Prof Greg Clark CBE
Senior Non Resident Fellow
Brookings Institution
Committee for Sydney
Sydney March 2017
Origins of the Global City: Trade and Connectivity
•
1300 BC Phoenicians
Tyre, Syracuse, Carthage
•
500 BC Persian Royal Road
Babylon, Susa, Ephesus
•
400 BC The Silk Roads
Ctesiphon, Samarkand, Balkh
•
1300 AD The Mediterranean
Venice, Barcelona, Genoa.
•
1300 AD Hanseatic League
Hamburg, Lubeck, Bruges
•
1300 AD South East Asia
Canton, Melacca, Surabaya
• Trade led to Innovation = Transport, Exchange, Currency, Insurance, ….
• Innovation led to Cities = specialisation, clustering, agglomeration,
• Cities organised to promote trade = Connectivity, Logistics, Merchants
183 Pages, 7 Chapters
i. Navigating global cities.
ii. Origins: Trade and cities.
iii. Global Cities in the ancient world.
iv. Global cities in the modern world.
v. Understanding global cities. Theory and Benchmarking.
vi. Global Cities today. New wave. Why and what?
vii. Global City Futures: Challenges and leadership.
5 recurring ingredients of global cities over 5,000 years:
• Trade and connectivity
• Openness, diverse and entrepreneurial populations
• Innovation and Influence
• Discovery of new markets
• Geo-political opportunity
3
Navigation.
• 3 new trends in current cycle post 2010
• Global economic change and new dynamics.
• Rising Number of Global Cities
• Metropolitanisation
• Reaction to globalisation
• Cycles, Waves, and Paths.
• Not just Finance and business centres, Capitals or Ports.
• 3 new types: Emerged, Emerging and New.
• Cycles
• Waves
• Paths
The Royal Road ~500 B.C.
Innovations Money, road building, architecture, metallurgy, taxation,
shared language
Externalities Rise of separatist provinces, military disorganisation
Phoenician trade routes 1000BC-149BC
Innovations Ship building, glass and dye technology, alphabet and
spread of literacy, more integrated economies.
Externalities Conquest and enslavement. Regional rivalries.
Inequality
7
The Silk Roads 400BC – 1600 A.D.
Innovations Caravans, paper, algebra, gunpowder, banking, medicine
Externalities The black death, Hunnic and Mongol Invasions, religious war
8
The Hanseatic League 1250-1550
Innovations
Commercial organisation
Shipbuilding
Banking
Externalities
Restrictive trade monopolies
Self interest of individual
cities
9
Failure to adjust to new
markets
Ming Dynasty trade networks ~1400
Innovations
Navigation, Spice trade
Externalities
Failure to embrace science
and mathematical
innovations
Purges on intellectuals
High costs of wall defences
10
Atlantic Slave Trade network 1500-1830
Innovations
Improvements in navigation, shipbuilding, mercantilism, early
capitalism, spread of
Enlightenment ideals, property
rights, capital markets, canals
Externalities
Mass slavery, economic division,
piracy, social dislocation
11
Global Cities of the Ancient and Modern World: 10 Waves
•
Phoenicians, Persians
Silk Roads and Ancient roads.
•
600-1000 Post Roman Empire
Baghdad, Tikal, Cairo
•
1300 Commercial Wave
Hanseatic League, Venice, Barcelona
•
1500 Post Columbian Wave
Antwerp, Amsterdam
•
1600 Mercantilist Wave
London, New York, Buenos Aires
•
1760 Early Industry wave
Guangzhou, Boston, Manchester
•
1850 Mass Industry wave
Los Angeles, Birmingham, Bilbao
•
1945 Post War Waves
Tokyo, Munich, Singapore
•
1985 ICT, liberalism and integration
San Francisco, Sydney, Barcelona
•
2008 Techno-Globalism
3 city types: Singapore, Tel Aviv, Seoul
Global Cities of the Ancient and Modern World
• Alexandria 334BC – 1450s
Baghdad 8th-10th C
Heart of Islamic single
market. A ‘showcase’ city
open to new cultures:
progress in sciences.
