Flow paradigm: a new perspective on urban development

If we want to understand the nature of urban economy in the globalised - and at the same time 'delocalised' -  world, such an analysis should be more than about local GDP, industrial composition, occupational structure and the like. A need for deeper understanding of urban economy calls for paradigm shift, a transition from a static place-based approach to a "Flow Paradigm", which operates with such concepts as urban attraction, dissipative structure and frictional and frictionless flows. Such an approach starts from the observation that flows are constitutive elements of reality and define our social existence. Urban communities are best to understand as dissipative structures and thus as ecosystems in which there is a continuous exchange of energy, matter, values and symbols between the community and its environment. In other words, dissipative structures breath through their material and immaterial flows, thus providing tools for reconceptualising places and local economies in particular (see Anttiroiko, 2015).

From the space of flows to a new flow paradigm

An important source of inspiration for such a flow paradigm is Manuel Castells' theory of network society and one of the insightful ideas related to this theory, the space of flows. Castells (1989, 351) points to a local-global dialectic that poses a challenge to local government: first, production in the informational economy becomes organised in the space of flows, whereas social production continues to be locally determined, and second, local governments must develop a central role in organising the social control of places over the functional logic of the space of flows. Castells’ conceptualisation of the local-global dialectics is fine as such, but the way the space of flows is conceptualised warrants further sophistication. The need for reconceptualisation comes simply from the fact that flows have been understood in macrosociology and political economy too vaguely, including Castells' works (see Castells, 1989; 1996). They are usually referred to only passing without theoretical grounding and sufficient empirical specification. 

Due to increased fluidity and mobility in economic life there has been in the recent decade a clear increase in the interest in global networking in business and governance. Now it seems that this discourse is developing towards sophisticated flow paradigm or economic ‘flowology’ with an aim at gaining better understanding of the new economic reality and its dynamics. Such a paradigm is manifest in various emerging concepts, theories and approaches, which seek answers to the question of the nature of this new reality, including new mobilities paradigm (Urry, 2000) and the politics of flows (Hubbard, 2001; Doel & Hubbard, 2002; Halbert & Rutherford, 2010). There are also urban analyses that go beyond individual flows to wider set of flows (Gertler, 2001; Williams & Baláz, 2009) and urban-regional analysis of economic flows of particular cities, regions or city-states (Laakso et al., 2013; Yeoh & Chang, 2001). Furthermore, there also are attempts to provide comprehensive analyses of our world in terms of flows (e.g. Van Hamme & Grasland, 2011; 2012) or holistic picture of the world economy by analysing the global material and immaterial flows, as in McKinsey Global Institute’s ‘Global flows in a digital age’ (Manyika et al., 2014) and the ‘DHL Global Connectedness Index 2014’ report (Ghemawat & Altman, 2014). Such analyses tell about a need to understand the fluidity, mobility and connectedness of our world and the fundamental aspects of the morphology of the new economic reality. Why? One reason is simply the fact that higher degree of connectedness of a nation has a positive correlation with the GDP growth, as suggested by economic theory of comparative advantage (Manyika et al., 2014, 6, 21-23).

Towards methodological sophistication

An interesting feature of the development of flow paradigm is the continuous methodological sophistication in terms of data, methods and interpretative frameworks, which makes it plausible to make methodology-wise a distinction between the earlier analyses of the internationalisation of the pre-1980s world and the development of approaches with increased sophistication of the analyses of globalisation of from the 1990s onwards. This reflects interestingly to some extent the transition from the internationally-oriented search for low-cost production sites to the emerging global era of knowledge-intensive flows organised within complex production and innovation ecology (Manyika et al., 2014, 17). 

