Atlanta – Home of Coca-Cola, Essay Example

Atlanta has been known as the home of Coca-Cola the past 40 years and also a regional center for distribution into a truly global business center. Today, Atlanta has the busiest airport for passengers in the United States, home to 11 Fortune 500 headquarters, and has more than 4 million people. In terms of economy, diversification has been experienced in information technology and mass media, with variety of industries, and traditional clusters strengthened include logistics and transportation and communications. Atlanta’s importance is recognized worldly due to CNN and Olympics. Furthermore, the physical location of Atlanta has been relied upon as a critical economy advantage. Industrious businessmen have been attracted by its climate and geographic location. Foreign-based businesses in operation total to more than 1,300 and have managed to employ more than 81,000 residents. Machinery, printing, transportation, metals, textiles, telecommunications hardware, equipment, apparel, food and beverages, chemicals, furniture, and steel are items and goods produced in metropolitan Atlanta. Growth of Atlanta has been spurred by critical decisions made by the private sector, academic leaders, and its government.

Innovation and productivity is key to economic growth

Atlanta’s economy is diverse in terms of having international companies like Delta Air Lines, Georgia Pacific, and Home Depot have their blue-chip companies’ headquarters. In addition, it is home to major firms like Lucent, IBM, and Phillips Electronics, which operate on a worldwide scale. Agglomeration economies are the reason why clustering in Atlanta has been considered and is evident in labor-market pooling due to its large geographic area (Rosenthal & Strange, 2003). Urbanization economies are present in Atlanta since it has high industry density and high population city size. In addition, knowledge spillovers and input sharing that have given rise to innovation and production in Atlanta. Large markets in Atlanta have allowed fo more efficient sharing of local facilities and infrastructures, variety of intermediate suppliers of input, or a pool of workers having similar skills. Better matching is also evident in larger markets evident between employers and employees, buyers and suppliers, or even business partners. This looks into improved chances of finding suitable, higher quality matches, or a combination. Larger markets also facilitate learning through promotion of developments and widespread adoption of business practices and new technologies. Its business services hub in the Southeast position is uncontested and recent years have seen the rise of employment in small companies (Conn, 2009). This has been experienced by many in emerging technology fields, which have spurred regional development. Therefore, it is true to say that Atlanta’s great breadth characteristic is evident in both small firms and large companies (Perry, 2005, p.1).

Combes et al. (2009) model of agglomeration features firms that are heterogeneous thus, allows benefits of agglomeration to vary systematically across firms within regions. This has been achieved through a simple technological complementarities between firms and workers productivity. It is said that, “firms that are more productive per se are also better at reaping the benefits of agglomeration”. The prediction of this model is that in practice, if this additional effect holds then agglomeration leads to rightwards shift and an increased dilation of the firm distribution for log productivities in larger cities. In terms of innovation, Atlanta has been able to use the skills and expertise of specialized research centers including universities and they have become the driving force behind Atlanta’s innovation. Companies and industries have managed to achieve and sustain competitive advantage.

References

Combes, P.-P., G. Duranton, L. Gobillon, D. Puga, and S. Roux. 2009. The Productivity Advantages of Large Cities: Distinguishing Agglomeration from Firm Selection. Discussion Paper 7191, Centre for Economic Policy Research.

Perry, M. (2005). Business Clusters: An International Perspective. New York: Routledge.

Porter, M.E. (n.d.). Atlanta-Columbus: Clusters of Innovation Initiative. Council on Competitiveness: Monitor Group.

Puga, D. (2010). The magnitude and causes of agglomeration economies. Journal of Regional Science, 50(1), 203-19.

Rosenthal, S. & Strange, W. (2003). Geography, industrial organization, and agglomeration. Review of Economics and Statistics, 85(2), 377-93.