Source: adapted from T.R. Lakshmanan and L.R. Chatterjee (2005) “Economic Consequences of Transport Improvements”, Access, No. 26, pp. 28-33.
Urban areas, as economic units, are influenced by globalization in the scale and scope of their development. Since globalization was relying on different technological and economic drivers through time, this temporal evolution was associated with a different urban context, from the small city-states of the mercantilism era (from the 16th to 19th century), to the industrial city (from the 19th to the mid 20th century), to the megalopolis of the early 21st century.
Long-distance sailing was a key technology of the mercantile era, enabling the setting of the first truly global trade networks linking emerging European powers with Asia and the Americas. Several of these territories were incorporated into colonial empires. Emerging trade networks were complemented by advances in navigation (through cartography) and payment methods through the setting of banking systems (letters of credit). The increasing spatial reach of the main commercial cities and the beginning of a division of labor permitted growth in their population and size. There was also the setting of a global urban primacy with centers such as Amsterdam, London, and Lisbon dominating.
The technical innovations of the industrial revolution relied on the mechanization of production and mobility. This permitted new processes that were previously challenging to apply, particularly the principles of economies of scale and the vertical integration of production through an increasingly complex system of suppliers. Substantial developments in infrastructure (e.g. railways and telegraph networks) and transactions (banking, legal enforcement) took place. This was associated with large-scale urbanization, particularly through rural to urban migration, with several cities surpassing one million inhabitants; the setting of metropolitan areas. This process was however associated with structural and social issues that would remain salient urban challenges such as infrastructure provision (utilities, public transit), slums, and unemployment.
Globalization has become a strong driver of the contemporary era, a process supported by expanded transport and telecommunication systems as well as an environment favoring international transactions (e.g. trade liberalization). The scale and intensity of the mobility of capital, goods, people, and information have been expanded. The urban region became a core organizational and competitive unit where multinational corporations thrive on their comparative advantages of costs and innovative capabilities. A complex lattice of metropolitan areas, global cities, and gateways has been established and this lattice coordinates global production, distribution, and capital accumulation. While large, competitive, and innovative urban regions thrive, more peripheral areas face the challenge of finding a role and function within the global urban system.