Urban economies throughout the world are under extreme pressure to be active rather than passive. This involves anticipating and responding to the threats to existing activities and the opportunities for developing new activities following the openness of markets, deregulation of industries and dramatic changes in technology that are the hallmarks of globalisation. A proper response necessarily requires the engagement of the national level of government and the mobilisation of local actors in both the public and the private sectors. While the free market and the invisible hand can very effectively allocate resources, they generally take more time to act than is available in the high-pressured environment of inter-urban competition, and are to varying degrees affected by market imperfections. If we think back analogously to recent advances in international economic theory, there is often little to chose from between two potential suppliers of a good or two potential occupiers of a specific role in the global urban hierarchy. In this situation the prize sale goes to the one that is active while passivity leads to stagnation and marginalisation. Because of this, a coherent approach to strategic planning or to policy aimed at enhancing an urban economy’s competitiveness is an absolute necessity if resources are to be efficiently allocated toward attainment of a clearly identified objective. In this chapter we will examine two basic approaches to competitiveness enhancement, and we will then apply them to Montreal – one of North America’s most active and engaged urban economies.

Why Montreal provides us with a good case study

To begin with it is natural to ask the question – why Montreal? Las Vegas, Portland and Vancouver are getting better press coverage as North America’s most interesting urban experiments. Los Angeles, Toronto and Atlanta have had more spectacular growth in recent decades. But it is cities like Chicago, Cleveland, and Montreal that have had experiences which are more difficult and less assured of success, and it is this kind of urban economy that gives us our best and most informative example of strategic thinking and accomplishment. Montreal is one of the most interesting cities from the standpoint of the objective of this chapter due to the following aspects:

• • Its location is rather peripheral to the main areas of economic activity in North America – a bit north of the ‘industrial heartland’ – Boston to Chicago to Cincinnati to New York.