Brookings: Projects - Global Cities Initiative

Going Global: Boosting Dallas-Fort Worth’s Economic Future

Thu, 16 May 2013 12:00:00 -0400

Event Information

May 16, 2013
12:00 PM - 1:30 PM EDT

As the United States emerges from the Great Recession, it is clear that the nation’s economy must be purposefully restructured from one focused inward and characterized by excessive consumption and debt to one that is globally engaged and driven by production and innovation. A growing chorus of leaders is calling for a new growth model, one that creates more and better jobs by engaging rising global demand and attracting global talent and capital. These leaders recognize that only by harnessing the power of cities and metropolitan areas can the country hope to foster job growth in the near term and restructure the economy for the long haul.

On May 16, the Metropolitan Policy Program at Brookings and JPMorgan Chase hosted a forum in Dallas, Texas, “Going Global: Boosting Dallas-Fort Worth's Economic Future,” the third in a series of domestic and international forums being convened this year by the Global Cities Initiative. This is the second year of the five-year initiative. The forum explored how metropolitan-led economic growth—including global trade and investment—are important for job creation, and how Dallas-Fort Worth can leverage its position in the global market.

Speakers and panels provided context on the region’s position in the global marketplace and offered insight into how area leaders can work together with international partners to expand global trade and enhance Dallas-Fort Worth's economic prosperity.

Join the conversation on Twitter with hashtag #GlobalCities.

Event Materials

Participants

Panelists

Bruce Katz

Vice President and Director, Metropolitan Policy Program
The Adeline M. and Alfred I. Johnson Chair in Urban and Metropolitan Policy

GCI Houston: Greater Houston and the Next Economy

Bruce Katz — Wed, 15 May 2013 00:00:00 -0400

Editor's Note: On May 15, 2013, Brookings vice president Bruce Katz spoke at the Houston convening of the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase to catalyze high-level discussions of metropolitan leadership in the world economy and the actions metro leaders can take to improve trade relationships with cities in mature and rising markets. Hosted by Rice University, the forum brought together distinguished regional, national, and international leaders from the business, civic, government, and philanthropic communities to explore how the greater Houston area can enhance its ability to compete globally.

Bruce Katz - Global Cities Initiative

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Authors

Bruce Katz

Going Global: Greater Houston’s Economic Future

Wed, 15 May 2013 13:30:00 -0400

Event Information

May 15, 2013
12:30 PM - 2:00 PM CDT

Baker Hall
Rice University, James A. Baker III Institute for Public Policy
6100 Main Street
Houston, TX 77005

On May 15, the Metropolitan Policy Program at Brookings and JPMorgan Chase hosted a forum at Rice University, “Going Global: Greater Houston’s Economic Future,” the second in a series of domestic and international forums being convened this year by the Global Cities Initiative. This is the second year of the five-year initiative. The forum explores how metropolitan-led economic growth—including global trade and investment—are important for job creation, and how Metropolitan Houston can leverage its position in the global market.

Join the conversation on Twitter with hashtag #GlobalCities. Photos courtesy of John Everett.

Roundtable Presentations:

View Bruce Katz's presentation on Houston's next economy »
Download Marek Gotman’s presentation on workforce development (PDF) »
Download Amy Liu's presentation on regional export planning (PDF) »

Bruce Katz, Brookings Vice President & Founding Director, Metropolitan Policy Program

Gina Luna, Chairman of JPMorgan Chase for Houston

Bruce Katz, Brookings Vice President & Founding Director, Metropolitan Policy Program

Video

Event Materials

Participants

Moderator

Amy Liu

Co-Director and Senior Fellow, Metropolitan Policy Program

Panelists

Bruce Katz

Vice President and Director, Metropolitan Policy Program
The Adeline M. and Alfred I. Johnson Chair in Urban and Metropolitan Policy

Honorable Peter Ammon

Ambassador

Honorable Richard M. Daley

Former Mayor of Chicago
Chairman

Dr. David Leebron

President

Gina Luna

Houston Market President

Amy Liu

Co-Director and Senior Fellow, Metropolitan Policy Program

David McClanahan

President and CEO

Atlanta Can Flourish in Global Economy

Richard M. Daley and Bruce Katz — Mon, 22 Apr 2013 14:00:00 -0400

"The economic foundation of cities is trade," proclaimed the great urbanist Jane Jacobs in her book, "The Death and Life of Great American Cities." Jacobs’ statement remains just as – if not more – relevant for cities and metropolitan areas as it was a half-century ago.

The Great Recession revealed the limitations of an inward-focused, debt-fueled U.S. economy. It coincided with a structural shift in the global economic order towards rapidly industrializing and urbanizing nations like Brazil, India and China. By 2012, a majority of the 50 top performing metropolitan economies worldwide were in developing Asia-Pacific countries. U.S. metros must take advantage of growing demand abroad by developing export and engagement strategies that build on their special assets in the global economy.

Atlanta is well positioned to thrive in a more export-oriented economy. Metro Atlanta – the 13th largest metro exporter in the United States – sent $20 billion worth of goods and services abroad in 2010, which supported nearly 152,000 jobs in the region. It houses many multi-national corporations such as Home Depot, Coca-Cola and UPS; innovative small and medium-sized firms; and several world-class research universities, and it maintains a strong international brand from its hosting of the 1996 Summer Olympics. Hartsfield-Jackson International Airport and the Port of Savannah form an important U.S. logistics hub and a gateway to world markets.

How can Atlanta build on its unique assets and strengths to maintain and expand its position in markets abroad?

The region has already taken the first step. Two weeks ago, Mayor Kasim Reed announced the launch of an Atlanta Metropolitan Export Plan that will be developed in collaboration with some of the region’s key business, political, university and non-profit leaders. The next step will be to conduct a market assessment of regional industries, identify the metro’s strengths and weaknesses, and determine what policies and investments are necessary to grow exports.

