Gonzaga, Aron J 11/9/2021

BSDS – 12 Mr. Jay Panganiban

Global Cities and its effect to the world economy.

Each stage of the world economy's long history poses special issues about the

conditions that allow it to exist. The ascendance of information technology, as well as the

concomitant growth in capital mobility and liquidity, is one of the fundamental characteristics

of the current phase. Cross-border economic processes—flows of capital, labor, goods, raw

resources, and tourists—have existed for a long time. But, for the most part, these took place

within the inter-state system, with national states serving as the primary articulators. This inter-

state framework was significantly responsible for the international economic system. As a result

of privatization, deregulation, the opening up of national economies to foreign enterprises, and

the rising participation of national economic players in global markets, this has altered

considerably over the previous decade. We may observe a rescaling of what are the strategic

territories that articulate the new system in this environment.

Due to the partial unbundling or at least weakening of the nation as a spatial unit as a

result of privatization and deregulation, as well as the resulting strengthening of globalization,

grounds for the ascendance of new spatial units or scales have emerged. Subnational entities,

such as cities and regions; cross-border areas including two or more subnational entities; and

supranational entities, such as global digitalized marketplaces and free trade blocs, are among

these. At these many scales, the dynamics and processes that get territorialized can

theoretically be regional, national, or global. In this context, and against this variety of strategic
dimensions and spatial units, I situate the creation of global cities (Sassen 2001; 2006a). The

dynamics and activities that get territorialized in global cities are global.

In this paper, I look at the broad conceptual and empirical features that can be applied

to a wide range of cities, each with its unique empirical peculiarities. Economic globalization

necessitates a new sort of organizational structure. A new sort of conceptual architecture is

required to capture this theoretically and empirically.1 Constructs such as the global city and

the global-city region, in my opinion, are crucial parts of this new conceptual architecture. The

naming of these elements is a part of the conceptual process. Other nearly related terms that

may have been used include the now-classic term "global cities, "2 "supervilles" (Braudel 1984),

and "informational city" (Castells 1989). As a result, deciding how to name a configuration has

its meaningful logic. I picked the term "global city" (1984) on purpose—it was an attempt to

name a distinction: the distinctiveness of the global as it is constructed in the modern moment.

I didn't go with the obvious option, world city, because it referred to a type of city that we've

seen throughout history (e.g., Braudel 1984; Hall 1966; King 1990; Gugler 2004), and most likely

also in much earlier periods in Asia (Abu-Lughod 1989) or European colonial centers (King 1990)

than in the West.

In this regard, it is possible to argue that the majority of today's big global cities are also

world cities, but that certain global cities are not world cities in the full, rich sense of the term.

This is partly an empirical question; however, as the global economy expands and more cities

are included in the various networks, the answer to that particular topic may change. As a

result, the fact that Miami began developing global city functions in the late 1980s does not

qualify it as a world city in the traditional sense.

Global Demography and its effect to the world economy.

The world has accelerated its shift out of long-term demographic stability in the last 50

years. Populations began to rise as newborn and child mortality rates declined. In most

countries, this expansion resulted in lower fertility rates. Despite lower fertility, the population

continues to grow due to population momentum, which will eventually level out. Meanwhile,

the demographic shift has created a 'bulge' generation, which now makes up a major working-

age population in many countries. In both rich and developing countries, this cohort will

eventually grow into a sizable elderly population. Economists and demographers have been

debating population growth for a long time.

Until recently, the majority of people believed in a middle ground where population

expansion has little effect on economic growth. According to new data, changes in population

age structure – specifically, a rising ratio of working-age to non-working-age individuals – can

contribute to faster economic development via both accounting and behavioral consequences.

