For elected officials and their advisers, the attractiveness of the territories they represent—whether a city, a region or a country—has become a constant concern. They have to attract companies, business activity, executives, entrepreneurs, students—in short, everything that is supposed to contribute to economic growth and job creation.
To achieve this, some policies rely on direct financial incentives, such as major tax breaks for companies or public institutions offering very high salaries for experienced professionals who are renowned in their particular field. These kinds of measures consume a significant portion of these institutions’ budgets, for generally disappointing results. Other common policies involve investing in developments, such as technology parks, supposedly sought after by companies, or residential neighborhoods adapted to what are presumed to be the tastes of “creatives,” with, here too, little in the way of concrete results. A number of French research projects in which I have been involved in recent years lead me to question the justifications for these attractiveness policies.
Unstable theoretical foundations
The first of these projects concerns so-called “innovative” businesses that were monitored by our team over a decade or so (Grossetti, Barthe and Chauvac 2018). In this study, we analyzed the “destination choices” of these “startups” that so many policies seek to attract. While these policies are based on the hypothesis that such businesses are highly mobile, our investigations showed that situations where companies have to choose between several urban areas are extremely rare: the people that found these businesses generally set them up in the area where they live and do not embark upon comparisons between a wide range of potential locations that might lead them to consider other solutions. The few exceptions we encountered concerned cases where the founders lived in different cities, or where the founders’ business creation plan was associated with a plan to move to a different part of the country (often “the south of France”). Within a given urban area, choices were more explicit, and generally involved weighing up factors such as travel constraints, the cost of premises, and access to specific services (for example, those offered by business incubators).
The second of these research projects focused on professionals (entrepreneurs, expert craftspeople, artists, financial backers, etc.) who were supposedly involved in “creative” industries (Eckert, Grossetti and Martin-Brelot 2012). This was a European project that sought to test certain theories concerning the factors that were assumed to attract these activities, in particular Richard Florida’s (2003) theory that insists on the importance of “soft” factors (tolerance in terms of social mores and origins, cultural offering, the quality of urban planning, etc.) with respect to “hard” factors (structure of the economy, jobs, infrastructure). The key takeaway was that the members of the supposed “creative class” were in fact no more mobile than the business founders mentioned above. Most of them were either born in the region in which they currently reside or went to university there. The others either already knew people in the city in which they settled (network effect) or moved there for the job they were offered. None of the strictly urban factors (quality of urban fabric, cultural offering, etc.) seemed to play an important role in their decision, or only did so once they had already settled there. Similar results were observed in the United States by the geographer Allen Scott (2010).
The error of much reasoning on the subject of attractiveness is to overestimate long-term geographical mobility, that is to say the kind of mobility that leads a family to settle in a place for several years, or that leads a company to develop a significant site in an urban area where it was not previously present. It is undeniable that short-term mobility (whether for professional or leisure reasons) has increased considerably with the development of rapid transport (by air or by rail), but long-term mobility has grown far less. Business creators and people in “creative” professions all have their own families and networks, and follow complex social logics that mean their “destination choices” are far removed from picking a vacation spot for a few days. The companies are engaged in economic rationales in which the question of location is often of secondary importance. They can very well maintain remote links by organizing short stays for their members and by using the latest communication technologies. While they consider that they have to be present in an urban area in order to access specific resources (certain target markets, typically, or sometimes certain technologies), they can open satellite sites that require lightweight infrastructure and are easily reversible. For cities, it would therefore seem preferable to focus resources on training up existing residents, as well as on the overall level of urban services that can be made accessible to all, rather than hoping to attract the kind of talent or wealth that they would be incapable of creating.
Territorial attractiveness, as it is generally envisaged, appears to be a myth—in other words, an interpretation and action framework that is rarely discussed or justified by those who employ it. [1] This myth is not isolated, but this only becomes apparent when it is connected with other myths, which in this case form a system that Olivier Bouba-Olga and I (2018) have dubbed the “CAME” mythology (an acronym of “Competitiveness, Attractiveness, Metropolization, and Excellence”).
