1–16, 2011

0042-0980 Print/1360-063X Online © 2011 Urban Studies Journal Limited

DOI: 10.1177/0042098010394688

Costanzo Ranci is in the Dipartimento di Architecttura e Pianificazione, Politecnico di Milano, via Bonardi 3, Milan, 20133, Italy. E-mail: costanzo.ranci@polimi.it.

Competitiveness and Social Cohesion in Western European CitiesCostanzo Ranci

[Paper first received, October 2009; in final form, August 2010]

Abstract

European cities are historically characterised by a strong association between social cohesion and competitiveness. However, in recent years, this stability has been affected by strains induced by rising new inequalities and increasing competition among cities. These facts have raised the need for a new understanding of the relationship between cohesion and competitiveness. This paper draws on a selection of social and economic indicators to explore this multifaceted relationship in 50 European cities, selected on the basis of their size and international role. The aims of the analysis are to assess the position of each European city, to identify clusters of cities and to suggest an interpretative hypothesis in order to characterise the particularities of this relationship in European cities.

massively invested by the struggle for compe-tition have also to cope with greater internal inequalities and social polarisation, to the point that “disparities within a given city have largely surpassed disparities between cities” (OECD, 2006, p. 145). Is this also the situa-tion in the big cities of western Europe? There is no doubt that these cities are increasingly integrated in the global economy. However, differently from other global cities, European cities have been historically characterised by a strong association between economic growth and social cohesion (Preteceille,

Introduction

In the past two decades, conflicting trends have characterised the situation of many urban areas across western Europe. The same processes driving an increase in the compe-tition among cities at the global scale have played a role in creating tensions in the social sphere. It is therefore not only the level of competitiveness of cities, but also the impact of such competition on the social cohesion of cities, that is under scrutiny today.

Globalisation seems to be a relevant factor of this situation. As the theory on global cities has pointed out (Sassen, 2000), cities that are

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2000; Haussermann and Haila, 2005). They have historically developed a particular urban regime to manage inequalities and social problems which was founded on a compromise between economic interests in the city and social responsibility (Le Galès, 2002). The 1990s constituted a turning-point in this regard. If national welfare policies underwent a period of retrenchment, the growth of globalisation transformed cities into new competing ‘actors’ fighting for the same resources (Taylor, 2003). While most of the European cities drew advantage from this new situation promoting a new urban growth, they had also to preserve their internal social cohesion. Rising inequalities, demographic changes brought about by ageing and multifaceted immigration and emerging risks of spatial segregation affected many urban areas, triggering potential fric-tions and entailing new political efforts. For many European cities, urban success today does not depend only on their capacity to compete in international markets; it also concerns their capacity to guarantee their own social reproduction (Ache et al., 2008).

Drawing on diffuse macro-level informa-tion made available by Eurostat, this article aims to examine the following questions. Is this particular historical character of European cities still preserved? To what extent does the struggle for competition among cities affect their own social cohesion? What aspects of social cohesion are more likely to be affected?

Competitiveness and Social Cohesion: A Theoretical Discussion

The new centrality of the relationship between competitiveness and social cohesion has been recently stressed by a number of authors (Buck et al., 2005; Ache et al., 2008) as well as institutional bodies (OECD, 2001, 2006). If cities are increasingly recognised as key sites of

economic opportunity (Florida, 2004), then the question becomes not only to what extent these changes impact on social cohesion, but also what role is played by social cohesion in fostering, or limiting, city competitiveness.

In scientific analysis the interplay between competitiveness and social cohesion has been considered from two different per-spectives. According to a liberal perspective, social cohesion is considered as a functional, positively correlated component of urban competitiveness. The crucial role now played by cities in the global economy would draw precisely on their capacity to offer an attrac-tive social environment for post-industrial, non-material economic activities (Begg, 1999; Cheshire, 1999; Buck et al., 2005). As stated by the OECD

There is considerable evidence that a good and attractive environment, including well-performing urban infrastructure, is not an alternative to metropolitan economic success but in fact fundamental to its continuation (OECD, 2006, p. 137).

