Invest in Success: Leveraging the Return from Global Cities Greg Clark Toronto, May, 2008 .

Invest in Success: Leveraging the Return from Global Cities

Greg ClarkGreg Clark

Toronto, May, 2008Toronto, May, 2008

www.citiesandregions.comwww.citiesandregions.com 11


Key questionsKey questions

i.i. Is city development an investment Is city development an investment or an or an expenditure for Governments?expenditure for Governments?

ii.ii. Why are there so many investment Why are there so many investment gaps gaps in cities?in cities?

iii.iii. Do these gaps need to be Do these gaps need to be addressed? addressed? What are the costs of not What are the costs of not closing them?closing them?

iv.iv. What can we do about it?What can we do about it?

v.v. What can Toronto do about it?What can Toronto do about it?


Propositions

1.1. New global era requires a renewed focus on city investment. New global era requires a renewed focus on city investment. Demand side drivers with supply side constraints.Demand side drivers with supply side constraints.

2.2. National success is not possible without city success.National success is not possible without city success.

3.3. Improved City investment requires dedicated tools and public / Improved City investment requires dedicated tools and public / private endeavour: financial tools and development agencies are private endeavour: financial tools and development agencies are essential.essential.

4.4. Investment is the critical task of city leadership.Investment is the critical task of city leadership.

5.5. Development Agencies are a key tool in fostering financial Development Agencies are a key tool in fostering financial innovation.innovation.

6.6. Being ‘investment-ready’ is the key task for cities.Being ‘investment-ready’ is the key task for cities.

7.7. Cities have to provide investment prospectus.Cities have to provide investment prospectus.

8.8. Asset management and leverage within cities is key.Asset management and leverage within cities is key.

9.9. Work with public and private investors in partnership.Work with public and private investors in partnership.

10.10. Investment and co-ordination are central to building prosperity.Investment and co-ordination are central to building prosperity.

But, substantial problemsBut, substantial problems

i.i. Cities have limited fiscal tools.Cities have limited fiscal tools.

ii.ii. Investment cycle is 25 years, not a single mandate.Investment cycle is 25 years, not a single mandate.

iii.iii. Major cities subsidise other places through transfer payments.Major cities subsidise other places through transfer payments.

iv.iv. Cities compete for investment in public finance systems and in Cities compete for investment in public finance systems and in marketsmarkets

v.v. National govs compete to be fiscally tight.National govs compete to be fiscally tight.

vi.vi. Cities cannot easily develop finance track record.Cities cannot easily develop finance track record.

vii.vii. Much of the national benefit of city growth is intangible or not Much of the national benefit of city growth is intangible or not measured.measured.

viii.viii. Political representation does not reflect actual population and Political representation does not reflect actual population and cities are under-represented.cities are under-represented.

ix.ix. Market knowledge on city investment opportunities is not Market knowledge on city investment opportunities is not perfect. perfect.

x.x. Municipal staff not widely skilled in development finance, Municipal staff not widely skilled in development finance, project finance, or investment disciplines. project finance, or investment disciplines.



Cities and Regions need investmentCities and Regions need investment Transition to knowledge led economyTransition to knowledge led economy

– Interaction of place with economyInteraction of place with economy– What businesses and people needWhat businesses and people need– Agglomeration, proximity, quality of place, co-ordination Agglomeration, proximity, quality of place, co-ordination

successsuccess Economic integrationEconomic integration

– Continental, global,…. Competition and CollaborationContinental, global,…. Competition and Collaboration Environmental Imperatives. Completing the clean-Environmental Imperatives. Completing the clean-

up and greening the city economy.up and greening the city economy. Social inclusion. New forms of intermediation.Social inclusion. New forms of intermediation. Policy Innovation and delivery.Policy Innovation and delivery.

speed, authority, governance.speed, authority, governance. Space, flows, economic units. Space, flows, economic units. Metropolitanisation, cities, and regions.Metropolitanisation, cities, and regions.

Productivity, Place, and Productivity, Place, and InvestmentInvestment

Investment

Enterprise

Management skills raise entrepreneurship and business performance

Increasing competition creates incentives for business investment

Competition

Skills raise firms’ capacity to develop and use new technology

Innovation

Entry of new firms raises competition

Skills

1. Indigenous growth 2. Primarily supply side 3. Market failures in……

4. And drivers of growth

New firms can create demand for skilled labour

Investment in physical capital increases firms’ innovative capacity


Take a long term view.Take a long term view.