It is critical for Atlanta to progress beyond a place through which goods and people flow by doubling down on becoming more of a center for advanced production and services. This transformation, from port to production or from airport to aerospace, will not just happen. It will require smart and strategic investments in areas such as advanced research and development, education and infrastructure.

A clear option would be to better leverage and commercialize the advanced research conducted at its major universities. One success story is Suniva Inc., a manufacturer of high-efficiency solar cells and high power solar modules, which spun out of Georgia Tech’s University Center of Excellence in Photovoltaics. Three years after its founding, the company was named “Renewable Energy Exporter of the Year” in 2010 by the U.S. Export-Import Bank after selling more than 90 percent of its products abroad in 2009.

The Atlanta region has the tools to flourish in the global economy. It’s time for its leaders to take the steps necessary for the region to realize its full potential.

Editor's Note: This article was originally published in the Atlanta Journal Constitution on April 10, 2013.

Authors

Richard M. Daley
Bruce Katz

GCI Atlanta: Greater Atlanta and the Next Economy

Bruce Katz — Wed, 20 Mar 2013 00:00:00 -0400

Editor's Note: On March 20, 2013, Brookings vice president Bruce Katz spoke at the Metro Atlanta convening of the Global Cities Initiative, a joint project of Brookings and JPMorgan Chase to catalyze high-level discussions of metropolitan leadership in the world economy and the actions metro leaders can take to improve trade relationships with cities in mature and rising markets. Hosted by the Georgia Institute of Technology, the forum brought together distinguished regional, national, and international leaders from the business, civic, government, and philanthropic communities to explore how the Atlanta metropolitan area can enhance its ability to compete globally.

Bruce Katz - Global Cities Initiative

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Authors

Bruce Katz

GCI Atlanta Rountable: Atlanta from the Air

Adie Tomer — Wed, 20 Mar 2013 00:00:00 -0400

Editor's Note: On March 20, 2013, as part of the Metro Atlanta convening of the Global Cities Initiative, Brookings helped lead a roundtable to focus on the role of Hartsfield-Jackson International Airport in generating economic activity, both local and global. The conversation, which included a presentation by Brookings’s Adie Tomer, senior research associate, associate fellow. and co-author of Global Gateways: International Aviation in Metropolitan America, built on efforts underway by Mayor Kasim Reed, Invest Atlanta, the Metro Atlanta Chamber, and the Atlanta Regional Commission to fully tap the economic potential of the airport.

Adie Tomer - Global Cities Initiative Forum

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Authors

Adie Tomer

Going Global: Boosting Metro Atlanta's Economic Future

Wed, 20 Mar 2013 11:30:00 -0400

Event Information

March 20, 2013
11:30 AM - 2:00 PM EDT

Historic Academy of Medicine
Georgia Institute of Technology
875 West Peachtree Street NW
Atlanta, GA 30309

On March 19, the Metropolitan Policy program at Brookings and JPMorgan Chase hosted a forum at the Georgia Institute of Technology, “Going Global: Boosting Metro Atlanta’s Economic Future,” the first in a series of domestic and international forums being convened this year by the Global Cities Initiative. This is the second year of the five-year initiative. The forum explored how metropolitan-led economic growth—including global trade and investment—are important for job creation, and how Metropolitan Atlanta can leverage its position in the global market.

Roundtable Presentations:
View Bruce Katz's presentation on Atlanta's next economy »
View Adie Tomer's presentation on global aviation »
View Amy Liu's presentation on global trade »

Other Resources:
For more information on the Global Cities Initiative, please visit the project's homepage.

Read the forum's press release » (PDF)
Read the forum's program » (PDF)

Video

Participants

Panelists

David Balos

Market Manager, Middle Market Banking

GCI Atlanta Roundtable: Atlanta’s Regional Export Plan

Amy Liu — Tue, 19 Mar 2013 00:00:00 -0400

Editor’s Note: On March 19, 2013, as part of the Metro Atlanta convening of the Global Cities Initiative, Brookings’s Amy Liu, senior fellow and co-director of the Metropolitan Policy Program, led an introductory meeting for targeted stakeholders to develop and implement an Atlanta Regional Export Plan, an initiative that was formally announced by Mayor Kasim Reed at the GCI Atlanta forum the following day.

Brookings Metropolitan Policy Program - Global Cities Initiative Export Roundtable - Atlanta, GA from Brookings Metropolitan Policy Program

Authors

Amy Liu

Finding the ‘New’ Mexico in Querétaro

Joseph Parilla and Alan Berube — Fri, 15 Mar 2013 00:00:00 -0400

Nearly five centuries after the arrival of Hernán Cortés on its shores, Mexico is being rediscovered again. After years in which drugs and thugs led the Mexico headlines in Western media, no less than the Economist, Foreign Affairs, and the Financial Times now highlight the country’s rapid federal reforms, booming middle class, and strong current and projected economic growth. Mexico City, which was largely spared from the recent wave of violence, is booming with new residential and commercial construction, including what will be the tallest building in Latin America. And upon visiting Monterrey, Mexico’s third largest region, New York Times columnist Tom Friedman described “How Mexico Got Back in the Game.”

But the “new” Mexico—site of this year’s Global Cities Initiative international forum—is exemplified best by neither Mexico City nor Monterrey. To see it, we drove two and a half hours northwest of the capital to the city and state of Querétaro. For decades, the 2 million-person state was perhaps best known as the site where Mexico’s current Constitution was ratified in 1917. Now, Querétaro is ground zero for the country’s economic revolution, achieving average annual GDP growth of 5.5 percent over the last decade, highest among Mexico’s 31 states. It is home to major multinational corporations like GE and Samsung, a burgeoning middle class, new golf courses, and what will soon be Latin America’s second-largest shopping mall, all within a stone’s throw of an immaculately preserved colonial center (a UNESCO World Heritage site).

