Hub – definition and meaning

A hub is a center of activity or the central part of a wheel. It is a central airport or another transport facility from which many different services operate. When the term relates to airlines and flights, we often refer to it as a ‘hub airport.’

It is also an electronic device that is the central connecting point for several computers. In other words, a device that connects other devices to a network.

In metalworking, the hub is a steel punch from which people make a medal or coin.

This article focuses on the term’s meaning in the world of business and hi-tech devices.

According to the Oxford Living Dictionaries, a hub is:

“1. The central part of a wheel, rotating on or with the axle, and from which the spokes radiate. 2. The effective center of an activity, region, or network.”

“3. A central airport or other transport facility from which many services operate.”

Hub - definition and examples
Imagine a bicycle wheel with many spokes that lead to a hub in the center. When the bicycle is moving, the wheel and spokes are turning round, and the hub is at the center. In other words, it is at the center of all the activity. Hub airports, as well as network and financial hubs, are also at the center of everything that is happening.

Financial hub

A financial hub may be a region or a city. It is the focal point of a country’s or whole region’s financial services industry. We often refer to this type of place as a financial center.

They are home to major financial institutions, stock markets, and other financial companies and services.

These major financial centers typically emerge after the government passes supportive regulation. They may also develop as a result of externalities.

In this context, ‘externalities’ refers to the result of a high concentration of financial companies in a specific location. In other words, an area may become a financial hub because there were many financial services there initially. That concentration attracted more financial companies, and then more, i.e., the growth snowballed.

Famous financial hubs, for example, are Wall Street in New York City, The City in London. Central in Hong Kong and Marunouchi in Tokyo are also major financial hubs.

Network hub

Network hubs are common connection points for devices that form part of a network. They typically connect segments of a LAN.

LAN stands for Local Area Network, i.e., a computer network that covers a relatively small area. Most LANs cover a building, a group of buildings, or just a single room.

The network hub has multiple ports. A port is an interface on an electronic device to which we can connect another device.

When a packet arrives at one port, it is subsequently copied to other ports. Consequently, all the LAN’s segments can see all packets. In this context, a packet is a piece of message that travels along a packet-switching network.

Webopedia says the following regarding the meaning of hub:

“Hubs and switches serve as a central connection for all of your network equipment and handles a data type known as frames. Frames carry your data.”

“When a frame is received, it is amplified and then transmitted on to the port of the destination PC.”

Video explanation