SYDNEY AS A GLOBAL CITY

by Glen Searle
 TABLE OF CONTENTS 2

EXECUTIVE SUMMARY.............................................................. 5

PART 1: GLOBALISATION AND SYDNEY: EFFECTS AND

PLANNING IMPLICATIONS........................................................ 8

1 Introduction.................................................................................................................................... 8

2 Globalisation and Sydney.............................................................................................................. 8

2.1 The Nature of Globalisation..................................................................................................... 8
(1) Cities as Favoured Locations for Economic Globalisation................................................ 10
(2) Winners and Losers: City Location Factors for Global Activities..................................... 11
2.2 Sydney as a Global City......................................................................................................... 12
(1) Overview............................................................................................................................ 12
(2) Employment Structure....................................................................................................... 13
(3) Global Command and Control Functions.......................................................................... 15
(4) Finance Sector.................................................................................................................... 15
(5) International Trade, Investment, Transport and Communication...................................... 16
(6) Trade.................................................................................................................................. 16
(7) Investment.......................................................................................................................... 17
(8) Air Transport...................................................................................................................... 17
(9) Telecommunications.......................................................................................................... 19
(10) International Tourism....................................................................................................... 19
(11) Foreign Students.............................................................................................................. 19
(12) Foreign Immigration........................................................................................................ 19

3 Urban Effects of Sydney’s Global Role...................................................................................... 19

3.1 Location of Global Office Functions...................................................................................... 20
(1) Regional Headquarters....................................................................................................... 20
(2) Advanced Producer Services............................................................................................. 20
(3) Finance Sector - Global Functions..................................................................................... 21
3.2 Commercial Property Market................................................................................................. 21
3.3 Exports and Imports................................................................................................................ 22
(1) Major Exporters................................................................................................................. 22
(2) Importers............................................................................................................................ 22
3.4 Global Activities and Inner and Outer Employment Areas.................................................... 23
3.5 International Air Transport..................................................................................................... 24
3.6 International Tourism............................................................................................................. 25
3.7 Special Events......................................................................................................................... 25
3.8 Education and Health Exports................................................................................................ 25
(1) Education........................................................................................................................... 25
(2) Health Services.................................................................................................................. 26
3.9 Housing and Employment Distribution.................................................................................. 26
3.10 Global Infrastructure: Social and Environmental Costs....................................................... 27

4 Planning Issues and Responses................................................................................................... 27

4.1 Land/Accommodation Supply................................................................................................ 27
(1) Regional Headquarter Office Supply................................................................................. 28
(2) Re-Use of Obsolete Inner Area and Harbourside Land..................................................... 29
(3) Supply of Greenfield Employment Land........................................................................... 30
(4) Area-Based Agencies and Programs.................................................................................. 31
(5) Tourism Accommodation and Attractions......................................................................... 33
(6) Needs of Other Consumption-Related Exports.................................................................. 34
(7) Sydney’s Stock of Large Sites........................................................................................... 34
4.2 Transport and Communication Infrastructure........................................................................ 35
(1) Sydney West Airport.......................................................................................................... 35
 (2) Freight Transport................................................................................................................
3 36
(3) Public Transport................................................................................................................. 36
(4) Telecommunications.......................................................................................................... 37
4.3 Amenity, Environment and Image.......................................................................................... 37
(1) Streetscape......................................................................................................................... 37
(2) Image in Critical Locations................................................................................................ 38
(3) Environmentally Sustainable Development....................................................................... 38
(4) Safety................................................................................................................................. 38
4.4 Housing................................................................................................................................... 38
4.5 Strategic Planning Frameworks.............................................................................................. 39

5 References..................................................................................................................................... 39

PART 2: PLANNING FOR A GLOBAL ROLE IN OVERSEAS CITIES

42

1 Purpose And Structure................................................................................................................ 42

2 The Selected Cities........................................................................................................................ 42

2.1 Choosing the Cities................................................................................................................. 42
2.2 Data Sources........................................................................................................................... 42
2.3 Size and Global Level............................................................................................................. 42
2.4 Planning Systems and Governance......................................................................................... 43

3 Specific Features Of Recent Planning For Economic Development........................................ 45

3.1 Land/Accommodation Supply................................................................................................ 45
(1) Key Zones.......................................................................................................................... 45
(2) Zoning................................................................................................................................ 47
(3) Redevelopment of Obsolete Areas..................................................................................... 48
(4) Office Parks........................................................................................................................ 51
(5) Land Use Issues................................................................................................................. 52
3.2 Transport and Communications Infrastructure....................................................................... 52
(1) Rail Transport.................................................................................................................... 53
(2) Highways........................................................................................................................... 55
(3) Airports.............................................................................................................................. 57
(4) Telecommunications.......................................................................................................... 58
3.3 Cultural and Entertainment Sectors........................................................................................ 59
(1) Tourism.............................................................................................................................. 60
(2) Business Visitors................................................................................................................ 61
3.4 Quality of Life and Environment............................................................................................ 62
(1) Road and Transport Impacts.............................................................................................. 62
(2) Environmental Greening.................................................................................................... 63
(3) Built Heritage..................................................................................................................... 63
(4) Role of Housing................................................................................................................. 64
(5) Other Elements................................................................................................................... 65
3.5 Other Sectors.......................................................................................................................... 65
(1) Education and Training...................................................................................................... 65
(2) Housing.............................................................................................................................. 66
3.6 Financing and Management Approaches............................................................................... 66
(1) Development corporations, etc.......................................................................................... 66
(2) Funding Land Assembly and Infrastructure....................................................................... 68
(3) Additional Methods of Intervention................................................................................... 69
(4) Compulsory Purchase Powers............................................................................................ 69

4 Implications For Sydney.............................................................................................................. 69

5 References..................................................................................................................................... 75
Figures - Part I 4

1. Circuits of Capital & Links with the Global Economy

2. Location of Regional Headquarters Set Up Under Commonwealth Government
RHO Program
3. Largest Advanced Producer Services Firms, 1995
4. Offices of Largest Value Exporting Companies 1995
5. Largest Hotels Established in Sydney since 1980
6. English Languages Colleges and Centres 1995
7. Median Households Income in Sydney 1991

Table 1: Employment Share in Manufacturing and Service Industries in Sydney,

Melbourne, New York, London and Tokyo (% of total employment).
Table 2: Direct International AirLinks, 1994.
Table 3: Approvals for Foreign Investment in Urban Real Estate - Expressed
Investment, NSW and Australia, 1992-93 and 1993-94.
Table 4 Metropolitan Regions Ranked by Number of Originating Passengers
Table 5 Companies Locating in Norwest Business Park
Table 6 Companies Locating in Huntingwood Industrial Estate
Table 7 Percentage of Persons Aged 25-54 with Incomes above $30,000,
Sydney and Melbourne, 1991 (per cent).

Figures - Part II

8. Regeneration and Opportunity Areas, London.

9. East London Development Focus.
10.
11. Airport Redevelopment Scheme, Berlin Aldershof
12. Multi-core Metropolis concept from a geographical perspective, Tokyo.
13. High Speed Rail of New Transportation System Planning, Tokyo.
14. Existing and Proposed Rail Lines, London.
15. Action for Promoting Public Transport in Glasgow.
16. Main Road Network, Tokyo.
17. Paris Motorways.

Table 1 Metropolitan Area Populations of Selected World Cities

 5
I. EXECUTIVE SUMMARY
This report examines Sydney’s role in the global economy, and the implications of
this role for planning. Part 1 of the report discusses the impact of globalisation on
Sydney, and the resultant planning issues and implications. Part 2 reports the recent
experience of major overseas cities in planning for a global economic role.

Part 1: Globalisation and Sydney: Effects and Planning Implications

The past two decades have seen the development of global trading and financial
systems generated by information technology developments, advances in air transport,
deregulated financial systems and national trade and industry policies. These global
economic activities have been concentrated in major world cities.

Sydney has several favourable location factors for global activities, including its
international air and communications links, its skilled workforce, its amenity, its
ethnic diversity, and its low costs relative to east and south east Asian cities.

Sydney is Australia’s major finance centre and the major location for regional
headquarters and related producer services. It is also the main entry point for imports,
investment, tourists and immigrants.

The Sydney Central Business District (CBD), North Sydney and other inner areas,
particularly on the north shore, have been the focus of the main global activities in
Sydney. Some globally-oriented advanced technology companies have tended to
locate in the newer, more attractive and accessible industrial parks in middle and outer
areas.

The growth of global activities has boosted the property market of the CBD and lower
north shore, and resulted in a significant level of foreign ownership of CBD property.
Investments in tourist facilities and export-oriented health and education facilities
have all tended to concentrate in inner areas of the city. This has tended to widen
income inequalities, resulting in a more spatially polarised housing market.

A key planning issue is the extent to which land and accommodation for global
activities can be provided without generating community and environmental costs. In
the CBD there is a potential conflict between preservation of amenity through
development controls and developer freedom to provide landmark buildings for
international companies. This may be addressed through development controls which
take into account the advantages of the city’s distinctive built heritage for global
identity.

The needs of global economic activity need to be considered in land use decisions for
underutilised former industrial sites in inner and middle areas. The use of area-based
agencies and programs to enhance global investment may be justified in strategic
locations.

There is a case for using planning controls to promote the development of CBD
tourist accommodation. Planning strategies to enhance non-CBD tourist destinations
and Sydney’s range of quality cultural facilities are also desirable.
Efficient transport infrastructure is6important for Sydney’s international
competitiveness. This includes a strong public transport system, the development of
Sydney West Airport and the planning of freight and passenger transport corridors to
link the airports, ports and the CBD.

While the influence of amenity, environment and image in attracting international

investment is open to debate, planning can play an important role in maximising their
positive aspects. A strategic framework, as provided by Cities for the 21st Century,
will increase investor confidence. This needs to be supplemented by a regional
economic development strategy setting out preferred paths and strategies for
economic development in Sydney.

Part 2: Planning for a Global Role in Overseas Cities: Features of

Recent Planning for Economic Development
The cities chosen for analysis were Tokyo, Berlin, Frankfurt, Düsseldorf, Paris,
London, Glasgow, Newcastle upon Tyne, Sheffield, New York, San Francisco and
Toronto.

Key zones for globally related economic activity are a feature of recent planning in
London, Tokyo and Paris. Redevelopment of obsolete areas has been a major feature
of planning for global restructuring in all selected cities. Planning in most cities has
allowed decentralisation of offices from the city centre, mostly to suburban centres on
the rail network and/or to office parks adjacent to international airports.

The transport policy emphasis in major cities is on new public transport infrastructure,
especially rail, to improve accessibility and accommodate global and other
investment. Major new road building is usually limited to areas of major
redevelopment and to orbital highways to increase cross-suburb access in outer areas.

Increases in international airport capacity are being planned in several cities to meet
expected increases in air traffic. High quality access to international airports is a
major planning issue, with new rail lines being the preferred mode. In Europe, the
development of a high speed rail network is leading to a switch to rail transport
between a number of cities.

Some cities have constructed ‘teleports’, or precincts with high quality

telecommunications infrastructure, to attract activities needing such facilities.
However the speed of innovation in telecommunications has resulted in some
uncertainty over planning for such precincts.

Major cities are seen as having advantages in generating globally traded activities in
the cultural and entertainment sectors. In turn, these activities strengthen cities’ global
image and add cultural richness. A number of cities have built major cultural facilities
to enhance their identity and attraction for investors.

The general quality of life and quality of the environment is being seen as an
increasingly important dimension of major cities’ competitiveness. This has resulted
in policies to reduce the impact of road traffic, increase provision of green areas, and
preserve built heritage. A number of cities are encouraging housing development in
central areas to increase the vitality of these areas.
Other initiatives to promote global7competitiveness include planning for
tertiary education and for housing for international executives.

The use of development corporations to facilitate economic development is

widespread. These corporations are usually funded to enable purchase of development
sites and the provision of part or all of the necessary infrastructure.

Major implications of the overseas experience for Sydney include:

 The redevelopment for global and other economic activities of well-located but
obsolete ‘brownfield’ sites served by rail transport should be a planning priority.

 Mixed use zones incorporating housing should be encouraged in and around

Sydney for reasons including making central office areas more lively.

 The protection of Sydney’s distinctive central city built heritage can contribute
significantly to Sydney’s image and amenity and thus its competitiveness; the
encouragement of regional office centres on the rail network can reduce heritage
pressures while retaining public transport advantages.

 Planning and development of a wide range of high quality cultural and

entertainment facilities is very desirable in terms of both their potential as new
export activities and as a ‘magnet’ to global investment in other sectors.

 Priority for improvements in transport access in the existing urban area,

particularly to central Sydney, should be given to rail transport; improved access
between outer suburban areas may require orbital expressways.

 Sydney’s relative newness as a city means its environmental qualities constitute a

distinctive advantage in global competition.
 8
I.
 9
I. PART 1: GLOBALISATION AND
SYDNEY: EFFECTS AND PLANNING IMPLICATIONS
A. Introduction
This report is part of on-going planning analysis and policy development for Sydney
following the publication of the Metropolitan Strategy, Cities For the 21st Century.
When that strategy was being developed, there emerged a need for better
understanding among planners of the global economic functions of Sydney and their
implications for planning.

Part 1 of this report addresses these issues. Firstly, it briefly discusses the nature of
globalisation. Then it analyses the extent to which Sydney’s economy has
international and global dimensions. The urban effects of international/global
activities within Sydney are then discussed. Finally, planning issues and implications
of Sydney as a global city are suggested.

Part 2 of the report examines planning policies being used by major cities overseas in
their global economic roles.

A. Globalisation and Sydney

1. The Nature of Globalisation

Over the last two decades or so the idea of a ‘global economy’ has emerged. This
involves a shift of the locus of economic competition and change from nation states or
global sub-regions to the whole world. Thus international competition has become
both more intense and more widespread, sectorally and spatially. A worldwide market
for goods and services has thus developed. This has been paralleled by the
development of a global financial system which supports the globalisation of
production and exchange of goods and services, and which has also developed its own
instruments and structures for autonomous accumulation and profit-making.

A number of factors have been responsible for this globalisation of production and
exchange. These include:

 The development of advanced information technology incorporating electronic

developments of all kinds, including computers, modems, and ISDN using fibre
optic cable and satellites. This has enabled vast quantities of data to be generated
and transmitted almost instantaneously anywhere in the world.

 Advances in air transport, particularly the advent of wide-bodied, long range jet
planes. These have greatly reduced the cost, as well as increasing the speed, of
moving people and freight around the world.

 The development of deregulated, open national financial systems, the development

of new financial instruments (especially securitisation: Sassen, 1995, p.52), and the
associated emergence of a global financial system.
 State policies in first and third world10countries to encourage exports and
international trade (Fagan, 1995), including GATT agreements and the creation of
regional trading blocs (Brotchie et al, 1995, p.33), and national industry
development policies (e.g. Japan, South Korea, Singapore).

To these could be added the technological diffusion of advanced manufacturing

processes (Brotchie et al, 1995, p.33), which allows low cost countries to take
advantage of the first two factors above - advances in information technology and air
transport.

The actual processes involved within the global economy, however, can be complex
and multi-layered (Figure 1). The picture of globalisation consisting of trans-national
corporations (TNCs) with world-wide production centres and markets is too simple.
As indicated in Figure 1, TNC production may be restricted to one or two nations,
even if markets are global and investment funds are sourced internationally. Figure 1
also suggests other important global economy components beyond the TNC
stereotype. ‘National’ companies may produce and be funded locally, although
exporting most production. Alternatively, TNC branches may set up specifically to
serve local markets, although funded through TNC head offices; production may be
carried out overseas or locally. TNC food and drink branches are examples of this
category.

Although economic globalisation is a complex process, a handful of activities are

central. The main one is the central decision-making processes - the control and
command functions - of international firms. Global and sub-global headquarters of
TNCs are the control centres of globalisation. In turn, firms operating a diverse range
of establishments around the world make planning, administration, and product
research and development increasingly important and complex. ‘Diversification of
product lines, mergers, and transnationalisation of economic activities all require
highly specialised services’ (Sassen, 1995, p.45). The growing demand for these
services (which include various law, accountancy, consultancy and information
technology supply activities) has led to the development of a specialised producer
services sector, another central part of the global economy.

Overlapping with this sector is the global financial sector and global financial system,
which are central to the new economy (Harvey, 1989). The development of TNCs
generated a requirement for international capital flows to finance foreign investments,
which led to the development of global financial activities initially centred on
international capital raising activities such as merchant banking. The size and
complexity of the global financial system grew rapidly with the growth of deficits in
the United States, which had the de facto world currency, and the deregulation of
financial systems from the 1970s. The latter led to currency and interest rate
instability together with lower barriers to financial flows. The larger volume of
available funds and the instability in their cost, plus increased complexity of
transactions caused by globalisation itself (Sassen, 1995, p.51) generated new
financial instruments; information technology/telecommunication advances aided
these developments. The new instruments included derivatives (including futures) and
securitisation of collateral. This has led to a very large increase in dealing in which
profits could be made independently of physical trade and investment. An ancillary
global activity has been international investment in property, as an alternative profit
source to financial market instruments.
The internationalisation of trade,11investment and financial flows generally
has been accompanied by rapid growth in international air traffic, another key feature
of the global economy. Global business travel has increased to allow TNCs to actively
direct and monitor their operations in different countries. International air freight has
also grown quickly, at a higher rate than global trade generally. The concomitant
reduction in the cost of air travel has also generated rapid increases in international
tourist traffic.

A final key sector of the global economy is probably advanced technology

manufacturing, particularly the research and development (R and D) component of
this sector. Such R and D has been the key to the global focus of advanced technology
manufacturing, giving world-wide competitive advantages translated relatively easily
into exports because of high value to weight ratios; indeed air movement is required
to capture markets quickly as product cycles diminish to only a few years or less. In
addition, such R and D increasingly involves international networks to spread the
increasingly high cost in a number of manufacturing areas as the research required to
keep products competitive becomes more complex.

a) Cities as Favoured Locations for Economic Globalisation

These globalisation trends have not operated uniformly amongst world locations. In
particular, global economic activities have been disproportionately concentrated in
major world cities. There are several reasons for this.

The first is that major cities have the greatest international accessibility. Their size
means that they have the greatest number of air services to the rest of the world. They
also tend to have the most advanced telecommunications, since their market size
means they are usually the first locations for investment in the newest
telecommunications infrastructure (Hall, 1995, p.5), particularly where
telecommunications are privatised. In Australia, Sydney and Melbourne were the first
places to have fibre optic cable installed. Major cities such as London, New York and
Osaka are the only locations able to support teleports. (Teleports allow data
transmission and receival via satellites from special satellite dishes connected by fibre
optic cable to offices, minimising data distortion underground from old
telecommunications wiring and above ground from tall building interference.) In
Europe and Japan, an increasing number of major cities now have access to high
speed trains, an important factor in their economic performance (Hall, 1995, p.11).

Another factor has been a change in the nature of production systems. The mass
production economies of scale of the industrial age have been replaced to a significant
extent by a ‘flexible’ post-industrial system involving sub-contracting of functions
and an emphasis on economies of scope in which the ability to compete and respond
across a range of products and areas in response to an uncertain and rapidly changing
environment is critical. This involves networking of various kinds, including research
collaboration to defray the high costs of bringing in new products to stay competitive.
Major cities provide the greatest potential for informal contacts when random
information can be gleaned and deals set up.

Next, the advanced producer services on which international companies depend

heavily, such as international legal and accounting services, management consulting,
and financial services, are heavily concentrated in major cities. Only large cities have
the number of corporate control and12command functions which provide a
market of sufficient size for the most specialised advanced producer services;
furthermore, proximity to clients and potential clients increases the chance of business
through personal reference, a critical avenue in such industries. Global financial
activities, which overlap advanced producer services, are particularly concentrated in
major world cities, notably New York, London and Tokyo. Face-to-face contact in the
finance sector promotes the trust required to make deals, and also generates informal
but unpredictable exchanges of idea and information (Parker, 1995).

A fourth factor favouring major cities as favoured globalisation locales is that they
have disproportionate concentrations of major educational and health facilities. Such
facilities are becoming major generators of new economic exports, both through
research leading advanced technology product development (Melbourne’s Parkville
biotechnology research precinct being a local example), and through export of
teaching services. Large cities also have significant concentrations of high level
cultural and entertainment facilities such as opera houses and symphony orchestras
which attract business tourism (conventions) and cultural tourism. Further, the high
quality educational, health and cultural facilities found in big cities make them
attractive to mobile ‘world’ labour such as managing directors and financial
specialists. In general, consumption involving spectacles and events has become a
major part of the new global economy (Harvey, 1989).

Finally, major centres gain global investment because of spatial constraints on the
knowledge of key international executives. Operating locations are selected on limited
evidence, involving ‘follow-the-leader’ behaviour into large established centres
(O’Connor and Stimson, 1995, p.3).

a) Winners and Losers: City Location Factors for Global Activities

Given that cities are favoured locales for global activity, what factors cause global
activities to locate in particular cities? In terms of command and control functions and
related key producer/financial services, the following appear to be significant:

 International air service access. Cities which have the best international air access
allow the easiest business connections with overseas branch enterprises, with
global networking, and generally allow the easiest access to actual or potential
TNC global inputs, outputs and markets. The importance of air access for TNC
headquarter location has been confirmed by the research of Dunning and Norman
(1987).

 Local amenity. This factor has also been demonstrated as being critical by Dunning
and Norman (1987). It can comprise a wide range of specific factors, ranging from
the quality of local educational and cultural facilities, to general lifestyle. For cities
like Sydney it would probably also include the local climate and the various forms
of amenity given by the harbour.

 Quality and size of local management and labour pools. The particular type of
labour which is significant will depend on the type of global activity. Singapore
has concentrated on producing a workforce which has advanced education in
information technology, as a basis for attracting activities in that field. Sydney’s
 large supplies of Asian language13speakers is proving an attraction for
activities with Asian markets.

 Operating costs. These include the cost of suitable labour, utility costs, and
property rentals. They are very important for cities such as Sydney which do not
have advantages of location or national economic size in the competition for global
activities.

 Sub-regional market size. This is a major factor in attracting global activities to

east Asia, and a generally negative factor for Australian cities.

 National/state policies covering investment, planning (including infrastructure),

etc. Such policies include taxation and other investment incentives, national
industry policies, infrastructure investment and pricing policies, and environmental
and development planning policies generally.

For financial activities, special factors operate, including time zone and the stability of
the local currency (perversely, greater instability generates more activity), as well as
the size of the local economy.

1. Sydney as a Global City

a) Overview

Because Sydney is favourably positioned in regard to several of the factors

influencing which cities emerge as global front-runners, it has become a global city to
a significant degree. Hall (1995, p.22) places Sydney toward the top of the group of
cities which are ‘potential’ global cities, and which are best described as sub-global.
Hall includes such cities as Singapore, Hong Kong and Los Angeles in the same
category. At the top of the hierarchy are the truly global cities of New York, London
and Tokyo, which dominate global command and control functions and global finance
system activity (see also Sassen, 1995).

A major reason for Sydney’s importance as Australia’s primary link with the global
economy is its role as the nation’s main international air and communications
gateway, discussed further below. This has been a significant factor in influencing
TNC command and control functions, and associated producer services, to locate in
Sydney rather than in Melbourne in particular, which was Australia’s leading
commercial city up to the 1960s. Sydney’s emergence as Australia’s leading financial
centre - and thus the centre for most international finance transactions - has followed,
assisted by a less conservative financial establishment in the 1960s and 1970s and the
ensuing development of futures trading. Daly (1984) adds that Sydney’s financial
status was also boosted at that time because the city was closer than Melbourne to the
new mining developments in the north and west of the country, and this gave its
merchant banks an advantage for development funding.

Sydney’s level of amenity has also been important. The attractions to foreign
executives of the harbour, beaches, climate and general lifestyle have been important
in influencing international decisions about an Australian and, increasingly, a south
east Asian/Australasian, location.
Sydney also has particular advantages in 14competition with east/south east Asian
cities for global activities such as regional headquarters. The latter are emerging as an
important segment of global activity in east/south east Asia because of the size and
fast growth rate of the regional economy. This means it is strategically necessary and
justified for TNCs to set up autonomous control centres solely for this area. One of
Sydney’s advantages in attracting regional headquarters is its ethnically diverse and
high levels of overseas immigration (discussed briefly below). This means it has
significant numbers of residents who are proficient in the main east Asian languages
in addition to English, the global commercial language. Also, Sydney’s distance from
the large markets of east and south east Asia is significantly compensated by its lower
costs and charges for real estate purchase and rental, and infrastructure services (for
details, see Office of Economic Development, 1994).

a) Employment Structure

Sydney’s employment structure, and changes therein, show how the city’s economy
has altered in response to its increasing global role. This is confirmed by a comparison
with the employment structure of the global cities of New York, London and Tokyo,
and with that of Melbourne (Table 1). The best indicator in Table 1 of a global role is
the proportion of total employment in the finance and business services sector. This
sector includes producer services activities and the finance sector.