• Grain and Silk Roads port. Multicultural
cross-roads and became city of
knowledge.
Guangzhou 10th-15th C
1760-1850s
China’s maritime gateway
Tea, opium, war.
13
Global Cities of the Ancient and Modern World
Amsterdam 1550-1700
Financial and trade
innovation. Colonies and
canals = European
distribution hub.
Vienna 1815-1914; 1995-Present
• From cosmopolitan capital to
Fascism. Reborn as city of
diplomacy, culture, tourism
and regional finance.
San Francisco
1970s-Present
• ICT driven by
R&D network,
quality of life
and local VC
finance
14
Understanding Global Cities: the concepts
1966-1990
1990-2005
2005-present
+ Major comparative studies (OECD, UN, WB, Brookings, MGI)
+ 250 global benchmarks and indexes
15
230 city indexes in 2016
All-round performance
91
Business, finance
and investment
Economic growth
and performance
33 1
18 2
Quality of life
46 6
Brand, reputation
and influence
Infrastructure
and transport
Culture and
lifestyle
Knowledge, talent
and innovation
Environment and
sustainability
Cost and
affordability
No. of indexes
New indexes
25 2
26 5
14 4
27 5
24 4
80
Total
230 30
16
Current Wave: Global Cities today
• London
• Tokyo
Shanghai,
Beijing,
Istanbul,
Mumbai, Sao
Paulo, Mexico
City, Joburg
• Singapore
+10-20 others
• New York
• Hong Kong
• Paris
• + Toronto, Seoul,
Sydney, Chicago,
Amsterdam.
Sydney, Toronto,
Stockholm,
Barcelona, San
Diego, Nanjing,
Brisbane, Oslo, Tel
Aviv, Cape Town,
Auckland
+20-40 others
5 Paths to globalisation….
• Trade led: Hamburg, Miami,….
• Geopolitical opportunities: Toronto, Singapore,…..
• Leverage Innovation: Nanjing, Tel Aviv,…..
• National Champions: Seoul, Santiago,…..
• Catalysts of Institutions or Events: Vienna, Nairobi,…..
18
19
ESTABLISHED
WORLD CITIES
Mumbai
Paris
London
Jakarta
Tokyo
New York
Beijing
Shanghai
Seoul
Hong Kong
Moscow
Sao Paulo
Mexico City
Dubai
Singapore
Sydney
Toronto
Berlin
Boston
EMERGING WORLD
CITIES
Santiago
Nairobi
Johannesburg
Bogota
Bangalore
Cape Town
Miami
Vienna
Barcelona
Copenhagen
Vancouver
Oslo
Auckland
Manchester
NEW WORLD CITIES
20
The New World of Cities
• ESTABLISHED WORLD CITIES
• London, Paris, New York, Tokyo,
Singapore, Hong Kong
CANDIDATE ESTABLISHED WORLD
CITIES
Seoul, Toronto, San Francisco, Sydney,
Amsterdam, Chicago, Shanghai, Beijing TOP TIER NEW WORLD CITIES
TOP TIER EMERGING WORLD
CITIES
Mexico City, Istanbul, Taipei,
Buenos Aires, Sao Paulo
2ND TIER EMERGING WORLD
CITIES
Bangkok, Jakarta, Manila,
Mumbai, Bogota, Rio de Janeiro,
Guangzhou
3RD TIER EMERGING WORLD
CITIES
Lagos, Dhaka, Karachi, Nairobi,
Cairo
Barcelona, Dubai, Berlin, Miami,
Munich, Seattle, Stockholm,
Melbourne
2ND TIER NEW WORLD CITIES
Oslo, San Diego, Auckland, Abu
Dhabi, Vancouver, Tel Aviv
3RD TIER NEW WORLD CITIES
Manchester, Lisbon, Busan,
Fukuoka, Montreal, Dublin
21
Sydney among world cities
22
Sydney
• An established world city and a new high quality of
life city.
• Hybrid of Established World City and New World
City : two different eco-systems? Like Singapore,
Toronto, Tel Aviv, Amsterdam.
