Form and Function: Visualizing the Shape of Cities and Economies

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Form and Function: Visualizing the Shape of Cities

Visualizing the Shape of Cities and Economies

The Industrial Revolution changed the form and function of cities. New patterns of work resulted in massive wealth and distinct advantages for certain regions. Urbanization emerged as a defining characteristic of this age.

During the latter part of the Industrial Revolution, Cambridge School economist Alfred Marshall looked at a particular question: why did certain industries concentrate in specific places?

Marshall argued that the local concentration of industry created powerful economies promoting technical dynamism and innovation.

This Chart of the Week highlights the spatial patterns and business relationships created at the urban scale. Marshall’s insights from the past help us understand present-day tech and media economies and the massive growth of urban regions.

The Logic of Concentration

Marshall observed that industrial concentration led to long-term tendencies such as increasing returns on capital and compounding regional advantages.

The heart of this observation is that knowledge resides within the companies that make up a particular industry. Over time, these companies can accumulate even more information and direct the flow of new and innovative ideas. This creates local specialization and increasing profits, while also concentrating success, knowledge, and wealth into one key locale.

He defined this pattern as a Marshallian Industrial District.

An Evolving Landscape: Four Patterns

Marshall’s work would later influence the work of Ann Markusen, who created a typology of three additional industrial patterns. The patterns identify what makes a city attractive or repellent to income-generating activities.

District Type:Description:Example:
Marshallian Industrial DistrictThis is a clustering of firms in a similar industry, operating within a certain geographic area.Social media marketing companies in San Francisco
Satellite Platform DistrictA set of unconnected branches with links beyond regional boundaries, each part of its own globally oriented supply chain.Suburban neighborhoods
Hub and Spoke DistrictAn industrial sector with suppliers clustering around one, or several, dominant firms.Airplane manufacturer Boeing and the region of Seattle.
State-anchored DistrictIndustrial activities are anchored to a region by a public or non-profit entity, such as a military base, a university, or a concentration of public laboratories or government offices.Madison, WI and Columbus, OH are examples of university towns, as are many cities with large defense installations such as Pearl Harbor in Hawaii.

There are both benefits and problems—called “externalities”—associated with the spatial agglomeration of physical capital, companies, consumers, and workers:

AdvantagesDisadvantages
  • Low transport costs
  • A great local market
  • A large supply of labor
  • Increased chance of supply and demand for labor
  • Lower search costs and fast matching of products and labor
  • Knowledge spillovers between firms
  • Strong environmental pressures
  • High land prices
  • Bottlenecks in public goods (e.g. poor/overburdened infrastructure)
  • Corruption
  • High competitive pressure
  • Economic inequality

Clusters for a Digital Age

In the past, the physical constraints of an area defined the structure of cities. Now that so many companies are free from the shackles of producing physical goods, does geography still matter?

Researcher Marlen Komorowski re-examined the concept of clustering with this question in mind. Here are five types of media clusters identified in her research.

The Shape of Media Clusters

District Type:Description:Example:
The Creative RegionA metropolitan region that provides advantages due to readily available infrastructures and institutions, and encourages the development of face-to-face interaction and collaboration networks.Berlin, Singapore, Amsterdam
The Giant AnchorA location defined by the activities of one or several large media institutions, which attract complementary firms to agglomerate. Similar to the hub-and-spoke cluster model.Seattle, (Microsoft, Amazon), and Cambridge (Harvard, MIT)
The Specialized AreaA media cluster that is located either in a neighborhood within a big metropolitan area or in a small urbanized area. The Specialized Area is marked by a readily available, large pool of employees from a specialized field.Soho (London), Silicon Valley
The Attracting EnablerDetermined by the location of certain facilities or resources that can be shared that enable media activities. Movie studios are a prime example.Los Angeles, Vancouver
The Real EstateThis type of cluster is centered around office space, sometimes purpose-built for media and creative companies. This space can also include incubators / accelerators.Dubai Media City, Dublin’s Digital Hub

Four rationales drive these patterns: agglomeration, urbanization, localization economies. and artificial formation.

The Shadow of the Industrial Revolution

Alfred Marshall made the argument that local concentration of industry can offer powerful economies and technical dynamism and innovation.

We now see this pattern with the emergence of megacities that accrue the majority of the financial and knowledge returns. These megaregions set the perfect stage for dynamic economic exchanges between skilled labor, technology, and networks.

What does your city look like?

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The post Form and Function: Visualizing the Shape of Cities and Economies appeared first on Visual Capitalist.

Categories Cities economic geography economics economy Jobs Markets marshallian cluster Real Estate urban planning urbanization


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