Hovedrapport English

The City Regions Project Synthesis report: Paths to growth in medium-sized European cities – with particular emphasis on the role of city collaboration

The project was carried out by DAMVAD and commissioned by the Danish municipalities of Aalborg, Aarhus and Odense and the North Denmark Region, the Central Denmark Region and the Region of Southern Denmark.

April 2011

Preface As the big city in each of their regions, Aalborg, Aarhus and Odense all play a central role as hubs for growth, wealth and welfare – now and in the future. The three cities are unique in their respective regions, but in a larger context they are merely three among a very large number of comparable, medium-sized European cities.

Therefore, the case descriptions of the individual cities do not focus on the individual strengths and challenges of the cities. They act more as general examples of how cities that are comparable with Alborg, Aarhus and Odense work to promote growth and development.

This prompts the question of how the three West Danish cities perform compared with similar cities in other countries, and what they can learn from other cities. For example, how do these cities perform as core cities for a functional city region? How do they collaborate with other core cities?

Based on these case descriptions, we have identified a number of lessons learned that we believe to be relevant and important for cities and city regions and their development.

The report should therefore be seen as an inspiration catalogue that communicates ideas, insights and lessons learned as to how These are the fundamental questions that the municipalities of medium-sized cities like Aalborg, Aarhus and Odense and their city Aalborg, Aarhus and Odense and the North Denmark Region, the regions can promote growth and strengthen their position and Central Denmark Region and the Region of Southern Denmark have influence in the national and international city landscape. As such, joined forces to investigate. the report is relevant for a broader range of medium-sized cities across Europe.

The idea behind the project was to carry out qualitative case studies of cities selected based on analyses of quantitative data on Nonetheless, we hope that this report will contributely positively to city growth in various European countries. This was a very ambiti- the various planning and development strategies of the three West ous starting point – too ambitious, as it turned out.

Danish cities, and not least help strengthen their intercity collaboration. We hope that the report will also inspire the ongoing work It is relatively simple to identify cities that are comparable with on the regional development plans in the North Denmark Region, Aalborg, Aarhus and Odense in terms of size and performance. the Central Denmark Region and the Region of Southern Denmark.

However, it is not possible to generate in-depth insights into these cities’ strengths and weaknesses based on the available, internationally comparable data.

Put differently: The internationally available quantitative data on cities’ growth alone does not allow for an analysis that explains why different cities exhibit different levels of economic performance and growth.

Contents Executive summary

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1 Introduction

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1.1 About the project 1.2 Main results of the project 1.3 Knowledge foundations for the project

7 7 10

2 On cities and their growth potential

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2.1 Cities are growth engines for the economy 2.2 Medium-sized cities have big growth potential 2.3 Growth is created not within the municipality but within the city region 2.4 Growth is based on the quality of – and interaction between – the city’s resources 2.5 Intercity collaboration creates growth 2.6 There is no “one size fits all” strategy for growth

13 14 16 16 19 21

3 From clusters to related diversification and integrated growth policies

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3.1 The cluster perspective does not focus on value creation 3.2 Focus on business development through related diversification 3.3 Build niche-based strongholds 3.4 Establish strong platforms for growth and collaboration 3.5 Work with integrated strategies for growth and urban development

23 25 26 28 29

4 Create good conditions for collaboration within the city region

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4.1 Collaboration can create growth in the entire city region 4.2 Bring key actors together on a burning platform 4.3 Clarify and communicate incentives for collaboration 4.4 Define ambitious and long-term visions and show active leadership 4.5 Create good conditions for collaboration

31 33 35 37 39

5 Organising and anchoring collaboration within the city region

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5.1 Champions are great – but collaboration must be anchored 5.2 Establish independent organisations with their own mandates and means 5.3 Find the right balance between bottom-up and top-down initiatives 5.4 Strengthen and support growth initiatives via public involvement 5.5 Support the social infrastructure of the city region

41 42 44 45 47

6 Support the city’s growth through intercity collaboration

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6.1 Collaboration can support the city region’s growth and adaptability 6.2 Use knowledge bridges and informal collaboration to encourage innovation 6.3 Find the right balance between cooperation and competition 6.4 Create a strong, united front through formal intercity collaboration 6.5 Ensure a professional organisation and management of the collaboration 6.6 Active leadership leads to greater influence

49 50 52 52 54 55

Appendix: Overview of the case study cities

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Executive summary Large and medium-sized cities are important engines of growth in the international knowledge economy because they act as gathering places for businesses, labour and investments. However, cities differ significantly in their economic performance and development.

The primary contribution of the project can be summarised as follow:

This project focuses on a particular category of large cities, namely the so-called “medium-sized cities” with 100,000 to 500,000 inhabitants. Previous studies show that medium-sized cities face particular challenges because their limited size makes it harder for them to attract new citizens and economic activity, compared to capital cities and other co-called “metropolises”. Many medium-sized cities therefore have a relatively poor economic performance; yet, a number of medium-sized cities perform extremely well. However, very little is known about why some medium-sized cities stand out from the crowd, or about what cities can do to promote growth.

•

This report summarises the results of a project initiated by the municipalities of Aalborg, Aarhus and Odense and the North Denmark Region, the Central Denmark Region and the Region of Southern Denmark. The aim of the project is to learn about how mediumsized European cities can use their resources more effectively in order to encourage economic growth – and to investigate whether intercity collaboration can help support growth.

The report presents the results of the project in the shape of an inspiration catalogue, which contains ideas as to how mediumsized cities can promote growth. These ideas have primarily been identified through case studies of nine European medium-sized cities that have experienced a positive economic development and performance in recent years. The idea behind the report is thus to communicate insights and lessons learned from the project, and to provide inspiration for growth policies and initiatives in mediumsized cities and their regions.

•

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The project generates valuable insight into growth initiatives and economic performance in medium-sized cities, a category of cities that we know relatively little about.

A good connection and a productive interplay between the city’s resources, actors and growth initiatives – the combination of which makes up the urban growth system of that city – is widely held to support city growth. This project identifies a number of examples of how medium-sized cities aim to promote and strengthen growth by developing a more coherent growth system.

Moreover, the project shows that cities can encourage growth through strategic collaboration with other cities. The project focuses on how cities can interact with their surrounding area (the functional urban region around a “core” city) and with other cities through national and international networks. The project offers valuable insight into the importance of such collaborations for growth and into how such collaborations should be organized and managed.

The report takes the form of an inspiration catalogue that communicates ideas, insights and lessons learned about how mediumsized cities like Aalborg, Aarhus and Odense and their city regions can promote growth and strengthen their position and influence in the national and international city landscape. As such, the report is relevant not just for Aalborg, Aarhus and Odense but also for a broader range of cities.

It is our ambition that this project will make a positive contribution to the planning and development strategies of the three West Danish cities and contribute to strengthening their intercity collaboration. We hope that the report will also inspire the ongoing work on the regional development plans in the North Denmark Region, the Central Denmark Region and the Region of Southern Denmark.

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1 Introduction 1.1 About the project This report summarises the results of The City Regions Project, carried out by DAMVAD and commissioned by the municipalities of Aalborg, Aarhus and Odense and the North Denmark Region, the Central Denmark Region and the Region of Southern Denmark.

The project was launched in recognition of the fact that cities are diverse and perform very differently when it comes to growth.

Some cities exhibit strong economic growth while others struggle to hold on to citizens and businesses. But how do you create growth in a city? Many growth policies focus on improving the conditions for growth in a city by strengthening the resources that the city’s economic activities are based on. But good preconditions alone are not sufficient to attain strong economic performance: It varies widely how well cities perform even though most mediumsized cities have many of the same resources for growth, such as well-educated citizens, a local business sector, research and education institutions, a good infrastructure etc.

Moreover, the business and growth strategies of most cities are relatively similar and contain many of the same elements, e.g. a focus on building business clusters, strengthening interaction between industry and knowledge institutions, establishing science parks, and a focus on growth sectors such as biotech, IT, climate and/or creative industries. So why are some cities more successful in creating value from their resources than others?

The key to economic growth is not only having access to resources for growth, but knowing how to make efficient use of these resources. This raises the central question that is investigated in this project: How can cities best combine and use their resources in order to attain growth?

The project focuses on a particular category of cities, that is, medium-sized cities with 100,000 to 500,000 inhabitants. These cities are important engines for growth in their region and in their country. Medium-sized cities such as Aarhus, Aalborg and Odense differ from metropolises like Copenhagen in their preconditions and opportunities for growth, as it is generally easier for metropolises to attract businesses and well-educated labour. This project examines how medium-sized cities seek to overcome these

challenges and make the most of their resources and potential for economic growth.

The City Regions Project builds on both previous research and analyses as well as independent analyses carried out during the course of the project. The heart of the project consists of nine indepth case studies of medium-sized European cities that have have experienced a positive economic development and performance in recent years. The purpose of these case studies has been to identify and examine initiatives and projects aimed at strengthening economic growth, which may therefore inspire growth policies or initiatives in other medium-sized cities.

The main report summarises the results of the project in an inspiration catalogue that presents a number of ideas as to how mediumsized cities can promote growth and strengthen their position and influence in the national and international city landscape. Overall, the project identifies a number of promising opportunities and inputs to future growth policies and initiatives for the three West Danish cities and their regions.

1.2 Main results of the project In order to answer the question of how cities can best combine and make use of their resources in order to achieve growth, this project has investigated a wide range of factors that influence the growth and performance of cities.

The project has especially focused on how cities interact with their surrounding city region, and on how they collaborate in national and international networks. The focus on intercity collaboration is explained by the fact that most growth initiatives launched in a city involve some degree of collaboration between actors in or outside the city. The project thus gives valuable insight into the importance of such collaborations for growth, and into how they can be organized and managed more efficiently.

Among other things, the case studies indicate that the case

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Introduction

cities are very good at building on existing strengths and thus making the most of their growth potential. They do this, among other things, by striving to achieve as much complementarity and interplay as possible between the resources, actors and growth initiatives of the city.

Figure 1.1 on the next page presents an overview of the lessons learned from the project and summarises the structure of the report: •

Chapter 2 presents fundamental insights into the growth of medium-sized cities, based on the results of previous analyses and studies. Moreover, the chapter presents key results of The City Regions Project. Among other things, the analytical framework of the project is described, as well as main conclusions regarding the importance of interaction and complementarity between resources within the urban growth system, and the impact of intercity collaboration on city growth.

•

Chapter 3 presents a number of general lessons learned from the project. These lessons primarily spring from the case studies, but also from other parts of the project, including the review of prior studies and analyses of city growth.

•

Chapters 4 and 5 both present lessons learned, focusing on how cities can encourage or support growth through collaboration within the city region. Chapter 4 focuses on how to estavlish a good framework for collaboration between actors and cities in the same region. Chapter 5 takes a closer look at how this kind of collaboration can be organised and anchored in order to promote sustainable economic growth. These lessons learned spring primarily from the nine case studies, but also from other parts of the project.

•

In chapter 6, we shift our focus away from collaboration within the city region to collaboration across or between city regions. The chapter presents lessons learned, focusing on how cities can promote or support growth through intercity collaboration, and how this kind of collaboration can be organised and anchored. These lessons learned are drawn mostly from the case studies, but also other parts of the project.

The project also shows that the case cities seek to strengthen their economic performance through strategic cooperation with other cities, both within and outside the city region. Intercity collaboration can be a way of working strategically with resources by connecting resources more effectively within or between cities.

The case studies indicate that intercity collaboration can support parallel growth among all the partners in a collaboration. Moreover, such collaboration often lead to other benefits such as knowledge exchanges and learning between cities, interaction between actors in the cities, increased coordination of growth policies, and a strengthened visibility in the urban hierarchy that makes it easier to attract citizens, businesses and investments.

The project also underlines a point made in previous analyses of city growth, namely that innovation and renewal occur when people meet and exchange experiences and ideas. As such, innovation indicates that there is a high level of social capital in the city. Social capital is valuable because it is through exchanges and interaction between individuals that knowledge sharing, new ideas and innovation occur. Strategies for strengthening growth should therefore aim at creating the best possible conditions (i.e. inspiration, resources and incentives) for interaction and collaboration among actors.

The overall results of the project are summarized and presented in this main report, which is structured as an inspiration catalogue for use by the West Danish cities and regions or by other mediumsized cities. It is, however, important for any city to consider which lessons are relevant in view of its particular situation and growth challenges. Cities should also consider how the strategies described in this report may interact with each other if implemented at the same time, by considering how they might overlap or reinforce each other, or even cancel each other out.

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Introduction

Figure 1.1 Overview of lessons learned

Chapter 6: On collaboration between city regions

Chapter 4 and 5: On collaboration within the city region

Chapter 5: Organizing and anchoring the collaboration

Lessons learned - about intercity collaboration

Chapter 4: Establishing good conditions for collaboration 4.1 Collaboration can create growth in

the entire city region

5.1 Champions are great - bur collaboration must be anchored

4.2 Bring key players together on a burning platform

5.2 Establish independent organisations with their own mandates and means

4.3 Clarify and communicate incentives for collaboration

5.3 Find the right balance between bottom-up and top-down initiatives

4.4 Define ambitious and long-term visions and show active leadership

5.4 Strengthen and support growth initiatives via public involvement

4.5 Create good framework for collaboration

5.5 Support the social infrastructure of the city region

Lessons learned generally speaking

Chapter 2: Fundamental insights into city growth

6.1 Collaboration can support the region’s growth and adaptability 6.2 Use knowledge bridges and informal collaboration to encourage innovation 6.3 Find the right balance between collaboration and competition 6.4 Create a strong, united front through formal intercity collaboration 6.5 Ensure a professional organisation and management of the collaboration 6.6 Aktiv ledelse giver større indflydelse

Chapter 3: General lessons learned

2.1 Cities are engines of economic growth

3.1 The cluster perspective does not focus on value creation

2.2 Medium-sized cities have big growth potential

3.2 Focus on business development through related diversification

2.3 Growth is created not within the municipality but within the city region

3.3 Build niche-based strongholds

2.4 Growth is based on the quality of - end interaction between - the city’s ressources

3.4 Establish strong platforms for growth and collaboration

2.5 Collaboration between cities create growth

3.5 Work with integrated strategies for growth and city development

2.6 There is no ”one size fits all” strategy for growth

Source: DAMVAD 2010

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Introduction

1.3 Knowledge foundations for the project This report summarises the results of a project that has had an international focus and approach to generating inspiration for growth policies and initiatives for the three West Danish cities and their regions. The project has, among other things, included insights and inputs from four international experts on city growth.

The project has also been based on an extensive analysis of the international literature and undertaken original analyses of growth in European cities.

The City Regions Project consists of five sub-projects that are described in five separate sub-reports (which are available in Danish).

Together, these five sub-projects they form the basis for the results presented in this main report.

Sub-report 1, A literature study of cities’ preconditions and possibilities for growth, presents an extensive analysis of results from previous studies of city growth. Thus, this part of the project provided a solid knowledge foundation for the project as a whole.

