Forum Journal (Summer 2013) Takeaway for Livable Historic City Cores: Attracting Investment to Cities

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1 Forum Journal (Summer 2013) Takeaway for Livable Historic City Cores: Attracting Investment to Cities Dublin, Ireland: Talent Hub Strategy Based on Livability of the Historic City Core By John O Brien Dublin provides an interesting case study of a place that has leveraged its cultural heritage with other assets to create a talent hub attracting world leaders in knowledge industries to establish operations there while at the same time becoming a hotspot for indigenous entrepreneurial development. Over the last three decades, Ireland has been very successful in attracting FDI, which now plays a vital role in the economy, accounting for: 250,000 jobs directly and indirectly out of a total of 1.8 million in employment; US$150 billion in exports, or 80 percent of the country s total exports; 65 percent of Corporation Tax payments; and 68 percent of business expenditure on research and development. This investment comes from the world s leading companies in information and communications technology, life sciences, financial services, and engineering, and increasingly from born on the internet content and service providers including companies such as Google, Facebook, Amazon, ebay, Blizzard, and Electronic Arts. Indeed, the IBM Plant Location International Report 2011 ranked Ireland as the number one destination worldwide for foreign investment projects by value and number two worldwide for FDI jobs. Ireland s Industrial Development Agency is the government body charged with attracting FDI to Ireland and working with existing investors to maximize their contribution to the economy. An important part of its job is to continually monitor trends in global investment and develop an appropriate response by government and other public bodies to these trends so that they can maximize the FDI contribution to the economy in terms of jobs and added value. Activities increasingly depend on two critical factors: interconnectivity with the rest of the world, and, above all, the availability of talent. Ireland s competitive strategy is based on four Ts: Talent, Technology, Tax, and Track Record Massachusetts Avenue NW Washington, DC E forum@savingplaces.org P F

2 It became clear in recent decades that for many of the world s leading companies that rely on a high creative input, their choice of where to locate was boiling down to deciding on which city rather than which country. Therefore, while Ireland s Industrial Development Agency continues to promote balanced regional development in line with the government s National Spatial Strategy, for many key projects success would depend on the promotion of Dublin (the only Irish city classified by the OECD as a metroregion) as an attractive city location compared to other similar competing European cities. Over the last 20 years, major conservation projects have been undertaken in Dublin, by both the state and city authorities, on important public buildings including the Royal Hospital (1684), Dublin Castle, Collins (Royal) Barracks (1709), Dr. Steevens s Hospital (1719), Custom House (1791), Kilmainham Gaol(1792), and City Hall (Royal Exchange) (1769). A works project has been ongoing in the Phoenix Park, including the reinstatement of the main entrance gates and the return of the Phoenix Monument (1747) to its original position on the main axis of the park. Conservation works have also been completed and new uses found for the former Bluecoat School (1773) and the churches of St. George (1802) and St. Catherine (1760). But in the city as a whole, the track record on the survival and conservation of the historic urban fabric is more mixed, directly reflecting the changing social dynamics of the city, the conflicts of the early 20th century, and modern redevelopment. Some surviving properties, particularly on the north side of the city, lost original fabric and details when they were converted to tenement occupation (although this too is now an important part of their history). Private individuals and bodies have also done significant conservation work, particularly in the northern side of the city. One important example is the project on North Great George s Street, where conservation and new interventions to replace missing historical fabric have helped to revitalize and reestablish the integrity of the street. Dublin City Council has published a conservation plan for Henrietta Street and recently started a program of urgent conservation works on a number of properties in the street (UNESCO 2010). The linking of investment promotion to a specific urban redevelopment project in Ireland started with the establishment in 1987 of the Customs House Docks Development Authority (CHDDA) as a statutory body to promote the redevelopment of historic but derelict inner-city docks areas of initially 11 hectares. It was envisaged that the economic basis for the redevelopment would be the establishment in the area of an International Financial Services Centre (IFSC), and incentives were put in place to both encourage redevelopment and entice international financial companies to locate in the 2

