PATTERNS OF DISTRIBUTION FOR BUSINESS SERVICES

GROUNDING Rather than distribute themselves in a regular pattern like consumer services do, BUSINESS SERVICES cluster disproportionately in a handful of urban settlements, and individual settlements specialize in particular business services.

WORLD CITIES WORLD CITIES are cities closely integrated into the global economic system because they are at the center of the flow of information and capital. SERVICES IN WORLD CITIES Business services (law, banking, insurance, accounting, advertising) concentrate in them. Transportation and Communication technology were expected to decrease the clustering but instead reinforced it… transportation networks converge on world cities (harbors, rail, highway, airports). BUSINESS SERVICES IN WORLD CITIES The Industrial Revolution caused business services to cluster in world cities. Most industries are owned by corporations that cluster in world cities, and financial, legal, accounting, marketing, etc. services agglomerate with them to service the corporations. CONSUMER SERVICES IN WORLD CITIES World cities have retail services with extensive market areas, and due to the concentration of wealth, both more retail and high-end retail gather. Major museums, theatres, libraries, music halls and sports teams also gather PUBLIC SERVICES IN WORLD CITIES World Cities tend to be centers of national and international political power. Most are national capitals and so contain structures for the head of state, national legislature, courts and government agencies. Geographers distinguish four levels of urban settlements according to their importance in the provision of business services. At the top are world cities.

LEVELS OF URBAN SETTLEMENT Cities can be divided in to four levels of importance WORLD CITIES COMMAND AND CONTROL CENTERS SPECIALIZED PRODUCER-SERVICE CENTER DEPENDENT CENTER Dominant World Cities : NYC, London, Tokyo Major world Cities: Chicago, LA, Washington, Brussels, Frankfurt, Paris, Sao Paulo, Singapore Secondary World Cities: four in North America, Seven in Asia, five in Europe, four in Latin America, one each in Africa and Oceania Contain HQs of many large corps, well-developed banking facilities and concentrations of other business services. Offer a more narrow and specialized variety of services (one type for the management and R&D of specific industries, the other as centers of government and education). Provide unskilled jobs and their well-being depends on decisions made in the other three types of cities (resort/retirement/residential centers, Manufacturing centers, Military centers, Mining Centers).

BUSINESS SERVICES IN LDCs LDCs specialize in two distinct types of business services: OFFSHORE FINANCIAL SERVICESBACK OFFICE FUNCTIONS Small countries (often island countries and microstates) exploit niches in circulation of global capital by offering offshore financial services: TAX SERVICES: taxes on income, profits or capital gains are low or non- existant, and companies incorporated in an offshore center have tax-free status regardless of the nationality of the owners. PRIVACY: Bank secrecy laws help individuals can protect and hide assets in offshore accounts Also called business process outsourcing (BPO) back office functions include processing insurance claims, payroll management, transcription work and other clerical activities… the most known is call-center work. Traditionally, back-office work and workers were housed in the same space as front-office (staff, management) workers. Proximity was important for supervision and speed. Due to rising rent prices in CENTRAL BUSINESS DISTRICTS (CBDs) as well as improved communication technology, many business services have moved routine, clerical work outside the CBD to suburbs and small towns (see bid rent theory in next slide. A select few LDCs have attracted back offices because of low wage labor and high English-speaking populations (India, Malaysia, Philippines

CENTRAL BUSINESS DISTRICT The CENTRAL BUSINESS DISTRICT (CBD) is a compact area, usually one of the oldest districts in the city (if not the original settlement) with a high concentration of the shops, offices and public institutions. Shops with a high threshold, shops with a long range and shops that serve people who work in the CBD locate in the CBD. Characteristics 1.Tallest buildings 2.Most pedestrian traffic 3.Highest value land 4.Smallest store fronts 5.Highest pop density (by day) 6.Original settlement cite 7.Compact (<1% of urban area) 8.High, centralized accessibility 9.Hosts retail, office and gov sistes Linkages within CBD 1.competitive: common stores cluster near each other to take advantage of large customer base 2.Ancillary: service establishments cluster near major employment and transpo centers. 3.Commensal: activities serving the same clientele cluster (theaters and restaurants) Linkages within CBD 1.Impenatrable surface (heavy runoff) 2.Increased air/water/noise pollution 3.Poor soils (compaction, loss of topsoil, construction debris) 4.Fewer species of wildlife 5.Channeled windiness 6.Lack of natural sunlight at ground level 7.Increased atmospheric warmTh (URBAN HEAT ISLAND) CHANGING POPULAITON DENSITY Population density changes as distance from the CBD increases. Due to the land cost at various distances, certain types of housing will be more prevalent at certain distances, thus changing the population denssity… (highrise apartments… older apartments… subdivided homes… then tight, single family homes… duplexes… detached houses… suburban McMansions

BID RENT THEORY Services wish to maximize their profitability, so they are more willing to pay more money for land close to the CBD and less for land further away from it because the more accessible an area (i.e., the greater the concentration of customers), the more profitable it will be. An ANCHOR STORE is one of the largest stores in a shopping mall or district that draws consumers and thus draws other stores to locate near it. The CENTRAL BUSINESS DISTRICT (CBD) is a compact area, usually one of the oldest districts in the city (if not the original settlement) with a high concentration of the shops, offices and public institutions. Shops with a high threshold, shops with a long range and shops that serve people who work in the CBD locate in the CBD. BID RENT THEORY states that price and demand for property changes as the distance from the CBD increases. Different land users will compete for land close to the city centre.

THE ECONOMIC BASE A settlement’s ECONOMIC BASE refers to its unique collection of basic industries. BASIC INDUSTRIES are those which export primarily to consumers outside the settlement (thus bring new money into the settlement’s economy). NONBASIC INDUSTRIES are those where the majority of customers live in the same settlement (thus not bringing new money in). These will usually be consumer services. The economic base is important because basic industry exports bring in cash flow to stimulate the provision of more nonbasic services in the community. Growth of basic industries will create growth in nonbasic industries (for example, more mining operations create more jobs which attracts more population which opens more grocery stores). Growth of nonbasic industries WILL NOT create growth in basic industries (meaning opening more grocery stores will not create more mining operations). Settlements in the US can be classified by their type of basic activity (the ones mapped have unusually high percentages of the workforce in the symbolized industry). Some communities specialize in manufacturing DURABLE GOODS… goods that do not wear out quickly or are not consumed in a single use (steel, cars, machinery, etc.). Others specialize in NONDURABLE GOODS … goods that are fully consumed in a single use or last less than three years (clothing, food, paper, chemicals, etc.) The US is largely post-industrial, and so many settlements have an economic base consisting of business, consumer and public services.

GEOGRAPHY OF TALENT Cartographer Richard Florida has done extensive work in showing that talented individuals (college educated scientists, engineers, professionals and technicians) are not evenly distributed across the map.Richard Florida However, instead of gravitating towards places with high levels of job opportunities and financial incentives, talented individuals gravitate towards cities with high levels of cultural diversity. To determine levels of cultural diversity, he used measured the presence of cultural amenities, the population of gay males, and the coolness index (generated by POV magazine (% pop in 20s, bars/nightlife facilities per capita and art galleries per capita). Florida found an extremely POSITIVE correlation between the distribution of talent and diversity in the largest US cities. Florida’s Who’s Your City websitewebsite CAPTION CONTEST!! Go.