Article

The Role of Industrial Clustering and Increasing Returns to Scale in Economic Development and Urban Growth

Philip McCann

in The Oxford Handbook of Urban Economics and Planning

Published in print December 2011 | ISBN: 9780195380620
Published online September 2012 | | DOI: http://dx.doi.org/10.1093/oxfordhb/9780195380620.013.0009

Series: Oxford Handbooks

 The Role of Industrial Clustering and Increasing Returns to Scale in Economic Development and Urban Growth

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The size of cities is a crucial issue for the ability of an economy to promote economic growth and development. This article opens with discussing the transactions costs perspective and briefly reviews the different types of industrial clusters that exist. Furthermore, it explores how cities have grown during the twentieth century. At the turn of the twentieth century, the relationship between cities and national economic development was very simple. Large cities meant wealthy economies. However, at the turn of the twenty-first century, urban scale was not a simple indicator of urban productivity. In many parts of the world the most productive cities are not the largest. This fact poses major challenges to regional planning strategies that are discussed in detail. The article also argues that twenty-first-century planning strategies in many countries will involve the promotion of global connectivity, and this tendency toward polycentric urban systems will dominate land-use planning strategies.

Keywords: cities; economic growth; development; urban productivity; planning

Article.  13470 words. 

Subjects: Economics ; Urban, Rural, and Regional Economics

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