Understanding the global environment

In this post I will refer to the concept of global business cities and how they develop strategies to compete with each other, for the attraction of international capital and consumers. In the first section, I will discuss the concept of globalization and the interlinked ambiguities, while the second section is devoted to the description of the most important features of global business cities and their development strategies.



Interpretations of the globalization

Some historians claim that globalization is not a modern phenomenon, as the human history provides us with many examples of interdependencies between autonomous regions, from the civilizations of Mesopotamia and Egypt, to the recent world empires (e.g. Britain). Nowadays, globalization is perceived as an element of an era when:

a) the national states are no longer able to exercise their economic functions,

b) the international trade is increasing, affecting the movement of people and capital,

c) the use of digital technology is spreading worldwide, and

d) the new production processes create division of labor and social inequalities on a global scale.

There is, therefore, a general definition of globalization with references to a global functional integration through the use of new technologies and telecommunications - so not simply the expansion of economic activities beyond the national borders.

Based on the above definition, which refers to the concepts of the homogeneity of lifestyle and mentality, the systematization of the production process and the codification of transactions, there are some alternative interpretations of contemporary Geography, in the context of the "cultural turn", i.e. a turn towards the concepts of specificity and differentiation (let’s sleep on these terms; I will probably elaborate on these in my next article).



So what causes the globalisation?

Globalization is not a linear mutation of human activity towards a particular model; its dynamics develop through opposing trends:

a) Trade and development of multinational enterprises unify the world and allow the spread of a particular type of labour market and production model.

b) The removal of economic borders between states and the abolition of institutional constraints are opening the way for the development of a global economic community.

c) Migration flows contribute to cultural homogeneity, while allowing cultural peculiarities to emerge and communicate.

d) New technologies, and especially networks, are a quite unique factor in enhancing globalization, as they also enable cultural diversification.

It is therefore perceived that globalization is ambiguous - and as such it is understood and experienced: on one hand, networking in communication and information creates a cosmopolitan experience, and on the other, cyberspace not only does not negate territorialism, but instead it enhances spatial re-concentration of economic activities, creating new inequalities.

The global city is just one of the results of the aforementioned international reassignments.



What is a global city?

The global cities are nodes in the global networks of economy, technology, politics and culture. Not all of them are similar, but they all have a significant economic power in the global system. The concept of a global city is associated to the presence of stock exchange markets, concentration of services and the operation of international political organizations. It is crucial to understand here, that global cities are not always the transformation of traditionally strong industrial cities that are being re-urbanized (like London). Some of them are set up as such from scratch (like Dubai). Finally, key features of global cities are cosmopolitanism and multiculturalism.


Global cities’ strategies

So global cities are urban centres evolving in the context of globalization in a specific way that distinguishes them from other major cities. Their urban development depends not only on economic but also on ideological and cultural factors, and of course on their ability to compete each other in attracting international capital.

These cities are developed and run in terms of a business, outside the conceptual framework of nation-state. Political power, decision-making and urban infrastructure financing are not limited to public institutions and resources, but also involve private agents. Their local government becomes the institutional framework, let’s say, in which the individual actors undertake the construction of the city, as a "business city" – a city that is managed as a business.

- Key feature of their strategy is the modernization of the urban landscape and its promotion to the international audience.

- Another feature is the development of specialized services such as financial services, b2b, IT etc.

- Targeting alternative sources of financing (eg. European development programs, venture capital funds, business angels etc.) is also of major importance.

- Extraversion is another element that business cities actively seek to develop – by this I mean both being literally accessible to the rest of the world (e.g. by building transport and telecommunications infrastructures), and establishing a number of cross-border business and cultural co-operations (e.g. town twinning). Cultural diplomacy is high on the agenda of these extrovert cities and it takes place either within the traditional institutional frameworks (e.g. embassies), or by independent cultural institutions (e.g. institutes exercising cultural diplomacy). Furthermore, I cannot, but observe, the distinct effort of these cities to improve their visibility through the networks of world tourism and through attracting global events.

- Last, but definitely not least, I would like to underline that a common feature of the global cities’ strategies is the open debate among public and private stakeholders, regarding the development and promotion of the concept of the city itself.

In the paragraphs to follow I am going to explain why London is a global city, highlight the key feature of its development strategy and note how its local cultural resources have been turned into comparative advantages in the context of the international competition.

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