Cities of the future global competition, local leadership* *connectedthinking Cities of the future - global competition, local leadership Contents Part 1 Cities of the future Executive summary 1 Chapter 1 The vision for cities 7 Chapter 2 The way to the future in cities 13 Chapter 3 Managing capitals 27 Chapter 4 Capitals, the key issues 37 4.1 Intellectual and social capital 38 4.2 Democratic capital 45 4.3 Cultural and leisure capital 52 4.4 Environmental capital 57 4.5 Technical capital 62 4.6 Financial capital 69 Chapter 5 Summary and conclusions 77 Part 2 Cities in focus List of participating cities 85 Interview summaries 86 Appendix 1 Lead authors 174 Appendix 2 Bibliography 175 Cities of the future Cities of the future - global competition, local leadership Cities of the future - global competition, local leadership Part 1 Cities of the future “We need new perspectives on cities, their dreams, knowledge, creativity and motivation in order to find new ways to develop strategic city management. Therefore PricewaterhouseCoopers (PwC) will develop a new arena for dialogue with leaders in cities as a tool for strategic development and knowledge sharing, resulting in added value for people in cities, organisations or companies.” Cities of the future Executive summary Many of the challenges and opportunities In this report, the first from the network, we that are coming to define the early part of set out to discover the principle challenges the 21st century are at their most visible and trends that are influencing city leaders in the cities in which a growing proportion in their strategies for delivering prosperous of the world’s population now lives. and socially harmonious environments for their citizens. In the course of our research, In response to the importance of cities in we interviewed over 40 senior figures from the global economy, cities all over the world. What emerges from PricewaterhouseCoopers (PwC) established these interviews is a number of common a City and Local Government Network in themes that all city leaders, despite their 2004. The Network aims to bring together specific circumstances, believe to be city leaders so that they can share the setting the agenda for their cities. experience, knowledge and insights that they have gained and to develop their ideas This report takes those themes and and strategies for the future. explores some of the strategic responses required for effective leadership. We have The City and Local Government analysed the constituent elements of the city into a number of different asset groups, Network’s vision is: or capitals, that form the basis for “We need new perspectives of cities, their developing a strategic agenda that will take dreams, knowledge, creativity, and a city forward. These capitals cover the motivation in order to find new ways to people, knowledge, natural resources, develop strategic city management. technical infrastructure, finances, Therefore PwC will develop a new arena democratic and political aspects and for dialogue with leaders in cities as a tool cultural values that a city embodies. Using for strategic development and knowledge these capitals as a starting point, the report sharing, resulting in added value for examines how different cities around the people in cities, organisations or world are developing their understanding of companies.” each form of capital and assessing how they can ensure that they develop the city intelligence to make the best use of the capitals they have and develop those which may be in shorter supply. Intellectual and social capital Environmental capital Financial capital Technical Culture and capital leisure capital Democratic capital Figure 1: Integrating capitals Executive summary 1 Cities of the future - global competition, local leadership There are six different types of capital and dialogue, all need to be taken into discussed in this report: account when establishing a strategic plan for the future. In addition to these • Intellectual and social capital – people trends, city leaders also identified a and knowledge; number of significant challenges that have • Democratic capital – participation and to be taken into account when creating a consultation; strategic plan for the future. • Cultural capital – values, behaviours Challenges for: and public expressions; Intellectual and social capital • Environmental capital – natural Competing in the international knowledge resources; economy means ensuring that the • Technical capital – man-made capital appropriate people, skills and capabilities and infrastructure; and are developed, with city leaders demonstrating that they understand how • Financial capital – money and assets. these qualities can be captured and allowed to prosper. Navigating into the future Managing these identified capitals Democratic capital effectively means taking a holistic City administrations need to improve their approach, since each of the capitals accountability and the transparency of depends on the others. their dialogue with citizens in order to achieve the commitment of the whole city The necessity of taking a holistic on its journey into the future. approach is one of the themes to emerge particularly strongly from the interviews Cultural and leisure capital with city leaders. These city leaders are The competition among cities is intense, keen to stand back from meeting the day and a strong city brand is a potent to day demands and look to the future to weapon to maximise the visibility of a see how their policies and strategies can city’s qualities and allow it to differentiate adapt to the dynamic social, economic itself from its competitors. and political environments unfolding in their cities. This process is like navigation Environmental capital – but navigation into the future. To make Environmental issues are near the top of sure that cities reach their intended all cities’ agendas. As quality of life destination they need to be aware of their becomes an important source of starting position. This requires them to competitive advantage, cities have to ask some important strategic questions, provide a clean, green and safe identify their strengths and work towards environment for their citizens. eliminating areas of weakness. Technical capital Once cities have identified where they are, The demands on a city’s infrastructure they need to decide where they want to change and expand constantly. Cities be in the future. And to do this, they need have to ensure that their physical and to understand the significant trends that technological assets can support the will influence the direction in which the changing needs of their citizens. future unfolds. Financial capital These mega-trends cut across the experience of all cities. The trends Growing demands on cities’ budgets, towards individualism, for example, or the combined with diminishing revenue bases effect that information and mean that cities need to be creative and communications technology has had on flexible in their financial strategies and speeding up the demand for information increasingly partner with the private sector. 2 Executive summary Managing all of these capitals together Intellectual and social capital requires strong leadership. City leaders Intellectual capital is identified by the city need to develop a style of leadership that leaders as one of, if not the most, is both highly consultative and directional. important assets that their cities possess. They need to inspire and fulfil the dreams In the knowledge economy, it is the and visions of the future that they share people in a city – their skills, capabilities with the people and organisations that and knowledge – that can make a critical their city comprises. Values are a critical difference to a city’s ability to compete element of good leadership. A value- successfully for investment. based approach is one that city leaders How do cities measure and map their are increasingly adopting. Value-based intellectual capital? Measuring intangible leadership operates on the basis of a assets is very difficult and the evidence number of specific, shared values that are suggests that, to date, very few cities communicated clearly throughout an have specific initiatives in place to do so. organisation and used by the leaders to However, from our interviews with city guide their daily thoughts and actions. leaders it is clear that many of them are Managing capitals trying to develop policies that will make their cities attractive to the skilled and City governments are highly complex entrepreneurial people that will help their organisations. They need to respond to cities to succeed in the economy of the the demands of many different groups 21st century. One of the key drivers of a and manage the allocation of resources city’s attractiveness is the extent to which between different, and often competing, people feel connected to one another, in claims. other words, the degree of social capital Developing the capabilities to ensure that that exists. cities manage their capitals effectively Social capital is, again, hard to define but means looking at the people, processes expresses itself in the quality of informal and property that they need to manage in and formal relationships that characterise a order to achieve their goals. city. The degree of social capital in a city is Cities need to make sure that they can linked closely to low levels of crime, to measure the performance of each of educational achievement and to physical these three categories. Without effective and mental health. Building a sense of performance management, cities will not cohesion though is not easy. Many of the be able to create a culture of continuous city leaders we spoke to cited the challenge improvement. of ensuring that divisions and segregation The pace and extent of change that cities were not allowed to develop between rich have to cope with requires them to become and poor, and between different cultures. particularly adept at programme and project Engaging all citizens is therefore a major management. To do this, they need to challenge for cities.