3 center. While the CHDDA would be responsible for the development of the area, the government mandated that IDA Ireland promote the center to investors. The initiative proved to be very successful, and today there are 30,000 people employed in financial services and ancillary support activities in the IFSC. Dublin is now a center for international banking, funds management, and insurance, and the sector continues to grow despite the international financial crisis. In 1997, the CHDDA was subsumed into the Dublin Docklands Development Authority (DDDA) with a broader mandate to promote the development of the entire Dublin docklands area consisting of 520 hectares. Since the DDDA s inception in 1997, the area under its control has attracted more than 3.35 billion of public and private investment and has seen the creation of 40,000 new jobs. The number of residents in the area has grown from 17,500 to 22,000, and 11,000 new homes have been built, of which 2,200 are either social or affordable. In addition, the area has developed as a vibrant cultural center with a new theater and a new concert venue. In 2003, as part of a further urban regeneration initiative, the government formed the Digital Hub Development Agency, an Irish state agency, to establish a digital hub in the historic Liberties area of the city. Its role is to provide incubator space and support for largely indigenous, small and medium-size enterprises while promoting the broader social and economic regeneration of the area. It currently houses more 90 such enterprises developing products ranging from mobile apps to online games. Dublin, as the major urban center in the country, had always attracted a significant share of FDI into Ireland. By the mid-1990s, it was already attracting major investments from an impressive range of international companies, including Intel, Microsoft, Oracle, IBM, and SAP, as well as major financial institutions such as Citicorp, Merrill Lynch, Deutsche Bank, and HSBC. (See figure 1.1.) IDA Ireland recognized that this established track record, combined with the exciting urban redevelopment of the city core, provided the opportunity to promote Dublin as a talent hub that would attract the web-based knowledge industries of the future as well as encourage the existing technology and financial services companies already established there to deepen their investment and add more knowledge-based activities. To succeed with this endeavor, it was evident that Dublin would need to have state-of-the-art data interconnectivity with the rest of the world. While this would be largely supplied by the private sector, it was clear that some pump priming would be needed, so IDA Ireland sought and received government funding to invest in a project, called Global Crossing, that connected Ireland to the transatlantic fiber network between the United 3

4 Kingdom and the United States and thus to the rest of the world. This made Dublin a credible location for investment projects that require the speedy and secure transmission of high volumes of data at a competitive cost. A basic pillar for the promotion of Dublin as a talent hub was the concentration of higher education institutions in the city. These include three universities (Trinity College in the city center and University College Dublin and Dublin City University just outside the center); the Dublin Institute of Technology, also in the city center; and the National College of Ireland that relocated its campus to the heart of the IFSC as part of the urban redevelopment project. These institutions educate 65,000 undergraduates and postgraduates in the full range of disciplines, with a strong focus on technology and business. They also conduct a wide range of research, with faculty and postdoctoral students drawn from varying backgrounds and nationalities; research activity has increased significantly since 2002 with the support of Science Foundation Ireland. While having good higher education institutions locally can provide a stream of talent, it was clear that this, while necessary, was not sufficient to build a talent hub. Apart from the fact that (as has been pointed out by analysts such as Florida) not all cities with good universities retain their graduates, knowledge-based companies would only locate their regional base in a city that could supply people offering a wide range of skills and languages. Companies would need to feel that a Dublin location gave them access not just to a good local talent market but to a European talent market; this would be based on Dublin s appeal to creative class people, especially those in the 20 to 40 age group. Dublin is attractive to such people because it is seen as a livable and dynamic city with good nightlife and leisure facilities but also with a strong cultural heritage that was reflected in a regenerated city center and the significant investment (public and private) in heritage conservation over recent decades. Recently, Dublin has successfully attracted most of the leading internet companies to establish operations to service the European, Middle East, and African (EMEA) market from Dublin. Companies such as Google, Facebook, Linkedin, Zynga, Popcap, and Twitter have chosen to locate in the city center in or near the urban regeneration area. Others such as PayPal, ebay, Amazon, and Yahoo have chosen larger sites further out of town, as have many of the larger tech companies such as Oracle, HP, SAP, and Symantec. The importance of talent to these companies can best be illustrated by Google, which established its EMEA headquarters in 2003 in a building in the Dublin docklands regeneration area. It currently employs more than 4

5 2,000 people, all higher-education graduates, to support all of its products: search engines, consumer products (Gmail, calendar), advertising products (Ad Words, Ad Sense), right through to business solutions for major corporations. It also undertakes new product development through a dedicated engineering team and provides central support for the finance, payroll, legal, and human resources functions. To do this effectively it operates in 45 languages and covers 65 countries. It is also important to note that not all of the creative and innovative activity has been generated by FDI. The Digital Hub has been highly successful in nurturing and developing creative and innovative small and medium-size enterprises. The Digital Hub is currently home to more than 90 companies employing more than 500 people doing everything from developing apps for mobile phones to web design to computer games. This is only one manifestation of the strength of indigenous high-tech entrepreneurship in Dublin that feeds off the nexus of multinational corporations, innovative research in educational institutions, and the availability of venture capital. The success of the talent hub approach can also be seen by the fact that in a recent survey called Hotspots (EIU 2012), which ranked the competitiveness of 120 major cities worldwide, Dublin ranked first in the Human Capital sub index and was tied for fifth (with Paris and Vienna) on the social and cultural sub index. The following chapters give many more examples from diverse places around the world facing varied economic and social challenges that further demonstrate the role of heritage conservation as a major contributor to economic development. 5