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The Metropolization and Regionalization of the Knowledge Economy in the

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The Metropolization and

Regionalization of the Knowledge
Economy in the Multi-Core Rhine-Ruhr
Metropolitan Region
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Angelika Münter & Kati Volgmann
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Research Institute for Regional and Urban Development gGmbH
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European Planning Studies, 2014
http://dx.doi.org/10.1080/09654313.2013.844776
The Metropolization and

Regionalization of the Knowledge
Economy in the Multi-Core Rhine-Ruhr
Metropolitan Region
Downloaded by [Forschung NRW Bibliothek] at 00:17 04 February 2014
ANGELIKA MÜNTER & KATI VOLGMANN

Research Institute for Regional and Urban Development gGmbH (ILS), Dortmund, Germany
(Received December 2012; accepted September 2013)
ABSTRACT The currently observed urban rescaling is characterized by two opposing trends: the
regionalization of core cities and their metropolization. Such restructuring processes have
consequences for a city-region’s spatial and functional structure, even in traditionally multi-core
metropolitan regions. This paper looks at the hypothesis that city-based business sectors
belonging to the knowledge economy, dependent on their function, transaction costs and the need
for geographical proximity for innovation, form different polycentric business patterns
engendering either metropolization or regionalization. The aim of the paper is to analyse the
metropolization and regionalization of knowledge-intensive business activities at both a
municipal and a locational level, thereby shedding light on the complexity of polycentric business
structures in traditional multi-core metropolitan regions. The spotlight here is on the Rhine-Ruhr
metropolitan region, a prime example of a polycentric metropolitan region without a traditionally
dominant metropolitan core. We show that metropolization can be seen as an agglomerating
phenomenon, applying also to traditional multi-core metropolitan regions, while—with specific
reference to the Rhine-Ruhr metropolitan region—“regionalization” would seem to have only a
slight effect on the knowledge economy.
Introduction
Metropolitan regions that are traditionally multi-core, such as the Rhine-Ruhr region, are
currently undergoing complex restructuring, spatially manifested by (a) a centripetal
process involving the metropolization of urban areas and (b) a centrifugal process
leading to a regionalization of cities. The globalization of the economy and the growing
importance of the knowledge economy are contributing to a basically economic-functional
and spatial-structural metropolization of the global urban system, with metropolitan
Correspondence Address: Angelika Münter, Research Institute for Regional and Urban Development gGmbH
(ILS), Brüderweg 22– 24, 44135 Dortmund, Germany. Email: angelika.muenter@ils-forschung.de
# 2014 Taylor & Francis

2 A. Münter & K. Volgmann
regions gaining in importance (Scott, 2001; Brenner, 2004, p. 178ff.). A condition of this
development is that these regions assume metropolitan attributes or specific metropolitan
functions (Blotevogel & Schulze, 2009) and that they show a concentration of development
potential and innovative capacities in the knowledge economy (Scott, 2000; Krätke &
Taylor, 2004). Metropolization has an agglomerating effect. Traditionally, multi-core metro-
politan regions with flat spatial hierarchies are faced with the challenge of not having one
dominant metropolitan core, which also provides a focal point for metropolization. At the
same time, we are seeing a process of urban regionalization in all metropolitan regions
and even in hitherto monocentric regions, manifested by polycentric city-regional structures
and networks characterized by a division of labour (Kloosterman & Musterd, 2001; Parr,
2004). The evolution of cities into urban regions is no longer characterized by a steady
outward expansion as was the case in Fordist industrial cities. What we are now seeing
instead is the development of spatial specialization, manifested by polycentric urban struc-

tures (Hesse, 2010, p. 44). The corollary to this is a certain overlapping of conventional
inter-urban and new intra-urban forms of polycentricity within traditionally multi-core
metropolitan regions (Kloosterman & Musterd, 2001). Such regions are thus characterized
by exceptionally complex spatial structures requiring in-depth analysis.
Both metropolization and regionalization are closely connected with the growing
importance of knowledge in business processes, contributing to a shift in local and intrar-
egional structures and relationships in metropolitan regions. Metropolitan regions are ben-
efiting disproportionately from the increasing importance of the knowledge economy. On
the one hand the knowledge economy is a key driver of economic globalization, while on
the other hand it strengthens cities and metropolitan regions as centres of business activity
(Dunning, 2000; Blotevogel & Growe, 2011).
Business activities are determined by the need for geographical proximity within a pro-
duction process, thereby enabling firms with high transaction costs to reduce these costs as
much as possible. We assume that in city-based knowledge economy sectors with high
transaction costs, a certain concentration favouring the core cities is taking place, even
in polycentric regions. In this case, the benefits of choosing a central location should be
weighed against the costs, both in terms of renting office space and moving people to
the chosen place. In city-based knowledge economy sectors with low transaction costs
(ones not relying so much on geographical proximity), it can be assumed that de-concen-
tration processes favouring peripheral locations are taking place, with such businesses
taking the decision to reduce their costs by relocating to non-core city locations.
Against this background, the aim of this paper is to analyse the metropolization and
regionalization of knowledge-intensive activities at both a municipal and locational
level, thereby shedding light on the complexity of polycentric business structures. The
spotlight here is on the Rhine-Ruhr metropolitan region in Germany, a prime example
of a multi-core metropolitan region. Focusing on metropolization and regionalization
and different forms of polycentricity in metropolitan regions, this paper looks into the
following research issues:
. What spatial-functional consequences does metropolization have on the Rhine-Ruhr as

