Metropolitan economy
Encyclopedia
A metropolitan economy refers to the cohesive, naturally evolving concentration of industries, commerce
, markets, firms, housing
, human capital
, infrastructure
and other economic elements that are comprised in a particular metropolitan area
. Rather than the definition of distinct urban
and suburban economies that evolve and function independently, a metropolitan economy encompasses all interdependent jurisdictions of particular regional clusters. This type of economy has all its units functioning together in a trans-boundary landscape that often crosses city, county, state, province, and even national lines. Metropolitan economies expand from the parochial view taken in urban economics
which focuses entirely on a city’s spatial structure, and broadens it into a metropolitan’s spatial and social/economic structure.
In the latest evolution of global economic restructuring
, metropolitan economies have become as experts at the Brookings Institution
Metropolitan Policy Program assert, “the engines of the New Economy
.” Globalization
has essentially reconfigured localities, placing value on the unique, innovative assets that have been historically formed and attuned to the local area. Embodied within metropolitan economies is what Saskia Sassen
describes as the global city
but branches out to include the central business district
and its satellites. The accelerated advancement of transportation and communications, particularly with capital flight
, outsourcing
, and supply chain
logistics
, has virtually removed factor endowment
s and comparative advantage
concepts. In its wake, metropolitan economies are competing globally in specialized sectors and fields tailored to their regional clusters, a term coined by Harvard Professor Michael Porter
(i.e., information technology
in greater San Francisco; leather shoe and apparel textiles industry in Florence, Italy; digital media
and electronics
in Seoul, South Korea).
More and more developed nations are becoming defined and fueled by their local, metropolitan economies. Before, analysis focused on what happens inside companies, how inputs of labor and capital
are used for productivity
of output
. Now, what happens outside companies in the immediate business environment is just as important. With global competition in innovation
of processes and products, the clustering of knowledge (such as the research community), consulting firms, skilled laborers, financial institutions, legal services, government entities, and specialized technology industries have become vitally important. Such agglomeration and diversity, unique to a metro, catalyzes growth. Additionally, auxiliary industries in local services and trades evolve in such metropolitan areas, such as the production of wind turbines in the automotive industry
of the greater Detroit and Cleveland areas. Cultural ambience even emerges with the area’s quality of place and historical heritage in the form of the arts (art galleries, music halls, publishing houses), non-profit venues (museums, performing arts
theaters), and public assets (libraries, parks).
s, provinces, and regions and embracing a network of integrated metropolitan economies. Hence, metros must become a recognized actor among the usual federal-state-local apparatus. Additionally, government departments and ministries must acknowledge the interplay of arenas such as the inflexible tandem of housing and transportation as well as energy and the environment. Coordinated efforts across agencies and programs must take place to ensure best performance outcomes and high efficiency. Even more, management must change from prescriptive, formulaic, hierarchical leadership to more nimble, networked, and compact collaborations. These organizational reforms would influence a host of policies including among others transportation infrastructure, housing
systems, employment
hubs, energy
standards, green spaces, and environmental protection
.
For instance, the incorporation of metropolitan planning organizations (MPOs) in US DOT programs and emergence of metropolitan governments worldwide are evidence of the impact of metropolitan economies. Other concrete examples include: building the Washington DC metrorail
system that required coordinated agreement between the district, Virginia
, and Maryland
environs; likewise, high-speed rail in Spain
which connects virtually every large metro in the country. Chicago
’s Plan for Transformation in overhauling the city’s public housing
stock has to work together with local stakeholders on lease agreements, land use
, economic development
, and local taxes. The Triangle Area’s high tech life sciences research hub, the Research Triangle Park
, continually works together with surrounding research universities in Durham
, Raleigh, and Chapel Hill
. Denver’s expanded metropolitan transportation system needed a surrounding mayor caucus for joint efforts. The Hong Kong
Airport and Shenzhen
Airport dual services link that aim to capitalize on “the synergy of their complimentary flight networks” required agreement between Hong Kong
and China
. The Channel Tunnel
, an undersea rail tunnel under the English Channel
, required cooperation and financing between the French
and Britain
governments. The Port of Rio de Janeiro
serves the city and surrounding states in Brazil
. All these partnered, comprehensive initiatives are crucial in metropolitan economies.
