Metropolitan Regions

In the summer of 2007, the United Nations Population Fund released a report forecasting greatly increased levels of urbanization during the next two decades, especially in the developing world (United Nations 2007a). The report declared that for the first time in recorded history, more than half the world’s population resided in urban – not rural – areas. At roughly the same time, another agency of the United Nations (UN-Habitat) issued a report highlighting the slums and deplorable living conditions in cities in developing countries and estimating that at the end of 2007 there were more than a billion slum dwellers, largely in developing countries (United Nations 2007b). This latter report argued that in many cases the economic circumstances of urban migrants are worse than those of rural peasants. Four years earlier, it had been reported, also by the UN (United Nations 2003), that surveys of member governments eliciting their attitudes towards urbanization found that the “vast majority” of these governments would wish to shift populations back to rural areas and stem the tide of urbanization that has been experienced around the world.

A major characteristic of the economic development in Sweden during the past 10–15 years is a fast expansion of the producer-service sector. To analyse this process, the present paper employs an approach to identify the spatial pattern of local, regional and extra-regional demand for producer services. In the associated theoretical model producer-service firms grow in locations with large market access. The estimated model predicts that the supply of producer services grows in urban areas with large market access, whereas the rest of the economy shrinks in the same areas and expands in other parts of the urban region. The change process is interpreted as an effect of firms’ outsourcing of service activities when they can rely on accessibility to service suppliers. As a result service suppliers agglomerate in central parts of the urban region, where they obtain high accessibility to their customers. The estimated change process comprises a non-linear response mechanism.

Economic growth has conventionally been modelled for space-less economies. Econometrically, growth models have mostly been estimated on time series of national economies with minimal distinctions between economies as large as Japan or the USA and as small as the smallest economies of Asia and Europe. This approach to the analysis of economic growth is especially dangerous when the impact of scientific and technological knowledge is important for the process of growth. Creative activities and the formation of knowledge are highly clustered in space. Thus, the spatial distribution of accessibility to knowledge capital and investments determines economic growth of nations and other spatial aggregates.

The Haavelmo paradox contrasts chaos as the generic property of non-linear dynamic models with the fact that most statistics on macroeconomic growth processes tend towards persistent constant positive rates of growth. The paradox can be resolved if the non-linear dynamic model is subdivided into fast, private variables and very slow, public variables. Modelling spatial accessibility of knowledge as a slow, public variable and machinery and similar material capital as a relatively faster, private variable ensures stable growth, at least in the short and medium terms of the economic growth processes.

This paper reviews local growth promotion policies in the light of an analysis of the drivers of differential urban growth. It starts by arguing that major shifts in urban functions interacting with European integration and the wider process of internationalisation, have produced incentives to create local growth promotion agencies. The supporters of such agencies and the agencies themselves naturally have to make claims both as to their necessity and their likely success. An analysis of growth drivers, however, shows that there is only a restricted scope for local – indeed any – policy to influence city growth. Moreover, some existing policies work directly against urban economic growth. The most successful policies are likely to be the efficient execution of well known functions, including policies to reduce the costs of city size and efficient public administration. There is a danger, therefore, not only of raising expectations with respect to the potential contribution of local growth promotion agencies but of such agencies concentrating on inappropriate actions which are more visible but likely to be less effective.

The regional relationships between agglomeration and economic growth are expected to be different in different types of regions. In the literature of the new economic geography it is common to stress the importance of access to cities with agglomeration of economic activities in the form of firms and households in order to be able to explain regional growth. However, it is also well known that many rural areas are performing fairly well in terms of employment and economic opportunities.

The purpose of the present research is to analyze if concentration of population drives economic growth or if it is the other way around. A second question is if this relationship between concentration of population and growth is different in different types of regions.

In order to shed light on these two questions the economic performance of three types of Swedish regions (metropolitan-, cities- and rural regions) is related to changes in population densities.

In the empirical analysis the Shannon index is used in the measurement of regional concentration. By considering the effect of previous levels of the Shannon index on average wages we extract information on how regional concentration affects regional economic growth (expressed as growth in average wages). In the empirical analysis we employ a VAR Granger causality approach on regional Swedish yearly data from 1987 to 2006. From this analysis we are able to conclude that there are strong empirical indications that geographic agglomeration of population unidirectionally drives economic growth in metropolitan- and city regions. Concerning the rural regions no such indication is found in either direction. This is a fairly strong indication that urban regions are more dependent on economies of agglomeration compared to rural areas.

