New Spatial Pattern as an Effect of Globalisation Hierarchies, Networks, and Markets

Braun _ AAG Boston 2008 1

New Spatial Pattern as an Effect of GlobalisationNew Spatial Pattern as an Effect of Globalisation

Hierarchies, Networks, and MarketsHierarchies, Networks, and Markets

Gerhard O. BraunGerhard O. BraunFreie Universität BerlinFreie Universität Berlin

1. A new pattern of spatial and sectoral growth?1. A new pattern of spatial and sectoral growth?

2. Changes in the organisation of companies2. Changes in the organisation of companies- from production of products to money production - from production of products to money production - from coordinated to liberal capitalism- from coordinated to liberal capitalism- fragmentation and selective growth- fragmentation and selective growth

(3. Changes in the spatial organisation of (3. Changes in the spatial organisation of companies)companies)

4. New spatial pattern at different scales4. New spatial pattern at different scales


Change in Occupation 1997-2003Change in Occupation 1997-2003

Growth and Decline inOccupation in CloseVicinity is Even MoreSiginificant Than in Demography

decreasedecrease

increaseincrease

Employment Development (Change in %)Employment Development (Change in %)

HamburgHamburg

FrankfurtFrankfurt

MunichMunich

BerlinBerlin

StuttgartStuttgart


chan

ge

in e

ntr

epre

neu

rial

go

als

Product development

Product market leader

Product identification

Product monopoly, divisional consolidation

pow

er

Product diversification, functional integration

Multiple product leadership

Core business, shake out

Shares on product-clusters

Shareholders, Financial Services

Private Equity Comp.

Hedgefonds

product- vs. money-orientation

Real Estate

Family Operated Companiesmedium scale

Development Paths of Joint Stock CompaniesDevelopment Paths of Joint Stock Companies

Traditional Companiessmall scale

Idea

prod

uct

shar

es

con

trro

l ove

r sp

ace TNCs

MNCs large scale


Decay of Deutschland AGDecay of Deutschland AG

Source: http://www.mpi-fg-koeln.mpg.de/ak/themen/doks/Deutschland_AG_1996bis2004.pdf

Network of Shares in 1996

Capital Investment FlowsCapital Investment Flows


Vertical (In-House) Production:Industrialisation

Horicontal (In-Region) Production: Fordism

R&D

In-House

In-Region

Stage I:Stage I:Structural Changes in Production Structural Changes in Production From Vertical, In-House to Horizontal, In-Region Production

backward/ forward linkages

HQ, Management

Production

Engineering

Assembling

Distribution, Logistics


HQ

s, P

rof.

Se

rciv

es

R&

D

Pilo

t-P

rodu

ctio

n

Pro

duct

ion

Pro

duct

ion

Pro

duct

ion

Markets

Chain Links of TNCs

Stage II: Post-FordismStage II: Post-FordismConcentration and Dispersion of Production Chain-LinksConcentration and Dispersion of Production Chain-Links

Spatial Concentration Dispersion

Ver

tica

l Co

nce

ntr

atio

n

Professional Services

Universities, Research Cluster, Creative Milieus

High Tech Manufacturing, Engineering, Creative Milieus

Networks

Markets

NetworksNetworksRegional Networks

Logistik

Permanent adjustments

ICT

ICT

ICT


HDC

H/LDC „C“

H/LDC „B“

LDC „A“

Investment,,Technology, InfrastructureProfit, Products,

Economic control

Backwash effects

Spread effects

Information, Management

Research and Development

Know how

Global City, HQs

Growth Pole, R&D, regional HQs

Mega City IRegional HQs

Mega City II

Regional Markets

Globalisation: Hierarchies, Markets, and NetworksGlobalisation: Hierarchies, Markets, and Networks

G. Braun

Braun _ AAG Boston 2008 9Source: Deutscher Städtetag [ed.], 2004

HQs/Lobby R&DHQs/Lobby R&D LogisticLogistic Production Production

community tax per capitacommunity tax per capita

Thresholds of Thresholds of population sizepopulation size

Strategic Spatial Pattern of Nestlè Germany

x Berlin

x Bonn


decreasedecrease

increaseincrease

Employment Development (Change in %)Employment Development (Change in %)

LL

LL

LL

LL Lobby Lobby

R&DR&D Research & Develop. Research & Develop.

R&DR&D

HQHQ Head Quarters Head Quarters

HQHQ

HQHQHQHQ

T Transport, LogisticT Transport, Logistic

P ProductionP Production

TT

TT

TT

PP

PP

PP

PP

PP

Fragmented Pattern – Fragmented Pattern – Value Chain Organisation Value Chain Organisation of Nestlè Germanyof Nestlè Germany

TT

TT

TT

TT

PP

PP

PPPP

PPTT

PP

PPPP

PPPP

TT

PP

PP

PPPP

PP

PP


HQ,Mana-gement, Controlling, Prod.orient.Services

R&DProduct & Process-develop-ment

Engineerng Pilot-Production

Production Logistics, Distribution

Market,Con-sumption

Assem-bling

Upper social

status

Middle social status Middle social status

Lower social s

tatus

Number

Social Groups

Complete (continuous) production chain within an urban region

Urban Region

Contiguous spatial distribution of contiguous social groups

Fordistic Economy and Urban Social OrganisationFordistic Economy and Urban Social Organisation


Social Groups

Number

Increasing discrete spatial distribution of fragmented (discrete) social groups

Discrete Production Chain Within a Region

Urban Region

Post-Fordistic Economy and Urban Social OrganisationPost-Fordistic Economy and Urban Social Organisation


Hierarchy Markets Networks

Locations Levels of Central Places

Core – Periphery

Polycentral

Spaces Contiguous Coherent Discrete

Interaction Uneven Disparate Balanced

Change Decline Stagnation Growth

Is the Hierachical Pattern Is the Hierachical Pattern Overlayed, Overruled, or Replaced Overlayed, Overruled, or Replaced by a Market and/ or Network Pattern?by a Market and/ or Network Pattern?


