1. Key Issue # 3: Business Services & Settlements
EVERY settlement in an MDC provides CONSUMER SERVICES to people in the area & the area surrounding
NOT all settlements of a given size has the same # & types of BUSINESS SERVICES
BUSINESS SERVICES disproportionately CLUSTER in a handful of settlements
Individual settlements specialize in particular BUSINESS SERVICES

2. World Cities
Prior to modern times, virtually all settlements were RURAL
Providers of CONSUMER SERVICES met most of the needs of farmers in village
A handful of urban settlements provided BUSINESS & PUBLIC SERVICES as well as some CONSUMER SERVICES with large market areas

3. Ancient World Cities
WHEN: Urban settlements date from the beginning of documented history in the Middle East & Asia (Fertile Crescent)
Oldest documented Ur (Iraq) 3000 BC
COMPACT, surrounded by a WALL, TEMPLE at center (ziggurat), surrounded by residential areas containing a dense ntwk of narrow winding streets & courtyards
Evidence indicates urban settlements were well planned
Houses arranged in a regular pattern (walls/streets laid out first, public buildings (temples, palaces) in the center, cemeteries beyond the wall. House sizes varied but similarly designed, built around a center courtyard with room for extended family
WHERE: Diffused ? To Egypt, China & South Asia (Indus Valley). Or these may be individual hearths.
Then diffused to the rest of the world

4. Ur, in modern day Iraq, was one of the earliest urban settlements
Ur, in modern day Iraq, was one of the earliest urban settlements. The ziggurat, or stepped temple, was surrounded by a dense network of residences.

5. Athens, Greece
The hilltop site of the Acropolis, t 500 BC, still dominates the skyline of modern Athens. Largest city-state in Greece (100,00) Developed from trading ctrs. Into city-states, offering PUBLIC SERVICES, (govt, military, etc)

6. Athens, Greece
The hilltop site of the Acropolis, dating to about 500 BC, still dominates the skyline of modern Athens.

7. Medieval World Cities After Rome fell came a retreat to rural life
Urban Life began to revive in 11th c.
Feudal lords established new urban settlements
Gave residence charters to establish independent cities in exchange for periodic military service
Urban dwellers (freed from serfdom) began expanding trade
Trade was enhanced by new roads & more use of rivers
14th c. Europe covered by dense ntwk of small market towns serving the needs of particular lords.
Largest Medieval European Urban settlements served as power centers for lords & church leaders, & major market ctrs
Major PUBLIC SERVICES occupied palaces, churches etc. arranged around a central market square
Usually surrounded by walls
Dense & compact within these walls shops/houses were nestled into the side of the walls & large buildings
Before 19th c. world’s largest cities were in Asia, NOT Europe
5 most populous cities: Baghdad, Constantinople, Kyoto, Changan & Hangchow

8. Brugge, Belgium
Brugge was a major port & wool manufacturing center from the 12th c. It is marked by squares (plazas) surrounded by public buildings.

9. Carcassonne, France
Medieval European cities such as Carcassonne, in southwestern France, were often surrounded by walls for protection.

10. Paris
Paris was originally surrounded by walls which were expanded to include new neighborhoods as the city grew.

11. Modern world cities MULTIPURPOSE—
Several emerged where a high % of world’s business is transacted & political power is concentrated
MULTIPURPOSE—
Centers of BUSINESS SERVICES
Stand at the top of Central Place Hierarchy in the provision of CONSUMER SERVICES
Many also serve as PUBLIC-SERVICE centers
New form of transportation & communication were expected to reduce the need for CLUSTERING economic activities in large cities (telegraph, telephone, computer, R.R., trucks)
there has been some decentralization, (manufacturing), but modern inventions have REINFORCED not decreased the primacy of world cities in the global economy

12. Business Services in world cities
CLUSTERING of BUSINESS SERVICES is a product of the Ind. Rev
Factories operated by large corporations formed to minimized the liability to any 1 owner
Board of Dir. (far away) make key decisions RE: what & how much to make, & what to charge
Support staff also far away account for the flow of $ & material to & from the factory (done in offices in cities)
World Cities offer many financial services to these businesses = Centers of Finance
Attract HQ of major banks, insurance co. & specialized financial inst corporations obtain & store funds for expansion
Shares of corporations are bought & sold on the stock exchanges (located in world cities)
Getting the info fast is essential in order to buy & sell shares
Lawyers, accountants, etc. CLUSTER in world cities, provide advice to major corp. & financial Institutions.
Ad. Agencies, marketing firms, etc. concerned w/ style & fashion locate in world cities to help corp. anticipate changes in taste & to help shape those changes
Transp. serv. converge on world cities. (busy harbors & airports) lie at the junction of rail & hwy ntwks

