These specialized service firms need to provide a global service which has meant a global network of affiliates … and a strengthening of cross border city-to-city transactions and networks.The more headquarters outsource their most complex, unstandardized functions, particularly those subject to uncertain and changing markets, the freer they are to opt for any location.Those specialized service firms engaged in the most complex and globalized markets are subject to agglomeration economies.These central functions become so complex that increasingly the headquarters of large global firms outsource them: they buy a share of their central functions from highly specialized service firms.
The geographic dispersal of economic activities that marks globalization, along with the simultaneous integration of such geographically dispersed activities, is a key factor feeding the growth and importance of central corporate functions.She argues for seven fundamental hypotheses about the modern global city: Sassen emphasizes the importance of creating new conceptual resources for making sense of urban systems and their global networks - a new conceptual architecture, as she calls it (28). Sassen points out that these flows are no longer tightly bound to national boundaries and systems of regulation so the dynamics of the global city are dramatically different than those of the great cities of the nineteenth century. Cities are major nodes in the interconnected systems of information and money, and the wealth that they capture is intimately related to the specialized businesses that facilitate those flows - financial institutions, consulting firms, accounting firms, law firms, and media organizations.
Key to Sassen’s concept of the global city is an emphasis on the flow of information and capital. This article is a convenient place to gain an understanding of her basic approach to the subject. (Here are several prior posts that intersect with her work.) Her The Global City: New York, London, Tokyo (1991) has shaped the concepts and methods that other theorists have used to analyze the role of cities and their networks in the contemporary world. The core ideas in her theory of the global city are presented in a 2005 article, “The Global City: Introducing a Concept” ( link). Saskia Sassen is the leading urban theorist of the global world.
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