Guidelines for Federal Policy Priorities in Urban Areas

E. Themes in the Literature on North American Cities

Important themes that have been documented in the recent literature on North American cities include:

The role of cities in national and regional economies
Developing competitive cities through innovation and cluster building
The link between the New Economy and the quality of urban life
Attributes of successful urban areas
The revival of American cities and the challenges they face (Urban revival/Urban challenges)

Each of these is briefly discussed below.

1. The Role of Cities in National and Regional Economies

The importance of cities in national and regional economies has been a recurring theme in the recent literature on the economies of North American cities. Cities and their surrounding metropolitan areas with their aggregation of people, services, businesses, educational institutions, and supporting infrastructure continue to be significant focal points for economic activity and development. In the U.S., they generate most of the nation's jobs, income and output. Their contribution to the U.S. national economy has increased markedly in recent years and is expected to continue for the next 25 years. ¹⁵

Cities offer a number of competitive advantages such as large, diverse, accessible markets for companies providing goods and services to businesses and consumers, a diverse, educated workforce, the geographic concentration of transportation systems, a gateway between non-urban areas and the global economy, greater access to international markets and advanced telecommunications infrastructure. ¹⁶ These factors provide the institutional, economic and physical infrastructure that serve to promote economy activity.

The size of metro area economies is evidence of their importance. A single metropolitan area often dominates the economy of a particular province or state. In Minnesota, for example, the Minneapolis-St Paul metro area produces 65% of the state's output and employs 64% of the state's workforce. ¹⁷ Winnipeg's impact on the Manitoba economy is even greater; 63.7% of the employed provincial workforce works in the Winnipeg metro area and the area accounts for close to 80% of the province's economic activity.

A recent article in The Brookings Review identified three classes of cities: global, national and regional and three market types: supercharged, vibrant and emerging. ¹⁸ A city can contain all three markets and any type of market can be present in any class of city. Global cities (New York, London and Tokyo) are "epicenters of human activity that help drive the global economy." They are diverse, densely populated centres for cultural innovation, tourism and specialized information services such as financial services, medical, educational and health services. National cities (Chicago, Los Angeles, Washington D.C.) are "political, commercial or cultural capitals". They can resemble global cities but operate on a smaller scale or in limited commercial sectors". Regional cities are "smaller in size and sphere of influence than national cities" and have historically been the retail, commercial, banking, market and entertainment centres of a regional economy. Some regional centres may attain a national-level specialization in a particular field but overall they do not operate at the national level. ¹⁹

The market power of cities is also affected by three types of markets operating within them: the supercharged market where market valuations exceed the national market average for metropolitan areas in the country; the vibrant market characterized by moderate to high price appreciation, a unique subculture and attributes or entertainment venues that attract area residents and tourists; and the emerging market performing below market potential but having the potential to make significant gains. ²⁰

Categorizing cities and markets in this way can facilitate a better understanding of their market power and help to define appropriate approaches to developing and strengthening their economies.

<< Previous | Table of Contents | Next>>