How local brands can boost a city’s growth

City officials around the world are spending time and money on strategies to attract tourists and world-class talent. But new arrivals find little apart from chain stores and global brands in which to spend their money, leaving little for the local economy.

Finding locally made goods, it turns out, may not be so easy. In June this year, the Financial Times wrote that British companies were being driven from London’s high streets, and global brands were outnumbering British retailers on Regent Street for the first time since the early 19^th century. In New York City, the number of chain stores continues to rise, increasing by 2.5% last year.  As international brands move into our urban areas and local businesses struggle to compete, it becomes increasingly difficult to distinguish Beijing from New York.  Are cities losing their unique cultural identities in the wake of globalization?

Thankfully, it may not be that simple. While basic manufacturing and value chains have spread across the globe for certain industries, Harvard Business School Professor Michael Porter argues that globalization has actually made location more important, not less. In what he calls the location paradox, Porter explains that industry clusters have sped up and become more focused. Urban guru Richard Florida agrees, pointing to the tendency for high-level economic activities such as innovation, design, finance and media to gather in specific locations: “Economic activity and innovation have spread to more places around the world. But not all places, just certain places.” Now, more than ever, cities should continue to specialize in the industries where they remain world-class leaders.

With small and medium-size enterprises representing 99% of businesses and creating 85% of new jobs in the EU in the past five years, it’s clear our attention should be devoted to how we can protect local businesses and help foster urban economic development. While places such as San Francisco have developed extensive anti-chain legislation, such laws remain controversial in the United States and are perceived as infringing upon free-market principles. As economic forces displace neighbourhood family shops, how can we use the elements of a globalized world to support local growth?

Indeed, sometimes it’s not easy to know where a brand is from, when the place of design and place of production are different. Just flip your iPhone over and read: “Designed by Apple in California. Assembled in China.” But according to a report by Futurebrand, “where and how a good is made now matters more because it can qualify key considerations – such as safety, quality and ecological standards – in consumers’ minds at the point of purchase”.

According to a survey by the World Economic Forum’s Global Shapers community, over 75% said they supported buying locally made goods. Just as a product’s country of origin can evoke certain strengths and qualities, so too can the city of origin. This is all the more true when a city has a strong industry-cluster association. Recognizing just how important the place of origin is for consumers, cities are now seeking to harness the soft power of their ‘made in’ brand to help distinguish and market locally made products.

In 2010, San Francisco did exactly this by establishing SFMade, a non-profit corporation that supports its local manufacturing sector. In 2013, former New York City Mayor Michael Bloomberg launched We Are Made in NY, an initiative to promote the city’s key sectors, such as digital and theatre. The idea caught on, and the following year the Brooklyn Chamber of Commerce launched the Brooklyn-Made brand. Across the globe, through public-private partnerships or business associations, communities are seeing the value in promoting urban manufacturing to create jobs and support growth. Just in December this year, a “Made in DC” programme was announced for Washington DC. Similar schemes exist outside the US, too, such as Fait à Montréal or Copenhagen’s CPHMade.

For city newcomers and tourists, these initiatives can promote sustainable development by making it clear for consumers what it is they are purchasing and keeping money in the local economy. Local manufacturers benefit from associating with the city brand (such as with free marketing), while the city’s reputation as a world-class leader in a certain industry gets a boost. So, when buying gifts for your friends and family this holiday season, check to see if your city has its own “made in” partnership and support your local community.

Author: Salvatore Freni is Community Specialist, Regional Strategies – Eurasia at the World Economic Forum

Image: The setting sun reflects off of One World Trade Center and surrounding buildings at sunset in the Manhattan borough of New York City REUTERS/Rickey Rogers