkages with the 'quaternary' finance and producer services sectors. The latter, striving for consensus building through an ad- hoc interactive and collective work style, tend to cluster in central city prime locations, usually in the CBD or in its satellites, where they can operate within their agglomerated linkage networks (Burris, 1989; Offe, 1985; Waters 1989). In sum the crucial linkages between the 'quinary' and the 'quaternary' sectors taking place in the central city milieu have been a vital element in creating a growth pole 'enclave' within a world city context.
POST-INDUSTRIAL SOCIETY, ECONOMICS, AND SPACE
Post-industrial economies differ from the industrial in their method of production, and are known for their being hyper-differentiated, at their levels of structure and function (Crook et al., 1992). The industrial economics are goods producing, while the post-industrial depends on specialized and complex producer services, in order to help integrate their centralized management of production. For Castells, post-industrial equals his 'informational mode of development', where information processing is a fundamental activity shaping the efficiency and productivity of production, consumption, distribution, and management. This mode of production is the outcome of the development of large corporations and of the shift from capital and labor to other factors of production linked to science, technology, and management (Castells, 1996). Also noteworthy is that post-industrial economies tent to adopt flexible production processes and organization, diversify their scope of activities, and join worldwide production alliances and networks (De Jong et al., 1992; Hartshorn, 1992; Sassen, 1991). Being hyper-differentiated, post-industrial society ought to provide for a diversified needs and aspirations. Community leaders, or those who might assume the role of an agency actor, should be capable of sensing the values they should assign to their community's social, cultural, and leisure assets (Coffey, 1992; Felsenstein and Razin, 1993). These assets are pivotal elements for the community's psychic income and rewards (Buswell, 1983), and for its white-collar environment (Malecki, 1980).
A few large urban centers, the articulation nodes of the global economy and where timely information and knowledge cluster (Castells, 1996; Gottmann, 1983; Moss, 1988) are the host environment for post-industrial economies (Friedmann, 1986, 1995; Illeris, 1991; Sassen, 1991; 1994; 1995; Short, 1996; Veltz, 1997). In agglomerated urban centers competition among industries is determined by quality and flexibility of their short-production series and by their ability to respond quickly to changing market/production conditions (Illeris, 1991). They are also the arena where quinary staff meet quaternary professional experts in face-to-face meetings, so necessary for creating new knowledge and/or a new agenda (Illeris, 1991), or for the exchange of complicated and sensitive information (Gad, 1979; Gottmann, 1983). Quaternary sector's advanced producer services firms are located in proximity to other complementary quaternary service firms, enabling them to create ad- hoc alliances for joint production ventures (Gottmann, 1983; Illeris, 1991; Sassen, 1991). Finally, culturally and service rich urban centers allow high-income, knowledge-intensive labor, professional experts, the elite, and those who might become agency actors, fully realize their lifestyle expectations (Sassen, 1991; Sklair, 1991; Stanback and Noyelle, 1982).
Israel's entry into the post-industrial age and its integration into the global economy accelerated during the 1990s as a result of the absorption of more than 1,000,000 immigrants, and of the evolving peace aspirations in the Mideast. This was accompanied by profound structural shifts in employment and in industrial mix, a large increase in FDI,11 and enlarged exports in quantities, mix, and destinations. Since the late 1980s industrial production has more than doubled, mainly in high-tech, and the percentage of manufacturing R&D expenditures has reached 3% mark, to place Israel among the leading high-tech, start-up intensive countries (Arazi, 1998; Karp, 1998; Kipnis, 2001). Israeli innovations are placed in products of multinationals in the fields of computers, optics, communication, information systems, medicine, software and even consumer goods (Achsat, 1998). High-tech giants like Intel, Microsoft, Digital, and IBM have located R&D labs in Israel, striving to bud their future generation products (Maor, 1998).
Foreign trade and FDI patterns display Israel's alliance with the global economy, taking advantage of Israel FTA12 with the EU and NAFTA. The FTAs have turned Israel into an 'export bridge' between the two markets (Raveh, 1991), and into an investment paradise of the global economy.13 In the late 1990s over 80% of Israel's exports and also of its imports were destined for or originated in the global mega-markets: the EU, North America, and the West Pacific Rim (Bank Hapoalim, 1998). Since 1993 FDI to Israel has increased dramatically revealing cross investment patterns (Dolev and Sarel, 2000; Cox, 2001). Most FDI originates in the USA but growing amounts are arriving from the EU and the Far East, primarily Japan (Sagee and Dagoni, 1997; Timor, 1997). Hermony (2000) reported that the total investment in high-tech industries in Israel during the first half of 2000 was $1.35 billion, and the expected total investment for 2000 would be more than $3 billion. Israel, according to Hermony is fifth among the high-tech countries in total investment, and first in investment on a per capita basis. All these have led investors and reporters to refer to Israel as the 'new/second Silicon Valley' (Sagee and Dagoni, 1997; Karp, 1998; Lashinsky,14 1999; Global News Analysis, 2000; Perman, 2000). Henzler, president of Europe Division of McKenzie praised Israel as having more firms on NASDAQ than all EU countries together, and suggested that Israel has a real chance of becoming Europe's Silicon Valley (Sade, 2001).
