The Urban Turn: Cities, Talent and Knowledge in Denmark

Hgni Kals Hansen Lars Winther
Urban
Cities, talent and knowledge in Denmark Aarhus University Press
The
Turn
The Urban Turn
The Urban Turn

Cities, talent and knowledge in Denmark
Hgni Kals Hansen and Lars Winther
Aarhus University Press | a
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The Urban Turn the authors and Aarhus University Press Cover by Camilla Jrgensen, Trefold Ebook production: Narayana Press ISBN 978 87 7124 0 98 6 Aarhus University Press Aarhus Langelandsgade 177 DK 8200 Aarhus N Copenhagen Tuborgvej 164 DK 2400 Copenhagen NV www.unipress.dk Published with the financial support of the COWI Foundation and the Centre for Strategic Urban Research financed by Realdania INTERNATIONAL DISTRIBUTORS: Gazelle Book Services Ltd. White Cross Mills Hightown, Lancaster, LA1 4XS United Kingdom www.gazellebookservices.co.uk ISD 70 Enterprise Drive Bristol, CT 06010 USA www.isdistribution.com
Contents
Acknowledgement 1. Introduction to the Urban Turn 2. City Regions, Talent and the Knowledge Economy: Framework for Analysis 3. The Rise of City Regions in Denmark 4. Urban and Regional Distribution of Talent: Location Dynamics and the Spatial Division of Talent in Denmark 5. The Outer City: Urban Economic Geographies in the Making 6. Location Dynamics and Imaginary Spaces of Location Epilogue: Geography, the Urban and Economic Growth References Index
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Acknowledgement
This book is based on a series of papers that have appeared in scientific journals. We wish to express our appreciation to the publishers who have granted us permission to use the material. The papers in question are: Hansen, H.K. and Winther, L. (2010), The Spatial Division of Talent in City Regions: Location Dynamics of Business services in Copenhagen, Tijdschrift voor Economische en Sociale Geografie, 101: 55-72; Hansen, H.K. and Winther, L. (2007), The Spaces of Urban Economic Geographies: Industrial Transformation in the Outer City of Copenhagen, Danish Journal of Geography, 107(2): 45-58; Winther, L. (2007), Location dynamics of business services in the urban landscape of Copenhagen: Imaginary spaces of location, BELGEO, 2007(1): 51-72; and Winther, L. and Hansen, H.K. (2006), The economic geographies of the outer city industrial dynamics and imaginary spaces of location in Copenhagen, European Planning Studies, 14(10): 1387-1406. The book has been published with generous financial support from the COWI Foundation and the Centre for Strategic Urban Research financed by Realdania.
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1. Introduction to the Urban Turn
This book is about the urban turn. The urban turn is about the growth and resurgence of large cities and city regions in the past decades. The urban turn emphasises the importance of cities and city regions as the key places that generate economic growth in modern capitalism. The resurgence of large cities happened concurrently with the rise of the knowledge economy, together with the increased use of talent that has become a key resource in the economy. Talent, e.g. the ability of people, or groups of people, to produce, use and distribute knowledge thus helping to solve problems and generate new ideas is an essential resource exactly because the rise of the knowledge economy was a major response to stronger global competition. Globalisation processes have transformed the economies in Denmark and in Europe through, for instance, increased price competition from the low-wage countries, the expansion of new markets and a stronger competition among global and local firms. As a result, many firms in Europe have had increased focus on innovation, i.e. new products and production processes, to remain competitive. New knowledge is fundamental to innovation, and thus the rise of the knowledge economy as an economy that is based on the production, distribution and use of know-how, has become a major important constituent in the modern European economy. It has become visible in many places in the economic landscape particularly in the large urban regions that generally offer a greater degree of accessibility to qualified labour, and to diverse labour markets, as well
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as proximity to knowledge institutions, markets and global linkages. Although this is evident for high-tech industries and advanced business services, it produces an uneven economic geography of talent and economic growth and changes the conditions for local economic growth. Hence, the book is an introduction to and analysis of the location, distribution and dynamics of economic activity, uneven geography and the local economic development processes. A key element of such an analysis is that knowledge and knowledge production have become important themes for understanding urban and regional development; not least in an analysis of the locations that underpin the production, distribution and use of knowledge. Talents are people who work in creative occupations and thereby are innovative in their everyday work. The creative class, which Florida (2002) labels this group of people, is characterised by being paid for their brain skills rather than their physical skills. This particular group of people therefore has been allocated a new position in the workforce in comparison to the situation earlier in a traditionally capitalist production. Today, with the growing importance of knowledge in capitalist production, a crucial part of the knowledge embedded in the means of production is embedded in the employees themselves, and thus the power relation between employers and employees has changed dramatically. The employers today are more vulnerable to loosing key and core skilled employees and are thus more dependent on drawing new knowledge into the firm by way of attracting talents. According to present theories within the field of urban and regional studies, firms that compete on knowledge and innovation have better opportunities to optimise qualifications and human resources in larger city regions because the supply of competences in these places is much greater and varied. Thus cities, especially large cities, have gained an increasingly central position when discussing the appropriate conditions for regional economic growth and development. Geography does matter, and cities and city regions have once again turned out to be the vital places of innovation and creativity, making them important strongholds in the national and global economy. This is an important prerequisite to understand the processes of competitiveness and knowledge production in firms and industries and to understand how locations underpin the economic spaces which increase their competitiveness.
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The analysis of urban economic dynamics in this book takes its point of departure in two basic ways of theorising and explaining the urban and regional economic growth. Both frameworks build on agglomeration economies, and thereby argue that the co-location of economic actors and the concentration of economic activity have a positive influence on the economic performance of firms and industries, and hence on urban and regional growth. The first framework, localisation economies, concerns local factors that are external to firms but internal to an industry within a geographical region (Feldman, 2000, p.383). Localisation economies can be understood as dense input-output relations, a skilled labour pool and organisational and knowledge spillovers that are external to a firm but internal to firms within an industry in a geographical bounded area. Localisation economies relate to firms within closely related industries and the basic argument is that co-location in the knowledge economy can help to spread new knowledge on the one hand and provide a large pool of highly qualified labour on the other. The second framework, urbanisation economies, can be seen as scale effects associated with city size or density. (Feldman, 2000, p.383). Urbanisation economies shall be understood as effects that are external to industries but internal to a bounded urbanised area. Urbanisation economies are related to all firms in all industries, and the basic argument is that density and diversity can help reduce search costs, on the one hand, and expose firms to unexpected events that can bring along new knowledge, and hence innovations, on the other hand. An important conclusion is that urban size, diversity and density matters to realise urbanisation economies. Further, changing economic and industrial structures, shifting modes of production and organisation caused by fluctuating demands and technological breakthroughs have induced different moderations of localisation economies and urbanisation economies in an attempt to explain the dominating economic dynamics of a particular place at a specific time. Time and place are parameters that constitute the field of economic geography and urban and regional growth (Storper and Scott, 2009). Essential for the understanding of urban and regional development is that the urban and regional systems drive the economic development in different directions; the importance of a particular city
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changes over time and the geographical context matters but differs among cities and regions. The theoretical focus in urban and regional studies in the 1980s and early 1990s was on localisation economies and highly specialised local growth especially directed against theorising the emergence of industrial districts in the 1970s and 1980s and flexible specialisation as a new mode of growth (Brusco, 1982; Prior and Sable, 1984). The economic growth in many European countries was found outside the large city-regions in former rural and peripheral regions based on specialised local production systems (Asheim, 1996; Markusen, 1996). In the late 1990s and 2000s, the theoretical focus changed and was directed towards urbanisation economies and the growth of large city-regions as they once again began a period of marked growth (Scott, 2008; Hansen and Winther, 2010). In the 1970s and 1980s many large city-regions in Europe were in crisis, experiencing job loss and deindustrialisation especially in the inner cities (Scott, 1988). The resurgence of the large city regions was based on the rise of a variety of industries mainly within the service and knowledge economy, partly initiated through a general organisational disintegration of non-core activities leading to a growing independent field of service activities formerly taking place inside the organisations and hence a revitalisation of many inner cities in Europe and North America. This set of processes led to an increasing regional division of labour reinforcing inter-urban and urban-peripheral competition, creating even more distinct differences between spaces of production and consumption. Consequently, the 1990s and 2000s witnessed an increasing competition between places for investment, firm location and, recently, also labour and especially talents. The book takes its departure from this perspective, e.g. viewing the city as a crucial entity for understanding the economic dynamics of modern capitalism. However, the book is also sceptical towards these new theories as they often reduce cities and city regions to spaceless, one-dimensional cauldrons of creativity and innovation evident from Jacobs (1969) to Florida (2002). In the following chapters we analyse the relation between geography and growth in Denmark to provide the readers with a better understanding of the conditions for regional development. We do this by analysing and discussing different aspects
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of the city, looking at the geography of knowledge economy represented by firms, employment and talent. Cities and regions expanding into the surrounding areas and creating large city regions characterised by new urban forms, shifts in location patterns, changing divisions of labour and transformation of industrial structures have produced new economic geographies and new urban structures. The economic geographies of the new urban forms produce many different challenges to our analysis of the urban landscape, including social and political aspects. We focus entirely on the economic geographies and practices in the urban landscape. The main concern is how the new urban forms as such challenge our theories and methods. Understanding what produces the changes in the economic geography of city regions requires a relational approach to urban economic geography. The various urban forms are not autonomous, independent, urban economic forms. Rather, they are relational spaces that transcend borders and urban hierarchies. Industrial dynamics and the location of firms cannot only be understood from a location in the local urban hierarchy or the size of its local hinterland, as suggested in the standard models of economic geography, which draw heavily on the orthodox research tradition in economic geography. This tradition is highly influenced by Christallers central place theory and Webers model of location and their later different theoretical developments, which, of course, are also evident in regional science and the quantitative revolution in geography (Hoover, 1963; Lsch, 1954; Isard, 1956; 1960; Chorley and Haggett, 1967; Harvey, 1969). Although the position has been heavily criticised in economic geography since the 1970s see, for instance, Massey (1973) over Barnes (1996) to the current relational turn in economic geography (Boggs and Rantisi, 2003; Bathelt and Glckler, 2003), the understanding of the outer city or suburban areas as subordinate to a city centre is still strong in the literature: the central city is the epic centre of the service and knowledge economy in the global city-regions. City regions are, as stated above, sometimes reduced to spaceless caldrons of innovation and creativity. The problem with this conceptualisation of metropolitan regions is that this alone cannot explain the economic processes of transformation in the regions (Jonas and Ward, 2007).
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Founded on the observed structure and dynamics of the outer city and suburban areas of Copenhagen, we argue that the multifaceted economic geographies of the city regions call for alternative ways of thinking about urban economic geographies. The main question to be answered is: what are the underlying processes and structures that produce the new economic geographies of the new urban forms? We suggest in the book that the analysis of the economic geographies of city regions should take an epistemological leap away from thinking of the various urban forms industrial and economic development as only a result of a specific position in an urban landscape, where the outer city and suburban areas are subordinate to the central city and their economic functions are a result of the size of the hinterland: to think of the city region and its various urban forms as relational places, where different relational spaces of the firms and industries for instance, the firms knowledge spaces, customer spaces, or labour spaces connect and produce specific spatialities of urban economic geographies. Another important epistemological leap is from understanding the specific urban forms as independent, territorial units within a hierarchy and as autonomous entities with a hinterland; in other words, to understand them as borderless, relational places. These relational places are produced in a changing functional and spatial division of labour with new specialisation patterns arising as a result of the interdependence with other urban forms and the processes of path-dependency and lockins. This draws partly on the relational position in economic geography (Amin, 2002; 2003), Amin and Thrifts (2002) and Amin and Cohendet (2004). In this context, location is understood as situated distanciated networks. Amin and Cohendets (2004) discussions of the production of knowledge in firms illustrate the relational position. They focus on the firm as the locus of knowledge production rather than the region. By doing so, they see different factors underpinning the knowledge producing processes. They do not exclude geography (the local or regional) as an important factor for the shaping of firm networks, but the space that the firms operate in cannot be reduced to a matter of geographical scale (regional or local). The firms network consists of the firms relations and hence, analytical focus should be on the space that is defined by the firm relations: the spatial extension of the relations.
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On the other hand, we need to understand how places/locations underpin the firms networks and relational spaces. A regionalist account can contribute to an understanding of the production of firm networks and their spatiality. The regionalist position attributes geographical proximity a vital role in the production of knowledge, and hence, for urban and regional competitiveness and growth. At present, researchers like Asheim (1996, 2002), Morgan (1997), Storper (1997), Cooke and Morgan (1998), Maskell and Malmberg (1999) and Gertler (2003) are drawing the main conclusions of the position, theorised, for instance, in the conceptualisation of learning regions to understand the path-dependency of regional change from an evolutionary perspective (Essletzbichler and Winther, 1999; Boschma and Frenken, 2006). Common to the contributions is the fact that the geography of culture, institutions, norms and values are decisive for trust among economic actors (people and firms). The region is conceptualised as a space in which the institutional framework of learning processes and knowledge production is produced and reproduced. Consequently, the new dynamics in the urban economy call for an analytical framework that emphasises the importance of social relations and how these relations interact in space. The analysis has to take into account that local, regional and national institutions play a crucial role in the contents and evolution of specific linkages in networks. Therefore, the dichotomy between for instance the city centre and suburbs, or the urban fringe and the hinterland, should be replaced by an analytical conceptualisation that opens for new understandings of economic dynamics by detecting and analysing linkages within firms networks. This will contribute to a better understanding of the knowledge creation and competitiveness of firms and how they can be underpinned within various urban forms. Figure 1.1 summarises the main focuses and relationships of this book. We examine urban and regional growth with the city region as the geographical entity in the cross field between localisation and urbanisation economies. We stress the importance of the rise of the service and knowledge economy for the resurgence of city regions and the urban turn and especially how talent is related to urban and regional growth in the last decades. We do that using different perspectives. Chapter 2 sets out the theoretical frame and describes the
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main relationships of Figure 1.1. Therefore the chapter gives a more thorough introduction to the theoretical contributions to the debates on the urban turn in economic geography and urban and regional studies. The chapter serves as a theoretical framework explaining the localisation of economic activity within which the forthcoming chapters shall be read and understood. It presents and outlines the key concepts that are essential for our argumentation throughout the remaining chapters. Thus, we explain the importance of knowledge in contemporary capitalism and how it is related to location and cities and regional growth. We especially focus on localisation and urbanisation economies as two important sets of mechanisms and processes changing modern economic geography. Creativity and talent is critical for knowledge and knowledge production, and we emphasis the role of talent in understanding regional growth and the uneven geography.
Figure 1.1 Key relationships and theoretical conceptions in urban and regional development
Inter and intra regional nevenness u Expansion of the outer City
Location of Industries Location of Firms
Spatial distribution Space and place
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Chapter 3 presents the main characteristics of the urban turn in Denmark with a focus on the economic geographies of two dominant city regions. The chapter supplies an introduction to the economic geography of Denmark in a historical perspective. It describes the geographical outcome of the recent decades of development, stressing the patterns of the uneven geographies in the making and division of labour, division of production etc. The rise of the knowledge and service economy has a strong influence on the success of the city regions, and talent is one of the strong explanatory factors of the new economic geography with strong city regions. This leads on to Chapter 4 which focuses on the regional and urban division of talent in Denmark. This section discusses the geography of talent in Denmark and how this geography is becoming increasingly imbalanced with the present economic dynamics. The chapter goes even a step deeper and discusses the division of talent, not only between regions, but also within regions, stressing the heterogeneity of cities on the one side, and talents on the other. The heterogeneity of city regions that is already touched upon in Chapter 4 is taken further in Chapter 5. This chapter looks into what we coin the outer city. A strong effect of the urban turn and resurgence of cities is that they expanded into their surroundings and include small and medium sized cities and open land in the urban region. Thus, we argue in Chapter 5 that the transition zone between the urban and the rural represents a new economic geography in the making. The outer city still provides shelter for more traditional types of production and represents location dynamics that are different from what we see elsewhere in the city, and this is the point of departure in Chapter 6. Here we change perspective and introduce the concept of imaginary spaces to challenge the traditional understanding of the location preferences of firms. Thus, in Chapter 6 the firm and firm location becomes the perspective from which we examine the location of economic activity in city regions. Lastly, the book concludes with an epilogue and puts the findings into perspective in regard to how we want to approach regional development in Denmark.
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2. City Regions, Talent and the Knowledge Economy: Framework for Analysis
This chapter outlines the conceptual framework within which we can understand the dynamics that shape the current economic geography of Denmark. We introduce contemporary theory within the field of urban and regional studies, focusing on the nexus between knowledge production, urban spaces and regional development to coin the main drivers of modern capitalism. The aim of the chapter is to provide a solid conceptual frame for understanding the following chapters and to introduce the geographical units of analysis that are used throughout the book and the data that are used for analysing the dynamics of the units. Competitiveness between city regions has gained a more and more central position in regional development and regional planning within the last decades (Amin and Thrift, 2002; Florida, 2002; Glaeser, 1998). A reason for this is that globalisation has caused pressure on industrial structures, forcing firms to increase their competitiveness by more actively promoting innovation and knowledge creation. Access to knowledge has therefore become vital for most types of production in Western economies. Based on growing interest in knowledge creation and knowledge exploitation, a bulk of literature has emerged within the field of economic geography and neighbouring disciplines that study the relation between geography and knowledge creation. Lundvall (1992) points to
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the importance of establishing and underpinning systems of knowledge creation to facilitate innovation in what he calls the learning economy. These systems of innovation, he argues, depend on national institutions and are embedded in a national economic structure. This argument is taken further by Cooke (1992), Cooke, Uranga and Extebarria (1997) and Asheim and Isaksen (1997) who argue that not only national but more importantly also regional institutions and institutional set-ups underpin innovation. Therefore, a regional innovation system based on institutions embedded in a local and regional socio-economic context should rather be the perspective for understanding processes of knowledge creation and innovation. Further, within industrial geography, the regions are stressed as the key to understanding industrial development. Storper (1997) and Storper and Walker (1989) claim that labour is produced and reproduced within the institutional set-up of regions which is strengthened by regional industrial and economic structures. Hence, labour skills, competences and capabilities become deeply rooted in the geographical settings of cities and regions, and thus production of goods and services and reproduction of labour have a path-dependent character. As argued in Winther (2001), regions, like firms and industries, can be considered to follow distinct paths of technological change and innovation. Regions may be characterised by their variety in terms of technology, organisational and informational characteristics (Rigby and Essletzbichler, 1997). Geographical and industrial inertia and differences through investment in capital stock, knowledge production and learning, business culture, regional institutional set-ups including public and private organisational structures and traded and non-traded interdependencies between firms and other regional organisations and institutions result in a diversity of regional production and innovation systems (Clarke and Wrigley, 1997; Storper, 1997; Saxenian, 1994; Braczyk et al., 1998), a diversity that is emphasised on firms and industries use of various knowledge bases (Asheim and Gertler, 2005; Asheim et al., 2007).The regional diversity is carried through ties between local firms and institutions, the accumulation of capital and knowledge, and the knowledge embodied in labour and organisational routines. Bounded rationality and interaction between institutions and organisations have strong enabling as well as constraining effects
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on the pace and direction of economic growth and performance in a region. Firms are a part of the regional environment of social relations and institutions which set regions on a successful or fruitless development path. Economic crisis in regional systems are a part of the dynamics of capitalism through innovation and restructuring. Viewing institutions as reinforcing regional success, or the lack of it, is based on a systemic line of thinking. The understanding of production and innovation can, however, also be viewed in a more individual perspective. Individuals are carriers of the knowledge that is created and used in production of goods and services. Consequently, individual people are the nexus for firms to access information and knowledge. In the literature, people in possession of valuable knowledge are often referred to as talents1 (e.g. Florida, 2002). Therefore, the geography of knowledge is also the geography of talents. The geography of talents deals with the location of labour, which possesses valuable knowledge and which is capable of absorbing and applying knowledge and information. The understanding of location of talents cannot, however, be detached from the analysis of institutions (understood as the rule of the game, norms and values), private and public organisations and economic structures including regional labour markets, that will have influence on the location of talent and the efficiency to generate and use knowledge. As the creation of and access to knowledge have become increasingly important to remain competitive, a growing focus has been placed on how, who and where knowledge is produced, used and diffused this is the key to understanding the geography of the knowledge economy. The interest in the relation between knowledge and regional competitiveness, and in how knowledge creation is underpinned, has been addressed within study areas of innovation systems (e.g. Lundvall,
1 In the literature, talent is only one of several concepts covering the same area of interest people who become assets in the knowledge intensive production due to skilled or special competences, high educational level, or their creative mindset, which makes them valuable for solving problems, generating new ideas etc. Concepts used to cover the same group of people are e.g. human capital and creative capital. Hereafter, the term talent will be used as a common denominator for this group of people, though the difference between the concepts will be touched upon later in this chapter.
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1992; Edquist, 1997; Braczyk, Cooke and Heidenreich, 1998; Asheim and Isaksen, 2002), learning regions (e.g. Florida, 1995; Asheim, 1996, 2000; Morgan, 1997; Archibugi and Lundvall, 2001), industrial districts (e.g. Brusco, 1986, 1990; Beccatini, 1990; Asheim, 1996, 2000; Markusen, 1996), regional clusters (e.g. Malmberg et al., 1996; Porter, 1998) and urban dynamics (Jacobs, 1969; Florida, 2002; 2005a). The latter is often referred to as an urban turn in economic geography, a reference to the emergence of urban landscapes as the (global) hotspots for economic growth in modern capitalism. Briefly, the urban turn is the focus on the diversity that cities offer and how they provide an excellent arena for accessing new knowledge, defined as the ability to materialise information into productive ideas and later innovation. Therefore, the city becomes central to understanding the location dynamics of economic activities in a knowledge economy defined as the use of knowledge to produce economic profit.
Location, cities and regional growth

We identify two main research paradigms that have had significant influence on research of the economic geography in Denmark: the orthodox and the heterodox research paradigm. The orthodox paradigm has its roots in the quantitative revolution of the 1950s and 1960s and positivism and in the tradition of empiricism and more descriptive economic geography (idiographic approach). The heterodox paradigm is very heterogeneous and has its theoretical advances within the studies of the economic geography of production and urban and regional development in the 1980s and 1990s. The paradigm is divided into two main strands. The first strand is rooted in the early critique of the quantitative revolution and the development of Marxist approaches to industrial geography, often building on critical realism. The second strand is based on the institutional and relational turn that emerged in economic geography in the 1990s with traces of the cultural turn. This marks the backbone of the current debates in urban and regional studies. We do not provide a full fledged review of all the theories and models that have seen the light of day in economic and industrial geography in the last fifty years. Neither is this an attempt to write
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the history of economic and industrial geography. It is, however, an attempt to point to the central theoretical frameworks in industrial and economic geography that have stimulated, influenced and been the explanatory base for research of the space economy in Denmark. The two paradigms have been central in the development of western human geography (Cloke et al., 1991; Peet, 1998) and in economic geography (Walker, 1989; Barnes, 1996; Scott, 2003), although the strength, influence, importance and perseverance of the paradigms vary tremendously between countries (Bathelt and Glckler, 2003; Barnes, 1996; 2001b; Scott, 2004). The classification does not provide any review of the behavioural and humanistic traditions as they have not been dominant in studies of urban and regional growth and uneven economic geography. Further, the classification does not take into account feminist economic geography and the emergence of a post-structural paradigm (Oberhauser, 2003; Gibson-Graham, 2003). Perspectives from these paradigms have had an important influence on recent development within the heterodox tradition, including actor network theory (Amin, 2002; Barnes, 2001b; Murdoch, 1995; Dicken et al., 2001). The different post-structural perspectives, including discourse analysis, have not yet been significantly applied to economic geography in Denmark although recently Stber (2003) and Ek (2003) have analysed the discourses involved in creating an economic cross-border region between Denmark and Sweden: the resund region. Further, the cultural turn in economic geography (Lee and Wills, 1997) has pointed to the social and cultural embeddedness of economic geography (Gertler, 1997; 2003) and hence the understanding of multiple rationalities (Ettlinger, 2003) and the fact that economic spaces are always imbued with a variety of meanings beyond those of economic rationality. (Hudson, 2005, p. 3). The ideas of social and cultural embeddedness of economic action have had a more important role in recent years. The emergence of new fields of research such as the urban turn is often a result of historical contingency (Scott, 2003; 2004). It is related to the real world changes but is also a result of institutionalised research traditions. First of all, we identify a group of orthodox perspectives. This group of perspectives has its roots in the quantitative revolution of the 1950s and 1960s and in the tradition of empiricism
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and more descriptive economic geography. Secondly, a group of heterodox perspectives is identified. It is a heterogeneous group that has its theoretical advances within the studies of the economic geography of production and urban and regional development in the 1980s and 1990s. This group is divided into two main sub-groups of perspectives. The first sub-group is rooted in the early critique of the quantitative revolution and the development of Marxist approaches to industrial geography. The second heterodox sub-group is based on the institutional and relational turn that emerged in the 1990s. We emphasis the latter in the following. This division into two main groups of perspectives is of course a rough simplification of the real research done, and of the history of economic and industrial geography. It does not do justice to the studies that have crossed the borders between the two but it does, on the other hand, pinpoint crucial ontological, epistemological, theoretical and methodological differences between the different research traditions.
The orthodox tradition

The orthodox research tradition in geography and urban and regional studies is constituted by several strands of research that are grounded in at least two different scientific paradigms, both of which have been very visible in the history of economic geography and immensely influential on the early research of economic geography in Scandinavia, mainly in the 1960s and 1970s. One string of explanations is based on the theories that were read into (economic) geography during the quantitative revolution in the 1950s. Therefore, this string of research bears significant marks of the deductive nomothetic science and (logical) positivism, and thus the marks of a search for universal laws and regularities among atomistic observable objects. This is evident in the holy trinity of the quantitative revolution in economic geography: Christallers central place theory, Webers model of location (see below) and von Thnens land-use model, and of course also evident in the neoclassical paradigm in regional science (Isard, 1956), and geography in general (Chorley and Haggett, 1967; Harvey, 1969). Another important theoretical development that influenced the
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research was Perreuxs ideas of ple de croissance, its translation into spatial terms by Boudeville and especially the theories of spatial economic polarisation provided by Myrdal (1957) and Hirschman (1958). These theories provided alternatives to neoclassical explanations but they share the ontological and epistemological inheritance; thus, for instance, homo economicus with the above-mentioned theories. In contrast to the neoclassic model of regional equilibrium (Armstrong and Taylor, 2000), theories of polarisation claim that the market and the market mechanisms do not produce equilibrium and regional equalisation through the price mechanism and factor mobility, but are precisely the reason for regional economic differences because of the regional economys cumulative characteristic (Myrdal, 1957; Hirschman, 1958, Kaldor, 1967). The basic argument is that changes in the regional economy lead to further changes due to multiplier effects. The market and the markets mechanism are, due to internal and external economies of scale, the cause of uneven regional growth. Central to the arguments is Verdoorns law (Verdoorn, 1949), which states that increases in labour productivity is a function of the growth in output, due to economies of scale, that is seen as vital to the growth of regions. Further, agglomeration economies (urbanisation and localisation economies) are more effective than investment in low wage labour. Labour migrates to growth regions due to high wage levels, and the result is that peripheral regions lose labour, causing a slowdown in economic growth. Capital is not immobile, but is moving from peripheral regions with few options for investment towards the growth regions with higher profit and less market risks. Myrdal (1957) defines these effects as backwash effects, while Hirschman denotes them as polarisation effects. A growth region can have positive effects on other peripheral regions. These effects are defined as spread effects (Myrdal) or trickle down effects (Hirschman). The growth of a centre region increases demand for goods and services in peripheral regions and creates growth through multiplier effects and diffusion of technological changes. These models of centre-periphery have been criticised empirically and theoretically (Farro and JensenButler, 1987) and share their static understanding of regional systems and geographies with several neo-Marxist models of centre-periphery (Frank, 1970; Amin, 1974).
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A third string of research within the orthodox tradition is more related to the long tradition of empiricism in (economic) geography. This string of research often provides solid descriptive studies combined with more inductive explanations, and often the studies have some of the contours of earlier ideographic studies. This Janus-faced research divided between the universal and nomothetic science on the one hand, and the more ideographic and descriptive science on the other, is one of the characteristics of the translation of the quantitative revolution into economic and industrial geography (see Barnes, 1996) and evident in the early Scandinavian economic geography research.
The heterodox tradition

The heterodox tradition in economic geography and urban and regional studies is very heterogeneous and consists of many different contributions in the aftermath of the economic crisis of the 1970s, but especially two large bulks of theories can be detected in the Scandinavian tradition (Winther, 2004). First, a group of heterodox perspectives that arose from the justified critique of the quantitative revolution and its models building on the fundament of logical positivism or the static centre-periphery structure of the growth pole theories. The early critique pointed to the idealised conception of geographical space in the traditional Weberian location models (Massey, 1973) and the whole scientific paradigm behind the quantitative revolution (Sayer, 1976). The industrial decline of the North England regions encouraged new research on urban and regional development within a new explanatory framework. This research resulted in the seminal restructuring approach (Massey and Meegan, 1982; Massey, 1984) and the rise of critical realism as an alternative philosophy of science in human and economic geography (Sayer, 1984; 2000). Further, the rise of new industrial spaces in Europe and USA put the region as a specific place back on the research and policy agenda and spurred a diverse literature on industrial districts in Europe (Piore and Sabel, 1984; Pyke, 1990; 1992) and other forms of new economic spaces in the US, such as Orange county and Silicon Valley (Scott, 1988b). A significant contribution came from the Californian School (Scott, 1988a; Scott and Storper, 1989; Storper and Christopherson,
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1987) that emerged during the 1980s that provided an explanation building on institutional economics and the work of Williamson (1975; 1985) on transaction cost theory, the macro economic framework of the Regulationist School (Lipietz, 1986; Boyer, 1990; Jessop, 1990) and the ideas of flexible specialisation (Piore and Sabel, 1984). Although they were accused of eclecticism (Amin and Robins, 1990), the research of the Californian School has been the groundwork for Storpers (1997) and Storper and Salais (1997) work on regional worlds of production that involved a transition towards an evolutionary explanation of industrial and territorial development. From the intense discussions on industrial decline, restructuring, transformation of capitalism and the rise of new industrial spaces in the 1980s, the early 1990s witnessed the emergence of another very important string of research within the heterodox tradition. The appearance of the new string was based on a renewed interest in local and regional competitiveness and economic growth driven by technological change, innovation and knowledge. The new string was drawing on the insights from transaction cost theory (Coase, 1937; Williamson, 1975; 1985; see also North, 1990), evolutionary economics (Nelson and Winter, 1982) and old institutional economics (Veblen, 1898) and the rich and diverse literature on innovation, path-dependency and historical lock-in. In this literature, regions have, for instance, been conceived as learning environments that have strong knowledge spill-over effects involving firm networks, the local labour market and the local institutional set-up (Camagni, 1995; Braczyck et al., 1998). Innovation is in this setting understood as an evolutionary and path-dependent process favoured by geographical and socio-cultural proximity (Maskell and Malmberg, 1999; Storper, 1997), for instance combined in the idea of learning regions (Asheim, 1996; Morgan, 1997). Theoretically, these directions in economic and industrial geography use the ideas coming from a broad range of social sciences, e.g. organisation theory including the resource-based view of the firm (Penrose, 1959; Maskell and Malmberg, 1999), network theory drawing on economic sociology (Granovetter, 1985) and the socio-economic networks (Hkansson, 1989), social capital (especially Putnam, 1993; 2000; but also Coleman, 1988, and even Bourdieu, 1986), and untraded interdependencies formed by
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conventions, norms and rules (Storper, 1997). This theoretical development in industrial and economic geography whirled up a renewed theoretical and empirical interest in agglomeration economies and clusters within economic geography and regional policy (Malmberg, 2003; Maskell and Malmberg, 1999; Martin and Sunley, 2003; Essletzbichler and Rigby, 1997). These new perspectives within the heterodox perspectives are far from uniform. They provide many different explanations of the industrial and economic geography. These different directions manifest, however, the beginning of recent institutional and relational turns in economic and industrial geography (Martin, 2000; Boggs and Rantisi, 2003), that is the increased focus on the social relations of the economic and industrial geography and an understanding of a dynamic and open-ended evolutionary economic system (Bathelt and Glckler, 2003). Things can go many different ways (Sayer, 2000).
Location
Central to understanding the location of economic activity is Webers location theory. To Weber location is an outcome of two variables; distances to material used in production and distance to market. Consequently, transport costs have played a major role in analyses of location of economic activities. Weber launched the minimum transport cost model in 1909 (Weber, 1909). Down to basics, the model argues that the location of firms is an outcome of distance to materials and market. According to Weber, materials can be categorised into two groups; ubiquitous and localised.2 Based on the two categories of material, Weber constructs the ton-mile to decide the most adequate location of economic activity. The ton-mile represents the relationship between the distance, amount and category of the material that has to be transported to the production site and the weight of the product
2 Ubiquitous materials are materials that can be found in most places water is a typical ubiquitous. Localised material is the second type of material and can be divided into two groups. Pure material is material like yarn for manufacturing of cloth. Gross material is material that loses weight in production. An often used example of a gross material is production of sugar from sugar beets, where the dry sugar represents a considerably lower weight than the crude beet.
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that has to be transported to the market. The relationship between the weight of the localised material used in production and the weight of the end product gives a mass index indicating which is most favourable: location close to market or location closer to resources used in production. A classic example of Webers logic is what determines location of breweries. Beverages hold more water than sugar, hop etc. Consequently water will be crucial for location. As water is a ubiquitous material, the brewery will tend to locate close to the market where the beverages are sold. The example of location of breweries describes a very simple situation. When production is a composition of several materials, e.g. ubiquitous, gross localised, and pure localised (for details see footnote 2), then a much more complex pattern rises but; the basic principals are the same. The main gain from Webers minimum transport cost model was that he managed to model location within a heterogeneous surface. By stressing the difference between ubiquitous and localised material, Weber opens for an analysis of why economic activities tend on the one hand to cluster, and why, on the other hand, certain types of inputs over the production process favours location within a specific area. The minimum transport cost model was modified over several generations and by various researchers up through the 1940s, 50s and 60s, e.g. Lindbergs (1953) on location patterns of pulp and paper production in Sweden, Isards (1956) transformation line which illustrates possible combinations of location based on distance to market and distance to resources, and Smiths (1955) study on location patterns of manufacturing in England.
Localisation and urbanisation economies of externalities and location

One of the best established approaches to explaining spatial patterns of economic activities would be the various forms of agglomeration economies. This theoretical understanding of why industries tend to cluster originates from Alfred Marshall and later Alfred Weber. Advocates of agglomeration economies argue that firms benefit from external factors by locating in proximity to each other. The traditional, highlighted advantages of agglomeration are transportation, commu-
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nication and services. However, external benefits can also originate from location of a skilled and specialised labour force, organisations that provide specialised knowledge, specialised services, input-output relations etc. These factors differ from the traditional perspective on cheap labour and materials in location economies. Agglomeration economies can be divided into two dominating directions. First, localisation economies are external to firms but internal to an industry within a geographical region (Feldman, 2000, p.383). Localisation economies can be understood as knowledge, labour pool, and organisational spillovers that are external to a firm but internal to firms within an industry in a geographical bounded area. Localisation economies relate to firms within closely related industries and the basic argument is that co-location can help to spread new knowledge codified and tacit as well as provide a large pool of highly qualified labour. Secondly, urbanisation economies can be seen as scale effects associated with city size or density. (Feldman, 2000, p.383). Urbanisation economies should be understood as effects that are external to industries but internal to a bounded urbanised area. Urbanisation economies are related to all firms in all industries, and the basic argument is that density and diversity can help reduce search costs, on the one hand, and expose firms to unexpected events that can bring along innovations on the other. Agglomeration economies also have a counterpart. Dis-economies of scale relate the disadvantages that firms might experience from being located in proximity to each other. Pollution, rising land prices etc. are examples of this, but in the following I will only address the positive effects of agglomeration economies.
Localisation economies
Localisation economies and urbanisation economies are two variants that have gained more important positions in economic geography within the last three decades. One major reason for this is the work done by Italian regional economists on industrial organisation in Northeast and Central Italy (e.g. Brusco, 1982). The Italian school reactivated the thoughts of Marshall on industrial districts performed almost a century earlier. Eventually, this work inspired to the book The
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Second Industrial Divide by Piore and Sabel (1984)3 who identified two industrial divides based on technologies. Piore and Sabel (1984) argue that a shift in the capitalist mode of production away from Fordist mass-production and towards specialised flexible production systems favours co-localisation of production within the same industries consequently arguing for location economies. The flex-spec approach is inspired by the work done by Alfred Marshall on industrial districts in the 18th century England. Marshall finds that some aspects of economic activities are difficult to explain by straight economic rationality. He concluded that the success of some industrial districts could partly be explained by inputoutput relations between firms, a pool of skilled labour, spillovers of knowledge and by what has been called industrial atmosphere and in the air mechanisms being factors which reduce transaction cost and stimulate informal networking to raise trust (Asheim, 2000). Piore and Sabel (1984) point to the competitiveness and flexibility of small and medium sized enterprises (SME) within the same industry and located within small communities. Findings from case studies of the geographical co-localised SMEs suggest that strong social relations, a flexible labour force and flexible machinery offer a competitive and flexible production system (Piore and Sabel, 1984). Flexibility within the system is found on several levels. First, a highly skilled workforce provides flexible labour. Secondly, production organised around the use of subcontractors provides a flexible production system, and thirdly, using CAM and CAD machinery provides flexible technology. All this it is argued can be linked to social ties between the economic actors within the flexible network. Promoters of flex-spec stress the social dimension of the competitive systems, arguing that the embedded nature of mutual understanding, trust, knowledge spillovers and knowledge exploitation are crucial for the competitiveness of the system. Consequently the flex-spec approach has a spatial dimension
3 The first industrial divide is identified in the late 19th and early 20th century when mass production and mass consumption slowly started to overtake traditional artisan production. The second industrial divide emerged in the 1970s where mass production was overtaken by a flexible mode of production based on flexible labour, machinery and organisation.
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which stresses the importance of co-location to obtain mutual trust and thereby harvest the fruits of localisation economies (Piore and Sabel, 1984; Sabel, 1994). Critics of the flex-spec approach have pointed to the instability of industrial districts in an increasingly globalised world (Tomaney, 1994). Questions have been put towards the sustainability of small local production systems based on trust and social relations when local firms tap into global networks or when small successful firms are overtaken by trans-national corporations. Others question the ability of the local production systems to stay competitive for a longer period of time because the tight relations that they build upon may reduce the chances of acquiring new knowledge and hence successful innovations (Grabher, 1993). The flex-spec debate contributes with important insights on the localisation debate by stressing the impact of social capital and the link between social capital and geography. While the flex-spec argument lost some interest from geographers in the mid-1990s, it did help to put agglomeration and localisation economies on the agenda by changing the analytical perspective from only addressing horizontal learning (hierarchical) to also including vertical learning (input-output relations). Debates on industrial districts by Asheim (1996), Markusen (1996) and Harrison (1992) among others, followed by conceptualisation of learning regions (Morgan, 1997), and regional clusters, (Malmberg and Maskell, 1997; Maskell and Malmberg, 1999), provided a new perspective on location dynamics and competitiveness by placing localisation economies very central. The inspiration came from sociologists like Granovetters (1985) and political scientist like Putnam (1993; 2000) who, with concepts such as embeddedness and social capital argued that economic transactions would be constrained by social relations. Additionally, inspiration from organisational economists work on transaction cost theory (Coase, 1937; Williamson, 1985) entered the field of economic geography through Scott (1988) who argued that economic agents act opportunistically, which is why all economic actions hold an element of uncertainty. Therefore firms try to reduce uncertainty by integrating sub-production internally in the organisation, if profitable, or by cooperating with firms that they already trust, because building trust is costly and time consuming.
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The cost of building trust between economic agents is one of the most important insights that transaction costs have contributed within economic geography. This literature argues that knowledge spillovers are facilitated by social institutions like trust, and the social institutions are embedded in the local or regional geography. Further, relations are strengthened by cognitive, geographical, institutional, organisational or social proximities (Boschma, 2005). Moreover, this literature claims that the overall institutional setup which underpins knowledge production and knowledge diffusion and helps regions to become competitive is deeply rooted in geography and space. Examples from Jutland in Denmark, Gnosj in Sweden, Northern Italy, Baden Wurttemberg in Germany and Silicon Valley in California USA suggest that social processes embedded in the regional structure provide favourable milieus for innovation. The processes occur due to the embedded character of spatially fixed assets and are thus difficult or impossible to replicate. Markusen (1996) uses the term sticky about knowledge, and based on studies from Germany and Canada, Gertler (1997; 2003) argues that exchange of knowledge is difficult across distance and in particular across cultures because knowledge is not always codifiable; tacit knowledge (Polanyi, 1967) is passed on by routines in combination with culture that calls for spatial proximity. Consequently, geography and spatial proximity become central to understanding economic activities, and being there becomes essential in order to acquire the knowledge that a given region possesses. Becoming embedded in local institutions and structures overnight is impossible, however, and just being there is no warranty for becoming a part of the localised knowledge-creating networks. It takes time to tap into networks and pipelines of knowledge and to win trust. Advocates of localisation economies argue that face-to-face interaction is critical for building trust, lower transaction costs and increasing knowledge diffusion within production networks (Grabher, 1993). Consequently, due to the embedded character of institutions, norms and values that constitute the localised knowledge producing networks and help to utilise the tacit knowledge the chances of accessing knowledge increases with location within the local area where it is produced.
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Urbanisation economies
Urbanisation economies and the urban dynamics which it represents differ fundamentally from dynamics emphasised by advocates of localisation economies. Localisation economies rest on industry internal spillovers, while urbanisation economies rest on spillovers external to industries but internal to a bounded urbanised area. Contrary to localisation economies, studies inspired by dynamics of urbanisation economies suggest that social capital and strong ties can be obstructing to the creation of new knowledge (Florida, 2002; Grabher, 1993). Knowledge creating networks need to be shaken now and then to secure new inputs, and the strong ties that social capital facilitates restrict such new input, according to Florida (2002). The more loosely organised networks of the city characterised by a thick and diverse access to knowledge is a strength according to advocates of urbanisation economies. Knowledge inputs from several different sectors will help innovation and thereby competitiveness. Further, the density of multiple economic activities raises the face-to-face contact between economic factors which, in itself, is perceived to have a positive effect on innovation and learning. Traditionally, cities are centres of service supplies. These service activities are characterised by a considerably different organisation of production and exploitation of knowledge compared to traditional manufacturing, which has often been the main focus for studies inspired by localisation economies (Gershuny, 1978; Bell, 1979). Glckler (2007) examines firms in knowledge-based business services and argues that because these services are not produced in value chains based on traditional input-output linkages, there is a need to develop explanatory approaches that are different from those based on a traditional understanding of transaction cost advantages and technological spillovers etc. Service commodities are, for most part, produced and consumed at the same time. Consequently, to understand urban location of service activities, Glckler (2007) asks for a shift away from the traditional theoretical approaches on externalities that favour technological know-how towards a relational understanding of the importance of know-who. According to Glckler, this is necessary because knowledge based business service firms do not innovate in
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laboratories but in close interaction with their clients. Therefore the market place for knowledge services becomes intransparent and consequently know-who becomes a vital form of knowledge that relates to the interconnection of people and the quality of their relation (Glckner, 2007 p. 952). Glckers (2007) notion of the advantage of knowing-who in densely urbanised areas corresponds with Jacobs (1961; 1969) focus on diverse economic activities as the prime advantage of cities. Jacobs (1969) argues that cities are the most innovative places through history. Large cities that offer diversity, i.e. externalities external to industries, have shown to be competitive over time. Jacobs exemplifies this by addressing competitiveness in Birmingham. Though no industrial specialisation can be identified in that city it remains highly competitive, while highly specialised cities like Manchester witnessed enormous problems in remaining competitive in the 1960s. Basically, what Jacobs argues is that a specialisation and concentration of specific industries will eventually lead to a negative lock-in situation, while diversity in economic activities will promote continuous innovation because economic actors are exposed to multiple ways of thinking and multiple ways of producing. Jacobs ideas of diversity as a competitive advantage are often addressed as Jacobs externalities in the literature. Boschma (2004; 2005) argues that negative lock-in can be avoided by the presence of a diversified local knowledge base. Henderson, Kuncoro and Turner (1995) identify a distinction between location of industries based on localisation and urbanisation economies. They argue that firms in mature industries tend to locate where localisation economies are in place, i.e. where spillovers within matching industries can be accessed. On the other hand, industries in new fields of knowledge, e.g. hightech industries, tend to locate in large cities characterised by diverse structures of economic activities. Consequently, the results based on Henderson, Kuncoro and Turner (1995) are that localisation economies are favourable in order to attract and retain mature industries, while Jacobs externalities are important when regions seek to attract high-tech industries. Recently, Frenken et al. (2004) and Frenken et al. (2007) have launched the conceptual idea of a related variety, arguing that the
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relatedness and diversity of regional industrial structures can facilitate a high level of regional competitiveness and thus regional growth. Related variety is best explained as a hybrid resting on urbanisation economies building on Jacobs externalities but adding insights from localisation economies. Models that measure related variety do not only look for diverse industries but also for the density of sub-industries within every industrial sector; thereby the approach argues that firms can benefit from both firm and industry external spillovers, as well as firm and industry internal spillovers. The critical volume and combination of a related and diverse industrial structure are, according to Frenken et al. (2007), best found in larger city regions.
Creativity and talent

