A transition from an Urban Industrial Society to a Post Industrial Society occurs when a city’s economy becomes based in the services sector rather than manufacturing. Jobs move to the tertiary sectors (where jobs are focused around cities that are corporate headquarters or headquarters for relations between governments) or quaternary sectors (where jobs focus on health and medicine, research and development, and tourism and recreation) and become mainly focused on services for the people.
The change in Moscow began with the resignation of Russia’s final Soviet leader, Mikhail Gorbachev. After the collapse of the Soviet Union, Moscow experienced an economic explosion accompanied by new signs of capitalism. A new economy developed and avenues filled with cars, streets became heavily populated with vendors, and a retail sector emerged.
The business services sector in Moscow has grown drastically in the last twenty or so years. Moscow’s employment in the business services sector has risen from practically zero in 1990 to 8.5-10% in 2000. The rate then rose to 15-16% by 2007. These are incredibly high jumps for a period of only 17 years. The most popular servicing occupations were in banking, insurance, advertising, real estate, corporate legal services, management consultancies, and accounting.
The great increase in service industry goes along with a sharp decrease in employment in the industrial sector. In Moscow many formerly leading industries have either collapsed or have been sold to foreign investors. For example, major corporations, OTIS and British American Tobacco were both sold off to foreign investors. With the changing focus of the economy, room must be made for new buildings to be constructed. Surprisingly enough, rather than knock down or convert old industrial buildings, the preferred route has been to destroy and rebuild historical buildings to make room for new ones. There have been over 1,000 historical buildings knocked down in the last decade to accommodate this. The currently are no incentives to convert old industrial buildings and rather are drawbacks to convert old industrial buildings rather than making new ones. These include a regulation that only new buildings can qualify for class A office status. Until these regulations are changed, much of Moscow’s history will be destroyed.
However, there are a lot of future constructions in Moscow. The "Moscow International Business Center" (Moscow-City) is a projected new part of central Moscow. The Moscow-City area is under intense development. The goal of MIBC "Moscow-City" is to create a zone, the first in Russia, and in all of Eastern Europe, that will combine business activity, living space and entertainment. It will be a city within a city. The project was conceived by the Moscow government in 1992. Also, The Federation Tower, now being built is to be completed in 2016, will become the tallest building in Europe when completed. However n March 2009 the Russian business newspaper "Kommersant" reported that because of the Worldwide Economic Crisis, which started in 2008 and spread globally, many of the construction projects in Moscow are frozen and may be cancelled altogether.
Due to the expanding economic situations, the price of real estate continues to rise in Moscow. Moscow is ranked as one of the most expensive cities to live in the world. In Moscow today, you could expect to pay around $4,000 per square meter (around 11 square feet) in the outskirts of the city, $6,000-7,000 per square meter in the city, and prices may exceed $40,000 per square meter in the wealthiest of housing. The increase in living cost is due to the free spending trends of “New Russians”. In post-Soviet Moscow, many spend money in extravagant ways and shop, dine, live, and buy whatever they want. This makes it very hard on those residents of Moscow without the ability to spend as they are fighting to keep their heads above water in the increasingly opulent city.
Sources:
Brunn, Hays-Mitchell, and Zeigler. (2008) Cities of the World, 4th Edition. Maryland: Rowman & Littlefield Publishers, Inc.
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