6 Long Term Drivers:6 Long Term Drivers:Economic Internationalisation.Economic Internationalisation.Human mobility and demographics.Human mobility and demographics.Environmental change and challenge.Environmental change and challenge.Technology development.Technology development.Urbanisation of poverty and inequality.Urbanisation of poverty and inequality.Continental governance.Continental governance.

How localities and regions respond matters.How localities and regions respond matters.Governance, investment, strategy, leadership, marketing & Governance, investment, strategy, leadership, marketing & branding, catalyst, collaboration.branding, catalyst, collaboration.Population and investment strategies, branding, climate Population and investment strategies, branding, climate impact, science and knowledge, inclusion, open-ness.impact, science and knowledge, inclusion, open-ness.

88

An Urban and Metropolitan An Urban and Metropolitan WorldWorld

Globalisation and the knowledge economy have Globalisation and the knowledge economy have repositioned metropolitan regions as drivers of repositioned metropolitan regions as drivers of national economies:national economies:

1925: 25% of world population lived in cities

2025: 75% of world population will live in cities/metropolitan areas

2025: 17 of world’s 25 largest cities will be in coastal regions in Asia


Global economic integration has increased Global economic integration has increased dramatically over recent years…dramatically over recent years…

History of Globalisation

• Globalisation is not a new phenomenon, there have been numerous examples of markets undergoing structural change and periods of high levels of cross-border trade going back as far as Roman times.

• However globalisation, as we consider it now, really took off in the late 19th Century as Britain led the way with a large increase in exports to the world and global migration increased significantly.

• World War I sparked a period of retreat but after World War II there has been further waves of globalisation.

• The current wave is distinctive because of the scale and pace of change; the international fragmentation of production and the maturity of international capital markets.

Figure: Three waves of globalisation

Source: World Bank

“Globalisation is the growing economic interdependence of countries worldwide through increasing volume and variety of cross-border transactions in goods and services, free international capital flows, and more rapid and widespread diffusion of technology.”

Source: International Monetary Fund

1


Free Trade/Geo-Political Shift

• Since World War II and especially since the fall of the Soviet Bloc, there has been a strong commitment by many nations to free trade.

• This is achieved in principle through reducing tariffs and other barriers to trade.

• There have been numerous multi-lateral trade agreements between countries and overseen by the World Trade Organisation.

• The establishment of the EU has allowed and encouraged the free movement of goods, services and capital between its member states.

Falling Transport Costs

• An important factor that has driven globalisation over the last 50 years is the significant falls in the costs of transportation.

• Containerisation and haulage have dramatically increased the capacity and speed with which goods can be transported around the globe and domestically.

• This has reduced the need for goods to be manufactured near to the consumer.

• Recently there has also been significant falls in the cost of air travel allowing people to move easily around the world.

Advances in Technology

• There have been significant advances in information and communication technology over the last 20-30 years.

• This has facilitated information exchange and has lowered transactions costs.

• Combined with lower transportation costs, this has enabled firms to outsource different elements of their business to various locations and hence the growth of multinationals.

• There is also a direct effect with new technology industries offering opportunities and a greater need for skills.

Mobility of People

• Both internal and international migration have been drivers of globalisation.

• The willingness and ability of people to move has provided an increasingly flexible labour market to meet the needs of growing sectors.

• Internal both inter- and intra-regional migration has increased steadily over the last few decades.

• International migration has also been on the increase, with indications suggesting that this trend will accelerate in the coming years, supporting continued globalisation.

There are economic, political and social drivers of There are economic, political and social drivers of this recent wave of globalisation…this recent wave of globalisation…

2


Urbanisation - Nearly half the world now live in urban areas.

Trade Flows - World trade has increased dramatically over the last 50 years.

Source: UN DESA (2005)

Capital Markets – Dramatic increases in the last few decades.

Geographic fragmentation of production – Companies are splitting their production process around the world to where it can be done most efficiently.

