Local and Global
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Local and Global

The Management of Cities in the Information Age

Jordi Borja, Manuel Castells

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Local and Global

The Management of Cities in the Information Age

Jordi Borja, Manuel Castells

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This text challenges the belief that cities will eventually disappear as territorial forms of social organization as new information technologies permit the articulation of social processes without regard for distance, arguing that the specific role of cities will become more important, and proposing that a dynamic and creative relationship be built up between the local and the global. In this way, cities will remain the focus of social organization, political management and cultural expression, equipped to deal with the enormous social and environmental problems of urbanization.

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Chapter 1

Globalization, Informationalization and Management of Cities


Cities and societies all over the world are experiencing now, as the twentieth century draws to a close, a far-reaching historical transformation in their structure. At the heart of this transformation lies a technological revolution that is organized around information technologies. Based on the new technological infrastructure, the process of globalizing the economy and communication has changed the way we produce, consume, manage, inform and think. Not every economic or cultural activity in the world is global. In fact, by far the greater part of that activity, in terms of the proportion of participants, is local or regional in its sphere. However, the strategically dominant activities, at all levels, are organized in global decision-making and exchange networks, from financial markets to audiovisual messages. The planet is asymmetrically interdependent, and this interdependence is articulated every day in real time through the new information and communication technologies, a phenomenon that is new in historical terms and one that is in fact opening up a new era in the history of humanity: the information era.
Urbanization processes, cities and citizens are caught up in these structural changes. We are in fact witnessing the fastest and most wide-ranging urbanization process in history (Figure 1.1). In just a few years most of the world’s population will be urban, and the vast majority of that urban population will be living in cities, located in countries that are now developing countries. The era of telecommunications is not diluting urban centres, as technological determinists prophesied — on the contrary, by enabling distant urban and rural systems to be managed and to communicate together, they tend to concentrate the population in territorial agglomerations, partially discontinuous ones of huge size and of historically new socio-spatial characteristics, as we shall seek to set out in this book. In a sense, the destiny of humanity is being played out in urban areas and, in particular, in the great metropolises.
Managing those cities and building new life-models capable of responding
Figure 1.1 Metropolitan agglomerations, 1995
to the new productive and cultural forms poses enormous challenges. Not just on account of the accumulation of functional, social and environmental problems in the new type of human settlement, but also because we are facing processes of transformation that are little understood. Urban policies pursued to date seem behind the times with regard to the globalization of the economy and of technology as against the localization of society and culture. Municipal governments are often overtaken by events occurring in spheres that are beyond their control. Hence the essential step for redefining the instruments for urban management is analysing the technological, economic, cultural and institutional processes that underpin the transformation of cities. That is the issue, in outline, which this chapter will seek to address.


