Growing cities, ever more mobile people, and increasingly specialized products are integral to development. These changes have been most noticeable in North America, Western Europe, and Northeast Asia. But countries in East and South Asia and Eastern Europe are now experiencing changes that are similar in their scope and speed. World Development Report 2009: Reshaping Economic Geography concludes that such transformations will remain essential for economic success in other parts of the developing world and should be encouraged.
These transformations bring prosperity, but they do not happen without risk and sacrifice. Look at three of the world’s most prosperous places:
The first is Tokyo, the largest city in the world with 35 million people, a quarter of Japan’s population, packed into less than 4 percent of its land.
The second is the United States, the largest economy in the world and perhaps also the most mobile, where about 35 million people change residences each year.
The third is Western Europe, the most connected continent in the world today, where countries trade about 35 percent of their gross domestic product (GDP), more than half among neighbors.
Visitors to Tokyo can see people being crushed into trains by professional train-packers. Millions of people willingly subject themselves to the unpleasantness of such a crush. A map of Japan’s economic density shows why. Tokyo generates a big part of Japan’s wealth—to get a share of it, people have to live close by. The most striking feature of this map is density—the concentration of wealth in Tokyo and Osaka.
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In the United States, each year in the days before the Thanksgiving holiday, about 35 million people try to get back to their families and friends. It is the start of winter in some parts of the country, so flights often are canceled. But Americans put up with the pain of leaving friends and family, because economic activity is concentrated in a few parts of the country. To get a part of this wealth, you have to get closer to it. That is why 8 million Americans change states every year, migrating to reduce their distance to economic opportunity. The most striking feature of this map is distance.
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Across the Atlantic, in Western Europe, another massive movement takes place every day—not of people but of products. One example is Airbus, which makes parts of planes and assembles them in France, Germany, Spain, and the United Kingdom as well as in other countries. Huge sections of aircraft are loaded onto ships and planes, as places specialize in making different parts and producing them in scale. Countries in a region that was divided not so long ago now trade with former enemies to become an ever-more- integrated European Union (EU). As this integration has increased, economic divisions have decreased, making specialization and scale possible.
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What is the payoff for this pain? A map of economic geography, which resizes the area of a country to reflect its GDP, shows the benefits of big cities, mobile people, and connected countries. The United States, Western Europe, and Japan dominate the world’s economy.
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Cities, migration, and trade have been the main catalysts of progress in the developed world over the past two centuries. These stories are now being repeated in the developing world’s most dynamic economies.
Mumbai is not the largest city in the world, but it is the most densely populated. And it keeps growing.
China is not the largest economy in the world, but it is the fastest growing and may be among the most mobile.
Southeast Asia may not have formed a political union like Europe, but it trades parts of goods back and forth as the EU does.
Did you know...
Half of the world’s production can fit into an area smaller than Algeria?
Cairo’s metropolitan area generates over half of the Arab Rep. of Egypt’s production using 0.5 percent of the country’s land area?
In the U.S., 96 percent of innovations take place in metropolitan areas?
200 million Chinese migrants travel to their hometowns to spend the Lunar New Year?
As transport costs fell over the last century, countries traded even more with neighboring countries than with more distant ones?
In 2006, Singapore, with 700 sq km in area, exported the same amount (US$300 billion) as the Russian Federation, with more than 16 million sq km?
People risk loss of life or limb on Mumbai’s packed trains to take advantage of economic density. Despite the crush among commuters and in such slums as Dharavi, Mumbai’s population has doubled since the 1970s. Since the 1990s, millions of Chinese workers have migrated to get closer to economic opportunity concentrated along the coast. Just as Americans travel during Thanksgiving, more than 200 million people in China travel during the Chinese New Year.
Regional production networks in East Asia are spread far wider than Airbus sites in Western Europe. East Asian countries may not trade airplane parts, but nations that once were enemies now trade parts of cars and computers with the same frequency and speed.
And what is the payoff? We can again recognize the shapes of China, India, and Southeast Asian countries on the map of the world’s economic geography. Contrast these shapes with that of the mighty continent of Africa, which shows up as a slender peninsula.
The World Development Report argues that some places are doing well because they have promoted transformations along the three dimensions of economic geography:
Higher densities, as seen in the growth of cities.
Shorter distances, as workers and businesses migrate closer to density.
Fewer divisions, as countries thin their economic borders and enter world markets to take advantage of scale and specialization.
The United States and Japan reshaped their economic geography along these lines in the past. China is reshaping its economic geography now. This Report proposes that these will be the changes that will help developing nations in other parts of the world, most notably Africa.