Informational City

Many cities worldwide face the prospect of major transformation as the world moves toward a global information order. In this new era, urban economies are being radically altered by dynamic processes of economic and spatial restructuring. The result is the creation of informational cities, or their new and more popular name, knowledge cities.

For the last two centuries, social production had been primarily understood and shaped by neoclassical economic thought, which recognized only three factors of production: land, labor, and capital. Knowledge, education, and intellectual capacity were secondary, if not incidental, factors. Human capital was assumed to be either embedded in labor or just one of numerous categories of capital. In the last decades, it has become apparent that knowledge is sufficiently important to deserve recognition as a fourth factor of production. Knowledge and information and the social and technological settings for their production and communication are now seen as keys to development and economic prosperity.

The rise of knowledge-based opportunity has, in many cases, been accompanied by a concomitant decline in traditional industrial activity. The replacement of physical commodity production by more abstract forms of production (e.g., information, ideas, and knowledge) has, however paradoxically, reinforced the importance of central places and led to the formation of knowledge cities.

Knowledge is produced, marketed, and exchanged mainly in cities. Therefore, knowledge cities aim to assist decision makers in making their cities compatible with the knowledge economy and thus able to compete with other cities. Knowledge cities enable their citizens to foster knowledge creation, knowledge exchange, and innovation. They also encourage the continuous creation, sharing, evaluation, renewal, and update of knowledge.

To compete nationally and internationally, cities need knowledge infrastructures (e.g., universities, research and development institutes); a concentration of well-educated people; technological, mainly electronic, infrastructure; and connections to the global economy (e.g., international companies and [Page 393]finance institutions for trade and investment). Moreover, they must possess the people and things necessary for the production of knowledge and, as important, function as breeding grounds for talent and innovation.

The economy of a knowledge city creates high value-added products using research, technology, and brainpower. Private and public sectors value knowledge, spend money on its discovery and dissemination, and, ultimately, harness it to create goods and services. Although many cities call themselves knowledge cities, currently, only a few cities around the world (e.g., Barcelona, Delft, Dublin, Montreal, Munich, and Stockholm) have earned that label. Many other cities aspire to the status of knowledge city through urban development programs that target knowledge-based urban development. Examples include Copenhagen, Dubai, Manchester, Melbourne, Monterrey, Singapore, and Shanghai.