Sunday, September 19th, 2010

Are Networks or Size More Important to Urban Success?

When we hear people discuss the cities that are adjusting well to the demands of the new economy, it is frequently the largest cities that are touted: New York, Chicago, London, etc. At a minimum, these places tend to be “of a certain size.”

Zachary Neal, a professor of sociology and global urban studies at Michigan State, has a new study out that disputes this. Entitled “From Central Places to Network Spaces,” it makes the argument that networks rather than size are the critical determinant of urban success in the current economy:

At the beginning of the twentieth century, many urban economies in the United States depended primarily on factors located within the city and its adjacent hinterland, thus situating cities in a size-based hierarchy like that described by central place theory. However, by the end of the twentieth century, technological innovations and economic restructuring led urban economies to depend more on factors located between cities, namely, the relationships among cities that permit the exchange of key resources and allow the development of interurban cooperation and economies of scale. This transition implies the emergence of a newer, more network-based hierarchy in which the dominant cities at the top of the hierarchy are those which serve as “basing points” for resources flowing through intercity networks.

Since, like most academic studies, this one is painful to read, you may prefer to check out an essay version Neal posted to New Geography.

The size based notion of an urban hierarchy was rooted in central place theory, where cities’ size, economic clout, and amenities depended on the size of their hinterlands. The author notes that this worldview may have had more accuracy in the early 20th century, when huge cities such as Detroit and Philadelphia, were among the nation’s most important.

But during the 20th century, size and hinterland decreased in importance and the networks that cities participated in became more important. Some cities such as Chicago and New York retained high rankings in both cities, but it was because they either had or developed the networks that were relevant to the 20th century. Cities like Detroit, Cleveland, and Pittsburgh – Neal’s examples – failed to develop these networks and so became what he dubbed “offline metropolises.”

Conversely, places that previously would not have ranked highly in the size based world, such as North Carolina’s Research Triangle or Bentonville, Arkansas, can, by developing networks, become important economic nodes.

It’s an interesting viewpoint, though I think the use of Bentonville points out a weakness. Bentonville owes its status almost entirely to Wal-Mart. If Wal-Mart departed tomorrow, no more Bentonville. Wal-Mart may have networks, but Bentonville is only borrowing them. The same might be true of any company town or even university town. The economic structure of these towns only changed to the extent that they got lucky with one major institution.

Jim Russell seizes on these findings to question the idea of the megaregion, which he sees as a relic of central place theory and industrial age thinking.

The Case for Size

While Neal pooh-pooh’s size, other researchers have pointed to its virtues. This 2007 article in SEED magazine discusses the work of Geoffrey West, Jim Brown, and Brian Enquist who did research into testing whether the effect of greater metabolic efficiency found in larger animals also applied to cities. Their conclusion was that it did:

After analyzing the statistics, the answer was clear: Cities are like elephants. They get more economical with size. It doesn’t matter whether the city is located in China, Europe, or the American Midwest; every city is simply a scaled version of the same city. In metropolis after metropolis, the indicators of urban “metabolism”—like the per-capita consumption of gasoline or the surface area of roads or the total length of electrical cables—scaled to an exponent of (population)0.8, which is very similar to the biological equivalent of (mass)0.75. This means that a city can double its population without doubling its resource consumption. “One of the basic principles of cities is that it’s more efficient to bring people together,” West says. “You need a little bit less of everything per person. It’s the exact same way in biology. As animals get bigger, they require less energy to support each unit of tissue.”

So while the authors do not predict success, they do indicate that there are efficiencies from scale – a conclusion opposite from some who have suggested large cities are in fact inefficient.

Other researchers have also found differences based on city size. Jim Russell pointed me at recently released research paper called “Spatial Sorting”:

In this paper we show that there is indeed evidence that disproportionately more skilled citizens locate in larger cities. However, we provide a key new insight: larger cities also disproportionately attract lower skilled agents. And it turns out that large cities like New York and Detroit in that respect are more similar to each other than to small cities.

The “fat tails” the authors find for larger cities show that they differ in another important way from smaller ones. Given the strong evidence linking college degree attainment and high skill labor to urban success, perhaps this explains more than networks the relative success of the places Neal discusses (e.g., Wal-Mart recruits lots of people with degrees to Bentonville).

My own take is that there are benefits to size in some cases. For example, a certain minimum scale is a prerequisite to being able to support certain activities. Want to have a major airport or a pro football team? Better be big enough to support them. This is one legacy of central place theory that hasn’t gone away. As size decreases, you progressively lose the ability to support more and more of the functions and amenities that the largest cities can simply by virtue of their market size and aggregate wealth. The internet (e.g., Amazon and iTunes) have reduced this somewhat, but not eliminated it entirely.

So it size generates economic efficiencies, attracts more talent, and enables you do potentially do more things, perhaps it does have utility. That’s not to say networks are unimportant. They are of critical importance. But size remains an important consideration as well.

What do you think?

9 Comments
Topics: Economic Development, Globalization, Strategic Planning

9 Responses to “Are Networks or Size More Important to Urban Success?”

  1. Jarrett says:

    Excellent post.

    Re size: If the case for size lies in efficiencies of scale, then it’s important to think harder about which efficiencies are really about size and which are really about density. Public transit is only the most obvious example of something that is more about density than size — once you’re above a size where many trips are too long for walking/cycling and you have congestion issues. And it’s not so much about average density over a whole city than it is about patterns of density in specific transit corridors.

