From Global Financial Center to Global City:

Evolution of an Image

Diana Bhaktul
Advisor: Helio Fred Garcia

May 8, 2009

M.S. in Public Relations and Corporate Communications

New York University
 “So a city comes to be regarded as a person, with all its
idiosyncrasies and little weaknesses, its strength and power.”

Alan Birch
1962

Museum of Sydney
Australia
From Global Financial Center to Global City: Evolution of an Image

Table of Contents

Abstract ………………………………………………………………… 1
Introduction ……………………………………………………………. 2

Section 1 ………………………………………………………………… 2
The New Global Financial Centers
The Rise of Place Marketing
The Role of Strategic Communication
Constituents
Focus on Applied Anthropology
Objective
Section 2 ………………………………………………………………… 8
Shifting Global Trends
Dispersion versus Agglomeration
The Network Society
Financial Services Impact
Node Expansion
Agglomeration is Attractive
The Nation-state
The Urban Growth Coalition
Global Peers
Transnational Dialogue
Section 3 ………………………………………………………………… 14
City Branding
Best Practices
More than Slogans and Logos
Broad Coalition Support
Coherent Messaging
Perception is Reality
Dubai and Mumbai
Dubai: Transformation of Urban Landscape
Prestige Projects
Hedging Risk
Dubai International Financial Center
Moving Forward
Mumbai: Past and Present
Two Identities
Managing Globalization
Costly Loss
Strategic Vision
Brand Management Considerations

Section 4 ………………………………………………………………… 24
Engaging Constituents
What are Frames?
Benefits of Framing Theory
Using Language
Global City Framing Process
Section 5 ………………………………………………………………… 28
Global Financial Centers
Early Definitions
Florence and the Medici Family
Control and Concentration
Diversification
The Medici Model
Amsterdam
Centralized Information
Institutional Management
Political Will
Attracting the Financial Services Sector
Ranking Systems: Variety of Definitions
Global Financial Center Index
Hong Kong
Hong Kong’s Strengths
Business Climate
Regional Competition
Shanghai
Singapore
Centralized Economic and Social Control
Sound Governance
The Global Financial Center Frame
Section 6 ………………………………………………………………… 42
Global City
History
Financial Center Foundation
Political Leadership
Global-Only Messaging
Value of Urban Space
Source of Inspiration
Media, Entertainment, Arts – Soft Capital
Creative Spaces
Transnational Community
The Global City Frame

Conclusion ………………………………………………………………… 51
 From Global Financial Center to Global City: Evolution of an Image
Diana Bhaktul
Capstone: Spring 2009
MS in Public Relations and Corporate Communications
New York University

Abstract
This paper explores how framing can be used to transform geographical identities. The
geographic space in question is the city, and the two identities in question are the global
financial center and global city. Global cities began as global financial centers,
interlinked in a web of transnational financial transactions. These cities rapidly developed
as the centers of all forms of globalization and redefined the business network into a
network of transnational communities with shared accomplishments and ambitions.
Global cities are not only financial centers, but also "premier locations of
globalization." This paper posits that an image evolution is necessary if policymakers
of global financial centers want a more robust and resilient position in the world economy.
This paper then describes several historical and contemporary global financial
centers, identifying common characteristics of the transformation from global financial
center to global city. This paper concludes with frames that encompass these
characteristics, and examples of how these frames are used in global city image
construction.

Keywords: global financial center, global city, globalization, urban development, place
marketing, public relations, framing, place branding

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Introduction
A year before this research report, business publications wrote about the shifting trends of
"capital market competitiveness" and the "rise and fall" of financial centers around the
world. Cities like Dubai, Hong Kong, Shanghai, São Paulo and others made headlines as
the new financial hot spots of their home nations, giving well-established financial centers
such as New York, London, and Tokyo a run for their money. A 2007 McKinsey report
commissioned by New York City Mayor Michael Bloomberg and New York Senator
Charles Schumer warned "that the US could lose seven percent of the global financial
services market over the next five years to European and Asian competitors if urgent
measures are not taken to improve the business climate for foreign companies.” In
contrast, the merger between Bovespa of São Paulo and BM&F in June 2008 effectively
created "the third largest exchange group in the world by market capitalization," according
to Bloomberg data. "In the capital market sector, Brazil is no longer a colony. It is a
developed nation," proudly declared Brazilian President da Silva at the launch of the new
BM&FBovespa exchange group (Basar 2008).

Section 1
The New Global Financial Centers
What has changed in the world of business that makes cities compete against each other?
The intersection between globalization and urban development presents new opportunities
and challenges for cities. The global financial network has traditionally been limited to
three major cities holding the majority of the world’s market share – New York, London
and Tokyo – and several other several specialized financial centers such as Zurich for
private banking or Hamilton, Bermuda for offshore finance. Cities in the developing world
were not known as major players in the global financial network. Yet over the past three
decades, the rapid pace of globalization and technological advancements stimulated the
transformation of urban landscapes, most notably in the developing world. “To be sure,
cities and regions have long jostled with one another for economic advantage, but as
regulation theorists have persuasively argued, the global economic crisis of the 1970s both
raised the stakes of this competition and radically expanded the field of competitors”
(Gibson & Lowes 8). Cities in Asia, Latin America and the Middle East are reshaping
their policies to participate in the global financial network. The rewards of becoming a

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leading global financial center – such as job creation, real estate development, tax
revenues and improved quality of life – are encouraging these cities to take a more
proactive role in the process of globalization. “Cities which so far have not been part of
the international competition need to be prepared to profit from international capital flows
when the time comes” (Hall & Pfeiffer 116).

Part of this preparation involves developing a story and an image worthy of attracting
investment, tourism and jobs of global caliber. No longer just working with local
companies to create opportunities for local residents, cities are now tasked with
developing policies that provide for the needs of a global community. An image that
corresponds to this new urban reality is also a top priority for place leaders such as urban
planning commissions, city government officials and other high-profile civic leaders that
regularly represent the city’s image. “In the past two decades, and in particular the last
decade, there has been a significant increase in the attempts made by place leaders, urban
planners and decision-makers around the world to promote a positive and attractive image
for their cities” (Avraham 471). As globalization grows, so does the rise of place
marketing as part of a complete global urban development agenda.

The Rise of Place Marketing

Place marketing is not a new concept as governments during colonial times attempted to
persuade citizens to settle in newly acquired territories; however urban place marketing
first became popular during the 20th century (Avraham 472). Short et. al. best summarize
the definition of place marketing as “the re-evaluation and re-presentation of place to
create and market a new image for localities to enhance their competitive position in
attracting or retaining resources (Avraham 318). The global financial markets are going
through a transition period and resources such as capital, advanced information
technologies, and highly skilled labor can no longer be taken for granted by any global
financial center. This presents an opportunity for cities to reassess their competitive
strengths so that they may continue to reap the benefits of being a premier destination for
global business. Understanding globalization and how these trends affect local urban
communities can help place marketers of both traditional and emerging financial centers
develop branding strategies that ideally mitigate the impact of a vulnerable market on a

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city’s business environment while also establish a more robust and resilient position in the
business landscape.

The Role of Strategic Communications

Kotler et. al. defines the image of a place as “the sum of beliefs, ideals, and impressions
people have toward a certain place” (Avraham 472). The strategic communications
function for urban development organizations plays a significant role in the development
of beliefs, ideals and impressions toward global financial centers. In the arsenal of
communication strategies such as advertising, marketing or direct mail, public relations
provides an ongoing link between the management of urban development organizations
and the constituencies that most matter to management. “More than producing glossy
brochures and glad-handling executives at international trade conferences, advancing
one’s interests in the place wars also requires a determined effort to reshape the urban
fabric to suit the needs of global tourists and multinational corporations” (Gibson &
Lowes 4). Public relations professionals use the link between management and target
constituencies to focus on attitudes and perceptions most beneficial for the advancement
of a global urban development agenda, and accordingly attempts to shape an attractive
urban image. “The professional communicator helps a management team understand how
any given constituency is likely to think, feel and behave in any given circumstance; the
communicator also helps bring a company’s desired perception into focus for the
constituency (Doorley & Garcia 387).

Constituents
Avraham’s succinct overview of the target audiences for urban developers helps the public
relations professional craft an image that favorably speaks to the needs of these
constituents, each with their own set of considerations in mind when evaluating urban
advantages: “These people [urban planners] believe that their cities’ public images have
far-reaching implications for significant decisions made by several target audiences: the
residents of other cities – where to emigrate to, visit or work; investors or the management
of companies, industrial factories or plants, and entrepreneurs – where to move a factory
to, where to establish a business, where to find business opportunities; the city residents
themselves – whether to stay or to leave, whether to recommend the city to others, real-

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estate value, local pride; and national decision-makers – whether to allocate budgets and
resources, whether to establish industrial areas” (Avraham 471). Understanding how these
audiences form opinions and perceptions that govern their decision to develop a global
business center is the first step of global financial center and global city development.
Without knowing how key constituents feel about global business strategies or urban
marketing initiatives, any messages or images developed run the risk of being inaccurate
or irrelevant. In the early stages of financial center development, missing the mark on
developing a solid foundation of messages may result in lackluster or incomplete
development plans as constituencies quickly realize that the growth story is not as
promising as hoped. In the latter stages of financial center and global city development,
communication without a solid foundation contributes to perceptions of an unsustainable
urban development model, thereby resulting in missed or lost opportunities to participate
in the global business landscape.

Focus on Applied Anthropology

Edward L. Bernays often cited as the father of public relations first links public relations
and applied anthropology as a public relations counselor for the U.S. government during
the 1920s. He describes the field “as the vocation of the social scientist who advises
clients on social attitudes and on the actions to take to win support of the public upon
whom the viability of the client depends” (Doorley & Garcia 389-390). In this description,
the public relations professional as part of the place marketing industry represents the
social scientist and the urban development organization represents the client; the
combined goal being to win the support of various constituents to create a world-class
business center by recognizing and communicating mutual benefits.

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Doorley and Garcia describe a three-step process for communicators interested in the
applied anthropologist approach:

1) Rigorous observation of the behavior of individual groups.

2) Diagnose the value systems, social relationships and power relationships within
and among groups.

3) Prescribe a response for management to take action that enhances the groups’
relationship with the organization.

The first step involves understanding the current dynamics of actors and situations. The
shifting trends of globalization and the changing roles of multinational corporations, urban
governments, and local communities merit an assessment of how cities can participate in
the business world. The applied anthropologist works to understand how globalization and
urban development have evolved in tandem. Understanding how these trends intersect and
affect global city development gives the communicator deeper insight into what makes an
attractive world-class destination (or what does not).

