CityReads│What Saskia Sassen Talks about the Global City?

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What Saskia Sassen Talks about When She Talks about the Global City?

The Global City is an extreme space for the production and/or implementation of very diverse and very complex intermediate capabilities. 

Saskia Sassen, 2016. The Global City: Enabling Economic Intermediation and Bearing Its Costs, City & Community.

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Picture source: http://la.network/la-identidad/ciudadania-activa/la-ciudadania-como-la-ciudad-se-puede-ir-reinventando-saskia-sassen-2/

Saskia Sassen’s Global City, published in 1991, received attention and debate from diverse disciplines. Its influences go far beyond the academia. It is particularly well received among city mayors without understanding what the global city really means. For example, in Shanghai Master Plan 2040, it proposes to build Shanghai into excellent global city.

In a recent article published in City & Community, Saskia Sassen analyzes what global city is and explains four overlooked propositions. She also discusses today’s conundrum: who owns our city?

What is the global city?

Why do the most powerful, rich, and digitized economic actors need“central places” more than ever before? Large corporate firms engaged in routinized production could locate anywhere. But if they went global they needed access to a whole new mix of complex specialized services almost impossible to produce in-house as had been the practice.

This new economic logic, partial as it was, would generate high-level jobs and low wage jobs; it would need far fewer middle-range jobs than traditional corporations. But those low-level jobs, whether in the office or in households, would matter more than one might imagine. I described them as the work of maintaining a strategic infrastructure.

The Global City is an extreme space for the production and/or implementation of very diverse and very complex intermediate capabilities. This did not refer to the whole city. The Global City was a production function inserted in complex existing cities, albeit a function with a vast shadow effect over a city’s larger space.

Considerable complexity involved in a firm or market going global would require a whole range of new instruments and capabilities, and that these would have to be made, and further, that this making would require a considerable mix of knowledge functions. I saw as one effect the rising demand for intermediate sectors: It would make more sense gradually for firms to buy these services from highly specialized producers rather than generating them in-house via full-time employees. Intermediation had the added advantage of enabling firms to consider even minimal operations in some countries

In that earlier period of the 1980s, the most famous cases illustrating the ascendance of intermediate functions were the big mergers and acquisitions. What stood out to the careful observer was how rarely the intermediaries lost. The financiers, lawyers, accountants, credit rating agencies, and more, made their money even when the new mega-firm they helped make eventually failed. Finance became the mother of all intermediate sectors.

From the early phase dominated by mergers and acquisitions, intermediation has spread to a growing number of sectors. Intermediation can now be thought of as a variable that at one end facilitates the globalizing of firms and markets and at the other end brings into its envelope very modest consumer oriented firms. It also contributes to explaining the expansion in the number of global cities and their enormous diversity in terms of specialized knowledges. Intermediation has become a logic of extraction.

Intermediate functions needed to be produced, developed, refined, mixed with other types of instruments, and so on. In its narrowest sense, then, I conceived of the Global City function as a space of production; a silicon valley for advanced services, notably finance. Finance could not have become as complex and innovative (to put it kindly) if it had not had a network of global cities.

As a space of production, the Global City generates extreme needs. These include state of the art infrastructures that almost inevitably go well beyond the standards for the larger home cities. Further, the Global City generates a sharp rise in the demand for both high-level talent and masses of low-wage workers. What it needs least are the traditional modest middle classes so central to the era when mass consumption was the dominant logic. Finally, as the global economy globalized, this Global City function spread to more and more cities: It was a sort of frontier space enabling global corporate actors to enter national economies.

Such instruments for intermediation are a marking feature of the type of global economy that emerged in the 1980s and had developed its global reach by the late 1990s. This, then, also explains the rapid increase in the number of global cities during the 1990s and onwards. Today, we can identify about 100 plus global cities, no matter how diverse their power to shape major global trends and their capacities to develop/invent new instruments; one, mostly overlooked, fact is that even minor global cities have invented new instruments and built new markets, often based on a single commodity.

The Global City function is made, and that process of making is complex and multifaceted: It needs to factor in laws, accounting practices, logistics, and a broad range of other components, such as the existence of diverse cultures of investment depending on the country and the sector. This process of making could not take place simply in a firm or a laboratory situation.

It had to be centered at the intersection of different types of emergent global economic circuits with distinct contents. It needed a space where professionals and executives coming from diverse countries and knowledge cultures wound up picking up knowledge bits from each other even if they did not intend to do so. I saw in this process the making of a distinctive “urban knowledge capital,” a kind of capital that could only be made via a mix of conditions among which was the city itself with its diverse knowledge and experiential vectors.

Finally, and critical to the whole project, was what I refer to as the infrastructure to ensure maximum performance by high-income talent—the broad range of conditions enabling their work-lives. Prominently included in my analysis was a range of lowly rewarded tasks, ranging from low-level office to low-wage household work. In many regards the homes of top level staff are an extension of the corporate platform. To get it out of the language of “low-wage jobs,” I described these tasks as the work of “maintaining a strategic infrastructure”.

Overlooked propositions

The book, Global City, received attention and debate from diverse disciplines, but a few basic vectors got lost in the process. Here, I want to focus on a couple of these overlooked propositions.

