New patterns of global trade along with the demise of manufacturing and the commercialization of knowledge are forcing cities and regions worldwide to restructure economies. Reordering economic life poses various threats and challenges for policymakers in cities with economies that rely on heavy industry.

In Strategy and Partnership in Cities and Regions: Economic Development and Urban Regeneration in Pittsburgh, Birmingham and Rotterdam, Brian Jacobs examines how these three urban areas have adapted their organizational structures to revive economies once dependent on manufacturing. Such adaptations have allowed these cities to integrate themselves into the regional economy while promoting competitiveness and economic growth through public-private partnerships.

Jacobs selected Pittsburgh, Pennsylvania; Birmingham, England; and Rotterdam, the Netherlands, for his case studies because "they are broadly comparable within the international urban hierarchy as important 'urban centres.'" With municipal populations ranging from about 350,000 in Pittsburgh to just over a million in Birmingham, these three cities have suffered similar fates. Factory closures throughout the 1970s and 1980s resulted in high unemployment and a host of social ills. In each instance, an economic downfall led to the realization that urban regeneration and economic prosperity were inherently linked and that holistic policies were needed to address the needs of socially distressed communities.

To combat joblessness and remain competitive, each city has had to adjust its economy to take advantage of the opportunities associated with new technology and the growth of the service sector. Public-private partnerships have led this change in Pittsburgh, Birmingham, and Rotterdam, producing a vision shared by corporate and government leaders who are not content merely to respond to circumstances but seek to "shape urban futures."

Laying the Groundwork

In preparation for the case studies, Jacobs discusses changes in the social and economic environments that influence public policy as well as "their implications for organizational hierarchies and modern governance." He examines the differing business climates in each city and looks at how changes in the political landscape have altered the relationship between local government and business, spurring the formation of economic development and urban revitalization partnerships.

External economic factors often encourage collaboration between public and private organizations, but the continued metamorphosis of the local and global economy requires members in the partnership to "revise their commitments, expectations, and ways of working." Using examples such as the 1998 threat by BMW to close a car manufacturing plant near Birmingham because of low productivity, Jacobs illustrates the need for effective strategies to deal with ever-changing economic conditions and for the re-examination of economic policy.

The potential shutdown of the automobile plant undermined a regional strategy that envisioned Birmingham as a hub for automotive manufacturing, underscoring the city's need to broaden its employment base. It also symbolized the region's continued vulnerability to decisions made beyond its borders.

A Framework for Evaluation

Despite similarities among the three cities, comparisons reveal important organizational differences at the regional, municipal, and neighborhood levels. The economic development agencies in each region also differ in structure and operation. These factors, says Jacobs, make it virtually impossible to develop "blueprinting strategies to apply under all conditions." Still, there are lessons to be learned from the ways in which public-private partnerships have developed and operated in each city.

Jacobs lists five factors as especially relevant to the examination of operational and structural dynamics of partnerships. The changing nature of public-private interactions, spatial organization, organizational development, the achievement of synergy, and the effective sharing of risks combine to provide a framework for comparison.

Spatial Organization in Pittsburgh

For decades different interests prevented public agencies and county and city governments from developing coherent regional revitalization strategies in southwestern Pennsylvania. Following the decline of smokestack industries in Pittsburgh during the 1980s, several studies noted that economic revitalization was not possible without a shared vision as to what the regional economy could be. The corporate sector encouraged the development of a shared regional vision. After much discussion, city officials and corporate and nonprofit leaders finally adopted a phased approach to achieving consensus and building regional partnerships.

The partnership started by developing a shared vision for the region. Next, work groups considered issues relevant to existing and new businesses, including regional innovation and competitiveness. Partners also considered regional problems associated with infrastructure, labor policies, and tax issues.

The result of these activities was the creation of the Working Together Consortium (WTC), a broad-based public-private partnership committed to mobilizing the region's resources and capitalizing on its core economic competencies. WTC's organizational structure provided for a strong leadership team to identify or encourage the development and implementation of the Consortium's strategy. By allowing individual organizations to retain their autonomy, WTC ensured that all major partners had a role in the regional strategy. For some participants, however, the partnership structure has resulted in fragmented implementation of the economic development strategy, reducing regional growth.

Risk Sharing in Rotterdam

The Kop van Zuid project, which developed a prosperous new business district and provided housing and social services for low-income groups in nearby neighborhoods, illustrates Rotterdam's highly regimented approach to sharing the risks and benefits of economic development among its partners. Economic conditions in the mid-1980s had limited the government's ability to finance development projects. Thus, a collaborative approach—bringing together municipal councils, local and regional businesses, and the central government resources—was adopted.

Sharing the risk inherent in such a large-scale development was important to all involved. Partners retained their independence while each member contributed resources and shared project benefits and risks. To achieve consensus and cooperation, a partnership agreement described the roles and obligations of those involved and clarified relationships between the public and private partners.

A project manager and steering committee were responsible for project oversight, and a project team was responsible for implementing individual initiatives such as construction of a metro station and development of housing. The project team partnered with various government agencies, architects and developers, and community groups to achieve its goals.

The Rotterdam approach of risk sharing brought about a high level of public accountability during the successful development of Kop van Zuid. Although such open discussion of risk/benefit may dampen corporate enthusiasm, this partnership model provides a stable climate for corporate investment.

Organizational Support in Birmingham

To succeed, partnerships need external management support, or they must develop their own administrative competencies, such as project management and service delivery. In Birmingham, the local economic development corporation operated outside the confines of local government, providing support for partnerships it entered into. By employing professionals familiar with competitive markets and responding to the needs of national and local companies, the Birmingham Heartlands Development Corporation assisted area businesses in securing funds, garnering support for various projects, and coordinating with the city council and other public agencies.

To diminish local political competition, the corporation's management structure included the city council's director of planning as an advisor to the board of directors and the corporation's planning board chair as a member of the city's planning committee. The corporation's objective was "to work with the private sector to make things happen by indirect actions and making large direct interventions when market conditions made them necessary."

The urban development corporation model provided rapid relief during a time of economic stagnation. The model values short-term investment opportunities, swift implementation of development proposals, and "social interventions at the margin."

Since such corporations in Britain tend to be reactive rather than proactive, development in the Heartlands was fragmented. The approach resulted in a landscape of architecturally diverse and uncoordinated development of different functions and scales.

Responding to Change

Jacobs reminds the reader that developing and maintaining public-private partnerships requires the commitment of local governments, businesses, and civic organizations. The partnerships in Pittsburgh, Birmingham, and Rotterdam face challenges and, like all partnerships, must continue to redefine themselves as their membership and market conditions change. Partnerships like those Jacobs examines show that by linking public and private sector resources, effective economic development strategies can be devised to respond to political conditions, policy innovation, and shifts in the global economy.