One
of the most challenging aspects of making sense of Flow Paradigm is to identify the
relevant types of economic flows. To
start with, it is worth stressing that the flows between hubs are
difficult to identify and quantify (see e.g. Salisbury & Barnett, 1999, 35;
Pain & Hall, 2008; Limtanakool et al., 2009). Some simple dichotomies
have some relevance in this respect, such as frictionless vs. frictional flows. ‘Frictionless’
flows - what Castells (1996) has referred to as a whole as the 'space of flows' - that are generally transferable as electronic or digital flows are
characteristically production factor flows (technology flows,
capital flows, and information flows), whereas ‘frictional’
flows or physical flows are basically of three kinds: (i) freight and
material flows; (ii) client flows, such as tourists, conference visitors and
students; and (iii) productive actor flows, such as relocating firms, inflow of
skilled and creative people and professionals as well as low-skilled immigrants
(cf. Kostiainen, 1999). These flows make up two primary realms, both of which
are expedited by technological development. Digitalisation changes symbolic,
information, and monetary flows, whereas improvements in mobility and logistics do the same
to material and client flows (see e.g. Williams & Balàz, 2009; see also Anttiroiko, 2014b).
To make sense of the
field of flows, we may consider the fundamental economic roles of people in
terms of consumption and production, the classic typology of markets (factor
and product markets) and the city as an economic spatio-temporal locus that
combines these elements through investment, production, distribution and
consumption functions. Such a robust model of the main aspects of economic flow
analysis is presented in Figure 1.
Figure
1. Illustration of city as the integrator of different types of flows. (Anttiroiko, 2015).
Some
of the typologies of flows are based on contextual analysis, such as
Appadurai’s (2003) five ‘flowscapes’ – people, technologies, finance, media and
ideologies – as the landscape of late modernity. Yet, to achieve a scheme that
is relevant for local economic development policy, such a typology should be accurate
and provide a synthesised approach to flows. An example of the generic typology
of flows that fulfils this criterion is proposed by Williams and Balàz (2009,
679-680). It is built on four major categories related to regional development:
(1) trade, (2) labour migration, (3) capital and (4) knowledge. Similarly, in
McKinsey Global Institute’s report on global flows the main flow categories
analysed were goods, services, finance, people, and data (Manyika et al., 2014).
In DHL Global Connectedness Index 2014 global connectedness of a country or
macro-region was defined as their participation in international flows of
trade, capital, information and people. These four pillars were further divided
into following components (Ghemawat & Altman, 2014):
Trade
- Merchandise trade
- Services trade
Capital
- FDI stocks
- FDI flows
- Portfolio equity stocks
- Portfolio equity flows
Information
- International Internet bandwidth
- Telephone call minutes
- Trade in printed publications
People
- Migrants (foreign born population)
- Tourists (departures and arrivals)
- International students
To summarise, it seems that the four most frequently included categories of flow analysis are capital, trade, information and people.
These form a good
starting point for identifying different flows that have a critical role in
local economic development. Yet, they show also clearly the differences in the
clarity and availability of relevant data. As a rule, any flow that can be
expressed in units, such as money or number of items or people, are fairly easy
to define, even if the availability of data may be occasionally a problem. Yet,
categories like information or knowledge are obviously difficult to
operationalise not to speak of the difficulty of obtaining relevant data. The
problem in the latter case concerns both ambiguity and uncertainty (Daft &
Lengel, 1986). This explains the use of surrogate data, which leads sometimes obvious methodological problems. To illustrate the complexity of this setting, let us
combine various flows in a rudimentary model, presented in Figure 2.
Figure 2. Illustration of economic flow analysis. (Adopted from Anttiroiko, 2014a).
This kind of analysis helps to make sense of the nature of local economy in an increasingly 'fluid' economy. Increasing share of our wealth is created at the hubs of flows, which should be taken into account in local economic development policy. It urges us to learn more about how to attract flows from the space of frictionless and frictional flows, how to process such flows within a local 'dissipative structure' (i.e. open city), and how to create products and services that meet the demand in global markets.
References
Anttiroiko, A.-V. (2014a). International City Branding: Attraction Imperative, Specialization and New Urban Brand Analytics. Proceedings of the 17th Annual International Conference of ASBBS, pp. 12-25. Paris, June 20-22, 2014. San Diego, CA: American Society of Business and Behavioral Sciences.
Anttiroiko, A.-V. (2014b). The Political Economy of City Branding. London and New York: Routledge.
Anttiroiko, A.-V. (2015). New Urban Management: Attracting Value Flows to Branded Hubs. Basingstoke: Palgrave Macmillan.
Appadurai, A. (2003). Modernity at Large. Cultural Dimensions of Globalization. First published 1996. Sixth printing 2003. Minneapolis, MN: University of Minnesota Press.
Castells, M. (1996). The Rise of the Network Society. The Information Age. Economy, Society and Culture. Vol. I. Cambridge, MA and Oxford, UK: Blackwell.
Daft, R.L. & Lengel, R.H. (1986). Organisational Information Requirements, Media Richness and Structural Design. Management Science, 32, 554-571.
Ghemawat, P. & Altman, S.A. (2014). DHL Global Connectedness Index 2014. Analyzing global flows and their power to increase prosperity. DHL. Retrieved February 12, 2015, from http://www.dhl.com/content/dam/Campaigns/gci2014/downloads/dhl_gci_2014_study_low.pdf
Kostiainen, J. (1999). Competitiveness and Urban Economic Development Policy in Information Society. Futura, 18(3), 14-36.
Limtanakool, N. & Schwanen, T. & Dijst, M. (2009). Developments in the Dutch Urban System on the Basis of Flows. Regional Studies, 43(2), 179-196.
Anttiroiko, A.-V. (2014a). International City Branding: Attraction Imperative, Specialization and New Urban Brand Analytics. Proceedings of the 17th Annual International Conference of ASBBS, pp. 12-25. Paris, June 20-22, 2014. San Diego, CA: American Society of Business and Behavioral Sciences.
Anttiroiko, A.-V. (2014b). The Political Economy of City Branding. London and New York: Routledge.
Anttiroiko, A.-V. (2015). New Urban Management: Attracting Value Flows to Branded Hubs. Basingstoke: Palgrave Macmillan.
Appadurai, A. (2003). Modernity at Large. Cultural Dimensions of Globalization. First published 1996. Sixth printing 2003. Minneapolis, MN: University of Minnesota Press.
Castells, M. (1996). The Rise of the Network Society. The Information Age. Economy, Society and Culture. Vol. I. Cambridge, MA and Oxford, UK: Blackwell.
Daft, R.L. & Lengel, R.H. (1986). Organisational Information Requirements, Media Richness and Structural Design. Management Science, 32, 554-571.
Ghemawat, P. & Altman, S.A. (2014). DHL Global Connectedness Index 2014. Analyzing global flows and their power to increase prosperity. DHL. Retrieved February 12, 2015, from http://www.dhl.com/content/dam/Campaigns/gci2014/downloads/dhl_gci_2014_study_low.pdf
Kostiainen, J. (1999). Competitiveness and Urban Economic Development Policy in Information Society. Futura, 18(3), 14-36.
Limtanakool, N. & Schwanen, T. & Dijst, M. (2009). Developments in the Dutch Urban System on the Basis of Flows. Regional Studies, 43(2), 179-196.