The applied anthropologist then explores three questions: what each actor values; for
example cities want investment, growth, and sustainability while residents want
opportunities, diversity, and success; what is the social climate of global cities; exploring
how people’s achievements contribute to the identity of the city; and what are the
relationships of power that can provide competitive advantages for cities’ development
agendas.

The final step of the process demonstrates the value of such research as communicators
advise urban development organizations on how to gain critical support from its
constituencies for global city development. “A fundamental study of group and individual
psychology is required before the public relations counsel can determine how readily
individuals or groups will accept modifications of viewpoints or policies” (Doorley &
Garcia, 388-390). As global financial centers engage in “capital market competitiveness"
and the "rise and fall" of financial centers, looking ahead to the future towards a more
robust and resilient position in the global business network will be a critical objective for
global city developers worldwide.
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Objective
Accordingly, this paper takes the applied anthropology approach to provide a strategic
vision for global financial center and global city image construction. Scholars from fields
such as urban geography, sociology, and economics collectively point to two major trends
of globalization that challenge the status quo of urban development. An analysis of these
trends demonstrates how the global financial center and global city identities are part of
an evolving continuum. The communications theory of framing and image transformation
can be useful for cities looking to break out of the global financial center and into the
global city, understood as the center for all forms of globalization. This image
transformation can be a natural progression provided the organization and its constituents
are mutually motivated by the right strategic vision. The key to successful engagement “is
to have clarity about the destination – the reputation that will help a company better
accomplish its goals – and of the best path by which to get there” (Doorley & Garcia 407).
In other words, target constituencies will respond favorably when included in the city
development process. For public relations professionals, the successful engagement
process described above is two-fold: be clear on the desired city brand and then be clear
how this strategic vision will help an urban development organization and its affected
constituencies achieves its goal to become a global city.

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Section 2
Shifting Global Trends
The following economic and political trends are of great interest to urban development
organizations as they pursue global financial center and global city development agendas:

1) Dispersion versus Agglomeration: Early urbanization trends indicated people and

businesses leaving the city center in search of suburban amenities however
increasing specialization and demand for advanced services shows a reversal of
this trend. Indeed there is a distinct network pattern: centers of power and
influence concentrated in certain key cities connected by worldwide flows of
capital, information and labor.

2) Nation-state versus City-state: As cities and businesses seemingly share similar

agendas, national influence takes a backseat as cities capitalize on their newfound
opportunities. Cities connected in the transnational business network ultimately
have more in common with each other than with other urban areas in their home
nations.

Each trend details current conditions in the global business cycle and how new challenges
are altering the urban landscape. Analyzing business cycles allows urban developers to
understand where capital, information and labor – three key inputs into any development
agenda – are going to or leaving from; and then work to create an attractive business
climate for their cities.

Dispersion versus Agglomeration

The contradiction between dispersion and agglomeration results from the shifting
opportunities available for residents and businesses. “Despite the centrifugal impact of
technological change, leading to constant decentralization and deconcentration …there are
still profoundly important centripetal forces, or agglomeration effects, causing important
areas of activity to cluster in the centers of the most important cities (Hall & Pfeiffer 114).
Mass transit and highway construction facilitated much of the urban flight of the early 19th
and 20th centuries. Companies and residents alike searched for lower rents, better jobs and

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suburban creature comforts unavailable in cities during that time. Three types of industries
benefited from this urban flight: manufacturing, technology research and development,
and standardized electronic services. The suburban areas that attracted these industries
offered cheaper, skilled labor and lower costs of doing business.

Innovations in technology, business operations, and management however amplified the

demand for resources and business networks needing higher levels of capital and
information management. Standardization lost its relevance and the low-cost, low-touch
business model also lost its attractiveness. The latter half of the 20th century reveals a
return to the city center or downtown business district model where corporate
headquarters found the high-level, high-touch resources and business networks needed to
expand exponentially (Gehrig 1998; Hall and Pfeiffer 120).

The Network Society

John Friedmann first labeled these cities as “command centers;” places that control and
define the global flow of capital, labor and information (1986). Amin and Thrift later
identified “integrated global networks of production and services” connecting these
commands centers (1992). Tying the two concepts together, Manuel Castells explores how
these cities organize and manage global resources in his work The Rise of the Network
Society (1996). Castells believes that recent technological advancements have made it
possible for capital, information and labor to flow in and out of key business centers via
the network framework. The framework consists of nodes and flows. Nodes are clusters or
agglomerations of activity concentrated in key cities, serving as the command center
directing flows, and flows are the exchanges of capital, information or labor between
nodes. Places are defined by their connections and not necessarily by their fixed locations.
Castells believes, “Networks constitute the new social morphology of our society.” He
further posits, “[the] network logic substantially modifies the operations and outcomes in
processes of production, experience, power, and culture.”

If networks have the power to modify operations and outcomes as Castells suggests above,
then building one’s capacity to support network transactions or strengthening network ties
with other key centers allows for significant control of outcomes and processes. A city

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with a strategic position within this network can influence how resources are allocated and
can competitvely pursue development agendas. “Those with greater access to the key
forms of capital have a better chance of imposing upon the field a structure that benefits
themselves and their allies. In other words, although there are no guarantees of success or
failure in these struggles, a pre-existing accumulation of economic capital, cultural
knowledge, and social prestige confers enhanced power to shape the field to one’s
advantage” (Gibson & Lowes 7).

Financial Services Impact

Saskia Sassen further develops the network society theory by describing the impact of the
financial services industry in positioning cities within the network. Widely attributed to
deregulation and privatization policies of the last several decades, the financial services
industry plays a significant role in directing capital around the world. Money accumulates
in business centers offering the most incentives for multinational institutions and in turn
cities are rewarded with Castells’ strategic role as the node, or command center that
directs global flows of resources. “Since the early 1980s … vast amounts of funds
introduced by large institutional investors contributed to the rapid growth in cross-border
investments in equities and the formation of an international market for equities” (Sassen
68). “The resulting shift in liquidity [to developing countries] is one of the greatest
transfers of economic activity and wealth in the past 100 years” (The Economist 2007).

Node Expansion
Node expansion loosely follows three steps: the first step is to attract the financial services
industry as described above, then ancillary advanced services will develop to service
complex, specialized operations and finally tertiary services create social and cultural
atmosphere enhancing quality of life for city dwellers.

According to Sassen, once the financial services industry establishes activities in a

particular city, ancillary advanced services such as law, accounting, advertising, and
management consulting build up to support and service the transnational financial
community. These are collectively referred to as advanced producer services, as they
provide advanced high-demand technological skills and specialized knowledge. “The

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distinct production advantage of global cities is the highly specialized and networked
service sector” (Sassen 7). The complexities of cross-border investments and capital flows
necessitate centralized management and business services across the network.

The advanced business community looks for high-quality cultural outputs to compliment
their lifestyles. Thus agglomeration is important for both high- and low-technology
communities: “high-technology producer services, such as banking and finance, command
and control activities and media services, require access to large amounts of information
both electronically and face-to-face, and lower-technology personal services such as
restaurants, bars, fast food outlets, hotels, clothes shops, haircutting salons, gymnasia,
sports stadia, entertainment of all kinds cluster around them. The cores of the great global
cities – London, New York, Tokyo – illustrate this symbiotic juxtaposition most perfectly;
but it can be found in dozens of other cities which compete for global status” (Hall &
Pfeiffer 114).

Agglomeration is Attractive
This concentration of capital, information, labor and culture creates an attractive business
climate with tangible benefits such as more jobs, increased intellectual capital, higher tax
revenues, and improved quality of life. Other qualities include “local intelligence in the
financial sector, the innovation milieu in the city, the intensity of interaction with multiple
types of expertise, and the up-to-the-minute information not generally available or
standardized” (Sassen 118). As mentioned earlier, cities in the developing world are
taking a more proactive role in process of globalization, hoping to serve as a command
center and provide an open business climate friendly to the needs of local and global
constituencies. Many such cities would not have had a chance had it not been for the
political will to prioritze urban development.

The Nation-State
National government structures historically controlled economic and social development
of its people. From kingdoms to empire building to colonization, the will of the people has
largely been taken for granted as synonymous with the will of the reigning government.
During these histories, people were forced comply with the government without any

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consideration for minority opinions or tolerance for dissent. The iron will and
determination to expand its territory, acquire resources and exploit opportunities for
national gain was the primary and often unquestioned function of the state. “The modern
nation-state appeared as the main agent for developing national economies, protecting
citizens against intruders and business against foreign competitors, providing public good,
and enforcing homogenous cultural spaces” (Segbers 2-3). Contemporary democracies
represent the culmination of the people’s ongoing struggles to dethrone old empires and
monarchy systems. More inclusive and tolerant of the diversity of its constituents yet still
compelled to push political agendas, politicians in support of urban development agendas
face two challenges: growth coalition politics and conformity with other like-minded
urban communities.

The Urban Growth Coalition

Flexible economic and fiscal policies of the past several decades have opened cities to
multinational firms. “These cities deliberately chose privatization and deregulation
policies to begin the process of wealth accumulation in their financial institutions” (Sassen
4). Cities replaced national organizations as the primary governing entity capable of
keeping up with globalization. Multinational firms work with local politicians to promote
pro-business interests since the growth of these firms heavily depends on how the local
government authorizes land use. Both private and public sector constituents such as real
estate developers, firm executives, construction firms, and even local charities and other
civic organizations form a growth coalition, a group dedicated to promoting business
interests in the local region to improve quality of life and opportunities for locals.
“Through these modes of participation, growth coalition members over time become
repeat players in the formal and informal environments for local decision making”
(Nevarez, 4-5). With a dedicated team looking after the interests of a particular local
region, it is easy to see how cities are able to marshal enough political and economic
power to bypass national agendas. Cities control their own policies to attract investment
and growth and quite often outpace national growth indicators; “metropolitan regions
produce a large percentage of the national GDP, it is clear that cities have outpaces
national governments as the main agents of growth and development” (OCED, 3)

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Global Peers
The parallel between the process of globalization and the development of the city marks
“the transition from a national mutuality between city and state towards a new inter-city
mutuality at a transnational state” (Taylor 1995). The new inter-city mutuality refers to
interdependence of cities in the global business network. As transactions are shared across
borders, so are the mutual gains and losses. One city’s capital infusion is another city’s
urban revitalization project. Doing business together means cross-border constituents will
share each other’s successes and strive for similar future opportunities. The ability to share
interests, find common ground, collaborate and cooperate contributes to a sense of
community, albeit outside of traditional political borders. "Global cities face similar
challenges and in many cases have more in common with each other than with smaller
cities in their own countries. “Recognition of these similarities fosters alliances as well as
competition” (PricewaterhouseCoopers, 30).

