Does a link exist between city success and city leadership? What contribution does effective leadership make to a city? The new economy seems likely to produce sharper divides between ‘winners and losers’, resulting in increased competitiveness and larger returns for successful transition to productivity improvements. This means that the return on good leadership is potentially great, but the penalties for failed leadership are likely to be much greater too. City leadership is riskier than before. There are some important observations to make:
Successful businesses do not often locate in failing cities
Successful cities do not have failing leaders very often either.
Successful city development requires influential leadership as well as good management.
Successful regions have successful cities, and successful cities strengthen regions.
In a complex, dynamic, and internationally connected world, locating roles and responsibilities for advancing complex city development agendas becomes very important. Although the most successful cities all appear to have been blessed with advantages, realisation of the opportunities these advantages offer does not happen by accident.
Leadership provides a key ingredient in cities just as it does in firms. City leaders that are in tune with the needs of international firms and leading sectors can make a big difference if they calibrate local services and infrastructures to support them and actively try to solve the local operating problems such firms face. Of course it is not always easy to achieve this calibration politically; the need to drive citizen behaviour change to make progress on long term goals is regularly jeopardised by citizens failing to vote with long term perspectives in mind.
But does the ecosystem of city leadership really add to the performance of firms? What does a city and its leadership do for business? The last cycle saw many informal public-private agreements come unstuck when the crisis began. Master-plans were not always implemented, funding agreements had to be revisited, and job creation did not often materialise. Consequently, local agreements between city governments and businesses will need to be fashioned in a new way in the next cycle, often with much more staged agreements that take stock of progress at defined intervals, before further support is granted. Remaking the relationship with
The original core insight about this comes from what the theorists call ‘agglomeration economies’. They recognise that the world is not ‘flat’ (as Thomas Friedman puts it). Although the rules and systems are increasingly flat and ‘open’, the world is in fact ‘spiky’ (as Richard Florida has it) with an open system in fact contriving to encourage large numbers of firms, investments, and activities to concentrate in a smallish number of very dense places (the leading cities). Firms congregate in some cities rather than others for two basic reasons, either or both of which may be present.
The cities offer high-calibre infrastructure, logistics, real estate, digital facilities, and efficient public services relative to the price paid for them (in taxes and operating costs) because the quality and orientation of those factors are what the business needs, and the costs of providing them is shared appropriately with others who use them.
The cities have large numbers of other firms present that offer access to suppliers, services, skilled staff, and capital. The cities are ‘an internal market’ in, often specialised, business inputs that is a competitive advantage in the external competition the firms face.
These are ‘urbanisation’ and ‘localisation’ economies, but they frequently work together, with one reinforcing the other. Madrid’s expansion of transport capability with the award-winning Terminal 4 at Barajas airport and the speed at which it has introduced a metro subway system are key ingredients in an urbanisation economy. Dublin’s success in attracting and building clusters of information and bio-technology firms, underpinned by a rapidly internationalising labour force, is a great example of localisation benefits. But cities like London and New York find the two reinforce each other: in London, a strong lobby of well-organised businesses campaign for a fast cross-city train (CrossRail) to be built and agree to help finance it. In New York, business backs the plan to streamline regulation in financial services to be more successful in the long term.
As cities continue to face constraints in public finance, and national leadership does not appear to be willing to embrace urban and metropolitan problems systematically or overtly, leaders have the challenge to find ways to tackle this collectively, as well as individually. So city leaders can encourage and foster these agglomerations, by understanding what businesses need locally and by reinforcing the clustering effects. However, success also brings problems like congestion, price rises, and shortage of amenities (such as housing or office space). How well city leaders solve these ‘growth challenges’ is central to success in the longer term.
Should City Leaders Use City Indices?
As the conclusions drawn above show, city indices are increasingly helpful sources of insight and useful in the round when indicating where city leadership should focus attention and develop strategy. Unfortunately however, they do not offer ready solutions - these still have to be worked out by city leaders themselves. Indices and benchmarks can assist city leaders and their partners to understand better how the city needs to change but they will have the best impact when their use is guided by clear principles:
i. Be clear about purpose and audience. Unless the benchmark’s purpose and target audience is
understood, the data cannot be properly contextualised nor can suitable conclusions be drawn. In particular, if the index is produced by a private sector firm it is important to investigate why it was produced and whether it was produced with a set of potential clients in mind.
