LESSON 8: THE GLOBAL CITY

It was Saskia Sassen, one of the leading urban theorists of the global world, who
popularized the term “global city”. She ignited a debate on what defines a global city with her
works on the effect of globalization and international human migration in urban areas. She also
stressed the differences between the terms – world cities and global cities.

World city – refers to a type of city which we have seen over the centuries, such as in earlier
periods in Asia and in European colonial centers.
Thus, some of today’s global cities- namely economic powerhouses like Hong Kong,
Sydney, New York- cannot be described as world cities. But a city may correspond to both her
world city and global city models (e.g. London- a retired imperial capital).
However, other urban theorists and experts do not really draw a line between the two
terms.

THE A.T. Kearney (ATK) GLOBAL CITIES INDEX

This index, established in 2008, ranks 65 of the world’s most influential urban centers on
five dimensions of globalization, namely, business activity (30%), information exchange (15%),
human capital (30%), political engagement (10%) and cultural experience (15%). It remains
highly regarded for its holistic assessment of city capabilities and potential.

Top 10 Global Cities (2018 result)

1. New York 6. Los Angeles
2. London 7. Singapore
3. Paris 8. Chicago
4. Tokyo 9. Beijing
5. Hong Kong 10. Brussels

Lecture Reading I: Sassen, S. (2005). The Global City: Introducing a Concept. Brown Journal of
World Affairs. XI

Key concepts: Global city, Agglomeration economies, capital and information flow

Main points:

A. An emphasis on the flow of information and capital is the key to Sassen’s global city. Cities
are major nodes in the interconnected systems of money and information and the wealth that
they take is closely related to the specialized businesses (accounting firms, law firms, financial
institutions, media organizations) that facilitate those flows.

B. The Global City Model: 7 hypotheses

1. The geographic dispersal of economic activities that marks globalization, along with the
simultaneous integration of such geographically dispersed activities, is a key factor feeding the
growth and importance of central corporate functions. The more dispersed a firm's operations
across different countries, the more complex and strategic its central functions—that is, the
work of managing, coordinating, servicing, financing a firm's network of operations.

2. These central functions become so complex that increasingly the headquarters of large global
firms outsource them: they buy a share of their central functions from highly specialized service
firms—accounting, legal, public relations, programming, telecommunications, and other such
services.

3. Those specialized service firms engaged in the most complex and globalized markets are
subject to agglomeration economies. The complexity of the services they need to produce, the
uncertainty of the markets they are involved with either directly or through the headquarters
for which they are producing the services, and the growing importance of speed in all these
transactions, is a mix of conditions that constitutes a new agglomeration dynamic.

The mix of firms, talents, and expertise from a broad range of specialized fields makes a
certain type of urban environment function as an information center.

4. The more headquarters outsource their most complex, unstandardized functions, particularly
those subject to uncertain and changing markets, the freer they are to opt for any location,
because less work actually done in the headquarters is subject to agglomeration economies.

5. These specialized service firms need to provide a global service which has meant a global
network of affiliates or some other form of partnership, and as a result we have seen a
strengthening of cross border city-to-city transactions and networks.

6. The growing numbers of high-level professionals and high profit making specialized service
firms have the effect of raising the degree of spatial and socio-economic inequality evident in
these cities.

7. One result of the dynamics described in hypothesis six, is the growing informalization of a
range of economic activities which find their effective demand in these cities, yet have profit
rates that do not allow them to compete for various resources with the high-profit making firms
at the top of the system.

C. Three trends seem to follow from these facts about global cities.
1. Wealth is concentrated in the hands of the owners and professionals linked with the
high-end firms
2. A growing detachment between the city and its region
3. Growth of large marginalized populace having a hard time earning a living
D. Therefore, the challenge lies on the leading economists and urbanists of today to envision
economic mechanisms that would lead to a more equal sharing of the fruits of economic
progress for the whole society.

Lecture Reading II: Toly, N. (2017). Brexit, Global Cities, and the Future of World Order.
Globalizations 14(1): 142-149

Key concepts: Brexit, global cities, open economy, closed economy, urbanization

Main points:

A. In June 2016, roughly 60% of the total London vote (most populous and urbanised area)
favored staying in the EU, however, the UK as a whole, voted narrowly to leave. This
relationship between London, one of the world’s quintessential global cities, and the less
densely populated, less wealthy parts of the UK, is one key to understanding Brexit.