Transnational Dialogue
It is clear that globalization and urbanization carry considerable significance in policy
discussions by urban developers. These discussions foster a transnational dialogue on the
necessity of a sustainable urban development model and the credibility of image
construction efforts. What are the implications of the network society for urban
development? How have cities altered their physical or socioeconomic landscapes to
increase their participation in the network society? And how do public relations
professionals construct the image that will best help the urban development organization
accomplish its goal to become a global city? Smart global city development policies are
intended to capitalize on opportunities gained and rewards earned from the global business
network. Similarly, public relations professionals must maximize what the global business
network has to offer for all constituencies in order to create a sustainable and credible
brand image for the global city.

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Section 3
City Branding
The above context of globalization and urbanization leads to three considerations specific
to urban development at the global level:

1) Scope: These cities cannot only look inward for growth opportunities; global cities
must competitively pursue opportunities across borders to sustain their ambitious
development agendas. Balancing local and global interests is a constant challenge
for global cities.
2) Affected Constituencies: Global cities are home to a diverse cross-section of the
world’s population. Creating a place that supports this tremendous inflow of
people is a significant pressure for global cities.
3) Risk: The expectations of a global city are arguably the highest of any urban
development plan. Meeting these expectations results in big rewards – such as an
overall positive impression of the city matched by world-class investments and
opportunities. Failing to meet expectations results in big losses in credibility as
constituencies are disappointed and less likely to believe in the city brand. The
pressure to perform intensifies at the global city level.

As place marketing takes the forefront in urban development dialogue, organizations turn
to public relations professionals to reinterpret the brand of their city. “Image and progress
unfailingly go hand in hand. Although it is usually true that a positive image is the
consequence of progress, rather than vice versa, it is equally true that when both are
carefully managed in tandem, they help each other along and create accelerated change”
(Anholt 216).

Place Branding Best Practices

Public relations professionals can use brand management strategies to set a direction for
development, distinguish a city’s advantages from other cities, and create a foundation of
values shared across constituencies. Succinctly defined, brand management is “the
cautious husbandry of existing perceptions and the painstaking reconciliation of diverse
elements into a harmonious yet distinctive whole” (Anholt 220). Place branding expert

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Simon Anholt advises the following place branding best practices, accompanied by two
examples specific to global city development.

More than Slogans and Logos

Kotler et. al. defines the image of a place as “the sum of beliefs, ideals, and impressions
people have toward a certain place” (Avraham 472). These collective values change
frequently and are nearly impossible to package into a short-term promotional campaign.
In fact the short-term perspective can be damaging to a city’s image. For example, Ottowa
in the late 1990s developed multiple marketing campaigns to transform into a world-class
city. Slogans such as “Meeting Place of the World” or “Ottowa: Technically Beautiful”
lead to “less than enthusiastic [reactions] and the brand disappeared after a combination of
ridiculing the slogan and irritation about the cost” (Andrew 132). “Dealing with possible
investors, tourists, or entrepreneurs is an ongoing process that does not culminate in
securing a one-time investment or establishing a single tourist attraction." (Avraham 472).
The ability to have an ongoing relationship with constituencies allows for a continuous
reassessment of the constituencies’ collective values. A combination of successful
investments and development projects builds confidence in the development
organization’s strategy and contributes to the reputation of the city as a destination for
continued prosperity. “[Place] branding is cumulative. It is about building a positive
reputation over a period of time…about doing real things to earn that positive reputation”
(Anholt 4).

Broad Coalition Support

Given the scope of global city development, the challenge is to convince both national and
non-national citizens of the potential for prosperity in the global city. This is often at odds
with the local population who would rather reserve opportunities for local communities.
The pro-local versus pro-global division appears to conflict, however the “pro” indicates
shared aspirations for jobs, wealth, and improved quality of life. “Widespread
participation by a range of stakeholders will help ensure both an extensive contribution of
ideas and perspectives, and subsequent commitment to the vision achieved” (OECD, 101).

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Coherent Messaging
As mentioned earlier, cities compete for capital, information and labor as the three key
inputs to any development agenda. The global city competes with cities across the world
with which there would be no linkages without the forces of globalization. Place
marketing takes the forefront in development priorities only because of this global
competition for resources. Having a coherent set of messages, ideas, or values ensure they
are spread consistently throughout the global network. “Unless that city always seems
exactly like itself every time it crops up, there is little chance that those few seconds of
attention will ever add up to a preference for its products, a desire to go and visit the place,
an interest in its culture, or, if we were prejudiced against the place in some way
beforehand, a change of heart.” (Anholt 214) Additionally public relations professionals
know the importance of being in control of the brand identity; other parties outside the
organization can step in and define the brand in the absence of any control. Such
definitions may not always portray the organization in a positive light. “Development is as
much a matter of positioning as anything else. So it makes perfect sense for governments
to do everything possible to ensure consistency of behavior in every area” (Anholt 221).

Perception is Reality
Much of place branding is about debunking preexisting images that are often inaccurate or
misunderstood. People form perceptions about places based largely on what was said or
seen, even if this is at odds with what cities envision as its ideal image. For better or for
worse, opinions and attitudes collectively form the brand identity. Any city wanting to
engage in global city development must have an image compelling enough to encourage
constituents’ willing exploration of the truth in order to calibrate their perception with
reality. In return, reality must catch up to perception. Urban policies for development
should parallel the desired vision of the city. As reality and perception are initially at
opposite ends of the spectrum, the right development plan and strategic brand vision
brings the two closer together to meet in the middle where visions for sustainable and
credible prosperity can be realized.

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Dubai and Mumbai
Both Dubai and Mumbai represent extreme examples of city brand development. One city
is arguably the most buzz worthy, most visually recognizable and yet the most incredulous
example of global financial center development. The other city is relatively unknown in
the international financial scene, and lacks a clear direction for reshaping that perception.
How do both cities approach city branding? Dubai and Mumbai are actively engaged in
this dialogue and are enacting transformative policies even as this paper is written. Both
cities have economic and political capital to begin the process yet both cities face
challenges reconciling disparate constituencies and creating a brand that leads to
sustainable participation in the global business network. The following section will
explore brand strategies of these two cities and assess their achievements and challenges.

Dubai: Transformation of Urban Landscape

Beginning in the 2000s, Dubai set out to build a financial center from scratch in order to
diversify away from an oil-dependent economy. “This tiny sun-baked patch of sand in the
midst of a war-torn and isolated region started with few advantages other than a long
tradition as a hub for Middle Eastern trade routes” (Economist 2007). Now Dubai boasts
the world’s tallest buildings, world’s only man-made archipelago, the world’s only seven-
star hotel, the world’s largest shopping mall and many other impossible architectural feats.
Given the rapid pace and larger-than-life size of development, “an observer may fairly
wonder: is the growth that we see the result of visionary leadership or haphazard
planning?” (Saddi et. al. 3)

Prestige Projects
The power to build an urban environment from scratch requires significant investment,
collective willpower and an iconic, striking visual signaling the arrival of the change.
Prestige projects, as they are collectively referred to, are ideally intended to showcase
local achievements to a global audience, hoping the resulting recognition can translate into
investments and growth. Baltimore redeveloped its Inner Harbor in the 1960s and for a
period of time, successfully altered perceptions away from a city of crime to a city of
culture. The model was quickly copied and “these designer spaces became enshrined as a
readily-identifiable symbols of the 'renaissance' city. Similarly, the names of these

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monumental spaces quickly become associated with the cities in which they are located:
Bilbao's Guggenheim, Barcelona's Olympic Marina, Vancouver's Pacific Place, Atlanta's
Peachtree Center, Sydney's Darling Harbour and so on” (Hubbard 2001).

Dubai’s first claim to fame was the Palm Islands, a group of man-made islands created for
high-end tourism and real estate. Hoping to convince political leadership and regional
skeptics, officials felt that an unprecedented, image-conscious, attention grabbing,
development project could jumpstart the rest of the city into action. As Anholt mentions,
attention is a limited resource and getting as much as possible and as quickly as possible
can immediately form perceptions and demonstrate a city’s willingness to take control of
shaping its identity. With seemingly unlimited capital and ambition to match, Dubai is one
of the few cities able to even attempt this level of development. It was a success; “once the
Palm Island concept demonstrated its value, it was endorsed by the larger community in
Dubai, and other islands were built. That same dynamic occurs across many industries in
the region: Bold decision making in one key project sets the course for others to follow.”
(Saddi et. al. 9)

Hedging Risk
The region is flush with capital thanks to revenues from the oil business. Regional
officials recognize the need to evolve beyond one industry and establish a more
sustainable presence in the global economy. “Today oil-producing countries are using
their extra revenue to reduce foreign debt, boost liquidity, develop trade ties, and attract
foreign investment” (Saddi et. al. 9). Given the risks of global development, officials here
attempt to hedge risk by limiting development to special economic zones. Using zones
where economic activity is controllable allows for easier experimentation.

Dubai International Financial Center

As the face of financial services in the region, the Dubai International Financial Center is
advertised as the “world’s fastest growing international financial center” (DIFC website).
This 110-acre free zone offers banking, trading, insurance and other related financial
services. Full foreign ownership and no tax on profits are some of the experimental
policies designed to quickly attract international investment. To enhance Dubai’s global

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financial image, developers built the Gate, the symbolic entrance to the Dubai
International Financial Center. “The Gate will be a national landmark and is symbolic
both in name and design, because it embodies the vision that drives the DIFC; to position
Dubai as the regional gateway for the flow of capital and investment into and out of the
region” (DIFC 2003). The intention of the gate is similar to the Grande Arche entrance to
La Defense, Paris’ premier business district. Coupling experimentation with familiarity is
Dubai’s way of mitigating global development risks while at the same time reaching out to
the international community.

Moving Forward
Dubai’s strengths lie within the urban growth coalition that has quickly gathered around a
vision for a new, international Dubai. “Indeed the tremendous economic vitality of the
region is due, in no small part, to visionary individuals in positions of authority who are
eager for progress and willing to move quickly” (Saddi et. al. 6). Negative perceptions of
the region however weigh down on Dubai’s progress. “In some ways this progress
remains unseen by outsiders because the region continues to be stereotyped and
misunderstood (Saddi et. al. 8). An image shift greater than just the urban center may be
needed to move beyond the past. Dubai’s developers have the luxury of learning from past
mistakes of other urban development plans and want to gain trust and confidence from
investors new to the region. Having policies familiar to the international community could
establish Dubai as part of the global peer group instead of an unknown, misunderstood
player in the global network.

