Small and medium-sized cities in the Age of the Urban Triumph

Evert Meijers Delft University of Technology, Netherlands

The Age of the Urban Triumph…

• The bigger, the better

• Agglomeration benefits are key to economic growth

• Explains rapid pace of urbanisation and rise of megacities

Agglomeration advantages

• Quantity and quality of urban functions (specialisation) • Infrastructure • Labour market matching • More economic diversity – more resilient • Innovation, knowledge exchange • City as production & consumption environment • ‘Elevator’ • Greater variety in lifestyles / ‘stadsluft macht frei’ • Energy efficiency • Household-optimisation ‘Sharing, matching, learning’ are the mechanisms (Duranton & Puga, 2004)

The bigger, the better: labour productivity

+5.8% (Melo et al., 2009)

Agglomeration disadvantages

• Exposure to environmental pollution / noise / a more stressful environment

• Crime

• Social deprivation

• Congestion

• Price/quality ratio houses

• High office rents and land prices

• Less social cohesion

Tide is turning…

Tide is turning…

Problem!

• Many European cities are small or medium-sized

• OECD: Lack of agglomeration benefits is biggest threat to competitiveness of small- and medium-sized cities

But, contradictory urban dynamics…

• Urbanisation rate stable

• Large cities do not grow faster

• Large cities do not contribute increasingly more to economy

• Second-tier cities outperform capital-city regions

Dynamics cannot be explained by conventional agglomeration theory!

A novel explanation: borrowing size & city network externalities’

A different interpretation of the geographical dimension of agglomeration economies

Urban network externalities

Urban network externalities

• Urban network externalities are defined as external economies from which firms and households can benefit by being located in agglomerations that are well embedded in networks that connect with other agglomerations (Capello, 2000; Burger & Meijers, 2016).

• ‘Networks substitute for proximity’ (Johansson and Quigley, 2004).

• McCann and Acs (2011) argue that nowadays national and international urban connectivity is more important for urban performance than urban size.

• Camagni et al (2016) show that small cities manage to profit relatively more from a developed network of cooperative relationships with other cities than do large cities.

• Combination matters: local buzz & global pipelines (Bathelt et al., 2004)

metropolitan functions as

proxy for agglomeration

benefits

Metropolitan functions

Business related functions

Financial services (banks)

Advanced Producer Services

Headquarters top-500 multinationals (revenues,

employees)

Conference/exhibition facilities

Science related functions

top-500 universities (Shanghai-index)

international research co-operation

Sports functions

• Seats in sports stadiums

• Important sports events (WC/EC)

• (summer) Olympic games (after 1948)

Cultural functions

• Cultural venues (theatres, opera houses, galeries,

museums)

• Cultural events (concerts, film festivals, art

exhibitions)

Index Metropolitan Functions

Aggregate of subindices

Networks substitute for size

• A good ‘network embeddedness in (inter)national networks (flows of people + information) significantly contributes to the presence of metropolitan functions in cities

• Still, ‘size’ is on average 2.5x more important than network embeddedness

• But for particular metropolitan functions network embeddedness is more important than size

Relative importance size and networks for individual metropolitan functions

Local Size Regional Networks

(Inter)national Networks

International Organisations + 0 ++

Headquarters + 0 ++ Banks + 0 ++ Advanced Producer Services

+ - ++

Fairs + 0 ++ Universities ++ 0 0 Conferences + - ++ Patents + - ++ Cultural Venues ++ - + Cultural Events ++ 0 0 Sport Venues ++ 0 0 Sport Events ++ - 0

But…

Importance of ‘size’, ‘regional network embeddedness’ and ‘international network embeddedness’ differs for different sizes of cities

Figure 1: Fitted equation and 95% confidence interval for metropolitan function index and local population size (average marginal effect)

An increase in city size has a minor effect on the presence of metropolitan functions in large cities (>200k), but a large effect for smaller cities.

Figure 3: Fitted equation and 95% confidence interval for metropolitan function index and (inter)national network embeddedness by local population size (average marginal effect)

An increase in (inter)national network embeddedness is positive for all cities, but relatively more positive for larger cities

Figure 2: Fitted equation and 95% confidence interval for metropolitan function index and regional network embeddedness by local population size (average marginal effect)

An increase of regional network embeddedness is positive for larger cities (>400k), not necessarily for smaller cities (agglomeration shadows?)

Regional network embeddedness: a closer look – where relevant?

