Cities must partner with their business communities and invest in education to stand out to foreign investors in an increasingly integrated global economy, experts said at the U.S.-Russia Business Council‘s annual meeting in Atlanta Oct. 24.
“To me, mayors must assess the business community to find out about their requirements, about their needs, to be able to advocate for them not just in the United States, but throughout the world,” said Richard Daley, former mayor of Chicago.
While isolationism characterized the 20th century in America, globalization and the rise of “megacities” are threatening to leave behind metropolitan areas that fail to adapt to the changing tide, Mr. Daley said.
In a world where emerging markets are contributing a greater proportion of economic activity and outbound investment, cities’ only sustainable competitve advantage is their people, which is why Chicago is teaching Chinese, Arabic, Russian and Portuguese in public schools, he said.
“The younger generation has to see the world differently than our generation,” he added during a luncheon discussion in partnership with the World Affairs Council of Atlanta to close out the three-day event.
Equally important to a competent workforce is maintaining open lines of communication with the business community, which can be enlisted to promote a city’s brand around the world, he said.
Too often, especially in Washington, government treats business as a liability instead of an asset, a mindset that has to change for America to become more competitive, Mr. Daley added.
Coca-Cola Co. and Delta Air Lines Inc. have played the role of global ambassadors for metro Atlanta, which has the third largest concentration of Fortune 500 firms among cities in the United States.
In a recent speech, Delta CEO Richard Anderson praised Atlanta as a place where business and government put egos aside to accomplish big things that move the city forward. Mr. Anderson warned, however, that the Georgia capital must become more receptive to foreigners if it is to continue its rise as a center for international business and trade.
Atlanta was criticized for allowing commercial interests to dictate too much of the decision-making process in the run up to the 1996 Olympics. After the games, a public-private marketing partnership called the Georgia Allies was installed to ensure that the state used this once-in-a-lifetime platform to woo as many investors as possible.
Terrence Burns, president of Atlanta-based sports marketing firm Helios Partners, said during the discussion that Atlanta’s commercial consciousness helped it become the “posterchild” for Olympic “legacy,” a buzzword use to describe how cities use mega sporting events to foster long-term development.
Today, the International Olympic Committee considers the support of a city’s business community when weighing its bid for the games, said Mr. Burns, whose firm has put together the bids for four Olympic winners and two FIFA World Cup winners, including Russia’s 2018 bid.
Russia got this right in its bid for the 2014 Winter Olympics in Sochi, he said.
“The business community in Russia got behind those games quite strongly,” he added.
One example: While Helios’ admittedly optimistic bid projected merchandise and sponsorship sales of $450 million for the Sochi games, they have already surpassed $1.2 billion, Mr. Burns said.
In the absence of oil and gas, which drive much of Russia’s economy, the state of Tula relies on human capital and its welcoming environment to attract foreign investors, said Denis Tikhonov, deputy governor and foreign and economic minister for the region.
“This is what we are building on,” Mr. Tikhonov said through an interpreter.
More than 200 foreign companies including Procter & Gamble Co. and Cargill Inc. have invested some $2.4 billion in the region, which lies a little more than 100 miles south of Moscow.
Not only has Tula paid for special infrastructure for their factories, but it also engages them with the educational system in an effort to match the skills of the local workforce with the needs of companies.
The government also provides regulatory transparency and allows enterprise to run its course, keeping social and economic issues separate in a country known to mix business with state action, Mr. Tikhonov said.
In a separate panel a day earlier, CEOs of major international companies including Duluth-based AGCO Corp. said that Russia has a base of extraordinarily talented people but needs to a broaden it order to take full advantage of the access it gained by joining the World Trade Organization last year.