Mumbai: Past and Present

In complete contrast to Dubai’s growth coalition, Mumbai suffers from a policy void and
could prove to be a costly loss. Created by the British as a trading port to service the
British trading empire in India, “Mumbai was not an indigenous Indian city…it looked
outward toward the widespread framework in which it played a role [and] served as an
interface between India and the world” (Segbers 258). Post-colonial Mumbai is struggling
to reconnect with this international heritage as present-day globalization trends amplify
the differences between local and global interests.

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Two Identities
Mumbai has two dominant identities; one as an international, progressive urban center,
and one as the capital of Maharashtra and center of Hindu nationalism. The former is
referred to as Bombay, the Anglo-British name associated with all things Western and
foreign for much of the native Indian population. Mumbai however is a preservation of
Hindu identity as it is derived from “Mumbadevi,” the mother goddess in the Hindu
pantheon (Segbers 259). Mumbai’s paradox of sprawling slums and neighboring high-rise
development pits the two groups against each other in competition for participation in and
rewards from the global business network. Despite their proximity, “connections among
these constituent groups are however infrequent except where such groups are bound
together in a common economic or cultural practice” (Segbers 261).

Managing Globalization
Senior development official of the Mumbai Metropolitan Region Development Authority,
Vidyadhar K. Phatak, states, “Against this background to answer the question ‘does
Mumbai aim to become a global city?’ will have to be no. Mumbai as represented by city
or state government does not deliberately aim to become a global city. But the macro
economic framework that has been put in place by the national government has prompted
the city, perhaps at the behest of the business and services sector, to begin to become
global” (324)

Deregulation and liberalization on national level enacted by Prime Minister P.V.

Narasimha Rao in the 1990s opened up India’s borders to multinational investments.
Multinational corporations took advantage of India’s high-quality, low cost labor force
and predominantly provided jobs throughout the country for the advanced services sectors
such as technology, engineering, and research and development. In Mumbai, this process
unfortunately favored the educated, wealthy city elites and has had difficulty incorporating
the manufacturing and industrial labor base, resulting in “an asymmetry of opportunity
and entitlement” (266). Marginalized and disadvantaged, these local groups created their
own parallel city, reinforcing pride in the Indian identity perhaps lost in the process of
globalization in Mumbai. Whereas at one time in history under the banner of coordinated
colonial administration, citizens of Mumbai shared goals of prosperity and collectively

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worked together to manage trading, commerce and industrial operations of an
international business center; now citizens of Mumbai are increasingly embattled in the
pro-local versus pro-global debate. As groups develop apart from each other, what
benefits one community no longer benefits another. Likewise losses in jobs or wealth are
no longer shared but marginalized to groups increasingly disenchanted with the promises
of globalization.

Costly Loss
With fewer opportunities to share common ground, the lack of a single voice or uniting
image increasingly threatens Mumbai’s progress. As the gap between the privileged and
the marginalized increase, this also increases the gap between perception and reality.
“There is no single dominant image of the city, no broadly shared civic vision, no
common discourse regarding policy objectives, no agreement on the greatest common
good of the metropolis” (261). Mumbai’s internal competition makes it difficult to enact
redevelopment policies for the city as a whole. Basic business infrastructure often
assumed of global cities lack attention in Mumbai and represents a barrier for foreign and
national investment into the city. “Global citizens whose advent is so ardently desired,
even by localist sentiment, do not arrive in great numbers, simply because
Bombay/Mumbai’s civic governance cannot ensure refined amenities – the absence of
pollution, well-regulated traffic, the quality of life, and the opportunities for leisure – that
such cities as Singapore, Hong Kong, or Shanghai can, as metropolitan centers that have
self-consciously programmed themselves as global city regions" (Segbers 273).

Strategic Vision
The above two examples highlight different directions global city development can take;
Dubai chose a bold leap into the global arena versus Mumbai, which faces an uphill
struggle. Having a vision increases the likelihood of development as urban development
officials have agreed upon the direction to take and then coordinate efforts to reach this
goal. To being the vision creation process, officials must have an internal discussion on
what is the desired outcome of development. The vision serves as the internal road map
for what the organization intends. An ideal vision intends to transform the city into a
leading destination for business, culture, and education; bringing wealth, opportunity and

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prosperity to its residents. Such a vision will require support from groups outside of the
organization's elite as residents, investors, tourists and other external audiences are equal
contributors to the success of a global city. Their cooperation with the urban development
organization will depend on how they understand and internalize the vision as their own.
A major part of the public relations professional's role is to provide ways for audiences to
understand the vision; "the communicator also helps bring a company’s desired perception
into focus for the constituency" (Doorley & Garcia 387). Once audiences understand and
agree upon the vision set by urban officials, audiences can communicate the vision as their
own; "place brands are about people in addition to what is made or done in a place. People
need to communicate their qualities and aspirations about their experience with the place.
It is the exact place branding equivalent of 'living the brand' [as understood] in the
commercial field" (Anholt 214). Audience acceptance and participation with the vision is
considered successful from the city official's perspective as development begins with the
city's various constituencies moving together towards the global city vision. "The dream
of a global city is the one shared platform in a city of divergences, a common motivation
that brings together social, [economic] and political actors" (Segbers 273).

Brand Management Considerations

The city brand image includes the desired vision as defined by city officials, the attitudes
and perceptions of target constituencies and the lived reality as experienced by all
constituents. A large part of a successful vision is the diligent mindfulness of the above
place branding best practices. The expectations of prosperity and opportunity are credible
so long as the rewards of being a world-class city such as job creation, real estate
development, and improved quality of life are a part of the urban experience. Additionally,
target audiences are already predisposed with attitudes and perceptions about a place.
Whether positive or negative, these contribute to the existing brand image of a city. To the
extent that a strategic vision can influence constituents' attitudes and perceptions of the
mutual benefits of global city development is a testament to the success of brand
management strategies. The following section will explore how public relations
professionals can contribute to vision development and evolve the global financial center
into the global city.

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Section 4
Engaging Constituents
Once city officials agree upon the desired vision, the public relations professional begins
the task of engaging constituents in the future urban vision. “If public relations is defined
as the process of establishing and maintaining mutually beneficial relations between an
organization and public on whom it depends, the establishment of a common frame of
reference about topics or issues of mutual concern is a necessary condition for effective
relations to be established” (Cutlip, Center and Broom 1995). Bringing the benefits of
opportunity and prosperity into focus for the global city audience establishes a mutual
foundation of shared interests. With this foundation established, the organization will have
a better understanding of what kind of policy initiatives its audience is willing to accept.
Investors looking for new business opportunities and residents looking for jobs or
improved infrastructure converge as they begin to see the potentials for partnerships and
shared rewards. Audiences can relate to development agendas as outlined in the vision and
then support the development organization’s goals to become a global city.

What are Frames?

Leading cognitive scientist George Lakoff explores frames and how individuals develop
attitudes and perceptions; “frames are mental structures that shape the way we see the
world. As a result, they shape the goals we seek, the plans we make, the way we act, and
what counts as good or bad outcomes of our actions” (Lakoff xv). Neither physically seen
nor heard, he believes these mental structures exist in one’s conscious and are only
accessible when triggered by symbols or language associated with the frame; “we also
know frames through language. All words are defined relative to conceptual frames. When
you hear a word, its frame is activated in your brain” (Lakoff xv).

What symbols and texts are associated with global financial center and global city? Not
knowing related associations between text and thought can result in an indefinable target
for image constructionists. Grunig states that, “once an organization understands its own
identity; it can use symbols [or text] to communicate that identity to external publics”
(1993). Even if a strategic vision is developed, public relations professional still need to

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know what symbols and texts are most effective when communicating with its
constituents.

Benefits of Framing Theory

Public relations professionals can use framing theory as a way to reinforce desired
qualities, shape audience interpretation of these qualities and discover a deeper
understanding of the determinants of the global financial center and global city identity.
“Framing is conceptually connected to the underlying psychological process that people
use to examine information, to make judgments, and to draw inferences about the world
around them” (Hallahan 206). As global financial centers expand both in physical size and
marketability, they will need to understand what information investors, residents, tourists
and other external constituents use to draw inferences and judgments about the financial
center’s capacity for global expansion. Evolving into global cities such as New York and
London is considered a natural progression only if policymakers and constituents agree
upon their ability for such mobilization. “At an organizational level, frames represent
strategic devices for mobilization … creating a more sympathetic environment in which
movements can evolve" (Carragee 3).

Using Language
To move from old to new frames requires reshaping ideas and associated language that
evokes these ideas. Lakoff defines reframing as, “changing the way the public sees the
world. Because language activates frames, new language is required for new frames.
Thinking differently requires speaking differently” (Lakoff xv). To change the way
constituents see global financial centers and their expanding role in the global business
network, public relations professionals adopt a new set of texts and associations for their
city. The right use of language can include or exclude certain attributes, emphasize
advantages or and deemphasize negative outcomes. Language can “select some aspects of
perceived reality and make them more salient in the communicating text” (Entman 1993).
Salience is demonstrated by making selected language more meaningful to constituents.
Once having gained the support of constituents, this can have an indirect effect on policy
as decision makers are less inhibited to act (Knight 383). Framing can not only help create

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 the text that defines the global financial center and global city, but also goes one step
further and shapes the interpretation of these identities.

Global City Framing Process

The framing process begins by understanding how symbols, texts and associations are
created, recreated and interpreted in society. Cultural studies scholar Richard Johnson
“conceptualized the social flow of cultural forms and meanings as a circuit” (Gibson &
Lowes 5). Johnson believed the processes of reinterpretation and reframing of identities
were part of an ongoing movement of social meanings. If this is true then it is possible for
global financial centers to move beyond their existing identity and evolve into global
cities. If circulation is inherent in the movement of images, texts and identities, then it is
certainly possible to reframe and evolve an identity. Communications scholar Timothy
Gibson applied this concept to urban communication. The below chart shows how the
intersection of globalization and urban development motivates cities to reassess their
identities (Gibson & Lowes 10):

Global Scale Local Scale

(Urban Promotion) (Urban Struggle)
Production Interurban competition inspires Competing alliances struggle to define
spectacular redevelopment to “urban vitality” and to realize their
secure global investment. definitions in the fabric of urban space.
Text The transformation of The visions of “urban vitality”
redevelopment projects into expressed in political struggles; the
promotional texts. semiotics of new urban spaces.
Context The interpretation of promotions How urban spaces (spectacular, civic,
by global actors. etc.) are lived, appropriated, and
contested by residents and visitors at the
level of everyday life.

