Airports in Cities and Regions - KIT Scientific Publishing

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20 Stephen J. Appold and John D. Kasarda Fig. 2: Sectoral distribution of value-added in the U.S. economy, 1947-2006 Organizational design as well as transport costs impact geographic redistribution. As work processes become routinised and institutionalized, a geographical spin-off may become feasible. Locations distant from the largest cities may offer sufficient labour cost advantages to justify the increased travel required for coordination and management. Low-skill economic activities were among the first to relocate from core regions. Rail, road, and water were critical catalysts for the peripheralisation of goods production (Hoover and Vernon, 1959; Vernon, 1966). As progressively more highly-skilled activities have been routinised and the work processes institutionalized, air transport has become central in the movement of high-skill office functions, such as research and development, and headquarters away from the largest cities leading to cost savings without sacrificing communication and contact. Today, a manager from, IBM’s New York headquarters can catch a morning flight to Raleigh-Durham, meet with executives, and then return to New York for an early afternoon meeting. Initial investigations suggest that someone who only needed to meet with his or her New York-based superior every two weeks or so, might prefer living in a less-costly, amenity-rich area many hundred miles away and flying in for an occasional day trip to living in New York. Of course, while affordable air fare is a key aspect of such decisions, so are other factors, such as the depth of the local labour market, the cost of living, and amenities.
Looking in all the wrong places? Tab 1: Income and population growth 1969-70 to 2005-06 by county type Commercial aviation reduces the advantages of a central location while, in combination with local resources and the accidents of history, decreasing the penalties of a peripheral location to the point that even headquarters functions can function effectively away from large cities. Accordingly, as air travel has become increasingly integrated into the business process over the past half century, New York City, Los Angeles, and Chicago have declined in importance as locations for large corporate headquarters. Table 2 shows that Fortune 500 headquarters have become less concentrated in the very largest cities and less concentrated overall. Some of the most innovative and information-intensive international firms, such as WalMart and SAP, are headquartered far from gateway airports. 21
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