Sunday, 17 December 2006

Economic development and planning


The activities of development interests have always had an effect on urban planning. The question is then: what effect they are having now and what brought it about? As the purpose of the paper is to investigate economic development, a starting point is to determine the impact of economic changes on urban areas over the past two decades. Specifically, changes in the way that development interests are organized, their power, and demands for space will be examined. The effects on planning that show up on the landscape is affected should allow conclusions to be drawn.

In a broad sense, development interests can include any person or organization that has an interest in increasing the value or use of land. How they are organized is taken to mean how they are organized over space: the location decisions made by development interests shows up in the urban landscape. The industrial and business uses involved include: head-office, research, and clerical functions, production, warehousing, and transportation activities, and service and supply functions.

A demand for various types of land uses or buildings should suggest a pattern in the urban landscape. This should demonstrate how the landscape is being shaped by development interests. Another pattern is how different sorts of industrial and business activities organize themselves over space.


The central theme of this paper is economic development and its influence on urban planning. Hence, a review of recent economic changes that have spatial implications is in order. Logan and Moltch identify three historical processes that affect the structure and conditions for growth dynamics of cities:

  1. technological revolution
  2. the formation of a global economy
  3. the emergence of an information form of economics production and management

Other authors, such as Peter Hall, have identified similar influences. Each of these processes will be discussed. These must be seen in light of the economic restructuring that is occurring in national and international economic systems. The economic change that is causing the restructuring of the economies of cities and regions is one of shifting away from an industrial economy based on the production of material goods to what is commonly called an information economy (Hall, 886). There has in addition, been growth in international capital (Logan & Molotch, 40). Two manifestations of this are the influx of new capital and well-to-do people and the withdrawal of investment and population (Fainstein, 5).

At the core of economic restructuring are economic forces that have influence on the global scale. Logan and Molotch identify a group of influential forces which they call the 'growth machine'. In it, those seeking "exchange value" (ie., to increase the value of land) often have common interests with others who control property in same area. Entrepreneurs attempt by collective action and often in collective alliance with other business people to create conditions that will intensify land use in the area (Logan & Molotch, 32). The growth machine is composed of interlocking pro growth associations and governmental units. Private sector members generally oppose government intervention. There is as well, the notion that the free market should decide land uses (Logan & Molotch, 32).


The organization of industries over space is undergoing change, both at the global scale and internally. In a "global economy" local interests are shaped by the changing ordering of international spatial relations. There is then a regional dependence on foreign events. For example, in the USA, there has been a shift in new manufacturing investment to the south and western parts of the country away from the north and east. Consumer goods manufacture is now going to lower wage locations abroad (Logan & Molotch, 249).

"Globalization" of the world economy has led to deindustrialization in some cities that previously had large concentrations of older less competitive manufacturing industries. This has produced mass unemployment in the manufacturing sector and as well, in the goods handling industry. Docks, ware houses and freight movement are particularly hard hit as employment areas in inner city locations contract and move to locations that can accommodate the new containerized methods (Hall, 884).

The proces of economic restructuring is exemplified by emerging high technology firms. These are not necessarily bound to certain locations such as was often the case for older industries. Old industries, such as iron-ore smelting, often had to locate in particular areas for reasons of proximity to scarce or bulky materials or resources or markets. New firms can be much more selective about location. They do tend however, to cluster in a few locations and not others to gain the advantages of synergy (Hall & Markusen, 144). It would be simplest to say that there are many suitable locations. These firms also tend to favour locations detached or peripheral form older urban seedbeds of innovation (Hall & Markusen, 144). High-technology industry does not directly generate as much employment as is commonly supposed (Hall & Markusen, 144).

An almost unlimited mobility is now an option available to many firms. Instead of expending energy organizing the place they are in, people can move residence or investment. A mobile firm can be called 'footloose' (Logan & Molotch, 39). The ability to move as needed affects spatial patterns and landscape. Not being bound to a particular location, the city is not seen as principally as a place to live or work (Logan & Molotch, 51). The consequences of change are not their concern.


One result of economic restructuring is the intensification of the formation of truly multi-national firms. An effect of this is an increase in control activities at headquarters locations in a relative few countries. This makes for a concentration of economic 'control points' in fewer urban areas (Logan & Molotch, 201). Also, there is a tendency for larger firms in big cities to swallow up smaller ones. This concentrates decision making in larger cities (Logan & Molotch, 202).

As firms grow in size, they are better able to take advantage of economies of scale such as the separation of control functions from production activities. Control functions can be located in big city skyscrapers and production functions in the 'field'. The separation of branch operations influences the landscape in two ways. The first is that there may be fewer spin-off benefits to local entrepreneurs. Branch operations can operate in economic isolation and do not stimulate so much growth in local economic sectors and thus can be of less value to local growth (Logan & Molotch, 203). Hence, firms can 'make or break' local economies or even large ones depending on their decisions. The second is that there may be agglomeration if a firm wishes to take advantage of synergistic effects and" just-in-time" deliveries.

