Changing ground: The future place of the productive city

Over the past decades, metropolitan areas across Europe have experienced a considerable restructuring of their economic base. For numerous reasons, productive activities have largely been at odds with modern urban economies, resulting in industry moving out and being discouraged from operating in central urban areas.

This move has been supported by public policy, which has favoured sustainable development associated with housing, public amenities and commercial activities in urban cores. Activities associated with the productive sector have been considered ‘weak’, less profitable and incompatible with popular visions of a 21st century city.

In contrast, trends are emerging that suggest that the increasing peripheralisation of industrial activities to urban edges can be undesirable, and even counterproductive, for metropolitan areas looking for economic development, social cohesion and sustainable urban development. New emerging industrial businesses are also forcing cities to review years of urban gentrification and anti-industrial policy.

The ESPON project MISTA (Metropolitan Industrial Strategies & Economic Sprawl, takes on part of this challenge. It looks at the recent past and the near future of metropolitan industries to help planners and policy-makers make informed decisions on industrial activities. What is production today? Where is the manufacturing sector located in the contemporary city and where has it moved? What is the future role of industry in the city? Should we take for granted that productive activities should leave the city, or are there signs of a new coexistence within the city? The project aims to challenge the current divided and separated narratives on this issue and explore new opportunities for a productive city.

What productive activities exist and grow in cities today?

A first important question is the nature of production in city regions today, as scholars reflect upon the changing nature of manufacturing in the contemporary world. New business models, the progressive fragmentation of value chains and the rise of ‘hybrid’ goods based on blended manufactured and service contents lead to increasing interpenetration between firms and activities in the secondary and tertiary sectors. The boundaries between productive sectors and services are becoming blurred, tending towards a more mixed and ‘serviceled’ identity.

However, comparable data at the sectoral level are officially collected and available only through the standard NACE ( ) industry classification, which is very much based on the traditional production–services dichotomy. To empirically grasp the dynamic evolution of manufacturing and its consequences for sectoral profiles and the ongoing structural change at the metropolitan level, the project uses disaggregated sector-level data at a highly granular (NACE) level. This allows the generation of comparable data more closely related to the hybrid activities of contemporary metropolitan enterprises and the development of sectoral typologies and alternative sectoral aggregations.

The project also extends the analysis to public utility provision (energy and water and waste management); transport and logistics; wholesale and storage; and construction and repair services. These activities play an important role in cities and metropolitan areas, again blurring the boundaries between the manufacturing and service sectors.

" As a first step, the project develops an original analysis of the 289 metropolitan regions and 58 ‘first-tier’ metropolitan areas The analysis focuses on the longest possible period for which data are available "

How is manufacturing developing in EU metropolitan regions? A second important question is about the specific role of metropolitan areas in processes of deindustrialisation. To what degree is deindustrialisation a ubiquitous and homogenous phenomenon in European metropolitan regions? Have there been different developments in different types of metropolitan regions, differentiated, for example, by size, by location in old or new Member States or by the city tier? Is it possible to distinguish different types of manufacturing developments at the metropolitan level in terms of the causes of shrinking manufacturing employment? As a first step, the project develops an original analysis of the 289 metropolitan regions and 58 ‘first-tier’ metropolitan areas (i.e. regions that host national capital and/or have more than 1.5 million inhabitants). These areas can be analysed using NUTS3-level national accounts data from Eurostat and the Joint Research Centre.

The analysis focuses on the longest possible period for which data are available for the crude sectoral breakdown available for these data (i.e. from 1995 onwards). Focusing on industry (i.e. NACE B–E), including manufacturing and the public facilities provision sector, it analyses the development of gross value added (GVA), employment and productivity in metropolitan regions and identifies the relevant drivers of industrial change empirically.

" The boundaries between productive sectors and services are becoming blurred, tending towardsa more mixed and ‘service-led’ identity "

While employment in industry has shrunk since 1995 in metropolitan regions in terms of volume and share, real GVA in industry has risen significantly despite a declining output share. These basic patterns of industrial development are similar among different groups of metropolitan regions and even between metropolitan regions and all EU regions. Still, more recent trends allow a cautiously optimistic view of the further development of industry in European metropolitan regions: the downwards trends have flattened out and industry shares have been largely stable since the mid-2000s, except for the years of the great recession (2007-2008). In addition, productivity gains seem to have a much greater impact on employment losses in metropolitan regions than a shrinking industry sector (i.e. ‘true’ deindustrialisation).

The first round of interviews with relevant local stakeholders from the supporting city regions (Vienna, Warsaw, Oslo, Turin, Stuttgart, Riga) showed that quite varied processes are taking place, despite some convergent trends. The relevance of the policy problem to local policy agendas, within quite diversified metropolitan development models and trends, is clear. This was witnessed by the different ideas for both regulatory (taxation, planning) and land policy; as well as by the different institutional (agency) changes that local cases have so far developed in different contexts. This outcome provides the opportunity for reflection and the exploration of these different cases, which can inspire local policy-makers across Europe’?.

References

Levinson, M. 2017. ‘What is Manufacturing? Why Does the Definition Matter?’ Washington, DC: Congressional Research Service.

Veltz, P. 2017. La Société Hyper-Industrielle. Paris: Le Seuil, La République des Idées.