A string of deindustrialisation literature has been focusing on the city region as central for innovation and the dominating economic dynamics. In Scandinavia this debate has been most dominant in Sweden, where Andersson (1985), Andersson and Strmquist (1988), and Trnqvist (1994, 2004) have stressed the importance of cities for knowledge-creating processes. Within recent years similar arguments have gained momentum. Especially Floridas (2002) work on cities as caldrons of creativity have penetrated the academic debates and beyond. Florida has two entrances to his understanding of regional growth. Firstly, Florida is heavily inspired by Jacobs (1961; 1969) view on the importance of quality of place and tolerance. Florida combines the two in his people climate concept. People climate is conceptualised as tolerance through cultural diversity, and openness and quality of place through architecture, pedestrian area, bicycle tracks, cultural amenities etc. According to Florida (2002), people climate is however not enough to compose a competitive region in the knowledge economy. Therefore he introduces business climate as a supplementary to people climate. Business climate covers qualified labour, business policy, industrial structure, universities etc. Florida argues that the presence of these two types of climate is central to underpinning a competitive economic milieu. Secondly, Florida (2002; 2005a; 2005b) acknowledges the work done by regional and urban economists on the linkages between
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growth and knowledge. Romer (1990) stated that knowledge and growth could be linked to each other, and increasing returns could be accomplished by investment in knowledge. These insights were taken further by Lucas (1988) and Glaeser (1994) who found that growth is associated with the density and level of human capital. Human capital is directly linked to the years of studying. Most often the level of human capital is described by the share of people who have a college degree or bachelor degree (Glaeser, 1994). Florida, however, sees the definition of human capital as too narrow to describe the creative mindsets that bring along growth and prosperity. Florida argues that growth is dependent upon innovation at least in a Western context and that innovation and creativity are inseparable, and, consequently, the most creative occupations must be the ones that are linked to innovation and hence economic growth. Therefore Florida introduces the concept of the creative class based on people occupied in creative job functions. Florida divides the creative class into two subgroups. First, the creative core is defined as people who have to be very creative to fulfil their job. This group includes researchers, teachers etc. Secondly, the creative professionals are people who are more creative by routine. These include administrative associate professionals, business professionals, lawyers etc. Florida links regions that experience economic growth with regions that hold a high share of creative class people, and he further links location of creative class people to regions that have an attractive people climate. Basically, Richard Florida argues that welcoming, diverse and openminded cities attract creative class people in large volumes, and large volumes of creative class people attract investments in high-tech industries leading to economic growth. Accordingly, Florida, like Glaeser (1994; 1998) and Lucas (1988), identifies a positive correlation between a group of people, highly educated or creative, and regional growth. The difference between the human capital and creative capital argument has, however, led to a discussion of old wine in new bottles. Glaeser (2004) argues that the subdivision of the creative class, called the creative core, is almost identical with his human capital concept, and further that this group shows the same correlations as Glaesers calculations; hence, Florida is actually reinventing the well-accepted
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human capital concept. On the other hand, Florida argues that the creative class concept is wider than the human capital and more accurate in regard to innovation because it does not discriminate between people with or without higher education, but rather between the extents of creativity that people have to unfold in their work process. Empirical findings from Sweden (Hansen, 2007) demonstrate that the correlation coefficient between human capital and creative class people is 0.93 on a regional level based on data from 2002, and highly statistical significant. Consequently, human capital and creative class can be understood as two concepts having almost equal geographical characteristics in a Swedish context and most likely also in a Danish context. Thus, we do not distinguish between creative capital and human capital in the remainder of this book. Instead, we use the term talent to cover both the formal and informal competences of labour when discussing the impact and geography of knowledge perceived by the workforce. In the following chapters we will depart from foregoing discussed theoretical understandings of the spatial outcome of economic activities, and while this chapter should be understood as a conceptual introduction, the next chapter should be seen as a contextual one. Together these two chapters provide the bedrock of the following chapters.
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3. The Rise of City Regions in Denmark
This chapter outlines the main features of the Danish economic and industrial geography in the past two decades. The focus of the chapter is on the recent economic and industrial resurgence that have occurred mainly in the two dominant city regions: Copenhagen city region and a more diffuse city region in Eastern Jutland. Consequently, emphasis is on the urban turn in Denmark. The urban turn and the rise of the service and knowledge economy are visible in new geographical patterns of growth and decline that remains strong even after the financial crisis in 2008 (Andersen and Winther, 2010). The current spatial dynamics with two dominant city regions are markedly different from the spatial dynamics of 1970s and 1980s. The crises in the 1970s and the long period of transformation and restructuring of the economy in the 1980s and early 1990s gave rise to several new industrialised spaces in Denmark, especially in small and medium sized cities outside the large urbanised areas, often located in peripheral regions of the country first and foremost in Jutland. At the same time, the largest cities in Denmark including the Copenhagen inner city and city region were suffering severe job losses and high unemployment rates largely because of a strong de-industrialisation process in traditional manufacturing industries (Andersen and Winther, 2010). The transformation of the Danish space economy in the 1970s and 1980s has been thoroughly examined in a range of studies (Maskell, 1986; Jensen-Butler, 1992). The main conclusions of this transformation will be presented below.
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Since the early 1990s, however, there has been a resurgence of the large cities in Denmark in terms of growth in jobs and population, including Copenhagen inner city and city region (Engelstoft et al., 2009; Andersen and Winther, 2010; Andersen et al., 2011). This new pattern of urban growth and resurgence resembles the development in many other European countries and the USA, based on urbanisation and agglomeration economies (Scott, 2008; Manville and Storper, 2006; Hall and Pain, 2006). The economic and industrial resurgence of the large cities is based on the rise of the service, knowledge, cultural and welfare economies, together with new industries and new jobs that include a strong growth in highly skilled jobs primarily occupied by talents and creative professionals of which many have a university degree (the focus of the next chapter). In this chapter, focus is on the rise of city regions and the history of the Danish space economy, after which an examination of the past decades of changing economic and industrial geography in Denmark in broad terms is presented.
The rise of city regions

Currently, much attention is given to how urban spaces transform into, for instance, polycentric structures, and how urban development absorbs existing cities in the surrounding areas, producing new centres and places of production and living that, together, form large city regions. These regions refer to large metropolitan areas that cannot be reduced to the densely built-up city, but include its hinterland that stretches beyond the administrative and morphological boundaries of the city and include functional networks of labour and capital. The city region concept has recently been contested by numerous authors mainly situated in political and social geography (Jonas and Ward, 2007; McGuirk, 2007; McCann, 2007; Purcell, 2007; Jarvis, 2007; Krueger and Savage, 2007). One of the main critiques of the city region concept is its rather uniform treatment of large cities and metropolitan areas competing in the global economy which does not reflect the diversity and multiplicity of economic, social and political processes producing large metropolitan regions and the local political and social conflicts. The critique itself, however, also tends sometimes to treat the economic argument of city-regions in a rather simplistic manner. We argue that the concept of
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city regions is not just problematic from a social and political point of view, but also from an economic geographical perspective. Global city regions cannot be reduced to cauldrons of innovation and creativity; they are produced by a diversity of often interrelated economic activities and practices. Two issues are important in discussing the economic geography of city regions. First, we think that the recent conceptualisation of city regions in economic geography, with its focus on competitiveness in the global economy, has emphasised the importance of (economic) geography in making sense of the globalising world economy. Geography matters, and cities are vital places of innovation and creativity (Jacobs, 1969; Scott, 2001; 2002; 2008; Florida, 2002; Storper, 1997), having great importance as economic strongholds in the national and global economy during the rescaling and re-territorialisation of economic and political powers (Scott and Storper, 2003; Jessop, 1994; Brenner, 2004; Storper and Manville, 2006). This, we believe, is an important prerequisite for understanding the processes of competitiveness and knowledge production in firms and industries, and for understanding how cities underpin the relational economic spaces of firms and industries which increase their competitiveness. The problem is, however, that the city regions are sometimes reduced to spaceless, one-dimensional cauldrons of creativity and innovation with an exclusive focus on high-tech industries, advanced business services and cultural and creative industries. The new fashionable knowledge activities are supported by local labour markets of talent and this is often seen as the only pathway to the future growth and prosperity of cities. This reduction of the complexity of the economic geographies of city regions is manifested politically in the strategic plans of many cities throughout the world and is also evident in the literature of economic geography and regional and urban studies. We argue that it is important to understand that even global city regions are produced by many economic activities not merely the glamorously new high-end, fast growing industries but also the dull, everyday life industries and the supporting industries to the global competing industries. High-end industries live in symbiosis with other industries that equally contribute to the urban economy and the success of the high-end industries with their services and labour markets. Hence, they facilitate basic necessity
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for production, contribute to the production of jobs and income and remain as important as ever. Second, city regions refer to large metropolitan areas. These areas cannot in any way be reduced to the densely built-up city. They include its hinterland that stretches beyond the administrative and morphological boundaries of the city; for instance, the office of the Deputy Prime Minister in the UK wrote: City regions are the enlarged territories from which core urban areas draw people for work and services such as shopping, education, health, leisure and entertainment. (Urban Research, 2006, p. 1). The conceptualisation of the city region appears in this context as having an epic-centre with the remaining urban spaces being subordinate to the central place. We argue that the city region is being produced by many economic geographies and different urban forms that cannot be understood in terms of one central place with subordinated local centres and hinterlands. We emphasise the relational spaces of the urban economy and suggest a movement toward studies that examine, or at least reflect, for instance, on the inner city, suburbia and the outer city as economic, political and social processes that are a part of the rescaling of divisions of labour, industries and political powers in metropolitan regions. These are all interrelated places that contribute to the production of the urban economic landscape(s). Hence, we suggest a relational understanding of place, to analyse the economic geographies and practices of the (new) urban spaces, which emphasises the unboundedness of regions (Amin, 2004) and the distanciated networks, but also how places underpin different relational economic spaces, e.g. knowledge producing spaces, production spaces, or the diversity of local labour markets. In Denmark, growth has been concentrated in two large urbanised areas: 1) the Copenhagen city region, and 2) in a more diverse and diffuse urban space in Eastern Jutland (Andersen et al., 2009; Nissen and Winther, 2008; Landsplanredegrelse, 2006). The Copenhagen city region will be analysed in greater depth in Chapters 4, 5 and 6, including a discussion of various urban forms present in city regions. The city region of Eastern Jutland has recently been constructed as a new urban space, a new Danish city-region, by national and local planning authorities that recognised the economic potential for future growth in eastern Jutland (Landsplanredegrelse, 2006), although
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the realities of a full blown city region are much more vague (Nissen and Winther, 2008). Below we analyse the main industrial changes and developments of the two city regions and compare to the rest of the country. Before the analysis of the contemporary development a short introduction to the history of economic geography in Denmark is provided to frame the current resurgence of the city regions.
The economic and industrial geography of Denmark

Denmark has like most countries in Western Europe and North America experienced a stagnation, decline and relocation of manufacturing production since the late 1960s. The relocation was mainly from the traditional industrial spaces towards new industrial spaces in primarily more peripheral regions or in new economic spaces closer to the old centres. The spatial restructuring of manufacturing was evident in the USA with the relocation from snow-belt to sun-belt and the rise of new industrial spaces in Silicon Valley and Route 128. In Europe the relocation of economic activity and manufacturing was evident in particular in the UK, Germany, France, Italy, Spain and the Netherlands (Keeble et al., 1983) and evident in a range of studies of industrial districts (Brusco, 1982; Winther, 2003). Denmark was no exception in terms of relocation of manufacturing. Manufacturing production has in the post war years relocated primarily from Copenhagen towards the rural and peripheral regions in Denmark. These regions experienced employment growth and greater economic prosperity than before, and this resulted in regional economic convergence, as Copenhagen and especially the inner city of Copenhagen suffered long term economic gloom (Andersen and Winther, 2010). During the 1970s and 1980s Copenhagen changed its position: from being the national manufacturing centre in the early post war-years, Copenhagen experienced a long and considerable phase of de-industrialisation, e.g. loss of manufacturing jobs and firms. The de-industrialisation began in the 1960s, and strengthened during the economic recession of the 1970s, and continued steadily throughout the 1980s (Maskell, 1986; Winther, 2001). The process of de-industrialisation continues even today, although not at the same rate as in the 1970s and 1980s. Several studies have revealed that the
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de-industrialisation process was also a restructuring process changing the structure of the manufacturing sector. On the one hand, Maskell (1986) showed that job loss was mainly due to firm closure and downsising in the traditional manufacturing industries. On the other hand, Breum (1991) and Jakobsen (1993) proved that in the 1980s there was a significant start-up of new high-tech firms in Copenhagen compared to the rest of the country. Further, the manufacturing sector continued its decline in the central parts of the Copenhagen, whilst in suburbia and the outer city (see chapter 5) the sector grew especially in the outer city (Hansen and Winther, 2007).4 This relocation has been examined thoroughly in the past decades. The relocation of manufacturing was first really discovered in the late 1970s and early 1980s, although it took off as early as the late 1950s. Empirical studies from the 1960s had already pointed out the relocation of manufacturing (Illeris, 1965; Jensen, 1966; Jensen, 1967; 1971) but up to the 1970s the dominant discourse in regional planning and research was that economic activity concentrated in the main urban centres. The main discourse was supported by theories of polarisation and cumulative causation based on the seminal work of Myrdal (1957) and Hirschmann (1958), or of various Marxist and neo-Marxist positions that examined the uneven geography of capitalism (Harvey, 1982; Massey and Meegan, 1982). The main perception of the economic geography of Denmark was that Denmark had a traditional centre-periphery structure with a regional and urban component (Jensen-Butler, 1992). Copenhagen was the main centre, while the larger cities, Aarhus, Aalborg and Odense, were considered centres of regional importance. The periphery was mainly considered
4 The other large, traditional urban, industrial spaces in Denmark such as Odense, Vejle, Aarhus and Aalborg were also heavily influenced by de-industrialisation in the 1970s and 1980s with a reduction in manufacturing jobs that almost matched Copenhagen (Matthiessen, 1987). Matthiessen (1987) further demonstrates that most urban areas, with the exception of Herning and Ikast, Esbjerg, Frederikshavn and Hjrring (cities that later lost manufacturing jobs in the 1990s), had a reduction in the number of manufacturing jobs in the 1970s and 1980s, especially in the traditional industrial medium-sized cities such as Silkeborg, Nstved, Svendborg and Slagelse. The growth in manufacturing was hence mainly a phenomenon outside the larger Danish cities, occurring in the rural areas and smaller provincial towns (Maskell, 1986).
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to be the northern, southern and western parts of Jutland as well as the smaller islands such as Lolland, Falster and Bornholm all with low productivity and high unemployment. By the late 1970s the relocalisation process was given more serious attention empirically and theoretically. It was mainly the spatial restructuring of manufacturing that was in focus (Hartoft-Nielsen, 1980; Maskell, 1986; 1992; Christensen, 1988; Jensen-Butler, 1982; 1992; Pedersen and Illeris, 1984; Breum, 1991). During the 1970s and 1980s Copenhagen, therefore, changed its position. From being the national industrial (manufacturing) centre, Copenhagen experienced a period of de-industrialisation, including a massive loss of manufacturing jobs. The de-industrialisation was strengthened during the economic recession of the 1970s and continued strongly throughout the 1980s (Maskell, 1986; Winther, 2001). The process of de-industrialisation continues today, but not at the same rate as in the 1970s and 1980s. Several studies have revealed that the de-industrialisation process also was a restructuring process changing the structure of the manufacturing sector. On the one hand, Maskell (1986) showed that the job loss was mainly due to firm closure and downsising in the traditional manufacturing industries. On the other hand, Breum (1991) and Jakobsen (1993) proved that in the 1980s there was a significant start-up of new high-tech firms. The manufacturing sector continued its decline in the central parts of the city but in suburbia the manufacturing sector grew, especially in the outer city (Hansen and Winther, 2007). Winther and Hansen (2006) showed that the growth in the transition zone is constituted by a range of different industries. The service sector grew in the 1970s and 1980s in the Copenhagen region, but the de-industrialisation was stronger and there was a general loss of jobs in the 1980s and early 1990s (Winther, 2004). The main reason for the loss of jobs was the continuing de-industrialisation of the central city while the rest of the city region had a total increase in employment by workplace. The growth outside the central city was even higher than the national average and mainly in a range of services. Bells (1999) and Gershunys (1978) seminal books initiated several studies of the coming of the service economy in Denmark (Illeris, 1987a; 1987b; 1996). Most studies of the economic geography of
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services in Denmark, however, examined producer and business services based on the observation that producer and business services had become economically more important (in terms of jobs) in the 1970s and 1980s, but the service sector did go through a general restructuring (Hansen and Winther, 2007). Retail and wholesale trade grew slowly in the 1980s and 1990s, with a minor loss of jobs in the central city. Likewise, there was a restructuring of finance and insurance with a movement from the inner city towards suburbia -the suburbanisation process (Illeris, 1997). The sector had a relatively stable development in employment. The public sector had a loss of jobs in the 1980s, especially in the central city, and growth was very slow in the 1990s. Transport and communication had a decline in employment by workplace in the 1980s. Like finance, the insurance sector experienced a suburbanisation process with loss of jobs in the central city and growth in suburbia and the outer city. Finally, business services grew rapidly in both the 1980s and 1990s, with the core of the city region showing the highest growth rate in the 1990s. The 1990s were markedly different from the 1980s. A long period of economic growth and job creation in Copenhagen became characteristic from the mid-1990s.
The resurgence of cities and city regions in Denmark

Since the 1990s there has been a resurgence of the large cities and city regions in Denmark. This analysis takes its point of departure in the current geography of Denmark and the two dominating urban areas Copenhagen and Eastern Jutland that have dominated this growth in the past decades. Eastern Jutland consists of 17 municipalities ranging from Randers in the North to Kolding in the South, while the Copenhagen city region refers to Greater Copenhagen (see chapter4 for further definition). There is a marked concentration of economic activity in the two main urbanised areas in Denmark. Copenhagen and Eastern Jutland remain the two most important spaces of economic activity in terms of jobs in 2006 and recent data reveals that this spatial pattern is persistent even after the world economic crisis in 2008 (AE, 2010; Hansen et al., 2011). The latter is essentially driven by the city of Aarhus (the second largest city in Denmark) and the so-called Triangle area
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around Vejle, Kolding and Fredericia. Odense and Aalborg are also important urban locations for economic activity, but as the remainder of the book will show, the main dynamics of the new economy are concentrated within the two dominant urban areas.
Table 3.1 Employment in total and their shares for selected regions and Denmark 1993-2006
1993 1996 2002 2006
Employment total City Region Copenhagen City Region Eastern Jutland Denmark Outside City Regions Denmark 907,077 550,238 1,118,250 2,575,565 921,084 569,489 1,133,602 2,624,175 1,003,941 595,998 1,156,337 2,756,276 992,987 604,019 1,140,368 2,737,374
Share Per Cent of Total City Region Copenhagen City Region Eastern Jutland Denmark Outside City Regions Denmark 35.2 21.4 43.4 100.0 35.1 21.7 43.2 100.0 36.4 21.6 42.0 100.0 36.3 22.1 41.7 100.0
Table 3.2 Employment growth for selected regions and Denmark 1993-2006
1993-2006 1993-1996 1996-2002 2002-2006
Growth City Region Copenhagen City Region Eastern Jutland Denmark Outside City Regions Denmark 9.5 9.8 2.0 6.3 1.5 3.5 1.4 1.9 9.0 4.7 2.0 5.0 -1.1 1.3 -1.4 -0.7
Annual compound rates City Region Copenhagen City Region Eastern Jutland Denmark Outside City Regions Denmark 0.7 0.7 0.2 0.5 0.5 1.2 0.5 0.6 1.4 0.8 0.3 0.8 -0.3 0.3 -0.3 -0.2
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The resurgence of the two main city regions is evident in Table 3.1 and Table 3.2. Copenhagen city region accounts for more than 36 percent of the total employment in Denmark and the city regions in Eastern Jylland have just above 22 percent in 2006. In sum, the two city regions account for close to 60 percent of all employment by workplace in Denmark. It is also evident in Table 3.1 that the two city regions have increased their share of national employment since the early 1990s. This is confirmed by examining the growth of employment from 1993-2006. Employment grew with more that 9 percent in the period 1993-2006 in both city regions, while employment growth outside the two regions was much more modest with a growth of around 2 percent a growth that includes the cities of Odense and Aalborg revealing that growth in Denmark was highly concentrated in the two dominant city regions. The Table also reveals that growth was stronger in Eastern Jutland at the beginning of the period than it was in Copenhagen, but Copenhagen caught up later in the 1990s. The millennium crisis struck Copenhagen and the rest of Denmark, while Eastern Jutland continued its growth until 2006. As mentioned, the effects of the 2008 economic crisis were strongest outside the two main urban regions, emphasising the significant process of urbanisation of the economy in recent decades. Regarding the city region of Eastern Jutland, Nissen and Winther (2008) showed that there was a marked difference within the region in terms of growth. Aarhus and the surrounding municipalities were the main centres of growth, together with Vejle in the southern parts of the region. However, some parts of the region did suffer small decreases in employment. The southern parts of the region have a concentration of manufacturing industries while the northern parts around Aarhus are specialised in knowledge services. Thus, Aarhus also benefits from its industrial profile, with a strong concentration of services and knowledge institutions such as universities. Likewise, there are marked intra regional differences in the Copenhagen city region, which will be addressed in the following chapters.
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Industrial change in Denmark

