Dublin: Economic Growth and Competitiveness in the Functional Urban Region by Dr. Brendan Williams Lecturer in Urban Economics and Faculty Research Fellow Faculty of the Built Environment, Dublin Institute of Technology Bolton St. Economic Background The 1990s in Ireland were characterised by rapid economic growth, with average annual GNP growth rates of 7 to 8%, greatly increased spending power, increased manufacturing output and service provision, improving educational standards and new infrastructure. The transformation of the Dublin Urban Economy commenced in the late 1980s with a substantial shift away from older manufacturing industry and towards services. This restructuring involved major closures of previously tariff-protected industries and unemployment rose to a national level of 17% with higher levels in urban areas. By 2000 the reversal in economic trends has seen unemployment fall below 4% nationally and by May of that year unemployment applying I.L.O. criteria stood at 3.4%. These figures represent employment expansion over the period 1993 - 2000 of 150,000 to a then total for Dublin of 534,000 (CSO, 2000). The National population by the end of 2001 was at its highest level in 120 years at 3.84 million with immigration at 46, 000 per annum, of which a large part is to Dublin (CSO 2001). While the importance of IT and the software industry is widely recognised and the Dublin Region is seen as a new technology led economy the key role that such new employment has played in shaping the new urban development pattern is only new becoming clear. The location of new employment centres gives a clear indication of the emerging edge city employment pattern. While the growing financial services sector (now employing over 30,000) remains central city based many of the recently emerging sectors have tended to locate at suburban and office park type locations. While the process of economic globalisation has presented the region with significant opportunities the future and continuing economic development of the region is also threatened by global exposure of the export orientated sectors in the face of economic downturn. Nevertheless there remains a broad consensus to develop a high knowledge based and high technology based productive sector. The trend at end of 2001 is that while the new economy downturn has resulted in job losses and closures such as Gateway, Motorola and others the current skills and labour shortages have seen significant numbers of such staff re-employed elsewhere. Whether this scenario continues if the IT sector restructuring accelerates is of course open to question. The previous absence of a definite regional strategy or plan for the development of land use and transportation in the Dublin city region has seen economic and population growth occurring in a strategically uncontrolled manner. In particular the failure to meet the regions expanding infrastructural requirements is now placing constraints on the economic potential of the region. What emerges is a picture of consolidation of the city with a number of economic growth nuclei influencing the future shape and direction of development activity. Also evident is the growth of a significantly expanded commuter belt up to 80km around Dublin. Understanding this pattern is a necessary first step in achieving maximum economic and social benefits from such development and minimising the negative impacts of the development boom. Forms of Urban Development Urban development is expressed through a variety of distinct processes which act to constrain and influence the competitive ability of metropolitan areas. Each metropolitan region is the product of a number of principal economic, social, physical and political factors that have influenced the respective character of each urban region to varying degrees. All of the urban areas under investigation have been affected by urban development processes, including: Agglomeration of economic activity Commercial enterprises tend to cluster together in order to achieve economies of scale and derive the benefits associated from complementarity and the use of a developed infrastructure. Major urban areas tend to offer a wide range of infrastructural supports to businesses, including transport (roads, rail, airports, ports), telecommunications, educational institutions and ancillary services. In addition, the agglomeration process tends to be self-reinforcing, as incoming enterprises recognise the economic benefits offered to existing commerce and accordingly locate adjacent to these. In essence, businesses that cluster adopt a risk-minimisation strategy. Restructuring of economic activity As a direct consequence of the trend toward globalisation of commerce, many traditional industries in Europe and the developed world, particularly of a labour intensive nature, have relocated to low-wage developing economies. The major metropolitan regions of Europe have been affected by these developments, with basic assembly, heavy industry, food processing and clothing manufacturing experiencing plant closures. New inward investment has tended in recent years to be high-technology and internationally-traded service nature, which requires a skilled labour force. The consequence for the built fabric of cities as a result of these trends has been the physical decline of older manufacturing and port areas, and the economic and social exclusion of the less skilled and unskilled workforce contributing to increased unemployment rates. Within Europe, metropolitan regions have increasingly engaged in competitive strategies with each other in order to attract a finite amount of new commercial activity. Today, inward investment demands a different and more comprehensive range of facilities compared to industry in previous years: · The quality and capacity of telecommunications systems have become a major priority for the Information Technology and service sectors. Telecommunications will continue to increase in relative importance with the growth of the World Wide Web. · The importance of air cargo facilities has increased due to the use of this type of transport for lightweight electronic components used by the electronics sector. This form of transportation is of particular importance to Dublin. · Educational facilities, particularly third-level institutions, with a heavy emphasis on research activity and links to industry have become a vital asset for cities wishing to maintain a competitive edge. A concentration of specialist research activity can facilitate the development of zones of high technology-based innovative activity, also known as technopoles. Examples of technopoles in Europe include the M4 Corridor to the west of London and the Massy area, located to the south of Paris. · Cultural, social and environmental assets of cities are becoming more important in terms of their ability to compete on a global basis. Prospective enterprise increasingly seeks locations with a high degree of social and environmental standards, and these factors will be accorded more importance in the coming years. more