local economic development and urbanism

כלכלה עירוניתעירונית של עסקים ותושבים" מערכת אקולוגית"כיצד נבנית

עיר ללא הפסקה ופרברים סביב לה

סוגיות אורבניות בתל אביב

"כלכלית-המכללה החברתית"קורס חדש וחלוצי של

מרחב על אורבניות בישראל בשיתוף עם

[email protected]

May 2010

www.miu.org.il

mailto:[email protected]

http://www.miu.org.il/

Agenda

• A brief history of LED

– Summary of current best practices

• LED in the context of cities and towns

– Urban Economics

– Cities have natural economic advantages

– How does the urban economy develop?

– How can we jumpstart economic development?

What is LED?

• The purpose of local economic development (LED) is to build up the economic capacity of a local area to improve its economic future and the quality of life for all. It is a process by which public, business and non-governmental sector partners work collectively to create better conditions for economic growth and employment generation.

The Industrial Revolution

• Group I - English-speaking

• Group II - Japan

• Group III - northwest Europe

• Group IV - the rest of Europe and European-dominated

economies in Latin America.

• Group V - the rest of Asia and Africa.

A Brief History of LED

Prior to WWII

• Economic Development was

focused by each nation on

developing their own economy

– Included trade with other

nations

– Included investment in

territories, colonies and other

nations directly or indirectly

under the control of empires in

order to exploit their resources

Post WWII

• A new concept was born - Economic

Development aid to other nations

aimed at improving quality of life

without altering basic social structures

(conquering)

– Driven by multiple factors:

• The recognized need for global

stability – to avert another WW

• Political influence – the ―cold war‖

• Create bigger markets for goods and

services – globalization

– Creation of the UN, the WorldBank,

the IMF, ITO / GATT / WTO

– The Marshall Plan

– Creation of USAID

• Continued investment in own LED


• Results of Marshall Plan seemed

promising

– Investment in hard infrastructure brought on

rapid economic growth in western Europe

• The recipe for LED seemed to be clear

and this brought on huge investments that

kicked off three waves of LED

• Most of these investments have been

fruitless…


• Since the 1960s, LED has passed through three

broad stages or 'waves' of development.

– In each of these waves LED practitioners have

developed a better understanding of successful and

unsuccessful programs.

– Today LED is in its 'third wave'.

– Although LED has moved through each of these

waves, elements of each wave are still practiced

today.

– Each of the waves had some basis in a prevailing

economic development theory

– With each wave the appreciation of the difficulty and

complexity of LED grew

The Three Waves of LED

Nations Regions / Sectors

Cities and Towns

Hard Infrastructure and

Manufacturing Transplants

Attract Foreign Investment and Support Local Businesses

Skills/Education, Attractive Policies

and Public/Private Partnerships

1960s to early1980s

1980s to mid 1990s

Late1990s onwards

Summary of Current Thinking on LED

Participatory approach

• Including all stakeholders and sectors

• Led by local government

Growth of local businesses

• Promotion and support of innovation and entrepreneurship (both business and social)

• Business friendly policies

Focus on cities

• As engines of economic development

• Urban regeneration as a tool

Goal is quality of life for all

Employment Environment Livibility Social inclusion

Have we all learnt the lessons

of past LED attempts?

Which Programs Do Not Work

(But We Still Keep Using Them!)

• Unfortunately there are countless examples of failed LED strategies and projects. These include:– Expensive untargeted foreign direct investment marketing

campaigns

– Supply-led training programs

– Excessive reliance on grant-led investments

– Over-generous financial inducements for inward investors (not only can this be an inefficient use of taxpayers money, it can breed considerable resentment amongst local businesses that may not be entitled to the same benefit).

– Business retention subsidies (where firms are paid to stay in the area despite the fact that financial viability of the plant is at risk)

– Reliance on "low-road" techniques, e.g., cheap labor and subsidized capital

– Government-conceived, -controlled, and -directed strategieshttp://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTURBANDEVELOPMENT/EXTLED/0,,print:Y~isCURL:Y~contentMDK:

20185187~menuPK:402643~pagePK:148956~piPK:216618~theSitePK:341139,00.html

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTURBANDEVELOPMENT/EXTLED/0,,print:Y~isCURL:Y~contentMDK:20185187~menuPK:402643~pagePK:148956~piPK:216618~theSitePK:341139,00.html















Typical Shortcuts proposed for LED

• Attract:

– Outside investment

– Outside transplants

– Outside talent

– Outside residents

• Connect:

– Under-developed regions to successful ones

… if only LED was so easy…

Agenda




– Urban Economics




Urban Economics from

Econ171 Economic Development

UC Berkeley

14

Lecture 27 Urbanization by Atanu Dey

Cities are the biggest idea

• Cities represent the largest and the most

persistent human artifact

• Cities are the aggregation of the biggest

ideas of humans

• Urbanization matters because that is what

humans naturally tend to do

Lecture 27 Urbanization Atanu Dey 15

Urbanization Matters• Economic Growth and Urbanization are bi-

directionally causally connected

• Why is this so?

