Global Cities = Flat World?

Sassen defines global cities as cities "where international financial functions are disproportionately concentrated and whose economies are most closely integrated with the global economy". Part of Sassen's argument includes the theory that the global cities act as hubs for financial functions, and other, smaller cities act as virtual nodes, using the global cities to send and receive information all over the world. For example, In order for a business in Scranton Pennsylvania to interact with a business in Dublin, Ireland, the transmission might go from Scranton, to New York, to London, to Dublin, using New York and London as vehicles to transfer the communication. The globalization of cities occurred primarily due to the awesome inventions in telecommunications over the last 20 years. In The Wold is Flat, Thomas Friedman defines those forces which have "flattened the world", and reason number two, second only to Windows, is the internet--more specifically, the internet as a vehicle for work-flow software.

The internet, as a vehicle for work-flow software is by far and wide the biggest catalyst of the rise of global cities. It allows businesses and financial advisers to communicate with the touch of a button. It is the reason an international bank in Rio de Janeiro can send a a year's worth of financial records to New York in seconds. Work-flow software is what allows companies to outsource and offshore certain jobs to reduce labor costs and increase profit margins, which make for more lucrative investments for affluent people in any part of the world. The globalization of cities allows for an investor in Tokyo to easily invest in an American company such as Dell.

However, work-flow software can hurt just as much as it can help. While increasing profit margins is well and good for the prosperity of businesses, one corrosion of the advancements in work-flow software involves the economies of these global cities. If a company in a global city is offshoring work, it is laying off jobs and hurting a neccessary piece of the city--whether it is global or not--the economy. Less people employed means less money circulating. That, combined with the shady investments of investors in these global cities, can lead to a big economic crash, such as the one that happens to be occurring in what is arguably the greatest global city on Earth--New York. The current economic crisis facing not only America, but the rest of the world as well, displays a corrosive flaw in the very structure of the global city--too much interdependence.

We have seen how much prosperity globalization can cause, and it is scary to think we just might now be seeing how much harm it can cause, as well.