The New Economy of the inner city

The New Economy of the inner city

Thomas A. Hutton

School of Community and Regional Planning, University of British Columbia, Vancouver, BC, Canada V6T 1Z2



1. Introduction: new production spaces in the inner city
The rapid rise (and even more dramatic contraction) of the so-called dot.coms and other technology-intensive industries has provided the backdrop for a scholarly debate concerning the contours and trajectories of the "New Economy", a concept associated with the rapid growth of information and communication technologies (ICT) over the 1990s. There is a strongly critical tone to much of the discourse, related in part to the volatility of New Economy sectors and industries, to the apparently ephemeral nature of New Economy products, and to the perceived lack of differentiation between structures and operating characteristics of the "old" and "new" economies (see for example Gordon, 2000; OECD, 2000 and Slater, 2001). Mowery reminds us that episodes of technological innovation and diffusion, arguably as significant (or even greater) than the 1990s round of ICT developments, have been features of advanced industrial economies for much of the post-war period, notably in the US ( Mowery, 1997). Others have pointed to the extraordinary crash of New Economy corporate share values, in contrast to the recovery of stock values among many established industries and firms, to refute the notion that the former has supplanted the latter as the industrial foundation of advanced societies.

There is of course corrective value to this critical literature. But at the same time other research findings tend to underscore significant aspects of redefining novelty and innovation at the level of national economies, both in the nature of industrial regimes (Brynjolfson and Kahin, 2000), and also in processes of change and new mixes of factors and interdependencies. These include the influence of information technologies in reshaping markets and business organisations ( Shapiro and Varian, 1999), and the role of IT investments both in productivity growth (via capital deepening effects on labour productivity; Jorgenson, 2001) and overall national economic development ( Jorgenson and Stiroh, 2000). But even granting the validity of these interpretations, there remain fundamental questions concerning the extent to which they support the idea of a new economy, particularly in light of the collapse of the dot.coms and the greatly diminished demand for ICT products, especially hardware.

It seems reasonable then to focus research on more enduring (or structural) features of change in the economy, notably the formation of new sectors and industries (as well as redefining changes in extant industries), the emergence of new "economic spaces" in the form of innovative industrial ensembles at regional and local levels, and fresh divisions (social, spatial, and technical) of production labour. To this end, we can reference more robust models of industrial innovation and occupational change which emphasise the centrality of creativity and knowledge as driving forces, notably Allen Scott’s seminal writings on the cultural economy (Scott, 1997a and Scott, 2000), Richard Florida’s idea of an ascendant "creative class" ( Florida, 2002), and Andy Pratt’s research on new media industries and spaces ( Pratt, 1997 and Pratt, 2001). These scholars take on board the importance of technology in new production processes, development trajectories, and divisions of labour, while avoiding the pitfalls of an overly narrow focus on ICT as the defining feature of industrial innovation and change. Each also acknowledges the need to investigate associated normative issues, including experiences of social dislocation and displacement, and to encourage innovation in progressive development policy for New Economy sectors and industries.

Where these exigent issues intersect in particularly interesting and consequential ways—somewhat paradoxically, perhaps—are in the old, deindustrialised inner city districts of metropolitan regions. The growth of creative, knowledge-based and technology-intensive industries within certain precincts of the inner city constitute important aspects of the spatiality of the New Economy. These new industry clusters are shaped by the convergence of culture and urban development, by the increasing significance of technology in value-added production, and by the competitive advantage of the inner city for creative industries. To be sure, important agglomerations of New Economy industries are situated in suburban and even exurban sites, but the city—and more especially the metropolitan core—represents the "creative habitat" par excellence for these new industry clusters (Florida and Gertler, 2003), offering a critical mass of human capital, amenity attributes, and environmental conditions. Stephen Graham and Simon Marvin suggest that "as the value-added in IT industries shifts from the zones dominated by hardware producers to places that can sustain innovation in software and content, so the focus of industries may actually be shifting from Silicon Valley-like Research and Development campuses to central, old-city locations" ( Graham and Marvin, 2000: p 78). These inner city New Economy sites and districts comprise not just isolated firms or "outliers", but rather quite substantial ensembles of dynamic industries. Hill documented a cluster of over 700 "new media" firms in Manhattan’s "Silicon Alley", incorporating Soho and Tribeca ( Hill, 1997), and there are comparable concentrations of such industries within London’s "City Fringe" (on the periphery of the City of London), which takes in parts of the Boroughs of Camden, Islington, Hackney, and Tower Hamlets.

The purpose of this article is to contribute to a deeper understanding of the forces shaping the distinctive new production clusters within the older industrial (and in some cases residential) districts of the inner city, as well as associated economic, social, and environmental implications.1 First, the paper describes the key intersections of culture, technology and urban milieu that are seen as crucial to the development of New Economy formations within the inner city, stressing the importance of "space and place" in these processes, and the role of public policy as facilitating (or mediating) influences. Secondly, defining attributes of New Economy formation within the inner city will be identified, including the mix of constituent sectors, industries, and divisions of labour. A third section presents a typology of inner city New Economy production territories, together with illustrative reference cases in London and Vancouver, followed by implications for urban development within five key domains of growth and change. Next, the paper describes important environmental and social impacts of New Economy formations within the inner city, including both broadly positive and more problematic features. The paper concludes with a summary of principal observations, including a commentary on new planning directions, and conjecture on ramifications for urban theory and development models.

2. Defining processes and attributes
To some extent new industry formations within the metropolitan core can be viewed as part of the larger phenomenon of New Economy development, as typified by innovation in communications and production technologies, by the growing pervasiveness of marketing and distribution conducted within electronic or "cyber" space (incorporating "e-commerce" channels and networks), and by the emergence of new occupational cohorts requiring advanced technological skills. But in other respects, the experience within the urban core embodies quite distinctive development processes and signifying attributes. These new industrial sites within the inner city are configured by (and represent defining features of) the convergence of technology (including ICT and technology-intensive production processes), culture (as represented by creative human capital and design functions), and place, and more specifically the innovative milieu of the inner city. The interdependency and interaction of these factors have underpinned the formation of new industry clusters in the central city over the last decade or so.

We can further elaborate upon the importance of cultural influences as underpinning features of new industry formation within the core. Inner city New Economy formations represent key sites for the growth of the urban cultural economy, which Allen Scott depicts as a deeply consequential phase of development for global cities and city-regions in the early 21st century (Scott, 2000 and Zukin, 1994). Many New Economy industries and firms ensconced within precincts of the inner city are engaged in the creation of "cultural products" (after Scott, 1997a), i.e. goods and services imbued with high design values and symbolic content. In the wake of the crash of the dot.coms, the defining industries of the inner city’s New Economy comprise hybridised firms which combine creative inputs and applied design with technology-intensive communications and production systems in the fabrication of high-value outputs. These include long-established industries such as architecture, industrial design, graphic arts and design, and fashion design, as well as archetypical New Economy industries exemplified by software design, Internet design and services, computer graphics and imaging, and multimedia industries. One can in fact take a position that creativity and design constitute defining aspects of many New Economy industries in the inner city especially, with technological innovations as essentially enabling or accelerative factors. As Scott has observed, the concept of cultural and other new industry sectors "refers not only to agglomerations of technologically dynamic firms, but also to places where qualities such as cultural insight, imagination, and originality are actively generated from within the local system of production" ( Scott, 2001: p 9). The critical role of the inner city as an innovative milieu is emphasised by Graham and Marvin, who note that "the creative small firms that dominate Internet software, digital design, and World Wide Web services, far from scattering toward rural idylls, seem in fact to be concentrating into a small number of gentrifying metropolitan information districts" ( Graham and Marvin, 2000: p 78).

