competitive cities for jobs and growth. what, who and how

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#CompetitiveCities

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Заметки для презентации

Once upon a time….

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• Will tell a story based on evidence of ‘what works’:– Data on 750 cities worldwide;– 6 structured case studies of high-

growing cities;– Secondary literature;– Firm-level econometrics;– Lots of conversations.

‘Market systems’ in a city context

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Economic development is lumpy --- cannot be “spread like butter”. But even the peaks are different heights (GDP per km).

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How have other cities created jobs and growth?

What should be the top priorities for my city?

How do I get it done?



We have all heard that cities are the drivers of the global economy. We at the world bank experience it through the questions that our clients ask us. And these are not trivial questions, because traditionally we look at cities as places where work on transport, planning, service provision is done, but not so much on economic and private sector development.

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So we decided to find a way to answer these questions

In-depth lit reviewand consultations Database of

750 Cities

6 in-depthcase studies

Econometric analysisin two countries



We leveraged existing work done, and conducted primary research where there were gaps. We looked at global, regional and national trends. We compared cities by typologies – income, sector, region and industrial mix. Our team was drawn from different parts of the institution, leveraging different ideologies and different skill sets. And in all of this, we used several methodologies

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Any manner of city can be competitive

Meknes

Bucaramanga Coimbatore

GaziantepOnitshaSaltillo

New York Tokyo

London

And while all cities are unique, some principles of promoting competitiveness apply across the board



So we started by defining what the competitive cities were, The cities we found that met some of our criteria – accelerated economic growth, outstanding job growth, increased incomes and productivity and magnets for foreign direct investment – were more than household names, capital cities or global centres of commerce. We set out to understand what are the things that made these cities competitive, and we have found that there are certainly common trends.

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• And How does it get done?

A “COMPETITIVE CITY” facilitates firms and industries to grow jobs, productivity and incomes over time

• What do successful cities do? • Who does it?

• We are looking at private sector performance• We do not distinguish informal businesses• Data is imperfect• There are no silver bullets and all circumstances are unique



So we defined three questions we want to address. And today we will present you part of the answers that we have found.

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An unexpected story of ONE city



Three main parts of the report. First: What. What is done in competitive cities? I will give you two stories of two very different cities that highlight some core findings of our study.



Dry landscape. Bad neighbourhood (Raqqa; Aleppo).

WHAT WOULD YOU DO…..?• Land is dry and ill-suited for agriculture.• Not a port city; 210km from a port.• Low skilled population.• No high-tech clusters.



So: what would you do?

Gaziantep (Turkey), 2003



Industrial zone growth between 2003 and 2014.

Gaziantep (Turkey), 2014

• Light-manufacturing firms export to 175 countries around the globe.

• Exports increased tenfold from $620 million in 2002 to $6.2 billion in 2013.

• Ranked #9 globally for economic growth in the decade 1999 to 2009.

• Recorded an average of 6.3 percent in annual GDP growth from 2005-2012.

• 3.6 percent in annual employment growth.



(grew from approx $4,500 GDP pc in 2007 to $6,000 GDP pc in 2012).

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1. WHAT CAN BE DONE



Three main parts of the report. First: What. What is done in competitive cities? [Give a brief description of policies that were implemented in Gaziantep] I will give you two stories of two very different cities that highlight some core findings of our study.

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Combining economy-wide with sector-specific interventions

∆ Firm growth;∆ Investor attraction;∆ New start-ups.

City wedge



Cities we examined used a COMBINATION of policies and investments to support firm-level performance. We group these initiatives into FOUR MAIN BUCKETS [read them]. None of these will be news to you! But what was different in competitive cities was that these measures were tightly CONFIGURED to the needs of firms and industries. For example, : Not just regulatory reforms, but also support to firms in navigating the city’s regulations and licensing procedures. Not just vocational training and SME support, but ensuring these are geared towards actual industry needs. Gaziantep worked across the different buckets (give examples)

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Successful cities combined:a) industry-specific (sector/value

chain) interventions, withb) economy-wide interventions.

This was not an either/or choice…

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First of all they show that there is no real-world DICHOTOMY between improving overall business environment and implementing targeted programs to support selected industries. [Give an example of how Gaziantep combined both]

Source: Analysis using Oxford Economics city-level data for 750 cities worldwide, 2005-2012

Tradable goods & services drive growth in competitive cities

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Top 10 percent of cities Other 90 percent of cities

Tradable goods & servicesNon-tradable goods & services

The reasons: • Expand the local economic

pie;• Help increase productivity

through competition.

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Data shows that tradable sectors are the best way to boost growth and jobs creation. First, industrial sectors matter. See on the graph: top 10 percent of cities growth is DRIVEN most of all by expansion in tradable sectors. ‘Tradable’ = goods & services that are mobile and subject to regional/international trade and competition– like LIGHT MANUFACTURING, FOOD PROCESSING, TOURISM. (Gaziantep thrived on tradable industries)

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2. WHO DOES IT



A tale of two cities: - secondary cities - national/state have fiscal/admin remit - change in city fortunes Tangier managed to grow jobs at a rate of 3% annually and GDP at 5%, on average. Coimbatore doubled its GDP per capita between 2002-2012.

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Who: The city wedge

i. Growth Coalitions: collaboration with stakeholders;

ii. Mayor’s Wedge: internal scope and capacity;

iii. Intergovernmental relations: external leverage.



Default thinking at WBG about who Cities have limited policy space, but can be opportunistic Back to examples: Gaziantep didn’t have that big of a wedge itself, but it galvanizes local business community, and lobbied national government to implement major infrastructure projects including enterprise zones. Local firms: Rivals, but come together on common interests, (e.g. infrastructure upgrades)� Two business chambers: Large professional staffs, budgets, and political influence. Help determine priorities, build consensus, and advocate on behalf of business. Municipality: Supportive, not dominating Business-friendly City Council: Forum for information sharing and consensus. Members: 80% private sector, universities, or civil society Several thematic working groups issuing recommendations. Credible individuals with a track record of success (e.g. President of Sanko Holdings, one of the largest firms in Turkey).