What accounts for Querétaro’s economic energy? Both state leaders and local residents credit the 2005 arrival of Bombardier, the Canadian aerospace and transportation manufacturer, as the catalytic investment that put Querétaro on the global map. The firm was attracted to the region’s well-educated population and the promise from federal and state governments to locate a new aerospace university, UNAQ (Universidad Aeronáutica en Querétaro), to supply the budding cluster with skilled workers. Of the 1,800 workers at Bombardier, nearly two-thirds were trained at UNAQ, and the firm works closely with the university to tailor the curriculum for all rungs of the aerospace career ladder—from production workers to engineers.

Beyond its local assets, Querétaro lies at key intersection of North American advanced manufacturing. It sits at the convergence of Mexico’s road, rail, and telecommunications network, right along the “NAFTA Highway” that allows parts to be shipped to Wichita and Toronto for assembly much more quickly than from China. Bombardier’s plant abuts the brand new Querétaro International Airport, whose runways the state hopes will test the first entirely Mexican-made aircraft within a decade. And with Querétaro producing fuselages, wings, and electrical harnesses; Wichita offering design and assembly; and Montreal providing research and development, Bombardier’s supply chain for the Learjet 85 benefits from the distinct specializations of three metropolitan economies all within two time zones and one free trade area.

Queretaro’s story exemplifies the increasingly important role Mexican metropolitan areas play in advanced industry supply chains—such as aerospace, automotive, and appliances—that unite North America as one de facto economic market that not only trades goods, but co-produces them for the rest of the world. Nearly 20 years after NAFTA’s passage, 40 percent of what the United States imports from Mexico is actually American-made content. With global economic winds like the shale gas revolution, eroding cost advantages for Chinese labor, and the “just-in-time” production imperative at North America’s back, the continent has clear incentives to integrate further to compete with Asia, Europe and the rest of Latin America.

Yet the administration of newly elected Mexican President Enrique Peña Nieto recognizes that the country can no longer simply integrate into global value chains. Its economic strategy seeks to move Mexican firms up those value chains by boosting productivity, innovative capacity, and entrepreneurial dynamism in key sectors. To do so, it must build from the sort of strengths evident in regions like Querétaro, which are building expertise and infrastructure to accommodate higher-value activities like research, design, and finance.

Mexico’s rise could usher in an even more prosperous next 20 years for North America, but not without stronger cooperation between the three nations. With the Obama administration still focused on the Middle East and the “pivot to Asia,” regional and state leaders in the United States have a unique opportunity to change the conversation. U.S. cities and states should get to know Querétaro, as its progress pinpoints the challenges and opportunities of the maturing economy to our south, and holds some lessons for its northern neighbors, too. And they might learn, as we did, why signs greeting visitors say, Suertudo, vives en Querétaro (Lucky you live in Querétaro).

Authors

Joseph Parilla
Alan Berube

Metro Brazil: An Overview of the Nation's Largest Metropolitan Economies

Jill Wilson and Nicole Prchal Svajlenka — Fri, 30 Nov 2012 00:00:00 -0500

To coincide with the Global Cities Initiative’s international forum in São Paulo, Brazil, the Metropolitan Policy Program is providing economic snapshots of the Brazilian metro areas that rank among the world’s 300 largest metropolitan economies. Using data from the latest Global MetroMonitor, these profiles illustrate how metropolitan areas contribute to national economic growth.

All profiles are available in English and in Brazilian Portuguese. All files are PDFs.

Baixada Santista English » Portuguese »	Belo Horizonte English » Portuguese »	Brasília English » Portuguese »
Campinas English » Portuguese »	Curitiba English » Portuguese »	Fortaleza English » Portuguese »
Grande Vitória English » Portuguese »	Manaus English » Portuguese »	Porto Alegre English » Portuguese »
Recife English » Portuguese »	Rio de Janeiro English » Portuguese »	Salvador English » Portuguese »
São Paulo English » Portuguese »

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Authors

Jill Wilson
Nicole Prchal Svajlenka

Global MetroMonitor 2012: Slowdown, Recovery, and Interdependence

Emilia Istrate and Carey Anne Nadeau — Fri, 30 Nov 2012 00:00:00 -0500

While the global economic recovery slowed in 2012, the world’s largest metropolitan economies continued to have very different growth experiences. Disparities loom both across major world regions and within them, reflecting differences in metro industrial structure, national growth rates, and metro starting points.

An analysis of GDP per capita and employment changes from 2011 to 2012 for the largest 300 metropolitan economies worldwide, which account for nearly one-half (48 percent) of global output but contain only 19 percent of world population, shows that:

Three-quarters of the fastest-growing metropolitan economies in 2012 were located in developing Asia, Latin America, and the Middle East and Africa. By contrast, almost 90 percent of the slowest-growing metro economies were in Western Europe and North America. These recent trends reflect the accelerating shift of economic growth from developed metro areas in the global West towards developing metropolitan areas in the global South and East.
Compared to their countries, more than half of metro areas outperformed on employment growth in 2012, but only 40 percent achieved faster GDP per capita growth. Fifty-six (56) metro areas were pockets of growth in their countries, with both GDP per capita and employment expanding at a faster pace than national averages.
Almost three-quarters of the 300 metro areas had higher levels of employment and/or GDP per capita in 2012 than in 2007. Most metro areas in the developing Asia- Pacific and Latin America regions suffered no recession in the last five years or fully recovered to pre-recession levels, while only five North American metro areas managed to recover in both employment and GDP per capita. About 46 percent of metro areas, mostly in North America and Asia-Pacific, achieved higher employment and/or GDP per capita growth rates in 2011-12 than before the worldwide downturn.
Growth rates of both GDP per capita and employment slowed between 2011 and 2012 compared to the previous year for half of the 300 metro areas. Only in developed Asia- Pacific metro areas did combined GDP per capita growth accelerate last year, and among developed economies only North American metro areas achieved faster aggregate job growth in 2012 than in 2011.
Both national and local factors influence metropolitan economic growth. The previous year’s metro GDP per capita, the previous year’s national GDP per capita growth, and industry performance most affect annual changes in metro GDP per capita growth in the short-term. Over the long run (2000 to 2010), factors including national GDP per capita growth, initial metro GDP per capita, metro industry specialization, and metro human capital stock influence changes in a metro area’s standard of living.

