- Cities starts small and the market cap for each product is also small. Players are used to, and enjoy building large scale business will not feel comfortable and waste lots of resources .
- Players are used to expand and grow dramatically but city development take longer time to see effect.
- Micro-economy is not the easiest to understand.
- Players are used to bully the market for own companies profit and will hurt the city's economy
- Based on 4, players tend to use political power to give their own company too much unfair advantage and hurt the city's economy.
GDP
It is important to have a stable economy. A stable economy is a economy keep growing with a moderate rate. (2-3%). GDP growth below this range will cause the economy stall. People, company will reduce consumption and potential reduce investment. GDP grow too fast will result inflation. More importantly, growing too fast will send wrong signal to the market, they could over investment and do not have enough money for the future. Thus a recession will come soon.
To maintain a healthy GDP growth, you need to look the GDP report at 1st, Jan every year and make decisions. And make your yearly plan based on this report.
Consumption
Adjust consumer tax will have a direct impact on consumption, but also have a direct impact on your government income. You can use this as a tool to boost or restrain consumption if it is too high or too low but adjust maximum 1% every year. Remember, you need a stable economy.
You could also adjust personal income tax, but the effect will be longer because income tax will indirectly impact the economy. Ideally if you know the average income / consumption/ savings of your citizen you can adjust the income tax but unfortunately the game does not provide such data. I am normally keep income tax stable.
Private Investment
Companies invest when they see the future growth and have money in place. This is something you can not control directly, but could predict a bit. You could look into the finical report of several largest companies in your city. If their profitability is decline, they might not invest more soon and if it is improving they will invest more. Other than that, investments are not happening evenly, it could be one year increase 20% and another year reduce 30%.
It is not always possible to keep a stable investment, what you can do is to make small adjustments on company tax rate to help companies' profit in a certain range.
Government Investment
Government investment are mainly controlled by you. A common mistake by players is to dramatically increase government investment in order to improve the QoL score. The dramatic increase in government spending will boost your GDP for first year and then you GDP will stall. Use government investment to offset the instability of private investment. When you see last year the private investment increased a lot, you could expect next year there will be a decrease, and you should moderately increase government investment to offset the impact of private investment, and vice versa. This can help you keep a stable GDP growth.
Export
Export is a bonus on your economy and always good to improve, especially when your city is small. There are 2 ways to improve export, one way is research in the university. Always do it and invest maxinum of money. The small investment will help you gain a healthy GDP.
Another way is to produce products in this city and sell to another city. This only work when you are developing a small city while there are other big cities in the game. For large cities, the export is not as useful as small city because the main economy growth engine will be consumer and private investment.
Recently the game released a "export company" feature. Utilise it when your city is small. While I have not tried it myself, I suspect it will make the city development easy and impact the balance and fun.
Public Service
Public service decide quality of life and have a long term impact to you people growth and economy. Maintain a healthy, high efficiency public service system is vital to your economy. Here are some tips for having a healthy public service system.
- Ensure all services are at least have a higher score than 30 to avoid people leaving city
- Put public service at right location, the coverage score is a free bonus for your public service
- Prioritise training and equipment upgrade over supply. You spend fixed money on training, and it will improve your quality of service year over year and help you get higher score. The money spend on supply is fixed every year and you only improve score once.
- Plan your service level based on income, it is important to have a positive cashflow
- When you have money to spend, always prioritise education because education have positive side effect to your economy and improve quality of all other public service. Other services are just score, there is no different either you prioritise one of them to very high score or improve all services together
Ensure the demand index for both commercial and residential building are above 10.
City Layout
In order to make a high efficient city. You need a more condensed layout. Thanks to the game that does not have a traffic system so you don't need to worry about traffic jam.
You need to get all commercial building closest to CBD and get the residential buildings close to commercial buildings in order to get "free score" of those buildings.
You also need to have building close to each other to have better coverage of your public services. And no mention that a condensed setup will also create traffic index.
When you start a city there are normally 2-3 areas are very condense. I normally reserve the area around CBD to be exclusively for my own company. You can forbid the land from any building and only allow it for sale when your company need to build shops. You can restructure the road, buildings, to ensure you can squeeze as much as possible people, shop in the space and put all you public service building in a central area to have best coverage. For other 1-3 condense areas, I leave it to AI companies and try to put public services at as central as possible. I will also actively remove the residential and commercial buildings which are not in the condense areas to avoid building separate public services for them.
Keep in mind that you should not do it in a big bang. Restructure and building new buildings should be done slowly along with the economy growth
Financing
Don't get loan. In real world, no government can pay back their loans and the only solution is keep getting new bond. But in the game you can get very limited bond and the interest rate is not low at all.
What do you do as a companyLast but not least. City development is slow, it is more important to keep a sustainable growth, like 1-3% of GDP, or grow 1-2% people every year than aiming for a boost.
Plan your businessGreat power comes with great responsibility. As a company, you need to not only take care your own profit but also need to be a healthy force of the city's economy. Here are some tips to behave as a good business citizen.
You need to understand how to plan your business according to the market cap. Going to the product report, you will see the market cap and respective quantity for each product. And you should know the production rate for each product. Based on this you need to plan your factory, shop, marketing and research budget carefully to ensure you are not over invest a small market.
You need to plan only for 40%-50% market cap. This will help your supply chain running very high efficient and help you get proper profit. Running high efficient will help you grow the level of your business fast and reach to 2.6x when everything is to level 9. Considering the city growth, you will ultimately have 80%-100% market share with very high efficient businesses and good profit.
Keep your marketing budget moderate, I keep it at maximum 10% market cap. Unlike large market that you can rush brand by using crazy marketing warehouse with 7M money a month, in the small cities, you might need x year more to get the investment back.
Prioritise Quality
As you are operating in a small city, you can not scale your business just by produce more. You need to over invest research. The good news is small cities normally have cheap labor and the cost of R&D is not very expensive. One you decided which industries you want to start, you also need to decide what is the industry you want to start after 3 years. Place R&D ahead to ensure you can have a better start for your next industry.
Healthy Competition
When you are entering a market where already have players, try to avoid destructive competition You should aim to getting better profit and improve the industry rather than destroy competitors. You should start with aim for 20-30% market share, providing better quality product with a bit more expensive price rather than having a price war. Having price war will not only impact your government income but also hurt the consumption because the quantity of market cap is fixed and lower price cause lower consumption.
Fill product gaps
You need to prioritise enter industry where no one provide product, even though you don't like it. This is not only help your avoid competition but also contribute your quality of life score of city by increase the available kinds of products.
Place your factories with a distance
Ensure there is a distance between factories to ensure a high environmental score. You can fill the gaps with warehouses, farms or research center.
Hope my strategy will help you with the city economy DLC, not only get better result, but also have more fun in the game
