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Private Sector Development

Play the 'Competitive Cities' game: See whether you're a guru of urban competitiveness

Juni Tingting Zhu's picture

To start the new year, I've designed a 10-question game to recap some of the major findings of our flagship report, “Competitive Cities for Jobs and Growth: What, Who and How.”

The report, which was launched at at a World Bank conference in Washington on December 10, 2015, has been gaining wide recognition in the news media. Positive coverage has included analyses in Citylab (edited by urbanologist Richard Florida) and in Citiscope (edited by urbanologist Neal Peirce), as well as an essay in The Huffington Post by Marcelo Giugale, senior economic advisor in the World Bank Group's practice group on Equitable Growth, Finance and Institutions (EFI).

This short 3-minute game features many of the central themes of the Competitive Cities initiative.  Please click on  this link – http://sgiz.mobi/s3/The-Competitive-Cities-Game – to start the game.





For more information about the Competitive Cities initiative at the World Bank, please visit: http://www.worldbank.org/en/topic/trade/publication/competitive-cities-a...  

What’s next for the Competitive Cities initiative: 'To travel far, let's travel together'

Ceci Sager's picture



“I wish that I had had this [report] when I started. . . . It has some great things that we found out over a long period time 
–  in many cases, through trial and error. And so, when I read it, I said, 'Wow, we are doing these things, but it did take us awhile to buy into these things.' It is going to be very informative to cities around the worlld.” 
– Tracey A. Nichols, Director of Economic Development, City of Cleveland


The World Bank Group launched the Competitive Cities report on December 10 – “Competitive Cities for Jobs and Growth: What, Who and How,” which represents almost two years of research and analysis to put together a reliable, comprehensive and unified body of work. It is aimed primarily to help cities formulate and implement economic development strategies, and it is intended to be used by city leaders  themselves.
 
The report was launched jointly by the senior directors of two Global Practices at the Bank Group: the Trade and Competitiveness and the Social, Urban, Rural and Resilience practices. The roundtable discussion included academics, policymakers, senior World Bank advisors, and representatives from the private sector. The Bank Group's stately Old Board Room was filled to overflowing, and the audience was particularly appreciative of the video animation summarizing the central ideas within the Competitive Cities report. The twitter feed associated with the event (#competitivecities) was inundated with live tweets. Supportive analyses in the news media – for instance, in the Huffington Post by Marcelo Giugale and at CityLab by Richard Florida – focused supportive news coverage on the event.

The launch of the report is much more than a flash in the pan. The report itself is only the start: What follows is the rollout, the active dissemination to regional task teams and city leaders, and the setting-in-motion of the findings of the report, which focuses on sub-national growth and job creation. These are some of the events we have planned:

  • Events in the various World Bank Group regions, to share the general framework and also to customize the findings of relevance to each specific region.  So far, we are considering events in Singapore, Sydney, Dar Es Salaam and potentially cities in the Middle East, North and West Africa, and in the Caribbean. If your city is interested in hosting a regional event, we would be pleased to hear from you.
  • A three-day interactive executive training course on competitive cities, which is aimed at city mayors and economic development advisors to cities.
  • An operational guide to help configure competitive cities into World Bank lending projects and advisory services, including deep dives for regional and country task teams. Let us know if you’re particularly interested in hosting such a training session in your region.

'If I knew that avocados had value, I would plant more of them'

Cecile Fruman's picture



Emilienne Isenady poses while showing off the crops on her land in Lascahobas, Central Plateau, Haiti.

“If I knew that avocados had value, I would plant more of them,” says Emilienne Isenady, a single mother of six in Lascahobas, in the Central Plateau of Haiti.

Emilienne grows and sells avocados to Dominican buyers and to “Madan Saras” (the local name for women brokers who buy and re-sell products in other cities), who will buy the avocados and transport them using the perilous local “tap taps” – trucks converted into public transportation. She will also sell them in the local market in Lascahobas.

