Competition and Cooperation of Cities - Essay Example

COMPETITION AND COOPERATION OF CITIES AND REGIONS WITHIN THE EUROPEAN UNION of Submission The contemporary economies are characterized globalization and formation of economic blocs by many nations for common economic goals. Economic blocs such as the European Union are characterized by urban and regional economies with divergent goals regardless of their engagement in cooperative or cohesive interests and ends (Lever, 1998, 1029). The specific needs for economic growth within cities and regions have led to a competitive environment within the EU. Budd and Edwards (1997, p. 173) argues that this is an adjunct of decentralization of political and economic powers which have caused regions and cities such as those within France and Germany to become more competitive and seek comparative advantage over other cities. Jessop (1998, p. 78) adds that the Lisbon Strategy of 2000 presented contributed to the competitiveness within the region by presenting a European Union (EU)’s goal of becoming the most competitive, knowledge based and dynamic among the world economies. Past scientific literature demonstrates that cities and regions within the EU compete for several objective based reasons. These include competition for investment, economic growth, population and public funds. This essay gives a critical analysis and discussion of the competition among regions and cities within the EU. A theoretical understanding and explanation of the objectives behind the competition is also presented. Regions and cities within the European Union have demonstrated a competitive approach to development and growth with the support of EU and national policies. According to Lever (1998, p. 1030), cities and regions within the EU compete for mobile investment in manufacturing and production. Each region and city within the EU desires to utilize the resources at its disposal too maximize production or manufacturing and as a result become the most productive of the territories within the Union (Committee On Spatial Development, 1999, p. 9). With the increased competition for resources within the EU, states are currently competing for various forms of wealth (Cox, 1995, p. 213). This involves competitive fight for dominance within the housing and property sector, labor market, information technology and the development of commerce. Lever (1998, p. 1034) explains that the competitiveness of the EU regions and cities is said to be fueled by the support of the EU competition law in additional to the supportive national policies which encourage competition. Budd and Edwards (1997, p. 175) argue that through a competitive approach, the general goal of creating the common market within the EU is achieved. Cities and regions within the EU also compete for resources which catalyze economic growth. Lever (1998, p. 1038) asserts that the competition within EU cities and regions is further demonstrated by the struggles within different territories for economic growth. Various regions within the EU and states such as Spain, Europe and France have registered different values of their GDP which are determined by their level of competiveness within the union. Cox (1995, p. 217) illustrates that the different levels of competitiveness have defined the economic growth within regions and cities and in return the social, political and economic organization within these regions and cities. More significant though is the competition for the population which is currently a major and yet unrecognized form of competiveness within regions and cities of the EU (Budd and Edwards, 1997, p. 179). According to Lever (1998, p. 1041), the competition of cities and regions for the population is based on the premise that a diverse population represents a state or city’s strength in labor, demand, income, political and economic power, social cultural richness and talent. Because of this, various cities and regions are taking advantage of the forces of globalization to attract a diversity and human capital from all parts of the world (Marcuse, 2005, p. 247). Public funds are the most notable resources for which cities and regions compete for. Lever (1998, p. 1035) argues that the most notable form of competition among cities and regions of the EU is the struggle for public funds (Jessop, 1998, p. 83). This form of competition exists within all regions and cities of the union and is illustrated by the city Challenge within the UK and the Single European Market. These forms of competition comprise of cities, regions and states within the EU which compete for state and public funds for their own economic growth (Committee On Spatial Development, 1999, p. 12). in accordance to Lever (1998, p. 1040), the cities and regions within the EU compete for public funds so that they would effectively develop their infrastructure such as health care systems, institutions of learning, airports, seaports and roads into world standards. This would further facilitate the global competitiveness of these regions in areas such as tourism. It is in this regard that cities and regions within the region have planned their commercial and private structures in a way that attracts sustainable development which emanates from both within the union and the world at large (Cox, 1995, p. 219). Cities within the EU have also competed for hosting special and temporary events for