Descriptive statistical analysis of specific cross-border flows have fairly long history, which had their methodological culmination in inter-regional flow analyses within regional sciences in the 1950s and 1960s (Isard, 1962). In the 1980s the shift from domestic economy to international economy gained ground, culminating in the globalisation discourse of the 1990s. The manifestation of this new period can be seen in methodological sense in research on global cities, first within political economy framework (Friedmann, 1986; Sassen, 2001) and later by the projects of GaWC research network with a strive for understanding global value flows through the world city networks. Research within GaWC started with the collection and analysis of data on corporate service office networks and later continued with the exploration of the spatial configurations of hyperlink networks at the interface of web mining and social network analysis. 

The recent phase of this development seems to bring the true flow analysis into the picture, which benefits from Big Data analytics and multi-dimensional interpretative frameworks (Manyika et al., 2014; Ghemawat & Altman, 2014). As described by Manyika and others (2014) in the preface of their analysis of global flows in a digital age, “[w]e know a great deal about individual flows such as goods trade and cross-border financial flows. Yet little research has been done thus far that seeks to paint a comprehensive picture of the web of cross-border interactions of the different types of global flows that increasingly characterizes our world.”

From the margin to the centre 
The term ‘flow’ is mentioned only passing and can hardly ever be found in keywords or indexes in the literature on urban management and urban economic geography. Flows have remained in the margin of urban analysis so far. It urges us to start an exploratory journey to shed light on urban flow analysis and its relevance for understanding the new premises of local economic development policy (see Anttiroiko, 2015). Such an endeavor certainly benefits from interregional flow analysis developed in regional science as well as from the models and concepts of mainstream economics, but it has to take a new course towards urban analysis in order to understand how such flows relate to the fixities of local communities, how they constitute local economies of late modernity, and how they eventually blow life into spatio-temporal instances of everyday life in the globalised world.

References

Anttiroiko, A.-V. (2015). New Urban Management: Attracting Value Flows to Branded Hubs. Palgrave Macmillan. 

Castells, M. (1989). The Informational City. Information Technology, Economic Restructuring, and the Urban-Regional Process. Oxford: Blackwell.

Castells, M. (1996). The Rise of the Network Society. The Information Age. Economy, Society and Culture. Vol. I. Cambridge, MA and Oxford, UK: Blackwell.  

Doel, M.A. & Hubbard, P.J. (2002). Taking World Cities Literally: Marketing the City in a Global Space of Flows. City, 6(3), 351-368.  

Friedmann, J. (1986). The World City Hypothesis. Development and Change, 17(1), 69-83.  

Gertler, M.S. (2001). Urban Economy and Society in Canada: Flows of People, Capital and Ideas. Isuma: The Canadian Journal of Policy Research, 2(3), 119-130.  

Ghemawat, P. & Altman, S.A. (2014). DHL Global Connectedness Index 2014. Analyzing global flows and their power to increase prosperity. DHL. Retrieved February 12, 2015, from http://www.dhl.com/content/dam/Campaigns/gci2014/downloads/dhl_gci_2014_study_low.pdf  

Halbert, L. & Rutherford, J. (2010). Flow-Place: Reflections on Cities, Commutation and Urban Production Processes. GaWC Research Bulletin 352. Edited and posted on the web on 9th June 2010. Retrieved January 23, 2015, from http://www.lboro.ac.uk/gawc/rb/rb352.html  

Hubbard, P.J. (2001). The Politics of Flow: On Birmingham, Globalization and Competitiveness. Soundings, 17, 167-171.  

Isard, W. (1962). Methods of Regional Analysis: an Introduction to Regional Science. First published in 1960. Second Printing, August 1962. Cambridge, MA: The M.I.T. Press.  

