Transcript Lecture 19

Today’s Agenda
Review
 Internal and External Economies
 Economic Base concept
 Urban economic structure
 Urban system

The City as an Economic Node

Urbanization as a process
 Once
a feature of development
 Urbanization
has come to an end,
 Levelling off at about 80% urban
 Now
a feature of underdevelopment
 Rapid
urbanization is found in developing countries
 Megacities found in LDCs (Table 4.10)
 Mexico City now largest at 27.6 million!
Why Do Cities Grow Large?
Agglomeration Economies
Contrast internal and external economies
Urbanization Economies
Localization economies
Transfer economies
Why Do Cities Grow Large?
Communication Economies
Face-to-face interaction
Negotiation
Building relationships
Document transfer
Social interaction potential
Conventions/trade shows
Collaborative/joint decision-making
Boards/committees
Why Do Cities Grow Large?
Communication Economies
Jazz as a form of musical communication
ABC Person of the Week, October 22, 2004
Wynton Marsalis:
“We all congregate here [NYC] because of the energy
of the place and the diversity of the people”
Pred’s Circular and Cumulative Causation (p. 50)
“Enhanced possibility of Invention and Innovation”
Urban Economic Base

Basic activity – ‘exports’ outside city


Non-basic activity


City forming, growth inducing
City serving
Urban multiplier
TA  BA  NBA
TA
UM 
BA
Hypothetical Problem
New meat packing plant to locate in
Lethbridge to serve California market
 300 jobs to be created with prospect of
second shift adding 200 additional jobs
 What will be the total urban impact?
 What is the UM in Lethbridge?

Hypothetical Urban Multiplier
BA = 10,000 and NBA=10,000
 UM?
 Total new employment:

Phase 1
 Phase 2

300*2=600
200*2=400
Economic Base Concept
Foundation for classification of cities
 A crude basis for predicting growth
 Acknowledges urban interdependency and
location of markets

 (skip
minimum requirements pp.142-143)
Chasing Smoke stacks
Basic activity is NOT just manufacturing!
 But manufacturing has a relatively high
multiplier effect (interindustry)
 But leakages can be huge

 In
and out!
 Empresa Brasileira de Aeronáutica S.A.