GaWC Research Bulletin 63

This Research Bulletin has been published in Stadt und Region: Dynamik von Lebenswelten, Tagungsbericht und wissenschaftliche Abhandlungen, 53. Deutscher Geographentag Leipzig, 29. September bis 5. Oktober 2001. Edited by A Mayr, M Meurer and J Vogt. Leipzig: Deutsche Gesellschaft für Geographie, 2002, 87-97.

Please refer to the published version when quoting the paper.

(Z)

Transnational Elite Communities in Global Cities: Connectivities, Flows and Networks

J.V. Beaverstock

We live in a network society, reproduced unevenly by "flows of capital, flows of information, flows of technology, flows of organizational interaction, flows of images, sounds and symbols" (Castells 2000, 418). Of importance in this Castellian view is the flow of people in the world-system. Migration between states has long been constituted 'flow' and a process of contemporary globalization (Castles and Miller 1998). Migration cannot be underestimated in the reproduction of Castells' nodes in the space of flows: the global cities. The network of global cities are the strategic command and control nodes of the space of flows (Beaverstock et al. 2000a; Taylor 2000). But, the concentration of command and control is intensified by the disproportionate spatialization of transnational migrant elites employed in the international service economy of the global city (Beaverstock and Boardwell 2000). As the contemporary international service economy requires specialist professionals to be globally mobile to deliver intelligence, skills and knowledge to the point of demand, the development of a cross-border transnational migrant elite contributes to the production and consumption of the global city and its cultural and social relations. As Sassen (2001, 188) suggests: "The new professionals of finance are members of a cross-border culture that is in many ways embedded in a global network of 'local' places - a set of international financial centres, with much circulation of people, information, capital among them."

The aim of this paper is to illustrate how the cross-border circulation of transnational elites constitutes 'flow' in Castells' space of flows. The existence of nomadic, highly-mobile and affluent transnational elites in the corporate segments of the service economy are not only a part of the space of flows, but their cosmopolitan working, cultural and social practices are highly spatialized and embedded in the network of global cities. The remainder of this paper is in three parts. In the following, the paper presents a brief synopsis of the literatures that discuss transnational elite flows and networks. The paper then reports empirical research generated from questionnaire and interview surveys of firms and transnational elites in London, New York and Singapore. Finally, the paper ends with a re-evaluation of transnational elites as constituents of both the space of flows and the network of global cities.

CONCEPTUALISING TRANSNATIONAL ELITES IN THE SPACE OF FLOWS

The premise of the argument is to explain that transnational elites are a fundamental part of Castells' 'space of flows'. Two key discourses will be considered.

Discourse One: The Castellian Approach and Transnational Connections

Castells (1989, 2000) argues that the spatial architecture of the world-system is based upon a logic of flow, connectivity, networks and nodes: "the organizational logic of corporations and their satellite activities is fundamentally dependent upon the network of interaction among different components of the system. While organizations are located in places, and their components are place dependent, the organizational logic is placeless, being fundamentally dependent on the space of flows that characterises information networks" (Castells 1989, 169). Castells reads the global city as "a process" in a network of flows, which "cannot be reduced to a few urban cores at the top of the hierarchy. It is a process that connects advance services, producer centers and markets in a global network, with different intensity and at a different scale depending upon the relative importance of the activities located in each area vis-à-vis the global network" (Castells 2000, 411). Hence, the global city is the strategic node of the space of flows, which is reproduced by not only what is situated within its boundaries, but more importantly by what flows through it, and between the network of global cities (Allen 1999; Beaverstock et al. 2000a).

