Strategic Sustainability: The Power of Ecosystem Location in Global Cities

In an era where sustainable development has become a core agenda for global cities, cooperation is widely regarded as the default pathway to advancing the circular economy transition. However, a study on circular economy small and medium-sized enterprises (SMEs) in Kenya has found that cooperation is not universally equitable—the importance of ecosystem positioning and strategic collaboration far outweighs business model innovation itself. This conclusion not only applies to corporate strategy but also carries profound implications for the sustainable governance of global cities.

The Dual Logic of Cooperation: Engine and Filter

Through in-depth interviews with 15 circular economy startups in Kenya, along with key intermediaries such as accelerators and donor programs, the research team found that cooperation generates two distinctly different types of value within sustainable ecosystems: operational value and strategic value. The former includes shared logistics, material exchange, cost reduction, and peer knowledge transfer—activities that are broadly accessible and support daily operations. The latter involves building legitimacy, unlocking capital, and achieving scale, which is often concentrated in the hands of a few enterprises positioned at the network's center.

In other words, within the same system, cooperation simultaneously plays the dual role of an engine and a filter: for well-positioned enterprises, it accelerates resource access and scaling; for marginalized enterprises, it perpetuates distance and deepens isolation. This finding directly challenges the prevailing assumption that "cooperation inevitably leads to equal opportunity."

For global cities, this logic applies equally. When cities participate in sustainable development cooperation networks, not all participants benefit equally. Those cities occupying a hub position in regional innovation ecosystems—for example, global cities with strong research institutions, active venture capital, and mature industry associations—tend to attract more green investment and policy support, while smaller cities on the network's periphery may fall into a "cooperation without benefit" predicament.

Institutional Constraints: Non-Transferable Sustainability Strategies

The study further points out that cooperation dynamics cannot be simply replicated across different institutional environments. In the EU, mature extended producer responsibility systems, certification schemes, and industry associations serve the functions of verification and resource allocation. In Kenya, however, these functions rely on trust relationships and the brokerage of a few intermediaries. This means that in environments with weak institutions, the legitimacy of an enterprise does not come from formal certification but from visible affiliations—such as being selected for an accelerator program or appearing at a national-level sustainability conference.

This finding has profound implications for global city strategies. When cities adopt sustainability frameworks from other regions, they must be aware of differences in institutional contexts. For example, a successful green bond program in a European city, when transplanted to a developing city with weak institutions and severe information asymmetry, may fail due to a lack of credible certification and intermediaries. Therefore, sustainability strategies require deep localization rather than simple replication.

Ecosystem Position as a Strategic AssetThe most striking finding in the study is that ecosystem position can sometimes be more critical than the business model itself. A company with a strong network position but only average innovation may outperform a technologically more advanced competitor on the network periphery. This means cities need to actively manage their ecosystem position like they manage capital: identify key intermediaries (such as international development agencies, regional headquarters of multinational corporations, global initiative networks) and build meaningful connections.

This strategy is particularly important for cities in the Global South. They often lack formal sustainable governance systems, but can build legitimacy by proactively joining international coalitions (e.g., C40 Cities Climate Leadership Group), attracting pilot projects, or twinning with cities in the Global North. The Kenya case shows that partnering with locally rooted businesses or community organizations often yields trust and access that outsiders find hard to achieve.

Three Strategic Actions: From Vague Cooperation to Targeted Positioning

Based on the research, the authors propose three actionable strategies:

1. Conscious Upward Collaboration: Not all partnerships are equal. Companies (and cities) should distinguish between horizontal collaboration and strategic collaboration. The latter refers to partners that can amplify influence—for example, intermediaries that connect to international funding channels, or institutions that provide certification endorsement.

2. Manage Network Position Like Capital: Most organizations invest heavily in products and operations, but treat network position as an accidental outcome. In fact, who is connected to whom and who is trusted often determines resource flows. Cities should treat building key relationships as an investment: proactively participate in summits, co-create projects, and even co-cultivate talent.

3. Choose Partners That Open Doors, Not Just Those Inside the Door: Some networks cyclically reinforce existing elites, while others actively bring in newcomers. Cities should assess whether their existing cooperation networks are inclusive or closed, and prioritize intermediaries that have cross-boundary connectivity.

Conclusion: The Network Dimension of Strategic Sustainability

The Kenya research ultimately points to a more general truth: in any market or region where the institutional environment is still developing, lasting sustainable competitive advantage comes from building legitimacy at key nodes. This is not just a business concern—it is a city concern. Global cities are in a race for sustainable transition; victory depends not only on internal policies, but on who occupies a favorable position in the global ecosystem. When cities learn to manage networks like capital and choose partners like projects, sustainable strategies can truly shift from slogans to structural advantages.