• A winning city: many assets and big opportunities.
But is it prepared for 2-3 cycles of growth?
• Sydney needs to shape and manage success
• Weaknesses have to be addressed
23
Sydney’s peers
Hybrid established/new world cities:
• Toronto, Singapore
Most similar global services firms concentrations:
• Chicago, Milan
Most similar basic economic profile:
• Vancouver, Amsterdam, Tel Aviv
Most similar post-crisis performance since 2008:
Berlin, Tel Aviv, Hamburg
Other similar cities by size, scale, assets and internationalisation:
Madrid, Miami, Barcelona, San Francisco, Vienna, San Diego, Taipei, Santiago,
Source: Brookings Global Metro Monitor24
2015
Cape Town
Greater Sydney – The City Region
Key economic indicators
Greater
Sydney
Position
globally
Population
4.8
million
90th
GDP
$223bn
47th
2009-14 GDP per
capita growth p.a.
2009-14 Jobs
growth p.a.
1%
151st
1.4%
Sectoral make-up of Sydney’s economy
Sydney’s
Largest and smallest
Sector sector size
sector sizes among
compared
Size
world cities
to 14 peers
Construction
7.4%
1st
Transportation
5.8%
2nd
Business and
Finance
39.2%
2nd
Commodities
0.8%
4th
Utilities
1.9%
6th
Public Sector
Services
24.1%
9th
Manufacturing
8%
10th
12.9%
10th
Trade and
Tourism
Sydney (7.4%)
Chicago (2.9%)
Singapore (11.5%)
San Francisco (2.5%)
San Francisco (48.4%)
Barcelona (22.9%)
Melbourne (2.9%)
Chicago (0.2%)
Munich (3.5%)
Toronto (1%)
Berlin (34.7%)
Singapore (9.9%)
Singapore (23.6%)
Vancouver (6.8%)
Singapore (21.3%)
Berlin (9.7%)
25
© The Business of Cities Ltd 2015
Sydney’s key traits and spidergram
2017
2015
Image, brand
and influence
Global Firms
Increasing reputation for
investment
management and
business environment
•
Consistently high scores
across a wider mix of
brand indexes.
•
R&D/innovation fell due
to increased global
competition
•
Liveability has slipped
due to more focus on
transport and inequality.
Business friendliness
Visitor and
Destination power
Financial services
Investment
attraction
Culture and
diversity
Talent and
labour market
Transport and
infrastructure
Higher education
Sustainability
Wages
and
costs
•
Liveability
R&D and
innovation
Based on comparative performance against other peer cities
26
Sydney’s cycle of growth viz NWCs
Post-crisis economic performance
Sydney
Source: Brookings and GaWC
27
Sydney: one of the most important locations for
global corporates among medium-sized world cities
GDP ($US bns)
No of Cities
Sydney
Toronto
Vienna
San Francisco
Melbourne
Miami
Barcelona
Boston
Munich
Stockholm
Copenhagen
Tel Aviv
Berlin
Auckland
Vancouver
Oslo
Brisbane
Helsinki
Seattle
Denver
GDP per
Global Connectivity
Capita ($US
Rank (GaWC)
‘000)
IBM Most
Competitive Cities
‘International HQs’
300
300
300+
100
223
46
9
17
276
45
17
8
184
49
27
18
331
72
28
14
178
40
34
26
263
44
36
24
171
36
37
25
360
76
39
220
56
42
143
56
43
11
127
42
48
15
153
43
60
49
158
36
63
10
50
32
72
35
110
44
76
23
74
53
79
97
42
80
77
48
81
267
73
99
170
62
106
Highly globalised
corporate economy
29
28
An investment magnet
JLL
JLL Global 300
Emerging
JLL City
Investment
Trends in Real
Momentum
Intensity
Estate
Index
Commercial Cross Border
Index
Attraction
Real Estate
Index
Investment
No of Cities
Berlin
Munich
Boston
Denver
Copenhagen
Sydney
Toronto
Miami
San Francisco
Melbourne
Oslo
Auckland
Seattle
Vienna
Brisbane
Barcelona
Stockholm
Helsinki
Vancouver
