A metropolitan economy refers to the cohesive, naturally evolving concentration of industries,

commerce Commerce is the organized Complex system, system of activities, functions, procedures and institutions that directly or indirectly contribute to the smooth, unhindered large-scale exchange (distribution through Financial transaction, transactiona ...

, markets, firms,

housing Housing refers to a property containing one or more Shelter (building), shelter as a living space. Housing spaces are inhabited either by individuals or a collective group of people. Housing is also referred to as a human need and right to ...

human capital Human capital or human assets is a concept used by economists to designate personal attributes considered useful in the production process. It encompasses employee knowledge, skills, know-how, good health, and education. Human capital has a subs ...

infrastructure Infrastructure is the set of facilities and systems that serve a country, city, or other area, and encompasses the services and facilities necessary for its economy, households and firms to function. Infrastructure is composed of public and pri ...

and other economic elements that are comprised in a particular

metropolitan area A metropolitan area or metro is a region consisting of a densely populated urban area, urban agglomeration and its surrounding territories which share Industry (economics), industries, commercial areas, Transport infrastructure, transport network ...

. Rather than the definition of distinct urban and

suburban A suburb (more broadly suburban area) is an area within a metropolitan area. They are oftentimes where most of a metropolitan areas jobs are located with some being predominantly residential. They can either be denser or less densely populated ...

economies that evolve and function independently, a metropolitan economy encompasses all interdependent jurisdictions of particular regional clusters. This type of economy has all its units functioning together in a trans-boundary landscape that often crosses city, county, state, province, and even national lines.Mark, M., Katz, B., Rahman, S., and Warren, D. Brookings MetroPolicy: Shaping A New Federal Partnership for a Metropolitan Nation. Metropolitan economies expand from the parochial view taken in urban economics which focuses entirely on a city's spatial structure, and broadens it into a metropolitan's spatial and social/economic structure.

Development

In the latest evolution of global economic restructuring, metropolitan economies have become as experts at the

Brookings Institution The Brookings Institution, often stylized as Brookings, is an American think tank that conducts research and education in the social sciences, primarily in economics (and tax policy), metropolitan policy, governance, foreign policy, global econo ...

Metropolitan Policy Program assert, "the engines of the New Economy".

Globalization Globalization is the process of increasing interdependence and integration among the economies, markets, societies, and cultures of different countries worldwide. This is made possible by the reduction of barriers to international trade, th ...

has essentially reconfigured localities, placing value on the unique, innovative assets that have been historically formed and attuned to the local area. Embodied within metropolitan economies is what Saskia Sassen describes as the global city but branches out to include the

central business district A central business district (CBD) is the Commerce, commercial and business center of a city. It contains commercial space and offices, and in larger cities will often be described as a financial district. Geographically, it often coincides wit ...

and its

satellites A satellite or an artificial satellite is an object, typically a spacecraft, placed into orbit around a celestial body. They have a variety of uses, including communication relay, weather forecasting, navigation ( GPS), broadcasting, scientif ...

. The accelerated advancement of transportation and communications, particularly with capital flight,

outsourcing Outsourcing is a business practice in which companies use external providers to carry out business processes that would otherwise be handled internally. Outsourcing sometimes involves transferring employees and assets from one firm to another ...

, and

supply chain A supply chain is a complex logistics system that consists of facilities that convert raw materials into finished products and distribute them to end consumers or end customers, while supply chain management deals with the flow of goods in distri ...

logistics Logistics is the part of supply chain management that deals with the efficient forward and reverse flow of goods, services, and related information from the point of origin to the Consumption (economics), point of consumption according to the ...

, has virtually removed factor endowments and

comparative advantage Comparative advantage in an economic model is the advantage over others in producing a particular Goods (economics), good. A good can be produced at a lower relative opportunity cost or autarky price, i.e. at a lower relative marginal cost prior t ...

concepts. In its wake, metropolitan economies are competing globally in specialized sectors and fields tailored to their regional clusters, a term coined by

Harvard Harvard University is a private Ivy League research university in Cambridge, Massachusetts, United States. Founded in 1636 and named for its first benefactor, the Puritan clergyman John Harvard, it is the oldest institution of higher lear ...

