15 Sep 2022

107

Economic Impact of Aerotropoli

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Aerotropolis is an urban sub-region whose land use, economy, and infrastructure are centered on airports' development. The value proposition offers efficient business connections to customers, suppliers, and enterprise partners worldwide, resulting in increased efficiency between firms at the national and international levels. Aerotropolis is considered important for regional and national economic growth. According to LIOU et al. (2018), aerotropolis has led to increased demand for airport transport and industries' emergence around the airport's geographical location. Due to the role of airports in economic development, the creation of aerotropolis has resulted in a fast-paced global trading network. Airports such as Amsterdam Schiphol and Dallas-Fort Worth have developed property divisions that have resulted in commercial areas and foster development in areas that border the airport. Aerotropolis development is an evolution of basic aeronautic infrastructure whose purpose is creating a complex multinational enterprise that can provide aeronautic needs. The airport business activity has also led to the enhancement of commercial activities such as tourism, land use, and transportations. The creation of aerotropolis in the 21 st century has resulted in the emergence of airport cities, central drivers in global and urban economic growth ( Wium & Coetzee, 2014) . Aerotropolis also contributes to negative impacts on the economy, such as the project's failure to benefit the community. The government targets investors who can generate high income, and thus, the incentives in place might not favor the local communities. The development of aerotropolis amounts to airport-centric development that promotes and at the same time hinders the economic growth of the region. 

Positive Economic Impacts of Aerotropolis 

Aerotroplis plays an integral role in both regional and international commerce. As outlined by Wium & Coetzee (2014), aerotropolis acts as mainstream for economic and social benefits to local communities and owners of airports. Aerotropolis contributes to the provision of goods and services due to the growing volumes of cargo and passengers. As a result, the airport city has led to the development of a modern form of metropolitan area. The areas covered by the airport and its boundaries reflect on the world's ever-growing economy characterized by agility, speed, and connectivity. Various linked business clusters and residences have sprouted in the region. Local communities and the owners of the airports benefit from various activities that take place around the airport. For instance, the two stakeholders can conduct businesses, exchange knowledge and cultural activities with foreigners. The business transaction process has led to fostering new economic ties between different regions in the world. 

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Aerotropolis has led to establishing a robust transportation system, an essential factor in the successful businesses in regions bordering the airports worldwide. The creation of aerotropolis has led to the region's development, where the airport acts as a logistics hub. The creation of an aerotropolis involves the integration of a breadth of inputs from transportation planners. Through aerotropolis, the airport has been created into multi-modal transportation and commercial nexus. The increase in the airport's economic activities due to the development of aerotropolis is associated with development in road networks and the railway transport sector. The airport is increasingly becoming a hub for commercial activities. Thus, road and railway transportation networks are crucial for the movement of goods and services in and outside the airport. The primary purpose of road and railway infrastructural development is to allow for improvement in efficiency. Aerotropolis has also contributed to economic development through the improvement of commercial border crossing using airplanes. For instance, the infrastructural development has led to improved direct flights to different parts of the world. The mechanism has enabled the airport transport network characterized by aerotropolis to be attractive and impressive globally. The creation of aerotropolis is based on imperial logistic subsidiaries that involve integrating airports with freight and logistics services. The development of aerotropolis in airports such as Schiphol has led to improved business connections worldwide. For instance, the airport is currently connected to 326 destinations globally (LIOU et al., 2018). The area has been enjoying upward development and cordial relationships with other parts of the world in terms of trade because of its efficiency. 

Aetropolis is also viewed as a revenue source to most airports, thus contributing to its economic development. It is characterized by the incorporation of a variety of entertainment and commercial avenues into passenger terminals. Currently, most of the airports are developing retail centers, hospitality, office clusters, logistics, and free trading zones that facilitate the processing of goods and services. Much revenue is collected from such businesses, and some are reinforced from major financial streams like parking and advertisement ( Banai, 2017) . The business mentioned above activities has led to greater revenue streams for airports than traditional aeronautic sources such as landing, passenger service charges, and gate leases. For instance, airports such as Dallas and Schiphol receive approximately two-thirds of their revenue from non-aeronautic revenue streams. Flores-Fillol et al. (2016) argue that the construction of aetropolis in Schiphol airport has played an integral role in further expanding the airport since the money collected has helped in the modernization and extension of its infrastructural needs. Incorporating revenue-generating activities in the airport has also contributed to most airports' cost-competitive nature and attracting and retaining airlines. 

Aerotropolis contributes to employment activities. The development of aerotropolis in airports such as Ekurhuleni was geared towards solving unemployment in the region. Aerotropolis has led to the commercial services and businesses that support air transport. The businesses have resulted in the creation of employment opportunities for a large number of people. Notably, most airport cities are characterized by business activities such as high-tech, entertainment industry, sports, medical field, hotels, trade and exhibitions, business parks, and manufacturing companies, which offer millions of job opportunities to locals and aliens. It is estimated that the airport cities employ relatively 60 million workers through direct and indirect employment opportunities annually ( Rogerson, 2018) . For example, Schiphol airport, a developed aerotropolis contributes to direct and indirect employment of 220,000 people annually. The airport receives 70 million passengers yearly and transports 1.8 million goods from the region ( Rogerson, 2018) . Nonetheless, aerotropolis has allowed for the emergence of more than 600 international companies within airport regions that offers employment opportunities. The activities within the airport have contributed to talent development and reduction in unemployment cases within the region. Apart from creating employment, aerotropolis has also contributed to the labor industry's large expertise and talent pool. 

Aerotropolis has also resulted in an improvement in the tourism business. The architectural development of the airport city is made up of tourism attraction activities such as museums. Its planning has contributed immensely to tourism development by utilizing technology, which favors the tourism industry. In most parts of the world, tourism is important in local development by creating employment and straightening economic ties globally. Notably, Ekurhuleni airport in South Africa has contributed to economic development by aligning and leveraging tourism to aerotropolis development. Countries like Indonesia have also intertwined their aviation expansion to accommodate government initiatives meant to improve the country's tourism sector. The state views that tourism is among the key players in economic growth, and thus, through coordinating with airport practices through tourism, the state anticipates increasing its revenue-generating base. 

Aerotropolis has contributed to special economic zones that are designated for specific industries. The government and local authorities provide supportive infrastructure, including power and water, tax breaks, transportation links, and incentives to encourage businesses' growth. For example, in Indonesia, SEZ investors were given incentives such as exemptions in income tax, exercise duty, and value-added tax to encourage commercial activities within the airport ( Banai, 2017) . Furthermore, the government offered additional support, including incentives, and enhanced the development of transport networks, electricity, and seaport. The government initiative is intended to augment the region's economic growth rate by allowing investors to develop the area without restrictions. Through incentives, the government has encouraged industries' development and other infrastructural development within the airport. 

Aerotropolis has led to the emergence of new business opportunities called clusters, especially in Asia and Europe. Airport cities have resulted in the development of airports and regions adjacent to the airport called airport edge-city. For instance, In Amsterdam, Zudas, a region located six kilometers from Schiphol airport, is emerging as headquarters for companies in the global context (LIOU et al., 2018). Similarly, in the US, aerotropolis development in cities around Dallas Forth-Worth has contributed to the development of towns bordering the airport. Currently, the government offers land that allows entrepreneurs to build businesses from scratch. In the development of clusters, the main goal is to realize business activity that can create higher-paying jobs and increase investments. LIOU et al. (2018) argue that countries such as India, China, and Dubai engage in developing business hub clusters beneficial to travelers and locals. Such an initiative is beneficial to distribution and manufacturing facilities such as conferences, commercial offices, hotels, and entertainment venues. The development of clusters in aerotropolis has been contributed by integrating various entertainment and commercial venues into terminals used by passengers. The mechanism has led to the realization of clusters based on the passengers' hospitality, retail complex, logistics, exhibition, and conference needs. Specialization in clusters has contributed to the maximum generation of revenue among various investors in aerotropolis development. 

Airport-centric commercial development also contributes to regional development. Airport cities are hailed as global production systems that offer speed and connectivity vital for transforming different parts of the world. Like other cities, aerotropolis consists of rings of development, central in the outward trading activities. The new form of economic growth hailed by Wium & Coetzee (2014) is globally competitive, economically efficient, sustainable, and attractive. Aerotropolis creates powerful engines through which local economic expansion can be achieved by generating employment and attracting tourism-related business. The commercial activities are important for regional development since it adds value to local and neighboring communities' lives. 

Aerotropolis has also contributed to effective land use in airports and their surrounding areas. Airport cities have led to the conversion of undeveloped land for trade and residential purposes meant for accelerating the construction of companies, residential apartments, and trading centers in the airports. Aerotropolis has resulted in the dynamic utilization of land through the changing of unproductive land for commercial purposes. The effective utilization of the airport has led to the widening of development in most towns' outskirts. In most parts of the world, airports are located on the outskirts of major towns and cities. The introduction of airport cities has led to the growth of sub-urban regions comparatively to developed cities. Notably, the spatial plan of North Sumatra of 2012-2018 led to synergy in developing regions that borders the airport and linking it to the urban region ( Banai, 2017) . Land use within the airport has led to region development by influencing capital accumulation from regional spillover and its physical potential. The introduction of aerotropolis has also led to the improvement in the value of the land. Traditionally, airports are located in regions outside the town and in unproductive lands. As such, the property value in such areas is poor compared to developed urban centers. The introduction of aerotropolis business has led to the development of business activities such as industries' construction, thus improving the property's value. 

Negative Impacts of Aerotropolis 

Apart from the positive developmental economic significance highlighted, aerotroplis is also characterized by negative economic effects. Aerotroplis is considered to have a profound subvert building of sustainable, inclusive, and equitable cities. Airport metropolises are driven by integrating private commercial activities and state control endeavors characterized by high levels of control and security ( Banai, 2017) . The business is majorly made up of facilities that can only cater to the wealthy and privileged upper-class passengers' needs. Despite its needs for equality and sustainability in society, it is evident that it can only benefit rich people. 