Since the economic resurgence began in the early 1990s there has been a strong transformation of the economy and industrial structure in Denmark. This is illuminated in Table 3.3 that shows the main features of this industrial transformation towards a service and knowledge economy. The industrial structure of Denmark has changed drastically in the past two decades, causing a transformation that has had a strong impact on the Danish economic geography favouring the city regions. In Denmark there has been a marked decline in employment in the agricultural sector as a result of the long term transformation, industrialisation and specialisation of the sector since the early mechanisation of the 1950s (Jensen and Reenberg, 1986; Kristensen and Busck, 2009). Another recent and central dimension of the transformation of the agricultural sector is the rise of part-time and hobby farming, and a new form of entrepreneurialism: for instance, farm shops and other economic activity on farms that indicates a transition from agricultural production to consumption of the countryside (Prstholm and Kristensen, 2004; Wilson, 2001). Thus, the sector is declining in economic importance in terms of employment, but is on the other hand, an important contributor to the emergence of new economic activities. Manufacturing remains an important sector in the Danish economy, largely dominated by low and medium tech industries (Hansen et al., 2011). The de-industrialisation and restructuring of the manufacturing sector, however, continued to have a strong impact in the period 1993-2006. The sector had a job loss of close to 20 percent as a result of globalisation and internationalisation processes including outsourcing and stronger competition; especially in the latter part of the period the sector suffered noticeable reduction in jobs, starting just before the millennium crisis when almost 100,000 jobs disappeared from the late 1990s to 2006 (Hansen et al., 2011). The job loss mainly consisted of low and medium skilled jobs, but many manufacturing industries did have a considerable increase in highly skilled jobs, including a growth in low and medium tech industries often located in the two main city regions. This increase in talent intensity indicates the transformation of even low and medium tech industries towards increased production, use and distribution of knowledge.
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Table 3.3 Industrial structure and changes in selected regions and Denmark 1993-2006
Share in 2006 City region stjylland% City region stjylland% Denmark Outside city regions% Growth 1993-2006 Denmark Outside city regions% -36.0 -17.5 -25.4 29.8 12.3 13.0 -6.9 -20.2 -2.4 163.5 27.8 68.9 8.4 42.1 4.3 2.0
City region Copenhagen%
City region Copenhagen%
Denmark%
Agriculture Manufacturing Energy and Water Supply Construction sector Retail and Whole Sale Hotels and Restaurants Transport Post and Telecommunication Bank and Insurance IT Services Research and Development Business Services Public Sector Entertainment. Sports and Culture Other industries Total
3.3 16.8 0.5 6.6 16.4 2.9 4.3 2.2 3.6 1.3 0.2 7.9 30.2 1.6 2.2 100
0.7 9.1 0.5 5.7 15.4 3.3 4.9 2.3 6.3 2.8 0.9 10.4 31.6 3.0 3.0 100
5.6 17.5 0.6 7.3 15.0 3.1 3.6 1.3 3.4 0.7 0.1 6.1 32.2 1.6 2.1 100
3.3 14.3 0.5 6.6 15.5 3.1 4.2 1.9 4.5 1.6 0.4 8.0 31.6 2.1 2.4 100
-36.5 -15.7 -16.0 33.6 19.0 32.1 10.0 7.4 1.6 128.9 109.9 79.9 12.1 33.3 22.0 9.8
-21.4 -25.5 -13.4 24.3 4.3 39.3 -3.0 2.7 0.1 138.8 60.4 64.7 7.8 35.9 12.3 9.5
-35.2 -19.0 -19.7 28.8 10.7 25.8 -1.8 -4.1 -0.4 140.8 59.6 69.1 9.0 37.3 11.0 6.3
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Denmark%
The construction sector, on the other hand, has enjoyed a marked growth during the past decades due to huge public and private investment in infrastructure and generally in the building industry including the large investments in the fixed bridges between Denmark and Sweden and Zealand and Funen. Recently, however, since the crisis in 2008, the sector has seen a relatively modest decline in employment. Moreover, traditional services, retail and wholesale, had a growth just above the national average while hotel and restaurants grew with almost 26 percent. Further, the remaining traditional service industries, transport, post and telecommunication, and banking and insurance, all experienced a job loss during 1993-2006 because of significant rationalisation processes and investment in new technologies and ICT (all sectors). Growth of the economy is to be found in the ICT sector, various business service industries, entertainment and culture and, not least, in the public sector. The public sector accounts for more than 31 percent of employment, with a growth of 9 percent above national average growth. Thus, the public sector has a huge impact on the Danish economy in terms of jobs and investments, including an appreciable redistribution of jobs and income with a strong spatial dimension (Hansen and Jensen-Butler, 1996). Besides the dynamics of the public sector growth, business services, ICT and the cultural and experience economy were the main contributors to the hefty growth of the past decades with growth rates well above national average. All these sectors and industries have strong spatial location patterns and have undergone transformation: hence they had a considerable impact on the economic geography of Denmark. Table 3.2 also reveals the strong dominance of the two city regions in Denmark and distinctly uneven geographies between the two city regions and between the city regions and the rest of the country. The transformation of the Danish economy towards a service and knowledge economy with marked effects even in low tech industries has had a critical influence on the Danish geography, favouring the city regions as many of these new industries tend to locate and concentrate in city regions. The next chapter will show that talent is a significant explanatory factor for the urban turn. It is evident in Table 3.3 that
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the city regions, and especially Copenhagen city region, have benefited from the substantial growth in the knowledge and service industries. The industrial structure in the Eastern Jutland city region resembles generally the Danish industrial structure, while the Copenhagen city region is particularly dominated by services and especially business services and therefore remains the national service and financial centre. Furthermore, Eastern Jutland has a large share of manufacturing employment, well above national average, including a range of low and medium tech industries mainly located in the Southern parts of the region in the so-called Triangle area (Nissen and Winther, 2008), and thus remains a strong national manufacturing centre. The Copenhagen city region has a very low share of manufacturing employment, the industrial structure being greatly dominated by producer and business services. The Eastern Jutland city region appears therefore as a more traditional city region, while the Copenhagen city region appears as a national centre for the rise of the knowledge and service economy. The rest of Denmark, i.e. a very geographically diverse category, has a higher share of the traditional sectors, while the transformation towards the new service and knowledge economy is limited.
Summing up
The economic geography of Denmark has changed. Since the 1990s there has been a resurgence of the large cities in Denmark in terms of growth in jobs and population, including the Copenhagen inner city and city region. Thus, the urban turn is evident in Denmark. The economic resurgence of the two dominant city regions is based therefore on the rise of the service, knowledge, cultural and welfare economies, as well as significant de-industrialisation processes. The city regions have benefited from this transformation of the economy and appear today as two economically strong city regions, although the Eastern Jutland region has a more traditional industrial structure compared to Copenhagen. The remainder of this book examines this transformation as a dynamic and ongoing process that shapes the contours of the economic geography of the new millennium.
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4. Urban and Regional Distribution of Talent: Location Dynamics and the Spatial Division of Talent in Denmark
The knowledge economy has underscored the importance of innovation in generating competitive environments. The competitiveness of firms increasingly depends on their ability to innovate by improving their productivity (process innovation, including new forms of organisation), product quality, or, by producing new products (David and Foray, 2002). According to Amin and Cohendet (2004) a critical aspect of the innovation process is knowledge and the understanding of knowledge production as an interactive, relational learning process. The process of knowledge production is vital for the business service industries, and business services have become increasingly important in knowledge production because of their role as intermediates of knowledge. They have a fundamental position in the production network as producers and distributors of knowledge between firms and industries. Their position has been emphasised by the immense growth of the past decades that resulted in new location patterns and shifts in the urban landscape. Bryson (2000), Bryson et al. (2004), Beyers (2003; 2005), Daniels and Bryson (2005) and Miles (2005) are good examples of analyses that link the business service economy to a more general understanding of urban economic dynamics as well as innovation and regional development. The geography and dynamics of the knowledge intensive
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business services provide an important insight into an understanding of the geography of talents because these industries hold a relatively large share of the talented and creative labour force (Kahin and Foray, 2006). The industrial resurgence of city regions and the rise of the knowledge economy are thus related to an increasing focus on labour and labour qualification as an important location factor (Reich, 1992; Florida, 2002; Glaeser, 1998; 2003). Even in mainstream economics, human capital is incorporated in the growth models (Lucas, 1988; Romer, 1990). Therefore, important location factors of the knowledge economy are talent and human capital. Consequently, in order to gain an understanding of industrial location dynamics and its spatial development the chapter focuses on talent and industrial location in the urban landscape of Copenhagen. This is in line with the arguments put forward by Florida (2002; 2003), who further claims that cities are cauldrons of creativity, and that people holding a creative position have become the single most important asset for economic growth. The central aspects in Floridas approach to regional development are talents and the preferences of talents. To Florida (2002), talents are people who work in creative occupations and thereby are innovative in their everyday work. The creative class, which Florida labels this group of people, is seen to be highly mobile and, accordingly, cities have to focus on what he calls an attractive people-climate to attract and retain talented people. Florida thus builds on the recent decades of focus on human capital as an important category for explaining economic growth (Romer, 1990; Lucas, 1988). The overall aim of this book is to provide a solid theoretical and empirical analysis as well as a discussion of the dynamics that form and shape the economic dynamics of the city. While throughout the chapters of this book we discuss both inter-regional and intra-regional perspectives on economic growth and the city, this chapter examines the interregional aspects of attracting talent and canalise this discussion into an analysis and a debate of the intra-regional division of talent and how this offprint materialises in Copenhagen. This chapter is conceived to address the geography and spatial distribution of talent to provide evidence of the diversity of economic geographies not only between but also within regions. Regions cannot be regarded as homogenous growth
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machines but represent complex economical and functional landscapes. The rise of the knowledge economy has led to an increasing focus on labour and labour qualification as an important location factor, including focus on the creative class and human capital. In this chapter we examine the economic geography of talents in Denmark. In this chapter we are concerned with the spatial division of talent and how locations and the concentration of talent have an impact on urban and regional economic development in terms of job growth. Within this context we address the impact of the Danish welfare state. The public sector in Denmark accounts for 30.6 percent of total employment and 43.1 percent of the Danish talent in 2006. Thus, the welfare state has a major role in the Danish economy in terms of jobs, but also in terms of a geographical distribution of talent. Production has changed. Globalisation, decreasing tariff barriers and low production costs have caused pressure on more standardised manufacturing in the western hemisphere, causing innovation and inputs of knowledge to be increasingly critical for competitive production. This is one of the central reasons why the geography of talent has gained momentum in the regional development debate.
Talent and regional development

Within the last decade sub-disciplines within the field of economic geography have approached each other. One of the bridging elements between industrial geography and labour market geography has been the focus on skills, creativity and human capital or talent as it is put here. Talents are assumed to have a positive impact on regional development due to skills, knowledge etc. And facilitate innovation. Therefore talents have been met with considerable interest from a firm perspective as well as from a regional development perspective. The notion of talents and the impact of talents on regional development have a long history, even though it has had a more or less explicit character. Weber (1909) noted that labour costs could have influence on location, and, further, he acknowledged that some industries were more labour oriented than resource orientated, due to the greater importance of labour input over other factors. Though cheap production costs rather than localised skills was the reason why Weber mentioned
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labour as an influencing factor on the location of economic activities, it illustrates that labour as a perquisite regional development, has had a central position in economic geography for much more than a century. Skills, education and creativity have, however, become more central in the debate concerning regional development. Globalisation has caused pressure on the economy of the Western World forcing firms and regions to be highly innovative. This asks for policies that can contribute to a competitive regional innovation system. One of the cornerstones in competitive regional innovation systems is the qualifications of the labour force. Glaser (1994) and Florida (2002) are exponents of two different theoretical approaches that stress the importance of attracting talents to generate economic growth. Glaeser (1994; 2003) represent a traditional marshallian entry to the regional development debate emphasising localisation economies by stressing the importance of a critical mass of skilled labour for generating economic growth. Florida (2002), inspired by Jacobs (1969), emphasises the importance of diversity and thus stresses urbanisation economies as the main driver for creating competitive environments. Despite their differences both Glaeser and Florida argues that amenities of different kinds propel talents to regions. This is however questioned by Storper and Scott (2009) who sympathise with the idea but point to the lack of evidence on causal relation between concentration of talent and regional growth. Rather Storper and Scott (2009) argue that the path dependent nature of capitalist production is highly influent on the trajectories of development that regions take. Hansen and Niedomysl (2009) qualify this discussion by providing data on location preferences of talented people. Using a large scale questionnaire Hansen and Niedomysl (2009) find that the main motivation for talented people to migrate is due to employment opportunities or due to social relations. Thereby, the assumption that quality of place is a driving motivator for choice of location can be rejected if quality of place is regarded as an overload of cultural supply etc. An important point of critique that can be raised is that Hansen and Niedomysl (2009) only analyse primarily the reason for migration. Secondary reasons for choosing a particular place instead of another can be amenities and therefore the impact of amenities cannot be excluded. All this according to Boschma and Fritsch (2009), Hansen
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(2007) and Hansen, Asheim et al. (2009) clearly indicates that regions that host high concentrations of talent also experience higher growth rates. Consequently, the geography of talent is an interesting avenue to explore from a regional development perspective.
The geography of talents in Denmark

The discipline of economic geography distinguishes itself from neighbouring disciplines by stressing the importance of context for understanding regional dynamics. One such context-specific variable in the case of the Danish space economy is the role of the welfare state. The welfare state accounts for more than 30 percent of the national employment, and public expenditures amounted to more than 50 percent of GDP in 2006. Thus, the Danish welfare state has a marked impact on the Danish economy and on local and regional economies in terms of jobs and demand through the three-tier layers of government state, region and municipalities (Hansen and Jensen-Butler, 1996), and very importantly, the spatial distribution of the welfare states jobs and demand does not necessarily follow the logic of capitalist markets: it is politically resolved. A central outcome of the welfare state system is access to free education. This is often highlighted as one of the cornerstones in the Danish welfare system and has led to a marked upgrading of the labour force in terms of formal education. Table 4.1 reveals the upgrading of the formal qualifications of the employees in a period between 1993 and 2006. The share of employees with only the compulsory level of education has been reduced from 36 percent to 25 percent. The remaining categories have increased their shares in the same period. The lower secondary level increased only slightly while growth in the upper secondary level and especially bachelors and academics increased their share considerably during the period, in relative numbers. This development is reflected in the growth rates where especially talents grew with a high rate throughout the period. This witnesses a general upgrading of formal skills in Denmark but with the important notion that the group with a lower secondary education remains almost the same and that 70 percent of the labour force can still be categorised within the lower skilled segment.
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Tabel 4.1 Shares of and growth of the educational level in Denmark 1993 and 2006
1993 Compulsory school Lower Secondary Higher secondary Bachelor level Academic degree PhD Total 36.0 44.3 14.8 0.5 4.3 0.1 100 2006 25.6 46.5 19.2 1.6 6.7 0.4 100
While the development in formal education has been substantial it has also left a geographical expression where the inequality between the shares of talents across the municipalities in Denmark has been substantial too. Figure 4.1 is a Lorenz diagram exploring the uneven distribution of talents among Danish municipalities. The diagram consists of two curves indicating the years 1993 and 2006. Not surprisingly the figure illustrates a general unequal distribution of talent across the municipalities in Denmark. Plotting the curve for 1993 and 2006 allows us to illustrate that not only is the distribution of talent unequal, it is also growing. In 1993 municipalities that accounted for 80 percent of total employment only accounted for less than 68 percent of the talent, the remaining 20 percent hence accounted for 32 percent of the talent. In 2006 the numbers had changed even more. Municipalities that accounted for 80 percent of the employment accounted for 60 percent of the talent, whereas the remaining 20 percent hence accounted for 40 percent of talent. The 20 percent of municipalities with the highest share of talents in the labour force includes Copenhagen, which accounts for 12 percent of the national employment but more than 20 percent of national talent. Thus, there has been an increased spatial concentration of talent: municipalities with high concentrations of talents have increased their share of talents, while municipalities with low shares of talent have experienced declining shares.
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Figure 4.1 The distribution of talent in Danish municipalities according to the employment 1993 and 2006
100 90 80 70 60 Talent % 50 40 30 20 10 0 0 20 40 Employment % 60 80 100 1993 2006
Figure 4.1 illustrated a growing unequal distribution of talent in Denmark. Figure 4.2 below shows the geographical distribution of this inequality. The map visualises and emphasises the uneven geography of talent in Denmark. It reveals a vast concentration of talent in the central and northern municipalities of Copenhagen. Outside Copenhagen the three dominant cities (university cities), Odense, Aarhus and Aalborg also have a marked share. Most municipalities have a below-national-average share of talent and, in many cases (the white municipalities), the share of talent is very low covering the basic service function only.
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Figure 4.2 The talents share of municipal employment 2006
Share of talent 2006

0.0-2.9 3.0-4.8 4.9-8.1 8.2-14.0 14.1-20.1
Besides showing that talents are concentrated in the larger city areas Figure 4.2 also illustrates that the peripheral areas of Denmark are the areas that have the worst preconditions for creating growth, based on activities that rest upon formal education. This is of course a major concern in the knowledge economy as it witnesses an increasing divide between the centre and the periphery and, with Figure 4.1 in mind, leads us to expect that this divide will only increase over the coming years. Such strong indications should lead policy makers to implement more diverse growth policies that not only benefit knowledge production but also more traditional production.
The geography of talent in cities

The uneven geography of talent cannot only be witnessed between regions in Denmark but also within city regions itself. The uneven industrial geographies of large city regions are well-documented in the literature, including the immense suburbanisation and restructuring
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processes in Copenhagen in the 1970s and 1980s (Scott, 1988; Massey, 1984; Illeris, 1997; Winther, 2001; Hansen and Winther, 2007; Hansen and Winther, 2009). The economic revitalisation of the city region which involves an industrial resurgence of the inner city and the rise of the knowledge economy, including the growth of knowledgeintensive business services, has produced new location dynamics which have changed the spatial division of labour within city regions (Storper and Manville, 2006; Wood, 2006; Cook et al., 2007; Grabher, 2001; Winther, 2007). This has resulted in new economic spaces of relations and flows which transform existing (local) economic spaces and produce new economic spaces as well as a more polycentric structure (Kloosterman and Musterd, 2001; Phelps and Parsons, 2003; Ascher, 2002; Bontje, 2004; Sieverts, 2003). By applying data from 1982-2002, we provide evidence that the location dynamics in Copenhagen in the past decades have become more complex than the suburbanisation processes in the 1980s. We demonstrate this process by analysing the case of knowledge-intensive businesses and add a talent perspective. We use the knowledge intensive industries for two reasons. First, they have a vital position in the knowledge economy as producers and distributors of knowledge and, secondly, the recent wave of outsourcing and outplacement has been manifested in a marked growth in business services in terms of jobs especially knowledge-intensive business services have come to play a central role in the production networks which facilitate and produce knowledge (Bryson et al., 2000; Boden and Miles, 2000; Grabher, 2002; 2003; Harrington and Daniels, 2006). Many recent studies of the city and the knowledge economy focus on the revitalisation of the inner cities, the core of large metropolitan regions or specific urban districts (Hutton, 2004; 2006; Grabher, 2001; Pratt, 2006). Woods (2006) study of the knowledge-intensive sectors in the UKs main city regions reveals that the central cities grow faster than the surrounding regions. The city region of Copenhagen shows that the location dynamics of talent and business services expose a more complex urban landscape than just resurgence of the inner city. New locations and centres in suburbia have emerged and been reinforced in the recent decade. This is in line with other studies of polycentric urban structures in Europe (Hall and Pain, 2006). Con-
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sequently, we suggest that the spatial division of talent also produces an increased fragmented and polarised city region. The city is not just divided by industry but also by talent. Figure 4.3 is the spitting image of Figure 4.2, only using the municipalities of the greater Copenhagen area instead of the total Denmark and only using 1994-2002 instead of 1993 and 2006. As in Figure 4.2, Figure 4.3 also demonstrates an increasing area between the even, theoretical distribution and the actual distribution is growing from 1994 to 2002. This indicates an increasing uneven distribution of employed talents between the municipalities in Copenhagen and emphasises a more polycentric urban structure.
Figure 4.3 Lorenz diagram of the distribution of talent in 1994 and 2002 in Copenhagen (Hansen and Winther, 2010)
100 1994 90 80 Talent in Employment 70 60 50 40 30 20 10 0 0 20 40 Employment 60 80 100 2002
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Figure 4.4 The central city, the corridors, and the outer city of Copenhagen (Hansen and Winther, 2010)
Grsted-Gilleleje Helsingr
Helsinge
Frederiksvrk
Fredensborg-Humlebk Hillerd Karlebo Hrsholm Allerd Farum lstykke Stenlse Vrlse Birkerd Sllerd Lyngby-Taarbk
Skvinge Slangerup
Frederikssund
Skibby Ledje-Smrum Gunds Bramsns Albertslund Hje Taastrup Roskilde Hvals Lejre Rams
Gladsaxse Gentofte Herlev Rdover Kbenhavn
Frederiksberg Glostrup
Brndby Vallensbk Hvidover Ishj
Greve
Trnby
Dragr
Solrd
Skovbo
Kge
Vall Haslev
Rnnede
N
0 4.5 9 18 Kilometer
(C) KMS - http://www.kms.dk (C) IGUC - http://geogr.ku.dk
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To get an understanding of the division of labour across the city, we divide the urban landscape of Copenhagen into three different main groups (see figure 4.4). First, a central city is defined which is represented by the municipalities of Copenhagen and Frederiksberg. However, based on the morphology of the city, we have added the six municipalities that boarder up to the two central municipalities and thereby the central city area becomes almost identical with the tram city that was enlarged in the beginning of the 20th century (Jrgensen, 2004). Further, five corridors of the city are defined. The division is based on the morphology of the built-up area in 2002 rather than the original urban strategic master plan on regional development the fingerplan. The five corridors detected start north of the coastal corridor, which stretches from Copenhagen to Elsinore; the Hillerd corridor; the Frederikssund corridor; the Roskilde corridor, that stretches from Copenhagen to Roskilde; and finally, the Kge corridor that stretches along the southern coastal bay area. Each of the five corridors is developed around major infrastructural developments, including public and private traffic on highways and by S-trains. Around these channels of infrastructure, city centres have been planned and developed and sites for industry have been demarked. Finally, we have identified a transition zone outside the corridors which is integrated in the urban economy (see chapter 5 and 6). See Figure 4.4. The data applied consists of employment data and covers full range for the day-time population by workplace. We use three main variables in the analysis: geography (municipalities), industries and formal education. The industry variable represents a two-digit categorisation of industry codes based on the NACE nomenclature in 1994 and 2002. The longitude data from 1982-2002 is aggregated into 18 industries due to the changing nomenclature in 1993, and the group of talent covers employees with a university degree (ISCED 5A, 6) and is available for both sets of industry data.
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Location dynamics and spatial divisions of labour in Copenhagen

