While the book is undoubtedly oriented around cities, very little of it is about the structure or sociology of urban places. The bulk of the book is about the global financial markets’ relationship to these cities and it’s packed with statistics — not the most fun read ever. There is some discussion on “softer” topics that were more interesting to me, such as growing inequality due to the change in nature of the financial markets, and, briefly, the effect on urban structure (eg, gentrification). But, while it has interesting points, the weight of the economic stats meant it took me two months to get round to finishing the thing.
Preface to the New Edition
xxii Dominant discourse states cities are declining as important economic units due to global communications and multinationals. Sassen says that the capabilities in global communications and the power of multinationals must be produced. She focuses on this production, shifting the emphasis to “the practices that constitute what we call economic globalisation and global control.”
4 First thesis of the book: “The territorial dispersal of current economic activity creates a need for expanded central control and management.”. ie, cities.
5 Second thesis: Cities are sites of production (of services, markets and financial innovations), not just (as the idea of postindustrialism indicates) sites of management.
7 Third thesis: How does the decline of manufacturing in traditional industrial cities, combined with thesis one affect cities and their relations to each other?
9 What are the social impacts of these changes? (eg, employment and equality).
2: Dispersal and New Forms of Centralization
26 Dismantling of old industrial centres in highly developed countries, end of Fordism. Also new technologies designed to separate low-wage and skill jobs from high, maximising locational options for the company. Use of low-wage labour maximised, effective mechanisms for empowering labour minimised. Dispersal involves not just geography but political and technical reorganisation.
26-8 Trans-nationalisation of organisations through foreign direct investment, mergers and acquisitions, and joint ventures. Manufacturing and its employment internationalised.
28-9 Dispersal of office work: away from expensive head offices, subcontracting to other firms, home working, etc.
29-30 Third area of dispersal: Large corporations entering into retailing consumer services, hotels, cinemas, repair services, retail, etc.
30 Decentralisation of ownership has not accompanied this dispersal.
32-3 Historically, workers in advanced sectors of the economy acquired considerable economic power. But now production is highly dispersed and differentiated, eg electronics production in third world export processing zones.
33 International circulation of capital has contributed to the formation of international labour markets.
3: New Patterns in Foreign Direct Investment
37-43 Trends, eg:
- The rate of increase of developed to developing countries FDI rose during the 1970s, slowed from then on.
- US had been the leading exporter of FDI. By 1981 leading importer and fell behind UK in exports.
- Japanese FDI increasing with relatively little incoming FDI.
- In developed countries, finance and trade are leading recipients of FDI. In developing countries, real estate and chemicals.
- US, UK and Japan account for 50-60% of the global stock of FDI historically.
- Growth in cross-border mergers and acquisitions.
49 By mid 1980s international trade in services was accelerating and surpassing trade in merchandise, suggesting it was now less dependent on merchandise and more connected to things like growth of investment income flows and finance.
63 Developing countries have 240,000 foreign affiliates of companies located in them. Developed countries have 94,600. 9,200 parent companies are in developing countries; almost 50,00 in developed countries.
63 South East Asia has replaced Latin America as main location for FDI by developed countries. Services now account for over half global stock of FDI.
64 A handful of countries account for 70% of global activity in services. Key production sites for extractive or manufacturing activities have often been in less developed countries, while major cities are central locations for finance and professional services.
65-84In 1970s financial activity was dominated by transnational banks controlling the vast surpluses of the oil-exporting countries. In 1980s banks declined and other institutions (and new kinds of financial instruments) dominated. Banks were the key locations in the 1970s, now it’s financial centres (homes of the financial markets).
5: Producer services
93 Traditionally services were not seen as tradable (unlike manufacturing) or storable, were therefore neglected in economics. Changed from the late 1960s.
94 Fuchs: Service work is less alienating than industrial mass production.
98-9 Growth of large firms. Developed specialised services internally. People realised there was a market for these services. Set up firms to offer just these services. Able to offer the services to many firms. Economies of scale. Small firms able to afford to buy in the services.
100 Subcontracting out of services is growing.
104-5 Producer services do not need to be near their buyers. But it can be useful to be near other producer service companies. And large urban centres offer salaries and lifestyles that attract producer services company employees. Agglomeration economies but not necessarily near big firms (the buyers). (Not always true, eg, advertising tends to have many smaller branches to be near clients.)
