Effects of Globalisation on City Regions

Essay from the year 2005 in the subject Economics - International Economic Relations, grade: 20, University of St Andrews (Department of Economics), language: English, abstract: The debate about the effects of globalisation on cities is controversial. On the onehand, scientists and journalists predicted the end of the city due to technologicalchange, especially in the area of telecommunications implying that an increasednumber of home-workers and the possibilities of video-conferences would makecalm suburbs or rural areas more attractive in comparison to a grid-locked and expensivedowntown area.1 Yet, whenever the abstract idea of globalisation is illustratedin newspapers or TV, it is not a suburb or the green hills of Fife that areshown. Rather, symbols of globalisation like Manhattan or Tokyo look more likeRidley Scotts Nighttown in Bladerunner. In contrast to the prediction of decliningcities, globalisation seems to boost the growth of cities in a way that many scientists influenced by the ideas of Alfred Marshall and Joseph Schumpeter started to writeabout global cities, world-cities or global city-regions. Leamer/Storper calledglobal cities the big winners of the Internet Age.2 But what are exactly the effectsof globalisation on the functions and economy of cities? In order to examine theseeffects, it is useful to address two questions: (1) why do firms choose cities as a locationin general? (section 2.1); and (2) how does globalisation affect this reasoning?(section 2.2). Section 3 summarises the results.