The Business of City Competitiveness_Greg Clark
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Transcript of The Business of City Competitiveness_Greg Clark
The Business of City Competitiveness
Greg Clark
ICCA
Antalya, November 2014
© The Business of Cities Ltd
Questions to delegates 1
Are we living in an age of cities? Yes No
Are businesses re-urbanising? Yes No
Is the visitor economy re-urbanising? Yes No
Do congresses and conventions help
cities to be competitive? Yes No
Is this well understood by City Govs? Yes No
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Cities and Business – A Rapidly Evolving Relationship
Cities and commerce have always been inextricably linked …..
….. but rapid and continuing urbanisation and globalisation are changing the bonds between the two.
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What are the big new trends between cities and business?
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Trend 1 Cities 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 Cities are Hubs of Business Innovation
trend 6 Businesses are restructuring to meet City goals
Cities are Emerging Markets for Businesses • Size of the global metropolitan market
• 70% of world population of 9 billion by 2050
• 70 million people per year added to developing world cities
• 2 billion strong ‘consumer class’ in emerging market cities by 2025
World’s Urban Population in 2050 Source: UNICEF
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Cities are Emerging Markets for Businesses • Shift in nature of economies and products
• Technology is shifting which sectors globalise and how they do so
• Growth of service economies encourages commercialisation of urban space
• Cities are the natural habitat of innovation (Glaeser, Florida, Hollis, Katz)
• Customers of increasing importance • Expansion, upgrading, replacement of infrastructure = €27
trillion over next 25 years (Booz Allen Hamilton) • Smart Cities market = $400 billion by 2020 (UK government) • Building and retrofit – demand for advanced technology and
innovations in design, finance, and delivery of city systems • Purchasers of huge range of services from legal advice to
landscaping
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Why are businesses
moving back to the city?
Demographics and lifestyle
Transport and safety and education
Improvements
Changing Working Practices
Sustainability Concerns
Policy-driven and market incentives
(eg trade)
Technological Advances
Opportunities to collaborate
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Businesses are (Re)Urbanising
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 urbanisation needs of (now) mature cities.
• Now, rapidly internationalising to support the growth of emerging cities.
Sydney: Engineering and Construction to Dubai and Abu Dhabi
London: Architecture and Urban Design Worldwide
Paris: Water, Waste and Energy to African cities
Masdar City, Foster + Co Masterplan Zaha Hadid deisgn for Abu Dhabi Performing Arts Centre
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Business Brands in City Markets
Sustainability / Eco-Cities
Siemens GE
Arup Bombardier
The ‘City of the
Future’ Audi
Deutsche Bank Microsoft
Atkins GDF Suez
Liveability Mercer
Monocle Grosvenor
Global Cities JP Morgan
Aecom AT Kearney
Smart Cities + Networks
Cisco Ericsson
IBM Cap Gemini Bird + Bird
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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
• Institutions – (Universities, incubators, development agencies) overcome co-ordination problems and sustain networks
Examples
• Tech – Lisbon, London, Tel Aviv, Berlin, Amsterdam, Nairobi
• Fashion – New York, London, Amsterdam, Milan
• Life Sciences – Dundee, Dortmund, Boston
• Creative and Media – Seoul, Manchester, Shanghai, Lagos
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Cities are Hubs of Business Innovation Cities as Test Markets
• The most cosmopolitan cities are microcosms of the global market – ideal locations for developing / trialling products
• Some cities promote their role as regional test markets - Invest in Brussels: city representative of the European Market
- Jakarta – densely populated, high consumer confidence, testing ground for emerging markets
• Others have become renowned as national test markets - Columbus, Ohio – US fast food
- Bangalore – product testing for Indian market
• Diverse labour forces develop content which translates across cultural barriers
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Corporate Urbanising Structure: Internal Reorganisation
• Cities divisions e.g. Siemens ‘Infrastructure and Cities’ sector
• Representatives in target cities e.g. Bank of America ‘Market Presidents’
• Internal city advisory functions e.g. KMPG Cities Global Centre of excellence
• City strategies e.g. Air BnB
• CRM to manage interactions with cities
“Cities are a key growth market for the future. By establishing the Infrastructure & Cities Sector, we’re clearly gearing ourselves to the market. We have the portfolio, the know-how and the consulting expertise to make cities of all sizes greener and more competitive…..”