Moreover, it generated important inputs to the development of the analytical framework in the project and to the identification of data sources and indicators used in later parts of the project.

Sub-report 2, The analytical framework of the project, draws an overview of central preconditions for and drivers of city growth.

The aim of this part of the project was to develop a framework, which is easy to operationalize, so that it could function as the underlying framework in each of the subsequent parts of the project.

Sub-report 3, A screening of approximately 100 European cities, presents the results of an analysis of 95 European cities’ economic performance and development. The aim of this screening was to undertake an overarching analysis of these cities’ position within their national urban system and of their economic performance and development, to strengthen the empirical basis for subsequent parts of the project.

The analysis took as its starting point the three West Danish cities

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as well as comparable cities in six other countries: Norway, Sweden, Finland, Holland, Germany and England. The 95 cities were chosen on the basis of their size and the availability of internationally comparable data on the city.

The screening included data on the cities’ ability to generate economic value, their recent economic development, the development of the population, the educational level of the workforce, commuting patterns, the city’s ability to attract labour from abroad, as well as the unemployment rate.

The results of the screening draw a picture of the growth and performance of medium-sized European cities that put the performance of the three cities of Western Denmark into perspective.

These results also formed the basis of the subsequent selection of case cities. Based on data from the screening, nine cities were chosen for in-depth analysis. The primary criterion was a good economic performance and an average or above average growth over the last decade, compared with similar cities in the same country.

Moreover, the cities had to have a relative size and position within their national urban hierarchy that was comparable to those of the three West Danish cities. This additional criterion was included to ensure that the cities could provide lessons and inspiration that is relevant for the Danish cities. As a result, potential candidates for case cities were excluded if they had significant, special preconditions for growth that are difficult or impossible for other cities to emulate or compensate for (e.g. if their economic growth was primarily based on an oil economy).

Through this process, which is described in more detail in Subreport 4, the following nine cities were chosen for in-depth case studies: Gothenburg (Sweden), Turku (Finland), Eindhoven and Groningen (The Netherlands), Nottingham and Manchester (England), and Saarbrücken, Freiburg and Karlsruhe (Germany).

Sub-report 4, Quantitative city profiles of 12 European cities, presents in-depth quantitative profiles of the three West Danish cities and the nine European case cities.

Introduction

The city profiles are based on international data on city level and regional level. They include a wide range of indicators of growth, development and preconditions for growth in the twelve cities. The aim of the city profiles was to contribute to the knowledge foundation for the nine case studies by identifying the cities’ relative strength and weaknesses.

Sub-report 5, Case studies of nine European cities: Inspiration for growth and intercity collaboration, presents the nine in-depth case studies. The aim of these case studies was to identify initiatives with the aim of furthering or supporting growth in the cities that could form the basis for lessons and inspiration for the three West Danish cities and their city regions.

Originally, it was our intention to use the data gathered for the city profiles in a comparative analysis of economic performance and drivers for growth in the three Danish cities and the nine European case studies. The analysis of the collected data has however revealed a number of fundamental problems with the available international data on cities and regions, for instance due to differences in procedures for data collection and data availability across countries. These problems include a lack of data on city level, poor representativity and insufficient data coverage for the indicators that are available, plus a generally insufficient quality of data. In view of these limitations, it was our assessment that it was not possible to carry out meaningful comparisons across borders.

The project was carried out in cooperation with a project group commissioned by the municipalities of Aalborg, Aarhus and Odense and the North Denmark Region, the Central Denmark Region and the Region of Southern Denmark, as well as four experts of city growth and development.

However, the available data do enable us to carry out analyses of the cities’ performance and preconditions for growth relative to other cities in the same country. The project confirms the results of previous studies, which show that the preconditions for growth of economically strong cities are not necessarily very different than for other cities. This becomes apparent in the screening of 95 European cities presented in Sub-report 3, but also in the closer quantitative analysis of twelve medium-sized cities describes in Sub-report 4: There are no special resources or preconditions that differentiate the cities that are economically strong from other cities. So economic growth in our case cities is not the result of inimitable, favourable conditions for growth.

In particular, Associate Professor Mark Lorenzen, Copenhagen Business School, has contributed to the shaping of the project, workshops and discussions of the results and conclusions of the project.

Moreover, three experts from the United Kingdom have made valuable contributions to the design of the project and its analytical framework, and to workshops held in connection with the project: •

Paul Hildreth, Visiting Policy Fellow at The Centre for Sustainable Urban and Regional Futures (SURF), Salford University

•

Naomi Clayton, Senior Researcher, The Work Foundation

•

Lena Tochtermann, Analyst, Centre for Cities.

On the contrary, the case studies indicate that the positive performance of the nine cities is the result of effective, long-term investments that build on the particular strengths, resources and growth potential of each city.

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2 On cities and their growth potential 2.1 Cities are growth engines for the economy Cities are key engines of economic growth in the regional, national as well as international economy. By creating gathering places for labour, business and investments, cities supply the framework for innovation and economic development. However, not all cities are equally skilled at exploiting this framework. As a result, there are large differences in their economic performance.

Cities play a central role in the knowledge economy because they are home to universities, well-educated labour and knowledgeintensive businesses, as well as to capital and public authorities.

Numerous analyses show that cities are important for economic growth because they offer a good framework for economic development by providing gathering places for people, business and economic activity1. For example, people move to cities because they give access to a large variety of jobs, shopping options, and cultural and leisure activities, as well as a diversity that helps attract qualified labour to cities.

At the same time, cities’ concentration of labour, knowledge institutions, authorities and infrastructural hubs such as airports and railway stations are attractive features for companies and for educational institutions.

They differ, however, in their ability to exploit this capability. As a result, there is a high degree of variation in cities’ economic performance.

A city that performs well is a city with sustainable economic growth. Economic growth indicates that a city is well-functioning, as growth is both a consequence of and a catalyst for growth in other important parameters such as innovation or growth in the business sector, in welfare, in education and in culture. Economic growth and innovation alone are not enough, however, to characterise a city as successful. For that, it is essential that the foundation of the city’s growth is sustainable, that is, that it cannot be easily eroded. In a global economy, where people, businesses and economic activity can easily move to a more attractive base, competitive advantages can quickly be reduced or disappear. Cities are thus vulnerable to the international development of capital flows, the development of other cities, and citizens’ demand of their work life and social life.

A well-functioning city is therefore a city that knows how to adapt to possibilities and challenges in the global knowledge economy, and whose performance builds on sustainable competitive advantages. This means that the growth strategies of cities ought to be long-term and take the development of the global knowledge economy into consideration.

The importance of cities is underlined by the fact that their job creation, growth and productivity are typically higher than for the rest of the country. Much innovation springs from cities because they supply gathering places where businesses, scientists and entrepreneurs can form networks and exchange and develop new ideas. Cities also attract investors with venture capital, which is necessary in order to realise new ideas and thereby spur renewal and innovation.

Cities thus supply the best framework for economic development.

1 See e.g. Van den Berg & Van Winden. (2004). Cities in the knowledge economy. Report to the Ministry of the Interior and Kingdom Relations; OECD. (2001).

Cities and Regions in the New Learning Economy; OECD. (2006). Competitive Cities in the Global Economy.

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On cities and their growth potential

2.2 Medium-sized cities have big growth potential Medium-sized cities in particular have considerable growth potential, but we need more knowledge on how possibilities and challenges of growth in medium-sized cities differ from the preconditions for growth in capitals and other metropolises.

Medium-sized cities with good economic performance are not necessarily characterised by having easier or better access to valuable resources than other cities. They do however appear to be very good at making the most of the growth potential that they do have, for example by ensuring the highest possible degree of complementarity and interplay between the city’s resources, and by supporting growth initiatives through strategic cooperation with other cities both within and outside their region.

Because of cities’ importance for economic growth, there are many studies, analyses and reports on cities and on how to create the best possible conditions for city growth. However, most of these analyses focus on “metropolises”, that is, capitals and other cities with millions of inhabitants. But the major part of the global population and economic activity is found in medium-sized cities, not metropolises. The medium-sized cities are fully functional cities with a population of less than 500,000 in the core city. In a Danish context, Aalborg, Aarhus and Odense can thus be characterised as medium-sized cities, while Copenhagen can be characterised as a metropolis.

Metropolises generally attract more businesses, public authorities, knowledge institutions and highly skilled labour. They are, however, also characterised by higher living and business expenses. Mediumsized cities, on the other hand, offer many of the same advantages as metropolises (although on a smaller scale), which makes them attractive to businesses, workers and students. Moreover, it is generally cheaper to live and do business in medium-sized cities, where you can get the benefits of living in a city but at a lower cost.2

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Medium-sized cities also benefit from an increasing political and economic influence on regional and national growth, as there is a tendency towards moving the responsibility for regional and local development from the national level to regional and local authorities.

In the last decade, a growing recognition of the economic importance of medium-sized cities has led to an increased focus on these cities and their growth. While we know a lot about metropolises, we lack similar insight into the preconditions and potential for growth in medium-sized cities. There is therefore an urgent need to increase our knowledge of the particular challenges and possibilities for growth faced by medium-sized cities, and that is exactly the purpose of The City Regions Project.

Medium-sized cities can be defined in two ways. The first is by population. A medium-sized city is often defined as a city with approximately 100,000 to 500,000 inhabitants. However, medium-sized cities can also be defined according to their position in the national urban hierarchy. In all countries, there is a network of cities, a so-called “hierarchy” of cities, which is more or less defined by the relative size of each city and its influence on the national economy.

For example: Based on its population, Aarhus is comparable to the British city of Leicester, as both cities have a population of approximately 300,000. Based on its position in the national hierarchy, however, it makes more sense to compare Aarhus with a city like Manchester, even though the population of Manchester is significantly larger. This second approach is particularly interesting because previous analyses show that a city’s position in the national urban hierarchy is often a more important determinant of its growth potential than its size relative to cities in other countries.

As described previously, cities have good preconditions for attracting economic activity. But economic growth does not happen by itself. For instance, previous analyses show that a city’s size matters: metropolises generally perform well because their size alone is enough to attract citizens, businesses and economic activity. In contrast, small towns are generally characterised by a

2 Clayton & Morris. (2010). Recession, recovery and medium-sized cities.

Report from The Work Foundation.

On cities and their growth potential

relatively weak economic performance as there is a natural limit to how much economic activity they can attract and generate. Thus, the size of cities and their economic performance can be said to be proportional.

This tendency does, not however, hold for medium-sized cities, as illustrated by figure 2.1: Previous analyses show that some mediumsized cities perform far better than one would expect from their size, while others perform far more poorly than expected. 3 The bad news is thus that medium-sized cities face special challenges compared with metropolises that do not have to work so hard to attract business and labour. Meanwhile, the good news is that the much higher degree of variation in the economic performance of medium-sized cities shows that there is a considerable growth potential in medium-sized cities. But how do medium-sized cities attain above average economic performance?

Figur 2.1. The relationship between cities’ economic performance and size The city’s economic performance Strong performance Weak performance The size of the city Small cities

Medium-sized cities

The City Regions Project explores what characterises medium-sized cities with strong (as in above average) economic performance.

The project confirms results from previous analyses, which show that the preconditions for growth of economically strong cities are not necessarily different from those of other cities. Being “above average” is therefore extremely important.

Most medium-sized cities share similar preconditions for growth: well-educated citizens, a business sector, one or more research institutions and science parks, a well-functioning infrastructure etc.

So why are some cities capable of creating more value from these resources than others? Previous analyses show that some cities are particularly good at making the most of their growth potential by combining their resources more effectively. This project generates a number of examples of how cities strive to do this by maximizing the complementarity and interplay between the city’s resources, and by supporting growth initiatives through strategic collaboration with other cities. This is described in more detail in the subsequent chapters of this report.

Metropolises

Source: DAMVAD 2010. N.B. The figure is not based on empirical data. For an empirical basis for the figure, see Lorenzen & Andersen. (2009). Centrality and Creativity: Does Richard Florida’s Creative Class Offer New Insights Into Urban Hierarchy? Economic Geography, 85(4): 363-390.

3 See e.g. Lorenzen & Andersen. (2009). Centrality and Creativity: Does Richard Florida’s Creative Class Offer New Insights Into Urban Hierarchy? Economic Geography, 85(4): 363-390.

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On cities and their growth potential

2.3 Growth is created not within the municipality but within the city region Economic growth is not created within the administrative boundaries of a city, but within the functional city region, defined as the area around a core city that shares living spaces, jobs and services with the city. This implies that growth policy and initiatives should consider not just the core city, but the city region as a whole.

In our definition of a city we not only include the central municipality that gives the city area its name, but also the immediate surroundings that border on the city and exchange living spaces, jobs and services with the city. This area is called a city region. City regions are also called “functional urban areas” because they often draw a more accurate picture of a city than the administrative borders of the core municipality. People do not limit their activities to the geographic borders of a city; they live, work, shop and use the cultural and leisure activities on offer within a larger geographic area around the city they live in or close to. Likewise, businesses choose their location and their partners without looking at the administrative borders of the city.

Figure 2.2: The city region

The city region

City city

City Core city City

Source: DAMVAD 2010

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The functional city is thus defined by how people live and work, and how the economy works between a core city and its surroundings.

The city region can include independent cities as well as rural areas and suburbs.

The city region’s importance for city growth implies that growth policies and initiatives must be take the city region – and not just the core city – into consideration.

2.4 Growth is based on the quality of – and interaction between – the city’s resources A city’s growth potential is either supported or stunted by the resources that are available to it. These include the city’s industry base and knowledge base, but also its access to highly skilled labour (“talent”) and the general conditions for growth in the city (e.g. its growth policy, business climate, and infrastructure). The quality of the city’s urban growth system – that is, the sum of its resources – depends on how well the city’s resources complement and interact with each other.

The economic performance and growth potential of cities is based on the preconditions for growth that is available to the city, meaning primarily the city’s resources. A city does not grow by itself: Its performance and position relative to other cities is to a large extent based on the resources available to the city as well as the quality and degree of complementarity between these resources.

These resources include the businesses and knowledge institutions located in the city, but also other important resources such as human capital (“talent”), financial capital, social capital and the infrastructure in the city.

The combination of resources is important and can form the basis of sustainable competitive advantages. For instance, it does not create value to have many entrepreneurs with good business ideas, if these entrepreneurs do not have access to financial capital in the shape of venture and start-up capital with which to realise those ideas. Likewise, a concentration of well-educated citizens is less valuable if there is not also a high degree of social capital,

On cities and their growth potential

that is, relationships and trust between individuals that make them exchange ideas and knowledge and cooperate with each other.

In this project, we distinguish between four categories of resouces: The industry base refers to the city’s businesses, that is, the main engine of economic growth in the city. This resource includes the city’s performance, measured by productivity and value added and its business structure (i.e. the number and size of companies in the city). Here it is also relevant to consider the degree of specialization of the city’s industry, meaning which sectors companies are located in. Last, but not least, it is interesting to look at the inflow of new business through entrepreneurship and new firm formation.