This notion of hybridity as a defining feature of New Economy formations within the inner city is defined in part by the distinctive mix of pre-Fordist (artisanal) and post-Fordist industrial production regimes, and is underscored by new divisions of labour and employment trends. Field research conducted in several New Economy sites in Vancouver’s inner city (Yaletown, Victory Square, and Gastown) has disclosed some of the ambiguities concerning occupational categories associated with new industry clusters in the inner city, illustrated by the range of responses to questions of whether workers in the computer graphics and imaging and Internet design industries are primarily design professionals or (alternatively) technology specialists. Certainly, many of these (mostly young) workers embrace the advanced technologies that dramatically enhance the creative possibilities, imaginative scope, and speed of their tasks, but a large proportion of this cohort also emphasise the centrality of cultural and design influences to their work.

2.1. The reassertion of production in the inner city
Research on the New Economy tends to focus naturally on recent processes and experiences, reflecting the rapidly changing quality of New Economy industries (recall here Andy Pratt’s description of the multimedia sector as a cluster of industry groups "in the making" (Pratt, 1997)). But in important respects, the emergence of technology-intensive industries within the inner city can be seen as part of a somewhat longer-running process of industrial restructuring, following the collapse of Fordist manufacturing in the metropolitan core over the 1960s, 1970s, and 1980s. A useful informing exercise here is to position the contemporary development of New Economy clusters of the inner city within a sequence of specialised industry formations over the last two decades or so, including (1) the development of business service sub-centres located within the metropolitan core, but beyond the confines of the Central Business District, dating from the 1970s in some cities ( Daniels, 1985); (2) the growth of artisanal production, associated in part with communities of artists and craftsmen in older inner city districts experiencing incipient gentrification ( Ley, 1996); (3) the expansion of creative and design-based services as part of the "reconstruction" of inner city heritage districts and conservation areas, dating from the mid-1980s in many large- and medium-size cities ( Hutton, 2000); (4) the recent (and much-discussed) rise and partial collapse of the dot.coms and other technology-intensive firms, which now comprise a somewhat diminished contingent within the inner city landscape in many cities, but remain important and indeed essential features of advanced urban economic systems ( Pratt, 2001); and (5) the emergence of hybridised firms typified by creative processes and by advanced-technology production techniques, which comprise the ascendant industry types within the New Economy of the inner city.

This progression of intermediate service production industries and activities suggests the need to situate new industry formation and development in the central city within a more extended development model, acknowledging the comparative advantage of inner city sites for creative and knowledge-based activities through periods of intense and wrenching industrial restructuring. These new intermediate service formations also offer insights to the importance of place-embedded skills, experiences, and social relations seen by Ilse Helbrecht (see Helbrecht, 1998) as central to the evolution of highly localised "knowledge cultures" within the metropolitan core.

2.2. The innovative milieu of the inner city
New industry clusters of the inner city provide particularly striking examples of the "compulsion of proximity" for creative and knowledge-intensive firms (Boden and Molotch, 1994), as well as an opportunity to reassert the centrality of space in New Economy theory and discourse. Research undertaken in a range of cities positioned within different echelons of the global urban hierarchy has disclosed a range of interdependent factors which define the competitive advantage of certain inner city sites for new industry formations. These include to be sure the familiar attraction exerted by economic agglomeration, as evidenced by the marked clustering of New Economy firms within inner city districts, and in particular the dense patterns of backward linkages between new industry firms and a host of supporting industries and activities located in situ or in adjacent districts. The dense concentrations of technology-intensive creative firms also confer advantages of inter-firm "knowledge spillovers", which tend to be locally or regionally bounded (Audtresch and Feldman, 2000: p 182). Together, these firms and supporting activities comprise integrated production ensembles within the precincts of the metropolitan core, and to this extent resemble other complexes of specialised services production, notably the corporate clusters within the CBD. , 2 But the operation of these place-based new industry production ensembles is also enabled by increasingly sophisticated, high-capacity and high-speed Internet systems, characteristic of New Economy industries and firms. The point is that many of the New Economy firms ensconced within the inner city utilise both localised supply chains of a traditional sort, as well as the power of the Internet and other communications systems to enhance production quality and efficiency, to procure specialised inputs, and to serve both domestic and export markets.

The inner city also offers other major advantages to New Economy firms in the form of social agglomeration factors. This observation is not exactly new, as scholars such as Frank Moulaert and Camal Gallouj have emphasised the importance of social and cultural agglomeration factors for advanced service industries over the last decade (Moulaert and Gallouj, 1993), while Nigel Thrift and Kris Olds have written about "the extraordinary social nature of modern economies" ( Thrift and Olds, 1996: p 316). Field work in a variety of New Economy sites (including Hoxton in London, the South of Market Area (SOMA) in San Francisco, Telok Ayer in Singapore and Yaletown in Vancouver) has underscored the particular significance of these social factors (which include the density of social networks, opportunities for interaction and exchange, and the diversity of "actors" and groups) for New Economy firms. Interviews conducted in these New Economy sites disclose the saliency of social interaction and exchange to creative processes, to the production of cultural products and services, and to innovation in general. As Andy Pratt has observed, certain inner city sites are particularly conducive to new industry sectors and industries, "because of the micro-scale ways of working, socialising, and labour market access" ( Pratt, 2002: personal communication) characteristic of the New Economy. Richard Florida and Meric Gertler also note that the ethnic and cultural diversity of the city (and particularly the inner city) greatly enhances the potential for creative activity and innovation ( Florida and Gertler, 2003).

There is in fact a marked blurring of the social worlds of work and lifestyle for many of these New Economy workers. In his study of the "milieu preferences" of workers in high-technology companies, Mugerauer found that "(m)ore than half the players went out of their way to explain that there was no clear line between work life and outside-of-work life; that what they did with whom was generally all part of a connected routine" (Mugerauer, 2000: p 223). The restaurants, coffee-houses, and bars situated within inner city sites such as Clerkenwell and Hoxton within London’s City Fringe reflect not only contemporary urban consumption patterns but also a distinctive "geography of amenity" which complements the intensive social interactions of the New Economy. The co-mingling of artists, artisans, designers, cultural industry workers, students, educators and other actors, although not without experiences of tension and displacement, nonetheless enriches the "information surface" and collaboration possibilities for firms within New Economy sites within the inner city. These social and cultural conditions are difficult to replicate elsewhere in the metropolis.

Agglomeration dynamics are complemented by what we can broadly describe as the unique environment of certain inner city districts. Within this omnibus category there is a rich, complex and interdependent set of attributes, including the built environment, particularly heritage buildings and architecturally distinctive structures which comprise the essential infrastructure and working spaces for New Economy firms in many cities; cultural amenity including galleries, museums, exhibition spaces, and what Peter Meusburger calls the "historical legacy" of certain inner city spaces, which complements the "spatial concentration of knowledge" (Meusburger, 1998); and environmental amenity, exemplified by the many small parks, squares, and other spaces that contribute to the identity of New Economy sites in the inner city, while offering opportunities for social interaction and exchange. In this latter regard, observation and interviews conducted by the author in San Francisco’s South of Market Area (SOMA) in January and October of 2003 disclosed that South Park, one of the few green spaces in SOMA, acted not only as a key forum for social interaction, but also as an informal labour market.