Commerce
While business refers to the value-creating activities of an organization for profit, commerce means the whole system of an economy that constitutes an environment for business. The system includes legal, economic, political, social, cultural, and technological systems that are in operation in any...
, markets, firms, housing
House
A house is a building or structure that has the ability to be occupied for dwelling by human beings or other creatures. The term house includes many kinds of different dwellings ranging from rudimentary huts of nomadic tribes to free standing individual structures...
, human capital
Human capital
Human capitalis the stock of competencies, knowledge and personality attributes embodied in the ability to perform labor so as to produce economic value. It is the attributes gained by a worker through education and experience...
, infrastructure
Infrastructure
Infrastructure is basic physical and organizational structures needed for the operation of a society or enterprise, or the services and facilities necessary for an economy to function...
and other economic elements that are comprised in a particular metropolitan area
Metropolitan area
The term metropolitan area refers to a region consisting of a densely populated urban core and its less-populated surrounding territories, sharing industry, infrastructure, and housing. A metropolitan area usually encompasses multiple jurisdictions and municipalities: neighborhoods, townships,...
. Rather than the definition of distinct urban
Urban area
An urban area is characterized by higher population density and vast human features in comparison to areas surrounding it. Urban areas may be cities, towns or conurbations, but the term is not commonly extended to rural settlements such as villages and hamlets.Urban areas are created and further...
and suburban economies that evolve and function independently, a metropolitan economy encompasses all interdependent jurisdictions of particular regional clusters. This type of economy has all its units functioning together in a trans-boundary landscape that often crosses city, county, state, province, and even national lines. Metropolitan economies expand from the parochial view taken in urban economics
Urban economics
Urban economics is broadly the economic study of urban areas; as such, it involves using the tools of economics to analyze urban issues such as crime, education, public transit, housing, and local government finance...
which focuses entirely on a city’s spatial structure, and broadens it into a metropolitan’s spatial and social/economic structure.
Development
]In the latest evolution of global economic restructuring
Economic restructuring
Economic restructuring refers to the phenomenon of Western urban areas shifting from a manufacturing to a service sector economic base. This transformation has affected demographics including income distribution, employment, and social hierarchy; institutional arrangements including the growth of...
, metropolitan economies have become as experts at the Brookings Institution
Brookings Institution
The Brookings Institution is a nonprofit public policy organization based in Washington, D.C., in the United States. One of Washington's oldest think tanks, Brookings conducts research and education in the social sciences, primarily in economics, metropolitan policy, governance, foreign policy, and...
Metropolitan Policy Program assert, “the engines of the New Economy
New Economy
The New Economy is a term to describe the result of the transition from a manufacturing-based economy to a service-based economy. This particular use of the term was popular during the Dot-com bubble of the late 1990s...
.” Globalization
Globalization
Globalization refers to the increasingly global relationships of culture, people and economic activity. Most often, it refers to economics: the global distribution of the production of goods and services, through reduction of barriers to international trade such as tariffs, export fees, and import...
has essentially reconfigured localities, placing value on the unique, innovative assets that have been historically formed and attuned to the local area. Embodied within metropolitan economies is what Saskia Sassen
Saskia Sassen
Saskia Sassen is a Dutch sociologist noted for her analyses of globalization and international human migration. She is currently Robert S. Lynd Professor of Sociology at Columbia University and Centennial visiting Professor at the London School of Economics. Sassen coined the term global city...
describes as the global city
Global city
A global city is a city that is deemed to be an important node in the global economic system...
but branches out to include the central business district
Central business district
A central business district is the commercial and often geographic heart of a city. In North America this part of a city is commonly referred to as "downtown" or "city center"...
and its satellites. The accelerated advancement of transportation and communications, particularly with capital flight
Capital flight
Capital flight, in economics, occurs when assets and/or money rapidly flow out of a country, due to an economic event and that disturbs investors and causes them to lower their valuation of the assets in that country, or otherwise to lose confidence in its economic...