Table 1
Employment Share in Manufacturing and Service Industries in Sydney,
Melbourne, New York, London and Tokyo (per cent of total employment)
(1) 1991 (2)
1985/1986 1995
Sydney
Manufacturing 16.7 14.0 13.8
Tertiary industry 74.1 77.8 76.6
Wholesale/retail 19.6 19.4 21.6
Finance & business services 14.3 15.4 16.8
Other services 40.2 43.0 38.2

Melbourne
Manufacturing 20.6 17.8
Tertiary industry 70.8 74.9
Wholesale/retail 19.3 19.8
Finance & business services 11.7 12.7
Other services 39.8 42.4

New York
Manufacturing 15.4
Tertiary industry 73.8
Wholesale/retail 20.2
(3) 17.3
Fire
Services 36.3

London
Manufacturing 16.0
Tertiary industry 78.515
Wholesale/retail 20.5
(3) 18.2
Fire
Services 39.8

Tokyo
Manufacturing 22.0
Tertiary industry 59.8
Wholesale/retail 28.4
(3) 6.1
Fire
Services 25.3
(1) 1985 for New York, London and Tokyo
(2) Data for May, 1995
(3) Finance, insurance, real estate
Sources: Sassen (1991), O’Connor and Stimson (1995), ABS Cat. No. 6201.1.

Table 1 indicates that Sydney’s proportion of total employment in producer services

and finance activities of 17 per cent is now approaching that of New York and
London in the mid 1980s, and is significantly ahead of Melbourne’s share in those
activities. Conversely, although Sydney’s share of employment in manufacturing has
been falling steadily, this reduced share is comparable with that in New York and
London. Like Sydney, the share of manufacturing in total jobs in London and New
York has been declining more rapidly than the national average. New York lost nearly
34 per cent of its manufacturing jobs between 1969 and 1989, while London lost 47
per cent of such jobs between 1971 and 1989 (Sassen, 1995, p.44, citing Fainstein et
al and Buck et al). Both declines were significantly greater than the national average.

The commonality in the structural changes between the global cities suggests some
underlying shared processes. Two that suggest themselves are the working of the
labour market and the working of the property market. The growth of the producer
services and finance sectors, which have well above average income levels, will tend
to attract labour from other sectors and also attract a disproportionate share of new
entrants to the labour force. This will lessen the competitiveness of those sectors such
as manufacturing which cannot pass on the higher costs of attracting labour for their
own activities. Similar effects will be caused through the property market. As
globally-related office activities expand, there will be pressure on land prices both in
existing major office areas and for available land in preferred areas for expansion.
Industrial land prices, especially, in preferred areas will come under pressure, directly
through global activities locating in suitable industrial precincts or indirectly through
pressure to redevelop old industrial areas for residential uses as the latter are displaced
adjacent to the CBD by global and other offices (as in Tokyo). Hence competing uses
for such land, particularly manufacturing, will have to absorb higher land prices if
they can, and reduce activities if they cannot. In these terms the decline of the
manufacturing sector is influenced by competition for land and labour from the
expanding producer services and finance sectors. The property market effect, in
particular, seems to have occurred in Sydney, which has Australia’s highest industrial
land prices, and where global office activities have competed intensively for industrial
land in places such as North Ryde and also helped force out remaining manufacturing
and wholesaling activities from the CBD fringe.
a) Global Command and Control 16Functions

These functions are at the apex of the global economy. A significant concentration of
these is located in Sydney. Two main types of companies exercise global command
and control functions from Sydney. The first is Australian-owned firms which have
started producing in, or exporting to, other countries. The second is foreign-owned
firms which exercise significant sub-global command and control through their
regional headquarters in Sydney.

The dominance within Australia of Sydney as a global or sub-global command and

control centre is broadly given by the proportion of Australia’s largest companies
which have their head office in Sydney. The largest firms are mostly either foreign-
owned or are Australian firms which now have significant trading links with, or
operations in, overseas countries. By the late 1980s, about 150 international
institutions had their head office in Sydney compared to 43 for Melbourne (Daly and
Stimson, 1992). Of the largest 100 Australian companies in 1989, 60 had their
headquarters in Sydney compared to 29 in Melbourne. In 1984, only 45 of the top 100
Australian companies were headquartered in Sydney, just ahead of Melbourne’s total
of 41. Thus Sydney achieved dominance of large Australian headquarter activity
during the period when globalisation went into a more intense and all-encompassing
phase, marked by the deregulation of national financial systems and strengthening of
the global financial system and its influence on companies in Australia and elsewhere.

The latest phase of Sydney’s emergence as a major sub-global centre has been the
attraction of a number of TNC regional headquarters for the east Asia-Pacific region.
Since the start of the Commonwealth Government’s regional headquarter (RHQ)
program in September 1993, Sydney has been the chosen location for 35 of the 59
RHQs attracted under the program and for which locations are known, and the shared
location for a further 3 of the 59 RHQs. Sydney already had a significant
representation of RHQs when the program started. In particular, Sydney had 39 per
cent of the RHQs of the top 20 TNC firms in accounting, advertising, management
consulting and international real estate in 1990, with other Australian cities (10 per
cent), Hong Kong (32 per cent), Tokyo (13 per cent) and Singapore (6 per cent)
sharing the rest (Langdale, 1991, cited in Lepani et al, 1995).

a) Finance Sector

Sydney’s role as the dominant financial centre in Australia and the main link with the
global financial system is suggested by the concentration of bank head offices in the
city. In 1994, Sydney contained 24 of the 36 head offices of banks with a full
Australian banking licence (Office of Economic Development, 1994). The
international dimension of Sydney’s financial sector is suggested even more strongly
by its concentration of foreign banks. In 1988, 155 of the 185 Australian head offices
of foreign banks were located in Sydney (O’Connor and Stimson, 1995, citing
Australian Business data).

A central feature of the growth of Sydney as a global financial centre has been the
strong growth of newer types of financial activity associated with the emergence and
maturation of the global financial system. In particular, Sydney has Australia’s only
futures exchange, where trading in many of the new instruments of global finance
takes place. The original commodities futures trading of the exchange was expanded
into currency futures trading in the early 171980s, interest rate and share index
futures and options trading in the mid 1980s, and share futures trading in 1994. The
total number of futures and options contracts traded at the Sydney Futures Exchange
(SFE) has increased from 1.22 million in 1984 to 31.6 million in 1994 (source: SFE).
By 1994 the SFE was the eleventh largest international exchange in the world
(excluding trading on futures and selected options) (source: SFE). Sydney’s position
in the international time zone band has helped such trading, although competing
exchanges in Hong Kong and Singapore are quite close in this respect.

a) International Trade, Investment, Transport and Communication

Sydney’s global financial role means its banking and finance companies handle the
major share of funds generated by Australia’s trade and international investments to
or from overseas. Activity is also generated by the actual trade in goods and services
and by application of investment funds from overseas. All this activity as well as
movements of business people and tourists to and from overseas are supported by
international transport and communications networks. The focussing of Australia’s
international air services and telecommunications on Sydney reflects the city’s
dominance of Australia’s links with the global economy.

a) Trade

In 1992-93, New South Wales exported $13,246 million of goods, or 21.8 per cent of
Australia’s total (source: ABS Cat. no.5410.0). Much of this was through the ports of
Sydney and Port Botany and through Sydney Airport. Exports by sea through Sydney,
Port Botany and Kurnell in 1992 were $5,437 million (source: ABS Cat. no.5440.0).
This was only 11.6 per cent of total national exports by sea, reflecting the importance
of agricultural and mineral exports from the rest of Australia. However, NSW was the
head office location of nearly 200 of Australia’s top 500 exporters in 1990-91
(O’Connor and Stimson, 1995). Nearly all of these NSW head offices were in Sydney,
reflecting its importance as the location for higher level functions associated with
exports such as marketing and financing. On the other hand, imports through Sydney
ports in 1992 were $16,078 million, which was 39.9 per cent of all Australian imports
by sea. The share of imports through Sydney Airport would have been even higher,
given Sydney’s dominance of international air movements (see below). Overall,
Sydney ports generated about one third of Australia’s container traffic in 1993 (Figure
1).

INSERT FIGURE 1 (CHART) HERE

a) Investment

In recent years, Sydney has been the main destination of foreign investment in
Australia. For example, planned foreign investments in New South Wales of $8.1
billion in 1993-94 were 34.5 per cent of total planned foreign investment of $23.5
billion in Australia in that year (Foreign Investment Review Board, 1994). In the
tourism and real estate sectors, which made up more than half of planned foreign
investment in 1993-94, New South Wales had nearly half of the Australian totals. In
urban real estate, planned investments of $4,952 million were 45.6 per cent of the
national total. This NSW investment would have been almost entirely made in
Sydney. Table 2 shows that most of this foreign investment in NSW real estate was in
the ‘residential for development’ and18‘developed commercial’ categories. The
investment would have tended to assist residential supply and to have increased the
share of foreign ownership of commercial property, albeit while also helping to
increase commercial property supply.

Table 2
Approvals for Foreign Investment in Urban Real Estate - Expressed Investment,
NSW and Australia, 1992-93 and 1993-94 ($ million)
Developed Residential for Developed Commercial Total
residential development commercial for
development
92/93 93/94 92/93 93/94 92/93 93/94 92/93 93/94 92/93 93/94
NSW 0.16 0.20 1.00 2.77 0.32 1.55 0.76 0.44 2.24 4.95

Australia 0.28 0.32 2.54 6.03 0.95 3.19 2.29 1.31 6.06 10.85

Source: Foreign Investment Review Board: 1993-94 Annual Report.

The importance of foreign investment in funding property deals and property

development, especially in the non-residential sector, has significant implications.
Perhaps the main one is that the office and industrial property markets (and the top
end of the residential market) have become more subject to international property
cycles and to international business cycles in general (c.f. Goldberg, 1994). This was
very evident in the Sydney property boom of the late 1980s, when high international
liquidity generated a world-wide property boom, reflected most strongly in global-
status property markets such as Sydney’s. The end of the global boom caused a
recession in the same markets. In Sydney, CBD office prices fell by as much as 50
percent.

a) Air Transport

Sydney was Australia’s first international airport, and it has kept its dominance of
Australia’s international air links as these have expanded over the years. Table 3
shows Sydney’s lead over other cities in terms of number of airlines represented,
direct flights to international destinations, and international departures.

Table 3
Direct International AirLinks,1994

City of departure Number of International International

airlines destinations - departures per
direct flights week
Sydney 40 215 288
Melbourne 25 72 118
Brisbane 19 81 105
Perth 12 61 61
Adelaide 7 9 17
Source: Office of Economic Development (1994), using unpublished data provided by
the (Commonwealth) Department of Transport
In global terms, Sydney was the 25th19busiest city in terms of originating air
traffic in 1988 (excluding Singapore) (Table 4). It had a comparable position in
relation to total air traffic. In the east Asia region, Sydney has almost as much air
traffic as Hong Kong, but much less than Tokyo.

Table 4
Metropolitan Regions Ranked by Number of originating passengers
Metropolitan Region Two or more Originating Total traffic
airports traffic
(Millions of passengers)
New York Yes 31 78
London Yes 25 62
Los Angeles Yes 23 57
Tokyo Yes 22 47
Paris Yes 16 40
San Francisco Yes 16 40
Chicago Yes 15 65
Miami Yes 12 33
Washington-Baltimore Yes 12 35
Dallas-Fort Worth Yes 12 49
Atlanta 11 46
Boston 10 24
Frankfurt 9 24
Houston Yes 8 23
Denver 8 32
Honolulu 7 20
Toronto 6 19
Orlando 6 16
Phoenix 6 16
Seattle 6 15
Hong Kong 6 15
Stockholm 6 13
Philadelphia 5 16
Amsterdam 5 15
Sydney 5 14
Source: Kinhill Engineers (1990), citing BASL data.

a) Telecommunications

Sydney is Australia’s node for overseas telecommunication linkages. It has the head
office of Optus and of the overseas telecommunications activities of Telstra. It is also
the headquarters of the five free-to-air television enterprises and of the new pay TV
companies, all of which receive large volumes of telecommunication traffic from
overseas. Related to this, Sydney is also Australia’s largest centre of film and
television program production, a significant proportion of which is exported overseas.

a) International Tourism

This international air transport dominance means that Sydney captures the main share
of international tourists to Australia (see below) and of international business visitors.
In 1992, New South Wales received 163,000 international business people, compared
to around half that level or less to each of Victoria and Queensland (Office of
Economic Development, 1994, citing Bureau of Tourism Research data). Overall, 47
per cent of the 2.60 million international visitors to Australia in 1992 arrived in
Sydney rather than other cities (Office of20Economic Development, 1994, citing
ABS, Bureau of Tourism Research and NSW Tourism Commission data).

a) Foreign Students

Sydney and other Australian cities are now starting to generate significant income
from overseas students carrying out studies here. In 1994, 23,214 full-fee overseas
students were enrolled in NSW, about one third of the Australian total of 69,819
(Department of Education, Employment and Training, 1995). Students from Asia
comprised 19,815 of the NSW enrolments. The majority of enrolments - 15,348 in
NSW - were in the higher education sector.

a) Foreign Immigration

A major dimension of Sydney’s global role is the number of immigrants from the rest
of the world who come to Sydney to settle. Most of the city’s population increase now
comes from net overseas immigration. In 1991, 1.071 million, or 30.3 per cent, of
Sydney’s population had been born overseas, including 21.0 per cent of the
population from mainly non-English-speaking countries (5.3 per cent from the main
east Asian countries) (ABS Cat. no. 2722.1). As a result, much of Sydney’s
population is proficient in a language other than English. Nearly a quarter (24.8 per
cent) of the population spoke non-English languages at home in 1991. Further, there
were at that date 245,000 persons born overseas who spoke another language plus
spoke English well (ABS Cat. no. 2722.1). The strongly multi-ethnic nature of
Sydney’s population and its large pool of foreign language speakers is a potential
major resource in developing exports to Asia, in particular, as the case studies in
Lever-Tracy et al (1991) suggest.

A. Urban Effects of Sydney’s Global Role

The global role of Sydney has had a number of significant effects on Sydney’s urban
structure. These relate principally to the locations preferred by globally-oriented
activities. In addition, these location decisions have implications for Sydney’s housing
market and the equality of employment opportunities within Sydney. There are also
effects relating to the provision and operation of transport infrastructure needed for
international trade and travel.

1. Location of Global Office Functions

a) Regional Headquarters

The location of regional headquarters since the inception of the Commonwealth and
NSW Government’s RHQ program in 1993 is indicative of the intra-urban impact of
new global and sub-global command and control activity. Figure 2 shows the
locations of RHQs under the program, where these are known.

Of the 27 known RHQ locations, 11 are in (or adjacent to) the Sydney CBD and North
Sydney, emulating the location focus of pre-existing head offices of large companies
in general. However, the location of 16 of the 27 RHQs outside the CBD/North
Sydney zone - mostly to the North Shore - is noteworthy, indicating a more
decentralised pattern than high order command and control functions of longer-
established companies. This seems partly 21because a large number of the new RHQs
are in the information technology sector, which has favoured North Shore locations
for several reasons. These include the positive image of the area and associated
prestige, and the concentration of skilled information technology personnel (and, for
the Australian headquarters to which a number of RHQs are attached, a company
customer base which itself is decentralising to the North Shore). The opening of the
harbour tunnel has also helped by making the North Shore more accessible to the
airport. Advances in information technology itself are assisting this deconcentration.
The North Shore RHQs have located in sub-regional office centres (Chatswood, St
Leonards) as well as in high tech industrial areas (North Ryde, Frenchs Forest).

a) Advanced Producer Services

Transnational company head offices have generated a significant demand for

specialised advanced producer services. This demand has been directed mainly to the
large firms in the advanced producer services sector. It is the major firms which have
the depth and range of expertise and, commonly, the international links required by
the TNCs. Most of the largest accountancy and advertising firms are foreign-owned
and thus have functional ties to equivalent services overseas.

Figure 3 shows the location of the largest firms in the key advanced producer services
industries of law, accountancy and advertising. In law and accountancy, nearly all of
the major firms are located in the Sydney CBD. In advertising, a number of major
firms are also found in North Sydney, as well as inner suburbs around the CBD and in
the Lower North Shore outside North Sydney. The slightly greater dispersion of
advertising firms reflects the smaller average size of the large firms compared with
those in law and accountancy, and the location of four of the five television network
headquarters - the largest advertising clients - in the North Shore/northern suburbs.
Access to major courts for law firms and to high order activities of the financial sector
for accountancy firms contribute to their centralisation in the CBD. In general, the
major advanced producer services firms are mainly located in the CBD and North
Sydney because these locations maximise access to major clients, and because of
prestige.

a) Finance Sector - Global Functions

The globally-related functions of the finance sector are almost entirely carried out in
the Sydney CBD. The same factors that favour large cities as locations for specialised
financial activities also favour locations in city centres. Trust and information
exchange are more easily developed where there are better opportunities for face-to
face contact. The CBD also confers more prestige than other locations.

The Futures Exchange is located in the heart of the CBD. The nine main private client
futures brokers are also located in the CBD near to the exchange (source: Business
Sydney, 1995).

Similarly, merchant banking operations, which largely involve the financing from
global and local sources of special corporate needs (such as takeovers and major
developments), are also concentrated in the Sydney CBD. Of the 97 merchant banking
companies listed in the current Yellow Pages, 88 have their offices in the CBD (with
four of the remaining nine being located 22in North Sydney, and two more on the
CBD fringe in Ultimo).

A similar pattern exists for the location of foreign banks in Sydney. Of the 50 foreign
banks listed in the current Yellow Pages, 46 have their only or main Sydney office in
the CBD. The four outside the CBD are very small in world terms.

1. Commercial Property Market

The overall preferences of firms with global activities embracing transnational

command and control functions, high level advanced producer services, and
international finance have favoured the Sydney CBD in particular, and also the lower
North Shore. In the CBD, the net effect of this has been to help retain central
Sydney’s employment level and provide a significant market for the major increase in
CBD office floorspace since the early 1980s. CBD employment was estimated by the
Department of Planning to be about 190,000 in 1986. The most recent census results
suggest the CBD’s employment had stayed at about the same level by 1991, with
global activities helping to stabilise jobs. By 1988, 55.9 per cent of CBD office space
was occupied by the sectors in which global functions were concentrated (finance
32.9 per cent and professional and business services 23 per cent), (JLW Research and
Consultancy, 1990), these sectors having been the major stimulus to the rapid increase
in office space supply in the late 1980s. In the lower North Shore, global activities
have provided a significant stimulus to the office market since the early 1980s. Thus
far, office development in the CBD and lower North Shore has been able to respond
to the new demands from the global services sector with increased office construction
under existing planning controls and policies, albeit with higher property prices.

Much of this new development to accommodate global and other office activities has
used overseas funding, as the foreign investment data (noted earlier) indicate. This
data also shows that, at the same time, foreign purchases of existing office stock have
been even more important. This foreign commercial property investment has been
concentrated in the CBD, for several reasons: being the best-known area; the security
offered by the CBD’s size and economic structure; and the large size of many
buildings being suitable for the major investments favoured by the bigger funds.

As a result, the level of foreign ownership of the CBD has become significant. In
1984 about 15 per cent of Sydney CBD office properties were estimated to be foreign-
owned (Adrian, 1984). The inflow of foreign funds during the late 1980s boom
increased this level. By 1990, Japanese investors alone owned an estimated 9 per cent
of CBD properties by value (Stimson, 1995), although this has since fallen.

1. Exports and Imports

Global office-based activity represents the most obvious manifestation of Sydney’s

growing global role. But this role also includes a significant sector comprising goods
exporters and importers, now discussed, as well as other service sectors such as
transport, tourism and education (discussed below).
a) Major Exporters 23

Figure 4 shows the location of offices of Sydney’s largest exporters. Three main types
can be distinguished. The first is a group of exporters in the CBD and North Sydney.
These are mainly the administrative offices of trading and mining companies
exporting agricultural, pastoral and mining and metal products produced elsewhere in
Australia. The second group is found on the North Shore and consists of firms
exporting highly transformed, high knowledge goods such as pharmaceuticals and
computer products. The third group consists of exporters found in Sydney’s
traditional areas, particularly the Bankstown and middle west areas, with the export
goods ranging from ‘low tech’ such as building materials to elaborately transformed
manufactures. Exporters in the second and third groups generally combine head office
and production activities on the same site.

a) Importers

As noted earlier, Sydney is the main import centre in Australia. These imports come
through Port Sydney, Port Botany and the airport. In the area between the two ports,
and particularly around the airport, hundreds of establishments handling imports (and,
to a lesser extent, exports) are found in the transport, storage and wholesaling sectors.
Most of the 1991 Inner Sydney Statistical Subdivision (Botany, Leichhardt,
Marrickville and South Sydney Local Government Areas) employment in wholesale
and retail trade of 18,225 and in transport and storage of 7,541 would have been
related to import-export activities based on the ports and airport. The impact of these
sectors has grown as Australia’s economy, like that of other nations, has become more
specialised and the proportion of both exports and imports in Gross National Product
has increased. In Australia, the relative size of the import sector has been magnified
by continuing large balance of payments deficits. The overall effect has been that the
proportion of the central industrial area (CIA) given over to import-export transport,
storage and warehousing activities has steadily increased because of the area’s prime
location near the ports and airport. Yellow Pages data suggest that over half of all
establishments in the CIA are now occupied by wholesalers. This has put pressure on
industrial land prices there, and been a causative factor in traditional manufacturing in
the CIA relocating further out (or, in some cases, closing).

1. Global Activities and Inner and Outer Employment Areas

The preceding discussion indicates that inner area employment zones, notably the
CIA, have accommodated an increasing share and level of import-export activities in
the transport, storage and wholesaling sectors. International tourism has also
stimulated air and road transport activity in the inner area. These increases in activity
have been achieved mainly through the closure or relocation of much of the traditional
industrial base of inner areas. Another smaller, but significant, globally-related
restructuring in inner employment areas has related to the attraction of these areas for
film production, being the main location for writers, actors and film production
personnel and reasonably close to clients in television offices and advertising
agencies. Some film studios have set up in old industrial buildings with suitable
interior spaces; the dimensions of the old RAS showground buildings have likewise
been suitable for the new Fox studios. Old industrial sites in Pyrmont-Ultimo, with
their excellent access to the CBD, are now also proving attractive for television
companies, with the Channel 10 network 24headquarters/studios and two pay
television companies having recently shifted to there.

The impact of global activities on middle and outer employment areas has been much
more selective. There has been a tendency for the newer, more prestigious and
attractive employment areas to be more favoured by globally-oriented companies.

This is most apparent in information technology and other advanced technology

industries, in which an attractive, modern environment in higher amenity areas with
good managerial and professional labour supplies is an advantage for image reasons
and for attracting highly skilled personnel. This is suggested by the group of leading
information industry exporters in Figure 4 located in northern Sydney. Large business
parks with a high quality image reinforced through strict planning controls are
particularly favoured by globally-oriented firms, especially foreign-owned firms.
North Ryde and Frenchs Forest, for example, have a number of TNC Australian head
offices and associated import warehouses in the information technology industry.

The companies attracted to Sydney’s largest business park, Norwest, illustrate these
points. Table 5 lists these companies, whether they foreign-owned, and their product.