13. Consumer Services Due to size world cities = large MARKET AREAS
Larger # of retailers than even the size would indicate
Disproportionately large # of wealthy people live in world cities
Luxury & highly specialized products are especially likely to be sold here
Leisure services of national significance are especially likely to cluster in world cities, in part b/c they require large thresholds & large ranges & they have so many wealthy patrons
Offer cultural services
Plays, night clubs, restaurants, bars, concerts, operas, museums, libraries, concerts, sporting events

14. Public services
World Cities may be centers of national or international political power.
MOST are capitals: contain mansions/palaces/ national leg./courts/govt. offices/bus./Offices for doing business w/ govt./trade assc./labor unions / prof. org.
EX. NY, Brussels, Paris, London, Tokyo

15. Hierarchy of Business Services
4 levels of cities that play a major role in the provision of producer & other business services
Atop the HIERARCHY are a HANDFUL of world cities that can be subdivided into 3 groups :
Dominant, Major, Secondary
Next major role in global business service economy are REGIONAL COMMAND & CONTROL CENTERS, specialized producer-service centers, & dependent centers
Differences also exist among cities w/in ea. level
Other cities– some with large population– play less important roles in the provision of business services

16. Hierarchy of World Cities
London, New York, and Tokyo are the dominant world cities in the global economy. Other major and secondary world cities play lesser roles.

17. World cities (w.c.) Top of the Hierarchy
Most closely integrated into the global economic system b/c they are the CENTER of the flow of info & capital
BUSINESS SERVICES (law, banking, ins., accntng, & adv.) concentrate disproportionately lrg #s in W.C.
LONDON, NEW YORK, TOKYO
Each is the largest of its region & the world’s most important stock exchanges operate in these three cities
2nd tier= Chicago, LA, Wash DC, Brussels, Frankfurt, Paris, Zurich
Only 2 of the 9 are in LDCs Sao Paulo & Singapore
Major corp. & banks may have their HQ in these world cities vs. London, NY, Tokyo
3rd tier= of secondary world cities
4 in No. Am.: Houston Miami, San Fran., Toronto
5 in W. Europe: Berlin, Madrid, Milan, Rotterdam, Vienna
4 in Latin America: Buenos Aires, Caraa, Mexico City, Rio de Janeiro
1 in Africa: Johannesburg
1 in So. Pac. : Sydney

18. Business Service Cities in the U.S.
Below the world cities in the hierarchy of U.S. cities are command & control centers, specialized producer-service centers, and dependent centers.

19. Command & Control Center (C & C)
2nd level of cities
Contains HQs of many lg corp., well developed banking facilities, & concentrations of other BUSINESS SERVICES (incl. insurance, accounting, advertising, law, & public relations)
Include Educational, medical & public institutions
2 levels of C & C centers can be id’d
regional centers
Atlanta, Baltimore, Boston, Cincinnati, Cleveland, Columbus, Denver, Indianapolis Kansas City, Minneapolis, New Orleans, Philadelphia, Phoenix, Portland, St. Louis & Seattle
sub regional centers
Biloxi, Birmingham, Charlotte, Des Moines, Jackson, Jacksonville, Little Rock, Memphis, Nashville, Oklahoma City, Omaha, Richmond, Salt Lake City, Shreveport, Spokane, & Syracuse

20. Specialized Producer-Service Centers
3rd Level
Offer a more narrow & highly specialized variety of services
One group of these cities specializes in the management & R & D activities related to specific industries (motor vehicles: Detroit; Steel: Pittsburgh; office equipment: Rochester; Semi conductors: San Jose)
Second group, specialize as centers of govt & education, notably state capitals that also have a major universities (Albany, Lansing, Madison)

21. Dependent Centers 4th level
Provide relatively unskilled jobs & dependent on decisions made in the world cities, regional command & control centers & specialized producer-service
4 sub types of dependent ctrs can be id’d in US
Resort, retirement, residential ctrs: Las Vegas, Fort Lauderdale, Orlando, CLUSTERED IN SW
Manufacturing ctrs: Buffalo, Chattanooga, Erie, Rockford, CLUSERD in the old NE manufacturing belt
Industrial & military ctrs: Huntsville, Newport News, &San Diego; CLUSTERED IN S & W
Mining & industrial ctrs: Charleston W Virginia., Duluth, (mining areas)

22. Economic Base of settlements
A Settlement’s distinctive economic structure derives from its
BASIC INDUSTRIES;
export primarily to consumers outside the settlement
NON BASIC INDUSTRIES:
enterprises whose customers live in the same settlement,
essentially CONSUMER SERVICES
Community’s unique collection of basic industries defines its ECONOMIC BASE
Important b/c exporting by the basic industries brings $$ to the local economy, thus stimulating the provision of more non basic CONSUMER SERVICES. >>> attracting new workers who bring their families. >>> adding CONSUMER SERVICES to meet the needs.
THUS a new basic industry stimulates establishment of new Consumer Services (ex. Stores) BUT… a new nonbasic (supermarket) service will not induce construction of a new basic industry

