Michael Storper, Director of GPA, FCL of Global Processes and Institutions, Professor of Urban Planning at Luskin, wrote the background paper for Chapter 3 of The State of European Cities 2016, a report published as a Commission Staff Working Document with the agreement of UN-Habitat. The reports sheds light on Europe’s unfolding demographic, economic, mobility, societal and environmental trends and the associated challenges faced by the region, its governments, the business sector and civil society.
Professor Storper’s chapter focuses on urban economic development, highlighting the income gap between Europe’s high-income cities and middle-income cities. The latter face a “middle income trap,” because they are more expensive than the low-income cities (for attracting basic economic activities) and yet they don’t have the technology and skills endowments of the very high-income cities, so they are “in between.” In Europe, this makes a lot of middle income cities candidates for potential stagnation. Storper’s chapter also shows that cities are generally more productive and higher-income than their national economies, and in the case of Europe’s superstar cities, they are often much wealthier than their national economies as a whole, which leads to issues of very uneven development – a phenomenon quite similar to what is happening in the United States.
Read the full report here.