The Second Megacities Lecture
November 1998, The Hague
Urban economy and fading
Distance
by Saskia Sassen
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The new role of services in the economy: impact on cities
A new geography of centrality and marginality
The urban economy today
The formation of a new production complex
The research and policy agenda
Conclusion
References cited
Curriculum Vitae Saskia Sassen
Urban Economies and Fading Distances
I was asked to address the question of why and how urban economies matter today in a
context of globalalization and telecommunications. Is there something different about
their role today from twenty or thirty years ago? This is, inevitably, one particular angle
into the question of the importance of cities today, since most cities have probably had
few interactions with the global economy and have felt only minor repercussions from its
growth. It is also partial because cities are about much more than their economies. But it
is an important issue to pursue because many experts and policy makers appear to be
convinced that globalization and the new information technologies mark the end of the
economic importance of cities.
The dispersal capacities emerging with globalization and telematics-the off-shoring of
factories, the expansion of global networks of affiliates and subsidiaries, the move of
backoffices to suburbs and out of central cities- led many observers to assert that urban
economies would become obsolete in an economic context of globalization and
telematics. Indeed, many of the once great industrial centers in the highly developed
countries did suffer severe decline. But, against all predictions, a significant number of
major cities also saw their concentration of economic power rise. Why?
One way of summarizing my answer to this question and the argument I will develop
here is to say that place is central to the multiple circuits through which economic
globalization is constituted. One strategic type of place for these developments, and the
one focused on here, is the city. Other important types of places are export-processing
zones or high-tech districts such as Silicon Valley.
The combination of geographic dispersal of economic activities and system integration
which lies at the heart of the current economic era has contributed to new or expanded
central functions and the complexity of transactions has raised the demand by firms for
highly specialized services. Rather than becoming obsolete due to the dispersal made
possible by information technologies, a critical number of cities:
a) concentrate command functions;
b) are post-industrial production sites for the leading industries of our period, finance and
specialized services;
c) are national or transnational marketplaces where firms and governments can buy
financial instruments and spe-cialized services.
How many such cities there are, what is their shifting hierarchy, how novel a
development they represent, are all subjects for debate. But there is growing agreement
about the fact of a network of major cities both in the North and in the South that
function as centers for the coordination, control and servicing of global capital.
One extreme case for the analysis of the ongoing importance of cities in the global
economy is the recent growth of electronic trading networks in finance. I will focus in
some detail on this subject. Introducing cities in an analysis of economic globalization
allows us to reconceptualize processes of economic globalization as concrete economic
complexes situated in specific places. A focus on cities decomposes the nation state into
a variety of sub-national components, some profoundly articulated with the global
economy and others not. It also signals the declining significance of the national
economy as a unitary category in the global economy.
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The new role of services in the economy:
impact on cities
This new or sharply expanded role of a particular kind of city in the world economy
since the early l980s basically results from the intersection of two major processes. One
is the sharp growth in the globalization of economic activity. This has raised the scale
and the complexity of economic transactions, thereby feeding the growth of top-level
multinational headquarter functions and the growth of services for firms, particularly the
growth of advanced corporate services. The second is the growing service intensity in the
organization of the economy, a process evident in firms in all industrial sectors, from
mining to finance. This has fed the growth of services for firms in all sectors, and for
both nationally and internationally oriented firms.1)
The key process from the perspective of the urban economy is the growing demand for
services by firms in all industries and the fact that cities are preferred production sites for
such services, whether at the global, national or regional level. The growing service
intensity in economic organization generally and the specific conditions of production
for advanced corporate services, including the conditions under which information
technologies are available, combine to make some cities once again a key "production"
site, a role they had lost when mass manufacturing became the dominant economic
sector. They are the world cities or global cities that are the focus of this paper.
While the decline of industrial centers as a consequence of the internationalization of
production beginning in the 1960s has been thoroughly documented and explained, until
recently the same could not be said about the rise of major service cities in the 1980s.
