Competitiveness and the Urban Economy: Twenty-four Large US Metropolitan Areas

During the past decade, as trade barriers have been lowered as a consequence of trade liberalisation negotiations conducted at both the international and the regional levels, urban economies have been increasingly vulnerable to competitive forces emanating from the most distant corners of the global economy as well as having been presented with previously unimaginable opportunities for penetration of markets equally distant. National governments have accepted self-imposed constraints on their capacity to intervene in their own economies, through adoption of limitations on the use of tariffs, quotas and other traditional devices, and through establishment of impartial, trade dispute resolution mechanisms. Technological change has only exacerbated the situation facing each urban economy and, in many industries, industrial agglomerations are giving way to plants, such as mini-mills in steel production, that can be located according to a new set of criteriaÐ proximity to consumers and access to transport, rather than proximity to resources; or to labour with certain qualities, rather than to other ® rms in the same industry. In many industries, clustering, of course, remains important. The result of these two forces is the creation of new economic spaces within which new actors, urban economies, must make decisions about production and distribution; notions of periphery and centre must be rethought; and relationships of competition and co-operation take on new meaning and importance. This increased exposure of urban economies to economic change and rationality has made it imperative that each local government pay more attention to the competitiveness of its tradable goods industries. While they did not examine, nor do they recommend, speci ® c policy initiatives at the level of the urban economy, Schmitz and Musyck (1994, p. 905) conclude in their study of industrial districts in Europe that: