Urban and Regional Economy Essay

1172934Urban and Regional Economy

What are medium sized cities and how are they different to global/world cities? Why do some underperform and how can we make them more 'resilient'?

Introduction

Medium cities play a major role in countries as Hildreth (2006) highlights that a large

proportion of a country's population reside and do businesses in these cities. Various

measures are used to define a medium sized city, the Smart Cities: Ranking of European

Medium Sized Cities Report (2007) uses population, universities and catchment area

whereas Hildreth (2006) identifies the economic size of the city in the form of gross value

added as a possible indicator. The first section of the essay will distinguish between medium

sized cities and global cities by investigating traits and characteristics of both. Section 2 of

the essay will investigate the reasons behind the underperformance of some medium sized

cities and will look at Stoke-on-Trent as a specific case study to further illustrate

underperformance. The final section places a focus on how we can make medium sized

cities more resilient and this will include examples from the city of Norwich and city of

Exeter that are performing well to highlight strategies in action that make a city more

resilient.

Distinguishing between a Medium Sized City and a Global/World City

A critical point to start with is the understanding that the concept of a medium sized city is

place-specific and Hildreth (2006 p.12) exemplifies this with a simple statement "a city

which is categorised as medium sized in China would be a large or very large city in Europe."

A major characteristic that enables us to distinguish between medium cities and global cities

is the structure of the economy, the medium sized city, according to Hildreth (2007) offers a

localised service within the industry in which they specialise and thus every city is different

due to the nature of the workforce skills and industrial structure Clayton and Morris (2010).

As a result of the differing nature and industry of medium sized cities they perform different

roles within an urban economy and according to Hildreth (2007) this role can change over

time.

Combining Hildreth (2007) and Henderson (1997) the medium sized city has a localised

economy that exhibits certain traits such as a smaller and less specialised workforce,

stronger manufacturing base but weaker in advanced services and more standardised


products Henderson (1997) whereas in comparison global cities have urbanisation

economies and as Sassen (2012) highlights are strategic cities in the global economy and

through a large and more diversified market allow businesses to have increased interaction

with suppliers and access to knowledge and information enabling them to benefit from

economies of scale McCann (2001). Whereas the world cities are the organizing nodes of

the global economy Friedmann (1995), medium sized cities perform a particular role,

dependent on their structure, within the regional and national economy and in the UK

context are important as the 49 medium cities produced £227 billion of economic output in

2007 Clayton and Morris (2010).

Hildreth (2007) creates a typology for medium sized cities which categories cities into;

industrial, gateway, heritage/tourism, knowledge, large-city region or regional services.

There further exists a pattern that in the UK industrial and gateway cities tend to be

concentrated in the north and midlands with certain traits such as high primary

employment with a low knowledge intensive sector. The south in contrast exhibits more

graduates and a higher knowledge intensive sector displaying characteristics of knowledge

and regional service cities, thus the type of medium sized city in the UK shows evidence of

also being place-specific at the national level which is a result of their structure. An example

of a regional services city is Bristol whereas an example of an industrial city would be Stoke-

on-Trent and the roles they perform depend largely on the access to resources such as clay

for Stoke's pottery industry, in comparison Bristol exhibits a base of universities and is

supported by the M4 growth corridor. In comparison while medium sized cities have a

localised economy and specialise in particular products, they are different to world cities as

Pacione (2009) highlights that world cities show the presence of headquarters of

transnational corporations, high-level service sector, financial institutions and major banks

thus share generic ground.

Connectivity is a major characteristic of cities and has an ever increasing presence in urban

policy both on a regional and national scale. to illustrate, a main section in the Big City Plan

(2010) for Birmingham is that of connectivity and a focus is evident in the Cities of

Tomorrow Report (CTR) (2011). If we take three medium sized cities in the UK: Leicester,

Aldershot and York all show good connectivity within their city region as Aldershot located

on a major transport artery Clayton and Morris (2010) has good connectivity to London and


the surrounding towns of Reading and Slough. The point being made is that medium sized

cities act as a hub for the surrounding towns and other medium sized cities whereas a global

city such as London is a major global hub with links to other global cities such as New York,

Tokyo, Shanghai and Paris, this is a defining attribute that distinguishes a medium sized city

from a global city.