, outsourcing
Outsourcing
Outsourcing is the process of contracting a business function to someone else.-Overview:The term outsourcing is used inconsistently but usually involves the contracting out of a business function - commonly one previously performed in-house - to an external provider...
, and supply chain
Supply chain
A supply chain is a system of organizations, people, technology, activities, information and resources involved in moving a product or service from supplier to customer. Supply chain activities transform natural resources, raw materials and components into a finished product that is delivered to...
logistics
Logistics
Logistics is the management of the flow of goods between the point of origin and the point of destination in order to meet the requirements of customers or corporations. Logistics involves the integration of information, transportation, inventory, warehousing, material handling, and packaging, and...
, has virtually removed factor endowment
Factor endowment
In economics a country's factor endowment is commonly understood as the amount of land, labor, capital, and entrepreneurship that a country possesses and can exploit for manufacturing. Countries with a large endowment of resources tend to be more prosperous than those with a small endowment, all...
s and comparative advantage
Comparative advantage
In economics, the law of comparative advantage says that two countries will both gain from trade if, in the absence of trade, they have different relative costs for producing the same goods...
concepts. In its wake, metropolitan economies are competing globally in specialized sectors and fields tailored to their regional clusters, a term coined by Harvard Professor Michael Porter
Michael Porter
Michael Eugene Porter is the Bishop William Lawrence University Professor at Harvard Business School. He is a leading authority on company strategy and the competitiveness of nations and regions. Michael Porter’s work is recognized in many governments, corporations and academic circles globally...
(i.e., information technology
Information technology
Information technology is the acquisition, processing, storage and dissemination of vocal, pictorial, textual and numerical information by a microelectronics-based combination of computing and telecommunications...
in greater San Francisco; leather shoe and apparel textiles industry in Florence, Italy; digital media
Digital media
Digital media is a form of electronic media where data is stored in digital form. It can refer to the technical aspect of storage and transmission Digital media is a form of electronic media where data is stored in digital (as opposed to analog) form. It can refer to the technical aspect of...
and electronics
Electronics
Electronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...
in Seoul, South Korea).
More and more developed nations are becoming defined and fueled by their local, metropolitan economies. Before, analysis focused on what happens inside companies, how inputs of labor and capital
Capital (economics)
In economics, capital, capital goods, or real capital refers to already-produced durable goods used in production of goods or services. The capital goods are not significantly consumed, though they may depreciate in the production process...
are used for productivity
Productivity
Productivity is a measure of the efficiency of production. Productivity is a ratio of what is produced to what is required to produce it. Usually this ratio is in the form of an average, expressing the total output divided by the total input...
of output
Output
Output is the term denoting either an exit or changes which exit a system and which activate/modify a process. It is an abstract concept, used in the modeling, system design and system exploitation.-In control theory:...
. Now, what happens outside companies in the immediate business environment is just as important. With global competition in innovation
Innovation
Innovation is the creation of better or more effective products, processes, technologies, or ideas that are accepted by markets, governments, and society...
of processes and products, the clustering of knowledge (such as the research community), consulting firms, skilled laborers, financial institutions, legal services, government entities, and specialized technology industries have become vitally important. Such agglomeration and diversity, unique to a metro, catalyzes growth. Additionally, auxiliary industries in local services and trades evolve in such metropolitan areas, such as the production of wind turbines in the automotive industry
Automotive industry
The automotive industry designs, develops, manufactures, markets, and sells motor vehicles, and is one of the world's most important economic sectors by revenue....
of the greater Detroit and Cleveland areas. Cultural ambience even emerges with the area’s quality of place and historical heritage in the form of the arts (art galleries, music halls, publishing houses), non-profit venues (museums, performing arts
Performing arts
The performing arts are those forms art which differ from the plastic arts insofar as the former uses the artist's own body, face, and presence as a medium, and the latter uses materials such as clay, metal or paint which can be molded or transformed to create some physical art object...
theaters), and public assets (libraries, parks).
