THE COMPETITIVENESS AND ENTERPRISE CITIES PROJECT BABSON CONNECT, - - PowerPoint PPT Presentation

▶
the competitiveness and enterprise cities project
SMART_READER_LITE
LIVE PREVIEW

THE COMPETITIVENESS AND ENTERPRISE CITIES PROJECT BABSON CONNECT, - - PowerPoint PPT Presentation

Jul 09, 2023 505 likes •728 views

THE COMPETITIVENESS AND ENTERPRISE CITIES PROJECT BABSON CONNECT, CARTAGENA, COLOMBIA, APRIL 26, 2015 POVERTY IN THE WORLD Poverty Facts More than 3 billion people live on less than $2.50 per day 5.6 billion people live on less than

slide-1
SLIDE 1

THE COMPETITIVENESS AND ENTERPRISE CITIES PROJECT

BABSON CONNECT, CARTAGENA, COLOMBIA, APRIL 26, 2015

slide-2
SLIDE 2

POVERTY IN THE WORLD

Poverty Facts

More than 3 billion people live on less than $2.50 per day

5.6 billion people live on less than $10 per day

2.6 billion have no access to basic sanitation

45% of the world’s 2.2 billion children live in poverty, 29% have no shelter

25% of people live without access to electricity

600 million people lifted out of poverty in China in the past 20 years

The poverty rate in China fell from 85% to 15.9%

785 million people are illiterate; 2/3rd of these are women

slide-3
SLIDE 3

CONTEXT OF E-CITIES

Sources: http://www.globalissues.org/ http://elibrary.worldbank.org/doi/book/10.1596/1813-9450-3915 http://www.mckinsey.com/insights/engineering_construction/infrastructure_productivity http://www.milkeninstitute.org/events/conferences/global-conference/2013/panel-detail/4062

Poverty Urban Migration Infrastructure Cost

  • Two billion people live
  • n less than $2/day
  • 22,000 children die each

day due to poverty

  • Massive migration of

people from rural to urban areas

  • Particularly relevant in

developing countries as a result of innovation, entrepreneurship

  • pportunities, etc.
  • An estimated $57 trillion

in infrastructure investment needed between now and 2030

  • But, lack of investor-trust

With approximately $30 trillion of capital on the sidelines and rapid migration causing greenfield sites to urbanize, the opportunity exists to combine the two

slide-4
SLIDE 4

THE PROBLEMS OF NATIONWIDE REFORM

 90% of capital flows go to 12 countries, despite better returns in developing

countries

 Returns in developing countries are lowered by economic distortions  National-level reform is difficult to achieve  Beneficiaries from distortions tend to block reforms  Their power prevents the creation of a level playing field for competition

and promotes “crony capitalism”

slide-5
SLIDE 5

BUT GROWTH ENGINES DO EXIST

HONG KONG SINGAPORE DUBAI LONDON

slide-6
SLIDE 6

THEY ARE LIVING E-CITY LABS

  • All characterized by explosive growth driven by entrepreneurial energy
  • Governed by regulatory regimes that favor:
  • Open trade
  • Property rights protection
  • Merit-based competition
  • Level playing field for new entrants and established firms
  • Inviting environment for both entrepreneurs and capital providers
slide-7
SLIDE 7

WHAT IS THE PURPOSE OF THE PROJECT?

 Connect governments with developer groups, and other stakeholders

such as foundations or international development agencies who wish to alleviate global poverty and create opportunity for socially inclusive growth for people in developing countries and emerging markets:

 By identifying the constraints to economic activity in these countries  By advising the elimination of these constraints  By facilitating the creation of merit-based competition systems

slide-8
SLIDE 8

THE CECP WORKS WITH:

slide-9
SLIDE 9

TIMELINE OF A FULL E-CITY PROJECT

Launch: LOI/MOU with government showing intent Apply Competitiveness Diagnostic, e-City Simulator: what are the constraints on growth? What could the gains be? Write feasibility study and negotiate RFA: consult with government to determine Conclude RFA and create investor proposition

Launch 4-6 weeks 6-8 months

slide-10
SLIDE 10

CREATING A GROWTH MODEL

1.

Sign Letter of Intent to launch a feasibility study (Launch)

i.

Outline the broad scope of the project

ii.

Identify comparative advantages for site (i.e., air hub, maritime hub, tourism, etc.)

iii.

Specify the type of regulatory changes needed and possible

iv.

Negotiate the city governance structure and government revenue share to embed the project in the country

i.

Spins off direct, tangible benefits to Host Government and People

2.

Apply Competitiveness Diagnostic (4-6 weeks)

i.

Identify regulatory barriers that deter entrepreneurial activity

ii.

Use e-City Simulator to determine the economic activity unleashed by removing anti-competitive market distortions (ACMDs)

3.

Write feasibility study and negotiate Regulatory Framework Agreement (6-8 months)

i.