Finally, there are the complementary institutions that support the operation of New Economy industries and firms in the inner city, including colleges of art and design situated in such precincts, fashion design schools, and institutions specialising in the training of artisans and other crafts occupations. There are also public agencies, non-governmental organisations (NGOs), and community-based organisations (CBOs) committed to fostering design activities and craft-based skills in cities such as London, Paris, Milan, and Florence., 3 The density and "thickness" of these institutional networks represent critical underpinnings of the New Economy, as they facilitate the quotidian interactions, exchange, and collaboration among enterprises, enhance the creative human capital of constituent industries and firms, and support in many ways the complexity of industrial organisation in the inner city.

3. New territorial forms of specialised production in the inner city
Just as we can distinguish stages of development in the evolution of the inner city’s New Economy, we can also identify in at least a preliminary way the distinctive spatiality of new production formations in the metropolitan core. Research conducted over the last several years in London, Cologne, San Francisco, Seattle, Singapore, San Francisco, and Vancouver (to illustrate a partial list of case studies under investigation) has disclosed the contours of a provisional typology of inner city New Economy sites and spaces, including (1) extensive production districts, (2) compact new industry clusters (both spontaneous and induced), (3) "signifying" New Economy precincts, and (4) "incipient" new industry districts and sites (Table 1), characterised as follows:

1. Production districts, extensive terrains of inner city space which encompass both dispersed and more concentrated distributions of New Economy firms (e.g. "Multimedia Gulch" in San Francisco, and areas of the City Fringe in London), as well as a more mixed pattern of other land use types and industrial activities. These relatively large territories can incorporate both primary sites of New Economy industries and proximate areas of supporting businesses and industries. Within these districts, we normally find large stocks of underutilised, older (but structurally sound) industrial and commercial buildings which can be renovated and readapted for new industries and employment, on sites which offer lower land costs and rents than those typically found within the CBD. The redevelopment of these districts for new industries tends to be driven (or at least initiated) by market actors, although local government and public agencies can play important supporting roles, for example by adjusting zoning and land use policies, and by introducing building by-laws which facilitate the establishment of new uses. New production districts often comprise contiguous territories of heritage districts and older commercial and quasi-industrial areas in the CBD fringe and inner city, encompassing ensembles of industries and firms linked by complex input–output relations, but may also include precincts within the CBD. Here, New Economy firms have in some cases taken advantage of lower office rents ensuing from oversupply, and reduced demand associated with corporate restructuring (as well as the relocation of head offices to suburban locations; see Leigh, 2000), to "recolonise" marginal quarters of the CBD.
2. New Economy clusters, which take the form of more compact inner city sites within which agglomerations of New Economy industries and firms are situated. Here, we can broadly distinguish between two important sub-categories: (a) essentially spontaneous clusters, in which market actors have initiated redevelopment, transition, and new industry formation (a number of which can be observed on the fringe of Toronto’s downtown), and (b) induced New Economy clusters, in which governments and public agencies have assumed leading roles across a spectrum of interventions ranging from changes in land use policy and zoning schedules designed explicitly to promote New Economy industries (for example the False Creek Flats high-technology project in Vancouver), to public equity participation in property and/or buildings (as exemplified by the Cité Multimédia project in the Faubourg de Récollets district of Montréal; Dionne, 2001). Heritage policies and programmes can also be seen as central to the preservation of buildings and sites for new industries, as seen in the Bermondsey Street Conservation Area in the London Borough of Southwark.
3. "Signifying" New Economy precincts, sites that constitute the defining "epicentres" of the New Economy of the inner city, comprising critical production functions as well as redefining attributes of consumption, lifestyle and urban imagery. These signifying precincts (typically less than one kilometre square in extent, and often tightly bounded by major arterials or structures that effectively contain these sites) encompass major concentrations of "leading edge" or propulsive firms in key New Economy sectors, and offer special opportunities for social interaction and information exchange (both formal and informal). Signifying precincts vividly demonstrate both the synergies of culture, technology and place in the New Economy, as well as the intermingling of economic and social worlds in the inner city. These sites also offer distinctive cultural and environmental amenities, contribute to the reformation of local identity, influence the re-articulation of inner city margins or boundaries, and therefore embody broader processes of economic, social, spatial, physical, and symbolic change in the metropolitan core. Examples of these signifying precincts include the southern portion of Clerkenwell and Hoxton and the Shoreditch Triangle (London), South Park (San Francisco), Ehrenfeld (Cologne), Telok Ayer (Singapore), and Belltown (Seattle). These high visibility precincts also tend to attract considerable media attention, constitute "places to be" for the new urban elite and opinion-leaders, and may add prestige and value (as well as inflationary pressures) to adjacent residential neighbourhoods, underscoring their role as multifaceted cultural markers in the post-modern inner city.
4. "Incipient" new industry sites, which exhibit early signs of transition from older industrial, commercial or residential activities to new industry sites, typified by "pioneer" New Economy firms in formerly derelict or vacant buildings, or by hybridised creative services/technology-intensive businesses in existing commercial areas. Examples here include Deutz (on the eastern side of the Rhine, in Cologne), and Stratford, in the London Borough of Newham.


Table 1. New territorial forms of industrial production in the inner city




The emergence of these new territorial forms of industrial activity, differentiated internally by scale considerations, industrial mix, and functional specialisation, among other factors, represents the reorganisation of urban space to meet changing market demands and ascendant forms of intermediate services production., 4

3.1. Specialisation and differentiation of inner city sites: two reference cases
We can illustrate these important processes of territorial specialisation by reference to the recent experience of two cities positioned within different echelons of the global urban hierarchy, London and Vancouver. In London, a first-tier global city and an established world centre of design, culture, and creative industries, the last decade has seen a proliferation of New Economy districts and sites, both north and south of the Thames. There are some developmental features common to most of these sites, notably the sequence of new uses, accelerated processes of succession and transition, and gentrification pressures within proximate residential areas. But there are also significant variations, underscoring what Allen Scott describes as the "ever more finely grained patterns of locational differentiation and specialisation" (Scott, 1997b: p 74) within advanced metropolitan economies. Some of these more nuanced aspects of spatiality and specialisation can be presented in selective overviews of Hoxton (within the Shoreditch district of the London Borough of Hackney), Clerkenwell (Islington), and the Bermondsey Street Conservation Area (Southwark).

Hoxton conforms persuasively to our model of a "signifying" inner city New Economy precinct, encompassing not only clusters of leading edge creative and cultural industries and firms, but also the full range of high-consumption outlets, complementary institutions and social organisations, and environmental amenities. The epicentre of Hoxton is a compact enclave of mostly small firms and ancillary activities situated within a triangular territory, bounded by Old Street, Shoreditch High Street, and Great Eastern Road. Each of these major arterials which border Hoxton include larger technology-based firms and institutions, domiciled within larger commercial structures and converted warehouses, in contrast to the generally smaller, heritage brick buildings within the enclave itself. Social interaction in Hoxton is facilitated by the intimacy of the streetscapes within the enclave, an array of pubs, coffee-houses and restaurants, and Hoxton Square itself, each of which is intensely utilised by a remarkable diversity of groups and individuals (defined by age, gender, ethnicity and occupation), as noted in field observations conducted over the last two years. Within the triangular enclave of Hoxton, the defining activities include graphic designers and artists, architects, ITC firms, laser printers, small consultancies, estate agencies, and specialty retail. In addition to the day-to-day energy and vitality generated by the New Economy businesses domiciled within its territory, Hoxton is a primary social venue for opinion-leaders and those seeking status affirmation, including the much-discussed "Ditcherati" (derived from "Shoreditch"), a contingent of self-regarding new media types, politicians, artists, entrepreneurs, and other celebrities and public figures.