“The globally integrated enterprise, fashions its strategy, management and operations to integrate production worldwide. That has been made possible by shared technologies and shared business standards, built on top of a global information technology and communications infrastructure. New technology and business models are allowing companies to treat their functions and operations as component pieces, companies can pull those pieces apart and put them back together in new combinations.” – S Palmisano, head of IBM, 12/6/06 in the FT

3

Internationally this has led to urbanisation, increased trade and Internationally this has led to urbanisation, increased trade and capital flows and thecapital flows and the geographic fragmentation of production…geographic fragmentation of production…


The current wave is expected to continue with the emergence The current wave is expected to continue with the emergence of new economies driving the global economy…of new economies driving the global economy…

Emerging economies

• Globalisation Is expected to continue at an ever increasing pace driven by emerging economies, such as China and India.

• They are growing at a rapid rate and are forecast to account for nearly 40% of the growth in the world economy over the next 15 years.

• Emerging economies have access to a huge labour force; over 80% of the world’s population live in emerging economies.

• This supply of labour, combined with an increasing openness to trade and improved communications has allowed these emerging markets to forge strong manufacturing based, export economies.

• This shift in power away from developed countries will have a profound effect over the coming years across the global economy and specifically for Britain.

• In general, the emergence of these economies has and will be good for the developed world with consumer goods becoming cheaper and productivity being boosted by increased competition.

• However, there are likely to be losers as a result of increased competition with rising inequality as the rising ascendancy of emerging economies alter the relative returns to labour and capital.

• The impact on the UK over the coming years is likely to follow a similar pattern to what has been going on over the previous 30 years, with the comparative advantage shifting towards innovative and knowledge-intensive service sectors.

4


Framework for city growthFramework for city growth

Pre-conditions

Business environment & investment

Educational and research

base

Land and physical

infrastructure

Social/ cultural infrastructure &

quality of life

Ecological base .

Innovation & creativity

Industrial structure

Business ownership & mgt

Human capital

Connectivity .

Use of resources

Productivity Population

Economic growth performance

Drivers

Global economy and Macro-economic

framework

Feedback effects

Markets

Governance structure .

Environ mgt


As many city economies are ‘under-bounded’ some As many city economies are ‘under-bounded’ some regional governance may boost growth…regional governance may boost growth…

Relationship between size of government and economic growth

…

Proportion of city-region population covered by city-region governance arrangement

Gro

wth

in G

DP

pe

r ca

pita Local

Authority

Regional

Note that the identification of LA and regions on this curve is

stylised - we are doing some work to identify where the core cities

are on this curve


City/Region

Cities, Regions, and Mobility

Work

International Students

Recreationand Tourism

Shopping and Commerce

Events & Culture &Sport

Investment

Migration

Inward Investment& Trade


Traditional Regional Traditional Regional PoliciesPolicies‘‘Regional Planning’Regional Planning’1950s to 1990s1950s to 1990s

New Regional PoliciesNew Regional Policies‘‘Territorial Development’Territorial Development’1980s to present1980s to present

ObjectivesObjectives Balance national economies Balance national economies by compensating for by compensating for disparitiesdisparities

Increase regional development Increase regional development performanceperformance

StrategiesStrategies Sectoral approachSectoral approach Integrated development Integrated development programmes and projectsprogrammes and projects

Geog. Geog. focusfocus

Political regionsPolitical regions Economic regions and eco Economic regions and eco regionsregions

TargetTarget Lagging regionsLagging regions All regionsAll regions

ContextContext National economyNational economy International economy and local International economy and local economieseconomies

ToolsTools Subsidies, incentives, state Subsidies, incentives, state aids, and regulationsaids, and regulations

Assets, drivers of growth, soft Assets, drivers of growth, soft and hard infrastructures, and hard infrastructures, collaboration incentives, collaboration incentives, development agencies, co-development agencies, co-operative governanceoperative governance

ActorsActors National governmentsNational governments Multiple levels of governments, Multiple levels of governments, private and civic actors. private and civic actors. Implementation agencies.Implementation agencies.