Downloads

Download the report

Authors

Emilia Istrate
Carey Anne Nadeau

Image Source: © Aly Song / Reuters

The Metropolitan Future of Brazil and the United States

Bruce Katz and Julie Wagner — Fri, 30 Nov 2012 09:33:00 -0500

Editor’s Note: During the Global Cities Initiative’s international forum in São Paulo, Bruce Katz delivered remarks on metropolitan areas and their potential to power national economies worldwide. The remarks were written by Katz and Julie Wagner.

The Metropolitan Future of Brazil and the United States
(This presentation is also available in Portuguese)

Good morning everyone. It is a pleasure to be back in Sao Paulo with JP Morgan Chase, our partner in the Global Cities Initiative. I am grateful for their support and leadership.

I first want to thank Governor Alckmin and Mayor-elect Haddad for their participation today and we fully welcome the opportunity to work with both of them and the city and state in the coming months and years.

This has been an extraordinary week for our delegation of mayors and business, civic, and university leaders from 10 major American cities and metropolitan areas.

We have seen firsthand the proud history and infectious energy and vibrancy of this great city and macro-metropolis. We are grateful to Luiz Felipe D’Avila and the Centre for Public Leadership for co-sponsoring this forum today. We also owe a debt to others who have hosted and guided us this week—the State of Sao Paulo, particularly the State Secretariat for Metropolitan Development, Insper, the Commercial Association of Santos and the Port of Santos and the Brazil-U.S. Business Council, and the U.S. Embassy and Ambassador Shannon.

As Aod said at the outset, São Paulo is the first stop outside the United States in our five year Global Cities Initiative. That is a deliberate choice. The relationship between the United States and Brazil is a critical one. Despite barriers, the economic and social ties between our two countries are strong and growing stronger. Trade is booming. Investment is up. Tourism and business travel have never been higher. And the recent state visits by presidents Obama and Rousseff send a clear signal that this is a partnership of the highest order.

Yet there is hard work to do in both our countries. The U.S. and Brazil are undergoing major economic transitions. By global standards, both of us under-perform on exports, far trailing other countries. The U.S. is shifting slowly back towards a more productive, sustainable economy after our worst downturn in 80 years; Brazil is moving forward towards a more open, outward looking economy.

Against this complex backdrop, our delegation comes bearing a simple proposition. The answers to national challenges lie, in great part, below the national level.

We live in a century where cities and metropolitan areas are driving national economies and the global economy. The U.S. and Brazil have 84 and 85 percent of our respective populations living in our cities and metropolitan areas … and these communities generate 91 percent of the GDP in the U.S. and 88 percent of the GDP in Brazil. There is, in essence, no American or Brazilian—or German or Chinese—economy; rather our national economies represent networks of powerful city and metropolitan economies.

Today, I will make three main points.

As the world urbanizes, cities and metropolitan areas have emerged as the engines of national economies.

As our economies globalize, cities and metropolitan areas act as the centers of international trade and investment.

To prosper today, cities and metropolitan areas need to drive their economic destiny. In our federal republic, where power is shared across national, state and local governments, that requires new thinking about who does what.

But, first things first; we cannot put forward a metropolitan playbook without first understanding what a metropolis is. And the best way to do that is from the ground up.

On the right side of the screen you see the São Paulo metropolis, 20 million strong, 10^th most populous in the world.

On the left side of the screen you see Chicago, Mayor Daley’s hometown, with a population of 9.5 million, 26^th largest in the world.

Both of these metro areas cluster around core cities but cover large land masses and encompass multiple jurisdictions.

The São Paulo metro is more than 8,000 square kilometers in size, with more than half of your population living in the city proper and the remainder residing in 38 other municipalities.

Chicago is close to 19,000 square kilometers in size with one third of the population living in the central city and the remainder spread across, incredibly, three states, 14 counties encompassing hundreds of separate municipalities and townships.

The assets São Paulo and Chicago need to compete nationally and globally are spread across their regions:

Clusters of workers;

Key colleges and universities;

Major hospitals and health care facilities;

A network of urban green space; and

The infrastructure—roads, rail and transit and airports—needed to move people, and freight

In other words, metro areas are the natural, organic geographies of the economy, clustered around central cities for sure, but also benefitting from the assets offered by satellite cities and suburban, exurban and rural areas.

With that background, let me start with an irrefutable observation: cities and metropolitan areas are the 21^st century engines of national economies.

Since 1950, the world’s urban population has more than quadrupled in size. Now sized at 3.6 billion people, it is expected to surpass 5 billion by 2030.

In 1950, 29 percent of the world’s population lived in cities and their metropolitan areas. By 2009, the share surpassed 50 percent. By 2030, urban settlements will harbor more than 60 percent of the world’s population.

In many respects, the world is becoming more like us. The United States and Brazil are two of the most highly urbanized countries with city and metro concentrations surpassing those of both mature economies in Germany, Britain, and Spain and emerging economies like China, India, and South Africa.

Cities and metros do not just house people; they power economies. Today Brookings released our annual Global Metro Monitor that tracks the economic performance of the world’s top 300 largest metropolitan economies.

Incredibly, we find that these metropolitan areas house a little under one fifth of global population but generate nearly half its total output. Put simply: Metros around the world punch way above their weight.

Why are they so powerful?

Because they cluster and connect firms, large and small, with ports and airports, transport and energy infrastructure, and a broad range of supportive institutions that supply skilled labor, advanced research and customized capital. And when that happens, productivity improves, entrepreneurship rises, employment and wages increase.

The dominance of metros holds true for both our countries, which house 13 and 76 of the top 300 global metros, respectively.

Your thirteen top metropolitan areas are home to one third of Brazil’s population, concentrate half of Brazil’s manufacturing output and your population with college education and account for 56 percent of national GDP and 63 percent of financial services output.