Roland Busch, Siemens Managing Board, Infrastructure & Cities Sector CEO
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Associated trends
• Tourism is re-urbanising
• Housing is re-urbanising
• The Knowledge Economy is re-urbanising
• Dıplomacy ıs re-urbanısıng
• Retaıl ıs re-urbanısıng
• Urban Real Estate is now an Investment Asset
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What part does being a city of conventions and congresses play in becoming a successful competitive city?
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2010 metropolitan population:
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2050 metropolitan population:
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Waves of cities in globalization
Cities (re)entering a global path
1492-1650 Antwerp, Genoa, Istanbul, Venice
1650-1780 Amsterdam, Guangzhou, London, New York
1780-1850 Berlin, Paris, Birmingham
1850-1914 Bilbao, Liverpool Manchester, Rotterdam, Vienna
1945-1973 Munich, Seoul, Singapore, Tokyo, Toronto
1985-2007 Bangalore, Barcelona, Chicago, Sydney, Tel Aviv
2010- Colombo, Nanjing, Brisbane, Sao Paulo….
Leadership with a
Worldview
Enabling Government
History of Global Orientation
Distinct Specializations
Adaptability to Global Dynamics
Culture of Knowledge
and Innovation
Opportunity and Appeal
Connectivity
Securing Investment for
Priorities
Compelling Brand
Identity
Brookings Global Cities Initiative
10 Traits of Globally Fluent Cities
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City Typologies
As categorised in the State of European Cities Report 2007
? ?
Openness
>$25bill
$10-25bill
$4-10bill
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PARIS
NEW YORK TOKYO
LONDON
Seoul
Hong Kong
Singapore
San Francisco San Jose
Los Angeles Washington DC
Sydney
Melbourne
Shanghai
Beijing
Moscow Stockholm
Hamburg Berlin Frankfurt Munich
Calgary Toronto
Boston
Houston Taipei
Chicago
Where is the money going? Top 30 cities for direct commercial real estate investment 2010 – 2011
Source: Jones Lang LaSalle
Rio de Janeiro
San Diego
Oslo
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Types of Globalising Cities i. Established world cities ii. Emerging world cities iii. New World Cities iv. High Quality of life Cites v. Specialised centres vi. Port and airport cities vii. Visitor destinations viii.Knowledge hubs ix. Re-emerging capital cities x. New gateway cities
Vote 2: Which one these most resembles your city? © The Business of Cities Ltd
What is a type? Origins Performance Aim Path Point in cycle
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Growing gap between big six and the rest
Los Angeles is falling fastest
Washington DC and Vienna are very strong all-round
Established World Cites
Established World Cities ingredients of success? • At core of post-1945 global economic system – capital, law, rules and standards and
language
• Strategic locations in globalising economy: hubs and gateways
• Political stability - commercial interests rarely overridden for long.
• Long record of investment in key assets attractive to people + business
• education, research, safety. and telecommunications.
• large air/sea connectivity platforms
• Reputations as ‘safe havens’ for entrepreneurs, families, and capital.
• Record of tolerance and diversity.
• Range of skills, information and experience to constantly adjust
• World-class higher education institutions.
• Compelling brand: linked with vibrancy, professionalism, opportunity
Emerging World Cities
30+ large or fast-growing cities competing for:
• Investment
• Financial and business services
• Air and port gateway roles
• Mobile talent
• Inter-regional relationships
Where are they improving?
• business climate (Taipei, Jakarta, Santiago)
• talent retention/attraction (Shanghai)
• infrastructure overhaul (Moscow, Istanbul)
• Long-term strategic planning (Sao Paulo)
• Investment in and promotion of culture (Istanbul)
• Building international organisational presence
(Nairobi)
Top cities by GDP in 2030
Source: Oxford Economics
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Emerging world cities hierarchy
Beijing and Shanghai lead the charge
Buenos Aires and Sao Paulo in close contention, Istanbul and Kuala Lumpur climbing rapidly
Indian cities have fallen behind others
Smaller secondary cities do well, large megacities struggle
Emerging World cities: a typology?
