Winning Global Markets: How Businesses Invest and Prosper in the World's High-Growth Cities

Chapter 3The Real Generators of WealthGlobal Multinational Company Investment

We have made the case that in many nations, an inversion is taking place between the role of the nation and the role of its cities. Most economic thinking in the past has focused on how to build a nation's strength, with the nation's cities reduced to an afterthought. The normal hierarchy is the nation first, then the states or provinces, and finally the cities. This hierarchy made sense when the nation had great economic power and wealth and could dispense it to the states and cities. Today, this makes less sense, given that national treasuries are running dry and cities can no longer depend on the largess of the nation for infrastructure development, loan guarantee programs to local companies, employment and training assistance, and other types of support for companies to grow city economies.

Cities are turning increasingly to large multinational companies (MNCs) to make direct investments in their local economy by locating company headquarters (HQs), regional business centers, business division HQs, research and development (R&D) centers, and production and distribution facilities in their city regions, as well as by participating in public-private partnerships (P3s) for new physical and information infrastructure. Cities are reaching out to the private sector, principally to American and foreign MNCs, for local economic growth.

Let's look at the issue of infrastructure and its impact on local economies. ...