Table 5
Companies Locating in Norwest Business Park

Company Ownership Product

Fisons Foreign Pharmaceuticals
Cathay Pacific Airways Foreign Data processing
ARV Food Services Australian Food preparation
Le Reve Foreign Cosmetics
Bullivant’s Natural Health Australian Health products
Products distribution
Interfab Australian Precision laser cutting
Alltech Foreign Scientific equipment
distribution
Source: North Sydney Brick and Tile Co Ltd

Good quality modern outer suburban industrial areas which are located outside the
high tech belt in northern Sydney but with excellent road access have also attracted
TNCs, but with a slightly different emphasis. The TNCs in these areas are generally
firms manufacturing standardised consumer products for the local market, or else
branches which import consumer goods produced in affiliate factories overseas. The
latter group includes high tech import warehouses and offices with a hi fi equipment
specialty, a group which formerly might have located at North Ryde and other
northern Sydney areas. However, the current high price of land and accommodation in
these areas now offsets any advantages of locational prestige (which may not be so
significant for high tech consumer goods such as hi fi equipment, where price
considerations are extremely important). This trend is illustrated in Table 6 by the
composition of firms in Huntingwood industrial estate, on the M4 freeway near
Blacktown

Table 6
Companies Locating in Huntingwood Industrial Estate
Company Ownership 25 Product
Pepsi Foreign Soft drinks
Sony Foreign Hi fi equipment warehouse
Arnotts Biscuits Foreign Biscuit warehouse
Just Jeans Australian Clothing warehouse
Danks Australian
United Distillers Foreign Liquor warehouse
Sharp Foreign Hi fi equipment warehouse
Prospect Electricity Australian Electricity distribution
head office
Source: Australian Financial Review, 2 August 1995

1. International Air Transport

The international operations of the airport are a significant generator of jobs and
output in themselves, in addition to their importance for Sydney’s global activities
generally. In 1988-89, direct jobs in international airlines in the Sydney Airport
economic subregion (Randwick, Botany, South Sydney, Marrickville, Canterbury,
Bankstown, Rockdale, Kogarah, Hurstville and Sutherland) totalled 12, 537
(producing an output of $1,052m), with flow-on jobs totalling a further 4,012 (output
$397m). International operations also accounted for most of the 5,574 direct jobs
(output $412m) in airport administration, airport commerce and airport-associated
activities (Kinhill Engineers, 1990). The third runway is estimated to generate an
extra 5,555 jobs and $463m of output by 2000 (Kinhill Engineers, 1990), with
international operations accounting for most of the increases.

1. International Tourism

International tourism in Sydney has increased significantly since the early 1980s. Its
spatial impact, however, has been limited and largely confined to the CBD and its
environs, with some activity also being generated at well-known beaches, wildlife
parks and the Blue Mountains. The best indicator of the urban effects of international
tourism is the location of major new hotels. Figure 5 shows that of the 18 major hotels
built in Sydney since 1980, 11 were built in the CBD and Darling Harbour. Most of
the rest were built in the Kings Cross area and around the airport. The latter reflect the
increasing importance of business air travel, with TNCs being a significant generator
of such traffic.

The sites of international tourist spectacle and consumption have had significant
effects on urban form, especially around the CBD. The major buildings and facilities
visited by tourists have usually been state-sponsored or preserved with state
intervention. These include the Opera House, The Rocks, the Darling Harbour
exhibition and convention centre, the Museum of Contemporary Art, and major
theatres such as the Sydney Theatre Company at Walsh Bay and the Capitol Theatre.
Around such major attractions there have been less prominent, but still significant
effects on urban form with the growth of restaurants, cafes and retail outlets relying
heavily on tourist trade. This has been particularly evident in the CBD and in the
Kings Cross area. For example, the opening in the CBD in the last ten years of a
number of shops each specialising in clothes from a leading European fashion house
has been greatly stimulated by the growth of international tourism in Sydney.
1. Special Events 26

The state has also funded Sydney’s competition with other cities for world special
events, which are becoming significant in the modern economy of large cities (c.f.
Harvey, 1989). The Eastern Creek motor racing track was built with state funds to
attract the Australian round of the world 500cc championship. Facilities for the year
2000 Olympic Games will be funded to a greater or lesser extent by the state, at least
in the short term. Both the Eastern Creek and the Olympic Games complexes will be a
major advantage in Sydney’s bids for further special sporting events. However, by
their very nature, special events are locationally volatile, as the experience of Eastern
Creek demonstrates. Special event facilities which have a wide range of potential
uses, such as the Darling Harbour exhibition centre and its mooted extensions for
Olympic Games events, will offer the flexibility necessary in such an uncertain
environment.

1. Education and Health Exports

a) Education

As indicated previously, Sydney now has a significant education export sector

through full fee-paying students from overseas. The urban effects of this have been
very localised. The three central Sydney universities (Sydney, UNSW and UTS) have
been the main educational destination of overseas students, and these students have
helped to underpin expansion of university buildings and facilities.

The teaching of English as a second language to foreign students (commonly prior to,
or during, studying in the higher education sector) is now also a significant part of
education exports. Figure 6 shows the location of English language colleges and
centres in Sydney. The main concentration of such centres is around Central station,
reflecting the proximity of UTS and the University of Sydney, part time employment
opportunities in Chinatown, and the high accessibility by public transport. A
secondary concentration is at Bondi Junction. This location is near to a large supply of
rental accommodation and to UNSW, where the highest proportion of foreign students
enrol. In general, although specific data are lacking, most foreign students appear to
live in the inner city and Waverley-Randwick. In these areas, they form an important
part of the private rental housing market.

a) Health Services

Exports of health services are also starting to become significant. Sydney has world
class health treatment facilities in fields such as cardiac surgery in its major hospitals.
The urban effects are as yet limited, but are expected to grow as more fee-paying
patients from Asia arrive, with the teaching hospitals and their environs capturing the
main effects.

1. Housing and Employment Distribution

The growth of Sydney’s global role has implications for the housing market and its
spatial structure and for the distribution of employment opportunities. The starting
point here is to note that there has been an increase in inequality of incomes between
households since the 1970s, at least in part the result of changes in the operation of the
global economy. IBIS Business27Information has calculated that the
economic middle class, defined as households with incomes between $22,000 and
$72,000 in 1991-92 terms, fell from 65 per cent of all Australian households in 1976
to 40 per cent by 1992 (Australian Financial Review, 28 August 1995). The
proportion of households in income groups above and below the middle class both
rose significantly. Among the reasons for this are increased international competition
which has depressed wages except where there is high productivity or skills scarcity,
and the rise of a new wealth class based on participation in a global decision-making
class (Lepani et al, 1995, p.96). The managers and professionals in Sydney’s sub-
global command and control activities and in associated advanced producer services
and international finance activities are typical of this new high income class.

Because the bigger and more wealthy high income group is able to have first choice of
the housing market (c.f. Stilwell, 1993), increased spatial inequality in incomes and in
the housing market have resulted. The favoured locations for high income households
have spread from the North Shore and eastern harbour suburbs to the inner suburbs
(Figure 7). This reflects a number of factors, including the convenient access of the
inner areas to the new global activity jobs in the CBD and North Sydney, and their
concentration of consumption opportunities favoured by the new global class such as
opera, theatre, nightclubs and high quality restaurants. Relative incomes in the
western half of Sydney, by contrast, have declined as the workforce there has few of
the new wealthy global class and many of those now facing increased competition
from overseas countries for lower wage jobs. These changes in income distribution
have been mirrored in the housing market. Relative house prices have increased in
eastern Sydney, most spectacularly in the inner suburbs, and declined relatively in the
western half of Sydney.

Sydney’s role as Australia’s global city, and the concentration of this role in and
around the CBD, is reflected in the greater average incomes of its inner city residents
compared to those of inner Melbourne. Table 7 shows that working age males had
slightly higher incomes in inner Sydney in 1991 than those in middle and outer zones,
whereas in Melbourne the highest working age male incomes were in the middle
suburbs. As for males, working age female incomes were bigger overall in Sydney,
but again the pattern of the inner zone as being more favoured than middle suburbs for
higher incomes is repeated.

Table 7
Percentage of Persons Aged 25-54 with Incomes above $30,000, Sydney and
Melbourne, 1991 (per cent)

Zone Sydney Melbourne

Men Women Men Women
Inner 45.4 29.2 38.2 26.5
Middle 43.0 18.3 44.9 18.7
Outer 44.9 13.0 37.5 9.4
Source: McDonald (1995)

1. Global Infrastructure: Social and Environmental Costs

While employment restructuring resulting from Sydney’s increasing global role has
had social impacts, there have also been specific social and environmental impacts
resulting from the development of28necessary global infrastructure. The
impact of noise levels from increased aircraft movements on residents under Sydney
airport flight paths is presently a major issue, especially following the redirection of
aircraft with the opening of the third runway. Extra costs on airlines and their
travellers are being imposed to pay for noise amelioration measures for occupants
under the flight paths. Planning for Sydney West Airport is ensuring that development
under future flight paths is controlled so that incompatible uses are avoided.

The other major existing global infrastructure costs in Sydney are those caused by
truck movements to and from Sydney’s ports. The lack of sufficient road arterial
capacity around the ports means that inner city residents are subject to high levels of
noise, pollution and congestion. This has already been a factor in causing exports of
wheat and coal to be diverted from Sydney to Port Kembla.

A. Planning Issues and Responses

1. Land/Accommodation Supply

Central functions of planning in helping to maximise the benefits for Sydney of

globalisation are to ensure that a suitable supply of land and buildings, in the right
locations, is available through zoning and development control measures for sought-
after global activities and their work force, and that provision of the necessary
infrastructure is co-ordinated. A principal issue following from this is the extent to
which existing planning controls and programs (which have been to a significant
extent developed prior to the period of rapid globalisation from the early 1980s) can
provide this supply in a manner which does not generate community and
environmental costs. Central issues here involve the extent to which the types of land
and buildings needed by global activities and workers are distinctive, and the
effectiveness of planning in meeting any such distinctive needs.

a) Regional Headquarter Office Supply

Command and control functions of transnational corporations represent the highest

level of global activity. While Sydney’s location makes it unlikely to attract global
headquarters of non-domestic firms, the growth of the east Asian market means it is a
potential location for TNC regional headquarters being set up to service
south-east/east Asia plus Australasia. Some success in this has already been achieved,
and planning has a potential role to play in attracting further regional headquarters.

The principal need of regional headquarters, once a city has been chosen, is an
adequate supply of high quality office space in desired locations (usually the CBD and
its extension to high status suburbs but also, potentially, high grade business parks).
Thus planning needs to monitor the supply, demand and vacancy rate situation of such
office accommodation, and plan for the most suitable way to allow increased office
space to be built when vacancy rates move towards tight levels. Office costs by
themselves are also important as an attraction factor, although cities with underlying
advantages as command and control centres may be able to sustain high office costs
because of the strong location benefits. Broadly similar considerations will apply to
the accommodation needs of advanced producer services which support regional
headquarters, particularly in the case of large law and accountancy firms.
What constitutes the most suitable way of29ensuring an adequate supply of good
quality office space in the CBD and other areas raises its own set of significant issues.
Companies intending to set up large regional headquarters may desire accommodation
in ‘landmark’ buildings which allow appropriate image and prestige to be reflected.
Development controls such as height limits and setback controls, which attempt to
provide a degree of streetscape coherence (such as included in the new Sydney City
local plan), could be seen as limiting the extent of individualistic architecture of the
kind which may be sought by landmark building developers. One alternative planning
approach is the specification of performance standards which allow a high degree of
architectural freedom while at the same time requiring certain environmental
standards to be met. These could include standards relating to heritage context,
streetscape contribution, and the like. The use of performance standards may also
enable office costs to be reduced, and thus increase Sydney’s attractiveness for mobile
head office activities. Even so, key cumulative planning constraints on office supply
such as traffic generation would still seem to require additional mechanisms to ensure
that precinct or business area externalities generated by development are addressed. In
particular, floor space ratios and parking codes need to be related to the traffic impact
of the allowable development.

Whatever planning approaches to ensuring an adequate supply of office space for

global activities are adopted, they will need to consider the particular constraints and
opportunities offered by the long history of Sydney’s CBD. A major general impact of
increased global activity is to make the world more homogeneous and to lessen or
eliminate regional differences. One consequence of this for international investment is
that it becomes harder for individual cities to ‘position’ themselves to investors. Thus
cities which are able to retain and enhance their uniqueness have an important
advantage in drawing the attention of the investment community. The Victorian
government’s Capital City Policy states that Melbourne’s built heritage, which gives
the city elegant and cosmopolitan qualities that mark it out from the ‘soulless glass
and steel cities now commonplace around the globe’, is of world significance and will
be preserved (Victorian Government and Melbourne City Council, 1994, p.39)
Singapore has sought to regain amenity by recreating “old Singapore” (Lepani et al,
199, p.85). Sydney is fortunate to be very well-known in much of the world because
of the uniqueness of the Opera House and the beauty of the harbour, reinforced by the
image of the Harbour Bridge, and these constitute an important marketing and tourist
advantage. However, the CBD’s older built environment is also regionally distinctive,
particularly in its use of local sandstone. The retention of that distinct older built form
will reinforce the identity of the CBD to investors and will indeed be actively sought
by activities such as financial houses wanting an image of solidity and prestige. It will
also increase the attractiveness of the CBD to tourists and make the CBD a more
enjoyable place in which to walk and work, thereby enhancing the CBD’s attraction
for a wide range of labour and its advantages for networking. Thus planning for global
activities in the CBD needs to take into account the advantages of reinforcing the
historic distinctiveness of precincts such as Barrack Street, lower Martin Place, Bridge
Street, and lower Macquarie Street (from Bridge Street to the expressway).

a) Re-Use of Obsolete Inner Area and Harbourside Land

To date, most of the new global activity in Sydney outside the CBD has located
within the older parts of the urban area, a trend that seems likely to continue. While
the operation of market forces, through30higher prices, will provide a mechanism
for adjustment, there is a role for planning in increasing available supplies of land for
global functions.

At the most obvious level, there is a need for planning to reassess existing zonings of
land for industry and housing in the light of current employment trends (both sectoral
and spatial) and considering present economic development and housing needs. This
is already happening, and is epitomised by the establishment of the South Sydney
Development Corporation and associated proposals for rezoning large areas of the
central industrial area for medium density housing. This is in response to the need to
increase housing supply in areas with good access to jobs, services and public
transport, as well as in recognition of the obsolete nature of the location and much of
the building stock there for a range of traditional general and heavy industrial
activities. Industrial zones on the harbour with obsolete uses including gas works,
power stations and oil terminals, which represent very desirable sites for global
activities, are also an excellent example of the need to re-evaluate existing land use
controls to meet contemporary planning needs. In the case of the central industrial
area and perhaps some other older industrial areas, however, the need for more
medium density housing must be weighed against the preference of a range of newer
global and other economic activities for these locations. The central industrial area,
for example, is sought after by a range of activities dependent on international
movements through the airport and Port Botany, such as airline catering, transport
companies, warehouses, etc. A study has been commissioned by the Department of
State Development to assess the needs of economically significant activities for a
location in the central industrial area, which will assist in the replanning of this area.
A possible response to competing demands here is the adoption of mixed use zoning
outside the area most vital to industry, accompanied by performance standards to
control negative effects on residents of industrial use such as truck movements and
noise and atmospheric emissions.

It needs to be recognised that tensions with local communities may emerge as inner
areas are restructured to incorporate global and other new activities. Planning needs to
address these potential tensions and seek ways to resolve them. The degree to which
change is incremental, and the extent to which participation processes allow the
community to genuinely influence major planning outcomes will help determine the
acceptability of restructuring.

A more specific planning concern in the re-use of old industrial sites for global
activity (particularly in regard to harbourside sites) or other uses is the issue of ground
contamination. A number of these were occupied by industries using or producing
materials which poisoned the soil on site. The valuable harbourside and other
locations of a number of these sites means there is a strong case for planning
intervention which can assist in the freeing-up of the land for uses with high regional
utility. At a basic level there is a need to identify the extent of contamination on
prospective industrial re-use sites, and generally ensure that maximum information is
available to assist in decisions about re-use. Planning and development guidelines
should also be produced to assist developers and local planners to bring about
redevelopment.
a) Supply of Greenfield 31Employment Land

Although greenfield industrial sites have not been a major focus of global investment
in Sydney, greenfield business parks (Norwest, Australia Centre and Terrey Hills,
plus the more tightly controlled North Ryde technology zone) have been notably
successful in attracting global activity. This indicates a need by international
businesses for high quality, well-located low density employment zones with flexible
use in which tight planning and development controls are used to create a prestige
image, and in which the corporation’s identity can be expressed in their own head
office building at lower cost than in the CBD. A continuing supply of such land is
needed to provide a full range of sites attractive to global employers. To date the
market, with suitable planning support, has kept up with demands of this type (the
latest example being the newly-opened Riverside Corporate Park, North Ryde), but
the balance of supply and demand in this market needs to be monitored, and action
taken to facilitate rezonings if supply starts to fall short. A key issue for planning here
is the extent to which business parks can be located where there is good public
transport, as the environmental and equity costs of other locations can be great. As a
priority, new business parks and other employment areas should be zoned on vacant
sites along existing and planned public transport corridors. Conversely, there should
be planning to provide good public transport - preferably at least to light rail standard
- to existing major business parks lacking such access. In this respect, prospective
plans to provide a rail link through North Ryde and a light rail or similar link past
Norwest should be strongly supported, particularly as both areas still have room to
accommodate further international activities.

An adequate supply of appropriately located employment land in general is also

important in enhancing Sydney’s attractiveness for global activities, for several
reasons. Some international investment is directed to general industrial zones,
especially the higher quality new ones such as Huntingwood. Further, a tight supply
of general greenfield employment land will place pressure on prices in employment
areas preferred by international activities, particularly the central industrial area, and
to a lesser extent the business parks. In addition, the nature of future site demands by
emerging global activities cannot be known with certainty, and adequate supplies of
general employment land provides flexibility in meeting unknown demands. To date,
Sydney has been able to meet the site demands of new generation global activities
such as the Fox studios and the Olympic Games, but a continuation of this facility
cannot be assumed; on the other hand, there are costs of leaving zoned land vacant too
long because of initial over-zoning. In general, the Employment Lands Development
Program (ELDP) is providing the necessary supply of general employment sites in
Sydney, with the aim of having a stock of zoned vacant land equal to around 5 to 7
years’ demand. There is a case for a more finely tuned ELDP in which supply and
demand in separate sub-markets and sub-regions is closely monitored, given the
significance of global investment in distinctive types of sites including business parks,
high tech areas, and international warehouse locations. There should also be
monitoring of industrial rental and land prices in relation to those in competing cities,
initially in Australia, taking account of general differences in raw land costs. The
application of the NIEIR land requirement prediction model for different economic
activities (NIEIR, 1994), as used for the Victorian government, should also be
considered. Finally, the importance of an adequate supply of greenfield industrial sites
in helping to redress employment imbalances in Sydney exacerbated by global
activity preference for eastern Sydney32should be noted, given that locations for
new industrial zones are largely restricted to outer western and south-western areas.

a) Area-Based Agencies and Programs

Area-based planning agencies and planning programs to enhance the development of

global and other strategic investment have been used by a number of cities around the
world; examples include Development Corporations in the UK and Paris, central city
public-private partnerships in US cities, and publicly-funded technology parks in
dozens of urban areas. Some have been successful in their objectives, while others
have merely relocated economic activity from adjacent areas or not even achieved that
(for a critique of UK inner city initiatives in these terms, see Edwards (1995) and
references therein; for a more general critique of particular types of area-based
planning approaches to attracting economic development, see Henshall Hansen
Associates, 1994).

Although comprehensive area-based planning approaches to achieve economic

development have shown great variation in their effectiveness, it is possible to suggest
conditions under which such approaches to improve the workings of the market are
justified:

 Strategically-located precincts containing obsolete development and fragmented

landholdings which are too small to attract global and other strategically significant
investment. Imrie and Thomas (1993) describe the modestly successful Atlantic
Wharf development in Cardiff Docks (UK), where fragmented land ownership as
well as the need for a planning framework required developers to enter into a
partnership with the public sector.

 Strategically-located precincts with obsolete development and spare infrastructure

capacity, where that spare capacity is not reflected in discounted prices to
encourage take up (which is generally the situation in Sydney). There are elements
of this situation, as far as it concerns the promotion of economic development
(including internationally oriented activities such as the casino), in current
planning for Ultimo-Pyrmont. There, the spare infrastructure of the old goods line
has been a key to providing the new light rail system forming the backbone of the
transport system for new development. The redevelopment of the Walsh Bay piers
is a further example here.

 Where it is desired to promote development of spatially clustered global or other

strategic activities which generate external economies. Planning and other public
intervention is justified in stimulating development in order to increase the external
economies and thereby promote the efficient working of the cluster. The best
example in city planning is the promotion of advanced technology complexes (via
technology zones/parks and the like), in which externalities are produced by the
transfer of information between proximate firms, increased attractiveness for
establishment of component suppliers and users, and increased visibility and
prestige as a high tech cluster. Henshall Hansen Associates (1994) found that
public agency technology zones are best at providing certainty for investors about
future sophisticated factors of production; net increases unemployment have been
achieved in their study examples, although the cost-effectiveness of public
 infrastructure investment in the zones33is questionable, and that expenditure
needs to be carefully targeted.

The Government is currently developing an Advanced Technology Park (ATP) on

surplus rail land at Eveleigh, where it is intended that research from the three central
universities be developed and applied. To maximise the potential for the development
of spin-off advanced technology industry and related development from the ATP, a
strategic plan for the industrial area around the ATP needs to be made, particularly as
accommodation within the ATP will be largely limited to research itself. The strategic
plan should identify means of facilitating the use of industrial land in the ATP
precinct for advanced technology applications. It should also provide a blueprint for
developing a supportive environment for such activities. This could range from
landscaping to enhance the area’s attractiveness and image, to the provision of means
for researchers and others in the area to network with each other and exchange
information, e.g. via a local pedestrian or cycle system focusing on the ATP and on
cafes and the like. Improved pedestrian and other public transport links between the
ATP and the three universities are also important. More broadly, there is a need to
monitor the supply of, and demand for, land and buildings for advanced technology R
and D and production in different sub-regions, and to plan for an increased supply
before supply becomes too tight.

a) Tourism Accommodation and Attractions

Tourism is now a very significant part of Sydney’s global activities, and issues
associated with the supply of accommodation for increasing tourist numbers are likely
to become even more important in the run up to the year 2000 Olympic Games. A
particular issue is the availability and cost of hotel sites in the CBD and environs
especially, which poses a particular challenge for price- and location-sensitive
segments of the market such as the 3 star level. There is an obvious need, as for other
global activities, to monitor supply and take-up of new hotel accommodation in each
major category, and extend this to forecasts of supply and demand because of likely
continued significant expansion in tourism numbers (for an example of such
forecasting for Sydney, see Grosvenor (1995)).This will be particularly important in
the period leading to the Olympics, with some forecasts predicting a shortage of
accommodation over the next few years. The question of supplying adequate visitor
accommodation needs to be given high priority in planning for the Olympic Games.
Beyond this, little seems to be known of the influence of the CBD property market on
hotel room supply and price, and hence the potential impact of planning measures
intended to influence the property market in relation to hotel demand.
Notwithstanding this, a case for floorspace ratio bonuses for hotels in the CBD could
be argued on the grounds that the externality effects of hotels are on balance more
positive than office development, because less traffic per square metre of floorspace is
generated in peak hours, and because tourist activity increases the liveliness of the
CBD at night. It has been suggested that a more competitive and differentiated retail
sector in the CBD is needed to maximise the advantages of tourism for Sydney.
Planning and other policies to achieve this should be considered, although there are
signs that the situation is improving with the recent opening of boutiques for several
leading European couturiers.

More fundamental are the planning and development issues concerning the
relationship between tourism and business, especially in the CBD. On the one hand,
tourism could be seen as adding to 34congestion in the city, and increasing the
price of CBD land by adding to demand. In addition, the long lead times required to
develop both offices and hotels means that the office building cycle may be
accentuated. On the other hand, the present steady increase in international tourism -
which cannot necessarily be assumed to continue indefinitely, though - could be
regarded as helping to level out the large fluctuations in CBD development caused by
the economics of the office building cycle. In addition, there may be
complementarities between tourist and business development, such as the availablity
of weekend hotel rates and off-peak air fares for tourists at times of lower business
demand. Moreover, tourists tend to be heavy users of the city rail and ferry systems,
which help their viability and capacity to provide good services in peak hours for
CBD workers.

Related to this, there is a growing demand by visitors for serviced apartments in all
price ranges up to that of visiting executives. This demand raises its own set of issues,
notably the potential reduction of private rented accommodation for low income inner
city inhabitants which may result. However, planning solutions to this conflict are
possible, as the redevelopment of the near-CBD Crown St. Hospital site showed,
where new medium density accommodation was split evenly between public housing,
owner-occupied apartments, and serviced apartments.

In tourist zones outside the CBD, particularly Bondi and Manly, joint state-local
planning strategies to retain and enhance local environmental qualities as tourist
numbers increase seem likely to be needed. Local planning measures to address
congestion generated by tourists in other areas, such as Paddington on Saturday, also
seem desirable. More widely, the continuation of state initiatives to enhance the range
of high quality cultural facilities in Sydney should be strongly encouraged in a global
context. This will not only increase Sydney’s attraction for tourists but also make the
city a richer environment for people we wish to persuade to locate activities in Sydney
(c.f. Lepani et al, 1995, p. 123), as well as existing residents.

a) Needs of Other Consumption-Related Exports

Tourism is only a part of a growing export segment related to consumption. Education

and health sectors are both expected to steadily increase their exports, while cultural
tourism, business tourism and visitors to special events are growing segments of the
general tourism sector which have their own issues and policy responses.

