7- from Free Trade to Globalization: The City-Region a Challenge to Globalization

Abstract

Foreign demand will place technology intensive productive factors and various areas of knowledge in motion. There will be institutional changes that will lead productive centers to modify their allocation of tasks and functions. Regional production centers, such as Bogota, as a city-region with its zones of regional influence will have to accommodate their productive processes to the requirements of foreign demand and global market incentives. Production will be far more specialized and aimed at goods that are exchangeable in foreign markets. A close look to figures show that opening the economy in some cases do not lead to convergence. Convergence considers that in stages of globalization capital, labor and transport costs decline. In an open economy forces migration of factors of production, lead to rapid economic growth, even faster than in rich countries. The sigma-convergence test relates standard deviation of per-capita income dispersion of economic regions with time. While beta-convergence shows the speed of convergence of poor countries, or a country's economic regions, contrasted with rich ones when subject the economy to openness. From this historical and convergent growth theory we analyze how city-regions given certain conditions might face globalization opportunities.