    Re networks: It seems to me the late 20c saw a lot of clever private-sector efforts to create new network hubs, and often these could profitably be placed in second or third-tier cities. Hub airlines proliferated until even Reno, Nevada — pop <400,000 — had its moment. Even Bentonville is a hub of sorts, even if it's a hub of communications and power rather than shipping.

    Ultimately these networks are sorting into those that need cities of a certain size and those that don't. So rather than thinking of networks as an alternative to size, it's better to think of them as a different dimension of analysis. Different kinds of networks will choose the kinds of nodes that meet their needs. Many but not all of these will need size.

  2. Chris Barnett says:

    (This comment is more toward “size matters” than “networks vs. city size”.)

    This weekend, the WSJ had a piece on the impending decline of the Detroit Symphony from front-rank status.

    Clearly, for cultural amenities city size and wealth do matter.

    But that’s today, and it begs the question, are those amenities even relevant to the rising generation? My kids and many in their “network generation” watch movies on 3-inch phone screens and listen to music on iPods or phones today; if they are interested in symphonic music or opera, they will just listen on an iPod or watch on a smartphone.

    Who needs to get dressed up to go to a concert hall anymore? Will my kids and their generation view “cultural infrastructure” as valuable?

  3. Vin says:

    Chris:

    I don’t know how old your kids are, but young people are still going to rock concerts in droves. If people were to stop consuming live music because advancement in media, it would have happened already: the record, VHS, DVD, CD, cassette, the walkman. The iPod/iPhone/etc. makes it easier to get more music quickly and take more of it with you but the basic user experience (ie, the act of listening to it) is really not fundamentally different from walking around with a discman ten years ago.

    I didn’t read the WSJ piece and know nothing of the Detroit Symphony. But my guess is that it’s decline has little to do with any kind of a decline in interest in live music. Rather, high-end cultural institutions are almost always reliant upon a small number of wealthy benefactors to stay afloat. This is nothing new – it completely pre-dates the rise of the internet, the cell phone, and the personal computer. Sadly, for Detroit, there’s not as much wealth to go around there as there used to be. And, yet, this problem is not unique to Detroit – museums, symphonies, operas, and other such things are experiencing this all across the country due to the economy.

  4. Jim Russell says:

    Size can remain an important consideration without supporting central place theory. Sticking with the sports analogy, consider top-tier college programs. The size of the university matters as a predictor of success. But the support, financial or otherwise, is namely a network geography.

    Another way to think about this new urban geography is to focus on the hinterlands. A world city does more than attract the best and brightest from its hinterlands. The talent flow is global.

    That point comes out nicely in the Sassen interview published in Foreign Policy. Global hinterlands don’t generate the nifty geometric patterns of central place theory. Left out are what I jokingly call the “cul de sacs of globalization”. Relatively big cities are economically isolated.

    At the other end of the spectrum, cities further down the traditional urban hierarchy can break free of their hinterlands through connectivity. Thus, a small city can be more important than central place theory would suggest. That’s how I understand Neal’s research.

  5. George Mattei says:

    I found this to be intersting:

    After analyzing the statistics, the answer was clear: Cities are like elephants. They get more economical with size.

    If this is the case, why is New York one of the most expensive cities to live in? You would figure that at least some of that efficiency would be passed along to the residents.

    Having asked that question, I think it is clear that some efficiencies, i.e. transit, are clearly size-based.

  6. George Mattei says:

    Further, I still think that face-to-face meetings matter. Maybe that’s why New York is still successful-because it has an internal network of like-employed people-i.e. clusters.

    That would also explain a Raleign-Durham.

  7. Chris Barnett says:

    George, the answer to NYC being “expensive” is that world cities offer a wholly different life to urbanites than smaller cities. That richer experience costs more simply because people value it more highly and (in New York’s case) there’s no new greenfield land in Manhattan for development. Hence the gentrification of the outer boroughs.

    Most of the high cost is indeed related to proximity to desirable features (and thus, access to benefits).

  8. Wad says:

    Aaron wrote: Cities like Detroit, Cleveland, and Pittsburgh – Neal’s examples – failed to develop these networks and so became what he dubbed “offline metropolises.”

    What happened was eclipse, the industrial society’s equivalent to resource exhaustion in supply regions.

    The problems stemmed from the time they were industrial dynamos. Taylorism and Fordism became the industrial paradigm, and this extended to the cities themselves.

    Factory towns produced a factory mindset.

    It was so successful that the companies that thrived in the factory environment were able to replicate their efficiencies without being tied to the land.

    The cities and their residents couldn’t, though. They were too slow to develop the networks because it wouldn’t have been beneficial to industrial production.

    Even now, “offline metropolises” gain very little by converting to “online metropolises” because the biggest and best gains have been made elsewhere, and they plug in the network at a disadvantage.

  9. John says:

    I can see that there are efficiencies in sharing units of infrastructure for cities with larger populations, but that doesn’t mean the city itself is more going to be more economical. I think inefficiencies in management (that are in part due to the complex and overwhelming task of managing such large systems) could easily cancel out the economies of scale.

    For example, Chicago may have fewer lane-miles of roads per capita or miles of sewer line per capita than smaller suburbs, but do you think Chicago’s city government is actually efficient at maintaining it? It doesn’t seem like it. Of course age of the infrastructure also plays a role here. Older stuff requires more maintenance. For many suburbs, their time will come. Then they’ll have legacy costs and lack of scale benefits to pay for it.

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