By Scott Ferguson, CEO, World Trade Centers Association (WTCA)
It’s no surprise that in the current geopolitical climate, people are facing economic uncertainty all around the world. Escalating trade tensions between various countries and economic slowdowns in others have contributed to this uncertainty. So what can be done at a local level to encourage growth and prosperity while mitigating these challenges?
In the second annual WTCA Trade and Investment Report: Navigating Uncertainty, conducted by the World Trade Centers Association (WTCA) in partnership with FP Analytics, findings highlight how cities are optimizing trade, investment and growth during this state of intensified economic competition. Despite the state of the global economy, resilient cities — or those that outperform their countries during economic downturns — around the world are well positioned and have the means to act as centers of economic stability and growth in their respective countries.
The report found a consistent set of characteristics amongst top resilient cities that would allow them to overcome the uncertain global economic circumstances. In addition to having diversified economies, these cities feature strong service sectors, and are home to both college-educated (or higher) and global populations. In addition, these cities have a sound transportation system, and can easily attract FDI, with investment contributing a great deal to their overall GDP.
Additionally, the report shows that cities and businesses are being forced to consider new investment strategies and trade opportunities in a time where the global economy is in a state of near-constant flux. They are confronting new risks and complexity in decision-making that threaten to add costs to their operations, undermine competitiveness, or even render them obsolete. While investment diminishes and competition increases for limited foreign direct investment (FDI), businesses are shifting their investments to locations perceived to be lower-risk, and reorienting trade relationships with long-term effects for industry and supply chains.
With investment in these key areas, cities are taking control to strengthen their resilience at a local level to navigate and prosper during these uncertain times. Their leaders understand the importance of international diplomacy to deepen economic ties, demonstrate credibility, and instill confidence with old and new trading partners. They are looking for opportunities to capitalize on the economic disruption by leveraging geography, language, political ties, and other strengths to attain new trade and investment opportunities. Additionally, they are looking to innovative tech industries as part of their strategy to maintain their cities’ resilience and instill future growth by attracting FDI. They also support small- and medium-sized enterprises (SMEs) because they are the most agile, capable of adapting quickly to evolving economic environments, and capitalizing on changing conditions.
It’s up to cities and their local businesses to take hold of their platform, assess risks, utilize their resources, and do what they can to foster trade and investment at the local level. In fact, the current climate may offer opportunities that national governments are unable to leverage. With a firm strategy in place cities can build up their resilience and resources, navigating these uncertain times and mitigating the risk to their people while finding new areas to grow.
To review the full 2019 WTCA Trade and Investment Report: Navigating Uncertainty, including commentary from WTCA Members, download at www.WTCAReports.org.
Compliments of the WTCA, a member of the EACCNY