1 er Encuentro ProBogotá Region Greg Clark Metropolitan Business Leadership Groups proBogotá

The Business of Cities and Metropolitan Business

Leadership Organisations Greg Clark

Pro-‐Bogota

November 2014

Cities and Business – A Rapidly Evolving Relationship Ci8es and commerce have always been inextricably linked …..

….. but rapid and con8nuing urbanisa8on and globalisa8on are changing the bonds between the two.

© The Business of Ci8es Ltd


Trend 1 Ci8es are Emerging Markets for Businesses

Trend 2 Businesses are (Re)Urbanising

Trend 3 The rise of Tradable Urban Services

Trend 4 Businesses rebranding for city markets and consumers

Trend 5 Ci8es are Hubs of Business Innova8on

trend 6 Businesses are restructuring to meet City goals

Ci8es are Emerging Markets for Businesses •  Size of the global metropolitan market

•  70% of world popula8on of 9 billion by 2050 •  70 million people per year added to developing world ci8es •  2 billion strong ‘consumer class’ in emerging market ci8es by 2025

World’s Urban Popula0on in 2050 Source: UNICEF


Ci8es are Emerging Markets for Businesses

•  Shi[ in nature of economies and products •  Technology is shi[ing which sectors globalise and how they do so

•  Growth of service economies encourages commercialisa8on of urban space

•  Ci8es are the natural habitat of innova8on (Glaeser, Florida, Hollis, Katz)

•  Customers of increasing importance

•  Expansion, upgrading, replacement of infrastructure = €27 trillion over next 25 years (Booz Allen Hamilton)

•  Smart Ci8es market = $400 billion by 2020 (UK government) •  Building and retrofit – demand for advanced technology and innova8ons in design, finance, and delivery of city systems

•  Purchasers of huge range of services from legal advice to landscaping


Why are businesses

moving back to the city?

Demographics and lifestyle

Access to Talent and networks

Transport and safety and educa8on

Improvements

Changing Working Prac8ces

Sustainability Concerns

Policy-‐driven and market incen8ves (eg trade)

Technological Advances

Opportuni8es to collaborate


Businesses are (Re)Urbanising

Agglomera8on effects are much bigger in growth sectors and globalising sectors

Rise of Tradable Urban Services

•  Industries which support city building and growth have become important tradable economic clusters e.g. Planning, architecture, design, energy, water, infrastructure, engineering, waste management, housing development.

•  Businesses emerged to meet the urbanisa8on needs of (now) mature ci8es.

•  Now, rapidly interna8onalising to support the growth of emerging ci8es.

Sydney: Engineering and Construc8on to Dubai and Abu Dhabi London: Architecture and Urban Design Worldwide Paris: Water, Waste and Energy to African ci8es

Masdar City, Foster + Co Masterplan Zaha Hadid deisgn for Abu Dhabi Performing Arts Centre


Business Brands in City Markets

Sustainability / Eco-‐Ci0es Siemens

GE Arup

Bombardier

The ‘City of the

Future’ Audi

Deutsche Bank Microso[ Atkins

GDF Suez

Liveability Mercer Monocle Grosvenor

Global Ci0es JP Morgan Aecom

AT Kearney

Smart Ci0es + Networks Cisco

Ericsson IBM

Cap Gemini Bird + Bird


Cities are Hubs of Business Innovation Urban Spaces Encourage Business Knowledge Networks to Form Why? •  Density – brings businesses together for idea exchange •  Assets – developed transport and comms networks enable increased business contact

•  Ins8tu8ons – (Universi8es, incubators, development agencies) overcome co-‐ordina8on problems and sustain networks

Examples •  Tech – Lisbon, London, Tel Aviv, Berlin, Amsterdam, Nairobi •  Fashion – New York, London, Amsterdam, Milan •  Life Sciences – Dundee, Dortmund, Boston •  Crea8ve and Media – Seoul, Manchester, Shanghai, Lagos © The Business of Ci8es Ltd

Cities are Hubs of Business Innovation Cities as Test Markets

•  The most cosmopolitan ci8es are microcosms of the global market – ideal loca8ons for developing / trialling products

•  Some ci8es promote their role as regional test markets

-‐  Invest in Brussels: city representa8ve of the European Market -‐  Jakarta – densely populated, high consumer confidence, tes8ng ground for emerging markets

•  Others have become renowned as na8onal test markets

-‐  Columbus, Ohio – US fast food -‐  Bangalore – product tes8ng for Indian market

•  Diverse labour forces develop content which translates across cultural barriers © The Business of Ci8es Ltd

Corporate Urbanising Structure: Internal Reorganisation

• Ci8es divisions e.g. Siemens ‘Infrastructure and Ci8es’ sector

• Representa8ves in target ci8es e.g. Bank of America ‘Market Presidents’

•  Internal city advisory func8ons e.g. KMPG Ci8es Global Centre of excellence

• City strategies e.g. Air BnB

• CRM to manage interac8ons with ci8es

“Ci:es are a key growth market for the future. By e s t a b l i s h i n g t h e Infrastructure & Ci:es Sector, we ’ r e c l e a r l y g e a r i n g ourselves to the market. We have the porColio, the know-‐how and the consul:ng exper:se to make ci:es of all sizes greener and more compe::ve…..”

