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Small Urban Areas Of Comparative Advantage

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Small urban areas can do a number of things to increase and diversify export efforts. Increasing the exports will enhance the ability of the small urban area to pay for its imports. First the small urban areas should look at other opportunities so they can mitigate the export dependency they have on target areas such as large urban areas that have economies of scale. They could target investment and industrial policy to develop potential new areas of comparative advantage. Thing such as technology, infrastructure development, entrepreneurship, institutional and regulator efforts, and communication all are essential components in looking for new areas of comparative advantage. In addition, things like investment in human capital development, and integration into the global market, which provide more profitable value chains, should also be a focus to address this type of issue as well 1. As income levels change from area to area or through time, there is also a systematic change that takes place. This change takes place in the importance of higher- and lower-order centers. At higher income levels, more shopping and specialty goods are demanded, and people are willing to travel farther to obtain the goods they desire. Income, scale, and accessibility changes are all responsible for the progressive centralization of functions in the higher-level centers in the United States and the progressive decline of the smaller cities. In conclusion when people have more

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