The demographic indicator of population is an important characteristic in distinguishing

between medium and world cities, however a critical point is that population size will vary

from country to country, and for example the population of a British medium sized city

would be less than that of a Chinese medium city. In the UK context medium sized cities as

highlighted by Hildreth (2007) are those with a population greater than 125,000, excluding

the core cities whereas London being a world city has a population of 8.17 million people

Greater London Authority (2012).

Reasons behind underperformance of some Medium Sized Cities

A range of factors that are interlinked are responsible for the underperformance of some

medium sized cities in the UK, in particular their economic performance is a main issue, a

prime example of this would be Stoke-on-Trent Hildreth (2007). Factors such as

connectivity, reliance on a single economic sector and its proximity to other urban areas are

all reasons that contribute to the performance of a city. Hildreth (2007) highlights that a

city's economic role is shaped by its history and economic structure and that their future is

path dependent and thus will depend on the resources available. A city that has a

dependency on a sector such as manufacturing will have a limited number of options to

improve their economy much like the industrial city and during times such as the recent

recession, the manufacturing sector was hit hardest in the respect that 17% of the total jobs

lost in the UK between Q2 of 2008 and Q4 of 2011 were in manufacturing Philpott (2012),

thus a reliance on a single sector means that as industry declines or raw materials diminish a

city will struggle to recover or maintain growth. The city of Stoke-on-Trent in 2009 had 25%

of its population employed in manufacturing Cities Institute (2011) and in particular the area

depends on employers in ceramics and firms such as JCB and Britannia The Work

Figure 1: Location of Stoke-on-Trent and its proximity to Birmingham and Manchester

Adapted from Hildreth (2010)

Source: Google Earth (2012)

Key

Location of City

Travel patterns of Commuters


Foundation (2008) thus is an important factor in its weaker economic performance

documented by Hildreth (2007) and is therefore vulnerable to further decline and change.

The relationship that a city has with the nearest

cities is an important factor that somewhat

determines its performance. Hildreth (2010)

identifies a situation where a shadow effect

occurs in which a given city faces competition

from other cities. The competition affects the

growth rate which Cheshire et al (2004) highlight

that a city- region will exhibit slow growth when

it is located close to other growing city-regions.

The concept of the shadow effect concerns

commuting patterns which is directly related to

economic push and pull factors Cheshire et al

(2004) such as wages and job opportunities.

Stoke-on-Trent is a prime example of the shadow

effect in action as in reference to figure 1 the city

is located between the core cities of Birmingham

and Manchester. The Work Foundation (2008

p.29) highlight 'investment is drawn like magnets

towards Birmingham and Manchester' and by

drawing on the economic push and pull factors

there is a movement of people from the Stoke-

on-Trent city- region to the core cities evident in

figure 1 with the thicker arrow representing a

greater number. As a result the notion of 'place'

is a major factor as to why medium sized cities, particularly Stoke-on-Trent underperform

and will continue to be a barrier to growth and investment.

The concept of connectivity is interlinked with city relationships on numerous scales;

international, inter-city or local which Hildreth (2007) argues is important in the modern

global economy and is key, according to the CTR (2011), in creating balanced development.


Some medium sized cities, such as Stoke-on-Trent exhibit poor connectivity meaning that

they have a reduced ability to access places of interest for cooperation and also knowledge

CTR (2011) but the effects of poor connectivity are best highlighted by the OECD (2011);

reduced economic opportunities, small and medium enterprise development and

employment opportunities which for medium sized cities reduces their overall economic

performance. One of the key challenges facing Stoke-on-Trent is to improve its internal

transport and links between major centres The Work Foundation (2008). There are a

number of instances where poor connectivity is evident, in particular the poor internal

transport of the city. For example the A500 bypasses the city centre, consequently drawing

people away from the city centre rather than encouraging people towards it thus there is

reduced access to places of interest. The poor links between Stoke-on-Trent and other

major centres will leave the city in isolation in a variety of ways such as its labour market

links and ability to access areas of the city leading to a weaker economic performance.

