City Role in Business Development
Business takes place in cities. Cities are
an important part of the business environment. But municipalities
do not create other jobs than those directly decided by
the municipality. Real and sustainable jobs are created
by entrepreneurs who start or develop business activities.
The role of municipal business promotion policy is therefore
to stimulate and support entrepreneurship by utilising its
network and engaging all good forces in the region.
This role has developed very much during
the recent decade or so. Only some years ago, business policy
of cities was to allocate good industrial ground and to
produce plans on business policies. Now it is not possible
just to sit in the City Hall and make plans. Instead it
is necessary to spend time and carry out activities with
the companies and other network I partners.
The task of the municipal business development
department is to increase the attractiveness ofthe city
for the business community. They must look, specify market
competencies, and secure that the general development of
the city is attractive for business. As the underlying I
aim of municipality business policies is to increase the
tax base, it is also necessary to give a higher priority
to the municipal revenue aspect. The higher wage-level of
a business enterprise, the better for the I tax-base.
We are now in a very volatile period in business
development. The situation will develop very much with the
EU enlargement and new ways of making business. Among trends
is the rapid increase of knowledge-based business and of
outsourcing of activities. There is a need for municipalities
to understand I the development. The municipalities must
be ready, flexible to accept new trends in an early stage
in order to be successful in the long perspective. For example,
the most precious assets of successful companies are the
employees. The trend is now that availability of staff is
more steering for company development or location of additional
working places than any other factor. Consequently, one
ofthe main roles of municipalities is to create an environment
that is attractive for the employees and workers of the
business community. The cities must create pleasant living
conditions for all types of staff, including the leading
staff.
It is also clear that people commute from
one city to another for work. The business networks do not
stop at the municipal border. Therefore it is necessary
for neighbouring cities to co-operate and form city networks
instead of competing.
Municipal business promotion policies deal
very much with forming partnerships with various actors:
Universities, chambers of commerce, business organisations,
neighbouring communities, municipalities, enterprises....
The partnerships can be formal or temporary partnerships
in various projects. Access to the Structural Funds and
other financing steers to some extent the organisation of
partnership formation.
Kolding Municipality in the middle of Denmark
forms partnerships in a cooperation body together with enterprises
and other actors. The body carries out joint projects with
the members, aiming at boosting business level and make
Kolding Region attractive for investors. The role ofthe
manager is mainly to keep the municipality on the right
track in order to secure that the city's attractiveness
for business activities increases.
Umea in the north of Sweden has also an active
business development policy, but as it has access to the
Structural Fund's money and also utilised other EU financing
sources, the partnership is formed around various projects
together with neighbouring municipalities, the business
community, the University and even with partners in neighbouring
Finland.
Apart from being a source of financing of
projects, EU also plays another important role. It gives
an impetus to increase the international aspects ofthe city
and promotes co-operation across sectors and borders.
by Juhan Janusson
Based on information by
Mr Erling Winther, City of Kolding
Mr Roland Carlsson, City of Umea
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