Geography Reference
In-Depth Information
terminology of industrial economics, the competitive advantage of some
countries (Switzerland, the UK), and of some regions or cities (Zurich, London),
is in service provision.
Under the old thinking there was a special geographical pattern to industrial
location, while services might be spread quite evenly across the country, simply
matching population distribution. Thus, for example, there was a precise
geography to iron and steelmaking because of the high transport costs of the
materials from which the iron was made. Steel manufacturing was limited to
sites near or on coalfields and iron ore and limestone supplies, or later, on coasts
where these materials could be assembled. Banking services, by contrast, might
be found in every market town with a few thousand inhabitants. Central place
theory did serve to highlight the hierarchy of services, with lower services in
small places, and higher order ones only in the largest cities. But this was a size
ranking of services, placing high-order services in the centre of large market
areas or large populations, and low-order services in the centre of small areas.
There was, in most cases, little need for these services to agglomerate for
interaction amongst themselves, nor for them to locate in reference to raw
materials, power supplies, special skills in a labour force, or any other special
factor. Now, however, there are major concentrations of services, some of them
new ones catering to new industrial structures and needs, such as advertising and
marketing.
Global cities
In
Chapter 2
the world systems concept of the global city was briefly described.
This concept is relevant to the geography of the producer or business services.
King (1990) and Sassen (1991) have analyzed the structure of some of these
cities, which have emerged to cater to the new needs of global companies.
To take an example, the financial role of the global cities is indicated by the
presence of foreign banks, which act not within the national economy, but as
agents of the international economy and for international firms. In London (King
1990) there was a doubling of the number of foreign banks in the 1960s, and
again a doubling in the 1970s. In the 1980s the numbers stabilized at about 450,
but numbers employed increased in the mid-1980s from 38,000 to 72,000, to be
followed by decline with the stock market crash of 1987, and then a gradual
rebuild. Within this sector there is considerable specialization, including many
merchant banks which deal with company finance and not with individuals,
securities firms, and conglomerates, which latter include banking, securities, and
currency trading as well as other functions.
Putting all the producer services together, they make a substantial although
not overwhelming contribution to the employment totals. In global cities such as
London, Tokyo and New York, the employment in these sectors is double the
rate nationally in the countries concerned. In London (Sassen 1991), business
services accounted for 10.2 per cent of all workers in the 1980s, against 5 per