Focus: the Challenges of bigger Focus: the Challenges of bigger city-regions.city-regions.

i.i. Bigger cities now key to Bigger cities now key to national economic successnational economic success..ii.ii. But bigger cities not focus of But bigger cities not focus of national economic policiesnational economic policies..iii.iii. Cities/regions/metropoles not recognised well in higher Cities/regions/metropoles not recognised well in higher

order or sectoral policies.order or sectoral policies.iv.iv. But globalisation happens through But globalisation happens through institutions and firms institutions and firms

based in bigger citiesbased in bigger cities, and using metropolitan logistics and , and using metropolitan logistics and infrastructure.infrastructure.

v.v. Bigger cities provide a Bigger cities provide a high return on public and private high return on public and private investmentinvestment if they can solve problems effectively. if they can solve problems effectively.

vi.vi. Organising the Organising the economic city and it’s storyeconomic city and it’s story is the first key is the first key task.task.

vii.vii. Demonstrate the ability to make an economic difference.Demonstrate the ability to make an economic difference.viii.viii. Global cities working with globally companiesGlobal cities working with globally companies, a large firms , a large firms

agenda as well as small firms.agenda as well as small firms.ix.ix. Make the Make the case for the city economicallycase for the city economically……London, New ……London, New

York, Auckland, Madrid.York, Auckland, Madrid.x.x. Invest in success......Invest in success......


Leadership challenges in cities and Leadership challenges in cities and regions.regions.

1.1. Transition to a new economy and it’s requirements.Transition to a new economy and it’s requirements.

2.2. Openness to international populations.Openness to international populations.

3.3. Rapid and dynamic growth of metropolitan regions. Mega trends driving Rapid and dynamic growth of metropolitan regions. Mega trends driving metropolitan growth.metropolitan growth.

4.4. Service needs of dynamic populations.Service needs of dynamic populations.

5.5. Greater transparency to customers and stakeholder.Greater transparency to customers and stakeholder.

6.6. Investment not enough. Financial resources are finite and national public Investment not enough. Financial resources are finite and national public finance is slow to follow growth. Lack of investment tools.finance is slow to follow growth. Lack of investment tools.

7.7. Formal power and competence less than needed. City and regional Formal power and competence less than needed. City and regional governments do not control everything: boundaries, competences, division governments do not control everything: boundaries, competences, division of labour with higher/lower tiers, markets, regulation/freedomof labour with higher/lower tiers, markets, regulation/freedom

8.8. National and sub-national governments guard their own space. Co-National and sub-national governments guard their own space. Co-ordination challenges.ordination challenges.


City LeadersCity Leaders

There are new ingredients appearing in city strategies that appear to be distinctive

– Internationalisation strategy.Internationalisation strategy.– Talent and population strategies. (eg Open-Talent and population strategies. (eg Open-

ness).ness).– Economic collaboration.Economic collaboration.– Sustainable development and climate Sustainable development and climate

adaptation (environment and energy).adaptation (environment and energy).– Investment strategies.Investment strategies.– Business partnerships.Business partnerships.– Regionalism and national success.Regionalism and national success.

Additional investment requirements.Additional investment requirements.www.citiesandregions.comwww.citiesandregions.com 2323


Positioning the role of Economic Positioning the role of Economic Development within City-Development within City-Regions.Regions.i.i. Economic develop not like public services. Engaging in Economic develop not like public services. Engaging in

marketsmarkets, increasingly global…, increasingly global…ii.ii. It is It is not an expenditurenot an expenditure cities/regions make. It is an cities/regions make. It is an

investment investment that yields returns if done well. that yields returns if done well. Income sideIncome side of of balance sheet.balance sheet.

iii.iii. Not just a department within a city/region, but a rationale Not just a department within a city/region, but a rationale for what the city/region doesfor what the city/region does. The . The prosperityprosperity agenda. agenda.

iv.iv. Wide range of city gov activities and other public services Wide range of city gov activities and other public services contribute to economic developmentcontribute to economic development: culture, tourism, : culture, tourism, planning, housing, education, transportation: city needs a planning, housing, education, transportation: city needs a co-ordinating approach. co-ordinating approach. ChoicesChoices about how to organise. about how to organise. Offices, Agencies, Partnerships.Offices, Agencies, Partnerships.

v.v. Not a choice amongst competing priorities, but a Not a choice amongst competing priorities, but a meansmeans to to achieve wider goals in social, environmental, cultural achieve wider goals in social, environmental, cultural realms. realms. It is the business of everyoneIt is the business of everyone..

vi.vi. Economic development has broad Economic development has broad outcomesoutcomes: : taxes/resources, land values and assets, jobs and choices taxes/resources, land values and assets, jobs and choices for citizens, investment, visitors, prestige, dynamism and for citizens, investment, visitors, prestige, dynamism and buzz, partnership with business on city goals, a clear buzz, partnership with business on city goals, a clear future for the city and its people…..future for the city and its people…..