107 Large firms are able to use external expertise wherever it’s located. SMEs are usually restricted to local providers with more general expertise.
110-111 “the accelerated transformation of debt and assets into highly marketable instruments has made many of the financial markets akin to commodity markets, where the value of the instrument lies in its resale potential; financial markets have become less and less like service markets, where the value of the service lies in its utility to the buyer.”
115-6 Internet backbone capacity is not a good indicator of the importance of a city as an international business centre.
119 Given telecommunications advances and the intangible nature of financial markets’ products, why do firms opt to locate in expensive centres?
120 A: The importance of social connectivity and central functions (to control the increasing amounts of IT).
121 B: Cross-border networks, needed to manage the increasingly complex global financial system.
123-5 Four forms assumed by centrality:
- The CBD.
- A “grid of nodes of intense business activity” over a metropolitan area. “A reconstitution of the concept of region.”
- Transterritorial centre constituted by intense economic transactions in a network of cities. Identifies different levels and importances of networks of cities. [No idea how this is a “centre”.]
- Electronically generated spaces.
6: Global Cities: Postindustrial Production Sites
131 In US, UK, Japan, growth in producer services jobs was higher than growth in total national employment, late 1970s to mid 1990s. Share of producer service jobs in NY, London, Tokyo is 33-100% greater than the share of these industries in national employment.
133 Producer service jobs account for about one third of all private sector workers in NY, London and Tokyo.
140 Producer services have grown rapidly over past decade and more rapidly in these countries as a whole than in these cities.
146 SMEs tend to use local producer services companies while large firms look further afield. SMEs therefore may not get best or cheapest advice. SMEs tend to rely on close, strong ties to identify external advice — a disadvantage to using or having weak ties.
7: Elements of a Global Urban System: Networks and Hierarchies
195 Lifting of restrictions on FDI and deregulating of financial markets means governments play small parts in this area of economic activity. NY, London and Tokyo contain transnational economic spaces for the operation of both domestic and foreign firms.
196 Central NY, London and Tokyo form part of an international property market. Cities like these and Frankfurt, Paris and Hong Kong handle a disproportionate share of international financial transactions.
8: Employment and Earnings
204 New York Employment 3.5m in 1950 and 1960. Fell to 3m by 1977. Back to 3.6m in 1987. Many manufacturing jobs lost, largely replaced by finance and producer services.
205 1m manufacturing jobs in 1950, 387,000 in 1987. Not just due to closing/departing factories: NY lost the headquarters of many Fortune 500 industrial companies.
206 NY lacked the right kind of space: The highway system meant central city location wasn’t as important; international competition; technologies allowing for production in low-wage locations.
209 1950: 1 in 3 jobs in manufacturing, 1 in 7 in services. 1980: Figures reversed.
209-10 London 1960-85, 800,000 manufacturing jobs lost; A stagnant economy for 20 years with steady losses in employment and population; new phase of growth from 1984 based on financial and producer services, with employment in these overtaking manufacturing in 1985.
215 Tokyo Less dramatic manufacturing job losses, less dramatic increase in FIRE. Central Tokyo underwent a big change by mid 1980s - dismantling of old industrial areas, construction of high-rises in CBD, but this structural change is lost in the numbers for Tokyo as a whole.
223 Earnings inequality increased in most OECD countries over recent decades.
226 US: More women and young people in the job market do not account for increase of low-wage jobs - inequality increased within these demographic groups. Similarly, inequality increased within sectors. Technological transformation of the work process has up or downgraded many middle-income jobs, polarising earnings.
227 The growth industries of the 1980s, FIRE, trade, business services, have high shares of low-wage jobs, little unionisation and higher percentages of female and part-time workers.
9: Economic Restructuring as Class and Spatial Polarization
261 “Up to the late 1970s, the notion of gentrification as residential rehabilitation may have been an adequate understanding of the process, but by the early 1980s, it was becoming evident that residential rehabilitation was only one facet of a far broader process linked to the profound transformation in advanced capitalism: the shift to services and the associated transformation of the class structure and the shift toward the privatization of consumption and service provision. Gentrification emerged as a visible spatial component of this transformation. It was evident in the redevelopment of waterfronts, the rise of hotel and convention complexes in central cities, large-scale luxury office and residential developments, and fashionable, high-priced shopping districts.”