Laakso, S., Kostiainen, E., Kalvet, T. & Velström, K. (2013). Economic flows between Helsinki-Uusimaa and Tallinn-Harju regions. Helsinki-Tallinn Transport and Planning Scenarios project, 01/2013. H-TTransPlan. Retrieved March, 10, 2014, from http://www.hel.fi/wps/wcm/connect/15e9d665-795c-4429-91c9-af5abdb63d8e/Helsinki-Tallinna+talousvirrat.pdf?MOD=AJPERES&CACHEID=15e9d665-795c-4429-91c9-af5abdb63d8e  

Manyika, J., Bughin, J., Lund, S., Nottebohm, O., Poulter, D., Jauch, S. & Ramaswamy, S. (2014). Global flows in a digital age: How trade, finance, people, and data connect the world economy. April 2014. McKinsey Global Institute. Retrieved February 20, 2015, from http://www.mckinsey.com/~/media/McKinsey/dotcom/Insights/Globalization/Global%20flows%20in%20a%20digital%20age/MGI_Global_flows_in_a_digial_age_Full_report.ashx  

Sassen, S. (2001). The Global City: New York, London, Tokyo. First published 1991. Princeton, NJ: The Princeton University Press.  

Urry, J. (2000). Sociology Beyond Societies: Mobilities for the Twenty-first Century. London: Routledge.

Van Hamme, G. & Grasland, C. (2011). Divisions of the world according to flows and networks. Work Package 5: Flows and Networks – Synthesis. From deliverable 5.8. March 2011. EuroBroadMap.

Van Hamme, G. & Pion, G. (2012). The relevance of the world-system approach in the era of economic flows and networks. Geografiska Annaler, B, 94(1), 65-81.

Williams, A.M. & Baláz, V. (2009). Low-Cost Carriers, Economies of Flows and Regional Externalities. Regional Studies, 43(5), 677-691.  

Yeoh, B.S.A. & Chang, T.C. (2001). Globalising Singapore: Debating Transnational Flows in the City. Urban Studies, 38(7), 1025-1044.

New Urban Management: Attracting Value Flows to Branded Hubs (Palgrave 2015)

New Urban Management: Attracting Value Flows to Branded Hubs (Palgrave, 2015) discusses the logic of economic flows, which requires paradigm shift in urban management. The need for such an approach lies in increased fluidity in economic life, which has created new kind of space with its own logic, the space of flows. The emergence of such an economic condition has intensified global intercity competition, as metropolitan governments’ ability to maintain their economic vitality depends on their ability to attract flows of values through their innovation milieus, urban amenities and other assets. Ability to attract global flows in turn depends less and less on location-specific physical assets and increasingly on collective symbolic capital. This brings us to the core issue of this book: how to utilise flow analysis in brand-oriented economic development policy? This book conceptualises global flows of values and on that basis shows how such knowledge can be used to smarten up brand-oriented economic development policy.

Below is a short description of the chapters of the book. 

1 Introduction 

It is a truism to say that globalisation conditions urban development everywhere in the world. But do we know what kinds of changes they actually impose on cities? Discussion in this chapter aims to clarify one special aspect of globalisation, the increased fluidity in economic life, which urges local governments to reconsider the premises of their economic development policy. One new direction in this respect is emerging ‘flow paradigm’, which provides conceptual tools to understand the current economic reality and its dynamics. Ability to attract global flows depends less and less on hard factors of production and more and more on collective symbolic capital. Hence the relevance of city branding in global competition between cities. Such observations boil down to the idea of new urban management that focuses on attracting flows of values, such as capital, technological know-how, innovative firms, creative people and tourism consumption, to branded hubs in order to guarantee their wealth and economic resilience. 

2 Process view of local economy 

The promotion of local economic development takes place in an increasingly fluid economic environment. This is why local governments benefit from better self-understanding of their nature as hubs of flows or ‘dissipative structures’, which opens up a view of city’s interaction with the outside world. This chapter builds a picture of local economy within such a framework. Discussion starts from approaches to flows and continues with flow-based view of urban community and economy. It conceptualises local economic processes and builds ideal models of growing and declining city, which illustrate the idea of city as a dissipative structure. Lastly, this section discusses the implications of such a view to local economic development policy. 

3 Flows of people, cultures and symbols 

This section discusses the aspects of urban dissipative structure that go beyond material flows. Discussion starts with a brief outlook of migration flows. Next topic is the political economy of urban symbolism followed by discussion of economies of signs and of the cultural landscapes of late modernity. The figures whose theorisations are in focus include Manuel Castells, Scott Lash, John Urry and Arjun Appadurai. This chapter provides not only a glance at space of flows and similar concepts but also a selective introduction to the sociological side of flow analysis. 

