Challenges of the global city

Challenges of the global city

Cities have been the crucible of politics, economics, society and culture down the ages. Unprecedented urbanisation, now overwhelmingly outside the West, makes them even more important. Cities come in various shapes and sizes. One type is the "global city"; membership is extremely limited.

A global city is where truly global services cluster. Business - in finance, the professions, transport and communications - is done in several languages and currencies, and across several time zones and jurisdictions.

Such creations face a unique set of challenges in the early 21st century.

Today, there appear to be only five global cities. London and New York are at the top, followed by Hong Kong and Singapore, Asia's two services hubs. Dubai, the Middle East hub, is the newest and smallest kid on the block.

Shanghai has global-city aspirations, but it is held back by China's economic restrictions - the vestiges of an ex-command economy - and its Leninist political system. Tokyo remains too Japan-centric, a far cry from a global city.

The global city has a relentless market logic. It is where Adam Smith, David Hume, Milton Friedman and F.A. Hayek would feel most at home. It has to be the most open to trade, foreign capital and migrant workers. It must have among the most business-friendly regulatory environments.

Its infrastructure - physical infrastructure as well as "soft" infrastructure (such as education, skills and cultural activities) - must also be among the most advanced. Above all, it has to be a hive of individual freedom, where creative ideas, entrepreneurship and innovation can thrive.

The medieval adage, Stadtluft macht frei ("city air makes you free") finds its most powerful expression in the twenty-first century global city.

But the logic of the global city runs counter to that of the "normal country". Normal countries are more ambivalent about the market and less open to the world. Their citizens probably want to lead settled, secure lives rather than constantly having to adapt to changing global market conditions.

London and New York - global cities that are part of normal countries - face this contradiction all the time. The natives of Hong Kong and Singapore are no longer dirt-poor immigrants. Overwhelmingly, they are settled and middle-class, with increasing "normal- country" aspirations that sometimes jar with global-city imperatives.

How do global cities rate against each other? London and New York have historic "first-mover" advantages, especially in having the world's most advanced financial markets. Hong Kong is a de facto city-state, combining municipal and nation-state functions, though under Chinese sovereignty. Singapore is a de jure city-state, with its own military and independent trade and foreign policies.

Both Hong Kong and Singapore outrank other cities, and indeed other countries, in having the best business climates, hard infrastructure and quality of governance.

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