1. Adjusting to new economic
realities: local growth and
investment strategies.
Debra Mountford Udine, 2013

2. A challenging context for local
development
• Local economies confronted by serious
challenges in the pursuits of viable
economic growth and job creation.
• Local government budgets have been
reduced.
• National level funding streams and
redistributive grants have diminished.
• Access to private capital more demanding
and risk averse.

3. Lessons from our work
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•
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Growth Strategies
Investment tools and trends
Economic leadership
City approaches
Challenges for national governments
The changing role of the private sector.

4. Growth Strategy
(1) More strategic cluster consolidation capable of growing
employment
– Improved pathways for intra-sector sharing of technology and investment
opportunities
(2) Clearer support for SME research base around leading
universities
-
commercially profitable synergies
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More self-conscious HE cluster
-
international students/universities.
(3) Growing jobs base by maximising reach into new global markets
– pathways (events, missions, new air routes) for executives and business tourists
– local businesses as international ambassadors and advocates

5. Growth Strategy
Economic Board
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Integration along 2 development corridors
‘Humuslaag’- densification of research
Conversion of office space
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Amsterdam 7-sector approach with Amsterdam
Barcelona
Key initiatives
Start-up culture: financing, employment markets,
space
China outreach round-table
Mobile World Capital
Barcelona Creixement (Growth) 30•
point plan
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Boston
Brisbane
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2031 Economic Development Plan
Cape Town Economic Development Strategy
Hamburg
Innovation District
Create Boston, single PoC
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Conventions and cultural events
Programme for Asian resource firms
Digital Economy governance
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Metropolitan public transport corridors
Radically improve the skills base.
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Cluster strategy in aviation, maritime, renewables
Upgrade of port
Initiatives of City of Boston and BRA •
Vision Hamburg - Responsible
Growth

6. Growth Strategy
Manchester Greater Manchester Strategy
Lyon
Nanjing
Devised with CoC, the Univ/Lyon,
and business groups
Key initiatives
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Expand trade links - China, India, ME
Grow Oxford Road science corridor
Employer-led skills programmes
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La Part-Dieu and Confluence districts
BIOASTER institute of research
Business ambassadors
Live business development strategy •
since 2009
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321 Talent Plan to attract 3,000 entrepreneurs by
2016
Attract anchor engineering institutions
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World-class cluster groupings
High-speed rail links with Gothenburg and
Copenhagen
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Qianhai – major new financial zone
Large expansion of HE
$2bn Creative Valley project
Oslo
Untitled
Shenzhen
Implemented through Five-Year
Plan
Zurich
Metropolitan initiatives + Strategien •
•
Zurich 2025
Integrate clean technology cluster
Expand spatial access for creative industries

7. Investment Tools and Trends
Public investment
•Retention of revenues generated within metropolitan area (eg. Manchester)
•Decentralisation of nationally/provincially-held infrastructure funding mechanisms(Zurich)
•Pursue core projects by trimming budgets (Amsterdam).
•Consolidatation of regional investment capabilities (Cape Town)
•Investment in training to maintain private sector jobs (Hamburg)
Private investment
•Privately-backed funds to grow science sectors (e.g. Amsterdam, Lyon and Nanjing).
•Business-friendly Zones with favourable tax offerings and high accessibility (e.g. Manchester,
Boston)
•Competitions, accelerators and investment forums to better connect start-ups to private funds
(e.g Lyon, Barcelona)

8. Main sources of investment since 2008
What’s changed?
Amsterdam
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American investment leads in ICT, creative, finance.
Twice as many Chinese companies investing
Barcelona
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Netherlands, US and France - key sources in software, • Grasp of Barcelona’s potential as a
chemicals, imaging, automotive, agrifood
gateway to Mediterranean
€500m Hong Kong investment in Port expansion.
Boston
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Developers instrumental in innovation district
Influx of European life science firm investment
Harvard Business School support from Tata Group
Brisbane
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Foreign and institutional investment mostly active in • Firms seek direct exposure
quality central property assets, and toll road PPPs
thriving Queensland economy
Cape Town
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Banks primary funders of central city overhaul
Convention Centre precinct €500m, private-led
Hamburg
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Logistics and industrial firms engaged in office- • Increase in private house-building
building projects
• More Korean and Japanese
Open-ended real estate funds very active
investment in energy/shipping
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• Strong, growing Japanese logistics
presence around airport.
• Funding more school tuition
• Summer internships scheme
• Surge in wind/photovoltaic sectors
• New interest from S.A./ Singapore
to

9. Main sources of investment since 2008
What’s changed?
Manchester
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Reliance on expanding US firms, also German and • Recognition as a cheaper and viable
Italian,
esp.ICT,
life
sciences,
advanced location for headquarters
manufacturing
Lyon
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French biotechnology firms
Fast growing SME setup in e-commerce
Nanjing
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Most foreign investment through Development Zone. • Investment higher up the value
chain in software and outsourcing.
Oslo
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Investment in cultural flagship projects
Surrounding niche financial services
• Large real estate investment influx
due to stability and low debt
Shenzhen
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Japanese investment in retail, electronics.
MNC interest in business-equipped offices
HK and global financial firm interest in Qianhai
• FDI boom in real estate, vehicles
• Recognition of Qianhai Zone’s
regulatory advantages
Zurich
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• Established tech firms show more
support for SME and start-ups
Swisscom CHF300m investment in fibre-optic network • More partnered investment in
Local investment from headquarter bodies: e.g. FIFA
cultural institutions

