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Weekly UpdatesAnother explanation is the increasing pace of knowledge and technology advancement. Due to globalisation and the use of new ICTs, the diffusion speed of information and knowledge has increased dramatically. ICTs, particularly the Internet, facilitates the codification and diffusion of knowledge (van Winden 2003). New technologies, ideas and concepts become public very quickly and are very easy to copy, which speeds up advancements in a number of knowledge fields. It has become crucial to be able to select and interpret new information and knowledge, and to turn it into profitable activities (Castells 2001), putting a premium on human capital that uses new technologies to improve service and products and become more productive. This tendency favours large and diversified cities with a highly educated workforce.
Third, the relative growth of diversified metropolitan areas may be caused by increasing linkages between different sectors. For instance, the ICT sector has become increasingly linked up with many other sectors, as ICTs are crucial enablers of business processes; logistics and manufacturing are increasingly integrated with Just-In-Time delivery systems. Design and technology are increasingly linked, as the design of high-tech products increasingly becomes a critical selling point. In new product development many companies have set up multi-disciplinary research teams consisting of engineers, designers, marketing professionals and finance experts.
In sum, there are large variations between cities concerning their potentials to thrive in the knowledge economy. The best cards seem to be in the hands of internationally connected metropolitan areas that have a diversified economy, a strong knowledge base, and a high quality of life. In the coming years, these cities' relative position is likely to improve further: with increasing internationalisation of research and business, their cultural diversity and accessibility are clearly assets in attracting (foreign) firms and people. Also, they will benefit from the trend of improving co-operation between universities and business because they are strong in both respects. In some areas in Europe, the development of a high speed rail system will relatively improve cities' international connectivity. Smaller cities with an outstanding knowledge base are also likely to benefit, especially those located near large metropolitan areas.
GOVERNANCE ISSUES AT THE URBAN LEVEL
The development of cities is a co-production of many urban actors that follow their own agendas and interests. Cities differ in both the local alignment of agendas and their ability to pursue collective action that contributes to the competitiveness of the city as a whole. Van den Berg et al. (1997) use the term 'organising capacity' to describe the process of creating local strategic agendas. Organising capacity is the ability of public authorities to convene all stakeholders public and private, internal and external - to jointly generate new ideas and formulate and implement policies that respond to fundamental challenges posed by the evolving knowledge economy. The term organising capacity is related to the concept of governance in that governance is about the capacity to get things done in the face of complexity, conflict and social change (Stoker 1995). In urban studies it is generally recognized that effective urban/metropolitan governance is an important factor underpinning competitiveness since adequate governance structures and institutions help to improve the asset base, to increase the utilization of the asset base and to mobilize resources.
Policy integration
A first key aspect of governance is the degree of policy integration. Metropolitan areas are receivers of a plethora of policies from a number of bodies. These policies affect the urban assets that determine competitiveness in the knowledge economy. In many cases, national, provincial and local policies are poorly co-ordinated: policies may be fragmented, overlapping, or worse, conflicting, and produce perverse outcomes. A higher level of policy integration positively affects urban competitiveness.
One may distinguish between three types of policy integration: sectoral, horizontal, and vertical. Sectoral integration relates to the co-ordination of policy fields and sectors: economic policy, transport policy, spatial planning, housing policy etc. The relevance of sectoral integration for metropolitan areas is evident but in practice very difficult to realise. Horizontal integration refers to the alignment of policies between authorities in a metropolitan area. The need for this type of integration has increased with the expansion of cities: most metropolitan areas are functional economic units but are governed by many municipalities, leading to unfruitful competition and foregone opportunities of resource sharing and co-ordination. They vie to attract inward investment, to attract higher educated inhabitants or to develop new growth clusters. This often leads to a waste of resources and produces sub-optimal outcomes. In many important policy fields, notably spatial policy, housing policy and transportation, intrametropolitan co-ordination can lead to much better results for the urban region as a whole. One small example of a solution to unproductive local competition for policy space is given in Box 1.
In their cluster policies, cities also hardly look beyond their administrative borders while cluster actors (firms, universities, workers) operate on a different scale level and do not respect administrative borders. With improving transportation systems (the high-speed train network is particularly important), functional regions are still growing: commuting distances will increase, and the relevant region for knowledge-based clusters will continue to grow accordingly. This is typically not reflected in policies.
There are several ways to improve horizontal integration. In some cases, integration can be reached in a bottom-up process (the Eindhoven case). The most radical solution is to create a strong metropolitan authority that replaces the existing municipalities, as was done in Montreal, Canada. In 2000, a new metropolitan authority was created, the Montreal Metropolitan Community (CMM), covering the functional area of Montreal, including the urban fringe. Also, the municipal organisation was re-organised, resulting in the amalgamation of 28 municipalities in Montreal (OECD 2004). The Government of Quebec (the region of which Montreal is the capital) recognized the role of Montreal as strategic leader and promoter of the region's economic vitality. In January 2003, the City of Montreal and the Government of Quebec signed a city contract, a five year agreement to improve the competitiveness of the city. The aim of the contract is to give the city more room to shape its own destiny. The contract gives Montreal adequate tools to alleviate the tax burden and to upgrade the city' infrastructures in important areas such as housing, transportation, the environment, culture, and social and community development. In the 5-year contract, the City and the Government of Quebec agree to invest CAD 2.5b in total. The City will invest CAD 1b, and the Government of Quebec's commitment adds up to CAD 1.4b.
Finally here, vertical integration concerns the co-ordination between different layers of government, typically national, regional and local. City contracts (see Box 2) between national or state governments and cities are a way of promoting vertical integration.
Creating a comprehensive vision for a metropolitan region can be an important step in achieving greater policy integration: it is a way to set shared priorities, to channel investments and to avoid fragmentation. The vision should be a reference point for all decision makers. Therefore it is crucial that all stakeholders are involved in the process of the creation of the vision.
National governments in Europe increasingly seek to promote horizontal, vertical and sectoral integration. One tool is to organise 'competitions' among cities or regions, with the aim of improving regional governance or to promote strong clusters. In some cases, competitions refer to a particular cluster type or technology. In the late 1990s, the German federal government, for instance, organised a competition for cities to create biotechnology clusters. The city that submitted the best plan was rewarded by substantial federal funds to elaborate it. The plan had to be a co-operative venture between universities, companies and (local) governments. Munich won the competition and created its BioM cluster, now one of the leading biotech clusters in Europe.
Promoting the metropolitan 'triple helix'
An important aspect of governing the urban knowledge economy is the organisation of the 'triple helix', co-operation between knowledge institutions, firms and public agencies. Cities and regions in Europe are seeking ways to optimize these co-operations because it is increasingly recognized that they are the basis for innovation and wealth creation. Tordoir (2008) makes a distinction between three levels of co-operation in the triple helix:
* The institutional-strategic level. This refers to regional strategic coalitions between local 'hotshots', key people from municipality, research and education institutes and the business sector. It helps when these coalitions are 'institutionalized' because that ensures frequent strategic communication.
* The facilitating level. Strategic co-operation has to be translated and implemented via more concrete initiatives. This can be done by the individual organizations that participate on the strategic level but often facilitating organizations, such as regional development companies, knowledge transfer institutions, incubators or science park organizations, are needed.
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