Globalisation and City Economic Development: A Practitioner Perspective. Greg Clark South African Cities Network Johannesburg, March 2003

Globalisation and City Economic Development Globalisation and the New Economy: –Trade and Economic Integration, Industrial Restructuring, Demographic mobility, ICTs, Globalisation and Cities: opportunities and challenges: –Functional roles, hubs and nodes, clustering, high demand for urban locations, cities reinvent their role. But, –Social, spatial,and economic disparities within cities and between cities. –Globalisation alone insufficient for social and economic justice. –Local development capacity a critical ingredient. –National, Federal, and Multi-national roles in promoting local development capacity.

Practitioner Perspective. Learning from other practices. Implementation the key variable; not policy. Factors that promote effective implementation. Factors that inhibit effective implementation. Focus on means to achieve ends, not just ends. Avoid copying policies from elsewhere without understanding what makes them work. Good strategy and policy is very important but meaningless without implementation. Good implementation occurs even without good strategy and policy occasionally. Focus on the reality of how to get things done.

Explaining Local Successes Some apparently similar cities are doing better than others. Cities and regions are the new units of competitiveness and productivity. But, are all equally or sufficiently capable of promoting themselves and developing their economies. What are the variables? City economic Development is about positively managing the new economy at the local level, not about creating an alternative economy. Management of resources, opinion, change, risk, assets, and relationships is key. Requires capable local management capacity.

Distinctive role of city and regional government ED is not like mot municipal services or functions. Influencing and shaping market based processes. Not a local government monopoly. New organisational forms: partnerships, JVs, companies, and development agencies. New rationales and roles for local governments. Outward looking: customer focused, wide range of clients and stakeholders. 80/20.

Good Governance and Metropolitan and Municipal Reform. Functional economic areas/regions are the site. Need to align economic geography and political geography where feasible. Unintended consequences: –Spillovers. –Displacement. –Substitution. –Competition between neighbours (bidding wars). Dangers of zero sum or negative aggregates. ED is a strong driver of metropolitan/municipal reform. Metropolitan economic development alliances and organisations often lead the way.

National, Federal and Multi-national Roles. Not the ‘ death ’ of the national state, but a more precise set of roles within a more complex canvass. Urban Policy Reviews and Regional Policy Reviews. Cities and regions re-established as focus for national policy and support- seen as key to prosperity and social justice. Multi-national organisations see cities and regions as essential for national economic growth and as sites for future lending. Economic development has become more aligned with national and multi-national policies: Need to know more about sub-national economies. Expansion in the range of agencies getting support. New metropolitan government. Goals of economic development have broadened.

Changing Practices of City Economic Development Changes to focus and goals: –Sites and buildings to firms, people, and skills. –Hard to soft infrastructure. –FDI to diverse regional economies. Changes to organisation: –Municipal departments to corporate programmes. –New geography/ new economy. –Wide range of partnerships/Special purpose vehicles. Changes to tools: –Grants to funds. –Incentives to credits. –Land use zones to development companies. Changes to skills needed: –Generalists to professional specialists. –Wide range of training now available.

Local Development Agencies and Organisations. Huge expansion (now about 20,000) with many variations. Special Purpose Vehicles. Rationales are key: why an agency? –Adding value of flexibility, focus, partnership, tools, skills, processes, risk/cost sharing, ‘ independence ’ etc. 12 possible reasons (not mutually exclusive). Working relationships are essential.

Financing City and Regional Economic Development. Private sector co-investment is an important quest. Role of city to make key initiatives ‘ investable ’ and ‘ investment-ready ’. Reduce risks and costs, improve returns, help to build steady flow of propositions. Economic Development Strategy as ‘ Investment Prospectus ’. Good for Cities. Good for Private Sector. Key roles for national and multi-national organisations.

How is economic development changing for you? Goals. Strategy. Leadership. Geography. Organisation and partners. Funding. Tools. Impact. Factors of success.