In modern times several world cities have emerged where a high percentage of the world’s business is transacted and political power is concentrated. These world cities are centers of business services, but they stand at the top of the central place hierarchy in the provision of consumer services, and many also serve as public-service centers. These world cities such as New York, London, and Hong Kong are examples of primate cities since it has close to twice as many people as the second largest settlement around the area. New forms of transportation and communications were expected to reduce the need for clustering of economic activities in large cities. The telegraph and telephone in the nineteenth century and the computer in the twentieth century have made it possible to communicate immediately with coworkers, clients, and customers around the world. The railroad in the nineteenth century and the automobile and airplane in the twentieth century made it possible to deliver people, inputs, and products quickly. This is an example of time-space compression because there is a reduction in the time it takes to diffuse something to a distant place.
Business Services in World Cities
The purpose of business services is to facilitate other businesses. Producer services provide services primarily to help people conduct other business like agriculture and manufacturing. This type of service assists the secondary sector jobs since they focus primarily on manufacturing and assembling raw materials. Transportation and information services are businesses that diffuse and distribute services. Most of these services are in transportation, primarily trucking. The clustering of business services in the modern world city is a product of the Industrial Revolution. Factories are operated by large corporations formed to minimize the liability to any individual owner. A board of directors located far from the factory building makes key decisions concerning what to make, how much to produce, and what prices to charge.
World cities offer many financial services to these businesses. As cdenters for finance, world cities attract the headquarters of the major banks, insurance companies, and specialized financial institutions where corporations obtain and store funds for expansion of production. Shares of major corporations are bought and sold on the stock exchanges, which are located in world cities. Lawyers, accountants, and other professionals cluster in world cities to provide advice to major corporations and financial instituions. Advertising agencies, marketing firms, and other services concerned with style and fashion locate in world cities to help corporations anticipate changes in taste and to help shape those changes. Transportation services tend to have busy harbors and airports and lie at the juncion of rail and highway networks. This is known as a break of bulk point since this is a location where transfer is possible from one mode of transportation to another.
Consumer Services in World Cities
The purpose of consumer servies is to provide services to individual consumers who desire them and can afford to pay for them. About ¼ of all jobs in the U.S. are in retail services, which provide goods for sale to consumers. Personal services make up 1/5 of all jobs in the U.S., which provide services for the well-being and personal improvement of individual consumers. Because of their large size, world cities have retail services with extensive market areas, but they may even have more retailers than large size along would predict. A disproportionately large number of wealthy people live in world cities, so luxury and highly specialized products are especially likely to be sold there. Personal services of national significance are especially likey to cluster in world cities, in part because they require large thresholds and large ranges, and in part because of the presence of wealthy patrons. This goes along with the Central Place Theory which explains the distribution of services and that larger settlements are fewer and farther apart than smaller settlements.
Public Services in World Cities
The purpose of public services is to provide security and protection for citizens and businesses. World cities may be centers of national or international political power. Most are national captials, so they contain mansions or palaces for the head of state, imposing structures for the national legislature and courts, and offices for the governemnt agencies. Also clustered in the world cities are offices for groups having business with the government, such as representatives of foreign countries, trade associations, labor unions, and professional organizations. Unlike other world cities, New York is not a national captial. But as the home of the world’s major international organization, the UN, it attracts thousands of UN diplomats and bureaucrats, as well as employees of organizations with business at the UN. Brussels is a world city because it is the most important center for EU activites. International organizations that strive for overall peace and security in the world like the UN and the EU have helped kept stability in the world. These public services would also act as a centripetal force since it unites the nation against threats from other people.