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Stamm Economic Research

Perspectives 2009: An Exploration of Infrastructure Issues in Applied Spatial Economics for Canada. Stamm Economic Research. 1. Outline. 1 . Introduction to Urban And Regional Economics, how Spatial Economic Forces Dynamically Configure and Snape Human Settlement

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Stamm Economic Research

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  1. Perspectives 2009:An Exploration of Infrastructure Issues in Applied Spatial Economics for Canada Stamm Economic Research 1

  2. Outline 1. Introduction to Urban And Regional Economics, how Spatial Economic Forces Dynamically Configure and Snape Human Settlement 2. Gross Domestic Product and the Concept of “Value-Added” Related to 3D Space and “Land” 3. The Role of On-Site and Connective Infrastructure 4. Canada as Spatial Economic Entity. 5. The Urban Region as a Spatial Economic Entity 6. The Downtown as a Spatial Economic Entity 7. The Critical Role of Urban, Regional and National Infrastructure Stamm Economic Research

  3. Introduction to Urban and Regional Economics • - Ice Cream Vendors on a Beach: Hotelling Model of the Outcome of Spatial Competition (1926) • - Gross Domestic Product (GDP) and the Concept of “Value-Added” • - Economic Forces determine the Spatial Settlement Configurations, from Urban Regions to Residential lots, and even Architectural Floor Layouts. • - Location Attributes of Economic Complexes in 3D space • - The Critical Role of Infrastructure: Control the Efficiency of the Interactivity of Elements and Operations within and among Operational Efficiencies of Human Settlement Stamm Economic Research

  4. The GDP Concept of “Value Added” • - The full “value” (market price or facsimilie for non-market production) is the sum of the “values” (market determined or comparative cost) brought together to create and deliver a “good or service”. • - Resources, labour, capital and entrepreneurship and government administrative skills (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. • - How is that important to this discussion? Stamm Economic Research

  5. The GDP Concept of “Infrastructure” in Economic Investment” • - Infrastructure is “foundation investment” on which all else in the economic settlement systems is based. • - Infrastructure is comprise of two classes: • (a) the “public” foundations investment (such as road transportation and airports) that cannot “self-organize” through market-driven systems, • (b) the “private” foundation investment that can and “self-organize” through market-driven systems. Stamm Economic Research

  6. The Critical Roles of “Value-Added” and “Infrastructure” • - It is the existing and potentialvalue-added of “places” and the existing and potentialinfrastructure at and connecting between “places” that determines location preference ordering of capital investment (on-site and off-site) and thereby establishes or adjusts the spatial settlement pattern of human geography through economic forces that annual “layer” a geography of investments onto the 3D “settlement-scape”. • - Made up the urban centres, urban-regions, and rural areas these aggregate to the national economic geography. Stamm Economic Research

  7. The Concepts of Places and Location Preference Ordering 1.Everything is produced at a place 2.Every “place” has:- (a) local production attributes and - (b) location interactivity attributes 3. Location interactivity attributes are extremely important in determining the potential value-added of a place 4. Comparative value added potentials of places determine location preference order (rank) of investment attraction of places compared to any and all other places Stamm Economic Research

  8. The National Perspective

  9. Canada a Unique Half-Continent Stamm Economic Research

  10. GDP and Settlement on the Land of Canada (2) This “place” has: - 32 million people - 16 million people employed - a GDP of near $1.5 trillion I It also has: - almost 1,000,000,000 hectares of land area - “population density” of .032 persons per hectare - “employment density” of .016 - an average of $1,500 of value-added per hectare - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  11. The Thin Canadian GDP Ribbon(3) - The largest 100 urban places comprise 80% or 25 million in population and almost 13 million employed persons. The 5000 km ribbon - The largest 100 urban places total to about 1,600,000 hectare of developed urban land, with a production rate of the $750,000 in “value-added” per urban hectare. - The $750,000 in “value-added” per urban hectare can be understood as an average GDP density. Stamm Economic Research

  12. Extreme Dispersion of Canada's GDP into Economic Macro Regions - The distribution of the over $1.2 trillion of urban produced annual GDP has been determined by the investment markets generating the “urban concentrations” and the relative scale of thereof. - The distribution is not “planned”, but the direct outgrowth of “economic optimizing behaviour” . - The 10 largest urban places in Canada account for over 65% of the urban population, and over 68% of the urban produced GDP and collectively just over 750,000 hectares of developed land - That is an annual generation GDP generation rate of $1,100,000 per urban hectare. - The “dispersion measurement” of having so much of Canada's urban GDP such vast distances apart is extreme, bringing to Canada an enormous economic disadvantage. - That is Canada's greatest single economic (and political) challenge. - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? I Stamm Economic Research