A closer examination of Castells' space of flows suggests that it is constituted not only by electronic exchange and the requirement of the spatialization of command and control in nodes, but also by the importance of the "spatial organization of the dominant managerial elites (rather than classes)" (Castells 2000, 443-5). Castells argues that as the technocratic-financial-managerial elites occupy leading positions of command and control in the world-system, they will require specific spatialities (the global cities) to reproduce their cosmopolitan interests and practices. In Castells eyes, elites are "global", unlike ordinary people who are deemed to be "local". But, there are fuzzy issues over whether elites themselves are part of the flow. On the one hand, Castells argues that "elites do not want and cannot become flows themselves" (Castells 2000, 446). But on the other, the spaces of flows are constituted by the flow of elites between the network of global cities. Elites are themselves part of the flow, and their direction, magnitude and mobility reproduces the space of flows in the strategic nodes. Castells talks of elites having "personal micro-networks" which include "the residential and leisure-orientated spaces, which along with the location of headquarters, tend to cluster dominant functions in carefully segregated spaces" (Castells 2000, 446).

Hannerz's (1996) work on transnational connections in the city adds considerable weight to the argument that elites are constituents of the space of flows. Drawing upon a Castellian framework (Castells 1989), he stresses the importance of relationships and transnational flow: "World cities are places in themselves, and also nodes in networks; their cultural organization involves local as well as transnational relationships" (Hannerz 1996, 128). More importantly, he recognises that it is the transnational relationships of people that "play major parts in the making of contemporary world cities" (Hannerz 1996, 129). By drawing upon Friedmann and Wolff, who note that "transnational elites are the dominant class in the world city, and the city is arranged to cater to their life styles and occupational necessities" (Friedmann and Wolff 1982, 322), Hannerz suggests that the transnational managerial elite are key actuates of world city production.¹ The key function of the transnational managerial elite is to support the global city's corporate and advanced producer economy. Thus, such labour is very highly-educated, highly-skilled and wealthy. Moreover, as many of these elites are from "elsewhere" because they have hyper-mobile international careers and cosmopolitan cultural distinctiveness, they find it relatively easy to move between global cities with very little personal dislocation. As Hannerz (1996, 129) suggests, they are "one of the more conspicuous populations of the city . [who] . stand a better chance than others to extend their habitats from the world cities into their other locations."

In a similar vein to Hannerz, Smith (1999, 2001) emphasises the importance of the agency of transnational actors, deciphered through their networks, practices and social relations. He argues that contemporary globalization and the tensions of the global-local dialectic have been articulated in the global city through migration 'flow' and the agency of transnational migrant networks, which are created and reproduced in transnational social spaces. Pries agrees, and argues that "New forms of international migration and the intensified activities of international companies, amongst others, can thus bring about the establishment of transnational social space" (Pries 2001, 5-6). Accordingly, elites are not only important flows into and through the city, but their cosmopolitan practices and discourses are deeply embedded in specific transnational spaces, which are at the intersecting points of particular corporate, capital, technological, information and cultural lines of flow, and connections.

Discourse Two: The Producer Service Complex

At the heart of the economic function of the global city is the producer service complex (Sassen 1995, 1999). The demand for complex, diverse and specialist services by the financial economy of the city has not only encouraged proximity and agglomeration economies, but has also spawned constellations of legal, accounting, consultancy, tax, recruitment, advertising, public relations and design firms, who provide specialist services at the point of demand. Such agglomeration economies within the global city have been referred to by Sassen (2000, 71) as the "new production complex." As the financial and corporate sectors require fast and more accurate intelligence, information and specialist services, the spatial logic is one of speed, proximity, concentration and intensity of both managerial and other specialist functions, which is mediated through 'face-to-face' contact in many instances. The role of 'face-to-face' contact cannot be underestimated in the accumulation of capital: "face-to-face contact is actually a production process. having immediate and simultaneous access to the pertinent experts is still the most effective way to operate, especially when dealing with a highly complex product. Furthermore, time replaces weight in these sectors as a force for agglomeration" (Sassen 2000, 72). Face-to-face contact articulates the production and circulation of intelligence and knowledge networks within and between producer service firms and their clientele (which are often other producer services), and is a pre-requisite of the success of the contemporary international finance centre.

