Chapter 12 Section 3 Why do business services locate in large settlements?

Business Services & Settlements World cities – Ancient world cities – Medieval world cities – Modern world cities Hierarchy of business services – World cities – Command and control centers – Specialized producer-service centers – Dependent centers Economic base of settlements

Distribution of business services In MDCs, all settlements have consumer services proportional to their size Not all settlements of the same size have the same number of business services though They tend to cluster in a handful of settlements Individual settlements also might specialize in a particular business service like banking or communications

Ancient Ur Fig : Ur, in modern day Iraq, was one of the earliest urban settlements. The ziggurat, or stepped temple, was surrounded by a dense network of residences.

Athens, Greece Fig : The hilltop site of the Acropolis, dating to about 500 BC, still dominates the skyline of modern Athens.

Athens, Greece The hilltop site of the Acropolis, dating to about 500 BC, still dominates the skyline of modern Athens.

Distribution of business services History of business services: – Ancient World Cities: from 3000 BC on – Ancient Athens: 1 st millennia BC – Ancient Rome: 509 BC to AD 476 – Medieval World Cities: AD – Modern World Cities: 1300 to present

Distribution of business services The Industrial Revolution’s push for industry and business gave rise to a more important set of business services They also were more centered in industrialized regions and settlements The more industry, the more business services This is still true to this day (more in Northeastern US, western Europe, east Asia)

World Cities Big cities have lots of consumer services (demand creates supply) Also, a large percentage of the really rich live in major world cities so luxury and specialized products are also offered Big cities have more businesses and therefore more business services They also are often seats of government or have large local governments themselves so they offer lots of public services

Brugge, Belgium Fig : Brugge (or Bruges) was a major port and wool manufacturing center from the 12th century. It is marked by squares surrounded by public buildings.

Carcassonne, France Medieval European cities such as Carcassonne, in southwestern France, were often surrounded by walls for protection.

Paris Fig : Paris was originally surrounded by walls which were expanded to include new neighborhoods as the city grew.

Hierarchy of World Cities and Business Services There are four levels of cities that play a major role in the provision of producer and other business services in the global economy – World Cities – Command and control centers – Specialized producer-service centers – Dependent centers

World Cities They are most closely integrated into the global economic system Center of the flow of information and capital More business services than any other cities Three main ones- London, New York, and Tokyo 2 nd tier- Chicago, Washington, D.C., Brussels, Frankfurt, Paris, Zurich, Sao Paulo, Singapore, and Los Angeles 3 rd tier- Houston, Miami, San Francisco, Toronto, Bangkok, Bombay (Mombai), Hong Kong, Manila, Osaka, Seoul, Taipei, Berlin, Madrid, Milan, Rotterdam, Vienna, Buenos Aires, Caracas, Mexico City, Rio de Janeiro, Johannesburg, and Sydney

Hierarchy of World Cities Fig : London, New York, and Tokyo are the dominant world cities in the global economy. Other major and secondary world cities play lesser roles.

Command and Control Centers This is the second level of cities They contain the headquarters of many large corporations, banking facilities, and other business services like insurance, accounting, advertising, law, and public relations as well as important educational, medical, and public institutions Two levels- regional and subregional centers In the US, regional command centers are Atlanta, Baltimore, Boston, Cincinnati, Cleveland, Columbus, Denver, Indianapolis, Kansas City, Minneapolis, New Orleans, Philadelphia, Phoenix, Portland, St. Louis, and Seattle Subregional centers include Biloxi, Birmingham, Charlotte, Des Moines, Jackson, Jacksonville, Little Rock, Memphis, Nashville, Oklahoma City, Omaha, Richmond, Salt Lake City, Shreveport, Spokane, Syracuse

Specialized Producer-Service Centers The third level of cities are more narrow in what they offer and highly specialized in a variety of services Some specialize in management and R&D (research and development) Motor vehicles in Detroit Steel in Pittsburgh Office equipment in Rochester, NY Semiconductors in San Jose, CA Also include places that specialize in govt. or edu. Like Albany, Lansing, Madison, Raleigh-Durham-Chapel Hill (Research Triangle Park)

Dependent Centers These cities provide relatively unskilled jobs and depend for their economic health on decisions made in the cities above them in the hierarchy Four types: – Resort, retirement, and residential cities like Fort Lauderdale, FL, Las Vegas, Orlando, Albuquerque – Manufacturing Centers like Buffalo, Chattanooga, Erie, Hickory, Winston-Salem, and Rockford – Industrial and military centers like Huntsville, Newport News, Fayetteville, and San Diego – Mining and industrial centers like Charleston, WV, Duluth, Iowa

Business Service Cities in the U.S. Fig : Below the world cities in the hierarchy of U.S. cities are command & control centers, specialized producer-service centers, and dependent centers.

Economic Base of U.S. Cities Fig : Cities that have a high proportion of their labor force engaged in the specified economic activity shown.

Economic Base of Settlements Basic industries- export primarily to consumers outside of a settlement Nonbasic industries- export mostly to people that live in the community The economic base is a community’s unique collection of basic industries It looks at imports and exports

Specialization Many cities specialize They become known for it It gives them a comparative advantage Can become too dependent though Makes them more economically interdependent

Business Services in LDCs Far fewer than MDCs Most people are in the primary and secondary sectors of labor Fewer needs for business services Fewer world cities They specialize in two types of business services generally- offshore financial services (tax advantages and privacy) typically on islands and in microstates and back-office functions (processing insurance claims, payroll management, transcription work, billing services, credit card claims, call centers, and other routine clerical activities

Distribution of Talent Brain drain Talent is drawn to world cities Often people with skills and lots of brainpower and novel ideas and inventions head to MDCs This hurts LDCs

Geography of Talent Fig : Cities with high levels of talent (measured by percent of scientists, professionals, etc.; left) are also often cities with high levels of diversity (measured by cultural facilities, % gay population, etc.; right).

Cities with High Talent Levels Fig a: Cities with high levels of talent (measured by percent of scientists, professionals, and college-educated).

Cities with High Diversity Fig b: Cities with high levels of diversity (measured by cultural facilities, % gay population, and a coolness index).