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Cities ignite innovation at the Economic Development Forum

24 March 2023

After years of crises, strong economies in cities are essential to building a future-fit Europe. But the nature and goals of a strong economy, and the path to achieving it are far from self evident. At the Eurocities Economic Development Forum 2023, cities banded together to work towards an economy that is inclusive, just, innovative and sustainable.

Juhana Vartiainen, Mayor of Helsinki, launched the forum by highlighting the active role that cities are taking in solving the many challenges facing our world. Helsinki, forum’s host city, and one of the EU’s Mission Cities aiming at climate neutrality by 2030, addresses global challenges with local solutions and city to city cooperation.

As Anni Sinnemäki, Chair of the Economic Development Forum and Deputy Mayor of Helsinki, echoed his remarks, stating, “We are living in turbulent global times, with pressing local and global challenges, and we cities are in the forefront of solving these.”

Unpacking the many facets of local economic development for global good, the forum tackled the topics of how economic development could be enabled to improve local skills, help foreign talent to thrive locally, and include everyone in society to achieve sustainability.

A strong through-line was the need for the European Commission to work more closely, and more directly with cities to bolster their effort as it is in cities that all the action intended to further the grand goals of the Union actually takes place.

Eurocities Secretary General André Sobczak emphasised the key role of cities and events like the this. “We have shown that cities are not only in the forefront, not only concentrating a lot of challenges, but also innovating for sustainability,” he said. Sobczak also noted that cities are ready and willing to share solutions with each other, as well as with cities outside of the EU, in particular Ukraine.

Essential collaboration

Collaboration between cities is essential, insisted Layla Pavone, Coordinator of the Board of Innovation in Milan, giving the example of the need for establishing common standards among cities: “If we are altogether and we don’t want to reinvent the wheel, we need to communicate, we need to meet each other. We need to try to build some common rules.” This kind of communication and sharing of best practices was at the heart of the three day event in Helsinki, which ended today, 24 March 2023.

Cities were also clear on the fact that, despite their great ambitions, funding remains a challenge. Tanja Tanayama, Head of Advisory Hub at the European Investment Bank, noted that two thirds of surveyed cities highlighted an investment gap when it comes to realising local and European sustainability goals.

EU funding will be critical in filling these gaps, she said, particularly in addressing the challenges of climate change. “That there is a big momentum in cities to address these challenges,” she said, as evidenced by the 370 applications received for the EU Mission For 100 Smart and Climate Neutral Cities.

As cities work together and continue to innovate, they can lead the way towards a sustainable future. As Sobczak noted, “Cities will manage to find the solutions. Those gathered here are optimistic and are willing to use this optimism to be a driver of change.”

Innovation enablers

Innovation is a key driver of economic growth and urban development. Cities around the world are trying to create an ecosystem that promotes innovation and entrepreneurship. However, innovation requires a collaborative approach, bringing together different stakeholders from the public and private sectors, academia and civil society. These were some of the key messages that cities were eager to transmit.

“It’s the privilege of mayors and deputy mayors to see first-hand the needs of people and companies, and to be able to bring together the stakeholders to innovate on new things,” Sobczak declared.

Bram Pauwels, Chief Strategy Officer of the European Business Network, in his keynote address, stressed the role of cities in nurturing innovation. The important thing, he said, is for cities to understand the many players involved, and the appropriate roles of each.

He also warned against too much obsession with the tech ‘unicorn,’ companies that zoom into the billions in value, and extolled the importance of ‘tech zebras,’ more cautious and realistic animals. Pauwels finished by recommending that cities check out the Better Incubation Insights Paper to discover the latest in this field.

Rosa Huertas Gonzalez, Director for Economic Development in Valladolid, stressed the importance of monitoring the progress of innovation. “It’s important to have good data and to have feedback,” she said, “for example by interviewing a project’s beneficiaries at the beginning of the project, in the middle, and at the end.”

Huertas Gonzalez also highlighted the need for public and private cooperation to achieve climate neutrality. “Innovation shouldn’t be seen as a technical thing but as something transversal,” she said. The pointed out that innovation is a way of thinking that can be applied to every local policy to improve resilience.

Layla Pavone, Coordinator of the Board of Innovation in Milan, emphasised the role of the city as facilitator for innovation, for example by connecting startups with big companies. “We try to meet startups and companies every day, to connect up the dots,” she said, “We are trying to create bridges.”

Pavone also discussed the importance of gathering feedback and sharing data. “We are building platforms that give us the ability to measure feedback day by day.”

During the Milan Digital Week, the city shares this data in engaging ways with the whole city. “We want the people to see that innovation is not something so difficult to understand,” she said.

Enabling vision

Sinnemäki stressed the importance of creating an environment that promotes innovation and entrepreneurship. However, she said that it is easiest for cities to convince companies of the value of climate-friendly innovation when there is certainty surrounding climate goals.

“It is important that the EU is adamant in its climate goals, so the whole of Europe knows that everyone is going there,” she said. This way companies know that if they succeed in showcasing an investment in a certain city, there will also be a market for it throughout Europe.