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The first step in Gibson’s framing process is Production, which describes the social,
economic, or political processes that creates the backdrop for urban competitiveness and
the rise of place marketing. These trends impact the urban dialogue on both a local and
global scale, the two not always consistently experiencing the same results. While cities
are engaging in competitiveness and place marketing, local groups are beginning to
experience the movement of image and cultural forms taking place in their local spaces.
The first two sections of this paper describe and establish the backdrop within which
global financial center and global cities are operating.

The second step is Text, where public relations professionals take hold of the movement
of cultural forms and attempt to shape images according to what is mutually beneficial for
all parties involved. In the local space, conflicts between old and new can arise as in the
case of Mumbai. The third and fourth section of this paper covers how public relations can
responsibly and credibly control the framing process to foster growth and cooperation
within city environments.

The third step is Context, when development visions are realized and audiences begin to
live the experiences promised in the vision. How constituencies prosper from jobs, wealth
creation and improved quality of life as promised by the global financial center model will
determine the success of the vision and ultimately the brand. The successful reframing
process from global financial center to global city occurs when global city language
triggers support and mobilization from participating constituencies to partner with urban
development officials.

The final two sections will start with an analysis of the global financial center and global
city identities, highlighting key attributes and determinants of each identity. By
repositioning these attributes within the window of framing theory, public relations
professionals can shape the inferences and outcomes of global city development.

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Section 5
Global Financial Centers
Early definitions of global financial centers largely focused on the volume and breadth of
financial transactions in a given marketplace. As the scope of financial transactions
expanded, so did the potential for financial centers to serve as key business centers.
Historical examples such as Florence during the Renaissance and Amsterdam during the
17th century illustrate the transformation from early financial center to key business center.
Present-day definitions now include ranking systems that measure the characteristics of
financial centers in question. The ranking systems function like league tables, where
performance is quantitatively measured in terms of investment inflow, business deals
made, real estate growth, etc. to clearly identify winners and losers in the urban
competitiveness landscape. Urban planners from both traditional and emerging financial
centers are keenly interested in the results of these rankings as these numbers attempt to
identify the socioeconomic clout of a financial center. Image branding professionals can
translate this socioeconomic clout into an urban image of dynamism, productivity, and
excellence. Top-ranking financial centers achieve global status whereas mid-ranking
centers serve as gateways or regional centers. The layers of the financial center definition
limit the evolution of urban identity by keeping cities locked within a set of qualities.
Breaking out of this cycle will be a key step in the transformation process from global
financial center to global city.

Early Definitions
According to Charles Kindleberger’s The Formation of Financial Centers, spatial location
is an important factor in the development of the network of financial transactions.
“Banking and financial centers perform a medium of exchange function and inter-spatial
store-of-value function… the specialized functions of international payments and foreign
lending or borrowing are typically bets performed at one central place that is also (in most
instances) the specialized center for domestic interregional payments” (6). He summarizes
financial centers as places to “balance the savings and investments of individual
entrepreneurs and to transfer financial capital from savers to investors” (6). This process is
seen throughout history in many successful global financial centers.

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Florence and the Medici Family
In the 15th century, Florence was the center of European commerce and like other
Florentine families, the Medici family contributed significantly to building a thriving
financial services industry in Florence. A review of the operations of the Medici bank
shows trends similar to present-day financial center development (de Roover 1946).
Economic concentration and the diversification from strictly financial operations into
multiple industries lead to the development of and subsequent control over the network of
business centers during the Renaissance.

Control and Concentration

The Medici family developed a network of bankers and transactions in which roles and
responsibilities were clearly defined. The ‘principal’ and the ‘agent’ represented the two
sides of each transaction; “the ‘principal’ was the individual/firm who initiated an
exchange transaction and assumed the risk of any loss. The ‘agent’ was the person /firm
who carried out the orders from a foreign principal” (de Roover 155). With only two sides
to every transaction, bankers could enter into dealings with different counterparties either
as principal or as agent. “Relations between the different branches of the Medici bank
were the same with regard to bills between any two of them. One branch could act either
as principal or as agent for another branch. Relations between the Medici bank and
outsiders were on exactly the same basis: the Medici sometimes acted as agents for other
firms and sometimes as their principals” (de Roover 156). Bankers played both roles
which significantly enhanced their ability to build the network of transactions. No bank
had one single function and instead developed the ‘critical mass’ of transactions necessary
to build a fledging business network.

Over time the Medici banking system dominated markets in Florence, Venice and Rome.
“The appearance of powerful banking houses with a network of branches and
correspondents made it possible for one firm to gain monopoly control or for several firms
to form combinations” (de Roover 172). The banking system at its height had over nine
branches outside of Florence (Economist 1999). By controlling the financial system across
Italy, the Medici family exerted much power and influence over its business network.
They also worked closely with the Vatican through its branch in Rome and used the

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influence of the church to extend their operations into Bruges, Lyons, Avignon, Geneva,
Basel, London and other surrounding territories (Cameron 710). “Though the scale of its
network was not new – the Bardi and the Peruzzi, the great Italian banking houses of the
early 14th century, had more branches and probably more power – the Medici bank was
the most international of its time. And it used this network to great effect for what became
its biggest client: the Vatican, to which it brought the tithes and taxes due to Rome from
other branches of the church commercial in Europe” (Economist 1999). The Medici
banking network thus exemplified the meaning of a global financial center, with Florence
as the core of commercial transactions for regional and cross-border business centers.

The customers of Medici banks represented the upper echelons of society. “The Medici
operated on the exchange not only with their own funds but also with the funds of
depositors, mostly noblemen and other persons of wealth. Thus landowners and other
people without any connection with business participated indirectly in the financing of
foreign trade” (de Roover 159). The Medici built their power serving as market experts
that could be trusted with aristocratic wealth. In turn each relationship and successful
transaction contributed to the Medici’s reputation as the go-to bankers of the times. The
risks and rewards of serving such high-powered clientele however were not lost on the
bankers; “Most of the Medici bank's lending was to royalty, to finance military campaigns
or lavish princely lifestyles. The sovereign risk of the day was high: both the Bardi and the
Peruzzi houses were felled when England's King Edward III defaulted. Though the
Medici’s banking experience was not much better, they felt that shouldering such risks
was necessary to get other business” (Holmes 415).

Diversification
In addition to establishing control in international business centers, the Medici family
expanded their role beyond traditional banking functions. They entered into commodities
trading in order to diversify risk. “The Medicis were no exception to the general rule.
They also diversified their risks by dealing in a great many commodities, but the mainstay
of their business was trade in certain staple products and luxury articles such as wool,
cloth, silk, alum, dyestuffs, spices, olive oil, and citrus fruits, for which there was a steady
demand in the principal commercial centers. Risks were further spread by entering into

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joint ventures or “anonymous partnerships” with other merchants (de Roover, 162).
Additionally the Medici family mixed banking and trading to further deepen their control
and influence in the business network. “Italian merchants might, for example, lend to
English sheep farmers or wool merchants, in return for lower prices [on goods]… Another
[example] was to use foreign currency: the bank could lend, or accept a bill of exchange,
in one currency and collect its debt in another, building a hidden rate of interest into the
exchange rate” (Economist 1999). With their expertise in banking and trading, the Medici
family’s dominant priority was to control international flows of money and commodities
in order to further profits from those transactions; “the greatest opportunities for trade
were offered by the constant flow [of money] into the papal Chamber from all parts of
Europe and by the commercial transactions between north-west Europe and northern
Italy” (Holmes 415).

The Medici Model

Basic business practices such as economic control and diversification continue to define
global financial center development of today. The Medici system of expansion leading out
from Florence and into European markets mirrors similar ambitions of present-day
financial centers to expand their global business network. Florence represented the center
of finance, trade and banking, in full control of the dominant economic system of the
times. The Medici family exploited their expertise in banking operations to control the
flow of capital and information. Similarly merchants in Amsterdam used the same tactics
to establish their city as the leading financial center of Europe in the 17th century.

Amsterdam
Amsterdam rose to power in the 17th century as “Europe’s leading financial center and a
major generator of investment capital” (Smith 986). Three factors contributed to
Amsterdam’s rise to power: the centralization of commodities operations, the
centralization of business information and the (almost identical) alignment between public
and private interests. “Amsterdam merchants, by linking control of warehousing to
finance, manufacturing, overseas trade, and distribution, could create monopolistic
conditions in commodities markets” (Smith 986). Amsterdam served as the single
strategic location for the import and exports of most popular commodities. Doing so

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reduced transaction costs and increased market access for merchants from Amsterdam and
other countries. “That so many channels of private correspondence culminated in
Amsterdam made it important for businessmen in certain key trades (textiles, Asian goods,
grain) to maintain correspondence with Amsterdam even if their actual commerce there
was limited” (Smith 992). Thus Amsterdam positioned itself as the place for all global
commodities trading for both large and small business operations.

Centralized Information
What Amsterdam did best was take advantage of market inefficiencies and created what
Woodruff D. Smith calls an information exchange (Smith 1984). Market inefficiencies
included getting accurate information about incoming commodities shipments and
outbound shipping schedules, maintaining correspondence with merchants in other
European trading hubs, and publishing data on trade flow, goods pricing, and other
socioeconomic conditions impacting the business network. Smith argues “the nature of
information as a commodity and as a byproduct of the operations of trade networks lead to
the evolution of Amsterdam as a leading information exchange for Europe” (Smith 987).
Smith further states that information from Amsterdam and other European businesses
collectively constituted the largest input into the trading exchange (Smith 990). Similarly,
modern-day research supports the theory that controlling information develops a desirable
business climate providing advantages such as “local intelligence in the financial sector,
the innovation milieu in the city, the intensity of interaction with multiple types of
expertise, and the up-to-the-minute information not generally available or standardized”
(Sassen 118). Smith further argues that local intelligence and the intensity of interactions
as suggested by Sassen transformed Amsterdam into a more attractive place for buyers
and sellers. No longer just out of necessity, market participants wanted to contribute more
money and information, expanding access and further developing Amsterdam’s central
position in the European trading network. Amsterdam’s trading institutions profited
because of the mutual benefits shared by market participants; bringing business to
Amsterdam added value to their businesses. Before Amsterdam’s rise, market participants
often needed family ties or an established presence in foreign markets. Centralizing
trading and information made it possible for smaller business to make connections and
enter markets previously inaccessible.