•

The knowledge base refers to the city’s knowledge foundation, that is, its research and educational institutions. In this context, it is also interesting to see which areas the city has specialised in. It is also relevant to look at the degree of internationalisation of research and education, e.g. in international research collaboration and in the exchange and recruitment of scientists and students. Last, but not least, this resource also includes the research and educational institutions’ orientation towards and collaboration with industry.

•

Talent refers to the city’s citizens and labour. In this context, it is interesting to look at the demography and employment of the city (e.g. the age distribution, and work places for the city’s inhabitants). Human capital covers the qualifications and educational level of the labour force, while social capital refers to the presence of trust and personal networks between. Moreover, it is relevant to look at the city’s ability to attract and retain labour, including the sought-after creative class, that is, knowledge workers whose primary job function is to innovate. 4

4 See e.g. Lorenzen & Andersen. (2008). Den Danske Kreative Klasse: Hvem består den af? Hvor bor den? Hvad betyder den for det danske samfund? Aarhus: Klim.

•

The framework conditions cover the general conditions for growth in the city and thus include national, regional and local policies, e.g. focusing on growth, business development and innovation. The framework also includes the quality of the general business environment and the quality of life that the city can offer. Last, but not least, it is relevant to look at the city’s infrastructure, including the quality and price of public transportation, but also the city’s accessibility by plane, car and train from the city region, other cities and from abroad.

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On cities and their growth potential

All these resources are important to the city’s economic performance and are therefore relevant to work with in order to promote growth, either to ease the city’s challenges or to further strengthen a good economic performance.

As the full value of a resource is only realised when it is brought into play in a productive interaction with other resources, it is, however, important to assess these resources in the context of the city’s urban growth system, that is, the city’s overall set of resources. The productivity of the growth system depends on two things. Firstly, it depends on how complementary the resources are, that is, how well they support each other. Secondly, it depends on the level of interaction between complementary resources, that is, how much and how efficiently these resources interact in order to unleash growth potential. The key to growth in a city does not, therefore, lie in the resources available to the city as much as it lies in how these resources are managed and relate to each other. Later in this report we look at a number of examples of how medium-sized cities in other European countries seek to strengthen their econo-

mic performance by creating connections and interaction between their business sector, their knowledge base, their labour force, and the general framework conditions for growth in the city.

It is relevant to point out that certain resources are more expensive to build than others. For example, educational and research institutions require large public investments, while others (such as grassroots, and many culture and leisure activities) are relatively inexpensive investments for the municipality.

In addition, some resources take a very long time to build up or lose, while others are fast. This is also related to the fact that some resources are more mobile than others. For instance, labour is by far the most mobile resource and can therefore be attracted (or eroded) the most easily.

The most risky public investments are of course investments in expensive resources that take a long time to build, but which may be quickly eroded.

Figure 2.3: The city’s resources and the urban growth system

The city’s growth system Degree of complementarity between the city’s ressources Degree of interplay between the city’s ressources

The industry base

The knowledge base

• • • •

• • • •

Productivity and value added Industry structure (size and scope of firms) Specialization (sectors, technologies etc.)

Entrepreneurship and new firm formation

Research institutions Educational institutions Internationalization of research and education Orientation toward/collaboration with industry

The talent base

Framework conditions

• • • •

• • • •

Demographics and employment Human capital Social capital Attraction and retention of labor

National, regional and local policy The business environment The livingg environment and quality of life Infrastructure

Source: DAMVAD 2010

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On cities and their growth potential

2.5 Intercity collaboration creates growth Cities can enter into more or less formalised collaborations with other cities. Formal intercity collaborations might for instance focus on strengthening the business sector, carrying out joint research and education initiatives, strengthening infrastructure or attracting highly skilled labour or cultural events. Moreover, cities can cooperate on marketing or on political lobbying in order to strengthen their national or international visibility, bargaining position or access to capital.

The case studies indicate that cities that do well are also good at cooperating with other cities, both within and outside their city region. These collaborations can support and increase growth for all involved. But intercity collaborations do not automatically lead to benefits. In subsequent chapters, we will therefore take a look at factors that affect the impact of intercity collaboration on city growth.

Cities do not exist in isolation. As previously mentioned, they are a part of a national and international urban hierarchy. The whole network of cities is said to constitute an urban system. Within this system, cities can interact with each other to a smaller or larger extent. Interaction between cities can, among other things, occur through interaction between individuals, businesses and knowledge institutions, or among city councils.

In The City Regions Project we raise the question: How important are intercity collaborations for the growth potential of cities and their position in the urban hierarchy? Medium-sized cities compete with each other and with metropolises in order to attract labour, businesses and financial capital. However, the results of this project indicate that collaboration between cities is a more efficient means of achieving growth than competition is.

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On cities and their growth potential

For instance, the case studies indicate that growth in a city region can be strengthened through cooperation with other cities. The economic performance of cities is thus not only influenced by the degree of complementarity and interplay between the city’s resources, but also by how effectively the city cooperates with other cities.

Intercity collaboration can either be informal (such as networking and exchange of experiences) or formal. Examples of formal collaboration in the case studies can be seen in Box 2.1.

Box 2.1.

Examples of types of formal intercity collaboration • Business: Cooperating on attracting businesses or creating more coherence between related sectors in order to strengthen the whole business sector • Research and education: Cooperating on research in selected fields or on offering educations • Talent: Cooperating on attracting talent or strengthening the mobility of labour between cities • Infrastructure: Cooperating developing infrastructure • Culture: Cooperating on attracting and implementing high-profile cultural and sporting events • Marketing: Joint marketing and city branding • Political: Joint political lobbying and applying of funds for financing growth initiatives, explorative projects and/ or intercity collaboration

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In addition to distinguishing between formal and informal collaboration, we also (cf. figure 2.4) distinguish between two kinds of city collaboration: Collaboration within the city region (which we will take a closer look at in Chapters 4 and 5) and collaboration between city regions (which is the focus of Chapter 6).

On cities and their growth potential

Figure 2.4: General types of intercity collaboration

Informal collaboration

Formal collaboration

Collaboration within the city region

Knowledge exchange, network formation, labor market links etc.

Joint growth ventures, infrastructure development, joint lobbying etc.

Collaboration across city regions

Twin cities, knowledge exchange, network formation etc.

Joint (inter)national lobbying and growth or innovation ventures

Source: DAMVAD 2010

2.6 There is no “one size fits all” strategy for growth There is no standard recipe for growth that fits all cities.

In order to attain an above-average economic performance, a city’s growth policy must therefore take into account that particular city’s strengths and weaknesses, which – to a large extent – are historically determined.

Cities have different paths to growth, as there is no standard solution for how to generate growth. Even though cities have many of the same fundamental resources and engage in various types of intercity collaboration, this is by no means sufficient to explain why one city performs better than the other. To realise the growth potential of medium-sized cities, the cities must succeed in bringing their resources, growth system and city collaborations into play in a productive manner. Previous studies show that cities can change, even dramatically, but that they develop but slowly, and that their development can be hampered by the city’s historic development, challenges and positions of strength.

5 Hildreth (2007). Understanding medium-sized cities. Town and Country Planning May 2007.

This historic anchoring is also called path dependence, because new roads to growth and development to some extent always spring from the existing structures, competencies, actors and institutions of a city.

Path dependence does not mean that a city cannot develop significantly over time, but it means that this development will be gradual and must take into consideration the special strengths and weaknesses of the city, as well as how its history affects its potential for creating sustainable economic growth. 5 In order to stimulate above-average growth, a city therefore has to base its growth policies and initiatives on a well-founded analysis of its particular challenges and opportunities for growth.

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3 From clusters to related diversification and integrated growth policies This chapter presents a number of general lessons learned from The City Regions Project. These lessons learned spring primarily from the case studies, but also from other parts of the project, including the evaluation of existing studies and analyses of city growth.

3.1 The cluster perspective does not focus on value creation Many cities attempt to create dynamic, knowledge-based business clusters that will strengthen their exposure and economic performance and thus contribute to putting their particular city on the map. But these attempts to create successful business clusters fail more often than not. Why? Business clusters can indeed be important drivers of growth, but it is difficult to establish a successful cluster.

A problem for many major cluster investments is that they focus on achieving a geographic concentration of businesses and establishing a physical infrastructure (such as joint office buildings or a science park), but overlook the importance of also establishing a good social infrastructure. The source of innovation and growth in a cluster is not the geographic concentration of businesses and knowledge institutions, but the productive interaction between organisations and individuals, which is merely facilitated by the concentration.

Moreover, many clusters are built around the same generic technology or business sectors, such as biotech, ICT or energy. This makes it difficult for a city to differentiate or promote itself in the face of competing cities and clusters.

The point is not to discourage cities from investing in clusters, but that cluster investments and other business investments make more sense and are more efficient if they (1) build on existing strongholds of the city, (2) identify attractive niches that can help to differentiate the cluster from competing cluster, and (3) build effective meeting places for the actors within the cluster and within the city in order to promote the development of good social infrastructure.

The last few decades have seen a strong focus on business clusters, based on the idea that growth can be stimulated by building business clusters, that is, geographic concentrations of businesses that work within the same technological field or sector and thus stand to benefit from each other’s experiences and from cooperating with each other. Clusters can also promote interaction with knowledge institutions close to or in the cluster. At the same time, this kind of concentration of companies can attract specialised labour that all the organisations of the cluster can benefit from, as well as subcontractors or service suppliers for the companies of the cluster. A successful cluster can thus further business development and attract both companies and talent to the city where the cluster is located.

Stories of a few but extremely successful clusters have inspired many cities to invest in clusters of their own. As a result, almost all cities now point to one or more business clusters as the cornerstone of their growth policy, but the truth is that most major cluster investments are not particularly successful. Very few of these clusters end up creating significant value for the city.

What is the cause of the limited success of many business clusters?

Firstly, a number of fundamental conditions must be in place before a business cluster can be called successful, including for instance a good business environment, R&D, the presence of research and business actors, a well-functioning physical infrastructure, access to venture capital, access to highly skilled labour, access to support functions such as business services etc. Secondly, it is difficult to establish and maintain a well-functioning cluster because it is dependent on a complex interplay between a long list of factors, including the business climate of the city, its infrastructure, the specialisation and productivity of the existing business sector and academic environment etc.

A business cluster is therefore much more than a geographic concentration of business. It is about having the right companies in the right combination at the right place and time. Business clusters are only an asset for the city if they significantly increase the eco-

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From clusters to related diversification and integrated growth policies

nomic performance compared to the performance, which is likely to have been attained in the absence of the cluster.

A cluster investment therefore risks shifting the attention of a city towards initiatives that do not necessarily create value or promote growth, for instance by gathering related businesses and research institutions within the same field. Moreover, such cluster investments often focus on one of a handful of generic sectors and technology areas that everybody wants to be successful in, such as ICT, biotech, sustainable energy and creative/cultural sectors. This makes it hard for the city to rise above rival cities and clusters.

The results of project indicate that successful growth initiatives often build on joint platforms for business development and cooperation rather than specific cluster investments. Moreover, successful initiatives typically focus on niches rather than generic technology and business fields. These points are explained in further detail later in this chapter.

A key risk connected to cluster investments is that they focus on establishing a physical infrastructure, but forget the social infrastructure. Physical infrastructure established in order to further interaction between actors (such as joint facilities and city spaces, business areas or research parks) rarely has the desired effect. The problem arises for instance if more facilities are established than are actually needed, or if too little consideration has been given to the development of these facilities so that they do not meet the needs and wishes of the business sector. Often, it is also a problem that the physical facilities simply do not provide an optimal environment for interaction between individuals, companies and knowledge institutions.

Even with the right actors in place, and when there is a sufficient number of them to make up a critical mass, this does not automatically mean that they will interact. As mentioned previously, growth does not spring from the concentration of actors, but from the quality and character of the interaction that arises between

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companies, knowledge institutions and authorities. It is through interaction among individuals – across organisations – that knowledge exchange, new ideas and innovations arise.

A successful cluster thus requires a well-functioning social infrastructure, that is, strong personal relations and shared interests across organisations, which enable an open and trusting exchange of knowledge and ideas. The primary contribution of the physical concentration and proximity is that it facilitates or supports this interaction. But the establishment of a well-functioning interaction between actors is dependent on many other things, such as whether the actors have adequate incentives and shared interests to be open to knowledge-sharing and cooperation, whether they trust each other, and whether they have good meeting places to form networks and interact in.

The main point of this chapter is not to discourage cities from investing in clusters, but that cluster investments make the most sense and are most efficient if they build on existing strongholds of the city, if they focus on niches that can help the city stand out from other cities, and if they establish gathering places for the city’s actors to help develop the social infrastructure.

From clusters to related diversification and integrated growth policies

3.2 Focus on business development through related diversification The most efficient road to innovation is through related diversification, whereby new investments focus on areas that build on the city’s existing strengths. This will enable the city to expand its future growth potential while also maintaining and expanding the basis of its existing economic performance.

As described in the above, the growth potential of cities is influenced by their historic development and strongholds. This does not mean that a city cannot change its preconditions for growth, but only that there are limits to how much and how quickly a city can adapt. This is due to the fact that you not only have to adapt the resources of the city (for instance the types of companies, focus of research and educations, the quality of labour, municipal business service etc.), but also form new connections among these resources.

It is easier for metropolises to initiate an investment within for instance biotech or ICT and attract funds, research institutions and businesses. Medium-sized cities, not being natural magnets for businesses and talent, have to adopt other approaches to growth.

Here, the quickest and most efficient road to recognition is through related diversification, meaning that the city diversifies or expands its focus areas, but within areas related to and building on its existing strengths. This will enable the city to expand its growth potential while simultaneously maintaining and building on the sources of its past and current economic performance.

A successful example of related diversification comes from Eindhoven, which during the last two decades has built a position of strength within research and technology-based sectors. However, the city wanted a broader foundation for growth and was particularly interested in riding on the wave of interest and activity in the field of creative sectors. Eindhoven therefore chose to initiate an investment in industrial design as this enabled the city to build on existing competencies within engineering, technical design and product development, while simultaneously building a complementary competence in the field of design.

As a result of this investment, the design area experiences a positive development in the city, which is reflected in new initiatives within research and education of a new, specialised workforce at design institutions such as Design Academy and Phillips Design. The share of entrepreneurs in the field of design in Eindhoven is also higher than for other sectors. Network initiatives between designers and technological businesses also help provide good meeting places for design companies.

