THE NEXT URBAN ECONOMY: DRIVERS OF ECONOMIC TRANSFORMATION Ricky Burdett Professor of Urban Studies Director, LSE Cities and Urban Age Study Methodology 69 Guadalajara 70 São Paulo 71 Dallas Annual Employment Growth 2.3% Annual Income Growth 1.6% Chart Annual Employment and Income Growth 1 Assess performance before, during, and after recession 2 Rank 150 metro areas in each period 3 : São Paulo, Pre-Recession GLOBAL METRO MONITOR • 150 Metropolitan Areas • 12% of global population • 46% of global GDP • 1993-2010: a marked shift in growth towards lower income metros • Recession: metros followed their national economies • Recession: US hit hardest, EU slowest to recover, Asia largely unaffected World population continues to urbanize World population continues to urbanize 30% Source: UN World Urbanization Prospects, 2007 Revision 60%
Transcript
THE NEXT URBAN ECONOMY: DRIVERS OF ECONOMIC
TRANSFORMATION
Ricky Burdett Professor of Urban Studies Director, LSE Cities and Urban Age
Study Methodology
69 Guadalajara70 São Paulo71 Dallas
Annual Employment Growth2.3%
Annual Income Growth1.6%
Chart Annual Employment and Income Growth
1Assess performance before, during, and after recession
2 Rank 150 metro areas in each period3
: São Paulo, Pre-Recession
GLOBAL METRO MONITOR• 150 Metropolitan Areas
• 12% of global population
• 46% of global GDP
• 1993-2010: a marked shift in growth towards lower income metros
• Recession: metros followed their national economies
• Recession: US hit hardest, EU slowest to recover, Asia largely unaffected
World population continues to urbanizeWorld population continues to urbanize
30%
Source: UN World Urbanization Prospects, 2007 Revision
60%
Chicago - CityChicago - City
2.9 million residents
Chicago - MetroChicago - Metro Buenos Aires - CityBuenos Aires - City
2.8 million residents
Buenos Aires - MetroBuenos Aires - Metro
9.8 million residents
$500 billion economy 12.6 million residents
$80 billion economy
150 metropolitan economies in the Global 150 metropolitan economies in the Global MetroMonitorMetroMonitor
Metros are highMetros are high--value economic centers nationallyvalue economic centers nationally
GVA per capita, metros versus nations, 2007
65%
300%
25%18%
Share of World GDP
12%
Share of World Population
Metros are highMetros are high--value economic centers globallyvalue economic centers globally
46%
Metro performance in 3 economic periodsMetro performance in 3 economic periods
World GDP percent change, market exchange rates. Source: IMF World Economic Outlook Database, Oct 2010
Pre-recession1993-2007
Recovery2009-2010
Recession2007-2009
Study Methodology
69 Guadalajara70 São Paulo71 Dallas
Annual Employment Growth2.3%
Annual Income Growth1.6%
Chart Annual Employment and Income Growth
1Assess performance before, during, and after recession
2 Rank 150 metro areas in each period3
: São Paulo, Pre-Recession
Fastest-growing metro economies in 2010
Rank
Metro Area Change
1 ISTANBUL, Turkey +43
2 SHENZHEN, China -1
3 LIMA, Peru +13
4 SINGAPORE +14
5 SANTIAGO, Chile +36
6 SHANGHAI, China +2
7 GUANGZHOU, China -4
8 BEIJING, China -4
9 MANILA, Philippines +25
10 RIO DE JANEIRO, Brazil +90
11 HYDERABAD, India +4
12 MUMBAI, India +12
13 BANGALORE, India -6
14 MELBOURNE, Australia +33
15 GUADALAJARA, Mexico +54
Rank
Metro Area Change
16 KOLKATA, India +23
17 CHENNAI, India +14
18 TIANJIN, China -6
19 BUENOS AIRES, Argentina +41
20 JAKARTA, Indonesia +103
21 TAIPEI, Taiwan, China +32
22 BELO HORIZONTE, Brazil +20
23 KUALA LUMPUR, Malaysia -6
24 RIYADH, Saudi Arabia +105
25 SÃO PAULO, Brazil +45
26 AUSTIN, United States -1
27 MONTREAL, Canada +47
28 ALEXANDRIA, Egypt +8
29 CAIRO, Egypt +8
30 HONG KONG +42
Rank
Metro Area Change
1 ISTANBUL, Turkey +43
2 SHENZHEN, China -1
3 LIMA, Peru +13
4 SINGAPORE +14
5 SANTIAGO, Chile +36
6 SHANGHAI, China +2
7 GUANGZHOU, China -4
8 BEIJING, China -4
9 MANILA, Philippines +25
10 RIO DE JANEIRO, Brazil +90
11 HYDERABAD, India +4
12 MUMBAI, India +12
13 BANGALORE, India -6
14 MELBOURNE, Australia +33
15 GUADALAJARA, Mexico +54
Rank
Metro Area Change
16 KOLKATA, India +23
17 CHENNAI, India +14
18 TIANJIN, China -6
19 BUENOS AIRES, Argentina +41
20 JAKARTA, Indonesia +103
21 TAIPEI, Taiwan, China +32
22 BELO HORIZONTE, Brazil +20
23 KUALA LUMPUR, Malaysia -6
24 RIYADH, Saudi Arabia +105
25 SÃO PAULO, Brazil +45
26 AUSTIN, United States -1
27 MONTREAL, Canada +47
28 ALEXANDRIA, Egypt +8
29 CAIRO, Egypt +8
30 HONG KONG +42
STR
ON
GE
RW
EA
KE
R
Metro industries shaped economic performance
PRE-RECESSION RECESSION AND RECOVERY
Construction Manufacturing(non-U.S.)