An indication of their power is the ability to locate virtually anywhere desired and their footloose nature. Firms can move and locate where it is to their greatest benefit. As well, they can position the various functions where the greatest benefit will accrue.


The multi-locational firm is made necessary on one the hand by the processes of the "globalization" of the world economy and made possible on the other because of technological advances. Firms must respond to economic demands and opportunities and arrange themselves accordingly. Various activities such as production, distribution and administration do not have to occur at the same site. The local effects of a firm depend on what specific functions are being located in a given area. The benefits and negative impacts on a community will vary from one city to the next. Sassen provides a summery of this:

The spatial dispersion of production, including its internationalization, has contributed to the growth of centralized service nodes for the management and regulation of the new space economy...To a considerable extent, the weight of economic activity over the last fifteen years has shifted from production places such as Detroit and Manchester, to centres of finance and highly specialized services.

(Sassen, 1991 in Hall, 886)

Greater freedom of location for firms allows for cities to develop specializations in certain types of uses. This specialization will, according to Logan and Molotch, produce a hierarchy of cities (Logan & Molotch, 251). Certain functions will be more desirable than others. For example a warehouse could be considered less desirable than a research centre due to the number and nature of jobs. As well, the two uses would create different planning outcomes.

Some cities developed a competitive edge: they could offer superior, less expensive space. Redevelopment took place either in already existing Central Business Districts (CBD's) or within near-by areas occupied by residences or small business. Some required the demolition of occupied structures. The largest projects took place on vacant land generated by the abandonment of obsolete transportation, manufacturing, whole sale market or port facilities or created by landfill. Canary Wharf for example (Fainstein, 35).

The emerging industry of the economy of the future is the that of the information based high-technology firm. The location criterion for information industries comes down to access to information (Hall, 886). High-level business services, especially those that require face to-face contact, or have national or international character, will be concentrated in the traditional central areas in the largest and specialized cities such as London (Hall, 887). However, other industries with the same need for access for information are free to locate in other, possibly less glamorous areas. This leads into new forms of industrial arrangement, the Edge City and the 'technopole'.


This new form of urban centre, the so called Edge City, contains all functions in a spread out form. They are typically situated on lands a distance from old downtowns and were villages or farmland 30 years before. Differing from the typical post-WWII suburb, Edge Cities will contain tall office buildings, white-collar jobs, shopping and entertainment, prestige hotels, corporate headquarters hospitals etc (Garreau, 5). The variety of functions can be confusing: office buildings are situated juxtaposed to shopping malls, strip shopping centres, rich beside poor (Garreau, 9). The automobile is supreme: these developments are built at the 'automobile scale'.

In general, they started to form as people moved to the suburbs in the post-war period. Following this, retailing moved. This is exemplified by the extensive mall construction on the 1960' and 1970's in the USA and Canada. Finally, employment moved out to join where the workforce lived and shaped (Garreau, 4). These areas cannot grow unless and until there are jobs: people have to live there firs1 (Garreau, 87).

A demand existed for large scale buildings that would not always have been possible to have been built in the old downtowns. They needed massive amounts of car parking and support from people from all over the region. The land requirements for some uses, such as hyper-markets, could not be met (Garreau, 23). For example, Sears Corporation moved to an Edge City where they were able to consolidate operations, enhance the quality of the workforce and the living and working environment (Garreau, 28). However, it often the fast growing entrepreneurial high technology firms locating there (Garreau, 29).

A key component of an Edge City is office space. Industrial and warehouses workers do not demand spaciality retail, high-end services, bookstores, restaurants or hotels (Garreau, 31). Proximity to highways and airports also important (Garreau, 39). Factors in the attraction of Edge Cities are the typical push factors: dirt, crime, stress, congestion and costs. Pull factors include: greater safety, new housing and space (Garreau, 55). Big corporations move out for the advantage of being near major transportation interchanges. Moreover, they do not necessarily have to be near other companies (Garreau, 79).

An advantage of Edge Cities is that they can make it easier for people to live close to their jobs. In contemporary lifestyles, it is often the case that the place of residence has to be convenient to two places of work. Edge Cities are a cheap and efficient way to house large numbers of people close to jobs (Garreau, 87).

There are problems with some Edge Cities. Sun City region in Arizona, USA is a privately owned development with its own private police force and has resisted incorporation to avoid taxation (Garreau, 184). Many Edge cities in the USA are private but often assume the duties of a municipality such as libraries, fire department swimming pools, water, garbage collection. They are like shadow governments but are not elected in the sense of a municipal government and thus have little accountability (Garreau, 184-5). This new form of privatized living arrangements has serious implications for control over who is allowed to live there and the freedoms available to residents.


