A sustainable city combines stable long-term economic growth with a resilient ecological system. It is also a region of social sustainability with low levels of spatial segregation of different socio-economic groups. Spatial inclusion primarily involves provision of equalized city-wide access to territorial public goods. High durability of physical networks and buildings facilitates economic, environmental and social sustainability. This study shows that durability varies considerably between Asian, European and North American cities, with mean life expectancies of buildings that range from below 20 years in Chinese cities to over 100 years in European cities such as Paris. Urban planning principles that focus on the slow and steady expansion of accessibility and density within a durable built environment are consistent with general economic equilibria, while avoiding the pitfalls of political planning of the markets for private goods.
A dynamic model that distinguishes between slow and fast processes shows that a triple helix model is impossible as a tool for promoting interdependencies among science, industry and government. We present a theorem to demonstrate that a triple helix strategy is logically impossible as a means of funding scientific research in universities. In spite of this logical impossibility, national and regional triple helix strategies to improve productivity and innovative capacity have been favoured by politicians of almost every ideological stripe. Coordination of science and industry by governments is not new; it harks back to the mercantilism of seventeenth-century Britain and France. In the twentieth and twenty-first centuries, triple helix policies have led to a short-term bias in favour of applied technological research. Several examples, ranging from the military use of scientists in World War II to Chinese high technology parks show how triple helix strategies tilt playing fields, suppress academic freedom0 and expose scientists to the whims of politicians.
Europe has a long history as a global center of scientific research, but not all European regions are alike. Regions such as Île de France and the corridor that stretches from Cambridge to Oxford via London produce a disproportionate share of Europe’s science output. An econometric analysis sheds light on the factors that explain the spatial distribution of European science. One result is that the regional volume of Web of Science publications depends on the regional number of researchers in higher education institutions. This is however not the only cause of high output. Universities and their surrounding regions are slowly evolving institutional structures. Some regions host universities that are more than 500 years old. A second key result is that an increase in the age of a region’s oldest university is associated with greater output, other things being equal. Third, interregional accessibility via road, rail, and air networks is important for small regions, but not for large ones. Conversely, regional high-tech R&D employment is important for large but not for small regions.
Long-term economic development is determined by changes to the infrastructure, especially material and non-material infrastructural networks that link agents in different locations. The infrastructure consists of the slowly changing, collective arena that supports production, exchange, and consumption, such as the built environment, transport networks, and institutions. In the short run the infrastructure can be regarded as fixed. Changes to the infrastructure are under normal conditions small enough to be disregarded by producers and consumers. With the creation of a critical link of a network, there will however be a revolutionary restructuring of the arena. Critical links are here defined as additions to infrastructural networks that create opportunities for new information and transport flows between previously unconnected regions. Such a revolutionary restructuring of infrastructural networks has been called a logistical revolution. Certain institutional pre-conditions are necessary for a logistical revolution, while the creation of a critical link is both a necessary and a sufficient condition. This paper discusses the three logistical revolutions that occurred in the 13th century, around 1600, and in the 19th century, which each had crucial similarities with the current “information revolution.”
Economic development spans centuries and continents. Underlying infrastructural causes of development, such as institutions and networks, are subject to slow but persistent change. Accumulated infrastructural changes eventually become so substantial that they trigger a phase transition. Such transitions disrupt the prior conditions for economic activities and network interdependencies, requiring radically transformed production techniques, organizations and location patterns. The interplay of economic equilibria and structural changes requires a theoretical integration of the slow time scale of infrastructural change and the fast time scale of market equilibration. This paper presents a theory that encompasses both rapidly and slowly changing variables and illustrates how infrequent phase transitions caused four logistical revolutions in Europe over the past millennium.
