Globalization and Urbanization

Mercantile Era Industrial Era Contemporary Era
Technology New transport technology: long distance ships, sextant, etc. Steam power; Railroad; Steamships; Machine fabrication New transport and communication technologies; Advanced production technologies
Supporting Principles Cartography (navigation); New means of payment (credit): precious metals, financial Innovations (accounting & banking) Economies of scale; Vertical integration of production; Factory systems; Assembly line Labor unions; Property rights; Central banking; Currency; Monetary policies; Compulsory education Economies of scope; Trade liberalization; Logistical innovations to facilitate flows of goods, services, capital, and information
Spatial Structure Division of labor brings increasing urbanization; Size of major cities increases. Massive urbanization (metropolitan areas); Average town size increases; Structural issues (housing, infrastructure, spatial organization); Social issues (unemployment, health, welfare, education). Urban regions competing globally; Relatively fast economic changes causing local dislocations; Rise of large urban regions around major cities connected to the global economy.

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 supporting and are influenced by globalization. Since globalization was relying on different technological and economic drivers through time, each of its stages was associated with a different urban context, from the small city-states of the mercantilism era (from the 16th to 19th century), 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 true 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 payments methods through the setting of banking systems. The increasing spatial reach of the main commercial cities and the beginning of a division of labor permitted a 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 and the mechanization of production and mobility. This permitted new processes that were previously close to impossible 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 has 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 areasglobal cities and gateways has been established and this lattice coordinate 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.