Professor

Michael Porter Michael Eugene Porter (born May 23, 1947) is an American businessman and professor at Harvard Business School. He was one of the founders of the consulting firm The Monitor Group (now part of Deloitte) and FSG, a social impact consultancy. ...

(i.e.,

information technology Information technology (IT) is a set of related fields within information and communications technology (ICT), that encompass computer systems, software, programming languages, data processing, data and information processing, and storage. Inf ...

in greater

San Francisco San Francisco, officially the City and County of San Francisco, is a commercial, Financial District, San Francisco, financial, and Culture of San Francisco, cultural center of Northern California. With a population of 827,526 residents as of ...

; leather shoe and apparel textiles industry in

Florence, Italy Florence ( ; ) is the capital city of the Italian region of Tuscany. It is also the most populated city in Tuscany, with 362,353 inhabitants, and 989,460 in its metropolitan province as of 2025. Florence was a centre of medieval European t ...

;

digital media In mass communication, digital media is any media (communication), communication media that operates in conjunction with various encoded machine-readable data formats. Digital content can be created, viewed, distributed, modified, listened to, an ...

and

electronics Electronics is a scientific and engineering discipline that studies and applies the principles of physics to design, create, and operate devices that manipulate electrons and other Electric charge, electrically charged particles. It is a subfield ...

Seoul, South Korea Seoul, officially Seoul Special Metropolitan City, is the capital city, capital and largest city of South Korea. The broader Seoul Metropolitan Area, encompassing Seoul, Gyeonggi Province and Incheon, emerged as the world's List of cities b ...

).Porter, M. E. Clusters and the New Economics of Competition More and more developed nations are becoming defined and fueled by their local, metropolitan economies. Before, analysis focused on what happens ''inside'' companies, how inputs of labor and capital are used for

productivity Productivity is the efficiency of production of goods or services expressed by some measure. Measurements of productivity are often expressed as a ratio of an aggregate output to a single input or an aggregate input used in a production proce ...

output Output may refer to: * The information produced by a computer, see Input/output * An output state of a system, see state (computer science) * Output (economics), the amount of goods and services produced ** Gross output in economics, the valu ...

. Now, what happens ''outside'' companies in the immediate business environment is just as important. With global competition in

innovation Innovation is the practical implementation of ideas that result in the introduction of new goods or service (economics), services or improvement in offering goods or services. ISO TC 279 in the standard ISO 56000:2020 defines innovation as "a n ...

of processes and products, the clustering of knowledge (such as the research community), consulting firms, skilled laborers, financial institutions, legal services, government entities, and specialized technology industries have become vitally important. Such agglomeration and diversity, unique to a metro, catalyzes growth. Additionally, auxiliary industries in local services and trades evolve in such metropolitan areas, such as the production of wind turbines in the

automotive industry The automotive industry comprises a wide range of company, companies and organizations involved in the design, Business development, development, manufacturing, marketing, selling, Maintenance, repairing, and Custom car, modification of motor ve ...

of the greater

Detroit Detroit ( , ) is the List of municipalities in Michigan, most populous city in the U.S. state of Michigan. It is situated on the bank of the Detroit River across from Windsor, Ontario. It had a population of 639,111 at the 2020 United State ...

and

Cleveland Cleveland is a city in the U.S. state of Ohio and the county seat of Cuyahoga County. Located along the southern shore of Lake Erie, it is situated across the Canada–U.S. maritime border and approximately west of the Ohio-Pennsylvania st ...

areas. Cultural ambience even emerges with the area's quality of place and historical heritage in the form of the arts (

art galleries An art gallery is a room or a building in which visual art is displayed. In Western cultures from the mid-15th century, a gallery was any long, narrow covered passage along a wall, first used in the sense of a place for art in the 1590s. The long ...

, music halls, publishing houses), non-profit venues ( museums,

performing arts The performing arts are arts such as music, dance, and drama which are performed for an audience. They are different from the visual arts, which involve the use of paint, canvas or various materials to create physical or static art objects. P ...

theaters Theatre or theater is a collaborative form of performing art that uses live performers, usually actors to present experiences of a real or imagined event before a live audience in a specific place, often a Stage (theatre), stage. The performe ...

), and public assets (

libraries A library is a collection of Book, books, and possibly other Document, materials and Media (communication), media, that is accessible for use by its members and members of allied institutions. Libraries provide physical (hard copies) or electron ...

