Services and high skills: a new challenge for developing medium-sized cities

Abstract

Medium-sized cities are often considered as a valuable substitute to a large metropolis as they may promote better sustainable growth. However, these second rank conurbations do not benefit from economies of scale as do larger cities. They share some characteristics with a big metropolis, notably their spatial spreading on surroundings areas, but are not able to attract high-order service functions. The research reported here is supported by a statistical analysis of censuses from 1982 to 1999. It highlights the service-location patterns of medium-sized cities compared with metropolises, proposes a typology of medium-sized cities based on their economic structure and tries to explain through regression analysis the growth sources of their economy.

Keywords:

• urban growth
• medium-sized cities
• service activities
• high skills
• drivers of growth

Notes

Among the 52 middle-sized cities defined by these limits, one (Annemasse) had to be put apart as it is the French part of the international conurbation of Geneva.

Our data group together the smaller urban areas and the rest of the French territory. It could not allow, therefore, the study of how different are the economic structures of the studied medium-sized towns from those of smaller cities.

Using the location quotients (LQ) as defined in Table 1, the following criteria allow us to classify the urban areas:

–	Diversified service centres: over representation (LQ > 105) in at least five of the following seven activities: research, upper-grade business services, other business services, wholesale, logistics and communications, insurance and finance, and foreign representatives.
–	Specialised service centres: neat over representation (LQ > 110) in two, three or four of the same seven activities.
–	Production centres: neat over representation (LQ > 110) in manufacturing activity (including mining) and no more than one of the following four categories being over represented (LQ > 110): research, upper-grade business services, other business services and private sector executives. Garrison cities are identified by a very high public-employment location quotient (LQ > 200) with no more than one of the same four categories being developed; they are grouped together with production centres.
–	Resort cities: over-representation in the hotel activity (LQ > 110) with no more than one of the same first three activities being over-represented.

Compared with others, this typology proves to be more suitable to forecast future dynamics in employment; geographical categories commonly used in France give far less significant results: North/South (F = 4.94; p > F = 0.0309), North-west/South-east (F = 4.80; p > F = 0.0332) or belonging to the Northern European ‘ridge’, ‘Latin’ or ‘Atlantic’ ‘arcs’ (F = 1.72; p > F = 0.1758); the Administrative level of the main city of the urban area also gives lower quality results (F = 4.45; p > F = 0.0169).

The mean of their absolute values gives an average shift of 185,338 jobs (7.2%), that is, more than two times higher than the average share effect which is of 88,130 jobs (3.1%).

Ninety percent of the variance of the increase of global employment is explained by the increase of basic employment, the increase of ‘induced’ employment explaining only 8.5% (partial R ²).

According to relation (1), if the driving block looses 10% of its jobs, the total employment would nevertheless grow at a 5% rate; on the opposite, a 10% growth of employment in the driving block would entail a much higher growth in the whole local activity (about +21%), but a two times more rapid growth in the drivers (+20%) would just give a global growth of 29%.

The business-services sector is taken here in a broad sense and groups together merchant business services (consulting or not), research, transport and communication, wholesale trade, holdings or consular organisations and foreign representatives.

The nine largest metropolises were retained here: Paris, Lyon, Marseille, Lille, Nice, Toulouse, Bordeaux, Nantes and Strasbourg.