This paper questions the extent to which agglomeration economies can develop in a cluster of close-by cities, so-called polycentric metropolitan areas or polycentric urban regions (PURs). Theory suggests that agglomeration economies are nowadays increasingly associated with more dispersed spatial structures. Are polycentric metropolitan areas, despite their polycentric spatial layout, able to reap the advantages of urban size to a similar extent as monocentric metropolitan areas? By means of a novel method, the most monocentric metropolitan areas (a MSA or CSA dominated by a single city) and most polycentric metropolitan areas (MSAs or CSAs in which population is rather evenly distributed over their constituent cities) in the USA are identified. Polycentric metropolitan areas are furthermore divided into conurbations and polycentric metropolitan areas proper, which is based on the question of whether the cities in a polycentric metropolitan area are part of a contiguous urban area (conurbation) or not. Labor productivity serves as a proxy for agglomeration economies. Using 2006 data, strong evidence was found for metropolitan labor productivity, and hence agglomeration economies, being higher in polycentric metropolitan areas compared to monocentric ones. Referring to Alonso, this means that in polycentric metropolitan areas, cities are able to ‘borrow size’ from each other. The findings suggest that the location of a city nearby other relatively similar-sized cities results in a ‘borrowed size’ effect of 11 % in polycentric metropolitan areas. This borrowed size effects suggests that polycentric metropolitan areas on average outperform monocentric, single cities, controlling for the size of the urban population, urban density, human capital and the structure of the metropolitan economy. A similar result is found when explaining mean annual wages, with an elasticity of polycentricity of 5.7 %. Polycentric conurbations resemble monocentric metropolitan areas more than polycentric metro areas. Furthermore, it is demonstrated that while many sectors of economic activity have a stronger presence in monocentric metropolitan areas, productivity in many sectors tends to be higher in polycentric metropolitan areas. One explanation is that the spatial range of agglomeration advantages has been regionalized, while agglomeration diseconomies remain relatively more limited to the local level.

It is a well known fact that wages have a tendency to be higher in larger regions. The source of the regional difference in wages between larger and smaller areas can be broadly divided into two parts. The first part can be attributed to the fact that regions have different industrial compositions. The second part is due to the fact that average regional productivity differs between regions. Using a decomposition method, akin to shift-share, we are able to separate regional wage disparities into an industrial composition component and productivity component. According to theory it is expected that productivity is higher in larger regions due to different kinds of economies of agglomeration. Also, larger regions are able to host a wider array of sectors compared to smaller regions. Output from sectors demanding a large local or regional market can only locate in larger regions. Examples of such sectors are e.g. various types of advanced services with high average wages. The purpose of the paper is to explain regional differences in wages and the productivity and composition components, respectively.

The paper tests the dependence of wages, productivity and industrial composition effects on regional size (using a market potential measure). In the estimation we control for regional differences in education, employment shares, average firm size and self-employment. Swedish regional data from 2004 are used. The results verify that larger regions on average have higher wages, originating from higher productivity and more favorable industry composition.

Cities are highlighted in traditional theories to be the most efficient drivers of economic growth. Considered as sort of collective agents, implicitly or explicitly defining specific development trajectories, cities compete in the global economy for their attractiveness, building on their historical strengths and identifying opportunities for diversification and enlargement of their specializations by strengthening their know-how and knowledge base. Therefore, cities pro-act, and react, to economic volatility, by anticipating expectations on future economic trends and by absorbing the economic effects once they take place. This is true for both virtuous as well as declining cycles of development. The reasons for their static and dynamic efficiency lie in three main elements: the physical size, source of economies of scale; the functional specialisation in advanced value-added functions, source of creativity, learning, and knowledge; the urban system (or the network of cities) in which cities lie, where advantages of scale can easily be exploited avoiding hyper-concentration of production and residential activities. In the age of globalisation like the one we are going through nowadays, cities are areas able to grasp advantages of international competition from outside Europe, and they are expected to be the drivers of growth. In this paper, the aim is to analyse – with a prospective approach – the economic performance that European cities will manifest under different assumptions on the globalisation patterns that may develop in the future. With respect to the present literature, this paper contributes in two new directions: firstly, the aim is to highlight empirically the different actions and reactions that cities of different size, different functional specialisation and located in regions with different settlement structures have in front of a world economic integration; secondly, the aim is to analyse how cities act and react to alternative globalisation patterns, to different quality of competition from outside Europe, which may be sources of different opportunities and threats for different urban areas.

Metropolitan regions are advantageous location for new export products due to factors such as external economies, diversified industry environment and a large share of skilled labour. This is the main assumption of this paper. What happens to these products when the technology becomes common knowledge? Using empirical data on exports, we find that products with a high specialisation in the metropolitan region have a tendency to be successful in the non-metropolitan regions subsequent years. Also, this export product diffusion does not seem to be related to a location in the immediate proximity to the metropolitan region. Instead, the recipient regions are mainly characterised as being centrally located in its labour market region, having a high share of highly educated individuals. Features related product standardisation such as a large manufacturing sector and low labour costs cannot be distinguished as prominent features.