a traditionally multi-core metropolitan region with regard to the integration of its cities
into global business networks?
. Are we seeing a regionalization of the knowledge economy in the polycentric
Rhine-Ruhr metropolitan region? Does a differentiation of the knowledge economy
Metropolization and Regionalization of the Knowledge Economy 3
into different types of functions reveal (a) a concentration favouring the dominant core
cities; or (b) a de-concentration favouring peripheral locations?
. What spatial patterns arise out of the business location decisions of leading global
advanced producer service (APS) firms and knowledge economy companies in
general at a sub-municipal level? Are these leading to the emergence of new business
clusters?
The remainder of this paper is structured as follows. In the first part we provide the
requisite theoretical background on city-regional development with regard to metropoliza-
tion and regionalization, two forms of regional-level polycentricity and the role of geo-
graphical proximity and transaction costs for innovation in the knowledge economy.
After a short introduction into the Rhine-Ruhr metropolitan region, the empirical part
covers three analyses. The first analysis presents our findings on the multi-core Rhine-
Ruhr region with regard to metropolization. The second analysis presents our findings
on regionalization of the knowledge economy. The third empirical analysis focuses on
the business clusters resulting from business concentration at a locational level (central
business districts (CBDs)). In the final part, we discuss our empirical findings on the
basis of our hypothesis and the research questions posed, drawing conclusions on what
consequences traditional polycentricity has on a region’s competitiveness.
Theoretical Background of City-Regional Development

The evolution of cities and metropolises into polycentric regions is a phenomenon affect-
ing all metropolitan regions. Nevertheless, the term “polycentricity” is far from being a
consistently used term in spatial sciences and related disciplines. Many different labels
have been used to denote and conceptualize polycentric urban configurations when analys-
ing them at a regional scale, such as “global city-region” (Scott, 2001), “polycentric urban
regions” (Kloosterman & Musterd, 2001; Meijers, 2005) or “mega-city region” (Hall &
Pain, 2006). The concept of “polycentricity” is used for analytically describing existing
settlement patterns, but is also a desirable aim of spatial planning. In this paper,
we focus on an analytical perspective of polycentricity, focused on two types of
regional-level polycentricity: (1) multi-core metropolitan regions and (2) post-suburban
metropolitan regions.
Multi-Core Metropolitan Regions Between Metropolization and Polycentricity

Multi-core metropolitan regions are made up of metropolitan regions already showing his-
torically polycentric spatial patterns. They have evolved due to an increase in functional
connections between several core cities or metropolises in close proximity to each other,
with the hinterlands of the individual metropolises increasingly overlapping each other.
Klostermann and Musterd (2001) define these regions as consisting of historically distinct
cores that have constituted independent political entities up to now, in more or less close
proximity. No one of the core cities within these regions is clearly dominant from a pol-
itical, economic or cultural perspective. In addition, such regions may contain several
smaller cities (Kloosterman & Musterd, 2001, p. 628). The ways such regions have
evolved historically are multifaceted, but in numerous cases the region offered a locational
advantage, leading to an economic boom during a specific economic period. Such regions
may, for example, be former industrial areas in which the core cities emerged in a period of
rapid industrialization (e.g. the Ruhr), or the cities of the Pearl River Delta in China, which
have grown rapidly over the last decades due to their “special economic zone” status.
Within multi-core metropolitan regions, the old cities either performed different functions
(e.g. in the Randstad where Amsterdam was the financial centre and Rotterdam the main
seaport) or the same kind of functions (e.g. in the Ruhr) (Kloosterman & Musterd, 2001,
p. 627).
Metropolization supports the emergence of cities operating at an international level with
specific metropolitan knowledge economy functions and the importance of business
capacities of strategic clusters of global companies (Krätke, 2007). Metropolization thus
acts in an agglomerating manner. The knowledge economy is seen in particular as a
specific constellation of companies, markets and institutions concentrated in agglomera-
tions where specific advantages can be leveraged. In analogy to the concentration of

specific higher-end and knowledge-intensive business activities, metropolitan city-
regions tend to have a sophisticated relational structure reflecting a division of labour
both internally and externally (Short & Kim, 1999; Castells, 2004). Yet it also presents
metropolitan regions that are traditionally multi-core with specific challenges. One
specific feature of such multi-core metropolitan regions is the lack of intraregional
spatial hierarchies. While in a metropolitan region with a dominant core city urban and
metropolitan functions are concentrated in a specific core centre, this role is spread out
over many centres in a multi-core metropolitan region (Volgmann, 2013). Multi-core
metropolitan regions with flat spatial hierarchies are thus faced with the metropolization
challenge of having to achieve a certain critical mass in the division of labour, enabling
them to generate agglomeration advantages within their traditionally polycentric spatial
structures and thus to achieve success in the global competition for the best business
locations for knowledge-intensive companies (Meijers et al., 2012, p. 145).
Post-Suburban Polycentric Regions and New Business Clusters as a Result of