A desirable specialized area is the "technopole". More than chance clustering evolving into agglomeration economies and synergistic effects, it is a planned centre for the production of high technology industry. These may be developed by the private sector or by the co-operation or partnership between the public and private sectors (Castells & Hall, 1). They are promoted by governments of all levels as a panacea for economies hurt by economic restructuring (Castells & Hall, 223).

Large corporations and small business locate in technopoles. Networking between other firms is important and made possible by technological advances (Castells & Hall, 4). Factors important to investors include: good buildings and building sites; an attractive environmental setting; excellent highway access and proximity to an international airport; excellent international tele-communication facilities; good quality housing for managers; and, east access to a substantial pool of well trained and motivated labour (Castells & Hall, 241).

These new industrial areas that are developed outside of traditional industrial areas have regional impacts. The aim is to create new industrial jobs to replace jobs lost from old industries that are contracting. However, re-industrialization using these sorts of industries creates fewer jobs than are lost (Castells & Hall, 223). In spite of not being the desired 'cure all', it does remain a tool for regional development. Technology now becomes another factor to be planned for.


Changes to development interests show up in how land is planned. This begs the question: for whose benefit is much of the contemporary development for? The combination of changes in organization, power and demands appears to have assisted in the creation of new forms of city environments. Furthermore, development activity also appears to have been self-serving in-as-much-as according to Fainstein, builders and developers were more interested in stimulating economically productive activities rather than enhancing the quality of life. The emphasis was on constructing commercial office space over housing and public facilities.

The impact of the development industry had in the 1980's was enormous and suggests why contemporary development firms are so important. In London England, there was the Broadgate development and in New York City USA, the Trump Tower. These are mammoth projects that have the capacity to generate fortunes for a few (Fainstein, 3).

The global and information economy brought a growing need of space to serve expanding financial institutions. There was demand for appropriate space for expansion. Office space that met technological demands of computer age and development of luxury residential and high end consumption facilities (Fainstein, 33). This resulted in the wide scale construction of offices and luxury residential units since there is less profit in building industrial space or affordable housing (Fainstein, 26).

Two divergent outcomes are evident. One consequence of the above development strategy was that many people were left or forced into reduced circumstances. The juxtaposition of rich and poor often resulted and the problem of homelessness was exacerbated. There was displacement from factory jobs because of economic restructuring. Gentrification and financial hardship dislodged people from their homes. At the same time, others were experiencing good fortune. Large projects overwhelmed neighbourhoods. Those opposed could be passed off as being against progress. Office vacancy rates were high but large projects were still proposed (Fainstein, 26)

Pressure was on to build which created an oversupply. (Fainstein, 64). Planning became piecemeal and accommodating to development interests. This is reflected in the landscape. Most office projects and upper income condominiums were erected as single site efforts where as they would have previously (hopefully) been part of a larger development programme. Development that is un-coordinated with its surroundings resulted in checker board development pattern, a miss-match of architectural styles, uncontrolled congestion and a sharp juxtaposition of rich and poor. (Fainstein, 101).


The affect on planning has that it has had to deal with various new demands that exert a powerful influence on cities. The following lists some implications for planning in light of the changes to development interests discussed here:

  • the demand for new forms of built environments such as Edge Cities and technopoles which draw development out of the traditional CBD's;
  • at the same time, dual demand for development of additional office space in CBD's and industrial locations in suburban areas
  • the decline of older industries;
  • the construction of massive amounts of office space and luxury housing;
  • the demand for very high quality office environments such as Canary Wharf in London;
  • having to deal with the rise of 'global cities' such as London;
  • the use of technopoles as regional development tools;
  • having to deal with a developer led planning environment; and,
  • having to deal with highly mobile, multi-locational firms that can locate virtually anywhere that is to their advantage.

The combined mobility of firms and separation of functions lead to a fine sorting out of activities across space according to cost and amenities. There is also a sorting by quality or order according to need to be in a more prestigious location. These are evident is a dual dispersal and concentration pattern at the urban-regional, national, and international levels.

At the urban-regional level, firms which need the advantage or the prestige of locating in the CBD will do so. Other firms can locate in suburban areas or in smaller cities. Industry will move out of the older, central city to new locations in the suburbs or smaller centres. There can be an ordering of uses on the lines of: head-office, clerical, production, and warehouse functions with increasing distance from the CBD. Research functions can be located in the most appropriate technopole. All parts of the firm can be held together with modern communications systems.

On the national level, firms can disperse to lower cost centres or regions while locating other parts of their operations in major cities.

On the global scale, firms can locate according to the advantages or disadvantages of each country. For instance, certain uses can be located in lower wage, Third World countries. Alternatively, certain cities, namely London, New York and Tokyo hold great advantages for locating there in spite of the costs.

Concentration and dispersal is evident at each of the three levels. This fine sorting is logical since firms will locate so as to maximize their gain and minimize their costs. Every area has advantages and disadvantages for each type of function and desired amenity. How this is addressed is revealed in the landscape.

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