COMPETITIVE CITIES IN THE
GLOBAL ECONOMY
A Synthesis Report
City Competitiveness
Santa Cruz de Tenerife, Spain, March
3-4, 2005
Attractiveness of cities
Nagoya, Japan, 2-3 June
2005
Sustainable cities
Montreal, Canada, 13-14
October, 2005
Urbanization: the Challenge of the New Century
By 2007, the world will have more urban residents than rural
residents for the first time in history (United Nations, 2003)
-
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
1950
1955
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
2010
2015
2020
2025
2030
Millio
ns o
f P
eo
ple
Rural Population Urban Population
Urbanization in OECD Countries: a well advanced process
53 % of the OECD total
population lives in urban
regions
-2.0%
-1.0%
0.0%
1.0%
2.0%
3.0%
4.0%
Turk
ey
Mexic
o
New
Zeala
nd
Canada
Austr
alia
Fin
land
Unite
d S
tate
s
Sw
eden
Irela
nd
Norw
ay
OE
CD
Avera
ge
Spain
Sw
itzerland
Gre
ece
Port
ugal
Neth
erlands
Denm
ark
Japan
Fra
nce
Austr
ia
Belg
ium
Germ
any
Unite
d K
ingdom
Italy
Kore
a
Pola
nd
Slo
vak R
epublic
Czech R
epublic
Hungary
Average Annual Growth in Population in Predominantly Urban Areas (1980-2004)
80% including less
densely populated
areas in intermediate
regions
- 5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000
TokyoSeoul
New YorkMexico City
OsakaRhine-Ruhr
Los AngelesIstanbul
ParisChicago
AichiBusan
Randstad-HollandLondon
MilanMunich
BerlinPhiladelphia
DallasMadrid
FrankfurtMiami
OECD AverageHouston
WashingtonFukuoka
BarcelonaAtlanta
TorontoHamburg
DetroitBostonSydney
San FranciscoAnkaraAthens
BrusselsRome
PhoenixMelbourne
GuadalajaraMontreal
IzmirSeattle
MonterreyMinneapolis
NaplesWarsow
San DiegoBudapestSt. Louis
LisbonStuttgart
BaltimoreTampa Bay
BirminghamLille
DaeguManchester
ZurichPittsburgh
CopenhaguenDenverPrague
ValenciaTurin
ViennaStockholm
KrakowCleveland
PueblaLeeds
PortlandVancouver
HelsinkiOsloLyon
DublinAuckland
Population
Globalisation and the emergence of metro-regions
78 metro-regions with more
than 1.5 millions inhabitants
United Nations
OECD
Megacities
A common OECD Definition for metro-regions based on
functional areas
0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%
BerlinM ontreal
CopenhaguenOslo
LondonZurich
TorontoBirminghamStockholm
Detro itVancouver
AucklandLeeds
RandstadPittsburgh*
M anchesterCleveland
ChicagoHoustonSt. Louis
DenverPortland
New YorkNaplesDallas
AtlantaLos Angeles
BostonPhiladelphia
PhoenixSeattle
M inneapolisSan Francisco
BaltimoreViennaLisbon
Rhein-RuhrSan Diego
LilleM elbourne
OsakaHamburgFukuoka
M iamiTampa BayWashington
SydneyHelsinki
TokyoFrankfurtValencia
AichiBarcelona
ParisLyon
StuttgartM unich
DublinPragueM adridAthens
BrusselsKrakowDaeguSeoul
BusanRomeTurin
WarsowM exico City
PueblaM onterrey
GuadalajaraM ilan
BudapestIstanbulAnkara
Izmir
Key actors of national economies
Produce the bulk of national GDP
Around 50%: Budapest, Seoul, Copenhagen, Dublin, Helsinki, Brussels, (Montreal, Toronto, Vacouver in their respective provinces), etc.