Turku is an example of a city that has built on existing strengths in order to establish a strong biotechnological business cluster. A recession in the 1990’s forced the city to explore new paths to economic development and motivated a strong interest in investing in new sectors and in strengthening the interaction between the local business sector and knowledge institutions. The investment paid off, because it built partly on a broad and effective collaboration between actors in the city region (motivated in large part by a widespread recognition of the need to renew the foundation for economic growth in the city), and partly on a strong academic environment as well as an existing concentration of businesses in the field of drug development and diagnostics. The basis of the business cluster and for the collaboration was thus already in place, which helps explain the success of the cluster investment.

Nottingham is an example of a city with a strong national position in the creative sectors, which builds on a strong textile industry in the 20th century. At this time, Nottingham’s “Lace Market” was at the centre of the city’s international trading with machine-produced lace and other textiles. The recipe of Nottingham’s position today as a national hub for creative industries is based on this historic position of strength as well as on an extensive urban development effort in the old “Lace Market”. Today, you will find many of the city’s creative companies here, as well as New College Nottingham’s School of Art, Design and Media. Moreover, Nottingham has entered into a collaboration with two other main cities of the region, Derby and Leicester, on supporting creative businesses.

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From clusters to related diversification and integrated growth policies

3.3 Build niche-based strongholds There are always certain technology and business fields that are particularly attractive and which many cities therefore wish to develop. At this day and age, this goes for fields such as biotechnology, ICT, green energy as well as the creative and cultural sectors. Many cities therefore choose to invest broadly in one or more of these areas.

However, there are two big risks connected with such a venture. Firstly, it is important to attract the right companies and knowledge environments in order to create the best basis for interaction, but it is easier to attract actors with shared interests if you focus on a more specialised knowledge area than on a broad technological area. Secondly, it is harder for a city to distinguish itself in a broad technological or business area than in a clearly defined, niche-based stronghold.

It follows that it is more attractive to build a niche-based position of strength that will give the city a sharper profile, as this affords more opportunities to make the city stand apart from other cities. This will also make it more feasible to attract specialised businesses, knowledge environments and labour because of the increased relevance of the city’s research and business sector for their work.

Focused, niche-based positions of strength are thus better at supporting a coherent development and promoting the city’s growth system than generic investments.

An example of a generic investment area is “climate and energy”. A niche-based investment area builds on a more focused knowledge or business area in which the city already has distinguished itself, for instance “solar energy”.

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As mentioned above, many cities seek to profile themselves on broad sectors that are popular with growth and innovation policymakers, such as ICT, biotechnology, sustainable energy and the creative and cultural sectors. However, the results of this project indicate that niche-based investments that build on existing knowledge or industry strengths provide a better foundation for growth than broad investments in generic sectors.

Building a niche-based stronghold means that the city focuses on specialised rather than generic technological areas or sectors.

As described in the previous section, the building of niche-based focus areas ought to be carried out through related diversification, meaning that it builds on existing knowledge, competencies and resources of the city.

The primary benefit of a niche-based investment rather than a more general one is that specialisation gives the city a sharper profile, both nationally and internationally. There are many cities that focus on biotechnology, so a city that for instance focuses on bioinformatics or protein-based medicine already has a head start in trying to set itself apart from the crowd.

This sharper profile might also be an important tool for attracting more relevant actors to the city. A city known for a niche-based stronghold in for instance ICT will not attract as broad a number of businesses, knowledge environments and talent as a city with a more general ICT profile. However, its higher degree of specialisation will make the city more attractive to talent and businesses operating within its chosen niche area.

This opens up for a more coherent development of the city’s growth system. For instance, the city can launch initiatives targeted toward businesses in the field, develop specialised educations, focus on attracting highly skilled and specialised labour, attract the best international researchers in the niche area through conferences or visiting fellowships etc. This kind of coordinated effort will support a more focused business development and, potentially, the establishment of a cluster within the niche area.

From clusters to related diversification and integrated growth policies

This does, however, presuppose the ability to identify promising niche areas as well as the will to invest in niche areas where the city already has existing or at least budding strengths, and which might enable it to distinguish itself from other cities. In the long run, the city could also extend the effort to include new but related niche areas, so that innovation in the city’s growth system will continue to build on a growing number of existing and related strengths in the city’s industry and knowledge base.

Niche-based positions of strength can also support the city’s effort to distinguish itself from other cities, for instance by helping to target its marketing and branding activities.

Freiburg is known as Germany’s “sunshine city”. This is due to the fact that Freiburg has a general focus on sustainable energy, but has chosen to focus – and profile the city – on one specific source of sustainable energy: solar energy. This focus, which dates back to the 1980’s, permeates the city’s research and business sector. Moreover, the municipality has been a central force in enabling and supporting solar energy in the city, e.g. by implementing a law that all public buildings must use solar energy, as well as by focusing on solar energy and sustainable energy in general in urban renewal and development projects.

This focused investment has enabled Freiburg to become globally recognised as a “best practice example” of the integration of sustainability in urban development, research and industry.

The city’s focus on solar energy has definitively put it on the map of sustainable energy sources and has in recent years enabled it to build on these successes and expand its focus to include other energy sources and a more general focus on green energy and sustainability.

Actually, the three German case cities all illustrate the advantage of focused investments: All three cities are both nationally and internationally known for their “best practice” status in a specialised knowledge area. While Freiburg sets the standard for integrating solar energy into research, business and urban development, Karlsruhe illustrates “best practice” within integrated infrastructure development, focusing particularly on the development of public transportation through light rail technology. Saarbrücken has been hailed by EU as the “best practice” example in the field of intercity collaboration across borders, particularly in connection with the city’s QuattroPole collaboration with Trier, Metz and Luxembourg. All three cities have managed to use this “best practice” status to develop the city’s growth system further and in their marketing efforts to attract investors, collaborators, businesses and talent.

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From clusters to related diversification and integrated growth policies

3.4 Establish strong platforms for growth and collaboration A “platform for growth” is a vision and agenda that brings relevant actors in a city region together around shared growth objectives and initiatives. Platforms for growth are a strategic tool and a communication tool that establishes a long-term framework for cooperation and development in the city region. This framework should be based on the shared interest and needs of the actors, so that it may benefit from and support the development of the social infrastructure of the city.

The case studies show that the case cities focus on a number of platforms for growth that bring relevant actors together around shared growth targets. Platforms for growth are essentially a vision that brings actors of the city region together by supplying the framework for interaction and collaboration, based on the shared interests of these actors. A platform is thus a strategic tool and a communication tool that both uses and strengthens the city’s social infrastructure.

The cities in the case studies illustrate the value of establishing and communicating ambitious and long-term platforms for growth that set a shared agenda and assemble key actors around shared needs and targets, while simultaneously building on existing strengths in the city.

A city can have more than one platform, as long as all platforms are supported by the city’s growth system, that is, as long as they build on the city’s existing resources and strengths.

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For example, Groningen brings together the city’s actors around focuses on healthy ageing and wireless information technology. As a student town, Groningen has also launched a large investment in order to attract and retain young talent, under the City of talent initiative. Nottingham has chosen to focus on the integration of information and communication technology, especially in public institutions and services. The aim is to supply better service while simultaneously supporting business development in the ICT sector. The technology and knowledge town of Eindhoven has established an organisation that brings together municipalities and actors across the city region, headlined Brainport. Brainport is a cross-municipal collaboration that focuses on furthering growth through talent and technology development.

Freiburg’s focus on solar energy, as mentioned earlier, is another example of a shared platform that helps build coherence and strengthen the growth potential of the city’s growth system. For instance, it is reflected in the research areas that the knowledge institutions focus on, and in the targeted recruitment of experts. Moreover, the University of Freiburg has established a cross-disciplinary research centre for sustainable energy in order to strengthen problem-orientation as well as cross-disciplinary interaction between researchers and industry. The green theme is also reflected in the development of focused educations that are intended to deliver new, highly specialised talent for the city.

Moreover, Freiburg has managed to build a strong and competitive business cluster that contains established companies as well as a number of academic “spin off” companies from the local academic environment. There is an intensive R&D collaboration between the research institutions and the business sector of the city, which include public-private R&D projects as well as exchanges of employees between basic and applied research environments. Moreover, knowledge institutions and businesses cooperate on education and development of talent, e.g. through traineeships and student projects. The municipality also plays an enforcing as well as a supporting role for the green profile through its business policy and urban development, which is illustrated, among other things, in its energy legislation, which focuses on sustainability in urban development, as well as in the marketing of the city in relation to tourists as well as businesses and investors.

From clusters to related diversification and integrated growth policies

3.5 Work with integrated strategies for growth and urban development Successful growth initiatives are initiatives that build on and strengthen the connection between resources in the city’s growth and where focus is shifted from general growth policies towards more targeted initiatives aimed at prioritised areas (such as a platform for growth). Integrated strategies for growth also implies collaboration across municipal departments, among municipalities in the city region and across the municipal and regional level.

The previous sections have dealt with how cities can create a basis for sustainable growth by making sure that growth policies and initiatives build on existing resources and strengths in the city. In addition, the case studies generally indicate that positive economic development in cities is linked to integrated growth initiatives. But what are integrated growth initiatives?

The case studies indicate that successful growth initiatives build on or strengthen the connection between resources in the city’s growth system. This emphasises the importance of making sure that growth initiatives build on existing or at least budding strongholds of the city’s growth system, and that these are supported by several kind of resources, e.g. in the business sector, the academic environment, the education system, the labour force and/or the general framework conditions for growth in the city.

The case studies also show that successful growth initiatives are based on strategies that span multiple areas and actors involved in growth policy. Previous studies6 have shown that Danish urban development policy has gone from focusing on selected sectors to dealing more with holistic, integrative policies. This trend is a result of a growing recognition that the challenges of urban development are related to each other and that the solution to these challenges should involve all relevant areas and actors.

Andersen & van Kempen. (2003). New trends in urban policies in Europe: evidence from the Netherlands and Denmark. Cities 20(2): 77-86.

But what does this mean in practice? It means, among other things, that focus is moved from general growth policies towards more targeted efforts to improve a certain area, for instance a certain sector in the business community, a certain neighbourhood or a shared platform for growth.

It also means that people cooperate on creating more cohesion and synergy between growth policy initiatives across municipal departments, but also through collaboration between municipalities of the city region and the municipal and regional level.

The case studies give a number of examples of successful, integrated problem-solving and urban development that span social, physical and economic urban development – and departments and organisations. As mentioned before, Freiburg’s focus on sustainability and green energy is an example of how a coherent and integrated growth policy in a municipality can support the city’s development as a whole.

The importance of coordinating across municipal departments is also seen in Gothenburg, which has established an “international unit” in the municipality that coordinates and oversees all activities related to the municipality’s international activities, collaboration and marketing. This facilitates knowledge-sharing and the coordination of international efforts across municipal departments, within the framework of an explicit, shared strategy for international activities.

Manchester is a good example of an extensive and long-term collaboration between the regional and municipal level. Since 1986 there has been a strategic collaboration between ten cities of the Great Manchester Region, facilitated by the organisation Association of Greater Manchester Authorities (AGMA).

The cities collaborate on, among other things, infrastructure (for instance, they share ownership of Manchester Airport), innovation and marketing of Greater Manchester. Moreover, in 2011, AGMA will be transformed into a joint public authority for the ten cities, thus increasing its possibilities to stimulate growth across municipalities in the region even further.

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4 Create good conditions for collaboration within the city region This chapter presents a number of lessons learned, focusing on how cities can promote and support growth through collaboration within the city region. These lessons spring primarily from the nine case studies, but also from other parts of the project.

4.1 Collaboration can create growth in the entire city region

The results of The City Regions Project show that the case cities strengthen their role in the city landscape by entering into alliances with other cities. However, some of the biggest growth gains of the case studies have not been reaped through collaboration with remote cities but with close and long-term collaborations within the city region.

The nine city cases indicate that successful city collaboration within the city region has a number of benefits: •

Coordinated and thus a more efficient growth policy. The case studies show that collaboration within a city region facilitates coordinated growth initiatives which in turn increase the efficiency of the regional growth policy. The increased efficiency is due to the fact that if you coordinate within the city region, you can avoid superfluous overlapping, learn from each other’s experiences and knowledge, support each other’s initiatives and launch shared investments that benefit the whole city region. This emphasises that coordination can support the growth policy efforts of the city region as a whole, and opens the door to shared and more ambitious investments that can benefit the entire region.

•

Parallel growth in the whole city region. Previous analyses7 show that economic collaboration and a certain extent of economic interdependency between core cities and surrounding cities can strengthen their growth as a whole as well as individually. This means that collaboration can lead to parallel growth in all the cities of a region. The case studies show examples of how growth in the core city can catalyse growth in the other cities of the region, and how growth in the hinterland can help the economic development of the core city.

•

A joint national and international front. Medium-sized cities compete not only with each other but also with neighbouring metropolises to attract businesses and talent. At the same time, medium-sized cities are often overshadowed by metropolises, for instance in national business and innovation policy initiatives. The results of this project show that cooperation can strengthen the visibility and bargaining power of the whole city region – partly due to the increased visibility, partly

Collaboration within the city region can have a direct influence on the growth of the whole region. Initiatives in the core city can contribute to growth in the surrounding cities, just as initiatives in the surrounding cities can contribute to growth in the core city.

The most significant growth gains in the case studies of this project have been attained through close and longterm collaborations within the city region. These gains include (1) coordination of (and thus a more efficient) growth policy, (2) parallel growth in the whole city region, (3) a strong, united front that increases the visibility and bargaining position of the whole city region both nationally and internationally, (4) stronger and better anchoring (and thus more far-reaching effects) of growth policy initiatives, and (5) a more efficient social infrastructure because relevant actors and individuals come together across the city region to work on shared agendas and goals.

City collaboration does not automatically lead to growth, however. The likelihood of achieving shared growth in a city region is greater if the growth systems of the cities within the region complement each other, and if the cities are connected in a way so that people, commodities and capital can flow easily between them. Moreover, the case studies point to a number of factors that can increase the chance of reaping benefits of intercity collaboration. These factors are presented in this chapter and in Chapter 5.

7 Jones, Clayton, Tochtermann, Hildreth & Marshall. (2009).

City relationships: Economic linkages in Northern city regions.

Report to The Northern Way.

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Create good conditions for collaboration within the city region

because the city region is stronger when it represents the collected economic importance and performance of the cities.

The united front can both strengthen the city region nationally and internationally speaking.

•

•

Stronger and broader anchoring of growth policy initiatives.

The case studies of this project also show that collaboration within the city region helps anchor growth initiatives, thereby strengthening their long-term effects. This is because collaboration within the city region is not just about collaboration between cities but also collaboration between various actors in the city, which are brought together because of their shared interests. The inclusion of a broad range of actors from the business sector, knowledge institutions, authorities and citizens help anchor the city’s growth initiatives broadly, and entice the participants to take ownership of new projects and initiatives. This ownership can be further strengthened through the establishment of a more binding collaboration – a point which will be elaborated later in the report.

A more efficient social infrastructure. Previous studies8 show that a central force of economic growth and innovation is a well-functioning interaction between the people that live in a city and work in its businesses, knowledge institutions and public institutions. Basically, innovation occurs when people come together and exchange their experiences and ideas.