  13. Canada is Unique in its Geographic Scale - Despite having the most extremely dispersed Economic Macro Regions Canada does not have a “national” infrastructure strategy plan to maximize and develop the interconnectivity of Canada's economic regions. • - As with rail, and air, higher order road, pipeline and wire transmission (power and communication) should be “federal” to create national infrastructure systems serving Canadian national goals. I - Creating much improved connectivity amongst Canada's dispersed Economic Macro Regions would (I) greatly improved Canada's aggregate economic performance , (ii) lessen unnecessary vulnerability and (iii) promote unity and independence Stamm Economic Research

  14. Canada is a Family of Regional Economies - Canada has become less and less a “national” integrated economic system but is in reality an agglomeration of economic regions that respond to individual specific world markets united only as a “customs union” that shares a single currency. - Canadian economic management is like an admiral dragging a convoy of different vessels, rather than a captain steering a ship. The common factor is the foreign exchange value of the Canadian dollar. - The Canadian economic regions are internally integrated and operate on an expanded “urban-region” systemic basis. - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? I Stamm Economic Research

  15. The Urban-Region (Macro Region) Perspective

  16. The Spatial Economic Macro Regions The parts of the Economic Region include - the Urban Core and Core Frame, then adding - the Contiguous Conurbation, then adding - the Contiguous Growth Periphery, then adding - the External Commutershed, (Dormitory Settlements and Exurbia), then adding - the External “Business Day” Ring, then adding - the Extended Umbilical Specialty Areas (such as recreation zones) - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? I Stamm Economic Research

  17. The Toronto “Business Day” Region Perspective (1) Stamm Economic Research

  18. The Toronto “Business Day” Region Distance Bands Perspective (2) Business Day Area Conurbated Suburbs, Dormitories, Exurbia Region Core Stamm Economic Research

  19. The Toronto “Business Day” Region Directive Radials Perspective (3) North Radial East Radial West Radial Stamm Economic Research

  20. The Urban Region Perspective (4) The urban system is fundamentally shaped by: (a) the external economic interaction corridors, and (b) the externally-oriented infrastructure that creates the higher order economic opportunity skeleton, and (c) the internally-oriented infrastructure that knits the urban system elements together - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  21. E. G. Urban Growth Periphery Intersects with Regional Trade Corridor Infrastructure: Expressway, Rail, Airport Peripheral Dormitory Community Anchor Canada's Most Integrated Transportation Internetwork Intermodal linkage of rail, expressway, airport creates extremely high infrastructure capacity - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Exurbia Suburban Conurbation Stamm Economic Research

  22. Hollowing-Out the Economic Core of the Toronto Urban-Region

  23. The Spatial Economics of Central City, Toronto (1) The Central City is fundamentally shaped by: (a) the economic health of its high performance elements (downtown, centres of learning, education and cultural complex, highest order retail, etc.) (b) the quality of its inter-element transportation performance (automotive, transit, wires, pipes ) (c) The spatial supply of quality of life with “shoe leather” features to daytime (employment) and residential concentrations - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  24. Toronto's Employment Districts are Stagnant Infrastructure Development, 2000 to 2008? - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  25. Toronto Stagnant Total Employment 2000-2008 1.30 million 1.25 million 1.31 million Stamm Economic Research

  26. Toronto Stagnant By Employment Area Characteristics 2000-2008 '000 Rest of City Expressway Served Downtown Non-Expressway Served Subwayand LRT Served Centres Stamm Economic Research

  27. Infrastructure Lack in Toronto Leaks Economic Base to Suburban Conurbation - Failure to Provide Appropriate Core Infrastructure Capacity and Performance Improvements Causes Stagnation in the City of Toronto - Toronto now Even at Risk of Losing Critical Financial Headquarters Functions from Downtown - Toronto Likely to Loose Education and Health Centre Pre-eminence - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  28. Toronto Real GDP (Value Added) and Capital Stock (After Depreciation) is Starting to Decline - Toronto Gross Income per Household, per Person, Now Falling in Comparison to Suburban Conurbation, Exurbia and Dormitory Settlements - Public Infrastruture and Private Capital eroding and depreciateing with lack of reinvestment - Per Hectare Value- Added will Decline Accordingly - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  29. Downtowns are Critical Elements to Urban and Regional Economic Performance (Value Added) Per Hectare - By far the Highest Concentration of Urban Employment - the Most Cost-Effective Infrastructure Costs per Employee - Usually Generate the Higher Order Services Exported to Surrounding Regions: Highest Order Finance, Education, Health, Culture and Recreation, Entertainment, Communications, Specialized Science and Technology, Knowledge Industries - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  30. Massed Downtown Private and Public Investment Justified by Immense Economics of Agglomeration and High Economics of Scale - Labour and Capital in Downtowns is Inherently Far Above Average in Productivity - Extremely Low Capital and Operating Costs of Downtown Infrastructure Capital per unit of Value-Added, - Extremely High Tax Generation to Support the Modest Costs in the Downtown. Office Buildings are the Golden Geese of Municipal Finance - Surpluses More than Pay for and Supporting Regional Access of Taxation Assists to Transit as well as Road Access. - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  31. The Vancouver Downtown Core - 70+/- hectares - $15 Billion in GDP per year - $210 million in GDP per hectare per year - Downtown Vancouver attracts some economic base office growth - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  32. The Edmonton Downtown Core - 70+/- hectares - Subway Served - $7.9 Billion in GDP per year - $105 million in GDP per hectare per year - Comparatively Inaccessible. - Hollowed out with Minimal Retail and Retail Services - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  33. The Toronto Downtown Is A Critically Important Element - 95+/- hectares - $39 Billion in GDP per year - $410 +/- million in GDP per hectare per year ($700 million in Financial Core) - Failure to provide any major transportation infrastructure after 1970 led to economic stagnation of Downtown - Attracts only residential growth and related jobs - Economic base slowly leaving for suburbs and exurbs - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