Is There a New Spatial Pattern as Is There a New Spatial Pattern as an Effect of Globalisation? an Effect of Globalisation?

Yes, there is.Yes, there is.

The system develops more complex.The system develops more complex.

Thank you for your attentionThank you for your attention


Change in Demography 1997-2003Change in Demography 1997-2003

Growth and Decline

in Close Vicinity

decreasedecrease

increaseincrease

Population Development (Change in %)Population Development (Change in %)


Change in Employment (Trend Analysis)Change in Employment (Trend Analysis)

decreasing

increasing

Trend in Employment Development Trend in Employment Development


Legend:

Energy

Car Production

Car Parts

Commercial Transportation

Tourism

Source: Metro-Seminar

Spatial Distribution of Head Quarters in Five Spatial Distribution of Head Quarters in Five Interlinked Economic SectorsInterlinked Economic Sectors


HQ

s, p

rof.

Se

rciv

es

R&

D

Pilo

t-P

rodu

ctio

n

Pro

duct

ion

Pro

duct

ion

Pro

duct

ion

Markets

Logistik

Concentration and Dispersion of Production Chain-LinksConcentration and Dispersion of Production Chain-Links

Spatial Concentration Dispersion

Ver

tical

Con

cent

ratio

n

Chain-Link of TNCs

Stage II : Structural Changes in Production (Post-Fordism)Stage II : Structural Changes in Production (Post-Fordism)

Permanent Adjustment

TNC1TNC1

TNC2TNC2

TNC3TNC3


„Welt AG“ (joint-stock company)born 1998; dead 2004

ExpansionExpansion

DaimlerChrysler, 2004, Automotive IndustriesEmployees: 384.723

in Germany 185.723Change 1997/2004: -17.8% (Transfer of Shares)

Daimler-Benz: European Market, Technology: luxury cars

Mitsubishi: Asian Markets

Chrysler Group

Commercial Vehicles

Services

Mercedes Car Group

Chrylser: US Market: SUV, Vans, light trucks,merger

European Aeronautics

Mitsubishi Motors Corp.

MTU Friedrichshafen


Adidas, 2004, Sport Products

Employees: 17 023in Germany: 2580 (40 nations; 40 employees in production; in 1984: 3.000 in all sectors of employment)

Change 1997/2004: +61.1%

Adidas HQ

RestructuringRestructuring

Product Development: Portland

Design: Tokyo

Marketing: Amsterdam

Buying: Hongkong

Production: Asiapreferably supplier:850 companies, 500 000 employees(small / medium scale businesses)

Product ManagementControlling, Design

Design: New York


Specialisation, NichesSpecialisation, Niches

ZF, 2004, Engineering Industries, supplier of automotive industries. Sectoral Market Leader.Employees: 54.500

in Germany 34.000Change 1997/2004: + 38.2%

ZF

12 ZF global branches

Regional system of highly specialised suppliers and of creative milieu

High Re-investment into R&D and Production ProcessesMilieu: Innovation, Quality, Cooperation, Interaction, Competition, Rivalry, Proximity to Customers,Trust


Hoechst, 2004, Chemical Industry

Employees: 15 628 (max. 180.000)in Germany: 8518

Change 1997/2004: -53,7%

Suppression, Buying OutSuppression, Buying Out

Hoechst industrial park Frankfurt: formerly 25.000 Hoechst employees

Merger with Rhone-Poulenc, 1999

Sanofi-Aventis: 2005

Sanofi: 2005

Today: 23.000 employeesin 80 different companies(small/ medium scale)

Pharma: Sanofi

Pesticide: Bayer

Paint:Dupont

Plant Production:Thyssen-Krupp

Chem. Industry:Private Equity C.

Textile paint:Private Equity C.


Official information flows

Firm A

Firm C

Firm B

Production line

Management

R & D

Network InteractionNetwork Interaction

G. Braun


Firm A

Firm C

Firm B

Management

R & D

NetworkNetwork Interaction: Interaction: CommunityCommunity Type Type

Informal contacts

neighbourhoods

Production line

G. Braun


Firm A/B

Firm C

Firm B

Production line

Management

R & D

Network Interaction: Contact SystemNetwork Interaction: Contact System

Firm A

G. Braun


Firm A

Firm C

Firm B

Production line

Management

R & D

Network Interaction: Lobby SystemNetwork Interaction: Lobby System

Lobby

RegionInfluence on regional politics

G. Braun

Lobby


Opportunity Inception Growth Maturity Decline Identification

strong

weak

development path 1

development path 4

development path 3

development path 2

Development Paths: Ties and Innovation

G. Braun, 2003Source: Tracey P. & G.L.Clark, 2003


LobbynetzwerkeLobby – Networks of NestlèLobby – Networks of Nestlè

Braun _ AAG Boston 2008 30Quelle: eigene Darstellung nach Deutscher Städtetag [Hrsg.], 2004 und Internetrecherche

HQsHQs R&D R&D LogisticLogistic Production Production

Thresholds of Thresholds of population sizepopulation size


Vernetzungen im Vorstand I

Quelle: eigene Darstellung nach www.nestle.de


Quelle: eigene Darstellung nach www.nestle.de

Vernetzungen im Vorstand II

New Spatial Pattern as an Effect of Globalisation Hierarchies, Networks, and Markets

Documents

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