What drives the relation between market-size and employment? There is a relationship between the size of an agglomeration and its diversity; in terms of number of sectors present and in terms of number of firms within each sector. There is also a relationship between the size of different agglomerations and the average size of firms located in them. Total employment in a region may be expressed as the product of number of sectors, number of firms in each sector and average firm size in each sector.

In the literature it is emphasized that diversity may be important for aggregate productivity and growth. The scale of operations in individual firms may also be important for productivity. Thus, the productivity in a region depends on both external and internal economies of scale. Looking at the relationship between regional size and employment it is possible to reveal the relative importance of each of the three factors.

The applied technique allows us to untangle the overall elasticity of employment with respect to market-size and estimate the contribution of each component to the overall elasticity. Using data on Swedish regions over the time period 1990–2004 we show that there are marked differences between manufacturing and service sectors in terms of the contribution of the different components to the overall elasticity. The contribution of the respective component is also different for regional and extra-regional market-size.

… it is essential … that the town should be planned as a whole, and not left to grow up in a chaotic manner as has been the case with all English towns, and more or less with the towns of all countries. A town, like a flower, or a tree, or an animal, should, at each stage of its growth, possess unity, symmetry, completeness, and the effect of growth should never be to destroy that unity, but to give it greater purpose….

This paper considers whether planning policies, as practiced in the world’s cities, have the potential for controlling or limiting the expansion of urban land use. The question is certainly relevant for design of policies to respond to urban sprawl. The analysis does not establish that these constraints are necessarily desirable, but does find some evidence that some aspects of planning regulations can be effective in limiting urban expansion.

This paper offers a critical review of current debates on the importance and the potential of ICT for modern cities. Much attention is given to the opportunities offered by local e-governance, as a systematic strategy to exploit the potential of ICT for the public domain in European cities. Since the views of many experts and elected policy-makers in cities (so-called ‘urban frontliners’) is coloured by subjective expectations and perceptions, we examine in particular the extent to which the expected influences of ICT, as perceived by urban frontliners, affect their perceptions of the relevance of ICT to mitigate contemporary urban challenges. The final (empirical) part of the paper addresses the issue of the systematic study of cyber perceptions of cities in Europe.

The main objective of this contribution lies in the exploration of a new metropolitan form in the context of the knowledge economy: polycentric Mega-City Regions. In the first part, we focus on the theoretical building blocks of Mega-City Regions by considering these polycentric urban structures as an emerging spatial phenomenon based on re-scaling processes of agglomeration economies as well as network economies. By using the two inter-related concepts, we secondly analyse large-scale interlocking networks and functional urban hierarchies in nine Mega-City Regions in North West Europe: Munich, Northern Switzerland, the Dutch Randstad Region, South East England, Rhine-Ruhr, Rhine-Main, the Paris Region, Central Belgium and Greater Dublin. The main conclusion of the paper is that polycentric Mega-City Regions are becoming a more general phenomenon in advanced economies. The inter-urban functional linkages are found to be extending and intensifying while, at the same time, global functions are clustering and centralising. These apparently contradictory processes are intersecting on the Mega-City Region scale, which emerges as a new strategic location for activities of the knowledge economy.

In the modern economy, cities are assumed to be in fierce competition. In contrast with this, regional and national Dutch policymakers advocate the Randstad region as a single urban region in which economic complementarities are supposed to be numerous. Using insights from urban systems theory and urban ecology, we introduce an indicator to estimate the degree of revealed competition between cities based on patterns of inter-firm relations between these cities. Results indicate that urban competition is more the rule than the much-anticipated urban complementarities, as urban functional influences of the Randstad cities spatially overlap.

