DEATH OF DISTANCE
The communications revolution will have overwhelming and generally benign effects on how businesses function, governments rule, and individuals live their lives. Firms will respond more quickly to market cues, citizens will understand governments better, children will know more about foreign lands. Philosophers and anthropologists may wince in disgust, but it is a faith common among the cyber-elite. The notion of the “death of distance” has gained traction, both in the work of academics but more especially in the popular image of globalisation. Citing radical improvements in the cost and efficacy of long-distance communication and transportation, Cairncross depicts a world marked by the free movement of goods, people, and ideas. Unfortunately, this prognosis has been difficult to identify in present-day trade data. One of the first studies to recognise this was Leamer and Levinsohn (1995), who write “that the effect of distance on trade patterns is not diminishing over time. Contrary to popular impression, the world is not getting dramatically smaller”.
Taking this view as a starting point, a string of papers has strongly confirmed their initial results. Berthelon and Freund (2008) find corroborating evidence in highly disaggregated trade data. Their main findings are that changes in the composition of trade cannot account for the time-invariant coefficients on distance emerging from gravity equations and that trade in homogeneous products has tended to become more sensitive to distance.
Adding support to this view, Carrère and Schiff (2005) argue that the importance of distance in trade has been on the march in recent times. They make this claim on the basis of a trade-weighted measure of the distance separating trade partners (or distance-of-trade) which has been falling from the 1960s. Additionally, this declining distance-of-trade is observed in the majority of nations, suggesting that the result is not driven by distinctions in the trading relations of rich versus poor countries. Finally, Disdier and Head (2008) collect over 1000 distance coefficients estimated from gravity equations in 78 previous studies and perform a meta-analysis. They find that the estimated distance coefficient has been on the rise from 1950, suggesting that the “death of distance” has been greatly exaggerated.
SPATIAL ECONOMIC
Since 1990 there has been a renaissance of theoretical and empirical work on the spatial aspects of the economy -- that is, where economic activity occurs and why. Using new tools -- in particular, modeling techniques developed to analyse industrial organization, international trade, and economic growth -- this "new economic geography" has emerged as one of the most exciting areas of contemporary economics. Producers and buyers are dispersed in space, and overcoming the distances between them can be costly. Much commercial activity is concerned with “space bridging,” and much ENTREPRENEURSHIP is aimed at making good use of locational opportunities and cutting the costs of transport and communication. Spatial economics is the study of how space (distance) affects economic behaviour. Spatial economic show how a common approach that emphasizes the three-way interaction among increasing returns, transportation costs, and the movement of productive factors can be applied to a wide range of issues in urban, regional, and international economics. This book is the first to provide a sound and unified explanation of the existence of large economic agglomerations at various spatial scales.
URBAN SPRAWL
The issue of urban sprawl, evaluating the claim that the spatial growth of cities is excessive. It has been shown that urban spatial expansion is mainly due to three powerful forces: expansion of urban population, rising incomes, and falling commuting costs. It has been argued that urban growth occurring purely in response to these forces cannot be faulted as socially undesirable. The reason is that the resulting spatial expansion is the outcome of a fair competition for land between real estate developers and agricultural users, whose bids reflect the social value of what they produce. The discussion, however, identifies three market failures that may distort the operation of the fundamental forces, upsetting the allocation of land between agricultural and urban uses and justifying criticism of urban sprawl.
These are failure of market transactions to account for the benefits of open space, excessive commuting because of a failure to account for the social costs of congestion, and failure of local governments to make new development pay for the infrastructure costs it generates. Precise remedies for these market failures are identified, which consist of two types of development taxes along with congestion tolls levied on commuters. Each of these remedies leads to a reduction in the spatial size of the city. When crafting policies to address sprawl, policymakers must recognize that the potential market failures involved in urban expansion are of secondary importance compared to the powerful, fundamental forces that underlie this expansion.
For example, while the failure to fully charge for infrastructure costs may impart a slight upward bias to urban expansion, the bulk of the substantial spatial growth that has occurred across the U.S. cannot be ascribed to such a cause. Instead, this growth mostly reflects fundamentals such as the nation’s growing population and the higher incomes of its citizens. Because of the secondary role of market failure, a draconian attack on urban sprawl is probably not warranted. By greatly restricting urban expansion, such an attack might needlessly limit the consumption of housing space, depressing the standard of living of American consumers. Instead, a more cautious approach, which recognizes the damage done by unwarranted restriction of urban growth, should be adopted.