A mythology
In the minds of those who promote attractiveness policies, cities, regions or countries are engaged in a permanent competition to access resources and attract people or companies likely to enhance the economic development of these territories. In this competition, only the big cities are assumed to be in a position to benefit from these flows of resources, thereby further reinforcing their growth and their hegemony. Supposedly, this system can only be influenced by contemporary public policies, which may or may not reinforce certain characteristics of competitors. Historical processes—and in this case the long-term effects of past actions seen as the result of path dependency [2]—have very little place in this mythology.
This framework of reasoning is at odds with observable empirical trends. First, as I have pointed out, mobility remains limited, which means that policies that focus on attracting people or firms are unlikely to succeed. Second, for most business sectors, different areas are not really in competition with one another, except perhaps when it comes to obtaining favorable decisions from central authorities. Finally, more often than not, the argument for the supposed economic advantage of “metropolises” is based on an indicator that everyone agrees doesn’t make much sense, namely local gross domestic product per capita (Bouba-Olga and Grossetti 2015). This indicator is very approximate and misleading because it is calculated on the basis of the wage bill (and therefore overvalues cities or regions with concentrations of high wages) and it aggregates very different sectors of activity into a mean. I thought this indicator had been definitively abandoned, but I have seen it being used again in some recent publications (Davezies 2021; Hermelin 2021), which disagree on the political interpretation of the superior productivity of metropolises, a phenomenon that analysis of the available data suggests is in fact imaginary.
This mythology masks a reality in which population concentration is not actually especially conducive to innovation and productivity. These can be achieved in less densely populated locations, by fine-tuning economic activities and densifying networks, as in the case of “industrial clusters,” or even in small towns or rural areas, by leveraging non-local networks of durable links. Large cities are more conducive to the presence of certain types of rare activities, which have long been established there, such as cultural activities with a global market (fashion, music, cinema) or finance. They are also more conducive to the settlement of executive households for reasons linked to the spatial organization of higher education, among other things—an organization that can only be understood by looking back at the long history of its development in different countries (Grossetti et al. 2013).
This mythology is a diffuse network of beliefs that are shared to a greater or lesser extent (and often accepted without too much questioning) which functions like a system when viewed on the scale of the small world of people—researchers, experts, consultants, technocrats, elected officials—who are concerned with local economic development, regional planning or regional policy. In addition to discussing the notion of attractiveness on the basis of available data, which in my view should lead to its abandonment, the whole concept should be debated alongside the other components of the mythology with which it goes hand in hand. Abandoning this mythology as a whole will enable us to build more robust analyses of the regional and urban dimension of economic activities.
Bibliography
- Bouba-Olga, O. and Grossetti, M. 2015. “La métropolisation, horizon indépassable de la croissance économique ?”, Revue de l’OFCE, no. 143, pp. 117–144.
- Bouba-Olga, O. and Grossetti, M. 2018. La mythologie CAME (Compétitivité, Attractivité, Métropolisation, Excellence) : comment s’en désintoxiquer ?, HAL (reference: hal-01724699v2), 23 November.
- Eckert, D., Grossetti, M. and Martin-Brelot, H. 2012. “La classe créative au secours des villes ?”, La Vie des idées, 28 February.
- Davezies, L. 2008. La République et ses territoires. La circulation invisible des richesses, Paris: Seuil.
- Davezies, L. 2021. L’État a toujours soutenu ses territoires, Paris: Seuil.
- David, P. A. 1985. “Clio and the Economics of QWERTY”, The American Economic Review Papers and Proceedings, vol. 75, no. 2, pp. 332 – 337.
- Florida, R. 2003. The Rise of the Creative Class, and How It’s Transforming Work, Leisure and Everyday Life, New York: Basic Books.
- Grossetti, M., Eckert, D., Jégou, L., Gingras, Y., Milard, B. and Larrivière, V. 2013. “Cities and the Geographical Deconcentration of Scientific Publications”, Urban Studies, vol. 51, no. 10, pp. 2219–2234.
- Grossetti, M., Barthe, J.‑F. and Chauvac, N. 2018. Start-ups, des entreprises comme les autres ? Une enquête sociologique en France, Paris: Sorbonne Université Presses.
- Hermelin, P. 2021. “Rééquilibrer le développement de nos territoires”, report by the Institut Montaigne, 11 March.
- Pinson, G. 2020. La Ville néolibérale, Paris: Presses Universitaires de France.
- Scott, A. 2010. “Jobs or Amenities? Destination Choices of Migrant Engineers in the USA”, Papers in Regional Science.
