Saskia Sassen, professor of urban planning at Columbia University, is the author of "The Mobility of Labor and Capital" (Cambridge University Press, 1988), "The Global City: New York, London, Tokyo" (Princeton University Press, 1991), and "Cities in a World Economy" (Pine Forge/Sage, 1994). Her latest book is "Losing Control? Sovereignty in an Age of Globalization" (Columbia University Press, 1996). She is presently a scholar at the Center for Advanced Research in Palo Alto, Calif.

"Government Technology" Editor-at-Large Blake Harris caught up with her in Toronto, where she spoke on some of her work and answered questions concerning the new

role of the city in the 21st century. GT: There is increasing discussion about the new role of the city in the global economy, especially what we have started to call "global cities" as the hubs of the international financial and business communities. Yet there is also a great deal of talk about the decentralizing characteristics of the electronic network environment. Are not these two trends, to some extent, contradictions?

Sassen: If you look at a city like New York, Tokyo or Hong Kong ... you see that the headquarters of an increasing number of firms are clustered together there. At first, that logic doesn't make sense in the context of a world increasingly connected digitally.

However, what these firms need is ... to be located near a specialized network of financial, accounting, management consulting, design and other such firms. These kinds of support services form an incredibly dynamic sector. And that is where the city -- in the contemporary era -- recovers a production function that it lost in terms of large-scale manufacturing.

If you just look at Fortune 500 companies, a lot of them are not in a place like New York or Chicago or Miami. But if you look a little broader and take firms that make over 60 percent of their revenues in overseas sales, over 40 percent of those firms have their headquarters in New York City.

There is, however, a certain kind of manufacturing that needs the city. I have a team right now in New York City researching what we call "urban manufacturing." It is the kind of manufacturing that is design-based -- woodwork, metal work, garment, furniture. But the main point is that the city -- after its global strategic functions -- also regains its position as a strategic production site, not only in terms of this design-oriented manufacturing, but also in terms of these highly specialized services. So that is one way in which we can connect the discourse of the global economy with the discourse on the city. The fact that the global economy is a highly structured and coordinated system makes the city an important site for those coordination functions.

GT: You also argue that government really has not fully understood its role and power in connection with digital networks. Can you explain?

Sassen: When government looks at telematics, they will see at least six realms or six worlds operating, not just fiber-optic cable. If you are a small- or medium-sized town, then you are looking primarily at fiber-optics as the advanced technology. But the total infrastructure of telematics, which is partly invisible to our eyes, is characterized by enormous concentrations of state-of-the-art technology. There are certain micro-technologies which are available today only in New York and in six European cities. So these seven places are highly connected and do stuff together that cannot be done in other places. We are talking about highly specialized functions here. So yes, the global system has properties of interconnectivity and simultaneous integration. That is key, by the way -- that it is all simultaneous.

But that is only half the story. The other half is this enormously unequal geography of the infrastructure which privileges a limited number of places with hyper-concentrations of

Blake Harris  |  Editor