Cities strength beyond the crisis

Business conditions in a globalized world

The day to day business clearly demonstrates the need and feasibility to pursue location development taking account of the conditions presented by a globalised world. Global competition for export markets, capital and commercial developments are leading to ever increasing momentum when it comes to competing for European business locations. Currently, due to globalisation, this competition is no longer solely decided between companies but also increasingly between cities and regions as sponsors of important locational factors.

In times of the global financial crisis business development policy more than ever faces the challenge to develop and implement effective strategic measures because the cities and regions of the future will look different than today. Internationalization, continuous economic structural change and demographic challenges will give them a new shape. Cities face the challenge of increasing their attractiveness for companies and employees through a high quality of life. Attractive locational conditions play a decisive role in the development of knowledge-intensive sectors of the economy. The complexity of urban and regional development processes and constrained public budgets force all decision makers to walk new paths of economic development jointly and to create innovative means of facilitating development. Promoting innovation, knowledge and openness will increasingly gain relevance in shaping the future of cities regardless of their size.

In the future the population with its skills and talents will shape the location more strongly than infrastructural preconditions. Creativity is nowadays considered the "resource of the future"and forms the basis for successful development of cities, regions and entire economies. In this respect knowledge and openness are crucial locational conditions. These factors directly influence the business climate and the quality of life.

In the heterogeneous BSR the urban structures are particularly determined by cities of a rather traditional scale. Small and medium sized cities operate as pulse generators for their regions. Although they are often not located in a central geographical position and do not have a metropolitan size, they have to push forward the knowledge-based structural transformation of their entire countries. In order to master this challenge new strategic approaches are to be tested.

Challenges for the Baltic Sea Region

Diverse urban structures, a broad landscape of services, excellent educational institutions and an attractive cultural life especially determine the quality of life in small and medium sized cities. Only locations with such qualities possess good fou ndations for knowledge-based growth. In the BSR cities with such qualities can be found in many places. Successful cities, which act as the drivers of growth and, together with their surrounding regions, can prove they are attractive locations, are required for the future dynamic development of the European business area. Regions cannot be developed like a company using a "masterplan" but reveal their potential via a host of partially unrelated initiatives.

Many cities are increasingly showing the major development potential required to establish themselves as knowledge locations in this setting, the hallmark of which is change. These locations provide a good basis for knowledge-based commercial growth, which means they not only provide a diversified service landscape and the infrastructure needed, such as excellent universities and high profile training and research facilities, but also a good quality of life, cultural diversity and the creative force provided by a highly qualified local workforce. This is why there are cities which can drive forward the structural change of the entire state to create a knowledge economy. The soft locational requisites namely innovative skills, knowledge and openness are of key importance when it comes to the dynamic development of cities and the successful positioning of centres as knowledge locations.

BizCom Action Plan in the UBC Strategy2010 - 2015
The new UBC Strategy gives great opportunities for the work of the Commission on Business Cooperation. The time is right to meet the challenges of the financial and economic crisis by joining the forces. In this aspect, BizCom has started to develop strategic goals and clear measures for a prosperous work in the coming years.

User Driven Innovation

Innovations are the engine of success in business. They enhance competitiveness and are indispensable for securing and strengthening a market position. But the rate of failure is alarmingly high: 25 to 40 % of industrial goods and even 35 to 60 % of consumer products fail! In addition, R&D budgets are decreasing, innovation cycles are becoming shorter, and the general risk of innovation is high. There is an urgent need for action. One tool to counteract these trends efficiently and effectively is that of user-driven innovation, understood as active participation by the future user in the development of products and services, including the central issues of market-orientated product identification, engineering, and design, both participative and em-pathic. A systematic integration may be carried out in many ways and may take place at many stages of the innovation process. Expertise in these methods and procedures are still scattered randomly across the region; there is a transparent structure. While big global companies have frequently integrated user-driven innovation successfully into their processes, entrepreneurs and SMEs have a backlog demand. User-driven innovation is a process whose systematic implementation in existing company processes can considerably reduce the general risk of innovation. In particular SMEs, spin-offs and entrepreneurs do not normally have the infrastructure to implement new methods and procedures to increase their competitiveness. Luthje (2003) reports failure rates of product innovations of 25 to 40 % of industrial goods and even 35 to 60 % of consumer products. Gassmann et al. (2005) consider it therefore to be indispensable to introduce the external knowledge of users in an early stage, in order to increase the power of innovation. Today customers frequently limit their marketing research to surveys on products which have already been developed. If requisite changes are identified in this way, they can only be implemented after the event, if at all, and generally lead to delayed market launch.

Plan for international business-location marketing

Global competition for export markets, capital and business locations make targeted profiling and national and international positioning of individual business locations in the UBC cities an absolute necessity. This is true particularly given the increasing mobility of workers and businesses, the increasing internationalisation of the economy, and the increasing rapidity of structural change towards knowledge economies. With the involvement of further experts from business and science, recommendations for further action will be prepared and set out in writing, covering the following topics in particular:

• drawing up a profile for a business location and science centre
• the linkage between scientific excellence and economic success
• strategies for presenting a business location and science centre at national and international level
• what business promotion can and needs to do directing enterprise.

UBC - a strong family with a clear vision

The logic of cooperation corresponds to the logic of European integration, a "Europe of Regions". The guiding principle of the EU policy is ever greater interregional cooperation between regions. That means sweeping away the barriers presented by national borders, and greater Inter-European regional collaboration in the social, economic, ecological, infrastructural, technological and cultural sectors. If we want to succeed in the international competition for investors and sponsorship we need to look for joint venture partners, both regional and international, in good time. We will only be successful if we are able to develop new joint initiatives in a European context and view our commercial location as part of a European centre for commerce and knowledge.