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New Spatial Pattern as an Effect of Globalisation Hierarchies, Networks, and Markets Gerhard O. Braun Freie Universität Berlin 1. A new pattern of spatial and sectoral growth?
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New Spatial Pattern as an Effect of GlobalisationHierarchies, Networks, and Markets Gerhard O. Braun Freie Universität Berlin 1. A new pattern of spatial and sectoral growth? 2. Changes in the organisation of companies- from production of products to money production - from coordinated to liberal capitalism- fragmentation and selective growth (3. Changes in the spatial organisation of companies) 4. New spatial pattern at different scales Braun _ AAG Boston 2008
Change in Occupation 1997-2003 Employment Development (Change in %) Growth and Decline in Occupation in Close Vicinity is Even More Siginificant Than in Demography Hamburg Berlin Frankfurt Munich decrease increase Stuttgart Braun _ AAG Boston 2008
Development Paths of Joint Stock Companies TNCs Real Estate Hedgefonds Private Equity Comp. Shareholders, Financial Services MNCs large scale Shares on product-clusters Core business, shake out change in entrepreneurial goals power Idea product shares contrrol over space Multiple product leadership Family Operated Companiesmedium scale Product diversification, functional integration Product monopoly, divisional consolidation Traditional Companiessmall scale Product market leader Product identification Product development product- vs. money-orientation Braun _ AAG Boston 2008
Decay of Deutschland AG Network of Shares in 1996 Capital Investment Flows Source: http://www.mpi-fg-koeln.mpg.de/ak/themen/doks/Deutschland_AG_1996bis2004.pdf Braun _ AAG Boston 2008
Decay of Deutschland AG Network of Shares in 2004 Capital Investment Flows Source: http://www.mpi-fg-koeln.mpg.de/ak/themen/doks/Deutschland_AG_1996bis2004.pdf Braun _ AAG Boston 2008
Stage I: Structural Changes in Production From Vertical, In-House to Horizontal, In-Region Production Vertical (In-House) Production:Industrialisation Distribution, Logistics In-House Assembling Production Engineering backward/ forward linkages Horicontal (In-Region) Production: Fordism R&D HQ, Management In-Region Braun _ AAG Boston 2008
Stage II: Post-FordismConcentration and Dispersion of Production Chain-Links Pilot-Production HQs, Prof. Sercives Production Production R&D Production ICT Networks Networks Regional Networks ICT ICT Vertical Concentration High Tech Manufacturing, Engineering, Creative Milieus Markets Universities, Research Cluster, Creative Milieus Logistik Chain Links of TNCs Professional Services Permanent adjustments Spatial Concentration Dispersion Markets Networks Braun _ AAG Boston 2008
Globalisation: Hierarchies, Markets, and Networks Information, Management Backwash effects H/LDC „B“ Research and Development Spread effects Know how LDC „A“ Mega City I Regional HQs HDC Global City, HQs Mega City II Investment,, Technology, Infrastructure Growth Pole, R&D, regional HQs H/LDC „C“ Profit, Products, Economic control Regional Markets Braun _ AAG Boston 2008 G. Braun
Strategic Spatial Pattern of Nestlè Germany Thresholds of population size x Berlin x Bonn HQs/Lobby R&D Logistic Production community tax per capita Source: Deutscher Städtetag [ed.], 2004 Braun _ AAG Boston 2008
Employment Development (Change in %) Fragmented Pattern – Value Chain Organisation of Nestlè Germany P P HQ Head Quarters P L Lobby P R&D Research & Develop. P L P P T P T Transport, Logistic T P P Production P T P L P P T L P HQ P HQ P P T decrease increase T T HQ P P R&D P P T T Braun _ AAG Boston 2008
Fordistic Economy and Urban Social Organisation Complete (continuous) production chain within an urban region HQ,Mana-gement, Controlling, Prod.orient.Services R&DProduct & Process-develop-ment Market,Con-sumption Engineerng Pilot-Production Logistics, Distribution Assem-bling Production Urban Region Lower social status Middle social status Middle social status Upper social status Social Groups Contiguous spatial distribution of contiguous social groups Braun _ AAG Boston 2008 Number
Discrete Production Chain Within a Region Urban Region Social Groups Increasing discrete spatial distribution of fragmented (discrete) social groups Number Braun _ AAG Boston 2008 Post-Fordistic Economy and Urban Social Organisation
Is the Hierachical Pattern Overlayed, Overruled, or Replaced by a Market and/ or Network Pattern? Braun _ AAG Boston 2008