This sows the seeds of the projects that are later launched, whether they are implemented through establishes organisations or citizen-led initiatives. The case studies show that collaboration within the city region can strengthen the social infrastructure of the city by creating meeting places for key actors and bringing them together around relevant themes and shared interests, which in turn opens up for new growth possibilities and initiatives.

The City Regions Project thus shows that there are considerable advantages to be had from collaborating within the city region. But collaboration is not guaranteed to generate growth or value for the participants. So what determines whether these potential benefits are realised or not?

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8 See e.g. Lorenzen. (2007).

Social Capital and Localized Learning: Proximity and Place in Technological and Institutional Dynamics. Urban Studies 44(4): 799-817.

Intercity collaboration within the city region does not automatically create value. For example, previous studies9 show that the likelihood of realising value from intercity collaboration is greater when two preconditions are in place. First, the cities must complement each other. As mentioned previously, cities are a part of a national and international city hierarchy. Their role and position in this hierarchy is determined, among other things, by their size in an international perspective, their size and importance in the national city landscape, and their economic performance. A city’s role is also influenced by the degree to which it complements other cities in the same region.

A collaboration within a city region could for instance take as its starting point the fact that some of the cities (typically, but not always, the core city) are the primary engines of economic activity that attract businesses and citizens to the region, while other cities act as attractive local bases for certain parts of the business sector or for a science park, as suppliers of certain services for the citizens (for instance good schools and shopping facilities), or as attractive living areas for the region’s citizens. Efficient collaboration within the city region therefore builds on a shared understanding of what role each individual city plays in the region and seeks to strengthen and expand these important complementarities further.

The other precondition for efficient intercity collaboration is that the cities must be connected. Apart from the fact that the collaboration between the cities should be based on an understanding of how the cities complement each other, it is also important that the cities are connected. For instance, it should be easy for the citizens to commute from living areas to work places and to get to daycare institutions, schools and shops. It should also be easy for businesses to get goods delivered, receive visitors and travel around the city region. Efficient collaboration within the region therefore presupposes that the cities are connected in a way that facilitates interaction between actors.

9 Jones, Clayton, Tochtermann, Hildreth & Marshall. (2009). City relationships: Economic linkages in Northern city regions. Report to The Northern Way.

Create good conditions for collaboration within the city region

4.2 Bring key actors together on a burning platform A burning platform often works as a catalyst for collaboration in the city region: Partly because it brings the actors of the city region together around shared challenges and interests, and partly because it makes it easier for them to overcome different interests and find a common ground.

It is therefore important to identify and communicate burning platforms that can bring the actors of the city region together, for instance around a central challenge for the city’s future growth.

The case studies reveal that many successful collaborations have a burning platform as their point of origin. Cities usually do not lack interest in or intentions to launch promising, growth-promoting initiatives or collaborations. But in practice they often lag behind their intentions when it comes to prioritising the planning and implementation of ambitious investments and collaborations, as these are always competing for resources and attention with a number of other activities and areas of responsibility that are often more urgent on a day to day basis. A burning platform can therefore serve as an important catalyst for growth-promoting initiatives, for example if the city is experiencing an economic recession or lack of capital, or if it faces other significant challenges that call for a targeted effort and collaboration across the city’s growth system.

Moreover, burning platforms bring actors together across the city region and help facilitate the dialogue between them. By focusing on important, shared challenges, it becomes easier for the actors to overcome their individual interests and find a common ground.

The case cities give a number of examples of burning platforms for collaboration. For example, a general economic recession in Finland in the 1990’s and a decrease in exports to Russia meant that the city of Turku came under pressure to find new sources of growth. Actors in the city got together because of a shared recognition of the need to develop new, long-term strengths, and because of a shared wish to strengthen the interaction between the academic environment and the industy in the city.

As Turku had a good academic environment and an existing business sector within the development of pharmaceuticals and diagnostics, a decision was made to focus on biotechnology.

The active leadership of the municipality, combined with a close collaboration between knowledge institutions, business sector, the municipality and the region, led to the establishment of a strong biotech business cluster. What also characterises Turku’s biotech cluster is the fact that, unlike many other, well-functioning biotech clusters, it is based solely on small and medium-sized businesses – in other words, there are no large pharmaceutical companies that act as driving forces for the cluster.

Eindhoven is today a knowledge city recognised for its technological research and business competencies, but this is a relatively new position. In the 1990’s, the city experienced an economic recession which, among other things, forced large businesses and employers in the city region, among them Philips and DAF, to dramatically downsize their operations. This impacted their employees as well as hundreds of smaller businesses in the region that acted as sub-suppliers to the large firms. The city therefore launched a large shared investment targeted at retaining the big companies in the region while simultaneously strengthening the city’s growth potential through collaboration among the 21 municipalities in the city region as well as key actors from the business community.

The crisis led to an awareness of the fact that it was necessary to cooperate in order to overcome the shared growth challenges. This led public authorities, the industry and the universities to enter into a close “triple helix” collaboration among leading actors across sectors. Likewise, a long-term strategy was launched aimed at making the city region’s economy less vulnerable in the face of economic crises. This strategy focused

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Create good conditions for collaboration within the city region

on strengthening the industry by improving its innovation competencies and stimulating diversification so that the business sector would become less dependent on big corporations like Philips and DAF. This led, among other things, to the launch of a collaboration between the 21 municipalities in the city region of Eindhoven in 1993, Samenwerkingsverband Region Eindhoven (SRE). SRE also established a fund to finance stimulus programs, and an active effort was made to attract EU funds that would support investments in the city region. The regional stimulus fund meant that businesses could apply for financing for projects to adapt or strengthen their business activities. Businesses that collaborated with other firms and/or with knowledge institutions were moreover rewarded with additional funds, in order to stimulate cooperation between the city’s actors, thus anchoring growth initiatives and effects.

Moreover, the success of the SRE collaboration and the stimulus program led to other initiatives, such as the Horizon program, which e.g. focused on strengthening industrial innovation, attracting qualified labour and increasing knowledge sharing in the city. All in all, these initiatives were a strong contributing factor as the number of businesses and new jobs increased markedly from 1995 to 2000 and has developed steadily ever since. The collaboration also led to the establishment of the aforementioned Brainport initiative.

Today, Manchester is known as a flourishing city that has managed to develop from a stagnant industrial city to a knowledge city characterised by value-creating and broad collaborations between actors in the city’s growth system. Part of the explanation for this development is that Manchester, because of its industrial past, was hampered by big economic challenges and needed to find new roads to growth. Another important catalyst for the close collaboration within the region dates back to 1995 when an IRA bomb destroyed large parts of Manchester’s city centre. The subsequent crisis led to an intensive rebuilding and cooperation within the city that helped lay the groundwork for Manchester’s subsequent partnerships. Greater Manchester has managed to gather its resources and ensure that public and private organisations work together in order to create the best possible framework for the city’s growth.

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Moreover, both Manchester and Nottingham, like all other English cities, have a particular incentive for creating growthpromoting alliances between the actors of the city region as well as across city regions: English cities only have about 5 percent of the taxes collected in their area at their disposal.

Most development funds for the cities therefore come from national funds, where the cities apply for means on the basis of specific projects and initiatives. This provides an incentive for collaborating across city borders and across sectors, as it is often easier for broad partnerships to achieve funding from the national funds than it is for individual cities. This is due to the fact that partnerships often facilitate more ambitious and comprehensive investments and help ensure a better anchoring of the initiatives.

However, the case studies also show examples of cities that have managed to create well-functioning platforms for growth based on lukewarm rather than burning platforms. Groningen is an example of a city that did not have a significant burning platform. Instead, the city took one of its central challenges as its starting point: As a student and university city, the city attracted many students, but there was a growing concern about increased competition from other university cities. Moreover, like many other university cities, Groningen has a hard time retaining students once they graduate. The municipality therefore chose to bring the city’s actors together around the vision “City of talent” – a shared focus on building a city on talent.

Similarly, Freiburg’s “green focus” sprung from the fact the city lacked heavy industry and therefore an engine for growth.

Since the 1960’s, the inhabitants of the city had participated actively in protests against the building of a nuclear energy plant, and this had created a strong awareness of environmental and climate-related issues. This meant that a green focus was a natural vision for the city to adopt, which the municipality supported by showing active leadership and launching focused and ambitious initiatives in the municipality as well as among central actors from the academic environment and the business sector.

Create good conditions for collaboration within the city region

4.3 TClarify and communicate incentives for collaboration The case studies indicate that a shared platform for growth is not enough to establish well-functioning, sustainable and ambitious collaborations. All the actors must be able to see obvious benefits of the collaboration – benefits for themselves and for the city region as a whole.

It is therefore important to identify and communicate incentives for collaboration already from the very beginning of a collaboration, but also during the course of the collaboration.

In continuation of the previous lesson about the importance of burning platforms in order to catalyze collaboration within the city region, the case studies also more generally indicate that it is important that all parties see clear and obvious benefits of participating in the collaboration. Interview respondents emphasised the importance of all parties being able to see what they get out of the collaboration, and what the potential gains for the city are.

Cities often think of each other as rivals rather than potential allies. Respondents in several of the case cities therefore point out that it is especially important to the make the benefits of a collaboration between the core city and the surrounding cities visible. One respondent emphasised that the core city, as the primary economic force of the city region, has a responsibility to drive the development of the city region forward, but that it is also dependent on simultaneous development in the neighbouring cities to support the growth of the core city.

This type of simultaneous development can for instance be achieved by coordinating growth-promoting initiatives, developing complementary industry sectors in the neighbouring cities, establishing good schools and leisure activities for the citizens and their families, or strengthening the shopping and living spaces in the city region as a whole.

There is also a natural limitation as to how much development the neighbouring cities can carry on their own, partly because of their

smaller size, and partly because having a bigger city as your neighbour can sometimes hamper rather than strengthen the growth of a city – if the proximity is not used strategically and for the benefit of both parties.

It therefore appears that there are strong incentives for collaboration within the city region for the core city as well as for the neighbouring cities and that these incentives have to be defined and communicated clearly in order to facilitate efficient collaboration.

Likewise, various kinds of actors (such as businesses, knowledge institutions and citizen groups) must be able to see the gains of supporting such collaboration initiatives in their city region.

If the actors are not convinced of the relevance and importance of participating in a collaboration, they will either pull out and downscale their investment of time or money. It is thus important to identify and clarify incentives for collaboration from the very beginning, but also during the collaboration.

The Brainport collaboration between Eindhoven and twenty neighbouring cities has been important to Eindhoven City as well as to the smaller surrounding municipalities. For example, Brainport has played an important role in the development of a cluster within the automotive industry in Helmond where, High Tech Automotive Campus is a key part of a larger investment in the cluster’s development. Through the Brainport collaboration, the city has managed to convince TNO Automotive, a knowledge and research centre, to locate there rather than in another Dutch city. Brainport played a central part in this decision, because the Brainport collaboration enabled the city to offer more attractive framework conditions for the knowledge institution. Moreover, Brainport has contributed actively to the shaping of the Automotive Facility Centre in Helmond, a grand investment of more than EUR 18 million. The project was established as a public-private partnership where Brainport helped secure the public financing in place – from the Ministry of Economy, the Noord-Brabant province and the SRE collaboration mentioned above. This public funding was a decisive factor in convincing the private partners that helped establish the centre to finance half of it.

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Create good conditions for collaboration within the city region

In Gothenburg, both the core city and the neighbouring cities have become convinced of the positive effects of collaboration. Business Region Göteborg, an organisation of thirteen municipalities, has had a big influence on regional business development. The thirteen municipalities collaborate on the location of businesses moving to the region, by considering to the particular characteristics and strengths of the individual municipalities against the needs and wants of incoming businesses. The municipality works out a recommendation about where it would be most suitable for the company to open office, e.g. based on where other similar businesses are already established. This practice stands in stark contrast to the time before the establishment of Business Region Göteborg, where the municipalities competed amongst each other to attract businesses. The success of Business Region Göteborg has also meant that other municipalities in the region have indicated their interest in joining the collaboration.

Manchester has managed to establish an efficient collaboration between the ten cities of the city region via the AGMA organisation. Respondents explain that the effective collaboration is, among other things, a result of the fact that there is a broad understanding among the cities that one city alone cannot create the critical mass necessary for supplying the businesses of the region with the best possible access to specialised suppliers, clients and labour, or to supply the inhabitants with access to attractive living areas and a broad variety of job offers.

Moreover, the cities all recognize that Manchester is a global brand whose development benefits the region as a whole. Last, but not least, the ambitious program The Manchester Independent Review has supplied analyses of the economic situation of the city and created an evidence-based foundation for discussing and prioritising joint investments. As one respondent put it, “There is no point in fighting against ourselves; we have to collaborate to compete.”

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When Turku applied to become cultural capital of Europe in 2011, the neighbouring cities in the South Western part of Finland worried that the benefits of this would be limited to the core city. In order to make sure that cities across the region were included in the planning of the application and associated activities, a number of idea workshops were held in the neighbouring cities of Salo, Pori, Rauma, Parainen, Loimaa, Uusikaupunki, Mariehamn and Laitila. Moreover, Turku’s application was supported by the cities of the region via a collaborative agreement headlined Many Faces of Culture. Apart from supporting Turku’s application, the aim was also to secure a broad regional anchoring of initiatives and effects of the culture capital project.

Create good conditions for collaboration within the city region

4.4 Define ambitious and long-term visions and show active leadership The case studies emphasise the importance of defining long-term and ambitious visions as well as clear goals for intercity collaborations in order to establish an effective collaboration. Likewise, the results of the project indicate that the municipality of the core city has a central role to play by catalysing and/or facilitating efficient growth initiatives across the city region, e.g. by getting the actors together and showing active leadership backed by strategic and financial commitment to joint projects and initiatives.

The case studies show that clear visions and goals for intercity collaboration support a more efficient collaboration. They help to ensure clear objectives for the collaboration, which gives the participants a clear sense of direction, while communicating the aims and expected benefits of the collaboration.

Clear visions also include a prioritisation of potential target and focus areas, which helps ensure relevance and coherence in the collaborations and initiatives that are launched, so that the efforts of the actors are not directed at different things but at a shared target. This makes it easier to avoid that intercity collaborations get burdened by all the good intentions of the city but insteas maintain a clear focus.

A clear vision thus helps strengthen the strategic coherence of the city’s growth-promoting initiatives and the connection between the actors’ efforts – on the basis of a shared understanding of the aims of the initiatives. However, good visions and targets must be backed up by clear and well-defined strategies that build on factual insight into the challenges and opportunities of the city, and a collaborative preparatory process that involves key actors in the identification of joint goals and targets from Day 1.