Innovation is often seen as a buzzword associated with technology. During discussions at the Economic Development Forum, it was agreed that innovation should be viewed as a system, particularly in relation to cities.

City officials should consider themselves as enablers of innovation, acting as visionaries, community agents, and service providers. When supporting innovation, it is essential to align it with city goals. If not, there is a risk of missing out on opportunities to integrate actors across the territory.

The discussion also explored ways for cities to future-proof their workforce. Digital literacy is essential, but there is a need to also develop green literacy as the green transition continues to gain momentum.

The phrase “You cannot be future-proof if you are not future-aware” encapsulates the discussion’s overarching theme. It is crucial to anticipate future challenges and changes that may arise to prepare for them. Cities present at the forum suggested that Eurocities could potentially be used as a space for forecasting these challenges.

The discussion highlighted the importance of collaboration between various actors, including city officials, businesses, and community members, to achieve innovation and prepare for the future. It is essential to have a cohesive strategy and a shared vision to achieve these goals.

Economic growth must be sustainable

The mayors and city experts present in Helsinki discussed the importance of sustainable economic growth. Mayor Vartiainen emphasised the need for growth that is in harmony with nature and sustainable in all aspects: “Underpinning everything is long-term, sustainable economic growth.”

Minna Arve, Mayor of Turku, spoke to the importance of cities working together to implement big goals, such as sustainability, infrastructure, energy, integration, and wellbeing. Arve urged cities to explain their actions in terms that residents can understand and relate to, such as cleaner air, better public transportation, and protecting the environment.

Eveline Jonkhoff, Head of Sustainability and Circular Economy in Amsterdam, shared her perspective on combining sustainability and economic development. She stated that it is no longer a question of whether we can combine the two, “that is the only option if we want to stay in business as cities and companies.”

Jonkhoff gave the example of Amsterdam’s political agreement, which is based on a just city, a sustainable future, and sustainable growth. She emphasised that the goal is to strive for broader wellbeing and a circular economy, and that long-term leadership and vision are essential for achieving this goal.

Miimu Airaksinen, Senior Vice President for Development at the SRV Group, shared the example of research for new materials with a lower carbon footprint in the construction industry. Airaksinen mentioned the SRV Group’s efforts to build climate-neutral construction sites and the need for cooperation in finding new sustainable building materials.

Cities are directing their policies to ensure that economic growth is environmentally and socially sustainable in order to address global challenges effectively. By working together and sharing innovative solutions, cities can drive change at a broader level and create a sustainable future for all.

Growth and green transition must be inclusive

As cities aim to achieve sustainable and green growth, it is crucial to ensure that the transition is inclusive and just. The cities at the Eurocities Economic Development Forum 2023 spoke on the importance of addressing issues such as social equity and accessibility to green jobs and technologies.

Jonkhoff highlighted the importance of ensuring that the green transition is just. In Amsterdam, she said, “We’re addressing the energy crisis, but also those who can’t afford to pay their electricity bills. This is essential for the just transition.”

Kristine Langenbucher, Head of Unit, Employment and Skills at OECD Centre for Entrepreneurship, SMEs, Regions & Cities, discussed the green divide and the need to ensure that the green transition is inclusive. She noted that the green transition is a very male-dominated sector, with 72% of green jobs filled by men.

She also pointed out that many of the measures proposed to achieve the green transition may affect lower-income people the most. “We need to ensure that the green transition is also a fair and inclusive transition,” she insisted.

Langenbucher also noted that cities are doing a lot to boost green initiatives and support green job creation. For example, Copenhagen is attracting young people to create green career opportunities in vocational education and increase female participation in relevant professions, while New York is providing funding to develop training in the clean energy economy.

Talent attraction

During the event, Mayor Vartiainen stressed the importance of labour migration to Helsinki. He highlighted the need for both foreign and locally grown skills, especially since this year is the European Year of Skills.

To give an idea of how things look from the perspective of a company collaborating with the city, Helsinki invited Markku Ignatius to join the conversation.

Ignatius is the General Counsel and Public Affairs Representative of Supercell, a Helsinki-based video game company that has launched several games that have earned them millions. “Thousands of games are released every day,” he said, “It’s a very competitive industry, so we have to have the top talent.”

Almost half of Supercell’s 300+ employees are from outside Finland. To remain competitive, Ignatius stressed the need to attract global talent and make immigration processes more fluid. Ignatius mentioned the difficulties that foreign professionals’ spouses have finding work, which can sometimes lead to their departure from the company.

However, he also mentioned that Supercell’s recruiters sometimes bring potential employees to Helsinki’s schools so they can see first hand that young children walk to school safely all by themselves – “The Americans are amazed at that!”

Other speakers shared their insights and experiences on attracting and developing talent in their respective cities. Linda Ozola, Vice Mayor of the City of Riga emphasised the need for systematic work on talent attraction and skills development. She stated that 40-60% of an investor’s decision on where to base themselves is based on talent availability, which makes talent the priority for Riga.

