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Hamburg - One of Europe's Local Economic Leaders

In the survey on "Local Economic Leadership", the OECD finds a lot of praise for the Hanseatic City

For the survey, the OECD has analysed four internationally oriented, mid to higher ranking EU cities to share lessons about how local economies can capture the leadership dividend. These cities were Amsterdam, Hamburg, Manchester, and Stockholm. According to the OECD, this European quartet has been actively engaged in the challenge to re-build their jobs base, attract employers and grow investment, raise the investment rate, ensure adequate supply of business space, expand new sectors, and build economic inclusiveness in a higher skilled economy. Their leadership models also stand out for their success in shaping their local economies.

Hamburg – A European Best Practice

Hamburg’s local economic development is underpinned by several cycles of investment into hard infrastructure, workforce development, employment innovation and research expertise. Despite an advanced innovation system, the city has nevertheless faced strategic challenges – especially around housing, congestion and port expansion – that have needed strong leadership and deeper inter-governmental co-operation.

Financial Discipline Pays Off

Since 2011, Hamburg’s leaders have pursued a counter-austerity inclusive growth strategy that has begun to yield significant results. The city has pursued a rational and professional approach to short-term delivery of fiscal prudence, increased housing supply, and a more flexible labour market, within a broader framework of a more globalised local economy. Thus, Hamburg succeeded in increasing its employment rate by more than eight per cent since 2005, one of the fastest improvements of any city in Europe. Hamburg’s economic growth since the global financial crisis makes it Germany’s most affluent city.

Booming Wind Energy Capital

Hamburg has also become one of Europe’s leading locations for the wind industry, with 185companies employing 25,000 workers in renewable energy across the metropolitan region. A cluster strategy has been built around the research agenda of four universities in Hamburg and participating companies. This has been complemented by the construction of an ‘Energy Campus Bergedorf’ for wind energy research and the settlement of the Siemens Wind Power Division. The city’s Environmental Partnership has institutionalised voluntary action and legal measures to conserve resources. The Partnership, made up of 1,000 partner firms, has provided a platform for dialogue between business, politics and administration, as well as having saved an estimated 50million euro in annual operating costs.

Hamburg’s Outstanding Assets

According to the OECD, Hamburg possesses a high quality education and training system, beginning with small classes for primary school and extending to its acclaimed youth employment agency (Jugendberufsagentur). The agency provides a one-stop service for the needs of jobseekers under the age of 25, relating to education, employment, support services or extracurricular pathways. It also leads the process in Hamburg of developing systematic career advice at school and increasing the proportion of direct transitions from school int training. Hamburg has seen the number of students in higher education grow from 70,000 i2008 to over 90,000 in 2013 (Statistikamt Nord, 2015).

Naturalisation Campaign Praised

Public and private sector leaders play an important role in ensuring inclusion. The City recently abolished a range of fees associated with schooling and daycare, and the Chamber of Commerce actively supports the integration
of refugees with language training and long-term skills monitoring in order to support faster integration into the labour market. Alongside this, Hamburg’s First Mayor Scholz has publicly spearheaded the city’s “Ich bin Hamburger” naturalisation campaign to accommodate the growing number of new arrivals to a common purpose and spirit of the city.

Best-Practice in Housing

Hamburg especially effectively tackled the risks of housing unaffordability. The Senate’s housing programme is one of the largest and most successful in Germany, building thousands of homes each year for families, single and older people across the price ranges, says the OECD. The number of housing units constructed each year has increased from 3,600 to well over 6,000, a remarkable shift that has over achieved on original targets, while the city has also exceeded its target for 2,000 subsidised rental housing buildings per year every year since 2011. This step change in housing has begun to absorb the very high demand to live in Hamburg.

Rent Increases Capped

An ‘Alliance for Homes’ between the Senate, associations of the housing industry and municipal housing company SAGA GWG has set the specific objectives for an inclusive housing market, and Senate districts support the objectives by ensuring a faster approval process and the provision of affordable urban land. The programme has also sought to amend relevant state government statutes including the protection of living space, and has taken advantage of federal government legislation to cap rent increases.

Increasingly Attractive to Foreign Investors

Also, Hamburg has improved its system for attracting external investment, and is witnessing a significant rise in foreign real estate investment, which accounted for nearly half (44%) of all transactions in 2014. In addition, the HWF Hamburg Business Development Corporation has played an influential role for 30 years
in attracting new employers to Hamburg and in developing local economic policy. Since 2014, HWF has been assigned new responsibilities, including the marketing supply of commercial properties, the provision of publically-owned premises for the logistics sector, and support of industrial development in the eastern areas and leadership in the regeneration o f Hamburg’s eastern districts.

Big Deals by Public Agencies and Developers

Public agencies and developers such as HafenCity Hamburg GmbH, IBA Hamburg GmbH and HWF also play key roles in terms of marketing new real estate to target audiences, principally local and regional investors, developers and owner occupiers. One of the major new projects in the city HafenCity is the Überseequartier, purchased closed in 2014 for 860 million euro by Unibail-Rodamco, one of Europe’s leading commercial property companies, which is supporting the city’s commercial development housing construction drive.

City State with a Big Vision

In 2015, the city submitted its bid for the 2024 Olympic Games. According to the OECD, this ambition
demonstrates the leader’s capacity to master the minutiae of city administration with a big picture vision. Hamburg’s pitch to the international Olympic community is that it is a historic independent city state in Europe that can guarantee a compact, manageable and community-based games that avoid excess spending and affirm diversity. Underpinning the bid are a series of inclusive urban development objectives.

The full survey, a documentation of 116 pages, can be viewed here in full length:

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