Resilience

Resilience of cities in this context concerns their economy and Davoudi (2012 p.301)

highlights one definition of the term as the "capacity to absorb shocks and to bounce back"

and Shaw (2012) sees resilience as a dynamic process that provides the foundations for

social, economic and environmental strength.

In order to achieve resilience, medium sized cities must become more competitive which is

focused on in the CTR (2011) and to do this there are a number of critical drivers such as

economic diversity, connectivity and innovation Competitive European Cities (2003).

Diversity is a principle of resilience meaning a city has numerous different components that

are used in conjunction Albers and Deppisch (2012), in terms of the economy this would

mean a balanced economy thus a combination of the industrial, service, financial and

creative sectors that is a characteristic of the entrepreneurial city, a strategy evident in the

Plan for Growth (2011) where there is a emphasis on creating balanced economies, which in

turn particularly from medium sized cities will reduce vulnerability to change Albers and

Deppisch (2012) and will prevent population decline which is a key measure of urban

shrinkage.


Two important characteristics of a competitive city are innovation and education

Competitive European Cities (2003) and the emphasis is on small and medium sized

enterprises (SMEs) that account for almost 60% of private sector jobs Plan for Growth

(2011). Furthermore, the Plan for Growth (2011) has a particular focus on innovation by

SMEs which comes in the form of tax relief on firms undertaking research and development

and more resources and information on intellectual property thus improving the range of

products and services which is vital to local business and subsequently helps to diversify and

expand the city market. Innovation needs to be supplemented by educational

establishments and medium sized cities would benefit from such links. The city of Norwich

as highlighted by Clayton and Morris (2010) spent £2.7 million in 2009 on activities designed

to stimulate innovation and enterprise, the results of this were supporting 745 businesses,

helping create 176 business start-ups and 120 jobs. This approach shows signs of

interdependency in the form of links between SMEs, educational establishments and local

councils and thus these links help to strengthen a particular system Albers and Deppisch

(2012).

Both internal and external connectivity enables cities to become more competitive and

allows coherent spatial development Cities of Tomorrow (2011). The key challenge for

medium sized cities is to strengthen connectivity which is concerned with the mobility

principle of resilience Albers and Deppisch (2012). International and inter-city connectivity

are of particular importance as it allows access to a variety of markets, resources and people

which will contribute to making areas more resilient and reduce vulnerability. A focus of

future urban policy should be to promote networks of road and rail links coupled with the

ability to reach destinations abroad through airports benefitting people and businesses

through their relationship with suppliers and customers. The city of Exeter, documented by

Clayton and Morris (2010) as a medium sized city performing well and according to the

European Business Review Online (2013) Exeter's economy grew 6.6% per annum between

1999-2009 and 4500 jobs were created in construction, services, professional and scientific

activities between 2008-2010 thus showing the diverse economy and resilience during the

recession, is well connected as the airport flies to destinations abroad and is the major

transport interchange of the city-region. The main station Exeter St Davids has links to the

cities of Bristol and Plymouth on the West of England mainline and to London via the Exeter


to Waterloo line whilst serving local areas through the East Devon growth corridor Exeter &

East Devon Council (2012). The road links are also important as the city is at junctions of the

M5 motorway which have undergone improvement works to allow better access into the

city and to the airport and business parks via the newly constructed A30.

Conclusion

Medium sized cities remain a policy issue for governments through their differing economic

structures of a localised economy and tend to specialize in a particular product whereas the

global city benefits from economies of scale. The medium sized cities perform different roles

which is partly attributed to its history but also access to resources. The underperformance

of some medium sized cities is for a range of reasons such as a narrow range of economic

sectors, poor connectivity and its location to other major cities which has been shown

through the example of Stoke-on-Trent an underperforming city. Medium sized cities need

to become resilient to change and this can be done through increasing competitiveness in a

number of ways such as a diverse economy, improved connectivity and innovation by SMEs.

Word Count: 2,431

References

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Urban and Regional Economy Essay