Issues in the Developed World
Edited by H. S. Geyer
Chapter 3: Large Urban Economies: The Role of Knowledge and ICT Infrastructure
P. van Hemert, M. van Geenhuizen and P. Nijkamp Introduction The modern age of globalization not only means increasing openness (in terms of imports, exports and trade of goods, services, foreign direct investment (FDI), capital and information) among the nations of our world, but also an intensification of interaction between players and stakeholders at the international level. Regions (both national and urbanized) are increasingly influenced by global forces. This holds not only for Europe and North America, but also for Asia and Africa. Globalization leads to a new force with a new division of power and economic progress at all geographical levels. It is often argued that globalization forces and the benefits associated with them tend to be concentrated in the richest metropolitan regions of the world (OECD, 2006a). For example, metropolitan areas act as magnets of FDI, but the type of FDI motivation and the type of economic activity concerned may be very different. Thus cities in developing economies are attractive mainly for reasons of cheap labour, availability of cheap raw materials in adjacent regions, and market penetration. Cities in the developed world attract FDI because they are centres of knowledge but also because they are strong markets (distribution–logistic nodes). This broad pattern reflects major traits of the traditional global division of labour, but the division seems to be changing. For example, some cities in Eastern Europe and Asia, traditionally attractive as centres of cheap labour supply, are increasingly attracting activities requiring high levels of knowledge. The city...
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