Globalisation and the Role of the Urban -2


saskia sassen

In the second part of Globalisation and the Role of the Urban, Malathy Madathilezham will dwell on Saskia Sassen’s concept of the change in the role of the nation state and the growing importance of cities in the era of globalisation.

Saskia Sassen is a Dutch-American sociologist noted for her analyses of globalization and international human migration. She currently is Robert S. Lynd Professor of Sociology at Columbia University and Centennial visiting Professor at the London School of Economics. Sassen coined the term global city(http://en.wikipedia.org/wiki/Saskia_Sassen) .

Till very recently, in the system of cross border economic flows, the nation state was the key arbitrator in all exchanges.With the advent of neoliberal practices and globalisation, there has been a ‘rescaling’ of the territories that represent this system. Sassen sees globalisation as a differentiated phenomenon which is not quite ‘placeless’ as is claimed to be.

She talks about three different scales at which these flows can be seen to exist;

Subnational Regions: These are regions that have come up as intended outcome of policies. This can be seen in the manner cities are gaining ascendancy and considered to be pioneers in globalisation. The focus on decentralisation has greatly contributed to this.

Cross Border Regions: These are regions of enhanced flows under the shadow of policy and many exchanges here take place an unintended consequence and in stealth.

Supra National Regions: Here the importance of the nation state is subsumed and free exchange of capital is facilitated. For example free trade zones, SEZs etc. Here we can reflect also on what is the incentive that the nation state has to invest in the supra national region. In the kind of flow of capital taking place across the world, nations are in a competition to attract capital in the form of investments and supranational regions create conditions to attract the same. For developing countries like India there would also be added benefits of creation of these regions like bilateral trade, improved infrastructure and increased employment opportunities.

In this system of flows, the nation state is not the sole actor in the system which has now firms and markets involved in these processes which are enabled by new policies and international standards of the nation states themselves.

One of the main indicators of these are the growing number of cross border mergers, acquisitions and financial centres. Therefore, it can be seen that while there is huge potential for global dispersal and mobility, this system also brings about territorial concentration of resources that are required to manage the dispersal. As a result, Sassen like Brenner says that the growing number of cities are playing an important role in connecting the national economies with the global ‘circuits’. Thus with the growth of global transactions these links become stronger and pronounced in which particular cities are bound in linkages.

Thus in contrast to the earlier era when the cities were considered more as part of a nation state or region, the cities now while still part of the nation become also nodes of the flow of globalisation and address the ambitions of the nation where the nation would also be an investor. Within cities would be embedded different kinds of flows which in turn undergoes pressures due to rescaling at city level.

As cities become nodes for globalisation, there is also a creation of a hierarchy where the cities of the ‘North Atlantic System’ occupy the higher and bulk of the flows. These are regions where the headquarters of multinational organisations are situated. Thus even with the increased use of new telecommunication technologies, there is a tendency of territorial concentration of top level management functions which seem to still benefit from agglomeration economics. Sassen explains this by saying that business networks as opposed to technical networks thrive on economies of agglomeration.

Thus one of the key elements in the current global system is the simultaneous geographic dispersal and concentration of a firm’s operations. In addition, a major component of the global economy is the rise of global financial markets which have gained importance because they enable instantaneous transaction of money and information around the globe through electronic systems. It is interesting to note here that here too there is a disproportionate concentration of location of these markets in the cities of the global North.

Sassen explores the reason behind this form of territorial concentration. According to her the forms of globalization have created a specific organisational requirements like expansion of command function and increase in demand for specialized services (also referred to as corporate services complex) for the firms. The specialised functions are often outsourced to specialized firms rather than produced inhouse. It is seen that these agglomeration of specialized firms are more available in highly developed countries and particularly in ‘global’ cities. So these the availability of these strategic corporate and command function are more in the network of major global and financial markets.

Furthermore, infrastructure requirements of leading firms in information industries are also high with good facilities and capacity for global communication. These factors actually aid in territorial concentration and formation of hierarchy of cities and global cities.It is also pertinent to note about the relationship between nation, state and city in this context. According to Sassen,there is recalibration of these scales and they become embedded within the the city. For example, in the case of Mumbai, the State government of Maharashtra considers it as a source of revenue while the national government looks at Mumbai as an international financial hub and a major node of globalisation.

Sassen discusses how globalisation has got tendencies for concentration and centralising rather than dispersal and decentralisation as can be seen through empirical evidence. Her focus is on how there is the allocation of resources, development and capital are uneven globally and even within cities. She explores the reasons which are conducive or which promote such aspects in the process of globalisation. Both Sassen and Brenner are of the view that cities have become central and important in the context of globalisation.

global-city1_large

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