Today we have a rich new scholarship, replete with debates and disagreements, on cities
in a global economy.
There are good reasons why it has been more difficult to understand the role of cities as
production sites for advanced information industries. Advanced information industries
are typically conceptualized in terms of the hypermobility of their outputs and the high
levels of expertise of their professionals rather than in terms of the work process
involved and the requisite infrastructure of facilities and non-expert jobs that are also
part of these industries. Along with the hypermobility of their outputs there is a vast
structure of work that is far less mobile and, indeed, requires the massive concentrations
of human and telecommunication resources we find in major cities.
The specific forms assumed by globalization over the last decade have created particular
organizational requirements. The emergence of global markets for finance and
specialized services, the growth of investment as a major type of international
transaction, all have contributed to the expansion in command functions and in the
demand for specialized services for firms.
A central proposition here is that we cannot take the existence of a global economic
system as a given, but rather need to examine the particular ways in which the conditions
for economic globalization are produced. This requires examining not only
communication capacities and the power of multinationals, but also the infrastructure of
facilities and work processes necessary for the implementation of global economic
systems, including the production of those inputs that constitute the capability for global
control and the infrastructure of jobs involved in this production. The emphasis shifts to
the practice of global control: the work of producing and reproducing the organization
and management of a global production system and a global marketplace for finance,
both under conditions of economic concentration. The recovery of place and production
also implies that global processes can be studied in great empirical detail.
Two observations can be made at this point. One is that to a large extent the global
economy materializes in concrete processes situated in specific places, and that this
holds for the most advanced information industries as well.
We need to distinguish between the capacity for global transmission/communication and
the material conditions that make this possible, between the globalization of the financial
industry and the array of resources -from buildings to labor inputs- that makes this
possible; and so on for other sectors as well. The second is that the spatial dispersal of
economic activity made possible by telematics contributes to an expansion of central
functions insofar as this dispersal takes place under the continuing concentration in
control, ownership and profit appropriation that characterizes the current economic
system. More conceptually, we can ask whether an economic system with strong
tendencies towards such concentration can have a space economy that lacks points of
physical agglomeration.
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A new geography of centrality and marginality
We can then say that the global economy materializes in a worldwide grid of strategic
places, uppermost among which are major international business and financial centers.
We can think of this global grid as constituting a new economic geography of centrality,
one that cuts across national boundaries and across the old North-South divide. It signals,
potentially, the emergence of a parallel political geography. An incipient form of this is
the growing intensinty in cross-border networks among cities and their mayors.
The most powerful of these new economic geographies of centrality at the inter-urban
level binds the major international financial and business centers: New York, London,
Tokyo, Paris, Frankfurt, Zurich, Amsterdam, Los Angeles, Sydney, Hong Kong, among
others. But this geography now also includes cities such as Sao Paulo, Buenos Aires,
Bangkok, Taipei and Mexico City. The intensity of transactions among these cities,
particularly through the financial markets, transactions in services, and investment has
increased sharply, and so have the orders of magnitude involved. At the same time, there
has been a sharpening inequality in the concentration of strategic resources and activities
between each of these cities and others in the same country.
One might have expected that the growing number of financial centers now integrated
into the global markets would have reduced the extent of concentration of financial
activity in the top centers.2) One would further expect this given the immense increases
in the global volume of transactions. Yet the levels of concentration remain unchanged in
the face of massive transformations in the financial industry and in the technological
infrastructure this industry depends on.3)
The growth of global markets for finance and specialized services, the need for
transnational servicing networks due to sharp increases in international investment, the
reduced role of the government in the regulation of international economic activity and
the corresponding ascendance of other institutional arenas, notably global markets and
corporate headquarters - all these point to the existence of trans-national economic
processes with multiple locations in more than one country. We can see here the
formation, at least incipient, of a transnational urban system.
