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Congratulations.Auckland City Centre Housing and Development Winyard Quarter City Rail Link TPP Opportunity Next cycle is all about the effects of success 2
Cycle Dynamics and Cities 4 th Cycle 1st Cycle Projects & Physical Renewal Promote the Metro Tourism Events 2 nd Cycle Assets Specialist Agencies Metro brand Larger Events New funding tools. Entrepreneurship Economic development. Strategic Visions Internal governance reforms 3 rd Cycle Managing growth and diversification Business Friendly Metro Investment Ready Metro Innovation / Universities Shaping the future Metropolitan sphere Broader leadership Integrated Brand Alliances Summits Internationalisation Strategy Managing success at the international scale Competitive benchmarking Eco-system management Business Leadership Dealing with growth and externalities External governance reforms. Global Summits Signature events 3 FDI
A new urban age No longer about hierarchy, command and control More cities than ever competing Size no longer equals success Not one model of success more ways to win 4
Globalization of cities happens in waves Cities (re)entering a global path 1492-1650 1650-1780 1780-1850 1850-1914 1945-1973 1985-2007 2010 - Antwerp, Genoa, Istanbul, Venice Amsterdam, Guangzhou, London, New York Berlin, Paris, Birmingham Bilbao, Liverpool Manchester, Rotterdam, Vienna Munich, Seoul, Singapore, Tokyo, Toronto Bangalore, Barcelona, Chicago, Sydney, Tel Aviv Colombo, Nanjing, Brisbane, Auckland, Sao Paulo. 5
Global Fluency? Leadership with a Worldview Legacy of Global Orientation Compelling Global Identity Specializations with Global Reach Government as Global Enabler Adaptability to Global Dynamics Ability to Secure Investment for Strategic Priorities Culture of Knowledge and Innovation International Connectivity Opportunity and Appeal to the World 6
New Globalising Cities New World of Cities is about more than just big global cities Not only corporate hubs and financial centres Changing global geographies New Roles Hybrids and transformers Different types of cities with distinctive success models 7
The Established World Cities: the Big Six Uniquely globalised Corporate clusters with global reach Biggest shares of financial and biz services Strong infrastructure platform Cultural appeal Political and legal frameworks Magnets for global FDI 8
The Established World Cities: leading hubs for knowledge and talent 9
Established World Cities: Destination Power 10
Established World Cities: unintended consequences of success Biggest public transport, logistics, utility, IT and airport systems Challenge to invest, maintain and upgrade infrastructure Externalities within Metros Not the most liveable Congestion Housing affordability crises Higher risks Not the most sustainable: but perform well for size Improving policies for resilience Tackling externalities at national level. 11
Emerging World Cities a new economic geography New cities integrating into global economy New centres of demand and supply, new corporate gateways to large domestic economies New HQ locations Some also becoming financial centres 12
Emerging World Cities new roles Closing the gap as financial centres Tokyo and Paris being overtaken by Shanghai, Singapore, and Taipei 13
Emerging World Cities: diverse roles 14
A typology of emerging world cities Shanghai and Beijing nearly emerged 2 nd tier competitive megacities - many rapidly improving gateways, challenges remain 3 rd and 4 th tier high potential but constrained cities 4 th tier struggling megacities or cities starting 1st globalisation cycle 15
Emerging World Cities: key priorities Physical capital = urgent deficit To move up value chains, by attracting talent not just investment From production to innovation 16
The new silk road? 17
Asian cities in two cycles time? New Delhi Xi an Beijing Nanjing Seoul Busan Wuhan Shanghai Hangzhou Guangzhou Taipei Shenzhen Tokyo Osaka Mumbai HK Bangkok Bangalore Manila Big Six Colombo KL Singapore Tech and innovation hubs Adv. manufacturing + trade High quality of life Jakarta Institutions, diplomacy, domestic firm Tourism and entertainment 18