, parks).

Legislation

Consequently, this new configuration of metropolitan economies requires equally new and adaptive government policymaking. For effective legislation, contemporary nations must reformulate their understanding of place, moving away from disparate

state State most commonly refers to: * State (polity), a centralized political organization that regulates law and society within a territory **Sovereign state, a sovereign polity in international law, commonly referred to as a country **Nation state, a ...

provinces A province is an administrative division within a country or state. The term derives from the ancient Roman , which was the major territorial and administrative unit of the Roman Empire's territorial possessions outside Italy. The term ''provi ...

, and

regions In geography, regions, otherwise referred to as areas, zones, lands or territories, are portions of the Earth's surface that are broadly divided by physical characteristics (physical geography), human impact characteristics (human geography), and ...

and embracing a network of integrated metropolitan economies. Hence, metros must become a recognized actor among the usual federal-state-local apparatus. Additionally,

government department Ministry or department (also less commonly used secretariat, office, or directorate) are designations used by first-level Executive (government), executive bodies in the Machinery of government, machinery of governments that manage a specific se ...

s and

ministries Ministry may refer to: Government * Ministry (collective executive), the complete body of government ministers under the leadership of a prime minister * Ministry (government department), a department of a government Religion * Christian mi ...

must acknowledge the interplay of arenas such as the inflexible tandem of housing and transportation as well as energy and the environment. Coordinated efforts across agencies and programs must take place to ensure best performance outcomes and high efficiency. Even more, management must change from prescriptive, formulaic, hierarchical leadership to more nimble, networked, and compact collaborations. These organizational reforms would influence a host of policies including among others

transportation infrastructure Transport (in British English) or transportation (in American English) is the intentional movement of humans, animals, and goods from one location to another. Modes of transport include air, land ( rail and road), water, cable, pipelines, ...

systems,

employment Employment is a relationship between two party (law), parties Regulation, regulating the provision of paid Labour (human activity), labour services. Usually based on a employment contract, contract, one party, the employer, which might be a cor ...

hubs,

energy Energy () is the physical quantity, quantitative physical property, property that is transferred to a physical body, body or to a physical system, recognizable in the performance of Work (thermodynamics), work and in the form of heat and l ...

standards, green spaces, and

environmental protection Environmental protection, or environment protection, refers to the taking of measures to protecting the natural environment, prevent pollution and maintain ecological balance. Action may be taken by individuals, advocacy groups and governments. ...

. For instance, the incorporation of metropolitan planning organizations (MPOs) in US DOT programs and emergence of metropolitan governments worldwide are evidence of the impact of metropolitan economies. Other concrete examples include building the Metrorail system, which required coordinated agreement between the Washington, D.C.,

Virginia Virginia, officially the Commonwealth of Virginia, is a U.S. state, state in the Southeastern United States, Southeastern and Mid-Atlantic (United States), Mid-Atlantic regions of the United States between the East Coast of the United States ...

, and

Maryland Maryland ( ) is a U.S. state, state in the Mid-Atlantic (United States), Mid-Atlantic region of the United States. It borders the states of Virginia to its south, West Virginia to its west, Pennsylvania to its north, and Delaware to its east ...

environs; likewise, high-speed rail in Spain which connects virtually every large metro in the country.

Chicago Chicago is the List of municipalities in Illinois, most populous city in the U.S. state of Illinois and in the Midwestern United States. With a population of 2,746,388, as of the 2020 United States census, 2020 census, it is the List of Unite ...

's Plan for Transformation in overhauling the city's

public housing Public housing, also known as social housing, refers to Subsidized housing, subsidized or affordable housing provided in buildings that are usually owned and managed by local government, central government, nonprofit organizations or a ...

stock has to work together with local stakeholders on lease agreements,

land use Land use is an umbrella term to describe what happens on a parcel of land. It concerns the benefits derived from using the land, and also the land management actions that humans carry out there. The following categories are used for land use: fo ...

economic development In economics, economic development (or economic and social development) is the process by which the economic well-being and quality of life of a nation, region, local community, or an individual are improved according to targeted goals and object ...

, and local taxes. The Triangle Area's high tech life sciences research hub, the Research Triangle Park, continually works together with surrounding research universities in Durham, Raleigh, and Chapel Hill.

