Modern Approaches to Determining the Cyclicality of Urban Economic Development

Abstract

The cyclic nature of development is intrinsic to socio-economic systems. Despite the fact that none of the economic cycles is identical to another one, they all have the same stages. The city is a complex multifunctional system. The economy of the city can be viewed as a set of entities belonging to different areas and activities remaining in different stages of the life cycle. The life cycle of the city is a succession of stages of emergence, growth, maturity, and decline. This continuity is the result of the cyclic development of a territory’s functional specialization. The duration and depth of the fluctuations at each stage of the cycle are determined by the influence of external and internal factors as well as the effectiveness of urban management. Therefore, the cyclic development for different territories can have its own specific trajectory. If the urban economy is flexible and adapts quickly to changes in the external and internal environment, the trajectory will be characterized by intermittent cycles. The more pronounced the change of the city development stages is, the more efforts should be made by the city managers in order to diversify the city’s functional structure and create alternative areas of labor application. The paper summarizes the concept of the ‘life cycle of the city’. It also considers the features of each stage of the city life cycle. The studies of the life cycle carried out by leading scientists and practitioners are analyzed. The methodology of assessing the stages of the life cycle and the prospects of urban development is proposed and justified. In the course of the research, the developments of domestic and foreign scientists were systematized and the limit values of indicators-identifiers of the stage of the territory life cycle were offered. Determining the stage of the city life cycle is an important tool assessing the prospects for the development of the urban territory and helping to make effective management decisions and prioritize strategic programs. The methodology of determining the stage of the economic cycle involves identifying points of growth that contribute to the transition from a state of depression or crisis to the phase of development (revitalization). This involves the search for objectively existing or potentially possible factors, prerequisites, resources that will provide an impetus to the advance of the urban economy. Such points of growth can be found in the city-forming sphere (new technologies at enterprises, new competitive types of products), resource factors (natural resources, transport infrastructure, medical, tourist, and other factors), scientific, educational, cultural, and other areas.