Gentrification and greater employment opportunities are considered as positive fac-tors because

by providing a context for social interaction and, above all, by supporting larger labour markets, cities should be able to nurture an environment in which tacit knowledge can circulate (OECD, 2006, p. 137).

In this optimistic perspective, competitiveness and social cohesion are therefore considered to be basically convergent.

Even though this approach captures most the peculiarities of post-industrial urban economies dealing with increasing interna-tional competition, it also leaves analytical problems still unsolved. First, the concept of social cohesion is not adequately defined, either theoretically or empirically. It is used as a catch-all concept, not clearly linked to

COMPETITIVENESS AND SOCIAL COHESION 3

the new forms attained by social integration in fragmented, multifaceted urban com-munities. Secondly, the connection between competitiveness and social cohesion, whatever it means, is regarded as a positive synergy, without considering that in post-industrial cities, tensions and conflicts, much more than reciprocity and interdependence, emerge in the interplay between these two dimensions.

Research carried out in the UK in the 1990s (Buck et al., 2005) found no empirical support for this supposed interdependence. Changes in the level of economic performance of British cities during the 1990s were much bet-ter explained by traditional economic factors (level of deindustrialisation, spatial decon-centration) than by the level of globalisation (Buck et al., 2005). Furthermore, no clear correlations between economic competitive-ness and aspects of social cohesion were found (Buck et al., 2005).

Nevertheless, the progressive transition of city economies to post-industrialism may have partially changed this situation. Research more recently carried out on German cities (Panebianco, 2008) and Spain (Lopez et al., 2008) found a positive correlation between social cohesion and competitiveness. According to Panebianco, the good impact of increasing competitiveness among cities on their social cohesion was basically exerted via the labour market and it consisted in a significant decrease in the unemployment rate. In this analysis, however, further crucial aspects of social cohesion—such as income inequality—were not investigated.

To sum up, research shows that conven-tional or academic wisdom about the ‘natural’ complementarity between competitiveness and social cohesion does not have adequate empirical support. If this weak interdepend-ence shows the unrealistic assumptions of neo-liberalism, it should be considered as an important empirical result in itself. It may be hypothesised, indeed, that a lack of necessary interdependence between competitiveness

and social cohesion is the actual condition under which the economic growth of cities comes about in the global era. Whether or not this growth is combined with social cohe-sion is therefore not a matter of normative assumption, but merely one possibility among a broad range of options.

A second theoretical perspective has stressed the social harm that may be caused by increased international competition among cities. According to authors like Castells (1996) and Sassen (1991, 2000), the rise of global financial markets and the introduc-tion of IC technologies have exposed cities to increasing competition with other cities. Moreover, the same process brings about more social polarisation as a consequence of the parallel growth of a low-paid, low-qualified service industry, attracting masses of immigrant workers. The overall effects at the city scale are a growing polarisation in the earnings and work conditions of the popula-tion and a greater segmentation of the social structure due to the contraction of the urban middle class. Therefore, in the global era, the economic growth of cities contributes to social dualism rather than to the expansion of the middle class, as was the case in the three decades after the Second World War.

However, there is evidence that greater inequality in income affecting most of the European cities in the past decade has been more beneficial to the upper class than det-rimental to lower classes. In most European countries, the income of the top decile of the population has significantly increased, while the income level of lower classes has not fun-damentally changed. For example, Hamnett found that

London (like Amsterdam and Paris) has been characterised by an increase in the number and proportion of highly skilled and highly paid professional, managerial and technical workers in the service sector but by a decline in the number of less-skilled workers (Hamnett, 2003, p. 102).

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Increasing inequality has therefore negatively affected the relative position of the traditional middle and lower classes with respect to the emerging class of affluent professionals and managers, but it has not actually increased the risk of absolute poverty and social exclusion. Concepts such as inequality or social distance, in conclusion, seem to describe this situation more adequately than the notions of social polarisation or dualism.

