Cities and Competitiveness

Improved competitiveness, as we all know, is the path to economic nirvana. Plainly, it is a sought after property of any economy: the term trips frequently off the lips of politicians and commentators on economic and business matters. As cities increasingly engage in competition with one another at different levels, the determinants of competitive advantage are coming under intense scrutiny. Many an economic development strategy – whether at national, regional or urban level starts from the premise that ‘something can be done’ to make an economy more competitive. There is a highpowered Competitiveness Advisory Group which reports to the European Commission (Jacquemin and Pench, 1997); the US has a special Commission for competitiveness and the UK government produced a succession of White Papers on the subject in the 1990s. In the latest, the new Labour government highlights the need for the ‘right local environment for business success’ (Department of Trade and Industry, 1998). The OECD (1996, 1997a, 1997b) too has published a series of reports on the subject, looking particularly at new industries. But there is precious little agreement either on what the term ‘competitiveness’ means or on how policy should aim to enhance it. Yet most people have an instinctive understanding that some economies function better than others and that there are systematic reasons for this. We know one when we see one, but it is difficult to define an elephant.