Is There a New Spatial Pattern as an Effect of Globalisation? Yes, there is. The system develops more complex. Thank you for your attention Braun _ AAG Boston 2008
Change in Demography 1997-2003 Population Development (Change in %) Growth and Decline in Close Vicinity decrease increase Braun _ AAG Boston 2008
Change in Employment (Trend Analysis) Trend in Employment Development decreasing increasing Braun _ AAG Boston 2008
Spatial Distribution of Head Quarters in Five Interlinked Economic Sectors Legend: Energy Car Production Car Parts Commercial Transportation Tourism Braun _ AAG Boston 2008 Source: Metro-Seminar
Concentration and Dispersion of Production Chain-Links Pilot-Production HQs, prof. Sercives R&D Production Production Production TNC3 TNC2 Vertical Concentration TNC1 Logistik Chain-Link of TNCs Spatial Concentration Dispersion Permanent Adjustment Markets Stage II : Structural Changes in Production (Post-Fordism) Braun _ AAG Boston 2008
Expansion DaimlerChrysler, 2004, Automotive IndustriesEmployees: 384.723 in Germany 185.723Change 1997/2004: -17.8% (Transfer of Shares) „Welt AG“ (joint-stock company)born 1998; dead 2004 Mercedes Car Group Chrysler Group Daimler-Benz: European Market, Technology: luxury cars Chrylser: US Market: SUV, Vans, light trucks, Commercial Vehicles Mitsubishi Motors Corp. Services merger European Aeronautics MTU Friedrichshafen Mitsubishi: Asian Markets Braun _ AAG Boston 2008
Restructuring Adidas, 2004, Sport Products Employees: 17 023 in Germany: 2580 (40 nations; 40 employees in production; in 1984: 3.000 in all sectors of employment)Change 1997/2004: +61.1% Product ManagementControlling, Design Design: Tokyo Buying: Hongkong Production: Asiapreferably supplier:850 companies, 500 000 employees(small / medium scale businesses) Product Development: Portland Marketing: Amsterdam Adidas HQ Design: New York Braun _ AAG Boston 2008
Specialisation, Niches ZF, 2004, Engineering Industries, supplier of automotive industries. Sectoral Market Leader.Employees: 54.500 in Germany 34.000Change 1997/2004: + 38.2% 12 ZF global branches High Re-investment into R&D and Production ProcessesMilieu: Innovation, Quality, Cooperation, Interaction, Competition, Rivalry, Proximity to Customers,Trust ZF Regional system of highly specialised suppliers and of creative milieu Braun _ AAG Boston 2008
Suppression, Buying Out Hoechst, 2004, Chemical Industry Employees: 15 628 (max. 180.000) in Germany: 8518 Change 1997/2004: -53,7% Pharma: Sanofi Pesticide: Bayer Paint:Dupont Plant Production:Thyssen-Krupp Chem. Industry: Private Equity C. Merger with Rhone-Poulenc, 1999 Sanofi-Aventis: 2005 Today: 23.000 employeesin 80 different companies(small/ medium scale) Sanofi: 2005 Textile paint:Private Equity C. Hoechst industrial park Frankfurt: formerly 25.000 Hoechst employees Braun _ AAG Boston 2008
Decay of Deutschland AG Network of Shares in 2000 Capital Investment Flows Source: http://www.mpi-fg-koeln.mpg.de/ak/themen/doks/Deutschland_AG_1996bis2004.pdf Braun _ AAG Boston 2008
Network Interaction Firm A FirmB FirmC Management vertical contacts R&D Production line horicontal contacts Official information flows G. Braun Braun _ AAG Boston 2008
Network Interaction: Community Type Firm A FirmB FirmC Management vertical contacts R&D Production line Informal contacts horicontal contacts neighbourhoods G. Braun Braun _ AAG Boston 2008
Network Interaction: Contact System Firm A/B FirmC Firm A FirmB Management vertical contacts R&D Production line horicontal contacts G. Braun Braun _ AAG Boston 2008
Network Interaction: Lobby System Firm A FirmB FirmC Lobby Management vertical contacts R&D Production line horicontal contacts Influence on regional politics Region Lobby Braun _ AAG Boston 2008 G. Braun
Development Paths: Ties and Innovation development path 1 strong development path 3 Ties development path 4 development path 2 weak Innovation Opportunity Inception Growth Maturity Decline Identification G. Braun, 2003 Source: Tracey P. & G.L.Clark, 2003 Braun _ AAG Boston 2008
Lobbynetzwerke Lobby – Networks of Nestlè Braun _ AAG Boston 2008
Thresholds of population size HQs R&D Logistic Production Braun _ AAG Boston 2008 Quelle: eigene Darstellung nach Deutscher Städtetag [Hrsg.], 2004 und Internetrecherche
Vernetzungen im Vorstand I Braun _ AAG Boston 2008 Quelle: eigene Darstellung nach www.nestle.de
Vernetzungen im Vorstand II Quelle: eigene Darstellung nach www.nestle.de Braun _ AAG Boston 2008