4 Economic frameworks for flow analysis 

This chapter outlines the idea of flows in terms of economic taxonomies and categorisations. It provides brief description of circular flow models, T-account analyses (e.g. GDP), industry and cluster classifications, trade and capital flow analyses (especially FDIs) and descriptions of flows of goods and materials. The idea is to popularise the approaches and conceptualisations of flows on the basis of the rudimentary concepts and models in mainstream economics. Beside this, this chapter discusses briefly interregional flow analysis developed by Walter Isard and the new geography of flows as presented within GaWC research network led by Peter J. Taylor. This section provides thus conceptual tools needed to build a clear picture of flows that have economic value. 

5 Flow analysis in urban management 

In this chapter an economic flow analysis is built to concretise the picture of a city as an economic dissipative structure with in and out flows of consumption and production. Discussion is divided into three themes according to Attractors-Flows-Dynamics scheme: attraction factors, economic flows and dynamics of specific flows. As the types of flows are numerous and each have a dynamics of its own, this section discusses only selected types of flows as representative examples of the variety of economic flow dynamics. They are grouped into two broad categories, flows of business and people. Such flow analysis can be used by urban governments in managing their economic processes and directing development efforts to actions that maximise their benefits in the increasingly fluid economic environment.

6 Attraction management of branded hubs 

This chapter starts by linking localities with global economy using the scheme known as City Attraction Hypothesis. It discusses the attraction-oriented urban  development in the context of global intercity competition. Rest of the discussion takes a managerial view on flow analysis and related urban attraction management. If the economy is increasingly fluid, how are we suppose to promote urban economic development? What are the preconditions of the urban development vis-à-vis global space of flows? This section points to the increased importance of urban symbolism and its potential to improve cities’ ability to attract factors of production and consumption from the global flows. This discussion culminates in brand management as an aid to attraction management with a focus on mass, arena, institution and media branding. 

7 Concluding remarks 

This book provides a picture of new urban management. It is ‘new’ in the sense that the idea of urban management is built on a new premise, i.e. on cities’ need to cope with increasingly fluid economy. New urban management provides tools to understand the types and dynamics of flows of values and, as another side of the picture, tools to understand the nature of an urban community as a hub, including its assets and attraction factors. The global competition is increasingly symbolic. Value flows cannot be attracted by infrastructures or amenities alone but by collective symbolic capital. This is why city branding is valuable method to any city that has or aspires to have important role in some industries or niches in the global economy. The new urban management is, thus, a doctrine and practice that focuses on attracting flows of values, such as capital, technological know-how, innovative firms, creative people and tourism consumption, to branded cities in the purpose of guaranteeing resilient vitality and wealth through the maintenance and development of city’s transformative capacity. Taming the flows, in turn, is the key to cities future role as the primary loci of global solidarity.

Should you be interested in reading more, the book will be available in Palgrave's website.

City Brands: Dealing with a lack of control

By Ari-Veikko Anttiroiko

A mini-article published on 19 September 2014 in Tronvig Group’s Blog at http://www.tronviggroup.com/city-brands/

Cities have become important actors on the global scene. Metropolitan governments are among the best ‘glocal’ players, sharpening their global influence strategy and improving the management of their brand. International city branding has its undeniable challenges, however. One of them is the fact that cities must utilize their symbolic, or brand, capital—the resources and influence afforded to them through a perceived value—in an increasingly decentralized, fluid, and mediatized, or media-shaped and -defined, environment. This implies weak control over ones’ brand.

Let’s take a look at how branding can benefit local economic development and how to cope with the many factors that wrest control of the brand from its masters. This article is largely based on my new book, The Political Economy of City Branding.

