Urban economic perspective of Cape Town Essay Example | Topics and Well Written Essays - 2000 words

Urban economic perspective of Cape Town - Essay Example History claims that the city was founded by the Dutch East India Company and had served as the supply station of the Dutch ships which used to sail to the east like, in India. The city has a vast land area of about 948 sq miles. Apart from being the legislative capital of South Africa, the country is also the provincial capital of the region. As recorded in 2011, the population strength of Cape Town was 3740025. The rate of urbanization in the country has also risen by about 37.5% . The gross employment rate of the city is about 76%. The average monthly income of about 47% of them in the city is R.3200. 78% of the individuals in the city live in formal form of dwellings. The city has good access to safe drinking water and sanitation. The infant mortality rate of the city is about 33.2% . The crude death of the city was about 6014, as estimated in 2011. Gold mining is an important industry of the city. South Africa including the city of Cape Town is rich in terms of many natural resources like, coal, iron ore, gold, platinum and copper. Apart from gold mining, the region is also famous for various other types of industrial segments like, iron, steel and food processing. The city is also rich in natural resources like, cotton and wheat. Carrying forward an elaborate history with it, the city has undertaken vast changes to b uild and enhance its urbanization perspectives over the time. (â€Å"Natural resources and economy†). Economic Perspectives of the City The City of Cape Town is rich in terms of natural resources. These resources which are available in the city often serve as raw materials for the major industries of the country. Moreover, the gross demand of gold in the global market is increasing with time. This has been beneficial for the city of Cape Town as it possesses the core competence over gold reserves in the world. The city is also rich in terms of agricultural resources and animal husbandry. The available rich natural resources of the city are the underlying factor that holds the city together and sustains it. Theory of agglomeration in urban economy explains that when business industries are clustered together, the cost of production of each firm becomes low. This is because clustered firms often experience economies of scale in production. This is either due to common multiple suppliers or division of labor or specialization of work. Cost Quantity of output produced (Source: Authors Creation) It is due to the above factors that the gross quantity of output raises and simultaneously, the cost of production falls for economies in production. The extent of urban agglomeration rate in Cape Town is 690 (km^2). This good agglomeration rate of Cape Town has helped the city to improve its income thresholds. The annual growth rate of the city from 2005 to 2009 was 4.06%. The city has competitive advantage over manufacturing and extraction, film, media, health and medical services. The formal economy of the city provides about 64% of employment opportunities to the labor force in South Africa. The good degree of agglomeration, core competences and natural resources come together to help the city to become a prominent business location in the contemporary world. Growth Factors