Roland Busch, Siemens Managing Board, Infrastructure & Ci0es Sector CEO


Associated trends

•  Tourism is re-‐urbanising • Retail is re-‐urbanising • Housing is re-‐urbanising •  The Knowledge Economy is re-‐urbanising • Urban Real Estate is now an Investment Asset Ci8es now maper much more to business and


So, business becoming more interested in ci8es.

But are ci8es becoming more like businesses?

Are Cities Like Businesses? •  Compete in contested markets •  Innova8ve use of financial resources •  Clearly defined goals •  Networking •  R & D, Innova8on and Investment •  Human Capital •  Brand •  Leadership


Are Cities Like Businesses? •  Ci8es are under-‐powered. •  Ins8tu8onal v func8onal geography •  Short term money for long term challenges •  Complex governance •  Cannot choose ‘customers’ •  Cannot choose products and services •  Risk taking is controlled •  ‘Profit’ is retained by others •  City leaders:

•  democra8cally elected and accountable •  may have limited power.

•  Iden8ty and brand shaped by others © The Business of Ci8es Ltd

Cities suffer from wicked problems that businesses don’t always have v Short-‐termism and over poli8cised ins8tu8ons….. Makes them risk averse

v Fragmented jurisdic8on that limits impact of leadership and ini8a8ve

v Limited access to capital, low investment rate

v Power is subordinated to higher 8ers of Government

v Reputa8on, Brand, and Iden8ty influenced and even controlled from outside

Fortunately, well organised business can help ci8es with all of these issues.

Three new roles for business in city development. Role #1 Business and City Partnerships an Joint Ventures Role #2 Cities use Business Management Approaches and Tools Role #3 Business and City Governance


Business Leadership Groups •  More dynamic and proac8ve than tradi8onal Chambers of Commerce. •  Overcome constraints which bind city authori8es:

•  Think beyond short term electoral cycles •  Look beyond poli8cal geography / electoral boundaries •  Members have experience in branding, sales, marke8ng, agenda setng, priori8zing

•  Strong bargaining posi8on with central government as ‘customers’ rather than subordinates.

•  Develop strategies and advocate for policies to enhance a city’s compe88veness.

•  O[en work collabora0vely with local government and other city stakeholders

•  Concerned with making contribu8ons to urban and metropolitan development.


City Business Leadership Groups

Partnership for New York City Inaugurated: 1979 Membership size: 200 Composi8on: CEOs from top corporates based or present in NYC Also ‘Associate partners’ -‐ CEOs of small businesses, agencies or organiza8ons with a significant profile in the city (invita8on only)

Coverage: City Staff: President and CEO supported by five Senior staff members Key ini8a8ve(s): Fiscal stability Benchmarking Subway advocacy

Partnership Fund for New York City -‐ $110m,

London First Inaugurated: 1994 Membership size: ~ 200

Membership composi8on: Large firms which make up 25% of London GDP Coverage: Metropolitan region Staff: Board, 30 staff Revenue: £3.8 to £4.1 million Key ini8a8ve(s): Promote London. Cross rail Teach First Airports Housing Supply; Economic Development Plan

Barcelona Global

Membership size: ~200 Composi8on: Business leaders and entrepreneurs from companies

which make up the majority of Barcelona’s employment. Also Individuals with ‘reputa8on and talent’.