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Who does it?



Competences can be distributed across various stakeholders.

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3. HOW WILL IT BE DONE



Have you ever seen a DIFFERENCE between what’s on paper in a strategy, and what happens in practice? So have we. Actually it seems to be the default……!

City economic development strategies in practice

“There is a strategy on paper, but it’s not evident to us. What is evident is the various directorates with their own key focus areas– but that’s not a

combined strategy.”

-- Executive Directorof city Chamber of Commerce, South Africa

“In the Metro growth strategy there are two and a half pages of priority projects. We need 2-3 focused areas, rather than a wish

list.”

-- LED professional, South Africa

“If you ask people what is their number one priority, they will not say it’s housing; they will not say it’s electricity; they will say give me dignity by giving me a job. Job creation should be our number

one driver. If I get a job then everything else falls into place.”

— CFO of eThekwini, South Africa

“We thought we had a problem with our industrial development strategy, and instead we realized the biggest issues were with our management

system.”

--Minister of Planning, Central American city



Here are a few quotes from FOCUS GROUPS we had in cities. What do you notice? They all say that cities are NOT BEING STRATEGIC. [read] That’s alongside a quote from the CFO of eThekwini (read). How can we make things fall into place? This is not a problem of DOCUMENTS – it is a problem of MANAGEMENT and implementation. Gaziantep took quality of governance seriously. One of the decisive moments came when the mayor decided to change the most of the office.

While few cities are like Gaziantep, there are more

Bucaramanga, Colombia

Changsha, China



Changsha – the capital of Hunan province in China and Bucaramanga – the most dynamically growing city in Colombia. These cities have their own stories. Changsha’s growth was fired by manufacturing of heavy construction equipment, while Bucaramanga managed a transition from declining industry into ICT, specialized equipment manufacturing and medical services. But learning still apply… Both combined improving overall conditions for business (both worked on attracting talent to the city) and targeting selected industries. Changsha supported construction machinery manufacturers, while Bucaramanga focused on ICT. Both cities maximized their leverage through engaging partners. Changsha, while being a highly empowered city benefited a lot from national policies. Bucaramanga, had a public private coalition, that was driving the effort. Finally, both cities focused on efficient policy delivery. Bucaramanga ????, Changsha used Leader groups - regular meetings of department heads that focused on resolving issues, particularly in relation to the operation of the industrial zones. Yeah!

These findings apply to all sorts of cities

What

How

Who

NEW YORK

PITTSBURGH MANCHESTER

LONDON

BALTIMORE MEXICO CITY



We used the case of Gaziantep because it is one of the striking examples of success despite adversity. But the key finings apply across the board to cities in high middle and lower income countries. What: New York and London both simultaneously work on improving the fundamental conditions of competitiveness through attracting talent, improving infrastructure and urban environment., while also targeting technological start-up sector. Who; Pittsburgh and Cleveland both massively benefited from coalitions between private and public actors and local universities. Jointly they helped define strategic directions for city development and implement policies. How: Baltimore successfully introduced results based budgeting which helped improve quality of governance and save budget money. Mexico city introduced a delivery unit to improve coordination between departments.

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“We tend to keep people busy, rather than to change people’s

lives”—LED professional, South Africa

•No magic bullets(ICC? Monument? One-stop shop?)– has to be embedded in a growth strategy.

Summing up

4 broad levers to increase competitiveness

Focus on comparative advantage: especially tradable sectors

Horizontal (city-wide) and vertical (sector specific) interventions

What

“Economic development oriented” mindset – growth as an overarching goal.

Public-private “growth coalitions”

Delegation of powers to cities, with the right capacity

Keen attention to implementationHow

Who



To sum up: want to cite quote from South Africa. What have we shared with you? [read slide]

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What is of value to you?

WHAT

WHO

HOW

Analytics:

• Benchmarking of city performance versus competitors,

• Diagnostics of key enabling conditions: infrastructure,

• In-depth diagnostics of selected priority industries and value chains

Understanding the leverage: Analysis of the leverage of national local and regional governments. Understanding what powers mayors have and how they can expand their influence.

Public Private Dialog: Helping cities shape conversation with the private sector, to engage private actors in identifying strategic priorities and implementing competitiveness reforms

Training: Hands on training courses for city officials, covering key concepts city competitiveness through simulation exercises and case studies.

Improving municipal management: Helping set up economic development units and ensuring cross departmental coordination to maximize effectiveness of local governments.



Using our knowledge we can offer cities support across all three dimentions. Read out the core offers

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Austin Kilroy & Dmitry SivaevCompetitive CitiesWorld Bank [email protected] & [email protected]

mailto:[email protected]

mailto:[email protected]

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Types of economies and their needs change as cities develop…… and these changes should reflect those needs



What kind of industries are found in which kinds of cities? We examined INDUSTRY MIX of cities across income levels (horizontal axis = income level; vertical axis = industry mix). MANUFACTURING RISES, STAYS STABLE, THEN FALLS. So: STRUCTURAL TRANSFORMATION is important at lower levels of income, but after that until $20,000 per capita, EFFICIENCIES matter more--- the industrial mix actually stays relatively constant. (so, as we may already know– don’t bother aiming for biotech or nanotechnology while you’re at $1,500 per capita incomes) Gaziantep didn’t target flashy secotrs, its development was driven by gradual upgrading and scaling of its industrial base.

competitive cities for jobs and growth. what, who and how

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