Strategies and Catalysts for Urban Economic Development After the Crisis. Greg Clark

Transcription

1 Strategies and Catalysts for Urban Economic Development After the Crisis Greg Clark World Bank February 2011

2 The Agenda: Cities and Investment, City Economic Development

3 The Agenda: OpenCities, London, New York, Barcelona, Cape Town, Joburg, Toronto, Sao Paulo, Mumbai, and.

4 Today

5 Overview Crisis and after Local economies Next economy? Catalytic projects play in city strategic plans? - Hosting Global Events - Development Agencies Local Government/Economic Development Local development systems Local economic leadership

6 After the crisis?

7 Recession, Recovery and Reinvestment Recession, Recovery and Reinvestment: the role of local economic leadership OECD LEED Programme Book The impact of, and response, to the crisis and recession in 41 localities: Aarhus Barcelona Basel Berlin Bilbao Birmingham Brussels Cardiff Cologne Glasgow Hamburg Helsinki Lille Liverpool London Lyon Marseille Milan Munich Paris Rome Turin Zurich Budapest Prague Riga Warsaw Vienna Los Angeles Miami New York Pittsburgh Toronto Cape Town Beijing Hong Kong Mumbai Shanghai Singapore Tokyo Auckland 7

8 Banking Crisis Global Economic Shift Cities in the Crisis Recession Public Finance Crisis Policy Response and Stimulus 8

9 Towards long term recovery and reinvestment Four key areas of concentration observed: New economic strategies: New investment strategies: New partnerships with higher tiers of government: New focus on efficiency: Focus around distinctiveness, high skills, talent attraction and innovation New and innovative approaches to partnering and delivering with the private sector New long term working relationships with central government in particular based on more flexibility and local autonomy Drive for improved quality at lower costs

10 The new world city horizon A larger, more diffuse network of world cities, with a reorganised basis for competition BUT High value-added knowledge-intensive business more critical than ever Cities need access to finance capital, accounting/legal services, insurance, marketing, advanced logistics to meet supply chain functions

11 Expertise AND Attractiveness: The challenge for established world cities Improve quality of life Reduce congestion (Paris master plan for sustainable mobility, London congestion charge, Tokyo 3 loop roads by 2015) Affordable Housing (New York $7.5bn New Housing Marketplace Plan up to 2013) Improve governance and establish networks of partners Integration of governance capabilities across national and local scales, to provide framework of collaboration for city and partners (Greater Paris initiative and London s mayoral system post-2000) Global environmental and climate change leadership PlaNYC (2030), the 10-year plan for a Carbon-Minus Tokyo Adopt single tightly co-ordinated brand platform for international promotion ( Barcelona GLOBAL international positioning programme, and NYC Marketing) Use land-use powers to drive social and regional territorial equality Strategies to counter unequal development (Paris regional SDRIF plan) Commitment to care for aging society (Tokyo model for sustainable anti-agist society)

12 Power AND openness: The challenge for emerging world cities Openness to international populations and ideas are critical for success of powerful emerging world cities. Many are working on a range of internationalisation strategies: Improved business climate (Toronto Agenda for Prosperity, Mumbai Transformation Programme, Miami International Trade Consortium) Ambitions to become a regional/international talent capital (Hong Kong s Asia s world city positioning, Singapore s Global Schoolhouse campaign, Sao Paulo s study abroad initiative) International event-led marketing and infrastructure overhaul (Cape Town s leverage of 2010 World Cup, Auckland s 2006 City Events Strategy) Investment in and promotion of cultural and recreational qualities. (Singapore s Global City for the Arts branding and Renaissance City Plan, Louvre Abu Dhabi) Generating international institutional and organisational presence (Turin s attraction of EU/UN bodies)

13 Embrace the next economy? New cycle features... Productivity rather than consumption. Distinctive rather than copying. Specialisation in knowledge-led activities. Entrepreneurship and Innovation. Orientation towards growing markets. Human capital, Talent, Openness, Quality of life and Quality of place. Green economy, Resource efficiency and Low carbon. Leadership rather than Government... Assets rather than cash... Lessons from N America, lessons from Europe.

14 Catalysts Hosting global events Development Agencies

15 Global Events EXPOs, World Cup, Olympics, Festivals. Who is now bidding and hosting? Catalysts with multiple benefits. Alignment and acceleration of city plans. Good planning and management of benefits and leverage is essential. Influence public investment cycles

16 Global Events and Local Development The Urban Investment Opportunities Of Global Events (July 2010) Previously held events Barcelona, Summer Olympic Games 1992 Paris, FIFA World Cup 1998 Lisbon, EXPO 1998 Turin, Winter Olympic Games 2006 Planned events London, Summer Olympic Games 2012 Glasgow, Commonwealth Games 2014 Milan, EXPO 2015 Events being considered Amsterdam, Summer Olympic Games 2028