The changes in industrial mix and the emphasis on high-tech industries were followed by employment restructuring toward higher status occupations and advanced service industries. For example, between 1988 and 1998 total employment in Israel increased by 43% but the percentage of scientific and other academic workers both in finance and business services doubled (Table 2). This reflected, inter alia, the absorption of a huge wave of highly educated Russian immigrants, many of them with scientific, engineering, and art education, who boosted Israel's social and economic competence. Note that this wave of new immigrants caused a significant increase in unskilled employment too, also a worrisome symptom of the post-industrial age. All these manifestations were followed by a remarkable increase in GDP: from $70.3 billion in 1991 to close to $100 billion in the late 1990s. Per capita GDP was $16,650 in 1997, 46% higher than in 1991 (Bank Hapoalim, 1998).
TEL AVIV: ISRAEL'S HARD CORE REGION
The thesis of this paper is that Greater Tel Aviv (Figure 1) has already crossed the threshold of going global, and it has earned world city standing in spite of its frontier location in its region, the Mideast, and its situation at a dead-end site relative to the global economy. Furthermore, the history of Tel Aviv-Yaffo (the official name of Tel Aviv city) resembles the story of many other cities of world city caliber. The founding of Tel Aviv, a Jewish suburban garden city north of Arab Jaffa (Yaffo in Hebrew) was in 1909.15 Two decades later Tel Aviv surpassed Jaffa in population and economic activity to become, together with Jaffa, the 'primate city' of the Land of Israel. In 1948, following Israel's independence, when most of its Arab inhabitants became refugees, Jaffa was united with Tel Aviv, the central city of metropolitan Tel Aviv. The late 1990s the population of Tel Aviv City was 350,000 (that of the metropolis was 2.6 million) (Israel, 1999).
The process by which Jaffa emerged as a city with an international image dates to the second half of the 19th century. At that time the Ottoman government sought to boost its control over the southern coastal plain of the Land of Israel, to allow safe operation of Jaffa port and to promote the city's economy (Ram, 1982; Kark, 1984; Kellerman 1993). The principal events were the inauguration of a telegraph line to Jerusalem and to Europe (1865), the opening of the road to Jerusalem (1869), and the formation of the Municipality of Jaffa (1871). In those years American, German, and many other immigrants, who chose Jaffa for religious and ideological reasons settled in Jaffa, supporting Ottoman efforts to strengthen the city's economic base and its entrepreneurial environment. Jaffa rapidly evolved into a secular, pluralistic, cosmopolitan society and an innovative, enterprise-oriented urban center. Jaffa's diversified ethnic groups, economic activities, and eclectic architecture, a mix of Oriental and European styles, also became the home base of many cultural activities such as theater, music, newspapers and publishing houses (Kark, 1976; Kellerman, 1993).
At the end of WWI and with it the demise of the Ottoman regime, the city of Tel Aviv assumed the role of the main center of the social, cultural, and economic life of the rising Jewish community in the Land of Israel. The process was propelled by the fact that in those years, and subsequently until the mid-1930s, Jaffa was the main entry port for Jewish immigrants, who like most immigrants all over the world settled close to that port, in the region which later became metropolitan Tel Aviv. Many immigrants brought with them their educational assets and/or material capital wealth, which helped make the region of Tel Aviv the hard core of the emerging Jewish national territory in the Land of Israel (Kellerman, 1993). Even after Israel's independence in 1948, and in spite of its vigorous population dispersal policy in 1949, the Tel Aviv region managed to maintains its role as the a primate core area of Israel (Lipshitz, 1996).
A Service and Command Center
In this section and in the ones that follow, contemporary statistics are presented. To highlight the relative importance of a few selected attributes, a coefficient of concentration index Ci was calculated, where
Ci = the raw percentage of i / the raw percentage of ∑
where i is the attribute under consideration. In order to arbitrarily highlight only the most important coefficients, only Ci =/> 1.20 are shown.