The co-mingling of diverse groups, coupled with the ascendancy of new industries and labour cohorts, places intense pressure on this small urban space. A long-established community of artists was largely displaced by the initial influx of creative professionals, dot.coms and consultancies, but these groups are now themselves under pressure from other firms and industries, including major architectural concerns, property management firms, and other business services, attracted by the local amenity values and the reconstructed profile of Hoxton within the City Fringe. The impending opening of a new station of the East London Line at Shoreditch High Street, combined with Hoxton’s proximity to the City proper, and escalation in land prices and rents, will likely initiate a fresh cycle of redevelopment and succession in Hoxton. In contrast to many of the old inner city industrial districts, which sustained relatively durable ensembles of production over a period of decades, New Economy sites tend to be "works in progress", characterised by ongoing processes of experimentation, transition, and reproduction.

Clerkenwell, on the western margins of the City Fringe, is a somewhat larger New Economy district, bounded (roughly) by St. John Street to the east, Rosebery Avenue on the north, the Farringdon Road to the west, and Smithfield Market to the south. Clerkenwell was since the early 19th century a site of working class housing, small businesses, and more particularly craft-scale production and artisanal workshops, which comprised a large part of the district’s identity. Many of these workshops (which included watchmaking, engraving, silver plate-making, typesetting, and enamelling, among many other crafts) survived the collapse of Fordist manufacturing in London over the 1960s, 1970s, and 1980s, and a residual presence of these classic inner city artisanal and craft industries persists to the present day, reflecting a continuing demand for traditional, high-quality luxury goods. Clerkenwell was a favourite site for Dickens’ London novels and public lectures, and indeed is still "an area with a conscience", as seen in the location of the international head offices of Amnesty International and Asylum, as well as the Marx Memorial Library, the Guardian newspaper, and numerous NGOs and CBOs, recalling Clerkenwell’s progressive and radical traditions. As Peter Ackroyd observes, Clerkenwell has long been a site of communitarian action, including periodic riots and other "disruptions" (Ackroyd, 2000), as well as collective enterprise.

While vestiges of Victorian Clerkenwell remain, the current trajectory of development is defined more by new media and multimedia industries, applied design and creative services firms, Internet service providers, and the full range of social, cultural, and environmental amenities. We can therefore characterise Clerkenwell’s contemporary industrial structure as an overlay of dynamic, post-Fordist service industries upon a residual base of pre-Fordist craft production, entailing aspects of complementarity (or at least coexistence) as well as competition. There is also a major presence of large real estate agencies and property management firms, many of which are engaged in the conversion of older warehouses, workshops and obsolete commercial buildings to expensive loft housing. The southern part of Clerkenwell (roughly from Clerkenwell Road to Cowcross Street, and around Farringdon Station) incorporates a signifying precinct of New Economy firms, amenities and institutions, while a larger territory extending westwards to Grays Inn Road comprises a more extensive and variegated production district.

Clerkenwell is a comparatively large and complex inner city territory, but we can vividly illustrate its developmental reorientation by reference to several projects and processes. First, the historic Clerkenwell Workshops, some 160 separate work spaces situated within a heritage Victorian structure in Clerkenwell Close, and an important resource for the sustaining of the district’s traditional craft skills, has been purchased by an international concern with the intention of converting the building to cater to advanced, global telecommunications firms and customers. Existing tenants, mostly craftsmen and skilled workers, will be obliged to relocate under this plan, signalling a redefining change of scope (global over the local), land use, and industrial structure. A second signifier of change is the growth of multimedia and technology-support firms northward along Farringdon Road, succeeding older industries and small businesses along this critical axis. Finally—and perhaps the most striking symbol of Clerkenwell’s new trajectory—a Grade II listed building at 1 Sekforde Street which initially housed workshops has been purchased by Nick Mason and Rick Wright of Pink Floyd, and converted to decidedly upscale space for a target market of "creative professionals", including musicians and professional designers, among others. The designer spaces and special amenities of this project, labelled "Britannia Row2", include an organic latte bar, several "chill-out" rooms, and a massage room for those requiring a soothing of the tissues as well as a calming of the nerves. Every comfort and environmental inspiration for the elite creative worker is provided, in stark contrast to the cramped and austere conditions of the workshops which formerly occupied the building. By every measure Britannia Row2 constitutes a symbol of the "New Clerkenwell", and a particularly striking evocation of the interface between amenity and the inner city’s New Economy.

Our third and final London New Economy reference case is the Bermondsey Street Conservation Area (CA), a linear terrain situated between Crucifix Lane and Thomas Street to the north, and Long Lane on the southern margins of the district. The area is rich in high quality heritage brick buildings, which were constructed as warehouses for the leather goods, spice, sugar and coffee trades, and are eminently suitable for conversion to studio space, workshops, or housing. At one level, the Bermondsey Street CA can be seen as an extension of the new globalised spaces of consumption and spectacle in Southwark’s Bankside, which include the Tate Gallery of Modern Art and the Globe Theatre. But the area is cut off from Bankside by the South Eastern Railway viaduct, and has a less frenetic feel than the Hoxton and Clerkenwell districts noted above. The Bermondsey Street CA site specialises in design and creative services, induced in large part by the Borough of Southwark’s conservation policies (and augmented by British Heritage and other national government programmes), with a smaller presence of tech-based and business service firms than the two City Fringe sites described earlier. The dominance of architects, landscape architects, interior designers, and property management firms serves to highlight the system of interdependent industries engaged in the reproduction of inner city sites and spaces, in situ and throughout the metropolis.

The flagship project within Bermondsey Street is Zandra Rhodes’ recently opened (May, 2003) fashion and textile museum, a spectacular former warehouse building finished in orange and pink, the most visible presence on the street. This project represents a classic example of global–local interaction, demonstrated by the partnership of architects Ricardo Legoretta and Alan Camp. Legoretta’s practice is based in Mexico City, but he has a high international profile, and is a member of what Kris Olds has termed the "global intelligence corps" of architects and designers engaged in the reconstruction of world cities such as London, Berlin, and Shanghai (Olds, 1997). Legoretta’s bold design created the project’s leitmotif and imagery, while locally based Alan Camp negotiated with Southwark planning officials, and developed the idea of residential uses at the rear of the building which effectively cross-subsidised the construction of the museum. The profile and imagery of the Rhodes’ museum will likely attract new audiences and perhaps new industries and employment to the Bermondsey Street CA, potentially bringing the area within the sphere of influence of the larger Bankside redevelopment, entailing the comprehensive re-imaging of northern Southwark.

