CITIES AS A FACTOR OF SOCIO-ECONOMIC DEVELOPMENT

Abstract

The relevance of the topic. Cities and economic development are inseparable. The entire world economic history, starting with the Industrial Revolution, convincingly proves this. No country has managed to ensure dynamic industrialization and high welfare without urbanization. The study of the relationship between the level of well-being (measured in GDP or per capita income) and the level of urbanization has been reflected in the works of many scientists. In the context of the ongoing intensification of urbanization processes, the appeal to the problem of the role of cities in ensuring the economic growth of modern socio-economic systems is of particular relevance. Goal. Research and generalization of the main theoretical approaches to the role of cities in ensuring economic growth: from classical interpretations to modern theories. Methodology. In the process of developing the research problems, we used dynamic and structural analysis, synthesis, and design of logic circuits. Results and conclusions. It is now evident that it is in cities that economic activity is concentrated. For example, in the US, 80 per cent of the population lives in megacities, which make up only 20 per cent of the country's land area, but which account for 90 per cent of national income. Concentration of markets, economies of scale, knowledge sharing, access to a wide range of goods and services, etc. are cited as explanations for what attracts people to cities. Leading theorists such as R. Lucas argue that high levels of human capital and knowledge diffusion are powerful factors in the formation of «urban agglomeration», attracting and incentivising innovators who then become the engines of urban growth. Other well-known scholars, such as T. Holmes, believe that the size of commodity markets and low transport costs are the main factor attracting business and labour resources to cities. According to some economists, the main explanation of the role of cities is the concentration of labour resources in them. This gives businesses access to skilled labour. There are other theories that argue that cities develop due to consumption rather than production. Different schools of economics form their own scientific approaches to the nature and role of cities in socio-economic development. Nevertheless, they all agree that there is a stable positive relationship between urban agglomeration and labour productivity. Scope of application. Economic theory, theory of social and economic development.