Presentation on theme: "Key Issue # 3: Business Services & Settlements"— Presentation transcript:
1 Key Issue # 3: Business Services & Settlements EVERY settlement in an MDC provides CONSUMER SERVICES to people in the area & the area surroundingNOT all settlements of a given size has the same # & types of BUSINESS SERVICESBUSINESS SERVICES disproportionately CLUSTER in a handful of settlementsIndividual settlements specialize in particular BUSINESS SERVICES
2 World CitiesPrior to modern times, virtually all settlements were RURALProviders of CONSUMER SERVICES met most of the needs of farmers in villageA handful of urban settlements provided BUSINESS & PUBLIC SERVICES as well as some CONSUMER SERVICES with large market areas
3 Ancient World CitiesWHEN: Urban settlements date from the beginning of documented history in the Middle East & Asia (Fertile Crescent)Oldest documented Ur (Iraq) 3000 BCCOMPACT, surrounded by a WALL, TEMPLE at center (ziggurat), surrounded by residential areas containing a dense ntwk of narrow winding streets & courtyardsEvidence indicates urban settlements were well plannedHouses 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 familyWHERE: 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, GreeceThe 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, GreeceThe 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 settlementsGave residence charters to establish independent cities in exchange for periodic military serviceUrban dwellers (freed from serfdom) began expanding tradeTrade was enhanced by new roads & more use of rivers14th 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 ctrsMajor PUBLIC SERVICES occupied palaces, churches etc. arranged around a central market squareUsually surrounded by wallsDense & compact within these walls shops/houses were nestled into the side of the walls & large buildingsBefore 19th c. world’s largest cities were in Asia, NOT Europe5 most populous cities: Baghdad, Constantinople, Kyoto, Changan & Hangchow
8 Brugge, BelgiumBrugge was a major port & wool manufacturing center from the 12th c. It is marked by squares (plazas) surrounded by public buildings.
9 Carcassonne, FranceMedieval European cities such as Carcassonne, in southwestern France, were often surrounded by walls for protection.
10 ParisParis 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 concentratedMULTIPURPOSE—Centers of BUSINESS SERVICESStand at the top of Central Place Hierarchy in the provision of CONSUMER SERVICESMany also serve as PUBLIC-SERVICE centersNew 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. RevFactories operated by large corporations formed to minimized the liability to any 1 ownerBoard of Dir. (far away) make key decisions RE: what & how much to make, & what to chargeSupport 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 FinanceAttract HQ of major banks, insurance co. & specialized financial inst corporations obtain & store funds for expansionShares of corporations are bought & sold on the stock exchanges (located in world cities)Getting the info fast is essential in order to buy & sell sharesLawyers, 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 changesTransp. 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 indicateDisproportionately large # of wealthy people live in world citiesLuxury & highly specialized products are especially likely to be sold hereLeisure 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 patronsOffer cultural servicesPlays, night clubs, restaurants, bars, concerts, operas, museums, libraries, concerts, sporting events
14 Public servicesWorld 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 servicesAtop the HIERARCHY are a HANDFUL of world cities that can be subdivided into 3 groups :Dominant, Major, SecondaryNext major role in global business service economy are REGIONAL COMMAND & CONTROL CENTERS, specialized producer-service centers, & dependent centersDifferences also exist among cities w/in ea. levelOther 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 & capitalBUSINESS SERVICES (law, banking, ins., accntng, & adv.) concentrate disproportionately lrg #s in W.C.LONDON, NEW YORK, TOKYOEach is the largest of its region & the world’s most important stock exchanges operate in these three cities2nd tier= Chicago, LA, Wash DC, Brussels, Frankfurt, Paris, ZurichOnly 2 of the 9 are in LDCs Sao Paulo & SingaporeMajor corp. & banks may have their HQ in these world cities vs. London, NY, Tokyo3rd tier= of secondary world cities4 in No. Am.: Houston Miami, San Fran., Toronto5 in W. Europe: Berlin, Madrid, Milan, Rotterdam, Vienna4 in Latin America: Buenos Aires, Caraa, Mexico City, Rio de Janeiro1 in Africa: Johannesburg1 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 citiesContains 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 institutions2 levels of C & C centers can be id’dregional centersAtlanta, Baltimore, Boston, Cincinnati, Cleveland, Columbus, Denver, Indianapolis Kansas City, Minneapolis, New Orleans, Philadelphia, Phoenix, Portland, St. Louis & Seattlesub regional centersBiloxi, 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 LevelOffer a more narrow & highly specialized variety of servicesOne 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-service4 sub types of dependent ctrs can be id’d in USResort, retirement, residential ctrs: Las Vegas, Fort Lauderdale, Orlando, CLUSTERED IN SWManufacturing ctrs: Buffalo, Chattanooga, Erie, Rockford, CLUSERD in the old NE manufacturing beltIndustrial & military ctrs: Huntsville, Newport News, &San Diego; CLUSTERED IN S & WMining & industrial ctrs: Charleston W Virginia., Duluth, (mining areas)
