What Can Cities Do to Enhance Competitiveness? Local Policies and Actions for Innovation

Policies on municipal actions to promote
local competitiveness have typically focused in three areas:
i) providing infrastructure (transportation,
telecommunications, water & sanitation, etc.); ii)
improving public services (education, health, public
security, housing, etc.); and iii) reducing the cost of
doing business by simplifying regulations (making it easier
to open businesses, pay taxes, hire workers, acquire land,
and exit from businesses). Recent theoretical advances and
successful cases suggest that, for the local economy to be
competitive in a globalize environment, simply reducing the
cost of doing business, while critical, is not sufficient.
Leading cities are also taking actions aimed at adding value
to local businesses, by creating an environment that creates
incentives for local firms to innovate and learn from each
other, to upgrade the level of competitiveness of the
overall local economy.