For many years the service industry was the most important and most dynamic activity of Tel Aviv City (Kellerman, 1986; 1993), but it was only at the beginning of the 1960s that its service economy started to expand. Between 1968 and 1974, for example, the city's office floor space increased from less than 940 m2 to over 1.3 million m2, and the number of office units, most of them in old residential structures, numbered 10,000 (Har-Paz et al., 1977). Still, even in the mid-1980s the Israeli service industry, along with the Israeli economy at large, lagged behind those of most of the world's developed nations (Kellerman, 1986; Shachar and Choshen, 1993). Kellerman even blamed the service sector for "the current (mid-1980s) economic crisis", which could "be interpreted as a crisis of the services".
By the mid-1990s, however, Tel Aviv office floor space had risen to 1.7 million m2, most of recent increase of 410,000 m2 taking place in modern office towers that changed Tel Aviv's skyline completely. The Yizraeli Center, on the Ayalon freeway, Tel Aviv's major limited exit highway, is an example of a prestigious 'post-modern' -'post-industrial' office tower structure. Noteworthy too, is that at the end of the 1990s, two of the service industries led the employment profile of the city, scoring Ci coefficients larger than the pre-determined coefficient of concentration threshold of Ci =/> 1.20. They were finance, insurance, and business services, with 12.3% of the total national employment in this industry located in Tel Aviv City, compared to only 7.3% of total Israeli employment in Tel Aviv. The other industry was public, community, and personal services, with 8.6%, reaching the threshold coefficient of Ci = 1.20 (Table 3).
The domination of Tel Aviv in finance is much more impressive. In fact Tel Aviv is the financial capital of Israel, and all major banks have their headquarters in its historical CBD. In the past, regional offices of the major banks had some authority to handle small-scale banking dealings; today most decisions are taken by Tel Aviv's national headquarters. The supremacy of Tel Aviv in banking can be confirmed by the fact that even in early 1990s Tel Aviv, with only 6.5% of the nation's population, had 22% of bank branch offices, 51% of bank jobs, and 2.35 times more than the national average of jobs per office. All these figures were significantly higher than those of Jerusalem and Haifa, the two other large cities of Israel.
The projected office space for 2020 made in 1993 was 3.3 million m2 (Pasternak, 1993), all in 'post-modern' style towers. Nearly all of the projected growth of office space, completed so far, accommodates the fast growing producer services industries as well as command headquarters of Israeli and foreign firms. It has taken place along the eastern nucleus of the metropolitan CBD, most of it within the municipal boundaries of Tel Aviv City (Kipnis, 1998a; 1998b), and in two of its northward expansions along the Ayalon freeway in nearby suburban office clusters, the Bursa in the city of Ramat Gan and Herzeliyya industrial park in the city of Herzeliyya (Kipnis and Noam, 1998; Kipnis and Borenstein, 2001). This section of the metropolitan CBD enjoys excellent accessibility to the rest of Greater Tel Aviv, the rest of Israel, and the rest of the global economy via Ben-Gurion Airport, Israel's largest international airport, located on Tel Aviv-Jerusalem Highway 1, 15-20 minutes drive from downtown Tel Aviv.
Greater Tel Aviv and its core region also evolved as a center of Israel's industry quinary sector of command and control (Table 4). Observe how 55.2% of the headquarters of Israel's mid-1990s manufacturing firms were located in metropolitan Tel Aviv, primarily the large ones in terms of their number of employees, as revealed by the significantly large Ci values. As expected, the more important concentration was outside Tel Aviv City, in the 'rest of the metropolis'. However, Table 5 shows the central role played by the CBD of Tel Aviv City, and of the two adjunct suburban office clusters, Herzeliyya and to a lesser degree the Bursa, as the favored location of command headquarters of MNC and MLC.