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Institutional Management
The underlying benefit for Amsterdam’s institutions was the ability to develop large-scale
monopolies. In order to manage the increasing volume of transactions and information,
Amsterdam businesses took full advantage of monopolistic practices and arguably
developed the first large-scale management institutions. Large scale institutions existed in
Europe even before the 17th century; this paper highlights the Medici banking system as an
early example of such institutional management. “What was different in Amsterdam was
the proliferation of connected institutions within the same information exchange and the
immense variety of channels that they brought together” (Smith 993). In addition to the
traditional bourse, Amsterdam’s trading companies such as the East India Company or the
Amsterdam Exchange bank contributed their knowledge of trading operations to the
general market. Responding to the pressure to effectively manage an overseas trading
empire, these institutions developed characteristics of modern corporations such as
“administrative labor, hierarchies, career patterns, training systems, and performance
reviews…functions it had not originally been intended to perform” (Smith 1000) Other
information innovations include records management, commodities inventories, and even
trend forecasting and time-series analysis for new product launches or changing business
strategies. Sassen calls this process the development of “advanced producer services”
whereby multinational corporations grow to service the increasing demands of controlling
the flows of capital and information. As a result, “a sharp tendency toward concentration
and larger market share is evident among the top firms” (Sassen 100) and Amsterdam was
no exception.

The Political Will

For all the trading between merchants, state-sponsored trading companies, banks and
bourses, Amsterdam did not attempt to hide the connections between city officials and
upper class business elites. In fact this cooperation was encouraged in order to gain more
control over the trading network. “In such a commercially-oriented country, much of the
state’s information-gathering capacity was organized to provide business information”
(Smith 994). One could argue that Amsterdam achieved the ideal pro-business, pro-growth
coalition as public and private interests were often one in the same. Merchants regularly

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informed city government officials of incoming trade shipments or news from European
markets while government officials provided information about upcoming political events
such as expeditions or battles that would affect the trade network. During a time when
access to information could determine the success or failure of business trading
operations, those merchants privileged with close ties to the state gained critical first-
mover advantages. With seemingly no protest or reservations about expanding Amsterdam
past the local and into the global network, city official and merchants worked together to
realize their shared ambitions to develop Europe’s leading financial center. They pooled
capital, information, labor and any other resources necessary to create an ideal business
climate where merchants from Europe came to make their fortunes come true. The goals
of present-day financial centers are no less different and require similar levels of
commitment towards a common goal.

Attracting the Financial Services Sector

Thomas Gehrig mentions “the attractiveness of a financial center for multinational banks
is closely related to the amount of real economic activity of the region surrounding the
center and the presence of other multinational banks and liquid stock markets” (Gehrig
1998). In the case of financial centers, developing a business climate conducive for the
financial services sector is one of the most important factors. Dominant merchants in
Florence and Amsterdam not only expanded their own businesses, but created other
opportunities for growth that attracted merchants from all over Europe. Much like Sassen
and the Florence model, Gehrig also highlights that multinational banks are the drivers of
financial center development. The opinions and perceptions of the global banking system
is a key factor for cities considering developing an attractive business climate. Sassen
additionally argues that two other factors – national capital consolidation and market
liberalization – are considered when creating a financial center. She points out that stock
market presence is not a major perquisite for a financial center; a density of institutional
equity holdings is equally as significant (Sassen 76). To this effect, national policymakers
have proactively attempted to consolidate financial operations to one key city, e.g. “São
Paulo has overtaken Rio de Janeiro, while Bombay has outstripped New Delhi and
Calcutta. Paris today controls more of the financial sector… relegating once-important
stock markets like Lyon to provincial status” (Sassen 77). National capital consolidation is

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evident worldwide; “by the end of 1997, 25 cities controlled 83 percent of the world’s
equities under institutional management and accounted for roughly half of the global
market capitalization” (Sassen 77). As countries choose to open up their economies, these
consolidated centers of financial activity serve as “gateways to international business.”
Measuring the determinants of a financial center provides key benchmarks in financial
center development.

Ranking Systems: Variety of Definitions

Present-day cities are keen on knowing exactly what it takes to become a financial center
so they can direct policy initiatives accordingly. After all, becoming a financial center
means control over the majority of a nation’s wealth and the ability to connect with other
leading business centers around the world. The financial center identity is the open door
leading to the hallways and corridors of the global business network. Cultivating this
identity as part of a city’s branding strategy gives favorable impressions of the city as a
well-connected and resourceful center for business. The following section reviews a
popular ranking system that informally contributes to perceptions of financial center
status.

Global Financial Center Index

The Global Financial Center Index (GFCI) is compiled by The City of London
Corporation. In its second year, the GFCI continues its mission to “rank financial centers
based on external benchmarking data and current views of competitiveness.” Michael
Snyder, Chairman of the Policy and Resources committee of the City of London states the
purpose and value of the Index; “the GFCI is already proving to be an invaluable tool in
tracking issues pertinent to business, generating debate about the factors improving the
competitive position of global financial centers and keeping issues important to business
high on the political agenda” (Snyder 2007).

The GFCI uses five criteria to measure the attributes of a financial center: People,
Business Environment, Market Access, Infrastructure, and General Competitiveness.
Within each category is a compilation of various indexes created by international think
tanks, trade associations, and research institutes. The GFCI Survey goes into further detail

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as to why each index was chosen. Overall, the research supports popular opinions that the
combined possession of global stock exchange operations, banking, institutional finance
and related legal and accounting services plus a variety of complex financial products are
necessary for financial center development.

In addition to exploring the different requirements of financial center attractiveness, the

survey also refines the financial center definition to draw distinctions between the broad
sample set of cities (cited below):

• Global Financial Centers – The survey includes only New York and London in this
category. “Global financial centers have sufficient critical mass of financial
services institutions to act as an intermediary connecting international, national and
regional financial services participants directly.”

• International Financial Centers – the survey points to Hong Kong as a prime

example. “International financial centers conduct a significant volume of cross-
border transactions; those transactions involve at least two locations in different
jurisdictions.”

• Niche Financial Centers – Zurich and Hamilton are cities known for a specific type
of service such as private banking and reinsurance, respectively.

• National Financial Centers – these cities “conduct a significant proportion of a

particular country’s financial business. Although Montreal and Vancouver were
sampled in the survey, Toronto continues to be the prime example of a national
financial center in Canada.

• Regional Financial Centers – these cities “conduct a large proportion of regional

business within one country.” The survey cites Chicago as an example of a
business center servicing the mid-western region of the US.

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Although these categories attempt to depict the current financial center landscape, do these
categories also limit the potential for image transformation? Across all measurements in
the survey, London and New York continue to dominate as the two pre-eminent financial
centers. In fact, they held the lead for both years the study has been conducted. Yet the
survey also consistently concludes that both Hong Kong and Singapore remain in third
and fourth place respectively. Clearly policymakers of Hong Kong and Singapore are on
the right track towards an image transformation if these two cities can consistently attract
the “critical mass” necessary for placement in the global financial center category. The
following section will look at the growth stories of Hong Kong and Singapore and the
current challenges each center faces.

Hong Kong
Hong Kong has been Asia’s leading financial center since the 1960s. Hong Kong has been
effective in providing regional and international access to China and other surrounding
markets. Loans and advances abroad come from borrowers of regional governments such
as Indonesia, Malaysia, the Philippines, South Korea, Taiwan and Thailand (Jao 677).
Additionally, the number of international banking, insurance and other financial services
institutions is the largest in the region. Much like Florence and Amsterdam, the
transformation of activities from a national to international focus resulted in the need for
specialist services. “It is no mere coincidence that many well-known international money
brokers, securities houses and exchanges deals have opened offices in Hong Kong,”
thereby further establishing its presence as a premier trading destination for goods and
capital (Jao).

Hong Kong’s Strengths

Hong Kong’s primary strength is to function as a center for flows in and out of the region
matched by a high quality business-friendly climate. Both domestic and foreign
institutions rely on Hong Kong as a gateway destination to access capital and information.
Jao refers to this as “free convertibility – capital funds will converge towards a center only
if they can be quickly repatriated or transferred elsewhere” (684). Kindleberger’s
definition of financial centers related to borrowing and lending activity converging in the
dominant domestic financial center confirms Hong Kong’s success. This creates a robust

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marketplace that exponentially grows with every successful transaction. Hong Kong’s
ability to facilitate this movement of capital and information flows is a testament to its
business climate

Business Climate
Even in its early stages of development during the 1970s, Hong Kong was known as the
premier financial center for the Asia Pacific region. It led the region in number of banks
and insurance institutions, parallel to London and New York at the time. Although Tokyo
and Singapore have made significant leads into those sectors, Hong Kong still remains a
favored destination for both regional and international investors. A former British colony
and trading port, Hong Kong is well-accustomed to providing for the needs of global
business and over time, has expanded its ability to service a greater variety of financial
services. “Rapid growth of asset management and hedge fund center (i.e. non-banking
institutions) in Asia in recent years rests on its already high concentration of financial
institutions, well functioning legal and regulatory systems and highly skilled and flexible
labor force” (Leung & Unteroberdoerster 2008). The ability to meet both regional and
international demand for advanced services is a highly ranked quality among leading
decision makers looking to establish presence in Hong Kong.

Regional Competition
Learning from the success of Hong Kong, other cities in the Asia Pacific region are
looking to attract similar opportunities. Although Tokyo is still the largest financial center
in terms of market capitalization, it struggles to move beyond the economic and Japanese
banking crisis of the 1980s and 1990s. As the region bounces back from the past and
continues to gain traction among interested investors, Hong Kong now faces direct
competition with Shanghai and Singapore.

Shanghai
Shanghai is historically Mainland China’s financial center and is enjoying renewed
interest in development as China is considering shifting its operations to the Mainland.
Although Hong Kong has provided a relatively stable business environment and in fact
conducts most of its regional transactions with Mainland-based corporations, increasing

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pressures on its urban environment prompted Chinese officials to reassess Hong Kong’s
position as China’s leading financial center. Additionally, it is rumored that officials
would prefer a financial center with closer cultural ties to the Mainland; a center outside of
official borders may prove to be inherently distant as China’s economy evolves. “There is
a sense among some people that Hong Kong can be cast aside as soon as the larger
national system gets up to speed, which is why there are sentiments that Shanghai will
take over Hong Kong’s role as the premier financial center one of these days” (Emery
2008). Rumors circulate of a possible merger between the Hong Kong and Shanghai stock
markets, yet nothing is official at present (Bradsher & Barboza 2007). What Hong Kong
can do for global liquidity in terms of free convertibility – the in and out of global capital
flows – is exactly what Shanghai and the Chinese government are not currently prepared
to do as a considerable amount of capital restraint is in place in order to keep profits
domestic.