These metros range from Sao Paulo, 11^th largest economy in the world, to Baixada Santista, 295^th largest.

Eleven of your metro areas are state or national capitals; this state is home to three of the 13 large metro areas.

Metro São Paulo takes its place among the world’s most populous and economically powerful metros.

You are home to one tenth of Brazil’s population, account for one-fifth of Brazil’s GDP and generate 57 percent of the GDP of this state.

For America’s part, our top 76 metros form the real heart of the U.S. economy.

Housing 61 percent of our population, they concentrate a majority of our manufacturing output, gather our most educated people, and generate more than 68 percent of our national GDP.

They also make an outsized contribution on financial services and the production of patents.

In the U.S., the top 76 metros range from New York, L.A., and Chicago to less well known communities like Allentown, Little Rock, and Harrisburg.

This leads to my second point: as economies globalize, cities and metropolitan areas act as the centers of international trade and investment.

Metros and trade are inextricably linked, and have been for millennia. The Silk Road that connected Asia, Europe, the Middle East, and Northern Africa. The Hanseatic League that grew from Hamburg and Lubeck to include 170 cities that monopolized trade in Northern Europe between the 13^th and 15^th centuries. The great Italian city-states of Venice, Pisa, Genoa, and Amalfi.

These historic networks offer essential lessons:

As a recent Brookings report concluded:

“Trade is essential to metros—it is how they grow their economies. And metros are essential to trade—they provide the specialization and market access that facilitates exchange among producers and consumers.”

The top Brazilian and U.S. metros are our nations’ logistical hubs, concentrating the movement of goods and people by sea and by air. In Brazil, 61 percent of foreign waterborne trade, measured by tonnage, passes through the seaports of the top metros; in the United States the equivalent share is over 66 percent. Passenger travel is even more concentrated; in both countries, close to 82 percent of international air travel passes through the airports of the top metropolitan areas.

Significantly, the top cities and metros in both our countries are magnets for foreign direct investment, particularly “greenfield FDI” where foreign entities invest in new facilities or expansions of existing facilities rather than just purchase domestic companies.

From 2003 through September 2012, Brazil’s 13 accounted for 77 percent of greenfield FDI projects in Brazil and 59 percent of the jobs created through this key growth vehicle. The top 76 U.S. metros also accounted for 77 percent of Greenfield FDI projects and 70 percent of the jobs created.

Brazil’s 13 are responsible for a third of all national goods exports; the share is substantially higher for the top U.S. metros. Brookings research on U.S. exports shows that our top U.S. metros dominate the trade in manufacturing and services … and, given their edge in sectors like chemicals, consulting and computers, are on the front lines of commerce with China, Brazil, and India.

In sum, our research has shown the collective centrality of our top cities and metros to the trading position of our nations.

Yet metro economies do not exist in the aggregate; they have distinctive starting points and vary considerably in their trading prowess and intensity. What makes São Paulo special on the global stage—your distinctive offer, your special investment potential—is different from what defines and drives Rio or Curitiba or Salvador.

São Paulo is Brazil’s premier global metropolis and the numbers reflect that. Your metro houses 10 percent of Brazil’s population but:

Your airports handle 26 percent of all passenger traffic in Brazil and 33 percent of all air cargo.
Your macro metro neighbor, Santos, which we visited yesterday, is the busiest container port in South America and 43rd in the world.
You are Brazil’s largest metropolitan exporter, producing 27 percent of all metropolitan exports of goods

And from 2003-2011 you received 19 percent of all greenfield FDI in Brazil … in fact, more FDI than New York, LA, Chicago, Houston and San Francisco combined.

You trade with the world’s most prosperous cities, in the United States and elsewhere, but in particular ways given your distinctive industry clusters and sectors.

Given your substantial concentration in financial services (with 19 of the 25 top international banks present and the world’s third largest financial exchange), you interact naturally with New York and Miami in the U.S., London, Madrid, and Frankfurt in Europe and Shanghai, Tokyo and Hong Kong in Asia.

Despite the outward movement of industry, you still serve as Brazil’s main global platform for advanced manufacturing sectors like automotive, linking you closely with Detroit in the U.S., Milan and Stuttgart in Europe, and Nagoya in Japan.

The shape and structure of your economy puts São Paulo in an exclusive club of “global cities,” a definition drawn in the 1990s when the process of trade, investment, and globalization was seen as empowering a few command and control finance metros of the world.

But today, our notions of “globalizing cities” are more expansive, recognizing that all cities are fueled, to different degrees, by global investment and connected, in distinctive ways, via global commerce and exchange, global product and labor supply chains.

The energy cluster in Rio finds common interest with the energy cluster in Houston through investments by Exxon Mobil, Chevron and Petrobras … and then further with energy firms in Amsterdam, Dar es Salaam, and Bogota.

Campinas’ hi-tech sector naturally links with the hi-tech cluster in San Jose’s Silicon Valley via elite universities, advanced R&D institutions, and global tech giants like IBM, Hewlett-Packard and Dell … and then further with tech clusters in Tokyo, Bangalore and Dublin.

As headquarters of Embraer, São Jose dos Campos links via supply chains to Palm Bay, Florida, Harbin, China and Lisbon, Portugal.

In short, a new global map is being drawn in the world, not of nation to nation trade but of metro to metro exchange.

That leads to my final point: To prosper in the global economy today, metros need to drive their global economic destiny.

We have a three part playbook:

The playbook starts at home, with cities innovating locally to exploit their distinctive competitive advantages in the global economy.

In the U.S., cities and metropolitan areas are acting with intentionality in the aftermath of the Great Recession to devise and implement what we call “metropolitan business plans.” The purpose: build on their distinctive competitive advantages in the traded sectors of the economy, given the crippling effect on housing and consumption.

The elements of business planning are fairly simple and straightforward

Each metropolis does a market assessment of their unique economic profile and potential … what goods and services they trade, which nations they trade with, where trade trends are likely to head given market dynamics here and abroad.

