Nations compete. Cities compete. Innovation activities and entrepreneurship are increasingly scattered around the world. On September 27 Swedish Entrepreneurship Forum co-arranged a seminar in Washington DC where the role of global cities in promoting trade, innovation and growth and global entrepreneurship conditions where examined. In sum, key drivers for reform is access to relevant data and a strategy on how to improve a city’s or a country’s performance.
-These 10 years have meant a lot for the entrepreneurial ties between the US and Sweden. During this time Sweden has doubled direct investments in the US and is now the largest investor per capita.
Marek Gootman, Fellow and Director Strategic Partnerships and Global Initiatives at Brookings Institution and the moderator of the seminar, mentioned the increasing competitiveness of city regions and emphasized the need for trade, innovation, talent, infrastructure, and governance for growing high quality jobs.
He then introduced Maria Rankka, CEO of Stockholm Chamber of Commerce, who gave a speech on the theme: The Role of Global Cities for Trade, Innovation and Growth.
Maria Rankka started out by highlighting the fact that more and more innovation and growth is getting concentrated to cities. Cities with between one and six million inhabitants are also the ones that will grow the most. Especially when you focus on talent, trade and technology. Critical mass is an absolute key for success, Rankka said.
-Stockholm ranks number two, after Silicon Valley, per capita if you count unicorns, which is sensational if you ask me! And the single most common profession in Stockholm is computer programmer.
At the Stockholm Chamber of Commerce we believe in tearing down barriers to trade and services, Rankka continued. We have recently announced a strategy to internationalize Sweden’s Capital region including 40 action points to strengthen the region. Even though Sweden has IKEA and H&M, most businesses in Sweden are local, so there is a lot of international potential to unleash, Maria Rankka concluded.
The following panel discussion on San Diego and Stockholm with Andreas Hatzigeorgiou, Chief Economist at Stockholm Chamber of Commerce and Mark Cafferty, President and CEO at San Diego Regional Economic Development Corporation, focused on How cities promote trade and internationalization.
Mark Cafferty told the audience about the San Diego investment and internationalization strategy that has contributed to the city becoming one of few life science capitals of the world.
-We are also large in defense technology and have a vibrant tech sector due to decisions from the city that we benefited from, Cafferty said. As a region we have seen increases in trade, foreign business, trade and tourism resulting from the internationalization strategy.
Andreas Hatzigeorgiou, said that Swedish SME’s account for only 26 percent of the exports. Therefore he realized that something had to be done for Stockholm to be internationally competitive. Thus, the internationalization strategy Maria Rankka mentioned contains strategies regarding talent attraction, foreign investment, service exports and infrastructure, Hatzigeorgiou said.
-The track record the latest 15 years, including the Doha Development Round, shows that old tools for facilitating trade doesn’t work. We need a new approach to opening up markets.
Johan Eklund, Managing Director at Swedish Entrepreneurship Forum and Professor at Jönköping International Business School, introduced the next topic: Entrepreneurial Dynamics and the role of business regulations in a Global perspective.
He began by highlighting that the conditions of entrepreneurship have improved significantly in Sweden during the last 10 years. Sweden has seen almost Chinese growth figures, however there are a few challenges. There is a big gap compared to the US in entrepreneurial activity and the internationalization orientation has also decreased. All in all Sweden is doing well but could be doing better.
From the Global Entrepreneurship Monitor survey Johan Eklund draw the conclusions that the national regulatory and institutional frameworks matters a lot for entrepreneurial activities: taxes, labor market and housing regulations and the overall level of bureaucracy.
-The key message is that the cost of doing business have a significant negative effect on entrepreneurship and the whole entrepreneurial life cycle, Eklund said.
-We compare country performance for several indicators and we have, during the 14 years we have conducted the study, seen a process of convergence in the ease of doing business. Better practices has spread and that is good. We want entrepreneurs in Africa facing the same regulations as entrepreneurs in Stockholm.
Sameeksha Desai, Associate Professor at the School of Public and Environmental Affairs at Indiana University, commented on entrepreneurial characteristics such as attitudes towards failure and risk-taking from a US perspective. Indianapolis for example ranks 6th in number of high growth American companies even though it has a relatively small population.
-We assume regional pockets of failure and success. In Indianapolis, failure is perceived differently. Even within the US there are geographic differences directly related to talent attraction.
-That is visible in our studies too, Augusto Lopez-Claros added. Mexico has the best indicators of South America, we do six sub-national studies and are able to see high-minded competition between the Mexican states including improvement over time.
In sum up, the key drivers for reform is having access to the data itself. Then you get incentives for improving your performance. Countries care a lot about how they score and how their distance to their frontier is viewed, Lopes Claros said.
Johan Eklund concluded that rankings such as GEM helps policymakers to make priorities for better and evidence based choices.