STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

Chapter 3.1
From Comparative
Advantage to Urban
Prosperity
Geography has always played an important role in the
evolution of cities. Historically, coastal cities and cities in
river deltas have been preferred locations – at present, 14 of
the world’s 19 largest cities are port cities. However, with
advances in transport and communication technologies and
also with increasing specialization, other locational factors,
beyond positions along waterways, have accelerated the
growth and development of cities. Even when located in the
hinterland, cities located close to other major urban centres
or to important urban agglomerations have significantly
gained from their position and demonstrated relatively
higher levels of development. Indeed, new configurations
such as mega-regions and urban corridors generate regional
economies and trigger the evolution of new patterns of
economic activity which contribute to prosperity. Similarly,
cities which lie in the vicinity of markets and infrastructure,
or close to transnational
borders, have also exhibited
a tendency to grow and
prosper much faster. 1
It is time for
POLICy governments
to recognize the existence
The increasing number
of a wide scope for human of large and dynamic cities
intervention that can
which are not sea or river
enable cities to enhance
ports confirms that much
their potential as engines
of today’s and tomorrow’s as geographic location is
prosperity, both locally and an important correlate of
nationally.
a city’s prosperity, it does
not explain everything.
90
Many cities derive their prosperity from their capacity to
harness other advantages, particularly through repositioning
themselves in the national, regional or global context.
Common among all of them has been their capacity to
change and adjust to new circumstances and to build upon
their own history and identity. Such cities have been able
to envision a new future and to use their different forms of
capital and assets. Critical also has been the ability of these
cities to build social and political consensus. In essence,
many cities today are able to deploy the capacity of human
agency and to steer growth in the new direction of choice.
Indeed, the prosperity of any city is no accident. It is the
result of innovation, sustained vision and good governance.
It is also a result of proper laws, regulations and institutions,
as well as reinvigorated planning and adequate policies.
Effective use of these instruments and processes has
enabled many cities around the world to optimize their
comparative advantages and to set themselves along the
path of prosperity. They have used a range of avenues and
capitalized on different sets of ‘spokes’ in their drive to
shared and sustainable growth and wellbeing.
Some cities are enhancing prosperity though strategic
thinking and conscious
planning policies. This
is the case with Dubai in FACT the Persian Gulf, which
took advantage of its
privileged geographic
location to become the
largest re-exporting
centre in the Middle East,
and today is emerging
as a cosmopolitan
centre. Other cities
are devising long-term
visions with well-defined
Geography
alone cannot
determine which city
will grow and which will
decline. Other factors
such as government
policies, corporate
strategies, human
capital, major political
forces and decisions,
investments in strategic
sectors, all have an
influence on the fate of
cities.