Protiviti-Oxford survey: Cities will be more strategically important in 2030 — video transcript

Protiviti-Oxford survey: Cities will be more strategically important in 2030

Video transcript

Joe Kornik: [Music] Welcome to the VISION by Protiviti interview. I’m Joe Kornik, Director of Brand Publishing and Editor-in-Chief of VISION by Protiviti. Our content initiative where we put megatrends under the microscope and looking into the future to examine the strategic implications of big topics that will impact the C-Suite and executive boardrooms worldwide. In this, our first topic, the Future of Cities, we’re exploring the evolution urban areas are undergoing and how those changes will alter cities over the next decade and beyond. As part of this initiative, Protiviti partnered with the University of Oxford’s Sustainable Urban Development Department to conduct a global survey of CEOs and executives to discover their perspectives on cities’ roles in their businesses in 2030 and beyond. Today, I’m joined by the team of Oxford professors who conducted the research, Dr. Vlad Mykhnenko, Dr. Nigel Mehdi, and Dr. David Howard. Thank you so much for joining me today.

Vlad Mykhnenko: Thank you. I’m really happy to be here.

Joe Kornik: When we think about what makes a city successful, there’s a whole host of things we think about that sort of influence that but it’s typically not how CEOs view cities. This is a pretty unique survey in that it’s asking for global executives’ perspectives on cities in 2030 and specifically how they view their future as part of their overall business strategy. Why is that so important in the future success of cities around the world?

Vlad Mykhnenko: I think one way of understanding cities is to look at them as special concentrations of firms, people, and organizations. So, firms are really important because they drive growth. They just offer dozens of different benefits to firms as firms drive growth. So, the decisions of firms where to locate and where to relocate are really vital and I think the local authorities and local stakeholders must really understand the perspective of business in cities to try to influence their decision.

Joe Kornik: What was the biggest takeaway from the survey? How do cities factor into the future for CEOs?

Vlad Mykhnenko: I think undoubtedly, the biggest takeaway has been defining that a huge majority of global business leaders. Sixty-four percent of global business leaders believe that the role of cities for their business will increase in the next 10 years and only 6% are tiny minorities. Only 6% believe that the royalties will decrease. I think that is a really, really important finding.

Joe Kornik: Wow. That’s rather a ringing endorsement for cities, isn’t it? Some of those figures particularly that only 6% of leaders believe the role of cities will become less important for their business by 2030, especially when we consider which cities have been of late including a global pandemic, is rather stunning. So, I’ll open this up to all of you. What were some of the other surprising takeaways from the survey?

David Howard: Well, I think the pandemic has really consolidated the leaders’ reliance in some ways on larger incentives and particularly important having access to a talent pool of skilled labor, pools of having access to urban infrastructure and digital infrastructure. I think one of the most interesting takebacks really or takeaways from the survey was that 61% of business leaders in North America had said that they thought that the cost of urban location would decline or stay the same over the next 10 years. That’s a significant advantage of locating in a city. In Asia Pacific and Europe, the percentage of business leaders were 50% and 42% in terms of recognizing the cost benefit of remaining or moving to a larger urban center.

Nigel Mehdi: I think one big surprise was that CEOs are expecting the state of public infrastructure in their cities to improve by 2030. Leaders in all regions indicated expected improvements in public infrastructure; 75% in North America, 80% in Europe, and 82% in Asia Pacific.

Joe Kornik: So, as we come out of the pandemic, it seems the temptation for executives and corporations to sort of pull out of cities is there, right? I mean, save on some of those real estate costs that your workers continue to work remotely. So far, it’s been a fairly successful experiment, I think the remote work, at least in professional services. A lot of companies have done just fine during the pandemic but this data suggests otherwise, doesn’t it and why is that?

Nigel Mehdi: Yes, I think the gauge across all questions in the survey suggests confidence in the increasing role of cities over the next 10 years. Fifty-six percent of business leaders recognized the benefits of a geographically concentrated labor pool and I think that suggests that the role of cities is not going to decline regardless of the early indications of changes in occupation patterns as a result of the pandemic.

Joe Kornik: Yes, very interesting. I know the findings indicate that there’ll be a real distinction between first-tier or highly specialized cities which tend to be larger versus what are often referred to as second-tier cities which tend to be smaller. What conclusions did this survey reveal about those distinctions and each of those types of cities places in the future?

Vlad Mykhnenko: Well, absolutely right. We know that the share and importance of larger cities has been increasing. Today, about 33% of population lives in cities which are 300,000 inhabitants and above. So, larger cities have been increasing their importance generally and so it’s not surprising for us to find the finding that 61% of global business leaders believe that the benefits arising to their firms from the city size, from significance of cities from prestige will increase. What I think is important for the stakeholders in what you refer second-tier cities, perhaps smaller cities, perhaps less specialized cities are that the survey also offers a number of business fundamentals that can be improved in their cities: business environment, educational base, physical infrastructure, and politics. Those things, those levers can be tweaked to improve the significance of the cities for the business. I think those are very important also findings for the second-tier cities and their businesses.

Joe Kornik: One of the aspects of this survey I find really interesting, was the difference of opinion among CEOs in North America, Europe, and Asia Pacific, some of the regions that the survey touched. What were some of the more eye-opening takeaways from a geographical perspective?

Nigel Mehdi: Well, global business leaders find North American, European, and Asia Pacific cities attractive in very different ways. In North America, access to effective technology and good education was seen as a key. In Europe, the availability of talented labor pool and good public infrastructure are the leading attractions. While in Asia Pacific, access to the state-of-the-art technology is a requirement, but so are tax incentives and pro-business deregulation.

Joe Kornik: Finally, you asked executives about what could attract their business to a city and the other side of the coin, what they view is perhaps the biggest threat to cities over the next decade. So, what did they have to say about that in the research?

David Howard: Well, I think in terms of the attractions as a real emphasis on having access to good technology and educational, education skills services to provide that talented and skilled labor force. I think in terms of the threats, one that really stood out for me and for my colleagues is that in North America, 61% of business leaders believe that the critical context was going to be a potential threat particularly in terms of taxation and business regulation schemes and regimes in North America. In Asia Pacific and Europe, there was a 42% of concern, if you will, of leaders who were thinking about the possible disadvantages that the political context of their location is going to offer. Also, in Europe and Asia Pacific, I think it’s also interesting that over 40% of business leaders were concerned about climate change and a similar figure around 40%, or mid 40% of business leaders in those two regions, in Europe and Asia Pacific, were concerned about cybersecurity, cybercrime, and data privacy issues. Whereas conversely, in the US, only 70% of North American business leaders were concerned about climate change and data privacy which is similarly not important amongst North American business leaders.

Joe Kornik: Yes, really interesting. Thank you again, Vlad, Nigel, and David, for this really unique look inside this really detailed survey about CEOs and their perceptions of cities and their business strategy in 2030 and beyond. We appreciate the snapshot. Thanks again for being on the program and we’ll see you next time.. [Music]

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