COMPACT CITY
There is a widespread consensus that progress towards sustainable development is essential. Human activity cannot continue to use resources at the present rate without jeopardizing opportunities for future generations. Cities are the main arena of human activity, but they are also the greatest consumers of natural resources. However, urban sustainability is not just about environmental concerns, it is also about economic viability, liveability and social equity. Recently, much attention has focused on the relationship between urban form and sustainability, the suggestion being that the shape and density of cities can have implications for their future. From this debate, strong arguments are emerging that the compact city is the most sustainable urban form. Compact City is a high density urban settlement that has the following main characteristics: Central area revitalisation, High-density development, Mixed-use development and Services and facilities: hospitals, parks, schools, leisure and fun.
In recent years city planners, developers and policymakers have increasingly looked towards designing a more compact city in order to achieve a more sustainable urban form. Policies of urban compaction involve the promotion of urban regeneration, the revitalisation of town centers, restraint on development in rural areas, higher densities, mixed-use development, promotion of public transport and the concentration of urban development at public transport nodes. There are many perceived benefits of the compact city over urban sprawl, which include: less car dependency thus lower emissions, reduced energy consumption, better public transport services, increased overall accessibility, the re-use of infrastructure and previously developed land, a regeneration of existing urban areas and urban vitality, a higher quality of life, the preservation of green space, and the creation of a milieu for enhanced business and trading activities. As sustainable development relies upon the combination of economic, social and environmental elements. The Compact cities are generally attributed with high density urban development having increased socio-economic diversity and improved public realm providing ample opportunities for social interactions and exchanges with pedestrian friendly and closed knit urban form having equitable access to goods, services and facilities thereby minimizing environmental degradation, thus sustainable. But at the same time there are the literatures which point out that high density development have poor quality of life.
SMART CITY
A smart city is a place where the traditional networks and services are made more efficient with the use of digital and telecommunication technologies, for the benefit of its inhabitants and businesses. With this vision in mind, the European Union is investing in ICT research and innovation and developing policies to improve the quality of life of citizens and make cities more sustainable The smart city concept goes beyond the use of ICT for better resource use and less emissions. It means smarter urban transport networks, upgraded water supply and waste disposal facilities, and more efficient ways to light and heat buildings. And it also encompasses a more interactive and responsive city administration, safer public spaces and meeting the needs of an ageing population.
As the global population continues to grow at a steady pace, more and more people are moving to cities every single day. Experts predict the world’s urban population will double by 2050 – which means we’re adding the equivalent of seven New York Cities to the planet every single year. As our planet becomes more urban, our cities need to get smarter. To handle this large-scale urbanization, we’ll need to find new ways to manage complexity, increase efficiency, reduce expenses, and improve quality of life. With this rapid growth ahead of us, imagine if our cities could talk—if they could give us live status updates on traffic patterns, pollution, parking spaces, water, power and light. Imagine how that kind of information could improve the economic and environmental health of the city for residents, merchants, and visitors. Imagine how it could improve working conditions and productivity for the people who maintain the city. Emerging technologies are poised to reshape our urban environments. Using ultra-low power sensors, wireless networks, and web and mobile-based applications, Smart Cities are becoming a reality.
CONCLUSION
Transport costs have always been an important dimension in regional science. It is therefore remarkable that regional science and transport economics have developed in a rather unconnected way. Although being distinct, the routes of the two were parallel, and there are signs that the two fields will get closer to each other. This paper further discusses long run trends in transport costs and the potential spatial consequences. The main conclusion is that although in terms of money and time, the performance of transport has improved enormously, many economic activities have not become footloose to the extent as expressed by the notion of ‘death of distance’. One of the reasons discussed is the role of transaction costs, some being clearly related with distance.
It is clear that the city of the 21st century is no longer the city of the industrial era. Different spatial and temporal organizational principles, communication cultures, modes of economic organization and ways of life coexist in the current city. For urban and spatial planners the ICT related changes pose huge challenges, in the first place because the spatial reach of daily home and work activities and contacts has expanded from the local to the global scale. The consequences of this new spatial reach in the way of organization of the economy, business activities and everyday life have been enormous. On the other hand, the digital technologies that are the material support of the ‘wired new world’ are very dependent on conventional telecommunication infrastructures. These urban networks, deployed within and between cities, are still an understudied field. With very few exceptions the ICT infrastructures have been growing with little or no supervision or even awareness from local authorities. The lack of public authority and responsibility in the telecommunications sector and the discomfort of urban planners and local authorities regarding the technicalities of ICT infrastructures have played a role in the present disregard.