One third: Oslo, Aukland, Prague, Tokyo, Stockholm, London, Paris
-40% -20% 0% 20% 40% 60% 80% 100% 120% 140% 160%
WarsowMonterrey
IstanbulBudapest
LondonSan Francisco
IzmirWashington
PragueMexico City
ParisAnkaraLisbonBoston
GuadalajaraPueblaSeattle
StuttgartMilan
MinneapolisNew YorkStockholm
MunichDenverVienna
PhiladelphiaAuckland
MadridDallasRome
FrankfurtLyon
DublinBrussels
HelsinkiToronto
TurinAtlanta
HoustonSan Diego
OECD AverageChicago
BusanLos Angeles
HamburgTokyo
BarcelonaCopenhaguen
AichiSydneyDetroit
RandstadVancouver
BaltimoreCleveland
AthensPortland
MelbourneOsaka
St. LouisRhein-Ruhr
MontrealPhoenixKrakow
SeoulZurich
PittsburghOslo
ValenciaBirmingham
LeedsTampa Bay
MiamiManchester
FukuokaLille
BerlinNaplesDaegu
-20.0% 0.0% 20.0% 40.0% 60.0% 80.0% 100.0% 120.0%
MonterreyWarsow
BostonLondon
San FranciscoMexico City
LisbonIstanbul
New YorkParis
PraguePuebla
BudapestVienna
WashingtonGuadalajara
San DiegoSeattleAnkara
Los AngelesHouston
PhiladelphiaHamburg
DallasLyon
FrankfurtRomeIzmir
DenverStuttgart
MilanTurin
AtlantaStockholm
MunichChicago
DetroitOECD Average
AucklandBusan
BrusselsMinneapolisRhein-Ruhr
TokyoDublin
PortlandBaltimore
ZurichOsakaMadrid
AichiCopenhaguen
HelsinkiPhoenix
Randstad-HollandBirmingham
MiamiSydney
St. LouisClevelandBarcelona
TorontoMelbourne
SeoulManchesterTampa Bay
LeedsVancouver
MontrealFukuokaAthens
OsloNaples
KrakowValencia
BerlinLille
Pittsburgh
Higher GDP per capita… Higher productivity…
…then their national average
Higher employment…
URBAN ASSETS
Global and regional headquarters, large labour force, research insitutes, accessibility
in transportation and telecommunications, etc…
Krakow
Chicago
Aichi
Munich
Ankara
San Francisco
Washington DC
Puebla
Athens
Denver
PhoenixDublin
Berlin Busan
Randstad-Holland
London
Boston
Atlanta
Philadelphia
Detroit
Seattle
Madrid
Lille
Leeds
Lyon Sydney
Barcelona
FukuokaMonterrey
Copenhagen
-
10,000
20,000
30,000
40,000
50,000
60,000
70,000
- 2,000,000 4,000,000 6,000,000 8,000,000 10,000,000
Population
Per
Cap
ita G
DP
in
PP
Ps (
US
D)
Positive correlation between population size and income…
Sample of 69 OECD metro-regions with less than 10 million
Auckland
Zurich Stockholm
Vienna
OsloLisbon
Prague
Tokyo
Mexico CityIstanbul
Athens
Seoul
Budapest
Helsinki
Brussels
Randstad-Holland
Copenhagen
Sydney
Paris
Dublin
20%
30%
40%
50%
9 9.5 10 10.5 11
Linearised Income (per capita GDP)
Metr
o-r
eg
ion
al S
hare
of
Nati
on
al G
DP
…with an advantage for capital cities (16 out of 20)
Sample of metro-regions representing more than 20% of their national
output
Agglomeration economies
URBAN ASSETS
Advantages of both diversification and specialisation in high-value added activities
Strong innovative capacity More than 81% of patents are produced in urban regions
Great endowment of human capital
-30.0% -25.0% -20.0% -15.0% -10.0% -5.0% 0.0%
BusanLyonPueblaSydneyGuadalajaraMexico CityFukuokaMonterreyLisbonZurichOsakaOsloBirminghamMelbourneRandstad-HollandPragueAichiIzmirDaeguAucklandCopenhaguenLeedsSeoulManchesterDublinTokyoAnkaraRhine-RuhrWarsowOECD AverageIstanbulHamburgHelsinkiKrakowFrankfurtStuttgartBarcelonaMunichLondonStockholmBerlinValenciaTurinBrusselsBudapestMadridMilanLilleRomeParisAthensNaples
Lower old-age dependency ratio Higher level of skills
Higher capital stock per capita (physical
infrastructure, transport and telecommunications,
universities and research institutes, etc..)