Armed with this information, metros then set goals and objectives that build on their distinct advantages, devise strategies to meet those goals and establish metrics to gauge progress.

All these efforts are undertaken by a consortium of corporate, government, university and civic institutions that cut across jurisdictions, sectors, and disciplines and “collaborate to compete” globally.

Let me give you an example of how these business plans are helping cities and their metros grow jobs and restructure their economies.

Los Angeles, represented here by Mayor Antonio Villaragoisa, has devised an ambitious plan to grow exports by identifying and proactively supporting export ready firms in leading trade sectors like aerospace, computers, professional services, and film and television. The L.A. system of trade is moving from a story of fragmentation, where no clear institution defines or drives decision-making, to a reality of coordination and collaboration, responsiveness and flexibility under one Los Angeles Regional Export Council. The result: More firms will export more goods and services to more places producing more and better jobs.

We believe business planning holds great potential for São Paulo and other Brazilian metros. Obviously, fixing the basics is a critical first step for economic growth: safe streets, quality schools, efficient transport and sound governance. But a business plan might focus on increasing foreign direct investment in infrastructure necessary to reduce congestion, improve mobility, and enhance accessibility to jobs.

The key is not what you focus on … but to decide your focus based on evidence and in a collaborative manner and then to hold yourself accountable through continuous assessment and measurement.

Having innovated locally, cities must network globally—creating and stewarding close relationships with trading partners in both mature economies and rising nations.

The new global reality is leading to intricate networks of trading cities which grow together by linking together and learning together.

These networks obviously start with firms and ports that do business with each other.

But, over time, networks extend to supporting institutions—governments, universities, business associations—that provide support for companies at the leading edge of metropolitan economies.

The city of Houston and the city of São Paulo, for example, executed a formal agreement earlier this year that commits each city to increase commercial relations, intensify scientific and technological connections, and facilitate information to tackle shared challenges.

Enterprise Florida, the principal export and investment organization in that state, opened an office in São Paulo in 2011 to help Florida companies expand trade. APEX-Brasil, Enterprise Florida’s Brazilian counterpart, has its only U.S. location in Miami’s free trade zone. There it executes projects like providing clean and renewable fuels to IndyCar, the American based auto racing body.

The Ohio State University and the University of São Paulo have partnered to support the exchange of students and collaborative research. Areas of recent focus: natural and mathematical sciences, medicine, and teacher training. In 2014 Ohio State anticipates opening its third “Global Gateways” office in the world in São Paulo to further capitalize on these linkages.

Here is the simple message: We can see a network of trading cities emerging right here in São Paulo and it is a future characterized by multi-layered relationships across multiple dimensions and disciplines, interests and institutions.

Finally, having innovated at home and networked globally, cities and metros must advocate nationally for federal and state policies and practices that will support metro growth.

Metros are engines, but they do NOT act alone.

Only national governments can set the rules of the road: enhancing access to foreign markets, enforcing trade agreements, opening up borders to immigrants and protecting intellectual property. They can also help match domestic firms with potential global customers, provide export promotion support, and commit resources to modernizing logistics hubs.

As the world evolves as a network of trading cities, it is only natural that cities become more articulate and aggressive about the support they need from higher levels of government.

In the United States, cities have found a receptive partner in the Obama Administration. Key federal agencies—the International Trade Administration, the Ex-Im Bank, the Small Business Administration—have been central partners in guiding business plans with a particular focus on boosting exports.

Similar alliances could be built here. As part of the Global Cities Initiative, the ESADE Business School mapped the trading system in São Paulo. Their research clearly shows the central role of your federal and state governments in advancing the internationalization of your economy. True success will come when these higher level entities align closely with your distinct assets and advantages.

Going forward, the advocacy of cities must extend beyond accessing the export promotion and finance programs of federal and state governments. They must get to the heart of the matter.

The United States has had a North American Free Trade Agreement in place for 20 years with our partners, Mexico and Canada.

We have recently concluded important Free Trade Agreements with Colombia, Panama, and Korea.

President Obama was in Southeast Asia this month discussing the possibilities of a Trans-Pacific Partnership.

The 2011 Agreement on Trade and Economic Cooperation signed by President Obama and President Rousseff provides a platform to build on.

As they have expressed, we need a new vision for our Hemisphere … and for our two countries.

We are both growing with healthy demographics.

We both have an enormous pool of natural assets.

We both have a shared imperative to reorient our economies.

Empowered with the right policies, enabled with the right frameworks, we have the potential to grow together this century, powered by our major population and economic centers.

So that’s our playbook:

Innovate locally. Network globally. Advocate nationally.

Let me end where I began.

From the beginning of time, cities have been centers of commerce, formed along the roads and routes of trade.

And so it is today.

The cities of our nations are powering our nations.

They are giving physical shape to the globalizing economy, seamlessly integrating the exchange of people, goods, services, energy, capital, ideas, and culture.

The promise of the Global Cities Initiative broadly is to capture and channel this energy into lasting, sustained networks and partnerships.

Our pledge as we leave here today is to work with you, partner with you, and ensure that the United States and Brazil bind together not just as two nations but as living, vibrant, powerful networks of trading cities and metropolitan areas.

Authors

Publication: Global Cities Initiative, São Paulo, Brazil

No Global Safety Net if United States Jumps Off the Fiscal Cliff

Emilia Istrate — Fri, 30 Nov 2012 12:30:00 -0500

This week, the Organization for Economic Co-operation and Development (OECD) released a new forecast of the global growth for the next two years. The good news is that emerging markets might pick up slightly, but nothing to the levels seen before the global recession. The bad news is that the problems in the Eurozone area are here to stay, at least for the immediate future. As OECD Secretary-General Angel Gurria put it, “The world economy is far from being out of the woods.”

But what happened this year?