To sum up, the theory of social polarisation in global cities (Sassen, 1991, 2000; Castells, 1996) has to date received weak empirical support in Europe. A large amount of research has identified basic differences between European and American cities, showing that explanatory models that have been convinc-ingly used to describe social trends in US cities are difficult to apply to European cities. It is precisely the stability of the urban middle class that some scholars (Preteceille, 2000; Le Galès, 2002; Oberti, 2007) consider to be the most important factor protecting European cities against social polarisation. However, recent research on London has shown that, as a consequence of rising levels of immigration

alongside the growing proport ion of professional and managerial jobs in London there has also been a small but significant rise in the proportion of low-paid jobs (May et al., 2007, pp. 251–252).

Increased immigration could have contrib-uted to new forms of social polarisation (Wills et al., 2009).To sum up our discussion, previous research shows that, while there is no complementarity between these two aspects, nor is there a mechanical opposition between international competition and social integration. Both the theoretical perspec-tives considered in this discussion prove inadequate. The main difficulty is that both of them are biased by theoretical prejudices claiming to provide a unilateral, but at the same time general, interpretation of this

complicated relationship. Competitiveness and social cohesion can be both opposed and complementary. It depends on the specific conditions under which their relationship takes place (Haussermann and Haila, 2005), including the role played by national and regional welfare arrangements (Mingione, 2005). And it also depends on time and space. European cities exhibit a broad mosaic of possible interrelationships which have still to be categorised. Finding and describing these different configurations is the main purpose of the following empirical analysis.

Concepts and Methodology

Competitiveness and social cohesion are very broad concepts. Previous analysis has often attributed different meanings to these aspects. Therefore a brief discussion of their theoreti-cal and empirical definition is required. The general approach here is to consider aspects that are clearly related to economic indicators in the case of competitiveness, and to social indicators in the case of social cohesion. The challenge consists exactly in exploring the whole range of possible connections, or detachments, between these two aspects.

The data analysed were provided by Urban Audit1 and the analysis focused on 50 west-ern European cities selected on the basis of the following criteria: cities belonging to the EU-15 member-states; cities with more than 800 000 inhabitants.2

The first aspect to be introduced is global competitiveness, by which we mean the economic performance achieved by cities in relation to the role played in the global economy. It is generally accepted that urban competitiveness in the global economy should be considered as a multidimensional concept including various aspects of the economic performance of a city (Gordon, 1999; Boddy, 1999; Camagni, 2002; Turok, 2005; Schwab, 2009). In this paper, three dimensions of global competitiveness will be considered:

COMPETITIVENESS AND SOCIAL COHESION 5

the general level of productivity of the urban economy as it is reflected in standard meas-ures of economic performance; the capacity of the city to attract highly skilled workers and advanced trades; the level of internation-alisation of its economy by considering the specialisation in globalised economic func-tions and the presence of multinational com-panies in the city. The level of productivity is measured through GDP per head weighted by purchasing power parity3 and GDP per employed. We combined these two measures in order to minimise the bias caused by the presence of different levels of inequality in the income distribution due to different activity rates and wage levels in our cities.

Increasing scepticism has spread in the scientific and political discussion about the efficacy of GDP as an indicator of living standards (Stiglitz et al., 2009). However, the same critics recommend, as a way of dealing with these deficiencies, emphasising well-established indicators other than GDP in statistical accounts. This is precisely what we do in this study, by considering more eco-nomic dimensions: the level of globalisation and the accessibility of cities. Globalisation is measured by considering the proportion of employment in financial intermediation and business activities, and a global service firms index4 measuring the international net-working capacity of each city (Taylor, 2003). Accessibility is finally considered through two indicators: a multimodal accessibility index provided by Urban Audit (combining together accessibility by air, by rail and by road), and the proportion of non-domestic flight departures as reported in the same database. Finally, we have a multiple index including many aspects of the cities’ economic performance: productivity, specialisation in advanced services delivery, economic inter-connections at a global scale, accessibility. All these aspects are deeply intertwined with each other as shown by the highly significant correlations (around 0.60).