• Economies of scale and agglomeration

16Lecture 27 Urbanization Atanu Dey

Growth Urbanization

The Big Picture• The World is getting more urbanized

17Lecture 27 Urbanization Atanu

Dey

Lecture 27 Urbanization Atanu Dey

18

Ginza Area in Greater Tokyo

2 9

3 7

4 8

6 1

15

2 5

3 9

5 4

17

2 4

3 9

5 45 1

6 6

7 3

8 0

4 2

6 1

7 7

8 5

6 4

7 4

8 0

8 7

6 1

7 27 3 7 5

0

20

40

60

80

100

Perc

ent

World Africa Asia Europe Latin

America

and the

Caribbean

Northern

America

Oceania

1950 1975 2003 2030

Share of World Population Residing in Urban AreasBy World Region 1950-2030


Israel 92%

Some fun facts• Half the world’s population occupies only 1.5 percent of

the world’s land area

• The world is heterogeneous

– Wealth is unequally distributed

– North America, European Union and Japan account for 75

percent of the world’s wealth

– Around 1 billion have less than 2 percent of the world’s wealth

20Lecture 27 Urbanization Atanu

Dey

Economic Activity is Spiky

More fun facts

• Growing cities

– 35 million (a quarter of Japan’s population) lives in

Tokyo – 4 percent of its land

• Mobile people

– 35 million people move every year within the US

• Specialization

– Western Europe trade around 35 percent of their GDP


Urbanization and Growth

• Growth correlates with urbanization

• ―… no country in the industrial age has

ever achieved significant economic growth

without urbanization.‖

23

Story of Civilization

• Civilization is about

cities

• The world is getting

urbanized = civilized


1800

• 900M

• 3% in cities

1900

• 1,600M

• 10% in cities

2000

• 6,000M+

• 50% in cities

2050

• Projected 10,000M

• 75% in cities

Agenda




– Urban Economics




Why Cities Persist?

• Cities have natural economic advantages

• The advantages outweigh the disadvantages

• Positive relationship between size and productivity

• Larger cities produce more innovations

• Cities are engines of economic growth

– They manufacture wealth

Lecture 27 Urbanization Atanu Dey26

Cities are Engines of Growth

• They manufacture wealth

– Manufacturing occurs in urban areas

– Why rich countries are predominantly urban

• Urbanization makes mass production

possible

– Manufacturing is related to scale economies

– Scale economies require people in terms of

variety and quantity

27

Lecture 27 Urbanization Atanu Dey

Cities and Transaction Costs

• Transaction Costs are lower in cities

• Infrastructure has scale economies

– High fixed costs

– High aggregate demand reduces the average

costs

• Education can be more efficiently

produced and consumed in cities


Fun Observations As producers seek scale economies, agriculture disperses but

manufacturing clusters

Services become even more clustered than manufacturing

Cities facilitate scale economies of all types

Doubling city size will increase productivity by 3%-10%

In the US, 96% of all innovations occur in metros

Smaller cities specialize, receiving industries as they mature and relocate

Mid-size cities have mature industries and are industrially specialized

Large cities are diversified and are service oriented

Most countries have an urban hierarchy: a few large cities and many small

cities with varied economic functions


Education

• Major factor in economic growth

• Cannot be efficiently provided in villages

• Scale economies are huge in education

– High fixed costs and low marginal costs

– Especially using ICT (Information and

Computing Technology)


Mega Regions

• 40 mega-regions, 1.2 billion people

– Around 70 percent of world output

– 85 percent of all innovations

• 5 billion people living in 191 countries

produce the rest

• A resident of a mega-region is 8 times as

productive in goods, and 24 times as

productive in innovations


Internal Scale Economies

• The cost of producing each unit of

something changes when the volume

produced increases or decreases

• What’s the reason for increasing returns to

firm scale?


External Agglomeration Economies

• Localization economies

– Clustering of Firms in the same Industry

– Arise from clustering of activities near a specific

facility, such as a transport terminal, a big market

or a large university.

• Urbanization economies

– Diversity of different Industries in the same area

– Arise from common infrastructure, the diversity of

labour and market size.