Emilienne is a smallholder farmer, but little does she know that she is already part of an avocado local value chain, nor that there is a better avocado Global Value Chain (GVC) out there facing a global shortage.

Emilienne’s is guiding us to see her avocado trees. As we push aside branches, we do not see neatly planted rows of avocado trees but rather a wild two hectares of scattered mango trees, avocado trees, malanga, sweet peas and pineapples. We are accompanied by Marc André Volcy, Farah Edmond and Jean-Berlin Bernard, three “mobile agents” of the Business Support Service team for the Central Plateau Department.

The team is part of a program that the Haitian Ministry of Commerce and Industry has put in place to support entrepreneurs in micro, small and medium-sized enterprises across the country. The program is supported by the World Bank Group’s Business Development and Investment Project (BDI). There are nine other teams just like them in the nine other departments of the country, all working simultaneously on different value-chain reinforcement initiatives (in such sectors as coffee, cocoa, mango, vetiver, honey and apparel).

Marc, Farah and Jean-Berlin live in the Central Plateau, enabling them to support the avocado producers directly, visiting them often and understanding the local political economy. The team has visited about 80 other smallholder farmers like Emilienne in their department, and has invited them to two public meetings and strategic working groups to present key challenges and opportunities for their avocado cluster. The Central Plateau team has carried out the competitive reinforcement initiative of the avocado cluster in their department with training and coaching financed by a grant from the Competitive Industries and Innovation Program (CIIP), through which they have received in-class training and coaching on how to carry out their field projects. 
 

Trade competitiveness in Uruguay

Gonzalo Varela's picture
For a small economy like Uruguay, integration into the global marketplace is one of the most powerful vehicles for growth and development. Participating actively in international trade allows Uruguayan firms to become more productive, by achieving economies of scale and by learning through exposure to international technologies, know-how and ideas. 

How did Uruguayan firms perform, over the last 15 years, in the global marketplace?


Using the Trade Competitiveness Diagnostic Framework – which we presented today to the Uruguayan public and private sector – a World Bank team examined the performance of Uruguayan firms in global markets in terms of export growth, diversification, quality upgrading and survival;. The team presented a number of recommendations to increase integration and to gain from it.

The main findings of
the report reveal the following:

  • Exports have grown fast thanks to favorable external conditions, but also due to the dynamism of the private sector, as well as to sound trade and investment policies.
  • Tailwinds due to high commodity prices helped export growth. Exports in gross and in value-added terms expanded at double-digit rates, and they expanded even faster among primary and resource-based products. The emblematic example is that of soybean exports, which stood at US$1.5 million in 2001 and which climbed to US$1.6 billion in 2014, making Uruguay an increasingly important player in the world market with a share of 3 percent of total exports.
  • But it wasn’t just tailwinds. The private sector was dynamic enough to seize the opportunity of favorable conditions and penetrate 46 new markets between 2000 and 2013. In just one product, beef, exporters gained access to 30 new destinations, and they secured higher prices in top-quality markets on the back of smart entrepreneurship, quality upgrading and a longstanding government strategy of negotiating market access for the sector. In services, for example, modern, knowledge-intensive sectors such as ICT and other business services also grew at double-digit rates, increasing the knowledge content of the export bundle.

The War is Over. What Do We Do Now? Post-Conflict Recovery of the Private Sector in South Sudan

Steve Utterwulghe's picture


The White Nile in South Sudan. Photo by Steve Utterwulghe.

As I was landing in Juba, the bustling capital of South Sudan, I couldn’t help but reminisce about my days working in Khartoum for the UN Deputy Special Representative of the Secretary General. The war between the North and the South, of what was then, in 2004, still the Sudan, was raging as the peace negotiations were taking place in a plush resort on the shores of Lake Naivasha in Kenya. I was mainly focusing on guaranteeing access to the people of the Nuba Mountains, one of the three fiercely contested areas between Khartoum and the Sudan People’s Liberation Movement/Army (SPLM/SPLA). I was doing my fair share of shuttle diplomacy, going back and forth between the SPLM/SPLA leadership based in Nairobi and the Government of Sudan in Khartoum. At that time, hopes were high that one would soon see the end of decades of a bloody war in Africa’s largest country. The Comprehensive Peace Agreement was finally signed in 2005. In 2011, South Sudanese participated in a referendum and 99 percent voted for independence. South Sudan became the newest country in the world.
 