The Hard Core of Israel High-Tech
Greater Tel Aviv has attracted a large portion of domestic and foreign investments, to become an anchor of the Israel's post-industrial economy. These investments have been accompanied by large-scale real-estates development, much of it in the form of high-tech industrial parks, along with intensive infrastructure developments in transport (not yet enough due to Israel's high and increasing car ownership) and communication. One of the most important assets of these investments is the high-tech, start-up intensive activity (Perman, 2000; Kipnis, 2001), in which greater Tel Aviv dominates. Kellerman (1999) even refers to Tel Aviv as 'the startup metropolis' and portrayed it as high-tech, information and telecommunication center. A recent report published by Guide for High-Tech Employees (2000) states that Greater Tel Aviv contained 86% of Israel's high-tech firms in 2000.16 Of the three leading high-tech industries - communication, information technology, and the Internet, accounting for 78% of the high-tech firms in 2000, Tel Aviv had 89%. An earlier report, using national statistics from 1997 (Israel, 1999b) showed similar trends of concentration, but the predominant status of Greater Tel Aviv had been less impressive: Greater Tel Aviv had only 58% of the electronic and hardware firms; and 80% of the software houses. If Israel is perceived as the new Silicon Valley, Tel Aviv is its hard core, or as Lashinsky (2000) describes it in the opening sentence "Tel Aviv - - Imagine you've just arrived in Silicon Valley from halfway around the world." The Consulate General of Israel in New York (1998) cites Newsweek's ranking Tel Aviv among the 10 capitals of high-tech industry worldwide and as the most serious competitors to Silicon Valley. Innovative high-tech has been so impressive in Greater Tel Aviv, that Sendler (1999) named the Herzeliyya satellite 'a high-tech Mecca on the Coast', known as the 'Silicon Valley Coast'. In this epicenter of Israel tech industry between the HWY and the sea, Sendler explicates, global giants, Israeli veteran companies, and welter of startup are nested.
Felsenstein (2001) asserts that Greater Tel Aviv's high-tech 'hot spot' has not yet succeeded in evolving into an 'anchor' maintaining some linkages within its own regional context. Instead, and since Tel Aviv's advanced high-tech 'hot spot' has mostly concerned stock options and venture capital abroad, and many of its linkages are with firms overseas, it functions purely as a 'node' or an 'enclave' in a global network. From a local contextual point of view, Felsenstein concludes, Tel Aviv's high-tech 'hot spot' acts purely as a backdrop [of the global economy]. Although similar findings on the emerging ties of Israel's high-tech with the global economy were reported in Kipnis's (2001) study on Israel' startups, their meaning is somewhat different.
Israel being a small economy with relatively small local market, Israeli firms, be it in high-tech industry or in advanced services, aim at the global economy for financial resources and for markets. Most Israeli capital investment originates abroad as FDI and stock options, or from private venture capital. Recall how Henzler praised Israel as having more firms on NASDAQ than all EU countries together (Sade, 2001)!! Moreover, since the late 1960s more than 7,000 Israeli patents have been registered in the US. Seven out of ten carry a name of an Israeli inventor, but only 35% are listed under the name of an Israeli institution (Trachtenberg, 1999). One also ought to bear in mind, that many FDI ventures have came to Israel to take advantage of its unique status a 'bridge' between NAFTA and the EU FTAs. This allows an American firm investing in Israel reduced or tariff-free admittance for products to the EU and vice versa, as long as its products qualify under the FTAs rules of origin, namely a significant portion of it is Israeli added value (Raveh, 1991). Lastly, thanks to advanced communication, globally oriented Israeli firms strive to establish workable network alliances, mainly with US counterparts. These alliances allow R&D and prototype development operations to be carried out in two shifts around the clock, one in Israel and one in the western USA. Table 6 show Ci > 1.20 coefficients calculated from findings assembled in field surveys done during the mid-1990s in the metropolitan CBD of Tel Aviv, including its two suburban satellites. Observe how despite the strong linkages/dependency on markets, counterparts, and service suppliers abroad, the surveyed firms also revealed a vivid pattern of linkages (Ci > 1.20) with firms located in Tel Aviv City, in the rest of the metropolis, and in Israel at large. With quite a number of high-tech firms in the sample, and considering that local linkages have slightly intensified since the mid-1990s, one ought to conclude that Greater Tel Aviv's high-tech 'hot-spot' emerges as an 'anchor', or at least as complementary activity to its strong production ties with other global high-tech centers.
Add to this Tel Aviv's high fulfillment of Stanley's (2001) criterion of 'creative industry', and Tel Aviv's accumulated world city-ness attributes qualify the city for world city status. Among the leading creative industries one may include music, theater, dancing, visual arts, innovative medicine, and other scientific areas, to name but a few. Many of these creative industries function as groups or as individuals who are actively involved in the global arena and have gained world renown, but they always refer to Tel Aviv as their home base. Kummer (2000) referring to Tel Aviv achievements in these areas describe the city "as a secular city, a place where people experience Herzel's vision of cosmopolitan city, which is part of the modern world".