In Groningen, a number of actors in the municipality of Groningen and the three universities of the city – Hanze University, Groningen University and University Medical Centre Groningen – have formulated a strategy known as the Groningen Agreement. This strategy is to ensure that the city’s strong position as a university town is maintained, and it is also intended to support the continued development in the city and the surrounding region. The Groningen Agreement includes specific initiatives, e.g. the establishment of student housing that will strengthen the attractiveness of the city to students. Moreover, the strategy contains a number of related visions – for instance, a focus on healthy ageing, as a platform for growth in the city region – that are supported by concrete initiatives by local actors.

The Brainport initiative in Eindhoven has also been organised based on a clear and well-defined strategy set out in Brainport Navigator 2013, which describes a number of specific initiatives intended to sharpen the region’s profile and competitiveness.

The strategy has been worked out in dialogue between a broad range of actors from the business sector, knowledge institutions and public authorities. This has ensured a matching of expectations and contributed to a stronger sense of ownership among the stakeholders who, according to one respondent, see themselves as “owners of a shared problem”. In practice, this means that there is a broad involvement of key actors in the projects and initiatives defined in Brainport Navigator 2013.

In Manchester, the city, the region and the national organisation NESTA have established a joint fund, Manchester Innovation Investment Fund, with a budget of £ 7 million over three years.

The aim of the foundation is to finance experiments with new kinds of innovation that can support and expand Manchester’s “Innovation Ecosystem” and thus contribute to attracting talents and capital to the city as well as support networking, collaboration, creativity and culture, policy development and the physical infrastructure of the city. The foundation has supported twenty-five pilot projects that have all been aimed

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Create good conditions for collaboration within the city region

at designing and testing new ways of innovating and have dealt with a broad range of topics such as energy demonstration projects, strengthening citizens’ access to knowledge through “open access”, retaining students, strengthening the interaction between medical research and clinical practice etc.

The case studies also show that the municipality of the core city can play a central role by catalysing and supporting efficient growth initiatives across the city region by taking active leadership.

This leadership must include taking the first steps towards initiatives and efforts by getting actors together and taking a leading role in defining shared agendas and visions.

The active leadership must also be backed by strategic as well as financial commitment on the part of the municipality, as strategic prioritisation and a considerable economic co-financing signal commitment, a willingness to invest and strong faith in the initiative on the part of the authorities. This is an important signal to send to other actors, because it adds weight to the initiative, and motivates others to invest in the collaboration. In other words, municipal and regional authorities can play an important part by putting action and money behind their words and intentions.

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Active leadership has played a central role in connection with the Groningen Agreement. The mayor took on a leading role by assembling relevant actors together in a formal collaboration that eventually resulted in the shared strategy. Previously, interaction between the actors of the city had been limited, but the mayor succeeded in motivating them to meet and collaborate. Among other things, he brought money to the table, thereby signalling that the initiative was a top political priority.

In Brainport in Eindhoven, the active leadership of the municipal authorities has also played an important role. In particular, the mayor of Eindhoven has played a leading role in formulating a vision, Brainport 2020, which concerns a geographic expansion of the Brainport collaboration to include the South of Holland. The vision is intended to ensure that Brainport maintains and expands its position as a leading European technology region. Because of Brainport’s significance for the national economy, the government has also promised to support the vision.

In Turku, active leadership has taken the shape of e.g. the municipal authorities’ willingness to support the building of the biotech cluster through considerable financial contributions.

For example, in 1999, the municipality invested EUR 12,6 million in the establishment of Turku Bio Valley Ltd. to support the development of the cluster by facilitating offices, labs and plant facilities, especially for smaller biotech companies. Moreover, the municipality invests several million each year in Turku Science Park. According to one respondent, this is a good investment, as calculations have shown that for every 1 euro given in support of the Turku Science Park, the park in turn creates growth for 4.77 euro in the Turku region. The municipality also owns 90 percent of the company behind the science park, which is a significant development, as knowledge institutions and other actors were previously more involved.

Create good conditions for collaboration within the city region

4.5 Create good conditions for collaboration The case studies also point to the importance of creating good framework conditions for collaboration between actors. This is primarily due to the fact that good collaboration happens when actors trust each other – that is, when they trust that their partners will not act opportunistically and that they will actually contribute to the collaboration as promised. Trust is built on good experiences and over time, but case studies suggest that the building of trust can be strengthened by active leadership by the municipal or regional authorities and by limiting the extent of the collaboration.

A good framework for collaboration also leads to more efficient collaboration, for instance by setting up a clear division of responsibility and labour between the actors. Apart from contributing to a more efficient collaboration, the clear division also helps avoid that the collaboration becomes obstructed by conflicts of interest.

A precondition for successful collaborations within the city region is mutual trust among actors. The actors must believe that their partners will not act opportunistically and that they will indeed contribute to the collaboration as promised.

Several of the interviewees in the case studies emphasise that trust is built on several years of collaboration and close dialogue focused on communicating the benefits of the collaboration to all parties involved. This trust helps the relations between the municipalities become characterised by a collaborative mentality rather than a competitive mentality.

However, the case studies also indicate that the building of trust can be facilitated by active leadership on the part of the municipal or regional authorities, for instance if the authorities commit themselves strategically and financially, as described in the previous section, as this sends a clear signal that the authorities believe in and are committed to the collaboration.

The case studies moreover indicate that the building and maintainenance of trust among actors can be strengthened by limiting the extent of the collaboration. This means avoiding bringing in more actors than are necessary in order to reach the shared goals.

There is often a risk that successful collaborations are expanded to

include more actors because people believe that this will likewise expand the benefits of the collaboration – but there is no guarantee for that. On the contrary, an unsuitable expansion of the collaboration to include more actors can dilute its focus and erode the trust established between the original actors. Adjustments and further development of collaborations should therefore always be based on well-founded considerations of the purpose and the most appropriate scope of the collaboration.

The case studies also show that a clear division of responsibility and labour strengthens the efficiency of the collaboration. Firstly, because this helps ensure a more efficient collaboration, because the partners’ efforts are coordinated and everybody knows how best to contribute. Secondly, because a clear division of labour helps avoid that the collaboration becomes characterised by conflicts of interests or power struggles between actors. Therefore, potential conflicts of interest must be predicted and considered in the design of the collaboration, so that potential conflicting interests will not overshadow the shared goals.

Trust is an important factor in the Groningen Agreement.

Respondents describe it as a vital precondition for the collaboration. It has taken a long time to establish trust among the parties, especially as the collaboration has gradually been expanded. The increased trust has meant that the parties frequently launch new initiatives that lie outside the framework of the Groningen Agreement and which are financed by the partners themselves.

In the Brainport collaboration in Eindhoven, respondents mention trust as an important criterion for success. Without trust between the numerous involved parties, carrying out joint projects would not be feasible. Moreover, according to interview respondents, it has been vital that the stakeholders have not used the Brainport platform to promote their own interests. This is especially important when it comes to the strategic management, where political representatives work with representatives from knowledge institutions and the industry: This was a potential source of conflicts of interests and discussions, but a clear division of labour among the actors has been in place from the very beginning, wich has helped them avoid disagreements.

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5 Organising and anchoring collaboration within the city region This chapter presents a number of lessons learned from the project. Like Chapter 4, Chapter 5 focuses on how cities can further or support growth through collaboration within the city region.

However, in this chapter we take a closer look at how this kind of collaboration can be organised and anchored in order to attain long-term benefits for. These lessons spring primarily from the nine case studies, but also from other parts of the project.

5.1 Champions are great – but collaboration must be anchored Champions can act as catalysts for intercity collaborations and growth initiatives, but successful initiatives must be firmly anchored in more permanent constellations and/ or organisations. This anchoring is necessary to secure more long-term effects of the growth-promoting projects launched.

Projects can be anchored in several ways, for example through (1) the identification of key actors that can act as engines and anchors of growth initiatives, (2) efficient and timely inclusion of a broad range of relevant actors in the city region, (3) establishing formal and binding collaborations between actors, and (4) establishing dedicated organisations (such as networks, meeting places or organisations per se) that can support the project. Last, but not least, a long-term vision and continuity is important if projects are to maintain momentum.

10 The Work Foundation. (2010). Anchoring growth: The role of “anchor institutions” in the regeneration of UK cities. Report to The Northern Way.

The case studies show that in some instances, champions, such as a visionary mayor, play an important part when it comes to bringing actors around on a shared agenda and establishing a joint project. However, the case studies also show that all the successful growth-promoting initiatives analysed here have been firmly anchored in the city. A firm anchoring means that the joint projects and collaborations will not become superficial and blurred and thus increases the chance of the projects having a long-term influence on the growth of the city.

The case studies point to a number of examples as to how growthpromoting initiatives and collaborations can be anchored: •

Identifying central anchor institutions. Previous analyses 10 emphasise the importance of identifying central actors than can act as “anchors” for growth-promoting initiatives (e.g. universities, businesses or citizens’ groups) and therefore play an important role when it comes to realising the visions of a project. But it is also important to understand what motivates these anchor institutions in order to be able to activate and support them as much as possible in their roles as engines of growth and development in the city.

•

Including a broad range of relevant actors. If a project is to attain the desired effect, it must include and engage all relevant actors as early in the process as possible. It is therefore also important to ensure a broad and timely inclusion of all the actors that are to take part in realising the aims of the project, including municipalities, businesses, business organisations, knowledge institutions, citizens’ groups and other relevant actors.

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Organising and anchoring collaboration within the city region

•

•

•

Entering into binding collaborations. Several case studies show how municipal and regional actors enter into formal and binding collaborations with businesses, knowledge institutions and other relevant actors. These collaborations can commit the actors to undertake certain activities, but they can also commit them financially. The case studies show examples of actors committing themselves to certain investments, coordinated by the municipality or other actors, and examples of actors committing themselves to investing a percentage of their earnings in research and development projects to promote renewal and innovation. The point is that the binding collaboration ensures a firmer anchoring of growth initiatives while allowing for the activities and investments of other actors to be included in the planning and execution of municipal and regional initiatives.

Establishing dedicated organisations to implement growth initiatives. Good intentions are seldom realised if they are not anchored in efficient organisational structure. What constitutes an efficient structure depends on the purpose. It might for instance be a network aimed at strengthening acquaintance and dialogue between local actors, or concrete meeting places that facilitate a more focused interaction between these actors. A growth initiative can also be implemented through the establishment of an independent organisation, a possibility that we examine in more detail in the next section.

Long-term visions and continuity. Short-term visions or uncertainty as to future focus areas or financing can ruin even the most successful projects very quickly. If the interest and commitment of the actors is to be maintained, it is necessary to ensure strategic and financial long-term consistency and continuity in projects.

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5.2 Establish independent organisations with their own mandates and means The responsibility for new growth initiatives is often allocated to existing organisations or some of the participants, for instance a municipal department. However, the case studies indicate that this can lead to the projects being de-prioritised or to their sub-optimal implementation. Several of the successful projects in the case studies are organised as independent, dedicated organisations with their own mandates and funding, and this holds a number of benefits for the visibility, strategic flexibility and overall implementation of the initiatives.

Generally, the case studies indicate that there are large benefits to be gained by organising and anchoring joint initiatives in independent organisations with their own objectives, resources and management rather than e.g. placing the responsibility in the central municipality or among other existing actors.

Respondents from the case cities emphasise that projects that are anchored in existing organisations often become victims of administrative challenges or become de-prioritised because of other assignments and inadequate resources. They also risk being hindered because of internal politics or conflicts of interest.

Several of the interviewees therefore point to the establishment of independent organisations with their own funding and a clear mandate as an important part of the explanation behind successful growth initiatives. The independence gives joint growth initiatives more flexibility and dynamism when it comes to launching projects and implementing them within a shorter time span. At the same time, it places the responsibility for the collaboration in a dedicated organisation that can build up a considerable external visibility and thereby function as a lighthouse for the whole collaboration.

Such independent organisations generally have their own mandates and means, but answer to a steering group or board made up of representatives from municipalities, regions and other project participants. Often, these organisations – whose job is to realise the city’s growth strategies and ambitious projects – consist of a small secretariate with a few, but hand-picked people with the specialised experience, networks and competencies to make the project work.

The benefits from such organisations are as follows:

Organising and anchoring collaboration within the city region

•

The project becomes a dedicated activity rather than one of a number of tasks that compete for time and resources. Also, the organisation can recruit management and employees with the competence and experience profile needed to achieve desired results.

•

The management of the project can be professionalized, which gives a more efficient planning and implementation of activities in the project as well as a more effective overall management. This also opens op for a more professional marketing of the activities and results of the project, aimed at the participants as well as at the outside world.

•

The project benefits from greater visibility, which also supports the marketing of the activities and results of the project.

•

The establishment of a dedicated organisation indicates the will to invest in and commit to the project, and shows that the new organisation has the means and the mandate necessary to realise the ambitions of the project.

•

The project has more space for manoeuvring. Collaborative projects can quickly drown in attempts to negotiate and mediate between participants and other stakeholders, especially if they are anchored in a political organisation such as a municipality or a region. In contrast, the independent organisation has more space within which to manoeuvre and a clear mandate to manage the interests of the project, and is therefore better equipped to navigate through actors’ differing interests.

•

An independent organisation is seen as a more neutral actor and is therefore potentially a better bridge-builder between actors. The case studies show that several of the independent institutions (even when they are primarily sponsored by the municipality and work closely with them) feel that it is a great advantage for them that other actors in the city region see them as a neutral and impartial actor. This gives them very different and far better opportunities to enter into dialogue with project participants and to bring the actors together.

Respondents particularly mentioned this neutrality as an advantage when they trying to build bridges between public authorities and the business sector.

•

An independent organisation can be less risk averse and more flexible. The case studies point to another advantage of anchoring projects in independent organisations: As independent units with their own budgets and a more flexible management structure, they are able to take more risks and to be more ambitious than organisations like municipalities that have to consider a broad range of areas of responsibility and political interests. Moreover, some respondents point to the fact that the independent organisation, unlike municipal and regional authorities, is not characterised by a zero-error culture and therefore allows for greater experimentation and risk taking.

The independent organisation is also smaller and thus more flexible, making it easier for the organisation to adjust its activities and use of resources in response to changes in the project or in the outside world.

Business Region Göteborg in Gothenburg is an independent company. Among other things, this means that the organisation is used by industry in a number of respects, because firms see the organisation as a neutral actor rather than the prolonged arm of the municipality. For instance, Business Region Göteborg is included in confidential considerations by the companies, and the organisation often acts as a bridge or gatekeeper between firms and the public authorities. This includes establishing contact with the job centre to help recruit employees for new businesses. Other examples are helping businesses with legal aspects, as Business Region Göteborg can make contact with relevant public actors, for instance regarding city planning.

The Brainport collaboration in Eindhoven is also established as an independent organisation. This means that it is flexible when it comes to initiating projects and ensuring their implementation. The projects become more dynamic and are not hampered by unnecessary bureaucracy. Also, they become more ambitious, and in practice Brainport has been able to implement initiatives, which the individual municipalities do not have the resources to pursue.