B. More broadly, the emergence and role of global cities, and specifically the fortunes of those
cities and the misfortunes of their hinterlands, are an important lens for understanding both
the post- Brexit landscape and the future of world order.

C. An increasingly open economy has required global cities as platforms for orchestrating global
commerce. They became the focus of economic activity, concentrating large numbers of
‘winners’ in the open economy and attaining new levels of political influence. At the same time,
global cities are icons of inequity. The inequality between global cities and their regions
threatens to undermine the political consensus surrounding open economies and global
engagement, in favor of closed economies and isolationist disengagement.

How to bridge the gap?

Global cities to address regional economic disparities and to enfranchise and advance
the interests of those beyond their borders. If they are up to this task, global cities may be the
key to saving the open economy from itself.

D. Global Cities and Their Discontents

 By concentrating powerful institutions, global cities have reached new heights of

economic prosperity accompanied by bifurcated labor markets and rising local
inequality
 As Sassen (1991) points out, global cities are home to the ‘global mobile’, a class of
global elites who steer and profit from global political economic changes, and the
‘global immobile’, who toil in obscurity, perhaps cleaning hotel rooms, offices, and
airplanes for the jet-setting class, but are no less important to the day-to-day operations
of the global economy
 Global cities are often both surrounded by and separated from economically distressed
communities in their regions. Beijing, Hong Kong, and Shanghai can prosper while rural
 China, still home to almost half the country’s population, suffers. This regional dynamic
can lead to resentment of and alienation from global cities and the open global
economic system that has fueled their rise.

E. Strangling the Golden Goose - One thing the ‘Leave’ voters (Brexit) realized: in an open
global economy, in a world of global cities, like London, boom and bust are not only cycles,
following one after the other, but adjacent places. Brexit is a vote of no-confidence in the very
technological and political economic shifts that have propelled global cities from bit parts to
leading roles in the drama of global politics.
 If Brexit is the beginning of a trend toward more closed and modestly scaled economies,
we will likely witness a winnowing of global cities. We will see a leveling of the urban
playing field within countries, but greater gaps between countries.
 Widespread withdrawal from global interconnectedness may lead to less ‘spiky’ national
urban systems—with fewer and smaller differences between the prosperity of cities
within a given country—but it will not reverse the multi-century trend of global
urbanization. Some capabilities and characteristics of global cities are here to stay –
multiculturalism, political pluralism, technological infrastructure of telecommunications,
transportation, and information.

F. To address the aggrieved, global cities must adopt what Massey (2007) has described as ‘a
politics of place beyond place’, a politics that meets the needs of global cities but ‘addresses
head on the responsibilities of “powerful places”. This politics of place beyond place resonates
with Lawrence Summers’ (2016) recent call for a ‘responsible nationalism’ that acknowledges
the obligations of a state to seek its citizens’ economic well-being while circumscribing its ability
to damage the interests of others.

G. Cities can lead the Way - If they want to reshape openness and restore confidence in
integration, global city leaders must develop strategies and platforms for global engagement
that are rooted in a desire to drive regional prosperity. This might mean redirecting political
attention and economic development resources away from, say, splashy mega events that draw
attention to the city, and toward regional transportation and infrastructure initiatives that
reflect and raise the stakes of less populous and wealthy areas in their hinterlands.

 Global city leaders should commit to and collaborate on a systematic reduction of

regional inequities, leveraging transnational municipal networks and clout with national
governments in order to promote both interconnectedness and equality.
 Brexit proved that the economy has been shaped by, and can be reshaped by, people
with real influence who know that there are, indeed, alternatives.
 Perhaps the leadership of global cities can also reshape global interconnectedness in a
way that diminishes regional inequality and drives regional benefits. Whether they do or
not will prove whether their leadership is merely technical— helping us to do the same
old things more effectively and efficiently than before—or political— helping lead the
way to a new, newly equitable, and newly legitimate, world order.