Nearly transformed
• Dramatically upgraded infrastructure • Fast growing average GDP • Improved services to low-income groups • Addressed most business climate issues
Beijing, Shanghai, Dubai
‘Big 8’ competitive heavyweights
• Regional commercial centres • High investment rates, project pipeline • Challenges of liveability, infrastructure supply
Moscow, Istanbul, Sao Paulo, Mexico City, Taipei, Istanbul, Buenos Aires, Bangkok
High potential, weakly governed megacities
• Large markets, local entrepreneurship • Governance fragmentation or low political
effectiveness • Major inequality and poverty challenges
Mumbai, Jakarta, Manila, Nairobi
Agile, specialised secondary centres
• Rising up value chain • High share of well-educated workers
Warsaw, Bangalore, Shenzhen, Santiago
Struggling megacities • Large governance and economic development problems
Kinshasa, Dhaka, Lagos, Karachi
25 High quality of life (HQoL) cities
• Adelaide
• Amsterdam
• Auckland
• Barcelona
• Berlin
• Boston
• Brisbane
• Calgary
• Cape Town
• Copenhagen
• Frankfurt
• Melbourne
• Munich
• Perth
• San Diego
• Seattle
• Singapore
• Stockholm
• Sydney
• Tel Aviv
• Toronto
• Vancouver
• Vienna
• Zurich
What unites high quality of life (HQoL) cities?
i. Attractive climate, scenic assets
ii. Comfortable commute
iii. Authentic culture with strong sense of belonging
iv. High quality of amenities
v. Walkable and inclusive communities - broad access to housing
vi. Multiple sectors of employment
vii. Liveability has become part of city identity and DNA
viii.They compete on specialisation and QUALITY
Not strict groupings Lots of crossovers
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Benchmarking, Rankings and Indices
Urban performance management
through indexes
Diagnostic assessment
Comparative pegging
Pedagogy
Leverage and persuasion
Home truths
Produced by commercial outlets, but increasingly used by cities themselves:
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Urban Benchmarks and the Convention/Congress Economy
Different kinds of city succeed in the conference economy
i. Established world cities ii. Emerging world cities iii. New World Cities iv. High Quality of life Cites v. Specialised centres vi. Port and airport cities vii. Visitor destinations viii. Knowledge hubs ix. Re-emerging capital cities x. New gateway cities Many others
ICCA Ranking Average
Benchmark Ranking
Cities of Opportu
nity
AT Kearney Global Cities Index
Globalisation and
World Cities Index
Mori Global Power
City Index
EIU Hotspots
Paris 1 4 6 3 4 3 4
London 7 1.4 1 2 1 1 2
Seoul 9 13 14 12 6 20
Beijing 18 17.6 19 8 8 14 39
Sydney 20 12 9 14 9 13 15
Stockholm 21 23.8 7 33 43 16 20
Shanghai 29 20.4 20 18 6 15 43
Kuala Lumpur 33 34.2 17 53 22 34 45
ICCA Ranking
Average Benchmark
Ranking
Cities of Opportu
nity
AT Kearney Global Cities Index
Globalisation and
World Cities Index
Mori Global Power
City Index
EIU Hotspots
Istanbul 8 35.4 25 28 29 21 74
Buenos Aires 14 32.5 24 20 26 60
Bangkok 20 42.5 42 38 29 61
Singapore 21 5 3 9 5 5 3
Hong Kong 23 5.8 8 5 3 9 4
Tokyo 26 6.8 13 4 7 4 6
Toronto 32 12.6 4 13 17 17 12
New York City 64 1.6 2 1 2 2 1
Chicago 65 13.6 10 7 11 31 9
San Francisco 65 20 5 22 28 32 13
Moscow 70 29 21 17 14 35 58
Strong correlation between ICCA and all-round benchmark performance
Low correlation between ICCA and all-round benchmark performance
Urban Benchmarks and the Convention/Congress Economy
The underperformers
ICCA Rank Average
Benchmark Rank
Difference between ICCA
and Benchmark
Average
Hong Kong 23 5.8 -17.2
Tokyo 26 6.8 -19.2
Toronto 32 12.6 -19.4
Moscow 70 29 -41
San Francisco 65 20 -45
Chicago 65 13.6 -51.4
New York City
64 1.6 -62.4
• Established world cities such as Hong Kong, Tokyo and New York punch well below their weight
• US cities under-represented • Why? Different explanations:
costs? visas? point in cycle? nearby competitors?