  34. Summary (1) 1. Canada is a vulnerable thin Ribbon stretching 5,000 kilometres (Lisbon to the Ural Mountains, or Shanghai to Mumbai) with extreme region dispersion of its GDP of a tiny $1.5 trillion. 2. The infrastructure that 'shortens' and 'strengthens' the ribbon is vital to strengthening Canada's economic performance, national unity and economic security. We must do better and do more to tie Canada together. 3. At the urban-region level our downtowns are the elements with the highest productivity (value-added) at the low cost. Only Calgary is on track to high downtown efficient growth. 3. The urban-regions (except for Calgary) are experiencing and encouraging a 'hollowing-out' to a lower efficiency economy through neglect and unwise spending. - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion?

  35. Summary (2) 1. Toronto as the centre of the urban region has stagnated economically and belatedly risks following the American urban-region decline experience of the 1960's. 2. The Toronto downtown has seen no significant transportation infrastructure improvement as of the cancellation of the Scarborough and Spadina expressway projects in the 1970's. 3. Damaging the entire urban-region, the Toronto downtown is slowly bleeding its economic base to suburban and exurban locations that are comparatively extremely inefficient and very high cost per unit of value-added. 4. The challenge is to “re-shape” the spatial structure of the Toronto urban-region by greatly retrofitting and enhancing downtown oriented accessibility infrastructure. (e.g. Chicago which has well over twice the office space in downtown than does Toronto) Metrolinx too suburban oriented. - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion?

  36. Summary at the National Level (3) At the national level, Canada is unique in the world. 1. We must come to recognize our 5,000 km ribbon (Shanghai to Mumbai) ribbon for the challenge that it is and build the national infrastructure that protects/enhance it. If we do not, the ribbon will be cut. 2. At the urban-region level we must learn to recognize the economic structure of economically efficient urban-regions. We must reverse decades of neglect and revitalize and grow the economic base of the the extremely efficient downtowns. 3. Socio-economically we risk downtown Toronto with a diminishing economic role becoming only a cultured island of the elite in a sea of relative poverty . How? - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion?

  37. Summary (4) Examples for theCanadian Ribbon of Economic Regions: - completion of a coast to coast expressway systems for higher speed road transport, - a national coast high speed electrified rail system, (nuclear power fed for environmental reasons) to move cargo more efficiently over our 5,000 km., - an enhances national electric power grid from coast to coast for electrical supply security, - a national pipeline strategy for maximizing our huge advantage as a supplier of liquid/gas energy and gaining greater national energy security, (follow the German-Russian example) - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion?

  38. Summary (5) Examples for theToronto Urban-Region: - Unclog the urban-region roads by grade separated road transportation improvement to the Toronto core, i.e., the completion of the Spadina, ScarboroughandGardiner expresswayunderground, - Madrid Spain, - Hamburg - Stockholm, - Locarno - Boston, - Tokyo - Failure to do so risks a complete expressway system breakdown as the 401 427 and DVP jam solid. - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion?

  39. Summary (5)(cont.) Transit examples for theToronto Urban-Region: Adding an east-west subway through downtown using either: - the existing Queen Street station or - splitting the Yonge-Spadina line at Union station and building east and west extensions. COST is not the problem? - EACH LESS THAN 2008-2009 BAIL-OUTS FOR THE CAR INDUSTRY! - Far higher rate of return on investment with huge boost to urban-region economic efficiency and enhancements of the higher productivity downtown elements of the urban region economic system. - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion?

  40. Thank you for your kind attention - 16Resources, labour, capital and entrepreneurship (domestic and foreign) all contribute something to the final value of the good or service, whether a piece of carved furniture from India or a haircut. - How is that important to this discussion? Stamm Economic Research

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