Non-market services
Non-marketservices
Finance/business services
Construction
WesternEurope
UnitedStates
OtherEstablished
OtherEmerging
EasternEurope
WesternEurope
UnitedStates
OtherEstablished
OtherEmerging
EasternEurope
Pre-recession average ranking
EasternEurope
OtherEmerging
OtherEstablished
UnitedStates
WesternEurope
9691
66
49
29
89
33
54
102
82
Recession average rankingRecovery average ranking
91
22
53
80
116
Bubbles sized proportional to combined GDP of metros in region
Average performance
PRE-RECESSION PERFORMANCE (1993-2007)
RECESSION PERFORMANCE (2007-2010)
RECOVERY PERFORMANCE (2009-2010)
RECESSION IMPACT STRENGTH OF RECOVERY
ECONOMIC GROWTH (1993-2010)
KEY FEATURES OF ECONOMIC TRANSFORMATION IN EU AND ASIAN CITIES
DRIVERS OF FUTURE GROWTH
I. Active, aligned and intentional government with private sector and institutional partnership
II. Internationalisation, global positioning and trade
III. Knowledge economy, innovation-based entrepreneurship and modernisation of manufacturing
KEY FEATURES OF ECONOMIC TRANSFORMATION
IV. Strong link between human capital and attractive, distinctive cities
Green Economy, resource efficiency and low carbon (especially energy saving, retrofitting etc.)
Increasing proactive role of philanthropic sectors especiallyin the field of training, research and education (e.g. in 2010 Torino bank foundations invested Euros 120ml vsEuros 40 of local authorities)
POTENTIAL DRIVERS OF FUTURE GROWTH
Renewed calls for micro-enterprises, social innovation and localism in development (Big Society debate and localism bill in UK for example)
EU financial institutions such as European Investment Bank are developing new investment vehicles for cities, e.g. urban development funds with private sector
Potential partial shift of EU funding from “grant”model to “loan” model from 2013
POTENTIAL DRIVERS OF FUTURE GROWTH
KEY FEATURES OF ECONOMIC TRANSFORMATION IN EU AND
ASIAN CITIES
I. ACTIVE, ALIGNED AND INTENTIONAL GOVERNMENT WITH PRIVATE SECTOR ANDINSTITUTIONAL PARTNERSHIP
Institutional integration
Coalition building
Strategic planning
Metropolitan government
Civic and business leadership
Effective intermediaries
Innovative
TURIN, ITALY
TORINO:
City-Region collaboration leveraged €2.5bn from EU since 1989; €3.3bn loans from European Investment Bank 1993-2007
• Strategic planning: re-use of old factories in inner city to provide new jobs and integration with transport infrastructure (high speed rail)
• Institutional support: role of university, foundations and business community
TURIN METRO, ITALY
Population4,427,000 (2010)
Employment1,987,000 (2010)
GVA per capita$30,971 (2008)
Emerging Markets
Trade and Export
Foreign investment
International Events
Internationalisation of Anchor Institutions
International Tourism
II. INTERNATIONALISATION, GLOBAL POSITIONING AND TRADE
BARCELONA, SPAINBARCELONA:
Enhanced connectivity: new transport and logistic infrastructure and global repositioning towards emerging markets
Port of Barcelona has planned a Euros 3 billion of investment upgrade with support from Chinese private companies
BARCELONA METRO, SPAIN
Population7,520,000 (2010)
Employment3,342,000 (2010)
GVA per capita$27,499 (2008)
Knowledge Economy Strategy
Innovation
Entrepreneurship
Modern Manufacturing
Science and Technology
Re-use industrial land for next economy
III. KNOWLEDGE ECONOMY, INNOVATION-BASED ENTREPRENEURSHIP AND MODERNISATION OF MANUFACTURING
MUNICH, GERMANY
MUNICH:
• Bavaria-led innovation and €2.9bn public investment (government bonds)
• “Geeks in government”: technically educated bureaucracy
• Political stability, City-State collaboration, 13 universities, 55,000 in R&D = “institutional thickness“
MUNICH METRO, GERMANY
Population4,410,000 (2010)
Employment2,408,000 (2010)
GVA per capita$53,578 (2008)
SEOUL, SOUTH KOREA
SEOUL:
• Strong government leadership in industrial policy and knowledge-based industrial clusters
• Accelerating new sector market entry with strong and creative public-private partnerships
• Re-claiming industrial land for high-tech industries - Guro Digital Complex (100,000 jobs, $8bn p/a, since 1995), Digital Media City (25,000 jobs in IT, since 2007)
SEOUL METRO, SOUTH KOREA
Population23,907,009 (2010)
Employment11,887,826 (2010)
GVA per capita$21,372 (2007)
Build Human Capital
Talent Attraction and Retention
Quality of Life
City centre regeneration
IV. FOSTERING STRONG LINK BETWEEN HUMAN CAPITAL AND ATTRACTIVE, DISTINCTIVE CITIES
• INSERT SLIDE ON RELEVANT CITIES FOR HUMAN CAPITAL, QUALITY OF LIFE ETC. POTENTIAL DRIVERS OF
