Gauteng’s urban space economy

‘Urban space economy’ is shorthand for the distribution of economic activity in space, considering: how the spatial form of cities is structured by dynamic changes in economic activity; how economic opportunities and constraints are structured by spatial form, fabric and function; and the changing nature of economic space itself (changing industrial areas, suburban office parks, etc). This project aims:

To deepen understanding of how the urban space economy of the GCR works, through innovative mapping, analysis of quantitative data, a number of focused, qualitative case studies, and a re-examination of the theory;
To interrogate how governments in the city-region have understood the challenge of intervening in the economy of Gauteng over the last two decades, and how they have built institutional arrangements and techniques through which to perform ‘economic development’ functions;
Through (1) and (2), to reach conclusions on how governments in the GCR might sharpen future policy and practice on facilitating economic activity through spatial interventions.

The entry point for this study is the concept of ‘agglomeration economies’. The idea has its roots in early economic theory, specifically the work of Alfred Marshall, and has more recently been re-invigorated in economic geography and regional studies. Agglomeration economies refers to the positive externalities of industries co-locating in the same place. Put simply the idea is that when economic activities cluster together spatially there are advantages to all the actors in the cluster in the form of lower input prices, more efficient labour markets, and, in particular, the spillover and intense exchange of ideas in a way that spontaneously increases innovation and productivity. While the concept is well-rooted in academic literature there remain many questions on when, where and precisely how agglomeration works, and how – if it all – it can be fostered by government intervention.

After a decade of systematic efforts to spatially intervene in the economy, through initiatives such as the Innovation Hub, Maropeng, Constitution Hill, and the Automotive Industry Supplier Park, amongst others, the Gauteng Provincial Government is now moving to merge – and redefine the mandate of – its economic development agencies. It has recently produced a new Gauteng Spatial Development Framework, which envisages a range of essential spatial initiatives. And it is now ramping up a new set of space economy interventions, most notably an Industrial Development Zone around the OR Tambo Airport (lining up with the notion of an Aerotropolis being promoted by Ekurhuleni). All of these efforts could benefit from thorough applied research which carefully re-examines when and how agglomeration economies can be made to work through government intervention.

Work on the project started in 2011/12 with mapping of available GCRO datasets, as well as two commissioned studies, one into the so-called Ethiopian Quarter in inner city Johannesburg, and the other on the last decade-and-a-half of GPG spatial economic interventions. 2012/13 will see a set of further case studies, for example on the OR Tambo Aerotropolis, and de-industrialisation in Sedibeng.

Timeframes

This is a two year project that started in 2011/12, and will end in 2012/13.

Key partners

Key case studies will be commissioned out, preferably to academics at either Wits or UJ. Prof Ivan Turok at the HSRC is leading a project for UN Habitat on ‘Unleashing the Economic Potential of Agglomeration in African Cities’, which GCRO has been invited to connect into, and this may present a useful opportunity for exchange.

Outputs in 2012/13

A journal special issue made up of 10 pieces, two of which will be synthetic analyses and eight of which will be case studies;
A Provocation, synthesizing the most interesting findings and conclusions into an accessible form aimed at provoking academic debate.