School of Architecture and Civil Engineering

Bergische Wirtschaft 06/22: Dr. Roland Busch on the Promotion of Public Projects by Companies as a Win-Win Situation

28.06.2022|10:27 Uhr

Dr.-Ing. Roland Busch, an expert in the economics of planning and construction at the University of Wuppertal, describes corporate support for public projects as a win-win situation.

Dr. Busch, what would our cities look like without the societal engagement of the business sector?
Cities can function fundamentally without the societal engagement of the business sector, but municipalities certainly benefit from committed businesses. Firstly, companies automatically contribute significantly to the financing of municipal budgets through business taxes. The billions in business tax revenues currently generated by Biontech in Mainz illustrate the importance of this unfortunately very volatile source of income for cities. At the same time, this example demonstrates the dependencies that can arise. Car cities like Wolfsburg or Ingolstadt have experienced this painfully in recent years.

Societal engagement encompasses support provided by companies that goes beyond business tax contributions. Cities benefit from such engagement to varying degrees. In places where committed companies support urban development and city culture, projects can be implemented that would not be feasible without support from the business sector. Cities with less engaged businesses lack these opportunities.

What is unique about the Bergisches Städtedreieck?
The Bergisches Städtedreieck is characterized by a stronger presence of family-owned and medium-sized businesses with a long history at the location, compared to other regions such as the Ruhr area. These businesses often have a strong sense of attachment to the region and are deeply involved in local initiatives. Through their strong commitment, projects like the Nordbahntrasse in Wuppertal, which could not have been financed without civic and corporate engagement, have been realized in the past. Unlike, for example, in Leverkusen, the Bergisches Städtedreieck does not have a dominant corporation but rather a multitude of committed businesses, reducing the risk of financial dependence on the development of a single company.

Why do companies engage in this way?
In addition to their connection to the region and the high self-interest of entrepreneurs in the attractiveness of their residential areas, the increasing shortage of skilled workers is an important motivation. For companies, especially those located in peripheral areas, it is becoming increasingly difficult to attract highly qualified employees. A culturally and urbanistically attractive location can be a decisive competitive advantage for businesses. Furthermore, a strong educational and research environment is advantageous for the sustainability of a company's future, and investments in this area are usually well-spent. In general, sustainability and Corporate Social Responsibility (CSR) have gained significant importance for companies in recent years. ESG criteria, which stand for Environment, Social, Governance, have become increasingly important to customers, as well as investors and banks. As a result, even companies without a historical local connection are showing growing interest and necessity in engaging in local community initiatives.
 

What, in your opinion, are the future forms of local support by companies?
I believe that the ongoing sustainability discourse and the increasing skills shortage will continue to have a positive impact on local corporate engagement. In this context, there will be a particular focus on initiatives that enhance the quality of life and attractiveness of communities, as well as investments in local education and innovation capabilities. Additionally, through CSR (Corporate Social Responsibility) concepts, social engagement may play a more prominent role in the future. Municipalities should make it even easier for companies to engage locally through targeted outreach and programs. An example of this is the city of Nuremberg offering companies the opportunity to sponsor disadvantaged neighborhoods.

The conversation was conducted by Daniel Boss.
Photo: Süleyman Kayaalp

Here is the link to the article.

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