European cities in advanced producer services and real estate capital flows: a dynamic perspective

As emphasized in Chapter 1, the implications of economic globalization for Europe have been a major concern of the European Union (EU) and its constituent member states for over a decade. As discussed in Chapter 5 the advanced global economy now functions as complex horizontal networks of firms, made possible by developments in information and communications technology (ICT) since the 1970s. A consequent paradigm shift in the spatial organization of the global economy has led the geography of territorial structures such as the EU, its nation states and their borders, to be overlaid by more fluid relational spaces generated by business networks in which cities have a critical functional role. Amongst these networks, city-located APS (advanced producer services), finance and linked business services, have come to have rising prominence in the world economy from the latter years of the twentieth century onwards, as recognized in the EU Lisbon Strategy to boost Europe's economic competitiveness in a global context (EC, 2000). Hence, in this chapter, we focus attention on the role and position of European cities in the evolving APS network economy. Advanced producer services were first identified by Friedmann (1986) as having a key role in the process of capitalist 'world city' formation and by Sassen (1991, 1994) as having complementary geographic dispersion and concentration dynamics which result in a new economic role for 'global' cities.