Economic city profile as brand identity

One basic mission of cities in the global age is to find a productive relationship between the local community and its larger environment. We can see cities as systems that attract values from the outside world (in our digital age this is even less inhibited by space and territories), define those values through consumption, exchange, production, and export of products and services to global markets.

Branding is a strategic intervention in the typical functioning of a city that addresses the relevance of its urban resources and influence, thus seeking to increase attraction to and export power of the city. The more successful it is at this, the better chances the city has for long term prosperity. A city’s economic value can be broken down into industries and clusters that make up the city’s industrial composition, which ultimately compose its economic identity. To clarify, we can build a generic economic city typology, which relies on production and consumption operations. We can divide city profiles into four broad categories: capital, knowledge, mobility, and pleasure. These categories form a field of post-industrial activities that add high value to a city, as illustrated in the figure below.

Post-industrial city profiles. (Source: Anttiroiko, 2014).

We may consider a well-defined city profile as its economic identity, which serves as the basis for branding and an aid to economic development policy. However, the global scene on which such branding is supposed to make a difference has its challenges, one of them being its mediatized (media-influenced) nature. This poses obvious challenges to metropolitan brand leadership.

Mediatization of branding

Brands are created to benefit from symbolic values attached to products, organizations, or communities. They are created in an environment that can sometimes be favorable to the brand creator, but more often than not are teeming with factors prone to dissolve, redefine or nullify the brand—or even worse, leave it unrecognized.

City governments are not free from such a dynamic and the related social entropy, understood here as the ‘disappearance of social distinctions.’ Indeed, cities want to become associated with vital factors that contribute to their productivity, innovativeness, and attractiveness. Examples of well-known associations are Frankfurt’s association with finance, Vienna’s with international meetings, Milan’s with fashion, Portland’s with sustainability, and Boston’s with IT and intellectual capital. Such aspirations seek their realization in the elusive symbolic fields, which are widely mediated by mass and social media. Hence, there is a natural intertwining of branding and media.

City rankings as snapshots of a symbolic urban battlefield

Our lives are increasingly mediated by different kinds of media, from traditional mass media to various forms of new media. From the branding point of view, such an environment contains a range of uncontrolled elements. An illuminating example is city rankings, which are created by third parties, but affect the reputation of ranked cities. Even the inclusion of a city in the sample of a global industry-specific ranking is a good sign, as if ranked cities were members of a global club that have passed the first test in the process of gaining global media publicity.

City rankings are lists of cities that are evaluated and ranked with regard to different economic or other characteristics, in order to reveal the position of each ranked city as ordered according to given criteria (Giffinger et al., 2008). For example, in Saffron’s city branding ranking, the top cities globally were Los Angeles, New York City, London, Paris, Seoul, and Barcelona (The Guardian, 2014). Another ranking based on the Anholt-GfK City Brands Index of 2013 named London, Sydney, Paris, New York, Rome, Washington, Los Angeles, Toronto, Vienna and Melbourne as the top ten global city brands (GfK, 2013).
 
Such rankings provide a shortcut to the symbolic battlefield of cities, regions, and city-states. The implications for urban managers are obvious: cities are under considerable pressure to move up the rankings and to establish themselves as national, macro-regional, or even global hubs. As rankings are not guided by any generally accepted quality standards, they can be produced by any party and may be based on an analysis of relevant measures or not as the case may be.

When rankings are published in magazines, newspapers, and blogs, they start to create saturation of the top cities in the given industry, and thus contribute to the externally-influenced part of a city’s competitive identity. What would you think of the impact of such headlines as ‘Detroit tops 2013 list of America’s most miserable cities’ (Forbes, February 2013), ‘World’s costliest cities: Sydney and Melbourne ranked in top 10 by Economist magazine’ (ABC News, March 2014), ‘Ottawa ranked top global city by Toronto think tank’ (IT World Canada, August 2013), or ‘New York ousts London as top financial centre’ (Financial Times, March 2014)? No wonder many large cities have started to follow rankings and even publicize them selectively on their websites to substantiate the facts about their assets and performance (See e.g. Singapore Facts and Rankings, 2014).