17 Global Events and Local Development "Local Development Benefits from Staging Global Events (2008) EXPO Petroleum Congress City of Culture Summer Olympic Games Winter Olympic Games FIFA World Cup Americas Cup G7 & 8 Summit EU Summit Earth Summit

18 Tensions i. Existing strategies and plans v new opportunities ii. iii. iv. New start or accelerator? Place improvements v social and economic outcomes Awarding bodies v Host bodies v. Purpose v benefits vi. vii. viii. ix. Direct v indirect impacts Inclusion v exclusion Short term v long term Skill and leadership v lack there of x. Good luck v bad luck Science 18

19 The right event?

20 The benefits of bidding

21 Developing a clear and effective legacy Breadth of legacy benefits: Visitor Economy Transport and urban infrastructure Cultural infrastructure Sporting infrastructure Visible legacy City image, marketing and positioning Business interest and investment Science, Research, Education, Innovation. Managerial and events strategy development 21

22 Developing a clear and effective legacy Depth of legacy benefits: (+ 1 to + 10 years)

23 Developing a clear and effective legacy 23

24 Events help overcome problems that cities have Investment Failure: leverage Market failures: stimulus Co-ordination and capacity failures: governance dividend Information failures: communication opportunity Raising civic ambitions and expectations. Shaping an investment market for several business cycles. 24

25 Case Study: Cape Town World Cup 2010 Infrastructural legacy $2 billion investment in 3 years First phase of new Integrated Rapid Transit System, including connection to CT airport. Upgraded rail network ($65 million upgraded CT Station) Upgrade of key interchanges on highways connecting the Central City: eg Hospital Bend - $40 million 16.5 hectare Green Point Urban Park

26 Case Study: Cape Town Impact on business Tourist industry: 20-25% growth during World Cup; lessons from organising unique and authentic Cape Town visitor experience Stronger Cape Town profile and brand = enhanced business branding and marketing Future leverage as an event, conventions and festival city Impact on governance Enhanced citizen participation - improved communications with Central City stakeholders Enforced cooperation: Govt departments, city agencies and private companies learning to work more closely together Skills development: negotiating with FIFA and national government, planning and coordinating diverse work-streams, issuing complex tenders, managing multiple contracts, up-skilling construction industry Long-term planning - impetus for City Development Strategy, Central City Development Strategy and Creative Cape Town (bid for World Design Capital in 2014)

27 Case Study: Johannesburg World Cup 2010 Urban regeneration The Ellis Park Precinct - $15 million City investment, $55 million private investment new public square, new park Upgrade of commuter train station New 5-a-side soccer pitches for children release of public land made available for housing investment Nasrec Precinct (between Soweto and Johannesburg) New coach station, updated train station new pedestrian bridge linking divided areas. public land holding released for housing investment in 2010

28 Case Study: Johannesburg Transport modernisation Bus Rapid Transit system runs from Soweto into inner city Speed of funding and development directly linked to WC boost for residential and business investment in low-income areas Gautrain South Africa s first fast inter-city commuter train, between Jo burg, Pretoria and Tambo Airport. Biggest PPP in Africa, $4bn Forecast 140,000 passengers per day

29 Insights The science of benefits and costs is incomplete. Skills, capacity, institutional ability and leadership are critical, but challenging issues. Planning and building the legacy different task from running the event. Developing Countries have to get the match right between the event and the impact they need. Governance benefits should not be overlooked: vertical, horizontal, public/private. Image, Identity, Reputation, must be built through the event process and will stimulate multiple benefits. Visitor economy can leverage other opportunities. 29

30 Development Agencies and Companies: What are we talking about? A means to undertake some forms of city development in the public interest utilising a corporate structure rather than a municipal or governmental structure. Doing some of the business of local government as a business rather than as a local government service provider. Ensuring that Local Government has short life entities that can do complex interventions effectively with different skill sets and arrangements from those that Local Government usually has. Skills that Local government does not always otherwise have. 30

31 Development Agencies: No single model: a wide variety Different starting points: Europe, North America, Asia, Latin America, Different constitutional contexts. Different freedoms and flexibilities. Comprehensive, niche, sectoral development agencies. Defined territories. Public/Public, Public/Private, Private/Private. Governments, Business, Trade Unions, Community. New partners emerging: Universities, Airports, Sports Clubs, Utilities, Major Landowners Leads to different missions, objectives, and priorities. Need for learning, and not copying. Governance roles? Instrumentation roles? Joint Venture roles? Business led development agencies? 31

32 Development Corporation Typologies Typology Urban Development and Revitalisation Agencies Productivity and Economic Growth Agencies Integrated Economic Agencies Internationalisat -ion Agencies Visioning and Partnership Agencies Purpose Place drivers Employment and productivity drivers Place and productivity leaders Place and productivity promoters Place -shapers and visioners Example Agency

33 Value Added of Development Agencies *Aggregate* Bring together otherwise disparate economic development efforts within one body *Pace* Accelerate the local response to investors/developers. *Scale* Enhance the magnitude of implementation, by enabling simultaneous delivery on multiple programmes and projects by commissioning additional resources quickly *Credibility* Enhance the reputation of local negotiators, leading to external investor confidence *Risk-sharing* Share costs etc between those partners promoting developments and investments *Value Capture* Enable some of the fruits of economic development to be recycled within city budgets and programmes