But what should have been a new era of peace and prosperity quickly turned into a feeling of dejà vu. Dreams were shattered as a new internal violent conflict broke out in December 2013, putting the progress achieved at significant risk and disrupting economic activities and livelihoods.
 
The country is very rich in natural resources, including oil, minerals and fertile arable land. However, with 90 percent of its population earning less than US$1 per day, South Sudan is ranked as one of the poorest countries on the planet. South Sudan remains an undeveloped economy facing important challenges, including high unemployment, weak institutions, illiteracy and political instability. The economic overview of the country by the World Bank suggests that “South Sudan is the most oil-dependent country in the world, with oil accounting for almost the totality of exports, and around 60 percent of its gross domestic product.” The conflict has dramatically affected the production of oil, which has fallen by about 20 percent and is now at about 165,000 barrels per day. This, combined with the sharp global drop in oil prices, has greatly affected the fiscal position of the government.

In such an environment, private sector development is a must, since it has the potential to create market-led jobs and growth. However, private sector growth requires a conducive investment climate and an enabling business environment.
 
South Sudan has made progress in this area, thanks in part to support from the international community, including the World Bank Group. Yet more needs to be done. South Sudan ranks 187th out of the 189 economies in the Doing Business ranking, just ahead of Libya and Eritrea. In addition, among the top constraints reported by firms in the World Bank Group's Enterprise Survey, 68 percent mention political instability and 58 percent cite access to electricity, followed closely by access to land and finance. 

Tangier, Morocco: Success on the Strait of Gibraltar

Z. Joe Kulenovic's picture
 
 Z. Joe Kulenovic
Modern factories, seaport terminals, and technical schools, plus priceless cultural monuments: Tangier, Morocco

In late 2014, the World Bank’s Competitive Cities team visited the Moroccan city of Tangier, to carry out a case study of how a city in the Middle East & North Africa Region managed to achieve stellar economic growth and create jobs for its rising population, especially given that it is not endowed with oil or natural gas reserves like many others in the region.
 
In just over a decade, this ancient port city went from dormant to dominant. Between 2005 and 2012, for example, Tangier created new jobs three times as fast as Morocco as a whole (employment growth averaged 2.7% and 0.9% per year, respectively), while also outpacing national GDP growth by about a tenth. Today, the city and its surrounding region of Tanger-Tétouan is a booming commercial gateway and manufacturing hub, with one of Africa’s largest seaports and automotive factories, producing some 400,000 vehicles per year (with Moroccan-made content at approximately 35-40%, and a target to increase that share to 60% in the next few years). The metropolitan area now boasts multiple free trade zones and industrial parks, while also thriving as a tourist destination. As in our previous city case studies, we wanted to know what (and who) drove this transformation, and how exactly it was achieved.

Foreign direct investment and development: Insights from literature and ideas for research

Christine Qiang's picture
 The Leeds Library by Flickr user Michael D Beckwith


For many decades, academia and policy making has debated about the role of Foreign Direct Investment (FDI) in development. Such question has been very difficult to elucidate, not only because the discussion has being colored by many ideological dogmas, but also because the very fundamental characteristics of cross border investment have evolved over time. Indeed, over the last five decades, the paradigm of FDI has changed significantly. Traditionally FDI has been visualized as a flow of capital, flowing from “North” to “South” by big multinational enterprises (MNEs) from industrial countries investing in developing countries, traditionally aiming to exploit natural resources in the latter or to substitute trade as a means to serve domestic consumption markets. Such paradigm has changed significantly.
 