The Changing Urban Structure
All the above developments have had a forceful impact on Tel Aviv's physical layout, particularly its skyline (Table 7). Until the 1960s, Tel Aviv City had made every effort to maintain its moderate building environment, strongly influenced by the Bauhaus style,17 with buildings not permitted to rise higher than three to four stories. The first tall building, 36 stories high, was the Shalom Tower, built in 1965 at the hub of Tel Aviv's historical CBD, replacing Herzeliyya high school, a symbol of the early days of Tel Aviv. In December 1999 some 58 tall buildings, having at least 20 stories, occupied by offices and by high-level residences, were surveyed in central Tel Aviv City. Seventeen other tall buildings, including four 34-story high residential towers (located in the eastern neighborhood of Ramat Itzhak ) were under construction. The highest building is the Yizraeli Center two-structure tower complex (a third tower will be constructed in the future), built on the Ayalon Freeway in the late 1990s, and reaching 50 stories in height. Table 7 shows that the peak period of tower building construction was during the 1990s, when 18 new tower buildings were built and 17 others were started. Many of the tall structures of the 1990s were 30 stories and more. Table 7 also shows that the 1970s was the take-off decade in altering the Tel Aviv city's skyline.
The restructuring of Tel Aviv's skyline has been so impressive that a few web sites have mad a note out of it. Geocities (2001), for example, compared Tel Aviv to London, indicating that Tel Aviv's activity encourages high-rise buildings as space is at premium in Israel. It reported that over the past eight years Tel Aviv and Ramat Gan have gone into high-rise building spree fueled by the ever-growing economy. The geocities web also contains 50 photos of Tel Aviv's high-rise structures. Similarly, the Kusiatin web site (2001) disclosed a list of 19 high-rise buildings in Tel Aviv, 11 are 30 stories high, and seven have 20 - 30 stories. The Kusiatin site also cites Haarets and Globs newspapers' articles, reporting on 27 high-rise projects between December 1999 to Late August 2001.
Important too is the emerging lifestyle of the office space occupants of the metropolitan CBD of Tel Aviv. Table 8 shows that the image of the building was the number one criterion for selecting an office site for a firm situated in the suburban modern office /industrial facilities clusters. Accessibility and parking did not score Ci > 1.20 because they were important for all. But monthly rent payments, averaging in the mid-1990s in Tel Aviv $25-$35 per m2, was the least important location attribute. In fact, together with in-building services, and the cost of modern furnishings and decorations, the average cost o0f a square meter in a modern office/industrial building might have reached the $50 mark. All other location attributes, particularly regarding proximity, reflect the unique needs of the industry/cluster involved. Without doubt, the conclusion is that the firms' buildings occupancy criterion in Tel Aviv is that of a world city. In this respect Kellerman (1999) is in significant contrast to his (1986), referring to the economy of Tel Aviv as post semi-socialist, revealing strong entrepreneurship benefiting from a global network of venture capital and branching, and enjoying a variety of active 24 hours services.
A WORLD CITY AT A DEAD-END OF THE GLOBAL ECONOMY
Once the notion of Tel Aviv as a world city, at least at the threshold of going global, is established, the question arises as to the global networks to which Tel Aviv is and /or will be affiliated. Our thesis is, that regardless of the future geopolitical state of affairs in the Mideast, Tel Aviv as a global city, will not be part of its own region namely, of the genuine world cities embedded and linked into broader Mideastern network of exchange as described by Stanley (2001). Nor will it be within a circuit of [regional] world cities, where cross-border inter-state transactions take place as described by Sassen (2001). Tel Aviv is not ready to be embedded in such regional contexts, at least in the immediate future, even if peace prevails. This of course does not exclude the possibility that Tel Aviv, along with other Israeli and Mideast cities, will evolve into a regional urban system such as a peacetime east Mediterranean megalopolis (Kipnis, 1997). If this proves to be the case, then does Tel Aviv, geopolitically situated at a frontier within its own region, and as such at the periphery, a spatial 'dead end' in the global economy, represents a special case of a world city?
What Do We Mean by a 'Frontier' and a 'Periphery'?
While it appears to be much easier to define a frontier, the notion of a periphery has altered in response to the rapid restructuring of the economic, social, and political systems. A 'periphery' is usually perceived18 as an area located outside the 'core', and compares unfavorably with it in its level of economic development, prosperity, living standard, etc. (Small and Witherick, 1986). Short (1996), in reference to a system of cities, defined 'cities of peripheral capitalism' as those located outside the US, Japan, and most of Western Europe. Those cities according to Short, have oriented their economy toward the cores, exhibiting less auto centric economic growth and lower national income and wealth. Welch (1996) suggested that the traditional concepts of frontiers and peripheries as geographic and economic marginality should be abolished. Instead, that author added a dynamic quality to the concept of periphery. As a result of recent industrial and economic restructuring and increasing flexibility in the political and economic dimensions of life, Welch argued, it was no longer appropriate to view the periphery as a single, homogeneous entity. By contrast, the notion of frontier has been associated with the end of an entity, be it a developed region next to a barrenness, to a wilderness, or to a non-cooperative belligerent neighboring state.
