CHAPTER 6
Globalization, Urban Regions, and Cluster Development
Globalization has resulted in not just a closer integration of economies but also a tightening of the links among major cities. Advances in information and communication technology (ICT) and transport technologies, together with the modernization of urban infrastructure, have further facilitated interaction among cities at many different levels and contributed to the emergence of global urban regions. Cities, like Bangkok, Seoul, and Shanghai, lie at the core of urban regions and benefit from agglomeration economies that arise from specialization and scale of production and from industrial diversity that promotes spillovers and the emergence of new activities. Research suggests that each doubling of city size can raise productivity by between 3 and 14 percent. Urban regions are characterized by a concentration of services, high-tech and creative activities, and nascent industries in the core city, with large-scale manufacturing coalescing in nearby medium-size cities and more specialized cities. This arrangement optimizes the gains from urbanization economies in the core city and localization economies in the hierarchy of medium and smallsize cities in the urban region.
127