Riga is exploiting the fact that people are increasingly able to work from wherever they want in the world with a ‘workation.’ The city picks up the cost for small companies that move operations to Riga for a week.

Lena Forsgren, Lead for Skills and Workforce Development in the City of Stockholm, discussed the need for long-term financing for skills. She mentioned that the city is working with all industries to determine what skills they require and then attempt to create education in that area. Forsgren noted that businesses and cities both need to provide training.

Welcoming society

Judith Romera, Head of City Promotion in Barcelona, shared the city’s long-term strategy for taking care of its international community and attracting international talent. Since 2014, the city has held and ‘International Community Day.’ In 2018, the webiste ‘Barcelona International Welcome,’ became a go-to reference point for newcomers, and in 2021, the city opened an in-person welcome desk service.

Romera emphasised that if a city wants to have a successful future, it must take care of international talent, but it should be done in line with the city’s strategy and in a way that respects and responds to the city’s essence.

Mari Taverne, Head of Talent Attraction and Migration in Tampere explained that her city has a long history of working on talent attraction through projects, but only created a permanent structure for it in 2018.

One in five Tampere inhabitants is a student, so getting international students to enter the local workforce is a priority. “42% of international students at the University of Applied Sciences stay after graduation,” Taverne siad, “and we aim to increase this number.”

Tampere offers a range of services for internationals and employers, including education and work-based migration services, international recruitment, and support in intercultural competence and onboarding.

The city also has diverse initiatives to attract international talent, such as the ‘Game on!’ Hack-a-job event, promoting women in tech, and creating videos and podcasts. Tampere also uses ‘talent ambassadors’ and operates a phone number that people considering moving to Tampere can call anytime.

Participating cities touched upon the importance of regional collaboration and controlling the narrative around one’s city. The branding of a city and its service delivery for international talent are closely linked, and face-to-face meetings with corporate leadership and digital campaigns can be crucial in talent attraction.

Effective labour policies require an integrated approach, and supporting newcomers through one-stop-shop service desks is important. It was also noted that language training is crucial for people to be really attached to a city, and this should be extended to spouses as well.

Housing is another problem in many cities, with shortages, gentrification, and rising prices. Utrecht shared a workaround: focusing on getting spouses employed helps activate more international talent without requiring an extra home. Ultimately, managing the ecosystem and playing to one’s strengths are key in attracting and retaining international talent.

EU response

Diane Angermueller, Policy Coordinator for Legal Migration at DG Home, European Commission highlighted the importance of EU measures to address the talent shortage in Europe. DG Home’s proposed skills and talent package shows the EU’s commitment to streamlining the migration process to attract more talent to the region.

The proposed measures to shorten work permit and VISA processes for non-EU workers will help companies hire the staff they need, while strengthening the rights of long-term residents who have entered the EU and making it easier to become one.

As well as this, the EU’s proposed talent pool will provide a platform for non-EU workers to connect with EU employers, with migration experts involved in smoothing the process. The initiative to develop talent partnerships with countries like Morocco, Tunisia, and Bangladesh will also enable mutual benefit from legal migration while mitigating brain drain.

Diane also highlighted the need to give young people the opportunity to move to third countries, not just to study but also to work, to develop their skills. This aligns with the European Year of Skills, which prioritises not only finding skills elsewhere but also developing them locally. These proposed measures and initiatives show the EU’s commitment to attracting and retaining talent, making it easier for international talents to come and thrive in Europe.

The EU must work more closely with cities

It was clear that the European Union must work more closely with cities if it hopes to achieve its climate goals and invest in a green transition.

Sinnemäki highlighted a central takeaway of the event: the need for direct dialogue between cities, Eurocities, and the European Commission, as not all programmes and financial instruments of the Commission are structured to give cities access. Sinnemäki added that the initiative of the Mission Cities is a positive step, but there is still much room for improvement.

Alessandra Barbieri, Manager of Funding and European Projects for the Municipality of Florence, stressed the need to recognise the role of cities within the ambitious targets set by the European Commission. Barbieri suggested that the Mission Cities initiative, which aims for climate neutrality at the local level, could serve as a model for more direct and expansive collaboration between cities and the European Commission.

Sobczak proposed that cities and the network of Eurocities form a strategic alliance with the Commission to be a driver of change and succeed in the green and digital transition.

Sobczak suggested that cities can be the link that makes people feel closer to the EU, especially with European elections coming up next year. He added that there needs to be better connections directly to the European institutions and a certain part of the European budget should directly go to cities.

Given that all the global ambitions of the EU must be realised in its cities in order to succeed, and given the evident dedication of cities to those goals, a stronger collaboration is an obvious win win.

Direct dialogue between cities, Eurocities, and the European Commission is crucial, and initiatives such as Mission Cities should be expanded to recognize the broader role of cities beyond greening the world. By working together, Sobczak concluded, the EU and cities can succeed in the green and digital transition and change the reputation of Europe for the better.

Contact

Anthony Colclough Eurocities Writer

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