Vancouver is about one-quarter the size of London, and lacks the concentrations of multinational corporations and international financial functions associated with higher-order global cities, but is nonetheless an advanced services city with important specialisations in New Economy sites and industries. At an aggregated scale, patterns of new industry formation within Vancouver’s metropolitan core are depicted in Figure 1, including the signifying precinct of Yaletown, the epicentre of Vancouver’s inner city New Economy, as well as compact clusters and functionally diversified production districts. Empirical investigations (including local area surveys and interviews) have disclosed four principal production districts encompassing specialised ensembles of New Economy firms and linked industries. These include (A) the Downtown South–Southern CBD Fringe district (specialising in multimedia industries, computer graphics and imaging, graphic design, architecture, and other creative services), incorporating Yaletown; (B) the Downtown Eastside Heritage district (film and video production and post-production, Internet services and web design, architecture), which includes Gastown; (C) Mount Pleasant-Terminal Avenue (web-site design and video production, commercial photographers, and other specialised support services), linked to the "primary" New Economy sites in Yaletown, Victory Square and Gastown by dense supply networks; and (D) Granville Island–South of Granville Island (architecture, other creative services, and technical support services). There is also an established cohort of architects and newer concentrations of creative and technology services on the northern crescent of the CBD, exemplifying the selective recolonisation of the corporate complex by New Economy firms., 5


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Figure 1. New territorial forms of specialised production in Vancouver’s metropolitan core



Examples of clustering patterns of New Economy industries are depicted in Figure 2, which shows the location of firms within eight industry groups (selected from a larger panel of 20 industries examined in a recent survey supervised by the author) within Vancouver’s metropolitan core. This sample includes a group of computer services (computer graphics, computer networks, and computer applications services) conventionally included within New Economy industries, as well as multimedia and graphic designers, advertising firms (a creative business services industry which has increasingly absorbed new production and communications technologies), and, finally, commercial artists and photographers, key support services for these industries. As Figure 2 demonstrates, there are significant clusters of firms within the Yaletown–Downtown South district immediately south of the CBD, and in the Victory Square–Gastown heritage district to the east, as well as representation within the northern sector of the CBD itself. Outside the downtown peninsula, we find important distributions of technical support services for the creative sector in Mount Pleasant (between Main and Cambie streets, north of Broadway), and a mix of industries south of Granville Island, between Granville and Burrard streets. These patterns of creative and technology-intensive industries provide an exemplary demonstration of the distinctive spatiality of the New Economy within the metropolitan core.


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Figure 2. Distribution of firms for selected industries within Vancouver’s metropolitan core, 2002. Source: CHS survey of Vancouver’s New Economy of the inner city, Fall 2002



We can identify on the frontier of the inner city the "incipient" new industry district of Mid-Main, as well as examples of "induced" New Economy clusters. The latter include the False Creek Flats I–3 high-technology zone, initiated by statements of new planning policy, land use strategies, and innovations in zoning (City of Vancouver, 1999) ( Figure 1, area 10), and the Great Northern Way Campus (area 11), an institution comprising units of four Vancouver-area universities, designed to promote innovative new industries by means of synergy between design and technology ( University of British Columbia, 2002), identified earlier as a hallmark of the New Economy of the inner city. Overall, this necessarily succinct sketch of new territorial forms of industrial production in Vancouver, a medium-size city, is suggestive of the increasing pervasiveness, complexity, and variegation of New Economy sites in the inner city.

4. Implications for urban economic development
New industry clusters situated across increasingly extensive terrains of the inner city generate significant developmental outcomes for cities and their constituent communities, strongly conditioned both by the nature of sectors and firms, and also by the specificity of place, and include the following domains of growth and change: (1) restructuring of the core economy, (2) local area regeneration, (3) regional growth and development, (4) economic base effects, and (5) complements with new urban development trajectories.

4.1. Restructuring the metropolitan core economy
The emergence of new industrial clusters and ancillary production networks represents an important new phase of economic development in the metropolitan core, quite distinct from earlier redevelopment experiences which largely comprised retail and other final demand services, arts and crafts, and the like. Together, these new industrial spaces, supporting production networks, and new spatial divisions of labour have significantly reconfigured the space-economy of the metropolitan core. These new industrial clusters within the CBD fringe and inner city also redress to some extent the spatial imbalance in the core’s space-economy associated with the post-war dominance of the CBD (recall here Larry Ford’s observation that the growth of the CBD’s corporate complex over the 1970s and 1980s was "hard" on the CBD fringe and much of the inner city, dominating new investment within the core, and creating a kind of "backwash effect" in the inner city, thus contributing to the economic decline and physical deterioration of these districts in many North American cities; Ford, 1994). New industry start-ups and job creation within the inner city may also partially offset employment losses in certain key central area office occupations, notably among middle managers and clerical labour.

4.2. Local area regeneration
The New Economy clusters described above can contribute strongly to the regeneration of old industrial districts within the inner city. First-order regeneration effects include new investments in business start-ups, infrastructure and systems, and human capital; the injection of entrepreneurial visions and energy into deficient, lagging areas of the inner city; and new demand for labour. To be sure, this labour demand privileges highly skilled professionals, many of whom must be recruited from outside the locus of redevelopment, due to mismatches with local labour markets (Post, 1999), but employment in ancillary industries includes a more diverse range of occupations including artisanal and craft labour, technical support positions, part-time labour, and students and trainees. As observed earlier, too, intimate spaces of social interaction can provide opportunities for exchanging employment information as well as other forms of market intelligence. Local employment prospects can also be enhanced by means of partnership retraining and apprenticeship programmes involving private sector firms, public agencies, and CBOs, as seen in several inner London Boroughs.

There are important secondary regeneration benefits in terms of derived demand for restaurants, coffee-houses, shops, galleries, recreation facilities and the like, consistent with the observed spatial correlation between New Economy firms and labour and consumption amenities. Together, these retail and personal services may contribute significantly to the diversification of local economies and communities. Finally, the increasing scale of redevelopment of inner city sites and buildings for new industries has stimulated growth within industries engaged in retrofitting spaces for the New Economy, including architects, heritage consultants, interior designers, ICT system specialists, and builders. These integrated ensembles of specialised industries and labour constitute important sectors of the urban economy in places like London and New York.

4.3. Regional development impacts
In addition to the more localised effects of New Economy clusters within the metropolitan core, survey research has disclosed important linkage patterns between inner city clusters and other agglomerations and economic spaces within the metropolis, contributing to regional growth and development. These patterns can be complex and multilayered, but we can identify two principal sets of flows operating from the new inner city production spaces: "inward" (or "centripetal") linkages which connect the new inner city clusters to the CBD, and, secondly, a "centrifugal" set of flows between small subcontracting firms in the inner city and major advanced-technology corporations on the urban periphery. First, there are particularly dense linkage patterns between New Economy firms situated within the inner city (for example graphic artists, multimedia firms, and Internet providers) and corporate clients within the proximate CBD, as seen in the flows of information and services between firms in London’s City Fringe sites and corporations in the City proper. These New Economy firms within the City Fringe therefore can be seen as an important and distinctive part of the supporting intermediate service sector which caters to corporate clients, with specialisations in creative, design, and technology services, in contrast to the "mainstream" corporate legal and accounting firms which remain ensconced largely within the corporate complex.

Secondly, New Economy firms within the inner city can also function as subcontractors for major high-technology corporations within suburban sites. Subcontracting for large corporations in Silicon Valley provided much of the impetus for the growth in software developers and Internet providers in the South of Market Area of San Francisco. The subsequent collapse of the ICT sector and other high-technology industries in Silicon Valley led to large-scale business failures and employment losses in recent years throughout the region, but recent site visits by the author to SOMA disclosed some evidence of recovery, although commercial building vacancy rates are still very high. Seattle also provides examples of smaller New Economy firms situated within inner city districts such as Belltown which act as subcontractors for some of the large advanced-technology corporations in major suburban sites such as Redmond and Bellevue. As a third example, small- and medium-size ITC and new media firms within the Far East Square New Economy site (which also includes multinationals such as Yahoo! and BBC International) straddling Singapore’s CBD and Chinatown are linked both to larger corporations in suburban R&D parks and to global markets.