In 2002 the central city accounted for close to 53 percent of the regions employment, the corridors for 40 percent and the outer city for almost 7 percent see Table 4.2. Between 1982 and 2002 a geographical shift in employment was evident. The central city lost employment while the corridors and the outer city gained; especially the corridors had a marked growth of more than 25 percent. The development emphasises the suburbanisation process of employment in the past decades. By examining the 1980s and the 1990s independently, a slightly different picture appears. The recession of the 1980s had a marked pattern of suburbanisation and a shift in employment from the central city. The central city lost close to 10 percent of its employment while the corridors in particular grew. In the 1990s, however, the rise of the urban economy produced a considerable growth in all three regions, and although a shift occurred in the corridors and the outer city, the central city had close to average growth. Table 4.2 also reveals that from 1982-2002 most industries in the corridors grew. The only real reduction in employment was in public administration, the primary sector (almost insignificant in terms of employment), and a minor fall in employment in manufacturing. Especially post and telecommunication and business services are of importance, but also finance and insurance remained substantial. Today there is a clear spatial division of labour between the five corridors. The development and restructuring of economic activities differ significantly between the southern and the northern corridors. Three main developments are observable see Table 4.3. The first observation is the clear division of labour between the corridors. The Table shows that while growth rates are limited in Frederikssund and Roskilde, especially Kge in particular witnessed a considerable growth in manufacturing production and construction from 1982-2002. Concurrently, the northern corridors, Hillerd and Elsinore, have witnessed a clear decrease in manufacturing production and construction. In sum, there has been a marked shift in manufacturing employment from the northern towards the southern corridors, which has increased the division of labour in the city region of Copenhagen.
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Table 4.2: Employment shares and growth by aggregated industry and eography in Copenhagen 1982-2002 g
Industry Corridors
Central City
2002 Share of Employment Primary sector Secondary sector and construction Retail and Wholesale Hotel and Restaurant Land Transport Water, air and supporting transports Post and telecommunication Finance and Insurance Real estate, Renting of machinery and equipment, Computer and other business services Research and Development, and Education Public administration and Defence Health and Social work Sewage, disposal and other service activities Membership organisations not elsewhere classified Sport and Cultural activities Private households and sporting activities Extra-territorial organisation and bodies Of total employment
Source: Hansen and Winther (2010)
0.85 19.87 19.95 1.93 2.41 1.12 2.38 4.41 12.95
0.21 12.95 12.58 3.84 2.43 4.26 2.73 4.48 16.67
8.41 5.92 15.60 1.58 0.78 1.81 0.02 0.00 40.32
7.55 7.88 16.27 1.47 2.99 3.61 0.07 0.01 52.98
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Outer City 5.07 26.98 14.54 2.50 3.79 0.38 1.09 0.90 8.92 7.63 4.47 19.56 1.95 0.89 1.27 0.05 0.00 6.69
Central City
Central City
Outer City
Growth in Employment 19822002 -35.75 -1.21 25.98 49.52 9.28 170.70 109.29 62.10 147.75 -16.19 -34.56 -22.29 60.57 -41.37 20.73 -28.88 -19.19 117.23 -44.85 13.22 18.58 43.21 50.09 -12.03 -4.52 -30.68 191.43
Growth in Employment 19922002 -16.63 -3.99 14.36 14.17 -13.28 51.28 43.06 -3.78 54.19 8.63 -15.27 -0.58 37.37 -28.45 6.89 10.90 -14.98 79.43 -21.98 5.97 9.98 15.68 16.04 -28.89 0.14 -26.15 64.31
22.80 -23.13 28.15 47.82 57.29 45.22 308.00 25.11
17.59 -29.63 5.20 10.30 44.97 53.57 404.05 -2.06
17.04 -47.63 45.82 121.74 26.25 10.10 362.50 15.17
14.54 -18.47 19.68 49.32 9.05 28.07 218.75 -16.63 10.65
20.04 -17.06 7.37 53.46 16.37 38.81 107.22 8.63 7.89
Outer City 16.91 -33.01 36.53 87.82 -7.62 24.96 117.65 -21.98 10.57
Corridors
Corridors
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Table 4.3: Employment shares and growth by industry in the corridors of Copenhagen 1982-2002
Industry Kge
Employment shares 2002 Primary sector Secondary sector and construction Retail and Wholesale Hotel and Restaurant Land Transport Water, air and supporting t ransports Post and telecommunication Finance and Insurance Real estate, Renting of machinery and equipment, Computer and other business services Research and Development, and Education Public administration and Defence Health and Social work Sewage, disposal and other service activities Membership organisations not e lsewhere classified Sport and Cultural activities Private households and sporting activities Extra-territorial organisation and bodies Total Of corridors total
1.56 24.21 21.14 2.55 4.36 0.86 1.01 1.21 10.11
0.41 19.04 21.04 1.42 2.55 2.14 4.13 5.98 12.06
7.95 3.92 16.62 1.87 0.87 1.74 0.01 0.00 100.00 13.43
7.81 4.65 14.83 1.51 0.68 1.74 0.01 0.00 100.00 32.96
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Frederikssund 0.75 25.81 19.23 1.01 2.23 0.22 2.52 8.16 12.34 7.47 3.91 12.81 1.60 0.58 1.34 0.00 0.00 100.00 13.74
Roskilde
Frederikssund
Roskilde
Hillerd
Hillerd
Elsinore
Employment shares 2002 0.85 16.37 19.04 2.05 1.37 0.40 1.54 3.68 14.87 1.27 18.09 18.65 3.10 2.20 1.09 1.02 1.69 14.83 -27.96 15.76 40.03 89.04 30.78 220.27 9.92 -11.16 198.44
Growth in% 19822002 -46.48 6.58 8.84 80.09 24.90 827.33 254.56 153.57 215.75 -48.85 2.09 56.74 62.18 13.43 1.65 166.67 121.37 136.17 -34.52 -1.49 37.91 59.87 -18.71 77.13 22.12 -4.05 122.52 -25.40 -28.01 21.22 6.37 -15.09 -22.08 -17.46 -18.45 96.86
10.82 8.85 15.77 1.51 0.91 1.93 0.05 0.00 100.00 24.41
7.12 7.50 18.60 1.59 0.92 2.27 0.06 0.00 100.00 15.44
53.86 -56.77 59.02 130.27 82.44 40.74 100.00 31.56 -
33.94 -32.01 22.44 30.38 57.79 66.60 -38.46 31.94 -
12.14 -42.12 49.68 25.67 102.47 62.28 -100.00 31.47 -
12.93 4.13 20.71 54.40 52.53 28.89 5200.00 23.61 -
Elsinore 12.46 -5.12 18.95 47.50 31.60 35.32 516.67 7.19 -
Kge
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Secondly, other patterns of location are evident in the more knowledge intensive services. In Roskilde and Frederikssund finance and insurance have a considerable concentration of employment. Further, the growth rates show that both corridors have experienced considerable growth in these industries, while the remaining three corridors have had decreasing employment. This shift in location and increasing concentration is the result of long term restructuring and suburbanisation processes of business activities in finance and insurance starting in the 1980s. The shift in location can primarily be explained by a movement of back-office activities to particular localities in a few of the municipalities in each of the two corridors (see chapter 5 and 6 and Winther and Hansen, 2006; Illeris, 1997). Alongside, post and telecommunication display the same tendency of concentration in the Roskilde and Frederikssund corridors. The patterns of location in these industries follow the same logics of location as the finance and insurance. Third, the remaining industries do not differ much between the corridors especially so if the number of employees that influence the figures are taken into account. Interestingly, real estate, renting of machinery, computer and other business services grew considerably in all corridors (in numbers, the growth in e.g. Elsinore has been higher than in Kge). This, however, reflects more complexity than meets the eye. Table 4.3 also reveals that the rather large and heterogeneous business services account for approximately the same share of the employment. Below we will go into a more detailed analysis and discussion of the category and show a division of talent in these industries. Thus, we exclude finance and insurance from the analysis because of their different trajectories and location dynamics and because they have a different position and role in the economy.
Location dynamics of business services in Copenhagen

The business service industries account for 14.7 percent of the total employment in Copenhagen. Table 3 reveals that in 2002 the most dominant industries within business services were other business activities (NACE code 74), which holds close to 70 percent of the employment. Computer and data processing (NACE 72) accounts for 19
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percent, while Real estate activities (NACE code 70) display 10 percent and renting of machinery, equipment etc. (NACE code 71) 2 percent. Real estate as well as renting of machinery, equipment etc. hold similar shares of employment across the corridors as well as in the central city and the outer city. Though changes are considerable in employment within these industries in the period, the industries only count for a small share of the total employment both within the business service industries and within the regional employment in particular. Consequently, no important differences in location patterns or the division of labour within the two industries can be identified. Contrary to this, the computer and data processing and other business services show rather differentiated geographical patterns of location. Table 4.4 shows a clear concentration of computer and data processing activities in the central city, while the industry is very scarce in the Kge corridor and the outer city. Further, Roskilde and Frederikssund present relatively high concentrations while Hillerd and Elsinore have more moderate shares. When comparing these results with the share of the areas, total employment within the business service computer and data processing has highest importance in the Frederikssund corridor, followed by Roskilde, Elsinore, Hillerd and the central city, relatively speaking. The pattern is an indication of how the location dynamics within computer and data processing differ significantly from real estate and renting of machinery and equipment etc. Here differences between the different areas are marginal. One reason for this division of labour between the corridors may be that in the 1980s effort was put into developing an area around the Frederikssund corridor with high density of ICT and data processing related firms. The computer and data processing industry had high growth rates from 1994-2002. Employment grew with 138 percent in the region, which is noticeably higher than in other business service activities and especially real estate activities as well as renting of machinery and equipment etc. The growth rates reveal a diverse pattern of location shifts, which emphasises the conclusion that the location dynamics of the 1990s were generally more complex than in the suburbanisation of 1980s. The growth discloses that the central city in combination with Elsinore and Frederikssund had marked growth rates above 200
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Table4.4: Business services: Employment by Geography in Copenhagen 1994-2002
Employment 2002 Real estate activities Renting of machinery, equipment etc. Computer and related activities Other business activities 752 193 418 4182 Employment shares 2002 Real estate activities Renting of machinery, equipment etc. Computer and related activities Other business activities 13.56 3.48 7.54 75.42 9.29 3.36 27.89 59.45 1509 547 4529 9654
Employment growth 19942002 Real estate activities Renting of machinery, equipment etc. Computer and related activities Other business activities 14.46 -8.96 110.1 75.71 5.23 75.88 36.75 30.51
Employment shares between areas 2002 Real estate activities Renting of machinery, equipment etc. Computer and related activities Other business activities
4.98 6.06 1.47 4.11
Roskilde
Kge
10 17.20 16.01 9.48
percent. This indicates a concentration in the central city and a growth in a new location, the corridor of Elsinore, as well as an expansion of an existing sub-centre, the corridor of Frederikssund. Further, the outer
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Frederikssund
Central City
Employment 2002 764 61 3404 2698 1277 264 2567 10721 1037 171 1913 6234 8985 1818 14946 63699 765 126 520 4639
Employment shares 2002 11.03 0.88 49.14 38.95 8.61 1.78 17.31 72.3 11.08 1.83 20.45 66.64 10.04 2.032 16.71 71.21 12.64 2.08 8.59 76.68
Employment growth 19942002 49.22 -28.24 205.3 33.23 13.21 82.07 31.51 35.73 30.6 61.32 257.6 47.48 6.68 45.32 229.1 63.73 18.06 -4.54 144.1 50.47
Employment shares between areas 2002 5.06 1.92 12.03 2.65 8.46 8.30 9.07 10.53 6.87 5.37 6.76 6.12 59.55 57.17 52.82 62.56 5.07 3.96 1.84 4.56
city had just above-average growth, while the corridor of Kge and especially Roskilde (the largest sub-centre) and Hillerd had relatively low growth rates.
Outer City
Hillerd
Elsinore
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Location dynamics of computer and data processing in the 1990s: Concentration/re-concentration in the central city Growth of existing sub-centre (Frederikssund) Stagnation of existing sub-centre (Roskilde) Emerging new sub-centre (Elsinore) The coming of the outer city
Similar to computer and data processing, industries geographical differences can be identified within other business services but less distinct. This industry is highly heterogeneous and can almost be understood as a residual category. It includes everything from knowledge intensive business services such as lawyers and advertising to industrial cleaning and security but because of data restriction it has not been possible to use more disaggregated data. Below we use talent to differentiate the industry. If we examine employment across corridors, the central city and the outer city, the central city by far displays the highest shares with more than 60 percent of the employment, thus a specialisation. Accordingly, some differences can be found within the sector, although the general picture is that the sector is evenly distributed across the region. Reasons for the low representation of other service industries in the Frederikssund corridor can be several. The most obvious reason for this has to be found in the fact that the Frederikssund corridor has been appointed an ICT centre of Copenhagen. Consequently, focus has been on ICT, computer and data related areas, rather than other business services. This can easily have caused agents within other business services which are not related to data processing to look in other directions for location. To a large extent in 2002 other business activities are evenly distributed in the urban landscape of Copenhagen and generally follow the activities of the economy as a whole. The patterns of growth reveal that other business service activities display some location dynamics in the 1990s. The sectors employment grew with close to 55 percent in the region. The central city and the corridor of Kge had above average employment growth. The outer city and the remaining corridors had below average but still decent growth rates, especially Elsinore and the outer city.
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Location dynamics of other business service activities in the 1990s: Concentration/re-concentration in the central city Emerging sub-centre and high growth in the corridor of Kge though the regional share is low The coming of the outer city though the regional share is low Moderate growth in the remaining four corridors The analysis of the geography of business services, the dynamics of location and the division of labour that follows show a tendency for suburbanisation in some areas of the region and a concentration or relocation of activities into the central city. Very different growth rates can be found in different parts of the region within the same industries, and very different densities of employment in especially the computer and data processing industry are documented. This leads to an impression that different processes of location within the same industries are present in different parts of the same region. To gain a better understanding of some of the causes that result in these different patterns of location or growth, we will take a closer look at talent and how talent differs within the same industries.
Spatial division of talent in business services

As argued in the start of this chapter a spatial division of talent can be witnessed in the greater Copenhagen area. So far we have seen that when from a national perspective a growing unequal distribution of talent can be seen in Denmark, there is an uneven geography that is in favour of larger cities. Moreover the above analysis has shown that the division of labour varies within the different fingers of the Greater Copenhagen area, leading to a spatial division of labour within the city. In the following section we will address the spatial division of talent to get deeper into the fragmented city, using business services and Copenhagen as an illustrative case. Two categories are constructed, employed persons without a formal higher education and employed persons with a higher formal education (ISCED 5A,6) which we define as talents. Table 4.5 shows the shares and the growth of talents
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by workplace. The table reveals that the central city has the highest share of talents whereas the outer city has the lowest.
Table 4.5: Talents by geography in Copenhagen 1982-2002
Rest of workforce Talents Rest of workforce Talents
Shares of employed workforce 2002 Kge Roskilde Frederikssund Hillerd Elsinore Central city Outer city 96.4 93.2 92.9 88.9 92.2 88.7 97.2 3.6 6.8 7.1 11.1 7.8 11.3 2.8
Growth 19822002 29.4 26.6 26.2 17.2 3.7 -8.7 13.9 140.2 205.6 186.6 119.7 78.5 131.8 94.5
Looking at the corridors, a distinct difference between the Kge corridor and the remaining four corridors can be observed. The Kge corridor has a striking lower share of talents in the employed labour force compared to the remaining four corridors. Obviously, this can be interpreted as a result of the concentration of manufacturing and transport activities activities that traditionally have a low share of talents. Consequently, Kge is losing ground in regard to talent, especially if it is compared to the Roskilde corridor. The Roskilde corridor has also experienced a concentration in manufacturing and construction and transport, but additionally, the corridor has experienced considerably higher growth rates of employed talents. Three corridors have very similar shares of talents Roskilde, Frederikssund and Elsinore; but while growth rates have been strong in both the Roskilde and Frederikssund corridors, it has been more moderate and below average in Elsinore. Therefore, Elsinore is losing relative importance in terms of talents. Finally, Hillerd has a high share of talents almost equal to the central city. This gives the
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Hillerd corridor a central position in the knowledge economy of Copenhagen. Summing up, a division of talent is visible from an industry perspective. Industries using a large share of talents, which indicates a high degree of knowledge intensity, tend to concentrate in the northern corridors, whereas industries with more moderate knowledge intensity tend to gravitate towards the southern corridors and in particular Kge (Illeris, 1997; Winther, 2007). Table 4.6 shows that the business service industries hold considerably different shares of talents. Real estate activities (NACE code 70) and Renting of machinery, equipment etc. (NACE code 71) have low shares of talents compared to Computer and data processing (NACE 72) and especially other business activities (NACE code 74). Real estate as well as renting of machinery employ only a limited share of talents. Though the two industries have witnessed a general growth in talents, some of the corridors have seen a marked decline. While an incline of talents can be interpreted as an increasing efficiency IT controlling, mergers and acquisitions etc. the decreasing rate of talents in other corridors can be interpreted as a result of outsourcing and increased efficiency in the administrative parts of the industries. Although the increase and decrease of talents in the two sectors is notable, the spatial division of talent between the corridors is more striking. NACE 70 and 71 consist of only small shares of talents, and in actual numbers it is almost insignificant. Though cutbacks have also entered the Hillerd and Elsinore corridors and the central city area, these areas represent the highest shares of talents within both NACE 70 and 71. At the other end, Kge, Roskilde and Frederikssund represent the lowest shares of talent, which indicates a clear division of talent within the same industries across corridors in the Copenhagen city region. The two other industries, computer and data processing (NACE72) and other business activities (NACE74), consist of a considerably higher share of talents, and have a larger volume of employees in total, and thus, can be expected to have a deeper impact on regional development. In the period from 1994 to 2002, computer and data processing had overrun other business activities and was the industry that hosted the largest share of talents. A general growth in talents in the period
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Table 4.6: Share of employed talent 1994-2002 in business service industries Source: Hansen and Winther (2010)
70 1994 Kge Roskilde Frederikssund Hillerd Elsinore Central city Outer City Total 2.4 2.3 2.1 3.8 4 4.7 2.6 4 2002 2.1 3.1 1.6 4.7 4.2 5.8 3.5 4.8 Growth 1994-2002 -14.3 25.8 -31.3 19.1 4.8 19.0 25.7 16.7 71 1994 0 1 0 5.8 7.1 5.1 3.1 3.9 2002 0.5 1.3 0 1.6 2.4 1.8 1.6 1.6 Growth 1994-2002 100.0 23.1 0.0 -262.5 -195.8 -183.3 -93.8 -143.8
72 1994 Kge Roskilde Frederikssund Hillerd Elsinore Central city Outer City Total 7.1 9.3 12.8 19.3 22.1 15.6 7.3 14.2 2002 9.8 13.5 17.1 19.4 22.1 21.5 9.6 19.1 Growth 1994-2002 27.6 31.1 25.1 0.5 0.0 27.4 24.0 25.7
74 1994 6.3 12.8 6.2 22.1 18.7 15.6 6.1 15.2 2002 4.8 10.5 9 23.1 22.7 17.7 6.5 16.7 Growth 1994-2002 -31.3 -21.9 31.1 4.3 17.6 11.9 6.2 9.0
characterises the industry, but moreover, and of interest to this study, the growth is unevenly distributed. Kge and the outer city have considerably lower shares of talents compared to the rest of the city. The Roskilde and Frederikssund corridors experienced shares close to the level of Kge and the outer city in 1994; but with higher growth rates, the Frederikssund corridor in particular, managed to increase
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the level of talent to a share that is similar to Hillerd and Elsinore. The central city also displayed a notable growth especially when volume is taken into account. In actual numbers, the central city had the largest share of the regions employment in computer and data processing in 1994; by investigating the relative concentration of computer and data processing, the central city increased its share of the regions employment in the industry from 38 to 52 percent. Additionally, the Frederikssund corridor has increased its relative concentration, while the Roskilde corridor has decreased its relative concentration from 28 percent to only 16 percent of the employment in the region. These figures imply a relative concentration both in general and with regard to talent in the Frederikssund, Hillerd and Elsinore corridors and especially in the central city. In contrast, Kge and the outer city even though high growth rates are evident have a considerably lower level of talent. Hence, we move on to the last of the four industries, other business activities, which consists of a very heterogeneous group of economic activities. Various types of consultancy are mixed with legal business, industrial cleaning and clerk related services. Obviously, this results in an industry that requires very different types of labour due to very diverse job functions. While the employment volume across the city region is almost unchanged within the period from 1994 to 2002, changes in the level of talent reflect notable spatial patterns. From Table 5, the following patterns can be extracted. First, although low growth rates have characterised the Hillerd corridor, it is still the corridor that holds the largest share of talents within NACE 74 among the seven areas of the city region. Second, in the Frederikssund corridor the share of talents increased while the neighbouring Roskilde corridor has equally decreased. Third, going further to the south, the share of talents in the Kge corridor has been reduced. Fourth, Elsinore and the central city have also experienced a considerable growth in talents which brings them into a joint leading position along with Hillerd. Finally, the outer city has experienced a tiny growth bringing the share of talents up from 6.1 to 6.5. Other business activities show a pattern of concentration of activities within certain areas of the Copenhagen city region, but they have not witnessed any significant signs of concentration of activities in general across the seven areas of
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Copenhagen. Interestingly, however, a division of talent is clear. Talent intensive activities move toward a concentration in the northern parts of the region, which leaves the southern areas and the outer city with less talent intensive industries. Having examined the patterns of location of the business service activities in Copenhagen, one clear tendency is worth drawing attention to. The industries that hold the largest volume of employees and talents computer and data processing and other business activities tend to concentrate in the central and northern parts of the city. The general picture is that the southern parts of the region are becoming less and less important in terms of economic activities which are linked to talent. Consequently, as is also evident from Table 4.5, the geography of talent in Copenhagen is very unevenly distributed. Talents are concentrated in the northern corridors and the central city, while the southern corridors and the outer city are losing ground. Concurrently, this results in a self-reinforcing process. The division between the outer city and the southern parts of the city region and the northern and central parts is growing. This suggests that the Copenhagen region is facing a concentration of knowledge activities in certain areas of the city, while other areas are weakly positioned in the knowledge economy which emphasises that the city is also divided by talent. The analysis of the spatial division of talents shows that the central city and the northern corridors of Copenhagen are in the lead of the knowledge economy and talent intensive service production, while the Kge corridor houses an economic structure that is knowledgeintensive only to a very small degree. Alongside, the Roskilde corridor is losing its relative importance. But these two corridors are also the corridors that have the largest hinterlands and thus most direct access to the regions that the development in Copenhagen should trickle down on. Consequently, the corridors of Copenhagen that are most exposed to the neighbouring regions, which are also supposed to benefit from its development, are also the corridors that house the least knowledge-intensive industrial characteristics. This results in a rather complicated situation and highlights the problem of adapting the cities-first-approach for regional development.
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Summing up
This chapter has shown that a division of talent can be identified not only between regions but also within regions as the case of Copenhagen illustrates. Talent tends to cluster around the larger cities. Moreover, much literature has focused on the knowledge economy and the revitalisation of the inner cities in Europe and the US, or on city regions as cauldrons of innovation and creativity. The analysis in this chapter suggests that resurgence of city regions and the location of the knowledge economy cannot be reduced to a question of the inner city a more polycentric city structure emerges with the coming of the knowledge economy, which includes knowledge-intensive nodes in the suburbs and even spots in the outer city. Here the polycentric structure of the city region of Copenhagen has been studied, but in addition this chapter provides evidence of an emerging spatial division of talent. The latter contributes to an increasing fragmentation and polarisation of city regions. The city and city regions are not just divided by industry or activities but also by talent. Thus, understanding the current resurgence of cities also implies an understanding of labour and talent. The case of Copenhagen shows that business services represent an uneven distribution of talent across the city region. The spatial division of talent in Copenhagen has resulted in a relatively lower concentration of talents in the southern parts of the city region even within industries that are often said to be on the frontiers of the knowledge economy. Accordingly, we need to rethink and examine more closely the consequences of the uneven distribution of talent within the same industries. We not only need to understand location dynamics between but, more importantly, also within industries and while doing so, we need to look at the consequences of uneven intraregional development when city regions are regarded as locomotives for economic growth. What produces these new spatial patterns? What are the main causalities of the growing uneven geography of talents? We need to look in two directions for an answer. First, we need to examine the location dynamics of firms and industries, recognising that the focus should be on the firms networks including translocal and even global relations. Such a perspective would enable us to analyse
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the contemporary dynamics of the city regions and their economic geographies; and, hence, gain new knowledge about the economic resurgence and emergence in the city region. This perspective can provide us with a deeper understanding of location preferences and behaviour, which will include the social and economic embedded characteristics of firms and its nature of knowledge creation, exploitation and diffusion in the networks of production. As shown above, the complexity of location in the 1990s and 2000s cannot be explained by a single factor, such as suburbanisation or the logics of cost reduction. Second, we need to examine how and more important why talents choose a location. Amenities are often highlighted as one of the most effective vehicles to mobilise and then attract talent. Hansen and Niedomysl (2009) and Niedomysl and Hansen (2010) approached this question by asking approximately 5,000 people in Sweden who recently moved from one region to another about their motives and decisions to move. The findings do not support an amenity-driven growth paradigm. The main conclusion is that jobs and career opportunities are the single most important reason why people migrate, no matter what the migrants level of education and income are. Further, personal social relations come before factors that can be categorised as amenities. Looking at city regions in smaller countries like Denmark it is worth mentioning that the number of cities to shop between is limited, especially if highly skilled people wish to have not only one but several job opportunities. This leaves cities like Copenhagen in an almost monopolistic position as they are the only labour markets that offer a variety of job opportunities within several industries. Based on the above analysis of the spatial division of talent, we will argue that this is important to get a more nuanced understanding of the city and the city region because the city regions hold many different economic dynamics which are strongly linked to the uneven economic geographies of the city as Scott (2006) recently stressed. The spatial outcome of the economic dynamics of Copenhagen leaves an impression of a fragmented city where the structure of the knowledge economy is very irregular. Florida (2002) and others argue that the unevenness might have an essential effect on the citys dynamics and thus make an important contribution to the knowledge
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structure of the city. But the unevenness also points to the fact that cities cannot be seen solely as cauldrons of creativity. Modern cities are melting pots, not only when it comes to ethnicity but also in regard to economic activities. Different economic activities tend to concentrate in different parts of the city. Thus, the assumption of cities as creative centres is always based on average findings. In opposition to this, some areas of Copenhagen have faced development that even in some cases is considerably less knowledge-intensive than in the neighbouring regions.
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5. The Outer City: Urban Economic Geographies in the Making
The urban turn produces new urban forms and currently much attention is given to how the urban spaces transform, for instance, into polycentric structures and how the urban development absorbs exiting cities in the surrounding areas. This therefore, produces new centres and places of production and living, which together form city regions that, in this case, refer to large metropolitan areas. These areas however cannot be reduced to a densely built-up city, but include its hinterland that stretches beyond the administrative and morphological boundaries of the city and contain functional networks of labour and capital. Thus, the urban turn is about the concentration of economic activity in large urban areas based on the rise of the knowledge and service economies. However, the urban turn is also about the dynamics of the expansion of these urban areas as a consequence of an increased concentration of economic activity. In Chapter 3 and 4 we discussed and analysed the economic and spatial dynamics of Denmark, with focus on the two large city regions of Copenhagen and Aarhus. One of the central lessons in these chapters is that cities are heterogeneous units characterised by different economic dynamics, dependent upon where in the city region one looks. This chapter examines the geographies that shape the outer city a zone within the city region that is characterised by dynamics fundamentally different from the processes within the city.
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On the edge of city regions