As the global city producer service complex is highly globalized and itself a cluster of flows, it is also dependent upon specialist service workers to provide the knowledge inputs into the network. The global city financial centre network encompasses the financial markets and a wide range of ancillary services, banks and other advanced producer services, as well as key international professional staff employed by the numerous transnational firms who cluster with the complex. As Sassen (1996, 65) comments: "much of what we call international trade and investment in services actually involves specialized service workers: they embody the service and need to cross-borders to deliver it." Within the advanced producer service sector, the prevalence of transnational firms has reinforced the circulation and flow of professional labour, of all nationalities, between global cities. Such migration is very transient in nature, frequent and, for many, involves numerous international postings within the firms transnational (global city) office network (Beaverstock and Boardwell 2000). As producer services cannot be easily traded or franchised, their products have to be consumed at the point of demand, and delivered through human interaction, i.e. 'face-to-face' contact. The intensity and concentration of finance in the global city is manifested through global corporate networks, which are constantly being reproduced by the flow of workers, both foreign and national, through the city (see Amin and Thrift 1992; Leyshon and Thrift 1997; McDowell 1997; Thrift 1994, 1997).

QUANTIFYING TRANSNATIONAL ELITES IN THE SPACE OF FLOWS: BRITISH EXPATRIATES IN GLOBAL FINANCIAL CENTRES

Official international migration statistics only publish flows of emigrants and immigrants between nation-states (see OECD 2000). Migration data on inter-city relations can only be collected through primary research methods. In the following part of this paper, data collected from British transnational elites in the international financial service economy will be analysed to illustrate how such professional transient migration constitutes flow in the space of flows. Three scales of data will be analysed: a questionnaire survey of expatriate flows between London and other global cites; an interview-based study of advanced producer service firm inter-company transfers; and the international career trajectories of British expatriate workers, working in Singapore and New York City.

London in the Space of Flows: Questionnaire Survey

Data was collected from 161 transnational financial institutions in London, who on average had a mean of 277 world-wide offices (n=117, s.d. 1014) with 9019 professional staff (n=106, s.d. 28261) and 311 professional employees working in London (n=116, s.d. 837).² Six interesting findings can be reported from the survey. First, 442 expatriates left London (n=120, mean=3.7). Second, 40 firms accounted for all expatriation (25% of the 161 firms), which averaged at almost 13 per firm (mean=12.7, n=34). Third, 26 firms (37% of 72 usable replies) did not expatriate from London because they were foreign institutions, and all expatriation flowed from their respective HQs. Fourth, 32 firms (68% of the 47 usable replies) posted staff for periods of 2 to 3 years. Fifth, expatriates were posted to 41 cities, and Hong Kong (17%), New York (15%) and Tokyo (14%) accounted for 46% of all destinations (Table 1). Sixth, 30 firms (55% of 55 usable replies) sent staff out of London to provide specialist knowledge for a business need in the receiving office.

Five parallel findings can be reported from the immigration data. First, 554 foreign staff entered London (n=121, mean=4.6), from 77 firms (mean=7.2). Second, 81 firms received foreign staff into London (n=120). Third, 55 firms (67%) sent staff to London to provide either specialist knowledge for a business, or to head the office/department. Fourth, 69 firms posted staff to London for more than two years (almost 50% came for 2-3 years). Fifth, with respect to flow, foreign staff came from 49 cities, with New York (17%), Tokyo (16%) and Paris (12%) accounting for 45% of all known cities of origin (Table 1). The importance of European destinations and origins for both emigration and immigration, where one would expect business travel to replace migration, reinforced the process that transnational elites are required for 'face-to-face' functions, and to deliver their specialist services at the point of demand.

Transnational Connections in the Global Producer Service Complex: Interview Surveys with Transnational Firms

Precise data on inter-company transfers are hard to find. Salt (1997, 17) estimates that the "annual total number of corporate transferees involving companies in the UK would be 47,600." It is estimated that approximately 350,000 Americans are on expatriate assignment per annum (Schell and Solomon 1997). In producer services an extremely pertinent method for collecting inter-company transfer data is through interview-based research (see Beaverstock et al. 2000b). During 1999, 52 Directors of Human Resources were interviewed in 42 firms in London's financial district (the City and Canary Wharf).

