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Cities of the future global , local leadership*

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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 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 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 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 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 , 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 .

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 – 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 , 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 . 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 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 . 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. create the right skills that can guide and support change within the organisation. As Democratic capital with any programme of substantial change, All of the city leaders that we interviewed in effective is an essential compiling this report stressed the central tool. City governments have to identify and themes of collaboration and participation. understand the risks that they face, gauge City governments – like other political their own appetite for risks and link their entities – are faced with the challenge of risk management policies to governance declining participation in the democratic and compliance frameworks in an process. To renew the and activity integrated way. of their citizens, cities have to develop ways With the right frameworks and to make themselves more accountable, competencies in place, cities can start to increase the transparency of their decision manage the different assets they possess making and engage citizens directly in the and begin to address the specific challenges creation of policies and decisions. that each type of capital presents.

Executive summary 3 Cities of the future - global competition, local leadership

Cities need to develop new partnerships A city wishing to compete for attention in with the different stakeholders they serve. the global place needs to New forms of partnership that go beyond undertake a wide-ranging audit of all the simply listening to the views of others but qualities that differentiate it from others. take action together are a vital part of this. Once these qualities are understood, they Citizens become more than a voter or need to be developed and promoted to customer – they are engaged as co- the type of people that the city wishes to producers in the policies that will shape attract. The ‘experience economy’ is an the city’s future. increasingly important concept in Channels for interaction are also understanding what makes one city expanding and, most significantly, the different to another. It goes beyond simply Internet is providing a new forum for real the institutions (cultural or otherwise) a interaction. More than simply providing city offers. The experience economy information, the Internet provides a consists of the whole range of platform for genuine dialogue between associations and emotions that people cities and citizens in a way that traditional experience when they spend time – or channels cannot easily accommodate. consider spending time – in a particular place. Creativity – the bedrock of the Developing accountability is a key aspect of experience economy – cannot be ‘bought the strategies that cities are adopting to in’. Instead, city planners have to tease engage their citizens. They are doing this by out their city’s unique qualities, and invest disclosing their own targets and recording in nurturing and developing them. their performance against them; by creating collaborative forums with specific interest There is no single plan for creating a groups (e.g. business) and by arranging their successful city brand. However, there are services around the needs of their citizens. several strategies available that can help cities to draw attention to their qualities. For Cultural and leisure capital cities wishing to embark on this journey, A city comprises a complex array of there are some critical questions to ask. attributes that provide it with its unique They need to consider what will attract the identity. Cities that have succeeded in attention of the world to their city and, more attracting visitors, residents and importantly, what will keep it there? businesses do so by creating a city brand Environmental capital that encapsulates the qualities that the city offers and generates powerful and The quality of life that a city offers is a memorable positive associations. fundamental aspect of its ability to prosper. Offering citizens a clean, green, In building a brand, a city has to be aware safe and attractive environment is high on of how it is seen by the outside world. What the list of priorities for city leaders. are the cultural qualities it is seen to have? What is the lifestyle associated with the Balancing with city? Strategies designed to develop cultural environmental impact is a significant capital need to understand how they are challenge. Pollution, in all its forms, is a seen now and, from that understanding, major problem for many cities and so city develop the steps they need to take to governments have to develop policies that move their city forward to the experience incorporate economic and environmental that they wish to offer. Various different considerations. strategic directions are available. Global Developing policies for sustainable attractions can put a city on the map (such development necessitates a joined-up as the Guggenheim Gallery in Bilbao) and a approach to decision making. This means sporting or cultural event can act as a that environmental considerations are an magnet (e.g. the Barcelona Olympics that integral part of policy development across propelled the city on to the world stage) to the spectrum of city government. , draw the world’s attention. But a city cannot , finance and economic policies all rely only on single attractions or events; it need to reflect the environmental goals that has to use these as a starting point for the a city sets for itself. beginning of a much longer journey.