4.4. Economic base impacts
New Economy firms situated within the inner city can contribute to urban economic development by means of export sales of products and services, both in domestic markets, beyond the urban region, and increasingly in international and global markets. The competitive advantage of inner city districts for leading edge design, creative, and knowledge-based activities provides a platform for penetrating export markets across a broad range of specialised product lines, such as software and web design, graphic design, video and computer games production, architecture, Internet services, computer graphics and imaging, and industrial design. Competing in global markets for these inner city New Economy firms is facilitated by the World Wide Web and other telecommunications systems which have substantially reduced the friction of distance (although it must be acknowledged that participation in export markets in some regions carries with it risks of copyright infringement and piracy). The export performance of these inner city New Economy firms is also enhanced by locational factors, notably the opportunity to engage in cooperative ventures with complementary firms within the proximate CBD, such as marketing concerns, consultancies, and financial institutions. These liaisons may take the form of strategic partnerships, joint ventures, and/or information sharing.

4.5. Complements with new urban development trajectories
The rise of new industrial clusters within the inner city is central to larger processes of urban growth and change among advanced cities and city-regions. Taken together, these outcomes underscore the centrality of technology-intensive creative and knowledge-based industries to overall restructuring experiences. Beyond the substantive areas of impact described above, the imagery associated with these inner city New Economy formations contributes powerfully to the symbolism of urban change, including new tropes and metaphors such as the "creative city" (Richard Florida), the new "urban cultural economy" (Allen Scott), and "fractured urban geographies" (Wheeler, Aoyama and Warf, 2000), among others, both positivist and pejorative in tone. The New Economy formations of the inner city (together with important new amenities, housing, and public facilities) are also deployed by municipal officials in the rebranding of cities and urban communities, both to attract new investment and business start-ups, and to herald new, more hopeful visions of the urban future. Increasingly, the inner city is a prime signifier of the leading edge of urban change and renewal.

The inner city also performs special roles in larger processes of innovation and restructuring at the metropolitan level, notably in providing an environment for experimentation. The last decade and a half has seen sequences of innovation, transition and succession, seen first in the growth of design services and artisanal activity, followed by the tumultuous rise and collapse of the dot.coms, and now in the (apparently more durable) clusters of hybridised creative, cultural, and technology-intensive knowledge industries. Many of these businesses fail, and even entire industry groups suffer collapse or contraction, but in most cases new activities are rapidly introduced, presaging new rounds of innovation.

5. Environmental and social implications
As we have seen social factors and environmental conditions are clearly central to the establishment and development of new industry formations within the inner city. A growing body of research derived from field observations and case studies has disclosed that the emergence of new industry clusters and districts within the metropolitan core is also associated with complex, far-reaching and in some respects problematic social and environmental impacts. We can demonstrate that the New Economy phenomenon in the inner city carries with it significant normative, as well as developmental, implications.

5.1. Environmental impacts
The establishment of new industrial clusters and territorial forms of production over the past decade or so within precincts of the inner city has reshaped the environment of the metropolitan core in many ways, underscoring the far-reaching influence of the New Economy as an agent of urban change in the 21st century. Some of these environmental impacts within the inner city are highly visible, while others are more subtle and nuanced, but together they represent a comprehensive reordering of urban form, space, and territory in a growing number of large- and medium-size cities.

First, the establishment, development and expansion of New Economy sites in the metropolitan core constitute the reconstruction of inner city landscapes for new production industries. This experience incorporates but greatly transcends the more episodic adaptive re-use of individual heritage structures, and takes the form of the comprehensive restoration of entire inner city sites, blocks, and subareas over the last decade or so. These sites and structures are strongly preferred by many New Economy firms for a number of reasons, including the appeal of the building types and heritage characteristics of proximate districts, the availability of larger interior spaces for the kinds of creative tasks intrinsic to these new industries, and the steep rent gradients between inner city areas and the established corporate office market of the CBD (although these gradients may be decreasing as the rent values of reconstructed inner city sites continue to inflate). But there can be more intimate associations between these creative firms and the heritage environments of the inner city. Within a panel of a dozen firms (including design, new media, and Internet firms) interviewed by the author in Singapore’s Telok Ayer district of Chinatown in January of 2003, design professionals in fully one-half of the sample identified the distinctive aesthetics and embedded cultural values of the 2- and 3-storey traditional shophouses (Figure 3) as sources of creative inspiration. As Brenda Yeoh and Lily Kong acutely observe, Singapore’s Chinatown is "a multicoded space inscribed with a multiplicity of meanings" (Yeoh and Kong, 1994: p 33), and the authenticity of these spaces can be compromised by market actors, or subverted by the state for overriding policy purposes. But for at least a number of the workers interviewed, the integrity of building design, historical meaning, and contemporary resonances associated with the Chinatown shophouses represent wellsprings of imagination and creativity, or, more prosaically, renewable inputs to the production of cultural goods and services.


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Figure 3. Reproducing Singapore’s Chinatown for the New Economy, Telok Ayer district (photos by author)



At one level, the recycling of these buildings represents the means of preserving and restoring the distinctive built environment of inner city districts, and here we can acknowledge a positive contribution of New Economy firms to the urban heritage conservation movement. The restoration of older structures (as an alternative to demolition and redevelopment) can also be seen as an important tool for urban sustainable development, incorporating not only the retention of high-value building types (Figure 4), but also an intensification of land use, and (in some cases) the closer juxtaposition of employment with housing in the inner city. A more critical perspective can include concerns about dislocation effects of these inner city reconstruction processes, as well as references to the appropriation and re-imaging of the historical built environment for commercial (rather than purely heritage) purposes. There is a clear need to engage communities in planning for such districts on a case by case basis, rather than attempting to establish a universal policy template (Yeoh and Huang, 1996). But in some cases at least, the adaptive reuse of these heritage sites and districts can provide the means for the restoration of productive activity consistent with historical craft and artisanal roles, contributing to the retention of local authenticity and tradition.


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Figure 4. Kurt Geiger shoe design Bermondsey Street Conservation Area Southwark, London



A second environmental effect of new industry development within the inner city concerns significant changes in the reconfiguration of the structure of the metropolitan core and the city as a whole. As is well-known, the collapse of traditional Fordist manufacturing over the third quarter of the 20th century, coupled with the rapid growth of the corporate complex of the CBD, fundamentally altered the pattern of land use in the central city. The old structural model of the industrial city, comprising a downtown area of commercial activity surrounded by a ring of manufacturing, warehousing and ancillary industries, and working class housing, was supplanted over the 1970s and 1980s by a highly asymmetrical pattern of new investment and employment growth in the core, driven by the hyper-specialisation of the CBD (defined by the ascendancy of intermediate or "producer" services), and massive disinvestment and job loss in the industrial districts of the inner city. But over the last decade or so, new processes and trends have served to quite significantly modify this pattern within the urban core. First, the maturation (or even in some cases relative decline) of the CBD’s corporate complex is evident in many cities, owing to the overhang of speculative development from the 1980s, and to the effects of technological innovation and corporate mergers and restructuring on key office-based occupations. The second set of processes comprises the rapid growth of new industry clusters, production districts and ensembles within the CBD fringe and inner city, together with substantial reinvestment, new firm start-ups, and new spatial divisions of labour, as described above. Overall, then, we can speak of a significant spatial shift of development momentum in the central city in many cases, from the CBD, to the new production spaces and mega-projects of the CBD fringe and inner city (Figure 5).