Regionalization
Post-suburban polycentric regions have evolved in the course of post-industrial and post-
suburban developments on the periphery of a previously monocentric core city. This regio-
nalization is leading to a de-concentration of business activities towards locations away
from the major core cities and thus to polycentric city-regional structures (Pheps, 2004,
p. 976ff.; Burdack & Hesse, 2006, p. 384f.). Due to regionalization, the hitherto existing
relationship between core cities and their dependent suburbs has been lost, to be replaced
by metropolitan regions with an increasingly fragmented spatial hierarchy consisting of
core areas, individual districts and intermediate zones (Hesse, 2010).
Functions important to a metropolis’s economic viability are part and parcel of such
sprawl, not only involving such land-consuming metropolitan infrastructures as airports,
but also increasingly functions and business sectors such as producer services, previously
predominantly located in metropolitan cores. This is because certain areas in the hinterland
provide advantages regarding accessibility and proximity similar to those found in the
metropolitan core (Läpple/Soyka, 2007, p. 67f., 96f.). On the one hand, improved acces-
sibility leads to the regionalization of a population’s potential action radius (e.g. for daily
commuting to work), while on the other hand businesses can profit from the advantages of
proximity and knowledge spillover generated in the region without experiencing the
disadvantages of the core city (Brake, 2005). Thus core cities and their hinterland merge
into networked post-suburban structures that qualitatively differ from the former centre-
dependent hinterland (Meijers, 2005; Pheps, 2006). In the course of this post-suburban
polycentric restructuring, new business clusters emerge, complementing the traditional
CBDs within the whole region (both within the administrative boundaries of the core
city and in hinterland municipalities). Though a region’s traditional CBDs will retain its
functional dominance in the metropolitan region, it will no longer dominate all central
functions (Brake, 2005, p. 13ff.).
Thus nearly all metropolitan regions in post-industrial countries are polycentric regions.
But while most of them can only be characterized as post-suburban polycentric regions,
multi-core metropolitan regions with more than one traditional core are quite rare. In
the latter case the two types of regional-level polycentricism overlap (Meijers, 2007;
Münter, 2011), thus presenting exceptionally complex spatial structures.
The Role of Geographical Proximity and Transaction Costs for Innovation in the
Knowledge Economy
On the one hand, the knowledge economy drives the globalization of the economy, while
on the other hand it strengthens cities or metropolitan regions as centres of business
activity (Dunning, 2000, p. 15). Knowledge-intensive companies establish interaction net-
works—whether at a regional, national or global scale—in which cities represent trans-
action hubs, while at the same time cities are the preferred location for the knowledge
economy, as they are especially suited to meeting the production and exchange require-
ments of knowledge-based business, or can easily adapt to meet such (Kujath, 2010a,
p. 19).
As a “learning economy”, the knowledge economy is continually in need of, and gen-
erating, new knowledge. This is reliant on such factors as a critical mass of skilled
workers, proximity to competitors, the prevalence of academic and research institutions
or a high contact density (Kujath, 2010a, p. 21). External effects resulting from the proxi-
mity of firms in different sectors (urbanization economies) and from the proximity of firms
in the same sector (localization economies) are of primary importance. It is stressed in the
literature (Feldman, 1994; Feldmann & Florida, 1994; Audretsch & Feldman, 1996) that
geographical proximity is a driver of innovation and new ideas, as knowledge spillovers
are geographically localized. The key drivers for innovation are often found in urban
centres because geographical proximity to knowledge sources has a positive effect on
the performance of economic agents.
The literature on innovation dynamics strongly questions whether the interactions and
proximities driving innovation are necessarily geographically localized (Boschma, 2005).
It criticizes the importance of inter-organizational relationships with regard to the
innovative performance of firms and the stimulating effect of geographical proximity.
This provokes a discussion on whether geographical proximity still plays a role in inter-
organizational learning and fostering innovation (Weterings & Boschma, 2009).
Boschma (2005) argues that among the five dimensions of proximity (organizational,
institutional, social and cognitive proximity), cognitive proximity is a prerequisite for
interactive learning, while the other four dimensions act at mechanisms to bring actors
together. Co-location can foster inter-organizational learning, as it enables local agents
to “monitor each other constantly, closely, and almost without effort or cost” (Malmberg
& Maskell, 2002, p. 439 cited by Boschma, 2005, p. 64). In summary, geographical
proximity between economic actors does not automatically lead to innovation.
Nevertheless, it is unquestioned that geographical proximity can facilitate innovation
(Boschma, 2005, p. 70). Random interaction between holders of knowledge in different
functions can indeed be stimulating in terms of positive urbanization economies. The
more specific the knowledge exchanged, the more important are functionally specialized
contacts and the significance of geographical proximity (Growe, 2012). While codified
knowledge can be exchanged over long distances, the more tacit the knowledge exchanged
is, the higher the potential relevance of geographical proximity (face-to-face contacts)
(Gertler, 2003; Weterings & Boschma, 2009).
The transfer of knowledge between actors is discussed in the context of transaction costs
(Williamson, 1985). These costs increase with the specificity, frequency and uncertainty of
knowledge exchange and communication processes necessary for high-end business trans-
actions. A connection between transaction costs and spatial relations has been identified by
Scott (1998) and Porter (2000). In this context, Wood and Parr (2005) argue that trans-
action costs may foster the spatial agglomeration of firms, since physical proximity will
reduce the costs occurring in the context of firms’ business dealings. Hence, firms
facing high transaction costs due to the need for constant exchange with other actors
can be expected to be drawn to central locations within a metropolitan region (Audretsch,
2003).
Concentration and de-concentration processes in metropolitan regions can thus be
explained by transaction cost dependency in economic processes, allowing the conclusion
to be drawn that the greater the importance of transaction costs for a company, the more
likely companies are to relocate to core cities. Core cities facilitate knowledge spillovers
through lowering the friction losses of knowledge acquisition and dissemination in com-
parison to other spaces (Audretsch, 2003). Conversely, the lower the transaction costs are,
the more likely companies are to move away from a core city to the hinterland.
Operationalization of the Knowledge Economy

