Research - Institute Palemid Maribor

Economic development of regions and cities

Cities represent the driving force of development in economic, social and cultural life and reflect the spatial organization of human society. Today’s global cities have new challenges ahead; they are no longer self-sufficient, but embedded in broader, global developments. Furthermore, the city or strategic urban regions are becoming increasingly important players in the global economy, as the impact of national states decreases while the impact of cities and urban regions is increasing. The process of globalization is reflected in the tendency for gaining competitiveness and efficiencies of global trends.

Spatial and organizational effects of globalization show the concentration of financial and other specialized services in cities, deindustrialization, land use change and the importance of information and communication technologies. The last two hundred years of civilization defines an extensive variety of city visions. Our relationship with the city extends towards the environment, as well as the economy and quality of life. Technology, globalization and the growing complexity of life set cities in the centre of economic development and social progress. Cities are becoming centers of innovation, globalization, urbanization, scientific discoveries and dissemination of information and by the “natural structure” on the other hand also an optimal social unit to implement change and improve people’s lives. Although small, because they poses sufficient community cohesion for approval and adoption of new programs, yet large enough to display demonstration effects; they represent messengers of the future in terms of »change cities, change the world«.

In a large number of countries, and especially in the EU itself, there is growing interest in the economic contribution cities can make to the GNP. Of course, cities remain enormously diverse. There is not a single model of an urban development and the challenges are not the same in every city. Important differences shape the challenges that cities face: social composition, their economic structure and functions, geographical location and size. Simultaneously, national differences in cultures and traditions, institutional arrangements, economic performance, and government policy have an important impact upon cities, too. The problems of global cities like New York or Berlin or Brussels are far from those in medium-sized cities. Declining large industrial cities with less skilled work force, substantial immigrant communities and exhausted manufacturing economies, face very different dilemmas from fast growing cities based upon high-tech industries. Cities in the periphery face different social, economic and environmental challenges than those in the core.

Nevertheless, despite the differences between them, cities are affected by many common trends and face common challenges. In particular, the key challenge they face is to develop new models of decision-making which will increase their economic competitiveness, but at the same time reduce social exclusion. The size of a city does not matter here. Cities face this dilemma whether they are at the core or periphery, growing or declining economically, large or small. And the challenge confronts decision-makers at all government levels – supra-national, national, regional and local – and in all three sectors – private sector, government and civil society.

Despite the challenges presented by globalisation, institutional change and economic restructuring, many cities have substantial social, economic and cultural assets – and potential. Many of the factors which attract investment, people and events to particular places – education and training, the cultural, residential and physical environment, the quality of labour, the communication and transportation infrastructure, the planning and fiscal regimes, remain under the influence – if not control – of cities. They can be affected by urban strategic management, city policies, although increasingly in particular with other actors. And there are very many examples of successful responses to the new challenges throughout the world.

Many cities have achieved substantial physical regeneration, especially through the renovation of their city centres, which offer impressive retail, cultural, commercial and residential facilities. Many have concentrations of intellectual resources in knowledge hubs – universities as well as research and innovation institutions which encourage high level of innovation. Many cities play important roles as centres of decision-making, communication and exchange. Many have substantial cultural resources, which are increasingly the source of economic growth and job creation. Cities also have enormous integrative potential with the capacity to encourage community participation and civic identity. And many cities remain social and ethnically diverse and offer vibrant cultural opportunities which attract residents (especially creative class) and visitors.

Contemporary society is characterised by what might be described as “extraordinary global change” (Learning City Network, 1998). Globalisation – the “economic and cultural linking of diverse societies across large distances” (UNCHS 2001) – is occurring now with greater scale, scope, speed and level of complexity than ever before. A worldwide mobility of labour, the growth of the knowledge-based economy and information society, and the pervasion of information and communication technologies throughout all aspects of life mean that change is not only extent but ongoing.

Linkages at national and international levels are having significant economic legal, social, technological, cultural and political effects locally and regionally within cities and urban regions. Institutions, organizations and Individuals – indeed, entire communities – need to develop adaptability and resilience if they are to be able to function socially, politically and economically on a continental and/or global stage. Thus “…as the constraints of geographical distance are becoming less important, the specific features of particular locales are becoming more important…” and cities are constantly challenged to maintain skills, knowledge and systems that are relevant and competitive. The global phenomenon of the Learning City has evolved in response to this challenge. “A Learning City is any city, town or village which strives to learn how to renew itself in a time of extraordinary global change. Using lifelong learning as an organising principle and social goal, Learning Cities promote collaboration of the civic, private, voluntary and education sectors in the process of achieving agreed upon objectives related to the twin goals of sustainable economic development and social inclusiveness…” (Learning City Network, 1998).

Rapidly changing modern cities are creating a need for strategic development that offers constant a renewal of processes, innovation and peoples’ attitudes. It is important that a city’s management are able to see processes and events in a new way. An intelligent city has to be able to see what happens through time. An intelligent city needs to analyse, reach conclusions and define its present reality. They need to develop their strengths and eliminate their weaknesses by using out opportunities and reducing threats. That is how we create visions, ideas, and a strategy. This is how we create and prepare for the future. It is essential that a city management has the power to implement all this. Some city managements stay in the analytical phase and never move on to formulating and implementing their visions and dreams.

Strategic intelligence and social analysis involves learning from the past but, most importantly, understands trends and principles of development in the future. Social intelligence is an area of high importance related to city intelligence, being a substantial part of strategic urban management.

City managements leading a city towards an uncertain future are like the captains of a ship. The passengers and crew comprise their customers, employees and citizens. In this way, navigation is very similar to the management of a large organisation or a city.

City governments are highly complex organisations. They need to manage the allocation of resources between different, competing claims and respond to the demands of several different groups at the same time. To make sure that cities reach their development goals they need to be aware of their starting position. City managements need to ask themselves some important strategic questions, identify their strengths and work towards eliminating weakness. Once cities have identified where they are, they need to decide where they want to be in the future. And to reach the destination, they need to understand the significant trends that will influence the direction in which the future unfolds. On that journey, cities need to manage properly their assets by taking a holistic approach. Each asset depends on the others, that’s why the holistic approach in urban management is so important. The necessity of taking a holistic emerges particularly strongly from the knowledge-based economy.

Institute Palemid Maribor



Municipal and regional development.


Corporate Governance Culture.

EU projects

Participation in EU projects.


Participation in development assistance programs.


Educational processes at domestic and international institutions.


Dr. Vito Bobek is a member of the editorial boards of many journals.


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Institute for Sustainable Development


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