The pronounced orientation to the world markets evident in such cities raises questions
about the articulation with their nation-states, their regions, and the larger economic and
social structure in such cities. Cities have typically been deeply embedded in the
economies of their region, indeed often reflecting the characteristics of the latter; and
mostly they still do. But cities that are strategic sites in the global economy tend, in part,
to disconnect from their region. This conflicts with a key proposition in traditional
scholar- ship about urban systems, namely, that these systems promote the territorial
integration of regional and national economies.
Alongside these new global and regional hierarchies of cities, is a vast territory that has
become increasingly peripheral, increasingly excluded from the major economic
processes that fuel economic growth in the new global economy. A multiplicity of
formerly important manufacturing centers and port cities have lost functions and are in
decline, not only in the less developed countries but also in the most advanced
economies. This is yet another meaning of economic globalization.
But also inside global cities we see a new geography of centrality and marginality. The
downtowns of cities and metropolitan business centers receive massive investments in
real estate and telecommunications while low-income city areas are starved for
resources. Highly educated workers see their incomes rise to unusually high levels while
low- or medium-skilled workers see theirs sink. Financial services produce superprofits
while industrial services barely survive. These trends are evident, with different levels of
intensity, in a growing number of major cities in the developed world and increasingly in
some of the developing countries that have been integrated into the global financial
markets (Sassen 1996: chapter 2).
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The urban economy today
This is not to say that everything in the economy of these cities has changed. On the
contrary there is much continuity and much similarity with cities that are not global
nodes. It is rather that the implantation of global processes and markets has meant that
the internationalized sector of the economy has expanded sharply and has imposed a new
valorization dynamic, often with devastating effects on large sectors of the urban
economy. High prices and profit levels in the internationalized sector, e.g. finance, and
its ancillary activities, e.g. restaurants and hotels, made it increasingly difficult in the
1980s for other sectors to compete for space and investments. Many of the latter have
experienced considerable downgrading and/or displacement; or lost economic vigor to
the point of not being able to re-take their economic space when the recession weakened
the dominant sectors. Illustrations are neighborhood shops catering to local needs
replaced by up-scale boutiques and restaurants catering to new high income urban elites.
The sharpness of the rise in profit levels in the international finance and service sector
also contributed to the sharpness of the ensuing crisis. These trends are evident in many
cities of the highly developed world, though rarely as sharply as in major US cities.(See,
for example Le Debat 1994 for Paris; Todd 1995 for Toronto, etc.).
Though at a different order of magnitude, these trends also became evident towards the
late 1980s in a number of major cities in the developing world that have become
integrated into various world markets: Sao Paulo, Buenos Aires, Bangkok, Taipei,
Mexico City are but some examples. (See for more detail the series edited by Milton
Santos on Sao Paulo; Sassen 1994; Knox and Taylor 1995). Central to the development
of this new core in these cities as well were the deregulation of financial markets,
ascendance of finance and specialized services, and integration into the world markets,
real estate speculation, and high-income commercial and residential gentrification. The
opening of stock markets to foreign investors and the privatization of what were once
public sector firms have been crucial institutional arenas for this articulation. Given the
vast size of some of these cities, the impact of this new economic complex is not always
as evident as in central London or Frankfurt, but the transformation has occurred.
Accompanying these sharp growth rates in producer services was an increase in the level
of employment specialization in business and financial services in major cities
throughout the l980s. There is today a general trend towards high concentration of
finance and certain producer services in the downtowns of major international financial
centers around the world: from Toronto and Sydney to Frankfurt and Zurich to Sao Paulo
and mexico City we are seeing growing specialization in finance and related services in
the downtown areas. These cities have emerged as important producers of services for
export, with a tendency towards specialization.4 New York and London are leading
producers and exporters in financial services, accounting, advertising, management
consulting, international legal services, and other business services. (For instance, out of
a total private sector employment of 2.8 million jobs in New York City in December
1995, almost 1.3 million are export-oriented). Cities such as New York are among the
most important international markets for these services, with New York the world's
largest source of service exports.