The outer city on the edge of the Copenhagen city region is changing. In accordance with the dynamics of the city region, the outer city is transforming from being based on a local economy towards an economy that is entwined in the wider urban, regional, national, and global networks. With the aim of explaining the rise of new spaces of the urban economy, the chapter focuses on the transformation of the industrial structure and the location dynamics on the edge of the metropolitan region. The rise and expansion of city regions has produced new economic spaces of relations and flows, transforming existing (local) economic spaces also on the edge of the regions (Kloosterman and Musterd, 2001; Phelps and Parsons, 2003; Hidding et al., 2000). In an attempt to understand the expansion and rescaling of the metropolitan regions outside the built-up areas the development has lately been theorised in many directions using key concepts such as metropolisation, edge cities, post-suburbia and networks of urban networks, and Netzstadt or Zwischenstadt (Ascher, 2002; Phelps and Parson, 2003; Bontje, 2004; Borsdorf and Zempri, 2004, Sieverts, 2003). The edge of city regions has been given some attention in the literature, but there is a shortfall in understanding the transformation of the economic geographies in the new urban forms on the edge of the city regions and of the general urban complexity and fragmentation, including urban politics and social geographies (Jonas and Ward, 2007). The immense suburbanisation process in the post-war years and later in the 1970s and 1980s has been scrutinised extensively for instance in economic geography summarised by Scott (1988). Only recently however, has a new direction in urban and regional studies been followed that focuses on the new urban forms on the edge of metropolitan regions in Europe (Bontje and Burdack, 2005; Phelps and Parsons, 2003). In analysing the outer city of the Copenhagen metropolitan region, this chapter explicitly examines the industrial changes of the outer city that have emerged as geography in the making (Hansen and Winther, 2007; Winther and Hansen, 2006). The outer city is defined as a transition space on the edge of the metropolitan region, which is transformed by several central and interrelated economic processes. First of all, the outer city is transformed by
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economic processes that are changing the industrial structure, dominated by agricultural and manufacturing production, to an economy that is based on a range of service industries. Second, the outer city has increasingly become an attractive place in which to live for a growing urban population, including newcomers from the built-up area. Therefore, the outer city has, for instance, become more integrated into the urban labour markets through commuting. Third, and related to the economic and social transformation, land use has changed as new economic activities have emerged for instance, the leisure economy has transformed former farmland into golf courses, and empty spaces such as former gravel pits are now being used for weekend fishing, all consumed by the larger urban population. We focus in this Chapter exclusively on the first process the changing industrial structure, and the location dynamics, to answer some of the basic questions about the new economic geographies of the outer city. The main empirical question of the chapter is therefore: How do the industrial structure, the location dynamics, and the urban division of labour take form and shape the outer city? To examine the industrial transformation of the outer city we use employment data by workplace, stretching from 1982-2002. We examine and summarise the industrial transformation of the outer city, arguing that the existing industrial space is transforming and that new industries and location dynamics, eg. within business services, have emerged. We explore the dynamics of the industrial space in the outer city and the location dynamics of service firms to show the industrial transformation of the outer city during the expansion of the metropolitan region. The result of the empirical analysis and the main findings are then used as a launch pad for discussing the central theoretical and analytical challenges to get a better understanding of the industrial changes in the outer city. We suggest a movement away from classical models towards studies that examine, or at least reflect on, e.g. the inner city, suburbia and the outer city as economic, political and social spaces that are a vital part of the rescaling of divisions of labour, location dynamics and political powers in metropolitan regions. These are all interrelated places that contribute to the production of the urban economic landscape(s).
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The resurgence and spatial dynamics of metropolitan regions: framing the outer city
The resurgence of metropolitan regions reflects two significant processes of spatial economic restructuring (Storper and Manville, 2006). First, there is the revival/recovery of the entire metropolitan regions that lost jobs and population in the 1970s and 1980s. The second resurgence process is the revival of the city centre as a driver of economic growth. We add a third spatial process to this resurgence: the rise and transformation of economic spaces on the edge of the metropolitan region. The large metropolitan regions have gained economic growth and have expanded into the countryside. Towns and countryside close to metropolitan regions have become more economically, functionally and culturally integrated into the urban landscape. As a result of the expansion, new urban forms have materialised, but these have been understudied however until recently (Bontje and Burdack, 2005; Phelps and Parsons, 2003). Related to these current changes in the urban landscape new theories of the new urban geographies have emerged (Massey et al., 1999; Amin and Thrift, 2002; Amin, 2004; Hidding et al., 2000). Hidding et al. (2000) demonstrate how a number of different discourses about the relationship between town and country have replaced the former conceptual division between the two. One of the central discourses closely related to the coming of the knowledge economy is the network discourse. The discourse on networks has derived its general theoretical framework from recent advances in economic geography, including theories of clusters (and industrial districts), distanciated networks, and regional innovation systems, (Asheim et al., 2007; Amin and Thrift, 2002; Peck and Yeung, 2003; Asheim and Gertler, 2005). Further, the relational turn in economic geography has equally highlighted networks and network relations (Boggs and Rantisi, 2003; Yeung, 2005), including the recent focus on the firm (Asheim and Taylor, 2001; Grabher, 2001; Yeung, 2005). The fundamental idea of using networks is that a network approach to town and country does not advance town or country as dichotomies or, in our case, the outer city as a subordinate to the central city, but focuses on the relations and density of networks in the urban landscape between different urban
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forms. The network approach has recently had significant influence on the perception of urban regions (Borsdorf, 2004). This is also evident in Sieverts (2003) arguments. He provides a conceptualisation of the urban-rural continuum that is highly related to the network discourse. It provides new insight into the dynamics of the post-industrial urban landscape. The concept of Zwichenstadt is introduced:
meaning the type of built-up area that is between the old historical city centres and the open countryside, between the place as living space and the non-places of movement, between small local economic cycles and the dependency on the world market (Sieverts, 2003: xi).
Thus, location dynamics and shifts in the urban division of labour are produced by the economic relations and networks of firms and industries. Therefore, changes in industrial structure, location dynamics and a changing division of labour are a result of changes in the economic relations and networks of firms and industries. They are also a result of the role of firms in production networks and the social and political embeddedness of the networks. Our analysis of the industrial geography of the outer city is based on statistical material that can analyse the industrial structure, the location dynamics and the position of the outer city in the urban division of labour. Hence, the transformation of the industrial geography in the outer city is a result of changes in the economic relations and networks of firms and industries. We do not have data to analyse these changes, but we end the chapter with a discussion of the analytical consequences of this perspective.
The outer city of Copenhagen

What is the outer city? Andersen (2004) reviewed the literature on the outer city and related concepts. He concludes that the areas on the edge of metropolitan regions have often been regarded with scientific frustration in urban studies as their borders are difficult to demarcate (theoretically and especially empirically). Andersen (2004) argues that the outer city can be conceptualised as the transition zone between the built-up area and the open landscape. This definition shares some of the central features of Thomas Sieverts Zwischenstadt. The outer
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city is between the urban and rural; between town and country, to use Hidding et al.s (2000) conceptualisation. It is different from the built-up area but it is not the countryside. It is characterised by a different population density, industrial structure and land use but it is also integrated and related to the built-up area as a place of living and it is part of the spatial division of labour in the urban landscape. A landscape connected through flows and networks. The outer city is therefore both a conceptual and an empirical part of the urban landscape of city regions. Three central and related economic processes currently shape and transform the economic geographies of the outer city of Copenhagen (Winther and Hansen, 2006). First, there is a range of processes changing the industrial structure. The outer city is transforming from being an agro-industrial space with manufacturing to becoming a service and, in some cases, even a knowledge-based economy with manufacturing. This transformation of the industrial structure is elaborated below. Second, the outer city has become a place of living and a residential space with an increasingly urban population (Christoffersen, 2002; Mazanti, 2007; Mazanti et al., 2006). The newcomers and the existing population are largely integrated in the urban labour market, creating new patterns of consumption and evidently a marked growth in commuting (Nielsen and Hovgesen, 2006). Increased local consumption also creates increased demand for construction, retail and public services, together with the consumption of leisure and culture, resulting in a range of new economic activities and start-ups of firms in these sectors. Third, one of the results of these processes is the emergence of new forms of land uses, which change the agro-landscape of the outer city and the new economic activities that transform the original land use patterns (Prstholm and Kristensen, 2004; Prstholm, 2006). The new forms of land use are visible, for instance, as a result of the emergence of the leisure economy, and include, for instance, new golf courses on old farmland, fishing opportunities in former gravel pits and a diversity of theme parks, museums and entertainment. Leisure is consumed by both the local population (including newcomers) but also to a great degree by the large urban population of the metropolitan regions. Thus, the new economic spaces in the outer city are interrelated to the urban landscape through business relations, labour markets and consumption.
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As also stated in Chapter 2, we define the outer city as the transition zone between the built-up area and the countryside in the metropolitan region of Copenhagen (Winther and Hansen, 2006). The transition zone is defined according to the rules set up in the COMET project. The transition zone borders the built-up area of Copenhagen and is highly integrated into the urban landscape. It sheds light on the changing industrial geography of new urban forms in the Copenhagen urban landscape. The definition is related to different functional borders of Copenhagen but is not necessarily identical to them. For instance, the commuting area of Copenhagen stretches beyond the outer city (Kaag, 2000). The definition provided by the COMET project divides the urban landscape of Copenhagen into four main zones see Figure 5.1. Zones 1, 2 and 3 make up the built-up area and are identical with the rules of the N.U.R.E.C. (1994) classification. Zone 1 is the inner city area. In the case of Copenhagen, Zone 1 is demarcated by the lines of the medieval city. Zone 2 is the rest of the city core. Zone 3 is the suburban zone. Finally, zone 4 is the transition zone between the built-up area of Copenhagen and the rest of Zealand.
Transformations of industrial spaces in the outer city of Copenhagen

The economic geography of Copenhagen has changed dramatically over the past half-century and is currently transforming towards a service and knowledge economy see chapter 3. The transformation of the economic landscape of Copenhagen has been dominated by two central processes. The first is the emergence of a more complex urban structure that is evident in many urban agglomerations in Europe where new suburban centres have appeared, some of them highly specialised in, for instance, back-office functions in finance and insurance, retail, transport or various business to business activities. The transformation also includes a spatial expansion of the urban economy. The expansion of the city has created new spaces of economic flows and relations, transforming the spatial divisions of labour in the urban landscape, but it has also created new location dynamics of firms and industries. Second, the coming of the service and knowledge economy has been accompanied by industrial restructuring and immense de-
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Figure 5.1 Zones of Copenhagen
Copenhagen - Delimitation
N
Legende Zone 1 Zone 2 Zone 3 Zone 4
10
20
40 Kilometer
(C) KMS - http://www.kms.dk (C) IGUC - http://geogr.ku.dk
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industrialisation (Maskell, 1986; Breum, 1991; Illeris, 1997; Winther, 2001; 2004; 2007; Engelstoft et al., 2006). In terms of employment the main industrial spaces of the outer city are declining, transforming and restructuring and new industrial spaces have emerged. In 2002 the outer city (zone 4) had 222,141 inhabitants, almost twice as many as in 1971, and in the past 10 years its population has increased twice as fast as that of the Copenhagen built-up area (Winther and Hansen, 2006). Below, the main industrial sectors of the outer city are identified and their development and location dynamics are analysed. These are industrial sectors that relate to the three central economic processes defined as constituting an economic conceptualisation of the outer city based on the data from Statistics Denmark. The high level of aggregation used in the examination is necessary to produce a long time series of data. The main changes are summarised and displayed in Tables 5.1 and 5.2 and elaborated below. The tables reveal a considerable transformation of the industrial structure in the outer city over the past decades. Focus is on the transformation of the industrial sectors and the overall change in the industrial structure from an industrial economy towards a service economy. The primary sector The primary sector has traditionally been an important sector in the outer city but this has changed markedly over the past decades as the area has become integrated in the urban economic landscape. The agricultural sector has been one of the dominant industries in the primary sector and remains important today in terms of land use, but it has restructured tremendously since the 1960s with marked job losses (Kristensen and Busck, 2006). This restructuring is also evident in the outer city. In Copenhagen the outer city continues to dominate the primary sector, although there has been a clear reduction in employment, as Table 2 reveals. Another central transformation of the sector is the rise of part-time and hobby farming, new entrepreneurialism in the form of, for instance, farm shops and other economic activity on farms that indicates a transition from agricultural production to consumption of the countryside (Prstholm and Kristensen, 2004; Wilson, 2001).
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Table 5.1 The industrial spaces in the outer city 1982-2002

Growth in Employment Economic spaces* Primary sector NACE 114 82-02 82-92 92-02 Decline. Type of growth
Manufacturing NACE 1549 + + +
Relatively stable, minor growth rates and stronger growth in the 1980s than in the 1990s.
Consumption NACE 5052, 55 Transport NACE 60, 6163, 64
Moderate expansion. + + + Strong growth in the 1980s, declining in the 1990s.
Financial sector NACE 6567 Public services NACE 73+80, 75, 85, 90+93)
Moderate decline in the 1980s strong reduction in the 1990s. A small reduction in the 1980s. Strong growth in the 1990s.
Business service NACE 7072, 74 + + +
Strong growth in both periods.
Cultural economy NACE 92
Resurgence of the cultural economy in the 1990s.
Source: Hansen and Winther 2007 * NACE 91, 95 and 99 have not been used because of their minor importance. ** Based on a statistical analysis of location quotients variation in the 18 municipalities in the outer city.
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Economic importance 2002 Employment Low
Important industries 2002 Agriculture
Transformation&Location**
Decline of production and employment. Restructuring towards post-productionist activities. Evenly spread in the outer city with some concentration in the most rural municipalities. Industrial restructuring towards new industries and a broader industrial base. Spatial restructuring within the outer city towards new localities, while the old decline. This makes the sector relatively evenly spread out but with quite different industries. Growth of both retail and wholesale in both periods. Evenly spread with a tendency to concentration in municipalities with the larger cities. Restructuring. Strong growth in the 1980s, lower, but higher than average growth in land transport in the 1990s and a reduction in employment in post and telecommunication. Rationalisation, mergers and closure of affiliates in bank and insurance sector in the 1990s had significant influence on development. A small growth in the health sector in the 1980s but generally a reduction in the public sector. The 1990s had a marked expansion of the public service and utilities but decline in public administration, especially health and social work grew. Generally evenly spread. Strong growth in business services in the outer city. Evenly spread but with some concentrations in specific municipalities also rural and very strong growth in new industrial sites. Many SMEs. Local growth and relocation from the built-up area. Networks are generally more local than in the built-up area. Emergence of new locations in the outer city in the 1990s decline in old ones.
Very high
Heterogeneous Labour intensive industries Plastics Retail
High
Medium
Land transport
Low
Bank
Very high
Education Health and social work
Medium
Consultancy Cleaning
Low
Agricultural production and land use are currently transforming into a post-productive regime, which reduces employment in the sector and changes the use of land and buildings. Thus, the sector is declining in economic importance in terms of employment but, on the other hand,
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Industry
Table 5.2 Industrial employment changes in Copenhagen 1994-2002

Built-up area 2002 4350 146,842 15,233 68,651 62,254 28,355 22,658 3024 10,749 13,678 24,211 26,889 11,622 3409 14,195 3011 27,671 8592 96,506 65,859 65,298 148,448 6213 19,097 26,695 7862 475 5508 68 937,423 Percentage Change 1994- 2002 -10.8 -1.7 8.6 6.9 15.8 34.5 7.6 -12.7 15.6 28.0 12.6 0.4 -5.2 6.7 10.5 44.9 138.2 57.2 54.9 -11.8 7.0 10.6 -18.8 8.6 28.4 14.6 18.5 -7.1 -52.4 11.7 Outer city 2002 3449 20,432 2322 3684 6088 1580 2604 18 4 129 839 607 97 36 849 162 596 86 5067 3317 5587 14,427 752 697 867 722 22 575 0 75,615 Percentage Change 1994-2002 -15.7 16.8 11.6 13.5 17.5 5.3 22.1 -21.7 100.0 -26.3 -26.5 -32.9 -14.9 89.5 20.1 1.9 151.5 168.8 45.9 -26.4 11.9 31.5 -14.0 9.8 15.0 1.1 340.0 -37.7 0.0 12.7
Primary sector Secondary sector incl. construction Sale and rep. of motor vehicles Wholesale except of motor vehicles Re. trade and repair work exc. of m. vehic. Hotels and restaurants Land transport and transport via pipelines Water transport Air transport Supporting transport activities Post and telecommunications Finance Insurance Activities auxiliary to finance Real estate activities Renting of transport equipment and machinery Computer and related activities Research and development Consultancy and cleaning activities etc. Public administration Education Human health activities Refuse disposal and similar activities Activities of membership organizations Recreational, cultural, sporting activities Other service activities Private households with employed persons Not stated Extra-territorial organisations and bodies Total employment