The over-achievers
• Capital cities in emerging nations
• Popularity of Latin American cities
• Unique historic and scenic destinations
• Why? Novelty value? Affordability? Facilities? City appetite?
ICCA Rank Average
Benchmark Rank
Difference between ICCA and
Benchmark Average
Buenos Aires 14 32.5 +18.5
Bangkok 20 42.5 +22.5
Istanbul 8 35.4 +27.4
Budapest 17
Rio de Janeiro 26
Warsaw 34
Panama City 36
Santiago 37
Lima 42
Athens 47
Bogota 50
Florence 51
Cape Town 52
Richer cities do not dominate conference market
• Middle-income cities perform above expectations
• High income US cities less attractive
• Paris and London vibrant conference economies despite high costs
Quality of life just one factor in the conference sector
• Remoteness a disadvantage for some HQoL cities (Vancouver, Melbourne)
• Climate assets boost Madrid and Lisbon despite lower quality of life.
• Large emerging cities succeed despite infrastructure/QoL challenges - Buenos Aires, Istanbul
Visitor destinations have an advantage
• Gateway cities (London, Hong Kong and Paris) and tourist hubs tend to do well
• Buenos Aires and Seoul buck the trend (continental magnets?)
Brands more decisive in European cities, less so in Asia
• The best city brands (eg London, Paris) tend to perform well
• Stockholm, Sydney, Toronto do not fully leverage their brands for conference economy
How do congresses and conventions fit with the different competitiveness strategies of different cities?
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City Profile: London (Est…. World City)
ICCA Rank 7
Average Benchmark Rank 1.4
Real GDP /capita ($US 2012) 53,000
Euromonitor City Destinations 4
• London’s conference economy is crucial to its gateway functions
• It supports its numerous airports, and hospitality industry
• Reveals London’s new edges
City Profile: Barcelona New World City
ICCA Rank 4
Real GDP /capita ($US 2012) 36,000
2thinknow innovation cities index 56
• Barcelona’s conference economy helps anchor a new leading sector: mobile technologies
• As the city further develops its telecoms base, the conference economy will continue to thrive
• Adds technology to visitor brand
City Profile: Vienna New World City
ICCA Rank 3
Real GDP /capita ($US 2012) 48,000
AT Kearney International Political Engagement 7
Mercer Quality of Life 1
• Vienna’s density of international political institutions, especially UN offices, makes it a major conference destination – alongside its high quality of life
• Gives Vienna backs it global DNA
City Profile: Buenos Aires Emerging World City
ICCA Rank 20
Average Benchmark Rank 32
Real GDP /capita ($US 2012) 13,000
Cities of Opportunity Technology Readiness 20
• Buenos Aires’ strong conference economy is helping its regional ambitions in a more integrated Latin America.
• It also supports its growing digital economy, key to its ‘modern city’ strategy, which aims to improve urban management through digital solutions
• Positions BA as the Smart World City in Lat Am
City Profile: Bangkok Emerging World City
ICCA Rank 14
Average Benchmark Rank 42
Real GDP /capita ($US 2012) 8,000
Euromonitor City Destinations 3
• Bangkok’s conference infrastructure helps the city diversify its economy beyond tourism
• Aim to build capacities in trade, science, R&D and innovation
City Profile: Dublin (knowledge hub)
ICCA Rank 13
Real GDP /capita ($US 2012) 52,000
EIU Hotspots ‘Human Capital’ 1
• Conventions reinforce Dublin’s start-up economy ambitions and its specialised knowledge in health and education sectors
• Improves business amenities
City Profile: Singapore (Est… World City)
ICCA Rank 21
Average Benchmark Rank 5
Real GDP /capita ($US 2012) 35,000
EIU Hotspots ‘Global Appeal 4
• Singapore’s conference economy is crucial to its brand as a city that is ‘open for business’, thus helping it maintain its global appeal.