Legislation
Consequently, this new configuration of metropolitan economies requires equally new and adaptive government policymaking. For effective legislation, contemporary nations must reformulate their understanding of place, moving away from disparate stateState (polity)
A state is an organized political community, living under a government. States may be sovereign and may enjoy a monopoly on the legal initiation of force and are not dependent on, or subject to any other power or state. Many states are federated states which participate in a federal union...
s, provinces, and regions and embracing a network of integrated metropolitan economies. Hence, metros must become a recognized actor among the usual federal-state-local apparatus. Additionally, government departments and ministries must acknowledge the interplay of arenas such as the inflexible tandem of housing and transportation as well as energy and the environment. Coordinated efforts across agencies and programs must take place to ensure best performance outcomes and high efficiency. Even more, management must change from prescriptive, formulaic, hierarchical leadership to more nimble, networked, and compact collaborations. These organizational reforms would influence a host of policies including among others transportation infrastructure, housing
House
A house is a building or structure that has the ability to be occupied for dwelling by human beings or other creatures. The term house includes many kinds of different dwellings ranging from rudimentary huts of nomadic tribes to free standing individual structures...
systems, employment
Employment
Employment is a contract between two parties, one being the employer and the other being the employee. An employee may be defined as:- Employee :...
hubs, energy
Energy
In physics, energy is an indirectly observed quantity. It is often understood as the ability a physical system has to do work on other physical systems...
standards, green spaces, and environmental protection
Environmental protection
Environmental protection is a practice of protecting the environment, on individual, organizational or governmental level, for the benefit of the natural environment and humans. Due to the pressures of population and our technology the biophysical environment is being degraded, sometimes permanently...
.
For instance, the incorporation of metropolitan planning organizations (MPOs) in US DOT programs and emergence of metropolitan governments worldwide are evidence of the impact of metropolitan economies. Other concrete examples include: building the Washington DC metrorail
Metrorail
Metrorail may refer to:* Metrorail , a commuter rail system operator in South Africa** Metrorail Eastern Cape, commuter rail lines serving Port Elizabeth and East London...
system that required coordinated agreement between the district, Virginia
Virginia
The Commonwealth of Virginia , is a U.S. state on the Atlantic Coast of the Southern United States. Virginia is nicknamed the "Old Dominion" and sometimes the "Mother of Presidents" after the eight U.S. presidents born there...
, and Maryland
Maryland
Maryland is a U.S. state located in the Mid Atlantic region of the United States, bordering Virginia, West Virginia, and the District of Columbia to its south and west; Pennsylvania to its north; and Delaware to its east...
environs; likewise, high-speed rail in Spain
High-speed rail in Spain
The high-speed railway network in Spain currently consists of four dedicated passenger train main lines, in Spain named L.A.V. abbreviation for linea de alta velocidad...
which connects virtually every large metro in the country. Chicago
Chicago
Chicago is the largest city in the US state of Illinois. With nearly 2.7 million residents, it is the most populous city in the Midwestern United States and the third most populous in the US, after New York City and Los Angeles...
’s Plan for Transformation in overhauling the city’s public housing
Public housing
Public housing is a form of housing tenure in which the property is owned by a government authority, which may be central or local. Social housing is an umbrella term referring to rental housing which may be owned and managed by the state, by non-profit organizations, or by a combination of the...
stock has to work together with local stakeholders on lease agreements, land use
Land use
Land use is the human use of land. Land use involves the management and modification of natural environment or wilderness into built environment such as fields, pastures, and settlements. It has also been defined as "the arrangements, activities and inputs people undertake in a certain land cover...
, economic development
Economic development
Economic development generally refers to the sustained, concerted actions of policymakers and communities that promote the standard of living and economic health of a specific area...
, and local taxes. The Triangle Area’s high tech life sciences research hub, the Research Triangle Park
Research Triangle Park
The Research Triangle Park is a research park in the United States. It is located near Durham, Raleigh, and Chapel Hill, in the Research Triangle region of North Carolina...