Israel, notwithstanding the rapid restructuring of its economics, politics, and lifestyles, has remained from geographical standpoint a periphery relative to the global core regions. It is a periphery in terms of its location, the scale of its economic activities and markets, and its access to development capital. In addition, regardless of some encouraging steps toward peace on the Mideast, Israel is still a frontier relative to its bordering neighbors, either belligerent states or neighbors that despite de-facto normalization of relations, are reluctant fully to realize its inherent potential. Israel, therefore, is a 'cul-de-sac' for world traffic and for the flow of goods and services. In sum, Tel Aviv is to be seen as a unique case of a city 'going global' according to Beaverstock, et al.'s (1999; 2000) paradigm of a 'world cities in a network', as a 'dead end' periphery, exclusively affiliated with the mainstream of world cities.
What might have been Tel Aviv's situation as a world city if, following the Oslo accord, full peace had prevailed in our region? Would Tel Aviv 'going global' be a periphery, exclusively affiliated with the mainstream of world cities, or would it also be one of the growing hubs of world cities in its own region? These questions were indeed raised immediately following the Oslo accord in 1993. Candid calculations were made then, when hopes had been high, with the objective of estimating the expected impact of the emerging peace on the economies of Israel and of its neighbors.19 In these deliberations two scenarios were explored:
From the moment the Oslo accord was signed, it was apparent that the two scenarios had different chances of realization. Whilst the first essentially occurred, and largely contributed to Israel's economic boom of the 1990s, it has always been under the threat of reversal or of being harmed by acts of violence like those being committed at this time (2001). The second scenario, from day one, and despite its potential to become an essential vehicle for normalization in our belligerent region, had very little likelihood of materializing, First, a conceptual mismatch exist between the long time horizon needed to attain peace, and the short, even diminishing, time horizon of economic processes. Next, Israel, a western economy with close to $17,000 GDP per capita in the late 1990s, is surrounded by poor Mideastern economies, most of them with an extremely low per capita GDP by world standards. In the early 1990s (when the Oslo accord was signed) the purchasing power for Israeli goods and services by the relatively rich Persian Gulf countries was estimated at $170 million, equal to two thirds of what Israel exported to Switzerland. Similarly, the GDPs of 13 Mideast countries, excluding Iran and Iraq, together amounted to only 80% of the mid-1990s GDP of Canada, one of Israel's affluent markets. According to media reports, Economic Models Co. estimated, that if full peace prevailed, the total flows of goods and services from Israel to all of its neighboring Arab countries would increase annually by $500 million, to reach the $1 billion mark by 2000. This is an insignificant sum compared to Israel's total exports to the leading global markets.
The outlook for the projected economic impact of peace on the economic relations of Israel and Palestinian Authority was gloomier still. When the Oslo accord came into effect, following five years of Intifada, the Palestinian Authority's GDP was only 5% of Israel's. To this must be added the poor infrastructure at the Authority's territories, and the poor level of its labor. Consequently, all projections foresaw very poor results. The most important economic elements envisaged were employment in Israel of low skilled labor, and swift migration of labor-intensive Industries from Israel to the West Bank and Gaza, and to Jordan too. Even in the year 2000 the situation was the same, as reported by Hershman (1999), who expressed reservations on the real potential of high-tech, one of Israel's main assets, to become a Mideast elixir. So the answer to our question whether, in conditions of peace in our region, Tel Aviv's 'going global' would be in the form of a periphery, exclusively affiliated with the mainstream of world cities, or in addition would act as part of a hub of world cities in its own region, is categorically the former.
Tel Aviv was mentioned as a 'world city' in the early 1990s, and its world city-ness attributes have developed further from the mid-1990s to the present, in terms of recently expanding research on the emerging paradigm of world cities as a network phenomenon. We especially examined whether Tel Aviv has been going global as part of its own region's 'wannabe world cities' network, as proposed by Stanley (2001), or as a unique case, alien to its Mideast city network but affiliated, as a peripheral dead-end world city, with the mainstream world cities network. Evidences from this study, particularly on the wide gap between the Israeli economy and lifestyle and those of its neighboring Arab states, as well as the faltering peace process, indicate that the latter situation is the case.
Tel Aviv City, a central city of Greater Tel Aviv and a '24-hour-city', emerged as an urban place of a world city caliber in association with the Israel's entry into the post-industrial age and its growing links with the global economy. Tel Aviv is a quintessential modern Israeli city with youthful Saul and vivid economy (Griver, 1999), and secular cosmopolitan one, an integral part of the modern world. (Kummer, 2000).