Economies

• Internal scale economies arise from

sharing of fixed costs by a large quantity of

outputs and are higher in heavier

industries

• External Agglomeration Economies:

– Localization economies arise from input-

sharing and competition within the industry

– Urbanization economies come from industrial

diversity that fosters innovation and exchange

of ideas and technology


The 12 Urban Economies of ScaleType of economy of scale Example

Internal

1. Pecuniary Being able to purchase intermediate inputs at volume discounts

Technological

2. Static

technologicalFalling average costs because of fixed costs of operating a plant

3. Dynamic

technologicalLearning to operate a plant more efficiently over time

External or

agglomeration

Localization

Static

4. ―Shopping‖ Shoppers are attracted to places where there are many sellers

5. ―Adam Smith‖Outsourcing allows both the upstream input suppliers and downstream firms to

profit from productivity gains because of specialization

6. ―Marshall‖

labor pooling

Workers with industry-specific skills are attracted to a location where there is a

greater concentration

Dynamic

7. ―Marshall-

Arrow-Romer‖

learning by doing

Reductions in costs that arise from repeated and continuous production activity

over time and which spill over between firms in the same place

Urbanization

Static

8. ―Jane Jacobs‖

innovation

The more that different things are done locally, the more opportunity there is for

observing and adapting ideas from others

9. ―Marshall‖

labor pooling

Workers in an industry bring innovations to firms in other industries; similar to

no. 6 above, but the benefit arises from the diversity of industries in one location.

10. ―Adam Smith‖

division of labor

Similar to no. 5 above, the main difference being that the division of labor is

made possible by the existence of many different buying industries in the same

place

Dynamic

11. ―Romer‖

endogenous

growth

The larger the market, the higher the profit; the more attractive the location to

firms, the more jobs there are; the more labor pools there, the larger the

market—and so on

12. ―Pure‖ agglomerationSpreading fixed costs of infrastructure over more taxpayers; diseconomies arise

from congestion and pollution

Cities, it turns out, have

natural advantages • Cities naturally offer Variety, a wide range of valued choices. They

naturally offer Convenience. In cities, there are more choices close

at hand. Discovery is another city advantage. Cities offer people

more chances to discover things they didn't know they liked, things

they didn't know they wanted to know, and people they didn't know

they could make things with (including fun and babies). And cities

naturally offer more Opportunity to their citizens in the form of

access to jobs, education and smart people.

• But here's the problem: We keep screwing it up.

• We keep undermining the city’s natural advantages. Instead of

building compact cities that magnify, amplify and intensify these city

advantages, we've blown it…

http://www.ceosforcities.org/


Agenda




– Urban Economics




LED in the Context of Cities from the easiest to the most difficult

LED in a Great City

LED in the Region of a Great City

LED in a Town Outside a Great City Region

LED in a City that is not Great

A Great City generates much more wealth than it consumes for mere existence.

A Great City generates enough wealth to support growth in the city as well in its surrounding region.

LED in a Great City




LED in a Great City

What makes the city the true engine of LED

• Compact and vibrant mixed population communities lead to interaction, opportunity and innovation

• Easy access to skilled and unskilled talent

• Easy access to customers and markets

• Easy access to suppliers

• Easy access to technology and knowhow

• Easy access to credit

• Easy access to low-cost startup space and to expansion space

• Low regulatory barriers to small business

• Lot’s of imports to replace

LED in a Great City




LED in a Great City

• What is the role of Urban Planning and Transportation in creating a

great place to live and to develop economically?

It can become a LED generator

If the City provides

Density Mixed useMixed age buildings

Small Blocks

LED in a Great City




The cycle of city development

DensityVariety

&Access

Innovation&

Culture

DevelopmentIntensity

Opportunities

QualityOf

Life

People

LED in a Great City





• Create a great place to live and to develop

economically

• Provide attractive and efficient access to the City

• The City will do the rest

– The Five Economic Forces Exerted by Cities on Their

Own Regions

1. City markets

2. City jobs

3. City developed technology

4. Transplanted city work

5. City generated capital

LED in a Great City




Leveraging the five forces to

accelerate LED in the region of a

Great CityToD in the Center of Regional Towns of a Great City

StockholmThe Gr Stockholm Transit

Oriented Metropolis The Gr Copenhagen Transit Oriented Metropolis

The 1961 National Capital Plan for Gr Washington BC

Is Beer-Sheva a Great City?

What about rail stations in

the center of the towns?