Another negative impact of the aerotropolis is that the projects mainly benefit international corporations and investors such as hotel chains, construction firms, and real estate investment. The airport city business is viewed as a proliferation of schemes based on the global trend of infrastructure. Most of the airport projects are being coveted by the financial system and converted to assets that private investors can reap high returns. In most countries, especially in Africa, taxpayers' money and pension funds are being used to offset the risks involved in developing aerotropolis projects ( Rogerson, 2018) . The mechanism has resulted in the externalization of high costs to the people. Proliferation has caused an increase in poverty levels since the money meant for pensioners and economic growth is entitled to other activities and, in the long run, failure to benefit the citizens. Similarly, the growth rate of the country is dragged backward due to misuse of taxpayers' money. 

Aerotropolis schemes are also characterized by schemes that devour huge tracts of land. As a result, it has impacted challenges such as forced eviction, loss of farmland and biodiversity, land conflicts, noise and water pollution, lack of accountability and transparency (Flores-Fillol et al., 2016). Development of aerotropolis is perpetuated towards a global based-economy, a practice which is slowly causing runaway climate change. In the long run, the practice is bound to expose the world to negative impacts of changes in climatic condition. Cases such as rising water levels in indigenous lakes and depletion of ozone layers contribute to more economic challenges such as drought, diseases, and the inability to produce adequate foodstuffs. Due to the aforementioned negative impacts, resistance against venturing in aerotropolis businesses is growing in Latin America, Tanzania, Turkey, United Kingdom, and Taiwan (Flores-Fillol et al., 2016). 

Conclusion and Recommendations 

Aerotropolis development has resulted in both positive and negative impacts on economic development. From the positive economic impact perspective, aerotropolis is hailed for its essential role in stimulating job creation, improvement in tourism network, proper land use, regional development, and new business clusters. The creation of aerotropolis has led to development of businesses that offer employment opportunities to the locals. The initiative has also contributed to the emergence of new business opportunities in the regions. Most of the areas within airports are unproductive in agricultural development, and thus, through the creation of aerotropolis, industries and other businesses have been initiated. Such has led to improved local living standards through employment activities and the region's opening up due to road and railway network construction. The proper use of land in the area has also contributed spontaneously to the livelihood of the locals. Notably, before the development of aerotropolis, the communities bordering airport lived in a deplorable state due to their land's poor value. However, the introduction of airport cities has led to improved land value for commercial purposes. 

Aerotropolis has also contributed to a negative economic impact. The business activity is mainly carried out by the outsiders, such as foreigners who are rich due to the value associated with services and businesses carried out in the airport. The values of the businesses are expensive proposed are expensive and cannot be afforded by the local community. Development of the airport cities is associated with loss of land, forced eviction, and land conflicts due to the need to offer the property to foreigners for development, leaving the local community as squatters. The government targets investors who can initiate profitable business, which in most cases does not favor the local community. It has also contributed to the existence of the business holders within the airport who are foreigners; thus, the endeavor is failing to benefit the community. For the government to enhance the economic growth through aerotropolis maximally, it should consider offering support to the local community. For instance, the government can engage in providing loans and education on how to run successful businesses. The system will lead to the resolution of issues such as land loss and forced eviction. The airport owners should also consider partnering directly with the local community in the development of aerotropolis business. The initiative will foster enterprise-community relationships, allowing for the communities' growth bordering airports and avoiding land conflicts. 

References 

Banai, R. (2017). The aerotropolis: Urban sustainability perspectives from the regional city.  Journal of Transport and Land Use 10 (1), 357-373. https://doi.org/10.5198/jtlu.2016.889 

Flores-Fillol, R., Garcia-López, M.-Á., & Nicolini, R. (2016). Organization of Land Surrounding Airports: The Case of the Aerotropolis.  Land Economics 92 (1), 57–81 https://doi.org/10.3368/le.92.1.57 

LIOU, J. J. H., Chao-Che HSU, Chun-Sheng Joseph LI, Gudiel PINEDA, P. J., & Gin-Weng CHANG. (2018). Developing a Successful Aerotropolis by Using a Hybrid Model under Information Uncertainty.  Technological & Economic Development of Economy 24 (3), 1080–1103.  https://doi.org/10.3846/20294913.2017.1289484 

Rogerson, C. M. (2018). Urban tourism, aerotropolis and local economic development planning: Ekurhuleni and OR Tambo International Airport, South Africa.  Miscellanea Geographica 22 (3), 123-129. https://doi.org/10.2478/mgrsd-2018-0019 

Wium D, Coetzee M. (2014). Africa’s first aerotropolis in Ekurhuleni - will it foster economic growth?  Civil Engineering (10212000), 22(1):32-34. https://www.aurecongroup.com/about/latest-news/2014/jan/africas-first-aerotropolis-in-ekurhuleni 

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