The Role of World Cities as an Economic and Cultural Authority

The role of word cities as powerful centres of economic and cultural authority.

A world city is a large city that has outstripped its national network and become part of an international global system as a centre for command and control. The role of world cities such as London has rapidly changed to become and essential component for the multiplicity of linkages and interconnections that sustain the contemporary world economy and social and political systems. Thus their role has extended beyond their role based on trade relations largely controlled by nation states to a more global economy.

The economic role of world cities includes its role as a command point in the organisation of the global economy, as the headquarters of many TNC’s and large national corporations. For example Tokyo is base for 17 of the top 100 TNC’s and New York has 11. In association world cities are also the headquarters for many International Government Organisations, for example the World Tourist Organisation in New York and the Organisation for Economic Cooperation and Development in Paris.

World cities are also key locations for a wide range of financial services, with all the major stock exchanges located in world cities. For example New York is the major city in the world for the trading of equities and government bonds. Similarly they are centres for banking and associated financial services, with the largest banks in the world having their headquarters in world cities, for example London and New York.

World Cities are also key locations for specialised service firms, which have replaced manufacturing as the leading economic sector, for example finance, law, accounting and advertising. They are also markets for a vast range of goods and services, with extraordinary purchasing power. For example streets such as Fifth Avenue in New York are famous for their retailing of very expensive goods.

An examination of London, reveals that it is one of the world’s greatest cities, an important centre of financial authority and control. Since the 16th century London’s financial district known as “Square Mile” has become one of the world’s most important business centres. Along with New York and Tokyo, London is one of three main financial centres in the world, as a major centre for euro trading since its introduction in 1999. London plays a role as a strong global position in a range of financial markets. For example London has cross-borderer lending than any other country, with nearly 600 foreign banks in the city, such as Bank of America and Citi Bank. In terms of its insurance industry, London has the third largest in the world, a global market leader in aviation and marine insurance. London also has more foreign exchange companies listed on the ASX than any other city, with a daily turnover of approximately 30%. In terms of employment, Square Mile employs 600,000 people directly and draws on business command and control functions with employs a further 20,000 people. London is also the key location of specialised law firms such as Clifford Chance and professional associations such as the British Medical Association.