A second aspect is related to the demographic trends characterising cities. This aspect is crucial in our analysis for many, though controversial, reasons. In economic theory, growth in population has long been con-sidered as a sign of the attractiveness of cities, showing their capacity to offer good living conditions, work opportunities and good chances for the young generations to procreate (Glaeser et al., 1995; Glaeser and Gottlieb, 2006; Storper and Manville, 2006). Moreover, population growth is considered to have a positive influence on the economic conditions of cities, affect-ing their long-term financial sustainability, the size of the working-age population and fostering agglomeration economies and productivity (Turok and Mykhnenko, 2007). However, the empirical evidence supporting this strong association between population growth and economic success is not so large (Hansen, 2001). Moreover, the economic returns of population growth seem to depend on institutional factors, as Turok and Mykhnenko (2007) have shown. To what extent migration towards large cities indicates attractiveness basically depends on the integration model of new migrants: “the stimulus to cities may be lim-ited if the migrants are not integrated into the labour market” (Turok and Mykhnenko, 2007, p. 175). Finally, the relationship between population growth and economic performance is changing over time and space. It may be that part of the supposed advantages of large cities in favouring infor-mation mobility and knowledge externalities could be reversed in a future characterised by increasing diffusion of knowledge and infor-mation networks via Internet interactions.

To sum up, demographic trends seem to play a relevant role in determining the eco-nomic performance, but social cohesion, as well as inclusion policy, could play a crucial role in favouring, or impeding, this positive association.

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Data on both the demographic trends and the population structure will be used to characterise the demographic situation of cities. We will consider first population change 1991–2001 to characterise the main demographic patterns of cities in the 1990s. According to recent demographical analy-sis (Bosker and Marlet, 2006), differentials in urban growth among European cities depend more on their birth rate (or fertility rate) than on migration flows. Therefore, we will consider the general fertility rate (which measures the number of births per 1000 women aged 20–54) for each city to catch the propensity of the population to natural reproduction. Finally, one of the main chal-lenges of European cities comes from the ageing of the population and the consequent increasing financial and care burden taken by the active population (Scharf and Phillipson, 2009). Increase in the old age dependency rate (measured as the ratio between the popula-tion aged >65 years and the population aged between 15 and 65 years) is caused not only by increase in the life expectancy of the popula-tion, but also by the demographic trends of the overall population: indeed, cities showing the highest growth in population have the lowest dependency rate.

The final demographic trends index is the mean of the standardised values of these three indicators (correlations among them are around 0.40). It describes the demo-graphic situation of cities, jointly considering dynamic and structural aspects.

The third aspect to be considered is social cohesion. This is a fuzzy concept, includ-ing heterogeneous dimensions such as social integration, solidarity, inequality, place attachment or identity. Many dif-ferent definitions have been proposed in order to reduce its vagueness (Jenson, 1998; Lockwood, 1999; Berger-Schmitt, 2000; Forrest and Kearns, 2001; Chan and Chan, 2006; Hulse and Stone, 2007). The theoretical background of such definitions

is represented by Durkheim’s notions of social integration and solidarity. While most classifications try to cover the whole range of possible meanings attached to Durkheim’s original concepts (Buck, 2005), there have been recent attempts to assume a more inter-pretative approach. Starting from here, two different perspectives have been developed. On the one hand, aspects that are inherent to mutual trust among citizens, or a sense of belonging to or membership of specific communities or social groups, have been stressed (Chan and Chan, 2006). The basic argument behind this approach is to distin-guish clearly the means and ends of social cohesion in order to concentrate attention on the cultural orientations that seem to be intrinsic to the Durkheimian original con-cept of social cohesiveness.

On the other hand, attention has been focused on group divisions, cleavages or social inequalities limiting the access of citizens to equal opportunities and therefore reducing social inclusiveness (Dahrendorf, 1995). Here, the stress is on the emergence of new economic, ethnic or gender disparities and on urban fragmentation weakening the structural foundations of social integration in contemporary societies (Crouch, 1999; Taylor-Gooby, 2004). This second perspec-tive has also been adopted by the European Commission, which puts social cohesion forward as one of the main ingredients of the so-called European social model (European Committee for Social Cohesion, 2004; European Commission, 2006).

