This article about internationalization and cities is part of the series
‘One Year After: Urban Learnings from a year of pandemic’
— by anteverti team
Cities are not islands. In a globalized world, cities are part of a fabric of which they are the economic, social, cultural and political engines. A fabric that can also function as a global market to which cities come to complement what they do not have, pool their strengths with other ecosystems and collaborate to generate joint opportunities.
Internationalization is a crucial instrument to doing so effectively. If this “going global” process is pursued in a proactive manner, it allows cities to identify where their comparative advantages lie, to find areas of opportunity in the global context, and to outline ways so that their local agents can harness them.
If this pandemic year has shown us anything, it is that, in a context of high competition between cities to capture opportunities in the international environment, those municipalities that have long been proactive in their planning have proven to be more resilient. On the other hand, the pandemic shock has also changed the rules: it opens the door for cities to re-evaluate their advantages and assets, to rethink their alliances with other urban actors, and to compete for new sources of international financing – such as the stimulus package recently promoted by the European Union.
What challenges and opportunities does all this pose for cities? We have identified four key trends to summarize and better understand this new horizon.
The digital disruption that the pandemic has hyper-accelerated forces cities to reposition themselves on the global map
If we look at the intersection between digitization and economic development, nothing has ever been as disruptive as this pandemic. Remote work has established itself as a global trend, and business models –impacting both goods and services– see how the digital layer will be increasingly decisive. The world is getting virtual, and large global economic and business hubs, eminently linked to physical spaces and infrastructures – from office complexes to mega-airports – have seen their power to centralize economic growth become volatile.
What does this paradigm shift mean for cities? On the one hand, it means an imperative need – and opportunity – to rethink their economic models and, accordingly, their internationalization strategies: if they want to continue attracting opportunities, cities must reassess to what extent this new scenario affects the assets and comparative advantages that made them relevant. Yet, not all of them will face the same challenges: for example, cities that based their pre-pandemic model on the knowledge economy (e.g., San Francisco or Amsterdam) will find it easier than those that relied heavily on face-to-face activities with a high local impact such as tourism, gastronomy or large events (e.g., Barcelona or Rome).
In any case, all cities (no matter their size) will need to strengthen their digital presence in the international context and reposition themselves in a new, challenging and highly competitive post-pandemic scenario. Hence, some strategic approaches such as city branding will acquire particular relevance, as well as actions aimed at facilitating and stimulating investment through digital innovation. An example of this can be found in the ‘Barcelona Fàcil’ strategy – a plan promoted by the city council to make the digital procedures and bureaucracy necessary for entrepreneurship accessible and agile –, in whose deployment we collaborated in December 2020.
An opportunity for the urban peripheries to go global
The disruptions brought about by the pandemic compelled us to rethink the logics of centre-periphery and the idea that only global cities benefit from the international context. Indeed, we cannot longer assume that it is only large vibrant cities the ones attracting international talent and innovation. And the popularization of remote work has been a game changer here.
Today, more and more professionals are establishing their offices in the urban peripheries, which offer not only cheaper and more competitive rentals, but also healthier natural environments. This context opens up new opportunities for rural and peri-urban territories to attract talented professionals and innovative organizations, which could contribute to boosting their local economies. Yet, seizing this momentum entails developing a competitive value proposition. Take the Greek example: the government is offering a new digital nomad visa, which includes a 50% tax break for the first 7 years, designed to lure remote workers to move to the country. With this initiative, the Greek government is expecting to bring in vital revenue for local business, since all these remote workers will need to hire an apartment and will surely go to restaurants and visit the local shops. Some municipalities are pursuing even bolder moves and are trying to attract companies’ headquarters, offering a myriad of incentives based on a well-planned internationalization strategy.
In the near future we envision a growing number of peri-urban territories seeking to reposition themselves as new digital and innovation hubs, only some miles away from the bustling centers of capital cities. Yet, again, this requires playing the cards wisely.
European Union Funds: building back better
In Europe, cities concentrate most of the countries’ productive fabric. In the case of Spain, between the metropolitan regions of Madrid and Barcelona, they generate almost 80% of the country’s GDP. The concentration of productive activities in urban environments can be explained by different factors, being the potential of taking advantage of agglomeration economies, one of those. However, urban agglomerations, due to their higher weight on the countries’ economy, have been also heavily affected by the socio-economic consequences of the pandemic. In this context, cities acquire an important role in the post-Covid-19 recovery strategy, which will be financed through the Next Generation EU funds and the Multiannual Financial Framework for 2021-2027.
The funds represent a clear opportunity for cities, not only to help recover their current economy but to transition towards more resilient economic models. To do so, the funds will prioritize those projects built upon innovation and environmental sustainability, and that will add value to entire value chains while fostering social inclusion and gender equality. In turn, to benefit from these funds, cities will need to focus their efforts on those innovative city projects that involve qualified stakeholders such as the academia, research centers and industry partners while keeping citizens involved in order to promote inclusion and equal opportunities. Thus, those cities that already have a consolidated start-up ecosystem, powerful academic institutions and an industry with a strong component of innovation and research, will start from an advantageous position to capitalize part of the funds aimed at municipal corporations.
The funds may also represent an opportunity for the rural world to project itself at a regional and international level. That is, the funds will bet on projects that take care of the environment and that at the same time do add economic resilience in the framework of circular economy. The rural world is a clear source of primary materials and it makes food and artisan products of higher quality, which at the same time help position and project the area to new markets. In that sense, the European funds may help to reinforce rural development through projects fostering those activities that value natural assets and that take care of them.
The power of alliances
“If you want to go fast go alone, if you want to go far go together”. This African proverb is timelier than ever. Alliances have played a pivotal role as means of sharing knowledge and pooling resources in the hardest moments of this pandemic. Yet, it should be reminded that we live in a world of multiple, interrelated crisis. That is, there are fundamental links between the environmental degradation and global warming, the planetary health, the access to public services, or issues of racial and social justice. This means that the only way of recovering sustainably from this crisis is tackling them together, but also in a collaborative way between the different sectors of society. It is not by chance that Agenda 2030 pointed to the crucial importance of alliances as means of implementing the global goals.
Examples abound on how cities can work in alliances. For instance, only some months ago nine of the largest European cities addressed a joint letter to the European institutions demanding a direct earmark of 10% of the Recovery and Resilience Facility (the main pillar of EU’s recovery plan) for local governments. Similarly, cities can greatly benefit from participating in networking spaces such as the ones provided by well-established organizations like UCLG, Metropolis, Eurocities or C40. Interestingly, it is becoming common place for city networks to partner up with the private sector, philanthropies, civil society or intergovernmental organizations in search for resources, knowledge, legitimacy or expertise that could otherwise be very difficult to access.🌍 #OneYearAfter the #pandemic hit them, rethinking their #internationalization strategies becomes a must for cities if they want to continue capturing opportunities on the global map. @anteverti team explores 4 trends to better understand why—and how👇 Clic para tuitear
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