The survey highlighted three major series of research findings. First, 2,526 expatriates left London from 32 firms and 844 foreign personnel entered London (from 25 firms) (Table 2). For all banks, accountancy and law firms, flows of emigration exceeded immigration, which illustrates that London is an important global exporter of expatriate labour to other global financial centres. For banking and law, important destinations for expatriates were New York, Hong Kong, Singapore, Frankfurt, Paris and Tokyo (Table 3). Data from accountancy firms was far too sparse to map. Second, the most important time-scale for expatriation was between two and three years, with respect to both emigration and immigration.

Third, firms still supported expatriate labour as important agents of organizational and globalization business strategy despite information technology and more frequent business travel. Firms expatriated staff for three main reasons. First, for staffing (97% of firms used expatriates to: provide generic expertise and technical skills; balance skills shortages; manage offices/departments). Second, for management development (74% of firms used expatriates as either part of: an International Career Development Programme; their graduate training; the promotion criteria; technical training). Third, for organizational development, used by 87% of firms, to: disseminate corporate culture and policy; be seconded to clients, nation-states or supranational organizations; offer clients a 'seamless' operational capacity; network, in business and social circles.

Transnational Elites as Flow: Biographies of International Career Paths

In order to understand the processes underlying skilled international migration as flow, interviews with British expatriates were undertaken in New York City and Singapore.³ In the following, the transnational career paths of seventy-two expatriates are briefly summarised, accompanied by an in-depth biography of one transnational expatriate.

Thirty-six expatriates had experienced multiple postings to world cities, or offshore financial centres, for more than six months. For the remainder, their posting to New York or Singapore was their first expatriate destination from London (or another UK city). An evaluation of the international spatial career paths of all the expatriates shows three major characteristics. First, for many, flow constitutes working and setting up home in a multitude of different cities, with repatriation back to London in between multiple destinations. 42 expatriates had worked and lived in one foreign city (Table 4).⁴

Second, a small corpus of expatriates experienced multiple postings back to previous destinations (5 expatriates had experienced more than one posting to each of Singapore and New York, respectively) (Table 5). In Singapore, multiple expatriation postings tended to show a preference for movement between Hong Kong, Jakarta, Seoul, Sydney, Melbourne and Tokyo. But, multiple expatriates flows between New York and other destinations, again often via London, included a range of other global financial centres (Hong Kong, Singapore, Frankfurt, Paris).

Third, international mobility between firms and different international locations via expatriation was viewed by all expatriates as being the most important process by which they accumulated specific financial/market/client knowledge or 'know how', and disseminated such knowledge/'know how' into different working and cultural environments. All expatriates were assigned to New York and Singapore to perform particular business-specific functions. But, work-based and social networking in situ, became vital mediums by which the expatriates assimilated their knowledge into their new workplace and received 'local/global' intelligence from indigenous sources. In Singapore, such activities were highly spatialized at waterfront bars and restaurants; sporting clubs and events, residential areas and expatriate clubs (e.g. The British Club). For expatriates posted to New York, that city was deemed the 'prized location' for all. New York was highly beneficial for building social/cultural networks through interaction with Wall Street's and Midtown's financial complex, where the most influential players, clients and business networks could be penetrated, and invaluable knowledge, experience, contacts sought. The most important knowledge network, encompassing both assimilation and accumulation, was the interchange of information, practice and intelligence, within the expatriate's organization.

Turning to the personal biography, the respondent was a single male, living in Tribeca, Manhattan. He joined Standard Chartered Bank in Edinburgh in 1990 and was sent to Bangkok as a trainee analyst on the Thai equity market (Figure 1). He was in Bangkok for four years specialising in the Asian equity market. In 1994, he was repatriated back to London for two years to work on the Asian dealing desk, on the brokerage side. In 1996 he was recruited by a French bank and sent back to Bangkok to work as a broker on the Thai equity market, specialising in east Asian shares/stocks. In 1998 he was sent to Singapore for eighteen months to broker in all the Asian markets. He was sent to New York in 1999 to head the bank's Asian desk. As he suggests, "they needed someone to come here. I'm still doing the Asian markets. I've got six years experience broking in the Asian markets and they need people who know the markets well because US investors are quite sophisticated. I advise US pension funds, hedge funds and insurance companies which equities they should be buying in Asia." His Asian desk is composed of US staff, other British expatriates, Koreans, Indians and Singaporeans, all of whom have similar transnational career paths.