LED in a Great City




Source – Prof. Danny Gatt

LED in a Town Outside a Great

City Region

• Need to become a Great City (or wait for a Great City to develop nearby)

How?

• Leverage current thinking on LED

• Create a great place to live and to develop economically

• In the existing center of town

Jumpstart the economy

• Produce and sell something of value to a solvent market by turning any advantage into an opportunity

Leverage initial sales to

• Earn Imports

• Replace imports for yourself and for economically similar towns through innovation and improvisation

• Repeat last two steps forever

LED in a Great City





• Need to become a Great City (or wait for a Great City to develop nearby)

How?

• Leverage current thinking on LED

• Create a great place to live and to develop economically

• In a small focused area of the city (urban acupuncture)

Jumpstart the economy

• Produce and sell something of value to a solvent market by turning any advantage into an opportunity

Leverage initial sales to

• Earn Imports

• Replace imports for yourself and for economically similar cities through innovation and improvisation

• Repeat last two steps forever

LED in a Great City




How to Jumpstart the cycle of city

development

DensityVariety

&Access

Innovation&

Culture


Opportunities

QualityOf

Life

People

LED in a Great City




Where is the

―handle‖ ?

Summary of Current Thinking on LED







Focus on cities





Local Agenda 21

• The Local Agenda 21 (LA21) Campaign promotes a participatory, long-term, strategic planning process that helps municipalities identify local sustainability priorities and implement long-term action plans.

• It supports good local governance and mobilizes local governments and their citizens to undertake such multi-stakeholder process.

• A 2002 survey found that – more than 6,400 local governments in

– 113 countries have become involved in LA21 activities over a

– 10-year period.

But, a great strategic plan…• … in a binder on the shelf…

• Is just that -

• A great plan on the shelf!

• The questions remain the same:

– How do you advance ever closer to your vision of a

successful town, based on daily decisions and based

on existing budgets?

– How do you jump-start the cycle of city development?

How to Jumpstart the cycle of city

development

DensityVariety

&Access

Innovation&

Culture


Opportunities

QualityOf

Life

People

The

―handle‖

LED in a Great City




Urban Regeneration as a LED Toolor

How to increase Density, Variety and Access

First stage:

• Surgical urban intervention plan in the public space

Second stage:

• Renewal of the public space

Third stage:

• Private Development Construction and Renovation near the public space

Use the ―charrette‖ collaborative urban

planning tool as the basis of a LED program•Create a great place to live for local

residents

•Create a great place to succeed for local

businesses

•Leverage the true identity of the city / town

as seen by the local residents

•Local residents strengthen their sense of

belonging by planning their town

•Leverage existing budgets for

public building projects to

implement the plan

•Local residents are

empowered by seeing their

plans adopted and

implemented

•Provide loans to accelerate

private storefront and

residence renewal







Focus on cities





The critical role of the MIU in

LED in Israel


• Charrette –collaborative planning with all stakeholders

• Quality in Density Toolbox for all sectors

• Mayors Institute


• Making the local environment great for the locals

• Compact, quality and sustainable cities provide opportunities and breed innovation

Focus on cities

• We view the city as the key mechanism that provides people the opportunities to fulfill their inherent potential


In order to improve the quality of living in Israel, while contributing to the global sustainability effort, the MIU promotes quality urban living based on compact,

quality and sustainable urban environments.

Thank You

[email protected]

May 2010

www.miu.org.il

mailto:[email protected]

http://www.miu.org.il/

Can LED be achieved by attracting

transplants?

• Transplants within a city region vs.

transplants from afar

• What do transplants need? What makes

transplants possible?

• What is their influence on the local

economy?

• How many are available?

• What are the costs to attract one?

Can LED be achieved in peripheral

cities and towns by their residents?

• Yes! If it can be achieved (and it can not

always be achieved) then it can be

achieved by the local residents

– the problem is not the residents!

– What are the conditions that enable LED?

Wave Focus Tools

First:

1960s to

early 1980s

During the first wave the focus

was on the attraction of:

•mobile manufacturing

investment, attracting outside

investment, especially the

attraction of foreign direct

investment

•hard infrastructure

investments

To achieve this cities used:

•massive grants

•subsidized loans usually

aimed at inward investing

manufacturers

•tax breaks

•subsidized hard infrastructure

investment

•expensive "low road"

industrial recruitment

techniques

The three waves of LED - #1:

Wave Focus Tools

Second:

1980s to

mid 1990s

During the second wave the

focus moved towards:

•the retention and growing of

existing local businesses

•still with an emphasis on

inward investment attraction,

but usually this was becoming

more targeted to specific

sectors or from certain

geographic areas

To achieve this cities provided:

•direct payments to individual

businesses

•business

incubators/workspace

•advice and training for small-

and medium-sized firms

•technical support

•business start-up support

•some hard and soft

infrastructure investment


•During this wave much effort was also invested in trying to improve rural

quality of life, urbanization and city growth was seen as a problem

Wave Focus Tools

Third :

Late 1990s

onwards

The focus then shifted from

individual direct firm financial

transfers to making the entire

business environment more

conducive to business.