These two perspectives are actually not as different as they pretend to be. The eco-nomic growth of European cities has been historically characterised by the correspond-ing development of social citizenship as the basis for collective solidarity and institutional responsibility. The values of solidarity and mutual trust have therefore been established through the development of citizenship as a social status inextricably connected with

COMPETITIVENESS AND SOCIAL COHESION 7

rights and duties that are institutionally guaranteed, and on the capacity of pub-lic institutions to provide citizens with equal opportunities and social inclusiveness. Therefore, a clear-cut distinction between the means and ends of social cohesion is difficult to find in this context: equal opportunity and inclusiveness do not constitute means for social cohesion, but are fundamental elements of a collective solidarity as a shared identity connecting citizens and not just individuals. They provide the institutional and social grounds on which solidarity and the collective identity of European cities have been histori-cally developed.

Looking at the social and institutional mechanisms contributing to cities’ social cohesion, it emerges that equal opportuni-ties and inclusiveness constitute the two basic elements on which citizenship, as a social and institutional practice, is grounded and has developed in contemporary western European cities.

In this perspective, two main dimensions of social cohesion will be taken into account. The first aspect is equality. Obstacles to an even distribution of opportunities in cities will be investigated by considering gender discrimination, inequity in the level of educa-tion and territorial disparity. Three measures of disparity will be used: a ‘Gini’ index con-sidering the distribution of different levels of education in the population, the gender gap in the activity rate, the gap in the unemploy-ment rate between the core and larger urban zone of the cities.5 A condensed index (mean value of standardised values) combines all these aspects and therefore includes multiple forms of equity.

The second aspect is inclusiveness. In western European cities, the labour market is clearly the main channel for social inclusion, although not the only one. Although widely used to measure urban competitiveness, the general level of employment in a city more properly points to the social impact of

economic growth, which does not necessarily translate into labour extension. Indeed, cities differ greatly not only in the general amount of jobs available to the population, but also in their capacity to reduce explicit or implicit unemployment. Explicit unemployment is shown by the unemployment rate. Implicit unemployment is shown by the level of inac-tivity among the working-age population and it is generally related to women. A complex index of inclusiveness is therefore created calculating the mean of two standardised variables: the female activity rate and the general unemployment rate. As expected, there is a high correlation (-.68) between these two variables.

The Economic Performances of the Cities

Global competitiveness reaches very different levels in EU cities (see Figure 1). Four cities stand out for having a very high perform-ance: Brussels, Paris, London and Frankfurt. Following these are two continental cities, Milan and Munich, and three northern cities, Amsterdam, Copenhagen and Stockholm. Other continental and Nordic cities (not included in the figure) score closely to these cities, among which there are the three North Sea cities of Hamburg, Antwerp and Rotterdam, and the continental cities of Kohn and Wien. A larger group of south European, Anglo-Saxon and French cities are just below the average level, among which there are capital cities such as Berlin, Madrid and Rome as well as big non-capital cities with a relevant national and international economic role such as Manchester, Barcelona and Lyon. Finally, a much larger group of cities has a lower level of competitiveness; these cities are mostly located in southern Europe (Valencia, Oporto, Turin, Naples, Athens), in the ex-industrial areas of the UK (Birmingham, Liverpool) and in the former East Germany (Leipzig and Dresden).

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The global competitiveness index shown in Figure 1 includes many dimensions and cit-ies rank differently according to the various dimensions considered. While productivity is higher in Brussels, Paris and some Nordic cities, only three cities stand out for their level of global connectivity: London, Milan and Frankfurt. Accessibility is higher in London and Brussels. These differences show therefore that competitiveness takes different shapes through Europe. London stands out thanks to its strong interconnection at the global level, even though productivity is not high. Brussels and Paris show very high levels in productivity and accessibility, mainly due to their international status and, in the case of Brussels, to the EU political and administra-tive functions that are located in the city. Milan and Frankfurt excel thanks to their high level of international interconnectivity driven by the high concentration of financial services in these cities. Finally, the Nordic cities show a high performance in productivity but not in globalisation and accessibility. It seems therefore that different paths of economic developments characterise European cities.

