Next Stop Monaco

Everything you can imagine is real.
– Pablo Picasso

This article is about the Principality of Monaco, a unique place in the world. It is also about the current challenges for Monaco and what other places like Dubai do to compete with the unique principality. Below is a picture of the principality from above.

The Principality of Monaco is a place like nowhere else in the world. The tiny principality located on a picturesque mountainside slope of two square kilometres is the most densely-populated place in the world, and also the most millionaire dense. One person in three is a Euro millionaire according to Spears 2014 global ranking.

Since the opening of the Monte Carlo Casino in 1863, Monaco has been known as a destination for the rich and famous, a place for golden retirement and dolce farniente (sweet doing nothing). But since the millennium, the new generation of young and wealthy jet setters has changed Monaco into a vibrant place that never sleeps.

With more than 700 different events per year, with its mix of glamour, chic and elegance and ultimate safety, Monaco has become a place which is hard to resist for people with money to spend or, more often, to salt away. It has also gained a reputation of shady paradise for tax evaders and for decades Monaco was struggling with this image.

Prince Reiner made Monaco into a mini-Manhattan of concrete and glass. A process made possible by the glamour brought by his marriage to the film star Grace Kelly. Monaco, in origin a fortified rock overlooking the Mediterranean between Nice and Menton, is about the same size as Hyde Park. In the 1930s Somerset Maugham, reacting against the riff-raff attracted by its casino and tax advantages, and called it “a sunny place full of shady people“.

At the time of Prince Rainier’s accession in 1949, however, the Principality´s economic survival seemed doubtful. In that year the Société des Bains de Mer (SBM), which runs the casino, several hotels and various other tourist attractions, registered serious losses. Monaco had profited from the fact that gambling was illegal in France from 1836 to 1933 and gamblers flocked to the Monte Carlo Casino. After the war, though, competition developed, both on the Riviera and elsewhere.

Prince Rainer’s energy and vision of a Monaco for the rich and famous brought the principality success, and serious redevelopment. Stories tells that Prince Rainer was never happier than when poring over plans for new buildings, and with a constant stream of foreigners eager to establish residence in order to escape taxes, and American capital flowing freely into Monaco as a result of his marriage, he had both the motive and the means for construction.

Rainier presided over an economy in which even the social security system made a profit, in which unemployment was virtually unknown amongst the 5,000 native Monegasques, and in which 24,000 tax exiles found relief from income and inheritance taxes. From the commercial point of view, most of the developments proved hugely successful. Aesthetically, the benefits of the development in the 1960s and 1970s were very much less obvious.

Since the 1990s Monaco has been working hard on focusing its image towards a place with innovations in business and culture. Monaco nowadays strives to create a multinational innovative business hub by attracting and supporting talented and successful entrepreneurs and the place has a lot to offer in terms of networking and business support.

The Monegasque Fund for Innovation offers financial support to the technologic innovation projects. Monaco Welcome and Business Office (MWBO) aims to improve the welcome offered to Monaco visitors who want to relocate in the Principality, by putting them in contact with key organizations both in the public and in the private sector. The Principality agenda is busy with all sorts of business events, conferences and symposiums.

The current ruler of Monaco, Prince Albert II,  outlined his vision for the Principality in his inauguration speech on the 12 of July, 2005. He said he wanted Monaco to be a place where ethics and money can co-exist. Under his rule, the Principality has been working hard on refocusing its image towards the place with innovations in business and culture.

Despite its legal sovereignty Monaco has been fully integrated in the European Union Schengen zone and customs union with France which enables its participation in the EU market system. Prince Albert has clearly stated his vision of Monaco as a country generating modern models of life, development and well-being (Investiture speech, H.S.H. Prince Albert II of Monaco, July, 12th, 2005).

But the pace of the world is changing. The global economic crisis has had a severe impact on the Principality’s banking and financial service industries since 2008. The financial sector generated almost one third of country’s GDP and the crises had an immediate impact. By now many of the large banks have left Monaco, and some of the smaller have closed. For tourism, the steady flows of Italians and Americans have declined and the Principality needs to look elsewhere for new markets.

Last month, I and my fellow colleagues Olga Zubrilova, Brett Lowers, Carlos Cabal, Nuriya Khusainova, Svetlana Berezovska and Arbia Ziadi from the 2013/2014 MBA programme at the International University of Monaco had the pleasure to present our corporate project “Monaco: Place Excellence and Client Attraction” to the Direction du Tourisme et des Congrès (DTC) of Monaco.