There are also tendencies towards specialization among different cities within a country.
In the US, New York leads in banking, securities, manufacturing administration,
accounting and advertising. Washington leads in legal services, computing and data
processing, management and public relations, research and development, and
membership organizations. New York is more narrowly specialized as a financial and
business center and cultural center. Some of the legal activity concentrated in
Washington is actually serving New York City businesses which have to go through
legal and regulatory procedures, lobbying, etc. These are bound to be in the national
capital.5)
It is important to recognize that manufacturing remains a crucial economic sector in all
of these economies, even when it may have ceased to be so in some of these cities. This
is a subject I return to in a later section.
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The formation of a new production complex
The rapid growth and disproportionate concentration of producer services in central
cities should not have happened according to standard conceptions about information
industries. As they are thoroughly embedded in the most advanced information
technologies they could be expected to have locational options that by-pass the high
costs and congestion typical of major cities. But cities offer agglomeration economies
and highly innovative environments. Some of these services are produced in-house by
firms, but a large share are bought from specialized service firms. The growing
complexity, diversity and specialization of the services required makes it more efficient
to buy them from specialized firms rather than hiring in-house professionals. The
growing demand for these services has made possible the economic viability of a free standing specialized service sector.
There is a production process in these services which benefits from proximity to other
specialized services. This is especially the case in the leading and most innovative
sectors of these industries. Complexity and innovation often require multiple highly
specialized inputs from several industries. One example is that of financial instruments.
The production of a financial instrument requires inputs from accounting, advertising,
legal expertise, economic consulting, public relations, designers and printers. Time
replaces weight in these sectors as a force for agglomeration. That is to say, if there were
no need to hurry, one could conceivably have a widely dispersed array of specialized
firms that could still cooperate. And this is often the case in more routine operations. But
where time is of the essence as it is today in many of the leading sectors of these
industries, the benefits of agglomeration are still extremely high to the point that it is not
simply a cost advantage, but an indispensable arrangement.
It is this combination of constraints that has promoted the formation of a producer
services complex in all major cities. This producer services complex is intimately
connected to the world of corporate headquarters; they are often thought of as forming a
joint headquarters-corporate services complex. But it seems to me that we need to
distinguish the two. While it is true that headquarters still tend to be disproportionately
concentrated in cities, many have moved out over the last two decades. Headquarters can
indeed locate outside cities.
But they need a producer services complex somewhere in order to buy or contract for the
needed specialized services and financing. Further, headquarters of firms with very high
overseas activity or in highly innovative and complex lines of business tend to locate in
major cities. In brief, firms in more routinized lines of activity, with predominantly
regional or national markets, appear to be increasingly free to move or install their
headquarters outside cities. Firms in highly competitive and innovative lines of activity
and/or with a strong world market orientation appear to benefit from being located at the
center of major international business centers, no matter how high the costs.
But what is clear, in my view, is that both types of head-quarters need a corporate
services sector complex to be located somewhere. Where is probably increasingly
unimportant from the perspective of many, though not all headquarters. From the
perspective of producer services firms, such a specialized complex is most likely to be in
a city rather than, for instance, a suburban office park. The latter will be the site for
producer services firms, but not for a services complex. And it is only such a complex
that can handle the most advanced and complicated corporate demands
.Corporate Headquarters and Cities
It is common in the general literature and in some more scholarly accounts to use
headquarters concentration as an indication of whether a city is an international business
center. The loss of headquarters is then interpreted as a decline in a city's status. The use
of headquarters concentration as an index is actually a problematic measure given the
way in which corporations are classified.
Which headquarters concentrate in major international financial and business centers
depends on a number of variables. First, how we measure or simply count head-quarters
makes a difference. Frequently, the key measure is size of firm in terms of employment
and overall revenue. In this case, some of the largest firms in the world are still
manufacturing firms and many of these have their main headquarters in proximity to
their major factory complex, which is unlikely to be in a large city due to space
constraints. Such firms are likely, however to have secondary headquarters for highly
specialized functions in major cities. Further, many manufacturing firms are oriented to
the national market and do not need to be located in a cities national business center.