Polycentric Urban Regions in Europe

Urban network externalities through integration in polycentric metropolitan

regions

Indicators functional integration

Indicators Institutional integration

Indicators cultural integration

Finding: importance of integration • The stronger the cities in PURs are functionally integrated, the

better their performance (more agglomeration economies)

• Institutional integration, or metropolitan governance, has a positive effect on the performance of PURs – Effect is smaller than for functional integration

– Most important is that there is some form of metropolitan cooperation, but its exact shape and power/autonomy seem of secondary importance.

– There is some indication that the duration of cooperation plays a role, with longer lasting networks somewhat associated with better performance;

• Mixed evidence for cultural integration

• The main challenge is to move from fragmentation to integration, which demands a larger process of region-building referred to as ‘metropolisation’, in which the economic, functional, administrative and socio-spatial qualities and features once attributed to the 'city' are reconstructed by citizens, firms and institutions at the scale of the PUR.

Ongoing work: development of a new city network indicator

• Based on co-occurrence of toponyms in text corpora, in this case the Web Archive CommonCrawl (all 25 million .nl websites)

• Scientometrics: “The use of co-occurrence data in scientometrics assumes that the greater the probability of two elements co-occuring in the same article, the more strongly they are related.” (Chavalarias and Cointet, 2013)

The co-occurrence method: existing application in spatial sciences

Devriendt et al. 2008 Tobler and Wineburg, 1971

The Dutch urban system according to the Web… absolute value

The Dutch urban system according to the Web… relative value

Plaatsen met een zwakke en sterke positie in (nationale) netwerken

Sterk verbonden plaatsen % Minder geïntegreerde plaatsen %

1. Roermond 20,11 91. Capelle aan den IJssel -15,62

2. Middelburg 16,71 92. Spijkenisse -14,10

3. Zutphen 13,32 93. IJsselstein -10,74

4. Maastricht 12,01 94. Landgraaf -10,72

5. Zwolle 10,40 95. Hellevoetsluis -9,70

6. Hoogeveen 10,00 96. Vlaardingen -9,65

7. Gorinchem 9,82 97. Zwijndrecht -9,11

8. Wageningen 9,75 98. Almere -8,92

9. Vlissingen 9,34 99. Etten-Leur -8,80

10. Alkmaar 8,84 100. Kerkrade -8,40

17. Delft 7,76

Places with a strong network position (left) and those with a weak network position (right) in the Netherlands.

Borrowed size

The Concept of ‘Borrowed Size’

• Alonso, 1973: ‘Borrowed size’ describes and explains the situation that especially smaller cities that are located in a larger ‘megapolitan complex’ do perform better because they have access to (‘borrow’) the agglomeration benefits of larger neighbouring cities.

• Meijers & Burger (2016): not necessarily a one-directional process between a smaller and a larger city, but between cities that are close and within each other’s sphere of influence

• Borrowed size refers to:

a.) functions

b.) performance

The other side of the medal: ‘agglomeration shadows’

• Cities cannot just ‘borrow size’ from other cities in the urban system, they also face competition effects ‘agglomeration shadows’

• Growth near (higher tier) agglomerations will be limited due to competition effects (Dobkins & Ioannides, 2001).

• Agglomeration shadows play a negative role on growth of close-by small U.S. metropolitan areas (Partridge et al., 2009).

Randstad

Ongoing work: understanding why some cities borrow size and others

face an agglomeration shadow

Dimensions of borrowed size

Connection

size function

Less functions

than expected

given size

As many

functions as

expected

More functions

than expected

given size

Connection

size

performance

Performs less

than expected

given size

8 7,5%

14 13,2%

16 15,1%

Performs as

expected

17

16%

18

17%

11

10,4%

Performs better

than expected

given size

8

7,5%

11

10,4%

3

2,8%

Cities in the agglomeration shadow

Gouda Veenendaal Soest Vlaardingen Krimpen aan den IJssel Velsen Schiedam Maassluis

Social Status

Historical importance

Household Income levels

Conclusion

• Dominance of ‘urban triumph’ narrative focusing on agglomeration benefits as key driver of growth, prosperity and even sustainability has directed attention away from small and medium-sized cities

• In many parts of Europe, the actual urban dynamics suggest that also small- and medium-sized cities can do well

• My explanation is that agglomeration benefits are still important, but not geographically confined to large metropolitan areas: cities can ‘borrow size’ in networks on a variety of spatial scales.

• This opens up a new range of opportunities for small and medium-sized cities to organise more agglomeration benefits for their firms and citizens.

Köszönöm! Thank you very much for your

invitation and attention!

Evert Meijers e.j.meijers@tudelft.nl