Why Attractiveness alone is not enough: The role of Performance in city competitiveness

In today’s global economy, attractiveness has become a true driver of development, shaping the way territories and businesses interact. But behind this ability to attract and retain companies, talent, and investment lies a fundamental concept that is often overlooked: performance.

In this article, we’ll explore the link between territorial attractiveness, local governance, and business growth, to better understand why high-performing territories are the ones that succeed in creating lasting value.

Attractiveness as a Market of Exchange

Territorial attractiveness refers to a region’s ability to attract and retain businesses, residents, and investment through a combination of factors: infrastructure, quality of life, workforce availability, and the broader economic environment.

However, attractiveness is inseparable from measurable performance, which can be broken down into:

• Economic performance: transport and communication networks, land availability, tax incentives.

• Social performance: inclusion, public services, access to skilled labor.

• Environmental performance: sustainable resource management, quality of life, green initiatives.

In short: an attractive territory is always a high-performing one.

What Do Businesses Look for in a Territory ?

For a business, choosing a location goes far beyond land costs or tax advantages. What truly matters is a comprehensive ecosystem that supports long-term growth. Key factors include:

• Land availability and real estate costs.

• Quality of infrastructure (transport, digital networks).

• Access to a dynamic consumer market.

• Skilled and available workforce.

• Business services and support structures.

• Opportunities for subcontracting, partnerships, and innovation.

  
  

But companies also pay attention to intangible yet decisive elements, such as:

• The territory’s unique identity.

• The overall business climate.

• The ability of local stakeholders to cooperate.

• The cultural and social “soul” of the territory.

Ultimately, success lies in matching the territorial offer with the needs of businesses, ensuring a strong and sustainable fit. If attractiveness is the ability to draw attention, performance is the ability to deliver results. This is the dimension many territories underestimate.

Local Governance: The Hidden Driver of Competitiveness

A territory is not just a geographic space; it is a social construct. Its performance depends heavily on how well public and private actors work together. Behind every successful city lies a governance model that aligns public and private interests. Governance is not just about administration; it is the ability of local actors to coordinate, co-invest, and co-create a long-term vision for the territory.

• Strong local governance fosters innovation, creativity, and the enhancement of local resources.

• Weak cooperation, on the other hand, leads to stagnation, widening the gap between thriving and struggling regions.

Weak governance often explains why some cities, despite having significant resources, fail to translate attractiveness into economic performance. Without alignment and leadership, assets remain underutilized, and opportunities slip away.

In other words: Governance is a performance multiplier: it transforms fragmented initiatives into a coherent narrative, and isolated strengths into a competitive advantage.

The Global Market of Attractiveness

Today, territories operate in a global competition arena much like companies themselves.

Territorial attractiveness rankings act like stock market indices: they compare, measure, and highlight the most dynamic regions.For governments and companies alike, these rankings are vital tools for identifying the best opportunities for growth and investment. A city can appear attractive on paper ( good infrastructure, skilled workforce, appealing lifestyle) but unless this attractiveness translates into economic performance, it risks being short-lived. The real challenge for cities is to transform attractiveness into sustainable competitiveness.

Why This Matters for Entrepreneurs

If you are a business owner or entrepreneur, choosing where to establish your company is not just about tax rates or land prices. You should also consider:

• The strength of the local ecosystem.

• The long-term sustainability of your presence.

• The synergy between your project and local stakeholders.

  
  

A high-performing territory becomes more than just a location—it becomes a strategic partner that supports growth, fosters innovation, and strengthens your company’s integration into the market.

Territorial attractiveness and performance are inseparable.  Attractiveness remains a vital driver of economic development. But in the long run, cities that only rely on visibility will fall behind. What truly differentiates competitive territories is their capacity to convert attractiveness into performance - through governance, innovation, and a coherent economic identity.

The lesson is clear: cities must not only attract but also deliver. That is how they secure sustainable growth, build investor trust, and position themselves as global hubs of opportunity.