There is a general need to identify the planning needs of the export-related activities
of these sectors. This would include needs for overseas student accommodation, and
the temporary accommodation needs of patients, temporary workers, and hospital etc.
visitors. It should also include institutions’ site expansion needs to accommodate
export-related activities. For the central universities, co-ordination of planning for
these needs with planning of the ATP and surrounding precincts is desirable.

The infrastructure and facilities being built for the Olympic Games has potential for
further international activities beyond 2000, and seem likely to be able to provide for
a range of special events after that time. In any case the planning needs of individual
special events tend to be distinctive, and not identifiable in any detail until the event
itself has been captured. Planning thus has to be essentially reactive in dealing with
many of the newer elements of the post- 35modern global economy characterised by
increasing fragmentation and unpredictability.

a) Sydney’s Stock of Large Sites

An analysis in the late 1980s showed that Sydney had a lower stock of large industrial
sites than Melbourne or Brisbane (Department of Planning, 1990). The regional stock
of large industrial and other sites (notably special uses sites) is a highly significant
resource for attracting major land-using global activities, such as film studios, tourist
resorts, internationally-oriented business parks, and some special events. Large public
sector-owned sites are specially valuable, given their potential long term flexibility of
use.

There is a need to monitor Sydney’s supply of large sites, especially sites which are
underused or vacant, and their take-up by new development. Broad indicative long
term uses of major sites should also be identified, preferably within a regional
economic strategy framework - see below. There is a particular need to establish a
planning strategy incorporating long term indicative uses for government-owned sites.
This would provide, amongst other things, a benchmark for considering possible
opportunity costs (in terms of potential lost long term globally-related activity, for
example) of short term proposals for particular uses. Nevertheless, this should not
imply a need to keep large sites vacant for long periods, as this has its own costs. The
recent experience of the Fox studios proposal suggests that it is particularly critical
that the planning system and other government approval processes are able to respond
effectively to proposals to change the use of large government sites.

1. Transport and Communication Infrastructure

Efficient transport and communications infrastructure is an important factor in making

cities internationally competitive. While this is obvious in such cases as Bangkok,
lack of efficient transport infrastructure is threatening even London’s long term
competitiveness (Daniels, 1995; Coopers and Lybrand Deloitte for LPAC, 1991). The
transport and communications planning issues for Sydney centre on several areas of
infrastructure, as discussed below.

a) Sydney West Airport

The development of Sydney West Airport (SWA) to full international status is critical
to meeting Sydney’s long term air traffic demands and thus to retaining Sydney’s
dominance of international air traffic access - and all the global activities related to
this - to and from Australia. The third runway at Sydney Airport will be used to
capacity within the next decade or so (Kinhill Group, 1990), and SWA needs to be
operating as a full international airport by then. The Federal Government has in fact
agreed to provide funding for this to occur before 2000. To realise the demand
required to make a full international operation viable, rapid rail and road transport
connections between SWA, Sydney Airport and the CBD will be required. Planning is
in hand for this. Funding for rail access to SWA, however, appears to be very
uncertain, and this will need to be addressed quickly.

The importance of fast access to SWA is reinforced when changes in management

philosophy in recent years are considered (Lepani et al, 1995, pp. 118-119). Time-
based management has increasingly36replaced resource-based control as the
critical importance of the “time when a decision, product, costing or quality structure
becomes available” becomes recognised (ibid). Cities with fast transport links
between airport and office will therefore achieve major locational advantages.
Conversely, airport locations will become even more attractive for a range of
international activities.

The development of SWA thus provides a major opportunity to develop an

international activity zone in western Sydney around the airport. The amounts of land
potentially available for this under and near the flight path are very large. An
economic development planning strategy for the land in the SWA environs is
currently being produced. No other single planning initiative has the same potential to
attract significant amounts of new global activity to Sydney. The scope for
internationally-oriented transhipment activities, business parks for foreign companies,
advanced technology development with high export content, and hotel development
around SWA is very significant. Conversely, failure to maximise the development
potential of SWA will endanger Sydney’s ability to compete with other cities for
globally-related activity.

a) Freight Transport

The road strategy proposals in the current Cities for the 21st Century strategy appear
adequate for personal traffic, and in most respects for freight traffic also. Meeting
freight movement needs is critical for achieving maximum economic benefit from
Sydney’s international port and airport infrastructure. At present, freight movements
from this area have several adverse environmental effects, including generation of
traffic congestion and noise, often in residential streets. The Sydney Ports Strategy
notes that additional freight corridors for traffic from Port Botany are needed to the
west and north-west of the port, past the airport, in addition to the freight corridors
identified in the RTA’s strategy.

a) Public Transport

An efficient public transport system is an important contributor to the international

competitiveness of a city. London’s transport problems, noted above, need to be
remedied in large measure by better public transport provision; even Los Angeles has
now installed a commuter rail system.

Good public transport can contribute to global competitiveness in several ways:

 It provides a positive environmental image, which is becoming more important as

global pollution worsens and business, as well as public, environmental
consciousness increases.

 It makes it easier for tourists to move around the city, increasing the access to a
range of tourist attractions and thus making the city more attractive as a tourist
destination.

 It maximises the access of a full range of labour to locations preferred by

international investors and companies. This can be important to the efficient
functioning of global activities: during the strong economic period of the late
 1980s, for example, it was reported37that the CES office in Chatswood (one of
the locations for global activity companies) was finding it difficult to find clerical
labour for local firms, presumably because of the distance from the main clerical
labour pools south and west of the harbour and intervening job opportunities in the
CBD with its excellent public transport access. North Shore firms in locations
remote from rail stations probably found it particularly difficult to get clerical
labour at that time.

This raises the issue of the extent to which global investment can be steered to
locations with good public transport access. As discussed above, new employment
zones in locations favoured by global companies need to be sited adjacent to good
public transport, while new public transport needs to be provided to major
employment areas preferred by international companies but presently lacking good
public transport access (such as North Ryde). Beyond this, it will be difficult for
planning to be directive, given the intensity of competition for these companies.
However, planning does need to consider the adequacy of public transport access to
preferred tourist sites. For the most part, this seems generally adequate at present,
although suggestions for a light rail service from Bondi Junction rail station to Bondi
Beach should be viewed favourably in this regard. In addition, Sydney lacks a proper
coach terminal. A coach-rail terminal at central station would be an appropriate
response to this need, and would assist backpacker tourists in particular.

a) Telecommunications

Advanced telecommunications infrastructure is now seen as a vital competitive

advantage for attracting global activities (e.g. see Brotchie et al, 1991). Sydney is
fortunate in having fibre optic and related telecommunications infrastructure which
compares well with any major city in the world. The planning system has had a very
minor role in this. However, when state planning and other laws begin to be applied to
telecommunications developments after full deregulation of the sector in 1997,
planning may become more significant. There may at that time be a need for planning
directions which balance the provision of up-to-date telecommunications networks
with local community impacts such as visual blight, without significant loss of
efficiency for telecommunications operations.

1. Amenity, Environment and Image

Amenity and the related dimensions of environment and image have a potentially
significant influence on the international competitiveness of a city, although its
specific effect is uncertain. Dunning and Norman’s (1987) study indicates it has been
significant for the location of international head offices within Europe, whereas the
recent experience of the NSW Department of State Development suggests it has not
been important in attracting regional head offices to Sydney. As noted above,
however, it is likely that the importance of clean or sustainable environments will
increase. It is also uncertain as to whether Sydney’s positive image and amenity were
factors causing potential regional offices to include Sydney initially in the set of
possible locations, from which a choice was made using more financial criteria. For
the future, Lepani et at (1995, p. 123) see recreational resources and the social and
physical amenity of our cities as being basic dimensions of Australian cities’ ability to
compete for global investment and functions. Regardless of the exact influence of
amenity, environment and image,38planning can play an important role in
maximising their positive aspects.

a) Streetscape

The potential conflicts between the needs of international companies for landmark
buildings and the like and the associated issue of architectural freedom, and the
cultural and economic importance of distinctive streetscape elements particularly in
the CBD, have been alluded to above. The appropriate planning response is beyond
the scope of this paper. Suffice it to say, however, that it is probably an open question
as to whether quantitative controls as contained in the new Sydney City Local
Environmental Plan on the one hand or performance standards on the other are the
most appropriate way of responding to these issues. Even so, there is a need to extend
the planning attention given to the impact of tall buildings in the CBD to other
concentrations of international offices, such as Chatswood.

a) Image in Critical Locations

Certain parts of Sydney have a major importance in shaping the image of Sydney
because of their role or location. These include Circular Quay, major access roads to
the CBD (especially from the airport), and major beaches. Planning in relation to the
latter has been mentioned above. Circular Quay has been subject to ongoing urban
design proposals, although there now seems to be a hiatus in this. Planning for the
Olympics provides a major opportunity for initiatives to improve the image of such
critical locations.

a) Environmentally Sustainable Development

Planning measures to encourage environmentally sustainable development will

contribute to Sydney’s positive image for international companies and investors.
Relevant policies such as those included in Cities For the 21st Century and in the
Homebush Bay Regional Environmental Plan (which requires development to be
environmentally sustainable) should be strongly supported and extended where
possible.

a) Safety

Most urban centres in advanced countries have experienced increased crime levels in
the last few decades. Lepani et al (1995, p.84) note anecdotal evidence that crime, as
well as congestion, may now have reached levels in New York which are causing key
sections of capital to leave for other major cities. At the strategic planning level,
conditions conducive to crime can be ameliorated through provision of good access to
jobs, services, public facilities and affordable housing, and by avoiding the creation of
areas with concentrations of social dysfunctions.

1. Housing

The growth of a managerial and professional workforce for which there is a global
demand has been an important factor in causing Sydney’s average housing price to
rise to a level well above that of other Australian cities and reduce housing
affordability. Existing planning policies to protect housing affordability, such as
encouraging higher density housing, need39to be maintained. As noted, prices in
eastern Sydney have been particularly affected by increasing globalisation. Thus
planning needs to particularly promote housing affordability and access there, as is
happening with the creation of the South Sydney Development Corporation, for
example. This will help ensure that a suitable workforce remains accessible to global
activities which continue to prefer eastern Sydney locations. More generally, policies
to promote a wide range of housing are important for attracting a variety of
immigrants, and thus maximise the potential for a diverse population with the capacity
to respond to, and indeed create, presently unforeseen opportunities for economic
development in global and other activities.

1. Strategic Planning Frameworks

Global investors seek as much certainty as possible when making investments. One
way in which planning can contribute to this is by providing strategic planning
frameworks for investment. Cities For the 21st Century provides just such a
framework for Sydney. The feasibility of its infrastructure proposals being effected
are greatly increased by its proposals for the strategy to be the benchmark for
government agency capital works proposals in Sydney, and for the determination of
such proposals at Cabinet level in the context of the strategy. Particular aspects of the
strategy which will address planning issues identified here include the various urban
consolidation proposals, measures to increase jobs outside eastern Sydney, and
measures to improve key access routes between sub-regions.

It is also considered that the Cities strategy needs to be supplemented with a regional
economic development strategy, which would set out preferred paths of, and strategies
to achieve, economic development and its distribution within Sydney. This would
involve a higher level of detail than the Cities strategy in terms of identifying sectors
in which Sydney seems to have particular strengths and opportunities. While planning
needs to remain reactive to new global investment opportunities which are presented,
an economic development strategy would mean that otherwise unidentified
opportunities based on Sydney’s strengths can also be more actively considered and
proposed to investors, and supported by more targeted infrastructure outcomes.

A. References
Australian Bureau of Statistics (1993) 1991 Census Basic Community Profile (from
CData91

Adrian C (1984) Urban Impacts of Foreign and Local Investment in Australia,

Australian Institute of Urban Studies, Publication No. 119 (AIUS, Canberra)

Brotchie J et al (1991) Cities of the 21st Century (Longman and Cheshire, Melbourne)

Brotchie J et al (1995) Cities in Competition (Longman Australia, Melbourne)

Business Sydney (1995) Book of Lists (Business Sydney, Cremorne Junction)

Coopers and Lybrand Deloitte for LPAC (1991) London: World City (HMSO,
London)
Daly M T (1984) The revolution in 40international capital markets: Urban
growth and Australian cities Environment and Planning A, Vol. 16, pp. 1003-
1020

Daly M T and Stimson R J (1992) Sydney: Australia’s gateway and financial capital,
Ch 18 in Blakely E J and Stimson R J (eds) New Cities of the Pacific Rim,
Monograph No. 43, Institute for Urban and Regional Development, University
of California, Berkeley

Daniels P (1995) Office development and information technology: Sustaining the

competitiveness of the City of London? pp. 226-248 in Brotchie et al (1995)

Department of Planning (1990) Employment Lands Development Program 199x-199x

(Department of Planning, Sydney)

Department of Education, Employment and Training (1995) Overseas Students

Statistics 1994 (AGPS, Canberra)

Dunning J H and Norman G (1987) The location and choice of offices of international
companies, Environment and Planning A, Vol. 19, pp.613-631

Edwards J (1995) Social policy and the city: A review of recent policy developments
and literature, Urban Studies, Vol. 32, pp.695-712

Fagan, B (1995) Globalisation: Implications for labour markets in western Sydney,

pp.15-35 in Bounds M (ed) Globalisation of the West, Urban Studies Research
Group, University of Western Sydney Macarthur

Fagan R H and Webber M (1994) Global Restructuring: The Australian Experience

(Oxford University Press, Melbourne)

Grosvenor R (1995) An analysis of the supply and demand of hotel rooms in Sydney
since 1985 and future directions, Australian Land Economics Review, Vol. 1,
No. 1, pp.20-24

Hall P (1995) Towards a general urban theory, pp. 3-31 in Brotchie et al (1995)

Harvey D (1989) The Condition of Postmodernity (Edward Arnold, Oxford)

Henshall Hansen Associates (1994) Planning Measures for Economic Development

(Department of Planning and Development, Melbourne)

Imrie R and Thomas H (1993) The limits of property-led regeneration, Environment

and Planning C: Government and Policy, Vol. 11, pp.87-102

JLW Research and Consultancy (1990) Trends in Australian Office Space Demand: A
Review of CBD Occupiers (JLW Research and Consultancy, Sydney)

Kinhill Engineers (1990) Proposed Third Runway Sydney (Kingsford Smith) Airport
Draft Environmental Impact Statement (Federal Airports Corporation, Mascot,
NSW)
Langdale J (1991) Telecommunications41and cities: International perspectives,
Urban Policy and Research, Vol. 9, No. 4

Lever-Tracy C, Ip D, Kitay J, Phillips S and Tracy N (1991) Asian Entrepreneurs in

Australia (AGPS, Canberra)

Lepani B et al (1995) The Economic Role of Cities: Australia in the Global Economy
(AGPS, Canberra)

McDonald P (1995) Places for Everyone: Social Equity in Australian Cities and
Regions, Research Report #1, Australian Urban and Regional Development
Review (AURDR, Department of Housing and Regional Development,
Canberra)

O’Connor K and Stimson R J (1995) The Economic Role of Cities: Economic Change
and City Development Australia 1971-1991 (AGPS, Canberra)

Office of Economic Development (1994) NSW Competitiveness Report (OED,

Premier’s Department, Sydney)

Parker J (1995) Turn up the lights: A survey of cities, The Economist, Vol. 336, No.
7925, 29 July

Ratio (with NIEIR) (1994) Industry sector growth and employment location. Report
for Department of Planning and Development, Melbourne

Sassen S (1991) The Global City: New York, London, Tokyo (Princeton University
Press, Princeton)

Sassen S (1995) Urban impacts of economic globalisation, pp. 36-57 in Brotchie J et

al (1995)

Stilwell F (1993) Reshaping Australia: Urban Problems and Policies (Pluto Press,
Leichhardt)

Stimson R J (1995) Processes of globalisation, economic restructuring and the

emergence of a new space economy of cities and regions in Australia, pp.58-
87 in Brotchie J et al (1995)

Victorian Government and Melbourne City Council (1994) Creating Prosperity:

Victoria’s Capital City Policy (Victoria Government and Melbourne City
Council, Melbourne)
 42
I. PART 2: PLANNING FOR A GLOBAL ROLE IN
OVERSEAS CITIES
A. Purpose And Structure
The purpose of this second part of the study of planning for Sydney as a global city is
to describe recent initiatives in a number of major OECD cities in regard to planning
for their global economic role. This part of the study begins by comparing the chosen
cities in terms of their size and global hierarchy position and their planning modes and
instruments. It then looks at the recent experience of planning for a global role in each
city under a series of subject areas: land/accommodation supply, transport and
communication infrastructure, cultural and entertainment sectors, quality of life and
environment, other sectors (education and housing), and financial and management
approaches. It concludes with an assessment of lessons and implications for Sydney.

A. The Selected Cities

1. Choosing the Cities

The cities chosen for analysis were major cities, most with an existing distinct global
role, in six of the seven nations with the largest GNPs in the world. They were Tokyo
(Japan), Frankfurt, Berlin and Düsseldorf (Germany), Paris (France), London,
Glasgow, Newcastle upon Tyne and Sheffield (United Kingdom), New York and San
Francisco (USA) and Toronto (Canada).

1. Data Sources

Each of these cities was visited in late 1995 by the author. Planning and economic
development officials in the cities were interviewed, recent city planning and
development documents and relevant academic commentaries and critiques were
obtained, and site inspections of significant recent planning initiatives in each city
were made (except in Frankfurt, for which only an academic analysis was obtained
and some significant recent public developments were visited).

1. Size and Global Level

The populations of the metropolitan areas of the cities analysed are shown in Table 1.
The metropolitan populations of Tokyo, New York, London and Paris are very high,
being several times that of Sydney. On the other hand, Newcastle upon Tyne and
Sheffield, for example, are small by comparison with Sydney, though each has
interesting lessons for Sydney in their attempts to compete for national and
international economic activity.

Table 1. Metropolitan Area Populations of Selected World Cities

City (1)
Metropolitan Population
Sydney 3,657,000
Tokyo (2)
31,796,000
Berlin 3,400,000
Frankfurt 624,000
Düsseldorf 43 567,000
Paris 9,060,000
London 8,620,333
Glasgow 872,900
Newcastle upon Tyne 1,138,000(metro county)(3)
(4)
285,000 (city)
Sheffield 1,306,000 (metro county) (3)
(4)
532,000 (city)
New York 16,198,000
San Francisco 5,028,000
Toronto 3,822,400
(1)
The Times Atlas of the World (1992) definition: ‘...a continuous built-up area
containing a number of cities and towns’.
(2)
Japanese government definition: comprising Chiba, Kanagawa, Saitama and Tokyo
prefectures.
(3)
Includes some population outside Times Atlas definition.
(4)
Excludes some population included in Times Atlas definition.
Sources: Tokyo: Statistics Bureau, Management and Coordination Agency: Japan
Statistical Yearbook, 1995 (Tokyo, 1995).
Newcastle upon Tyne and Sheffield: Central Statistical Office: Annual Abstract of
Statistics 1995 (HMSO, London, 1995).
Other cities: Times Books: The Times Atlas of the World, 10th Ed. (London, 1992).

Commentators such as Hall (1995) agree that New York, London and Tokyo are
indisputably ‘global cities’. At the next level down are what can be termed ‘sub-
global cities’ (Hall, 1995, p.22). The cities of this level in Table 1 are Sydney,
Frankfurt, Paris, Toronto and San Francisco. The other five cities in Table 1 are what
Hall calls ‘regional capitals’, some performing global functions (e.g.eg. Düsseldorf),
although Berlin may become a sub-global city in the near future.

1. Planning Systems and Governance

Planning in the selected cities is carried out within a variety of planning and
governance systems. These different contexts need to be considered when comparing
the cities’ planning for international economic activity. The principal planning
mechanisms used are strategic planning, zoning and development control,
development corporations, and infrastructure and planning provision. Whether a
particular mechanism is used in a city depends on several factors, including prevailing
ideology and the level of government at which planning powers are vested.

Strategic planning is most apparent in countries with greater commitment to

government intervention to achieve national and community goals. In Tokyo, the
national government’s National Capital Regional Development Plan is a statutory
sStrategic pPlanning document. Each prefecture within the region provides a more
detailed structure plan. In Paris, a national government regional planning agency
determines the future structure of the Paris region via a Master Plan. For German
cities, the federal government specifies general objectives for land use planning by the
states, which in turn produce structure plans. For Berlin, a city-state, a regional
structure plan covering the city and 44surrounding areas in Brandenberg state is
being prepared. In Toronto the four metropolitan governments (the largest with over
half the total metropolitan population) each produce a strategic plan. A structure plan
produced by Strathclyde regional council guides Glasgow’s planning. For English
cities, the national government provides regional planning guidance to councils in
each region. In London, this is supplemented by the activities of the London Planning
Advisory Committee (LPAC), which is jointly funded by local councils and national
government. LPAC provides planning advice covering Greater London to national
government and councils, and carries out non-statutory coordination of planning.
There is no comprehensive strategic planning for the New York or San Francisco
metropolitan areas.

Zoning and associated development control methods are used at the local government
level in all the selected cities. The rezoning of areas with obsolete uses, and
development controls to address building height and overshadowing issues in central
cities, are the main applications of these methods in regard to planning for global
economic activities.

Development corporations and similar agencies are used to stimulate economic

activity in a number of cities. The corporations co-ordinate development in target
areas, usually arrange for basic infrastructure provision, and sometimes have special
site acquisition and land use planning powers. All the British cities studied here, plus
Tokyo, Parish, Düsseldorf and San Francisco have development corporations to
generate economic activity in selected areas of each city. In New York, the Port
Authority develops office complexes and industrial parks as part of its remit. In the
English cities, the development corporations have been given development control
powers within their areas.

The planning and provision of major infrastructure is another key mechanism for
achieving planning goals in the selected cities. This is achieved in a variety of ways.
Motorways are provided by national government in Frances and the UK, and by
state/provincial plus national government in North America. In Japan, national-level
public corporations develop and run motorways. Heavy rail infrastructure is provided
at the national level in Germany, France, the UK and the US, and at provincial level in
Toronto. In Tokyo, private companies and the privatised Japan Rail develop and
operate heavy rail lines. Subways and other light rail infrastructure is provided by
special regional agencies in London, Paris, New York, San Francisco and Newcastle
upon Tyne, the metropolitan government in Toronto, and the city-state government in
Berlin. Local government provides such infrastructure in Düsseldorf, Glasgow and
Sheffield, while private companies (with prefectural financial assistance) do the same
in Tokyo.

Airport infrastructure is provided by the national government in Japan and France,

and by a privatised national level agency in major British cities. In North America,
provision is made at the sub-national level. The metropolitan government level
controls the airport in Toronto, the Port Authority (a state level agency) provides
airport facilities in New York, and the city council does the same in San Francisco.

A variety of arrangements also applyies to the provision of other key infrastructure

items, notably those significant for global economic competition. The national
government has provided Parish with a number of significant cultural facilities. In
Frankfurt the city council has been45responsible for developing a complex of
major museums. Large exhibition and conference venues have been developed by the
city council in Düsseldorf, the prefectural government in Tokyo, and jointly by
federal, provincial and metropolitan governments in Toronto. Major sports stadia are
receiving increasing city government funding in the US and Toronto’s main stadium
received funding at the provincial as well as metropolitan government level.

A. Specific Features Of Recent Planning For Economic

Development
1. Land/Accommodation Supply

a) Key Zones

Key zones for globally related economic activity are a feature of recent planning in
London, Paris and Tokyo. The London Planning Advisory Committee’s 1994
Strategic Planning Advice (LPAC, 1994, p.4) sees the structural changes to London’s
economy necessary for long term viability as a world city as requiring strategic
targeting of vital areas. These include ‘Opportunity Areas’ along the East Thames,
Lee Valley and Park Royal/Paddington corridors (Fig. 8), as well as Central London.

Opportunity Areas are already included in local plans, in London, and as the main
land resources for large scale new site development they represent the most important
opportunities for realising extensive inward investment and new activities in growth
sectors (LPAC, 1994, p.19). They involve redevelopment of ‘brownfield’ sites, which
promotes sustainable development by reducing the need for ‘greenfield’ sites. The
Opportunity Areas are to be related with smaller, but strategic, Preferred Industrial
Locations and Business Parks, as well as areas for community regeneration, into
corridors. These corridors allow economic, housing and other development to be
considered on a strategic scale, and related to accessible transport and labour
catchments along existing and future connecting transport spines.