10. Public investment tools
Amsterdam
Barcelona
Boston
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Scholarship Fund, 50% local govt, to
attract PhD-level talent
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Pla Empenta – redirects €80m of local
funds from investment budget into
housing, to attract €300m private
investment
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Brisbane
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Cape Town
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Hamburg
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Relies on state government for capital
grant funding for life science/transport
Accelerated shared city-state-federal
funding for road tunnels, resurfacing
Pool resources at provincial and city level
City’s own VC company for SMEs (BTG
Hamburg) supports companies’ equity
base.
Private investment tools
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Life Sciences Fund - investment capital to
early-stage biomedical firms. Backed by major
banks
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Barcelona City Protocol - certification system
Tax Free Zone for mobile technology start-ups
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Up to 20% tax cuts for Innovation District
firms
MassChallenge $1m entrepreneur competition
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40-45% R&D tax offset for mining sector
3-year moratorium on hotel developer charges
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From Red Tape to Red Carpet
Building upgrade cost offset in UDZs
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Employee Qualification Programme,
funds up to €3k of training per employee
Programme to support high-risk
SME tech start-ups
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11. Public investment tools
Manchester
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Lyon
Nanjing
Private investment tools
‘City Deal’ to earn back up to £30m/yr
£300m Evergreen fund using pension fund •
investment
Regional Growth Fund
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City of Entrepreneurship programme
‘Future Investments’ for funds in edu,
digital
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Re-organisation of SOEs to improve
efficiency of large-scale housing and
transport projects
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Oslo
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Toll fare increase to fund road tunnels
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€100m state fund for life science start-ups •
Shenzhen
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3-5 year bond tranches as a check on local
government debt
Zurich
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Rail Infrastructure Fund to integrate
funding governance + waive interest on
debt financing
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High-tech Enterprise Zone around the airport,
offering 5-year business rate discounts
BoostInLyon start-up accelerator
€90m in BIOASTER microbiology institute
Personal financial incentives of €120k
50% loan interest offset for small firm
incubation
new regional Knowledge Partnership
National R&D tax credit scheme - SkatteFUNN
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Creation of coastal development zones, with
simplified tax system, more liberal HR laws
Relocation subsidies for IT firms
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tax assistance for some entrepreneurs

12. Delivery and organisational adjustments
Overcome political fragmentation through integrated city-regional bodies
-Increased applicability and efficacy of innovation and mobility strategies
-Shared ideas about integration and regional identity (Zurich, Lyon)
-Pathway for dedicated and evidence-led private sector input (Manchester, Cape Town)
-More professional approach to the fundamentally metropolitan and commercial character of
economies.
-Overturning the lack of shared vision and co-operation between stakeholders.
Cluster agglomeration as driver of strategic cooperation across political
boundaries. (eg Zurich)
Improved relations with higher tiers of government: delegated powers (Oslo, Brisbane,
Hamburg)
More influence for expert development agencies over workforce development, landuse and infrastructure (Boston)

13. How has national/regional government role
changed?
Amsterdam
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Commitment to specific core projects (especially logistics and transport-related)
Barcelona
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Emergency debt-relief financing support
Boston
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Growing amount of state aid (from Massachusetts)
Brisbane
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Queensland state government more attuned to city needs
Incremental devolution of planning and tourism powers
Cape Town
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Delegation of greater transport and housing powers
Sharing national fuel tax with local government to replace council levies
Hamburg
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Recognition of cluster competitiveness to complement infrastructure support
Manchester
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More competition for funding based on economic case. City beginning to be
more successful in bids.
Lyon
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More targeted funding for a handful of growth sectors
Nanjing
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More national support for software ambitions
Oslo
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Preparation of SMEs for international competition
Shenzhen
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Recognition of functional economic region size of Guangdong Province
Permitted creation of joint ventures
Regulatory relaxation in Qianhai Zone
Zurich
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Overcoming deadlock over funding channels and arrangements
for key infrastructure projects

14. A new kind of leadership
New ethos of pragmatism
•Compromises to improve the coherence of cluster and mobility strategies
•Mindful of previous over-ambition
•More astute lobbying for favourable national/federal investment
Lead the agenda for open-ness
•Communicate value of diversity and high-value immigrant workers for value chain position
Positive and authentic engagement with private sector
•Business support and market knowledge to re-assure end-user firms/investors
Commitment to sound fiscal platform
•Careful stewardship of balance sheets, projection of reliability and consistency
Long-term, multi-cycle approach
•encourage reflection on core assets

15. What’s needed from national government?
• Local business climate and stable framework conditions
• Rationalisation of complex policies and programmes into simple-topursue frameworks
• National-level transport infrastructure investment (greater fiscal and
organisational authority over transport needs)
• Initial investment in niche higher education facilities
• Recognition of practical economic geographies
• Facilitate expansion of the private rented housing sector
• Evidence-based and trend-based rather than politicised approach to
local economies

16. What’s needed from the private sector?
• Grasp the changing economic requirements of local areas.
• Foster a competitive business climate
• Support the internationalisation process with specialist
knowledge
• Activity and leadership in the housing sector
• Address the jobs challenge for young people
• Become a systematic strategic partner