Thus, the much publicized departure of major headquarters from New York City in the
1960s and 1970s involved these types of firms. If we look at the Fortune 500 largest
firms in the U.S. (cf. "Fortune Magazine 500 list") many have left New York City and
other large cities. If instead of size we use share of total firm revenue coming from
international sales, a large number of firms that are not part of Fortune 500 list come into
play. For instance, in the case of NYC the results change dramatically: 40% of U.S.
firms with half their revenue from international sales have their head-quarters in New
York City.
Secondly, the nature of the urban system in a country is a factor. Sharp urban primacy
will tend to entail a disproportionate concentration of headquarters no matter what
measure one uses. Thirdly, different economic histories and business traditions may
combine to produce different results. Further, headquarters concentration may be linked
with a specific economic phase. For instance, unlike New York's loss of top Fortune 500
headquarters, Tokyo has been gaining headquarters. Osaka and Nagoya, the two other
major economic centers in Japan are losing headquarters to Tokyo. This is in good part
linked to the increasing internatio-nalization of the Japanese economy and the
corresponding increase in central command and servicing functions in major
international business centers. In the case of Japan, extensive government regulation
over the economy is an added factor contributing to headquarter location in Tokyo
insofar as all international activities have to go through various government approvals.
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The research and policy agenda
There are a number of emerging issues for research and policy. I will discuss a few at
some length and simply name a few others.
1. The impact of telematics on cities.
Telematics and globalization have emerged as fundamental forces in the re-organization
of economic space. This reorganization ranges from the spatial virtualization of a
growing number of economic activities to the reconfiguration of the geography of the
built environment for economic activity. Whether in electronic space or in the geography
of the built environment, this reorganization involves insti-tutional and structural
changes.
Global cities and global value chains.
The vast new economic topography that is being implemented through electronic space
is one moment, one fragment, of an even vaster economic chain that is in good part
embedded in non-electronic spaces. There is no fully virtualized firm and no fully
digitalized industry. Even the most advanced information industries, such as finance, are
installed only partly in electronic space. And so are industries that produce digital
products, such as software designers. The growing digitalization of economic activities
has not eliminated the need for major international business and financial centers and all
the material resources they concentrate, from state of the art telematics infrastructure to
brain talent.
Nonetheless, telematics and globalization have emerged as fundamental forces reshaping
the organization of economic space. This reshaping ranges from the spatial virtualization
of a growing number of economic activities to the recon-figuration of the geography of
the built environment for economic activity. Whether in electronic space or in the
geography of the built environment, this reshaping involves organizational and structural
changes. Telematics maximizes the potential for geographic dispersal and globalization
entails an economic logic that maximizes the attractions/profitability of such dispersal.
The transformation in the spatial correlates of centrality through new technologies and
globalization engenders a whole new problematic around the definition of what
constitutes centrality today in an economic system where:
I) a share of transactions occurs through technologies that neutralize distance and place,
and do so on a global scale;
II) centrality has historically been embodied in certain types of built environment and
urban form, i.e. the central business district. Further, the fact of a new geography of
centrality, even if transnational, contains possibilities for regulatory enforcement that are
absent in an economic geography lacking strategic points of agglomeration. There are at
least two sets of issues that we need more research on:
1) Leading economic sectors that are highly digitalized require strategic sites with vast
concentrations of infrastructure, the requisite labor resources, talent, buildings. This
holds for finance but also for the multimedia industries which use digital production
processes and produce digitalized products. What is the range of articulations and their
spatial expression between the virtual and the actual components of a firm, or more
generally, an organization? What are the implications for urban space, the urban
economy, urban government?
