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Introduction: Clash of the centuries?
The emergence of 'world cities', urban areas that are becoming global in character and orientation, is one of the most important phenomena of our time. World cities1 are where much of the money, the knowledge and the decisions that shape the 21st century are generated. Their influence has propelled humanity beyond the inflection point from the 'age of the nation state' and into the 'age of cities'. And yet this new age inherits all the identities, institutions and organising principles of the nation state system. The tensions, trade-offs and opportunities that arise out of this unstable equilibrium are the subject of this book.
World cities confront nation states with a historic opportunity and challenge. These dynamic agglomerations of people, industries and infrastructure have the potential to help a national economy be more globally connected and productive, and to spread multiple benefits across national systems of cities through connectivity, economic specialisation and co-operation. Their activities might increase the connection of their national economy to global systems of trade, investment and talent. They also provide entry points to international markets, and are the spur for entrepreneurship and clustering activity for globally trading firms and sectors. In an increasingly urbanised global economy, world cities help to build the 'business brands' of nations and provide them with reputational advantages.
But world cities also depend on nation states and national governments in order to manage the effects of their global integration. Rapid population growth and diversification, urban restructuring and a surge in international investment can lead to multiple challenges. Inflation, congestion, stretched housing and labour markets, exposed infrastructure deficits, land-use dilemmas, ill-equipped city systems, sensitive environmental weaknesses and social divisions can all be 'side effects' of becoming a world city.
At the same time, national governments want to pay attention to the performance of other cities, towns and rural areas, and many look to address the impact the world city has on how other cities and regions within the nation develop. The world city may be understood in theory to offer competitive advantages and major contributions to fiscal resources, but the most visible effects may be de-population or de-clustering of other cities, or extreme concentrations of business, jobs and investment in one place. These challenges lie at the heart of the relationships and friction between nation states and their world cities, and lead to concerns about whether the 'world city model' is always a good one to adopt. Such apprehensions were very visible during the debate in the UK as to whether to leave the European Union and the subsequent fallout of 'Brexit', but they are also becoming increasingly influential in many other world cities and nation states.
In the current period, some world cities and national governments are beginning to embark upon a range of different forms of negotiation and collaboration around these issues that have major implications for the futures of both. These emerging dialogues and co-operation aim to address the understanding of the world city model and its needs, enhance the complementary roles of multiple cities within a national system, increase or improve governance and investment in the world cities, or develop national policies and platforms that can support different kinds of cities with specific tools and interventions. In this book we explore this new ground by examining the different ways in which world cities and nation states are contributing to each other's shared goals.
Each city's organisational and legal framework is different and complex, and the range of institutional dynamics in the world's major cities has not been compared in this way before. The book draws on the latest practical experience of 12 cities around the world - in Asia, Europe, Latin America and North America - to identify the trends and innovations in relations between central governments, state or provincial governments and their main international gateway city. Drawing upon a mix of local and governmental insight and global expertise, we identify recent innovations and reforms in governance, communication, investment and planning between different tiers of government. The book pinpoints the potential for nation states to leverage their world city to achieve mutually beneficial national outcomes, but it also raises challenges to the world city model that should be the focus of concerted attention.
Urbanisation and globalisation: The age of world cities
History shows that cities tend to embrace international opportunities in waves and cycles (Clark and Moonen, 2013). Which cities take part in a given wave may depend on major geopolitical events, key industries, new technologies, connective infrastructures or the whims of city, mercantile and/or national leaders. What is clear is that today, more cities than ever are participants in the cycle of globalisation that began after 2008-9. Many of them have no prior global experience, while others draw on a legacy of earlier phases of outward-facing trade and engagement; as new sectors emerge and integrate, and as some countries increase or resume their global orientation, new world cities are emerging all the time.
One upshot of 21st century globalisation is that more countries have seen their leading city or group of cities become international commercial and corporate management hubs and visitor destinations, serving large customer and client markets in their wider regions beyond national borders. National policymakers find that these cities fundamentally alter the migration patterns of workers, set new business and service standards and have a major impact on the number and kind of international firms, capital and visitors that a nation attracts.
The previous cycles, in which world cities such as London, New York and Tokyo thrived, hinged on cities playing hub roles in finance, business, media, leisure tourism and commodities. In the current cycle, science, medicine, ICT, cleantech, traded urban services, higher education, design and real estate are now prominent activities for globalising cities. World cities have also become complex visitor economies - not just attracting holidaymakers but also students, researchers, events and congresses. Established and emerging world cities all compete for investors, entrepreneurs and start-ups by focusing on liveability, culture and urban regeneration.
This new cycle of world cities is shaped by a clearer grasp of the mistakes of the past and concerns for the future. The 2008-9 financial crisis exposed the weaknesses of city development approaches that had become over-dependent on one sector - be it financial services, real estate, IT or tourism. Its fall-out has also highlighted the fragile investment profile of many cities as they seek to update and renew their own systems - housing, education and infrastructure. It has also focused attention on cities' environmental and spatial resilience, and how to avoid becoming 'locked in' to an undesirable development path.
This current cycle has also homed in on the growing inequalities within and between cities, which has prompted a tide of pessimistic opinion in many countries opposed to the perceived impacts of the 'world city model'. In many cases, national leadership and public discourse have become more equivocal about whether and how to support major urban centres on their globalisation journey. This cycle of globalisation is therefore unusual because the growing international economic roles of world cities are coinciding with a rise in nationalism, separatism and hostility to immigration (Dowling, 2014; Hashi, 2014; Seib, 2014). These are difficult tensions to resolve.
The future imperatives for world cities
World cities face a number of similar or overlapping challenges that require facilitation and support from national governments. They have little choice but to adapt to increased competition for mobile firms, jobs, people, goods, capital and services (Herrschel, 2014). They face demands to address the externalities that accompany intense demand, such as housing supply constraints, income inequalities and over-burdened infrastructure. Most have to operate in a context of constrained public investment and cuts to intergovernmental transfers and grants. Sub-national public investment declined by up to a fifth within the OECD in the five years after the financial crisis, and evidence from non-OECD countries indicates this drop is even more stark (Allain-Dupre, 2015). Because even world cities have to achieve 'more with less', they have to appeal to alternative sources of international investment, which usually demands that they present a simple and consistent strategy, and assemble a clear pipeline of competitive projects for development. Given these combined imperatives, the leadership of world cities is by no means straightforward.
The distinctive elements of this new cycle of world cities - wide-ranging competition, new industry trends, strategic awareness and conflict between the 'winners' and 'losers' of globalisation - all demand a fresh set of relationships and partnerships with leaders and agencies in national government. Nation states are only...