0%
10%
20%
30%
40%
50%
60%
Lon
don
To
kyo
Wa
sh
ing
ton
Den
ve
rS
an F
rancis
co
Bo
sto
nS
eatt
leM
adri
dS
an D
iego
Hels
inki
Min
ne
ap
olis
New
Yo
rkO
sa
ka
Chic
ago
Atla
nta
Oslo
Sto
ckh
olm
Bru
ssels
Fu
ku
oka
Ph
oe
nix
Aic
hi
Los A
ng
ele
sM
iam
iB
arc
elo
na
Dallas
Hou
sto
nP
hila
de
lphia
Detr
oit
Ta
mp
a B
ay
Pitts
bu
rgh
Pa
ris
Cop
enh
ag
ue
nS
t. L
ou
isM
anch
este
rR
an
dsta
d-H
olla
nd
Lee
ds
Lyon
Po
rtla
nd
Cle
ve
lan
dV
ale
ncia
Stu
ttga
rtB
irm
ing
ha
mS
yd
ne
yM
elb
ourn
eA
the
ns
Au
ckla
nd
Dub
linL
isb
on
An
kara
Bu
da
pest
Wa
rso
wL
ille
Pra
gu
eIz
mir
Kra
kow
Ista
nb
ulS
ha
re o
f L
ab
ou
r F
orc
e w
ith
Te
rtia
ry E
du
ca
tio
n
Metro-region Country
-6%
-4%
-2%
0%
2%
4%
6%
London
Pra
gue
Leeds
Mancheste
r
Birm
ingham
Naple
s
Sto
ckholm
Rom
e
Mila
n
Lyon
Wars
ow
Busan
Turin
Munic
h
Dublin
Stu
ttgart
Hels
inki
Tokyo
Fukuoka
Lis
bon
Vale
ncia
Madrid
Copenhagen
Paris
Aic
hi
Fra
nkfu
rt
Lille
Bru
ssels
Seoul
Oslo
Ankara
Ham
burg
Randsta
d-H
olla
nd
Osaka
Vie
nna
Ista
nbul
Rhin
e-R
uhr
Barc
elo
na
Berlin
Ath
ens
Izm
ir
Kra
kow
Daegu
Budapest
But Metro-regions not Always Synonymous With Success!!
A group of lagging metro-regions for almost all socio-economic indicators (e.g. Lille (France),
Fukuoka (Japan), Berlin (Germany), Pittsburgh (US), Naples (Italy). ..)
Differences with national averages not so large
for a number of metro-regions
GDP and productivity growth not always higher
than national averages
-5%
0%
5%
10%
15%
20%
25%
Pra
gue
Kra
kow
Bud
apest
Busan
Seo
ul
Dublin
Vie
nna
Stu
ttgart
Hels
inki
Daegu
Ham
bu
rg
Bru
sse
ls
Osa
ka
Copenh
aguen
Pari
s
Munic
h
Fuku
oka
Toky
o
Izm
ir
Ath
ens
Berl
in
Aic
hi
Fra
nkf
urt
Lyon
Ankara
Mila
n
Osl
oR
hin
e-R
uhr
Turin
Lill
e
Rom
e
Naple
s
Barc
elo
na
Randsta
d-H
olla
nd
Ista
nbul
Sto
ckholm
Vale
ncia
Madri
d
Pro
ductiv
ity G
row
th
National productivity grow th Metro-region productivity grow th
Productivity growth GDP growth
London Chicago
MunichMilan
Randstad-Holland
Aichi
Busan
Paris
Los Angeles
OsakaRhine-Ruhr
Istanbul
Mexico City
Seoul
Tokyo
-
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
45,000
50,000
5,000,000 10,000,000 15,000,000 20,000,000 25,000,000 30,000,000 35,000,000
Population
Per
Cap
ita
GD
P in
PP
Ps
(US
D)
But Metro-regions not Always Synonymous With Success!!
Bigger means richer
until…
City size and income (metro-regions with over 6 million)
Have big cities really important
innovative capacity?
? ?
Patents
Congestion costs?