Coming of the age of proto-brands

Branding is about conveying the symbolic essence of a city to target audiences for strategic gain. This essence has various sides, which reflect different aspects of the power to define and control a brand. To shed light on this, let us consider four interrelated concepts at the core of branding:

• Identity is what we are: a self-perception of the basic nature of an urban community;
• Brand is what we manage: the managed blend of symbolic elements the city government uses to affect its target groups;
• Image is how we are seen: a general perception and visual impressions of a community;
• Reputation is how we are known: people’s beliefs or opinions of the human-like qualities of a community.

In this scheme, identity and brand are constructed on the side of a brand creator, but in the case of image and reputation, the weight is on the receivers’ side. We may place the aggregated image or proto-brand (defined as the constantly evolving and co-created brand) somewhere in the middle of such a continuum.

Control-based continuum of key brand-related concepts.

As willing as city governments would be to control their brands, they have limited power to do so. There is actually a never-ending power struggle between brand creators and brand receivers.

Simon Anholt, for example, claims in his book, Places: Identity, Image and Reputation (2010), that the ‘brand’ of an urban community is only a metaphor, not a real brand comparable to the brand in business. This is primarily because of the diffused and unaligned nature of cities and the difficulty to manage the city as a brand. That is why he prefers the term ‘competitive identity’ rather than ‘city brand.’

Whether the term ‘city brand’ is justified or not, there is need to take into account the inherent lack of consistency and alignment typically afforded to businesses. This is why we rely here on a slightly similar idea by highlighting the emergence of proto-brands, which Wilmot (2010) crystallizes as follows: “As social media and technology open up development, co-creation will become the normative process for many brands.” City rankings are part of this same trend. When rankings are formalized and communicated to a wide international audience, they create proto-brands of cities, which come to be compared against the consciously created, identity-based brand promoted by the city government.

A way forward for city brands

In a mediatized environment, it is not enough for a city to do things well. It is equally important to affect the global scene on which cities are presented, benchmarked and ranked, as such a semantic presence is “the other half” of the untamed brand of a city.

Cities will always be proto-brands of a kind, distracted by their constantly-evolving internal identity and affected by external forces. However, this does not prevent city governments from making efficient use of available assets and extracting values from the world in the digital age using their collective symbolic capital. There is a plethora of cases that illustrate success in such an endeavor, such as London, Paris, New York, Toronto, Sydney, Amsterdam, Seoul, Dubai, and Singapore. What is needed in making things right is more than anything: clear understanding of city’s economic identity, a brand strategy that is linked with such an identity, and industry-specific brand communication that is adjusted to the logic of a mediatized environment.

Original text published in Tronvig Group's blog at http://www.tronviggroup.com/city-brands/

The Political Economy of City Branding (Routledge 2014)

Globalization affects urban communities in many ways. One of its manifestations is increased intercity competition, which compels cities to increase their attractiveness in terms of capital, entrepreneurship, information, expertise and consumption. This competition takes place in an asymmetric field, with cities trying to find the best possible ways of using their natural and created assets, the latter including a naturally evolving reputation or consciously developed competitive identity or brand.

The Political Economy of City Branding discusses this phenomenon from the perspective of numerous post-industrial cities in North America, Europe, East Asia and Australasia. Special attention is given to local economic development policy and industrial profiling, and global city rankings are used to provide empirical evidence for cities’ characteristics and positions in the global urban hierarchy. On top of this, social and urban challenges such as creative class struggle are also discussed.

The core message of the book is that cities should apply the tools of city branding in their industrial promotion and specialization, but at the same time take into account the special nature of their urban communities and be open and inclusive in their brand policies in order to ensure optimal results.

This book will be of interest to scholars and practitioners working in the areas of local economic development, urban planning, public management, and branding.

The Political Economy of City Branding by Ari-Veikko Anttiroiko, Routledge 2014.

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