Features of effective city/region Features of effective city/region organisingorganising

1.1. One Plan;One Plan; and strong story line. An investment prospectus. and strong story line. An investment prospectus.2.2. Economic agendaEconomic agenda across whole Regional/City Gov, not across whole Regional/City Gov, not

within one department.within one department.3.3. Organised business leadershipOrganised business leadership that is demanding and that is demanding and

consistent and speaks to all orders of Government.consistent and speaks to all orders of Government.4.4. Customer orientationCustomer orientation: employers, investors, visitors, : employers, investors, visitors,

entrepreneurs, traders, innovators, developers, entrepreneurs, traders, innovators, developers, infrastructure…infrastructure…

5.5. Focussed number of Focussed number of top prioritiestop priorities, sectors, and spaces., sectors, and spaces.6.6. Expanding Expanding capacity to implementcapacity to implement. Range of financing tools.. Range of financing tools.7.7. Range of Range of delivery vehiclesdelivery vehicles that can that can attract external attract external

investmentinvestment..8.8. Problem SolvingProblem Solving and and Project ManagementProject Management orientation. orientation. 9.9. Strong Strong economic agenda and partnershipseconomic agenda and partnerships with: with:

Local public sector, Local and regional Private Sector. Regional public Local public sector, Local and regional Private Sector. Regional public partners, Provincial and Federal Governments, Global partners.partners, Provincial and Federal Governments, Global partners.

10.10. A collaborative leadership that leads, empowers, A collaborative leadership that leads, empowers, focuses on focuses on big picture and leverages resources to deliverbig picture and leverages resources to deliver..


Success and failure in City Economic Success and failure in City Economic DevelopmentDevelopment

Success.Success. Rising tax base with Rising tax base with

lower taxes.lower taxes. Employment and Employment and

incomes for citizens and incomes for citizens and choice of jobs.choice of jobs.

Resources for social and Resources for social and environmental environmental programmes.programmes.

Multiple distinctive and Multiple distinctive and attractive locations.attractive locations.

Managed growth and Managed growth and investment.investment.

Increased global Increased global connectivity.connectivity.

Strong collaborations.Strong collaborations.

FailureFailure Dwindling tax base with Dwindling tax base with

high taxes.high taxes. Reduced resources for Reduced resources for

other programmes.other programmes. Environmental Environmental

degradation.degradation. High unemployment and High unemployment and

high emigration.high emigration. Disinvestment.Disinvestment. Failed projects and Failed projects and

initiatives. Bickering.initiatives. Bickering. Reduced global Reduced global

connectivity.connectivity. Unmanaged decline.Unmanaged decline.

Do some cities succeed without ‘strategies’? Yes they do, but are there other ingredients Yes they do, but are there other ingredients

present:present: BarcelonaBarcelona New YorkNew York LondonLondon DublinDublin

Long term factors of city success versus Long term factors of city success versus medium term factors of city success. (ref medium term factors of city success. (ref London and New York versus city indexes).London and New York versus city indexes).



Why do city and regional strategies Why do city and regional strategies fail?fail?

• Strategy done for Strategy done for wrong reasonwrong reason /strategy has no /strategy has no focus or specificityfocus or specificity

• Lack of leadershipLack of leadership and cross city working. and cross city working.• No No communicationcommunication, compacting, and conviction., compacting, and conviction.• No No assessment assessment of local assets and of local assets and

distinctiveness.distinctiveness.• No No assessmentassessment of demand side opportunities. of demand side opportunities.• No No responsibilityresponsibility amongst competent bodies. amongst competent bodies.• Lack of Lack of toolstools to implement at scale. to implement at scale.• Lack of Lack of investmentinvestment, capacity/resources., capacity/resources.• Failure to Failure to solve problemssolve problems as they arise. as they arise.• No No intentionintention to implement. to implement.• No No supportsupport from higher tier Govs, or neighbours. from higher tier Govs, or neighbours.

But is city strategy the key variable? What about?

