Theme: Productive restructuring and local economic development
Economic Restructuring and local economic development - Brazil/UK
Nigel Harris
University College London
Contact email: znv20@dial.pipex.com
Jun. 2010
I. Introduction
1.Throughout its history, capitalism has been driven by extraordinary surges of growth and of
contraction both in the long-term(“long-waves”) and the short, the cumulative effect of systemic
innovations in production and in supportive processes. Growth is characterized by the rapid
expansion of new sectors, new industries and new localities of production (along with associated
supporting infrastructure, acquisition of new skills in the workforce etc) which overwhelm the
contractionary or depressive effect of declining sectors and localities. Such waves of growth and
destruction are seen in at least three broad fields:
(i) the exploitation and exhaustion of raw materials – from mining(coal,oil, iron ore,
gold, silver etc) to agricultural production (sugar, wheat, rubber etc).
(ii) Innovations in infrastructure – for example, the transition between energy
sources – manual/wind/water/steam to coal to electricity etc. Or the transition in
transport from canal/road to rail to air; or more narrowly in sea transport, from
manual to sail to mechanical-powered ships (transforming ship capacity, ports and
port-regions); or the combined effects of the great variety of innovations included
under “containerization” or “palletization”, again from ship design to port
design(and the labour intensity of the work involved) to the associated city forms
and port regions.
(iii)the churning of the industrial/economic structure, rise of new industries and
new sectors (for example finance and other services), and the decline of others (for
example, in “deindustrialization”).
2. These changes are by no means smooth. A period of general growth can sustain the
continuation of most sectors while the boom persists. Recessions are the periods in which
all are tested and the “old”, apparently without warning, collapse – leaving, sometimes
thousands without work (and sometimes without any hope of work since the
skills/experience acquired in the old declining sectors, do not fit the demands of the
expanding sectors), and whole areas are left derelict, with little short-term opportunity for
new workers except outmigration (migration to areas where there are expanding activities).
II.Cities.
3. Cities are created and destroyed by these processes, and the economic landscapes of most
countries have examples of cities that are booming areas (drawing in capital and migrants),
and “ghost towns” (most often, exhausted mining centres). However, some cities attain a
scale and diversity of activities such that future innovations are generated within the city and
at least initially strengthen the city economy – the “churning” takes place initially in the city
itself . New industries developed in the city then frequently leave it in maturity for areas of
lower costs or greater opportunity
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4.
These processes – of economic churning - are as old as the city itself, but with the
accelerated economic development of the twentieth century have become very much more
rapid and all-encompassing in our own times. Now whole regions – for example, the Pearl
river delta region in China – can be transformed in two decades, alongside the equally rapid
destruction of old industrial regions such as the Ruhr, the mid-west steel producing and
using cities in the US (Gary to Pittsburgh, including Detroit), the north-east Lancashire and
the west Midlands in the UK. The destruction of old port areas and regions in the twentieth
century has notoriously been equally dramatic – in Baltimore and Manhatten, London,
Rotterdam, Cape Town, Sydney, Yokohama etc.
5. These processes have produced some dramatic examples of at least short-term collapse in
which it seemed recovery was almost impossible to achieve – as in New York in 1975/76, or
less dramatically, most older industrial cities in Europe and North America; some possible
candidates for zombie status (in Lant Pritchett's terms), as with Detroit; and some examples
of dramatic rehabilitation (of which Barcelona is one among many examples). On the other
hand, lessons from this process - particularly, in the stages of economic evolution of
Singapore and other cases have provided a menu of the economic activities supposedly
required in the modern city for newcomers (for example, in Dubai) – a financial centre, a
container port, culture and sports centre, higher education and advanced medical centres
etc., so that a city supposedly acquires a diversity capable of riding future waves of growth
and contraction without suffering the losses experienced in specialized cities (as with
Detroit).