2) The sharpening inequalities in the distribution of the infrastructure for electronic
space, whether private computer networks or the Net, in the conditions for access to
electronic space, and, within electronic space, in the conditions for access to highpowered segments and features, are all contributing to new geographies of centrality
both on the ground and in electronic space. What does this mean for cities?
2. The place of manufacturing in the new urban service economy.
Another subject for research and debate is the relation between manufacturing and
producer services in the advanced urban economy. (Drennan 1992; Markusen and
Gwiasda, 1995). The new service economy benefits from manufacturing because the
latter feeds the growth of the producer services sector, but it does so whether located in
the particular area, in another region, or overseas. While manufacturing, and mining and
agriculture for that matter, feed the growth in the demand for producer services, their
actual location is of secondary importance in the case of global level service firms: thus
whether a manufacturing corporation has its plants off-shore or inside a country may be
quite irrelevant as long as it buys its services from those top level firms. Secondly, the
territorial dispersal of plants, especially if international, actually raises the demand for
producer services because of the increased complexity of transactions. This is yet
another meaning of globalization: that the growth of producer service firms
headquartered in New York or London or Paris can be fed by manufacturing located
anywhere in the world as long as it is part of a multinational corporate network. It is
worth remembering here that as GM was off shoring production jobs and devastating
Detroit's employ-ment base, its financial and public relations headquarters office in New
York City was as dynamic as ever, indeed busier than ever.
Thirdly, a good part of the producer services sector is fed by financial and business
transactions that either have nothing to do with manufacturing, as is the case in many of
the global financial markets, or for which manufacturing is incidental, as in much of the
merger and acquisition activity which was really centered on buying and selling rather
than the buying of manufacturing firms. We need much more research on many
particular aspects in this relation between manufacturing and producer services,
especially in the context of spatial dispersal and cross-border organization of
manufacutring.
Not unrelated to the question of manufacturing is the importance of conventional
infrastructure in the operation of economic sectors that are heavy users of telematics.
This is a subject that has received little attention. The dominant notion seems to be that
telematics obliterates the need for conventional infrastructure. But it is precisely the
nature of the production process in advanced industries, whether they operate globally or
nationally, which contributes to explain the immense rise in business travel we have seen
in all advanced economies over the last decade. The virtual office is a far more limited
option than a purely technological analysis would suggest. Certain types of economic
activities can be run from a virtual office located anywhere. But for work processes
requiring multiple specialized inputs, considerable innovation and risk taking, the need
for direct interaction with other firms and specialists remains a key locational factor.
Hence the metropolitanization and regionalization of an economic sector has boundaries
that are set by the time it takes for a reasonable commute to the major city or cities in the
region. The irony of today's electronic era is that the older notion of the region and older
forms of infrastructure re-emerge as critical for key economic sectors. This type of
region in many ways diverges from older forms of region. It corresponds rather to a type
of centrality -a metropolitan grid of nodes connected via telematics. But for this digital
grid to work, conventional infrastructure -ideally of the most advanced kind- is also a
necessity.
3. New forms of marginality and polarization.
The new growth sectors, the new organizational capacities of firms, and the new
technologies -all three interrelated- are contributing to produce not only a new geography
of centrality but also a new geography of marginality. The evidence for the U.S.,
Western Europe and Japan suggests that it will take government policy and action to
reduce the new forms of spatial and social inequality.
There are misunderstandings that seem to prevail in much general commentary about
what matters in an advanced economic system, the information economy, and economic
globalization. Many types of firms, workers, and places, such as industrial services,
which look as if they do not belong in an advanced, information-based, globally oriented
economic system are actually integral parts of such a system. They need policy
recognition and support: they can't compete in the new environments where leading
sectors have bid up prices and standards, even though their products and labor are in
demand. For instance, the financial industry in Manhattan, one of the most sophisticated
and complex industries, needs truckers to deliver not only software, but also tables and
light bulbs; and it needs blue collar maintenance workers and cleaners. These activities
and workers need to be able to make a decent living if they are to stay in the region. (See
e.g. Social Justice 1994; Competition and Change 1995; King 1996).