4 Executive summary Citizens, too, need to be engaged in the pressure from a host of competing development and implementation of demands. At the same time, citizens environmental policies and be encouraged demand better services but are reluctant to take responsibility for the quality of the to pay more for them. The familiar environment in which they live. Engaging dilemma of having to do more with less is citizens is more than important; it is a one that all cities are facing. prerequisite for success in developing In order to respond to this challenge, cities sustainable environmental improvements. have to do a number of things. They have to establish accounting policies and analyses Technical capital that allow them to understand their financial The enormous complexity of cities today position, and introduce financial disciplines means that the demands on their and performance management infrastructure are relentlessly challenging. methodologies based on these findings. Not only are the ‘basic’ needs of transport, Cities need to adopt an entrepreneurial housing, water and energy under strain, but approach to the way that they finance and new demands for effective communication provide services. They need to understand make the supply of, for example, the true costs of the services and products broadband and electronic networks an that they supply in order to evaluate increasingly important element of whether alternative provision (such as infrastructure provision. shared services) may be more efficient. To cope with these challenges, many cities Some cities may be more effective in are adopting an integrated approach to certain areas than others. They should seek their . Rather than planning opportunities to ‘’ with other cities – for the separate provision of transport and selling those services that they perform housing, for example, a more holistic view most efficiently and buying in those where it is being adopted that seeks to measure the makes financial sense to do so. combined impacts of different types of New forms of partnership are also critical. development. This integrated approach also Many city authorities are discovering the means that cities are looking to establish advantages of working with the private partnerships and new forms of sector to fund the provision of services collaboration that allow them to deliver and infrastructure in innovative ways. infrastructure requirements in new ways. Public-private partnerships to deliver Taken together, the demands on a city’s infrastructure are now a common feature of finances call for planning that sets out the many cities, and allow city governments to goals and tasks that the city wishes to share the risks of provision with partners achieve, and establishes how the funding from the private sector. and investment they require can be most effectively put in place. By consulting and The pressure on cities to operate more examining the experience of others, they efficiently and at the same time improve will be able to begin developing the their services to citizens is increasingly financial structures that will allow them to responded to by the adoption of techno- meet their present and future needs. logical solutions. Improving processes and workflows within the city administration Unique cities, common challenges itself is a key focus for many cities. Using Our conversations with city leaders from new technology to improve all over the world show that, while each communications and the flow of data within city has its own unique identity and an organisation is made possible through circumstances, they also face numerous the application of e-Government solutions common challenges and opportunities. that are connecting departments and cutting across the traditional boundaries to A wide range of skills and capabilities are allow more effective collaboration, resulting needed to respond to those challenges, in better for citizens. and we hope that this report will help city leaders and others to develop their own Financial capital responses and assist them in their efforts to Cities face a number of common financial ensure the prosperity of their own cities. challenges. Budgets are under intense

Executive summary 5 6 Cities of the future Chapter 1 The vision for cities

In this chapter we outline our approach to developing new perspectives on governance and management practices in global cities - the concept of ‘managing capitals.’

The vision for cities 7 Cities of the future - global competition, local leadership

New perspectives on the city bring together this wealth of knowledge and experience. This Cities of the future – global As the 21st century unfolds, and we move competition, local leadership document is ever faster towards global economic the network’s first publication. The aim of integration, the role of major cities, in the project is to identify the most important driving forward growth, prosperity and trends and challenges affecting major cities social wellbeing is changing significantly. across the globe. Cities today are dense networks of interchanging , information, Since the autumn of 2004 we have and people as well as centres of interviewed over 40 senior political () innovation and knowledge management. and managerial leaders (city managers) from a range of cities. This document aims There are approximately 400 cities in the to bring together the common issues and world each of which has more than 1 challenges facing these cities and share million citizens. The largest metropolitan how political leaders and managers area, , has 28 million citizens and interpret and respond to these issues, both City has over 20 million. today and in their planning for the future. According to the 2004 United Nations We have tried to link the insights we have HABITAT report, 60% of the world’s gained to the visions and strategies population will live in a city by 2030. required to help cities compete on both the Determining what is a big and what is a global and local stage. small city depends on where you are in We recognise that political leaders and the world. A city with 300,000 citizens is, city managers require a new approach to for some, a ‘big’ city, while for others it’s networks and arenas for dialogue with small. The question of scale is relative and citizens, companies and organisations so so, in our terminology, a city is simply one that strategic growth and development that has a significant impact on the can be achieved on a sustainable basis. economy and development of a nation. In order to find relevant ideas for city leaders, Fundamentally, we also need to ask what a we have explored the key issues facing city is. It’s a place to live, which means leaders of the future. We have developed the somewhere to grow, to develop and to concept of ‘managing capitals’, to examine enjoy. But it’s also a place to work, to and explain the wide range of economic, educate, to socialise and to relax. Our focus social, practical and managerial issues facing is, of course, on these aspects, but history global cities. The term “capital” refers to the teaches us that the of many range of strategic assets and resources old cities was motivated by fear and the within a city. These are: search for protection. All these trends influence the development of a modern city. Capital Focus Cities aim to provide a warm atmosphere, welcoming people to stay, enjoy themselves Intellectual People and knowledge and in doing so spend their money. At the and social capital resource same time social disunity, crime and poverty Democratic Transparency, cannot be ignored. These factors motivate capital participation and the ongoing struggle for the city that patnerships improves people’s lives and meets their Cultural and Values, behaviours needs in all areas of life. leisure and public capital expressions The cities of the future project Environmental Natural resources PwC has strong connections with cities and capital local governments around the world – from Technical capital Man-made capital, to , and from to infrastructure . In 2004 the ‘Cities and Local Government Network’ was established to Financial capital Money and assets

