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New Spatial Pattern as an Effect of Globalisation
Hierarchies, Networks, and Markets Gerhard O.
Braun Freie Universität Berlin 1. A new pattern
of spatial and sectoral growth? 2. Changes in the
organisation of companies- from production of
products to money production - from coordinated
to liberal capitalism- fragmentation and
selective growth (3. Changes in the spatial
organisation of companies) 4. New spatial pattern
at different scales
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Change in Occupation 1997-2003
Employment Development (Change in )
Hamburg

• Growth and Decline in
• Occupation in Close
• Vicinity is Even More
• Siginificant Than in
• Demography

Berlin
Frankfurt
Munich
decrease increase
Stuttgart
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Development Paths of Joint Stock Companies
TNCs
Real Estate
Hedgefonds
Private Equity Comp.
Shareholders, Financial Services
MNCs large scale
Shares on product-clusters
Core business, shake out
change in entrepreneurial goals
power
Idea product shares contrrol
over space
Multiple product leadership
Family Operated Companiesmedium scale
Product diversification, functional integration
Product monopoly, divisional consolidation
Traditional Companiessmall scale
Product market leader
Product identification
Product development
product- vs. money-orientation
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Decay of Deutschland AG
Network of Shares in 1996
Capital Investment Flows
Source http//www.mpi-fg-koeln.mpg.de/ak/themen/d
oks/Deutschland_AG_1996bis2004.pdf
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Decay of Deutschland AG
Network of Shares in 2004
Capital Investment Flows
Source http//www.mpi-fg-koeln.mpg.de/ak/themen/d
oks/Deutschland_AG_1996bis2004.pdf
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Stage I Structural Changes in Production From
Vertical, In-House to Horizontal, In-Region
Production
Vertical (In-House) ProductionIndustrialisation
Distribution, Logistics
In-House
Assembling
Production
Engineering
backward/ forward linkages
Horicontal (In-Region) Production Fordism
RD
HQ, Management
In-Region
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Stage II Post-FordismConcentration and
Dispersion of Production Chain-Links
Pilot-Production
HQs, Prof. Sercives
Production
Production
RD
Production
ICT
Networks
Networks
Regional Networks
ICT
ICT
Vertical Concentration
High Tech Manufacturing, Engineering, Creative
Milieus
Markets
Universities, Research Cluster, Creative Milieus
Logistik
Chain Links of TNCs
Professional Services
Permanent adjustments
Spatial Concentration Dispersion
Markets
Networks
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Globalisation Hierarchies, Markets, and Networks
Information, Management
Backwash effects
H/LDC B
Research and Development
Spread effects
Know how
LDC A
Mega City I Regional HQs
HDC
Global City, HQs
Mega City II
Investment,, Technology, Infrastructure
Growth Pole, RD, regional HQs
H/LDC C
Profit, Products, Economic control
Regional Markets
G. Braun
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Strategic Spatial Pattern of Nestlè Germany
Thresholds of population size
x Berlin
x Bonn
HQs/Lobby RD Logistic Production
community tax per capita
Source Deutscher Städtetag ed., 2004
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Employment Development (Change in )
Fragmented Pattern Value Chain Organisation of
Nestlè Germany
P
HQ Head Quarters
P
P
L Lobby
P
RD Research Develop.
L
P
P
P
T
T Transport, Logistic
P
T
P Production
P
P
T
P
L
P
P
T
L
P
HQ
P
HQ
P
P
T
decrease increase
T
T
HQ
P
P
RD
P
T
P
T
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Fordistic Economy and Urban Social Organisation
Complete (continuous) production chain within an
urban region
HQ,Mana-gement, Controlling, Prod.orient.Services
RDProduct Process-develop-ment
Market,Con-sumption
Engineerng Pilot-Production
Logistics, Distribution
Assem-bling
Production
Urban Region
Lower social status
Middle social status
Middle social status
Upper social status
Social Groups
Contiguous spatial distribution of contiguous
social groups
Number
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Discrete Production Chain Within a Region
Urban Region
Social Groups
Increasing discrete spatial distribution of
fragmented (discrete) social groups
Number
Post-Fordistic Economy and Urban Social
Organisation
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Is the Hierachical Pattern Overlayed, Overruled,
or Replaced by a Market and/ or Network Pattern?
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Is There a New Spatial Pattern as an Effect of
Globalisation? Yes, there is. The system
develops more complex.
Thank you for your attention
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Change in Demography 1997-2003
Population Development (Change in )