Yet another dimension not sufficiently recognized is the fact of a new valuation
dynamic: the combination of globalization and the new technologies has altered the
criteria and mechanisms through which factors, inputs, goods, services are valued/priced.
This has had devastating effects on some localities, industries, firms and workers. Thus
salaries of financial experts and the profits of financial services firms zoomed up in the
1980s while wages of blue collar workers and profits of many traditional manufacturing
firms sank.
4. The global city and the national state.
Globalization has transformed the meaning of and the sites for the governance of
economies.(See, e.g. Mittelmann 1996; Competition and Change 1995; Sassen 1996).
One of the key properties of the current phase in the long history of the world economy
is the ascendance of information technologies, the associated increase in the mobility and
liquidity of capital, and the resulting decline in the regulatory capacities of national states
over key sectors of their economies. In order to understand what challenges and
opportunities this brings to urban government we need to consider at least the following
points.
1) One is the relation between the global economy and sub-national units, particularly
major cities that are international business and financial centers. This means
understanding how global processes are partly embedded in strategic concentrations of
resources and infrastructure, such as financial districts, as well as understanding the
importance of what is often referred to as world-class cultural centers, typically found in
large international cities. These are among the crucial aspects making cities more
important as a nexus with the global economy.
2) A second issue is the extent to which deregulation, privatization and generally the
declining role of the national state in the economy-all key elements in the current phase
of globalization-may contribute to replace the diad national state/global economy with a
triangulation which brings in sub-national units, particularly global cities. This would
clearly have major policy implications. A key aspect of the change and the potential for
future change in this relation is the fact that the content of foreign policy has shifted
more towards economic issues, so that a greater component of what we call foreign
policy is today international economic policy.
The transformation in the composition of the world economy, especially the rise of
finance and advanced services as leading industries, is contributing to a new
international economic order, one dominated by financial centers, global markets, and
transnational firms. Correspondingly we may see a growing significance of other
political categories both sub- and supra-national.6) Cities that function as international
business and financial centers are sites for direct transactions with world markets that
take place without government inspection, as for instance the euro-markets or New York
City's international financial zone (International Banking Facilities). These cities and the
globally oriented markets and firms they contain mediate in the relation of the world
economy to nation-states and in the relations among nation-states.
5. Making claims on the city.
There are major new actors making claims on these cities, notably foreign firms who
have been increasingly entitled to do business through progressive deregulation of
national economies, and the large increase over the last decade in international business
people. These are among the new "city users." They have profoundly marked the urban
landscape in many major cities. Their claim to the city is not contested, even though the
costs and benefits to cities have barely been examined.
City users have often reconstituted strategic spaces of the city in their image: emblematic
is the so called hyper-space of international business, with its airports built by famous
architects, world class office buildings and hotels, state of the art telematic infrastructure,
and private security forces. They contribute to change the social morphology of the city
and to constitute what Martinotti (1993) calls the metropolis of second generation, the
city of late modernism. The new city of city users is a fragile one, whose survival and
successes are centered on an economy of high productivity, advanced technologies,
intensified exchanges.
On the one hand this raises a question of what the city is for international
businesspeople, and what their sense of civic responsibility might be. On the other hand,
there is the difficult task of establishing whether a city that functions as an international
business center does in fact recover the costs involved in being such a center: the costs
involved in maintaining a state of the art business district, and all it requires, from
advanced communications facilities to top level security (and "world-class culture").
Perhaps at the other extreme of conventional repre-sentations are those who use urban
political violence to make their claims on the city, claims that lack the de facto
legitimacy enjoyed by the new "city users." These are claims made by actors struggling
for recognition, entitlement, claiming their rights to the city.