In addition, it enjoys a continuous increase in world city attributes, such as advanced producer services, high-level finance institutions, some with branches in many major urban centers, and growing presence of command and control activities. However, the leading function placing Tel Aviv at the core of the global economy, is its advanced high-tech, R&D-intensive, industry, much of it set off by FDI and by the world's top high-tech giants. The high-tech industry, coupled with large numbers of start- up ventures (Kipnis, 2001), have earned Tel Aviv (along with other urbanized regions in Israel the status of a 'global technology incubator' (Karp, 1998), 'a startup metropolis' (Kellerman, 1999), and 'a new (or the second) Silicon Valley'. The findings of the various surveys incorporated in this paper are in conflict with those of Felsenstein (2001), who describes Tel Aviv's high-tech 'hot spot' as a 'node' or an 'enclave' of a global high-tech network. This paper, presenting detailed survey data, attests that Tel Aviv's high-tech 'hot spot' is becoming a high-tech growth pole, an 'anchor' of strong internal linkages. All these of course, are in addition to the Israeli high-tech intensive links with other high-tech centers of the global economy, mainly in the US. Last but not least, Tel Aviv has experienced intensive real estate development associated with its high-tech industry and its affiliated producer and technical services. One of the leading elements in this direction is the construction of a series of high-rise office and of high-status residential structures, close to 60 of them during the 1990s. These have completely altered the Tel Aviv City skyline.
The roles played by Tel Aviv among the world's urban system were considered long before our times. They were rooted in Jaffa, the 'mother city' of Tel Aviv City, and later a part of it. Jaffa, 7000 years old, began to assume a pivotal role in the Land of Israel from the mid-19th century. From the 1920s Tel Aviv, fueled by increasing waves of Jewish immigrants, started to develop its own economic base, and to become the economic, social and cultural center of the rejuvenated Jewish community In the Land of Israel. Tel Aviv became the domicile of the Jewish elite, those who proved to be agency actors for its development as well as for the development of Israel at large. All major financial and other economic institutions and corporations, political movements, daily morning and evening newspapers, publishing houses, music and theater groups, some of world repute, art associations, and many other 'institutions' that had formed the basis for Israel to become an independent entity, began life in Tel Aviv, and have remained there ever since.
In this paper most attention has been devoted to Tel Aviv's 'going global' by emphasizing, in the first place, economic and spatial attributes. However, the restructuring processes that have helped grant Tel Aviv 'world city' standing, also resulted in polarized social structure, dividing Tel Aviv between the well-off 'northerners' and the hard-up southerners'. Yet in many world cities the affluent sector is more visible and influential, and there is ample evidence of this process in Tel Aviv too. A recent bulletin issued by Israel's Central Bureau of Statistics (Israel, 2000) disclosed that according to socio-economic indicators of the 1995 national census, Tel Aviv city ranked much higher than the other major cities, but significantly lower than some of its affluent suburbs.
The fact that Tel Aviv City has upgraded its social status was illustrated by Tikolsker (2000) in his article 'Tel Aviv: A City for Rich Families Only'. Tikolsker showed that in 1998 some 23% of the dwelling units built in Tel Aviv had 6+ rooms compared to only 5% in 1990. Similarly 1-2 room's apartments constituted 11% of the units in 1998 compared with only 1.6% in 1990. Note that small central city apartments have become a common residence for a few skilled producer services and command centers workers, some are DINKS (double income no kids) or SINKS (single income no kids) households. Finally, the 1990 per capita GDP of Tel Aviv district, the core of Greater Tel Aviv, was more than 50% higher than the country's. The projected 2020 GDP for Tel Aviv district is 45% above the national, even though one of the foremost goals of the 'Israel 2020' plan is to intensify national efforts to disperse population and economy over the entire national territory (Mazor and Trop, 1994).
The research agenda for Tel Aviv should include two leading elements: the inherent social inequality as described by Marcuse and van Kempen (2000a) in the concluding chapter of their edited book Globalizing Cities. The other is to conduct an in-depth analysis of Tel Aviv's overall linkage patterns according to Beaverstock et al.'s (2000) proposed paradigm of world cities in a network society.
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* This paper was initiated by an offer made by Wiley to introduce Tel Aviv in their World Cities Series, edited by Paul Knox and Peter Taylor. Unfortunately, this offer was not materialized due to Wiley's decision to economize their efforts by concentrating first on volumes dealing with larger cities already under contract. However, the detailed proposal has turned by the author into a few small scale research projects, their findings are incorporated into this manuscript. The first draft of this paper was presented at the IPHS Conference, Helsinki, Finland, in August 2000.