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Organising and anchoring collaboration within the city region

Nottingham Regeneration Ltd. (NRL) is an example of an independent organisation in Nottingham. The rationale behind the establishment of NRL was to create a bridge between the municipal city planning department and private engineers and developers.

One respondent emphasises that NRL “are the people who make things happen”. The municipal employees shape the district plans, but they do not contact private businesses themselves in order to establish whether they are interested in buying or developing land. People also point out that NRL helps reduce risk for private investors, because NRL keeps them abreast of planned improvements to the infrastructure and other factors that might influence the value of their investments. NRL has an important part to play because businesses think of the organisation as an unbiased actor who has the interests of the business sector at heart.

5.3 Find the right balance between bottomup and top-down initiatives Good ideas for growth can come from top-down initiatives from e.g. the municipalities as well as from bottom-up initiatives from e.g. citizens and firms in the city. Moreover, many growth initiatives are realised through an ongoing and productive interaction between bottom-up and topdown processes.

Much of this report focuses on how municipalities and regions can act as catalysts for and support growth, but the case studies also show that many ideas for growth come from so-called bottom-up initiatives, that is, from citizens and businesses of the city. The cases also show that there is no standard solution as to what works, but that successful growth initiatives can come from both bottomup and top-down initiatives. In recent years we have seen greater openness in urban development policies and strategies towards the public, and we see an increased inclusion of citizens, for instance in connection with urban renewal. At the same time, there is a growing recognition that the good urban development policy not only

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includes the authorities, the business sector and local knowledge institutions, but also committed citizens and citizens’ groups in the local community, both in the development and the implementation of growth policies and initiatives.

The two examples below illustrate how bottom-up and top-down processes can support each other in order to create growth in a city, whether the catalyst comes from the municipality or from the growth layer of the city.

Here we present two different varieties of successful cluster development: In Freiburg the “green cluster” was catalysed by local businesses, but supported by the municipality, while the situation was opposite for the biotech cluster in Turku.

In Freiburg, the city’s green focus has very much been characterised by bottom-up processes. For example, the establishment of a cluster for firms within green energy and sustainability was undertaken on the initiative of local businesses, who wanted to become more intimately associated with the city’s green and sustainable profile. It was thus the business sector’s wish for a formalisation of the collaboration with the public authorities and a platform for joint marketing of the city that led to the municipal effort to establish the green cluster.

In contrast, the biotech cluster in Turku was the result of a clear wish on the side of the municipality to strengthen the growth potential of the city by bringing together and supporting a number of existing R&D activities within biotech and medical technology in the business sector and knowledge institutions of the city. The municipality was thus the engine behind the process that lead to the development of a well-functioning biotech cluster through close subsequent collaborative efforts involving local industry and research institutions.

Organising and anchoring collaboration within the city region

5.4 Strengthen and support growth initiatives via public involvement Efficient public involvement can contribute to the implementation of more visionary and sustainable projects and strengthen the anchoring and ownership of the project in the city. There are therefore advantages to be had by adopting a proactive strategy for public involvement, where the citizens’ input are considered an integrated element of the city’s growth strategy and initiatives.

•

Integrating public involvement as a value-creating element in urban development and growth. A proactive strategy for involving citizens in projects opens up for a more efficient use of citizen inputs than a defensive strategy where citizens are e.g. invited to a dialogue meeting and presented with a strategy or project that is all but complete.

•

Identifying the best way to include citizens in a given process. For instance by hosting “open calls” for ideas where all interested parties can contribute with suggestions. Such events can also be used to promote projects and stimulate public involvement. Alternatively, the city can organise more traditional dialogue or discussion meetings, idea workshops or other events that are either open to the general public or targeted at certain citizens’ groups, grassroot organisations, or the city’s business sector. Moreover, relevant actors, such as representatives from organisations, businesses or ordinary citizens, can be involved more directly in projects via focus or advisory groups. The choice of inclusion method depends on the purpose and time frame of the project, on which stakeholders are relevant to include, and on how they are expected to contribute. Whichever method is chosen, it is important to secure efficient communication and a matching of expectations early in the process, so that the involved citizens or businesses know and understand the process and conditions for their inclusion.

•

Involving the citizens early on in the process. This enables relevant citizens and citizens’ groups to generate valuable inputs from the very beginning of a project. However, this presupposes that the city identifies and includes relevant citizens at the very beginning of the project.

•

Following up on public involvement processes. The case studies indicate that it is very important to supply clear information on the use and value of the input collected through public involvement processes. This helps strengthen the sense of ownership of the project among the citizens

In the previous section, we looked at the importance of a good interlpay between top-down and bottom-up processes for the development of growth initiatives in the city region. In this section, we take a closer look at how bottom-up processes can be strengthened and used efficiently.

The case studies show that effective public involvement can be a strong tool for growth-promoting urban development. Moreover, public involvement can be used as an integrated element in urban renewal projects or in cities’ efforts to attract big events like highprofile cultural or sporting events.

The cases also show that public involvement leads to more ownership of projects in the city, thus supporting their anchoring.

However, public involvement in urban development and growth often takes the form of a reactive process, where the inclusion of citizens is seen more as a necessary evil than an integrated, value-creating element. This means, for instance, that citizens are brought in late in the process, or that the way in which they are involved in is not optimal.

However, the case studies indicate that there are considerable advantages to be had by adopting a more proactive strategy for public involvement, e.g. by:

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Organising and anchoring collaboration within the city region

and strengthen their incentives to contribute to similar processes in the future.

In Groningen, student involvement has had a big impact on a number of investments. For instance, the Wireless Groningen initiative, which involved the establishment of a wireless network in the whole of Groningen, was created on the basis of a growing demand from the students of Groningen University who demanded an ambitious policy in that area. After several meetings where the subject was discussed with the students, Groningen University contacted partners from the Groningen Agreement, and a joint initiative was launched via a dedicated organisation, Wireless Groningen.

Freiburg has several examples of public involvement in the city’s development projects and political processes. Freiburg’s commitment to sustainability was especially driven by public involvement. Citizens’ groups demanded that the politicians defined ambitious goals and standards for the city’s general approach to environmental sustainability. At the same time, the resident organisation Forum Vauban, the engine behind the public involvement in the development of a new, award-winning neighbourhood, was honoured as a “best practice” example of the results that can be created by involving committed citizens in urban planning. The successful public involvement in urban planning processes has also paved the way for more public involvement. The citizens of Freiburg have thus been given the chance to be involved in the city’s budget negotiations and thereby get a more direct influence on central decisions made in the municipality of Freiburg.

In competition with other Finnish cities, Turku was named the cultural capital of Europe 2011. Public involvement was a vital part of the city’s efforts to secure this title. In developing its original application, the city included a broad variety of stakeholders by establishing an advisory board with more than fifty people. This broad included people from the academic world, the business sector and authorities, elected representatives, artists, journalists etc. Moreover, particular emphasis was

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placed on a bottom-up approach to the process, which meant that the city hosted special events and debates that interested citizens and organisations could attend. At the same time, the city hosted workshops in neighbouring cities, to ensure that the region as a whole was included in the process. Moreover, a so-called “open call” initiative was launched, where citizens could offer suggestions to potential projects to be undertaken as part of the “cultural capital”-year. Thirty-five “open call” suggestions were included in the application. When Turku was awarded the title, another “open call” was issued. Ultimately, 75 percent of the program was established on the basis of suggestions gathered through these “open calls”.

Organising and anchoring collaboration within the city region

5.5 Support the social infrastructure of the city region The case studies show that it is possible to support innovation and development in a city by strengthening its social infrastructure. Firstly, it is possible to strengthen diversity and interaction between the city’s actors by requiring or rewarding interaction and collaboration.

Secondly, shared platforms and designated meeting places for the actors of the city can also contribute to the development of coherent and boundary-crossing strategies and efforts by bringing together actors in new, neutral forums based on shared interests.

The importance of a well-functioning social infrastructure for innovation in the city has already been emphasised. A social infrastructure is well-functioning when the city is characterised by strong personal relations and shared interests across organisations, facilitating an open and trusting exchange of ideas and knowledge.

This is an important engine of city development, because new ideas and projects basically happen when people meet and share and discuss their ideas and experiences.

The key to innovation lies in the degree of variety between the actors (that is, the diversity of the competencies and experiences they bring to the forum) and the degree of interaction between the actors (that is, how well they complement each other, and how much and how efficiently they interact).

The challenge is to bring actors with complementary competencies and insights together in an efficient manner. This opens up for new connections to be made between the resources of the city. In other words, the aim is to bring assets and strongholds of the city together in new ways that can contribute to growth. Medium-sized cities have a particularly good starting point for promoting the development of the urban growth system through a better social infrastructure, because the strongest personal ties are typically found in the local community where people work and live. In medium-sized cities there are often strong networks among central

11 See e.g. Lorenzen. (2001). Localized learning and policy: Academic advice on enhancing regional competitiveness through learning. European Planning Studies 9(2): 163-185; OECD. (2001). Cities and regions in the new learning economy.

actors, which makes it easier to identify and bring together actors than in e.g. a metropolis. 11 The results of the project indicate that it is possible to bring innovation and renewal to a city by strengthening its social infrastructure. The case studies show that cities can strengthen diversity and interaction between the city’s actors by requiring or rewarding their collaboration. The cases also show that shared platforms and designated meeting places for actors in the city can contribute to the development of boundary-crossing strategies and projects by bringing together relevant actors around shared interests in new forums.

Some possible ways in which the social infrastructure in a city can be strengthened are: •

Demanding – or creating incentives for – interaction between actors. For example, the city can enter into binding collaborations with project participants that involve dialogue or collaborating with other actors. The city can also support projects or initiatives carried out in collaboration with certain actors (such as knowledge institutions or businesses). Another possibility is to support short-term, temporary projects between actors (such as pilot projects) in order to stimulate and fund experimentation with potential collaborations.

•

Creating efficient meeting places that further and support interaction. If actors who do not normally meet, are to be brought together, the city can create designated meeting places that these actors have an interest and an incentive to participate in. Such meeting places might for instance assemble actors within a particular industry sector, or actors working on certain themes within urban development or other focus areas in the city region. The meeting places might for instance take the form of morning meetings, short and focused workshops, or larger conferences for invited participants.

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6 Support the city’s growth through collaboration across city regions In this chapter we move away from collaboration within the city region and move on to intercity collaboration, that is, collaboration across city regions. This chapter will present a number of lessons learned, focusing on how cities can further or support growth through intercity collaboration, and how this kind of collaboration can be organised and anchored. These lessons spring primarily from the nine case studies, but also from other parts of the project.

6.1 Collaboration can support the city region’s growth and adaptability Collaborations between cities and city regions can support growth policies and initiatives in the city region.

Well-functioning intercity collaborations have a number of advantages, including (1) a basis for exchange of experience and learning, (2) the establishment of a strong, shared geographical axis in the city landscape, (3) a united front with which to strengthen the general influence of the cities and their ability to attract investments, businesses and talent, (4) shared marketing and city branding, (5) targeted export growth and R&D collaboration, and (6) a stronger adaptability through knowledge bridges to the outside world.

The case studies point to a number of potential advantages from collaborating with other cities and city regions: •

A basis for exchange of experience and learning. As cities face many of the same challenges and often work on similar projects, they can benefit greatly from more or less formalised structures for exchange of experiences and knowledgesharing among cities.

•

A shared axis in the city landscape. A way in which mediumsized cities can compete more efficiently with metropolises in order to attract investments, businesses and economic activity is by entering into alliances with each other. Some cities describe it as entering into a strategic alliance in order to draw a new “axis” in the city landscape, e.g. by carrying out ambitious infrastructure projects or shared marketing, business or cultural activities, that tie two cities more closely together, thus creating (or giving the sense of) a stronger, combined region.

•

A united front to strengthen the general influence and attractiveness of the cities. Just as cities in the same city region can collaborate in order to establish a stronger, united front in the national or international city landscape, city regions can collaborate in order to strengthen their general political visibility and influence. Collaboration between cities can thus be used to increase the bargaining power of the cities and improve their ability to attract economic activities and funding, both nationally and internationally.

•

Joint marketing and city branding. Just as shared marketing can help cities within a city region strengthen their general profile and visibility, city regions can collaborate in order to improve and communicate their image in the eyes of the outside world. This can help attract e.g. business, investments and large cultural or sporting events to the cities.

Even though the project shows that collaboration within the city region can have major influence on the city’s growth, the case studies also indicate that there are many advantages to be had by collaborating with cities outside the city region.

There are many forms of collaboration, as they can include both close and faraway cities, and cities in the same country or abroad.

The choice of partner depends, among other things, on the purpose of the collaboration, on how close the cities are geographically, on how easy it is to move between them, and on how they can best support each other’s growth potential and targets.

Moreover, there are many degrees of formalisation. They span from casual meetings and twin city collaborations to long-term and financially binding strategic partnerships. Again, the choice of partnership depends on the purpose of the collaboration.

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Support the city’s growth through collaboration across city regions

•

•

Focused export promotion and R&D collaboration. The case studies also show that cities use international city collaboration to support export promotion and/or joint research and education efforts. The case studies contain several of examples of how cities enter into active and multidimensional collaborations with faraway cities (e.g. in China), which has facilitated and strengthened their businesses’ and knowledge institutions’ strategic access to important foreign cities. These collaborations also help attract foreign businesses to the cities.

Strengthened capacity for innovation and adaptation through international knowledge bridges. One of the major challenges facing successful cities is to avoid resting on their laurels.

It often happens that a city has built a position of strength in a particular research area or industry sector, only to see its position eroded because the city failed to notice or adapt to important changes in the global technology and business environment. However, collaboration with other cities, e.g. through networking among businesses or research collaborations or through student exchange programs, can play an important role in establishing “bridges” for the transfer of knowledge and ideas from abroad. Such bridges can therefore help the city stay abreast of significant developments in the outside world.

However, the abovementioned advantages are not a guaranteed outcome of intercity collaboration. The case studies point to factors and initiatives that increase the likelihood that collaboration with either close or faraway cities till contribute to increased growth in the city region. These factors and initiatives are described in more detail in the remainder of this chapter, which also takes a closer look at the key advantages of collaborating across city regions.

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6.2 Use knowledge bridges and informal collaboration to encourage innovation Connections to other cities can support the city’s ability to adjust and renew its growth system, in response to changes and developments in the outside world.

Such connections can be established through e.g. municipal networks and exchange of experience with other cities, as well as through the establishment of “knowledge bridges” in the shape of e.g. business networks or research and education collaborations between knowledge institutions.

As described in the previous chapter, every successful city runs the risk of resting so heavily on its existing positions of strength that it fails to notice or respond to significant changes in the outside world that might threaten its long-term growth. For example, a city that is recognised for its achievements within sustainable energy or infrastructure development can be outmatched by other cities, or its position of strength can become outdated due to new scientific or technological developments. It is thus important to establish connections to other city regions and to the rest of the world through which the city and its actors can keep updated on important developments, so that activities and the growth system in the city may be adjusted accordingly.