New World Cities Smaller, specialised and agile Rapidly globalising Good infrastructure, high quality of life, fewer negative externalities Knowledge centres Culture/entertainment High-tech / innovation / R&D Convention / tourism hubs 19
New World Cities - Drivers Global economic centre of gravity shifting East and South Mobility and reach of new global middle classes Urbanisation reshaping economic and spatial balances New business sectors are internationalising Technology driving new systems of production and integration 20
New World Cities: attraction to global investment Punch above their weight Tech and start-up culture Liveability Attraction to investors seeking value beyond established and emerging cities 21
New World Cities: comparative advantages Business and Investor friendliness: e.g. Miami, Santiago Innovation and tech sector leadership: e.g. Melbourne, Toronto, Boston. Climate, urban environment and lifestyle: e.g. Auckland, Barcelona 22
New World Cities: key strengths 23
How do they succeed? Combining global leadership with local quality Size: smaller, more agile, and affordable Expert specialisation within a more managed metropolis Better live-work balance Efficient infrastructure Problem-solving capabilities Low congestion, inflation, and pollution Safety, security, education Clear leadership identity
New World Cities: sustaining advantages for 2+ cycles Danger of becoming one trick pony Need to address externalities of success, maintain quality: e.g. Auckland SuperCity, Greater Sydney Commission, Barcelona Global Talent Programme, Oslo Region Challenges include: rising costs / prices, access to entrepreneurs, digital infrastructure, congestion, overreliance on tourism 25
Auckland s key traits and spidergram Image, brand and influence Visitor and Destination power Global Firms Business friendliness Financial services Liveability and sustainability is its USP Culture and diversity Transport and infrastructure Sustainability Investment attraction Talent and labour market Higher education Attraction to investors, visitors, talent & tech Infrastructure improving Wages and costs Liveability R&D and innovation 26
Auckland s strong cycle of growth viz NWC Post-crisis economic performance Source: Brookings and GaWC 27
Auckland: smaller but plugged in GDP ($US bns) GDP per Global Capita ($US Connectivity Rank 000) (GaWC) IBM Most Competitive Cities International HQs No of Cities 300 300 300+ 100 Sydney 223 46 9 17 Toronto 276 45 17 8 Vienna 184 49 27 18 San Francisco 331 72 28 14 Melbourne 178 40 34 26 Miami 263 44 36 24 Barcelona 171 36 37 25 Boston 360 76 39 Munich 220 56 42 Stockholm 143 56 43 11 Copenhagen 127 42 48 15 Tel Aviv 153 43 60 49 Berlin 158 36 63 10 Auckland 50 32 72 35 Vancouver 110 44 76 23 Oslo 74 53 79 Brisbane 97 42 80 Helsinki 77 48 81 29 Seattle 267 73 99 Denver 170 62 106 Small economy by world city standards BUT One of the most dynamic Highly globalised for its size 28
An investment magnet No of Cities Emerging Trends in Real Estate EU 28, US 75, Canada 9, AP 22 JLL Global 300 Commercial Attraction Index Cross Border Real Estate Investment JLL City Momentum Index JLL Investment Intensity Index 300 120 25 Sydney 2 23 11 8 4 Berlin 1 48 21 - - Toronto 2 25 29 - - San Francisco 8 17 6 10 11 Munich 10 33 13-2 Miami 19 34 35 - - Melbourne 3 43 24 18 12 Copenhagen 5 67 45-6 Boston 13 23 10 5 17 Oslo - 70 54-5 Vancouver 1 83 73 - - Seattle 4 40 16 13 20 Stockholm 11 45 12-10 Barcelona 12 56 41 - - Auckland 10 102 58 20 7 Denver 6 39 25-25 Helsinki 16 91 61 - - Vienna 23 64 40 - - Brisbane - 78 50-22 Tel Aviv - 90 193 - - Punches well above weight 7 th in JLL Investment Intensity Index (investment relative to size) Top 10 Investment Promotion Strategy (fdi) About to join top 20 cities globally in 2016 index 29