** Baruch A. Kipnis is a Professor of Geography at the Department of Geography of the University of Haifa, Israel.
1. Tel Aviv denotes metropolitan Tel Aviv, a synonymous to Greater Tel Aviv. Tel Aviv City refers to the municipality of Tel Aviv, the central city of the metropolis.
2. The Mideast and North Africa.
3. Tel Aviv City is described as a "city without an intermission", known in other places, as a "24-hour city" (Singapore) and the "city around the clock" (New York).
4. The 'mega markets' are North America, West Europe and the West Pacific Rim (Dicken, 1998).
5. For cited literatures refer to Beaverstock, et al. (1999; 2000). One may add Shachar, 1990; 1994).
6. References are Reed (1981), Friedmann (1986; 1995), Thrift (1987) and Sassen (1991).
7. The sample covered 143 major office centers of 74 companies in 263 cities.
8. Examples are Beirut-Damascus, Rabat-Casablanca, Cairo-Alexandria (Stanley, 2001).
9. Creative services are architectural, interior and landscape design, fashion industry, publishing, software, music and cinema, etc'. A few have already become multinationals (Stanley, 2001).
10. Actors like local elites, community organizations, state ministries, business associations, among others, employing formal municipal structures in order to shape the networks and opportunities of their city, and to enhance its access to outside or networks (Stanley, 2001; Short and Kim 1999).
11. FDI - foreign direct investment.
12. FTA - free trade area.
13. By virtue of the FTA agreements, Israel can act export its products to the two markets with tariff-free admittance for products qualifying under the FTAs rules of origin (Raveh, 1991).
14. Lashinskey's (1999) article opening statements is: "Tel Aviv - - Imagine you've just arrived in Silicon Valley from halfway around the world."
15. Jaffa, one of the world's oldest port cities, was permanently settled around 7500 BC. During most of its early years Jaffa was a small port settlement, specializing in export of agricultural products and was a port of entry and departure for pilgrims to the Holly Land (Kark, 1984).
16. The urbanized region of Haifa, the second largest metropolis 100 kilometers to the north, had 9%, and Jerusalem, 70 kilometers to the east, had 4%. The three urban agglomerations are envisioned as Israel's high-tech core, but Greater Tel Aviv is the hard core.
17. Tel Avive with the largest concentration of Bauhaus buildings from early 1930s, is known as the 'white city'.
18. Defined on the basis of John Friedmann's mid-1960s 'core-periphery model'.
19. The ones described here are of the research unit of Bank Hapoalim (1993) and of an article by Plotsker (1993). Other sources include notes taken by the author from media reports and professional presentations made by Sheinin, Director of Economic Models Co.
Table 1: Number of cities by their hierarchical rank and by type of advanced producer services
Source: Compiled from Beaverstock et al., 1999
Table 2: Employment by industry and by occupation branches ranked by ratio of change, 1988-1998
Source: Israel, 1989 and 1999a.
Table 3: Employment in major industries - Tel Aviv City and Israel 1998 (percentages and coefficients)
Source: Israel, 1999a.
Table 4: Location of manufacturing firms by size groups of the employed 1995 (percentages and coefficients)
Source: Dun & Bradstreet International (1995).
Table 5: Organizational affiliation of firms of the CBD of Tel Aviv and of its suburban office clusters (percentages)
Source: field surveys 1995.
(1) MNC = Multinational Corporation; MLC = Multi-locational Corporation
Table 6: Location of clients, subcontractors and subcontracting professional firms, and suppliers of services of firms situated in the metropolitan CBD of Tel Aviv and its major suburban office clusters (coefficients Ci > 1.20)
Source: Field survey, 1995.
(1) FIRE = finance, insurance and real estate.
(2) NR = not relevant. Locally refers to Tel Aviv city.
Table 7: Evolution of tall buildings in central Tel Aviv city
Source: Field and archive survey, December 1999.
Table 8: Location attributes of office firms of Tel Aviv CBD and its suburban office clusters, the Bursa and Herzeliyya (coefficients of concentration)
Source: Field survey, 1995.
1. FIRE = finance, insurance and real estate.
Figure 1: Greater Tel-Aviv in the national context in the year 2020
Edited and posted on the web on 8th October 2001
Note: This Research Bulletin has been published in M Pak (ed) (2004) Cities in Transition. Ljubljana: Department of Geography, University of Ljubljana, pp. 183-193.