4. New technologies and the urban economy The rapid pace of technological advance we have experienced since the Second World War has made powerful impacts on all aspects of our economic life. The resulting efﬁciencies have lowered costs of production and the prices of goods and services, redeﬁned comparative advantage and optimal specialization for all economic entities and increased living standards for most people. But technological changes have also made many skills no longer viable in places where they had been viable for decades if not centuries, they have made individuals and ﬁrms vulnerable to competition for jobs and markets from localities thousands of miles away, and they have made the economic bases of many urban economies increasingly threatened and unsustainable. Globalization may be centered on the reduction of barriers to movements of goods and services and to the opening of these markets as well as that for ﬁnancial services and ﬂows, but it is advances in technology that enable all economic actors to realize the potential that is inherent in these liberalization policies that are enacted by national governments. Market liberalization may make it possible to think of reconceptualizing the economic space within which some activity is done but, for example, it is the advances in communication technology that make it possible for accounting, ﬁnancial analysis, back ofﬁce activities and other services to be outsourced from New York or London and to be done in south India. Obviously this new environment brings many exciting opportunities for...
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