Coverage: City

Staff: 1 manager co-‐ordinates daily work. Board of 30 – 50 elected members. Working groups drawn from Board have responsibility for

specific projects. Key ini8a8ve(s): Barcelona Open Talent, Brand Barcelona, School and Business Postcard to Business Card

Committee for Sydney Inaugurated: 2003 Membership Size: ~100 Composi8on: Major companies, universi8es, not-‐for-‐profits, strategically

significant local governments and key cultural, spor8ng and marke8ng bodies

Coverage: Metropolitan region Staff: 14 Board members + 4 staff

Key Ini8a8ve(s): Sydney 2054 Strategic Plan and Vision

Sydney as a global talent hub;

Financial Services

Knowledge Hub Sydney 2055

Committee for Auckland Inaugurated: 2001 Membership Size ~ 80 Composi8on: Chairs of Boards, Directors and Chief Execu8ves

corpora8ons, ter8ary and not for profit sector Coverage: Metropolitan Region Staff: Board + 7 staff

Key ini8a8ve(s): Governance reform and leadership of the region

Investment system

Future Auckland Leaders

Ci8es of Migra8on

Auckland Anchors

Toronto Board of Trade Inaugurated: 1845 Membership size: ~12 000 members Composi8on: Major firms, business associa8ons, entrepreneurs Coverage: Metropolitan region (Greater Toronto Area) Staff: 11 Board members, 11 staff on execu8ve team, 21 Advisory

Council members Key ini8a8ve(s): Think Twice, Vote Once;

Let’s Break the Gridlock; Scorecard on Prosperity.

Berlin Partner Inaugurated: 2005 Membership size: 236 (of which 24 are ‘science’ partners) Composi8on: Companies, scien8fic and educa8onal

ins8tu8ons. Open to any company ‘interested in working together for Berlin’

Coverage: Metropolitan region Staff: 30 staff plus supervisory board of 10 members Key ini8a8ve(s): Capital City Marke8ng and Brand, Business Welcome Package; Business Loca8on Centre;

And there’s many more…. Bombay First Greater Seaple Trade Development Alliance Accelerate Cape Town Commipee for Melbourne Tokyo Chamber Leaders AmCham Buenos Aires Stockholm Business Region And new organisa8ons being formed in Sao Paulo, Madrid, and many more

i.  Regional/Metro Vision, Plan, and Collabora8on. Engaged in pan regional ac8vi8es so can iden8fy and encourage poten8al rela8onships and broaden par8cipa8on in development

ii.  Advocacy and strategic case making for Cataly8c ini8a8ves. Can advocate more effec8vely with higher 8ers of government than local government can because they represent ‘customers’ rather than ‘subordinates’

iii.  Business aprac8on and reten8on. Can ar8culate the aprac8veness of a city from the persuasive ‘user’ perspec8ve

iv.  Bringing business innova8on and know-‐how. Can add value by introducing exper8se such as marke8ng and financial innova8on and a business culture of leanness, meanness and entrepreneurism.

v.  Interna8onal perspec8ve. Through their global networks businesses can bring examples of best prac8ce to the local development agenda.

What unique contribu8on can business leadership and membership groups make?

28 © 2010 Greg Clark

vi.  Communica8on and Promo8on. Seen as less self-‐serving, especially by the media

vii.  Pay for certain ac8vi8es. The private sector may be able to pay for things local government

may not e.g. celebri8es, adver8sing, awards, editorial

viii. Cross party collabora8on. Can also encourage cross-‐party and bi-‐par8san consensus and collabora8on because they are non par8san

ix.  Broker wider par8cipa8on. Broaden the base of par8cipa8on by encouraging Universi8es, Airports, Cultural ins8tu8ons etc.

x.  Corporate Responsibility leaders. Can organise this on a large scale to promote key causes.

What unique contribu8on can business leadership groups make?

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What role for business groups in the city development system? Nego8ate Advocate with Gov

Apract & reten8on

Reg collab

Bus know how

Comms & media CSR Int best

prac8ce Pay for ac8vi8es

X Party collab

Wider par8cip

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10 ‘Secrets’ of Success for Business Leadership Groups

i.  Combine long term vision view and short term tac8cs.

ii.  Business culture. Economics, compe88veness, brand, produc8vity, ac8on, measurement, RoI, managed risk. Opportunity focussed.

iii.  Focus on city needs rather than narrow business needs. Not rent seeking. Not a lobby for business but a lobby of businesses.

iv.  Broad base of sectors, not just real estate, or finance, or lawyers, or retailers, or hospitality, energy, IT, etc.

v.  Apoli8cal and able to face in all direc8ons.

vi.  Not publicly subsidised (not tax payers money).

vii.  Leverage business skills, innova8ons, and leadership. Show how.

viii.  Posi8oning: customers, investors, employers, not subs8tutes, subordinates, or subversives.

ix.  Priori8sa8on of the major catalysts, but not fe8shes or favouri8sm.

x.  Evidence led, not ideology.

www.ci8esandregions.com 32

within every very successful city is well organised business leadership

Good Luck Pro-‐Bogota

1 er Encuentro ProBogotá Region Greg Clark Metropolitan Business Leadership Groups proBogotá

Business

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