A liveability capital Mercer Quality of Living Survey EIU Global Liveability Liveable Index Cities Index Monocle Quality of Living Survey No. of Cities 230 140 63 25+ Vienna 1 2-2 Toronto 15 4 - - Melbourne 16 1 13 4 Helsinki 31 10 4 8 Sydney 10 7 14 5 Auckland 3 9 8 17 Vancouver 5 13 12 7 Stockholm 19 24 5 6 Berlin 14 20 11 3 Munich 4 28-9 Copenhagen 9 22 9 10 Brisbane 37 18 - - San Francisco 27 49 - - Seattle 44 46 - - Oslo 31 23-23 Miami 65 37 - - Boston 34 33 23 - Barcelona 38 31 29 24 Tel Aviv 105 76 - - Top 10% of most liveable cities Attracts people and talent Platform for cultural, tourism and innovation economy Cornerstone of The Auckland Plan 30
Key dimensions of Auckland s liveability Stability GLCI Public services GLCI Culture and environment EIU Governance GLCI 31
Specialisation in newly traded markets QS Best Student Cities Rank Melbourne 2 Sydney 4 Berlin 9 Munich 11 Vancouver 13 Toronto 13 Boston 13 Vienna 16 Auckland 18 Brisbane 18 Stockholm 24 Copenhagen 27 San Francisco 27 Barcelona 30 Helsinki 34 Oslo 60 Strong infrastructure platform IESE Cities in Motion Index Technology Mobility and Transportation No. of Cities 148 Munich 26 3 Boston 10 26 Copenhagen 32 4 Helsinki 29 9 Vienna 40 2 Berlin 33 17 Stockholm 36 15 Melbourne 18 35 San Francisco 5 61 Auckland 24 43 Barcelona 49 20 Oslo 44 32 Toronto 30 63 Sydney 16 95 Vancouver 41 89 Tel Aviv 102 87 Miami 77 133 32
Improving brand with global audiences City RepTrak Brand scores, 2015 Strong reputation for visitor and resident amenities Distance from key markets Lacks global stature, and reputation for pulse and dynamism 33
Imperative to grow innovation AON People Risk Index 2thinknow Innovation Cities Index IESE Cities in Motion 'Human Capital' IBM World s Most Competitive Cities Life Sciences R&D and Production IBM World's Most Competitive Cities 'Software and Web Development' No of Cities 138 445 148 100 100 Boston 10 4 2 - - San Francisco 13 1 6 11 3 Munich - 7 20 - - Seattle 21 10 - - - Berlin 40 13 13 5 5 Toronto 3 11 36 14 9 Stockholm 15 16 57 4 6 Oslo 16 32 39 - - Copenhagen 7 9 80 8 21 Helsinki 34 25 53 18 15 Melbourne 21 23 35 35 25 Miami 21 48 19 34 32 Vancouver 10 39 59 32 17 Vienna 37 6 60 19 28 Barcelona 49 56 40 18 23 Sydney 27 17 48 36 30 Brisbane - 60 - - - Denver 27 70 - - - Tel Aviv 45 24 67 39 44 Auckland 40 106 94 43 36 Behind other new world cities in terms of scale BUT Strong conditions for growth: ease of doing business, diversity, tolerance High expenditure on R&D Culture of entrepreneurship (Source: Solidance) 34
Auckland - comments Great progress in benchmarks scores-momentum. For a city of this size and location Auckland is starting to punch above its weight. Auckland does very well in JLL Momentum Index principally because of its diverse population, young population and its strong push towards tech, all key ingredients for real estate attractiveness. The strongest peers based on data to Auckland include Oslo, Vancouver and Helsinki. Visitor and Destination Power is a reflection of volume of visitors and conferences rather than attractiveness. Auckland is just outside top 100 cities for both in Euromonitor and ICCA rankings. Distance is key issue. Auckland s economic growth is due to: (i) high in-migration boosting retail and housing demand, (ii) dynamic tourism growth, (iii) high foreign investment in real estate, (iv) a cost-competitive tech sector, and (v) services sectors concentrated in the CBD. More effective use of land is seen as essential to sustain growth in the next cycle. 35
The real estate perspective Established World Cities Aim to capture footloose people and capital Challenges: bold urban transformation to stay competitive, land pressure, affordability, housing Emerging World Cities Need catalytic FDI, nurture local capital and talent Massive Real Estate expansion under way. Next phase: create a sense of place New World Cities Want mobile millennials, students, entrepreneurs. Millennials have stringent real estate demands Innovative, sustainable, technologically advanced 36
