Competitive cities and global value chains
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In its white paper on Competitive Cities and their Connections to Global Value Chains, the Global Agenda Council on Competitiveness identified policy elements that can be put in place at the city level to upgrade products and processes and foster participation in international production networks. Listed below are some of its main findings:
Inserting the productive sector into global value chains (GVCs) can be central to a city’s competitiveness. GVCs provide a vehicle for cities to take part in the global economy through trade and investment; they can contribute to making cities vibrant magnets for innovation, productivity increases, and employment.
Participating in GVCs requires a sustained effort by cities to re-invent and reposition themselves. This participation is not a matter of making just one major push to insert the city’s productive sector into GVCs. City leaders need to scan the global and local economic horizon to identify initiatives that can most enable their cities to catch the momentum of economic forces.
Creating robust soft connectivity advantages to build on hard connectivity is essential to improving participation. Access to a qualified and educated labor force, innovation and research and development policies conducive to upgrading, digital infrastructure to deepen connectivity, and trade facilitation and logistics policies to expedite movements of people are key elements of successful GVC participation.
Successful cities have flourished in a context of openness. Open trade and investment policies pave the way for connecting cities to the opportunities presented by international markets; a city open to talent from other regions and from abroad enhances its attractiveness to GVCs.
Understanding how GVCs operate and how investors select their investment destinations, with a focus on inclusiveness and flexibility, should guide policymakers’ competitiveness decisions. City leaders can maximize the impact of their investments in competitiveness by addressing bottlenecks and challenges that are particularly relevant in order to attract and facilitate the operation of GVCs, as well as to foster value addition in the city. Inclusiveness by opening opportunities to all members of society and flexibility to quickly adapt to constant changes in production networks determine the sustainability of successful competitive cities.
Contributed by Anabel Gonzalez, Global Agenda Council on Competitiveness, based on the white paper Competitive Cities and their Connections to Global Value Chains by the Global Agenda Council on Competitiveness. For the full paper, see http://www3.weforum.org/docs/WEF_2016_WhitePaper_GAC_Competitive_Cities_.pdf.