Positioning the Urban in the Global Knowledge Economy: Increasing Competitiveness or Inequality

Major cities are increasingly focused on being competitive on an international scale, developing innovative service sectors and investing in human capital. This has contributed to reshaping local socio-economic systems towards a knowledge economy by strategically fostering key business clusters. But what happens in terms of social inequality in this process? The purpose of this article is to analyse whether issues regarding challenges of social inequality and polarisation are considered in the strategies of urban centres positioning themselves in the global knowledge economy. This leads to a discussion about how the cities’ strategies address potentially growing inequalities, combining goals of competitiveness, internationalisation and social inclusion. The article builds on case studies from Milan in Italy, Vienna in Austria and Aarhus in Denmark. The three cities are all drivers of growth in their respective regions and countries and are embedded in different national welfare regimes. At the same time, they display internal spatial differentiation in that the municipality covers areas of growth and affluence as well as deprivation. In the article, we combine analysis of policy documents and interviews with governance, business and community actors from the three locations. Our results show that the association between competitiveness and integration is shaped through specific state-city relationships, highlighting both the importance of the welfare framework and the specific urban policy tradition.