various reasons. Lever (1998, p. 1037) reveals that cities within the EU have also demonstrated competition in holding Olympic Games. This competition is achieved through the development of superior sports infrastructure such as stadia. In order to be more competitive, the cities within the EU have designed their roads network, housing, hotel and accommodation with an aim of becoming the best within the region so that they would be nominated to host world sports events (Budd and Edwards, 1997, p. 172). According to (Lever, 1998, p. 1042), some benefits that are accrued by states within this competitiveness are short term. On the other hand, Marcuse (2005, p. 250) demonstrates that the short term benefits of cities and states in their competitive development often leads to long lasting or long term gains such as attracting tourists and labor from other economic regions of the world. Jessop (1998, p. 80) adds that the competition which exists within states, cities and regions within the EU include the need for attainment of cultural superiority. Because of this, cities and region in the union have been involved in competition for attainment of the status of European City or region of Culture (Cohen, 2007, p. 379). It is therefore notable that the benefits that cities aim to achieve through competition with other regions and cities are domestic, regional and global (Marcuse, 2005, p. 251). The ranking of cities and regions within the EU reveals an imbalance which means that there is likely to be more competition in the future. Lever (1998, p. 1043) demonstrates that the competitiveness within cities and regions within the EU is simply measured through their economic development ranking. Since the national policies support competition within the union, cities have been ranked in accordance to their level of success in order to further motivate their competitiveness (Cox, 1995, p. 220). the criteria that is used to rank cities include indices of economic growth such as the rate of employment or unemployment, infrastructural development, production and manufacturing, trade and commerce, housing, migration, labor market and political organization (Lever, 1998, p. 1039). Among the top ranking cities and regions within the EU include Frankfurt, Brussels, Amsterdam, Bonn and Strasbourg (Committee On Spatial Development, 1999, 8). The goals of the EU as provided by the supportive law and policies have been achieved through competition which is revealed by the theories which are used to explain and measure the different levels of economic development within regions and cities. According to Budd and Edwards (1997, p. 180), theories and hypotheses have been put forth with a view of understanding the micro-geographical, economic, political and social cultural basis for competition and growth among cities and regions within the EU. The centralized organization of EU’s cities is the first hypothesis for the competitiveness and divergent levels of development among them. It is argued that capital cities develop faster because private investments focus on these regions so that they would be close to the government and political forces which influence development and commerce (Jessop, 1998, p. 79). Secondly, geographical potential is described as the central explanation for competition and diverse level of development within the Union. (Lever, 1998, p. 1034) illustrates that cities which are bounded within the European core which is characterized by dominant London, Paris, Frankfurt and Amsterdam are more competitive. Marcuse, 2005, p. 249) argues that the geographical potential makes sense because cities and regions around the Mediterranean and Atlantic peripheries have been ranked as relatively less competitive and successful. According to Cox (1995, p. 213), it is the forces of urbanization, industrialization, globalization and technological advances which have caused competitive economic, social and political development within the EU. Because competition catalyzes development, it should be encouraged among the cities and regions of the EU. Kopetski (2009, p. 1) justifies the support for competitiveness within many EU and national policies because competition is a catalyst for development. Ross (2008, p. 390) adds that competition must be encouraged among cities and regions in the EU because it is the most effective way through which the Europe 2020 strategy can be achieved. Reuvid (2006, p. 11) says that the cities and regions within the EU compete in innovation in their respective sectors of the economy. In addition, the states and regions compete in the creation of jobs so that they would meet the needs of their citizens and reduce the financial burden that governments face as a result of unemployment (Baltaca and Mavrenko, 2009, p. 60). It is however notwithstanding that competition within the EU leads to forward development of regions and cities. As result, the social, economic and political imbalances within various cities and regions are reduced significantly (Archick and Mix, 2011, p. 276). Practical evidence demonstrates that there are many benefits of competition among cities and regions which justifies the encouragement of all forms of competition. Wise (2007, p. 10) shows that competition driven development within the EU has led to numerous advantages and gains within the economic and social realms. For instance, the 2000-2006 periods