Global Cities

Global cities are the command and control centers of the world economy, the sites of vast complexes of skilled, high value-added activities with globespanning consequences. At the top of the international urban hierarchy, this handful of large specialized metropolises are simultaneously centers of creative innovation, news, fashion, and culture industries; metropoles for raising and managing investment capital; centers of specialized expertise in producer services such as advertising and marketing, legal services, accounting, and computer services; and the management, planning, and control centers for corporations and nongovernmental organizations that operate with increasing ease over the entire planet. The stereotypical global cities include the famous trio of New York, London, and Tokyo. To a lesser extent, they include cities such as Paris, Frankfurt, Toronto, Miami, San Francisco, Osaka, Hong Kong, Los Angeles, and Singapore. All of these lie at the core of a worldwide chain of value-added linkages that have steadily fostered a pronounced concentration of strategic headquarter functions in a few conglomerations and a persistent dispersal of unskilled functions to the world's periphery. This process reinforces the long-standing transition of employment in such regions from low-wage, low value-added, blue-collar occupations to high-wage, high value-added, white-collar employment. In short, global cities shape the world economy as much as they are shaped by it.

In one sense, global cities are as old as capitalism itself: Amsterdam, for example, played a key role in the 16th-century world economy. The current hegemonic position of these centers in the international economy may be interpreted as an outcome of the post-Fordist global division of labor that emerged during the 1970s, which was marked by the collapse of the Bretton–Woods agreement in 1971 and the shift to floating currency exchange rates; the oil crises of 1974 and 1979 and associated growth of Third World debt; the deindustrialization of much of Europe and North America and the concomitant rise of the East Asian newly industrializing countries; the steady growth of multinational corporations and their ability to shift vast resources across national boundaries; technological changes unleashed by the microelectronics revolution; the global wave of deregulation, privatization, and the lifting of government controls, all of which reflect the hegemony of neoliberalism worldwide; the integration of world financial markets through telecommunications systems; and the initiation of new trade agreements and trade blocs and agreements that accelerated the freedom of capital to transcend national borders. These changes produced a highly volatile, deregulated, globalized form[Page 195] of capitalism that greatly accentuated the position of global cities in the world space economy.

The strategic position of global cities is closely bound up with the ability to move vast quantities of money and information rapidly. Financial firms use an extensive worldwide web of electronic funds transfer networks that form the nervous system of the international economy, allowing them to move capital around at a moment's notice, arbitrage interest rate differentials, take advantage of favorable exchange rates, and avoid political unrest. Such networks create an ability to move money—by some estimates, more than $3 trillion daily—around the globe at the speed of light; subject to the process of digitization, information and capital became two sides of the same coin. A global web of fiberoptics lines firmly links New York securities traders to their counterparts in London and elsewhere, allowing money to be switched in enormous volumes. The volatility of trading, particularly in stocks, has also increased as hair-trigger computer trading programs allow fortunes to be made (and lost) by staying microseconds ahead of (or behind) other markets.

...