Cities must be cool, creative and in control

Running a city isn’t what it used to be.

While mayors continue to be responsible for maintaining public safety and delivering public services, the 21st-century global economy has generated a new responsibility: staying ahead of the competition.

As individuals and capital become ever more mobile, cities are in competition for people, visitors and business. Until recently, “competitiveness” was outside a mayor’s domain because the factors defining it were decided at the national level. But today, with more than half the world’s population living in cities – generating about 80 per cent of global output – and businesses formulating growth strategies around urban markets, cities cannot afford to cede their futures to national governments.

A recent study commissioned by Citigroup and conducted by the Economist Intelligence Unit found New York City to be the most competitive city in the world, edging out London for the top spot, followed by Singapore, Paris and Hong Kong. What are these places doing better than others, and how should cities think about distinguishing themselves and cultivating long-term competitiveness in the 21st century?

Many newly successful cities on the global stage – such as Shenzhen and Dubai – have sought to make themselves attractive to businesses based on price and infrastructure subsidies. Those competitive advantages can work in the short term, but they tend to be transitory. For cities to have sustained success, they must compete for the grand prize: intellectual capital and talent.

I have long believed that talent attracts capital far more effectively and consistently than capital attracts talent. The most creative individuals want to live in places that protect personal freedoms, prize diversity and offer an abundance of cultural opportunities. A city that wants to attract creators must offer a fertile breeding ground for new ideas and innovations.

In this respect, part of what sets cities such as New York and London apart cannot be captured by rankings. Recent college graduates are flocking to Brooklyn not merely because of employment opportunities, but because it is where some of the most exciting things in the world are happening – in music, art, design, food, shops, technology and green industry. Economists may not say it this way but the truth of the matter is: being cool counts. When people can find inspiration in a community that also offers great parks, safe streets and extensive mass transit, they vote with their feet.

This is not to say that we can rest on our laurels. Cities at the top must continuously find new ways to meet the future demands of a talent-driven market. That starts with thinking about how we can deliver core services more effectively, an issue sure to shape elections in London and the rest of England in May – and the New York City mayoral election next year. But it also requires cities to realise it is not merely the job of national governments to anticipate the direction of the global economy. Those days are long gone.

In New York, for example, one of our most ambitious efforts has been a competition among world-class universities to build a new applied science and engineering campus. The first winner, a partnership between Cornell University and the Technion-Israel Institute of Technology, was selected in December. We expect the campus, set to convene its first classes this autumn, to spin off hundreds of start-ups from the school’s research and generate billions of dollars in economic activity. Economic development projects on this scale should not be the preserve of the nation state.

New York – unlike several other global cities – is responsible for its schools. More than 1m pupils are educated within the city and they stand to benefit too from our approach to economic development. P-Tech is the first high school in the country that connects high school, college and professional opportunities, via IBM and the City University of New York. It aims for students to complete a degree within six years – and when they do, they will be first in line for jobs at IBM.

Of course, these approaches may not work for other cities; each must chart its own course. But these are the types of strategies, once thought to be only the purview of national governments, that leading cities must adopt if they want to keep up with – and lead – the competition.

The writer is mayor of New York City