Strategies of cities in globalized interurban competition: the locational policies framework

David Kaufmann, University of Bern, KPM Center for Public Management
Tobias Arnold, University of Bern, Institute of Political Science

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Economic globalization pushes a variety of cities into a rapidly changing and globalized playing field. Cities of various sizes and in various locations formulate policies in order to become competitive nodes in interurban competition. Such efforts have been mainly studied in cities or regions of global importance. For example, Brenner (1999) studied locational politics and locational policies following German re-unification or Jessop and Sum (2000) analysed the policies and governance structures of Hong Kong in its attempts to become an entrepreneurial city. The strategies of smaller cities, however, have been neglected so far. The aim of our paper is to present a typology of locational policies and to apply it to two medium-sized cities – Lucerne (Switzerland) and Ulm (Germany).

For practitioners as well as scholars, there is an immense interest in the strategies of cities to position the locality in this increasingly knowledge-intensive, interurban competition. These efforts of local officials can be conceptualized as locational policies. Locational policies aim to enhance the economic competiveness of a locality by identifying, developing and exploiting the place-specific assets that are considered to be most competitive.

There is a lack of systematic research about locational policies in general because it is difficult to identify, distinguish and categorize them. Such strategies often appear in complex bundles, do not occupy a narrow policy domain and do not operate in isolation from each other (Uyarra, 2010: 132). Therefore, a relatively rich catalogue of possible locational policies is needed. In this paper, we develop an analytical framework of locational policies that is interdisciplinary informed by theories of urban studies, economic geography, and political science. Our framework consists of six categories of locational policies bringing order to the wide variety of policies that cities formulate to strengthen their competitiveness (see figure 1).



Figure 1: The locational policies framework



By applying this locational policies framework to the two medium-sized European cities – Ulm in Germany and Lucerne in Switzerland – we are able to illustrate the added value of the framework. We chose these cases because we want to study two comparable cities that are not an economic powerhouse of their nations. Such cities are specifically challenged to position themselves in the globalized interurban competition.

We found two very different locational policies agendas in the two cases. In Lucerne, tourism is the most important economic sector that is reflected in a lot of locational policies. Furthermore, low corporate income tax rates should attract firms to Lucerne. Ulm focuses on innovation enhancing policies in its “City of Science”, a cluster of research organizations, universities and firms. Furthermore, Ulm is positioning itself as an “Urban Micropolis” between the two metropolises Stuttgart and Munich.

Picture 1: Tourism is the most important economic sector in Lucerne – The Kapellbrücke in Lucerne

We suggest that place-specific factors enable and constrain the formulation of locational policies and that these place-specific factors can explain these variations in the two locational policies agendas. We outline three possible venues to tentatively explain these different locational policies, namely the economic sector mix, the national tax system, and politics.

Picture 2: A building in the Science Park Ulm

The paper shows that the locational policies framework is able to capture a wide range of policies that aim to enhance the competiveness of a city. Thus, the locational policies framework is a tool that can be used to reveal how cities face the globalized, and increasingly knowledge-intensive, interurban competition. Locational policies are formulated based on place-specific assets and constraints that can be economic, political, or geographical. The paper is thus a plea for an emphasis on such contextual variables in comparative urban research. It contributes to the scientific debate as it takes a clear stance against the somewhat deterministic perspective of a large body of literature studying city strategies in interurban competition.

References

Brenner N (1999) Globalisation as reterritorialisation: The re-scaling of urban governance in the European Union. Urban Studies 36(3): 431–451.

Jessop B and Sum NL (2000). An entrepreneurial city in action: Hongkong’s emerging strategies in and for (inter) urban competition. Urban Studies 37(12): 2287–2313.

Uyarra E (2010) What is evolutionary about ‘regional systems of innovation’? Implications for regional policy. Journal of Evolutionary Economics 20(1): 115–137.