Tel Aviv
EU 28, US 75, Canada
9, AP 22
1
5
12
11
6
9
25
10
16
12
14
4
14
16
8
18
300
48
32
21
39
62
23
25
37
15
44
70
102
38
60
72
53
46
91
76
90
17
13
10
36
37
11
29
32
7
23
54
58
15
45
47
43
16
62
92
247
120
25
9
20
3
14
16
6
4
21
12
16
10
2
7
20
• A major international real estate
location
• 4th in JLL Investment Intensity
Index (investment relative to
size)
• Slight relative drop since 2015
but still very strong
19
30
12
29
A top 10 quality of life destination
No. of Cities
Vienna
Berlin
Munich
Melbourne
Helsinki
Copenhagen
Stockholm
Vancouver
Sydney
Auckland
Toronto
Brisbane
Barcelona
Boston
San Francisco
Seattle
Miami
Tel Aviv
Mercer
Quality of
Living
Survey
EIU
Liveability
Ranking
230
140
1
13
4
15
30
9
19
5
10
3
15
36
39
34
28
46
66
104
2
20
28
1
10
22
24
3
7
9
4
18
31
33
49
46
37
76
Arcadis
Global
Monocle
Liveable Sustainable
Quality of
Cities Index
Cities
Life Survey
'People'
Ranking
63
11
13
4
9
5
12
14
8
29
23
100
25
4
5
8
22
3
2
5
6
12
4
10
11
8
22
24
14
23
25
40
21
13
41
54
61
89
19
Specialisation in
newly traded
markets
QS Best Student Cities
Melbourne
Sydney
Berlin
Munich
Vancouver
Toronto
Boston
Vienna
Auckland
Brisbane
Stockholm
Copenhagen
San Francisco
Barcelona
Helsinki
Oslo
Rank
2
4
9
11
13
13
13
16
18
18
24
27
27
30
34
60
30
Exceptional brand with global audiences
City RepTrak Brand scores, 2016
• Strong reputation
for visitor and
resident
amenities
• Less strong in
measures of
global influence,
culture and
nightlife.
31
Sydney’s emerging innovation economy
Innovative firms and start-ups
Paris
Region
Greater
Toronto
Area
Singapore
Number of
Top 10,000
rated
innovative
companies
Amsterdam
region
Hong
Kong
Greater
Sydney
Munich
metro
Number of start-ups
Source: Crunchbase.
Number of top ranked firms based on projections for some regions due to data limitations
Sydney’s innovation economy: room to catch up
2thinknow Mori Global
Innovation Power City
Cities Index Index ‘R&D’
No. of Cities
Boston
San Francisco
Seattle
Helsinki
Brisbane
Berlin
Stockholm
Munich
Copenhagen
Tel Aviv
Toronto
Miami
Melbourne
Sydney
Vancouver
Vienna
Barcelona
Auckland
The Global
Startup
Ecosystem
Report
442
42
20
4
6
4
2
9
1
Brookings
IBM World's Most
IBM World’s Most
INSEAD: Global
Redefining Global
Competitive Cities
Competitive Cities
City Talent
Cities 'Venture
'Software and
‘Life Sciences R&D
Competitiveness
Capital per capita
Web
and Production’
Index
2006-15'
Development'
100
100
11
3
18
15
11
5
5
15
4
6
24
8
21
5
12
39
44
17
31
14
9
47
32
34
32
33
64
35
25
54
36
30
19
32
17
13
46
3
4
8
25
123
2
6
3
57
14
15
17
22
9
13
12
15
39
30
19
11
18
1
18
14
16
35
28
18
3
25
15
59
19
28
27
26
20
50
18
23
43
36
98
12
25
33
Infrastructure challenges remain stark
Modal share of non-car based public
transport
Hong Kong
1
Singapore
2
Greater London
3
Amsterdam region/G4
4
Paris Region
5
San Francisco Bay Area
6
Munich metropolitan region
7
Greater Boston
8
Greater Toronto
9
10 Greater Sydney
Increasing affordability issues
Numbeo Housing Rent Index, 2016
Price rises and
unaffordability
happening faster than
in most other
medium-sized regions
Source: Numbeo Rent Index (0= cheapest)
Skills challenges
Sources: Brookings and QS
Source: PwC Cities of Opportunity
37
Sydney summary
• Has rapidly gained attributes of a mature, globally respected city
• Entertainment and Tourism brand much stronger than business brand.