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Figure 5. Yaletown (foreground) and residential megaprojects in Vancouver’s metropolitan core



Thirdly, the emergence of new industry clusters and ensembles has further modified the urban environment by influencing the reterritorialisation of inner city space at the district level, comprising shifts in local area boundaries and imagery. The uneven pattern of redevelopment within the inner city reflects the differentiated territorial forms of new industry development described above, and the impacts of inner city mega-projects (after Olds, 2001), as well as disequilibrium in localised development cycles. The growth of new industry clusters over the last decade has reconfigured the boundaries or margins of long-established districts of the inner city, in some cases imposing new identities on well-known urban places, and in others also encroaching upon adjacent districts. In London, the emergence of new industry clusters in Shoreditch has reshaped patterns of community and territory in the Hoxton Square neighbourhood with significant encroachment upon residential communities to the north and east of the district. In the Bermondsey Street Conservation Area in Southwark, a bifurcated development pattern has emerged, with a proliferation of creative services, multimedia industries and design firms in the northern section, characterised by sensitive, smaller-scale heritage restoration, in contrast to larger-scale conversions and housing development south of Morocco Street. Within the old metropolitan Borough of Finsbury, new industry formations (and very upscale warehouse- and loft-conversions for housing) in Clerkenwell are pushing up northwards from Farringdon Station toward the traditional small businesses of the Exmouth Market area and the high density neighbourhoods south of the Pentonville Road ( Figure 6).


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Figure 6. Multimedia firms precinct near the Farringdon Road, Clerkenwell, London



In Vancouver, the extraordinary concentration of hybridised creative/technology-intensive firms, expensive loft housing and culturally signifying consumer outlets (including trendy restaurants, coffee-houses, boutique hotels and shops) within the heritage precinct of Yaletown demonstrates the intimate interface between production and consumption in the New Economy (Figure 7), and has exacerbated rent inflation within the district as well as pressures on adjacent areas of the urban core. This has led to a continuing reterritorialisation experience in the larger Downtown South area which encompasses Yaletown, exemplified by the re-imaging of adjacent areas as "New Yaletown" and (further afield) even "Greater Yaletown". These experiences reflect the encroachment tendencies of dynamic new industry sites in the core, as well as efforts by property developers and entrepreneurs to capture some of the Yaletown’s "buzz" and marketing cachet.


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Figure 7. Boutique-scale Mini dealership in Yaletown, Vancouver’s signifying inner city New Economy precinct



5.2. Social impacts
As a first-level social impact, the rapid growth of new industry clusters within the inner city has created employment growth in some of the mainstream occupations (for example among management, sales, and clerical workers), but also in a number of newer categories, as in the case of web- and software designers, computer graphics and imaging professionals, and related IT specialists (Pope, 2002). Aside from these groups, we can also identify a significant "retooling" of established occupations which have become increasingly technology-intensive over the last decade, and have embodied new skill sets and task orientations; these include, to illustrate, graphic designers, architects, and industrial designers. There are also new cadres of entrepreneurs engaged in the critical processes of business start-ups in the inner city New Economy sites. These growing concentrations of employment within the inner city constitute an important new spatial division of labour (after Massey, 1984) within the metropolitan core. The rapid growth of this new spatial labour cohort concentrated within inner city production districts presents challenges to theories of urban social class, as Florida has articulated in his model of an ascendant "creative class" ( Florida, 2002). It appears that this group of inner city New Economy workers is not easily accommodated within Ley’s new middle class of central city workers (which is comprised largely of office-based white-collar managers and professionals), nor in the suburban/exurban high-technology social cohorts described in Saxenian’s research (1994), so further elaboration of the sociology of this new labour force is required. , 6

Other important social impacts of New Economy formation concern conflicts and tensions associated with the insertion of new industries and social groups within the confines of the inner city. At the level of the metropolis, the increasingly technology-intensive nature of the urban economy generally tends to exacerbate social polarisation and other negative externalities (Schön et al., 1998), while promoting the "splintering" of the city’s form, structure, and social patterns ( Graham and Marvin, 2001). But there are also more specific zones of social conflict, reflecting the distinctive spatiality of the New Economy, and here we can discern several classes of dislocation and displacement. First, the emergence of new industries in the inner city can directly displace existing businesses and residents in cases where these industries are allowed to locate in settled communities. These new, high-growth firms can bid up rents and compete successfully for properties and space against marginal businesses and low-income households within inner city neighbourhoods, leading to large-scale evictions and displacement, as seen in San Francisco’s SOMA ( Parker and Pascual, 2001). The experience here is one of contested space of an especially visceral nature, exacerbated by extreme asymmetries of power and resources among the interests involved.

Secondly, the reterritorialisation processes described above can lead to the physical encroachment of new industry clusters upon adjacent communities. The expansion of New Economy sites within London’s City Fringe, for example, has effectively pushed communities of artists further east. Complex issues of encroachment and dislocation, set against the potential roles of new industry firms in localised regeneration strategies, require particularly sensitive planning interventions, including public commitments to community consultation and retraining programmes.

A third, more indirect category of dislocation can be seen in the potential pressures arising from the proximity of New Economy sites to established residential communities, in cases where land use and zoning regimes offer protection against direct encroachment, but not necessarily against spillover land market effects. In the case of Strathcona, an important older inner city community in Vancouver’s Downtown Eastside, there is both strong planning support for the preservation of mixed-income housing (including a significant inventory of heritage properties and buildings) and a well-established local community association, but there are concerns about the potential spillover effects of new industry development in Gastown and Victory Square, to the west of Strathcona, and from the major high-technology district of False Creek Flats, immediately to the south (see Figure 1). Strathcona has been a community under pressure for many years, including the threat of an elevated freeway during 1970s which would have seriously compromised the livability and heritage integrity of the district, as well as more recent and continuing effects of crime and social disorder. The community has resisted (or adapted to) these stresses, but the prospect of adjacent new industries and investment, high quality amenity provision, and social upgrading associated with New Economy sites in Vancouver’s metropolitan core is likely to increase gentrification pressures within Strathcona, potentially destabilising households within the area.

Finally, we can identify social tensions associated with the increasing pluralism of social groups and their divergent expectations and lifestyle preferences within the inner city. The increasingly intimate juxtapositioning of New Economy industries and workers with new residential development in the inner city has created conflicts between residents (often middle-aged condominium owners) and younger workers with exuberant lifestyles, often typified by preferences for late-night partying and raves, and validated by the "24-h city" concept espoused by a growing number of cities in Europe and North America. In Vancouver, the City’s "living first" planning approach, which privileges new housing over other uses in the inner city, has led to an increase of about 30,000 new residents over the last decade, but sets up tensions between many of these residents and those who see the central city as a 24-h playground of entertainment and recreation, presenting a challenge to the "convivial city" concept broadly seen as a hallmark of Vancouver’s livability (Ley, 1996). These tensions can be seen as a problematic outcome of generally successful policies, hardly on a scale with the serious examples of dislocation and displacement described earlier, but they do require a new planning management approach if divergent interests are to be reconciled.

6. Conclusion: new research frontiers and policy directions
This article has demonstrated that the emergence of new industry clusters within the inner city over the last decade or so, far from representing a transitory episode in the life of the city, instead comprises a redefining set of transformational processes within the metropolitan core. There is to be sure considerable volatility in the fortunes of certain industries, as exhibited in the fluctuating experiences of the dot.coms over the last five years, but we can discern more robust features of new industry formation, innovation, and experimentation among the cities under investigation. The rise of new industrial districts and clusters of the inner city portrayed in this article represents a contemporary expression of what Ed Soja evocatively describes as the "still-evolving discourse" of industrial urbanism within the post-Fordist industrial metropolis (Soja, 2000: p 157).

