The economy of cities

The focus of this chapter is the urban economy. To understand fully the economy of cities we must locate our discussion within the framework of the wider phenomenon of post-Second World War global economic restructuring. This process is itself related to the more general concept of globalisation (see Chapter 1). In the context of urban economic change, particular importance is attached to the process of economic globalisation. The driving force behind economic globalisation is capitalism. This is evident in:

1. the growth of multinational and transnational corporations (TNCs);

2. the expansion of trade and foreign direct investment (FDI);

3. the emergence of a new international division of labour (NIDL);

4. the enhanced mobility of money capital across international boundaries;

5. the globalisation of markets for consumer goods;

6. the intensification of international economic competition with the rise of newly industrialising countries (NICs).