One way of systemizing the knowledge economy is to assign a differentiation of knowl-
edge types into analytical, synthetic and symbolic knowledge (Asheim & Gertler, 2007),
which is based on the observation that the production of new knowledge follows different
paths in different sectors. This in turn means that employees need different qualifications
and skills, with different mixes of tacit and codified knowledge. Sectors with a synthetic
knowledge base benefit from the spatial proximity of stakeholders, while industries with
an analytical knowledge base benefit from faster dissemination of knowledge in the
local context. For industries working with a symbolic knowledge base, spatial proximity
is beneficial for temporary projects with a high need for coordination and interaction
(Asheim et al., 2007).
Another way is to systematize the knowledge economy on the basis of activities and
knowledge use in the production process. The foundation was established by Park
(2000, p. 2f.). He differentiates between “knowledge industries” and “knowledge-based
industries”. On the basis of this concept, Kujath (2010b) proposes differentiating business
activities into four functional knowledge economy categories in accordance with insti-
tutional economics, using the assumption that business sectors use knowledge to different
degrees of intensity and are therefore not always fully dependent on highly specialized
data exchange mechanisms. This in turn means that both transaction costs and spatial
location patterns can differ (Kujath & Schmidt, 2010, p. 45ff.; Kujath, 2010b, p. 77f.;
Zillmer, 2009).
. Transaction-oriented services: These include, in particular, service companies involved

in the decision-making processes of global players, thus taking on global city functions
and corresponding to APS sectors (Sassen, 1991; Castells, 2004).
. The information and media sector: This category deals with the transformation of
knowledge into standardized (digitalized) knowledge/information products. The main
service offered involves the development of prototypes destined for future development
into a standard product.
. The high-tech industry: The focus of this category is on knowledge-intensive material

products, created by combining new knowledge with existing products and processes
and where the knowledge share plays an eminently important role.
. Transformation-oriented services: This category is closely linked to industrial manufac-
turing and with transforming knowledge into new knowledge benefiting various
business applications.
The following section uses the differentiation of the knowledge economy by Kujath
(2010b), which picks up the transaction cost approach and explains both different inter-
action spaces and functional types of the knowledge economy. The background to that
is, that the need to optimize the transaction spaces and to lower transaction costs differs
between the functional types of the knowledge economy:
. Transaction-oriented services and information and media sector frequently prefer

central locations in large agglomerations, where knowledge transfer is organized via
the interface of the cooperating players (Wolke & Zillmer, 2010, p. 144). Geographical
proximity is useful for assessing the production capabilities of cooperation partners and
building relationships at different stages of production development. Wood and Paar
(2005, p. 11) have shown that large city-regions have advantages in all stages of prepar-
ing, creating and controlling transactions and therefore advantages in the sharing of
information and the lowering of transaction costs. With the help of informal contacts
and open communication channels, search and information costs can be reduced. In
addition, a city’s atmosphere or “look and feel” is an important factor (Kujath,
2010b, p. 71ff.).
. The high-tech industry and transformation-oriented services are subject to clustering,
though not necessarily in central locations within an agglomeration. Malecki (2000)
points to the fact that companies with similar or complementary specializations tend
to create clusters, but not because of physical or institutional proximity, rather, for
using external facilities. These companies are often integrated in global networks and
therefore not dependent on the specialized transaction facilities offered by core cities.
Similarly not dependent on easy accessibility, they are concentrated on the periphery
of city-regions and tend to be more dependent on relatively stable and routine relation-
ships within their production systems (Kujath, 2010b, p. 75f.; Wolke & Zillmer, 2010,
p. 144).
Empirical Analysis
The Rhine-Ruhr Metropolitan Region: Delineation of the Study Area
The Rhine-Ruhr is a prime example of a multi-core metropolitan region, although no gen-
erally accepted analytical or political-normative delineation of the region exists. In this
paper, we thus refer to the functional delineation of the “functional urban region (FUR;
German: ‘Stadtregion’) model” developed by the German Federal Institute for Research
on Building, Urban Affairs and Spatial Development (BBSR) (Figure 1). According to
this model, the FUR, Rhine-Ruhr, comprises 20 core cities, each with more than
100,000 inhabitants. Together with a host of further densely populated smaller municipa-
lities, they constitute a spatially connected core area extending from Hamm in the east to
Bonn in the southwest. Around this core area a commuter zone is defined as having at least
a 25% share of a municipality’s commuters travelling into the core cities and the surround-
ing densely populated communities in 2008. Alongside the core cities looked at, we differ-
entiate between direct city peripheries (inner commuter zone) and surrounding areas (outer
commuter zone) (BBSR, 2011).
The Multi-Core Rhine-Ruhr Metropolitan Region Between Metropolization and

