As part of my series of blogs over the past few months, I have focused on what I believe are 12 key steps or considerations that we need to be aware of in creating successful intelligent communities around the world. The first four steps are creating a high quality INFRASTRUCTURE; exceptional EDUCATION creating, attracting talent and sustaining skilled knowledge workers; attracting and nurturing INNOVATION and CREATIVITY, nurturing superior and inspiring LEADERSHIP; and today I would like to add the notion of achieving excellence in GOVERANCE in intelligent communities.
I believe that demonstrating excellence in governance is extremely important in order to attract investors, especially foreign investors, and in creating a superb climate in one's community that attracts talent and nurtures innovation and creativity. I am not alone in this as other international authors have recognized the importance of the differences in political and institutional factors among countries (and even cities and regions) as determinants in the flow of "foreign direct investment" and in creating their overall investment environment. Recent empirical evidence suggests that differences in growth and productivity among various countries are related to differences in political, institutional and legal environments or what these authors have referred to as "governance infrastructure." The beneficial conditions for investment and economic growth are a result of a favorable governance infrastructure affecting both domestic and foreign investors, and as a result, foreign direct investment is attracted to those countries, regions and cities that exemplify a more favorable governance infrastructure. The link between foreign direct investment and a country's governance infrastructure has a direct relevance to that country's political stability and the effect that safe and secure governance provides.
Studies have demonstrated that inward foreign direct investment can contribute to improved quality of life, innovation and productivity. As a result competition to attract foreign direct investment has heated up in recent years among countries around the world. Researchers indicate that this is partly due to a large number of developing and emerging market economies, previously closed to competition, opening up their borders to market-friendly opportunities and successfully generating billions of dollars annually. This is significant because these countries represent the majority of the world's population, including BRIC nations (Brazil, Russia/Eastern Europe, India, and China), leveraging their competitive strengths, especially through labour and administrative arbitrage to attract FDI. We are all familiar with India and the impacts of global sourcing to attract FDI, which has completely changed the way in which India sees itself in the world and how we all view India moving forward. Other international regions are readying themselves to compete as effectively as well and are shoring up their governance infrastructure. In fact, the shifts in India that took place are truly remarkable and speak to the importance of both globalization and the important role of excellence in governance infrastructure in making this happen.
At the local level, community governance infrastructure, represented for example in the form of policies, official plans and bylaws of a community, reflect its attitude in providing for its citizens and in its interest in welcoming investments of all kinds, including foreign direct investment. It also reflects the community's ability to leverage and promote its governance infrastructure in creating a positive local environment that "nurtures" investment attraction as well as stimulating investment development and innovation. In turn these strategies, policies and official plans translate into focusing on implementation: building infrastructure, such as roads, transit, and more recently strategically developed broadband and broadband related infrastructure for businesses, research centers, education and homes. Of course, these include many other governance considerations such as strategic policies that involve land-use, environmental, and even marketing and branding considerations, all of which are designed to help create a high quality of life in a community and in economic development terms, establish directions that provide investors a sense of security and confidence in the community.
About two decades ago, OEDC governments around the world shifted their reliance on market deregulation and liberalization, further spurring competition in attracting FDI among countries in North America and Europe. As a direct result, it created the climate for the creation of economic development and international marketing organizations that now regularly compete and promote their regions in order to attract foreign direct investment, capital and talent to their areas. These innovative organizations exist largely due to the stability and confidence that local communities enjoy through stable and effective governance. Hundreds of similar organizations exist around the world today, competing against one another and attempt to differentiate themselves through incentives, promotional literature and provocative images and events. Many compete through branding and unique messaging to promote and differentiate their communities, such as securing the recognition as an Intelligent Community. ICF is proud to be a part of this economic development and marketing chain.
I believe that demonstrating excellence in governance is extremely important in order to attract investors, especially foreign investors, and in creating a superb climate in one's community that attracts talent and nurtures innovation and creativity. I am not alone in this as other international authors have recognized the importance of the differences in political and institutional factors among countries (and even cities and regions) as determinants in the flow of "foreign direct investment" and in creating their overall investment environment. Recent empirical evidence suggests that differences in growth and productivity among various countries are related to differences in political, institutional and legal environments or what these authors have referred to as "governance infrastructure." The beneficial conditions for investment and economic growth are a result of a favorable governance infrastructure affecting both domestic and foreign investors, and as a result, foreign direct investment is attracted to those countries, regions and cities that exemplify a more favorable governance infrastructure. The link between foreign direct investment and a country's governance infrastructure has a direct relevance to that country's political stability and the effect that safe and secure governance provides.
Studies have demonstrated that inward foreign direct investment can contribute to improved quality of life, innovation and productivity. As a result competition to attract foreign direct investment has heated up in recent years among countries around the world. Researchers indicate that this is partly due to a large number of developing and emerging market economies, previously closed to competition, opening up their borders to market-friendly opportunities and successfully generating billions of dollars annually. This is significant because these countries represent the majority of the world's population, including BRIC nations (Brazil, Russia/Eastern Europe, India, and China), leveraging their competitive strengths, especially through labour and administrative arbitrage to attract FDI. We are all familiar with India and the impacts of global sourcing to attract FDI, which has completely changed the way in which India sees itself in the world and how we all view India moving forward. Other international regions are readying themselves to compete as effectively as well and are shoring up their governance infrastructure. In fact, the shifts in India that took place are truly remarkable and speak to the importance of both globalization and the important role of excellence in governance infrastructure in making this happen.
At the local level, community governance infrastructure, represented for example in the form of policies, official plans and bylaws of a community, reflect its attitude in providing for its citizens and in its interest in welcoming investments of all kinds, including foreign direct investment. It also reflects the community's ability to leverage and promote its governance infrastructure in creating a positive local environment that "nurtures" investment attraction as well as stimulating investment development and innovation. In turn these strategies, policies and official plans translate into focusing on implementation: building infrastructure, such as roads, transit, and more recently strategically developed broadband and broadband related infrastructure for businesses, research centers, education and homes. Of course, these include many other governance considerations such as strategic policies that involve land-use, environmental, and even marketing and branding considerations, all of which are designed to help create a high quality of life in a community and in economic development terms, establish directions that provide investors a sense of security and confidence in the community.
About two decades ago, OEDC governments around the world shifted their reliance on market deregulation and liberalization, further spurring competition in attracting FDI among countries in North America and Europe. As a direct result, it created the climate for the creation of economic development and international marketing organizations that now regularly compete and promote their regions in order to attract foreign direct investment, capital and talent to their areas. These innovative organizations exist largely due to the stability and confidence that local communities enjoy through stable and effective governance. Hundreds of similar organizations exist around the world today, competing against one another and attempt to differentiate themselves through incentives, promotional literature and provocative images and events. Many compete through branding and unique messaging to promote and differentiate their communities, such as securing the recognition as an Intelligent Community. ICF is proud to be a part of this economic development and marketing chain.
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