[slideshare id=37587459&doc=zeaonxwhqf2wziwssspj-signature-5f9addc61f245a8a079bb18a0eafb6de873a6638f4252003e271237daf218966-poli-140801175507-phpapp01]

In the project, we analysed the current situation and capabilities of Monaco from the point of view of the Place Excellence concept and considering the existing world best practices and sustainable results of its execution in Monaco.

Place Excellence is an approach for how to work out a place management strategy. It is about the combined forces of Place Management, Place Branding and Place Development. The ideas of place management and place branding are not new, however increasing competition, new industrial growth and as a consequence fundamental changes of urban spatial development have required a new market-driven approach to the governance and marketing of cities. It is not about land use management any more but about a set of proactive activities and means aiming to create success and renewed economic growth of a place.

The entrepreneurial approach to urban development fosters local economic development by combining private resources, expertise and drive with local government powers. ”It strategically allocates resources to maximize the positive effects on city promotion and branding. Its policy measures are increasingly centered on image-enhancing and place marketing initiatives to project cities as attractive place to live, work and invest.” according to the OECD publication  “Competitive Cities: A New Entrepreneurial Paradigm in Spatial Development”).

As Christer Asplund and Philip Kotler wrote about in Marketing Places Europe, place branding is not about logo or slogan development, but instead a commitment to a community-wide strategy on what distinguishes the place from other places, as well as a community-wide effort to effectively communicate and create that unique destination experience to the customer. (Source).

Along with Place Branding and Place Development, successful Place Management plays a pivotal role in the process to achieve Place Excellence. The tool set for successful implementation of Place Excellence model has been described in the book “Place Management” published by Bearing in 2011, and we have used them in our analysis and benchmarking.

The Emirate of Dubai is an impressive example of the Place Excellence concept. The Dubai government’s decision to diversify from a trade-based but oil-dependent economy to one that is service- and tourism-focused turned Dubai into one of the fastest-growing cities in the world.

The Dubai Strategic Plan 2015 released in February 2007 reflected the innovative brand development approach and presented a clear vision of how to make Dubai a more desirable place to live and do business. Based on strong governmental vision, strategy and support Dubai has built a diversified innovation portfolio to strengthen national brand.

There is a strong interconnection between all the key participants in the local economy, including residents, business executives and government officials who act and translate a strong message of Dubai in a consistent innovative way. Whether it is business, trade, tourism, education or healthcare, every development project is driven by continuous effort for differentiation and innovation.

Travel and tourism has been identified as the key strategic thrust area of the national 2015 Plan. Department of Tourism and Commerce Marketing of Dubai (DTCM) plays a pivotal role in increasing the awareness of Dubai to global audiences as well as in tourists and inward investment attraction into the emirate. Through its clear vision of positioning Dubai as a leading tourism destination and commercial hub in the world DTCM identifies its core mission to promote Dubai economic growth and place excellence by:

• Development of sustainable tourism.
• Provision of a unique visitor experience combining quality service and value for money.
• Innovative promotion of Dubai’s commercial and tourism opportunities.
• Further development of partnerships with other industry stakeholder

DTCM has a strong on-line presence and its website translates strong messages anchored in the national strategy, the same as the Dubai Government website does. Its organizational structure is focused on all Dubai customers: visitors, resident and investors.

Such strong brand communication would not be possible without the harmonized interconnection of all actors in the local economy, including residents, business executives, government and academia interacting in a clear and concise manner in a collaborative environment.

Some may say that there is no comparison between Monaco and Dubai, but we believe there is, for the simple fact that they two locations compete for the same target markets of wealthy and international people, and tourists who wish to experience glamour and excellence in hospitality.

Successful Place Excellence requires a dedicated holistic approach. All assets, actors and activity need to be aligned and in unison provide place excellence based on a business and political environment based on a spirit of innovation and entrepreneurship. Comparing Dubai´s well-aligned messages with the messages from Monaco public websites, the target markets of the Principality are less clear. Our conclusions from the project are that along with the uniquely well developed tourism cluster and the financial services hub Monaco has rich, currently under-utilized assets.

Rich historical heritage, the glamour of Royalty, natural beauty and superb location makes Monaco a unique place to visit. Stability, safety and exceptional life quality as well as innovative entrepreneurial initiatives make Monaco a place to live and work. Monaco has in hand an excellent opportunity to become a unique place of its kind irrelevant to any world competitors.  By following Dubai´s and other places example and mobilizing the principality´s citizens behind a new, strong vision and then exploiting new potential for place economic regeneration in such policies as cultural policy and event-hosting Monaco could acquire a more powerful tool to communicate its brand to the world.

The key will be to make the vision of the future clear and easy to grasp, and the messages to do so were already in the Prince inauguration speech.