Globalization and Urban Development - Example

Globalization and Urban development Name Course Date Introduction Globalization is a topic that has received massive attention in literature with reference to all aspects of the contemporary human being. It is not a single phenomenon but an umbrella concept describing a range of forces that are driving modern social, cultural and economic operations. ‘Googling’ the term globalization on 15th May, 2012 would get millions of hits from the largest search engine. The term has been used differently in various disciplines. Essentially, all definitions and applications have an underlying tenet: the globalization is real and has profound effects on all humanity. In an attempt to define the term, Boudreaux (2008) cites it as simply the “advance of human co-operation across national boundaries” (page 1). It is both a force and a process that involves cross-border interaction and integration of people and economic entities as directed by international economics and trade and technological advancement. It entails the movement and the potential to move for key economic pillars such as trade, technology, investment, finance, and labour. With globalization, the world has become a web or matrix of associations with characteristic transfer of ripple effects across boundaries. Globalization has had and far-reaching implications on cities across the globe. This paper attempts to discuss the impacts globalization has had on Sydney Metropolitan region with reference to socio-economic development and general growth. It shall also explore wider impacts on the regional and national governments and the response of the NSW government to globalization as reflected in metropolitan planning. Globalized Sydney Globalization direct impact on Sydney is its new state as a global city. Due to the forces of globalization, there have been significant changes in the city especially with regard to its growth. This implies a need for proactive measures so that the city is well positioned to deal with the growth. According to McGuirk & O'Neill (2002) Sydney metropolitan strategies have over time been overtaken by the economic, social and environmental conditions of the times. This is since their inception in the post-war Australia. This may be the case as globalization-driven changes threaten to overtake the plans amidst highly competitive markets, proliferation, potential market disadvantage and poor urban social development outcomes. Corroborating this observation, the NSW government projects a population growth of at least 57 000 people annually to hit 5.3 million by 2031 (Centre for International Economics Canberra & Sydney 2010). This drives up the demand for social services and housing. Also related to globalization are other elements such as changes in population characteristics, incomes changes, employment rates and household consumption changes. Specifically, globalization has had economic, social and environmental impacts on the city. The Metro-Plan 2036 (further discussed in later sections) highlights key challenges facing Sydney to include population growth, changing population demographics, housing affordability and suitability, transport and infrastructural efficiency, sustainability, climate change and remaining competitive in international markets. Economically, there are new challenges with regard to property markets, employment rates, and diversification of service sectors. Firstly, globalization has brought on to Australian cities steady decline in manufacturing employment and an equally growing producer services and social services sectors. Currently, there are economies that are struggling with the recent economic crisis of 2008. This is one of the factors contributing to the shift in sector growth. In addition, globalization presents economies with postindustrial revolution causing a shift to producer and social services. The end of manufacturing dominance is replaced with a growing and diversifying services sector with similarly changing employment differences. In these differences, there is a rapid growth in the top end jobs especially in technological, finance-related and telecommunications sectors. Additionally, there are increases in lower jobs and gradual elimination of middle-level white collar jobs due to technological advances and automation and downsizing. More specifically, and due to the economic crisis, there has been an economic insecurity due to restructuring at all levels as the macro and microeconomics levels seek to respond to the crisis and cushion against further adverse effects. This restructuring is characterized by massive layoffs, destabilization of labor, and an imminent employment crisis. This is in spite of the aforementioned characteristics of the economy. It is vital to address the impacts of globalization on Sydney and other cities in Australia with reference to economic restructuring and spatial forms of globalization. As Sassen (2008) indicates, the spatiality is responsible for the differential impact on creation of job and the profile of the bottom and the top ends of labor. The loss of jobs and increased economic disadvantage in the Sydney mic-geography is as a result of restructuring characterized by declines in manufacturing, footwear, textile and clothing business (Collins & Poynting 2000). This disadvantage presents itself in another dimension as regarding social inequality. With globalization, there is a core element of capitalism and heightened competition for both resources and opportunities. As such, there is imminent growth of differences between social classes particularly with respect to the NSW. As Collins & Poynting (2000) cites, the there are area in the NSW that have cumulative disadvantage especially in the rural, indigenous communities. A focus on the social disadvantage distribution makes reference to social justice geography that points to increasing differences in unemployment rates, income, education access, access to health and other social services. A look into the environmental challenges presents Australia as having the highest rates of green house gas (GHS) emissions on the basis on per capita. Additionally, this makes the City of Sydney vulnerable given that it is a major economic hub of the nation. According to Marinda et al. (2011) the city is