Source: Statistics Denmark and COMET databases
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it is an important contributor to the emergence of new economic activities producing new economic spatialities in the form of, for instance, leisure-scapes and new commuting patterns. The manufacturing sector To understand the transformation of manufacturing in the outer city two things are essential. First, the secondary sector, including construction, has maintained its importance in terms of employment. The sector accounts for more than 27 percent of total employment and it is the single most important sector in the outer city. The sector even grew at a notable growth rate (16.8 percent in the 1990s, as Table 5.2 demonstrates. This is a faster growth rate than overall employment growth. Thus, the outer city experienced a period of industrialisation. The process of industrialisation is remarkable and remains in sharp contrast to the heavy de-industrialisation processes that have dominated the built-up area since the 1960s. So, it seems that there is still an outward movement of manufacturing jobs into the urban landscape of Copenhagen and not just across to other regions, producing new economic spaces of manufacturing. Second, the secondary sector in the outer city is very heterogeneous and has transformed from being dominated by traditional labourintensive industries, such as clothing and furniture, to having a broader industrial base including chemical industries producing, for instance, plastic products (Hansen and Winther, 2004). Therefore, the manufacturing sector remains a very important industrial space in the outer city. This has, however, not taken place all over the outer city. Its importance is very marked in specific manufacturing municipalities. On the one hand, there are old industrial spaces in the North-western areas that are dominated by heavy industry and, on the other hand, new industrial spaces in the south and South-western areas are dominated by firms in new industries, such as advanced electronics and plastic. Thus, even within the outer city there is a division of labour and a diversity of growth. The consumption sector The retail sector has restructured and transformed into new spaces including the retail centre of restad, a newly developed area close to
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the city centre. This is just the latest change in a long-term restructuring of shops and the emergence of new centres in the urban landscape of Copenhagen. All in all, the retail sector is showing tendencies of becoming more and more polycentric, with a specialisation and concentration of large shopping facilities close to the main infrastructure or in city centres. The location dynamics are changing; there has been a shift in location outwards from the central zones, while the growth in the number of hotels and restaurants has been higher in the central parts of the city region (Winther, 2007). The increasing population of the outer city has transformed the consumption space, producing new location patterns which also include new spaces and locations of professionals such as law firms, dentists, doctors etc. that are not captured in the statistics presented in Table. The growth of the consumption sector is evident in Table 2. Retail employment increased by 17.5 percent in the 1990s: a growth that also exceeds the growth of the built-up area. Furthermore, wholesale and the sale and repair of motor vehicles also grew in the 1990s, but wholesale in particular remains relatively unimportant when compared to the built-up area. Likewise, the growth rate in employment in hotels and restaurants is much lower than in the built-up area, suggesting that not all industries in the consumption sector follow the direct logics of an increase in the local population. The result of the analysis on location patterns summarised in Table 1 reveals that the retail sector and hotels and restaurants in general are evenly spread in the outer city, but with minor tendencies towards concentration in municipalities with larger residential areas (Hansen and Winther, 2004), while wholesale seems to be more concentrated in specific municipalities with higher accessibility to the main infrastructure of the city. The transport sector The transport sector remains a very important sector in the Danish economy. It also has a vital position in the urban economy of Copenhagen, especially in the suburban zone (Hansen and Winther, 2007). The suburbanisation process of the sector was evident in 1980s but in the 1990s the sector grew in all of the four zones examined, especially
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zones 1 and 3. Growth in the outer city was more moderate in the 1990s, but as Table 2 reveals this moderate growth rate covers up a restructuring of the sector in the outer city. Land transport grew by more than 22 percent from 1994-2002: a growth rate almost three times that of the built-up area. On the other hand, the remaining industries declined in the outer city, especially post and telecommunication, which lost more than 26 percent of its employees from 1994-2002. This decline contrasts the growth of post and telecommunication in the built-up area by 12.6 percent. This illustrates a restructuring process but also a changing division of labour in the urban landscape and a new position of the outer city as an urban form. The transport sector, and especially land transport, is concentrated in specific municipalities in the outer city close to the main transport infrastructure of the metropolitan region. So, either the municipality is specialised in transport or it does not play a role in the local economy. The financial sector The financial sector suburbanised in the 1980s and restructured and rationalised in the 1990s, making it a very spatially dynamic sector (Winther, 2007; Hansen and Winther, 2004). In the outer city the sector has declined since the 1980s, especially in the 1990s. The importance of the sector in terms of jobs is low, and from 1994 to 2002, employment was reduced by more than 32 percent in finance and close to 15 percent in insurance. The reduction in employment was due to the rationalisation of the sector, the relocation of the sector to the back-office landscapes in suburbia, and the closure of affiliates in many small cities. This is evidence of the spatial restructuring of the service economy in the outer city because, while finance and insurance declined, business services experienced very high growth rates, producing a different service space in the outer city. The business service sector Business services constituted one of the fastest growing sectors in the economy in the 1990s (Winther, 2007). The sector is a significant driver of the service and knowledge economy in Copenhagen with very strong growth rates (Winther, 2004). The growth of business services is vital to the integration of the outer city into the urban economy. The sector
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experienced strong growth in the 1980s and 1990s, making it a sector of medium importance in the overall economy of the outer city. It is generally evenly spread but there are some concentrations in specific municipalities, even some of the more rural ones, and moreover, new industrial sites have seen very marked growth rates. Growth has been considerable in computer and related activities, research and development (insignificant in absolute terms), consultancy and cleaning activities etc. The latter is the most important of the three, accounting for close to 7 percent of total employment in 2002. Thus, there is a strong emergence of a new business service space in the outer city. The public sector The population growth in the outer city has increased the demand for public welfare, including education, childcare and other public facilities. This is an interesting industrial space as the location of the Danish welfare state and its many related services are politically resolved. The population growth of the outer city has resulted in a significant expansion of welfare state related services, making human health activities the second most important sector in terms of employment in the outer city with a significant growth in the 1990s (31.5 percent) followed by a marked growth in the education sector, while the public administration sector has experienced major employment losses. The public sector activities are thus the main contributor to the local economy in the outer city. The cultural sector The cultural economy, including the creative industries and the central experience industries, has received much attention from academics and politicians, also in Denmark and Copenhagen (Bayliss, 2007; SmidtJensen et al., 2009). The rise of the cultural economy is evident in the built-up area, as indicated in Table 5.2, by the growth in employment in recreational, cultural and sporting activities by more than 28 percent from 1994-2002. In the outer city, the sector is relatively unimportant in terms of employment. It declined in the 1980s but had a relatively strong growth in the 1990s. The location also changed from the 1980s to the 1990s. The cultural economy is currently experiencing a locational shift, emerging in new locations while declining in the old. The
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shift can be related to the new activities in the outer city, such as golf courses, fishing opportunities and theme parks. A brief examination of the industrial sectors in the outer city reveals four important lines of transformation. First, there is a transformation of the industrial structure. Second, the outer city has become part of the spatial division of labour in the urban landscape of Copenhagen. Third, there is an internal diversity and division of labour within the outer city. Fourth, Winther and Hansen (2006) identified a tendency for firms located in the outer city not only to support local industries, but also to have their main clients within the metropolitan region or even abroad. This is supported by the examination above, for instance, of the marked growth in business services. This transformation cannot be analysed within the classic models of the urban economy. In the next section we conclude on the outer city of Copenhagen and then discuss the theoretical and analytical challenges of the rise of new urban forms on the edge of metropolitan regions.
The economic geographies of the outer city: findings and summing up

Taken together, the industrialisation and growth of the service economy of the outer city produce new industrial geographies based on two central processes: industrial transformation and urban growth, and hence relate directly to the urban turn. The empirical evidence suggests that the outer city of Copenhagen is transforming from an economy dominated by agriculture and traditional manufacturing industries into an increasingly important area for the manufacturing sector with sparse traces of an emerging knowledge economy. While agriculture has lost its importance in terms of jobs, manufacturing has maintained its position and has become a very important sector in the outer city the new production site for the contemporary city region. The service sector has expanded and restructured and new industries for instance in business services, have emerged. The combination of economic activities demonstrates that the economic structures of the outer city in Copenhagen differ from those of the built-up area. They also differ fundamentally from the more peripheral landscapes bordering the outer city. The Copenhagen city region covers a large area.
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Naturally, this results in heterogeneous urban forms where structures and dynamics differ across space. The economic geographies do not only differ between the central city, suburbia and the outer city; they also differ considerably within each of the urban categories (Winther and Hansen, 2006; Winther, 2007; Hansen and Winther, 2007). The economic geographies of the outer city represent the geography of difference, covering village-like communities, over new towns and new industrial sites, to satellite districts. In spite of this diversity, most of the economic sectors presented are connected to the spatial division of labour in the metropolitan region, and hence increasingly tapped into the urban economy. As a transition zone between the countryside and the built-up area, the outer city has become an arena of economic actions that resembles the service- and knowledge economy that dominates the built-up area, but it also facilitates an important arena for industries that do not easily fit into the picture of a central city knowledge economy. Therefore, the outer city of Copenhagen is becoming an urban form in which the industrial dynamics are based to a large extent on manufacturing, construction and traditional services, if compared to the central city. It does, however, also represent growing service activities dependent upon knowledge and knowledge-creation highly related to the overall urban economy. The study provides evidence that the economic dynamics of the outer city of Copenhagen is transforming towards a service economy with a heterogeneous manufacturing sector. It reveals a marked diversity and is increasingly tapped into the urban economy, with urban spatial divisions of labour shaped by the location dynamics of industries. To gain a better understanding of the economic and social processes that produce the transformation, we need to go beyond understanding the outer city as subordinate to the built-up areas and examine the flows and networks of the urban economy through different urban forms. Finally, the resurgence of the cities and the rise of the knowledgeand service-economy produced new urban complexities. The contemporary city regions are not spaceless caldrons of innovation and creativity but rather large urban places with multiple functional spaces and specialisation patterns that are interrelated.
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6. Location Dynamics and Imaginary Spaces of Location
The location and relocation of economic activity, and jobs and firms in and between regions have been a key issue in the urban turn. Hence, the spatial dynamics of city regions, the competition between them and analysis of industrial location and the location of firms provides a vital insight into the dynamics that shape the current economic geography of Denmark and many countries in Europe. In Chapter 3 we presented the marked growth and industrial change in the two dominant city regions in Denmark, and Chapters 4 and 5 reveal an uneven economic geography in the Copenhagen city region. In this chapter we examine the location choice and preferences of the firms. Localisation of economic activity and location theory emphasises the firm as a central actor/agent in shaping and transforming the economic geographies of cities and regions. In Chapter 2 the traditional location theory advanced by Alfred Weber focuses on the location of the firm from a cost-minimising perspective, finding the optimal location as the location with the lowest overall cost. The heterodox paradigm has produced several alternative theories on the location of economic activity. To understand the firms location we need to understand the firms networks and relations and how places and locations underpin these networks and relations. This is the centre of attention in this chapter. We introduce the concept of imaginary spaces of location and provide empirical insight from a large survey produced in 2003 of the
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location preferences of firms in Copenhagen. Imaginary spaces of location are the expressed location preferences of the firms at a particular point in time in a specific place. These imaginary spaces of location must not be understood as facts or exact preferences. They are social constructs of the interviewee (representing the firm) based on for instance personal beliefs, wishful thinking, political conviction, the discursive practice of interest groups or thoroughly considered location preferences based on market analysis. Two dimensions of imaginary spaces of location are examined. First, the differences of imaginary spaces of location between industries are examined, revealing marked differences in how the firms in various key industries perceive space and location, which points to the existence of different imaginary spaces of location between industries. Secondly, the spatial dimensions of imaginary spaces of location are analysed in the Copenhagen city region revealing marked differences between places. Firms in different places in the city perceive location dissimilarly, pointing to various imaginary spaces of location.
Location in place: geographical proximity or relational propinquity?

The economic urban landscape can be analysed in its own right. It must, however, always be understood in relation to other aspects, as it is related by the structures, relations and processes that originate from, for instance, the social dynamics, political visions, governance structures, regulation and cultural identities, which are the embeddedness of social action (Granovetter, 1985; Grabher, 1993; Peck, 2005). The economic geographies of the city region and the location strategies of the firms are not only related to the economic spaces but also to processes such as the changing demography and the everyday life of people. Emphasising these relations, focus is on the dynamics of the economic landscape. The economic landscape is constituted by a range of heterogeneous and differentiated spheres, e.g. physical and material structures in space, organisational and institutional set-ups and the geography of technology, knowledge and learning. This creates path-dependency where former processes, relations and structures influence current urban forms. The process of path-dependency points
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to the history of the economic landscape. An important feature of capitalism is that it produces and reproduces different geographies in different industries and sectors at different scales at the same time. Examples of these are changes in local labour markets and new housing patterns. These changes again produce new geographies of difference and interdependencies such as new relations and networks, i.e. new relational geographies and new divisions of labour. As stated in this book, a recent focus of urban and regional studies has been on the rise of the knowledge economy and, hence, on the geography of knowledge creation, learning and the understanding of how locations and places underpin the competitiveness of firms. The current understanding of industrial location has moved from the more neoclassical understanding of localisation and urban economies to the use of economic network theories and economic sociology, to recognising the regional social and cultural elements as explanatory factors in order to analyse the regional innovation systems, their knowledge bases, innovation potential and the competitiveness of firms. Concepts such as social capital, trust, norms and conventions have become central analytical categories explaining (uneven) regional development through traded and untraded interdependencies (Storper, 1997) or other marshallian in the air or knowledge spill-over mechanisms. It is necessary to address these concepts to understand the concept of imaginary spaces and understand the assumption that economic agents are not necessarily acting rationally in a strict economic way, but they are shaped by their social relations and their socio-cultural embeddedness. The knowledge direction in urban and regional studies draws heavily on institutional and evolutionary economic theories and the vast innovation literature. Three main strands can be identified (Asheim and Mariussen, 2003). The first strand of research emphasises institutions, formal and informal rules, norms and legislation as prerequisites for economic development, knowledge production and innovation. The second strand has a focus on geography pointing to localised learning, geographical proximity, clusters and agglomeration economies. This literature stresses the necessity of face-to-face contact and regards socio-cultural proximity as fundamental for innovation and knowledge transfer between the economic agents. Clusters, industrial districts
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and regional innovation systems are the main interest. The latter is an outcome of the third strand which concerns the innovation system that underpins the innovation process (Lundvall, 1992; Edquist, 1997). Two positions dominate the current debate in the geographical strand: a localist/regionalist position versus a relational position (Peck and Yeung, 2003). The regionalist position has had a marked position in recent years and attributes geographical proximity a vital role for the production of knowledge (Asheim, 1996; 2002), Morgan (1997), Storper (1997), Cooke and Morgan (1998), Maskell and Malmberg (1999) and Gertler (2003). The region is often conceptualised as a space in which the institutional framework of learning processes and knowledge production is produced and reproduced, and the common culture, institutions, norms and values are claimed to be decisive for trust among economic actors (people and firms). Especially the analysis of agglomeration economies and clusters has been in focus in recent years see for instance Asheim et al. (2007) for a recent summary including an emerging critique (Martin and Sunley, 2003; Amin, 2003). The analysis of geographical clusters focuses on the identification of local or regional capabilities. The theoretical framework gives emphasis to growth industries, the costumer and supplier networks and the general institutional set-up which are created within clusters but external to firm advantages. The dynamics have been theorized thoroughly but empirical evidence is needed (Malmberg and Maskell, 2002; Malmberg, 2003). The relational position emphasises relational propinquity and is associated with Amins (2003; 2004), Amin and Thrifts (2002) and Amin and Cohendets (2004) analyses of globalisation, urban and regional development, urban change and the production of knowledge. In Amin and Thrift (2002), location is understood as a situated, distanciated network. For instance, they argue that relational or organisational propinquity is more important than geographical proximity in the transfer of tacit knowledge. Amin and Cohendets (2004) discussions of the production of knowledge in firms illustrate the relational position. They focus on the firm being the locus of knowledge production rather than the region. Doing so, they see different factors underpinning the knowledge producing processes. They do not exclude geography as an important factor shaping firm networks, but the space in which the
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firms operate cannot be reduced to a matter of geographical scales. The firms network is constituted by the firms relations, and, hence, the analytical focus should be on the space which is defined by the firm relations, i.e. the spatial extension of the relations. Recently, Bathelt et al. (2004) promoted a theoretical sketch which discusses a) the local production of knowledge as a product of local buzz or as a presence of actors embedded in a geographical community, and b) knowledge stemming from channels of communication, called pipelines which are linked to places outside the community. Thus, an increasing return to location of economic activity is not only restricted to local spill-over effects but also to the relational spaces of firms that stretch beyond the territorial entities. Relational propinquity gives a new insight to the competitiveness and location of firms with its focus on relations. However, to understand the industrial and location dynamics, it is vital to recognise how places underpin the relational and organisational spaces. It is not within the present framework to examine these relational and organisational spaces. However, the analysis presented below indicates that inclusion of the relational spaces in the analysis may raise different questions of the location dynamics.
Imaginary spaces of location

The conclusion above contradicts the traditional urban hierarchic orders, rational choice and Homo Economicus rationality of the neoclassical-inspired location theory (Barnes, 1996). Moreover, the advantage and scope of agglomeration have been the main argument in explaining the logics of location. Social parameters such as family ties and environment have seldom been adapted, and in empirical studies, the main line of reasoning has been economic factors perceived as absolute neutral categories. Instead of understanding the location preferences of firms as absolute categories and as a result of economic rationality, the concept of imaginary spaces of location is introduced to point to the social embeddedness of economic action (Winther and Hansen, 2006; Winther, 2007; 2009). Imaginary spaces of location are the expressed location preferences of the firms at a particular point in time (in a specific place). These imaginary spaces of location must not be understood as facts or exact preferences.
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They are social constructs of the interviewee (representing the firm) based for instance on personal beliefs, wishful thinking, political conviction, the discursive practice of interest groups or thoroughly thought-through location preferences. Thus, the location preferences can be related to a variety of discourses arising from multiple rationalities (Ettlinger, 2003), i.e. economic, social or cultural embedded rationalities. The location preference of a firm (economic rationale) may, for instance, be related to values of residence (social or cultural rationale). Therefore, the imaginary spaces of location are all-in-all representations of the perception, experience and interpretation of location and the location preferences by the firm (or the interviewee representing the firm). They do not necessarily relate to the reasons for the original location of the firm but to the current understanding of the location. For example, a category such as prestige, which has been used extensively in studies on location preferences, is by far an absolute category as it often appears. Different firms have different perceptions of prestige and hence ascribe different values to prestige. International law firms may find prestige in waterfront offices, while IT HQs find green fields prestigious. The importance and the qualitative content of prestige may also very well change over time. This has to do with imaginaries. Imaginary spaces of location have importance also when it comes to relocation of firms. To a high degree, it is the perception of economic space that forms the firms location dynamics and their understanding of competitiveness. The survival and competitiveness of the firm do not necessarily correspond to imaginaries of the firms. A firm may perceive a certain location as a competitive advantage, but the location may in reality reduce the competitiveness of the firms in question. This will eventually appear through the section mechanism on the market, the birth and death, relocation or expansion and downsizing of firms.
Location preferences of business service firms: imaginary spaces of location

To explore the imaginary spaces of location, the main results of a large European survey of location preference by service firms are used (Bachmann et al., 2003; Winther and Hansen, 2006). The Danish part
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of the survey involved ten key industries see table 6.1. The ten key industries were selected to get a deeper understanding of the location of firms in the service economy representing a variety of industries ranging from personal services over transport to knowledge-intensive services. The survey included 182 service firms. 152 were located in Zones 1, 2 and 3 and 30 in Zone 4 the Zones are defined in Chapter 5, see Figure 5.1. The case study of Copenhagen was performed in January and February 2003, and therefore it provides an insight into the firms perception of location and hence an indication of the complexity of the location dynamics in the period of strong economic growth. Interviews with representatives of the firms were conducted by telephone. The telephone interviews took place after appointments had been arranged with randomly selected firms. Prior to the date fixed for the interview, the questionnaires were sent by e-mail or fax to the selected and interested enterprises. The interviewer filled in the questionnaire himself/herself (prevention of mistakes, gaps etc.). The questionnaire included questions about the firm, the choice of location, future location plans and questions about networks and cooperations. In this section, focus is on five of the ten key industries that are characterised as business services. This is to provide insight into the various imaginary spaces of location with one of the most important growth sectors in the past decades, a sector that is a key sector in the resurgence of city regions.
The service firms in Copenhagen city region

The Danish economy is generally dominated by SMEs (small and medium-sized enterprises), and the Copenhagen economy does not differ from this picture. This is a feature that reappears in the survey, but notable differences in firm size between the Zones can be observed. Relatively more small and medium sized firms (below 50 employees) are located in Zones 3 and 4 compared to Zones 1 and 2 see Figure 6.1. Compared to the built-up area, Zone 4 is relatively dominated by firms with 5-9 employees, but also firms in the category 10-19 employees have an important share. The share of very small firms (1-4 employees) is higher in Zone 4 than in Zone 1, but below the shares of Zones 2 and 3.
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Tabel 6.1 The Key Industries of the Survey (Source: Bachmann et al. (2003))
Key Branches 1 Research & Development NACE-Code 73.1 73.2 2 Consulting services 74.1 74.4 3 Technical & engineering services 74.2 74.3 4 Predominantly blue-collar business services 74.5 74.6 74.7 74.8 5 Finance & Insurance 65.1 65.2 66.0 67.1 67.2 6 Real Estate 70.1 70.2 70.3 7 Telecommunications, Computer & Electronic data processing 64.2 72.1 72.2 72.3 72.4 72.5 72.6 8 Press & Media 92.1 92.2 92.4 22.1 9 Culture & Entertainment 92.3 92.7 10 Activities of Membership Organisations n.e.c. 91.1 91.2 91.3
Description Research and experimental development on natural sciences and engineering Research and experimental development on social sciences and humanities Legal, accounting, book-keeping and auditing activities; tax consultancy; market research and public opinion polling; business and management consultancy; holdings Advertising Architectural and engineering activities and related technical consultancy Technical testing and analysis Labour recruitment and provision of personnel Investigation and security activities Industrial cleaning Miscellaneous business activities n.e.c. Monetary intermediation Other financial intermediation Insurance and pension funding, except compulsory social security Activities auxiliary to financial intermediation, except insurance and pension funding Activities auxiliary to insurance and pension funding Real estate activities with own property Letting of own property Real estate activities on a fee or contract basis Telecommunications Hardware consultancy Software consultancy and supply Data processing Database activities Maintenance and repair of office, accounting and computing machinery Other computer related activities Motion picture and video activities Radio and television activities News agency activities Publishing Other entertainment activities Other recreational activities Activities of business, employers and professional organizations Activities of trade unions Activities of other membership organizations
Figure 6.1 Size of Enterprises Divided by Number of Employees

100% 80% 50+ Employed 60% 40% 20% 0% Zone 1 Zone 2 Zone 3 Zone 4 20-49 Employed 10-19 Employed 5-9 Employed 1-4 Employed
Secondly, the growth of the service sector in Zone 4 is mainly based on local development. The overall effect of relocation from other parts of the city is relatively low. One of the central issues is to examine the movement of firms in metropolitan regions in Europe. In Copenhagen a movement of firms from Zone 1 and outwards can be observed in the survey; it must be emphasised, however, that the relocation is to nearby locations. Only few firms relocate, for instance, from Zone 1 to Zone 4 see Figure 6.2. Many relocated within the Zones and even within the original municipality. All-in-all, 30 of the firms in the survey were located in the outer city. Seven, i.e. 23 percent, had moved from other Zones within the last 10 years, whereas none of the 152 firms that participated in the survey had moved from the outer city. Third, the qualification structure of the jobs in the outer city is different. The service jobs in Zone 4 are characterised by a relatively low level of formal education compared to the built-up area (Backmann et al., 2003). The results of the survey also revealed differences in educational levels between firms located in the built-up area and the outer city. Firms in the three first Zones had employees with a noteworthy higher level of education. When linking location as a response to the accessibility to skilled labour, only 10 percent of the firms in Zone 4 rated it as important, whereas 25 percent of the firms located in the built-up area found it important. This result implies that firms located
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Figure 6.2 Relocation of Firms 1993-2003
9 8 0 0 4 10 1 4 0 2 3 0
* Numbers in parentheses correspond to the number of firms relocated within a zone. Source: Business enquiry, January-February 2003 (Bachman et al., 2003)
in the outer city did not depend on a highly skilled, formally-educated labour force compared to firms in the city (Hansen and Winther, 2004). Fourth, the economic networks of the outer citys service firms are more local than global but regionally interconnected to the other Zones. In the survey, the firms were asked about the Locational importance of proximity to customers, suppliers and other essential network partners. Table 6.2 reveals the location of the firms most important costumers to illustrate the local dynamics of the outer city. 52 percent of the most important customers are located in the outer city and 21 percent in Zone 3. The local importance of customers is contrasted especially by Zones 1 and 2 which have a more even distribution of important customers and a larger share of nationally located customers. Even though many important customers are local in the outer city, 20 percent of the most important customers are located outside Copenhagen and 3 percent in the rest of the world, which indicates that some of the firms do not depend on local markets.
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Table 6.2 Location of the Most Important Customers (%)

ZONE 1 ZONE 1 ZONE 2 ZONE 3 ZONE 4 Denmark EU Rest of the World 23 15 30 3 28 3 0 ZONE 2 0 33 25 0 30 5 8 ZONE 3 4 6 51 3 23 6 7 ZONE 4 0 7 21 52 17 0 3
Source: Business enquiry, January-February 2003 (Bachman et al., 2003)
At first it seems that geographical proximity matters because of the local orientation of the firms; this holds true. Many of the vital relations of the service firms are local, supporting the regionalist perspective. We must remember, however, that the emergence of the outer city is related to the development of the large urban agglomerations and is conditional on the dynamics of the urban landscape. The growth of local services is based on the economics of newcomers and the general population growth. Furthermore, cross-urban and distant networks are also significant in supporting the relational perspective. New business takes part of an urban and even distant division of labour. It points to the interdependency of the outer city to the urban landscape. To get further into the dynamics of the outer city, we now turn to how the firms perceive the location and the importance of different aspects of location. The imaginary spaces of location: business service industries The five key industries chosen are matched against overall results of the survey presented in Figure 6.3, which reveals a list of the location factors by total rating of the firms. The list of preferences was divided into five main categories: location, traffic, labour and knowledge, market and partners and soft factors. These categories are based on an orthodox or neoclassical understanding of firm location in economic geography, but it also includes the results of various new perspectives
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Figure 6.3 The Rating of Location Factors

