Informational interactions and the future of cities

Present-day city growth is chiefly the result of new tertiary activities such as financial and producer services, R&D, or business administration. It seems that these activities need to be more spatially concentrated than traditional manufacturing activities. These new trends affect both the structure of cities and the structure of city systems. The specific nature of the new activities concentrated in city centers makes them information intensive. These activities consume human capital, knowledge and hightech capital, which are all rapidly changing inputs; they are based on complex decisionmaking processes; this renders them highly information-dependent. Inasmuch as these activities are the main key to understanding the city, information must play a leading role in understanding urban forms and urban growth. In the framework of Economic Geography, we propose to focus on a number of features showing that information and telecommunications technology not only are compatible with contemporary city systems, but also help explain the formation of these city systems. We then examine the ways in which cities and city systems are affected by information. The following points can be made: (1) Simply treating information as a special case of non-market interaction fails to account for the current pattern of urban growth and new forms of city systems. (2) The permanence and growth of cities crucially depends on the permanence and increase of face-to-face contacts. (3)The complementarity of face-to-face exchanges and telecommunications can explain agglomeration in cities. (4) The existence of costs of entry and scale economies in telecommunication networks can reinforce the polarization in cities as nodes in telecommunication networks.