Polycentricity
The focus of this analysis is on the relationship between traditional polycentricity and the
agglomerating process of metropolization. Transaction-oriented service providers at the
top of the knowledge economy hierarchy represent a main driver of metropolization.
These are operationalized by the leading global APS firms. The APS sector is a “cluster
of activities that provide specialized services, offering professional knowledge and
specialized information processing to other service sectors” (Hall & Pain, 2006, p. 4).
APS firms play a key role in globalization outcomes. To retain their major clients, APS
firms have themselves globalized, and now have branches in cities throughout the world
(Taylor, 2004, p. 57).
“Measuring connectivity in the World City Network (WCN)”. Our analysis of the exter-
nal relations of the Rhine-Ruhr metropolitan region is based on the WCN model built by
the GaWC research group. The WCN is an empirical instrument for analysing inter-city
relations in terms of the organizational structure of the global economy. It is built as an
interlocking network model measuring relations between world cities indirectly, using
the branch location strategies of leading global APS firms as a proxy for WCN activities.
It assumes that communication flows in the global business network do not run between
cities, but between the APS firms located therein (Taylor, 2004, 2010). In this paper,
the analyses of the external relations of the Rhine Ruhr region (compared to other metro-
politan regions in Germany) are based on a data matrix of the 175 leading global APS firms
also considered in the global GaWC network model of Taylor et al. (2010), and all 192
cities within Germany that host at least one office of one of the leading global APS firms.1
“Integration of the Rhine-Ruhr metropolitan region in the global networks of trans-
action-oriented service providers”. Even in Germany, whose urban system shows a
clearly polycentric structure, multi-core metropolitan regions are quite rare. Among the
largest German metropolitan regions, we find that only a few are linked to the networks
of the leading global APS firms from more than one core city. These are primarily the
Rhine-Ruhr and the Rhine-Main regions. Thus with regard to connectivity to global
Figure 1. Spatial structure of the FUR Rhine-Ruhr.

Source: Calculations based on data from BBSR.
business networks, the Rhine-Ruhr metropolitan region is the prime example of a multi-
core region within the German urban system (Münter, 2011, p. 194).
Figure 2 clearly shows that the commuter zone of the metropolitan region is not signifi-
cantly included in the interaction networks of the leading global APS firms. Looking at all
branches of the 175 leading global APS firms, we see that the commuter zone only con-
tributes to 4% of the metropolitan region’s global connectivity (Figure 2(a)), whereby
not one of these 175 firms has its most important branch located in the commuter zone
(Figure 2(b)). This is in line with the hypothesis that the APS sector, which is highly
affected by transaction costs, is mainly concentrated in large cities to keep these costs low.
At first glance, the traditional inter-urban polycentricity of the Rhine-Ruhr metropolitan
region seems to have a major influence on the region’s connectivity to the WCN, with
several core cities contributing to the region’s global connectivity (Figure 2(a)). But if
we look in detail at the distribution of the connectivity generated by the locations of
leading global APS-firms within the Rhine-Ruhr region, the picture of the region as a
multi-core metropolitan region is put into perspective. Looking at all branches of these
companies in this metropolitan region (Figure 2(a)), we find that at least five of the
region’s core cities contribute significantly to the region’s global connectivity. But
when we take only the most important branch of each company, we see that nearly all
of them are located in Dusseldorf or Cologne, or that the company maintains equally
important branches in these two cities and optionally in other cities within the region
(Figure 2(b)). Generally speaking, the other company branches within the Rhine-Ruhr
Figure 2. Integration of leading global APS firms based in the Rhine-Ruhr in global business networks.
Source: Calculations based on data from Hoppenstedt company database.
metropolitan region outside of Dusseldorf and Cologne are subordinate branches or back-
offices of the main regional branch.2 Thus even in this prime example of a multi-core
metropolitan region, integration in the global networks of transaction-oriented service pro-
viders is highly concentrated within the region. Looking at the respective main branch of
leading global APS firms, the two cities, Dusseldorf and Cologne, together account for
97% of the Rhine-Ruhr region’s total connectivity while all other cities within the
region only account for slightly more than 3%. In summary, we can therefore conclude
that, with regard to the leading global APS firms, Dusseldorf and Cologne act as gateways
to the globalized world for the whole multi-core Rhine-Ruhr metropolitan region. We also
see that, even in a traditionally multi-core metropolitan region, the metropolization of the
global urban system has a strong agglomerating effect, thus putting a question-mark over
the historically flat hierarchies within the region.
The Rhine-Ruhr as a Post-Suburban Polycentric Region