Strategic imperatives for each type of city 37
Strategic imperatives for each type of city 38
Strategic imperatives for each type of city 39
JLL Momentum Index Highlights The Rise of the Innovation-Oriented City Innovation-Oriented Cities Dominate the Top 20 Strong Momentum of Established World Cities and their Challengers Increasing Momentum in US New World Cities Innovation Driving Agile Higher Value Emerging Cities Smaller Cities Achieving Global Reach Asia Pacific showing Strength 40
City Momentum Index Model Socio-Economic Momentum Economic Output Population Air Connectivity Fortune 2000 HQs Foreign Direct Investment Commercial Real Estate Momentum Construction, Absorption, Price Investment Transactions Transparency High-Value incubators Higher Education Infrastructure Innovation Capability International Patent Applications Technology / Venture Capital Environmental Quality Short-Term Momentum High-Value incubators City Momentum Index Source: JLL, January 2016 41
JLL City Momentum Index 2016 Top 20 London Silicon Valley Dublin Bangalore Boston Shanghai New York Sydney Beijing San Francisco 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 Nairobi Shenzhen Seattle Tokyo Nanjing Austin Hyderabad Melbourne Seoul Auckland Population Connectivity Technology and R&D Education Environment Economic Output Corporate Activity Construction Real Estate Investment Property Prices 42
JLL City Momentum Index 2016 Sub-Index Top 5 Future Proofing Real Estate Momentum Socio-Economic Dynamism 1 Silicon Valley 1 Dublin 1 Hanoi 2 London 2 London 2 Bangalore 3 Paris 3 Auckland 3 Ho Chi Minh City 4 Boston 4 Nairobi 4 Hyderabad 5 Tokyo 5 Boston 5 Delhi Source: JLL, January 2016 Future Proofing: Higher education infrastructure; innovation capability; international patent applications; technology/venture capital; environmental quality Real Estate Momentum: Office and Retail construction, absorption and price; investment transactions; transparency 43
City Momentum Index 2016: Short v Long Term Singapore, Toronto Brussels, Chicago Berlin, Taipei Stockholm, San Diego Tokyo, Hong Kong Paris, Randstad Seoul, Los Angeles Melbourne, Austin London San Francisco Bay Boston, New York Sydney Highest Dublin, Auckland Shanghai, Beijing Shenzhen, Bangalore High-Value Incubators Nairobi, Delhi Nanjing, Xi an Hyderabad, Chennai Lowest Lowest Short - Term Momentum Highest Source: JLL, January 2016 44
City Momentum Index Covers 120 Cities North America 31 Vancouver, Calgary, Toronto, Montreal Washington DC, Baltimore, Philadelphia, New York, Pittsburgh, Boston Minneapolis, Chicago, St Louis, Detroit Charlotte, Atlanta, Orlando, Miami, Tampa Denver, Austin, Dallas, Houston Las Vegas, Phoenix Seattle, Portland, San Francisco, Silicon Valley, Los Angeles, San Diego Latin America 7 Mexico City Lima, Bogota Sao Paulo, Rio de Janeiro Santiago, Buenos Aires EMEA 48 Oslo, Stockholm, Copenhagen, Helsinki Dublin, Glasgow, Edinburgh, Manchester, Birmingham, London Brussels, Randstad, Paris, Lyon Hamburg, Berlin, Dusseldorf, Cologne, Frankfurt, Stuttgart, Munich, Zurich, Vienna, Luxembourg Lisbon, Madrid, Barcelona Milan, Rome, Athens Prague, Budapest, Warsaw, Bucharest, Kiev, Moscow, St Petersburg Istanbul Abu Dhabi, Dubai, Jeddah, Riyadh Casablanca, Cairo Cape Town, Johannesburg Lagos, Nairobi Asia Pacific 34 Seoul, Osaka, Tokyo Beijing, Tianjin, Shanghai, Chengdu, Wuhan, Guangzhou, Shenzhen, Chongqing, Nanjing, Xian, Shenyang Hong Kong, Taipei Delhi, Kolkata, Mumbai, Hyderabad, Bangalore, Chennai Bangkok, Ho Chi Minh City, Hanoi, Kuala Lumpur, Singapore, Jakarta, Manila Perth, Brisbane, Melbourne, Sydney, Auckland 45
Auckland Celebrate amazing progress.. And momentum Recognise externalities and organise for them. Shift from cycle 2 to cycle 3. Map how the success model will change: private amenity to shared liveability mix of densities growth of evening economy New opportunities and catalysts. TPP? Get the story clear at home and tell it abroad. Australia and NZ together? OBOR? Learn with peers 46