Across the Organisation for Economic Co-operation and Development (OECD), globalisation is increasingly testing the capacity of regional economies to adapt and exploit their competitive advantages, while also offering new opportunities for regional development. More and more, authorities at all levels of government are rethinking their strategies for building competitive, sustainable, inclusive urban areas. Central governments can no longer assume the full responsibility for development policies. Effective relations between different levels of government, as well as greater participation by citizens, firms, education and research institutions, and other non-state actors are required in order to improve the delivery and quality of public services.

Chile has been very successful in turning its natural resource endowments into a generator of growth and modernisation. However, Chile’s mining regions, like many in the OECD, face the challenge of developing a critically important primary sector in a manner that contributes to regional goals, encompassing not only economic growth but broader measures of well-being.

Natural resource-intensive economies – often defined as economies in which natural resources account for more than 10% of gross domestic product (GDP) and 40% of exports – face some unique competitive advantages, a number of often debated disadvantages and some risks that do not typically confront regions where the primary sector is less prominent. They are a strong source of export revenue and are quite often somewhat sheltered from international competition, as competitiveness is based chiefly on having the relevant deposits. The widely cited disadvantages associated with such regions include exposure to volatile international commodity prices, potential limits on increased production, and potentially low entrepreneurial and innovative activity. These problems are linked to other risks, particularly so-called “Dutch disease” pressures, which can undermine the development of non-resources tradables, political economy concerns about the impact of resource dependence on institutions, and the potential generation of greater regional inequality. Taken together, these factors are believed by many to result in lower long-term growth.

Chile has been remarkably successful in turning its natural resource endowments into a generator of growth and modernisation. However, specific challenges remain for its mining regions, which often bear the costs associated with resource extraction while reaping only a portion of the benefits. Antofagasta, built around copper mining, is Chile’s sixth most populous city and contributes 4.7% of the country’s total GDP. Despite its ability to generate high growth rates and achieve one of the country’s highest standards of living, the quality of life it offers does not appear commensurate with its economic strength, due in part to challenges associated with its nature as a fast-growing urban area economically dependent on natural resources. This chapter examines economic and socio-economic trends in Antofagasta focusing on economic growth, the labour market and skills, and the quality of life offered, particularly in terms of life satisfaction.

Two of Antofagasta’s primary natural resources, copper and its coastline, translate into primary economic assets: mining and the port network. Of Chile’s total copper production, 54.4% is concentrated in the region of Antofagasta, and mining represents 66% of the region’s GDP. The four ports forming Antofagasta’s port network, combined, handled 11.45 million tonnes of cargo in 2011, which would make the region of Antofagasta the largest port complex in Chile, representing 18% of total Chilean port volumes. This chapter explores the need for a locally established economic growth and competitiveness policy, supported by public and private actors. It covers the role of innovation and entrepreneurship in economic sustainability, reviews opportunities and barriers for the mining cluster’s development, and considers the scope available for economic diversification. It also reflects on Antofagasta’s competitiveness as a global port city and concludes with recommendations for building stronger industries around both existing assets.

Antofagasta faces a series of urban and environmental challenges that constitute obstacles to a more competitive urban environment, including in the areas of land use, waste and water management, and public transport. It will need to better capitalise on its natural assets, including its coastline, and improve its physical environment, environmental quality and internal connectivity if it wishes to become a more accessible, sustainable and attractive city – one that not only draws people for work, but that also retains them as long-term residents. This chapter provides insight into these critical aspects of urban policy in Antofagasta, concluding with recommendations for enhancing urban frameworks as a means to improve the city’s quality of life.

Antofagasta’s rapid growth has accentuated the need to quickly and effectively address complex urban policy issues, including economic competitiveness, urban infrastructure, environmental quality and connectivity. There is a strong movement in Antofagasta to ensure that the city is prepared for its future and can provide a higher quality of life for its residents. Yet the ability to manage the challenges ahead and engage in a vibrant process of transformation is constrained by public governance institutions and frameworks that are not adapted to Antofagasta’s dynamic context. This chapter explores some of Antofagasta’s governance challenges, particularly with respect to financial and human resources, to the development and implementation of a comprehensive strategic vision, and to the role of citizens and external stakeholders in public service delivery. The chapter makes a call for greater innovation in sub-national government and governance to support the city as it moves forward in realising its aims.