23. Identifying a settlements basic industry
Compute % of community’s workers working in each type of business
Compare it to the % of all workers in the country in that industry
If % is much higher in the local community, then that type of business is a basic economic activity
Classifying a settlements basic industry
Each type of basic activity has a different spatial distribution
Some = high % of workers working in a particular sector that is higher or lower than the national average
(1-mining, 2- manufacturing, 3- service)

24. Specialization of Cities in Different Services
Basic Economic Activity are in business, consumer or public services
Steel- was Cleveland & Pittsburgh now hlth serv
Computing/data processing- San Jose & Boston
Military Activity- Knoxville, Albuquerque, Huntsville
Public services- dispersed around the country b/c areas usually include ST. capital, lg university, or military base.
Consumer service (entertainment/recreation)-Atlantic City, Las Vegas, Reno
Business Services- concentrated in lg metropolitan areas – Chicago, LA, NY, San Francisco
While population of cities in S & W has grown more rapidly recently, cities in the N & E have expanded their BUSINESS SERVICES more rapidly. Once manufacturing ctrs they have moved more aggressively to restructure their economic bases to offset sharp drops in manf. jobs
EX Baltimore was Steel; now medical research center

25. Economic Base of U.S. Cities
Cities that have a high proportion of their labor force engaged in the specified economic activity shown.

26. Business Services in LDCs
Specialize in 2 distinctive types of BUSINESS SERVICES
Small countries (ex. island/microstates): exploit niches in the circulation of global capital by offering offshore financial services
offer 2 important functions in the global circulation of capital
1) low or nonexistent taxes
2) bank secrecy laws
Caymans, Br. Virgin Islands, Isle of Man, Monaco, Belize Panama, Liechtenstein, Andorra, Gibraltar, New Zealand, US Virgin Islands, etc
2. Peripheral regions: Back-office function or Business-Process Outsourcing (BPO)
Incl. processing ins. claims, payroll, transcription, routine clerical, billing inquiries, shipment & claims, technical inquiries related to installation, repair, operation
Select LDC attract these jobs 1) low wages 2) better educated 3) English Fluency. India, Malaysia, Philippines
* considered menial labor in MDC attracts educated in LDC

27. Distribution of Talent & Cultural Diversity
measured by combo of:
the % of people in the city with college degrees,
% employed as scientists or engineers, &
% employed as professionals or technicians.
Cultural Diversity:
3 measures were employed:
1. # of cultural facilities per capita,
2. % of gay men &
3. a “coolness” index (combo’d % of pop. in 20s, # of bars & nightlife places per capita, & # of art galleries per capita)
Not equally distributed among cities
Talented are attracted to the cities w/ the most job op’s. & financial incentive. >>> Clustering of talent in only SOME cities (PATTERN)
Clustering seems to have a > relationship to cultural rather than economic factors
WHY important for a city, b/c they are responsible for promoting economic innovation, likely to start new business & infuse the local economy with fresh Ideas

28. Cities with High Talent Levels
Cities with high levels of talent (measured by
% of scientists, professionals, and college-educated).

29. Cities with High Diversity
Cities with high levels of diversity (measured by cultural facilities, % gay population, and a coolness index).

30. Key Issue #4: Why do Services Cluster Downtown (CDB) Clustering of Services
In the past, services of ALL types clustered in the center of the city, (downtown) CBD
Pattern Change!!
Recently, Services, especially retail, have moved from the CBD to Suburban locations

31. Central Business District (CBD)
Most visibly distinctive area of most cities
Usually old part of town, often original
Compact
(< 1% of the urban land area) containing a lg % of the shops, offices & public institutions)

32. CBD of Charlotte, NC
Charlotte’s CBD is dominated by retail & office buildings (service). Public & semipublic buildings are also in the downtown area.

33. Charlotte, North Carolina

34. Retail Services in the CBD
3 Types: Require accessibility to everyone in the region
Shops with HIGH THRESHOLDS
Dept. stores used to cluster w/in the CBD (100% Corner)
NOW, more likely located in a suburban Mall environment (CBD rent is > & range is <)
Shops with LONG RANGE
Very specialized w/ customers who go infrequently. CBD is central & therefore > preferred to wider area
Expensive stuff: jewelry, fur, designer cloths & cars etc.
Many are moving to malls unless the CBD combo’s entertainment w/ shopping (Staple Ctr, the Block, Harbor Place : Baltimore)
Shops that serve people who work in the center
Lunch shoppers: shoe repair, office supplies, computers, clothing, dry cleaning, photocopying, etc.
NOT moving; Growing
Outside No. Am. CBDs are > likely to have supermarkets, bakeries, butchers, open limited times

