Rapid technological advance during the past twenty-five years has brought with it a complex mix of benefits, challenges and costs, with most of them
having their incidence in, and implications for, urban regions. Technological advance seems to be at the heart of almost all SEPs, whether or not this makes sense in the local situation, and is central to almost all cluster initiatives. Since the consequences of technological change have been discussed by economists and geographers for most of that time period, it will be sufficient here merely to give a summary listing of them.42
Positive consequences of technological change for urban regions:
• It promotes the rise of new industries.
• Technological advances penetrate into other industrial sectors such as health care, education, entertainment and finance bringing higher productivity.
• It generates new products that enhance wellbeing.
• Cities are seen as the primary location of choice for entities involved with high technology.
• Demands are generated for an ‘attractive’ component of the labor force – educated, skilled, highly paid.
• In some circumstances, the disadvantage of peripherality may be over- come.
Negative consequences of technological change for urban regions:
• Local entities lose control over major aspects of the local economy.
• The adjustment costs, in terms of up-trading labor skills and infrastruc- ture, entailed in the transition from the old to the new may present an excessive burden on the local fiscal resources and institutions.
• Streams of immigrants and changes in the demands for factors of production may cause social and cultural disturbance and conflict lead- ing to increased exclusion and poverty among certain sectors of the population.
• Local decision-making and governance structures may be over-taxed by the need to respond creatively to change.
• The intellectual capital of local developers, economic geographers, consultants and officials may be found to have become outmoded and in need of rethinking and redevelopment.
There is certainly enough on these lists to demand the attention of any city leader who is looking to the future. Some of these consequences are rather general in their impact and incidence, some provide cautionary notes to already competitive cities, while others carry some hope and opportunity for cities that need imperatively to improve their situation. The fact that cities are
preferred locations for the location of concentrations of higher technology activities gives encouragement to all cities. However, new industries and new products are rather normal consequences of change, but consequences that will not be captured by many cities merely in the course of time. Effective govern- ment will be seen in later chapters to be one of the key elements in successful SEP and from the above it is suggested that either local governance structures or the thinking of local actors may be made ineffective by technological change.
Two of these consequences are likely to be of primary interest to city lead- ers. First, the need for certain components of the labor force and the draw of a successful city will generate flows of migrants that may tax the absorptive capacity of local housing, schooling, health, infrastructure and governance structures. This is most likely to be the case for cities in the EU which require these migrants for their productive systems, as well as to provide tax payers who will support the rapidly growing retirement and health financial obliga- tions of the rapidly aging society. This is most likely to pose the severest test of local authorities in the majority of large cities in the EU as it both expands its membership and works to implement the ‘four freedoms,’ the freedom of movement of capital, goods, services and people. Second, technological change lowers the economic cost of distance and for many economic interac- tions reduces the advantage of proximity. This has the potential to reduce the economic disadvantage of peripherality for cities that see this potential and are able to respond effectively to its exigencies. This can be one of the most trans- formative aspects of change, technological or other, that can make it available to a city that is located on the periphery. Stephen Graham is most enthusiastic in this regard when he concludes that information communication technology
‘can empower historically isolated individuals and groups . . . and has the potential to provide low-income, urban residents with: the requisite skills to participate in the informational economy; new opportunities to facilitate the communication and networking among individuals necessary for community building; the means to more effectively participate in public discourse; and data and information to understand and attack the problems they face.’43 While nothing is guaranteed, this is certainly a call to city leaders in periph- eral cities and in cities with problems with excluded classes and groups to consider the potential that technology has for easing some of their primary problems.
As is the case with most of the changes or turbulences noted throughout this book, these always present to city leaders a set of challenges, threats and opportunities. It is clear that the consequences of advances in technology can be factors that lead to the deterioration, expansion or even salvation of the individual urban economy.