Global cities and the growth challenge

Sallie Stiens asks what megacity mayors can learn from the CEOs of dynamic businesses, and vice versa

Today, more than half the world’s people live in cities or metropolitan areas. These cities produce more than 80% of the world’s patents and despite covering only 2% of the earth’s surface, they consume 78% of all global energy. The top global cities have diverse populations - between 20% and 80% foreign-born. And these commercial centers are home to more than 2,300 global companies.

The statistics are heady, but the real challenge for global cities is to continue to lead – commercially, politically, culturally – while driving growth and opportunity in a global economy where trade is no longer merely in steel and silicon, but in ideas and services.

The question of how global cities can continue to thrive was the topic of a lot of discussion earlier this month at the  Chicago Forum on Cities. The event focused on exploring the ways these truly global cities can create the environment which will continue to attract business, people and culture – and survive the challenges their predecessors failed when facing changing economic conditions.

Common benefits, common challenges

Global cities share characteristics and key functions. They are command points in the organisation of the world economy, and are key locations for both innovation and consumption in concentrated areas for finance and specalised services firms, which have replaced manufacturing as the leading economic sectors. They are also well connected, have strong, high-tech communications systems and are key business and economic centres.

What impact does all of this concentration have on a global city’s ability to succeed, then, relative to its national and global peer set?  How does Beijing compete with Shanghai – or Chicago with Los Angeles?  Or is it more likely that London competes with New York, and Brussels with Sydney? 

One of the most interesting questions of the forum was what role cities play in foreign policy, given their stature as significant contributors to all matter of global accomplishments – and challenges. Like the leaders of major corporations, city mayors are dealing with issues that affect any growth enterprise. How can they attract talent, trade & investment? How can they bolster natural trade routes while addressing environmental and security risks? Can they achieve sustainable growth for the entire population, not just a narrow elite?

These are not simple challenges.  Whether dealing with challenging immigration sentiments from the 'hinterlands', or reinforcing a commitment to education, the global cities of 2040 will be those that have recognised their unique opportunities and best addressed them with a clear focus.  Mayors of these large cities need to work closer together to leverage the experience of others – learning from struggles around infrastructure, immigration, technology and financing before they become too severe. One good example is the C40 Climate Leadership Group, a network of megacities that has begun this work on climate change.

Richard Longworth, from the Chicago Council on Global Affairs, presented four recommendations which remind me of the advice Grant Thornton professionals give to growing businesses the world over:

• Tell your own story: global cities need to understand what makes them unique, and how best to compete on key sector headquarters, universities, trade, immigrant communities and cultural links. 
• Identify your allies and competitors: are your allies in your region or on another continent?  Understanding trade flows, competitors and shared challenges will help identify whom to learn from, work with, and differentiate.
• Prioritise spending:  focus on jobs of the future – and what investment in key areas it will take to provide a productive, efficient home for such jobs.
• Deliver the product: much as Grant Thornton firms advise companies expanding into new markets, implementation matters; an incredible strategy is only the first step - cities must focus on execution in order to survive.

For more information about global cities, and to view presentations from the week, visit the conference site http://www.thechicagocouncil.org/publication/global-cities

Sallie Stiens is director, global public policy at Grant Thornton.