, continually works together with surrounding research universities in Durham
Durham
Durham is a city in north east England. It is within the County Durham local government district, and is the county town of the larger ceremonial county...
, Raleigh, and Chapel Hill
Chapel Hill
Chapel Hill may refer to:*Chapel Hill, North Carolina, a town in the United States, or**the University of North Carolina at Chapel Hill, a major university within the town*Chapel Hill, Alabama...
. Denver’s expanded metropolitan transportation system needed a surrounding mayor caucus for joint efforts. The Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
Airport and Shenzhen
Shenzhen
Shenzhen is a major city in the south of Southern China's Guangdong Province, situated immediately north of Hong Kong. The area became China's first—and one of the most successful—Special Economic Zones...
Airport dual services link that aim to capitalize on “the synergy of their complimentary flight networks” required agreement between Hong Kong
Hong Kong
Hong Kong is one of two Special Administrative Regions of the People's Republic of China , the other being Macau. A city-state situated on China's south coast and enclosed by the Pearl River Delta and South China Sea, it is renowned for its expansive skyline and deep natural harbour...
and China
China
Chinese civilization may refer to:* China for more general discussion of the country.* Chinese culture* Greater China, the transnational community of ethnic Chinese.* History of China* Sinosphere, the area historically affected by Chinese culture...
. The Channel Tunnel
Channel Tunnel
The Channel Tunnel is a undersea rail tunnel linking Folkestone, Kent in the United Kingdom with Coquelles, Pas-de-Calais near Calais in northern France beneath the English Channel at the Strait of Dover. At its lowest point, it is deep...
, an undersea rail tunnel under the English Channel
English Channel
The English Channel , often referred to simply as the Channel, is an arm of the Atlantic Ocean that separates southern England from northern France, and joins the North Sea to the Atlantic. It is about long and varies in width from at its widest to in the Strait of Dover...
, required cooperation and financing between the French
France
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
and Britain
United Kingdom
The United Kingdom of Great Britain and Northern IrelandIn the United Kingdom and Dependencies, other languages have been officially recognised as legitimate autochthonous languages under the European Charter for Regional or Minority Languages...
governments. The Port of Rio de Janeiro
Rio de Janeiro
Rio de Janeiro , commonly referred to simply as Rio, is the capital city of the State of Rio de Janeiro, the second largest city of Brazil, and the third largest metropolitan area and agglomeration in South America, boasting approximately 6.3 million people within the city proper, making it the 6th...
serves the city and surrounding states in Brazil
Brazil
Brazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
. All these partnered, comprehensive initiatives are crucial in metropolitan economies.
Examples
Many examples of the metropolitan economies worldwide include (see links below):- The financial commerce of Chicago, IL and media/entertainment of Miami, FL, both of which metros contribute a significant share of their state’s economies;
- The investment banks and insurance company capital of TokyoTokyo, ; officially , is one of the 47 prefectures of Japan. Tokyo is the capital of Japan, the center of the Greater Tokyo Area, and the largest metropolitan area of Japan. It is the seat of the Japanese government and the Imperial Palace, and the home of the Japanese Imperial Family...
and electronicsElectronicsElectronics is the branch of science, engineering and technology that deals with electrical circuits involving active electrical components such as vacuum tubes, transistors, diodes and integrated circuits, and associated passive interconnection technologies...
headquarters of OsakaOsakais a city in the Kansai region of Japan's main island of Honshu, a designated city under the Local Autonomy Law, the capital city of Osaka Prefecture and also the biggest part of Keihanshin area, which is represented by three major cities of Japan, Kyoto, Osaka and Kobe...
, both of which metros fuel JapanJapanJapan is an island nation in East Asia. Located in the Pacific Ocean, it lies to the east of the Sea of Japan, China, North Korea, South Korea and Russia, stretching from the Sea of Okhotsk in the north to the East China Sea and Taiwan in the south...
’s economy; - MunichMunichMunich The city's motto is "" . Before 2006, it was "Weltstadt mit Herz" . Its native name, , is derived from the Old High German Munichen, meaning "by the monks' place". The city's name derives from the monks of the Benedictine order who founded the city; hence the monk depicted on the city's coat...