Unemployment rates differ dramatically across European regions. This article analyses these differences by integrating institutional and spatial perspectives into a unified dynamic framework distinguishing between slow and fast processes of change. The framework forms the basis for an econometric model that is used to analyse labour market differences among European Nomenclature des unite ́s territoriales statistiques 2 regions. The results of random-effects models indicate that four key factors—all of which are of the slowly changing type—explain a large part of the variation in unemployment as well as employment rates. Flexible labour market regulations and above-average levels of interpersonal trust are institutional factors that reduce unemployment. Accessibility factors such as inter-regional transport connectivity and local access to skilled workers have similarly substantial effects. Whether a region belongs to the Eurozone or not seems to be less important.
With the publication of The Rise of the Creative Class by Richard Florida in 2002, the ‘creative city’ became the new hot topic among urban policymakers, planners and economists. Florida has developed one of three path-breaking theories about the relationship between creative individuals and urban environments. The economist Åke E. Andersson and the psychologist Dean Simonton are the other members of this ‘creative troika’. In the Handbook of Creative Cities, Florida, Andersson and Simonton appear in the same volume for the first time. The expert contributors in this timely Handbook extend their insights with a varied set of theoretical and empirical tools. The diversity of the contributions reflect the multidisciplinary nature of creative city theorizing, which encompasses urban economics, economic geography, social psychology, urban sociology, and urban planning. The stated policy implications are equally diverse, ranging from libertarian to social democratic visions of our shared creative and urban future.
Most of us have got an education adapted to the demands for specialized labor emanating in industry or public administration. Most of the jobs have been decided according to the basic principle of division of labour, generating productivity of the work. According to this principle the worker should be specialized to perform certain highly specialized tasks without any greater space for improvisation or change of work routines. Adam Smith (1776, 1904) argued strongly in favour of a far-going division of labor (or specialization of the workforce) as a way of achieving growth of productivity. However, Adam Smith clearly saw the potential conflict between creativity and productivity by division of labor and specialization of the work force: In the progress of the division of labor, the employment of the far greater part of those who live by labor, that is, of the great body of the people, comes to be confined to a few very simple operations; frequently to one or two. But the understandings of the greater part of man are necessarily formed by their ordinary employments. The man whose whole life is spent in performing a few simple operations, of which the effects to are, perhaps, always the same, or very nearly the same, has no occasion to exert his understanding, or to exercise his invention in finding out expedience for removing difficulties which never occur. He naturally loses, therefore, the habit of such exertion and generally becomes as stupid and ignorant as it is possible for a human creature to become. (Wealth of Nations, II)
Economic growth has conventionally been modelled for space-less economies. Econometrically, growth models have mostly been estimated on time series of national economies with minimal distinctions between economies as large as Japan or the USA and as small as the smallest economies of Asia and Europe. This approach to the analysis of economic growth is especially dangerous when the impact of scientific and technological knowledge is important for the process of growth. Creative activities and the formation of knowledge are highly clustered in space. Thus, the spatial distribution of accessibility to knowledge capital and investments determines economic growth of nations and other spatial aggregates.
The Haavelmo paradox contrasts chaos as the generic property of non-linear dynamic models with the fact that most statistics on macroeconomic growth processes tend towards persistent constant positive rates of growth. The paradox can be resolved if the non-linear dynamic model is subdivided into fast, private variables and very slow, public variables. Modelling spatial accessibility of knowledge as a slow, public variable and machinery and similar material capital as a relatively faster, private variable ensures stable growth, at least in the short and medium terms of the economic growth processes.
In the post-industrial network economy, international gateway regions are becoming increasingly important. These gateway regions are the nodes (defined as a city or a city region) that act as saddle points between a region and the global economy. While gateway regions have existed ever since inter-regional trade was first practised, new non-trade networks, and the wider global economy, have made these regions more complex. The book includes discussions of infrastructure networks such as the internet and air transport, as well as networking activities such as long-distance scientific cooperation, financial networks and direct investments. The contributors have expertise in fields such as regional economics, economic geography, institutional economics and business administration.