Parking space Local trafc (bus/train) Proximity to customers Image of location Local trafc (roads) Road connection Availability of industrial and ofce areas Market entry/potential Proximity to partners Railway connection Qualied labour supply Real estate and land prices Personal reasons Attractive housing Possibility of expansion Quality of environment Opportunities for training Proximity to suplliers Cultural and recreational facilities Cooperation with administration Airport connection Level of wages Social facilities Proximity to research institutions Proximity to universities Taxes Subsidies/subventions
Source: Backmann et al., 2003 and the Copenhagen survey
Very important and Important
Did not matter
Not important
Unimportant
that have been used as inspiration to explore the relational and geographical spaces of the firms. The main pattern of the ten key industries see Table 6.1 is that parking space was perceived as the most important location factor
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by the firms in the survey, followed by different, mainly local, traffic factors: proximity to costumers and the image of the location. Further down the list, market entry, proximity to partners and qualified labour appear, followed by personal reasons and attractive housing. Airport connections and proximity to research institutions and university were not considered as important by the firms in the ten key industries. In relation to the location dynamics of the ranking, the general conclusion is that the firms favour location in suburbia; here accessibility is higher than in the core of the urban landscape, Zones 1 and 2. Why, then, do we see the revival and concentrations in 1990s? To get a better understanding of this and of the imaginary spaces of location of business services firms, five of the ten key industries have been chosen for analysis based on the results of Bachman (2003). The key features are summarised below. The five key industries show the diversity and complexity of location and highlight some of the imagined advantages of, for instance, location in the central city the numbers of the key industries refer to Table 6.1. Key Industry 1: Research and Development: The industry differs significantly from the other industries and the average of all the firms in the survey. Features about the location such as real estate and land prices, availability of office areas and possible expansion are not relevant for the firms in this industry. Traffic is an important preference and is rated highly relevant by all firms in the survey; however, compared to the overall pattern, the industry puts emphasis on airport and railway connections, while the importance of road connections, local traffic and parking space is below average and rated as unimportant for the location of the industry. This reveals and emphasises the complexity of location dynamics for the firms in business service industries and of their perception of spaces of location. Another important location factor for the industry is qualified labour, and, as the only industry, the firms rate proximity to research institutions and universities very highly, while proximity to suppliers and partners is rated far below average. The industry generally regards the soft factors as unimportant and rates them around average. Hence, the industrys perception of location or imaginary space of location differs from the average perception. This will of course have an impact on the location dynamics of the firms in the industry and may favour locations close
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to universities and international traffic, pointing to the existence and importance of global networks. Key Industry 2: Consulting Services: The industry is very different from the one above, and consists of legal activities, accounting, book-keeping and auditing activities, tax consultancy, market research and public-opinion polling, together with business and management consultancy. The rating of the industry is very close to the average presented above, which rated parking space as the most important location factor. The exception is that the firms rate international traffic access (airport and railway) higher than local traffic, indicating the international linkages of some parts of the industry. Further, market entry, proximity to partners and qualified labour, along with personal reasons and attractive housing, appear high on the list again pointing to the diversity of the industrys imaginary spaces of location. Key Industry 3: Technical and Engineering Services: The firms in the industry have high rankings of available office areas, airport and road connections, while the rest of the traffic indicators are rated as unimportant. Qualified labour, however, is rated as more important than the average. In general, the firms rate proximity to market, customers, and suppliers as unimportant, but the firms rate proximity to partners very high and well above average, while soft factors are relatively unimportant with the exception of the quality of the environment. To the firms in this industry, the perception of location is ambiguous but again different from the average, as it is oriented towards different locations depending on the importance of the individual factor. It is worth noting that proximity to partners is rated highly which indicates a location pattern that follows partners of the firms, while qualified labour and airport connections may indicate a central location. Key Industry 4: Blue Collar Business Services: The industry is different from the knowledge intensive business services included in the analysis. For instance it includes labour recruitment and provision of personnel, industrial cleaning, and investigation and security activities. This is also evident in the firms perception of location. The firms rate location-related issues around average; traffic is interestingly rated below average and relatively unimportant, while qualified labour is rated above average but far below Key Industry 1. Proximity to research
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institutions is rated as unimportant, while the firms in the industry see proximity to market and customers as very important (the proximity to customers is of the highest importance for all industries), while proximity to partners and soft factors are rated as unimportant and below average by the firms. The firms in the industry are oriented towards the market, giving more diverse location dynamics for the firms, which points to Zone 3 especially. As Key Industry 1, the firms in this industry rate qualified labour as high and above-average. This illustrates the problem with absolute categories of location preferences. Based on the structure of the industries, qualified labour in Key Industries 1 and 4 are totally different categories but the understanding of labour as a vital input is perceived as important in both industries. However, it can provide completely different location dynamics in the urban landscape. Key Industry 7: Telecommunication and Computers: The industry is made up of two very different industries: telecommunication which, for instance, was located at the waterfront in the central city in the 1990s, while computer and data processing had a more diverse location pattern, including Zone 3. This produces an imaginary space of location that differs significantly from the other industries. The industry is the one that rates availability of office areas highest together with traffic, especially parking space but also local traffic (road, bus and train). Qualified labour and proximity to knowledge institutions are not important factors but the opportunities for training are regarded as more important than the average. Further, proximity to market, customers, suppliers and partners are rated higher than average, and especially market, customers and partners are of importance. Additionally, the image and prestige of the location are rated highly important. In Hansen et al. (2003) it is suggested that business to business activities in the industry are oriented towards Zone 3, while business to consumers has an orientation towards the inner city and waterfront. This also points to the fact that images of locations are very different among the industries. The business service industries have very different imaginary spaces of location. This can explain the more differentiated pattern of location dynamics in the 1990s and 2000s. The core of the urban landscape again gained jobs in business services. Existing locations expanded in
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Zone 3, but new growth patterns were evident with Zones 3 and 4 as well. It also points to a more profound division of labour between locations in the urban landscape and hence a polarisation between and within industries. We need to investigate how a firm and the decisionmakers of a firm produce their representation of space. Additionally, we need to understand how the social and cultural embeddedness of economic action produces a firms imaginary spaces of location. Imaginary spaces of location in Copenhagen city region Another dimension is the relational spaces of the firms and the role of the social embeddedness of the location strategies in space. Figure 6.4 summarises the main results of the firms location preferences from the survey. The list of preferences was divided into five categories: location, traffic, labour and knowledge, market and partners, and soft factors. These categories are based on a rather orthodox or neoclassical understanding of firm location in economic geography. However, various new perspectives from the different network theories have been used as inspiration to explore the relational and geographical spaces of the firms. Interestingly, however, the results provide evidence of the social embeddedness of the firms locational preferences and point to the existence of imaginary spaces of location. The firms location preferences are presented in Figure 6.4. The lines in the figure illustrate the importance of the preference and where the pre ference is important. A full line indicates that the preference is very important, while a dotted line indicates that the preference is important. Differences in imaginary spaces of locational preferences are obvious between Zone 4 and the built-up area and between the Zones within the built-up area. First, the possibility of physical expansion is not surprisingly perceived as important for location in the outer city, while access to land and land prices seem more important in the built-up area. Secondly, as regards accessibility to the location, roads are a valued locational preference by the service firms in the outer city, while airport and public transport are considered very important for firms located in the built-up area. Is this real or imagined? Are the preferences shaped by the location (roads are important because we have roads and not public transport), or is the location taken for its preferences (we choose the outer city because of the roads)? As we shall discuss below, a firms
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Figure 6.4 Factors and Spaces of Location

Very important ZONE 1 Location Real estate and land prices Availability of industrial & office areas Possibility of spatial expansion Airport connection Railway connection Road connection Local traffic (bus / train) Traffic Local traffic (roads) Parking space Qualified labour supply Labor support Level of wages Proximity to research institutions Proximity to universities Opportunities for training (education) Market entry / potential Market/environment Proximity to customers Proximity to suppliers Proximity to co-operational partners Co-operation with the communal administration Personal reasons Prestige / image of the location Attractive housing Soft factors Cultural and recreational facilities (e.g. theatre) Social facilities Quality of environment
Source: Business enquiry, January-February 2003 (Bachman et al., 2003)
Important ZONE 3 ZONE 4
ZONE 2
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(especially SMEs) locational choice may be due to personal reasons; after all firms live and die on location. Thirdly, the questions about labour reveal something interesting. Labour qualification issues do not really matter in the outer city. The firms in the outer city did not consider access to qualified labour or proximity to knowledge-creating and transporting institutions as important, while this was the case in the built-up area, particularly Zones 1 and 2. This reveals that, in addition to being small and local, the firms in the outer city do not perceive of themselves as knowledge intensive, as the firms in the built-up area do. That is not saying that they are not knowledgeintensive, but their own interpretation of space suggests that they do not perceive of themselves as knowledge-intensive as the firms. Fourthly, the local market is an important locational preference for the firms in the survey, as discussed above. This is emphasised in Figure 6.4. It is interesting that market potential and proximity to customers are important in the outer city, while proximity to suppliers and partners are important solely in the built-up area. This again emphasises the local market-oriented firms in the outer city. Finally, the different soft factors are more essential in the outer city than in the built-up area. Here personal reasons, attractive housing, social and cultural facilities and nature are important or very important locational preferences for the service firms. This is interesting and points to the fact that the location of firms in the outer city is based on other rationalities than strictly economic rationales. The perceived attractive housing of the interviewees, for instance, has to do with the owners or interviewees personal and family values and social and cultural embeddedness. Thus, the result of the survey indicates that locational preferences in the outer city of Copenhagen are connected to personal preferences and initiated by relational affiliations beyond the economic linkages of the founder of the firm. The results of the survey suggest that firms, which are located in different Zones, have different perceptions and interpretations of the context in which they are embedded. Put differently, service firms produce different imaginary spaces of location, even within the same context (the urban landscape of Copenhagen). To understand these spaces, a relational approach to understand the economic activity of the outer city is needed.
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The results presented here show that, for instance, personal reasons (e.g. family strategies of residence), and social and cultural conditions, play a vital role in explaining location of economic activities. To fully gain an understanding of the dynamics of the urban economy and industrial location, we suggest a relational approach which is coping with social aspects of affinity to place what Massey (1994) termed a place called home as well as geographical proximity to economic factors, including the institutional set-up. By developing such an approach, we will be able to get a better understanding of different geographical scales representing different imaginary spaces of location. The research questions that we need to answer are: How are the firms imaginary spaces of location produced? How do firms produce and reproduce their perception of space? In order to answer these questions, we need to theorise the firm as a set of relations (Yeung, 2002). We suggest therefore a departure point from the new promising perspectives within the recent institutional and relational turn in economic and industrial geography (Boggs and Rantisi, 2003; Yeung, 2005). These are: the increased focus on the social relations of economic and industrial geography; an understanding of a dynamic and open-ended evolutionary economic system (Bathelt and Glckler, 2003); inspiration from economic sociology focussing on the social and cultural embeddedness of economic action (Granovetter, 1985; Swedberg, 2003; Peck, 2005); evolutionary economics (Nelson and Winter, 1982; Dosi et al., 1988; Hodgson, 1993; Saviotti, 1996); and, of course, the recent debate about the firm in economic geography (Asheim and Taylor, 2001; Yeung, 2000; 2002; Grabher, 2001; 2002). We need to investigate how the firm and decision-makers of the firm produce their representation of space. Additionally, we need to understand how the social and cultural embeddedness can help us analyse the firms imaginary spaces of location.
Imaginary spaces of location summing up

The urban turn is not just about urban and regional growth in cities and regions but also about relocation of economic activity and firm location. The chapter has provided evidence of the from a large survey on firm location which, in providing further evidence of the more mul-
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tifaceted location patterns in the resurgence of the cities, the locational preference of the firms was conceptualised as imaginary spaces of location. The imaginary spaces of location are social constructs based on personal beliefs and discursive practice. The imaginary spaces of location can be related to a variety of discourses arising from multiple rationalities, including social and cultural embedded rationalities. The business service industries have very different imaginary spaces of location. This explains the more differentiated pattern of location dynamics in the Copenhagen city region, as shown in Chapters 4 and 5. The imaginary spaces of location are social constructs based on personal beliefs and discursive practice. The imaginary spaces of location can be related to a variety of discourses arising from multiple rationalities including social and cultural embedded rationalities. The imaginary spaces of location are different between the built-up area and the outer city. This is probably a result of differences in markets, size and knowledge intensity etc. The imaginary spaces of location of the firms in the outer city emphasise soft factors such as personal reasons, attractive housing, social and cultural facilities and nature. These spaces are not likely to arise from economic rationale but from, for instance, family strategies of residences of the owner. An affinity to place a sense of belonging seems to have decisive influence on industrial location. We have provided evidence from Copenhagen that a more differentiated understanding of industrial dynamics and urban planning is necessary in order to understand the complexity of urban economics. The chapter has shown that affinity to place seems to be a very strong issue for location dynamics. The different imaginary spaces of location call for an approach that makes room for a more differentiated perception of geography economic rationality is accompanied by social and cultural rationales.
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Epilogue
Geography, the Urban and Economic Growth
This book, in examining the urban turn has emphasised the importance of cities and city regions in the Danish space economy as the cornerstones that generate economic growth in modern capitalism. The discussions and analysis that has been put forward are based on the assumption that spatial patterns can partly be explained by two versions of agglomeration theory: 1) Localization economy arguing that the co-location of firms within related industries generates knowledge spill-overs and provides a large pool of highly qualified labour; and 2) urbanisation economies emphasising that the density and diversity of economic activities in general is crucial for the successful innovative behaviour of firms. Thus, both the urbanisation economy and localisation economy are valid theoretical concepts that can help to bring light on the changing economic dynamics of the city. Relational places are produced in a changing functional and spatial division of labour, with new specialisation patterns arising as a result of the interdependence with other urban forms and the processes of pathdependency and lock-ins. This argument emphasises the role of geography (the local or regional) as an important factor for the shaping of firms networks, but the space that the firms operate in cannot be reduced to a matter of geographical scale (regional or local). On the other hand, we need to understand how places/locations underpin firms networks and relational spaces. Geography of culture, institutions, norms
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and values are key factors for understanding economic actors, people and firms. Consequently, the new dynamics in the urban economy call for an analytical framework that emphasises the importance of social relations and how these relations interact in space. The dichotomy between, for instance, the city centre and suburbs or the urban fringe and the hinterland should be replaced by an analytical conceptualisation that opens for new understandings of economic dynamics by detecting and analysing linkages within firms networks. In our view, this type of analysis will contribute to a more qualified understanding of the economic geography of contemporary capitalism. Synthesising on the outcome of this book the following findings can be pointed out: Denmark is witnessing a rise of city regions. The largest city regions and the city based industries are the main drivers in contemporary space economy. Talents are becoming increasingly important for the post-industrial mode of production, but the distribution of talent is strongly unequal across and within regions, a tendency that is growing and continuously causing a more unequal distribution of talent. A focus on the Copenhagen city region reveals that city regions are dynamic categories. New urban forms such as the outer city have emerged providing a new economic space that offers a mix of urban and peripheral location dynamics. Location dynamics in the outer city are not necessarily an outcome of rational economic thinking, but rather an outcome of contextual factors in combination with individuals own preferences and beliefs. What are the implications of these findings for the Danish space economy? First and foremost politicians and regional planners have to come to terms with the fact that the city regions are the epicentres of the Danish economy. Most urbanised areas are also areas that generate the largest employment growth rates. If these trends are persistent investments and general economic activity will continue to concentrate in few places in Denmark, namely the urbanised. This leaves a potentially hot political issue to be solved: Should growth be stimulated outside the main urban areas to achieve a more even growth?
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Without regulating the current trends in regional development will, in turn, create pressure on housing, and the infrastructure, and increase pollution questions in urban areas. This can lead to increasing production costs causing a decreasing competitiveness. Meanwhile peripheral areas will experience a decreasing and aging population that, in time, will make investments in these areas even more difficult to justify simply because the most basic skills are not present. This leaves two possible actions: either upgrade urban infrastructure so that scale and dimensions meet future pressure, or kick-start economic activities in the more peripheral areas to create jobs that make people stay. Whether politicians choose one or the other of these actions or both, action must be taken. Throughout this book we argue that no single one-size-fits-all policy can be developed to fight the potential problems that Denmark will face in the future. Politicians, planners, etc. have to take national, regional, and local contextual differences into account when phrasing new development plans: the Danish economy varies across space and place and consequently the economy needs stimulation in less favoured regions if growth is to be considered as an alternative to the allocation of welfare goods and services. This book is based on empirical material that derives from the mid-1990s to the mid-2000s. Consequently, this book does not cover information on how the economic crisis of the Western economy from 2008 and forward influences the Danish space economy. The crisis is still going strong and thus it is premature to draw conclusions on the spatial outcome. However, the shifts in production, the closure of plants, the activities that have been outsourced etc. all point in the same direction: a relative increase in knowledge-intensive production at the expense of more manual and industrial related work tasks. In the light of such a development it can easily be argued that the dynamics addressed in this book will only increase in the coming years. Pressure will increase even more on the urban areas, making the divide between the urban and the peripheral even more explicit. Thus, the findings of this book demonstrate that the economic dynamics and processes outlined herein will, in the coming years, increase in speed and outcome.
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Index
A agglomeration 11, 25, 28, 29, 32, 105, 125 agglomeration economies 29, 30, 40, 106 amenity 36, 56, 82 Aarhus 44, 46, 48, 59 B bounded rationality 20 business climate 36 business service 10, 34, 41, 51, 53, 61, 70, 74, 75, 108 C city-region 12, 40 city region of Eastern Jutland 42, 48 Copenhagen 14, 39, 42, 43, 44, 45, 46, 61, 74, 81, 86, 91, 103, 112 creative class 10, 37, 54 creativity 10, 12, 36, 54, 83 cultural sector 100
D de-industrialisation 39, 43, , 49, 93 diversity 11, 20, 35, 41, 56, 97, 116, 125 E economic dynamics 11, 15, 36, 54, 85, 102, 125 entrepreneurialism 49, 93 evolutionary economics 27 externalities 29 F fingerplan 64 firm 9, 14, 71 flexible specialisation 12, 27 G globalisation 9, 49, 56 H heterodox tradition 22, 26 human capital 37, 38 I imaginary spaces 107, 116, 118
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industrial districts 12, 22, 30, 88 industrialisation 36, 43, 49, 101 inner city 39, 42, 61, 91 innovation 9, 10, 12, 20, 27, 34 innovation system 20, 21, 56, 105 institutions 15, 20, 21 J Jacobs 35, 36 K knowledge economy 9, 13, 19, 39, 53, 81, 82, 91 L localisation 16, 32, 103 localisation economies 11, 25, 30 location dynamics 17, 32, 54, 61, 65, 70, 81, 98, 103 location preferences 17, 82, 107, 108 M manufacturing 34, 43, 44, 97 O orthodox tradition 24 outer city 13, 45, 85 P path-dependency 14, 15, 27, 104 people climate 36 polycentric city 81 propinquity 104 proximity 104 public sector 46, 51, 100
R regional development 12, 19, 53, 55, 127 regional innovation system 20, 88 Regulationist School 27 relatedness 36 related variety 35 relational place 14, 125 relational space 14, 107 relational turn 13, 88 restructuring 26, 39, 60 resurgence of cities 17, 46 S skills 10, 55, 127 social capital 32, 105 suburbanisation 46, 60, 65, 82 suburbs 15, 126 T talent 9, 10, 36, 55, 57, 60, 75 transaction cost 27, 33, 34 U urban development 40, 85 urban hierarchy 13 urbanisation economies 11, 34, 125 urban turn 9, 15, 23, 39, 85, 103 W Weber 13, 24, 26, 29, 55, 103 welfare 40, 55, 57
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The Urban Turn: Cities, Talent and Knowledge in Denmark

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Hgni Kals Hansen Lars Winther

The Urban Turn

The Urban Turn

Hgni Kals Hansen and Lars Winther

Aarhus University Press | a

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7 9 19 39 53 85 103 125 129 147

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1. Introduction to the Urban Turn

Inter and intra regional nevenness u Expansion of the outer City

Location of Industries Location of Firms

Spatial distribution Space and place

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Location, cities and regional growth

The orthodox tradition

The heterodox tradition

Localisation and urbanisation economies of externalities and location

Creativity and talent

3. The Rise of City Regions in Denmark

The rise of city regions

The economic and industrial geography of Denmark

The resurgence of cities and city regions in Denmark

Industrial change in Denmark

City region Copenhagen%

City region Copenhagen%

Talent and regional development

The geography of talents in Denmark

Figure 4.2 The talents share of municipal employment 2006

Share of talent 2006

The geography of talent in cities

100 1994 90 80 Talent in Employment 70 60 50 40 30 20 10 0 0 20 40 Employment 60 80 100 2002

Gladsaxse Gentofte Herlev Rdover Kbenhavn

Brndby Vallensbk Hvidover Ishj

Location dynamics and spatial divisions of labour in Copenhagen

0.85 19.87 19.95 1.93 2.41 1.12 2.38 4.41 12.95

0.21 12.95 12.58 3.84 2.43 4.26 2.73 4.48 16.67

8.41 5.92 15.60 1.58 0.78 1.81 0.02 0.00 40.32

7.55 7.88 16.27 1.47 2.99 3.61 0.07 0.01 52.98

22.80 -23.13 28.15 47.82 57.29 45.22 308.00 25.11

17.59 -29.63 5.20 10.30 44.97 53.57 404.05 -2.06

17.04 -47.63 45.82 121.74 26.25 10.10 362.50 15.17

14.54 -18.47 19.68 49.32 9.05 28.07 218.75 -16.63 10.65

20.04 -17.06 7.37 53.46 16.37 38.81 107.22 8.63 7.89

1.56 24.21 21.14 2.55 4.36 0.86 1.01 1.21 10.11

0.41 19.04 21.04 1.42 2.55 2.14 4.13 5.98 12.06

53.86 -56.77 59.02 130.27 82.44 40.74 100.00 31.56 -

33.94 -32.01 22.44 30.38 57.79 66.60 -38.46 31.94 -

12.14 -42.12 49.68 25.67 102.47 62.28 -100.00 31.47 -

12.93 4.13 20.71 54.40 52.53 28.89 5200.00 23.61 -

Elsinore 12.46 -5.12 18.95 47.50 31.60 35.32 516.67 7.19 -

Location dynamics of business services in Copenhagen

Table4.4: Business services: Employment by Geography in Copenhagen 1994-2002

4.98 6.06 1.47 4.11

10 17.20 16.01 9.48

Spatial division of talent in business services

Source: Hansen and Winther (2010)

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5. The Outer City: Urban Economic Geographies in the Making

On the edge of city regions

The outer city of Copenhagen

Transformations of industrial spaces in the outer city of Copenhagen

Inter and intra regional nevenness u Expansion of the outer City

Location of Industries Location of Firms

Spatial distribution Space and place