Today, FDI is not only about capital, but also --and more important-- about technology and know-how, it no longer flows from “North” to “South”, but also from  “South” to “South” and from “South” to “North”. Further, FDI is no longer a substitute of trade, but quite the opposite. Today FDI has become part of the process of international production, by which investors locate in one country to produce a good or a service that is part of a broader global value chain (GVC). Investors then, have become traders and vice-versa. Moreover, FDI is now not only carried out by only big MNEs, but also from relatively smaller firms from developing countries that are investing in countries beyond their home countries. Last but not least, cross-border investment is no longer only about portfolio investment and FDI. International patterns of production are leading to new forms of cross-border investment, in which foreign investors share their intangible assets such as know-how or brands in conjunction with local capital or tangible assets of domestic investors. This is the case of non-equity modes of investment (NEMs) –such as franchises, outsourcing, management contracts, contract farming or manufacturing.

Does competition create or kill jobs?

Klaus Tilmes's picture

Greater competition is crucial for creating better jobs, although there may be short term tradeoffs.

Job creation on a massive scale is crucial for sustainably ending extreme poverty and building shared prosperity in every economy. And robust and competitive markets are crucial for creating jobs. Yet the question of whether competition boosts or destroys jobs is one that policymakers often shy away from.

It was thus valuable to have that question as a central point of discussion for competition authorities and policymakers from almost 100 countries – from both developed and developing economies – who recently gathered in Paris for the 14th OECD Global Forum on Competition (GFC).

According to World Bank Group estimates the global economy must create 600 million new jobs by the year 2027 – with 90 percent of those jobs being created in the private sector – just to hold employment rates constant, given current demographic trends.
Yet the need goes further than simply the creation of jobs: to promote shared prosperity, one of the urgent priorities – for economies large and small – is the creation of better jobs. This is where competition policy can play a critical role.
 
Competition helps drive labor toward more productive employment: first, by improving firm-level productivity, and second, by driving the allocation of labor to more productive firms within an industry.
 
Moreover: Making markets more open to foreign competition drives labor to sectors with higher productivity – or, at least, with higher productivity growth. Making jobs more productive, in turn, generally increases the wages they command.
 
That’s in addition to cross-country evidence on the impact of competition policy on the growth of Total Factor Productivity and GDP, and the fact that growth tends not to occur without creating jobs. Thus there’s compelling evidence that – far from being a job killer, as skeptics might fear – competition (over the long term) has the potential to create both more jobs and better jobs.



The key question then becomes whether such long-term benefits must be achieved at the expense of short-term negative shocks to employment – especially in sectors of the economy that may experience sudden increases in the level of competition.
 
Progress toward better jobs is driven partly by the disappearance of low-productivity jobs, as well as the creation of more productive jobs in the short run. Competition encourages that dynamic through firm entry and exit, along with a reduction in “labor hoarding” in firms that have previously enjoyed strong market power.
 

A good diagnosis for the city economy?

Dmitry Sivaev's picture



One walks into a doctor’s office knowing what hurts but with little knowledge of what should be done to fix it. Identifying proper treatment requires sophisticated tests, participation of experts and, often, second opinions.

Cities, arguably, are as complicated as human bodies. Our knowledge of diagnosing cities, however, is far less advanced than in human biology and medicine.  Most mayors know very clearly what they want for their cities – jobs, economic growth, high incomes and a good quality of life for the people. But it is very difficult to identify what prevents private-sector firms, the agents that create jobs and provide incomes, from growing and delivering these benefits to a city. And we have no X-ray machine to aid in the effort.
 
As a part of the World Bank Group's Competitive Cities project, we thought hard about ways to help cities identify the roots of their problems and design interventions to address them. We set out on a journey to put together methodologies and guidelines for cities that want to figure out what they can do to help firms thrive and create jobs.  We learned from our own experience of working with cities, and from other urban practitioners. We reviewed many methodological and appraisal materials, and we trial-tested our ideas.

So what have we achieved? We certainly didn’t invent an X-ray machine, but we have developed “Growth Pathways” – a methodology and a decision-support system to help guide cities and practitioners through diagnostic exercises.

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.

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