’s high-tech agglomeration of automotive engineeringAutomotive engineeringModern automotive engineering, along with aerospace engineering and marine engineering, is a branch of vehicle engineering, incorporating elements of mechanical, electrical, electronic, software and safety engineering as applied to the design, manufacture and operation of motorcycles, automobiles,...
, aerospaceAerospaceAerospace comprises the atmosphere of Earth and surrounding space. Typically the term is used to refer to the industry that researches, designs, manufactures, operates, and maintains vehicles moving through air and space...
, communications, life sciencesLife sciencesThe life sciences comprise the fields of science that involve the scientific study of living organisms, like plants, animals, and human beings. While biology remains the centerpiece of the life sciences, technological advances in molecular biology and biotechnology have led to a burgeoning of...
that contribute greatly to GermanyGermanyGermany , officially the Federal Republic of Germany , is a federal parliamentary republic in Europe. The country consists of 16 states while the capital and largest city is Berlin. Germany covers an area of 357,021 km2 and has a largely temperate seasonal climate...
’s output; - MumbaiMumbaiMumbai , formerly known as Bombay in English, is the capital of the Indian state of Maharashtra. It is the most populous city in India, and the fourth most populous city in the world, with a total metropolitan area population of approximately 20.5 million...
’s financial district and Hyderabad’s biotechnologyBiotechnologyBiotechnology is a field of applied biology that involves the use of living organisms and bioprocesses in engineering, technology, medicine and other fields requiring bioproducts. Biotechnology also utilizes these products for manufacturing purpose...
industries that have become powerful growing assets for IndiaIndiaIndia , officially the Republic of India , is a country in South Asia. It is the seventh-largest country by geographical area, the second-most populous country with over 1.2 billion people, and the most populous democracy in the world...
; - The chemical products, textileTextileA textile or cloth is a flexible woven material consisting of a network of natural or artificial fibres often referred to as thread or yarn. Yarn is produced by spinning raw fibres of wool, flax, cotton, or other material to produce long strands...
s, transportation equipment, and financeFinance"Finance" is often defined simply as the management of money or “funds” management Modern finance, however, is a family of business activity that includes the origination, marketing, and management of cash and money surrogates through a variety of capital accounts, instruments, and markets created...
in tertiary sector of Sao PauloSão PauloSão Paulo is the largest city in Brazil, the largest city in the southern hemisphere and South America, and the world's seventh largest city by population. The metropolis is anchor to the São Paulo metropolitan area, ranked as the second-most populous metropolitan area in the Americas and among...
, which is BrazilBrazilBrazil , officially the Federative Republic of Brazil , is the largest country in South America. It is the world's fifth largest country, both by geographical area and by population with over 192 million people...
’s largest metro.
External links
- Chicago's Plan for Transformation http://www.thecha.org/pages/the_plan_for_transformation/22.php
- Denver Metro Mayor Caucus http://www.metromayors.org/
- Florence, Italy Economy http://www.aboutflorence.com/economy-of-Florence.html
- Hong Kong Airport http://www.hongkongairport.com/eng/media/press-releases/pr_937.html
- Metropolitan Washington Council of Government http://www.mwcog.org/
- Munich, Germany Economy http://www.muenchen.de/Wirtschaft/invest_in_munich/businesslocation/branchen/181422/index.html
- Mumbai, India Economy http://www.mumbainet.com/template1.php?CID=3
- Osaka, Japan Economy http://www.pref.osaka.jp/en/attraction/industry/index.html
- Research Triangle Park, NC http://www.rtp.org/
- Seoul, South Korea Economy http://english.seoul.go.kr/db/kcp/sez1.php
- Silicon Valley, CA http://www.siliconvalley.com/
- Sao Paulo, Brazil Economy http://www.sao-paulo.com/v/economy/
- Spain High Speed Rail http://www.raileurope.com/train-faq/european-trains/ave/index.html
- Tokyo, Japan Economy http://tokyoeconomy.com/