Along comes Saskia Sassen (around the same time I'm wrapping my head around traditional urban geography). Regional urban hierarchies get recast as global hierarchies. The learned leap over the national scale. Cities are sexy again. Young geographers rush to the alter of Jane Jacobs. Even economists, such as Paul Krugman, get on the bandwagon. Why should a firm locate in the CBD? Agglomeration economies. Productivity gains justify the steep rents. Perhaps they did at one point. That's no longer true:
“The C-suite types want to be in a big downtown urban location, but they don’t want to bring the entire corporate headquarters location because the real estate there is way more expensive,” said David Collis, a Harvard Business School professor. “It’s OK for Jeff Immelt, but he doesn’t want IT people sitting there.”
To be in the CBD of a global city doesn't provide a productivity or innovation advantage. It provides a marketing advantage. The address helps to attract executive talent. The address doesn't make the company run better. The company cuts the best deal it can and amasses subsidies to justify the economics of the move. Being in downtown Boston helps General Electric attract talent globally to places not Boston.