The Location of Economic Activity since the Early Nineteenth Century: A City- systems Perspective

Abstract

The institutional, technological and overall contextual framework within which the location of economic activity occurs in economically advanced countries has changed greatly since the early nineteenth century. The most prominent changes are more or less common knowledge. The focus of economic activity has shifted from the countryside to the city. The sectoral centre of gravity has shifted from agriculture and other ‘primary’ activities, to ‘secondary’, or manufacturing activities, to the so-called ‘tertiary’ sector, that is, consumer, business and government services and retailing. The ‘secondary’ sector, as well as the ‘tertiary’ sector has increasingly employed people in administration, management, clerical work, research and other office-bound activities. That is, to a growing extent the job-providing economic units materialising at different locations in advanced economies have been principally involved with the processing and exchange of information rather than the processing and transportation of natural resources and intermediate- and final-demand goods. The typical decision-making entity responsible for the location of manufacturing and related activities has increased in size from the locally oriented workshop controlled by one or a few men, to the regionally oriented single-product factory, to the horizontally merged multiplant corporation enjoying a regional or national oligopoly, to the more elaborately administered nationally oriented corporation with several vertically integrated products, to the nationally oriented multidivisional corporation with a variety of integrated and unintegrated manufacturing and non-manufacturing functions and a great number of locationally divorced units. Overland transportation costs fell sharply with the spread of railways.

This paper was prepared in conjunction with a research project funded by the U.S. National Science Foundation.