Emerging global cities: Comparison of Singapore and the Cities of the United Arab Emirates

Real Estate Issues, Fall 2002 by Parsa, Ali, Sim, Ramin Keivani Loo Lee, Ong, Seow Eng, Younis, Bassam

Globalization processes and responses to them have important consequences for the growth and development of cities. This, however, is not a uniform process. The outcome at the regional and local level is highly path-dependent on inherited social, economic, and regulatory structures and relationships. This development path is heterogeneous and the path to regionalization and globalization of a city is influenced by multiple factors such as its geographic location, resource availability, and local productions and service advantages, to name only a few.

Singapore is often quoted as an exemplary city to have successfully embedded its development strategy within the global economic circuit while the main United Arab Emirate (UAE) cities, Abu Dhabi, Dubai, and Sharjah are among many urban regions in the developing countries that hope to emulate Singapore as an emerging global city. Although there has been extensive research examining the impact of the globalization process on urban and regional development in various geographical areas including Singapore, there is a distinct lack of studies on the Middle Eastern region, particularly the UAE cities. In view of this, the following study delves into the very path that each of the subject cities has employed and is an attempt to evaluate both the past development and the present and future capacity of their milieu, through an institutional study approach, to accomplish their respective "development visions" and emerge as economic centres of the global supply chain.

PROCESSES OF GLOBALIZATION AND THEIR IMPACT ON CITIES

There are many different approaches to the study of globalization and global cities, but some important concepts that have emerged from the body of literature are complementarities and competition. As networks develop, they engage in complementary activities; at the same time, they compete with each other to attract investments as illustrated in the studies reviewed in the following sections.

In their efforts to secure international investment, countries and cities today are increasing their operations in conditions of changing comparative advantage. As a result, rather than relying solely on traditional concepts of comparative advantage in terms of lowest production costs or highest investment incentives; cities are forming urban alliances and economic synergies within and across national boundaries in order to utilise different urban/regional functions and factor advantages towards accomplishing common economic objectives.

Network functionality and competitive co-operation creates synergistic effects for a win-win situation. Success is often dependent on the ability to offer institutionalising processes to attract flows of investment and entrepreneurship and to offer a variety of external economies of sufficient scope and scale to business.

One significant aspect that emerges from these studies is the recognition of the increasing importance of the business environment as a determining factor in the competitiveness of a city. Central to this is the role of policy factors and institutional design of a city. As a result, the institutional approach has gained importance in explaining the competitive and comparative advantage of cities.

THE INSTITUTIONAL APPROACH

The institutional approach has gained importance for analyzing the diversity of economic formations in different regions in recent years. Institutions have been defined as "rules of the game" in a society. Organizations, whether political, economic, or social, behave and perform within a framework defined by institutions, which are regarded as both formal and informal rules. Formal rules are laws and regulations while the informal rules are norms, conventions, traditions, and customs.

Thus, the institutional approach does not emphasize the presence of institutions per se but rather the process of institutionalization-the institutionalizing processes that both encourage and support diffused entrepreneurship-a recognized set of conduct, supports, and practices.

The questions to ask therefore -are cities up to the challenge of creating the kind of institutional thickness required? Are existing and inherited institutional structures and interest groups an obstacle to the kind of innovative milieu that is required for embedding entrepreneurship and international capital?

RESEARCH METHOD

The methodology underpinning this research draws upon the institutional school of urban analysis and academic work on world cities and global urban networks. In essence this is an examination of rules, regulations, conventions, and structures that shape processes and resultant interactions vis-a-vis the city's capacity for attracting and embedding international business.

In evaluating institutional capacities in the studies, a series of semi-structured interviews were conducted. These involved senior policy makers from different government departments and agencies, concerned with the formulation and implementation of economic and urban policy. International private sector participants were drawn from economic sectors that have been identified as being central to the economic globalization process in terms of higher value added functions as well as the more traditional sectors of comparative advantage in each case study city. Overall a total of 118 interviews were carried out in the four cities encompassing 15 different private categories.