The slowing of the global recovery continued in both developed and developing countries in 2012. As our new Global MetroMonitor, a study of economic growth in the world’s 300 largest metropolitan economies, shows, growth rates decelerated last year for about half of these large metro areas. Ongoing problems in the Eurozone led an increased number of metro areas into at least a partial recession, not only in Eurozone countries but also in the United Kingdom and in Eastern Europe .The slowdown in the global economy also reduced growth rates in developing Asia-Pacific metro areas, though they are still growing faster than other metro areas around the world.

But the news is not bad all around.

The 300 largest metro economies worldwide accounted for nearly one-half of the global economy, but for more than one half of the global economic growth between 2011 and 2012. And these 300 metro areas concentrate only 19 percent of the world population.

Beneath the grim global and national outlooks, we see pockets of growth at the metropolitan level. Fifty-six metro economies did better than their countries in 2012 on both of the indicators used in our study. Further, they are not concentrated in any one country or one world region; they are spread around the world, from 12 in developing Asia-Pacific to five in the Middle East and Africa. North America had seven, two fewer than Western Europe.

In terms of recovery, almost three-quarters of the 300 metro areas had higher levels of employment and/or GDP per capita in 2012 than in 2007. Most of the metro areas in developing Asia-Pacific and Latin America had no recession or had fully recovered to their pre-recession peaks.

Which brings us to the U.S. fiscal cliff.

The U.S. recovery remains fragile, with only three U.S. metro areas (Dallas, Knoxville, and Pittsburgh) having recovered to their pre-recession peaks. North American metro areas represented almost two-thirds of the largest metro economies still below 2007 levels of both GDP per capita and employment. If upcoming debates over the fiscal cliff and long-term solvency derail their progress, it could severely threaten not only the American economy but also the broader global recovery.

Authors

Emilia Istrate

Publication: The Avenue, The New Republic

Image Source: Kevin Lamarque

São Paulo Striving to Keep Global Economic Edge

Alan Berube — Tue, 27 Nov 2012 00:00:00 -0500

What makes São Paulo a global city? Some might say its size. It is the largest city in South America. The São Paulo metro area, as our forthcoming Global MetroMonitor will reveal, is the 10th largest in the world by population and 13th largest by GDP. Others might point to its role as the finance capital of Latin America. Still others might point to its large international population, which includes the largest number of ethnic Japanese residents outside Japan.

Our contention in our recent Metro Trade report, and in our Global Cities Initiative [forum this week], is that trade and international exchange define a city's global character. There is no "yes/no" global city status, so much as a continuum of global engagement along which all cities sit by virtue of their firms' participation in the global marketplace.

In that respect, the São Paulo city-region is indeed highly globalized. As we heard in a presentation today by Aod Cunha of JP Morgan Chase, the São Paulo economy is much more knowledge-intensive and services-focused than are other parts of Brazil. The headquarters of dozens of national and multinational firms in Latin America--including 19 of the world's 25 largest banks—can be found here. At the same time, it is a manufacturing powerhouse, leading in aircraft exports via Embraer. And it retains an important role in Brazil's commodity economy, sending oil, sugars, and fruits to foreign markets, especially China.

Yet as São Paulo and other cities have begun to understand, the upsides of participation in global trade--gaining access to new sources of demand, boosting productivity, hedging against domestic declines--are balanced by the demands of real global engagement: brutal competition, frequent dislocation, and constant pressure to innovate.

So São Paulo faces some critical challenges to maintaining its competitive edge and re-asserting its leadership in the fast-changing Brazilian and Latin American economy. Chief among these, as Cunha described, is urban mobility and industrial development. One ride into the center of São Paulo city at rush hour, or from one neighborhood to another in the middle of the day—often a multi-hour project--tells you much of what you need to know about the urgency of the problem.

This partly reflects that, relative to demand, São Paulo's public transportation is underdeveloped and in need of upgrading and expansion. But it also reflects a planning and economic development challenge. One is struck immediately upon entering São Paulo from the airport 25 miles to the northeast how many high-rise residential buildings ring the outskirts of the city. Connecting those densely populated neighborhoods to the places in the region with jobs to keep firms competitive is a huge priority for the city and region and the subject of the ambitious SP2040 plan and its associated public and private investments.

These are not the only factors that will determine São Paulo's global success; tax and education reform are key issues that remain to be tackled at the national level for Brazil. But they provide a reminder of the key role that metropolitan leaders play through local investment decisions in supporting a city's global engagement. As Cunha concluded, there are too many variables to know whether Brazil will grow at 3, 4, or 5 percent in the long term ... but if it even hopes to grow at 1 percent, it can no longer afford to ignore the huge infrastructure challenges that face its most important metro economy and most globalized city.

Note: This post has been updated to reflect that São Paulo is home to 19 of the world's 25 largest banks, not 15 of the largest 20 as previously stated.

Read Metro Trade: Cities Return to Their Roots in the Global Economy »

Authors

Alan Berube

Publication: The Avenue, The New Republic

Metropolitan Trade: Cities Return to Their Roots in the Global Economy

Alan Berube and Joseph Parilla — Mon, 26 Nov 2012 00:00:00 -0500

Economic theory, world history, and contemporary experience show that metropolitan areas (i.e., city-regional economies) and trade are inextricably linked. Trade is essential to metro areas—it is how they grow their economies. And metro areas are essential to trade—they provide the specialization and market access that facilitates exchange among producers and consumers. This report examines how the intersection between metro areas and trade is motivating a new—yet old—approach to economic growth in an age of increasing international exchange and rapid urbanization.

