I will first look briefly at the patterns of economic development in the last 20 years and at the way in which these have had an impact on the working lives of people, to the extent that some economists are beginning to talk about the end of work.
I will then look at how cities are reacting to these trends and at how important cities still are as markets, trading and production centres. As an example of the above, I will take London, and in particular I will show how the synergy between cultural and technological innovation represented by the multimedia industries still needs, in order to develop, an agglomeration type of economy, which cities such as London can provide. Finally, I will argue that in order to sustain these new types of industries and to address head on some of the urban and social problems cities face, they will need to harness their resources in a more strategic and creative way than ever before.
The end of work and the end of cities as we know them? In terms of economic development, the last twenty years have seen a major shift; government institutions, corporations and organisations in general are increasingly becoming both more flexible and less secure. The character of work is progressively moving away from fixed functions and clear career paths towards time-dated, contract-limited tasks and portfolios of skills and careers.
Today the century-old utopian dream of a future techno-paradise is within sight, and the technologies of the information and communication revolution hold out the long anticipated promise of a near-workless world in the coming century. This process, as the American author and economist Jeremy Rifkin points out, requires organisations to constantly reinvent themselves:
The new information and communication technologies have both increased the volume and accelerated the flow of activity at every level of society. The compression of time requires quicker responses and faster decision making to remain competitive... In the information era, ‘time’ is the critical commodity, and corporations bogged down by old-fashioned hierarchical management schemes cannot hope to make decisions fast enough to keep up with the flow of information that requires resolution. (Rifkin, 1995: 101) Contemplating this scenario, it is difficult to deny that we are going through a slow, but unstoppable erosion of the foundations that characterised the age of mass industrialisation. On the factory floor, the Japanese form of lean production has done away with the traditional managerial hierarchy and has replaced it with multiskilled teams that work together at the point of production. Under this new system of production the factory floor has become a sort of research and development laboratory, a place where the combined expertise of everyone in the production process is utilized to make ‘continual improvements’.
‘Re-engineering’, a word that has entered the vocabulary only recently, stands for corporations which are flattening traditional organisational pyramids and transferring more and more decision-making responsibilities to networks and teams. However, the re-engineering phenomenon is forcing a fundamental overhaul in the way business is handled, and, in the process is cutting further into employment, eliminating hundreds of job categories and forcing geographical dislocations across the globe. All this has huge implications for the future of some cities.
In this context, cities seem merely to react to the economy, and yet, some cities are more innovative than others, can think fast, can predict and act in order to harness their innovative capability. This is because the economy is not indifferent to location and cities are still a vehicle for the economy.
Businesses need cities; they need the educational and cultural resources which cities offer in order to attract the high-quality people whom they require at the core of their organisations. They need all the variety of services and small businesses which can sustain their activities and these can be found in cities. Businesses need the buzz of cities, the energy and the excitement, the variety of life and contacts that can be made in cities. (Handy, 1994)
And even though some observers think that this process may be in the process of exploding spatially, and as the technological revolution consolidates itself, there may be less need for spatial proximity as a sine qua non for innovation. As far as ex-urban relocation goes, the results of studies on the development of Silicon Valley and Route 128 conclude that though they both grew out of a historically unique confluence of political, economic and institutional circumstances, it is unlikely that this particular combination of circumstances will be repeated. (Saxenian, 1994) As this is no easy territory to tread on, there are no clear cut answers as to why some old cities appear to be more capable of fighting off their competitors, while other cities are in decline, lacking an overall strategy through which to launch a recovery. In this context, it is interesting to observe the behaviour pattern of London as an example of survival almost on a day to day basis without long term strategic thinking.

Is London a creative city?

Historically, cultural creativity and technological innovation came out of the cities - and in order to work as markets, trading and production centres, cities have always drawn from the critical mass of entrepreneurs, intellectuals, power brokers, artists and outsiders who provided the necessary creative energy for the city to survive. But, in the present economic climate, cultural creativity and technological innovation have become the equivalent of what raw materials had been in the 19th and 20th century, and the industries and cities of the 21th century will increasingly depend on the generation and circulation of knowledge matched by rigorous systems of control. In London, for instance, the present generation of innovative activities such as multimedia companies and related cultural industries, is emerging out of the synergy between cultural and technological innovation, which are not always coupled with strategic creative thinking by policy makers.
London is currently displaying two trends which run in parallel. On the one hand, as a result of the information revolution, business activities - direct banking being one example - are moving out of London to regional cities. British Airways is another example, having recently moved its enquiry reservation office to Newcastle. Next to this, however, there is another trend created by the synergy between art and technology which is developing entirely new opportunities for young creative people. What are moving into London now are jobs which need a lot of ‘intelligence’, but little space and are capable of combining information processing with a strong aesthetic component.
New techno-artistic activities such as electronic music, electronic art and multimedia software are finding their centre of production in London and, what is more, there is a tendency for clusters of activities consisting of two or more sub-sectors to develop in the same area. The chief example of this is Soho, where London’s single largest concentration of film, video and television, music, advertising and design companies is to be found. This is followed closely by clusters in Camden (film and TV production), North and West Kensington (film, video and music recording), Hackney (audiovisual, advertising) and Fitzrovia (fashion and television production). Soho’s new generation of companies respond to the needs of the ‘perfect consumer’ as defined by Bourdieu (Bourdieu, 1984) in that they are capable of interpreting and translating taste and consumption into lifestyles and vice versa. And Soho historically has offered the right social and cultural environment for the emergence of radical lifestyles and new fashions. These companies are usually small, alternative, and are often democratically run, risk-taking and need no middle managers to tell them where their clients are and how to ride the next innovative wave. They have ‘attitude’ and they are willing to move and shift between high and low culture. These companies reflect only one aspect of the potential impact the digital revolution could have on locations and cities alike. Sociologists Scott Lash and John Urry are very keen on emphasising the impact of these post-industrial goods and services produced by these kind of companies - as a result, they also see tourism as one of the major developments in the next century. Their research, however, leaves unanswered the question of why the creation of such products and services should be spatially bound to a specific location, as it is for instance in the case of London in the 1990s, and what strategic decisions a city needs to take in order to make this type of development sustainable. In approaching this question, Professor Peter Hall suggests that capital cities have on their side the competitive advantage of inertia:
Because things have always been done in a particular location, they tend to remain there. The pattern is especially pronounced when activities depend on privileged information... Why does the City of London exist when you can potentially trade from any location? (Hall, 1996: 25) The quality that capital cities have is that quite often they have attracted and consolidated, through the centuries, a set of institutions, activities and innovative milieux which they still maintain and which contribute to their track record in particular fields. London is still an important financial centre because not only has it had Lloyds, the Bank of England and finance services for a long time, but also because the City has always had at its core a unique set of formal and informal networks which have allowed the constant exchange of ‘special privileged information’ (Hall, 1996). This however does not mean that competition between places is ruled out and that London’s position is guaranteed in the future; in the multimedia and interactive educational services sector for instance, though London is advantaged in terms of content provider, it is not difficult to see that it will have to fight hard to retain its prominence over centres of multimedia production such as, for instance, Tokyo.
As far as the multimedia industries are concerned, it is difficult to construct a solid argument for inertia as there are many variables that could intervene at any given moment - consumer preferences, changing patterns of demand, new alliances and competition from other countries being just some of them.