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Lecture 4

GGRB05 - Lecture 4.pdf

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Denisse Macaraig

GGRB05 – Lecture 4 Monday June 6, 2011 Marvin Macaraig’s New Office: MW379, 1:30-2:30 and 5:30-6:30 Last Week - Why is growth and GDP always mentioned? Urban Economies, Employment, and Retail Patterns Readings: Chapters 12 and 14 Today’s Objectives Think about the following 3 questions: 1) The role of public vs. private spaces (Where are they?) 2) How are changing retail patterns connected to the competitiveness of cities? 3) Examine more evidence of how cities can be perceived as “generators of wealth”? - The idea of the global city, how governments promote themselves as global cities (only certain cities can be called “global cities”) Globalization - Significantly affected urban economies - Emergence of TNCs (multinational corporations) - Globalization has allowed the expansion of trade and direct foreign investment - Increased wealth and surplus capital - Mobility of capital, it allows capital to be reinvested - Today you can wire money to anywhere, pay by credit card, etc. (all facilitated by globalization) - We’re globalizing people (labour), not just products (goods, commodities) - It’s not a recent phenomenon, but it has been happening at an increasing rate recently, inter and intra-relationship with cities - Increased and intensification of global economic competition - We are living in an era of globalization Post-Fordism: 1940s – mid1970s - Organization of mass production and consumption of consumer goods - Factories increased employment opportunities Ex. Making desks, chairs, TVs, etc. all you needed was a highschool degree - It was a period of “full employment” because rising wages enabled workers to buy stuff - Increased unionization - Growth of the welfare state - Keynesian economics, government played a role with the economy - Markets were monitored - Exchange rates were stable Fordism: 1970s to Present - High-value added products Ex. Manufacturing elsewhere and putting a brand name label on it and charging a premium - Major differentiation, many brand names of products - Lots of subcontracting - High skilled labour markets, as well as lower paying McJobs, increased wage gap - Emergence of technology sector - Less government intervention - Transnational trade markets and agreements - Privatization and neoliberalization (private enterprises) De-industrialization and Tertiarization - Global economic becoming more complicated and integrated - Competition lead to de-industrialization Ex. TNCs look for cheaper rates for labour, materials, etc. - “path of least resistance” - The people who lose their jobs to other countries, they suffer the most because it’s happening so fast within the transition from De-industrialization to Tertiarization How does this affect our cities? - Rust belts (old industrial centres) that emerged because work sourced out to other countries such as Shanghai - Rise of tertiary sector (service industries), such as health care, tourism, education, etc. - The emergence of the creative class and a knowledge-based economy Ex. Scientists, engineers, professors, artists, musicians, etc. Today - It’s all about innovation and labour attractiveness - Board of Trade uses “innovation markers”: - IPO (Initial Public Offering), when a company decides to go public and expand (into other countries for example), they offer shares in a stock market to take in investments - Different cities have different ways of raising money, every city represents their own way - The Board of Trade highlights problems th - Toronto dropped to 8 place Demand-side Factors - The most important factor affecting retail pattern change is suburbanization of the affluent - As people move, retailers will follow - Also linked to increased car ownership - A decline in inner-city population and increased inner-city poverty will lead to a decline of inner-city retail - As people leave, the tax structure also declines, and the city cannot recover as quickly - Increased female employment = increased consumption (because of a growing larger market) Supply-side Factors - Significant increase in competition - Consolidation of companies - Results in smaller profit margins - TNCs use economies of scale to undercut small retailers and their own suppliers - TNCs requesting certain (low) prices for an order of a product, and it’s up to the supplier to answer to the request Decentralization - Caused by suburbanization of affluent consumers - Increased motorization and distance to reach the retailers, people having to drive further - Inner city will decline as people leave the city, and retail is changing Retail is Changing - Retail is a key urban function -
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