ii. Know the difference between perception and performance. Disparities can exist between the
perception of a city’s performance and its actual performance. This not only illustrates the impact of city marketing and the city’s image on individuals, but also can provide an inaccurate picture of a city unless the two are separated. Perception can be best analysed by individuals who live outside the city, whilst actual performance can be investigated by asking city residents and other stakeholders.
iii. Basket of measures, not one measure: evaluate input versus output measures. It is important to
consider what research and analysis was conducted to produce the final benchmark/index. iv. Reflect on costs and time scale. What is appropriate? Benchmarks and indices can take
considerable time and money both to produce and to purchase. The breadth and depth of data required must be considered and a cost-benefit analysis may be conducted.
v. Undertake assessment at the right spatial scale (functionality) and at an efficient scale. Global
indices should not be used to look at micro-scale urban variables. Likewise, functional urban regions may not correspond with geo-political boundaries. It is necessary to consider at what
scale the data is to be analysed at, and thus what geographical area should be covered by the index.
vi. Eschew one-off exercises (review needs to be continuous). Some benchmarks are produced
quarterly, some annually and some are a one-off exercise. To maintain an up-to-date impression of the benchmarks, they must be constantly reviewed and once out of date, replaced with newer versions of the same, or similar, reports.
vii. Link to review of strategy and investment. Benchmarks can be used to investigate how a city is
performing on its strategy and investment trajectories.
viii. Interpretation and discussion of results. The findings of benchmarks and indices should be
interpreted and discussed with regard to wider contextual issues.
ix. Stimulate and build strategic discussion. Benchmarks and indices can be used as a basis from
which to launch strategic discussion. They allow the winners and losers in the new global economy to be examined, and they provide insights for city leaders into how to emulate successes and avoid failures.
x. Mix different data and insights. Finally, the best view of a city is produced by investigating a
range of benchmarks and indices, together with other academic and practitioner literature.
No city leader can be certain that using indices will help them to their city and its needs, but city leaders can use the city indices to help them observe what other players think about their cities and to be informed about how their perceived performance will be presented and judged.
i
McKinsey Global Institute (2011), ‘Urban world: Mapping the economic power of cities’,p.1 http://www.mckinsey.com/mgi/publications/urban_world/pdfs/MGI_urban_world_full_report.pdf
ii World Health Organisation (2010), ‘World Health Day 2010’, http://www.who.int/world-health-day/2010/en/index.html iii Saskia Sassen (2001), Global City: New York, London, Tokyo, Princeton University Press
iv HPEC (2008), ‘Making Mumbai an International Financial Centre’,
http://www.prsindia.org/uploads/media/1182418292/bill128_20070621128_Report_of_the_High_Powered_Expert_Committee_Percy_Mistry.pdf v
Derudder et al (2009), ‘Pathways of Growth and Decline: Connectivity Changes in the World City Network, 2000-2008,’ GaWC paper, ww vi Toronto Board of Trade (2011), ‘Scorecard for Prosperity 2011’, http://www.theglobeandmail.com/news/national/toronto/the-global-city-report- card/article1957888/?from=1957897 ; 2thinknow(2010), ‘Top 100 city rankings for the innovation economy’, http://www.innovation-cities.com/top-100-city- rankings-for-the-innovation-economy/
vii
McKinsey Global Institute (2011), ‘Urban world: Mapping the economic power of cities’,p.4 http://www.mckinsey.com/mgi/publications/urban_world/pdfs/MGI_urban_world_full_report.pdf viii
