KI 4: Why do business services cluster in large settlements?

  Every urban settlement provides consumer services, but not every settlement has the same number or type of business services  4 levels of urban settlements according to importance of global business services:  World Cities  Command and Control Centers  Specialized producer-service center  Dependent center Hierarchy of business services

  Closely integrated into the global economy  At center of the flow of information and capital (optional Quaternary job sector)  Business services cluster in these cities despite advancement of transportation and communication  As centers of finance, attract large banks and economic institutions  Can be dominant, major, and secondary (provide at least 3 examples of each from pg. 396) World Cities

  Contain the headquarters of many large corporations, and many other business services  Two levels are regional (Denver, New Orleans, Atlanta) and sub-regional (Jacksonville, Charlotte, Nashville) Command and Control Centers

  More narrow and specialized variety of services  Specialize in management and research & development— Functional  Detroit: motor vehicles  Pittsburgh: steel  Rochester: office supplies  Others specialize in government and education like State Capitals with a major university  Colombia  Albany  Madison Specialized Producer-Service Centers

  Provide unskilled jobs and depend on economic decisions made in other regions (more tertiary jobs than quaternary or quinary)  Resort, Retirement, and Residential Centers:  West Palm Beach, Greenville  Manufacturing Centers  Gary, Lansing  Industrial/Military Centers  Charleston (SC), Mobile  Mining Centers  Charleston, WV Dependent Centers

  Two main types  Offshore Financial Services (usually small islands)  Taxes: taxes on income and capital gains are almost nonexistent (US loses almost $70 Billion in tax revenue because companies conceal their money in offshore accounts)  Privacy: bank secrecy laws protect individuals and businesses  Back offices  Ex. Call centers in India  Businesses use LDCs for low wages, low rent on office space, and their ability to speak English Business Services in LDCs

  Settlement’s economic structure comes from its basic industries—what they export to consumers outside of settlement  Nonbasic industries are ones that sell to consumers in the settlement  The basic industries are the economic base of a settlement because they bring money into the settlement, and that money is then used to grow nonbasic industries or local industries  Outline pgs. 398 and 399 on Notes  Read Case Study on pg. 399 Economic Base of Settlements