Singapore
In the wake of the Asian financial crisis of the late 1990s, Singapore took determined
steps to position itself as a leading financial center in the region. They rightly believed that
such liberalization would “create a more resilient financial sector, which could compete in
an increasingly globalized environment” (Hew 1). Singapore’s international outlook is
crucial for its survival, as the city-state itself has limited native resources compared to
other larger nations. Thus the notion of a global image is inherently a part of the Singapore
story; urban development officials are well aware of this limitation and consciously
manage the city-state’s image with international actors as their main audience.

Centralized Economic and Social Control

The Singapore city-state, a blended urban and national government, can establish a near-
identical link between the liberal economic agenda and the physical development of the
city. As Amsterdam benefited from the close public-private partnership, the system of
economic decision-making in Singapore was also extremely centralized (Chua 1996;
Newman & Thornley 2004). Decisions are made and implemented swiftly. Years after the
crisis, Singapore can now boast liquid equity, derivatives and foreign exchange markets,
state-of-the-art urban and telecommunications infrastructure, strong banking sector and

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sound legal and regulatory practices that encourage further development of the private
sector (Hew 21, Economist 2007). Singapore officials also control socialization of its
citizens to as an ongoing campaign for their support of pro-growth policies. Mixed income
and ethnic housing attempt to “limit the articulation of possible dissatisfaction, improve
inter-ethnic understanding, and provide the social stability need as part of establishing an
attractive business environment” (van Grunsven 2000; Newman & Thornley 2004).

New malls, parks, recreation centers and other lifestyle amenities enhance Singapore’s
well-established attractiveness in the financial sector. One example is the collaboration
with Hong Kong officials to build the Singapore International Convention and Exhibit
Center. “The prime minister himself appealed to Hong Kong business leaders to invest
more in Singapore…this demonstrates the close cross-national networks, often along
ethnic lines between business and politicians and the creation of a growth coalition around
the project” (Newman & Thornley 251). Like the Medici family who personally invested
in building its banking network by drawing in other like-minded European neighbors,
Singapore’s networks facilitate intermediation between regional and international actors
for mutually beneficial growth opportunities.

Sound Governance
According to the 2007 McKinsey report about financial center competitiveness, “a fair and
predictable legal environment [and] an overall responsive regulatory environment” placed
second and third respectively in the order of importance for financial service executives
looking to expand into new markets. Critics believe the Singapore government’s close
relationships with the private sector and single-minded vision for economic development
makes the city-state vulnerable to corruption (Rajan 147). While Singapore prides itself on
its cooperative and flexible government, its reputation for sound governance will continue
to be dependent on its ability to avoid corruption. Singapore officials believe its
legitimacy is due in large part to its deliverance on promises of prosperity and
opportunity; “the support of its citizens is achieved through enabling economic prosperity
and high-quality, subsidized, social provisions” (Newman & Thornley 253).

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The Global Financial Center Frame
From historical to modern financial centers, similarities can be drawn between the
common qualities and determinants of financial centers. Understanding how global
financial center language evokes perceptions and attitudes of key constituents is the first
step to strategic urban development and city branding management. Ultimately this
exercise is part of the challenge to break away from narrow financial center definitions
and into the global city identity that drives leading centers.

Global Financial Center

Diversification – predominantly regarding a diversity of financial services

institutions. The global financial center with more businesses in a wider variety of
activities is seen as more capable of global expansion.

Intermediary – global financial centers are primarily seen as place where capital
comes in or transfers out. Capital production is not immediately associated with
global financial center. Other words that contribute to this perception are host,
subsidiaries, gateway, regional and branch offices.

Opportunity – seen as limited to only international financial services experts.

Although they do exist, opportunities for middle class service workers are not
immediately associated with global financial centers. This limitation of perception
may contribute to lower immigration rates in comparison to global cities.

Quality of Life – amenities enhance experience for advanced service workers.

Local experiences infused with local culture – contributes to regional-only
perception despite the name global financial center.

Openness – not a quality immediately associated with global financial centers as

many cities are actively adjusting their legal and regulatory frameworks. Openness
is best associated with the financial center with strong support from city and
national governments.

Innovation/Experimentation – not immediately associated with knowledge

creation or production, despite cutting-edge architecture and infrastructure
technology. This limitation demonstrates uncertainty about the center’s capability
to successfully produce and profit from non-financial products.

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Section 6
Global City
Ranked consistently at the top of virtually every financial center or city competitiveness
indices are New York and London. As global peers categorized in a class on their own,
these two cities share business networks, lifestyle amenities and other features
characteristic of global command centers. New York and London successfully built upon
its financial center foundations and attracted world-class business opportunities from a
variety of sectors like technology, media, and entertainment. The question remains on how
other financial centers can evolve into global cities as more robust and resilient players in
the global economy.

The term global city was first coined by Patrick Geddes in Cities in Evolution to describe
the world’s most important business centers (Geddes 1915). Modern day definitions
incorporate the benefits of the global financial center identity with the outcomes of
diversity, innovation, creativity and leadership. Hall defines global cities as centers of
political power, of international banking and trade, of information gathering and diffusion,
of conspicuous consumption, and of arts, culture and entertainment (Hall 2004). Sassen
concurs that global cities have three major functions: as command points in the
organization of the world economy, as key locations and marketplaces for the leading
industries of the current period and as major sites of production for these industries,
including the production of innovations (4).

History
Throughout history, New York and London have played all of the above roles and
functioned as leading global cities. New York was first founded as New Amsterdam, the
Dutch East India Company’s lucrative trading post of the west. As the busiest trading port
for well over a century (1820 – 1960), New York attracted large numbers of immigrants
from around the world. Yet this came at a price: fires, riots, financial collapse, epidemics
and plagues were some of the conditions New Yorkers survived through. City developers
responded with development schemes such as parks, plazas, borough expansion, bridges,
and highways to accommodate the sprawling communities. With continued focus on its

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global role, present-day New York is now known as the financial, business, media, and
entertainment capital of the world.

Similarly, London was first founded by foreigners as the Romans established in AD 50

what would become the busiest and wealthiest port of England and arguably of Europe.
With markets, administrative services and law courts concentrated in the center, Britons
were exposed to merchants from around the world via the network of the Roman Empire
(London: The Greatest City 2004). Medieval historian William Fitzstephen best describes
his contemporary London image, which fittingly translates to modern-day representations;
“it [London] pours out its fame more widely, sends to farther lands its wealth and trade,
lifts its head higher than the rest.” (London: The Greatest City 2004). London capitalized
on its global focus and continued to function as the premier administrative, trading and
cultural center during the British Empire. As New York’s resiliency was tested, London
reinvented itself from the rubbles of plagues, fires, war and conquest into the vibrant
international city it is today. “In the last 20 years, London has regenerated itself, so that a
drab, dirty, rather dismal place is again full of new buildings [such as] Foster's tower block
in the City, the Millennium Bridge, and the Tate Modern Art Museum.”

Despite these ups and downs, both cities managed to retain their global focus and hold the
title of global city. “Although financial hubs have proliferated, few of them can claim to
be truly global.” (Economist 2007). Both New York and London often speak of world city
goals and aspirations. Mayor Michael Bloomberg wants to transform New York into the
“world’s second home” and Mayor Ken Livingstone’s vision is to develop London into
“The World City” by 2004 (Economist 2007; Newman & Thornley 142).

What do these cities have that others do not? Business-friendly policies, advanced
infrastructure and community amenities are features that all financial centers possess, but
what about New York and London defines them as the global cities of our time? The
following sections detail how these policies have created an environment that allows the
policy makers and constituents to take a step further beyond the global financial center
and into the global city identity.

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Financial Center Foundation
The financial center foundation rests on the network society theory as supported by
Castells and Sassen. “A spatially dispersed, yet globally integrated organization of
economic activity” results in a system of production and production (Sassen 3). In this
system, global cities both direct and produce economic activities worldwide as opposed to
regional or gateway financial centers which act as intermediaries or recipients of capital
flow. The success of a global city depends on its ability to achieve a level of autonomy as
opposed to dependence. In this case, autonomy is not defined as isolation; rather it is seen
as a result of command and control over capital flows. By building more linkages within
the business network, global cities gain access to and control over the production and
consumption of capital. “From investment banking to insurance, stocks to derivatives,
everything can be found in the world’s two pre-eminent financial hubs” (Economist 2007).
Global cities are the directors and consumers of capital. “[Global city process] implies that
the city-state must be not only an attractive location for material inflows from the global
economy, but also an origin of development flows versus mainly repatriated profits (Olds
& Yeung 508). Cooperation then is an instrument for success at the global city level.
Global cities create an open environment where inflows and outflows work together to
achieve increasing levels of growth. Economic integration at the global scale enhances the
global peer relationship and demonstrates tendencies toward partnerships between like-
minded city officials. At a recent speech in London regarding challenges in the financial
markets, Mayor Michael Bloomberg speaks of the special partnership with London; “the
more we work together, the more we can share ideas and strategies, the more successful
we will both be…by extending our special relationship beyond diplomacy more deeply
into matters of the economy we can build an alliance that will prove as strong in the 21st
century as it was in the 20th, and we can ensure that New York and London remain the
world’s most dynamic, exciting, creative and prosperous cities in the world” (Bloomberg
2008).

Political Leadership
City officials in New York and London recognize the need for strong leadership to
maintain competitiveness in the global business network. Place leaders of New York and
London focus heavily on partnering with global businesses to maintain their premier

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position. The partnership is mutual; “enterprises need local spaces to cope with
globalization and to globalize themselves…[cities] need global enterprises to ensure the
continuity of their legitimacy and perpetuation as local and social entities” (The Group of
Lisbon 69). During the past two decades when place marketing took the forefront of
development agendas, mayors of both cities prioritized global business development.
Mayor Ed Koch and Rudy Giuliani both strongly supported global business, as
demonstrated by increases in development spending and marked decreases in social
spending [on local welfare programs] (Newman & Thornley 77). As an example of global
city redevelopment, Giuliani rezoned the Times Square district to attract tourism. As a
result, Times Square became the center for leading global media and entertainment
companies and brings in millions of tourists. “New York now markets itself as the
business and tourist capital of the world” (Newman & Thornley 82). Ken Livingstone’s
London Plan aims to increase development of Central London where a significant density
of Britain’s business and cultural institutions is located. “The whole mindset here is that
international business is an important part of the national economy…so we’d better make
sure the regime is conducive to it, or it might go away,” says Howard Davies, dean of the
London School of Economics regarding London’s global imperative. Indeed over 80% of
London’s business is international and city officials are well aware of the pressure to
remain a global city (Gumbel 2007).