During this third (and current) wave

of LED, more focus is placed on:

•soft infrastructure investments

•public/private partnerships

•networking and the leveraging of

private sector investments for the

public good

•highly targeted inward investment

attraction to add to the competitive

advantages of local areas

To achieve this cities are:

•developing a holistic strategy

aimed at growing local firms

•providing a competitive local

investment climate

•supporting and encouraging

networking and collaboration

•encouraging the development of

business clusters

•encouraging workforce

development and education

•closely targeting inward

investment to support cluster

growth

•supporting quality of life

improvements


LED focus on Cities and Towns• At the threshold of the 21st century, cities

and towns headline the World Bank's development campaign.

• Within a generation, the majority of the developing world's population will live in urban areas, while the number of urban residents will double, increasing by over 2 billion inhabitants.

• Cities and towns are not only growing in size and number, they are also gaining new influence.

• The urban transition offers significant opportunities to improve the quality of lifefor all individuals, but whether this potential is realized depends critically on how cities are managed and on the national and local policies affecting their development.

http://siteresources.worldbank.org/INTINFNETWORK/Resources/urban.pdf


THE WORLD BANK URBAN & LOCAL

GOVERNMENT STRATEGY

• Urbanization is a defining phenomenon of this century…

• …main challenge for the urban policy maker is to understand the importance of managing this system of cities or ―portfolio of places‖ (of different sizes and vocation) within a country so as to maximize the benefits of agglomeration economies…

• With more than half of GDP coming from cities, the economic future of most developing countries will be determined by the productivity of these burgeoningurban populations.

• This interdependency between macro-economic performance and urban welfare has been seen in the aftermath of macro-economic crises in Argentina, Brazil, East Asia, and Russia

http://www.wburbanstrategy.org

http://www.wburbanstrategy.org/

Local Economic Growth• Cities are engines of economic growth. As a nation's primary source of

job creation and wealth generation, cites produce goods and provide services which strengthen economic opportunities for the entire country. Local Economic Development (LED) is a process of planning and implementation that seeks to increase the economic potential of a city, town, or region. LED aims to improve the economic future and the quality of life for all local residents and businesses. Although the process can be time-intensive, it is important to bring the public, business and civil society sector together to work collectively in creating better conditions for growth and employment generation. This ensures that all available local resources are accessed and that there is sufficient buy-in across all sectors to increase the chances of sustainability.

• Much of a city's potential competitive advantage lies in its various forms of capital (human, natural resources, land, location, and infrastructure).

• Decentralization has forced local governments to take more responsibility for designing their own economic development strategies, usually in partnership with the private sector.

http://www.makingcitieswork.org/urbanThemes/Localecongrowth

http://www.makingcitieswork.org/urbanThemes/Localecongrowth

Peering into the Dawn of an Urban Millennium

• Urbanization—the increase in the urban share of

total population—is inevitable, but it can also be

positive. The current concentration of poverty,

slum growth and social disruption in cities does

paint a threatening picture: Yet no country in the

industrial age has ever achieved significant

economic growth without urbanization. Cities

concentrate poverty, but they also represent the

best hope of escaping it.

www.unfpa.org/swp/2007/english/introduction.html

http://www.unfpa.org/swp/2007/english/introduction.html



Competitive Cities in the

Global Economy

• Cities are important generators of wealth, employment and productivity growth and often quoted as the engines of their national economies. Productivity levels are generally higher in metropolitan area and the increased trade and capital flows give rise to increased flows of people, goods, capital, services and ideas. In many OECD countries, metropolitan regions produce a larger percentage of the national GDP than their representative population percentage. The growing economic and demographic importance of metro-regions and their increasing relations to the worldwide economy raises important policy issues.

http://www.oecdbookshop.org/oecd/display.asp?lang=EN&sf1=identifiers&st1=042006041e1









Higher-Density Development

• Most public leaders want to create vibrant, economically strong communities where citizens can enjoy a high quality of life in a fiscally and environmentally responsible manner, but many are not sure how to achieve it. Planning for growth is a comprehensive and complicated process that requires leaders to employ a variety of tools to balance diverse community interests. Arguably, no tool is more important than increasing the density of existing and new communities, which includes support for infill development, the rehabilitation and reuse of existing structures, and denser new development. Indeed, well-designed and well-integrated higher-density development makes successful planning for growth possible.

http://www.uli.org/sitecore/content/ULI2Home/ResearchAndPublications/Reports/Affordable%20Housing/Content/Higher%20Density%20Development.aspx

http://www.uli.org/

http://www.uli.org/sitecore/content/ULI2Home/ResearchAndPublications/Reports/Affordable Housing/Content/Higher Density Development.aspx









We must have strong cities

to have a strong America.