The opening of China during the last 30 years has resulted in tremendous cross-border economic activities of Hong Kong manufacturers in the Pearl River Delta (PRD). Economic activities in the Greater Pearl River Delta (GPRD) are embedded into global value chains and shaped by the specific ‘front office-back factory’ division of labour between Hong Kong and the Chinese mainland. This business model has facilitated the rapid industrialisation of the PRD and the transformation of the HK economy towards sophisticated manufacturing-related business services (FHKI 2003, 2007). More recently, the competitiveness of the business model has been put under strain by forceful challenges that change the business environment in the PRD: rising production costs, upgrading pressures, new regulations for export processing businesses, labour shortages, a more employee-friendly labour law, and environmental issues. Against this background, it is the purpose of this paper to present and discuss findings from two surveys of electronics firms in HK and the PRD conducted in 2007 and 2008. The research question is based on the agility hypothesis, that supposes that business in highly competitive environments depends on competencies and resources of firms to capitalise on formal and informal business practices alike to gain flexibility. The results of our analysis may help to better understand how the HK-PRD business model did develop and eventually may sustain its competitiveness in the face of new challenges. We began with the overview of our HK as well as PRD sample in order to figure out whether there are indeed strong needs embedded in the current business and political conditions for informal and flexible organisation of firms. After that, we focussed on “customer-producer relations” and “industrial innovation” on the other hand to clarify how firms operating in the GPRD transformed the needs for agility into different kinds of means and actions in these two areas to sustain their competitiveness in the global market. With respect to agile firm organisation in general, the findings of our research confirm the hypothesis about the interaction of informal arrangements and flexible firm organisation. Informal institutions for doing business in the GPRD are not going to become less important with further development and improvement of the Chinese legal system. Adequate application of informal factors within given formal constellations enhances the capabilities of firms to more flexibly react to the fast changes in the political and business environment to sustain their competitiveness in the global market.

In The Tokyo metropolitan area, population growth and economic growth have caused serious urban problems like sprawl at urban fringe, heavy congestion not only in road network but also in railway network, environmental emission and so on. Although there still now remain the difficult problems for us to tackle with, the transport infrastructure policies until today have succeeded in sustaining the high business productivity with high spatial agglomeration and quality of life in the population-growing trend.

Japan is however now at the down-slope of the population trend curve and Tokyo is predicted to begin a decade-long decline in population. The significant population decline in Tokyo metropolitan area is an inexperienced situation for the people and policy makers. They may be concerned that the population decline would reduce the great merit of spatial agglomeration in Tokyo. The question at the heart of policy discussion is how we can sustain the high level of business productivity and quality of life in the Tokyo metropolitan area by spatial restructuring. This paper has developed the Computable Urban Economic Model, which re-formalizes the conventional landuse-transport interaction model on the basis of microeconomic foundation, so as to answer the above question.

As a result, we found that the central Tokyo remains as the center of the economy in 2050 with high spatial agglomeration since the agglomeration is accelerated by the scale economy. On the other hand, population which is not affected by agglomeration, is decreasing at each zone with the same level.

The investment to the three Ring Roads is expected to contribute to developing more dispersive urban structure since the three Ring Roads increase the transportation convenience at the suburb and it induces to the entry of the firms and population as well. This does not, however, the central Tokyo loses its competitiveness but they still remain strong in terms of the spatial distribution of the firms. The reduction of population mitigates the congestion of the road network. It enables us to increase our convenience in terms of the trip by car. It induces to more trips to the households and business people, which bring about more communication, that is one of the keys for the productivity growth and the enhancement of households’ utility. During this period, traffic density of car increase due to the enhancement of the transport convenience by car.

Metropolitan regions are often key centers of research, education and business services, and tend to have excellent preconditions for innovation and knowledge based sectors. They often have a highly qualified workforce and provide access to specialized resources and inputs for innovation. Consequently these centers are regarded to be important nodes in the knowledge-based economy. However, there is also evidence showing that metropolitan regions may suffer from innovation problems such as missing knowledge linkages between science and business, or a lack of innovation culture. The metropolitan region of Vienna is an interesting case of in this context since its regional innovation system (RIS) is well endowed with knowledge organizations such as universities, specialized schools and research institutes in many fields. It is also a central location for business services, and well connected via a good transport and telecommunication infrastructure within Europe and beyond. Still, Vienna seems to have faced innovation problems in the past such as missing venture capital and weak relations between science and business. The aim of this chapter is to examine whether these past deficiencies of Vienna’s RIS are still characteristic features also of the new knowledge intensive industries such as ICT and biotech that have grown in the last few years in the region.

Over the last two decades, Greece has seen a substantial influx of economic immigrants giving rise to a number of studies examining the social, economic and spatial implications immigration has for the country. In terms of the spatial impact, the observed tendency is immigrants to move primarily into metropolitan areas, which offer employment opportunities and anonymity. However, very little is known with regard to the specific, intra-urban, locations immigrants choose for their residence and the factors that affect such decisions. The current study attempts to shed light on the above issues, analysing the spatial distribution of economic immigrants within the metropolitan area of Athens, their mobility patterns and the resultant metropolitan structure. Our findings indicate a slight preference for central areas, but, over the time, the general dispersion of such immigrants to peripheral locations. On these grounds, spatial segregation, to the formation of clear ethnic enclaves, seems less plausible.