263-4 New York Young professionals had a growing preference for urban living since 1980, a key element of gentrification. Even stronger among women.
266-7 Home ownership in NY grew in some areas. High income residents, poor leaving (although a few areas of NY saw declines in household incomes). Housing market share of low-cost rental units fell, high-cost rose (1978-87).
268 Homelessness increased dramatically since 1980.
270 NY has worst income inequality in US.
272 London 1999, average gross weekly earnings of City workers were 78% above British average, and 37% above London average.
284 Tokyo “In brief, the greatest social, economic, and physical decline is not in the central business district but in the areas immediately surrounding it, which were once centers for manufacturing and trading.”
285 (General) High-income gentrification is labour-intensive (renovation of townhouses and storefronts, luxury apartment buildings require maintenance staff), but middle-class suburbs are capital intensive (tract housing, road construction, dependence on cars or trains, reliance on appliances, shopping malls and self-service operations. High-income gentrification creates demand for goods and services that are not mass produced or sold through mass outlets — labour-intensive methods of production. Low-wage, informal, jobs in small firms — low unionisation. Large department stores require mass production, often needing large scale distribution — this facilitates unionisation.
290 It is acknowledged that criminal activities are part of the advanced industrial societies, but informal, casualised work is usually not expected.
295-7 New York Late 1980s survey. 3 patterns of informal economic activity:
- In immigrant communities (both as a source of cheap labour and within the community — cabs, construction, repairs, etc).
- In areas undergoing gentrification — construction, goods and services.
- In emerging manufacturing areas (also eg, car repair shops), often in areas not zoned for manufacturing, serving a citywide market.
300 London 1980s and 1990s — growth in casual, part time and sweated labour. Construction, clothing, retailing, catering, tourism, cleaning. Majority women, but share of men has grown. More than 20% of hotel and catering staff are part time. [Describes Dirty Pretty Things.]
301 30-50% of East End and NE London garment production is home work.
302-5 Tokyo Daily labourers. Yakusa-controlled hiring halls, poverty, all-male, tiny living quarters.
321 (General) Immigrants both provide labour for low-wage jobs that service the expanding highly-specialised service sector and rehabilitate areas that would otherwise become abandoned/derelict. Residential segregation concentrates this small-scale investment of direct labour.
10: A New Urban Regime?
339 Growth in the new industrial complex is based less on the expansion of consumption by a growing middle class (as has been the case in the past), than on exports to the international market and on consumption by governments and organisations, rather than individuals. Key markets are the global markets for capital and services.
340 What happens to accountability when the leading economic sectors are oriented to a world market and to firms rather than individuals? Is the growth of poverty, homelessness, sweatshops, etc linked to growth of industrial complex oriented to a global market and less dependent on local factors? Professionals, managers, brokers have benefited from this new industrial complex and their numbers have grown in all three cities. But there is a class of these who have little control or ownership of the large corporations and investment banks for whom they work. Their alliance to the system leads them to produce far more profit than they get back in their large salaries and bonuses. (The “power elite” earn 10-20 times more.)
341 High income gentrification and associated consumption secures their alliance to an exploitative system. The class is urbanised, unlike previous suburban classes. A new vision of the good life: cuisine, not food; designer labels, not clothes; etc.
342 This numerically small class has caused a notable transformation in cities.
Artists are move into cheap areas and over time give it “value” [a bit vague as to how this happens]. In early 1980s developers bought buildings in NY’s Lower East Side and rented to artists — they’d pay more than current occupiers and make the area more desirable for higher income people.
343 There’s a new class alignment visible in global cities — expansion of a new high-income stratum and growing poverty.
346-7 The global city model is not about “globalisation” and its homogenisation. A global city is where global processes can get activated inside a country with the participation of some of its national actors. It represents the endogenising of key dynamics and conditionalities of the global economy.
350 Doesn’t agree with Castells’ space of flows (as a description of a city) being an alternative to “place”. A city is a place but is also a function of various networks.