本刊特稿

WHY GLOBAL CITIES?

SASKIA SASSEN

 

Global Cities across the world today are the terrain where some of the novel conditions marking the twenty-first century become concrete. They are key places where multiple globalization processes take on localized formats, where electronic networks intersect with thick environments (from financial centers to shopping centers), and where new subjectivities arise from the encounters of people from all around the world. Thus, today’s Global Cities have emerged as a strategic site for a whole range of new types of operations, including operations pertaining to the global economy as well as local ones.

 The concept of the city is complex, imprecise, and charged with specific historical and thereby variable meanings. Today’s major trends further add to these debates and complexity. One particular feature is that key cities in diverse countries enter global networks;  most cities and towns do not. These cities (which I named Global Cities) contain multiple networks that connect specific operations and activities often across large distances and across diverse countries. 

 

A TRANSFORMATION THAT BEGINS IN THE 1980S


The 1980s marks a very specific economic transformation in major western cities. It was, in many ways, the beginning of a new era, one that saw digitization as having the capacity to launch foundational transformations.  

One key transformation many experts asserted would be decisive, was that cities would no longer matter for the advanced economy. Cities might still matter for people who wanted to go to the theater and such, but they would not matter much for the advanced economy. There was great conviction that powerful firms, global firms, and  such would no longer need cities given the digital revolution.

This turned out to be mostly wrong. Cities have become even more important, and this is especially so for the most advanced and digitally enabled/connected sectors. Why? Because time began to matter even more –fractions of seconds mattered. And they mattered precisely because of the digital revolution: now competition was everywhere, accessing the latest could be executed by anyone, and more.

How could such smart high level professionals get it so wrong –both the developers of digitization and the high-level users of digitization?

This became one of several questions that led me to go digging so to say into the actual interior of digitized sectors. Why does distance and time matter even more now for the most digitized sectors?  

 

DISCOVERING THE NEW ELEMENTS OF THE GLOBAL CITY.


Contesting the widespread notion in the 1980s that place no longer mattered to highly digitized economic sectors turned out to be the first step towards conceptualizing the Global City function. It became an effort to detect a new, somewhat elusive formation deep inside major cities. And the Global City Function included only some of the most advanced sectors of major cities. It did not include a broad range of economic sectors nor did it include every single resident of a global city.

Then came 8 years of endless data analyses and exciting fieldwork. My basic mode was discovery, not replication. What was the combination of elements that might produce this ironic outcome: the fact that the most powerful, rich, and digitized economic actors needed “central places,” and perhaps more than ever before? Large corporate firms engaged in routinized production did not really need to be located in cities –they could locate anywhere. What these types of firms needed if they went global was access to a whole new mix of complex specialized services almost impossible to produce in-house (as had been the way of doing things for many big firms after World War 2 especially.

A second hypothesis that was stronger than I expected was that this new economic logic, partial as it was, would generate high-level jobs and low-wage jobs; it would need far fewer middle-range jobs than traditional corporations. But those low-level jobs, whether in the office or in households, were going to matter more than one might imagine. I described them as the work of maintaining a strategic infrastructure. And this strategic infrastructure includes the family or home life of top level personnel. Everything needs to work fine, because this top level personnel could not have family crisis, children crisis….none of that.

 

INTERMEDIATION: FROM MINOR SIDESHOW TO KEY LOGIC OF THE GLOBAL CITY


A key hypothesis I arrived at early on in my research was something I named “intermediation.” I posited that intermediation was an increasingly strategic and systemically necessary function for the global economy that took off in the 1980s. This in turn led me to generate the hypothesis about a need for specific types of spaces: spaces for the making of intermediate instruments, form of knowledge, and capabilities. One such strategic space concerned the instruments (legal, of talent and knowledge, of transport, of where to locate the factories off-shore, etc) needed for outsourcing jobs, something I had examined in my first book. 

