Technological Innovation: A Primary Driver to Promote Global Urban Common Prosperity

- An Analysis of Factors Influencing the Competitiveness of 1,007 Cities around the World

NiPengfei(倪鹏飞)etal..................................................................................................................................

Ni Pengfei( ) 1, Marco Kamiya2, Li Bo ( ) 3*,倪鹏飞 李博

4 5

Liu Xiaonan( ) and Li Qihang ( )刘笑男 李启航

1

National Academy of Economic Strategy, Chinese Academy of Social Sciences, Beijing, China

2

Urban Economy and Finance Branch, UN-Habitat Global Headquarters, Nairobi, Kenya

3

School of Management, Tianjin University of Technology, Tianjing, China

4

Graduate School, Chinese Academy of Social Sciences, Beijing

5

Center for Economic Research, Shandong University of Finance & Economics, Jinan, China

Abstract: Common prosperity, an important goal of human development, increasingly has to be achieved through the common prosperity of cities. The research into and discovery of the determinants which create differences in urban economic competitiveness is of great significance as, thereby, the research and expected discovery can help with the formulation of relevant policies for development, competition, and cooperation to promote win-win conditions among cities. However, such research is still rare. Based on the economic competitiveness data of 1,007 cities, this paper uses OLS regression and Shapley-value based decompositions regression to analyze factors affecting the economic competitiveness of global cities and differences that the cities made. Combined with quantile regression, studying the law of changing of each factor's effect on cities with different levels of economic competitiveness is of theoretical and practical significance. The study findings are as follows. (1) The variability of global urban economic competitiveness is quite large. Cities in North America and Europe are still the benchmarks of global urban economic prosperity. ( 2) Financial services, technological innovation, industrial system, business environment, institutional environment, infrastructure, among other factors, have significant impacts on the economic competitiveness of cities. (3) The primary factor that influenced the variability in economic competitiveness is technological innovation. (4) The ranking of the main influencing factors varied slightly between cities at different levels of economic competitiveness. These indicate that the international community should promote innovation in and diffusion of science and technology to achieve common prosperity by narrowing the gap between cities. The relevant decision-making departments, e.g. urban planning departments with strong economic and finance expertise of the cities in different development zones should adopt different measures in accordance with their actual situations.

Keywords: urban economic competitiveness, common prosperity, Shapley value, quantile regression

JEL Classification Codes: R58

DOI: 1 0.19602/j .chinaeconomist.2020.05.03

1. Introduction

In August 2015, representatives of 193 United Nations member states agreed on the post-2015 development agenda, with the main topic Transforming Our World: The 2030 Agenda for Sustainable Development. This marks the first time in the history of humanity that a consensus of its kind was achieved on the approach to development. Member states of the United Nations hoped to put forward a set of global goals intended to end poverty, protect the planet, and ensure that prosperity is shared by all people. In particular, the document states that “[w]e are determined to ensure that all human beings can enjoy prosperous and fulfilling lives” and “we pledge that no one will be left behind,” fully embodying the fundamental unity of common prosperity and narrowing the gap.

Urban development undoubtedly plays a decisive role in achieving this goal. In the agenda articles of the document, in addition to Goal 11 (to “make cities and human settlements inclusive, safe, resilient, and sustainable”), most other goals concerning “people, the planet, prosperity, peace, and partners” depend directly or indirectly on the overall development and common prosperity of cities.

The trend of global urbanization itself also determines that the development of a city is closely related to the future development of whole humanity. According to the UN report, in 1950, the urban proportion of the global population was only 30%, but is expected to increase to 66% by 2050, yet in 2014 the urban population had already exceeded the 50% mark. From the perspective of urban competitiveness, it helps to find the answers to promote common prosperity. After separating the common prosperity into different factors and different levels, one will find the important values of the cities’ common prosperity. On one hand, economic development is not the only goal of common prosperity. Not only can multiple factors’ common development and mutual coupling promote the development of urban competitiveness, but also the coupling can be, to a certain extent, the performance of the urban competitiveness itself. On the other hand, the existence of multi-leveled cities tells us that global common prosperity reflects a series of concrete realizations of the global market, the complexity of the division of labor, and the differentiation of urban functions. These created the conditions for each city’s development and the cities’ common development of in the world. How to achieve efficient, diversified, and innovative development is worth the attention of every researcher concerned with advancing global prosperity.

To sum up, the key to the common prosperity of humanity lies in the common prosperity of cities. The common prosperity of cities embodies the development of multi-dimensional, multi-factor, and multi-level urban competitiveness. In the era of global integration and urbanization, the competitiveness of cities is not limited to economic quantities, but also includes high- level differentiation and cooperation. Cities for prosperity do not only rely on innovation by themselves, but also on the sharing of innovation. Thus, a derived policy goal leveraging urban competitiveness also promotes the common prosperity of cities and humanity.

2. Literature Review 2.1 Common Prosperity: The Economic Consequences of Urban Competitiveness

In 2015, the World Bank stated that a way to eradicate poverty and increase common prosperity is to improve the competitiveness of cities. A competitive city always succeeds in boosting companies’ and industries’ productivity, creating jobs, and increasing citizens’ income. In most cases, the longterm sustained success of an economy can be observed in three corporate- level growth channels: its attractiveness to external investors, the growth of existing businesses, and the creation of new businesses. Most descriptions of urban competitiveness begin with examples of successful cities and their characteristics. The concept of urban competitiveness can be closely approached by theoretical