The East Thames Corridor (ETC) is to be the main target area (Fig. 9). This reflects
its location along the proposed high speed Channel Tunnel Rail Link (CTRL) which is
seen as a counter to West London’s proximity to Heathrow airport (LPAC, 1994,
p.22) This rail link is seen to strengthen the European dimension of the area’s
potential (UK Department of the Environment 1995, p.65). It also reflects the need to
give priority to eastern London which has suffered London’s greatest loss of
employment with restructuring, and which generally has a surplus capacity in land,
labour availability and transport (LPAC, 1994, p.17). Improving the accessibility of
the corridor is seen as central to realising its potential (UK Department of the
Environment, 1995, p.30). In addition to construction of the CTRL, four new or
extended rail lines and motorway widening or linkages are planned or proposed
(including four new Thames crossings to increase investment potential) (ibid, pp. 32-
35).

The experience of the London docklands indicates that large scale planning,
rehabilitation and infrastructure provision can succeed in attracting significant new
economic activity to priority areas. Nevertheless, the expenditures needed for
docklands redevelopment have been high in relation to job provision, and other
priority areas in east London are not as favourably located.
A particularly important development46focus is the East London Development
Focus (Fig. 9). This is the intersection of the Lea Valley Corridor and the ETC, and
contains four Opportunity Areas as well as the Docklands Special Business Zone. The
development of this area to achieve a new multi-site commercial, higher education,
research and technological innovation, exhibition, culture and leisure complex, as a
European Gateway to complement central London, is seen as vital to London’s world
city role (LPAC, 1994, p.22). It would also help achieve a better east-west balance
across London and reduce decentralisation beyond London (LPAC, 1994, pp.22-23).
To realise the potential, new transport infrastructure, encouraging partnerships, giving
investment priority, and co-ordinating infrastructure provision is needed (LPAC,
1994, p.23). The proposed transport improvements are described below. The
Department of the Environment (1995, p.39) has proposed a higher education facility
and science park at the nearby Royal Albert Dock/Basins as ‘image raisers’ to attract
business development. Further east, the Department (ibid., p.47) has also proposed a
master plan at Havering Riverside, just inside London’s orbital motorway, to take
advantage of 240ha. of developable land and a proposed CTRL station, to provide
international visitor attractions (a cinema theme park has been proposed) or regional
headquarters for multinational companies.

In Paris, the regional planning authority has nominated ‘centres of European focus’ as
attraction points for international functions (such as headquarters and research and
development), linked to each other with high grade transport links (particularly rail
transport). The centres are the Paris centre itself, the new office zone of La Dèfense
adjacent to the inner city, zones around each of Paris’ international airports
(Roissy/Charles de Gaulle airport and Massy-Saclay next to Orly airport), and Marne
la Vallée in the east.

Massy-Saclay is the most important research and development area in the Paris
region. It also has excellent transport access, with Orly airport nearby and being 2
km2km from the high speed train line and autoroute (motorway). Its nomination as a
European centre is intended to harness this potential to increase economic
development. In particular, land will be developed for activities related to the research
institutions; in the meantime it is intended to expand the university and create a
military research centre. A total of 3000 ha will be developed, one third of which is
owned by the government and the rest of which is subject to compulsory public
purchase. Marne La Vallée is the last of the Paris new towns and still has considerable
land available as well as good motorway and rail access (the government constructed
thea line to attract Eurodisney).

The Tokyo Metropolitan Government is redeveloping its waterfront as a major new

zone for its global sectors, in the context of a shortage of land in the late 1980s for
office development in central Tokyo. The full scheme is to be completed by 2004, and
the first of the four development phases was finished in 1995. The original targets for
the scheme were 106,000 jobs and a population of 46,000. The master plan is
designed to enhance Tokyo’s identity as a ‘multifunctional international city’ (Bureau
of Citizens and Cultural Affairs, 1994, p.98), with zones for mass media,
‘international business’, information business, fashion design business and convention
business (where an international exhibition centre has been built). The master plan
also incorporates the Tokyo Teleport as well as housing, cultural, sports and
recreation facilities. The waterfront development also provides an opportunity to
upgrade port facilities, including moving 47some port activities. Much of the land
supply for the project is being created via land reclamation carried out by government
agencies. Developers bid for long leases on blocks of the land, and pay for the
infrastructure. Other sites are being developed from obsolete manufacturing and port
facility areas around the waterfront. The government is providing major transport
infrastructure into the waterfront area to give a high level of accessibility. A new
freeway links the waterfront zone with central Tokyo. A light rail line into the area
opened at the end of 1995. A rapid transit line is scheduled to link the waterfront area
with east-central Tokyo. A booming office market ensured the success of the first
phase of development, but the downturn in this market has forced postponement of
phase two.

a) Zoning

Land use zoning is a traditional planning tool. It is widely used in major cities to assist
global and other economic activity. In central London, development pressures from
international and other business, commercial, government and cultural activities are
balanced against each other and local residential communities via Central Activities
Zones in local plans. Within a CAZ, planning policy relates large scale metropolitan
activities with smaller scale uses, including housing, the interaction between transport
capacity and development and improvements to the urban environment (LPAC,
1994,p.16).

For London, LPAC proposes the designation in local plans of three types of industrial
zones, which are to be promoted as London’s prime, strategic industrial opportunities
(LPAC, 1994, pp.38-40). The first type is Preferred Industrial Locations, where there
is adequate transport capacity (particularly proximity to the strategic road network).
The second type is Industrial Business Parks (IBPs). These are to meet needs of
activities requiring higher quality environments. They should be in attractive locations
accessible by public transport with attractive design, layout and general environment.
Partnerships between knowledge-based industries and higher educational/research
institutions should be encouraged; where these links are potentially vigorous, IBPs
should be designated as a third type - Technology Parks - to realise the links on
appropriate sites and maintain them against other development pressures (LPAC,
1994, p.39.) ‘Pump-priming’ by public investment may also be needed to create the
high quality business environment for such activities (LPAC, 1994, p.44)..

In most cities, the redevelopment of obsolete industrial areas requires rezoning for
new uses. In Berlin, the 1994 statutory land use plan provides for a change of use in
several old industrial areas, to accommodate new service sector workplaces as well as
new housing (Senatsverwaltung für Stadtentwicklung und Umweltschutz Berlin,
1994). A variant of this rezoning obsolete industrial areas occurs in Toronto, where
losses of manufacturing have been so severe that there is a significant surplus of
industrial land and some of this has been rezoned to permit high density residential
development.

a) Redevelopment of Obsolete Areas

This has been a central feature of planning for restructuring in major cities since the
end of the industrial era in the 1970s and the associated availability of old industrial
transport sites.
A concern for redressing spatial48imbalance is evident in the
redevelopment of obsolete sites in Paris. As in London, the goal of the 1994 strategic
plan is to steer job growth to the east of the city, to correct the existing employment
imbalance favouring western Paris, while at the same time redeveloping sites in the
west for housing. Bercy, an eastern node situated on the Seine on new and existing
lines of the metro system and with good access to the motorway system, has been
selected in the strategic plan as an economic activity redevelopment focus. Central
government offices, including Ministry of Finance buildings, have already been built
on the right bank. Airspace over rail tracks on Bercy’s left bank is being redeveloped
for the new National Library complex, and offices, a university complex and housing
in the Seine Rive Gauche project (Newman, 1995). The new population will be 15000
and 50000 jobs will be created. Decisions about the principle of development and its
scale and mix were taken by politicians and technical advisors. The project was put to
the community after these decisions and there has been local opposition to the scheme
(Newman, 1995).

The State-owned former Renault site at Billancourt in south-west Paris was also
nominated as a redevelopment area in the 1994 strategic plan. However, development
is currently on ‘hold’ because of local government opposition to Ministry of Industry
proposals for high commercial floor space levels which would return high land prices
to the Ministry.

In eastern Paris the site of a former government abattoir between two metro stations at
La Villette has been redeveloped as one of Paris’ ‘grand projects’ into a showpiece for
science and musical culture and a regional recreational facility. It contains centres for
science and industry, for music and for rock (music) information, together with
playgrounds, a large public park and some public housing. It incorporates re-use of
the old turn-of-century abattoir building and an industrial canal.

In Düsseldorf, industrial areas left vacant after the construction of the steel industry
have been bought by the city government development company, which has then put
in infrastructure to turn the sites into business parks. These are on or very near to
routes of the city’s extensive tram system. In the same city, obsolete port land owned
by the city has been rezoned to allow its development as a centre of creativity and
media. Land price adjustments have been made to support this objective.

Generally speaking the environmental ambience potential of obsolete waterfront sites

in all cities has made them prime targets for economic activity initiatives. While the
London Docklands redevelopment is the most famous, there are numerous similar
examples such as those in Paris just mentioned. In Sheffield the Canal Basin area is
the focus of current redevelopment for offices and leisure uses by the development
corporation. Some redevelopment of Toronto’s derelict waterfront area, particularly
for hotels, has occurred

In New York, where old dockside areas owned by Port Authority became obsolete
with containerisation, the Authority has been developing these areas for new uses
(Fig.10). These include housing, open space and offices such as the World Finance
Centre. The latter is adjacent to the city’s international finance district. One of its
main functions is to encourage the development of new firms associated with the
finance sector, through the granting of small leases in the Centre. The Port Authority
retains development control and design oversight in its redevelopment areas (through
a quasi-government agency, the Battery49Park City Authority in that area), though
actual development is usually carried out by the private sector.

While obsolete transport areas chosen for redevelopment are usually waterfront or
railyard areas, occasionally restrictions on airport expansion and the development of
new airports mean these old airport sites become available for redevelopment. In
Berlin, the old Aldershof airport site is being redeveloped through the city
government’s economic development strategy (Fig. 11). This strategy focuses on
attracting activities which ‘need’ to be in a large city, with office headquarters and
science parks being examples. The Natural Science and Mathematics Faculty of
Humboldt University is being relocated to the Aldershof site as the focus of
development. Seventy hectares has also been designated for high quality science and
technical institutes to restore Berlin’s world status in this area. It is intended private
science-related research and development plus associated production will follow.
Development will also include a media congress and communication centre (including
media workshops) next to the S-bahn station. The image of Aldershof development
will be enhanced by 110ha of open space including a 70ha landscaped area on the old
runway area for recreation, education and ecological regeneration. (Senatsverwaltung
für Stadtentwicklung und Umweltschutz Berlin, 1995, p.3.). The old Tempelhof
airport site is also being redeveloped, in this case for 17,000 service sector jobs as
well as for open space and housing (Senatsverwaltung für Stadtentwicklung und
Umweltschutz Berlin, 1995, p.53).

Science parks are also being planned and developed on greenfield sites, but less
commonly than on ‘brownfield’ sites because of the continuing concentration of
higher education institutions, and their scientific research, in older urban zones.
Tsukuba Science City, a short distance north of the Tokyo built up area and now
largely completed, is the most conspicuous example of such planned greenfield
development.

In London, the development of a new university campus at Dartford, adjacent to the

eastern orbital motorway, has provided the opportunity for development of the
London Science Park. The development is being backed by the borough council, the
university and a major pharmaceutical company (UK Department of the Environment,
1995, p.53).

The prefecture government in southern Tokyo has developed Kanagawa Science Park
on an old industrial site. New buildings contain accommodation for research and
development and related activities and the Park also has a major hotel. The Aldershof
development in Berlin (above) has a science park focus as its core.

In major cities with weaker attractions for international investment, direct financial
incentives may be necessary to secure the redevelopment of obsolete areas. In
Glasgow, which has been attempting to attract regional head offices, the Scottish
Development Agency is understood to have provided some financial assistance to a
developer to enable construction of a 24,000 square metre office complex in the
Broomielaw Special Project Area, a zone of old warehouses along the River Clyde.

Redevelopment of obsolete commercial areas for housing may indirectly support

economic activity objectives. In Glasgow, a planning goal is to improve the image of
the city centre to enhance its attraction for employment-providing investment,
particularly in international sectors such50as head offices and tourism. The
downturn in the office market has meant this sector is not a viable target for the
redevelopment of the blighted central Merchant City Special Project Area, formerly
occupied by wholesale food markets and related activities. Many of the old
commercial buildings are suitable for residential conversion, which is seen by city
planners as maintaining the city centre population and reviving central city investment
as well as providing a generally positive image to other potential investors. To make
residential conversions economic, the Scottish Development Agency has financed
many of the new dwellings now built, while the city council has also provided grants.

Active public sector involvement in the reclamation of derelict industrial land for new
economic activity is a central feature of development strategy in Newcastle upon
Tyne. The Tyne and Wear Development Corporation acquires and assembles derelict
industrial sites, obtains advance outline planning permission, funds site reclamation,
advertises for developers, and funds preparation of sketch plans from selected
developers to enable a final developer to be chosen. The designation of some areas as
10 year enterprise zones, giving developers tax and rate concessions, has assisted the
redevelopment process. One of the development corporation’s projects has been the
redevelopment of 10ha of riverfront land adjacent to the city centre for prestige
offices (plus executive waterfront housing), to provide office locations of
‘international status’. Development Corporations in the London Docklands and the
Lower Don Valley in Sheffield have similarly redeveloped derelict areas, involving
reclamation, infrastructure provision, securing of developers and enterprise zone
designation.

A variant of the development corporation approach is the San Francisco

Redevelopment Authority. This is a City/County agency set up by a state law which
entitles it to raise development bonds repaid through increased property taxes from
redevelopment of blighted/obsolete areas. While the Authority’s redevelopment
projects have not been specifically directed to generating global-level economic
activity, several projects have strengthened the process of restructuring the city’s
economic base toward globally-competitive sectors. For example, the Mission Bay
redevelopment provides for some office development, which will provide an
alternative supply to offset central area planning restrictions on office development
designed to retain the city’s amenity (though the downturn in the office market means
this is not presently an issue). Almost completed redevelopment at the 35ha Yerba
Buena Center on the edge of the downtown area is significant here. As well as offices
and housing, several major buildings boosting the city’s tourism and general image
have been constructed, including a major convention centre, a museum of modern art
(financed by private subscriptions) and a centre for the arts incorporating a theatre,
multi-use forum and three galleries (San Francisco Redevelopment Agency, 19985).

a) Office Parks

The development of office parks to attract headquarters and other office activities is a
potentially contentious planning issue in global cities. The desire to provide an
attractive supply of office accommodation in spacious, high quality environments may
conflict with the need to retain office activity in central cities to encourage public
transport use and promote a visible image of a dynamic urban economy.
The responses of major cities to this issue 51are varied. In Glasgow, the environment,
public transport and redevelopment potential of the city centre are seen as major
strengths in attracting regional headquarters; planning policy thus focuses on the
centre as the location for new offices. In Berlin, the old city centre is being replanned
and redeveloped, with new international head offices being a significant component.

On the other hand, the Toronto metropolitan government has allowed decentralisation
of offices from the central city to reduce overload on the transport system, but
encouraged decentralised offices to locate in designated metropolitan centres and
corridors on the subway network (Metropolitan Toronto Planning Department, 1994,
pp. 9-12). (This decentralisation is in the context of a financial incentive program of
the provincial government to attract global company headquarters to Toronto,
incorporating low interest loans and tax rebates and deferments). A similar approach,
though of much greater scale, is a major part of Tokyo’s long term planning, with
central city transport capacity being the main driving force. Paris office planning is
also based on focal areas outside the old centre, as much for reasons of preserving the
historic building fabric as of transport capacity. The head offices of most of the top 20
French companies are now located in high rise accommodation in La Defense focus
west of the inner city. Several of the focal areas are quite extensive and of lower
density, however, and office park-type development is characteristic, although with
excellent access to existing or planned rail lines. In Frankfurt, an overspill office area
for the overcrowded city centre, with its significant historic built fabric, is being
planned (Kunzmann and Lang, 1994, p.97). The situation in Düsseldorf is similar:
obsolete industrial areas have been rezoned and redeveloped as office parks, served by
the city’s tram network. These have helped address demand by Japanese companies in
particular, in the context of an historic city core and flight path restrictions on central
area building heights. Major office development in London Docklands, attracting very
large levels of overseas investment, has created a high density ‘brownfields’ office
park with excellent new rail access, though development around selected east London
rail nodes, particularly Stratford, is the preferred future strategy. Thus the majority of
major cities have planned for office decentralisation, but to locations which are well
served by rail transport in particular.

Competition for regional headquarters by smaller cities with fewer advantages,

however, can induce planning to encourage offices in areas most preferred by
developers. These are often locations less well served by public transport, especially
rail. In Newcastle upon Tyne, development corporation office parks along the Tyne,
but not served by rail, compete with office accommodation - much of it vacant - in the
centre. In Sheffield, the city plan allows offices in a high quality residential area and
around the airport, neither served by tram, as well as in the city centre and Lower Don
Valley, both with tram access. In general, Sheffield’s policy is to provide a wide
variety of sites in order to attract economic activity to the city, although planning
policy is that such sites should be made available by redevelopment of derelict and
other land accessible by public transport rather than through greenfield development.

Finally, a number of major cities have successfully capitalised on the critical

significance for headquarters of high quality international air service access by
planning for airport office parks. Examples can be found in Paris, London, Frankfurt,
Sheffield and Toronto.
a) Land Use Issues 52

Major city strategies to provide suitable land and buildings for international activities
raise several important issues relating to land use.

In London, LPAC has noted that the redevelopment of industrial land and buildings
for offices has contributed to surplus office space (LPAC, 1994, p.12). It says
planning, fiscal and other measures are needed to return such space to manufacturing,
especially in locations ‘inappropriate’ for office development (ibid).

Housing supply in central cities is important for global competitiveness in several

ways. One of these is to add vitality to the central city, as discussed below. Another is
to enhance central complexes of creative and cultural activities, in particular. Thus
LPAC sees a need for specific housing provision for the economically active, given
the ‘significance of the close links between workplace and homes in the centre’
(LPAC, 1994, pp. 16-17).

In cities where the supply of open space is low, such as Tokyo, the provision of land
for economic development can create tensions with residents, with their desire for
more open space. In Tokyo, a metropolitan government-appointed committee is
investigating the extent, if any, to which the commercial development focus of the
waterfront plan should be reduced in order to more directly benefit Tokyo’s
inhabitants generally via increased provision of parks and recreation facilities.

Strategic land use conflicts may arise where corporations have been established to
promote development in particular zones of metropolitan areas. The desire of such
corporations to maximise economic activity in their areas may mean that sites are
taken over by developments which do not enhance metropolitan economic strategy
goals. In Sheffield, where larger industrial sites are in relatively short supply (as in
most cities), a major retail centre was developed on one such well-located site within
the development corporation area.

1. Transport and Communications Infrastructure

A near-universal transport policy emphasis in major cities is that there should be little
or no increase in highway capacity in the existing urban area, except in areas of major
redevelopment (such as East London or Tokyo Waterfront) and to increase cross-
suburb access in outer areas via orbital highways. Major new road building is now
usually strongly opposed on local and wider environmental grounds (e.g. LPAC,
1994, p.74). Public transport, either existing or proposed, is seen as accommodating
the increase in journey to work trips resulting from new development (e.g. LPAC,
1994, p.65) or as improving the existing accessibility of key areas for international
investment.

Conversely in London, by examining the expected future capacity of the transport

network, LPAC (1994, p.66) has identified locations which have potential for large
scale employment-generating development. As these are greater than potential
development is likely to require, the emphasis should be on new developments which
complement existing development already well serviced by public transport.
Generally, LPAC sees a continuing53program of investment in public
transport, particularly the rail network, as a necessary element in creating the best
climate for new global activity investment (LPAC, 1994, p.34). Good transport
infrastructure is also regarded as important so that employment generated by new
development is not constrained (e.g. LPAC, 1994, p.10). Improved public transport
accessibility, in particular, is seen as addressing this issue in London by linking areas
of employment opportunity and labour surplus (LPAC, 1994, p.10), presumably
because of lower car ownership of labour surplus areas and greater public resistance
to new highway construction within existing urban areas.

a) Rail Transport

The growth of Tokyo as a world city has generated rapid employment growth in the
city centre, causing excessive transport congestion: some rail lines operate at over 200
per cent of rated passenger capacity in the morning peak. To decrease this excessive
centralisation of jobs, planning policy has encouraged the development of alternative
sub-centres in the inner city loop around the centre, and regional centres throughout
outer Tokyo (Fig. 12). For example, subway line 12 is a loop line connecting Shinjuku
sub-centre directly to the inner north-west; from Shinjuku it will loop around Tokyo’s
centre, relieving pressure on the numerous radial rail routes it crosses (Bureau of City
Planning, 1994, p.72) (Fig. 12). It has linear motor traction which allows a reduced
tunnel cross section and thus lower construction costs. Construction of a subway line
linking the three inner west sub-centres, as well as a subway line providing a new
non-radial north-south connection across inner east Tokyo will be accelerated. In
addition, accessibility to the inner west sub-centres from western and south western
suburbs is to be improved and congestion reduced by quadruplication of several lines.
North-south access into Tama centre (the planned development focus of western
Tokyo) is being improved by construction of a monorail (Fig. 13).

The development of peripheral regional centres within the Tokyo metropolitan area is
also being supported to reduce the central area congestion associated with Tokyo’s
global role (Fig. 12). A new rapid rail line from the waterfront sub-centre
development runs to the east, and is planned to eventually run from Chiba centre in
the outer east Tokyo through the waterfront zone to Yokohama centre in the southern
part of metropolitan area, shortening access times from the two other centres to
central Tokyo. It is also planned to link Tsukuba science city, a nominated regional
centre in the outer north of the metropolitan area, to central Tokyo by rail.

The growth of regional headquarters and other office functions in Toronto has also led
to planning for the construction of two new rail lines to the north-west and north. A
major function of the new lines is to encourage decentralisation of offices to major
nodes on the lines, in areas of high existing out-commuting. The new lines will relieve
pressure on the existing transport system caused by central city office expansion.

In Paris, high grade transport links are seen as the main way of attracting investment
to the designated international focii. The main aim in this regard is to improve non-
radial links between the focii. Transport planning priority is being given to public
transport over motorways, as 650 km of the latter have already been built in the Paris
region. High speed (TGV) train connections are being built between the Roissy and
Marne la Vallée focii in the east to the Orly airport focus and on to the south-west.
Another TGV line will connect Roissy with La Defense. A new train line already
links La Defense with the New Town of 54St Quentin-en-Yvelines. It is intended to
connect all four New Towns by rail to strengthen their economic potential. Train links
between main line terminals within the inner city, to improve access within the centre,
are also being planned. The metro rail system is also to be extended to the north and
south, beyond the inner city.

In London, new rail schemes are planned to link future assumed growth of
employment in world city and corporate functions, particularly in Central London, the
Isle of Dogs (London Docklands) and Stratford (the main Opportunity Area in East
London), with areas of available labour (LPAC, 1994, p.33). The new CrossRail,
Thameslink and Hackney-Chelsea rail schemes, to increase east-west and north-south
accessibility across central London, are under investigation (Fig. 14). The Jubilee
Line extension, from central London to Docklands, Greenwich and Stratford, is to be
completed by 1998 and will stimulate development in each of these targeted East
London development areas (UK Department of the Environment, 1995, p.32). A
proposed rail tunnel under the Thames would link the Royal Docks development area
with a wide labour market to the south and increase the potential for major
commercial development (UK Department of the Environment, 1995, p.37).

In Glasgow, funding is also being provided for a new rail line to increase rail access
across the centre of the city, in which the only existing north-south line now stops on
the southern edge of the centre (Fig. 15). The new rail line (‘Crossrail’), which will in
part incorporate an old freight line, will link the two existing east-west lines in the
centre, and continue on to link with existing lines to the southern urban area. The new
line will increase the accessibility of the central Queens Square area in particular, the
focus of the city’s cultural infrastructure. A similar concern is seen in San Francisco,
where the surface rail from the south will be extended to the heart of the downtown
area and its concentration of international offices.

In Europe and Japan, high speed rail transport is increasingly significant in improving
access within and between major cities. To provide it with adequate accessibility for
international businesses, Berlin is relying mainly on fast train services being
developed, linking it with Frankfurt airport and other cities. Middle distance journeys
to cities such as Paris are envisaged as being made via high speed train rather than
aircraft. The new Federal Government axis centred on the existing Reichstag building
will have an adjacent station for high speed long distance trains (as well as regional
train and S-bahn access). This will be on a new north-south long distance rail line
running underground through central Berlin (Senatsverwaltung für Stadtentwicklung
und Umweltschutz, 1995)

The construction of new light rail infrastructure is also prominent in world cities. In
the largest cities, light rail lines are being built to provide early access to special
development zones to assist achievement of full development. In Tokyo the
waterfront development area has been linked to central Tokyo by an automated light
rail line, while north-south access to the centre of western Tokyo’s Tama new town is
being upgraded by construction of a monorail. In Berlin, a tram system is to be built
focussing on Alexanderplatz, the main planned focus of a newly united, international
city, and which is already the main train and bus focus and the only redevelopment
area where high rise buildings will be allowed.
In London, a light rail line to central 55London was built in the early stages of
redevelopment of the Docklands. The Docklands Light Rail, privately funded, was
extended in 1994 and is to be further extended south across the Thames to Lewisham,
providing access to new jobs in Docklands (ibid, p.32).

