A hypothesis and an inspection on location polarization of economic activity and population due to economic globalization

In response to economic globalization many manufacturing firms fragment their production processes into small blocs. The fragmented blocs are scattered to the sites suitable to their production characteristics. These location changes alter not only economic composition of individual cities but also spatial organization in urban systems. This paper, first, proposes a theoretical hypothesis that sheds light on the influence of the globalization on altering urban systems. This hypothesis explains a mechanism that a few major cities attract more workers and consumers; some medium cities from which production processes and large retail stores outflow decrease in volume of economic activity; and many small cities entering the fragmented processes are characterized by a single manufacturing industry and small retailers. As a result of the globalization, the distribution of economic activity has been changed among cities so that many urban systems become composed of a large and diversified city and many small and simplified cities. Secondly, the present paper tests the hypothesis above by analyzing the distributions of the employees of manufacturing, retailing, finance sectors, and population of all cities in Japan and Sweden in 1990s. It is shown in this inspection that medium scale cities lose their vitality in the production and retail activity; due to these cities' decay, location distributions of economic activities are divided into a large city and many small cities. It is also elucidated in this analysis that the distribution of production activity in the urban systems in existing industrial area has a tendency to be relatively leveled, while the distribution in the urban systems in local area is relatively converged toward a large city. T hese results from the inspection seem to be consistent with the essence of the theoretical hypothesis.