Peter Vanham, Media Lead, Tel.: +1 646 592 5907; Email: pvan@weforum.org
Medellín, Colombia, 16 June 2016 – The city of Medellín provides important lessons on how to best take advantage of the growing spread of global value chains, and other cities around the world should follow its lessons, a new World Economic Forum study presented today in Medellín reveals. The most important lesson learned is that success at reinvention and repositioning comes from sustained effort, rather than an isolated initiative, and is best nurtured by an open society.
Concretely, the extent of Medellín’s achievement is reflected in its recognition in 2012 as the world's most innovative city, its reputation for textile manufacturing and as a beacon of the fashion industry, and its contribution to more than 8% of Colombia’s GDP.
“Participating in global value chains, as Medellín has done so well, provides a vehicle for cities to become vibrant magnets for innovation, productivity increases and employment,” Anabel Gonzalez, Chair of the World Economic Forum Global Agenda Council on Competitiveness and Senior Director of the Trade & Competitiveness Global Practice at the World Bank, said. “Global value chains are a defining feature of international trade today and are bound to grow in importance as technological advances further reduce coordination costs across different stages of production. Medellín is best-in-class in Colombia and even Latin America.”
The topic is timely and important as policy-makers are striving to enhance the competitiveness of cities. The white paper identifies the most important factors that need to be in place for cities to succeed in taking advantage of global value chains, including as a strong regulatory environment, institutions, hard connectivity (the core physical infrastructure) and soft connectivity, including social and knowledge capital. Importantly, these factors need to be embedded in a clear value proposition.
Five key takeaways for city leaders in Latin America looking to improve their city’s competitiveness are:
1) Insertion in global value chains can be central to city competitiveness. Global value chains provide a vehicle for cities to integrate into the global economy through trade and investment; they can contribute to making cities vibrant magnets for innovation, productivity increases, and employment.
2) Participation in global value chains requires sustained effort by cities to reinvent and reposition themselves; it is not a matter of just one major push to. City leaders needs to scan the global and local economic horizon to identify initiatives that can most enable their cities to catch the momentum of economic forces.
3) Creating robust soft connectivity advantages to build on hard connectivity is essential. Access to a qualified and educated labour force, innovation and research, digital infrastructure to deepen connectivity, and trade facilitation and logistics policies to expedite movements of people are key for succeeding in global value chain participation.
4) Successful cities flourish in a context of openness. Open trade and investment policies pave the way for connecting cities to the opportunities of international markets; a city open to talent from other regions and from abroad enhances its attractiveness to global value chain.
5) Understanding how global value chains operate and how investors decide on site selection, with a focus on inclusiveness and flexibility, should guide policy-makers in making competitiveness decisions. City leaders can maximize the impact of their investments in competitiveness by addressing bottlenecks and challenges that are particularly relevant to attract and facilitate the operation of global value chains, as well as add value in the city. Inclusiveness by opening opportunities to all members of society and flexibility to quickly adapt to constant changes in production networks determines the sustainability of successful competitive cities.
For more information, view the full white paper here.
More than 550 participants are taking part in the 11th World Economic Forum on Latin America in Medellin, Colombia from 16 to 17 June 2016. The theme of the meeting is “Reigniting Latin America’s Inclusive Growth”.
The Co-Chairs of the World Economic on Latin America are: Carlos Julio Ardila, Chief Executive Officer, Organización Ardila Lülle, Colombia; Ilene S. Gordon, President and Chief Executive Officer, Ingredion Incorporated, USA; Francesco Starace, Chief Executive Officer and General Manager, Enel SpA, Italy; Brian Gallagher, President and Chief Executive Officer, United Way Worldwide, USA; and Carlos Salazar Lomelin, Chief Executive Officer, FEMSA, Mexico.
Notes to Editors:
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