The World Trade Centers Association (WTCA) has unveiled its first-ever “WTCA Trade & Investment Report: Global Connections, Local Growth” at a private event at the Foreign Policy (FP) Group Offices.
The report was conducted in partnership with FP Analytics and reveals that cities are positioned to lead in this time of geopolitical turmoil by focusing on stakeholder networks, human capital and connective infrastructure.
According to the study, 71% of WTCA members polled believe that a significant disruption in trade and investment is likely to occur this year with investments being put on hold amid global economic uncertainty. Additional key findings include:
• Urban outperformers create cities without borders: Strategic partnerships between global and local stakeholders are the critical enabling factor for cities competing for Foreign Direct Investment (FDI) and seeking to expand local businesses’ access to new markets. Cities with a WTCA member on average draw FDI per capita at twice the rate of their country, and export goods at 1.55 times the national level, per capita. These thriving FDI destinations are also engines of job creation, with every $1-billion in annual FDI being associated with a 1.5 percent higher workforce participation.
• Planes, brains and connectivity: Hard infrastructure, a skilled workforce, and digital connectivity constitute core building blocks differentiating and strengthening cities’ relative competitiveness. For every 1 000 passengers transiting through an airport, one can expect a $7.3-million increase to local GDP and a $30 000 increase in FDI inflows. Additionally, adding just 1 000 people with tertiary education to a city’s population is associated with a $381 000 increase in FDI inflows by. Among cities with below average Internet penetration (less than 54.5%), every 10-percentage-point increase in household Internet penetration was associated with an acceleration in GDP growth by more than half a percentage point.
• Small companies are big business: SMEs drive local growth and employment, constituting 50-60% of value added, and 70% of jobs in the OECD. Still, the share of SMEs engaged in international trade is typically under 10%, underscoring the importance of trade-related support services–like those offered by WTCA Members–to unlocking their potential and making them an economic force multiplier for cities.
“These findings show that not only do our WTCA members have their fingers on the pulse of their local economies, but they can deliver great insight into the issues impacting the larger trade and investment communities,” says Scott Ferguson, CEO of the WTCA. “By leveraging our global network, members help to integrate their home cities into the international marketplace, which can have a profound positive effect on the strength and resilience of the economy by drawing Foreign Direct Investment, increasing exports and generating jobs.”