Cities’ competitive advantage more reliant on networks than size, study says

A new study released Monday by a Michigan State University sociologist finds that cities’ size and location are waning as indicators of its economic prowess. Assistant professor Zachary Neal credits the growth of communication technologies and other networks for realigning economic hub zones from places like Detroit and Cleveland to Raleigh/Durham and Denver.

“Fifty years ago, no one would have thought to put a multinational corporation in Bentonville, Ark., when it could be in New York or Chicago or Los Angeles,” Neal said in a statement. “But changes in technology have started to level the playing field in terms of what cities can do.”

Neal focused on the affects of commercial aviation, rail and the Internet to understand how smaller cities have won economic share from traditional urban centers like New York City and Chicago. Data on the economic structure, population size, and airline passenger traffic of 64 U.S. metropolitan areas from 1900 to 2000 served to test his hypothesis that a transition in the U.S. urban hierarchy occurred during the twentieth century, from size based to network based. His study, released in the academic journal City & Community, found that Denver, Pheonix and Bentonville, Ark. are some of the most “well-connected and economic sophisticated communities.”

Before the 1950’s, Neal found that population was the most important indicator for its economy. After the rise of commercial aviation, however, that trend began to spread to other hubs, such as Chicago, Pittsburg and Detroit. But with the continued spread of business travel, some cities began to leverage information and communication technologies through the spread of the Internet.

Large cities like New York, Los Angeles and Chicago were able to build those networks and maintain most of their clout, but other cities were unable to capitalize. Detroit, Cleveland and Pittsburgh are now considered “poorly connected,” the study indicated. But while relative economic giants were jostling for control, small cities that were essentially insignificant fifty years ago have emerged as major economic centers.

The Raleigh/Duram region of North Carolina was highlighted, as was Miami, which leveraged its location to serve as the primary link between North, Central and South America over the last several years.

“Just attracting more residents won’t have much effect. But building relationships with other cities both near and far, for example through business partnerships or more nonstop flights, can go a long way,” Neal said.

The most important factor in local economies is currently their connectedness, but that it is likely to shift again – Neal suggests it maybe to one based on the environmental sustainability of cities.

“The transition from a size-based hierarchy to one rooted in networks shows that this is a fluid structure.”

To read the study, “From Central Places to Network Bases: A Transition in the U.S. Urban Hierarchy, 1900–2000,” click here.

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