This expatriate's career path represents one facet of flow. Equally, cross-border knowledge and intelligence flows are a daily working-routine. As he was dealing with Asian markets, which were closed in New York's real-time, he had daily interaction with Asia: "I rely on the information flow that I get out of those markets to basically keep my clients up to date with what's happening. When you're in Asia you pick up the phone, you can call your client who's the Fund Manager, and you tell him right you should do this and buying that and selling this, you get e-mails and voice-mails here." In New York, he frequently attends business lunches with Asian and US clients, and socialises with Asian expatriates employed with rival banks, which he readily admitted was to discuss the real-time activities of the Asian markets. He has corporate membership of a golf club, "to entertain the clients." After this posting has been completed (2001), he will move back to London.

CONCLUDING REMARKS

Migration streams are constituents of the 'space of flows'. Castells has acknowledged that managerial elites assist in the reproduction of the space of flows, and Hannerz (1996) and Smith (1999) have suggested that transnational migration is flow, and an important process for engineering cosmopolitanism and transnationalism in the global city. In financial services, where specialist service workers embody the skills and intelligence of markets, products and other services, transnational elites are part of the real-time 'face-to-face' networks of the producer service complex (Sassen 2000). Transnational migrants not only circulate practices and networks between the city, which at the elite level attendants to the reproduction of the global city, but they are also vital components in the global corporate networks of financial centres. In this study of firms and British expatriates, the three complementary data sets have shown that firms still deploy expatriates throughout their office networks for organizational functions. Moreover, the circulation and hyper-mobility of expatriates between different global cities are regulated by the firm and market pressures, and the career aspirations of individuals. Specifically, flow is concentrated between the London-New York-Tokyo-Hong Kong-Singapore-Paris-Frankfurt axis, and the frequency of international mobility between cities feeds global corporate knowledge networks, as transnational elites bring new practical and tacit knowledge structures, cultural diversity, social practices, wealth, consumption, cultural capital and agency into the global city. The body of expatriates investigated in this research has displayed highly-mobile transnational elite existences and practices, which not only constitute flow in the 'spaces of flows', but also make significant contributions to the uneven reproduction of flow in the global city network.

ACKNOWLEDGEMENTS

I would like to thank the Economic and Social Research Council's Transnational Communities Programme for funding this research (Award L214252001).

REFERENCES

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NOTES

1. Hannerz (1996) suggests that the cultural role of world cities are produced by four transnational actors: Third World populations; artisans; tourists, and managerial elites.

2. 865 banking, accountancy, law, advertising and consultancy firms were surveyed in 1999, with a 19 per cent response rate (161 firms). The questionnaire sought data on the firms' organization, professional employment, magnitude and location of expatriates and inpatriates, and the organizational rationale for expatriation.

3. 24 British expatriates were interviewed in Singapore, 48 in New York.

4. Includes both first-time expatriates and those who have experienced multiple postings back to the same destination city.

Table 1: Emigration and immigration into London, 1999

(Source: Fieldwork)

Table 2: Inter-company transfers within London-based advanced producer service firms, 1999

(Source: Fieldwork)

Table 3: The top destinations of expatriate lawyers and bankers (n=13 firms)

(Source: Fieldwork)

Table 4: Number of expatriates who have worked and lived in ...

(Source: Fieldwork)

Table 5: Number of expatriates who have worked and lived in a city more than once

(Source: Fieldwork)

Figure 1: An expatriate's international career path 

Edited and posted on the web on 29^th October 2001

Note: This Research Bulletin has been published in Stadt und Region: Dynamik von Lebenswelten, Tagungsbericht und wissenschaftliche Abhandlungen, 53. Deutscher Geographentag Leipzig, 29. September bis 5. Oktober 2001. Edited by A Mayr, M Meurer and J Vogt. Leipzig: Deutsche Gesellschaft für Geographie, 2002, 87-97