Government/Developer or Agency agree on the extent of the regulatory framework

ii.

Government/Developer or Agency agree on the governance structure and Government involvement

slide-11
SLIDE 11

E-CITY SCENARIOS

 Control: the status quo  e-City 1: primarily Ease of Doing Business Indicators reforms  e-City 2: e-City designation with some regulatory and legal

autonomy, improved insolvency rules, and limited opening to foreign investment

 e-City 3: full e-City with a merit based competition, open trade, and

property rights protection

slide-12
SLIDE 12

PRODUCTIVITY/E-CITY SIMULATOR

This tool enables us to estimate the result (in terms of economic activity) of solving for constraints across three dimensions: property rights, domestic competition, and international competition depending on which version of e-City is developed

This simulator is much more accurate than existing databases and indices, ie World Bank Doing Business, WEF GCI, etc.

It is more accurate because of its non-reliance on survey data and its precise sorting and weighting of categories and subcategories of data

slide-13
SLIDE 13

DISTORTIONS INDEX

We have an index that measures distortions in countries and evaluates how much more productive those countries could be if their legal, economic, and regulatory environments were optimized across property rights, domestic competition, and international competition Property Rights Domestic Competition International Competition

slide-14
SLIDE 14

E-CITY CURVE

1000 2000 3000 4000 5000 6000 7000 8000 Control e1 e2 e3

E-City Curve

Economic Activity Column1 Column2

slide-15
SLIDE 15

GAINS FROM E-CITIES

1000 2000 3000 4000 5000 6000 7000 8000 9000 10000 Control Control + Revenue Enhancements Special City Designation + Regulatory Autonomy e-City MILLIONS USD Revenue Benefit to Host Government

Government Share 10% Government Share 10% Government Share 12.5% Government Share 20%

slide-16
SLIDE 16

MOROCCO ENTERPRISE CITY – CONTRIBUTION OF KEY SECTORS (IN $BNVOLUMES)

Control E-City 1 E-City 2 E-City 3 Financial 0.05 0.06 0.20 1.69 Air Hub 0.02 0.02 0.20 1.22 Maritime Hub 0.07 0.07 0.18 1.09 Entrepreneurial Activity 0.09 0.10 0.27 1.02 High T ech 0.04 0.04 0.21 1.66 Industrial Production 0.08 0.09 0.22 0.69 Energy Production 0.11 0.12 0.24 0.62 Logistics 0.03 0.04 0.23 1.51

0.2 0.4 0.6 0.8 1 1.2 1.4 1.6 1.8 Financial Air Hub Maritime Hub Entrepreneurial Activity High Tech Industrial Prouction Energy Production Logistics

Components of e-City ($bn)

Current E-City 1 E-City 2 E-City 3

slide-17
SLIDE 17

WHAT ARE OUR PRODUCTS?

Product Existing City Government/ Foundation/ Developer Governments for National Reform New City Developer City Mayor Industrial Zones and Science Parks Letter of Intent/MOU

✓

Regulatory Diagnostic

✓ ✓ ✓ ✓

E-City Simulator

✓ ✓ ✓ ✓ ✓

Feasibility Study/Exercise

✓ ✓ ✓

Regulatory Framework Agreement

✓

E-City Indicator

✓ ✓ ✓ ✓

slide-18
SLIDE 18

HOW DOES HOST COUNTRY BENEFIT? E-CITIES ARE AN ECONOMIC ENGINE FOR THE COUNTRY

Revenue Share with Government

Creates a trust fund for healthcare and education for the rest of the country

Embeds e-City prosperity into national economy, unlike free trade zones (FTZs) or special economic zones (SEZs)

Jumpstarts poverty alleviation and job creation in and outside of the e-City

Social Funds in e-City for healthcare and education

Puts 1% of revenue from the economic activity into an internal trust fund for healthcare and education expenses of the e-City

Increases human capital

Morocco Feasibility Study suggests e-City will produce

3.14% GDP injection

100,000 jobs

600,000 people lifted out of poverty per annum

slide-19
SLIDE 19

ENTERPRISE CITIES DEVELOPMENT COUNCIL

slide-20
SLIDE 20

ENTERPRISE CITIES ACADEMIC ADVISORY COUNCIL

Martin Anderson, Babson College

Philip Dover, Babson College

Beth Goldstein, Babson College

Christopher Hennessey, Babson College

James Hoopes, Babson College

Bala Iyer, Babson College

Kent Jones, Babson College

Donna Kelley, Babson College

Michael Mozill, Babson College

Srinivasa Rangan, Babson College

George Recck, Babson College

Alden Abbott, The Heritage Foundation

Eduardo Gamarra, Florida International University

John Macomber, Harvard Business School

Aaditya Mattoo, World Bank

Richard Miller, Olin College

Nikhil Rao, Wellesley College

S.P . Kothari, MIT