• Growth and Decline
• in Close Vicinity

decrease increase
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Change in Employment (Trend Analysis)
Trend in Employment Development
decreasing increasing
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Spatial Distribution of Head Quarters in Five
Interlinked Economic Sectors

• Legend
• Energy
• Car Production
• Car Parts
• Commercial Transportation
• Tourism

Source Metro-Seminar
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Concentration and Dispersion of Production
Chain-Links
Pilot-Production
HQs, prof. Sercives
RD
Production
Production
Production
TNC3
TNC2
Vertical Concentration
TNC1
Logistik
Chain-Link of TNCs
Spatial Concentration Dispersion
Permanent Adjustment
Markets
Stage II Structural Changes in Production
(Post-Fordism)
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Expansion
DaimlerChrysler, 2004, Automotive
IndustriesEmployees 384.723 in Germany
185.723Change 1997/2004 -17.8 (Transfer of
Shares)
Welt AG (joint-stock company)born 1998 dead
2004
Mercedes Car Group
Chrysler Group
Daimler-Benz European Market, Technology
luxury cars
Chrylser US Market SUV, Vans, light trucks,
Commercial Vehicles
Mitsubishi Motors Corp.
Services
merger
European Aeronautics
MTU Friedrichshafen
Mitsubishi Asian Markets
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Restructuring
Adidas, 2004, Sport Products Employees 17
023 in Germany 2580 (40 nations 40 employees
in production in 1984 3.000 in all sectors of
employment)Change 1997/2004 61.1
Product ManagementControlling, Design
Design Tokyo
Buying Hongkong
Production Asiapreferably supplier850
companies, 500 000 employees(small / medium
scale businesses)
Product Development Portland
Marketing Amsterdam
Adidas HQ
Design New York
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Specialisation, Niches
ZF, 2004, Engineering Industries, supplier of
automotive industries. Sectoral Market
Leader.Employees 54.500 in Germany
34.000Change 1997/2004 38.2
12 ZF global branches
High Re-investment into RD and Production
ProcessesMilieu Innovation, Quality,
Cooperation, Interaction, Competition, Rivalry,
Proximity to Customers,Trust
ZF
Regional system of highly specialised suppliers
and of creative milieu
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Suppression, Buying Out
Hoechst, 2004, Chemical Industry Employees 15
628 (max. 180.000) in Germany 8518 Change
1997/2004 -53,7
Pharma Sanofi
Pesticide Bayer
PaintDupont
Plant ProductionThyssen-Krupp
Chem. Industry Private Equity C.
Merger with Rhone-Poulenc, 1999
Sanofi-Aventis 2005
Today 23.000 employeesin 80 different
companies(small/ medium scale)
Sanofi 2005
Textile paintPrivate Equity C.
Hoechst industrial park Frankfurt formerly
25.000 Hoechst employees
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Decay of Deutschland AG
Network of Shares in 2000
Capital Investment Flows
Source http//www.mpi-fg-koeln.mpg.de/ak/themen/d
oks/Deutschland_AG_1996bis2004.pdf
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Network Interaction
Firm A
Firm C
Firm B
Management
vertical contacts
R D
Production line
horicontal contacts
Official information flows
G. Braun
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Network Interaction Community Type
Firm A
Firm C
Firm B
Management
vertical contacts
R D
Production line
Informal contacts
horicontal contacts
neighbourhoods
G. Braun
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Network Interaction Contact System
Firm A/B
Firm C
Firm B
Firm A
Management
vertical contacts
R D
Production line
horicontal contacts
G. Braun
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Network Interaction Lobby System
Firm A
Firm C
Firm B
Lobby
Management
vertical contacts
R D
Production line
horicontal contacts
Region
Influence on regional politics
Lobby
G. Braun
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Development Paths Ties and Innovation
development path 1
strong
development path 3
Ties
development path 4
development path 2
weak
Innovation
Opportunity Inception Growth Maturity
Decline Identification
G. Braun, 2003 Source Tracey P. G.L.Clark, 2003
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Lobbynetzwerke
Lobby Networks of Nestlè
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Thresholds of population size
HQs RD Logistic Production
Quelle eigene Darstellung nach Deutscher
Städtetag Hrsg., 2004 und Internetrecherche
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Vernetzungen im Vorstand I
Quelle eigene Darstellung nach www.nestle.de
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Vernetzungen im Vorstand II
Quelle eigene Darstellung nach www.nestle.de