The planned Croydon Tramlink, comprising three tram lines into Croydon, will
increase the attraction of outer London’s main office centre (LPAC, 1994, p.33). It is
to be completed by 1998. Croydon is one of several outer London centres seen as
having labour and transport capacity for development (LPAC, 1994, p.35).

To increase access between Paris’ middle suburbs, an orbital tram line is being
considered.

In Glasgow, a new underground light rail circle around the city centre, connecting
with the heavy rail system, has recently opened. There are also proposals to build a
tram system east-west across the city centre to link with peripheral housing in the east,
some 15km in total length. The underground and light rail measures increase the
attractiveness of the city centre for investment by decreasing motor traffic and
improving the centre’s access to the workforce. Bus transport in the centre (where the
focus of planning to make Glasgow a competitive international city is its
environmental quality and image) is being improved via bus lanes, bus-only streets,
etc. (Strathclyde Regional Council, 1995).

a) Highways

Construction of motorways and other highways in major cities, to address generally

rising motor traffic volumes as well as to provide for movement associated with a
global role, is now secondary to rail provision in current planning for world cities.
High financial costs in relation to increased person trips, environmental costs and
resulting public opposition are among the main reasons for this situation (e.g. LPAC,
1994, pp. 76-77). The emphasis has shifted to traffic management and control
measures, and encouraging greater use of public transport (Government Office for
London, 1995, p.39). In San Francisco, a proposed motorway route in the central city
has been abandoned and is being redeveloped, principally for offices.

The two areas where major new highway capacity is still being planned are zones of
major regeneration and redevelopment, and circumferential routes, principally around
the edge of the existing built-up area. The latter allow traffic to avoid congested inner
city areas. In London, East London has been targeted as the main regeneration zone.
There, additional highway capacity is seen as likely to be needed to secure the
economic regeneration sought by the government, particularly in the Opportunity
Areas there (LPAC, 1994, p.77). Improvements to the highway connecting the
London Docklands development area to the orbital motorway are under construction,
as is a link from Hackney to the MII motorway (UK Department of the Environment,
1995, p.32).

The M25 orbital motorway around outer London is proposed to be widened by the
government, but this is strongly opposed by local government as not in keeping with
sustainability and demand management approaches to traffic (LPAC, 1994, pp.76-77).
The government also plans M25 link roads in addition to the East London ones, again
opposed by local government. Improvements are also being made to London’s North
Circular road to bring it to motorway 56standard. This is proving very unpopular
at the local level, with the road being located in fully built-up areas of established
suburbs.

Of all the global cities, Tokyo has experienced the strongest central city office growth,
as its world role has increased, with resulting pressures on housing stock and transport
infrastructure. Planning has responded with a policy of developing alternative centres
around inner Tokyo and the provision of transport infrastructure to support these
centres. The most notable is the loop route no. 6 project, consisting of a motor
expressway and rail line no. 12 underneath, connecting the city centre and sub-centre.
In addition, to offset the historic pattern whereby main roads radiate from central
Tokyo, loop roads further out are also being built: the outer ring road and the Shuto
central axis (‘outer outer’ ring) expressway (Fig.16). The new east-west expressway
through the waterfront sub-centre development is a critical part of the loop plans,
enabling the large traffic flows from eastern to southern Tokyo to by-pass the centre.

In Paris, the existing ‘Péripherique’ orbital motorway around the inner area is at
capacity. Another orbital motorway is being built some 3 to 5km further out (Fig. 17).
It is almost complete except in the west, where local government agitation for it to be
built underground has halted construction. Consideration is also being given to
underground duplication of the existing Péripherique, and to construction of a third
orbital beyond the second one.

INSERT FIGURE 17 (paris motorways)

In Düsseldorf a partial motorway ring has been constructed to improve east-west

connections north of the inner city. To improve motor access to the city’s major
exhibition centre and airport in particular (with the centre drawing a large number of
day visitors from major urban areas nearby), an autobahn has been built connecting
the centre and airport with two north-south autobahns straddling the main urban area
(Landeshaupstadt Düsseldorf, 1987, p.48).

In Glasgow, as part of attempts to improve environmental quality for investors and

tourists in the central city, the motorway around the centre’s west and north periphery
is being extended by new links to the east and south, a major aim being to help reduce
traffic in the centre (Strathclyde Regional Council, 1995).

a) Airports

A number of cities with major international airports are planning for capacity
increases to meet continually increasing international air traffic.

In London, an application for a fifth terminal at Heathrow to accommodate another

35m passengers a year within existing runway capacity is now the subject of public
hearings. The government is also examining options for the provision of an additional
runway to serve needs in the early 21st century (UK Department of Transport, 1993).

The Toronto airport authority (controlled by local government) has bought land for a
second airport, and for connecting freeways. However, planning is not presently
proceeding, because of local objections to a new airport. A subway connection from
central Toronto to the existing airport is current metropolitan council policy
(Metropolitan Toronto Planning57Department, 1994, p.30). Federal funding
has been approved for an extension of the subway to San Francisco international
airport.

By early next century, Tokyo’s two airports will be at capacity. Planning is now
proceeding for a new runway at Narita. Preliminary planning for a third Tokyo airport
is also being carried out, with nine sites being considered. A rail line will be built to
the new airport.

In New York, the Port Authority (which operates the region’s airports) is planning to
increase transport capacity and access to the airports to increase the potential and
capacity of the airports themselves. There are plans to connect Kennedy Airport to
New York’s subway system.

Berlin has two international airports, a legacy of its division up to 1989; these are now
to specialise in different destinations, and a rapid rail link between them is planned
(Gollain 1992, p.106).

High quality accessibility to international airports is also a key planning issue. Access
to international airports has been shown by current French research to be a critical
location factor for international offices (Lecomte and Gollain, 1992). In London an
express train line from central London to Heathrow is to be completed in 1997
(Government Office for London, 1995, p.45). A new S-bahn line has been built
between Frankfurt airport and the city centre.

Nevertheless, the development of a high speed rail network in Europe has led to a
marked switch to rail away from air between a number of cities (LPAC, 1994, p.85).
Construction of the Channel Tunnel Rail Link will connect London to this network,
and will provide its own development opportunities. LPAC proposes construction of
an international station at Stratford, to support regeneration in East London, and
another international station further east along the Thames at Rainham to promote a
‘unique’ international development opportunity (LPAC, 1994, p.85).

Smaller air transport facilities close to central business districts to serve the needs of
internationally-oriented but time-constrained, businesses are provided in some global
cities. New York has a downtown heliport. In London, a city airport has been built in
the London Docklands area. A near-city heliport has been operating for over 30 years,
and the government has completed a heliport study looking at demand, noise, safety
and other operational issues as well as potential sites in London (LPAC, 1994, p.86).

a) Telecommunications

Since the 1980s, several major cities have developed teleports, originally enabling
international transmission of data via satellite without distortions from the footprints
of central city buildings. Teleports are defined by the World Teleports Association as
a system providing a means of access to the different modes of long distance
communication, incorporating a network ‘irrigating’ a whole region and often
associated with real estate programs or programs for economic development. In
practice, teleports have developed as locations where economic activity at the
international level is encouraged by the planned provision of advanced
telecommunications infrastructure, notably direct connection with fibre optic cable
which up to now hasve been rare outside 58central city areas. Teleport provision has
been quite widespread amongst European cities in particular. However, the increasing
spread of fibre optic networks on the one hand, and the speed of innovation in
telecommunications on the other, may make the future of teleports problematic.

The Tokyo government has constructed a teleport in its waterfront development zone
connected by fibre optic cable to users, as the centrepiece of a telecommunications
centre: the latter accommodates the goal in Tokyo’s third long term plan for
communications to be a major sector in Tokyo’s future world city role. The teleport is
intended to bring together companies with international business transactions (Office
of Planning and Coordination Tokyo Metropolitan Government, c.1994, p.6).The
teleport is still seen to have a role with the fibre optic network not being extended too
far ahead. However, plans to upgrade the teleport’s capacity by building a large
parabolic antenna have been stopped.

A Berlin teleport of 34,000 square metres has been developed in the city centre close
to major research and development centres and connected to the optical fibre network.
Its aim is to promote small firm development in areas such as satellite
communications and video activities, to develop a concentrated zone specialising in
new communication technologies. The teleport offers access to shared facilities such
as a multimedia video conference room, and also direct satellite access and ISDN
connections (Henry and Thépin, 1992, p.79).

The New York Port Authority has also constructed a teleport - a ‘satellite farm’ - and
an adjacent business park in partnership with the private sector and New York City
(Port Authority of New York and New Jersey, 1995). However, it is the opinion of
banking sector members of New York’s Regional Plan Association that deregulation
of telecommunication networks is now such that it should be left to the market to
provide the most appropriate telecommunications technology.

1. Cultural and Entertainment Sectors

Creative, cultural and entertainment industries are seen as an economic sector

producing globally traded, high value goods and services for which major cities have
significant advantages. In addition, they contribute significantly to cities’ vitality and
cultural richness, enhancing the quality of life; they also have symbolic power in
creating and strengthening cities’ global image (LPAC, 1994, p.43).

One of the most visible global city responses here has been that of Frankfurt
(Kunzmann and Lang, 1994, pp.95-96). There, ‘culture is considered to be a means of
improving the international corporate identity of the city and attracting tourists from
abroad’ (ibid., p.96). This emphasis has resulted in thirteen new museums being built
and others modernised in less than ten years. The city’s music fair and music related
education and training institutions have international recognition (ibid. p.95).

Glasgow City Council has financed cultural activities and infrastructure with the
specific objective of improving investment attraction, particularly for tourism and
regional headquarters. Glasgow was selected as the 1990 Cultural Capital of Europe,
for which a concert hall was built. It has been awarded the title of UK City of
Architecture and Design in 1999, based on a series of proposals including
construction of a national art gallery. With a similar objective, a range of arts festivals
are supported by the council.59Consequential rRegional office
development has so far been very slow to happen.

The Tokyo Metropolitan Government is about to open an international centre of

culture and information intended to ‘inspire creativity and new discoveries’ (Bureau
of Citizens and Cultural Affairs, 1994, p.100) and be visited by people from around
the world. The new centre, the Tokyo International Forum, has a distinctive design
chosen through an international competition and intended to be recognisable world-
wide. The Forum will be a centre for international exchange programs, and is part of
Tokyo’s attempt to turn itself into a ‘global capital of culture’ (ibid., p.100).

Planning is seen to have a role in several cities in supporting the development of

cultural and entertainment activity. In London, LPAC (1994, pp. 43-43) has
recommended that local plans should maintain appropriate sites for large scale
creative industries, such as film, and suitable premises in key locations (especially
Central London) for small companies. Local plans should also encourage re-use by
creative industries of surplus office floor space. For London, there are model policies
for local plans which set out how proposals to stimulate creative activities can be
integrated with policies for urban design, heritage, mixed use, pedestrianisation,
transport etc. (LAB nd; LAB/GLA, 1991).

Creative and cultural zones have been nominated in several cities in order to promote
development of cultural and creative activities, which are seen as areas in which
global and other major cities have significant advantages and potential because of the
concentration of markets, appropriate workforce and private sector support.

In Düsseldorf, media activities have been paired with creative activities as the focus
of redevelopment of obsolete city-owned port land along the Rhine. The area is
adjacent to the Rhine Tower, for television transmission and viewing, which was built
by the city authority’s development company. Appropriate rezoning of the port land
was put in place, and artists and film and TV companies have been encouraged by the
city to occupy studio conversions in old port warehouses. The regeneration of the port
area has included the opening in 1991 the building of a new national television
broadcasting centre, as the flagship for a cultural activity focus for the area. The city
planned for a new media and creative centre for media and film/video companies,
which will include cafeterias and a conference room (LandeshauptsStadt Düsseldorf,
1992, p.14).

In Toronto, the film industry is one of the sectors targeted in the city’s economic
development strategy. The city council has made large warehouses available for the
construction of sound stages, and has rezoned the warehouses to allow this. In
addition, the provincial government subsidised colleges of film animation, in which
Toronto is a world leader.

Moreover, some cities have designated special cultural areas to promote synergistic
cultural complexes and aid urban regeneration. In Sheffield, the city council has
designated a Cultural Quarter in the old cutlery district next to the city centre. The
council has supported development of the Quarter by building studios for popular
music productions and building a media/art/photograph gallery, recycling existing
building space where possible.
In London LPAC has recommended that 60particular attention should be paid to the
incorporation of specific arts, cultural and entertainment (ACE) structural features in
local plans. These are: cultural quarters to harness such activities for urban
regeneration; ‘Theatreland’ to protect and enhance the West End’s world class theatre
concentration; and areas of ACE excellence (to be shown on the Government’s
guiding Metropolitan Diagram) to provide an ‘appropriate planning framework’ for
international cultural complexes at the Barbican, Kensington, South Bank and
elsewhere (LPAC, 1994, p.43).

With the increasing professionalisation and growth of sport, there has been
recognition of its national and international importance for employment, business
generation, tourism and international prestige (c.f. LPAC, 1994, p.106). Major North
American cities have recognised this with public funding of major professional sports
stadia, often with the particular goal of keeping national sport franchises in their city.
These franchises promote a city’s image as well as its economic activity and jobs.
Toronto’s Skydome Stadium was built with joint provincial government- metropolitan
government-private sector financing in 1989. It hosts baseball and football games,
concerts and trade shows, with the entertainment events drawing part of their
audiences from across the US -Canada border. The Tokyo waterfront sub-centre
development includes a tennis park with an all-weather tennis court with seating for
10,000 (Office of Planning and Coordination, Tokyo Metropolitan Government,
c.1994, p.11).

a) Tourism

The tourism industry is a consumer of major cities’ culture and entertainment

activities, as well as their built heritage, is appropriately considered here. As part of
the need to continue generating international tourism, in particular, the need for
continued strategic planning support for new tourist attractions is recognised (LPAC,
1994, p.46).

In general, there seem to be few, if any, explicit planning policies to encourage hotel
development, beyond monitoring of hotel room supply and demand. Nevertheless, the
location of hotels and tourist facilities are seen to be an important concern of
planning. In London, LPAC (1994, p.46) recommends tourist hotel accommodation
should continue to be provided in accessible town centres to reduce tourist congestion
in central London and that other non-residential locations for hotels outside central
London be identified, especially along the Thames.

LPAC also recommends that planning ensure tourism development is accessible by

public transport and that it ‘does not compromise the environmental quality of
residential areas’ (LPAC, 1994, p.47); in general, new facilities should not intrude
into residential areas.

a) Business Visitors

Business visitors are a significant and growing component of tourism in global cities.

Business tourism is a specific sector with its own planning issues. These include
questions such as the quality of access between central cities and major international
airports. They also include the provision of specialised infrastructure associated with
business tourism, particularly convention61centres and exhibition centres. Business
tourism is lost to other cities if conventional exhibition facilities are inadequate.

In Tokyo, an international exhibition centre has been constructed as the centrepiece of

the International Convention Park in the waterfront development area.

In London, which has a shortage of large scale exhibition space, a major exhibition
centre has been mooted and a preferred developer chosen by the London Docklands
Development Corporation (UK Department of the Environment, 1995, p.38). In
Düsseldorf, an international trade centre has been developed by the city
administration with finance from the private sector.

In Toronto, an international trade centre is being built with joint federal, provincial
and local government funding on the latter’s land. The existing exhibition centre has
insufficient space and ceilings that are too low, resulting in the loss of trade shows to
the city. The provincial government is also funding the expansion of Toronto’s
convention centre in order to increase business tourism.

In addition to the planning and provision of facilities such as convention centres,

some cities have adopted highly interventionist policies to increase business visits.
Düsseldorf is a world focus of business tourism because of its concentration of trade
fairs, with 21 of its fairs being the largest of their kind in the world. Driving this
activity is a trade fair company which is over half owned by the city and 20 per cent
owned by the State (Land) government. The trade company contacts industry
associations to attract the fairs.

1. Quality of Life and Environment

The general quality of life and quality of the environment is being seen as an
increasingly important dimension of major cities’ competitiveness.

a) Road and Transport Impacts

As well as improving environmental quality by reducing road traffic, through

enhanced public transport, some global cities have decreased the impact of traffic and
preserved or created open space by putting highway sections underground. In Tokyo,
a tunnel takes highway traffic under one of the city’s largest parks, Shinjuku Park.
Parking lots in Tokyo are being built underground to save surface land costs, but this
will also improve environmental amenity. In Düsseldorf, the federal road authority put
the central city section of the Rhine River expressway underground, creating riverside
open space and mixed use development on the former expressway area. The new east-
west autobahn in the north of the city has been routed underground for two sections of
nearly 3km in total. The surface has been made into linear parks which connect
existing city parks. The new ‘tunnel lid’ parks include areas of artificial wetlands
(Landeshaupstadt Düsseldorf, 1987, p.48). Similarly the pedestrian amenity of the
inner city has been improved by the undergrounding there of the east-west S-bahn
(local rail line) (ibid., p.54).

A variant of this occurs in Glasgow, where the draft central area local plan has a
policy of strengthening motorway planting, including formal tree planting at
motorway entry and exit points to the centre (City of Glasgow District Council, 1990,
p.15). In Berlin, in an 875ha area of 62intended high quality mixed development
(Buchholz-Nord), it is proposed to protect the quality of the main road axis by
reducing heavy traffic through construction of a parallel road in the adjacent industrial
area (Senatsverwaltung für Stadtentwicklung und Umweltshutz 1995, p.44).

Complementing the reduction of transport impacts is planning for good pedestrian

facilities. The pedestrian environment is widely regarded as a ‘vital ingredient in
attracting investment’ (LPAC, 1994, p.80). In London, LPAC recommends that
boroughs develop new pedestrian facilities, by (partial) pedestrianisation of central
London and suburban centres, traffic management and traffic calming, and through
integration of pedestrian routes, ‘Green Chains’ and Metropolitan Walks, with other
pedestrian facilities and the transport system generally (including terminals and
interchanges) (LPAC, 1994, p. 80). The Tokyo Metropolitan Government also sees
pedestrian and general surface-level amenity as being helped by its normal
construction method of continuous elevated expressway.

Glasgow’s City Centre Millennium Plan aims to increase the attractiveness of the city
centre for new offices, retailing and tourists by decreasing the amount of through
traffic, extending pedestrian priority areas by 50 per cent and promoting public
transport (Strathclyde Regional Council, 1995) (Fig.15). Traffic calming is being
implemented in the centre to decrease traffic impacts. Parking measures are also being
used to discourage the use of cars in the centre, with long-stay parking being made
expensive.

a) Environmental Greening

The ‘green framework’ of major cities is seen as important for all major dimensions
of metropolitan planning, which includes its direct and indirect influence on creating a
strong economy (LPAC, 1994, p.93). Measures to maintain and expand the supply of
open space, to improve environmental quality as a key objective, are a feature of
planning in nearly all global cities.

In Britain, a particular emphasis has been placed on the development of ‘green chains’
(footpaths linking open spaces) and ‘green corridors’ (near continuous open space
acting as conduits for plants and animals). A number of green chain links already exist
in London, and more are proposed (LPAC, 1994. p.100). In regard to green corridors,
it is claimed that ‘the benefits of a comprehensive wild life protection and
enhancement policy in terms of promoting London and attracting investment for
economic regeneration are being increasingly recognised’ (LPAC, 1994, p.101).
While there are, as yet, no firm plans for green corridors in London, these are part of
Sheffield city’s current plan. Toronto’s metropolitan plan provides for valley, stream
and waterfront corridors, to be maintained primarily in a natural state, as part of a
metropolitan green space system (Metropolitan Toronto Planning Department, 1994,
pp. 20-21).

a) Built Heritage

Built heritage and the quality of new urban fabric are widely recognised as not only
intrinsically important but as also significant in attracting and retaining businesses,
global workers and tourists. Research on world cities showed that London’s historic
built environment is a major contributor to the city’s international competitive
strength (Coopers and Lybrand, Deloitte 631991). That heritage is regarded as a
major factor in attracting footloose employers, and keeping them (LPAC, 1994,
p.111), with people wanting to work in central London because of its historic
buildings.

In addition, most overseas tourists (69 per cent in 1993) are attracted to London by its
sense of history and heritage (English Heritage and LPAC, 1995, p.36). Specific
building conservation policies are already included in local plans, although there are
areas of special character along rivers, canals and skyline ridges which also require
preservation in local plans (LPAC, 1994, pp.111-112).

Government planning guidance has already ensured that ten strategic views to St
Paul’s Cathedral and the Palace of Westminster are being safeguarded in local plans.
Other local views of strategic importance, including those to international landmarks
such as Tower Bridge, also need to be included in local plans (LPAC, 1994, p.110).

In addition to measures to retain historic built heritage, certain cities have strong
planning controls which require new buildings to be the same scale as old buildings;
thus retaining and reinforcing the traditional character of the built fabric and keeping
the city’s distinctive character. Rigidly enforced floor space and height controls are
imposed on new buildings in inner Paris, with tall modern buildings steered towards
the La Dèfense development zone in particular. In Berlin, offices and other buildings
in the reconstructed city centre are required to be no taller than the traditional Berlin
height limit of 20 metres (except in the central focus of Alexanderplatz), and to
observe traditional building block dimensions. The city is not concerned that this will
decrease inward investment, as it anticipates strong demand consequent upon the shift
of the Federal parliament to Berlin in 1998.

Nevertheless, to reduce developer pressure on inner Berlin and stop the city’s spread,
a series of development centres in the outer ring beyond the city border are to be
supported (Senatsverwaltung für Stadtentwickheng und Umweltshutz, 1995, p.66).

To retain the environmental quality resulting from the fine Victorian architectural
character of Glasgow’s city centre, the draft central area local plan includes a general
presumption against high rise development except for small areas adjacent to the
peripheral motorway. (City of Glasgow District Council, 1990, p.14). New buildings
which are significantly higher than surrounding buildings can have potentially
negative effects on urban environmental quality, as in London where LPAC cites
‘mistakes of the past’ in this regard (LPAC, 1994, p.110). LPAC recommends local
planning policies which ensure all high buildings are of high architectural quality, and
that the English Heritage and the Royal Fine Art Commission be consulted by
boroughs on all applications for buildings significantly taller than their surroundings
(LPAC, 1994, p.111).

Generally, in London, there is a ‘reinforced push for quality in urban design’ to

address concerns that a poorer environment could reduce central London’s ability to
maintain its global and capital city functions (LPAC, 1994, p.33). To achieve the
necessary quality, LPAC recommends, inter alia, that government and boroughs
should apply urban design criteria to ensure that any development achieves a net
benefit in environmental, townscape and landscape terms (LPAC, 1994, p.109).
To increase the attraction for world city 64activities, improved environmental
quality through enhancement of the public realm, in addition to excellent architecture,
is seen by LPAC as required. Thus LPAC has recommended that developers
contribute a proportion of costs for ‘Percent for the Arts’ schemes (LPAC, 1994,
p.13). Glasgow and Sheffield city councils both require developer contributions for
public art to improve the environmental quality of public space in each city. In
Glasgow this policy is part of City Centre Public Realm initiatives, intended to
improve the overall streetscape. Glasgow’s traditional stone built heritage is also
being reinforced by re-introducing stone to new buildings on key sites through grants
under the ‘City of Stone’ initiative (Gillespies, 1995, p.11), as part of policies to
increase tourism.

In industrial and commercial improvement areas in Sheffield, the conservation of old

industrial features of architectural and historic interest is part of a policy to improve
the environment to promote a positive image and attract new industry and business.
The city council makes grants for these and other environmental improvements in the
improvement areas. These are supported by planning policy to encourage a high
standard of landscape design in industrial areas, and confining development causing
air or noise pollution to suitable areas.

a) Role of Housing

Housing provision is now seen as having a role in generating environmental and

living quality in cities, in addition to meeting the needs for shelter of their inhabitants.

In Paris, the planning aim of having a ‘real’ city centre is being addressed by
maintaining mixed uses in the historic inner city. A key strategy for achieving this has
been the development by a government corporation of a national office centre at La
Dèfense, just west of the inner city. La Defense now houses the majority of
headquarters of the largest French companies, reducing pressure to redevelop sites in
the inner city for major offices.

