Part I

 

 

The Space of Flows

 

 

Space and time are the fundamental, material dimensions of human life.

 

Both space and time are being transformed under the combined effect of the information technology paradigm.

 

And of social forms and processes induced by the current process of historical change.

 

For instance, it appears to be obvious that advanced telecommunications would make location of offices ubiquitous.

 

Thus enabling corporate headquarters to quit expensive, congested, and unpleasant central business districts.

 

Opting instead for custom-made sites in beautiful spots around the world.

 

Advanced Services, Information Flows, and the

Global City

 

The informational/global economy is organized around command and control centers.

 

Able to coordinate, innovate and manage the intertwined activities of networks of firms.

 

Advanced services, including:

 

Finance, insurance, real estate, consulting, legal services, advertising,      design, marketing, public relations, security, information gathering, and management of information systems, but also R&D and scientific innovation

 

Are at the core of all economic processes.

 

Be it in manufacturing, agriculture, energy, or services of different kinds.

 

They all can be reduced to knowledge generation and information flows.

 

As the global economy expands and incorporates new markets it also organizes the production of advanced services required to manage the new units joining the system.

 

And the conditions of their ever-changing linkages.

 

A case in point that illustrates such process is Madrid, relatively a backwater of the global economy until 1986.

 

In that year Spain joined the European Community.

 

Opening up fully to foreign capital investment in the stock exchange markets, banking operations, and in acquisition of companies equity.

 

As well as in real estate.

 

In the 1986-90 period foreign direct investment in Madrid and in Madrid’s stock exchange fueled a period of rapid regional economic growth.

 

Together with a boom in real estate and a fast expansion of employment in business services.

 

The global city phenomenon cannot be reduced to a few urban cores at the top of the hierarchy.

 

It is a process that connects advanced services, producer centers, and markets in a global network.

 

With different intensity and at a different scale depending upon the relative importance of the activities located in each area vis-à-vis the global network.

 

Inside each country, the networking architecture reproduces itself into regional and local centers.

 

So that the whole system becomes interconnected at the global level.

 

Furthermore, globalization stimulates regionalization.

 

In the 1990s, Philip Cooke has shown, on the basis of available evidence.

 

That the growing internationalization of economic activities throughout Europe has made regions more dependent on the activities.

 

Accordingly, regions, under the impulse of their governments and business elites, have restructured themselves to compete in the global economy.

 

And they have established networks of cooperation between regional institutions and between region-based companies.

 

Thus, regions and localities do not disappear, but become integrated in international networks that link up their most dynamic sectors.

 

Thus, in the early 1990s, while business-led explosive urban growth was experienced in cities such as Bangkok, Taipei, Shanghai, Mexico D.F., or Bogota.

 

On the other hand, Madrid, along with New York, London, and Paris, went into a slump.

 

That triggered a sharp downturn in real estate prices and halted new construction.

 

But why must these advanced service systems still be dependent on agglomeration in a few large metropolitan nodes?

 

The combination of spatial dispersal and global integration has created a new strategic role for major cities.

 

Beyond their long history as centers for international trade and banking, these cities now function in four new ways:

 

First, as highly concentrated command points in the organization of the world economy.

 

Second, as key locations for finance and for specialized service firms.

 

Third, as sites of production, including the production of innovations in these leading industries.

 

And fourth, as markets for the products and innovations produced.

 

These cities, or rather, their business districts, are information-based, value production complexes.

 

Where corporate headquarters and advanced financial firms can find both suppliers and the highly skilled, specialized labor they require.

 

The New Industrial Space

 

The advent of high-technology manufacturing, namely microelectronics-based, computer-aided manufacturing, ushered in a new logic of industrial location.

 

Roughly speaking, both for microelectronics and computers.

 

Four different types of location were sought for each one of the four distinctive operations in the production process:

 

a)                 R&D, innovation, and prototype fabrication were concentrated in highly innovative industrial centers in core areas. Generally with good quality of life before their development process degraded the environment to some extent.