• Allows Singapore to be regional decision making centre
For different types of cities convention and congresses can contribute different things
Type of City Vale Added for City Competitiveness
London Est World City Reveals new edges for London. You think you know London?
Barcelona New World City Links Technology and Business to Tourism. From ‘post card to business card’.
Vienna New World City Gives Vienna back it global DNA Where decisions wee made before
Buenos Aires
Emerging World City The smart world city in Lat Am (not so much congestion as those Brazilians………..)
Bangkok Emerging World City Diversification of the economy Challenge perceptions
Dublin Knowledge Hub Excellence in medicine, technology, and education in a small city.
Singapore Est World City A regional decision making centre © The Business of Cities Ltd
What conventions and congresses contribute to city competitveness?
i. Infrastructure and connectivity
ii. Multi-lingual labour force
iii. Amenities and cultural investment
iv. Global recognition, visibility, and acceptability
v. Competitive instinct
vi. Service culture
vii. Identity and affinity
viii. Openness
These are all advantages to cities in other aspects of their competitive development. Cities need visitor economy ın order to develop well. It help all types of internationalising cities.
Think about London, New York, Paris: they are successful cities with strong tourism.
Remember Miami, Barcelona, Singapore: they are new leaders where tourism has been a catalyst.
Visitor Economy can be a great friend or a danger for city development. Optimise its value and avoid lock-in!
1st, 2nd, 3rd and 4th Cycle Dynamics
1st Cycle
Projects & Physical Renewal
Promote the city
Tourism
Events
FDI
2nd cycle
Assets
Strategic plans
Specialist Agencies
City brand
Larger Events
New funding tools.
Entrepreneurship
Economic development.
3rd cycle Managing growth and diversificataion
Internal governance reforms
Business Friendly City
Investment Ready City
Innovation
Universities
Shaping the future
PPPs
Metropolitan sphere
Broader leadership
Integrated brand
Summits
Internationalisation
4th Cycle
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Managing success at the international scale Competitive benchmarking Eco-system management Business Leadership Dealing with growth and externalities External governance reforms. Global Summits Signature events
Recent city cycles, 1970s to 2014
• Eg. Barcelona
• Tourism --> Creativity and enterprise --> Exports, tech, students
• Eg. Singapore
• Low-end production --> High-value science --> wider services/creative
• Eg. Tel Aviv
• Technology cluster --> Finance/capital ecosystem --> Talent attraction
• Eg. Brisbane
• Commodities boom --> Infrastructure platform --> Diversification
Identity, Vision, and Metro Brands
Identity
Integration
Visitor Brand
Investor
Business Brand
Citizen
Resident Brand
Innovator / Leader
Brand
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Are Cities Like Businesses?
• Compete in contested markets
• Innovative use of financial resources
• Clearly defined goals
• Networking
• R & D, Innovation and Investment
• Human Capital
• Brand
• Leadership
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Are Cities Like Businesses?
• Risk taking is controlled
• Poor fit between institutional and market geography
• Complex governance arrangements
• Cannot choose ‘customers’
• Cannot choose products and services
• Citizens have wider range of interests than customers
• ‘Profit’ is retained by other tiers of Gov
• City leaders: • democratically elected and accountable • may have limited power.
• Identity and brand shaped by others
• Do not ‘fail’ to the point of extinction © The Business of Cities Ltd
Questions to delegates 2
i. Established world cities ii. Emerging world cities iii. New World Cities iv. High Quality of life Cites v. Specialised centres vi. Port and airport cities vii. Visitor destinations viii. Knowledge hubs ix. Re-emerging capital cities x. New gateway cities
Vote 3: Which one these most resembles your city?
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Questions to delegates 3
Does your city have a competitiveness strategy that fits its cycle? Yes/No
Do conventions and congresses feature in that strategy? YES NO
Does your city have a convention and congress strategy that matches its type? YES / NO.
Is the role of conventions and congresses in building your city’s competitiveness clear and accepted by all? YES / NO
Is your city optimising the role of conventions ad congresses for its competitiveness? YES / NO
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