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Colombia

Taking a tour of a ‘Competitive City’

Megha Mukim's picture

Do you want to take a walk through a competitive city? Since today, October 31, has been designated as World Cities Day by the United Nations, today is an especially good day to explore that idea. 

Have you ever noticed how mayors and city leaders experience life alongside their citizens? It forces them to be more focused on the local manifestations of their policy decisions. They connect with what their citizens see and experience on a day-to-day basis. Numbers are crucial, because policies need to be supported by evidence – but what if the numbers and experiences could be brought to life? What does a 5 percent annual GDP growth rate look like? For that matter, what does a “competitive city” look like?

Members of the Competitive Cities team at the World Bank Group traveled to Bucaramanga, Colombia to find out. Here, amid the city’s famously rugged topography – with no ports or railroads nearby, and almost 10 hours away from the nation’s capital, Bogota – economic development seemed to be a tough proposal. Bucaramanga, however, managed to reinvent itself and become a globally competitive city – with the fastest rates of GDP growth and job growth in Colombia, and one of the fastest growth rates in the Western Hemisphere. As part of the Competitive Cities for Jobs and Growth initiative, we had already looked at Bucaramanga’s success in numbers and had analyzed qualitatively how they managed to get things done. Now we wanted others to experience how it felt to walk through a secondary city that blossomed into a dynamic economic center.

Thanks to a donated helicopter, the use of hobbyist drone technology, a motorcycle and a hugely enthusiastic local chamber of commerce, the team captured images and videos of the places that were central to Bucaramanga’s growth story. Bucaramanga’s transformation began with the creation of a regional competitiveness commission, a public- private alliance spearheaded by the private sector. As you’ll see in the accompanying video, one single block within the city hosts the chamber, an industrial university, the enterprise center, the commerce association and important regional banks.



In Bucaramanga, Colombia, Erick Ramos Murillo (left) and Rómulo Cabeza (right) prepare to fly a 3-D camera rigged to a drone. 

How are future blue-collar skills being created?

Victor Mulas's picture



A technology bootcamp in Medellín, Colombia. © Corporación Ruta N Medellín/World Bank


The fourth industrial revolution is disrupting business models and transforming employment. It is estimated that 65 percent of children entering primary school today will, in the future, be working in new job types that do not exist today. These changes have been more noticeable in developed countries, with the 2008 financial crisis accelerating this transformation process. However, they are also affecting emerging economies that have traditionally relied on routine blue-collar jobs (e.g., textiles, manufacturing or business process outsourcing) for broad employment and economic development.

Start-ups are at the core of these disruptions in business models. In recent years, we have witnessed how completely new market categories have been created out of the blue, transforming entire sectors of the economy, including transportation, logistics, hospitality, and manufacturing. When start-ups disrupt a market, a new business category is created and new sources of growth and employment are generated.

When we think about start-ups and employment, the first thing that come to mind is the start-up founders, typically highly educated and motivated individuals. However, evidence from New York startup ecosystem, a testing ground of new jobs generated through technology after the financial crisis, suggests otherwise.

First, most of the jobs generated by the tech start-up ecosystem are not in start-ups but in the traditional industries that either are influenced or disrupted by start-up technologies (with over three times more employment generated in the non-tech traditional industry).

Second, more than 40 percent of these new jobs did not require bachelor’s degree skills or above. These are jobs like building a website, a basic database, a web or mobile app.

What are the skills needed to fill these categories — which we can call tech blue-collar skill jobs — and how people are being trained for them?

Competitive Cities: Bucaramanga, Colombia – An Andean Achiever

Z. Joe Kulenovic's picture


Modern business facilities, tourist attractions, and an expanding skyline: Bucaramanga, Colombia. 

When the World Bank’s Competitive Cities team set out to analyze what some of the world’s most successful cities have done to spur economic growth and job creation, the first one we visited was Bucaramanga, capital of Colombia’s Santander Department. Nestled in the country’s rugged Eastern Cordillera, landlocked and without railroad links, this metropolitan area of just over 1 million people has consistently had one of Latin America’s best-performing economies. Bucaramanga, with Colombia’s lowest unemployment rate and with per capita income at 170 percent of the national average, is on the threshold of attaining high-income status as defined by the World Bank.  

Bucaramanga and its surrounding region are rife with contrasts. On the one hand, it has a relatively less export-intensive economy and higher rates of informal business establishments and workers than Colombia as a whole. Indeed, informality has often been cited as a key constraint to firms’ ability to access support programs and to scale up. On the other, Santander’s rates of poverty and income inequality, and its gender gap in labor-force participation, are all better than the national average, and it has consistently led the country on a number of measures of economic growth, including aggregate output, job creation and consumption.   
 
But the numbers tell only part of the story. A qualitative transformation of Bucaramanga’s economy is under way. Once dominated by lower-value-added industries like clothing, footwear and poultry production, the city is now home to knowledge-intensive activities such as precision manufacturing, logistics, biomedical, R&D labs and business process outsourcing, as well as an ascendant tourism sector. Meanwhile, Santander’s oil industry, long a major employer in the region, has been a catalyst for developing and commercializing innovative technologies, rather than just drilling for, refining and shipping petroleum.

