1. © 2011 Pearson Education, Inc. F4/13/12 Clustering of Services (Ch. 12.4 – pp. 394-403)

2. © 2011 Pearson Education, Inc. I. Hierarchy of Business Services –A. Services in World Cities often center of information & capital (money) business services disproportionately concentrated –new technology expected to distribute services more - »esp. telegraph/telephone & RR –did not happen –continue to cluster in world cities - why? 1. Business Services in World Cities –clustering of business services is product of the Industrial Revolution –decision makers do not need to be near factory –continue to locate in world cities - proximity to services –focus on financial services »headquarters for banks, insurance, corporations –support areas also important »lawyers, accountants, advertisers, marketers, fashion

3. © 2011 Pearson Education, Inc. I. Hierarchy of Business Services A. Services in World Cities (cont.) –2. Consumer Services in World Cities often include retail services w/ extensive market areas often disproportionate due to wealthy urban dwellers may include many leisure services –culture - theaters, operas, museums, libraries –entertainment - bars, restaurants, sports »ex: London, NYC, Tokyo –3. Public Services in World Cities often center of national or international political power –ex: London, Tokyo (nat’l); NYC (int’l - U.N.) attract businesses due to gov’t location

4. © 2011 Pearson Education, Inc. I. Hierarchy of Business Services B. Four Levels of Business Services –1. world cities a. Dominant World Cities - London, NYC, Tokyo –all in MDCs - 1 per region –each includes stock exchange b. Major World Cities –Chi, L.A., D.C., - N.A. –Brussels, Frankfurt, Paris, Zurich - Eur. –all but 2 of the 9 are in MDCs - Sao Paulo & Singapore –some corporations have major headquarters c. Secondary World Cities –more even distribution, but still mostly in MDCs

5. 5 © 2011 Pearson Education, Inc. I. Hierarchy of Business Services B. Four Levels of Business Services (cont.) –2. command & control centers –may contain HQs for corporations, banks, business services –often contain educational, medical or public services –3. specialized producer-service centers –more narrow or specialized service –may be related to surrounding industries »ex: Detroit (cars), Pittsburgh (steel), San Jose (computers) –combined gov’t & education - state capital w/ university –4. dependent centers –often include unskilled jobs dependent on W.C. »ex: resorts, retirement, manufacturing, military, mining

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8. © 2011 Pearson Education, Inc. II. Business Services in LDCs A. Offshore Financial Services –often small countries or microstates –Two functions: Taxes - offer low or no taxes –many national gov’ts lose out on possible tax revenue Privacy - bank secrecy laws forbid disclosures –difficult to investigate –often used to “hide” illegal money - drugs, insider trading examples include: –1. British dependencies (Cayman Islands, Anguilla, Gibralter) –2. other European dependencies (Cook Island, Aruba) –3. independent islands (Antigua, Bahamas, Seychelles) –4. independent states (Andorra, Monaco, Belize, Bahrain)

9. © 2011 Pearson Education, Inc. II. Business Services in LDCs B. Back Offices aka business-process outsourcing (BPO) may include routine clerical work & communications used to be located near service often located in LDCs for 2 reasons: –low wages »often make more than local workers in LDC but much less than workers in MDC –Ability to speak English »must be able to communicate w/ customers »certain countries at advantage - India, Philippines, Malaysia due to former U.K. or U.S. colonies often work “off hours” to be in sync w/ high call volume from MDCs

10. © 2011 Pearson Education, Inc. III. Economic Base of Settlements Intro Basic industries - export outside community Nonbasic industries - used inside community these two create economic base of community prosperity of economic base determines size of community –if prospering, it grows to include more nonbasic industries –if not, then smaller community determined by its % compared to whole country/industry

11. © 2011 Pearson Education, Inc. III. Economic Base of Settlements –A. Specialization of Cities in Different Services determine regions by major basic industry each produces unique spatial distribution –see map of U.S. (12-8) in postindustrial society, more services developing (tertiary sector jobs) transformation of cities –esp. former manufacturing cities to service cities –cities need to shift to stay relevant & healthy economically

12. © 2011 Pearson Education, Inc. Economic Base of U.S. Cities Figure 12-28

13. © 2011 Pearson Education, Inc. III. Economic Base of Settlements –B. Distribution of Talent unequal distribution of talent cities differ in distributions cultural & economic factors –Richard Florida found cultural factors as important if not more –focused on several factors to determine talent »talent - college degrees, science/engineer, professionals »cultural diversity - cultural facilities, gays, “coolness” –positive relationship b/w talent & diversity in U.S. cities »D.C., San Francisco, Boston & Seattle at top »Las Vegas near bottom

14. © 2011 Pearson Education, Inc. Geography of Talent Figure 12-29

15. © 2011 Pearson Education, Inc. The End. Up next: Urban Patterns