now prone to crises such as bush fires, drought, and rising sea levels commensurate to noted increasing temperatures. The Sydney Metropolitan Plan 2036 has prospects of increased GDP to A$489 billion by 2036. These projections post a grim image on green economy sustainablity given that economic growth has been related to increases in GHG emissions. With respect to ensuring sustainability, Marinda et al. (2011) cites that to reach the 2036 target for emissions reductions of 50% there is a need to reduce emissions to 28 MtCO2-e in 2036 from the current 56 MtCO2-e. This implies a need to cut emissions to 4.5 MtCO2-e per capita from 12.5 MtCO2-e. Amidst the global financial crisis which has had impacts on various sectors of the Sydney economy and an apparent resource boom and terms of trade disadvantage respective to other regions and territories, the NSW government has the challenge of economically tackling climatic challenges cost effectively and create jobs, simultaneously. This challenge has been addressed in the Sydney Metropolitan Plan 2036 strategic direction G. This strategy has a focus on tackling climatic change amidst high levels of GHG and to protect the natural environment. This was also a central focus of the 2005 Metropolitan Plan. The 2036 focus is centred on developing Sydney into a compact city that is multicentred with jobs that are closer home thus reducing transport related emissions. This focus cites transport reduction as the optimum urban strategy for carbon control (NSW Government 2010). This may explain the focus of Strategic Direction A on specific metropolitan areas such as the ‘Global Sydney, Parramatta, Liverpool and Penrith distinctly. Figure 1 projected emissions by 2036 (Marinda et al., 2011) The 2036 plan cites a key challenge to the globalized Sydney as being housing. With increasing population and fast changing population characteristics, there is a concern with housing affordability and suitability. Demographic characteristics trends demonstrate an ageing Australia with a majority expected to be 65 years and above by 2036. There is also a trend that shows decreasing family sizes. Coupled with this, the recent economic down turn led to global decreases in consumer spending. The global economic down turn also came in with reduced investments, and increasing costs over low prices in real estates (Marinda et al. 2011). In this report, Marinda et al further point to weakening Sydney economy with the crisis. This weakening was characterized high household debts, and unaffordability of housing for many residents. In responding to this challenge, the Government rolled out the Greenfields plan. This plan created greenfield areas in various parts of cities. This plan freed up housing and construction sites. However, greenfields did not reduce housing costs since it was implemented by households shifting from one place. It was characterized by homeowners selling their property at higher rates than the purchasing price, and landlords hiking rent rates (Productivity Commission 2004). This resulted in affordability pressures downwards, implying more affordability problems with low-income populations. Strategy D of the 2036 plan aims at tackling such problems by creating new housing within existing free areas other than greenfields. Figure 2: Subregional growth targets for Strategy 2036 (Centre for International Economics Canberra & Sydney 2010) That notwithstanding, the City of Sydney is the most significant and largest urban economy in Australia employing close to half a million people. Its links with the global economy make the spine of the economy growth and wealth. It is the main connection hub especially with reference to South and East Asia. In addition, the city’s profile makes it the preferred destination for national companies, multinationals, the fast growing services sector, tourism education, information, and technology and communications industries. As such, it is vital that the NSW government focuses on making this urban economy sustainably competitive in the face of globalization and challenges that accompany the contemporary economic developments. Globalization has been cited as a driver of changes and wealth in the city. However, this ability of globalization to drive the economy must be marched with adequate opportunities. As cited in the Strategic Economics report, globalization “builds on the opportunities created by the City of Sydney’s unique role on metropolitan Sydney, state and national economies” (Strategic Economics 2007). In Martin (2011), literature points out the concern for sustainability by Australian local government authorities. Being sustainable has become the “catch-cry” for all authorities in their attempt to be economical in planning and offering high quality metropolitan lives in line with the social contract. With regard to these metropolitan planners are caught in between two models: new public management and neoliberalism. The new-model public management is established on the assumptions that there is a market for government works. This model is the focus of the 2005 Strategic plan and interventions such as Greenfields. On the contrary, the neoliberal approach entrenches a having a market-driven urban planning approach (Martin 2011). In this paper’s opinion, this is the most appropriate in responding to globalization. It entails a shift of governance strategy from just a regulator-role to a strategy that leverages other roles in which government provision and production are distinct. In Marinda et al (2011), market forces are cited amongst the main skills for sustainability. This approach has been criticized in (Derruder et al. 2012) where literature faults it for leading Sydney into a more opportunistic and outgoing edge. In this literature, the current status of the city has been cited to be as a result of a shift in urban management, and not necessarily due to global pressures. This is cited as the problematic rise of an entrepreneurial social and economic environment. In this, there has been an aggressive liberalization by Government policies with an aim of promoting competitiveness. The concern in this literature that makes comparisons of global cities is not liberalization but that the policies are entrenched in interests and economic relations which curtail the