The city competitiveness opportunity is huge. If average cities would manage to raise its performance to the level of the world's most competitive cities, this would create 19 million new jobs worldwide only in 2012, estimates the World Bank.
This estimation is a part of an interesting study of the most economically successful cities, prepared by the World Bank. In the study, 750 cities from 140 countries have been analysed, with their common economic development characteristics being summarised:
Accelerated economic growth – The top 10 percent of cities achieved 13,5 percent annual gross domestic product (GDP) per capita growth, compared with 4,7 percent in an average city.
Outstanding job growth – The top 10 percent of cities achieved 9,2 percent annual job growth, while the remaining 90 percent only achieved 1,9 percent.
Increased incomes and productivity – The top 10 percent of cities increased the average disposable income of their households by 9,8 percent annually.
Magnets for foreign direct investment (FDI) – The top 5 percent of cities obtained as much FDI as the bottom 95 percent of cities combined.
Of the 750 global cities analyzed in the report, three-quarters have grown faster than their national economies
Today’s most successful global cities manage to attract the majority of private investments to boost their economy. The growing economy provides jobs, improves the living standard of the population and, thus, keeps the city alive and even more interesting for new investments. Not only cities from the most developed parts of the world are among this elite group of cities, but cities from Mexico, Morocco, India, Turkey, Columbia, Nigeria and China as well.
There is no single recipe for becoming a competitive city, but some common patterns can be identified and some techniques proven to be successful. So, how did common cities succeed such breakthroughs among the most competitive cities in the world and what can be learned from them?
Specialization and innovation
Successful cities have either found a niche for their products and services or improve the current ones and, thus, became more competitive. San Francisco, for example, managed to gain 150 percent more foreign investments in the last four years on account of the innovative development of the mobile industry.
A stimulating business environment
Competitive cities create a favorable business environment with various locally adapted business measures for increasing competitiveness: regulations, infrastructure adaptation, land, providing relevant knowledge and expertise, … Successful cities also promote the growth of the private sector with various incentives for expanding business activities in the city, promoting the creation of new businesses and attract investors. Usually, only those companies and industries that show vibrant economic potential are supported through collective initiatives with the private (not just public) financial resources. The city of Gaziantep in Turkey, for example, has managed to revive the economy and increase exports tenfold mainly by removing administrative barriers, additional simplification of the bureaucracy, and the creation of business zones depending on the commercial or industrial usage purpose.
Building partnership for cooperation and consultation with stakeholders
Common characteristic of a prosperous city is a culture of a regular consultation with businesses about their needs and constraints encountered during their work, and regular consultations with end users (companies and industries) about infrastructure investments. Education and training are being adapted to business needs as well in the most successful cities. Most employment is generated by the private sector, especially small private businesses. Therefore, the city administration needs to know and monitor the factors that attract and retain those businesses in the city. Successful partnership between the city and its stakeholders created an innovative digital and media industry incubated in the South-Korean city Anyang in the formerly abandoned air base, which already managed to obtain $2 billion in foreign investments.
Successful cities differ from the others by how they get things done in the first place. Smart cities take advantage of the smart management solutions to optimize their performance and to cooperate better with their residents, stakeholders and potential investors. Successful cities choose their development strategy carefully, coordinate the budget accordingly, and devote enough time, financial and human resources into strategy implementation. They monitor their performance and solve development relevant problems during the implementation of the strategy and in collaboration with stakeholders.