Competitiveness and Demographic Trends

Data from Urban Audit enabled us to identify configurations between competitiveness and demographic growth that were distinctive of European cities. As shown by Figure 2, competitiveness and demographic trends are weakly correlated (r = 0.34). All the com-ponents included in our demographic trend index are not significantly associated with the global competitiveness index of EU cities. The only exception is the association between pro-ductivity and population change (r = 0.47), which shows that, in the 1990s, population growth was higher in the best performing cit-ies. Furthermore, city size does not affect this substantial statistical independence.

Nevertheless, the absence of strong statisti-cal causal links between these two variables does not mean that economic growth and population growth are unconnected in spe-cific urban contexts. Indeed, we can identify four groups of cities in which the relationship between competitiveness and demographic trends is marked.

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Figure 1. Global competitiveness index: ranking of 17 western European cities. Source: Eurostat Urban Audit, 2001.

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There are cities where an adequate level of global competitiveness is associated with growth in population and high fertility rates (see Figure 2). This synergy is particularly strong in Scandinavian, Benelux and French cities, as well as in London. In these cities, the availability of maternal benefits and child-care services, as well as good employment opportunities and generous housing policies towards the young, have contributed to raise fertility rates and attract youngsters.

Demographic stability with high economic competitiveness characterises most of the German cities. In these cities, it is a very low fertility rate that particularly contributes to the inertia of the demographic trend, favour-ing as well as the ageing of the population.

A third situation is characteristic of com-petitive cities (like Milan and Barcelona) with particularly critical demographic situations. In these areas, demography has become a serious social problem contrasting with good levels of global competitiveness. It concerns the capacity of these cities to sustain social

reproduction, reversing the outflow from the city of youngsters and satisfying the demand for liveability expressed by the local population.

Finally, there are some cities in southern Europe and ex-industrial British areas where positive demographic trends contrast with very low economic performance, paving the way for more unemployment and social tensions.

To sum up, as expected, we did not find a close association between competitiveness and demographic trends in European cities. This result is consistent with empirical evi-dence about American cities (Hansen, 2001) and contrasts with economic theories assum-ing that high immigration and birth rates are predictive of a good economic growth of cities (Glaeser et al., 1995). This independ-ence can be explained by two main factors: first, the translation of demographic growth into economic success crucially depends on the social inclusion capacity of cities (Turok and Mykhnenko, 2007); secondly, strong economic performance does not necessarily

Figure 2. Demographic trend index and global competitiveness index. Source: Eurostat Urban Audit, 2001.

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bring about more opportunities in the labour market. Much depends on social and institu-tional conditions, including the capacity to support the reconciliation of work and child-care, the provision of affordable housing for immigrants and the general inclusivity of the local labour market (Kazepov, 2005). As such conditions are differently distributed through European cities (Mingione, 2005), then it is not surprising that we found strong dissimi-larities among cities in the way competitive-ness and demography are linked together.

Competitiveness and Inequality

In this section we focus on the association between competitiveness and social inequality.Our data enabled us to consider inequality only in education, gender and territory. Inequality

in education can be considered to some extent as a good proxy for income disparities.

The results shown in Figure 3 do not provide empirical support for the idea of a negative association between competitiveness and inequality in western European cities. European cities exhibit levels of inequality that are largely independent from their levels of global competitiveness (the correlation index is not significant at the 0.05 level). In the absence of comparison with cities of other continents, it is difficult to assess the extent to which this finding is peculiar to European cities. My interpretation is that, in western Europe, certain levels of equity are still a social guarantee not significantly affected by economic performances. Cities with higher levels of competitiveness do not exhibit higher levels of inequality than cities with lower

Figure 3. Inequality index and global competitiveness index. Note: Equality index >0 means that inequality is higher than the average level. Source: Eurostat Urban Audit, 2001.

COMPETITIVENESS AND SOCIAL COHESION 11

performance, nor are the most globalised cities significantly more unequal than others.