• CEOs for Cities is a national network of urban leaders dedicated to

creating next generation cities that hold the answers to many of the

challenges our nation faces.

• If you care about keeping America globally competitive, fostering

innovation, providing citizens access to opportunity and education,

combating climate change, improving healthcare outcomes and

learning how diverse people can co-exist peacefully, then you must

be concerned about cities because that is where the solutions to

these challenges will be met.

• You can’t have a strong America without strong cities.

http://www.ceosforcities.org/about



http://www.ceosforcities.org/about

Economic Vitality requires a

Supportive Physical Framework

• The Congress for the New Urbanism views disinvestment in central cities, the spread of placeless sprawl, increasing separation by race and income, environmental deterioration, loss of agricultural lands and wilderness, and the erosion of society's built heritage as one interrelated community-building challenge.

• We recognize that physical solutions by themselves will not solve social and economic problems, but neither can economic vitality, community stability, and environmental health be sustained without a coherent and supportive physical framework.

http://www.cnu.org/charter

http://www.cnu.org/

http://www.cnu.org/charter

http://www.cnu.org/

Key Assets for Prosperity are

in Cities• …metropolitan areas are the engines of national prosperity

• To achieve true prosperity, our nation must leverage the key assets - innovation, infrastructure, human capital, and quality places - principally concentrated in metropolitan areas

• Prosperity—true prosperity—is based on achieving three types of growth:– Productive growth boosts innovation and entrepreneurship,

generates quality jobs and rising incomes, and helps the U.S. maintain its economic leadership

– Inclusive growth expands educational and employment opportunities, reduces poverty, and fosters a strong and diverse middle class

– And sustainable growth strengthens existing cities and communities, conserves fiscal and natural resources, and advances U.S. efforts to address climate change and achieve energy independence

http://www.brookings.edu/~/media/Files/Projects/blueprint/blueprint%20docs/execsumbp.pdf

http://www.brookings.edu/projects/blueprint.aspx

http://www.brookings.edu/~/media/Files/Projects/blueprint/blueprint docs/execsumbp.pdf

http://www.brookings.edu/projects/blueprint.aspx

…metros are the new

norm in global economic development…

• …metros are more than the sum of their parts. When they function at their highest pitch, metros epitomize the special ―multiplier‖ value of concentration, clustering, and agglomeration in economic life, a value celebrated over the centuries by economists such as Adam Smith, Alfred Marshall, and Paul Krugman. The gains are manifold. Thanks to the cost-effective sharing of fixed resources in relatively dense locations, infrastructure investments yield markedly higher payoffs in metropolitan areas than in non-metro areas…

• Metropolitan density yields invention: Patenting rates rise markedly with increased employment density, such as is provided by metropolitan areas.

• Metro areas also accelerate residents’ wage growth, because they promote learning, help match people to jobs and people to people. Economists Edward Glaeser and David Maré found that workers in large metro areas earn a 33 percent wage premium, that the premium accrues to them over time, and that it stays with them when they leave the area. Metro areas themselves seem to speed the accumulation of human capital.

• And finally, metropolitan land-use and placemaking bring special advantages. More compact development patterns preserve rural lands and valuable ecosystems that rapid suburbanization might otherwise consume.

http://www.brookings.edu/articles/2009/0311_metro_katz.aspx


A REVIEW OF THE FISCAL AND COMPETITIVE ADVANTAGES

OF SMARTER GROWTH DEVELOPMENT PATTERNS

• This paper makes the case that more compact development patterns and investing in projects to improve urban cores could save taxpayers money and improve overall regional economic performance.

• The cost of providing public infrastructure and delivering services can be reduced through thoughtful design and planning. Several studies suggest that rational use of more compact development patterns from 2000 to 2025 promise the following sorts of savings for governments nationwide: – 11.8 percent, or $110 billion, from 25-year road building costs;

– 6 percent, or $12.6 billion, from 25-year water and sewer costs; and

– 3.7 percent, or $4 billion, for annual operations and service delivery.