III Local Economic development
6. City authorities have been intervening to facilitate and spur local economic growth for as
long as cities and trade have existed, and the rich experience in Europe and north America
over the past two decades in transforming their city economies is only a recent part of the
story, heightened because it comes at the end of a century of, at least in Europe, high
administrative centralization, in which the local was most often superseded by national
government. A degree of local administrative autonomy is, it hardly needs saying, a
necessary precondition for any locally-initiated development. Due to that degree of
centralization, British local government, unlike local Chambers of Commerce, up until the
major urban crisis of the 1970s rarely needed to interest itself in the local economy. That
was transformed by the crisis, and generally since then there has been an immense
expansion in analysing and monitoring the city economy, in facilitating economic – and now
environmental – initiatives. In the case of Brazil, given the severe problems of economic
development (unlike the British case) there has been much more close attention to the
regional city economies – particularly, while regional Planning authorities functioned, in
Sâo Paolo with Emplasa and in Recife, Salvador etc. However, there is a striking difference
since Brazilian planning was directed at managing extraordinary and sustained economic
growth, British city economic planning was focused on managing contraction, on changing
the basis of the city economy, in particular coping with deindustrialization and the end of
the nineteenth century city economy.
7. What can city authorities do to assist city economic development? Although major public
infrastructure projects have been important in stimulating city economic growth, it is more
frequent that innovations in private business create new sectors and industries and open up
new localities to development. Local government has an important role here in:
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(a) adjusting local regulations to support growth;
(b)providing – or stimulating the provision - of new infrastructure (water, power,
transport) to support such growth;
(c) if appropriate (ie in the division of local/national powers) reshaping the city
educational and training system to expand the creation of an appropriately qualified
workforce and support local research;
(d) promoting the city's innovations – lobbying the national government for support
(especially where external trade is important to the new industry), arranging exhibitions
and trade fairs, twinning relevant cities etc.
8. However, there is a broader role for those who provide leadership in the city, public, private
and voluntary, in seeking to pull together all the diverse threads of the city's economic
activity in a common vision for the city's future, combining realistic financial scenarios, a
perspective plan projecting the city's future requirements, and an environmental strategy to
protect and improve the city. This requires continuous monitoring of city activity and
stimulating research on the city. In essence, this was the core of the proposals for City
Development Strategies (City Alliance).
IV. The future.
9. It is of course, impossible to suggest the likely trends in urban restructuring of cities, their
economic decay and refurbishing (in some cases, decline and disappearance). But based
upon the speed of change, the transformation of cities and their regions in the past half
century, we can expect not to be able to recognize now familiar cities in fifty years time.
The unknowables in the equation also include “sustainability”, how far can present trends be
sustained, both in the light of projected environmental scenarios and threats, and in terms of
the regulatory and technological innovations resulting from these threats. We can only list
some of the issues for possible consideration:
i) what is the viability of current high growth patterns(in, for example, China and
Brazil) and what are the spatial implications? Will deindustrialization set in the
foreseeable future, and how will this affect other regions(particularly Africa)?
ii)migration and the creation of a global labour market – the end of national selfsufficiency in labour and skills?
ii)what are the implications of the globalization of services – in particular, education
and health services.
iv)Will cities and city region retain their fundamental role in world growth? Urban
dispersal (metropolitanization) versus concentration.
v) is a global social structure emerging and what are the implications for national
political power and local governance?
v) What are to be the forms of (a) the continued attack on world poverty and (b)
the fearful effects of unmanaged economic growth?
V. Comparative work
10. Research concerning deindustrializatiuon between Brazil and UK is difficult particularly
because of the different economic histories – Brazil appears to be on a rising crescendo of
industrialization, Britain is possibly at the end of more than a century of manufacturing
decline from its pre-eminence in about 1870. However, this does nor rule out Brazilian
deindustrialization as a number of writers have argued – and certainly, in locality terms, the
threat to the ABC districts of São Paulo by the continued expansion of vehicle manufacture
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in east Asia is more substantial1. However, this is unfortunately likely to be almost
completely speculative.
11. On the other hand, to narrow the focus drastically – to the redevelopment of port cities –
might allow much more specific conclusions. In both Brazil and UK, the rise of new
container ports outside the port regulatory authority (in particular, Felixstowe in UK)
threatened to bankrupt major historic ports (London's Tilbury in UK, and Santos and Recife
in Brazil), forcing the decontrol of port activity, but with resulting heavy physical damage to
the associated urban fabric, the city region, as well as the inherited labour force. Other ports
– Recife, Liverpool, Southampton) – might tell variations on the main theme. However, the
interest here is in how city and city regional authorities reacted to an economic catastrophe
of the size, and with what success in creating an alternative economic basis for the city.
1 And perhaps, even more substantial, the threat to the Novo Hamburgo's footwear manufacture from Taiwanese
companies in Fujian province in China.
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