The world experienced three major urbanization processes between the eleventh and the twentieth century. All three periods of city growth were associated with revolutionary improvements in the logistical systems. In large parts of the world the third logistical revolution (the Industrial Revolution) has not yet come to an end. In industrializing countries and regions urbanization is thus very rapid. Concurrently, a new and fourth logistical revolution is changing the economic, social and regional structure of the post-industrial parts of the world, leading to the creation of a new Creative Society. A key aspect of this development is the increasing role of creative and innovative city regions with global linkages. These regions now form a new supranational rank-size distribution, which is centred on a few conurbations in Europe, North America and East Asia. Most post-industrial economic development is taking place in a small number of highly ranked creative regions, while other regions are suffering from the “creative destruction” of their traditional industries. One consequence of this restructuring is increasing regional income inequalities in the post-industrial nations.
Surveys of artists' location choices show that they disproportionately reside in large cities. This paper introduces a model that attempts to explain this urban preference. The model includes four factors: access to other artists; access to consumer demand; access to service jobs; and housing affordability. These four factors are combined in a spatial equilibrium model. An equilibrium spatial distribution of artists is derived from the model and is correlated with the actual distribution among Swedish municipalities. Subsequently, the model is used for an econometric estimation of factor effects. The results show that access to other artists and local access to service jobs are important localization factors. Educated labor used as a proxy for consumer demand has a significant effect on artists' location choices.
Production theory has remained substantially unchanged since the publication of the theory of production by Frisch (Theory of production, D. Reidel, Dordrecht, 1928; Nord613 Tidskr Tek Økon 1:12–27, 1935). The theory is based on the idea of a firm deciding on the possible input and output combinations of a single unit of production. His theory was substantially copied in contributions by Carlson (A study on the pure theory of production, University of Chicago, Chicago, 1939) and Schneider (Einführung in die Wirtschaftstheorie. 4 Bände, Mohr, Tübingen, 1947), and later by practically all textbooks in microeconomics. The idea is to model the firm as a “black box” in which a finite number of externally purchased inputs are transformed into a finite number of outputs to be sold in the market(s). Most of the time, the prices are externally determined. Often, the production process is summarized by some simplified production function as, for example, in the form of a CES function. Another and conceptually richer approach is the formulation of an activity analysis model. In the latter case, simple internal interdependencies can be included. In this paper, we indicate how internal interdependencies can also be modeled within a special CES framework. In recent decades, there has been a remarkable growth in the number of production units of firms such as IKEA, Walmart and Apple to name a few such global networking firms. Most of the analysis of these network firms has been modeled by logistics and other operations-research analysts (Simchi-Levi et al. 2008) and to a limited extent by researchers in business administration schools. Very little has been done in economics. We propose a modeling approach consistent with the microeconomic theory.
This title was first published in 2003. This book focuses on the role of tangible and intangible networks that affect spatial interdependencies in economic and social life. It addresses the question - is the effect of distance disappearing? In examining this question the book considers the types of interaction that bring about globalisation of markets as well as social life in general and the distortion of distance patterns and changes in spatial interdependencies. The contributions elaborate theory and methods by examining hierarchical fields of internal and external influence on regional change sources of productivity growth in a network of industries, endogenous growth and development policies. The book concludes with an assessment of plan evaluation methodologies for a changing and globalizing world characterized by new economic networks and networking arrangements.
The development of economic theory after World War II has focused on clarifying the necessary and sufficient conditions for the existence of an idealized general equilibrium. Debreu (1956), Arrow and Hahn (1971), and Scarf and Hansen (1973) established these conditions, building on earlier attempts by Cassel (1917) and Wald (1933–34, 1934–35). A key assumption in the formulation and proofs of the existence of a general equilibrium of a competitive economy is a large (or even infinite) number of buyers and sellers (Aumann 1964), which ensures anonymous markets and mutual independence of agents. Another assumption is the convexity of preference and production technology sets (Uzawa 1962). A third assumption is flexible pricing of goods and production factors.