Global-Only Messaging
Given the shared imperative for sustaining a global focus, development plans concentrate
heavily on global-only messaging. Messaging is reciprocal; audiences must be able to read
and interpret what organizations want to promote, “an individual’s knowledge of a city is
a function of the imageability of the urban environment…in turn imageability is
influenced by a city’s legibility: the degree to which the different elements of the city are
organized into coherent and recognizable patterns” (Montgomery 273). Global messages
are concentrated and distributed worldwide in large part due to the concentration of global
media. Headquarters of major media giants such as The New York Times, The Wall Street
Journal, Financial Times, CNN and BBC located in New York and London provide a
platform for publishing and distributing official comments and breaking news with
globally-oriented messaging. This direct access to a global platform enhances the cities’

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ability to coordinate messaging strategy. The central command center role is the reality of
global cities, developing perceptions that match this reality further reinforces the global
messages that city officials want to communicate.

Value of Urban Space

Global messages can also be consistently communicated when images and texts come
from centralized business districts. In addition to development plans, official speeches and
related communication – skyscrapers are a significant representation of global city
imagery. Although many financial centers are building high-rise developments, New York
and London were the first in their nations and regions to develop infrastructure suitable for
global businesses. The ability to concentrate workers, the proximity of neighboring firms
and the aesthetic grandeur of skyscraper developments fits well with how businesses see
themselves. In turn, this becomes the dominant image of the global city. “From their first
beginnings, skyscrapers have explicitly been representations of the modalities of power
and wealth within the city” (Rykwert 198). London actively promotes skyscraper
development in the Canary Wharf and Docklands neighborhoods in order to prepare for
global business expansion. Even the spatial layout of cities reveals how city officials value
the marketability of urban space; “uptown and downtown – the specific terms of the
Manhattan layout – have come to mean periphery and center much as West End and East
End from the London layout can mean upper class and middle or working class” (Rykwert
207). It is no secret that Manhattan and Central London receive privileged attention from
urban development organizations as these central spaces generate wealth and prosperity.

Source of Inspiration
The global-only messaging and imagery strategy succeeds since New York and London
are often seen as sources of inspiration for aspiring financial centers. “That is why the
word Manhattanization had to be coined for the process of making towns or cities more or
less like Manhattan. A compliment like that has not been conferred on any other
metropolis” (Rykwert 187). Global city development serves as a model because it is at
able to be replicated; it is an attainable goal. Skyscrapers, art and entertainment districts,
infrastructure improvements – these are projects that have defined and transformed the
New York and London landscape and are often considered by officials of emerging

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financial centers. As a counter example, although Dubai is famous for its extravagant,
attention-grabbing development, no other city can emulate its model. Perhaps the inability
to transfer development ideas risks isolating Dubai’s image. Another drawback is the
second place positioning that emerging financial centers may suffer. Always catching up
to the top may signal that the emerging financial center is only second-best, and not
prepared to evolve into a global city. Emerging financial centers may look to developing
other sectors as a way to strengthen their bid for world-class city development.

Media, Entertainment, Arts – Soft Capital

The early 1990s witnessed the rise of the technology sector also known as the ‘dot-com
boom.’ Mayor Bloomberg saw the opportunity to reinforce what makes a global city
resilient; “Companies are here because this is where the labor force of choice wants to
live…although traditional economic development incentives such as tax, zoning, and
retention deals are necessary to induce businesses to stay or return to lower Manhattan,
they are not sufficient to assure our future economic vitality… New York City’s quality of
life, in spite of the catastrophe, is still the city’s most powerful asset for economic
development” (Newman & Thornley 85). Investments in soft capital – those industries that
contribute to the quality of life that sustains global cities – were prioritized. The result was
the boom of new media sectors such as technology, entertainment, media and
communications. New York used its business network and centralization features to build
up these industries. More than just investing in art or cultural institutions, New York
provided access to capital and office space for start-up ventures thanks to its concentration
of financial power. “The equity created by initial public offerings became a currency for
inter-firm trading… small companies became less concerned with their position in the
internet market and more concerned with financial markets” (Newman & Thornley 83).
New York was able to monetize and distribute the innovations and creativity of the new
media sector. Doing so kept business circulating in New York even if Silicon Valley in
California grew to dominate the sector. Companies needed New York’s financial network
access to advance their businesses. Innovation combined with diffusion kept New York
competitive and produced a creation-friendly environment.

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Creative Spaces
In observations of the creative class in 18th century Britain, Martina Hefler and Clemens
Zimmerman discovered five requirements for creative spaces that still resonate today. As
advanced technologies and services increase in demand, cities have a direct interest in the
innovation capabilities of businesses in the city. “The [city] political and social legitimacy
is based on its ability to secure continuous socioeconomic development” (The Group of
Lisbon 69). Additionally, the credibility of a city to deliver on its promises of growth and
prosperity is inextricably linked to how companies succeed in new markets.

Encouraging an environment where innovation is acceptable, even desired is the first step.
Cities can establish the framework, as in the case of providing venture capital and office
space to support the new media sectos. Second, the circulation of knowledge provided the
material from which innovation could grow. Cities with a density of highly skilled
populations are more likely able to foster this circulation. The third requirement
encourages incentives for innovation. With access to capital networks, New York offered
an incentive for doing business there – more money and wider distribution of products and
services. In order to make money, the next step requires a demand for inventions; “surplus
wealth was directed into new products which were often over and above the necessities of
life, and had a strong cultural content” (83). The final requirement is an affinity for
anything new or in style. Even in the 18th century, business elites craved novelty which
created “an endless and insatiable stream of demand for new culturally-dense products,
institutions and modes of behavior” (83).

These five requirements succinctly capture the creative landscape that develops along with
the business landscape. Bringing together knowledge, information and a highly skilled
workforce fosters creativity and innovation efforts vital to the success of companies.
Given the close partnerships between business and city officials, success in business
translates into success in urban development. Advantages such as capital, information and
labor serve global cities in creating a sustainable, resilient and creatively-driven
environment. The excitement of creativity and innovation attracts a new group of globally-
oriented citizens.

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Transnational Communities
Transnational communities – global actors with shared accomplishments and ambitions –
are a consequence of the activity and creativity of global cities. These groups have
multiple linkages with people or institutions across national borders, and thrive on the
opportunities available in global cities. An article in Newsweek describes the “NY-LON
Life,” referring to cross-border commuters who live and work in both cities. Initially
joined by the boom in financial services, NY-LON also shares connections in related
industries such as entertainment, publishing, technology, architecture and hotel
management (McGuire & Chan 2000). With so much in common, the two global cities
seem to meld into one. This reinforces the global peer connection and strengthens each
city’s attractiveness in the eyes of key constituencies. Simon Anholt believes the “primary
determinant of brand essence is as much the people who live there as the things which are
made and done in the place” (Anholt 214). The global city brand represents the
transnational community and all the amenities offered. The accumulation of these
transnational groups and their successes in business makes a strong case for attracting
more investment into the city. Global cities are able to sustain their global image because
of the continued interest in and advantages gained from global city development.

The Global City Frame

In the latter stages of financial center development, an evolution of image is necessary to
break away from past associations and embrace new identities and meanings. What
perceptions and attitudes do global city evoke that are meaningful to key constituents and
representative of the new realities of maturing financial centers? Understanding these
perceptions will determine the credibility of the image shift. The framing exercise below
attempts to detail updated associations characteristic of global cities.

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Global City

Complete Cycle of Capital Flow – global cities are the directors, producers and
consumers of capital. Business opportunities multiply and merge in global cities,
enhancing attractiveness. The result is continued or enhanced investments in global
cities.

Alliances – proximity of advances services within a city creates intra-city connections.

These can extend to other global cities with similar conditions. As global cities share
similar industries, the potential for cooperation increases. Alliances are viewed as a
positive outcome of ranking high on the command center structure.

Population Growth – this is an unintended outcome as people can find opportunities at

all class levels. Strict regulation against immigration is virtually non-existent. This
leads to the perception that global cities are magnets for the international community.
This contributes to a level of openness and acceptance, despite the myriad of ethnic
enclaves living side by side

Creative, Innovation – this is another outcome of the density of knowledge and skills.
Global cities are seen as the place that creates, produces and consumes – much like
the complete cycle of capital flow.

Resiliency – global cities are expected to maintain their competitiveness and come
back from any downturns or challenges in history. This resiliency is associated with
mature markets, as history has tested them and global cities have survived. Flexibility
and adaptability are key attributes of global cities.

Inclusion of Global, Exclusion of Local – local news and events are almost non-
existent in discourse at the global level. Though the local is part of the global city
experience, it is strategically excludes so as to provide consistency and coherence
around the global message. This successfully shapes perceptions as cities are
continuously associated with their global-only messaging.

Transferability – the ability to imitate and redevelop what global cities created
effectively positions them at the top, as other cities follow instead of lead. This gives
the perception of leadership and dominance. Global cities are non-conformist.

Amenities – a mixed review since infrastructure and residential/community spaces are

often seen as insufficient to service the growing population yet cultural and social
lifestyle is the most desired quality. Development focused on rectifying infrastructure
problems is critical to avoid a backlash of discontented experiences.

Diana Bhaktul 49
NYU Capstone
Spring 2009
Conclusion
A year before this research report, business publications wrote about the shifting trends of
"capital market competitiveness" and "rise and fall" of financial centers around the world.
The years during this research report witnessed the largest financial crisis since The Great
Depression in the 1930s. With the mortgage meltdown, credit crunch and losses in
investor confidence, global cities are being called into question about the credibility ad
sustainability of their command center role. Headlines such as “The Death of Wall Street”
or “Other Financial Centers Could Rise amid Crisis” intensify the global city
competitiveness landscape. Cities see this crisis as an opportunity to replace New York
and London, thereby gaining control over the capital, information and labor networks that
drive global city growth. Time will tell if government interventions in the financial system
are enough to maintain control while place leaders repair the damage done.

Short et al sees this crisis as a chance for a new positioning strategy – revisiting the
gateway city. Short et al describes a new way of imagining the effect of globalization,
thereby moving away from the hegemony of global city discourse. "We use the term
gateway city to refer to the fact that almost all cities can act as a gateway for the
transmission of economic, political and cultural globalization" (Short et al, 319). Since
power has deflated during this crisis, the gateway concept may prove feasible for a wider
variety of participants and ultimately stimulate growth around the world. Policymakers are
certainly considering all options for maintaining resiliency during these times.

A lesson to learn from this crisis is the importance of participating in all forms of
globalization. Although the financial services industry brings in the most capital and is an
effective catalyst for growth, it leaves the city vulnerable to a system outside of classic
political control. The qualities of a global city can buffer against such vulnerability and
result in a more robust and resilient position in the global economy. A brand that can
survive is certainly worth investing in.

Diana Bhaktul 50
NYU Capstone
Spring 2009
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