Do cities matter anymore? To many experts and policy-makers, globalization and new
information technologies mark the end of the economic importance of cities. Most cities have
felt only minor repercussions from the global economy, and many once-great industrial
centers have suffered a severe decline. In the era marked by "offshoring" of factories,
expansion of worldwide networks of affiliates and subsidiaries, and movement of back-office
operations from central cities to suburbs, these observers frankly consider cities
Defying these predictions, however, certain cities have seen their concentration of economic power rise. Three features of the economy today explain why a network of 30 to 40 "global cities" matters more than ever. First, the global economy is not simply a market, but a system that needs the specialized managerial work that is concentrated in cities. Second, privatization and deregulation have shifted various governance functions to the corporate world, again centralizing these activities. Third, digitalization means that leading sectors need access to the state-of-the-art infrastructure found in the major international business centers. Instead of becoming obsolete, these cities concentrate command functions, serve as production sites for finance and the other leading industries of our "post-industrial" period, and provide marketplaces where firms and governments can buy financial instruments and services.
How many such cities there are, how their hierarchy is shifting, and how novel a development they represent are all under debate, but a growing number of scholars agree that major cities in both hemispheres function as centers for the coordination, control, and servicing of global capital.1 Analyzing globalization with a focus on cities allows us to reconceive economic processes not as abstractions on a national level, but as concrete complexes situated in specific places. This analysis also decomposes the nation-state into a variety of subnational components and signals the declining importance of the national economy as a unitary category.
A rich and contentious new scholarship surrounds these processes. Controversy exists, for example, over the role of cities as production sites for information industries, which some analysts view only in terms of hypermobile outputs and highly expert professionals, overlooking the work process involved and the requisite infrastructure of facilities and non-expert jobs. A vast structure of work in the information field is far less mobile and requires the massive concentrations of resources found in major cities.
Instead of taking the global economic system as a given, one may examine how the conditions for economic globalization are produced: not only communication capacities and the power of multinationals, but also the necessary infrastructure. The emphasis shifts to the practice of global control: the work of producing and reproducing a production system and a marketplace for finance, both under conditions of economic concentration. Recovering place and production in our analyses allows us to study these processes in great empirical detail.
Even the most advanced industries exist as concrete practices in specific places. We need to distinguish between the capacity for communication and the material conditions that make this possible -- between the globalization of the financial industry and the array of resources that makes this possible. Telematics spatially disperses economic activity but also, paradoxically, expands central functions, insofar as this dispersal takes place under the continuing concentration in control, ownership, and profit appropriation that characterizes the current economic system. One key question is whether such a concentrated system can have a space economy that lacks points of physical agglomeration.
A worldwide grid of strategic places (not only New York, London, Tokyo, Paris, Frankfurt, Zurich, Amsterdam, Los Angeles, Sydney, and Hong Kong, but also Sao Paulo, Buenos Aires, Bangkok, Taipei, and Mexico City) creates a new economic geography, cutting across national boundaries and across the old North-South divide. Will a parallel political geography also emerge? Cross-border networks among cities and their mayors may be an incipient form of such a realignment. At the same time, inequality is sharpening in the concentration of resources and activities between each of these cities and others in the same countries.
Cities have typically been deeply embedded in regional economies. Most still are, but global cities tend to disconnect from their regions. This conflicts with a key proposition in traditional economic scholarship: that urban systems promote regional and national integration. A vast territory has become more peripheral, excluded from the processes that fuel growth. Formerly important manufacturing centers and ports have lost functions, while activities ancillary to the financial sector -- hotels, upscale boutiques, and elite restaurants -- displace neighborhood shops serving local needs. Downtowns and metropolitan business centers receive massive investments in real estate and telecommunications, while low-income areas are starved for resources. Highly educated workers see their incomes rise to stratospheric levels, while low- or medium-skilled workers see theirs sink. Financial services produce superprofits; industrial services barely survive.
These conditions call for research on the following issues:
* Telematics and globalization. There is no such thing as a fully virtualized firm or industry, but digitalization has reorganized economic space, maximizing the profitability of dispersing certain activities. We see a new topography of economic activity that moves in and out of digital space. We need more research on how the virtual and actual components of the highly digitalized sectors are organized. We also need to understand what cities can do about inequalities in the distribution of electronic infrastructure.
* Manufacturing in the service economy. Manufacturing, mining, and agriculture feed the growth of the producer-services sector, regardless of where these activities actually take place. (As General Motors was offshoring production jobs and devastating Detroit's employment base, its financial and public relations headquarters in New York was busier than ever.) Some producer services, like finance, may have nothing to do with manufacturing; to others, like mergers and acquisitions, manufacturing is at best incidental. Research on this relation is essential.
* Marginality and polarization. General commentary about what matters in an advanced economic system is rife with misunderstandings about spatial and social inequality. Industrial services and manual workers may look like they don't belong in an information-based economy, but they are actually integral parts of this system, requiring recognition and support by policy-makers. Even a complex industry like finance needs tables and light bulbs. It also needs truckers and cleaners, who must be able to make a living and stay in the city.
* Global cities and national states. With information technologies ascendant and capital both mobile and liquid, the ability of governments to regulate key sectors has declined. To understand the challenges and opportunities this situation poses for urban government, scholars need to consider how privatization is replacing the "national state/global economy" dyad with a structure in which cities and other subnational or supranational units with large concentrations of private corporations play critical parts. This is so even in foreign policy, which now increasingly addresses economic rather than military goals.
* Whose city is it? New actors on the urban stage, or "city users," include foreign firms and businesspeople, for whom deregulation has expanded the ability and freedom to do business. The costs and benefits of their claims on the urban landscape have barely been examined. Reconstituting a city's strategic spaces (airports and office buildings, telematic infrastructure, and private security forces) in their image, these new players have created a fragile late-modernist metropolis. Scholars may ask what sense of civic responsibility weighs on this class and whether a city can recover the costs it imposes, from maintaining an advanced business district to attracting world-class culture. At the other extreme, one finds those making claims through political violence -- claims that lack the de facto legitimacy that the business sector enjoys, but claims reflecting a struggle for entitlement, for rights to the city.2
1. Further, several major organizations concerned with general international issues have
organized events focused on cities and globalization: the Organisation for Economic
Co-operation and Development meeting on "Cities and the Global Economy" held in Melbourne in 1995,
the 1996 project by the Council on Foreign Relations on "Cities, the world economy and
foreign policy," and the World Economic Forum's formation of a Club of Megacity Mayors in
1994-95, a first in its 25-year history.
2. Sophie Body-Gendrot, in Villes et violence (Paris: Presses Universitaires de France, 1993), shows how the city remains a terrain for contest, where the limitations of governments to address new demands for equity engenders social disorders. She argues for interpreting urban political violence not as a coherent ideology but as an element of temporary tactics, permitting vulnerable actors to confront the holders of power on terms somewhat more favorable to the weak.
SASSEN, Ph.D., is professor of urban planning at Columbia and is on leave at
the Center for Advanced Study, Stanford. Her latest book is Losing Control?
Sovereignty in an Age of Globalization (the 1995 Schoff Memorial Lectures; NY:
Columbia UP, 1996). This article is adapted from her keynote address at the conference on
"Cities and the Global Economy" organized by the Inter-American Bank for Development and
Reconstruction in Barcelona, March 1997. We thank the bank for allowing us to reproduce
Illustration Special Effects: Howard R. Roberts