Over the last two decades, a new technological paradigm has come into being, one that we call informational and one which amounts to a historical watershed as important as the industrial revolution was in the past. The present-day technological revolution is centred on information technologies, which include microelectronics, computer science, telecommunications, and also, though with marked specificity, genetic engineering (Castells et al, 1986; Castells, 1996a). Although the scientific foundations of this revolution go back a long way, and although some of its industrial elements have been around since the 1940s, the time when it became a technological system that spread and found applications was in fact in the 1970s, starting to a large extent in the American techno-industrial centres of California and New England. It spread initially to military technology and international finance. It moved on to industrial factories at the beginning of the 1980s, spread to offices at the end of the 1980s, and is now reaching our homes through the so-called information superhighways (Sullivan-Trainor, 1996). The effects of this change of paradigm vary depending on the countries, cultures, institutions, levels and forms of development concerned, but some common features can be noted that affect all societies with varying intensity and under varying modes. We will outline here some of these fundamental traits arising from the reciprocal interaction between technological revolution and social structure. It is important to stress that while the new information technologies are not the cause of the phenomena that will be reviewed here, they are the infrastructure that is a prerequisite for their existence: if there were no computers and no global telecommunications, for example, there would be no global economy and no world-scale communication.
First and foremost among the elements associated with the informational paradigm is the formation of a global economy as the operative economic unit of today (Chesnais, 1994). Let us pin down the exact meaning of the term. We are not dealing with a world economy, which has existed in fact since the sixteenth century, or even with an economy whose activities are subjected to internationalization. By the global economy we mean an economy in which the strategically dominant activities function as a unit at the planetary level in real or potentially real time. This is the case with capital markets, which are integrated world-wide via instantaneous electronic connections processed by information systems with large memories and high processing speed. However, the technology, information and management of the leading companies, and of their auxiliary branches, are also globally articulated, as are, increasingly, industrial production, advanced services, and markets, whether through multinational companies, networks of companies or exchange mechanisms. Highly skilled labour is also taking the form of a global market, though the masses of unskilled emigrants act more as a reserve army than as a form of globalization. In general, capital is global, but most labour is local (Campbell, 1994). What characterizes the new global economy is its extraordinarily — and simultaneously — inclusive and exclusive nature. It includes anything that creates value and is valued, anywhere in the world. It excludes what is devalued or undervalued. It is at once a dynamic, expansive system and a system that segregates and excludes social sectors, territories and countries. It is a system in which the creation of value and intensive consumption are concentrated in segments that are connected throughout the world, while for other broad sectors of the population, whose size varies from country to country, a transition is setting in moving from the previous situation of exploitation to a new form of structural irrelevance, from the point of view of the system’s logic (Carnoy, Castells, Cohen and Cardoso, 1993). These tendencies are not inexorable. Yet to counter them, by using the creative potential of the new technologies to benefit the majority of the population, policies acting as correctives to the present imbalances are needed.
The global economy is also an informational economy — ie an economy in which increases in productivity do not depend on a quantitative increase in the factors of production (capital, labour and natural resources) but rather on the application of knowledge and information to management, production and distribution, both in processes and in products (Foray and Freeman, 1992). The generation and strategic processing of information has become one of the essential factors for productivity and competitiveness in the new economy (Dosi et al, 1988). This has far-reaching consequences for regional economic development policies, which must henceforth be based on policies for communication, informationalization and human capital (see Chapter 4).
The informational economy is also characterized by a flexible model of production, built around the ever more widespread pattern of the network company. By this we do not mean a network of companies, but rather a new form of organization. What we are seeing in the economy (and to a large extent in society as a whole) is the decentralization of large companies and the creation of semi-autonomous business units; the proliferation of small and medium-sized companies; the formation of networks for cooperation involving small and medium-sized companies, or just small companies, or just large companies, eventually making up networks of networks (Ihmai, 1990). Since strategic alliances involving large companies vary by product, by technology, by market or by country, it can be held that the new structure of the economic system is made up of specific, ever changing networks, in a variable-geometry system. Hence at any given time and place, the real economic agent is not a company in the traditional sense of the term but rather a segment made up of a network of company segments. It is this absolutely flexible and dynamic — but also unstable — form of economic activity that characterizes the new processes of organization, management and production (Piore and Sabel, 1984; Harrison, 1994). And if it succeeded in emerging fully only at this point in history, it is thanks to the flexibility allowed by the new information technologies.
On the basis of the technological and organizational transformation of the new informational/global economy, we are witnessing far-reaching change in labour relations and in the structure of employment in all societies (Freeman and Soete, 1994; Carnoy and Castells, 1996; Castaño, 1994). However, contrary to an opinion as widely held as it is uninformed, the new technological paradigm does not cause unemployment. The results of empirical research over the last ten years (OECD, 1994) show that historical experience, the theory of economics, available data and the most reliable projections all enable the simplistic hypothesis of jobs being destroyed by present-day technological development to be rejected. Thus among Organization for Economic Cooperation and Development (OECD) members, the most technologically advanced societies are the ones that create the most jobs: in the United States in the period 1992–95, six million new jobs were created, and Japan’s unemployment has never risen above 3.2 per cent. Furthermore, in both countries the growth rate for more skilled employment is very much higher than that recorded for non-skilled employment (Carnoy and Castells, 1996). The problem of structural employment is a problem for European countries, due principally to macroeconomic policies that are excessively obsessed with European convergence indicators and to institutional rigidities in the labour market and in the mechanisms of the Welfare State. A globally interdependent economy cannot do without a global social chapter. Moreover, on a world-wide level, the new development processes in Asia and Latin America are creating an unprecedented wave of industrialization, with the result that the number of industrial jobs planet-wide, despite the de-industrialization of OECD countries, is higher than ever before in history: the number of industrial jobs in the world grew from 102.9 million in 1963 to 176.9 million in 1989 (the latest data available), ie a growth of 72 per cent in just 26 years (Wieczorek, 1995), though the geographical distribution of employment did change radically, shifting away from OECD countries to the newly industrialized countries, particularly Asian ones.
Yet if the new technological paradigm does not in itself destroy jobs, it does profoundly affect employment conditions and the way in which work is organized. On the one hand, bearing in mind the global interdependence of networks of companies, sectors that are open to world-wide competition tend to converge (though not fully to coincide) in their employment conditions, with the result that companies tend to relocate in areas with lower costs and less stringent regulations or, alternatively, to take supplies of products generated in those areas. On the other hand, in all societies, the new technological system clears the way for and accentuates the historical process of work dispersal on the basis of a new flexible model for labour relations. Indeed, while the industrial revolution consisted in aggregating the work potential of peasants driven away from their lands and craftsmen stripped of their means of production to form the social system of the factory, the present-day technological revolution is on the contrary leading to the individualization of tasks and the fragmentation of the work process, the unity of that process being reinstated through communication networks. Thus the phenomena of subcontracting, the decentralization of production, outworking, job sharing, part-time work, self-employment and consultancy are all growing apace, and already account for between a quarter and a third of the work force in the main developed societies (Carnoy and Castells, 1996). Societies resisting this dispersal, such as the societies of Spain and France, pay the price for it in high unemployment. Thus company decentralization and work dispersal result in, for one thing, an extraordinarily flexible, dynamic process, enabling companies to achieve cost savings and competi-tive gains, though there may be negative consequences for productivity in the long-term through undermining the accumulation of technological knowhow within the company itself. At the same time, however, this flexible model for labour relations makes employment precarious, undermines the Welfare State, hangs a question mark over the role of trade unions, and consequently induces a structural crisis in the institutions upon which social harmony in companies and in society are currently based (Navarro, 1994).
In developing countries, the transformation of work comes about through two distinct mechanisms. On the one hand, the formation of industrial production and advanced services networks without the stability and social control of the previous model: the new industrialization already functions in accordance with the patterns of the flexible model from the very outset. On the other hand, the expansion of casual, informal work in the urban nuclei of a world in the throes of transformation. The new technologies enable archaic forms of local over-exploitation to be articulated together with modern productive networks geared to global competition (Portes, Castells and Benton, 1989). The informal economy, at once ancient and new, is the extreme form of flexibility characterizing the new relations of production in an informational, globalized and polarized economy.


