Introduction
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Box 1.1 Innovation, Connectivity, and Livability as the Drivers of Urban Competitiveness Competitive cities have high innovation levels, are internally and globally connected, and have livable and high-quality environments. Market forces drive economic dynamism and competitiveness, but public policy has to deal with the urban externalities that affect innovation, connectivity, and livability, such as congestion, slum formation, and environmental degradation. Innovation Because innovation emerges through market forces, the knowledge spillovers that foster innovation are easier to capture within the urban space. More than 81 percent of patents—an important indicator of innovation activities—are filed by applicants in urban areas in Organisation for Economic Co-operation and Development (OECD) countries. Paris and London alone account for more than 40 percent of their countries’ total patent applications (OECD 2006). The economic exploitation of innovative knowledge depends not only on the skill mix of the local workforce but also on knowledge exchanges by universities, research centers, and business communities. Cities have a role to play in identifying educational needs, providing incentives to meet them, and brokering exchanges between universities and the business community to foster innovation. Skill upgrading and knowledge exchanges are important for nurturing the competitiveness of existing specialized clusters and facilitating new business growth and product development (World Bank 2010). Connectivity The advantage of proximity fosters competitiveness. Successful cities have better accessibility: they are connected internally through an efficient road network and public transport system, as well as externally, to the global economy. Firms located in well-connected cities find it easier to access networks of resources, including labor and components of the supply chain. Transportation and communication networks multiply interfirm linkages among cities, including flows of goods, people, and ideas, creating an integrated system of cities. Livability A livable city is a competitive city, especially in a rapidly changing global economy characterized by increasingly mobile human resources. There is no trade-off between economic dynamism and livability. On the contrary, international evidence indicates a strong association between economically vibrant cities and a high-quality environment. Firms in advanced sectors compete for high-skilled workers, who want to live in an attractive environment with good services and amenities. Livability calls for proactive public policies, as a high-quality city environment is very expensive to restore once problems develop. Slums, for example, are difficult to eradicate without massive disruption to people’s lives. Sources: OECD 2006; World Bank 2010.
industry—and its economic geography. Chapter 5 compares the drivers of and obstacles to urban competitiveness across locations through the lens of the garment sector. Chapter 6 discusses policy directions on how urban areas can leverage their comparative advantages and address their competitiveness constraints to accelerate growth. The full results of the analysis are presented in the appendixes. Appendix A presents the results of the diagnostic assessment of the economic base and cluster composition of Bangladesh’s urban areas based on location quotient and shift-share analysis techniques. Appendix B Bangladesh • http://dx.doi.org/10.1596/978-0-8213-9859-3