Key Success Factors for World Cities and Urban Growth

Introduction: Cities as Engines of Economic Growth

Since the dawn of the Industrial Revolution, cities have been drivers of economic growth. The critical mass of resources — labor and capital — that cities represent allows them to deliver economic production with a high degree of efficiency. However, this efficiency and productivity relies on heavy infrastructure investment to support the city. Critical infrastructure includes transportation, utilities, governance, law enforcement, and education, each of which contributes directly to the economic health of a city. In recent years, there has been a push to bring other components of infrastructure into focus as well, such as living space, recreational space, and sustainability. This paper analyzes the key success factors of the world's cities and draws conclusions about how governments can foster successful cities in the future.

Measuring Urban Success

There are many different measures of success for cities. The most basic come from macroeconomics — GDP, unemployment rate, and investment among the more prominent. De Leon and Boris (2010) argue that additional measures are needed, grouped into fourteen categories including poverty, health, natural environment, human rights, and well-being, alongside traditional economic indicators. Benfield (2011) supports the premise that a blend of measures contributes to the success of an urban area, including a sense of common identity among residents, the ability to withstand changes and shocks, and the inclusiveness of the city. The argument is that these categories are critical to sustaining long-term economic growth. The Global Cities Index uses a series of measures — including business activity, human capital, information exchange, cultural experience, and political engagement — in its classification of urban success (AT Kearney, 2011).

Antecedents of Long-Term City Success

Brooke (2004) outlines the antecedents of success for modern cities: diversity, good governance, a skilled workforce, quality of life, connectivity, physical renewal, business culture, brand, and city-region relationship. For cities to maintain long-run success, their leadership needs to deliver these antecedents — yet there are many underlying factors involved in building them.

Governance is the first place to start. A city relatively free from corruption is better positioned to create a business-friendly environment. Quality of life and a skilled workforce are also closely related. In the most vibrant countries and regions, skilled workers tend to be mobile, so a city must deliver not only employment opportunities but also a high quality of life to attract the best talent. This means safe neighborhoods for families, educational opportunities for children, a clean environment, and ample recreational and cultural amenities. Cities with these attributes develop a strong brand that helps draw both businesses and workers.

Diversity presents an interesting challenge because it relates in part to national immigration policies, but city governments can help foster diversity through policies of inclusiveness. It is worth noting the work of Niles Hansen (2001), who argued that very large cities experience domestic population outflow and therefore must rely on international immigration to thrive. A city like Miami thrives not because it excels in all other factors, but because it has attracted a large foreign-born population. Those communities bring economic ties to their home countries in South America and the Caribbean, from which the city derives substantial economic benefit.

Infrastructure and Economic Feedback Loops

Cities cannot produce strong economies simply by their very existence. The role of the city is to lay the foundation for economic growth. Transportation and communication infrastructure is essential to this growth because it facilitates the flow of goods and ideas — and it is this flow that generates income for a city. This creates a positive feedback loop, where increased revenue allows for increased infrastructure spending.

Networked spaces were critical to urban development throughout much of the twentieth century, and their development was largely the responsibility of government (in the case of transportation) or public monopolies (in the case of communications). Governments engaged in long-term infrastructure projects in order to attract investment and residents, allowing them to grow their tax base. Graham (2000) argues that the late twentieth century saw a shift toward greater private investment in infrastructure, particularly in communications. Reduced centralization of urban planning is also an issue — a result of urban sprawl that places development beyond the reach of core city governance. Kundu (2001) notes that governments in the developing world must still play a critical role in infrastructure development in order for their urban areas to remain competitive.

Conclusion

As the world becomes more urbanized, it is essential that urban planners develop a better understanding of how cities become successful. While there is disagreement on the details, most analysts agree on the broad strokes. A city can experience a positive economic feedback loop if it attracts talented people from around the world through a high quality of life, provides them with the strong transportation and communication infrastructure needed to support business, and maintains the good governance necessary to make smart long-term decisions. The result is the efficient and effective use of the revenue generated from this economic activity — and a foundation for sustained urban prosperity.