Christian Matthiessen, Annette Schwarz and Søren Find (2010), ‘World Cities of Scientific Knowledge’, Urban Studies, August 2010, vol.47 no.9 pp. 1879- 1897
ix AT Kearney (2010), ‘The Urban Elite: Global Cities Index 2010’, p.3; Global Urban Competitiveness Project (2010), ‘2009-2010 Global Urban Competitiveness Report’
x
Globalization and World Cities group (2009), ‘The World According to GaWC 2008’, http://www.lboro.ac.uk/gawc/world2008.html xi
Institute for Strategic Studies/Mori Memorial Foundation (2010), ‘Global Power City Index 2010’, p.9 xii
Z/Yen and Qatar Financial Centres Authority (2011), ‘Global Financial Centres Index: 9’, p.4 xiii Z/Yen and Qatar Financial Centres Authority (2011), ‘Global Financial Centres Index: 9’, p.4
xiv Institute for Strategic Studies/Mori Memorial Foundation (2010), ‘Global Power City Index 2010’, p.9; Z/Yen and Qatar Financial Centres Authority (2011), ‘Global Financial Centres Index: 9’, p.4
xv
AT Kearney (2010), ‘The Urban Elite: Global Cities Index 2010’, p.3 xvi
Tholons (2010), ‘CEO Spotlight: Top 100 Global Outsourcing Cities 2010’ http://www.tholons.com/nl_pdf/CEO_Spotlight_October2010.pdf ; http://www.tholons.com/TholonsTop100/index.html
xvii Institute for Strategic Studies/Mori Memorial Foundation (2010), ‘Global Power City Index 2010’, p.9; Citi/Knight Frank (2010), ‘The Wealth Report 2010’, pp.36-37; AT Kearney (2010), ‘The Urban Elite: Global Cities Index 2010’, p.3
xviii
QS (2010), ‘World University Rankings’, pp.4-11 xix
Brookings Institution (2010), ‘Global Metro Monitor’ xx
Cushman and Wakefield (2010), ‘European Cities Monitor’, pp.4-23
xxi fDi Intelligence (2010), ‘Global Outlook: Global Free Zones of the Future 2010/11’, p.22-26
xxii Tholons (2010), ‘CEO Spotlight: Top 100 Global Outsourcing Cities 2010’ http://www.tholons.com/nl_pdf/CEO_Spotlight_October2010.pdf ; http://www.tholons.com/TholonsTop100/index.html
xxiii
fDi Intelligence (2010), ‘Locations of the Future: Europe’ xxiv
Z/Yen and Qatar Financial Centres Authority (2011), ‘Global Financial Centres Index: 9’, p.4 xxv Brookings Institution (2010), ‘Global Metro Monitor’
xxvi La Salle Investment Management (2010), ‘European Regional Economic Growth Index E-REGI 2010’, p.9; Cushman & Wakefield (2010), ‘Main Streets Across the World’, p.8, p.16-20
xxvii
AT Kearney (2010), ‘The Urban Elite: Global Cities Index 2010’, p.3; Cushman and Wakefield (2010), ‘European Cities Monitor’, p.4-23 xxviii
Cushman and Wakefield (2010), ‘European Cities Monitor’, p.8 xxix
fDi Intelligence (2010), ‘Locations of the Future: Europe’
xxx Euromonitor (2011), ‘Euromonitor International’s Top City Destination ranking’, http://blog.euromonitor.com/2011/01/euromonitor-internationals-top- city-destinations-ranking.html
xxxi Institute for Strategic Studies/Mori Memorial Foundation (2010), ‘Global Power City Index 2010’, p.9; Citi/Knight Frank (2010), ‘The Wealth Report 2010’, pp.36-37
xxxii
PricewaterhouseCoopers (2009), UK Economic Outlook - September 2009’, p.31-34 xxxiii
PricewaterhouseCoopers and Partnership for New York City (2010), ‘Cities of Opportunity’, pp.10-11; PricewaterhouseCoopers (2009), UK Economic Outlook - September 2009’, p.31-34; Robert Huggins Associates/UWIC (2008), ‘World Knowledge Competitiveness Index 2008’, pp.7-8
xxxiv Institute for Strategic Studies/Mori Memorial Foundation (2010), ‘Global Power City Index 2010’, p.9; Economist Intelligence Unit (2011), ‘Liveability ranking and overview’; Mercer (2010), ‘Global Quality of Living Survey’, http://www.mercer.com/articles/quality-of-living-survey-report-2010 ; Z/Yen and Qatar Financial Centres Authority (2011), ‘Global Financial Centres Index: 9’, p.4
xxxv
2thinknow(2010), ‘Top 100 city rankings for the innovation economy’, http://www.innovation-cities.com/top-100-city-rankings-for-the-innovation- economy/
xxxvi AT Kearney (2010), ‘The Urban Elite: Global Cities Index 2010’, p.3; Globalization and World Cities group (2009), ‘The World According to GaWC 2008’, http://www.lboro.ac.uk/gawc/world2008.html
