Territorial Review Copenhagen - Region Hovedstaden

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States between 1860 and 1987 at the state level is 0.64. Dumais et al. (1997)
show that for US industries at the three-digit level, patterns of agglomeration
have been rather stable over time.
There has been a long ongoing debate on the consequences of city
specialisation, that is: the relative importance of localisation economies
versus urbanisation economies. Localisation economies are the benefits to
be derived from firms of the same sector locating in each other‘s proximity.
Urbanisation economies are the benefits to be derived from firms locating in
the proximity of a wide array of other necessarily related firms.
Specialisation has both advantages and disadvantages. The advantages are
less urban crowding and stronger localisation economies arising from the
proximity of closely related producers. The disadvantages are less
innovation and more exposure to risk as the fortunes of specific sectors and
technologies rise or fall. Specialised cities are exposed to a greater risk with
the rise and fall of specific sectors and technologies (Duranton and Puga,
2000).The empirical literature suggests that both economic specialisation
and economic diversity in cities may play an important role in fostering
innovation either in different industrial contexts or at different phases of the
product life cycle.
Glaeser et al. (1992) found evidence that cross-industry intellectual
externalities were particularly important for urban growth. They find that
diversity and local competition foster urban employment growth, whereas
specialisation reduces urban employment growth. This finding could in part
be a reflection of the recent relative decline in traditional manufacturing
employment in the United States. The relative importance of specialisation
and diversity, however, remains ambiguous and unresolved. If knowledge
spillovers are the focus, diversity may well be advantageous. If employment
impacts are the issue, specialisation in the ―right‖ sectors of the moment
may be best (Cheshire and Malecki, 2004).
Henderson (1997) has shown that large cities are on average more
specialised in services (finance, insurance and real estate sectors), and less
in manufacturing than medium-sized cities. Medium-sized cities are more
specialised in mature industries (textiles, food, pulp and paper) and less in
new industries (such as electronic components and instruments). Most
creations take place in diversified cities. Trial plants are overwhelmingly
located in major metropolitan areas, whereas mass-production plants are
almost always located in smaller cities or rural areas.
Both diversified and specialised urban environments are important in
systems of cities. There is a role for each type of local economic
environment, but at different stages of a firm‘s life-cycle. Diversified cities
are more suited to the early stages of a product‘s life-cycle, whereas more