• Work ahead to improve innovation system
• (R&D, start-ups, software/multimedia, sciences, commercialised knowledge) –
• Infrastructure and built environment becoming a big disadvantage in
global indexes
• low mass transit coverage, high car-dependency and travel times, low density,
environmental inefficiencies
• Scores highlight need for metropolitan approach. Software good,
hardware weak.
38
What is a City Deal?
• A negotiated contract, not a programme.
• Growth, productivity, and performance oriented
• Focused on infrastructure investment packages and
growth priorities
• Based on pre-agreed metrics and performance
• Designed to foster multi-municipal leadership and
governance that lead to reforms
• Innovative financing model including value capture
and forward financing
City Deals: the interlocking requirements
Growth and
improvement
appetite
Whole of Gov
+ negotiated/
customised
approach
Transformative
Investment
Value capture
mechanisms to
finance
investment
Institutional
Reforms to
guarantee
outcomes
Timeline of ‘City Deal’ type arrangements
Urban
Development
Agreements,
Canada
Contrats de
Villes,
France
1990
Local
Development
Agreements,
Sweden
Urban Growth
Agreements, Finland
2000
2010
City
Deals,
UK
City Deals,
Holland
Contrat de Ville:
Example - Lyon
• Lyon first to apply it at metro scale: regenerating struggling
neighbourhoods (housing, skills, jobs) with state funding and
coordinated strategy
• Latest in Lyon: 2015-2020: 37 neighbourhoods, €80m: housing,
public spaces, skills, jobs.
• Nationwide: 5-7 year terms. 435 signed for 2015-20
• Brings together all local stakeholders: state, regions, city, service
agencies
• Has improved horizontal collaboration, especially including civil
society.
Local Development Agreements,
Sweden
• Collaboration between state,
municipalities and districts
• Bottom up: each project has different structure –
decided locally
•
•
•
•
New bodies
Working groups
Mass-meetings
Working in housing districts, disadvantaged neighbourhoods
• 1999-2003: €230m allocated centrally, matched locally
• Outcomes (e.g. in Gothenburg): Increases in
employment, drop in benefit dependency, lower crime
Vancouver Tri-Partite Agreement
• 2000: Federal, state and city governments agree
to cooperate on economic and social issues
in downtown Vancouver up to 2010
• Response to acute public health crisis in Downtown Eastside (drugs,
social deprivation)
• Vancouver did not have jurisdiction or funding to deal with complex
problems: participation from other govt. tiers required.
• Coordinated, ‘whole of government’ intervention: jobs, health, skills,
businesses
• Initiatives: Economic Revitalization; Safety; Housing; Quality of Life
Manchester City Deal
• A revolving infrastructure fund: ‘earn
back’ model following infrastructure
tax uplift. Gov help up to £150m
• Establishes Greater Manchester
Investment Framework
• Creates City Apprenticeship and Skills
hub: local labour force matching
• A Housing Investment Fund: to pool
local + national resources for house
building
• Facilitates integration of regional
transpor
• Manchester Combined Authority gains
new mayor, powers and resources
The Future and global challenges
• Global cities will continue to emerge despite external threats.
• Why?
•
Global economy and nation states need them (talent and capital and trade and innovation)
•
Diversification from Established WCs by talent, capital, technology and firms. Appetite for more.
•
Infrastructure investment will create them. New global infrastructure scenario will reinforce open cities.
• What does change in city functionality and connectivity mean for global cities?
•
3 strategic imperatives…
1.
How to compete and achieve inclusion, resilience, flexibility?
2.
How to manage success and unintended consequences of growth?
3.
How to resolve external challenges to global city model?
46
Thank You
47