What makes a city successful?

The Cape is a region with many opportunities. Yet it is also challenged by economic, social and political issues.  It is therefore important to identify those things that will help to make it one of the world’s great city regions over the coming decades.

Without trying to impose “international best practice” on this unique place, we can share the learnings of what makes US cities successful in order to help the Cape develop its own success story.  Research by CEOs for Cities shows that, for cities to be successful in a knowledge economy, they must excel at four things:

  1. Talent:  Developing, attracting and retaining talent.
  2. Distinctiveness:  Understanding what makes their community distinctive and then having the confidence to capitalize on it.
  3. Connections:  Connecting citizens to opportunity, the city to the region and the region to the global economy.
  4. Innovation:  Developing the capacity for innovation.

We call these the City Vitals.  Of the City Vitals, talent is the first among equals.  If you have that, a lot of other good things can follow.  But without enough of it you’re in trouble.  In fact, in the US we need only one indicator of talent – percentage of population with a university degree – to determine which cities are successful and which are not.

Cities are in a race for talent, particularly young talent between 25 and 34.  But young talent is hardly locked in place.  In fact, this age group is the most mobile in our society. And the more educated they are, the more mobile they are.  Importantly, when university-educated young adults in the US consider where they want to live, 64% of them say they first choose a city before looking for a job, not the other way around.

It is important to note that the quest to develop, attract and retain university-educated young adults is not about making your city “cool”.  It’s about building a talented pool of workers, and it’s about building a pool of would-be entrepreneurs.  Entrepreneurship actually peaks at age 30 and declines steadily thereafter.

The jury is out on this issue for the Cape.  On the one hand, a recent international study found that Cape Town ranks 14th out of 34 world cities in entrepreneurial activity.  On the other hand, some big corporates have already moved their head offices out of the Cape.  If we lose the corporates, we lose the places where most young entrepreneurs cut their teeth and the customers that most small companies sell to.  In other words, if we lose the corporates, many of the entrepreneurs will follow.

At least part of why corporates would consider moving out of the Cape is the perception that this is not a serious business place.  In certain industries and in certain occupations it may make most sense to be in Johannesburg, but the Cape must develop its own special character if it is to compete and compliment Johannesburg.  Cape Town must become the San Francisco to Johannesburg’s New York.

This brings us to the next City Vital, Distinctiveness.  Specific industries and occupations are important, but we must also look at which consumer attitudes, behaviours and beliefs drive the distinctive nature of a place and hence the kind of leading companies that will come from there.  For example, the people of Portland, Oregon, showed a propensity to get out and run and sweat before the rest of us discovered that that would be “fun”, and Nike responded by becoming the city’s first Fortune 500 company.

So there is a tremendous opportunity to drill down deeply into the ways in which a city like Cape Town is different – and there are plenty of ways in which the Cape is different to the rest of the country – and then capitalize on those.  We don’t simply want to copy what other cities have already done to differentiate themselves and end up not being distinctive at all.  This must then extend into our brand messaging.  Currently the Cape’s branding is all about lifestyle, but we must also work hard to develop a compelling business brand.

The third City Vital is Connections.  Cities thrive as places where people can easily interact and connect, both with each other and to the rest of the world.

Two ways in which we can capitalize on connections within the city are:

(1)          Reducing the need to drive.  By reducing the need for cars, and the amount of time spent in them, the soon to be introduced Bus Rapid Transit system will save Cape Town enormous amounts of money over the long run.

(2)          Creating access to opportunity in the form of jobs and education for our poorest citizens.

The measures of external connections include the presence of foreign students, broadband Internet use and foreign travel.  While the first two are on the increase in Cape Town, the third is under threat, with SAA recently cutting direct flights.  Unless we increase the number of direct international flights to and from Cape Town, we will always struggle to attract international business, and we should be lobbying as hard as possible for an opening up of the skies.

The final City Vital is Innovation.  The ability to generate new ideas and to turn those ideas into reality is a critical source of competitive advantage.  A city’s capacity for innovation can be measured by looking at numbers of patents, the value of venture capital investments, the extent of personal entrepreneurship and the number of small businesses.  In addition to Cape Town ranking high in entrepreneurial activity, we also have four universities with significant numbers of A-rated scientists and researchers.

However, we can certainly do more to promote a culture of venture capital in order to ensure that the ideas coming out are translated into commercial success.

There is no question that the Cape is one of the world’s beautiful regions, filled with lots of opportunity, but also confronted by significant challenges.  If the challenges are to be overcome and the opportunity maximized, it is important that the people of the region work together to develop and strengthen the City Vitals. Only in that way will a happy, sustainable future for all be secured.

Guy Lundy is the CEO of Accelerate Cape Town, a business initiative aimed at bringing together stakeholders in the Cape region to develop and implement a long-term vision for sustainable, inclusive economic growth. 

Carol Coletta is President and CEO of CEOs for Cities, a network of urban leaders in the United States of America dedicated to creating next generation cities, and host and producer of the syndicated radio show Smart City.