All these achievements are neither random nor accidental: They are the result of local stakeholders successfully working together to respond to the challenges of globalization and external competitive pressures.

The reforms behind the Doing Business rankings

Cecile Fruman's picture



In Mozambique in 2003, it took an entrepreneur 168 days to start a business. Today, it takes only 19 days. That kind of transformation has major implications for ambitious men and women who are seeking to make a mark in business, or, as is often the case in Africa, seeking to move beyond a life in agriculture. In economies with sensible, streamlined regulations, all it takes is a good idea, and a couple of weeks, and an entrepreneur is in business.

This week, the World Bank Group launched its annual Doing Business 2016 report, which benchmarks countries based on their progress undertaking business reforms that make it easier for local businesses to start up and operate.

For the second straight year, Singapore topped the list, with New Zealand, Denmark, the Republic of Korea, and Hong Kong SAR, China, coming in closely behind.

In the developing world, standouts included Kenya and Costa Rica, both of which rose 21 positions; Mauritius, Sub-Saharan Africa’s top-ranked economy; Kazakhstan, which moved up 12 places to rank 41st among all countries; and Bhutan, which topped South Asia’s list of reformers. In the Middle East and North Africa, 11 of the region’s 20 economies achieved 21 reforms despite the challenges caused by a number of civil and interstate conflicts.
 
The reforms tracked by Doing Business are implemented by governments, but the results show up most in the private sector, which is critical to driving a country’s competitiveness and to creating jobs. Ensuring an enabling environment in which the private sector can operate effectively is an important marker of how well an economy is positioned to compete globally. 
 
For those of us working with governments to help improve their investment climates – and to create a policy environment in which business regulatory costs are reasonable, access to finance is open, technology is shared, and trade flows within and across borders – the real work begins long before the Doing Business rankings are published.

In the World Bank Group’s Trade and Competitiveness Global Practice (T&C), our mandate is to work with developing countries to unleash the power of their private sector for growth. Much of this work involves reforms in the very areas measured in the Doing Business report: starting a business, dealing with construction formalities, or trading across borders, among other factors.

Our experience working with clients confirms one of this year’s key findings: Regulatory efficiency and quality go hand-in-hand. A good investment climate requires well-designed regulations that protect property rights and facilitate business operations while safeguarding other people’s rights as well as their health, their safety and the environment.

PPPAmericas 2015: Taking public-private partnerships to the next level

David Bloomgarden's picture

The Latin America and the Caribbean region is crying out for infrastructure improvements. An investment estimated at 5 percent of the region’s GDP — or US$250 billion per year — is required to develop projects that are fundamental for economic development. This includes not only improving highways, ports and bridges, but also building hospitals and creating better transport, public transit and other mobility solutions for smarter cities. Rising demand for infrastructure also is prompting countries to redouble efforts to attract greater private investment

At the Multilateral Investment Fund (MIF), as at the World Bank Group, we believe that public-private partnerships (PPPs) can help governments fill this infrastructure gap. However, the projects must be implemented effectively and efficiently to achieve social and economic objectives.

Governments in the Latin America and the Caribbean region not only lack financing to address the infrastructure gap, but also face challenges in selecting the appropriate large infrastructure projects, planning the projects, managing and maintaining infrastructure assets — and gaining public support for private investment in public infrastructure. 

However, PPPs are gaining ground in Latin America and the Caribbean. Beyond the larger economies of Brazil, Colombia and Mexico, assistance from the MIF and the Inter-American Development Bank (IDB) has enabled countries such as Paraguay to develop laws that pave the way for PPP projects. Just this week, Paraguay announced its first such project, which involves an investment of US$350 million to improve and build more than 150 kilometers of roads. 

PPPs have been moving beyond classic interventions in public infrastructure, which have typically included roads, railways, power generation, and water- and waste-treatment facilities. The next wave of PPPs increasingly involves and provides social infrastructure: schools, hospitals and health services. In Brazil, IFC, the private sector arm of the World Bank Group, helped create the Hospital do Subúrbio, the country’s first PPP in health, which has dramatically improved emergency hospital services for one million people in the capital of the state of Bahia.

A Tale of Two Competitive Cities: What Patterns Are Emerging So Far?

Z. Joe Kulenovic's picture

As noted in a blog post earlier this year, the World Bank Group is pursuing a Competitive Cities Knowledge Base (CCKB) project, looking at how metropolitan economies can create jobs and ensure prosperity for their residents. By carrying out case studies of economically successful cities in each of the world’s six broad regions, the Bank Group hopes to identify the “teachable moments” from which other cities can learn and replicate some of those lessons, adapting them to fit their own circumstances.

The first two case studies – Bucaramanga, in Colombia’s Santander Department, and Coimbatore, in India’s State of Tamil Nadu – were carried out between April and June 2014. Although they’re on opposite sides of the globe, these two mid-sized, secondary cities have revealed some remarkable similarities. This may be a good moment to share a few initial observations.
 
Bucaramanga and Coimbatore were selected for study because they outpaced their respective countries and other cities in their regions, in terms of employment and GDP growth, in the period from 2007 to 2012. Faced with the same macroeconomic and regulatory framework as other Indian and Colombian cities, the obvious question is: What did these two cities do differently that enabled them to grow faster?