registered one of the greatest developments in the region. This development was recorded as a result of the improvement of GDP per capita within the EU’s poorest territories from 66.2% to 70.9% (Neumayer, 2008, p. 136). More importantly, the development which resulted from competition supportive policies significantly contributed to sprouting of thousands of new businesses within the region (Burch, Gomez, Hogwood and Scott, 2008, p. 465). Furthermore there has been an increase in the employment opportunities across the region due to the policies and strategies that support competition. In the light of this illustration, it is therefore recommended that competition among states and regions in the EU is encouraged so that economic growth and improvement of living standards are achieved (Yesilada, Efird and Noordijk, 2006, p. 609). The objectives of the EU include the utilization of opportunities and resources within regions for development. This objective would be achieved effectively through competition. Ponjaert and Beclard (2010, p. 108) argues that cities, regions, territories and rural areas within the EU face various opportunities and challenges which are as a result of differences in demographic and geographic features. It is in this sense that regions and cities should be encouraged to compete favorably in utilizing opportunities so that challenges would be overcome (Jackson, 2010, p. 371). It is debated that cohesion or cooperation within cities and regions should be emphasized more. This is due to the fact that some regions are disadvantaged by demographic and geographic handicaps such as high population, mountains and islands (European Policy Analyst, 2010, p. 8). Because of these cooperation within the region will enhance support in the use of territorial capital for the common good of the region (Eberlein and Newman, 2008, p. 25). However it is through competition that synergies, economies of scale, integration and complementarity are motivated because they are inevitable approaches to development (Lea, 2008, p. 73). In order for the cities and regions of the EU to adhere to the EU and national policies and objectives, they need to compete with each other. In line with the EU competition law, various states and cities have enacted policies which encourage competition for various reasons. European Policy Analyst (2010, p. 9) demonstrates that it is through a competitive region that cartels would be prevented from dominating the EU market. Burch, Gomez, Hogwood and Scott (2008, p. 467) adds that the EU competition law is supported by regional policies so that practices which discourage competition and development are avoided. Through competition, various institution, organization, agencies, companies and individuals are accorded equal opportunities in the utilization of opportunities within the market for development. In return this will lead to the achievement of the strategic goals of the Union (Burch, Gomez, Hogwood and Scott, 2008, p. 465). Moreover, competition has achieved increased support within cities because it is a measure through which monopolistic business practices are prevented (Terry, 2009, p. 15). Therefore, cities and regions within the EU are encouraged to compete so that dominant firms are not allowed to abuse their positions within the market (Chou, 2009, p. 541). In order to have more control of the common market within the EU, competition should be encouraged. According to Yesilada, Efird and Noordijk (2006, p. 609), many policies in congruence with the provisions of the EU competition law are supportive and encouraging to competitive programs as a way of controlling the market. This is demonstrated by the fact that competition controls mergers and acquisitions of companies within the EU (Veebel, 2009, p. 207). Moreover, policies on competition regulate joint ventures among companies from different regions. More significantly though is the importance of competition and the underlying law is to control the state aid that is given to specific cities or regions (Veljanovski, 2011, p. 163). This means that policies which support a competitive environment are geared towards promoting the achievement of the goals of the EU through controlling the functioning of business activities and social systems. In the light of the above analysis and discussion, it is conclusive that competition among cities and regions of the EU exists in different forms. This includes competition for resources; state funding, special and temporary events, economic growth and infrastructures. Competition should be encouraged within the EU so that more control of the common market can be achieved. Additionally, competition is to be encouraged because it is a catalyst to economic growth and development within cities and regions of the EU. Furthermore, competition among cities and regions promotes the achievement of EU objectives, goals and policies and therefore it should be encouraged. References Archick, K, and Mix, D 2011, The European Union: Questions And Answers, Current Politics and Economics Of Europe, 22, 2/3, pp. 275-289 Baltaca, B, and Mavrenko, T 2009, Financial Cooperation As A Low-Cost Tool For Effective Microfinancing, Journal Of Business Management, 2, pp. 56-64 Budd, L. and Edwards, M. 1997, ‘Confirming conforming conventions: the Four World Cities study, City (7): 171-181. 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