But what began to emerge in the 1980s was on a completely different scale of complexity and diversity of economic sectors: It brought with it the making of a new type of city formation. I called it the Global City—an extreme space for the production and/or implementation of very diverse and very complex intermediate capabilities. This did not refer to the whole city. I posited that the Global City was a production function inserted in complex existing cities, albeit a function with a vast shadow effect over a city’s larger space.

In that earlier period of the 1980s, the most famous cases that made visible the ascendance of intermediate functions were the big mergers and acquisitions. What stood out to the careful observer was how rarely the intermediaries lost. The financiers, lawyers, accountants, credit rating agencies, and more, made their money even when the new mega-firm they helped make eventually failed. Finance became the mother of all intermediate sectors, with firms such as Goldman Sachs and JP Morgan making enormous profits, followed at a distance by the specialized lawyers and accountants.

From the early phase dominated by mergers and acquisitions, intermediation has spread to a growing number of sectors. This also included modest or straightforward sectors: For instance, most flower sellers or coffee shops are now parts of chains, they only do the selling of the flowers or the coffee, and it is headquarters that do the accounting, lawyering, acquisition of basic inputs, etc. Once, those smaller shops took care of the whole range of items; they were a modest knowledge space. Intermediation can now be thought of as a variable that at one end facilitates the globalizing of firms and markets and at the other end brings into its envelope very modest consumer oriented firms.

It also contributes to explaining the expansion in the number of global cities and their enormous diversity: each major global city has specific knowledge cultures that tend to come from a deep local history.

 

MAKING AND INVENTING INTERMEDIATE FUNCTIONS.


A major concern for me was to capture the fact that intermediate functions needed to be produced, developed, refined, mixed with other types of instruments, and so on. In its narrowest sense, then, I conceived of the Global City function as a space of production: a silicon valley for advanced services, inventing new modes of producing wealth (notably by completely re-inventing high finance).

Finance could not have become as complex and innovative (to put it kindly) if it had not had a network of global cities. Each major city has had a history of inventing economic/financial instruments. Chicago’s was very different from New York’s. And I would argue that Shanghai’s is very different from Beijing’s, and so on.

Eventually, I expanded the category to incorporate a diversity of meanings, including the instruments needed by counter-systemic actors to operate in complex global settings – from environmental to human rights activists. And I began to include conventional actors such as museums engaging in international exchanges often for the first time because now they had access to a range of complex legal, accounting, and insurance instruments. It also enabled a massive scale up of irregular actors, from traffickers in drugs and people to an irregular market for armaments.

As a space of production, the Global City generates extreme needs. These include state of the art infrastructures that almost inevitably go well beyond the standards for the larger home cities; thus, for instance, the financial centers in New York and London in the 1990s had to develop types of digital infrastructure that were on a completely different level from most of the rest of the city. Further, the Global City generates a sharp rise in the demand for both high-level talent and masses of low-wage workers. What it needs least are the traditional modest middle classes so central to the era when mass consumption was the dominant logic; larger cities with more routinized economies do continue to need them. Finally, as the global economy globalized, this Global City function spread to more and more cities: It was a sort of frontier space enabling global corporate actors to enter national economies.

What started as a hypothesis and then became a researched fact is that such instruments for intermediation are a marking feature of the type of global economy that emerged in the 1980s and had developed its global reach by the late 1990s. Today intermediation is a major, and much needed factor. This, then, also explains the rapid increase in the number of global cities during the 1990s and onwards. Today, we can identify about 100 plus global cities. And each one has specific specialized capabilities.

Again Shanghai, Nanjing, Wuhan, and Beijing are sufficiently different, with sufficiently specialized knowledges that partly come from their long histories, that competition is not the major issue. Their diverse power to shape a major global trend, the capacity to develop/invent new instruments, and so on, in good part arises, comes out of their older deep economic histories.