Denver Denver ( ) is a List of municipalities in Colorado#Consolidated city and county, consolidated city and county, the List of capitals in the United States, capital and List of municipalities in Colorado, most populous city of the U.S. state of ...

's expanded metropolitan transportation system needed a surrounding mayor caucus for joint efforts. The

Hong Kong Hong Kong)., Legally Hong Kong, China in international treaties and organizations. is a special administrative region of China. With 7.5 million residents in a territory, Hong Kong is the fourth most densely populated region in the wor ...

Airport and

Shenzhen Shenzhen is a prefecture-level city in the province of Guangdong, China. A Special economic zones of China, special economic zone, it is located on the east bank of the Pearl River (China), Pearl River estuary on the central coast of Guangdong ...

Airport dual services link that aim to capitalize on "the synergy of their complementary flight networks" required agreement between

and

China China, officially the People's Republic of China (PRC), is a country in East Asia. With population of China, a population exceeding 1.4 billion, it is the list of countries by population (United Nations), second-most populous country after ...

. The

Channel Tunnel The Channel Tunnel (), sometimes referred to by the Portmanteau, portmanteau Chunnel, is a undersea railway tunnel, opened in 1994, that connects Folkestone (Kent, England) with Coquelles (Pas-de-Calais, France) beneath the English Channel at ...

, an undersea rail tunnel under the

English Channel The English Channel, also known as the Channel, is an arm of the Atlantic Ocean that separates Southern England from northern France. It links to the southern part of the North Sea by the Strait of Dover at its northeastern end. It is the busi ...

, required cooperation and financing between the French and Britain governments. The Port of

Rio de Janeiro Rio de Janeiro, or simply Rio, is the capital of the Rio de Janeiro (state), state of Rio de Janeiro. It is the List of cities in Brazil by population, second-most-populous city in Brazil (after São Paulo) and the Largest cities in the America ...

serves the city and surrounding states in

Brazil Brazil, officially the Federative Republic of Brazil, is the largest country in South America. It is the world's List of countries and dependencies by area, fifth-largest country by area and the List of countries and dependencies by population ...

. All these partnered, comprehensive initiatives are crucial in metropolitan economies.

Examples

Many examples of the metropolitan economies worldwide include (see links below): *The financial commerce of

and media/entertainment of

Miami Miami is a East Coast of the United States, coastal city in the U.S. state of Florida and the county seat of Miami-Dade County, Florida, Miami-Dade County in South Florida. It is the core of the Miami metropolitan area, which, with a populat ...

, both of which metros contribute a significant share of their state's economies; *The

investment bank Investment is traditionally defined as the "commitment of resources into something expected to gain value over time". If an investment involves money, then it can be defined as a "commitment of money to receive more money later". From a broade ...

s and insurance company capital of

Tokyo Tokyo, officially the Tokyo Metropolis, is the capital of Japan, capital and List of cities in Japan, most populous city in Japan. With a population of over 14 million in the city proper in 2023, it is List of largest cities, one of the most ...

and

headquarters of

Osaka is a Cities designated by government ordinance of Japan, designated city in the Kansai region of Honshu in Japan. It is the capital of and most populous city in Osaka Prefecture, and the List of cities in Japan, third-most populous city in J ...

, both of which metros fuel

Japan Japan is an island country in East Asia. Located in the Pacific Ocean off the northeast coast of the Asia, Asian mainland, it is bordered on the west by the Sea of Japan and extends from the Sea of Okhotsk in the north to the East China Sea ...

's economy; *

Munich Munich is the capital and most populous city of Bavaria, Germany. As of 30 November 2024, its population was 1,604,384, making it the third-largest city in Germany after Berlin and Hamburg. Munich is the largest city in Germany that is no ...

's high-tech agglomeration of automotive engineering,

aerospace Aerospace is a term used to collectively refer to the atmosphere and outer space. Aerospace activity is very diverse, with a multitude of commercial, industrial, and military applications. Aerospace engineering consists of aeronautics and astron ...

communications Communication is commonly defined as the transmission of information. Its precise definition is disputed and there are disagreements about whether Intention, unintentional or failed transmissions are included and whether communication not onl ...

life sciences This list of life sciences comprises the branches of science that involve the scientific study of life – such as microorganisms, plants, and animals including human beings. This science is one of the two major branches of natural science, ...

that contribute greatly to

Germany Germany, officially the Federal Republic of Germany, is a country in Central Europe. It lies between the Baltic Sea and the North Sea to the north and the Alps to the south. Its sixteen States of Germany, constituent states have a total popu ...