• Regional economic performance is enhanced when areas are developed with community benefits and the promotion of vital urban centers in mind. Studies show that productivity and overall economic performance may be improved to the extent compact, mixed-use development fosters dense labor markets, vibrant urban centers, efficient transportation systems, and a high ―quality-of-place." Productivity increases with county employment density.

• Suburbs also benefit from investment in healthy urban cores. Finally, studies suggest that to the extent these smarter development patterns foster equity in regions by improving center-city incomes and vitality, they will also enhance the economic well-being of the suburbs as well as the city. City income growth has been shown to increase suburban income, house prices, and population. Reduced city poverty rates have also been associated with metropolitan income growth.

www.brookings.edu/urban/pubs/200403_smartgrowth.pdf

http://www.brookings.edu/urban/pubs/200403_smartgrowth.pdf



New Strategies for Regional

Economic Development!

• …metropolitan areas have fared significantly better than rural areas in terms of economic and population growth in recent decades…

• Approaches that adopt a tabula rasa approach to the dynamic relations of cities, regions and the nation lack the necessary understanding to provide real solutions for the needs of diverse communities. By adopting a local economic development approach, place-based strategieswill be able to position America for success in the 21st century.

http://www.lincolninst.edu/pubs/dl/1708_928_America 2050 report 2009.pdf

https://www.lincolninst.edu/

https://www.lincolninst.edu/pubs/dl/1708_928_America 2050 report 2009.pdf









City Development = Local Economic Development

―If the last century was the century of urbanization,

the twenty-first will be the century of cities.

It is in the cities that decisive battles for the quality

of life will be fought, and their outcomes will

have a defining effect on the planet’s

environment and on human relations.‖

• Jaime Lerner, Former Governor of Paraná, Brazil, and former Mayor of Curitiba

http://www.worldwatch.org/node/4854

http://www.worldwatch.org/



Local Economic Development,

Human Development,

and Decent Work

Best practices and trends• Based on the review of hundreds of LED programs from 24 organizations

Worldwide

• Current Trends:– The most significant item that characterizes them is the participatory

approach.

– … participation is now considered the base, the condition sine-qua-non for fostering local economic development strategies and actions.

– A new trend is, however, coming along: participation is not seen as an instrument for building consensus, but as a way of good governance. The accent on good governance, in fact, is more and more evident in the most recent initiatives, such as the Ilo, Undp and Unops Ledas, the World Bank, South Africa and it, in fact, also responds to the human development aims of United Nations.

– Objectives, strategies and tools, of course, vary from case to case.

– Also in this case “traditional”objectives could be recognized in the improvement of employment, when job creation, promotion of micro and small local enterprise, attraction of external investment, territorial revitalization are mentioned. However a new typology of advanced objectives is recognizable: the improvement of the quality of life of the citizens in a more integrated approach, which includes human development, decent work, inclusion of the socially excluded people and the protection of the environment.

ReferencesThe World Bank Infrastructure Group Urban Development ―Cities in Transition: World Bank Urban and Local Government Strategy‖ (2000)


The World Bank ―Systems of Cities, Harnessing urbanization for growth and poverty alleviation‖ (2009) http://www.wburbanstrategy.org

The World Bank Urban and Local Government Strategy ―Urban Strategy Paper Concept Note‖ FINANCE, ECONOMICS & URBAN DEPARTMENT

SUSTAINABLE DEVELOPMENT NETWORK (2009) http://www.wburbanstrategy.org

USAID ―Making Cities Work, Local Economic Growth, Introduction‖ (2009) http://www.makingcitieswork.org/urbanThemes/Localecongrowth

OECD Territorial Reviews, ―Competitive Cities in the Global Economy‖ (2006)


ULI–the Urban Land Institute ―Higher-Density Development: Myth and Fact‖ (2005)

http://www.uli.org/sitecore/content/ULI2Home/ResearchAndPublications/Reports/Affordable%20Housing/Content/Higher%20Density%20Developme

nt.aspx

CEOs for Cities ― www.ceosforcities.org/about ― (2008) http://www.ceosforcities.org/about

CEOs for Cities Newsletter ReThink: 06.18.2009 ―Amplifying City Advantages, Excerpts from Carol Coletta's speech to the Congress for the New

Urbanism‖ (2009)

CEOs for Cities ―Cities and Economic Prosperity, A Data Scan On The Role Of Cities In Regional And National Economies‖ (2001)

http://www.ceosforcities.org/work/cities_and_economic_prosperity

The Congress for the New Urbanism ―Charter of the New Urbanism‖ (2009) http://www.cnu.org/charter

