Cosmic Cities: Small but Global

On a recent flight from San Francisco to Taipei, I enjoyed a program about the origin of the cosmos. What struck me is how planetary movement seems actually quite easy to understand, at least from a lay perspective. Fixity is nonexistent; everything is in motion. There is also an undeniable hierarchy among planetary bodies. As an admitted city nerd, I naturally began to ponder what the cosmos says about the relationship between global and secondary cities.

This analogy does not assume an understanding of astrophysics, but it does require some imagination. Planets and their clusters churn incessantly, with a majority in some kind of orbit—making hierarchy easy to identify. No matter how isolated, everything heads in the same overall direction as its neighbors.

Such is the case with cities in the modern economy. Free market reforms have brought economic growth to nearly every corner of the globe. Smaller cities have historically depended on regional hubs and global powerhouses, dutifully occupying their humble orbits along with others in their peer group. By crude measures such as GDP growth, nearly all have made progress (inequality notwithstanding).

It is tempting to compare global cities to the cosmos; hierarchy is implied even in the Globalization and World Cities’ (GaWC) alpha-beta ranking system. However, a valuable lesson emerges where the analogy breaks down. Many ambitious and aspiring secondary cities are escaping their isolated orbits and redefining the hierarchy of the global urban cosmos.

When considering exports as a percentage of GMP, backwater cities are becoming global. At the same time, many urban giants are paradoxically insular; they fail to have either the will or capacity to competitively serve international markets or network to exchange ideas, despite their large populations. In these cities, global interaction occurs at the individual or firm level and happens in spite, rather than because, of government policy. Some are in the developing world (Lagos and Dhaka), while others are in more mature economies (Johannesburg and São Paulo).

In the United States, the top of the global trade hierarchy is dominated by the usual suspects: New York, Los Angeles, Houston, etc. In seventh-place Chicago, exports have recently been cited as a “drag” on the local economy, with export growth ranking #54 nationally. More curiously, smaller cities are hitting above their weight. In the same ranking, San Jose, California, is #8, Portland, Oregon #15, Cincinnati, Ohio #16, and Memphis, Tennessee #24. In a 2010 ranking of urban exports as a percentage of GMP, the elite predictably included border towns: Laredo, Texas (92%), Brownsville, Texas (50%), and El Centro, California (48%). Indeed, six of the top twelve were near borders. However, the remainder represented some interesting stories: Tri-Cities, Tennessee (59%), Peoria, Illinois (51%), and Longview, Washington (35%), were in the top six.

The export-heavy economy of smaller cities is often a product of single industries or even companies. For example, Peoria is headquarters to Caterpillar. Longview is principally reliant on manufacturing and timber, and has a location advantage on the Columbia River. Kokomo, Indiana (33%), has been an automobile manufacturing hub, as was Janesville, Wisconsin (27%), until 2009 (2010 data still reflect this). Beaumont, Texas (20%), and Brunswick, Georgia (18%), are port towns, and Wichita, Kansas (18%), is home to several airplane manufacturers. In the 2010 ranking, there were few paragons of diversification in the top 25. Even the two largest cities—Detroit, Michigan, and Houston, Texas—are single-industry-dominant (cars and energy, respectively).

Is it possible for secondary cities to concurrently be diversified and export-oriented? Several strategies have been proposed. In a recent piece published by Brookings, Ryan Donahue and Brad McDearman argue that cities can stimulate growth through foreign-owned local enterprises. At the same time, Derrick Olsen argues that Asia represents a growth market for US cities. Taken together, these ideas illuminate a path to global competitiveness for secondary cities with large Asian populations, such as Raleigh-Durham, North Carolina; Seattle, Washington; Minneapolis-St. Paul, Minnesota; Sacramento, California; and Dallas, Texas. These are also some of America’s post-financial crisis success stories. One example is Houston, whose sizable Vietnamese population is a diversification opportunity, particularly as Vietnam is expected to be the biggest beneficiary of the Trans-Pacific Partnership. Smaller cities with large state universities also tend to have larger Asian populations, and a focus on retaining graduates can generate global networking opportunities.

In a world of ever-expanding communications and transport infrastructure, population size is neither a deterrent nor an advantage for improving global connectivity; any city can network and thereby enhance visibility. The challenge for smaller cities is building strategic flexibility and productive capacity to restructure their economies with evolutions in global markets. Networking can help identify opportunities and facilitate capital and idea transfer, but cities must still be fundamentally “good” at something; connecting is not enough. Arguably, the baseline for such capacity is education. Strategic flexibility at the city level begins with skill flexibility at the firm and individual levels. The human capital argument is not new. What may be new is the idea that relevance is unrelated to size. Secondary cities are finding exciting and unexpected ways to flourish in the new economic cosmos. Perhaps they should also be considered global.