22 Economic Base of settlements A Settlement’s distinctive economic structure derives from itsBASIC INDUSTRIES;export primarily to consumers outside the settlementNON BASIC INDUSTRIES:enterprises whose customers live in the same settlement,essentially CONSUMER SERVICESCommunity’s unique collection of basic industries defines its ECONOMIC BASEImportant 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 businessCompare it to the % of all workers in the country in that industryIf % is much higher in the local community, then that type of business is a basic economic activityClassifying a settlements basic industryEach type of basic activity has a different spatial distributionSome = 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 servicesSteel- was Cleveland & Pittsburgh now hlth servComputing/data processing- San Jose & BostonMilitary Activity- Knoxville, Albuquerque, HuntsvillePublic 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, RenoBusiness Services- concentrated in lg metropolitan areas – Chicago, LA, NY, San FranciscoWhile 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. jobsEX 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 SERVICESSmall countries (ex. island/microstates): exploit niches in the circulation of global capital by offering offshore financial servicesoffer 2 important functions in the global circulation of capital1) low or nonexistent taxes2) bank secrecy lawsCaymans, Br. Virgin Islands, Isle of Man, Monaco, Belize Panama, Liechtenstein, Andorra, Gibraltar, New Zealand, US Virgin Islands, etc2. 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, operationSelect 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 citiesTalented 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 factorsWHY 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) CBDPattern Change!!Recently, Services, especially retail, have moved from the CBD to Suburban locations
31 Central Business District (CBD) Most visibly distinctive area of most citiesUsually old part of town, often originalCompact(< 1% of the urban land area) containing a lg % of the shops, offices & public institutions)
32 CBD of Charlotte, NCCharlotte’s CBD is dominated by retail & office buildings (service). Public & semipublic buildings are also in the downtown area.
34 Retail Services in the CBD 3 Types: Require accessibility to everyone in the regionShops with HIGH THRESHOLDSDept. 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 RANGEVery specialized w/ customers who go infrequently. CBD is central & therefore > preferred to wider areaExpensive 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 centerLunch shoppers: shoe repair, office supplies, computers, clothing, dry cleaning, photocopying, etc.NOT moving; GrowingOutside No. Am. CBDs are > likely to have supermarkets, bakeries, butchers, open limited times
35 Patterns of ChangeShops that appeal to nearby office workers are growing in the CBDsThe # of CBD offices require more services &the # of actual workers has increasedPatrons of CBD shops, then tend more & more to be CBD employees who shop at lunchSo… the total volume of sales in CBD areas has been stable, but the pattern of demand has changedless dept. stores & more shops that cater to special needs
36 Redevelopment Revival Cities attempting to revive the CBD & older neighborhoods try promenade style shopping areasa “mall” style of shoppingShopping 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 buildingProximity of Professional Colleagues is important to: law, finance, journalism, banking & advertisingTemporary employment service are also proximity dependent
38 Faneuil Hall, BostonFaneuil 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 ValueTokyo’s CBD = world’s most expensive land. $125,000 per sq. meter due to severe shortage of “build able” land.REDEVELOPMENT is changing thisConversely,Populations of most U.S. CBD’s averaged a 10% > thruout the 90s & the pace is increasingDowntown 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 intensivelyCreates 3 dimensional character, pushing UP & DOWNDOWN: Parking, shopping, transportation, wiring, deliveryUP: (Skyscrapers) Shops at ground level, offices, hotels & residences higherCBD some activities are excludedHigh rents & land shortage discourage 2 principal activities manufacturing & residential often replaced by tourismMany poor people used to live downtown but Push & Pull factors changed thatPull to the suburbs- lgr homes/yrds/modern schoolsPush from the CBC- higher rents & limited space
42 European CBDs Less dominated by Commercial consideration Retail & office function, low rise buildings, narrow streetsRegulations+efforts to preserve historic core limit vertical growthMost prominent structures (often Churches/palaces) located in public squares / road junction / hilltopsRenovations cost more $$$$$ than new constructionNO PLACE for new construction if the CENTER location is to be maintainedRents are MUCH more in European cntrs than in US cntrs
43 London, EnglandSt. Paul’s Cathedral, designed in 1673, dominates the skyline of central London
44 Suburbanization of Businesses Businesses have moved to the suburbsWHY?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 patternsFrom 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” outRetailing has increasingly concentrated in planned suburban shopping malls (varied sizes) (think Irvine Spectrum/The Block)Supermarkets replace corner shopsLarger malls contain dept stores & specialty shopsGenerous parking (FREE)Location near key road junction / interchanges for hwysSome malls are elaborate entertainment centersKey to a successful large shopping mall is the inclusion of 1 or more ANCHOR storesSmaller 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 ACCESSModern 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 trafficIndustries increasingly receive inputs & distribute products by truckOffices 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.