35. Patterns of Change
Shops that appeal to nearby office workers are growing in the CBDs
The # of CBD offices require more services &
the # of actual workers has increased
Patrons of CBD shops, then tend more & more to be CBD employees who shop at lunch
So… the total volume of sales in CBD areas has been stable, but the pattern of demand has changed
less dept. stores & more shops that cater to special needs

36. Redevelopment Revival
Cities attempting to revive the CBD & older neighborhoods try promenade style shopping areas
a “mall” style of shopping
Shopping Streets reserved for peds = very common in Europe

37. Business Services & the CBD
Offices CLUSTER in the center for accessibility.
Despite technological advances many businesses still prefer a face to face transaction -trust building
Proximity of Professional Colleagues is important to: law, finance, journalism, banking & advertising
Temporary employment service are also proximity dependent

38. Faneuil Hall, Boston
Faneuil Hall Marketplace was originally built in 1742 and was renovated in the 1970s into a popular retail center.

39. Dublin, Ireland Retail services in Grafton Street, Dublin.
European cities have retained consumer services in the CBD.

40. High Land Costs in the CBD
CBD center’s accessibility = extreme competition for the limited sites available >>> Very High Land Value
Tokyo’s CBD = world’s most expensive land. $125,000 per sq. meter due to severe shortage of “build able” land.
REDEVELOPMENT is changing this
Conversely,
Populations of most U.S. CBD’s averaged a 10% > thruout the 90s & the pace is increasing
Downtown living = attractive to people w/out kids in school (young professionals or empty nesters)
Attracted by the entertainment, restaurants, museums, nightlife clustered downtown & have no need for quality schools

41. 2 distinctive characteristics follow GREATER land costs
CBD land is used more intensively
Creates 3 dimensional character, pushing UP & DOWN
DOWN: Parking, shopping, transportation, wiring, delivery
UP: (Skyscrapers) Shops at ground level, offices, hotels & residences higher
CBD some activities are excluded
High rents & land shortage discourage 2 principal activities manufacturing & residential often replaced by tourism
Many poor people used to live downtown but Push & Pull factors changed that
Pull to the suburbs- lgr homes/yrds/modern schools
Push from the CBC- higher rents & limited space

42. European CBDs Less dominated by Commercial consideration
Retail & office function, low rise buildings, narrow streets
Regulations+efforts to preserve historic core limit vertical growth
Most prominent structures (often Churches/palaces) located in public squares / road junction / hilltops
Renovations cost more $$$$$ than new construction
NO PLACE for new construction if the CENTER location is to be maintained
Rents are MUCH more in European cntrs than in US cntrs

43. London, England
St. Paul’s Cathedral, designed in 1673, dominates the skyline of central London

44. Suburbanization of Businesses
Businesses have moved to the suburbs
WHY?
Manufacturers (2ndary) select peripheral location (land cost is less)
Service (tertiary) providers have moved b/c their customers have moved

45. Suburbanization of retailing
Suburban residential growth >>> CHANGE in traditional retailing patterns
From small neighborhood shops in housing areas & CBD shopping for other product TO suburban shopping (> 5% rate yearly since WWII)
CBD sales stagnated as suburban residence live too far to shop there so, small corner shops have been “zoned” out
Retailing has increasingly concentrated in planned suburban shopping malls (varied sizes) (think Irvine Spectrum/The Block)
Supermarkets replace corner shops
Larger malls contain dept stores & specialty shops
Generous parking (FREE)
Location near key road junction / interchanges for hwys
Some malls are elaborate entertainment centers
Key to a successful large shopping mall is the inclusion of 1 or more ANCHOR stores
Smaller shopping ctrs anchor supermarket or discount stores

46. Retail Centers in Atlanta
Most shopping malls in Atlanta and other cities are in the suburbs.
The ideal location is near an interchange on an interstate highway beltway circling the city.

47. Shopping Center, Syracuse, N.Y.
Suburban shopping mall in Syracuse, N.Y. Retail services in most American cities have moved to suburban malls.

48. Suburbanization of factories & offices
Factories & warehouses have migrated to suburbia for MORE space, CHEAPER land & better truck ACCESS
Modern factories & warehouses demand more land for more efficient operations (single level)
Suburban locations facilitate truck shipments with good access to main hwys & no central city traffic
Industries increasingly receive inputs & distribute products by truck
Offices that don’t require face to face contact are moving to suburbs– cheaper rents, closer to workers (who moved to suburbia)
Low wage workers do have more trouble for lack of public transportation

49. “Daily Urban Systems”
The Commerce Department divided the US into “daily urban systems” with functional ties, especially commuting to the nearest metropolitan area.