Cities are often viewed in this part of the world where opportunities are. The rural youth often leaves the crude industries to come seek better opportunities in education, white and blue collar jobs.
Cities are more than that. Cities are actually the windows of countries to other countries. They are tools of globalization and transfer of capital, information and new knowledge
The recent drive to diversify Nigeria’s economy from oil based to non-oil has taken the form of round table discussions and efforts of entrepreneurs like Aliko Dangote in Agriculture and Cement.
However, these efforts are commodity oriented. The same problem may come back to haunt us if we don’t have an intentional slant in strategy by incorporating a more sustainable economy like the knowledge economy, where competitive advantage can be derived through local and tacit knowledge from local industries and global companies they are networked to.
An understanding is required by stakeholders of the requirements that will attract multinational knowledge intensive businesses. Schools, high value manpower, research capacity, proximity to local and international airports; alongside a huge connectivity index for air transport in favourable costs and direct destinations.
Several approaches in literature have identified paradigms in spatial development which include; agglomeration, Networked Economies and Value Added Chains.
Agglomeration Models
Agglomeration theories were introduced by economists such as Joseph Schumpeter (1926) and Alfred Marshall (1920). Schumpeter (1926), tried explaining spatial development through the role of entrepreneurs who should take cognizance of important inventions and provide requisite resources to turn them into marketable products while Marshall (1920) argued that spatial concentration of industries will confer external economies on firms as they concentrated on particular cities.
The agglomeration model appreciates the role of localisation economies and urbanisation economies.
Localisation economies, on the one hand, arise as a particular industry concentrates in a given location leading to the development of local expertise, special skills and advantages that are specifically related to the industry in question. (Luthi and Thiersten, 2014)
Urbanisation economies, on the other hand, arise from the diversity and the more general characteristics of a city; for instance the multiplicity of specialised business services, infrastructure and cultural and leisure functions that may be used by any firm in the city rather than only a single economic sector. (Luthi and Thiersten, 2014)
The agglomeration model guarantees local knowledge efficiency and knowledge spill over as well as production of skilled workers via concentration of firms in local cities.
A concentration of rubber industries in Edo State for instance will engender an exchange of value between players at various levels in the value change locally, establish an external economy for job creation, and ensure new knowledge as competition will be present and development of a service economy to service the industry.
Networked Cities
Networked cities are cities that fulfill the function of flow of capital, information and new knowledge. This happens with regular interaction with foreign partners in other global cities. The purpose central business districts serve includes points of reference by global companies, concentration of internal knowledge structures of indigenous and global firms where such knowledge is shared with their branch networks.
This phenomenon can best be understood using the stock exchange and global financial system and commodity trading businesses as examples. These businesses are information based and generate more value than other traditional businesses globally. Their strength lies in reducing information asymmetries in capital flows, information and knowledge. Having networked cities helps to get over this.
The challenges for a country like Nigeria such as poor connectivity of the air transportation system with most businesses situated on the Island and the international airport located many kilometres away in Oshodi-Isolo area of Lagos.
The latest effort of the Lagos State Government is to build one in the Lekki Free Trade Zone are. I also consider this misguided as the connectivity challenges of huge traffic renders the location inefficient.
Any new international airport should probably be where Eko Atlantic is. Hong Kong solved this problem when their city became congested by building a robust and complicated rail and air transport system on an Island constructed for the sole purpose of networking their city.
The network city model in the knowledge economy engenders city connectivity and a spill over of useful and high value knowledge. How useful this knowledge is and the frequency in the transmission of tacit global knowledge depends on the connectivity of our airports, broadband efficiency, and manpower competence in research and high value knowledge job roles. We know there is a lack of these capacities presently and something can be done.
Polycentric Mega Cities
This involves a fusion of the agglomeration model and networked society model. In essence we have local knowledge at work and global knowledge to complement it. Indigenous and global firms are creating value and there is a flow of capital and information in the country.
The implication of this lies in the audit of the closest thing to a Mega City in Nigeria. The banks remain the only industry that have the network economy concentration and the agglomeration model hardly applies as industries are scattered and firms exist in isolation. This makes the advantage of spatial concentration in terms of knowledge spill overs and utilization to value gotten by face to face/personal meetings almost impossible.
The polycentric megacity is the ideal means of stimulating and establishing a “CITY KNOWLEDGE ECONOMY”.
The banks stand as the only hope to position Nigeria in the “CITY KNOWLEDGE ECONOMY” as they can help make Nigeria a financial hub with specialized knowledge that can help gain more competitive value in the global economy.
More investment and new perspectives need to be applied in creating a “Polycentric Mega City” not just for the beauty of it, but for cross-fertilization of ideas across industries locally and for alignment to global value chains and global production networks.
Lagos has three sure bets in harnessing the “CITY KNOWLEDGE ECONOMY” that can serve as a comparative advantage globally, thereby driving more value. They are academic and scientific research, Finance and Media Technology. The reason is simple. The banks are here, the corporate industries are headquartered here and the emerging technology hubs are here and the media houses are concentrated here. Lastly, the population is here to justify the objectives of understanding perpetuation of domestic consumption.
The seeming haphazard establishment of industries away from city centres and further distribution of companies across hinterlands; some in Sango and other in Agbara, while others are in Ikotun needs new thinking if we are interested in scaling businesses for global growth and promoting a learning culture in Nigeria.
The “CITY KNOWLEDGE ECONOMY” is possible in Lagos.
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