Implementation.Implementation. City Leadership.City Leadership. Business behaviour and leadership.Business behaviour and leadership. Investment.Investment. Infrastructure.Infrastructure. City identity and imageCity identity and image Asset Management.Asset Management. Delivery capability.Delivery capability. www.citiesandregions.comwww.citiesandregions.com 2929

What is long term city success?25 Global Indexes of Cities.

Which Cities winning?Which Cities winning?

What factors of success?What factors of success?

An Index of Indexes?An Index of Indexes?

Long Term Factors?Long Term Factors?

London and New York in 21st C.

2000 – 2100?2000 – 2100?

1900 – 2000?1900 – 2000?

Collaboration not competition.Collaboration not competition.

Compare the cities: 14 Compare the cities: 14 measures.measures.

Thematic investigation.Thematic investigation.

Engage other cities:Engage other cities:

Tokyo, Paris, Hong Kong?Tokyo, Paris, Hong Kong?

Frankfurt, Dublin, Madrid?Frankfurt, Dublin, Madrid?

Seoul, Mumbai, Sao Paolo?Seoul, Mumbai, Sao Paolo?


Medium term measures of success?

i.i. Connectivity and space to grow.Connectivity and space to grow.

ii.ii. Quality of Life and Place (eg Urban Design).Quality of Life and Place (eg Urban Design).

iii.iii. Skills of labour force.Skills of labour force.

iv.iv. Innovation and CreativityInnovation and Creativity

v.v. Entrepreneurship.Entrepreneurship.

vi.vi. Industrial structure.Industrial structure.

vii.vii. Cost base of cities.Cost base of cities.

viii.viii. Transparency of business environment.Transparency of business environment.

ix.ix. Identity and Brand Building.Identity and Brand Building.


Longer term?

i.i. Openness to International Populations.Openness to International Populations.

ii.ii. Power of the City Identity and Brand.Power of the City Identity and Brand.

iii.iii. Location and Access to growing markets.Location and Access to growing markets.

iv.iv. Role of city in International Trade.Role of city in International Trade.

v.v. Power of influence of language and regulatory/legal systems.Power of influence of language and regulatory/legal systems.

vi.vi. Depth of artistic, architectural and cultural endowment.Depth of artistic, architectural and cultural endowment.

vii.vii. Continuity of city leadership.Continuity of city leadership.

viii.viii. Success in adjusting to shocks and luck in being on the right Success in adjusting to shocks and luck in being on the right side of conflicts. side of conflicts.

ix.ix. Sustainability in terms of climate and environmental Sustainability in terms of climate and environmental sensitivity.sensitivity.

x.x. Investment in the city from all sources (including higher tiers Investment in the city from all sources (including higher tiers of government).of government).



Financing city development: 10 principles..

i.i. Smart finance for smart cities: getting the fiscal Smart finance for smart cities: getting the fiscal relationships with higher tiers of Government rightrelationships with higher tiers of Government right

ii.ii. Promote active private sector leadership in city Promote active private sector leadership in city investmentinvestment

iii.iii. Metropolitan finance for metropolitan amenitiesMetropolitan finance for metropolitan amenitiesiv.iv. Sharing the benefits of growth locallySharing the benefits of growth locallyv.v. Flexibility in public funding to enable private co-Flexibility in public funding to enable private co-

investmentinvestmentvi.vi. A new approach to public assetsA new approach to public assetsvii.vii. Financial innovation in public and private sectorsFinancial innovation in public and private sectorsviii.viii. Long term market building by the private sectorLong term market building by the private sectorix.ix. Focus on the quality of the propositions not on the Focus on the quality of the propositions not on the

supply of financesupply of financex.x. Build capable specialist financial intermediariesBuild capable specialist financial intermediaries


Making markets work better Making markets work better for local developmentfor local development

The age of subsidies is past.The age of subsidies is past. Healthy local investment markets:Healthy local investment markets:

Supply of capitalSupply of capital Demand and deal flowDemand and deal flow Information and co-ordinationInformation and co-ordination Brokerage and intermediationBrokerage and intermediation

Market failure is not a simple supply issueMarket failure is not a simple supply issue Economic development task is to build the Economic development task is to build the

market.market. Demand side is key and facilitation is Demand side is key and facilitation is

essential.essential.


Investing in City and Regional Investing in City and Regional Economic Development.Economic Development.