Brookings Institution’s Metropolitan Policy Program ―Blueprint for American Prosperity, Unleashing the Potential of a Metropo litan Nation, An

Overview‖ (2008) www.blueprintprosperity.org

Brookings Institution’s Metropolitan Policy Program ―Miracle Mets, Our fifty states matter a lot less than our 100 largest metro areas‖ (2009)


The Brookings Institution Center on Urban and Metropolitan Policy ―INVESTING IN A BETTER FUTURE: A REVIEW OF THE FISCAL AND

COMPETITIVE ADVANTAGES OF SMARTER GROWTH DEVELOPMENT PATTERNS‖ (2004)

www.brookings.edu/urban/pubs/200403_smartgrowth.pdf

United Nations Population Fund ―State of World Population 2007 Unleashing the Potential of Urban Growth - Online Report, Introduction, Peering

into the Dawn of an Urban Millennium‖ (2008) www.unfpa.org/swp/2007/english/introduction.html

Lincoln Institute of Land Policy ―America 2050, New Strategies for Regional Economic Development!‖ (2009)

http://www.lincolninst.edu/pubs/dl/1708_928_America 2050 report 2009.pdf

Worldwatch Institute ―State of the World 2007: Our Urban Future, Foreword - The Honorable Jaime Lerner‖ (2007)


Cities / Towns separated into 4

groups

• Should we differentiate between different categories of cities? And score within each category differently?

• Subjective separation based on economic behavior1. Part of Tel-Aviv metro area

2. Next to become part of Tel-Aviv metro area

3. Part of secondary city metro area (Haifa, Jerusalem, Beer-Sheva, Ashdod)

4. Periphery – all the rest

tools for local economic renewal• bizfizz

– BizFizz is the leading business support model in the UK in which Coaching is the preferred methodology for offering business support to entrepreneurs living in areas of economic decline. Over the last seven years, BizFizz programmes have provided coaching to entrepreneurs across England and Scotland. The Civic Trust and new economics foundation are delighted that Coaching and supporting entrepreneurs by developing local resident led networks has been recognised by national government.

• plugging the leaks– The issue is not necessarily that too little money flows into a

neighbourhood. Rather, it is what consumers, public services and businesses do with that money. Too often it is spent on services with no local presence, and so immediately leaves the area.

• local multiplier 3– LM3 has been tried and tested across the UK, from agriculture to

social enterprise to local government procurement, to determine how money coming into your community is then spent and re-spent. 'The Money Trail' shows you how to use LM3 to find out what's really happening in your local economy, and how you can make it better.

http://www.neweconomics.org/gen/tools_top.aspx

http://www.neweconomics.org/gen/tools_bizfizz.aspx

http://www.neweconomics.org/gen/tools_plugging.aspx

http://www.neweconomics.org/gen/tools_lm3.aspx

http://www.neweconomics.org/default.asp

local multiplier 3

• Local money flows in Localton (top) and Leakyville (bottom) The area in blue represents money that’s stayed in the local economy



http://www.neweconomics.org/default.asp

revitalize older, traditional business districts

• The Main Street Four-Point Approach™ is a community-driven, comprehensive methodology used to revitalize older, traditional business districts throughout the United States. It is a common-sense way to address the variety of issues and problems that face traditional business districts. The underlying premise of the Main Street approach is to encourage economic development within the context of historic preservation in ways appropriate to today's marketplace. The Main Street Approach advocates a return to community self-reliance, local empowerment, and the rebuilding of traditional commercial districts based on their unique assets: distinctive architecture, a pedestrian-friendly environment, personal service, local ownership, and a sense of community.

– Organization

– Promotion

– Design

– Economic Reconstructing

• the four points of the Main Street approach correspond with the four forces of real estate value, which are

– social,

– political,

– physical, and

– economic.

http://www.mainstreet.org/content.aspx?page=47&section=2



http://www.mainstreet.org/content.aspx?page=1&site=1


Economic Statistics: The Main Street Program's Success

Historic Preservation Equals Economic Development

• 1980-2007 Reinvestment Statistics

• Dollars Reinvested:- Total amount of

reinvestment in physical improvements from

public and private sources.$44.9

BillionAverage

• reinvestment per community (i):$11,083,273

• Net gain in businesses:82,909

• Net gain in jobs:370,514

• Number of building rehabilitations: 199,519



Eight Principles of Success

Comprehensive

Incremental

Self-help

Partnerships

Identifying and capitalizing on existing assets

Quality

Change

Implementation