34 Value added of Development Agencies *Leverage and Capitalise* Unlock otherwise under-used assets, for example in real estate or infrastructure *Financial Innovation* Devise wholly new sources and instruments for investment, perhaps in partnership with private financiers. *Investment-readiness* Readying of key local projects, developing the propositions to make them more attractive to external investment. * Efficiency* Increase efficiency in the utilisation of land, property and local investment markets *Co-ordination* Overcome co-ordination failures arising from fragmented jurisdictions *Promotion* Brand and market the city better, overcoming information gaps+ asymmetries to build a clearer image+ identity

35 Development Agencies fostering the city development system i) Rowing ii) Steering iii) Cheering iv) Coaching 35

36 Bilbao-Ría 2000: Bilbao Local Development System

37 NYCEDC: NYC Local Development System

38 Leadership and Systems

39 The local government role in the 21st century? The role of Local Government... The 4 roles of local government i. Representation. ii. Local Services. iii. Regulation. iv. Development and Investment.

40 What are the ingredients of the local government role in the 21st century? The role of Local Government... The 4 roles of local government i. Representation. ii. Services. Acting upon markets... iii. Regulation. iv. Development and Investment. Acting within markets... This 4 th role is different: requires additional expertise, new geographies and new structures and arrangements...

41 Core challenge for local government engaging with economies Political Economic Political geography Economic geography Political time Economic time Political actors Economic actors Political money Economic money

42 Framework for local development Global economy and Macro-economic framework Markets Development and growth Feedback effects Productivity Use of resources Population Drivers Innovation & creativity Industrial structure Business ownership & mgt Human capital Environ mgt Connectivity Business environment & investment Educational and research base Land and physical infrastructure Social/ cultural infrastructure & quality of life Ecological base Governance structure 42 Pre-conditions

43 Leadership

44 Leadership challenges in cities and regions. i. Transition to a new economy and its business requirements ii. iii. iv. Speed of adjustment to post oil economy and low carbon futures Openness to international populations Rapid and dynamic growth of metropolitan regions v. Service needs of dynamic populations and businesses vi. vii. viii. ix. Greater transparency to customers and stakeholder Investment not enough. Financial resources are finite and national public finance is slow to follow growth. Lack of investment tools Formal power and competence less than needed. City and regional governments do not control everything: boundaries, competences, division of labour with higher/lower tiers, markets, regulation/freedom National and sub-national governments guard their own space. Co-ordination challenges

45 Capacity and leadership issues in local economic development One Plan, One Voice, One Identity Economic agenda across whole City Government Organised and demanding business leadership Customer orientation Focus on a number of top priorities, sectors, and spaces Expanding capacity to implement Range of delivery vehicles that can attract external investment. Problem solving and Project Management orientation. Strong economic agenda and partnerships Collaborative leadership that leads, empowers, focuses on big picture

46 How does Local Government have a role in economic prosperity? Roles of Local Government depend upon constitutional position of local government and existing institutional frameworks. i. Vision setter and planner. ii. iii. iv. Local dimensions of business climate. Infrastructure advocacy and management. Convenor and broker of alliances and coalitions. v. Good local governance and services (planning, transport, energy, education, housing, amenity). vi. vii. Information and communication (and branding and positioning?) Physical capacity, and area regeneration. viii. Local economic management (eg CBDs, Tourism areas, ports, industrial parks, etc) ix. Enterprise and Employment interventions. x. National and Regional alliances and coalitions.

47 Bilbao Local Development System

48 Local Economic Leadership and the Local Economic Development System City Council Citizens Groups Private and Business Sector And media Effective Local Economic Leadership National Government Economic Development Agency Institutional

49 Transfer between Countries 1 i. LED is not easy anywhere. Most OECD countries do it with variable success. Crisis has forced a rethink. ii. iii. iv. Major co-ordination and leadership challenges are faced. Local Government has to operate well beyond it s formal power, but can only do so if it uses it s formal power well. Credibility. Convening and co-ordinating skills are to the fore. v. The catalysts are seen as ways of producing this capacity. Pacing devices, partnering mechanisms.

50 Transfer between Countries 2 i. Many are now seeking to use or adapt tools developed in OECD countries. But the tools are not perfect and often context dependent. ii. iii. iv. Most urban innovation requires creation of new tools because most governmental systems are not fit for economic development purposes. Most such tools, when they work, rest upon somewhat mature institutions, a deep pool of leadership talent, and negotiated systems. The tools don t work on their own. The key issue is leadership talent. How it is developed and how it is recognised. v. The bank can and does play a key role here.

51 Common Challenge a. Economic Growth b. Economic Development c. Economic Inclusion These are not alternatives. They need to be combined. Common misunderstanding that we need to resolve.