East Asia's, Ireland's, and Sub-Saharan Africa's experiences all demonstrate the impact of the

demographic shift on economic growth (or lack thereof). Internal migration (from rural to urban

regions) and international migration both add to the complexity of the situation. The broader

policy consequences of population expansion are the need for increased investments in health

and education, as well as solid labor, trade, and retirement policies. Understanding future

trends are critical for good policy formulation. Large uncertainties — in the fields of health,

changes in human life span, scientific discoveries, migration, global warming, and wars – make

overall predictions exceedingly questionable. Demographic trends were relatively steady for

much of human history; human populations expanded slowly, and population age structures,
birth rates, and death rates altered slowly. Epidemics and pandemics had massive effects on

populations, but they were transient and had little impact on long-term patterns. However, in

the last 50 years, this tendency of long-term stability has given way to the world's largest

demographic upheaval, which is currently ongoing. In the developed world, a strong surge of

infertility after WWII was followed by a steep drop.

Through the emergence of a 'baby boom generation, these changes in fertility changed

age patterns. The population balance in affluent countries is changing from young to old as this

generation ages and fertility and old-age mortality continue to drop. Meanwhile, improved

nutrition, public health infrastructure, and medical treatment have resulted in a population

expansion in developing countries. Even if high fertility – the primary source of rapid population

expansion – were to abruptly drop to the long-run replacement level of 2.1 children per

woman, humanity would continue to face demographic upheaval for some time. The fast

growth of the world's population in recent decades has resulted in a significant number of

women of childbearing age.

This creates 'population momentum,' in which most countries' populations, even those

with declining birth rates, will continue to rise for many years. This is especially true in

emerging nations. Those countries that fail to seize this opportunity risk developing enormous,

chronically underemployed, and increasingly restless working-age populations.

Global Migration and its effect to the world economy.

In our increasingly interconnected society, migration is a key element. It has also

sparked debate in several countries, emphasizing the need of comprehending global migration

patterns and the economic impact that occurs when people across international borders.

People on the move: Global Migration's Impact and Opportunity, a new report from the

McKinsey Global Institute (MGI), strives to meet this requirement. In the eyes of the media,

refugees are the face of migration, but 90% of the world's 247 million migrants have crossed

borders voluntarily, mainly for economic reasons. Voluntary migration flows are often more

gradual than refugee movements, putting less strain on logistics and the social fabric of

destination countries. The majority of voluntary migrants are individuals of working age, which

serves to increase the proportion of the population in destination countries who is

economically engaged. The remaining 10%, on the other hand, are refugees and asylum seekers

who have fled their home countries to avoid conflict and persecution.

The Middle East and North Africa account for over half of the world's 24 million

refugees, mirroring the common pattern of fleeing to a neighboring nation. However, the

recent influx of migrants into Europe has brought this issue to the attention of the industrialized

world. Europe's New Refugees: A Road Map for Better Integration Outcomes, a companion

report, looks at the problems and opportunities that particular nations face. While some

migrants travel significant distances from their home countries, the vast majority of migrants

move to nearby nations or countries in the same region (exhibit). Approximately half of all

migrants in the world have relocated from developing to developed countries, making this the
fastest-growing category of migration. Nearly two-thirds of all migrants live in affluent

countries, where they frequently fill critical labor shortages. Immigrants accounted for 40 to 80

percent of labor force growth in major destination countries between 2000 and 2014.

Increasing labor productivity by relocating workers to higher-productivity environments

enhances global GDP. Migrants of all skill levels contribute to this effect, whether through

innovation and entrepreneurship or by freeing up native workers for higher-paying jobs.

Migrants make up only 3.4 percent of the world's population, but according to MGI's

analysis, they contribute nearly 10% of global GDP. In 2015, they contributed $6.7 trillion to

global GDP, a $3 trillion increase over what they would have created in their home nations.

More than 90% of this influence is felt in developed countries. In top destinations, immigrants

have slightly lower employment rates than native workers, but this varies by skill level and

origin region.

Although there can be short-term negative effects if there is a large inflow of migrants

to a small region, if migrants are close substitutes for native workers, or if the destination

economy is experiencing a downturn, extensive academic evidence shows that immigration

does not harm native employment or wages. However, by closing the wage gap to just 5 to 10%

by better integrating immigrants across multiple sectors of education, housing, health, and

community engagement, countries might add an extra $800 billion to $1 trillion to global

economic production each year. Although this is a conservative target, it has the potential to

have broader positive consequences, such as lower poverty rates and improved overall

productivity in destination economies.