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Development of Cities and Rural Areas: Agglomeration Effect, Sustainability Risks, and Regional Centers

This lecture explores the impact of agglomeration on economic efficiency, the circular causality in urban spatial agglomeration, and the negative effects of concentration. It also discusses the role of regional centers, the diffusion of innovations, and the development trends of cities and rural areas.

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Development of Cities and Rural Areas: Agglomeration Effect, Sustainability Risks, and Regional Centers

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  1. Лекция 2. Развитие городов и сельской местности Зубаревич Н.В.

  2. Agglomeration effect Geographic concentration enlarges economic efficiency: • scale effect • cutting of transportation costs • labor force, equipment, knowledge consentration • increase of technologic competition and speeding-up of innovations implementation

  3. Circular causality in spatial agglomeration of firms (consumer-goods producers) and consumers (Fujuta 1996) demand effect more consumerslocate in the city higher real incomefrom a given nominal wage more firms locate in the city greater variety of consumer goodsproduced real income effect

  4. Negative effect of consentration • Mono-profile (one-company) town • Sustainability risks: - economic situation / demand / price volatility- resource exhaustion • Double risks: one-company town + depressive sector company

  5. Russia settlement structure,% instable equlibrium – zones of traditionalism and modernisation cities 36% 38%

  6. Size of the city and capability to adopt to the market conditions • Cities 250,000 population and more seems to be the most sustainable. These are the centers of regions and the biggest industrial cities (Treyvish & Nefedova). • The number of big cities – only 7%, but they concentrate the half of urban population. • 1/4 Russian urban population lives in cities- "millionaires". • These are key points for Russia development.

  7. “Growing points” of Russia economy • Federal cities’ agglomerations • Big cities (1 mln population more) • Regional centers (250 thousand more) • Monofunctional cities/towns of exporting BB companies enterprises location

  8. Diffusion of innovations and concumption/ style of life modernization TOWNS RETAIL Periphery St-Peters Samara Region cenrets suburbs КОЛОГРИВ Moscow N.Novgorod Periphery BBC INTERNET Novosibirsk Postov-Don Yekaterinburg УРЮПИНСК MOBILE COM Reg. centers 250 th.pop

  9. Super centralization: share of federal cities/agglomerations in Russia total 2007, %

  10. Shifting of activities not investmentShare of big cities in Russia total, % Share of population 7% 3% 9%

  11. Retail expansion: construction of hypermarkets Share of different types of cities in total offer 2008,%

  12. Slow spreading: share of Internet-audience, % (2005) pop. 100,000 - 250,000 – 4% pop. 250,000 - 500,000. – 10% pop. 500,000 - 1 mln – 13% pop. 1 mln more – 71%

  13. Internet users in the Russian citiescoverage, % of poulation (2009) Barriers: poor infrastrusture, low incomes and education level, traditional lifestyle Russia total – 31%

  14. Speed of Internet diffusion (2009/2001): complex of factors (location, incomes, population etc.)

  15. Regional centers – the main structural shifts Retail functions concentrationShare of regional centers in region's trade turnover, % population, thousand people

  16. Regional centers – the main structural shiftsDeindustrialisation has stopped, new structure of industry is establishedShare of regional center in region's trade turnover, % population, thousand people

  17. Advanced wages growth in the centers with the bigger population: status + aggomeration effect advantages (regional center wages to region's average wages, %) population, thousand people

  18. What are the leading regional centers? Average wages in big cities: no significant difference exept Moscow (rubles)

  19. What are the leading regional centers?Retail turnover and housing construction

  20. What are the leading regional centers?Investment per capita industry

  21. Postindustrial shift depends on the structure of industryIndustrial output, thousand rubles per capita, constant prices 2005 industrial

  22. What kind of agglomerations will grow up?Regional resources for concentration(share of center/agglomeration in the region, %)

  23. Leading growth of wages Employeers concentration Retail concentration Housing construction concentration as well Low investment Low budget revenues due to redistribution policy Low migration inflow from the other regions and stable inflow within region itself Trends of regional centers development

  24. Suburbian areas – migrants flow concentrationPopulation growth in the regions and cities/towns nearby Moscow agglomeration, 2003to 1989,% Tver Yaroslavl Vladimir Smolensk Ryazan 0 +5 -1 -5 -5 -9 -10-12 Kaluga Покров – Штольверк Александров – Рекорд Заокский – рекреация,стр-во Обнинск – технопарк Гагарин – вынос пром. предприятий, логистика Конаково – пром., рекреация Переславль-рекреация Tula

  25. Suburbian areas – migrants flow concentrationPopulation growth in the regions and cities/towns nearby St-Peterburg agglomeration, 2003to 1989,% Petroza- vodsk St-Pb Vologda Novgorod Pskov 0 +4 -1 -5 -5 -9 -10 -14 Чудово - Кэдберри Струги Красные - Петмол

  26. Big and wealthy cities

  27. Monofunctional (one-company) towns - heritage of industrial planned economy. Different incomes range (high/ medium/ low) and shortage of diverse urban environment 460 cities / towns Soviet period (45%) 300 cities/towns – Ministry of Regional Development estimation 150-160 cities/towns BB companies location 14% of Russian cities 13% of urban populaton

  28. Monofunctional cities/towns of BB companies location. Many of them were injured by new crisis drastically

  29. Leading cities of Volga and Urals regions: mix of regional centers and monofunctional citiesRussian specific of urban development in transition period

  30. Modernization barriers • Despite the high rate of diffusion, development of global information and communication networks in Russian regions encounters real barriers - low incomes and non-modernized lifestyle. • Residents of medium-sized and small towns together with rural population have dropped out from the global space and the gap between the central and peripheral regions is widening.

  31. Agricultural functions of countryside are shrinkingCenter-periphery gradient of rural population and agricultural productivity Population density: from suburbian areas (1) to deep periphery (7) Cattle productivity (liters of milk per cow) from suburbian areas to periphery

  32. Population density and economic "black holes" – visible correlation

  33. Nonchernozem areas recreation nature conservation small wooden industries agriculture Huge problem of human capital Chernozem/ Southern areas agriculture Suburbian areas Settlement expansion Recreation Logictics Intensive agriculture New/old functions of countryside: objective trends Information for planning and doing business

  34. Независимый институт социальной политикиСоциальный атлас российских регионовМониторинг кризиса в регионахТематические разделыПортреты регионов • www.socpol.ru

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