 

b)                 Skilled fabrication in branch plants, generally in newly industrializing areas in the home country. Which in the case of the US generally meant in medium-sized towns in the Western states.

           

c)                 Semi-skilled, large-scale assembly and testing work that from the very beginning was located offshore in a substantial proportion.

Particularly in South East Asia, with Singapore and Malaysia pioneering the movement of attracting factories of American electronics corporations.

 

            d)            Customization of devices and aftersales maintenance and technical                         support, which was organized in regional centers throughout the

globe.            Generally in the area of major electronics markets, originally in America and Western Europe, although in the 1990s the Asian     markets rose to equal status.

 

High-technology-led industrial milieux of innovation, which we called “technopoles,” come in a variety of urban formats.

 

Most notably, it is clear that in most countries, with the important exceptions of the United States and, to some extent Germany.

 

The leading technopoles are in fact contained in the leading metropolitan areas.

 

Tokyo, Paris-Sud, London-M4 Corridor, Milan, Seoul-Inchon, Moscow-Zelenograd

 

And at a considerable distance Nice-Sophia Antipolis, Taipei-Hsinchu, Singapore, Shanghai, Sao Paulo, and Barcelona.

 

Some of the most important innovation centers of information-technology manufacturing are indeed new.

 

Particularly in the World’s technological leader, the United States.

 

Silicon Valley, Boston’s Route 128, the Southern California Technopole, North Carolina's Research Triangle, Seattle and Austin, among others.

 

Were by and large linked to the latest wave of information-technology-based industrialization.

 

Their development resulted from the clustering of specific varieties of the usual factors of production.

 

Capital, labor, and raw material.

 

Brought together by some kind of institutional entrepreneur, and constituted by a particular form of social organization.

 

Their raw material was made up of new knowledge, related to strategically important fields of application produced by major centers of innovation.

 

Such as Stanford University, CalTech, or MIT schools of engineering research teams, and the networks built around them.

 

Their labor, distinct from the knowledge factor, required the concentration of a large number of highly skilled scientists and engineers.

 

From a variety of locally based schools.

 

Everyday Life in the Electronic Cottage: The End

Of Cities?

 

The development of electronic communication and the information systems allows for an increasing disassociation between spatial proximity.

 

And the performance of everyday life’s functions.

 

Work, shopping, entertainment, healthcare, education, public services, governance, and the like.

 

A dramatic increase of teleworking is the most usual assumption about the impact of information technology on cities.

 

And the last hope for metropolitan transportation planners before surrendering to the inevitability of the mega-gridlock.

 

In the United States the highest estimates evaluated in 1991 aoubt 5.5 million home-based telecommuters.

 

But of this total only 16% telecommuted 35 hours or more per week, 25% telecommuted less than one day a week.

 

With two days a week being the most common pattern.

 

The Transformation of Urban Form: The

Informational City

 

The information age is ushering in a new urban form, the informational city.

 

Because of the nature of the new society.

 

Based upon knowledge.

 

Organized around networks.

 

And partly made up of flows.

 

The informational city is not a form but a process.

 

A process characterized by the structural domination of the space of flows.

 

Third millennium urbanization: megacities

 

The new global economy and the emerging informational society have indeed a new spatial form, which develops in a variety of social and geographical contexts.

 

Megacities.

 

Megacities are, certainly, very large agglomerations of human beings.

 

All of them (13 in the United Nations classification) with over 10 million people in 1992.

 

And four of them projected to be well over 20 million in 2010.

 

But, size is not their defining quality.

 

They are the nodes of the global economy.

 

Concentrating the directional, productive, and managerial upper functions all over the planet.

 

They control of the media, The real politics of power.

 

And the symbolic capacity to create and diffuse messages.

 

They have names, most of them alien to the still dominant European/North American cultural matrix.