Although there is a rich mixture of industries and firms types situated within inner city sites, from traditional craft production and informal services, to highly specialised advanced-technology industries, this article has demonstrated that the genuinely "new" elements of the New Economy include: (I) The extent and scale of new industry development within the inner city, as well as the variegation of New Economy districts, sites, and production ensembles; (II) The hybridised nature of industries and firm types which comprise the ascendant, defining sectors, incorporating both design-oriented advanced-technology industries (such as Internet services, software design, and computer imaging), and also increasingly technology-intensive creative and cultural services, including graphic design, industrial design, and architecture; and (III) The new divisions of production labour (social, spatial, and technical) associated with these inner city industrial clusters. The intimacy of engagement between the working and social worlds, and the marked affinity between firms and creative workers for intensely localised environmental conditions (buildings, streetscapes, spaces), also constitute distinctive features of the inner city’s New Economy.

The New Economy experience clearly differs from place to place, but we can readily identify a series of (on balance) favourable outcomes. These include (1) contributions to the regeneration of local communities, (2) growth in employment and high-value output, (3) the preservation of heritage buildings and sites though adaptive re-use, (4) positive regional growth effects, (5) more balanced development patterns within the urban core, (6) increased vitality of inner city neighbourhoods, and (7) complements with new development trajectories within the metropolitan region (notably the emergence of cultural and knowledge-based sectors and industries; see Hall, 1998 and Florida, 2002). There is also an important demographic feature to acknowledge, as younger workers are significantly over-represented within New Economy industries, although the increasing skill and knowledge requirements of New Economy industries and occupations present major entry barriers for many.

There are of course more problematic features of New Economy development within inner city districts, including (direct or indirect) community dislocation, social polarisation tendencies, and the costs associated with high levels of industry volatility. But the precise nature of outcomes vary considerably from place to place, contingent upon specific locational, environmental and policy conditions, indicating a clear need for more comparative research on the New Economy phenomenon within the metropolitan core. Given the scale, complexity and consequentiality of the New Economy experience, there is rich potential for innovative scholarship across a diverse range of issues and problems, including (1) investigations of the mix of production regimes (including residual Fordist and pre-Fordist, as well as post-Fordist, production) within inner city sites, focussing on aspects of coexistence, complementarity, and conflict, and including case studies of representative industry groups within each regime; (2) the nature of occupational change (as outlined by Florida, Pratt, and others), and the need for comparative study of changing divisions of labour (social, spatial, and technical) within inner city New Economy districts, which can contribute to the elucidation of new theory on urban social class reformation; and (3) implications of new industry formation for urban structure and land use patterns. Here, depictions of locational chaos and random development patterns advanced in some interpretations of inchoate post-modernism (see for example Dear and Flusty, 1998) appear to be challenged by emergent logics of industrial location presented in this article (and others cited in the narrative), so there is a particularly pressing need for new urban spatial theory which acknowledges contemporary clustering patterns within the inner city.

This new scholarship can usefully inform new planning and urban policy approaches within three policy domains related to new industry formation within the inner city: (1) industry development policy, including cultural industry policies, designed to increase sales, exports, productivity and employment among constituent sectors; (2) local regeneration strategies, which increasingly incorporate policies for New Economy industries as instruments of revitalisation and for inner city communities; and (3) development control and policies for the management of externalities associated with new industry formation. Policies for managing negative externalities tend to be reactive rather than anticipatory. This suggests the need for a more integrated approach to planning for new industry sites in the inner city, incorporating both developmental and regulatory policies to improve the welfare of local neighbourhoods, and to enhance security of tenure in marginal communities, as well as supporting opportunities for New Economy innovation, entrepreneurship, and employment growth.


Acknowledgements
Field work and survey research for this article have been generously supported by a Hampton Fund Research Grant, University of British Columbia (grant no. ORSIL JO-0002). I would also like to acknowledge the expert assistance of Mr. Eric Leinberger, of the Cartographic Division of the UBC Department of Geography in the preparation of the maps, as well as the technical advice provided by Ms. Christine Evans, Centre for Human Settlements, UBC. Andrew Kirby offered both editorial encouragement and a number of pertinent suggestions for revision. Finally, I want to acknowledge Dr. Andy Pratt and Professor Andy Thornley of the London School of Economics and Political Science (departments of Geography and the Environment, and Urban and Regional Planning, respectively) for their generosity in sharing their considerable knowledge of the London case study sites; and to Mr. Stephen Shotland, of the San Francisco Planning Department, for his assistance in scoping and interpreting the South Park-SOMA experience.


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1 For the purposes of this article, the constituent elements of the metropolitan core include (1) the office complex of the Central Business District (CBD); (2) an adjacent CBD fringe of mostly lower-rise commercial and quasi-industrial activities; (3) the former inner city industrial ring now undergoing processes of redevelopment, often in the form of "urban mega-projects" (after Olds, 2001), New Economy districts and sites, and new cultural, recreational, and professional sports facilities, as well as smaller-scale projects and investments such as adaptive re-use; (4) older residential districts, including marginal low-income housing; and (5) new areas of redevelopment close to the central city which we might provisionally term "new frontier districts", including overspill development from the established inner city zone, and the continuing encroachment of New Economy sites upon proximate communities.

2 There is also an interesting question as to the extent to which these inner city New Economy production districts and clusters resemble the classic inner city industrial districts of the 19th century metropolis, an issue raised by Graham and Marvin (2000). There are of course obvious contrasts we can readily acknowledge in the nature of these "species" of inner city industrial districts, separated by the span of a century and a half, notably in the pace of firm start-ups and the volatility of business cycles, production technologies, product mix, and divisions of labour. But there may also be some important commonalities, including the inner city siting of these 19th and 21st century industrial ensembles, clustering propensity, the density of input–output relations (and more particularly backward linkage patterns), and of course the use (and adaptive re-use) of particular building types.

3 Important examples in London include the Clerkenwell Green Association in Clerkenwell, in the London Borough of Islington; the Delfina Trust in Bermondsey Street (Southwark), and the Prince’s Foundation in Hoxton (in the district of Shoreditch, in the Borough of Hackney).

4 There are of course issues of conflict and contestation associated with these processes, particularly in cases where this "reorganisation" of urban space encroaches upon established interests and groups, including residential communities within the metropolitan core, as well as older industrial activities.

5 In the Vancouver case, this recolonisation experience within the CBD has been facilitated by the contraction in head offices and ancillary services, especially the headquarters of large resource industry corporations. Vancouver’s "command and control" functions over a vast provincial staple hinterland have been seriously attenuated by a series of corporate mergers and takeovers, which saw the locus of control shifted to higher-order business centres, such as Toronto and New York. At the same time, rents in Yaletown, the location of choice for many New Economy firms, are now as high (or even higher) than in some precincts of the CBD proper, reflecting the intense competition for space within Vancouver’s signifying inner city precinct.

6 Saxenian’s important investigation of the distinctive cultures of advanced-technology workforces in Silicon Valley and Route 128 in Massachusetts emphasised the importance of social relations in each case, a point also acknowledged by scholars cited in this article concerning the new industry clusters of the inner city. But in contrast to the cohorts of high-technology workers in suburban and exurban settings, our hypothesis is that inner city New Economy workers tend to have more intensive relations and interactions with the localised environment, lifestyles and consumption, and housing markets, including live-work, work-live, and other innovative forms of housing styles and tenures. There is also likely to be a richer, more diverse immediate social and cultural context for inner city workers, reflecting the social pluralism of neighbourhoods and working communities in the metropolitan core, an observation supported by (among others) Richard Florida and Meric Gertler in their studies of the "creative class".




Cities
Volume 21, Issue 2 , April 2004, Pages 89-108