World city formation (Key industries)

Question 1

Headquarter economy

Answer 1

• Cities encourage headquarters of global firms
• Attain headquarters agglomeration effect (Beijing institute of economic development 2011)
• Government incentives are crucial to HQ economies (Pan, Et al.2014)
• As command centres, HQ’s of large firms are crucial to the economy of cities where they are located (Pan,et al.2014)
• It has become a feasible strategy for cities to attract HQ of large firms in order to advance their urban and regional economies (Klier,Testa.2011)
• Promoting HQ economy, can improve a cities reputation (Pan,et al.2014)
• HQ tend to locate due to agglomeration benefits, sharing common inputs and the same labour markets and enjoying information spillover

Question 2

Advanced producer services

Answer 2

• Emergence of transnational corporation resulted in the globalisation of advanced producer services (Sassen,2011)
• Includes accounting, advertising and banking
• In 1980’s APS followed their clients onwards to create worldwide office networks (Taylor,P,J.2012)
• It is APS firms who are the prime actor in world city network formation (Taylor,P,J.2001)
• Places where this sector is expanding indicates economic success (Taylor,P,J.2012)
• Transnational operations require a huge amount of legal expertise (Sassen.2001)
• Sassen (1991) suggests that the rapid growth, specialisation and agglomeration of producer service firms has been responsible for the formation of global cities

Question 3

Cultural economy

Answer 3

Cultural and creative industries can be characterised as (Scott.2018)

1) Goods which have symbolic value (as opposed to utilitarian value)
2) Consumption of these goods rises with disposable income
3) No direct substitute exists
4) Employment relations are often flexible, fixed term, part time.
- Senior managers have found themselves turning to culture as a means of attempting to improve organisational performance
- The positive connection of product image to place yields a kind of monopoly rent that adheres to places, their insignia and brand names that may attach them. Their industries grow as a result (Molotch.1999)
- The more specific cultural identities of these cities the more monopoly power of place they possess that enhance their competitive advantages and provide their cultural products with an edge in wider markets (Scott.2000)
- A cultural economy is represented by an extremely wide variety of both manufacturing and service activities. (Scott.2000)