Agglomeration and Metropolitan Governance: Exploring Best Practices

1. Open day, Brussels, Belgium, 4-7 October, 2010 The CAEE targeted analysis project: the ‘new’ agglomeration and metropolitan/ city-regional governance Alan Harding, University of Manchester

2. This presentation • Preliminaries: agglomeration and metropolitan/city-regional governance • Headline project findings • ‘Best practice’ and policy implications • 4. The value of ESPON’s ‘targeted analysis’ model • 5. Future research avenues

3. Preliminaries • Agglomeration: the ‘new’ buzz word • Literally; ‘gathering together in a mass’ • Old urban (economic) geography concept with 2 competing traditions • ‘Localisation economies’, benefits experienced by firms from co-location (Marshall. Modern version; Porter on ‘clusters’) • ‘Urbanisation economies’, benefits derived by workers and households as well as firms from city size, density and variety (Jacobs. Modern version; Florida’s ‘creative class’) • Associated with key observations e.g. productivity benefits of population and employment density, urban wage premium • Recent rediscovery by economists who had previously ignored ‘increasing returns to (urban) scale’ • Basis of new work on, e.g. ‘spillover effects’, ‘effective density’, why falling transport costs are associated with concentration rather than dispersal of economic activity etc. • BUT concerned with ‘what’, not ‘why’

4. Preliminaries (cont.) • Agglomeration, productivity and (urban) scale in a knowledge driven economy • City-regions are locomotives of the national economies within which they are situated, in that they are the sites of dense masses of interrelated economic activities that also typically have high levels of productivity by reason of their jointly-generated agglomeration economies and their innovative potentials • Scott and Storper, 2003 • Metropolitan spaces are becoming, more and more, the adequate ecosystems of advanced technology and economy…. [T]he decrease of communication costs does not by itself lead to a spreading and diffusion of wealth and power; on the contrary, it entails their polarization. • Veltz, 2005

5. Preliminaries (cont.) • Metropolitan/city-regional productivity and governance • Work of Cheshire and Magrini (2008) demonstrates statistical association between economic performance and existence of metropolitan/city-regional tier /unit of governance • But treats governance as a ‘black box’ • Little appreciation of what metropolitan/city-regional governance arrangements actually do and how they relate to other scales of governance/market-based decision-making • Hence the CAEE project: fusing of (a) advanced econometric assessment of importance of agglomeration and (b) political science approach to the characteristics of metropolitan/city-regional governance

6. Agglomeration economies in Europe • Have agglomeration economies become more important across Europe? • Yes. Demonstrated in three main ways • Econometric analysis • Relationship between employment density and economic growth strengthened over time, especially over last decade • Evidence that urbanisation economies increased and localisation economies declined in importance with shift to ‘knowledge economy’ • GVA mapping at European and national levels • Strong correlation between employment density and GVA growth • Stretching of urban hierarchy (national and international) • Case study sectoral employment change analysis • Reconcentration of high value economic activity into core metropolitan areas + selective decentralisation of medium value sector activity • Grouping of modern manufacturing around critical infrastructures; peripheral low value manufacturing areas a key challenge

7. Governance and agglomeration economies • Should public policy focus on understanding, influencing and managing agglomeration economies more effectively? • Yes, if only to eliminate wasteful competition and limit unsustainable development, but needs to recognise... • Agglomeration patterns are driven by countless individual firm/household decisions, not grand policy designs • Key public sector ‘steering devices’ are indirect ‘big ticket’ issues: critical infrastructure, high level skills/education, corporate taxation, mega-developments • National government role (or regional govt.s in strongly decentalised systems) therefore crucial • Evidence of consistency in national approach to spatial development and clear linkage to expenditure planning setting important context • Devolution/decentralisation can represent problem avoidance as well as empowerment

8. ‘Good practice’ and policy implications • What ‘good practice’ was observed within the CAEE case study areas (Barcelona, Dublin, Lyon, Manchester) • Key challenge: ‘going with the grain’ of the ‘new’ agglomeration rather than resisting it. Fusing ‘competitiveness’ policies (often non-spatial) with (usually spatial) ‘cohesion’ policiies • Metropolitan/city-regional governance arrangements vary widely in their scope, focus and autonomy. An ‘ideal’ model has.. • Supportive national context • Strong technical capacity (analytical and delivery) at appropriate scale • Significant influence at regional/national scales • Strong horizonal networks with key public and private institutions • A compelling and broadly-shared ‘narrative’ • Strong leadership and co-ordinating capacity • Ability to recognise and deal with the environmental and social implications of realising its strategic ambitions

9. The ‘targeted analysis’ model • Targeted analyses proved effective in bringing academic analysis and institutional/policy concerns together • Improvements would be possible if there was.... • More investment in ‘speaking the same language’ • More sustained research-policy engagement , not just one-off meetings, comments on written products • Earlier engagement of researchers in defining key questions, not simply responding to pre-defined brief • Output/results-based rather than input-/process-based project management model

10. Future research avenues • Agglomeration patterns likely to be re-enforced, not reversed, by post-crisis, ‘post-financialization’ European growth model. 3 key challenges in understanding/adjusting to/shaping future change • Technical • Defining European metropolitan geographies • Understanding flows and inter-relationships • Exploring future urban scenarios • Flexible use of ‘densified’ urban space • Socio-economic implications of a stretching urban hierarchy • Beyond ‘governing competitiveness’ • Understanding the inter-governmental politics of climate change adaptation and mitigation • Best practice in the building of low carbon ‘regimes’