's output; *

Mumbai Mumbai ( ; ), also known as Bombay ( ; its official name until 1995), is the capital city of the Indian state of Maharashtra. Mumbai is the financial capital and the most populous city proper of India with an estimated population of 12 ...

's financial district and

Bengaluru Bengaluru, also known as Bangalore (List of renamed places in India#Karnataka, its official name until 1 November 2014), is the Capital city, capital and largest city of the southern States and union territories of India, Indian state of Kar ...

biotechnology Biotechnology is a multidisciplinary field that involves the integration of natural sciences and Engineering Science, engineering sciences in order to achieve the application of organisms and parts thereof for products and services. Specialists ...

industries that have become powerful growing assets for

India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...

; *The

chemical A chemical substance is a unique form of matter with constant chemical composition and characteristic properties. Chemical substances may take the form of a single element or chemical compounds. If two or more chemical substances can be combin ...

products,

textile Textile is an Hyponymy and hypernymy, umbrella term that includes various Fiber, fiber-based materials, including fibers, yarns, Staple (textiles)#Filament fiber, filaments, Thread (yarn), threads, and different types of #Fabric, fabric. ...

transportation Transport (in British English) or transportation (in American English) is the intentional Motion, movement of humans, animals, and cargo, goods from one location to another. Mode of transport, Modes of transport include aviation, air, land tr ...

equipment, and

finance Finance refers to monetary resources and to the study and Academic discipline, discipline of money, currency, assets and Liability (financial accounting), liabilities. As a subject of study, is a field of Business administration, Business Admin ...

in tertiary sector of

São Paulo São Paulo (; ; Portuguese for 'Paul the Apostle, Saint Paul') is the capital of the São Paulo (state), state of São Paulo, as well as the List of cities in Brazil by population, most populous city in Brazil, the List of largest cities in the ...

, which is

's largest metro; *

Toronto Toronto ( , locally pronounced or ) is the List of the largest municipalities in Canada by population, most populous city in Canada. It is the capital city of the Provinces and territories of Canada, Canadian province of Ontario. With a p ...

's agglomeration of the

Automotive industry The automotive industry comprises a wide range of company, companies and organizations involved in the design, Business development, development, manufacturing, marketing, selling, Maintenance, repairing, and Custom car, modification of motor ve ...

Steel Steel is an alloy of iron and carbon that demonstrates improved mechanical properties compared to the pure form of iron. Due to steel's high Young's modulus, elastic modulus, Yield (engineering), yield strength, Fracture, fracture strength a ...

production,

architecture Architecture is the art and technique of designing and building, as distinguished from the skills associated with construction. It is both the process and the product of sketching, conceiving, planning, designing, and construction, constructi ...

and

construction Construction are processes involved in delivering buildings, infrastructure, industrial facilities, and associated activities through to the end of their life. It typically starts with planning, financing, and design that continues until the a ...

all contribute to

Canada Canada is a country in North America. Its Provinces and territories of Canada, ten provinces and three territories extend from the Atlantic Ocean to the Pacific Ocean and northward into the Arctic Ocean, making it the world's List of coun ...

's output.

Notes

References

*Gueterbock, A. F. (1992). Concept, reality, expectations. The Channel Tunnel: Volume 1. Published by the Authors. Proceedings of the Institution of Civil Engineers. *Hong Kong Information Services Department of the Hong Kong SAR Government. Hong Kong 2009: Chapter 13: Transport. Published by Information Services Department of the Hong Kong SAR Government, 2009. *Mark, M., Katz, B., Rahman, S., and Warren, D. MetroPolicy: Shaping A New Federal Partnership for a Metropolitan Nation. Brookings Institution: Metropolitan Policy Program Report. (2008). 4-103. *Porter, M. E. Clusters and the New Economics of Competition. Harvard Business Review. (Nov–Dec 1998). 77–90. *Sassen, S. (1990). Economic Restructuring and the American City. Annual Review of Sociology, 16(1), 465-490.

Development

Legislation

Examples

Notes

References

External links