 

Tokyo, Sao Paulo, New York, Ciudad de Mexico, Shanghai, Bombay, Los Angeles, Buenos Aires, Seoul, Beijing, Rio de Janeiro, Calcutta, and Osaka.

 

In addition, Moscow, Jakarta, Cairo, New Delhi, London, Paris, Lagos, Dacca, Karachi, Tianjin, and possibly others, are in fact members of the club.

 

Megacities cannot be seen only in terms of their size, but as a function of their gravitational power toward major regions of the world.

 

Thus, Hong Kong is not just its six million people, and Guangzhou is not just its six and a half million people.

 

What is emerging is a megacity of 40 to 50 million people.

 

Connecting Hong King, Shenzhen, Guangzhou, Zhuhai, Macau, and small towns in the Pearl River Delta.

 

Megacities articulate the global economy, link up the informational networks, and concentrate the world’s power.

 

Megacities concentrate the best and the worst.

 

From the innovators and the powers that be to their structurally irrelevant people.

 

Ready to sell their irrelevance or to make “the others” pay for it.

 

Yet what is most significant about megacities is that they are connected externally to global networks and to segments to their own countries.

 

While internally disconnecting local populations that are either functionally unnecessary or socially disruptive.

 

At the heart of such staggering metropolitan development are three interlinked phenomena:

 

1.                  The economic transformation of China, and its link-up to the global economy with Hong Kong being one of the nodal points in such connection.  Thus, in 1981-91, Guandong province’s GDP grew at 12.8% per year in real terms.  Hong Kong-based investors accounted at the end of 1993 for US$40 billion invested in China, representing two-thirds of total foreign investment.

 

At the same time, China was also the largest foreign investor in Hong Kong, with about US$25 billion a year (compared with Japan’s US$12.7 billion).  The management of these capital flows was dependent upon the business transactions operated in, and inbetween, the various units of this metropolitan system. 

 

Thus, Guanghzou was the actual connecting point between Hong Kong business and the governments and enterprises not only of Guandong province but of inland China.

 

2.                  The restructuring of Hong Kong’s economic basis in the 1990s led to a dramatic shrinkage of Hong Kong’s traditional manufacturing basis, to be replaced by employment in advanced services.  Thus, manufacturing workers in Hong Kong decreased from 837,000 in 1988 to 484,000 in 1993, while employees in trading and business sectors increased, in the same period, from 947,000 to 1.3 million.  Hong King developed its functions as a global business.

 

3.                  However, Hong Kong’s manufacturing exports capacity did not fade away.

It simply modified its industrial organization and its spatial location.  In about ten years, between the mid-1980s and the mid-1990s, Hong Kong’s industrialists induced one of the largest-scale processes of industrialization in human history in the small towns of the Pearl River Delta.

 

By the end of 1992, Hong Kong investors, often using family and village connections, had established in the Pearl River Delta 10,000 joint ventures and 20,000 processing factories, in which were working about 6 million workers, depending upon various estimates. Much of this population, housed in company dormitories in semi-rural locations, came from surrounding provinces beyond the borders of Guandong.

 

This gigantic industrial system was being managed on a daily basis from a multilayered managerial structure, based in Hong Kong, regularly traveling to Guangzhou, with production runs being supervised by local managers throughout the rural area.

 

Materials, technology, and mangers were being sent from Hong Kong and Shenzhen, and manufactured goods were generally exported from Hong Kong (actually surpassing the value of Hong Kong-made exports), although the building of new container ports in Yiantian and Gaolan aimed at diversifying export sites.

 

This accelerated process of export-oriented industrialization and business linkages between China and the global economy led to an unprecedented urban explosion.

 

Shenzhen Special Economic Zone, on the Hong Kong border, grew from zero to 1.5 million inhabitants between 1982 and 1995.

 

 

 

 

 

 

 

 

 

 

Bibliography

 

Castells, Manuel.  The Information Age; Economy, Society and Culture, Vol. 1:

            The Rise of the Network Society.  Blackwell Publishers: New York, 1996:

            376-408.