Regional metropolitan planning

1. Regional & Metropolitan Planning
Dr. Mohammed Firoz . C
Architect and Urbanist
Department of Architecture and Planning
National Institute of Technology Calicut, India

2. Theories and Techniques of Regional Development and Planning

3. Economic Base models

4. • Export Base : The region which is capable of producing and
exporting goods and services is a prosperous region
• Kerala once had its economic base developed on Spice. Today,
Kerala export their service ( Nurse, Laborers etc. as export)
• Coastal states of India ( Port) is more developed compared to
landlocked
• In the world, Coastal countries are more developed than the land
locked counties . ( UK development – Industrial base –
Coloniasation)
• Multiplier theory : Growth multiplies growth ( Cyclic process)
• Growth of steel plants require more machineries. More
machineries require more steel.
• Better development require good infrastructure. Better
Infrastructure leads to better development.
Economic Base analysis

5. • Economic base analysis is a theory that posits that activities in an
area divide into two categories: basic and nonbasic.
• Basic industries are those exporting from the region and bringing
wealth from outside.
• Non basic (or service) industries support basic industries. Because
export-import flows are usually not tracked at sub-national
(regional) levels, it is not practical to study industry output and
trade flows to and from a region.
• As an alternative, the concepts of basic and non basic are
operationalized using employment data.
• The theory was developed by Robert murray Heig in his work on
the Regional Plan for New York in 1928
Economic Base analysis

6. Economic Base: Activities that bring income into a city
• Export activities: Products or services provided to the outside
world (most manufacturing; higher education and research,
advanced health care). Activities that attract money (retirement,
tourism)
• Secondary (Local) Activities: Activities that recirculate income in a
city (local government, local merchants and services
Non basic (“Service”) Employment
• Local professionals – attorneys, doctors, real estate brokers,
appraisers, lenders
• Most retailing – gas stations, grocery stores, etc.
• Local construction workers
• Local government workers – school teachers, city hospital
employees, etc.
Economic Base analysis

7. Economic Base analysis

8. Economic Base analysis
Source : Beyond Economic Base Theory: The Role of the Residential Economy
in Attracting Income to Swiss Regions

9. The Economic Base Multiplier
• The multiplier is total employment divided by basic employment.
• I.e., divide total employment into basic and nonbasic: T = B + NB
• The multiplier: k= T/B. E.g., k=3.0
• Estimate future growth in basic employment = cB. E.g., 5,000 new
workers, Then est. growth in total emp = kxcB, E.g., est. cT = 15,000 =
3.0x5,000.
Examples of Basic Employment
• Mining and extractive industries
• Manufacturing – cars in Detroit ( Ford Industry-Rise and Fall)
• Federal government – military bases
• State and local government –universities or hospital ( Manipal, Kattangal)
• Retail & financial services that attract customers – major mall in a rural
area.
Economic Base analysis
Economic Base Multiplier
The idea: As goes the base, so goes the city. One extra job in the basic sector
may cause more extra non-basic jobs.
Multiplier effect: Base income results in producing additional income

10. Economic Base analysis

11. Economic Base analysis

12. Economic Base analysis

13. Economic Base analysis

14. Location Quotient an Indicator
of Economic Base
• Location quotient (LQ) is basically a way of quantifying how
concentrated a particular industry, cluster, occupation, or
demographic group is in a region as compared to the nation.
• It can reveal what makes a particular region “unique” in
comparison to the national average.
• location quotient is a ratio that compares a region to a larger
reference region according to some characteristic or asset.
• Suppose X is the amount of some asset in a region (e.g.,
manufacturing jobs), and Y is the total amount of assets of
comparable types in the region (e.g., all jobs). X/Y is then the
regional “concentration” of that asset in the region.
• If X’ and Y’ are similar data points for some larger reference region
(like a state or nation), then the LQ or relative concentration of that
asset in the region compared to the nation is (X/Y) / (X’/Y’).
Economic Base analysis

15. Location Quotient an Indicator
of Economic Base
• Industry LQ is a way of quantifying how “concentrated” an industry
is in a region compared to a larger geographic area, such as the
state or nation.
• The basic uses of industry LQs (and, by extension, for clusters and
occupations as well) include these:
• To determine which industries make the regional economy unique.
• To identify the “export orientation” of an industry and identify the most
export-oriented industries in the region.
• To identify emerging export industries beginning to bring money into the
region.
• To identify endangered export industries that could erode the region’s
economic base
Economic Base analysis

16. Economic Base analysis

17. • Suppose that ABC Industry account for 0.16% of all regional jobs but
only 0.015% of all national jobs. The region’s LQ for ABC would then be
(.16 / .015) = 10.67, meaning that Breweries are nearly 11 times more
concentrated in the region than average
• Industries with high LQ are typically (but not always) export-oriented
industries, which are important because they bring money into the
region, rather than simply circulating money that is already in the region
(as most retail stores and restaurants do).
• Industries which have both high LQ and relatively high total job
numbers typically form a region’s economic base.
• Economic developers , Planners and government officials need to pay
particular attention to these industries not only for the jobs they
provide, but also for their multiplier effect.
• The jobs they create in other dependent industries like retail trade and
food services
Economic Base analysis
Location Quotient an Indicator of Economic Base

18. Economic Base analysis
Location Quotient an Indicator of Economic Base

19. Economic Base analysis
Location Quotient an Indicator of Economic Base

20. Limitations of Location Quotients (LQ’s)
• They assume that:
Consumption patterns are constant from one local (e.g.,
metropolitan) area to another.
Labor productivity is the same in all metro areas.
Each industry produces a single homogeneous good.
• The net result of these assumptions is that location quotients
usually underestimate basic employment.
• However, the LQ method is simple and data are readily
available.
Economic Base analysis

21. Economic Base analysis
THANK YOU

22. • https://www.sjsu.edu/faculty/watkins/base.htm
• https://slideplayer.com/slide/8699058/
• https://en.wikipedia.org/wiki/Economic_base_analysis#:~:text=Economi
c%20base%20analysis%20is%20a,two%20categories%3A%20basic%20a
nd%20nonbasic.&text=The%20theory%20was%20developed%20by,of%
20New%20York%20in%201928.
• http://www.usp.br/nereus/wp-content/uploads/Chapter-3-S11-for-
WVA2.pdf
• https://www.youtube.com/watch?v=7r1eo5-S-90
• https://www.youtube.com/watch?v=3VXhCq-zdkw
• https://www.youtube.com/watch?v=lfilNyEsJX8
Economic Base analysis

23. • https://www.researchgate.net/publication/26
6968851_Balanced_structural_policy_German
_savings_banks_from_a_regional_economic_
perspective/figures?lo=1

24. Theory of Cumulative causation

25. https://www.youtube.com/results?search_query=cu
mulative+causation+theory+by+myrdal