Particular types of cities would become highly desirable sites for ensuring the production and supply of extraordinary combinations of knowledge components. I developed at length the differences among the key cities. New York, London, and Tokyo each had very specific specialized functions in the emergent global economy. A simplified version of such differential specialization was that New York became the silicon valley for financial innovations, London became the ultimate entrepot city, where even small investors from poorish countries would get a hearing, and Tokyo became the exporter of the raw commodity we call money (rather than elaborate financial instruments based on an interest rate on a derivative in turn based on another speculative item). Eventually, all these cities developed extremely complex capabilities, but even so, they maintained a level of differentiation.

Second issue concerns the methodology. It did not have cities as its core point of observation. My engagement was with what the rise of digital technologies meant that sectors such as finance and advanced specialized service sectors could now locate anywhere. Can all these advanced sectors selling specialized knowledge that can be packaged digitally locate their headquarters anywhere? My aim was to establish a global map of locations for the most advanced digitized sectors operating across borders.

The result was clear evidence of an astounding growth curve in the 1980s: a growing concentration of such specialized services in a very limited number of key cities and a partial break with nation-led patterns. Based on the data, New York, London, and Tokyo together accounted for up to 60 or 70 percent of financial and other globally circulating specialized services for firms. The rest was concentrated in another 20 or so old established international centers: Paris, Amsterdam, Milano, Singapore, Hong Kong, and such.

As the global economy globalized more and more, the number of global cities also grew. Today we can identify a hundred or so global cities; these vary considerably in their capacities, with some counting on only a few genuinely global operational circuits.

A third issue concerns the growing inequality. The visual order of cities, with its gentrifications and great architectural innovations, spoke the language of prosperity and betterment. But this upgrading rested on the backs of growing numbers of the expelled—individuals and families thrown out of their homes directly or indirectly. And behind the neat facades of the modest middle-class neighborhoods, another history was getting made: impoverishment, sons and daughters with no options but to stay in their parents’ home. Today, it is, of course, a major subject, and I have returned to it in Expulsions. I saw it coming in the late 1980s just by examining the urban land-grabs by emergent operational spaces—the Global City function.

A fourth issue concerned the built environment: the mix of standardization and lack of clarity as to what work is actually done in today’s corporate buildings. In an earlier period, say the 1960s, the glass towers spoke a clear language: They were about office work. Indeed most of the jobs in the corporate sector were secretaries and supervisors. Today’s corporate buildings do not tell us so clearly what they are about. It is mostly not routine work. In each major corporate center across the world there is a set of building standards that rules, and this has led to an easy notion that all these global cities are becoming the same, and hence, that they are competing with each other. The main effect of this would be that the corporations can ask for many benefits and privileges, as they have, under the false notion that if they do not get these, they will leave the city.

My research signaled very clearly that today’s office buildings are not mostly full of secretaries and supervisors, but all kinds of high-level experts. Thus, the “backroom,” the space where the secretaries used to sit—of Goldman Sachs at one point—had over 100 physicists. I argued that we needed to find out what work is getting done in these buildings because it varies enormously, and that different types of firms need to be in different types of cities. For instance, Chicago houses a very different type of finance from New York. This contests the notion that all these global cities are becoming the same and hence their governments must give the corporates significant breaks if they are to locate there.

Today’s conundrum: who owns the city?

A major development of the last few years is a massive scale-up in the buying of high-end commercial and residential properties by national and foreign investors. In some ways this is not a new development. Already in the 1980s, foreign firms and some governments were buying properties in London and New York.

What is different in the current phase is the scale of these investments, the vast globalizing of the destinations of these investments, and the frequent underutilization of the properties. Many of these properties are not fully used, and some, in fact, stand empty. This does raise a question as to what it is that investors are after. At its most generic, the buying of urban property is a mode of gaining access to urban space in a context where a growing number of cities are emerging as significant in the current and near future global economy. In short, investing in corporate properties in cities is perhaps an inevitable consequence of the enormous value attached to these advanced production sites, that is, to the Global City function.

Source:

National and Foreign Investment in Property Acquisitions, Top 50 Recipient Cities (Q3 2014–Q2 2015)

It is also in this mix of complexity and incompleteness that rests the possibility for those without power to make a history, a neighborhood economy, and a (sub)culture. As the legendary statement by the fighting poor in Latin American cities puts it to power: “Estamos Presentes,” we are present, we are not asking for money or favors, we are just letting you know that this is also our city. It is in cities, to a large extent, where the powerless have left their imprint—cultural, economic, and social. It is mostly in their own neighborhoods, but eventually the imprint can spread to a vaster urban zone as “ethnic” food, music, therapies, and more. But this possibility to make a history, a culture, and so much more, is today threatened by the surge in large-scale corporate re-development of cities.

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The Global City is not a bounded unit, but a complex location in a grid of cross-boundary processes. It engages the global directly, often bypassing the national. Some cities may have had this capacity long before the current era. But today these conditions extend to a growing number of cities and to a growing number of sectors within cities. This can be read as a qualitatively different phase. Insofar as the national as container of social process and power is cracking, it opens up possibilities for geographies of the political that link subnational spaces across borders. But it does so also for those without power. It signals the formation of a new type of transnational politics that localizes in these cities and the possibility of global civil society.

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