Why Do Cities Decline and How Could This Trend Be Countered?

Why do some cities grow and are prosperous whereas others shrink and decline? VOLKER EICHENER investigates the key factors that determine the development of a city and also suggests a strategy for declining cities to reverse this trend. As he explains in this video, he examined population growth or decline in a given city as well as economic variables, such as industry, age, or social structure and used these data for building a multiple regression model. What he found is rather surprising: a city is either declining or growing but it does not find a balance – in contrast to the prediction of conventional economic theory. Cities are thus bound by a spiral dynamics and declining cities suffer from what Eichener calls ‘shrinking syndrome’. To counter this, he suggests a strategy of ‘active internationalization’ that uses the opportunities globalization offers, such as attracting innovative businesses, international talent and tourism.