The Berlin city government is requiring office developers to include housing to make
office precincts more lively. Its 1994 plan confirms a major international office
precinct on former wasteland adjacent to the Wall at Potsdamer Platz, and includes a
requirement for developers of offices there to include housing comprising 20 per cent
of total floor space. The objective is to retain life in the area outside office hours. A
similar requirement will apply to other office development areas such as Alexander
Platz.

More widely, in London, LPAC advocates strategic planning support for mixed use
policies in local plans, as mixed uses ‘maintain choice, vitality and a broader
economic base as well as minimise distances travelled’ (LPAC, 1994, p.9). Existing
‘vulnerable’ residential and mixed use areas should be protected (LPAC, 1994, p.35).
In Düsseldorf controls prohibit a change of use from residential to offices in the inner
city, to keep a mix of uses (Landeshaupstadt Düsseldorf, c.1988).

a) Other Elements

Of the other quality of life and environmental dimensions which are significant for
global competitiveness, safety is one of the most significant. The London Planning
Advisory Committee’s 1994 Strategic65Planning Advice (LPAC, 1994, p.3) sees
a safer and more secure London as important for visitors, as well as for those who live
and work there. The Regional Plan Association in New York, drawing on the views of
business leaders in eight key export clusters in the city, also sees a safe environment
as critical to the high quality of life needed to attract and retain the skilled people on
which New York companies critically depend.

1. Other Sectors

a) Education and Training

Education and training are seen as being crucial to economic development prospects
in several global cities, such as London. In the latter, co-ordination between education
and training providers and planning authorities is seen as necessary so that
employment from new development is not constrained by labour market inefficiency.
LPAC suggests planning agreements could require developers to make employment
training and/or apprenticeship provisions to address local and London-wide
inefficiencies in the labour market (LPAC, 1994, p.13).

Higher order education is frequently seen as crucial to the global city role for several
reasons. It is the ‘prime source of higher order skills necessary for effective
competition’ (LPAC, 1994, p.44). It contributes to widely traded services which are
significant job-generators, and its research activities can contribute to innovation for
business. In London, LPAC recommends local plans identify local land capacity to
meet the sector’s needs (LPAC, 1994, p.44). This may require plans providing support
so that higher education uses are not lost to competing activities. The use of surplus
office floor space should be encouraged, as should the provision of affordable housing
for students.

The Tyne and Wear Development Corporation includes funding for training of the
new workforce as part of its strategy for attracting new economic activities. It also
liaises with higher education institutions for the provision of suitable courses for
providing workforce skills needed by the new activities.

The presence of international schools for the children of executives has been shown in
current French research as a significant location factor for international offices. The
eastern Paris region, with its European focus of Marne La Vallée, is considered by
planners to need American and Japanese schools in order to attract investment
(existing such schools are all in western Paris).

In the United States, where there are large variations in the quality of school
education, this is seen as a significant dimension of inter-city competitiveness. Key
export sector business executives in New York, as surveyed by the Regional Plan
Association, regard school education as a crucial component of the quality of life
necessary to keep and attract skilled workers in their sectors.

a) Housing

The housing needs of international executives have been addressed in several global
cities. Current French research has shown that planning for the availability of such
housing is a critical planning action required to attract international offices. In Berlin,
where a number of multinational66companies are establishing head offices
in the wake of the city’s re-designation as Germany’s capital, planners see a need to
satisfy the preference by such executives for detached housing. Little such housing
exists in the city. The city’s 1994 plan designates greenfield sites (basically former
sewerage fields with low level contamination) for such housing, which will also help
satisfy the preferences of Federal government officials when they shift from Bonn
with the national parliament at the end of the decade.

In Paris, there is a good supply of executive housing in the western metropolitan area.
Government regional planners consider that the existing fast train service from the
west to the east plus the motorway network will adequately address the needs of
eastern Paris investment zones, particularly Marne La Vallée, for access to executive
housing.

1. Financing and Management Approaches

a) Development corporations, etc.

The use of special companies to facilitate the construction of infrastructure for

development has been prominent in Japan. These are essentially government business
enterprises, the so-called ‘third sector’. The Tokyo waterfront scheme is being
effected by a waterfront development company in which the Tokyo Metropolitan
Government owns most of the stock. As well as overseeing funding of land
development (see below), the waterfront company has also been a partner with the
private sector in the construction of a number of the buildings in the first phase of the
waterfront scheme.

The use of development corporations to boost economic activity in declining

industrial areas of British cities has been a feature of UK planning since the 1980s.
The most prominent of these is the London Docklands Development Corporation. The
corporations have development approval powers. They are subject to municipal plans
(‘unitary development plans’) which nevertheless are required to take account of
development corporation land needs. Where there is council/corporation disagreement
over this, central government may direct the Council to amend its draft plan following
public exhibition, statutory consultation and possibly a subsequent public inquiry.
Strategic planning goals for metropolitan areas may be more difficult to achieve with
this bilateral planning process: in Newcastle upon Tyne, office vacancies in the
central city are high, while office development in development corporation areas has
proceeded apace.

A variant of public development corporation is found in Berlin. There, on two

redevelopment sites (one an old industrial area of 131ha., the other a former airport of
460ha.), a developer chosen and fully financed by the government has been given the
responsibility for co-ordinating development from the framework plan stage. The old
industrial site at Rummelsburger has a mixture of government and private land
ownership. Compulsory purchase powers over private properties are available, but
have not had to be used as all owners have seen the redevelopment as beneficial. On
the Aldershof airport site the co-ordination process has been more complex. There,
development is intended to create a science park with a relocated university science
institute as the focus: the chosen developer has to co-ordinate development with the
university and a management company,67the latter being responsible for
coordinating private companies.

In Düsseldorf, the city administration owns a subsidiary development company which

carries out developments to increase economic activity throughout the city. It has
redeveloped obsolete industrial areas into business parks and built a television tower
and centre on obsolete city-owned port land intended to be a focus of creativity and
media. To reduce red tape blocking general redevelopment of the land, the city
transferred ownership to a municipal utility company. Some land price concessions
have been made to attract development on the land.

In New York, several variants of the development corporation approach have been
used to redevelop obsolete port and rail land. The (New York) Empire State
Development Corporation, the New York City Urban Development Corporation, and
the New York Port Authority have formed a partnership to redevelop an old railway
terminal for mixed use. On the old port area at Battery Park the Port Authority has
redeveloped its land through a separate Battery Park City Authority, controlled by the
New York City Development Corporation.

The San Francisco Redevelopment Agency is another variant. This is a city/county

agency set up to stimulate development in legally-designated blighted areas, and
whose main funding comes from bonds repaid from increased property taxes (see
below). The city planning department completes the preliminary redevelopment plan
for an area, in conformity with the general city Master Plan. A final redevelopment
plan is then prepared by the Authority, the planning department and a community
organisation (pre-existing, or set up for the purpose). If necessary, the Master Plan
may be modified to conform with the redevelopment plan.

In Paris, development of the Seine Rive Gauche is being implemented by a

development agency with majority shareholding by the City of Paris (Newman, 1995).
The agency operates under company law, which frees it from the administrative
constraints of public bureacracy.

a) Funding Land Assembly and Infrastructure

The extent of public funding for land assembly and infrastructure installation in zones
designated for increased economic activity varies according to local ideology
concerning government intervention and according to the local need for more
employment. Where development corporations have been established, they are usually
funded to enable the purchase of development sites and the provision of part or all of
infrastructure.

In the London docklands, major developers have been required to provide funding for
rail infrastructure. The Tyne and Wear Development Corporation differs in that it
purchases old industrial sites and carries out necessary reclamation (using EEC
funding) before seeking developers. Alternatively, where developers own the land,
‘gap funding’ for reclamation is provided by the corporation to ensure that
commercial returns can be obtained from development.

In the Seine Rive Gauche project in Pris, the development agency has borrowed
funds, 80 per cent guaranteed by the City, to finance provision of development sites.
Costs will be recouped by sale of 68development rights (Newman, 1995).

Government co-ordinated development of special areas may produce an anticipated

development impetus which allows for a higher degree of private sector funding. The
Tokyo waterfront scheme, in which land reclaimed by the government is leased to
companies for 25 years, reverting to the government after 50 years, was initiated at a
time of sharply rising property prices. This enabled the government to require
developers to fund all local infrastructure over the first 25 years, with the expectation
that, over time, rising rents would amply recoup developer spending on infrastructure.
Recently, however, land prices have fallen, and bidding for leases in the second phase
area has been postponed because of lack of developer interest.

In Toronto a version of value capture to pay for new underground rail infrastructure
has been proposed by the metropolitan government. Specifically, it has proposed that
part of the increase in property value due to proximity to new rail stations should be
taken by the government, with 75 per cent of the value capture accruing to the
provincial government (which pays 75 per cent of capital costs of new transit lines)
and 25 per cent to the metropolitan government. However, difficulties are seen in
getting local government to upzone along the new lines to allow value increases to
take place, while it is also considered that the nexus between revenue and expenditure
will be lost as the provincial government share is absorbed into consolidated revenue.

Another version of value capture is used by the San Francisco Redevelopment

Authority. The Authority pays for initial infrastructure and other costs mainly by
raising revenue bonds, which are paid back from increased property taxes generated
by each project (mostly from projects already completed, but sometimes on the basis
of anticipated tax returns from a project). In poorer areas, project costs are allowed to
be partly covered by surpluses transferred from projects in high value areas. Direct
contributions from property owneenrs are also sought as far as possible, such as
through the formation of assessment districts within which all owners pay pro rata
levies to repay bonds raised by the Authority for infrastructure items.

a) Additional Methods of Intervention

While the establishment of development corporations and the provision of public

funding for site purchase and infrastructure are common methods of accelerating
economic activity in major cities, examples of more distinctive methods of
intervention can also be found.

One example is the Tyne and Wear Development Corporation. To achieve the best
possible development on its reclaimed sites, it advertises for developers to produce
outline/sketch plans of development. The corporation selects the best entries and
provides funding for these developers to produce final plans, from which a winning
developer is chosen.

a) Compulsory Purchase Powers

These are a significant instrument to achieve redevelopment goals in a number of

major cities, especially in conjunction with development corporation activities. In
Paris, a corporation set up to oversee development of the La Dèfense complex in mid-
western Paris used compulsory purchase powers to acquire its land from existing
owners. Tyne and Wear Development 69Corporation has compulsory purchase
powers under a special 1980 Act of Parliament. The Berlin city government has made
compulsory purchase powers available to facilitate redevelopment of underused sites.

A. Implications For Sydney

This survey of major cities’ current planning for their global role has several lessons
and implications for equivalent planning in Sydney.

Central to planning’s role is the provision of a suitable supply of land and

accommodation for global activity sectors. Here, the redevelopment of sites which are
vacant or with obsolete pre-existing uses (such as manufacturing, rail or port uses, or
defence activities) should have a high priority given their generally good metropolitan
access. This is especially so where such sites are near major regional transport
infrastructure, and where the sites are large and/or in public ownership. At the same
time all cities are reluctant to allow continued urban fringe expansion (particularly
because of accessibility problems).

Such concerns are now being reflected in Sydney’s planning. The City West areas of
old industrial and rail uses in Ultimo-Pyrmont and Eveleigh are being developed for
globally-related activities such as a casino and advanced technology development.
The development of the old Showground site for a film studio complex is another
example, as is the redevelopment of old industrial land at Homebush Bay for Olympic
Games facilities However, as pointed out in Part 1, the opportunities for attracting
global activities to old industrial areas need to be kept to the fore in planning for
urban consolidation in areas nominated in Cities for the 21st Century such as
Pyrmont-Ultimo and the Central Industrial Area, especially given the latter’s
proximity to the airport.

This leads to a second major issue with implications for Sydney: the encouragement
of mixed use zones. This is desirable on a number of grounds. Planning controls to
achieve a mix of housing and offices and other economic activity in central areas can
address problems of household accessibility as well as increasing the investment
attraction and quality of life in central cities by making them more lively. Efforts to
achieve this in Sydney have become much more significant recently. The new Central
Sydney Local Environmental Plan allows higher floor space ratios for residential uses,
in order to increase the population living in the centre of the city. Some major
suburban rail nodes such as Bondi Junction have succeeded in attracting a significant
residential population to the retail/office core. Nevertheless, there is still great scope
for increasing mixed use zones to create lively, interesting precincts to the inner city
and older industrial areas such as the Central Industrial Area.

Another key issue is the need to retain the built heritage of central areas in the face of
the desirability of attracting global and regional headquarters with an adequate supply
of suitable office accommodation. International experience suggest that the historic
building fabric can be an attraction for workers and tourists alike. It can also create a
distinctive city image which is attractive to investors (as noted for Singapore and
Melbourne in Part 1). In overseas cities, planning controls to retain built heritage are
complemented by strategic planning to develop alternative office centres in suburbs
with good rail transport accessibility. Cities for the 21st Century includes the
development of major suburban centres on the rail network as a central element of its
Strategy. The extent to which this could70reduce development pressure on central
Sydney’s built heritage should be recognised. At the same time, active policies to
preserve central Sydney’s remaining built heritage can also enhance the city’s
attractiveness for new investment.

The surplus office space and demolitions of the 1980s provide abnormal location
opportunities for new office activities, and hence more scope for heritage building
controls. This can also meet the goal of encouraging development which maximises
use of rail lines into central Sydney. Full utilisation of vacant land and office
buildings should be able to satisfy much potential office demand in their medium
term, and potentially increase rail use levels, without the need to threaten central
Sydney’s building heritage. In the end, however, recent overseas experience suggests
that planning attempts to steer office development to preferred locations is now
hindered by low world levels of office development.

A related issue - central city amenity - arises from planning for headquarters. Where
these need to be retained in central cities or attracted there (central cities are still the
generally preferred locations because of face-to-face contact and prestige advantages),
the amenity of central cities becomes even more significant. Global cities such as
New York and Tokyo recognise the importance of regulations reducing the amount of
overshadowing by tall buildings. The preservation of historic buildings, precincts and
views is seen to enhance the ambience of central cities. The Central Sydney Local
Environmental Plan contains significant measures to improve the city’s amenity.
These include controls to enhance streetscape quality via building to front boundaries
and setting upper stories back, and strict controls on overshadowing.

The experience of major overseas cities points to the emergence of the culture and
entertainment sector, comprising activities for which large cities are the major
dynamo, as a key planning issue. These activities have economic growth potential
both as a new industry (such as films and tourism) and as a magnet to ‘global’
investment in other sectors. Planning has a role in promoting and protecting locations
for these activities (via ‘cultural quarters’, theme parks and the like), and for related
facilities such as exhibition centres which draw on the pulling power of cultural and
entertainment attractions. Even more important is the public sector provision or
financing of significant accommodation for cultural, entertainment and related
activities. These include museums, concert halls, cultural centres, exhibition and
convention centres, and sports stadia. European cities have emphasised cultural
facilities while North American city governments have emphasised sports stadia.
Sydney has emphasised both in its recent planning while most cities (including
Sydney) have been concerned to ensure provision of major exhibition/convention
space. Thus Sydney has done much recently in this sector: overseas experience
suggests that its various new facilities could generate much in terms of city image,
tourism and cultural activity and economic activity, and that further facilities will
produce similar benefits.

Transport planning is inevitably a crucial issue in addressing Sydney’s global role.

There are at least three main implications here from the experience of major
international cities. The first is that new rail infrastructure is the dominant means of
improving accessibility in, and through, inner and central cities. This is the case even
where motor traffic congestion is severe, as in London and Paris, and arises from local
community opposition to new expressways and from a general desire for more
sustainable development. The lesson71from world cities for Sydney is that
improved rail access to the central city is a key factor in its longer term attraction for
global investment. This is already being effected with the construction of the airport-
CBD rail line and the Pyrmont-Central light rail link. Proposals to extend the rail
network, as set out in Cities for the 21st Century, are very much in keeping with
recent planning in a number of global cities.

The second transport implication is that cross-suburb road links remain deficient in
most cities, and ring expressways are being completed, though with community
opposition where these are inside the built-up area. A similar situation prevails in
Sydney, although recent planning has favoured radial motorway construction.
Overseas experience suggests that a shift of emphasis to orbital routes may be
justified. The development of further key orbital roads such as the Prospect arterial is
already occurring.

The third transport implication concerns the importance of airports for attracting
‘global’ investment. Airport planning is a vexed area in most cities. While several
major cities are planning to expand airport capacity, opposition arising from
perceptions of increased noise, in particular, is strong. Sydney’s present situation here
is little different. Nevertheless, planning is attempting to increase accessibility to
major city airports, especially by rail, as this has emerged as a significant location
factor for international investment.

The actual planning mechanisms for achieving increased economic activity are a
further issue. Here, Sydney’s recent experience reflects that in other cities. Zoning and
related regulations are important in all cities. These are supported by strategic
directives which nominate particular areas as being suitable for certain types of
economic activities, with these directives being used to help co-ordinate the provision
of transport infrastructure. The nomination in Cities for the 21st Century of
employment zones with existing or planned rail links, such as North Ryde and South
Sydney, can be seen as an example of such a measure in Sydney. The use of
development corporations and the like to accelerate development, particularly in areas
where older uses are now obsolete, is widespread. Sydney’s City West Development
Corporation is one of the larger examples of its kind. Infrastructure and rehabilitation
costs of redeveloping obsolete areas in global cities are recouped to a greater or lesser
extent from resulting land value increases.

After all of these implications and messages for Sydney, there is perhaps one further
lesson. Sydney has unique attributes which provide it with major advantages for
attracting global activities. These unique attributes lie in Sydney’s natural heritage,
which is already world-renowned, as well as its position in Australian history and the
resulting significance of much of its cultural and built heritage.

Sydney’s natural heritage, in particular, can play a stronger role than in cities that are
older. The role is to maintain and enhance the amenity of Sydney as a global city.
ACKNOWLEDGEMENTS 72

The author wishes to thank the following persons for providing information and other
assistance for this study:

Dr Joan Vipond, Kevin Saunders, Danielle Deegan, Kim Ryder and Angela Lindstad,
Department of Urban Affairs and Planning

Dr Paul Paterson and Gerard Noon, Department of State and Regional Development

Professor Ryoichi Shimada, Department of Architecture, Tokyo Metropolitan

University

Mr Kunihiro Honma, Bureau of City Planning, Tokyo Metropolitan Government

Mr Akiko Nakajima, Bureau of City Planning, Tokyo Metropolitan Government

Mr Munemori Hanawa, Director of Protocol, Tokyo Metropolitan Government

Ms Cornelia Poczka, Ministry of Urban Development and Environment Protection,

Berlin State Government.

Mr Hans von Schaper, Werbe und Wirtschartsförderungsamt, Landeshaupstadt

Düsseldorf

Mr Hans von Schaper, Office for City Promotion and Economic Development,
Landeshaupstadt Düsseldorf

Mr Boris Kazanski, Düsseldorf

Dr Josef Konvitz, Urban Affairs Division, OECD, Paris

Professor Jean Bastié, Centre de Recherches et d’Etudes sur Paris et L’Ile-de-France,

Paris

Mr Eric Huybrechts, Secrétariat Général, Institut d’Aménagement et d’Urbanisme de

la Région de l’Ile-de-France, Paris

Mr Dominique Lecomte, Division Economie et développement local, Institut

d’Aménagement et d’Urbanisme de la Région de l’Ile-de-France, Paris

Mr Hervé Blumenfeld, Mission Europe, Division Aménagement Espace, Institut d’

Aménagement et d’Urbanisme de la Région de l’Ile-de-France, Paris

Mr Layton, Planning Department, City of Glasgow District Council

Mr Michael Mattock, Tyne and Wear Development Corporation, Newcastle upon

Tyne

Mr Robin Clement, London Planning Advisory Committee, London

Mr Keith Thorpe, Department of the Environment, London

Ms Rosanna Scotti, Corporate Planning73Division, Chief Administrative Officer’s
Department, Municipality of Metropolitan Toronto, Toronto

Mr Ed Zamparo, Corporate Planning Division, Chief Administrative Officer’s

Department, Municipality of Metropolitan Toronto, Toronto

Mr Philip L Fontaine, Office of the Chairman, Municipality of Metropolitan Toronto,

Toronto

Mr Ronald S Wandel, Office of the Chairman, Municipality of Metropolitan Toronto,

Toronto

Mr Robert Yaro, Regional Plan Association, New York

Mr Christopher Jones, Regional Plan Association, New York

Mr Robert Chaplin, Port Authority of New York and New Jersey, New York

Mr Michael Kaplan, San Francisco Redevelopment Agency

Professor Fred Collignon, University of California Berkeley

A.
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 76

PLANNING FOR GLOBAL ACTIVITIES IN SYDNEY

Glen Searle

Planning Program, Faculty of Design, Architecture and Building

University of Technology, Sydney

 77

The past two decades have seen the development of global, production, consumption and
financial systems generated by information technology developments, financial
deregulation and new, more flexible ways of organising production. These global
economic activities have been concentrated in major world cities. The major
Australian beneficiary of globalisation has been Sydney.

The competition between cities for these activities has been intense in an era of high
unemployment and hypermobile capital. Increasingly the state (including the local
state) has intervened to produce favourable local conditions for global and other
investment. 'Urban entrepreneurialism', involving proactive encouragement of
economic growth by whatever means possible, has become the dominant mode of
urban governance (Harvey 1989; Pickvance and Preteceille 1991). Urban planning
has become a major tool in this state intervention.

Nevertheless globalisation is not a uniformly advantageous process. Global activities

and related consumption by global workers bring low paying as well as very high
paying jobs. As a result, major global cities become economically and socially
polarised (e.g. Sassen 1991). Housing prices increase to high levels, and affordability
becomes more problematic for ordinary workers. Their housing may be taken over by
gentrifiers nourished by the global economy, or it may disappear to meet the land
requirements of global activities and supporting transport infrastructure. Intensified
spatial contrasts within the city in social and economic status and housing reflect the
polarisation (Badcock 1995). The airport expansion necessary for new global
activities lowers local amenity as noise levels increase.

Of all the urban entrepreneurial tools, urban planning is uniquely placed to ameliorate
such costs of globalisation, while at the same time harnessing city strengths to attract
global activities which increase the welfare of its inhabitants. Good planning can
mean that international investment takes place without serious equity or
environmental effects, though much depends on prevailing political will and ideology
and in turn on community awareness and expression. This paper examines planning's
potential role in enhancing global economic activity in Sydney in as environmentally
responsible, equitable and efficient a manner as possible. The paper draws on a
report by the author for the NSW Department of Urban Affairs and Planning (Searle
1996).

The need for such planning reflects Sydney's strengths and growing importance for
global activities. Sydney is Australia's major finance centre and the major location for
Asian regional headquarters and related producer services. It is also the main entry
point for imports, investment, tourists and immigrants. Sydney has several favourable
location factors for global activities, including its Australian pre-eminence in
international air and communication links, its amenity and world icons, its ethnic
diversity, and its low costs relative to Asian cities.

Land and accommodation supply

Planning's main potential contribution to fostering global activities in Sydney is to
ensure that a suitable supply of land and buildings, in the right locations, is available,
and that provision of the necessary78infrastructure is co-ordinated.

REGIONAL HEADQUARTER OFFICE SUPPLY

The growth of the east Asian economies means Sydney has become a potential
location for transnational corporations' regional headquarters being set up to service
south-east/east Asia plus Australasia. Some success in this has already been achieved.

The main planning need of regional headquarters is an adequate supply of high quality
office space in desired locations (usually the CBD and its extension to high status
suburbs but also, potentially, high grade business parks). Thus planning needs to
monitor the supply, demand and vacancy rate situation of such office accommodation,
and plan for the most suitable way to allow increased office space to be built when
vacancy rates move towards tight levels. Office costs by themselves are also
important as an attraction factor, although cities with underlying advantages as
command and control centres seem able to sustain high office costs because of the
strong location benefits. Broadly similar considerations will apply to the
accommodation needs of advanced producer services which support regional
headquarters.

Companies intending to set up large regional headquarters may desire accommodation

in ‘landmark’ buildings which allow appropriate image and prestige to be reflected.
Development controls such as height limits and setback controls, which attempt to
provide a degree of streetscape coherence (such as included in the new Sydney City
local plan), could be seen as limiting individualistic 'landmark' architecture. The use
of performance standards may be one way of allowing architectural freedom within
environmental standards; they may also enable office costs to be reduced. Even so,
key cumulative planning constraints on office supply such as traffic generation would
still seem to require floor space and parking space controls to address precinct
externalities generated by development.