Cities, not nations, were the original global commercial nodes. From the first urban civilizations in Mesopotamia, to the Silk Road connecting cities from the Mediterranean to central China, to the Crusades-era city-republics of modern day Italy, to the medieval network of maritime trading cities that formed Northern Europe’s Hanseatic League, cities were the indispensable actors of global trade before the rise of the nation-state. They enhanced trade by providing the physical space, constant interaction, and economic specialization needed to facilitate exchange between previously isolated actors.
Two centuries of economic theory reveal how metro areas both facilitate trade, and are themselves an outcome of trade. Adam Smith observed that large markets give rise to the division of labor upon which specialization and trade depend. This eventually led to Ricardo’s theory of comparative advantage and the Heckscher-Ohlin model of factor endowments that helped explain trade patterns among cities and nations. Marshall, meanwhile, explained how metro areas exhibit agglomeration economies that enhance their productivity and capacity for trade. And Krugman observed that in a world of mobile capital and labor, metro areas remain critical nodes for trade because their exporting firms can benefit from both scale economies and access to large local markets.
Metro areas depend on trade for their own prosperity. The goods and services produced by a metro area’s firms that are consumed elsewhere—its exports—inject income from outside the region into the local economy. In turn, that income supports the purchase of local goods and services, creating a “multiplier effect” that increases regional employment and income. Moreover, exporting—especially to international markets—entails high fixed costs and demands high firm productivity. As a result, exporting metro economies are overall more productive and wealthier.
Trade is becoming increasingly important to global and national economies, thanks in part to the growth of metro areas. The rapid advancement of technology, the growth of multinational corporations, and the concomitant rise of Latin America and Asia have helped to triple trade’s share of global output since 1950. Metro areas, meanwhile, increased their share of world population from just 30 percent in 1950 to more than 50 percent today. Urbanization enhances the productivity and export potential of countries, while upgrading jobs and incomes for their populations that can ultimately translate into demand for higher-value imported goods and services. In 2012, the world’s 300 largest metro economies contain approximately 19 percent of global population but account for 48 percent of world GDP.
Trade defines a metro economy’s global economic character. Not all cities are “global cities” in the way that researchers have defined the term, but all cities are touched by the process of globalization by virtue of their distinctive specializations and positions in complex global supply chains. Not only New York, London, and Tokyo, but also São Paulo, Buenos Aires, and Seoul lead in the production of advanced services. Madrid, Hong Kong, and Dubai are centers of media and information. Nagoya, Hannover, and Milwaukee are globally significant manufacturing hubs. And U.S. metro areas such as Wichita, Greenville, and Portland rank among the nation’s most trade-oriented economies by virtue of their world-class local industry clusters.
Metro areas are critical actors for helping boost national and global trade. Beyond national platform-setting activities like trade agreements, currency policy, and investment in research and development, forward-thinking metro leaders—in some cases together with state and national partners—are increasingly adopting strategies to enhance their global trade position. At one level, they are investing in the key assets that drive trade: building an innovation ecosystem in Shenzhen; improving human capital for the aerospace industry in Wichita; and using inherited land and infrastructure to build a world-class inland port in San Antonio. At another level, they are organizing for trade: conducting a detailed market assessment to inform new export strategies in Portland; coordinating regionally and with higherlevel governments to drive inward investment in Rio; and financially supporting the global trade ambitions of small/medium-sized enterprises in Hong Kong and Singapore. Finally, they are boosting trade by building structured relationships with trading partners, including cultivating sustained, market-oriented linkages with Beijing and Shanghai in the San Francisco Bay Area.

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Authors

Alan Berube
Joseph Parilla

Live from São Paulo, It’s Global Trade!

Alan Berube — Mon, 26 Nov 2012 00:00:00 -0500

This week, the Global Cities Initiative convenes its first overseas forum in São Paulo, Brazil. As participants from Brazilian city, state, and federal levels gather with counterparts from eight U.S. metropolitan areas, we are grappling with a critical question for our respective countries: How can our cities work together to advance national prosperity?

Our new paper suggests one key answer—trade. From the dawn of civilization in Mesopotamia, to the emergence of the Silk Road in Asia, to the Hanseatic League that linked port cities in Northern Europe, cities sprouted up to facilitate trade, even before there were nation-states. And trade makes cities, regions, and ultimately nations more productive and wealthier; Paul Krugman and his colleagues call a city's exports to the rest of the nation and the world its "economic rasion d'etre."

In the United States, however, city economic growth strategies—especially in the go-go real estate market of the 1990s and 2000s—have relied too heavily on housing, retail, and other consumption-oriented activities. Meanwhile, trade debates at the national level too often ignore the critical role of cities and regions in spurring innovation, productivity, and ultimately exports and foreign direct investment.

In response, a growing number of U.S. cities and metro areas are undertaking purposeful strategies to enhance their global reach and profile—for exports, investment, migration, and the like.

What does this have to do with São Paulo? As the largest metropolis in the Southern Hemisphere, São Paulo is now at a crossroads. It grew in the 18th and 19th centuries through the coffee trade, in conjunction with the nearby port of Santos. And it became Brazil's industrial powerhouse in the 20th century, eventually emerging into Latin America's capital of finance and one of the economic drivers of the "Brazilian miracle" growth of the 1990s and 2000s.

But of late, its growth has faltered. Other parts of the country are growing much faster; and as Brazil's economy cooled off in 2012, São Paulo's economy slowed even more. But Brazil needs São Paulo, which holds 10 percent of its population but generates 20 percent of its GDP. To grow Brazil's economy, São Paulo must build upon its competitive advantages to enhance its position in global trade and exchange, generating new sources of wealth for the city and the nation. Cities and metro areas in Brazil have not typically had a strong voice in these issues, but that may be changing with the election of new mayors and a new agency in São Paulo State focused on metro areas.

Each day this week, we'll look at the challenges and choices facing the 20-million person São Paulo metropolis as it strives to achieve growth and prosperity through trade and global linkages, including with U.S. cities and metro areas. How should it invest in the assets that drive trade, like innovation, skills, and infrastructure? How can it organize itself for trade, working with other players in the region and at the state and federal levels? And how could it network globally to forge strategic economic relationships with partner cities around the globe, including the eight U.S. metro areas represented here at the Global Cities Initiative forum?

The road to global economic prosperity runs through cities, our hubs of trade and commerce. São Paulo is an auspicious place to examine the potential for building a new network of trading cities across the globe.

Read Metro Trade: Cities Return to Their Roots in the Global Economy »

Authors

Alan Berube

Publication: The Avenue, The New Republic