Competitive Cities in the Global Economy: Connecting Jobs, Transportation, Housing and Land Use Key to Achieving Region’s Full Potential

Competitive Cities in the Global Economy: Connecting Jobs, Transportation, Housing and Land Use Key to Achieving Region’s Full Potential

Lamai Kamal-Chaoui heads the Urban Development Programme within the Directorate for Public Governance and Territorial Development at OECD. OECD is a HUD partner and key global economic policy forum. Created after World War II as cornerstone of the U.S. vision for rebuilding Europe, OECD now provides analysis and advice to governments around the world to create better policies for better living.

The Paris-based Organization for Economic Co-operation and Development (OECD) has just released its first territorial review focused on a metropolitan area in the United States. The Chicago Tri-State metropolitan area report is the 23rd in a series of reports focused on metropolitan regions around the world, including Toronto, Stockholm, Seoul, and Istanbul. The reviews analyze the economic strengths and weaknesses of these metropolitan areas.

Much of this comparative research stems from the work of OECD’s Working Party on Urban Areas, whose vice chair, Ana Marie Argilagos, also serves as deputy assistant secretary of the Office of Policy Development and Research's Office for International and Philanthropic Innovation. OECD also worked closely with the U.S. Department of Commerce’s Economic Development Administration, the Chicagoland Chamber of Commerce, and other groups to develop the report. OECD’s metropolitan area reviews, and the Chicago review in particular, present important lessons for HUD’s programs, including the Sustainable Cities, Sustainable Communities program and the Sustainable Communities Regional Planning Grant program.

This first-ever OECD snapshot made clear that the Tri-State region (specifically focusing on Chicago, Milwaukee, Gary, and northwest Indiana) is at a tipping point. The review warns that despite the region’s economic strengths, it must surmount considerable challenges to compete with other world-class cities. To fulfill its potential, the region must better match skills to jobs, become more innovative, and improve its transportation networks.

"As one of the richest regions in the world, the Chicago metropolitan area has all the ingredients for a vibrant economy. It’s now essential that all players work together to develop better policies for better lives in Chicago," said OECD Secretary General Angel Gurría. "That means encouraging innovation-driven growth based on knowledge and skills."

The Tri-State region is the most important transportation and logistics hub in North America and is home to numerous educational and research institutions. Yet its economic performance since 2000 has been disappointing, ranking 48th out of all 77 OECD metro regions in labor productivity growth. Most other U.S. metro areas, including New York and Los Angeles, have been growing faster and creating more jobs.

Chicago - GDP per Capita (Purchasing Power Parities)

An interactive and embeddable version of this map is available at
oecdwash.org/chicagoreview
Skills mismatch lies at the heart of many of these challenges. Less skilled workers are not finding jobs, and manufacturers can’t fill job vacancies for medium-skilled workers. High-end, knowledge-intensive companies are attracting talent from outside the region, while local university graduates are leaving for jobs elsewhere.

A racial and spatial divide is exacerbating this mismatch. The unemployment rate for African Americans in the area (24%) is nearly four times that of whites, and minority students are more likely than white students to drop out of high school. Low-income populations in the Tri-State region are concentrated in pockets of poverty where residents typically have little access to jobs and services.

The review recommends that state and local authorities and private-sector stakeholders in the Tri-State region cooperate closely to promote innovation-driven economic development, observing that when neighboring jurisdictions compete with each other, economic development efforts are fragmented. The region would be better served by exploring more creative ways to support start-ups in emerging business sectors and enhancing the transfer of technological capacity from research institutions to businesses.

The review makes recommends supporting economic and business development by shifting development efforts toward innovation clusters such as biotechnology and nanotechnology, focusing on emerging green technology sectors, and further enhancing the region’s manufacturing and finance strengths. Through these lessons and those in other territorial reviews, national and local governments can continue to learn from the challenges and innovations of other regions.

Further information on “OECD Territorial Reviews: The Chicago Tri-State Metropolitan Area, United States” is available at oecdwash.org/chicagoreview.