Within the Rhine-Ruhr metropolitan region, our intention was to identify regionalization
tendencies, characterized by concentration/de-concentration shifts between 1988 and
2008. When defining and delineating the knowledge economy, this paper takes as its
basis the occupations listed in the Federal Employment Agency’s employment statistics
(three-figure classification of occupations of 1988), as this form of differentiation is
better suited for depicting the intensity of knowledge use within business processes than
the traditional differentiation into economic sectors. A further differentiation is made
using the four above-described function categories (Kujath & Zillmer, 2010) related to
the knowledge economy. Based on the finding that Cologne and Dusseldorf play a
leading role among the region’s core cities, we complement the study categories described
in the delineation by differentiating between Cologne and Dusseldorf on the one hand and
the region’s other core cities within the core city category on the other.
Figure 3 shows the percentage breakdown of overall employment and people working
in the knowledge economy in 1998 and 2008. The knowledge economy is thus not limited
to one core city, but spread out over several cities in the Rhine-Ruhr metropolitan region,
although with a greater concentration of employees in the core cities compared to overall
employment. As expected, the large core cities of the Rhine-Ruhr region are well rep-
resented in the knowledge economy, with the highest knowledge economy employment
concentrations being found in Cologne and Dusseldorf. In 1988, Cologne and Dusseldorf
accounted for some 27% of such employment, with the remaining 18 core cities of the
Rhine-Ruhr region accounting for a further 44%. The transformation of metropolitan
business is reflected in the increase of employment in the knowledge-intensive profession
categories, raising the question of which type of municipality performed best between
1988 and 2008.
The development of employment in the knowledge economy reveals a very dynamic
structure in the Rhine-Ruhr metropolitan region, with a majority of municipalities witnes-
sing significant employment growth in knowledge-intensive professions (cf. Figure 4).
Within the 1998 – 2008 timeframe, we can see slight shifts in knowledge economy employ-
ment percentages (cf. Figure 3), with the percentage accounted for by Cologne and Dus-
seldorf rising to almost 30%. The remaining core cities have lost out somewhat, with their
share dropping to 39%. Nevertheless the major core cities, Bonn, Dortmund, Essen and
Bochum have registered absolute growth of more than 2000 employees. Knowledge
economy employees are present to a much lesser degree in the inner commuter zone.
Figure 3. Comparison and development of overall employment percentages and those of employ-
ment in the knowledge economy, 1988–2008, by type of municipality.
Source: Calculations based on data from the Federal Employment Agency.
Figure 4. Comparison of employment by function type in the knowledge economy, 1988–2008, by

type of municipality (2008).
Source: Calculations based on data from the Federal Employment Agency.
With their 20% share of the knowledge economy, the outer commuter zone assumes a
role comparable to that already seen in employment. The importance of these municipa-
lities has slightly increased in recent years, especially in association with Cologne and
Dusseldorf.
When analysing the knowledge economy and its effects on the Rhine-Ruhr metropolitan
region, we find a polycentric structure with many important core cities, underlining the
importance of the knowledge economy for major core cities and the importance of
agglomeration effects. The core cities have become the drivers of economic development,
whereby their immediate peripheries play a more important role for the knowledge
economy in general compared to the analysis of global network integration of the
leading global APS firms representing the peak of the knowledge economy.
The breakdown of the knowledge economy by function type found in Figure 4 shows
that knowledge-based services reliant on geographical proximity, particularly on face-
to-face customer contacts (transaction-oriented services, information and media), are
more concentrated in the core cities than transformation-oriented services and the high-
tech industry. The latter are not necessarily reliant on urbanization economies. Even so,
a high proportion of high-tech industries are to be found in core cities.
An analysis of shifts in the knowledge economy can provide indications both of a
qualitative upgrading of a city’s periphery (de-concentration as an expression of
regionalization) and of an increase in the importance of the knowledge economy for
core cities (concentration as an expression of metropolization). In all four types of muni-
cipalities, employment in the knowledge economy increased between 1988 and 2008
(Figure 4).
Nevertheless, different concentration processes can be seen between the four knowl-
edge economy function types and between core cities and their periphery. Knowledge-
intensive transaction-oriented services are increasingly concentrated in Dusseldorf and
Cologne, with these cities showing both the highest growth rates and the highest absol-
ute increase. By contrast, the increase in the other core cities is at roughly the same level
as in the commuter zone. This underlines the findings that a) the metropolization of the
global urban system has a strong concentration or agglomeration effect and b) these two
core cities play a dominant role within the metropolitan region. With regard to the infor-
mation and media industry, no clearly interpretable finding can be made: Though core
cities already had a high proportion of information and media employees in 1998, the
proportion has continued to increase. Similarly, the relative proportion is also
growing in the inner commuting zone. Turning to the transformation services, neither
concentration nor de-concentration processes could be observed: The number of employ-

ees has grown in all types of municipalities on both an absolute and relative level. In all
core cities, the proportion of high-tech companies has declined, indicating a slight
de-concentration towards both commuter zone categories. The strong decline of this cat-
egory in the “other core cities” (i.e. apart from Cologne and Dusseldorf) can be
explained by the fact that most of these cities belong to the “old” industrial Ruhr
area, whose economic development has clearly lagged behind the Rhine area ever
since the coal and steel crisis of the 1960s. Inter alia due to lock-in-effects (Schwartz,
2006, p. 22ff.) the Ruhr-area has not fully come to grips with structural change even
today.
This results in the formation of municipality types with different profiles, reflecting their
different business competences. Whereas the core cities are responsible for the traditional
“metropolitan” tasks associated with banking, culture and services, the commuter zone
complements the range of functions with more standardized services. Concentration
effects are mainly seen in Cologne and Dusseldorf, where transaction-oriented service
providers with their higher transaction costs rely on highly specialized exchanges
between players and are therefore dependent on geographical proximity. By contrast,
the high-tech industry is not necessarily dependent on tacit knowledge and thus geographi-
cal proximity displays greater affinity to peripheral locations.
(New) Business Clusters in the Core Cities and Their Peripheries