Private sector co-investment is an important quest.Private sector co-investment is an important quest. Role of regions and cities is to ‘investable’ and Role of regions and cities is to ‘investable’ and

‘investment-ready’.‘investment-ready’. Reduce risks and costs, improve returns, help to Reduce risks and costs, improve returns, help to

build steady flow of propositions. Conditions of a build steady flow of propositions. Conditions of a growing market.growing market.

Economic Development Strategy as ‘Investment Economic Development Strategy as ‘Investment Prospectus’.Prospectus’.

Good for Cities and Regions.Good for Cities and Regions. Good for Private Sector.Good for Private Sector. Key roles for national and multi-national Key roles for national and multi-national

organisations.organisations. Build partnership with investment sector.Build partnership with investment sector.


Public/Private Finance.Public/Private Finance.

Why? What is the incentive structure?Why? What is the incentive structure? Public Goals.Public Goals.

– More Capital, rebuild regional/local investment More Capital, rebuild regional/local investment markets, commercial discipline,attracts wider markets, commercial discipline,attracts wider interest, more sustainable, investment rather than interest, more sustainable, investment rather than expenditure.expenditure.

Private Goals.Private Goals.– New business lines and markets, diversification of New business lines and markets, diversification of

business, ethical or CSR priorities, predictable business, ethical or CSR priorities, predictable returns, new relationships and influence, returns, new relationships and influence, strengthen local economies and improve strengthen local economies and improve performance of related investments.performance of related investments.

Not just capital financing

Human capitalHuman capital

Enterprise, Creativity, InnovationEnterprise, Creativity, Innovation

Social and environmental Social and environmental infrastructuresinfrastructures

New technology and scienceNew technology and science

Brand, image, and identityBrand, image, and identity


What can cities do ?What can cities do ?

Public financei.i. Accept reality – sound fiscal strategy.Accept reality – sound fiscal strategy.

ii.ii. Prioritise larger and catalytic Prioritise larger and catalytic investments.investments.

iii.iii. Pursue sustainable growth of tax Pursue sustainable growth of tax base.base.

iv.iv. Make the case for cities through Make the case for cities through tangible investment projects.tangible investment projects.

v.v. Efficiency and effectiveness of city Efficiency and effectiveness of city government.government.

vi.vi. More public-public joint ventures.More public-public joint ventures.

vii.vii. Capable development agencies and Capable development agencies and corporations. Shared agencies and corporations. Shared agencies and intermediaries.intermediaries.

viii.viii. Asset management.Asset management.

ix.ix. Recruit financial talent.Recruit financial talent.

x.x. Business and investment friendly Business and investment friendly services and approaches.services and approaches.

Private financei.i. Foster investment dialogue with Foster investment dialogue with

private sector.private sector.

ii.ii. Support existing investors better.Support existing investors better.

iii.iii. Reduce risk, cost, and uncertainty.Reduce risk, cost, and uncertainty.

iv.iv. Seek advice and partnership early.Seek advice and partnership early.

v.v. Build ‘investment-ready’ Build ‘investment-ready’ propositions.propositions.

vi.vi. Better information on city finances Better information on city finances and investment opportunities.and investment opportunities.

vii.vii. Investment prospectus.Investment prospectus.

viii.viii. Promote the city for investment.Promote the city for investment.

ix.ix. Develop infrastructure as an asset Develop infrastructure as an asset class.class.

x.x. Build templates and pilots to make Build templates and pilots to make complex finance easier.complex finance easier.


What can Toronto do?

A 3 pronged strategy:A 3 pronged strategy: Improved financial management and fiscal autonomy.Improved financial management and fiscal autonomy. More public-public partnerships.More public-public partnerships. Better leverage of private finance.Better leverage of private finance.

– Demonstrate fiscal competence and optimum use of existing Demonstrate fiscal competence and optimum use of existing resources and tools.resources and tools.

– Work with existing investors to improve their returns and create Work with existing investors to improve their returns and create incentive for reinvestment.incentive for reinvestment.

– Identify key large projects for early due diligence and Identify key large projects for early due diligence and investment-readiness.investment-readiness.

– Innovate and be confident with new financial toolsInnovate and be confident with new financial tools..


Invest in Success: Leveraging the Return from Global Cities Greg Clark Toronto, May, 2008 .

Documents

Transcript of Invest in Success: Leveraging the Return from Global Cities Greg Clark Toronto, May, 2008 .