The Key to the Success of Growing Cities Lies in Constant Dialog Between Government and Business

4 july 2016

The Analytical Center held a discussion of the global experience with growing cities. To ensure their successful development, a constructive dialog must be maintained between the Government and business in which the Government should be willing to compromise with business, experts believe.

“We got interested in learning the secret of the most productive cities and finding out about the policies they pursue to expedite economic growth,” said World Bank specialist Dmitry Sivaev, presenting a report titled Competitive Cities for Jobs and Growth to the participants in the event. He noted that cities serve as key drivers of economic growth all over the world and yet different cities make different contributions to a country’s economy because their productivity and efficiency are not the same. First of all, it is not just large metropolitan areas that are home to large numbers of people that can serve as drivers for economic development. “This role can be played by smaller cities that do not seem to have that much potential on the face of it and are located far from major transport routes,” he explained.

Picking up where his colleague left off with the report, the Private Sector Development Specialist in the Trade & Competitiveness practice of the World Bank Austin Kilroy noted that fast growing cities are usually characterized by an abundance of business services across a variety of areas. “Economic sectors drive development and push cities forward, generating additional budget revenue and creating new jobs,” the expert said. Mr. Kilroy believes that well-developed cities have their own methodology based on the creation of new startups and development of companies. “There are 4 factors that allow you to move forward: developing laws and regulations, developing infrastructure, developing innovations and skills and looking for new sources of finance. Successful cities focus on all four of them while cities that are lagging behind in economic development normally focus on just one,” the specialist is sure.

There are also different stages to city development, Mr. Kilroy believes. First of all, the local government has to figure out what their city can produce and only after that can they begin to coordinate the businesses. “Once a business has been established it is vital to help it in every way possible, give it land and help it solve problems,” Mr. Kilroy said. “In this manner, the authorities grow the business, bringing new highly skilled labor to the city and eventually promoting and developing competition between companies.” The basic strategy of cities like that is to gain financial benefits for the region. It should also be noted that sometimes a city has to have several goes at it, because at the very beginning it is often unclear which industry is going to work best in a specific city,” the specialist pointed out.

The workshop on fast growing cities was organized by the Analytical Center for the Government of the Russian Federation in conjunction with the World Bank.