In this part, the analyses move away from the municipal level and start looking at the
spatial clustering of knowledge economy companies in more detail at the locational
level. Leading global APS firms and knowledge economy companies overall will both
be analysed with regard to spatial patterns and their degree of concentration within the
Rhine-Ruhr metropolitan region. By doing so, the focus can be put more on the emergence
of metropolitan core clusters within the metropolitan region. These business clusters may,
insofar as they are located in the traditional core city CBDs, be interpreted as a spatial
outcome of metropolization and, where new cores have emerged, as a result of the post-
suburban regionalization of the metropolitan region.
Measuring company concentration: (new) business clusters. When analysing company

concentration, two different sets of data are used:
(1) With regard to the leading global APS firms, we located all branches of the 175
leading global APS firms within the Rhine-Ruhr metropolitan region by their
address (postcode).
(2) The knowledge economy firm analyses are based on the company address data (head
offices as well as branches) found in the “Hoppenstedt company database” for 2009
and on the occupational categories congruent to the analyses of employment concen-
tration, with some limitations on account of the database.
The locations of (1) the global leading APS-firms and (2) knowledge economy compa-
nies overall are not per se sufficient to give any clear indication of possible company clus-
ters. With the aid of the kernel-density method, a geographic information system (GIS)-
supported analysis tool, address data are aggregated to spatial company clusters. This
involves generating frequency densities from points, with a symmetrical kernel function
explaining a normal distribution calculated for each point. The density function is calcu-
lated through adding up the individual kernel functions within a 100 × 100 m matrix, with
the result being the cumulative density (Feix, 2007, p. 160ff.). To also take in smaller
centres, 500 m was chosen as the threshold value for the search radius. A kernel-density
measure of eight times the standard deviation from the mean value was used as a threshold
value for identifying business clusters (for more details, see Knapp & Volgmann, 2011).
(New) business clusters of leading global APS firms and knowledge economy companies in
general. Looking first at the locations of the leading global APS firms, we see an even
greater spatial concentration of such companies within the metropolitan region than when
taking their global connectivity at municipal level into account. Figure 5 shows that the
locations of these companies are concentrated in the city centres of six of the region’s
core cities. Outside these traditional cores, the only other core identified is the “Dusseldor-
fer Medienhafen”, though even this recently built office district is very close to Dussel-
dorf’s traditional core, thereby de facto representing an extension thereof. The most
important business concentrations of leading global knowledge-intensive service compa-
nies are the Dusseldorf and Cologne CBDs. These would seem to offer specific locational
advantages important to the highly specialized leading global APS firms, facilitating pro-
duction and distribution across the global economy. By no means does the whole multi-
core Rhine-Ruhr metropolitan region benefit from metropolization. This is not even the
case with the region’s core cities overall, with metropolization only affecting a very
small proportion of them. Metropolization thus puts a fundamental question-mark over
the traditional spatial-functional hierarchy within this multi-core metropolitan region.
For the entire workforce of the knowledge economy, a total of 43 business clusters can
be identified (Figure 5). Of these, 28 are traditional CBDs and 15 located outside tra-
ditional CBDs, meaning that they can be considered as new business clusters. Of these
15 new business clusters, 13 are located within the core cities and only two in surrounding
municipalities. They are mainly to be found within the core cities Dusseldorf, Cologne and
Bonn. These 43 business clusters together form a morphological polycentric city-regional
structure, whereby they differ from a functional perspective. Whereas Dusseldorf is
specialized in transaction-oriented service providers, Cologne’s strengths are to be
found in the information and media sectors. The core cities of the old industrial Ruhr as
well as the two business clusters in the commuter zone are specialized in high-tech com-
panies and transformation-oriented service providers, with a lower prevalence of classical
Figure 5. (New) business clusters concentrating (1) leading global APS firms and (2) knowledge
economy companies.
Source: Calculations based on data from Hoppenstedt company database.
“global city” functions. Looking at the regionalization of the knowledge economy from
this micro-perspective, we see that the new business clusters are mainly to be found in
the administrative districts of the core cities, and in particular core cities enjoying an econ-
omic boom. No general gain in the importance of the knowledge economy in peripheral
locations can be seen, with new business clusters being the exception here.
Conclusion
In traditional multi-core metropolitan regions, metropolization and regionalization
overlap, as do traditional and new forms of polycentricity. The purpose of this paper is
to reveal the resultant complex locational pattern followed by the knowledge economy
at both a municipal and locational level, using the Rhine-Ruhr as a prime example of a
multi-core metropolitan region.
Our analytical results regarding metropolization and regionalization can be summarized
as follows:
“Metropolization” can be seen as an agglomerating phenomenon, applying also to tra-
ditional multi-core metropolitan regions. Looked at from a municipal perspective, Dussel-
dorf and Cologne are the two cities among the Rhine-Ruhr metropolitan region’s large
number of smaller and larger core cities acting as “global pipelines” for the whole
region. Looking at the locational level, we even see a greater clustering of leading global
APS firms, with these concentrated in just a few of the region’s CBDs, whereby here again
Dusseldorf and Cologne play a dominant role. Within the Rhine-Ruhr region’s multi-core
spatial structure, these companies are concentrated in just a few specific locations. Such
locations are able to fulfil the locational requirements of these types of companies, lever-
aging urbanization benefits. Metropolization is thus leading to a shift in the traditional
hierarchy within the Rhine-Ruhr metropolitan region, with only a few core cities—the
ones seemingly able to meet the highly specialized locational requirements of leading
global APS firms—able to benefit from metropolization, while the majority of the
region’s core cities are losing out.
“Regionalization”, an urban phenomenon increasingly seen over the last few decades
and closely associated with the de-concentration of business activities away from the
core cities and the concomitant emergence of intra-urban polycentric city-region struc-
tures, would seem to have only a slight effect on the knowledge economy in the multi-
core Rhine-Ruhr metropolitan region. Within this region, the knowledge economy
shows a continuing high affinity to core city locations, whether looked at from a municipal
or locational perspective. However, when differentiating the knowledge economy by
different function types, we start to see different spatial patterns. The regionalization of
business activities is dependent on the need for geographical proximity during service pro-
duction, enabling firms to keep their transaction costs low. It was therefore assumed that,
looking at city-based knowledge economy business sectors with high transaction costs,
concentration effects towards the major core cities would take place even in multi-core
regions. Looking by contrast at city-based knowledge economy business sectors with
low transaction costs, it was assumed that de-concentration effects favouring peripheral
locations would take place. Regarding transaction-oriented service providers—a sector
with very high transaction cost—and high-tech industries—a business sector with com-
paratively low transaction costs—these assumptions were confirmed. The need for geo-
graphical proximity and the dependence on transaction costs thus provide explanations
for different spatial patterns dependent on a company’s functional role within the
knowledge economy. On the one hand, these are leading high-tech companies locating
to peripheral locations, while on the other hand, they are leading to a concentration of
transaction-oriented service companies in the core cities.
What methodological insights can be gained from the analytical findings? What insights
can be gained with regard to the regional competitiveness of traditional polycentric metro-
politan regions and their regional politics? Where is further research needed?
Regarding the methodology used in this article for analysing the location patterns of the
knowledge economy in multi-core metropolitan regions, it can be stated that analyses at a
locational level allow a more differentiated understanding than the relatively imprecise
analyses at municipality level. A spatial concentration of the knowledge economy could
only be identified in very specific locations, especially in the traditional CBDs in the
core cities or their immediate vicinity. This underlines both the companies’ need for geo-
graphical proximity and the importance of a micro-perspective on spatial structures and
development processes within metropolitan regions.
Regarding regional competitiveness and regional politics in traditional polycentric
metropolitan regions in general and especially in the Rhine-Ruhr metropolitan region,
the following conclusions can be drawn: metropolization is progressing strongly in
multi-core metropolitan regions. Due to the fact that a certain critical mass is needed to
generate “metropolitan” locational qualities and that such qualities cannot be repeatedly
created within a metropolitan region (Meijers et al., 2012), we need to accept that only
a handful of cities or districts within these cities or within a multi-core metropolitan
region can assume a “global pipeline” role for the whole metropolitan region. These
focal points of metropolitanism reflecting the visibility of multi-core metropolitan
regions in the global competition for the best business locations are, however, less
clearly identifiable than in traditional monocentric metropolitan regions. This means
that these regions have to develop their own “metropolitanism” based on a division of
labour within a traditionally polycentric spatial structure in order to achieve success in
the global competition for the best business locations (Meijers et al., 2012). Multi-core
metropolitan regions should therefore not just position themselves with their metropolitan
locational qualities, but should also make the most of the fact that they have less agglom-
eration disadvantages than traditional monocentric metropolitan regions. For example,