If global competitiveness does not sig-nificantly affect the level of inequality in western European cities, it may be that geographical and institutional factors play a more substantive role. Most of the cities showing the highest levels in inequality are indeed located in areas of southern Europe where economic depression and underdevelopment are still dominant. Furthermore, inequality characterises a group of ex-industrial cities in the UK and in central-northern Europe. On the opposite side, high levels in equity are characteristic of Scandinavian and former East German cities. French cities come close to the former, while German-speaking cities are situated in an intermediate position.

How can we explain these results? Equity in western Europe has long been guaranteed by widespread and generous intervention of the state. Welfare programmes and high levels of housing and labour market regula-tion have greatly contributed to preserve equity and social cohesion in most of the European cities, including ex-socialist urban areas. The responsibility of local authorities to protect the most disadvantaged part of population has been only complementary to a wider intervention by the state in redistrib-uting benefits and resources. This situation has not basically changed in the past decade, notwithstanding cuts in welfare expenditures (Pierson, 2001; Starke, 2006; Ferrera, 2008) and state rescaling strategies aimed at dis-mantling the redistributive action of welfare institutions (Brenner, 2004; Garcia, 2006). It could be, therefore, that the national state scale is more appropriate to an understanding of urban equity than the urban scale itself. If European cities are not so much harmed by globalisation as other global cities in the world, this is due to the wide redistribu-tion performed by their own nation-states (Kazepov, 2005).

However, the extension and intensity of state intervention are very varied through western Europe. It should be expected, there-fore, that the level of inequality in the cities much depends on the type of welfare regimes adopted by the nation-states. This is actually the case, as Figure 4 shows. Cities belonging to the Mediterranean welfare regime have the highest score in the inequality index, fol-lowed by cities located in the Anglo-Saxon welfare regime. In these two welfare regimes not only do cities have a higher score, but also they show more variation. Scandinavian and continental cities are finally the most equal situations, with a lower degree of variations.6

Competitiveness and Inclusiveness

According to Gordon, the basic component of competitiveness affecting social cohesion is the demand for labour

The most obvious way in which competitiveness might be expected to affect cohesion would be through the impact of a stronger demand for labour on employment among marginal groups and hence on poverty, via reduced levels of unemployment and involuntary inactivity (Gordon, 2005, p. 84).

Our empirical evidence shows that this asso-ciation is rather complex to describe. Looking at correlations, it seems that productivity is positively associated with the level of employ-ment (r = 0.37), contributing also to decrease implicit unemployment (the correlation with the female activity rate is r = 0.44). This result is consistent with economic theory that points out the positive correlation between firms’ agglomeration in big cities and the extension of employment opportunities for workers (Krugman, 1991; Porter, 1995, 1996; Jensen-Butler, 1999).

While higher inclusiveness is associated with productivity, the same does not hold for globalisation (r = 0.07) and attractiveness (r = 0.19). This fact raises questions about the

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social impact of the increasing internationali-sation of the economies of European cities. Women and young people living in these global cities seem to have no better chances of employment than people living in more locally based or nationally based cities.

There is sense in this result. As Gordon (1999) has already shown, internationalisa-tion does not automatically bring radical changes in the economic arrangement of cit-ies, including the organisation of the labour market. The most significant advantages of globalising urban competition are likely to be taken by highly competitive international specialist centres, while local economic activi-ties are not significantly affected.

This analysis supports the view that pro-ductivity, rather than globalisation, contrib-utes to the general expansion of the labour market. Nevertheless, the consequences of this process are variable and they are a matter of controversy. According to some scholars, increased employment goes together with the deskilling of workers, because it mainly

takes place in low-skilled and underpaid services highly attractive to immigrants, the outcome being the progressive polarisa-tion of urban societies (Sassen, 1991, 2000; Wacquant, 2007). According to others, new employment opportunities are mainly to the benefit of those who occupy higher and already-privileged positions in the social scale, without substantially altering the work conditions and well-being of lower social groups (Brint, 1991; Preteceille, 2000; Burgers and Musterd, 2002; Hamnett, 2003). In the end, the crucial question is: who in a city does benefit from the increased employ-ment opportunities that are brought by a high level of productivity?

