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

Chapter 7The Responsibilities of Companies and Cities

We have encouraged metropolitan (metro) areas seeking growth to do their best to attract targeted multinational companies (MNCs). We have examined the decision-making practices of MNCs to help metro areas use this information to increase their success in attracting them. Now we want to turn to another question: How will these attracted MNCs conduct themselves in these metro areas? We also have to consider the new position of cities and metro regions as primarily agents for economic development. This is a departure from their traditional position as urban administrators of public service to the population.

We can imagine two extremes. At one extreme, the attracted businesses might act like hit-and-run businesses, squeezing out as much profit as they can, staying as long as the profit is there, and then moving to the next global city that is extending generous incentives. At the other extreme, we can imagine attracting fine industries and companies that look for a long-term position in that metro area and plan to infuse ideas and funds to help both the business and the metro area achieve their respective objectives.

Most businesses attracted to an area will do some good and some bad. Suppose the city of Mumbai manages to attract a new steel mill. The good news is that this will create needed jobs. But the bad news is that the new steel mill will add pollution to the city, especially if it is loosely regulated. The good news ...