rents in the Rhine-Ruhr metropolitan region are relatively low and many residential
locations have direct access to wide open spaces (Reicher et al., 2011, p. 218f). Such
“soft” locational qualities have to be communicated clearly.
One exciting next step would be to analyse the impacts of the developing spearhead (in
particular Dusseldorf and Cologne) on a) the region’s economic growth and b) economic
development within the region. The second question in particular, is difficult to answer for
the Rhine-Ruhr region, which, though functionally interlinked, is very heterogeneous with
regard to its economic structure. In the Rhine-Ruhr region, metropolization processes
overlap with ongoing structural change and the resultant path dependencies and lock-in-
effects. It can be assumed that the metropolization processes observed contribute to an
increase in inequality within the region.
Notes
1. For details on the methodology of measuring the WCN in general, see Taylor (2004) or Taylor et al.
(2010). For details on our application of the model see Münter (2011).
2. For further details on the methodology and the assumptions of these two analyses on the integration of
polycentric metropolitan regions into the WCN, see Münter (2011).
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The Metropolization and Regionalization of the Knowledge Economy in the

Article in European Planning Studies · April 2014

Angelika Münter Kati Volgmann

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The Metropolization and

ANGELIKA MÜNTER & KATI VOLGMANN

(Received December 2012; accepted September 2013)

# 2014 Taylor & Francis

instead is the development of spatial specialization, manifested by polycentric urban struc-

. What spatial-functional consequences does metropolization have on the Rhine-Ruhr as

Theoretical Background of City-Regional Development

Multi-Core Metropolitan Regions Between Metropolization and Polycentricity

tions where specific advantages can be leveraged. In analogy to the concentration of

Post-Suburban Polycentric Regions and New Business Clusters as a Result of

Münter, 2011), thus presenting exceptionally complex spatial structures.

Operationalization of the Knowledge Economy

. Transaction-oriented services: These include, in particular, service companies involved

. The high-tech industry: The focus of this category is on knowledge-intensive material

. Transaction-oriented services and information and media sector frequently prefer

The Multi-Core Rhine-Ruhr Metropolitan Region Between Metropolization and

Figure 1. Spatial structure of the FUR Rhine-Ruhr.

The Rhine-Ruhr as a Post-Suburban Polycentric Region

Figure 4. Comparison of employment by function type in the knowledge economy, 1988–2008, by

concentration nor de-concentration processes could be observed: The number of employ-

(New) Business Clusters in the Core Cities and Their Peripheries

Measuring company concentration: (new) business clusters. When analysing company

eration disadvantages than traditional monocentric metropolitan regions. For example,

Urban Studies, 41(5/6), pp. 971– 989.

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