Our data provide a partial answer to such a question. A significant positive correlation between competitiveness and educational equality has emerged (r = 0.41). The more cities are competitive, the more the gap between high and low levels of education diminishes. This holds especially true for continental cities, while in Scandinavian and

Figure 4. Range of variation in the inequality index of European cities, according to the welfare regime (means per welfare regime). Source: Eurostat Urban Audit, 2001

COMPETITIVENESS AND SOCIAL COHESION 13

East German cities education equity is very high due to the traditional strong investment of the state in these policies. Conversely, southern European cities, no matter what their competitiveness, show a high level of inequality in education.

Higher global competitiveness correlates with more equity and a higher general level of education in the population, and not with polarisation.7 It seems therefore that high productivity levels, inclusiveness of the labour market, prevalence of a highly skilled and well-educated population, and less ine-quality in education, reciprocally interweave to create a favourable urban environment for the social inclusion of both talented workers and workers at risk of exclusion. This actu-ally happens, however, only in some of the western European cities here considered, where public investments in education and social welfare are very high. In many cities the struggle for global competition does not open up great job opportunities, nor does it favour an increase in the education level of the population.

Conclusion

This analysis has shown that, in western Europe the relationship among social cohe-sion and global competitiveness is very com-posite and differentiated by city. Data show the absence of a statistical correlation between these two dimensions, which gives support to the hypothesis that there are specifically European patterns of economic development and internationalisation. An increase in the level of global competitiveness of cities does not necessarily increase their level of inequal-ity or inclusiveness. These two variables operate independently, giving rise to several possible combinations.

These findings support the hypothesis that, in western Europe, the question of social equity is relatively separate from the positive or negative dynamics of competitiveness and

economic growth. As discussed in the paper, it is mainly the solid tradition of national welfare systems, together with the specificity of the social structure of European cities, which still today anchors the population to a basis of social rights able to mitigate inequalities. Therefore, many of the remark-able differences in the social cohesion of cities are due to national rather than local features. State intervention in social welfare still makes a difference in the context of the well-protected, affluent countries of western Europe (Letho, 2000; Hausserman and Haila, 2005).

As a consequence of this disconnection between competitiveness and social cohesion, European cities do not run a high risk of inequality. Nevertheless, this fact also means that high levels in global competitiveness do not mechanically have positive impacts on the social conditions of the European urban population. If globalisation is today one of the basic components of urban competition, high international connectivity does not guar-antee that economic returns and additional opportunities will be taken by large parts of the urban population.

These results suggest that further close examination is required of this complex, and increasingly crucial, potential inter-dependence. The mechanisms by which competitiveness and social cohesion are actually connected, or disconnected, should be investigated in different cities, by focus-ing on the areas of possible co-ordination or trade-offs between them. The role of the welfare state is still crucial in determining the conditions under which globalisation and productivity can actually improve, not hurt, social cohesion. Increasing reduction in state intervention and the rise of rescaling strategies can threaten the social cohesion of western Europe cities. This analysis has shown that the future of social cohesion in these cities is not fully in their own hands, as it has been for long time so far.

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Notes

1. The Urban Audit database contains data for over 250 indicators across different domains for urban areas in all the member-states of the European Union. Data used in my analysis refer to 2001 as the data for 2004 are not yet fully available.

2. The only exception is a small group of Italian and British cities (between 600 000 and 800 000 inhabitants) that were included in order to balance the sample for these two countries.

3. The purchasing power parity (PPP) coefficient provides a common currency that eliminates the differences in price levels between countries.

4. This indicator (office distribution of global service firms) is provided by the GaWC database (see: www.lboro.ac.uk/gawc).

5. The larger urban zone (LUZ) is a spatial level of data aggregation within the Urban Audit database which is defined as an approximation of the extended functional urban area.

6. The typology of welfare regimes here considered is obtained by splitting the original continental regime that was identified by Esping-Andersen (1990) in three distinct categories.

7. There is no surprise in this result. In cities with a low level of illiteracy or poor education, such as European cities, any increase in the population that is able to graduate entails a reduction in the amount of population having a very low level of education. The overall impact is a better balance in the education level of the population.

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