-8%
-6%
-4%
-2%
0%
2%
4%
6%
8%
10%
12%
Naple
sB
erlin
Lille
Vie
nna
London
Detr
oit
Birm
ingham
Montr
eal
Osaka
Fukuoka
Lis
bon
Daegu
Seoul
Pitt
sburg
hC
levela
nd
Rhin
e-R
uhr
Bru
ssels
Housto
nC
hic
ago
Tokyo
St. L
ouis
Oslo
Auckla
nd
Melb
ourn
eR
andsta
d-H
olla
nd
Leeds
Vale
ncia
Ham
burg
Port
land
Denver
Toro
nto
Busan
Mancheste
rP
aris
Copenhaguen
OE
CD
Avera
ge
New
York
Dublin
Lyon
Rom
eD
alla
sB
arc
elo
na
Atla
nta
Los A
ngele
sS
tockholm
Aic
hi
Sydney
Bosto
nP
hila
delp
hia
Seattle
Phoenix
San F
rancis
co
Min
neapolis
Balti
more
Ath
ens
Vancouver
Budapest
San D
iego
Turin
Zurich
Fra
nkfu
rtM
iam
iH
els
inki
Tam
pa B
ay
Washin
gto
nK
rakow
Stu
ttgart
Pra
gue
Mila
nM
unic
hM
adrid
Wars
ow
THE URBAN PARADOX
Persistence of high pockets of unemployment
0
1
1
2
2
3
3
4
4
Unite
d S
tate
s
Kore
a
Sw
eden
Unite
d K
ingdom
Fra
nce
OE
CD
Avera
ge
Denm
ark
Japan
Sw
itzerland
Neth
erlands
Austr
ia
Italy
Mexic
o
Spain
Slo
vak R
ep
Pola
nd
Hungary
Austr
alia
Gre
ece
Crim
e a
gain
st pers
ons (
countr
y a
vg=1)
Predominantly Urban Intermediate predominantly Rural
On third of metro-regions have higher unemployment rate than their
national averages
Lower activity rates in urban regions (44.3%) than
intermediate (49.7%) and rural (44.5%)
Growth and Unemployment
Wealth and Poverty
High level of poverty in all types of
metro-regions (e.g. about 50% in Mexico
City, 22% in Rotterdam, 15% in Paris)
Exclusion of immigrants
Spatial polarisation (in 10 OECD
countries, up to 10% of the population
live in distressed areas)
Criminality (30% higher in urban regions)
Increasing role of large cities: what should policy-makers do?
Dilemma 1: Metro-regions versus other regions?
Causal relationship is not obvious
Impact on other regions is not clear
But public intervention is necessary
To sustain city competitiveness and adress negative
externalities
To seek a positive sum game and develop synergy
effects
Increasing role of large cities: what should policy-makers do?
Dilemma II. Which strategic vision in a market context?
Pursue a strategy of diversification based on clusters
Building assets of relations (universities, inter-firms, etc.)
Provide local public goods (tangible and intangible)
Avoid unrealistic expectations (not all metro-regions can be high tech)
Involve a wide range of stakeholder
Increasing role of large cities: what should policy-makers do?
Dilemma III. Economic dynamism or liveable city?
Liveability sustain competitiveness
City attractiveness (urban renaissance strategies, FDI attraction)
Burden of social and environmental costs
Time is crucial and delay is dangerous
Increasing role of large cities: what should policy-makers do?
Dilemma IV. Appropriate scale or closeness to citizens?
No best practice but considerable trade-offs in terms of benefits and costs
Most metropolitan governance overlook the question of long term strategy
Success depends on the public support
Social conflicts and tensions need to be addressed
Increasing role of large cities: what should policy-makers do?
Dilemma V. Metro-regions versus central/state government?
Higher level of governments are key for any metropolitan governance reform
Legal basis and incentives are crucial
New forms of vertical relationships (partnerships and contracts)
Increasing role of large cities: what should policy-makers do?
Dilemma VI. Participation of private sector actors in metro-regions' governance?
Better to deal with trade
associations than individual firms
A metro-wide level of governance
offers better chance of plurality
Increasing role of large cities: what should policy-makers do?
Dilemma VII. Unequal burdens or distorting subsidies?
Need for an urban lens to local finance
Pay more attention to perverse effects of
equalisation schemes