potential in these cities. The latter have become the key determinants of power geometrics and are party to inequalities. It is not that globalization is a stoppable force. Derruder et al. (2012) suggests a need for more control so that cities are sustainable and stable. This is reflected by globalization skeptics’ view that the extent of global processes and networks may not be global citing a need to develop city-specific strategies that are both responsive to global trends as well as being appropriately protective for sustained growth (Elliot 2009). The skeptics also view Sydney as being too market oriented and being driven by adhoc strategies that are not necessarily managerial, but entrepreneurial (Derruder et al. 2012). This challenges the 2036 plan and other responses themed to establish the metropolis competitiveness, as being demand-oriented leading to a status of deadline urbanism. This is a status in which urban planning is remedial and reactive rather than being proactive and long-term based. The criticism notwithstanding, globalization has been appreciated in NSW government’s approach to urban planning. What is of importance is that the Government acts to watch-guard so as to protect the “golden egg” from occurences of events such as the global economic crises. The Sydney Metropolitan Plan 2036 is a strategy whose intention is to develop adequate and green opportunities in the Global Sydney, as well as other regional cities. In a bid to strengthen what is the referred to as the ‘City of Cities’, the plan sets out key approaches. Firstly, the NSW government intends to expand the role and future of Sydney metropolitan. Secondly, there is an emphasis on sustainability, followed by enabling the metropolitan be globally competitive and finally, strengthening infrastructure. This approach focuses on the transport system as well as enhancing the opportunities within the ‘Global Sydney’ as a catchment area for the NSW Territory, the metropolitan, the national government and the internationals. To enhance the opportunities commensurate to the needs of globalization, the plan focuses on links to other economies, office and visitor accommodation, sustainable development of renewable urban projects, tourism, transport system and public transport increase to 80%. This is an adequate response to the Strategic Economics (2007) challenge on the inadequacy of the 2005 Metropolitan strategy. The Centre for International Economics Canberra & Sydney (2010) compares three growth path of the NSW government: the 2005 Metropolitan strategy, Greenfield focused strategy and the 2036 plan focused on urban renewal. In the report, the 2005 strategy is faulted as being inadequate in responding to the challenges of globalization adequately. Conclusions Globalization debate covers many issues and has been addressed variously depending on disciplines of application. Whatever the application, the globalization has two inherent aspects: it is real and has had impacts on virtually all human activities. It is both a force and a process that involves cross-border interaction and integration of people and economic entities as directed by international economics and trade and technological advancement. The effect cuts across financial markets, economics, markets, environmental issues such as pollution and civil society. It has also led to the emergence of forms of cosmopolitanisms that are new. Such include Sydney metropolitan. Globalization has impacted Syndey in all aspects. Economically, it has led to increase in GDP and brought on new forms of economic activities. There are also environmental and social impacts. Socioeconomically, there are new trends with regard to employment and demographics of labor especially with regard to diversification of services and technology sector. On the other hand, the decline of manufacturing has led to declines in employment rates. The population of Sydney is on the increase and is projected to be close to 6 million people by 2013. This population is also projected to be ageing, a majority being projected to be 65 years and above. Globalization has both benefits and challenges for the metropolitan. In view of this, it is important that the NSW Government establishes commensurate strategies to ensure sustainable growth. This paper has cited and explored the Metropolitan Plan 2036 as the model strategy. Additionally, it supports the view that the government should play a bigger role of a watch-dog so that dead-line urbanism. References Boudreaux, D., 2008, Globalization. Westport: Greenwood Press. Centre for International Economics Canberra & Sydney, 2010, The benefits and costs of alternative growth paths for Sydney: Economic, social and environmental impacts. Canberra/ Sydney : Centre for International Economics Canberra & Sydney. Collins, J., & Poynting, S., 2000, The other Sydney : communities, identities and inequalities in Western Sydney. Common Ground Publishing : Altona. Derruder, B., Hoyler, M., Taylor, P., & Witlox, F., 2012, International Handbook of Globalization and World Cities. Cheltenham : Edward Elgar. Elliot, A., 2009, Contemporary Social Theory: An introduction. Oxon: Routledge. Marinda, G., Dalziel, P., Estolano, C., Krasnowski, K., & Larcombe, G., 2011, "Climate change, employment and local development, Sydney, Australia", OECD Local Economic and Employment Development (LEED) Working Paper. OECD Publishing. Martin, J, 2011, Sustainability and the Social Contract with Australia’s Country Towns: Local Governance in Transition. Local Governance Researchers Forum 2011, Dec 14-15 (p. 4). Sydney: Australian Centre of Excellence for Local Government. McGuirk, P., & O'Neill, P, 2002, Planning a Prosperous Sydney: The challenges of planning urban development in the new urban context. Australian Geographer, 33 (3), 301-316. NSW Government, 2010, Strategic Direction G: Tackling Climate Change & Protecting Sydney's Natural Environment. Sydney : NSW Government. Productivity Commission, 2004, First Home Ownership, Report 28. Melbourne: Productivity Commission. Sassen, S, 2008, Territory, authority, rights : from medieval to global assemblages. Princeton: Princeton University Press. Strategic Economics, 2007, Draft Economic Development Framework: A report to the City of Sydney Council. Sydney : Strategic Economics. Read More