Planning for office space for global activities also needs to consider the particular
constraints and opportunities offered by the long history of Sydney’s CBD. A major
general impact of increased global activity is to make the world more homogeneous
and to lessen or eliminate regional differences. One consequence of this for
international investment is that it becomes harder for individual cities to ‘position’
themselves to investors. Thus cities which are able to retain and enhance their
uniqueness have an important advantage in drawing the attention of the investment
community. The uniqueness of the Opera House and the beauty of Sydney Harbour,
reinforced by the image of the Harbour Bridge, already constitute an important
marketing and tourist advantage for Sydney. However, the CBD’s older built
environment is also regionally distinctive, particularly in its use of local sandstone.
The retention of that distinct older built form in precincts such as Barrack Street,
lower Martin Place and Bridge Street - and not just through spatially random
preservation of individual buildings whose impact can be lost via unsympathetic
neighbouring development - will reinforce the identity of the CBD to investors. It
will also increase the attractiveness of the CBD to tourists and make the CBD a more
enjoyable place in which to walk and work, thereby enhancing the CBD’s attraction
for a wide range of labour and its advantages for networking.
RE-USE OF OBSOLETE INNER 79AREA AND HARBOURSIDE LAND
To date, most of the new global activity in Sydney has located in more central, older
parts of the urban area, a trend that seems likely to continue. While the operation of
market forces, through higher prices, will provide a mechanism for adjustment, there
is a role for planning in maintaining or increasing available supplies of land for global
functions.

The maintenance of industrial zonings to support globally-related activities is a

critical issue in the central industrial area (CIA) in south Sydney. The government
proposes rezoning large areas of the CIA for medium density housing. This is in
response to the need to increase housing supply in areas with good access to jobs,
services and public transport, recognising the obsolete nature of the location and much
of the building stock there for a range of traditional industrial activities. However the
CIA is the first choice of a range of activities dependent on international movements
through the nearby airport and Port Botany, such as airline catering, transport
companies, warehouses, etc. Direct Sydney Airport activities of airline companies
and airport administration and commerce alone generated 9,300 flow-on jobs in 1988-
89 (Kinhill Engineers 1990): it is one of Sydney's global strengths that so many of
these can be accommodated in the CIA next to the airport but also close to the CBD.

A possible response to competing demands here is the adoption of mixed use zoning
outside the area most vital to industry, accompanied by performance standards to
control negative effects on residents of industrial use such as truck movements and
noise and atmospheric emissions (mixed use zones of this kind, without these
performance standards, have now been proposed in the 1996 draft South Sydney
Local Environmental Plan). The danger of this approach for industry is that, as local
amenity improves with the construction of new dwellings and parks, higher land
prices and rising community aversion will force remaining firms out at an accelerating
rate. More generally, the CIA needs a strategic plan which recognises the area's role
for global activities (like similar globally-designated zones as the East London
Development Focus (London Planning Advisory Committee 1994)), and identifies
priority precincts for these activities and related transport and urban design
requirements. There is a particular opportunity to capitalise on growing demands by
international companies for offices close to major airports to reduce travel times.
Existing industrial land around the proposed Mascot station on the new airport-CBD
rail line would be ideal for this purpose.

It needs to be recognised that tensions with local communities may emerge as inner
areas are restructured to incorporate global and other new activities as has happened
in Paris (Newman 1995), London Docklands and elsewhere. Planning needs to
address these potential tensions and seek ways to resolve them. The degree to which
change is incremental, and the extent to which participation processes allow the
community to genuinely influence major planning outcomes will help determine the
acceptability of restructuring.

The environmental potential of obsolete industrial waterfront sites in global cities

such as London, Tokyo and Toronto has made them prime targets for economic
activity initiatives (Searle 1996 p44) ever since the Rouse-inspired redevelopment of
Boston's waterfront. Sydney has already realised the potential here of Darling
Harbour for global tourist activities. Remaining waterfront industrial sites are being
converted to up-market housing (with the80major exception of Sydney Olympic
Park/Millennium Park). In global competition terms this could be justified as meeting
demands for high amenity residential locations by globally mobile households. Most
of the sites concerned also have little prospect of the decent public transport needed to
make new activity areas more environmentally acceptable.

A more specific planning concern in the re-use of old industrial sites (particularly
harbourside sites) for global activity and other uses is the issue of ground
contamination. A number of these were occupied by industries using or producing
materials which poisoned the soil on site. There is a strong case for planning
intervention which can assist in freeing-up the land for uses with high regional utility.
The Department of Urban Affairs and Planning's recent Planning Guidelines for
Contaminated Land is a start in the right direction.

SUPPLY OF GREENFIELD EMPLOYMENT LAND

Although greenfield industrial sites have not been a major focus of global investment
in Sydney, greenfield business parks (Norwest, Australia Centre (Homebush) and
Terrey Hills, plus the more tightly controlled North Ryde technology zone) have been
notably successful in attracting regional headquarters and other global activity. This
indicates a need by international businesses for high quality, well-located low density
employment zones with flexible use in which tight planning and development controls
are used to create a prestige image, and in which the corporation’s identity can be
expressed in their own head office building at lower cost than in the CBD. A
continuing supply of such land is needed to provide a full range of sites attractive to
global employers. To date the market, with suitable planning support, has kept up
with demands of this type, but the balance of supply and demand in this market needs
to be monitored, and action taken to facilitate rezonings if supply starts to fall short.
A key issue for planning here is the extent to which business parks can be located
where there is good public transport, as the environmental and equity costs of other
locations can be great. As a priority, new business parks and other employment areas
should be zoned on vacant sites along existing and planned public transport corridors
(as in London, for example (LPAC 1994 pp38-40). Conversely, there should be
planning to provide good public transport - preferably at least to light rail standard - to
existing major business parks lacking such access. In this respect, prospective plans
to provide a rail link from Parramatta to Chatswood through North Ryde and a light
rail or similar link past Norwest should be strongly supported, particularly as both
areas still have room to accommodate further international activities.

An adequate supply of appropriately located employment land in general is also

important in enhancing Sydney’s attractiveness for global activities, for several
reasons. Some international investment is directed to general industrial zones in
western Sydney, especially the higher quality new ones such as Huntingwood.
Further, a tight supply of general greenfield employment land will place pressure on
prices in employment areas preferred by international activities, particularly the
central industrial area, and to a lesser extent the business parks. To date, Sydney has
been able to meet the site demands of new generation global activities such as the Fox
studios and the Olympic Games (albeit involving the state's usurping of local
development control in major cases), but a continuation of this facility cannot be
assumed. On the other hand, there are costs of leaving zoned land vacant too long
because of initial over-zoning. In general, the Department of Urban Affairs and
Planning's Employment Lands81Development Program (ELDP) is
providing the necessary supply of general employment sites in Sydney, with the aim
of having a stock of zoned vacant land equal to around 5 to 7 years’ demand. Finally,
the importance of an adequate supply of greenfield industrial sites in helping to
redress employment imbalances in Sydney exacerbated by global activity preference
for eastern Sydney should be noted, given that locations for new industrial zones are
largely restricted to outer western and south-western areas.

AREA-BASED AGENCIES AND PROGRAMS

Area-based planning agencies and planning programs to enhance the development of
global and other strategic investment have been used by a number of cities around the
world.

Although comprehensive area-based planning approaches to achieve economic

development have shown great variation in their effectiveness (Edwards 1995;
Henshall Hansen Associates 1994), it is possible to suggest conditions under which
such approaches to improve the workings of the market are justified:

 Strategically-located precincts containing obsolete development and fragmented

landholdings which are too small to attract global and other strategically significant
investment. Imrie and Thomas (1993) describe the modestly successful Atlantic
Wharf development in Cardiff Docks (UK), where fragmented land ownership as
well as the need for a planning framework required developers to enter into a
partnership with the public sector.

 Strategically-located precincts with obsolete development and spare infrastructure

capacity, where that spare capacity is not reflected in discounted prices to
encourage take up (which is generally the situation in Sydney). Elements of this
rationale, as far as it concerns the promotion of economic development (including
internationally oriented activities such as the casino), are reflected in current
planning for Ultimo-Pyrmont. There, the spare infrastructure of the old goods line
has been a key to providing the new light rail system forming the backbone of the
transport system for new development.

 Where it is desired to promote development of spatially clustered global or other

strategic activities which generate external economies. Planning and other public
intervention is justified in stimulating development in order to increase the external
economies and thereby promote the efficient working of the cluster. The best
example in city planning is the promotion of advanced technology complexes (via
technology zones/parks and the like), in which externalities are produced by the
transfer of information between proximate firms, increased attractiveness for
establishment of component suppliers and users, and increased visibility and
prestige as a high tech cluster. Henshall Hansen Associates (1994) found that
public agency technology zones are best at providing certainty for investors about
future sophisticated factors of production; net increases unemployment have been
achieved in their study examples, although the cost-effectiveness of public
infrastructure investment in the zones is questionable. Generally, the public
agency expenditure needs to be carefully targeted.
The government-supported Advanced82Technology Park (ATP) is currently
being developed on surplus rail land at Eveleigh, where research from the three
central universities is to be developed and applied. To maximise the potential for the
development of spin-off advanced technology industry and related development from
the ATP, a strategic plan for the industrial area around the ATP needs to be made,
particularly as accommodation within the ATP will be largely limited to research
itself. The strategic plan should identify means of facilitating the use of industrial
land in the ATP precinct for advanced technology applications. It should also provide
a blueprint for developing a supportive environment for such activities. This could
range from landscaping to enhance the area’s attractiveness and image, to the
provision of means for researchers and others in the area to network with each other
and exchange information, e.g. via a local pedestrian or cycle system focusing on the
ATP and on cafes and the like. Improved pedestrian and other public transport links
between the ATP and the three universities are also important. More broadly, there is
a need to monitor the supply of, and demand for, land and buildings for advanced
technology R and D and production in different sub-regions, and to plan for an
increased supply before supply becomes too tight.

TOURISM ACCOMMODATION AND ATTRACTIONS

Tourism is now a very significant part of Sydney’s global activities, and issues
associated with the supply of accommodation for increasing tourist numbers are likely
to become even more important in the approach to the year 2000 Olympic Games. A
particular issue is the availability and cost of hotel sites in the CBD and environs,
which poses a particular challenge for price- and location-sensitive segments of the
market such as the 3 star level. There is an obvious need, as for other global
activities, to monitor supply and take-up of new hotel accommodation in each major
category, and extend this to forecasts of supply and demand because of likely
continued significant expansion in tourism numbers (for an example of such
forecasting for Sydney, see Grosvenor (1995)). But little seems to be known of the
influence of the CBD property market on hotel room supply and price, and hence the
potential impact of planning measures intended to influence the property market in
relation to hotel demand. Notwithstanding this, a case for permanent floorspace ratio
bonuses for hotels in the CBD could be argued on the grounds that the externality
effects of hotels are on balance more positive than office development, because less
traffic per square metre of floorspace is generated in peak hours, and because tourist
activity increases the liveliness of the CBD at night. It has been suggested that a more
competitive and differentiated retail sector in the CBD is needed to maximise the
advantages of tourism for Sydney. Planning and other policies to achieve this should
be considered, although there are signs that the situation is improving with the
opening over the last few years of boutiques for several leading international
couturiers.

More fundamental are the planning and development issues concerning the
relationship between tourism and business, especially in the CBD. On the one hand,
tourism could be seen as adding to congestion in the city, and increasing the price of
CBD land by adding to demand. In addition, the long lead times required to develop
both offices and hotels mean that the office building cycle may be accentuated. On
the other hand, the present steady increase in international tourism - which cannot
necessarily be assumed to continue indefinitely, though - could be regarded as helping
to level out the large fluctuations in CBD development caused by the economics of
the office building cycle. In addition, 83there may be complementarities between
tourist and business development, such as the availablity of weekend hotel rates and
off-peak air fares for tourists at times of lower business demand. Moreover, tourists
tend to be heavy users of the city rail and ferry systems, which help their viability and
capacity to provide good services in peak hours for CBD workers.

Related to this, there is a growing demand by visitors for serviced apartments in all
price ranges up to that of visiting executives. This demand raises its own set of
issues, notably the potential reduction of private rented accommodation for low
income inner city inhabitants which may result.

In tourist zones outside the CBD, particularly Bondi and Manly, joint state-local
planning strategies to retain and enhance local environmental qualities as tourist
numbers increase seem likely to be needed (such a strategy has now been approved,
after years of debate, for Bondi Beach). Local planning measures to address
congestion generated in part by tourists in other areas, such as Paddington on
Saturday, also seem desirable.

More widely, the intensification of state and council initiatives to enhance the range
of high quality cultural facilities in Sydney (as well as to attract specific cultural
events) should be strongly encouraged in a global context. This will not only increase
Sydney’s attraction for tourists but also make the city a richer environment for people
we wish to persuade to locate activities in Sydney (c.f. Lepani et al 1995 p123), as
well as existing residents. Cultural/entertainment facilities and activities also have
symbolic power in enhancing global image; as well, they contribute high value,
globally traded production to the city economy (London Planning Advisory
Committee 1994 p43). Strategies to provide major cultural infrastructure and events
in order to raise their international image have been significant in cities such as
Frankfurt, Glasgow and Bilbao.

NEEDS OF OTHER CONSUMPTION-RELATED EXPORTS

Tourism is only a part of a growing export segment related to consumption.
Education and health sectors are both expected to steadily increase their exports,
while cultural tourism, business tourism and visitors to special events are growing
segments of the general tourism sector which have their own issues and policy
responses.

There is a general need to identify the planning needs of the export-related activities
of these sectors. This would include needs for overseas student accommodation, and
the temporary accommodation needs of patients, temporary workers, and hospital etc.
visitors. It should also include institutions’ site expansion needs to accommodate
export-related activities. For the central universities, co-ordination of planning for
these needs with planning of the ATP and surrounding precincts is desirable.

The planning needs of individual special events such as the Olympics tend to be
distinctive, and not identifiable in any detail until the event itself is being bid for.
Planning thus has to be essentially reactive in dealing with many of the newer
elements of the post-modern global economy characterised by increasing
fragmentation and unpredictability.
SYDNEY’S STOCK OF LARGE 84SITES
An analysis in the late 1980s showed that Sydney had a lower stock of large industrial
sites than Melbourne or Brisbane (Department of Planning 1990). The regional stock
of large industrial and other sites (notably special uses sites) is a highly significant
resource for attracting major land-using global activities, such as film studios, tourist
resorts, internationally-oriented business parks, and some special events. Large public
sector-owned sites are specially valuable, given their potential long term flexibility of
use, but many former public sites have already been used up for uses from the
strategic (e.g. Olympic Park) to the commercially opportunistic (Moore Park Supa
Centre).

There is a need to monitor Sydney’s supply of large sites, especially sites which are
underused or vacant, and their take-up by new development. Broad indicative long
term uses of major sites should also be identified, preferably within a regional
economic strategy framework - see below. There is a particular need to establish a
planning strategy incorporating long term indicative uses for government-owned sites.
This would provide, amongst other things, a benchmark for considering possible
opportunity costs (in terms of potential lost long term globally-related activity, for
example) of short term proposals for particular uses. Nevertheless, this should not
imply a need to keep large sites vacant for long periods, as this has its own costs.

Transport and Communication Infrastructure

Efficient transport and communications infrastructure is an important factor in making
cities internationally competitive. While this is obvious in such cases as Bangkok,
lack of efficient transport infrastructure is threatening even London’s long term
competitiveness (Coopers and Lybrand Deloitte for LPAC 1991; Daniels 1995). The
planning issues for Sydney centre on several areas of infrastructure.

SECOND SYDNEY AIRPORT

The development of a second Sydney Airport (SSA) to full international status is
critical to meeting Sydney’s long term air traffic demands and thus to retaining
Sydney’s dominance of international air traffic access - and all the global activities
related to this - to and from Australia. The third runway at Sydney Airport will be
used to capacity within the next decade or so (Kinhill Engineers 1990), and the SSA
needs to be operating by then. To realise the demand required to make a full
international operation viable and thus avoid congestion at Sydney Airport or re-
timetabling of flights to Melbourne or Brisbane, rapid rail and road transport
connections between the SSA, Sydney Airport and the CBD will be required.
Funding for SSA rail access, in particular, will require significant government
subsidies.

The importance of fast access to the SSA is reinforced when changes in management
philosophy in recent years are considered (Lepani et al 1995 pp118-119). Time-based
management has increasingly replaced resource-based control as the critical
importance of the “time when a decision, product, costing or quality structure
becomes available” becomes recognised (ibid). Cities with fast transport links
between airport and office will therefore achieve major locational advantages. Most
global cities, recognising this, already have or are planning rail access to their airport
from the CBD, including Toronto, Tokyo, London, Paris, New York, and Frankfurt.
Conversely, airport locations will become85even more attractive for a range of
international activities.

The development of the SSA thus provides a major opportunity to develop an

international activity zone in western Sydney around the airport. An economic
development planning strategy for the land in the environs of the Badgerys Creek
option was started; such a strategy will be needed for the option finally chosen. No
other single planning initiative has the same potential to attract significant amounts of
new global activity to Sydney. The scope for internationally-oriented transhipment
activities, business parks for foreign companies, advanced technology development
with high export content, and hotel development around the SSA is very significant.
In addition, completion of the SSA will remove longer term constraints on
international air access to Sydney which could otherwise impede expansion of global
activities such as tourism and corporate headquarters in the rest of Sydney.

FREIGHT TRANSPORT
Meeting freight movement needs is critical for achieving maximum economic benefit
from Sydney’s international port and airport infrastructure. At present, freight
movements from this area have several adverse environmental effects, including
generation of traffic congestion and noise, often in residential streets. The recent
Sydney ports strategy (Sydney Port Authority 1996) notes that additional freight
corridors for traffic from Port Botany are needed to the west and north-west of the
port, past the airport, in addition to the freight corridors identified in the integrated
transport strategy of the current metropolitan plan (Department of Planning 1995).

PUBLIC TRANSPORT
An efficient public transport system is an important contributor to the international
competitiveness of a city. In the face of often severe traffic congestion, global cities
from Tokyo to Berlin, Paris, London and Toronto are focusing on public transport,
particularly rail, to improve the accessibility of key areas for global investment,
especially central metropolitan areas.

Rising community opposition to new motorways has been critical to this process.
Nevertheless, good public transport can contribute to global competitiveness in
several ways:

 It provides a positive environmental image, which is becoming more important as

global pollution worsens and business, as well as public, environmental
consciousness increases.

 It makes it easier for tourists to move around the city, increasing the access to a
range of tourist attractions and thus making the city more attractive as a tourist
destination.

 It maximises the access of a full range of labour to locations preferred by

international investors and companies. This can be important to the efficient
functioning of global activities. The spatial polarisation of the Sydney housing
market, intensified by the high incomes of 'global' workers, means that clerks,
hospitality, cleaners and other lower wage earners required for global activities in
 the high amenity, expensive housing86sub-regions in eastern Sydney have less
and less access to global activity employment.

This raises the issue of the extent to which global investment can be steered to
locations with good public transport access. As discussed above, new employment
zones in locations favoured by global companies need to be sited adjacent to good
public transport, while new rail-based public transport needs to be provided to major
employment areas preferred by international companies but presently lacking good
public transport access (such as North Ryde). Beyond this, it will be difficult for
planning to be directive, given the intensity of competition for these companies.
However, planning does need to consider the adequacy of public transport access to
preferred tourist sites. The author's original support (Searle 1996) for a light rail
service from Bondi Junction rail station to Bondi Beach has now been overtaken by a
call by the government for expressions of interest for a heavy rail line there: the
capacity of Bondi Beach to accommodate the resulting tourist increases, without
compromising the existing inter-war character preferred by the community, is
problematical. In addition, Sydney lacks a proper coach terminal. A coach-rail
terminal at Central Station would be the most cost-effective option, and would assist
backpacker tourists in particular.

Amenity, environment and image

Amenity and the related dimensions of environment and image have a potentially
significant influence on the international competitiveness of a city, although its
specific effect is uncertain. Dunning and Norman’s (1987) study indicates it has been
significant for the location of international head offices within Europe, whereas the
recent experience of the NSW Department of State and Regional Development
suggests it has not been important in attracting regional head offices to Sydney
(although Sydney’s image and amenity may well have ensured it was on the list of
possible locations). As noted, however, it is likely that the importance of clean or
sustainable environments will increase. For the future, Lepani et al (1995 p123) see
recreational resources and the social and physical amenity of our cities as being basic
dimensions of Australian cities’ ability to compete for global investment and
functions. Planning can play an important role in maximising the positive aspects of
amenity, environment and image

STREETSCAPE
The potential conflicts between the needs of international companies for landmark
buildings and the like and the associated issue of architectural freedom, and the
cultural and economic importance of distinctive streetscape elements particularly in
the CBD, have been alluded to above. The controls contained in the new Sydney City
Local Environmental Plan, which are designed to reinforce traditional streetscape
elements via setback controls and the like, entail a reduction in architectural freedom.
But they should mean that new buildings act to reinforce the historic built form
rhythms of central Sydney and thus visually support the remaining built heritage.

IMAGE IN CRITICAL LOCATIONS

Certain parts of Sydney have a major importance in shaping the image of Sydney
because of their role or location. These include Circular Quay, major access roads to
the CBD (especially from the airport),87and major beaches. Planning for the year
2000 Olympics provides a major opportunity for initiatives to improve the image of
such critical locations, but innovative planning guidelines are needed so that longer
term development in such areas contributes positively to Sydney's urban character.

ENVIRONMENTALLY SUSTAINABLE DEVELOPMENT

Planning measures to encourage environmentally sustainable development will
contribute to Sydney’s positive image for international companies and investors.
Relevant policies such as those included in Cities For the 21st Century and in the
Homebush Bay Regional Environmental Plan (which requires development to be
environmentally sustainable) should be strongly supported and extended.

SAFETY
Most urban centres in advanced countries have experienced increased crime levels in
the last few decades. Lepani et al (1995 p84) note anecdotal evidence that crime, as
well as congestion, may have reached levels in New York which caused key sections
of capital to leave for other major cities. At the strategic planning level, conditions
conducive to crime can be ameliorated through provision of good access to jobs,
services, public facilities and affordable housing, and by avoiding the creation of
areas with concentrations of social dysfunctions.

Housing

The growth of a managerial and professional workforce for which there is a global
demand has been an important factor in causing Sydney’s average housing price to
rise to a level well above that of other Australian cities and reduce housing
affordability. Existing planning policies to protect housing affordability, such as
encouraging higher density housing, need to be maintained. Prices in the eastern half
of Sydney, which has globally-desirable levels of amenity, have been particularly
affected by increasing globalisation. This has increased the spatial polarisation of the
housing market. Thus planning needs to particularly promote housing affordability
and access in eastern Sydney. This will help worker accessibility to global activities
which continue to prefer eastern Sydney locations. This is easier said than done, as
community opposition to flat development in most suburbs shows: the point here is
that planning for increased housing affordability has a global competition dimension.
More generally, policies to promote a wide range of housing are important for
attracting a variety of immigrants, and thus for maximising the potential for a diverse
population with the capacity to respond to, and indeed create, opportunities for
economic development in global and other activities.

The new Sydney City LEP policy to provide floor space bonuses for residential
development may seem contrary to the encouragement of regional headquarters and
other global office activity. However, by increasing vitality in the city centre outside
office hours, it will increase the centre's amenity and safety for visitors to cultural and
other activities, for late hours city workers and the like, increase the range of high
amenity housing for global labour, and enhance the city's overall image.

Strategic planning frameworks

Global investors seek as much certainty 88as possible when making investments.
One way in which planning can contribute to this is by providing strategic planning
frameworks for investment. Cities For the 21st Century provides such a framework
for Sydney. The feasibility of its infrastructure proposals being effected are greatly
increased by its proposals for the strategy to be the benchmark for government agency
capital works proposals in Sydney, and for the determination of such proposals at
Cabinet level in the context of the strategy. Aspects of the strategy which will address
planning issues identified here include the various urban consolidation proposals and
measures to improve key access routes between sub-regions.

However the Cities strategy needs to be supplemented with a regional economic

development strategy, which would set out preferred paths of, and strategies to
achieve, economic development and its distribution within Sydney. This would
involve a higher level of detail than the Cities strategy in terms of identifying sectors
in which Sydney seems to have particular strengths and opportunities. While planning
needs to remain reactive to new global investment opportunities which are presented,
an economic development strategy would mean that otherwise unidentified
opportunities based on Sydney’s strengths can also be more actively considered and
proposed to investors, and supported by more targeted infrastructure outcomes.

ACKNOWLEDGMENT
The author thanks Dr Joan Vipond, Kevin Saunders and others in the Department of
Urban Affairs and Planning for their support and assistance in the preparation of the
report (Searle 1996) from which this paper is drawn.

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