Geography Reference
In-Depth Information
and multinationals are the decisive element in the ongoing evolution of
this leadership because the technological, institutional and organizational
changes driving modern globalization are all profoundly intertwined.
What therefore emerges from the discussion here is that such changes, and
the benefits that in principle they should trigger, are disproportionately
going to particular places and regions, either at the level of supra-national
macro-regions or at the level of sub-national regions, depending on the
types and distributions of the MNEs' assets. As such, MNEs play an ever
increasing role in determining the local distributions of the costs and ben-
efits of globalization across these different levels of geographies, and these
distributions depend critically on the spatial and organizational structures
of the MNEs.
Since the early 1990s, the imperative to build on knowledge assets has
meant that multinational investment strategies have been dominated by
investing in developed countries plus the mega-cities of the developing
world (MGI 2011a). These locations have been the major beneficiaries
of multinational R&D, technology and innovation-driving investments.
However, while MNEs have been crucial in shaping the economic geog-
raphy of growth in these regions, we still have to consider exactly which
types of places will MNEs invest in over the coming decades. Obviously,
city-regions are still likely to be major candidates for MNE investments.
Today, half of the world's population currently lives in cities, and this
urban population accounts for 80 per cent of global GDP. According
to McKinsey Global Institute (MGI 2011a), of this urban population,
the 600 largest cities in the world, calculated in terms of their city GDP,
alone account for some 60 per cent of global GDP, or three quarters of all
global urban output (MGI 2011a). At present, 22 per cent (approximately
1.5 billion people and 485 million households) of the global population
currently live in these 600 largest GDP cities. The largest 100 GDP cities
accounted for 38 per cent of 2007 global GDP, while the 23 mega-cities of
over 10 million people alone generated some 14 per cent of global GDP in
2007 (MGI 2011a).
By 2025, the share of population accounted for by the largest 600 cities
is expected to have risen to 25 per cent (more than 2 billion people and 735
million households), and accounting for nearly 60 per cent of global output
(MGI 2011a). Of the cities which are currently in the top 600 ranking, the
380 cities which are located in the developed world are estimated to account
for 50 per cent of global GDP in 2007, with more than 20 per cent of global
GDP alone coming from 190 US cities within this group (MGI 2011a,
2012). The other 220 of these largest GDP cities, all of which are located
in the developing world, account for another 10 per cent of global output,
and this is comprised of 4 per cent of global GDP accounted for by Chinese