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Conclusion
The massive trends towards the spatial dispersal of economic activities at the
metropolitan, national and global level which we associate with globalization have
contributed to a demand for new forms of territorial centralization of top-level
management and control operations. National and global markets as well as globally
integrated organizations require central places where the work of globalization gets done.
Further, information industries require a vast physical infrastructure containing strategic
nodes with hyper-concentration of facilities; we need to distinguish between the capacity
for global transmission/communication and the material conditions that make this
possible. Finally, even the most advanced information industries have a work process
that is at least partly place-bound because of the combination of resources it requires
even when the outputs are hypermobile.
This type of emphasis allows us to see cities as production sites for the leading
information industries of our time and it allows us to recover the infrastructure of
activities, firms and jobs, necessary to run the advanced corporate economy.
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Curriculum Vitae Saskia Sassen
Saskia Sassen is Professor of Sociology at the University of Chicago.
Her books are The Mobility of Labor and Capital (Cambridge University Press, 1988;
currently, fourth printing); The Global City: New York London Tokyo (Princeton
University Press, 1991; currently, seventh printing); Cities in a World Economy
(California: Pine Forge/Sage, 1994; now in its fifth printing); Losing Control?
Sovereignty in an Age of Globalization (New York: Columbia University Press 1996);
Migranten, Siedler, Flüchtlinge (Fischer Verlag, Frankfurt); and Globalization and its
Discontents. Selected Essays 1984-1998. (New York: New Press 1998). She is currently
working on a book sponsored by the Twentieth Century Fund entitled Immigration
Policy in a World Economy: From National Crisis to Multilateral Management. Her
books have been translated into several languages.
She has begun a new five year research project A Governance and Accountability in a
World Economy,@ and is director of a new project on global cities and cross-border
networks for the Institute of Advanced Studies, United Nations University (Tokyo). She
has been a member of several research groups, among them the Japan based project on
Economic Restructuring in the U.S. and Japan, sponsored by the United Nations Centre
on Regional Development and MIT (1988-1990); the Social Science Research Council
Working Group on New York City, sponsored by the Russell Sage Foundation (19851990); the Social Science Research Council Committee on Hispanic Public Policy,
sponsored by the Ford Foundation (1987-1991); the New York-London Comparative
Study sponsored by the Economic Social Research Council of the United Kingdom. She
also was a member of the Ford Foundation Task Force for Research on Hispanics; the
Research Working Group on the Informal Sector, supported by the Ford, Tinker, and
Rockefeller Foundations; the Stanford University Project on Mexico-U.S. Relations; and,
more recently, the Immigration and Economic Sociology Project sponsored by the
Russell Sage Foundation (1992-1995); the Comparative Urban Studies project at the
Woodrow Wilson Center, Washington DC (1992-on); and the Group of Lisbon
sponsored by the Science Program of the European Union and the Gulbenkian
Foundation (Portugal 1993-on). She has served on various advisory panels, including
Queens Borough President Claire Shulman's Blue Ribbon Panel on Government, and the
New York State Industrial Corporation Council.
She has also served on several scientific juries, most recently for the French
Government's Ministry of Urban Affairs and the Belgian Government's Agency on
Science and Technology in the Office of the Prime Minister. She serves on several
editorial boards.
She has received multiple awards, among others from the Ford Foundation, Tinker
Foundation, Revson Foundation, Chicago Institute for Architecture and Urbanism, and
Twentieth Century Fund. A 1986 studio she co-directed won the national prize of the
American Institute of Certified Planners. Most recently she was a Fellow at the
Wissenshaftszentrum Berlin, Germany; Distinguished Lecturer at the Institute for
Advanced Studies, Vienna, Austria; Henry Luce Lecturer at Clark University. She has
been a Visiting Scholar at the Russell Sage Foundation, and a Visiting Scholar at the
Woodrow Wilson International Center for Scholars, and at the Center for Advanced
Study in the Behavioral Sciences. She has been made a member of the Council on
Foreign Relations and a Fellow of the American Bar Foundation.
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