The historical transformations under way are not restricted to the technological and economic spheres: they also are affecting culture, communication and political institutions, in an interdependent system of social relations. Since this is the realm in which cities and their governing bodies work, the major trends in those spheres of society must be noted.
Communication, and consequently culture, in the information society have been organized for some time now around the audiovisual system. Yet over the last few years a more far-reaching phenomena has appeared: the increasing digitalization of all messages — audiovisual, printed or interpersonal — to form a globalized, interactive hypertext. This is enabling the present-day mass media to turn into media that are individualized, segmented and geared to specific audiences, though production and technological and financial control still display global characteristics. We live not so much in a global village as in individual little chalets that are joined together to a greater or lesser extent, and globally produced and distributed (Negroponte, 1995; Doyle, 1992). Along with this, the extraordinary development of the Internet is multiplying sources of information and horizontal exchange, though it is still limited to a world élite of some thirty million people (Anderson et al, 1996). The most significant point, for the time being, is that the breadth and flexibility of the new communication system has increased its capacity to absorb all kinds of cultural, social and political expression, in a digital universe that is electronically communicated and transmitted.
As a consequence of this, given that culture is a system of communication and that our society is increasingly organized around the production, distribution and manipulation of symbols, the political arena has essentially been engulfed in the arena of the media. It is not so much that politics only functions in the media but rather that, in democratic societies at least, the political process is essentially decided in the media (Castells, 1995a). This means that the symbolic level of politics is more important than ever, and that consequently messages are obliged, first and foremost, to generate symbols capable of winning support, and associated with credible, reliable and if possible charismatic personalities. However hard it may be for intellectuals to accept this fact, politics is not decided by political programmes. And however unfair it may be for administrators, good administration does not guarantee public support. Politics in the information society is symbolic communication, conflictually expressed in the arena of the media.
To guide our exploration of the new urban world that is in gestation, we shall put forward the hypothesis that, through all the transformations described as a whole, we have entered a new type of society that could be called ‘the flow society’ (Castells, 1996a) — a society in which the material basis for all processes is made up of flows, and in which power and wealth are organized in global networks carrying information flows. These flows are asymmetric and they express power relationships. Yet more important still than flows of power is the power of flows: financial flows, technological flows, image creation flows, information flows. The logic of the flow society often escapes its controllers, as is well known to governments struggling to regulate financial markets, and political or economic leaders tossed about by the conflicting and contradictory campaigns and conspiracies conducted through the media.
However, to understand the new political game, it must be added that flows are not the only thing in current societies. There is another history, another dynamic, that is developing not in parallel with, but rather in reaction to, and contradiction with, the global flow system: the assertion of identity, whether historical or reconstructed (Calhoun, 1994; Rubert de Ventos, 1994; Castells, Yazawa and Kiselyova, 1996). The creation and development in our societies of systems of meaning increasi...

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