I always want to tell mayors that they should never forget the fact that the deep economic history of place is what makes them different, special, and leaders in one or another domain. They compete far less with each other than much of the talking and newspaper writing would suggest. Their old histories are partly in play in those domains where they stand out, where they are the strongest. And it is often thoseolder specific, often highly specialized knowledge domains, that gives them strength today.

 

INVISIBLE BUT IMPORTANT.


Finally, and critical to the whole project was what I refer to as the infrastructure to ensure maximum performance by high-income talent—the broad range of conditions enabling their work-lives. This aspect is never really mentioned.

Prominently included in my analysis was a range of lowly rewarded tasks, from low-level office tasks to low-wage household work. I argued that in many regards the homes of top-level staff in the Global City are an extension of the corporate platform. To get such tasks out of the easy language of “low-wage jobs,” I described these tasks as the work of “maintaining a strategic infrastructure.” And, very important to my analysis but never mentioned in any analyses of the global city, is the fact that the households of top-level workers are strategic sites in the larger set up. Everything has to function like clockwork, with no little crises.

This interpretive move also fed into the notion of the Global City as a very specific space of production, and one enabling the organizing of its low-wage workers, such as janitors and household workers, precisely because it was about the maintenance of a strategic space. History bore this analysis out when it was janitors in major cities in the United States and Europe who managed to organize a janitors union. Some years later, it was domestic workers who succeeded in creating a union in high-income  neighborhoods –while they had failed to organize in middle class neighborhoods, where families either could not afford to hire an outside household worker, or did not want to “waste” their money. In contrast, in the high-level homes of top professionals, enabling/maximizing the intelligence and peace of mind was critical –so yes, they are expected to hire outside cleaners and cooks and baby sitters, and people who come and water all the plants, and more.

In my reading at the time (and today), the particular types of spaces where these jobs were being executed mattered. This underlines the notion that the homes of these high-level workers matter. And, thus, the need for a workforce in charge of maintaining this strategic infrastructure –that is, the homes of these high level workers). The same tasks in a typical suburban mid-level household would not have enabled the low-wage workers doing those tasks to organize as they did in the top level households. In short, the jobs could not be flattened into the tasks involved.

 

THE GLOBAL CITY


To conclude, let me add a few final elements.

The Global City function is made, and that process of making is complex and multi-faceted: it needs to factor in laws, accounting practices, logistics, and a broad range of other components, such as the existence of diverse cultures of investment depending on the country and the sector.

This process of making could not take place simply in a firm or a laboratory situation. It had to be centered at the intersection of different types of emergent global economic circuits with distinct contents, all of which cut across economic and cultural strengths of a given city or region. It needs a space where professionals and executives coming from diverse countries and knowledge cultures wind up picking up knowledge bits from each other even if they did not intend to do so. And, not often understood, an important but overlooked fact is that even minor global cities have invented new instruments and built new markets, often based on a single commodity –that is, based on what they have long known how to do.

I see in this mix of processes the making of a distinctive “urban knowledge capital.” I mean by this a kind of capital that could only be made via a mix of conditions, among which was the city itself with its diverse knowledge and experiential vectors. I saw this both in its broad sense (all the knowledge-making institutions, individuals, experi- mental moves), and in the narrower sense of the Global City function.  The latter is marked by highly specialized and dedicated knowledge systems that need each other, even if only bits of each other’s knowledge strengths). Out of this then came my hypothesis that particular types of cities would become highly desirable sites for ensuring the production and supply of extraordinary combinations of knowledge components.



[1] See 2001. 2nd Edition. The Global City. Princeton, NJ: Princeton University Press.

 [2]  “The Global City: Enabling Economic Intermediation and Bearing Its Costs” (City & Community 15:2 June 2016? (American Sociological Association)

 [3] See Sassen 2018. Cities in a World Economy,5th edition. London, UK: Sage.?

[4] Sassen, Saskia. 1990. The Mobility of Labor and Capital: A Study in International Investment and Labor Flow. Cam- bridge, UK: Cambridge University Press.