What is the productive city for ?
Practical notebook no.16: (Re)developing productive activities in metropolitan areas
Thierry Petit, November 2024
Although they have lost a large part of their industrial base, essentially those least compatible with the urban environment, metropolises remain attractive for innovative industries, those that are highly integrated with the services that complement them, as well as industries geared towards small production runs and customisation, that focus on quality and responsiveness, or that depend on specific local resources. The industrial sector of the 21st century can therefore play an essential role in urban dynamics. ‘The productive city will be resilient: a living space, a major player in transitions.
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According to Espon, the productive activities most likely to flourish in metropolises are those linked to the functioning of the metropolis and its population : industries linked to urban services (utilities) and logistics. Then there are the high-tech, high-skill activities that have the strongest agglomeration effects. Finally, there is production aimed at customers looking for a high level of differentiation, and for whom ‘Made in local’ is a differentiating asset. Espon shows that, in Europe, metropolises continue to host the majority of industrial jobs. In 2017, in the European Union, metropolitan areas accounted for 54% of industrial employment and 63% of industrial value added (VA). It is mainly the secondary metropolises, with 31% and 33% respectively, that concentrate these jobs, while the first-tier metropolises, including the capital regions, still account for 23% of industrial employment and 29% of industrial VA. On a national scale, the return of industry is helping to limit the trade deficit, and to move towards greater sovereignty by being less dependent on competing (or even hostile) countries, particularly for the most critical goods. This category often includes food, healthcare and defence, as well as digital and ecological transition activities.
Re-industrialising France also means helping to reduce CO2 emissions worldwide, and industrial pollution in general, as a result of more stringent environmental regulations than elsewhere in the world and the shortening of supply chains. In its 2021 report, Trendeo noted that since Covid-19 and the supply disruptions it caused, global supply chains have shortened by an average of 5% in distance. At the level of metropolitan areas, maintaining and redeveloping a productive base also addresses a number of issues.
Meeting the operational needs of metropolitan areas and their inhabitants.
It is imperative to maintain a place for the major urban services that ensure the day-to-day running of the metropolis. These services have a strong productive dimension, in particular the treatment and recovery of waste, the generation/distribution of water and energy (electricity, heat, gas), and repair, sorting and recycling activities. In addition, residents and businesses in the Paris Region use the services of a large number of craft businesses that have a productive dimension and whose market is the Paris Region. These are mainly in the building trades: plumbing, electricity, masonry, carpentry, joinery, etc.
Contribute to the ZAN (Zero Artificial Artificialisation) objective.
Maintaining productive activities in metropolitan areas means contributing to the goal of zero net artificialisation of land. In fact, when relocating outside the urban area, productive activities tend to occupy more space for the same level of activity, as they have little incentive to increase the density of their plots. Maintaining space for activity in metropolises means encouraging the intensification of land use. This intensification can be achieved in a number of ways, such as remobilising all or part of brownfield sites, taking advantage of urban gaps, encouraging the pooling of resources, and promoting high rise construction. In some cases, we can encourage the regrouping of under-occupied plots to offer new spaces, while certain activities can coexist with other economic functions, or even housing under certain conditions, or even participate in the deployment of renewable energies.
Participate in the ZEN (Zero Net Emissions) objective.
Re-industrialisation in general and maintaining productive activities in a dense environment also helps to reduce CO2 emissions from this sector, as the National Low Carbon Strategy points out. At a local level, this should make it possible to reduce travel, which is a major source of carbon emissions. This makes it easier for employees to live close to their place of work, to get there by public transport or to use active modes of transport. For some businesses, it’s also a way of staying close to customers and the market in general, and therefore reducing transport distances. Indirectly, this also contributes to the objective of reducing transport-related congestion and pollution.
Keeping metropolises vibrant.
The presence of a productive activity, in the case of craftspeople, brings a city to life, offering goods and services close to its residents. More generally, these activities help to break down the uniformity of towns and cities by introducing a certain mix of functions and intensifying the temporal use of monofunctional neighbourhoods on a daily or weekly scale, helping to liven them up.
Strengthening and diversifying the employment offer.
For local areas, this is also a way of strengthening and diversifying the range of jobs on offer. On the one hand, directly with productive jobs, but also indirectly through a powerful knock-on effect on the region, bearing in mind that one industrial job generates two or three service jobs, while industry is tending to tertiarise by incorporating more services into its offering. The hyper-industrial society theorised by Pierre Veltz shows that industry is tending to offer ‘ solutions ’ and not just products.
Providing quality jobs.
Productive employment, particularly in industry, offers a wider variety of possibilities and often, for the same level of training, a higher level of pay than that offered by the service sector, particularly for the least qualified jobs. What’s more, for these same categories, these jobs are often more stable than service jobs. The presence of productive activity therefore makes it possible to respond to a social challenge and maintain a relative social mix in metropolitan areas.
Enabling greater resilience and innovation.
Maintaining productive activities also strengthens the diversity of activities in an area, which in turn guarantees the resilience of the economic fabric, but also offers more opportunities for development and innovation through the many possibilities for interaction. In terms of the region’s competitiveness, industry is the main generator of R&D, accounting for 80% of spending in this area. Re-industrialisation will primarily involve developing new activities rather than relocating. In this respect, Louis Gallois believes that ‘ the reindustrialisation of France will be technological ’, yet the high concentration of research in metropolitan areas suggests that endogenous reindustrialisation will primarily take place in these areas.
The industry of the future will be urban
The manufacturing activities that are most attracted to urban areas want to benefit from the amenities that this environment provides, both to collaborate with research and service partners with whom they work closely. By being closer to their markets, they benefit from an advantage over their distant competitors, which enables them to mitigate cost competition thanks to a high level of responsiveness and a close relationship based on trust and quality. They also benefit from better digital connectivity, and more generally from the presence of digital players who have become essential.
The metropolitan area enables these companies to offer their employees access to an attractive environment, which can partly meet the labour needs of this sector, which is increasingly competing with services for certain profiles. It also provides access to a large and diverse employment pool.
However, relocating and maintaining production activities also means that manufacturers can consider diversifying their supplies with a more pronounced local component, which may be more costly, but offers the advantage of better control over lead times, reduced transport costs and uncertainties, lower warehousing and intermediary costs, as well as all the hidden costs of distant sourcing (risk to the goods during transport, actual product quality, risk of copying, etc.). What’s more, proposing a framework that gives sanctuary to productive activities in metropolitan areas gives them visibility, which in turn enables them to plan for the long term and therefore invest, renew and strengthen their production facilities.
For companies, the protection of business sites should curb land speculation and therefore help them to concentrate their financial resources on their production facilities.
Moving towards a more circular model is also a way for manufacturers to cope with the rising cost of raw materials and the growing uncertainty over their availability, both in a tighter international environment and as a result of global warming and its consequences. For some activities, being located in a metropolis allows them to take advantage of the urban mine and to envisage the creation of loops around reuse and recycling, along the lines of what is being put in place in the building industry with reused materials, plastics and the automotive industry. Recycling activities in particular are set to grow with the necessary decarbonisation of the economy and the increased demand for raw materials that this will bring.