There are two overall ways in which a city can connect with the outside world. Firstly, the city can enter into collaborations on exchange of experience and learning with other cities, e.g. through the so-called twin city collaborations or networks for actors that work with urban and business development either on a local or a regional level. The city can also gather experience from other cities that have achieved “best practice” in a relevant area. This kind of collaboration can be both national and international.

However, the challenge of these kinds of collaborations is often that they become too broad in their focus or in the range of participants. This diffuses the relevance of the collaboration for many cities and can increase the degree of bureaucracy connected with the collaboration. The case studies indicate that the most efficient collaborations are those that centre on a few, central themes and a smaller, but relevant, group of selected actors.

Support the city’s growth through collaboration across city regions

For instance, Freiburg participates in a collaboration focusing on environmental sustainability around the Aalborg Charter. In this collaboration, the participants exchange knowledge and experiences on their efforts in the field of sustainability. The participating cities exchange knowledge on how local city administrations implement sustainability in urban development.

However, respondents say that it is hard to unfold the collaboration, and that its full potential has yet to be realised.

We also find examples of knowledge-sharing and learning in other intercity collaborations. The collaboration between Nottingham and Karlsruhe has e.g. led Nottingham to organise its infrastructure for public transportation based on a successful model developed in Karlsruhe. Apart from adopting Karlsruhe’s infrastructure model, Nottingham has also learned from Karlsruhe’s experiences and adjusted the infrastructure model in order to reach a better solution for their city.

The university in Eindhoven has entered into collaborations with a number of foreign universities, including Manipal University in India and Northeastern University in Shenyang. The technical university of the city, TU/e, has also, together with the Netherlands Design Institute, entered into a collaboration with the National University of Singapore.

Gothenburg’s twin city collaboration with Shanghai is an example of relations between cities can be used in focused export promotion. Through this collaboration, which was established more than twenty years ago, Gothenburg has developed a good relationship with the Shanghai city administration. This means that the local city administaiton helps provide contacts and facilitate export promotion in Shanghai for Gothenburg and Swedish companies. According to respondents, this has made a big difference for Swedish businesses seeking to start up activities in China. Moreover, the collaboration has helped attract Chinese businesses to the Gothenburg region.

Secondly, as mentioned in the previous section, cities can establish knowledge-bridges to other cities and regions. The case studies indicate that initiatives to establish informal connections to other cities – e.g. through conferences or networks for businesses in related sectors, or support for collaboration on research or education between knowledge institutions – can create important “bridges” to knowledge and ideas abroad.

Focused export promotion and R&D collaboration through international intercity collaboration can also establish knowledge bridges while simultaneously strengthening international business opportunities for the city’s industry. Such collaborations help facilitate access to knowledge and personal networks, which can help citizens and businesses of the city gather vital knowledge on new growth opportunities and international developments. Knowledge bridges can thus help the city stay updated on significant changes in the outside world and continually pave the way for (preferably proactive) adjustments and adaptations of the city’s growth system.

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Support the city’s growth through collaboration across city regions

6.3 Find the right balance between cooperation and competition Cities compete with each other when it comes to attracting citizens, businesses and investments. But the case studies indicate that cities can improve their position in the international competition for resources for economic growth by entering into strategic collaborations and alliances with other cities.

However, it is important to ensure that intercity collaborations and alliances are considered in relation to the city’s general growth strategy in order to reap the maximum value for the city’s development.

Cities compete with each other in order to attract skilled labour and resourceful citizens, businesses, investors with risk capital, and large, international cultural and sporting events. The competition between cities for resources that can strengthen city growth is national as well as global.

Previously, competition between cities was seen as a “winner takes all” situation, where one city won all the glory, while the others lost. However, there is a growing recognition that cities can strengthen their possibilities for economic growth and attain a stronger position in the national and international competition between cities by entering into strategic collaborations and alliances with other cities.

Such collaboration is about creating the best possible conditions for the cities’ growth through e.g. shared business-promotion initiatives, collaboration on education, or shared marketing.

The collaboration between Saarbrücken and its neighbouring cities in France and Belgium is an example of cities collaborating rather than competing to strengthen their combined growth potential. The cities have discovered that collaboration on attracting businesses, students and academics has led to advantages for all the cities involved. These mutual benefits are the driving factor that motivates the collaboration, based on the idea that e.g. establishing a business in one of the partner cities will strengthen the region as a whole and lead to positive effects that can further strengthen collaboration and complementarity between the cities.

6.4 Create a strong, united front through formal intercity collaboration Cities and their city regions can create a stronger, united front by entering into focused alliances and partnerships with each other. For example, collaboration can strengthen the cities’ individual as well as shared chances of attracting businesses, students, labour or international events such as cultural or sporting events. Collaboration also gives the cities the opportunity to increase their influence on the development of national or international policies and initiatives.

The case studies give a number of examples of how cities and city regions can strengthen their combined influence and attractiveness by entering into focused collaborations and alliances.

As mentioned in the beginning of this chapter, cities can enter into collaborations in order to establish a shared axis in the city landscape. As such, medium-sized cities can strengthen their visibility and competitive edge. The collaboration can for instance be based on joint infrastructure development or shared marketing, business or cultural activities.

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Support the city’s growth through collaboration across city regions

Such collaborations can be entered into with other medium-sized cities, but also with metropolises, so that a medium-sized city can use its proximity to a metropolis strategically rather than regard it as a weakness. In this case, the aim of the strategic collaboration should be to strengthen and signal complementarities and connections between the medium-sized city and the metropolis, just as the previous chapter described how to strengthen complementarity and connections between the core city and other cities in its city region.

Gothenburg has entered into a collaboration with Oslo in order to create a shared axis in the Northern European landscape.

The aim is to establish a more coherent region and make it more attractive and competitive in order to attract more businesses. In this connection, the focus has been on a number of target areas, including bio- medicine, where the ambition is to make the region a leading biomedical region in Europe. The collaboration also concerns infrastructure development in the region and includes objectives to establish a high-speed train from Oslo to Berlin before 2019.

Cities can also collaborate in order to strengthen their shared influence, for instance by strengthening their political visibility and influence nationally or internationally. Intercity collaboration can thus be used to strengthen the cities’ barganining position and their ability to attract economic activity and funding internationally.

The case studies especially indicate that it can be advantageous to make alliances across national borders in order to be able to apply for EU funding for intercity collaborations or joint, international development projects.

A central challenge for many medium-sized cities is that they feel that they are far away from the political centre in the capital and thus have to work hard to strengthen political attention and priorities in their area. Intercity collaboration can increase the shared visibility and influence of the cities and also support the coordination and implementation of local and regional growth-promoting initiatives.

Saarbrücken has shown that intercity collaborations with neighbouring cities (also across national borders) is an important way in which medium-sized cities can communicate their challenges and needs more effectively to national governments.

Core Cities is a collaboration between the eight largest English cities outside of London. The Core Cities organisation works to influence the national government and the framework it sets for the cities’ development. The collaboration has enabled the cities to carve out a position that none of them could have attained on their own. Core Cities works to put the regional cities’ contribution to the national growth on the agenda. The organisation also works to change national legislation in areas where the cities believe that existing laws hamper their opportunities for growth. This has for instance led to a change in the national tax legislation, so that it has become easier for the cities to borrow money, using the future earnings from expected growth as a guarantee. Core Cities does not try to obtain financing for the individual city, but instead seeks to strengthen the overall framework conditions for all the cities. The individual city then has to compete for means on its own: the collaborations seeks to make “a bigger cake” before the cities can compete to get the largest pieces of it.

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Support the city’s growth through collaboration across city regions

Last, but not least, the case studies show that cities can collaborate on strengthening their appeal to e.g. businesses, investors and international events, for instance through shared initiatives or branding.

With a stronger, shared profile and visibility, as well as perhaps coordinated and complementary growth initiatives, city regions can collaborate to improve and communicate their strengths and competitiveness to the outside world.

For instance, Turku used its good relations with other cities actively in its application to become European cultural capital in 2011. The city hosted workshops with twin cities and other partner cities such as Tallinn, Stockholm, Gothenburg and St. Petersburg, which led to the initiation of several concrete projects that might support Turku’s application. Apart from Finland, it was also Estonia’s turn to host a cultural capital, which encouraged Turku to coordinate its application and plans with the Tallinn and Tartoo, who were both competing for the Estonian title. As a result, ideas for shared projects were incorporated into Turku’s application. When Turku and Tallinn were named as hosts, the plans were realised and boosted, which has resulted in shared projects within theatre, church music, performance art and other fields.

Karlsruhe and Saarbrücken have entered into collaborations across national borders in order to, among other things, strengthen mobility across Central and Eastern Europe by establishing high-speed train connections and strengthening growth by increasing the mobility of labour and companies across collaborating cities. Both kinds of collaboration have shown that there is much support from EU to be gained for such collaborations. Because they deal with specific collaborative projects that span European borders, they embody core principles behind the EU, and are therefore eligible for funding.

Respondents point out that multinational collaborations have a better “case” when it comes to applying for EU funds than purely national projects. Moreover, such projects are often larger and more ambitious than national projects.

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6.5 Ensure a professional organisation and management of the collaboration One risk of intercity collaboration is that the gains of the collaboration drown in coordination difficulties and poor management. If the aim of the collaboration is to coordinate cities’ business promotion or marketing initiatives, or to support shared lobbying efforts, it is especially important to ensure a professional and committed management and set clear goals for the activities and results of the collaboration.

Intercity collaboration risks falling prey to coordination difficulties and sub-optimal management. Large, international collaborations in particular run this risk, and the costs of participating can therefore quickly exceed the benefits.

However, the case studies indicate that many of these difficulties can be reduced considerably if the collaboration is managed by a professional management, either in a separate organisation or anchored in existing organisations involved in the collaboration.

Professional management also helps set clear goals for the activities and results of the collaboration.

If the collaboration is extensive – e.g. if the goal is to coordinate cities’ promotion of trade or marketing, or to support a shared lobbying effort – it is especially important to establish a professional and dedicated management.

Support the city’s growth through collaboration across city regions

In especially two of Saarbrückens intercity collaborations, SaarLor-Lux and QuattroPole, the importance of the professional organisation of the collaboration has been very obvious. In the Saar-Lor-Lux collaboration between the regions of Saarland in Germany, Lorraine in France and Luxemburg, the collaboration is managed by the top authorities of the participating regions.

The participation of top-level decision-makers means that ideas can be quickly translated into action, and it also signals that the collaboration is a key priority for all participants.

The intercity collaboration QuattroPole – which includes Metz, Luxembourg, Trier and Saarbrücken – is managed by the four mayors of the cities who each support the collaboration with a secretariat at the city hall. This means that the collaboration has a clear authority and process for decision-making, and that the cities’ budgets can supply the means to implement decisions, pending political goodwill.

6.6 Active leadership leads to greater influence The case studies show that – especially in larger, international collaborations – active leadership leads to benefits that strengthen the city’s advantages from participating in the collaboration. These benefits include increased influence on the content of the collaboration and the combination of participants, as well as greater exposure both within and outside of the collaborative venture.

A significant challenge in intercity collaborations, especially if they are international, is to ensure that it pays off to partake in the collaboration. The costs of participating can quickly outweigh the gains, particularly if the focus or extent of the collaboration is unclear.

the city’s own commitment to the collaboration. The case studies indicate that these two factors and thus the value of the collaboration for the city are strengthened considerably if the city takes on an active role in the leadership of the collaboration. Examples from the case studies show that taking an active role in the establishment and management of intercity collaborations leads to a number of advantages, such as: •

Considerable influence in the start-up phase, e.g. on the organisation of activities and the set of participants in the collaboration.

•

Considerable influence on the ongoing implementation and adjustment of the collaboration, including its content and focus.

•

Greater visibility in the collaboration – both internally in relation to partners and externally in relation to investors and other stakeholders.

For Karlsruhe, the city’s and especially the mayor’s active participation in a grand EU project on infrastructure and the development of a high-speed train connection in Europe has had a big impact on the city. The mayor’s active leadership of the project meant, among other things, that Karlsruhe was not left out of the train connection, as was originally the plan. The active leadership also provided Karlsruhe with influence on the design of the project and enabled the city to target the project to Karlsruhe’s aims and strengths. As Karlsruhe was already known for its efficient transport infrastructure within the city, this international collaboration has helped to further strengthen the city’s competitive advantage on infrastructure issues.

What can a city do to ensure that its participation in an intercity collaboration creates value? Firstly, it must ensure that the activities launched as part of the collaboration are generally of a high quality and are relevant for the city. Secondly, it is vital to maintain

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Appendix Overview of the case study cities Eindhoven

• Samenwerkingsverband Region Eindhoven (SRE), a collaboration between 21 municipalities in the Eindhoven region • Brainport, a triple helix partnership within the city region • High Tech Campus, science park

Groningen

• Groningen Agreement, a vision and binding partnership between key actors in the city region • Joint platforms, e.g. City of Talent and Healthy Ageing • Wireless Groningen, an initiative that developed (in part) from the Groningen Agreement

Gothenburg

• Business Region Göteborg, an industry-oriented collaboration between cities within the region • Göteborg & Co., a marketing organisation • Biogas Väst, a local collaboration focused on biogas • International collaboration with Shanghai

Turku

• Turku Bio Valley, a biotechnological cluster developed through a triple helix collaboration, and the Turku Science Park • Turku on Fire: Turku as the European Capital of Culture 2011, including international collaborations with Tallinn and St. Petersburg and collaboration with other cities witin the region

Manchester

• Associations of Greater Manchester Authorities (AGMA), a collaboration among 10 municipalities, and Greater Manchester Combined Authority • Manchester Knowledge Capital (M:KC), an organisation that promotes innovation in the region • The Manchester Independent Review (MIER) • Core Cities, a collaboration among England’s major regional cities

Nottingham

• Greater Nottingham Partnership, a collaboration between cities within the region • Accelerate Nottingham (ICT initiative) • Nottingham Regeneration Limited (urban regeneration and renewal) • International collaboration with Karlsruhe • Core Cities, a collaboration among England’s major regional cities

Freiburg

• University of Excellence – a national initiative which includes the University of Freiburg • City development through a dedicated, long-term focus on sustainable energy sources (particularly solar power), collaboration within the city region, and public involvement

Saarbrücken

• QuattroPole, an international strategic alliance between Trier, Metz and Luxemburg • EurodistrICT SaarMoselle, an international collaboration between the Moselle and Saarland regions • Eurozone Saarbrücken-Forbach, an international business and service park

Karlsruhe

• The Karlsruhe infrastructure model, a best practice example • Magistrale for Europe, a trans-European collaboration for the creation of a high-speed railway line • Cluster Linked Over Europe (CLOE), an international collaborative network between clusters

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