xxxvii
Institute for Strategic Studies/Mori Memorial Foundation (2010), ‘Global Power City Index 2010’, p.9 xxxviii
Business Courier (2010), ‘Green Cities’, http://www.bizjournals.com/cincinnati/datacenter/green_cities.html ; Sustain Lane (2008), ‘Green City rankings’,http://www.sustainlane.com/us-city-rankings/articles/the-sustainlane-methodology/JXICFDNN7CF9H7MD7P8USMW9Y78J
xxxix Farmers Insurance (2010), ‘Safest Cities in the US’, http://www.farmers.com/
xl GUCP (2010), http://www.gucp.org/en/admin/WebEdit/UploadFile/20100623093252216.pdf xli
AT Kearney (2010), ‘The Urban Elite: Global Cities Index 2010’, p.3; PricewaterhouseCoopers and Partnership for New York City (2010), ‘Cities of Opportunity’, pp.10-11
xlii
AT Kearney (2010), ‘The Urban Elite: Global Cities Index 2010’, p.3; Tholons (2010), ‘CEO Spotlight: Top 100 Global Outsourcing Cities 2010’
http://www.tholons.com/nl_pdf/CEO_Spotlight_October2010.pdf ; http://www.tholons.com/TholonsTop100/index.html; McKinsey Global Institute (2011), ‘Urban world: Mapping the economic power of cities’,p.4 http://www.mckinsey.com/mgi/publications/urban_world/pdfs/MGI_urban_world_full_report.pdf xliii
Euromonitor (2011), ‘Euromonitor International’s Top City Destination ranking’, http://blog.euromonitor.com/2011/01/euromonitor-internationals-top- city-destinations-ranking.html
xliv
Mastercard (2008), Emerging Markets Index, p.22
xlv 2thinknow(2010), ‘Top 100 city rankings for the innovation economy’, http://www.innovation-cities.com/top-100-city-rankings-for-the-innovation- economy/
xlvi Brookings Institution (2010), ‘Global Metro Monitor’; AT Kearney (2010), ‘The Urban Elite: Global Cities Index 2010’, p.3 ; Z/Yen and Qatar Financial Centres Authority (2011), ‘Global Financial Centres Index: 9’, p.4
xlvii
Centre for Cities (2011), ‘Cities Outlook 2011’, http://www.centreforcities.org/assets/files/Cities%20Outlook%202011/CITIES%20OUTLOOK_2011.pdf xlviii
UN Habitat (2010), ‘Bridging the Urban Divide: Inclusive Cities’, http://www.unhabitat.org/documents/SOWC10/R11.pdf xlix Siemens/Economist Intelligence Unit (2011), ‘Asian Green City Index’,p.15
l McKinsey Global Institute (2011), ‘Urban world: Mapping the economic power of cities’,p.4 http://www.mckinsey.com/mgi/publications/urban_world/pdfs/MGI_urban_world_full_report.pdf li
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liii
EIU (2010), ‘The Global Liveability Report: Press Release’,
http://www.eiu.com/site_info.asp?info_name=The_Global_Liveability_Report_Press_Release&rf=0
liv Blog of India (2010), ‘Delhi Tops as the Best City in the Livability Index 2010’, http://www.blogofindia.in/delhi-tops-as-the-best-city-in-the-livability-index- 2010/ ; Tholons (2010), ‘CEO Spotlight: Top 100 Global Outsourcing Cities 2010’ http://www.tholons.com/nl_pdf/CEO_Spotlight_October2010.pdf ; http://www.tholons.com/TholonsTop100/index.html
lv
Blog of India (2010), ‘Delhi Tops as the Best City in the Livability Index 2010’, http://www.blogofindia.in/delhi-tops-as-the-best-city-in-the-livability-index- 2010/
lvi Nature (2010), ‘Cities: Building the best cities for science,’, no.467, pp.906-908, http://www.nature.com/news/2010/101020/full/467906a.html lvii Siemens/EIU (2010), ‘Latin American Green City Index’, pp.28-29
lviii David Dodman (2009), ‘Blaming cities for climate change? An analysis of urban greenhouse gas emissions inventories’, Environment and Urbanization, vol. 21 no. 1, pp.185-201; World Energy Outlook (2008), ‘Energy Use in Cities’, pp.179- 193
http://www.worldenergyoutlook.org/docs/weo2008/WEO_2008_Chapter_8.pdf lix
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lxi Siemens/EIU (2011), ‘Asian Green City Index’, pp.32-35 lxii Siemens/EIU (2010), ‘Latin American Green City Index’, pp.28-29 lxiii
Foreign Policy (2008), http://www.foreignpolicy.com/articles/2008/10/15/the_2008_global_cities_index?page=0,1 lxiv