8 The vision for cities Of course, as figure 2 below illustrates, each of these capitals is inter-related, and must be managed in a holistic and integrated way to successfully grow and develop cities in a sustainable manner.

Intellectual and social capital

Environmental capital

Financial capital

Technical Culture and capital leisure capital

Democratic capital

Figure 2: Integrating capitals

This document begins with a chapter on money or and the business or strategic development and leadership, services they provide are the means by setting out the key challenges and which to generate profit. In a public sector opportunities for the future. We then organisation, e.g. a city authority, the goal examine each of the capitals in more depth, is to provide services and the means are presenting examples of good practice from provided by citizen’s . It is therefore the cities we have interviewed. important to take a multi-dimensional approach to understanding what value The basis for our approach is the and benefits customers and citizens difference between private and public derive from their ‘investment’ in public sector organisations. As figure 3 below services. shows, the goals in private companies are

Public sector Private sector

Business Money Goal Profit in service Profit in £, $ or € and benefits

Means Money Business Taxes, fees Service and benefits

Figure 3: Goals for public and private sector companies

The vision for cities 9 Cities of the future - global competition, local leadership

In order to clarify some of the major issues • To be a facilitator, and provider of new Strategic question: that cities face we have, throughout the arenas for a creative professional- document, posed a number of strategic public dialogue between city How does your city develop a new questions – see opposite for an example. government, business professionals integrated strategic approach across Their aim is to direct a city’s attention to and wider civic society; all its capital bases (resources) that key issues and to instigate a debate and will create a better, more sustainable exchange of information about the many • Create new content and new meaning and competitive city in the future? possible responses to the common for terms like innovation, intelligence, challenges to which such questions give transparency, trust, corporate rise. In our analysis and commentary, we governance and government; have drawn on our extensive experience as • Use the PwC City and Local advisers to many different cities all over the Government Network as a prototype world. We have also made sure that the designed to increase strategic social perceptions and insights of those in the ‘hot capital for city development and seat’ – the mayors and city managers that leadership, and to facilitate mutual are tasked with implementing strategies – learning between city leaders; and are central to this publication. • Highlight the importance of local and City and Local Government global connections between city Network – the long term vision leaders in the world. This publication is the first milestone in We hope that leaders in cities around the our work to take forward and develop the world will find this report interesting and global PwC Cities and Local Government valuable for their tasks and commitments Network. Our vision for the future is: in fulfilling the vision of developing their city as an even greater one in the future. “We need new perspectives on cities and their citizens, their dreams, knowledge, Acknowledgements creativity, and motivation in order to find new ways to develop strategic city We especially want to thank the following management. Therefore PwC will develop people for giving us energy and a new arena for dialogue with leaders in inspiration to try “to see around the cities as a tool for strategic development corner” in the area of strategic and knowledge sharing, resulting in added development and leadership relating to value for people in cities, organisations or challenges that cities face in the future: companies”. • Each of the interviewees who so Our goal is to: generously gave time and ideas to this project; • Create an informal and fellowship- based network among city leaders with • Leif Edvinsson, the world’s first Professor the motivation to develop new thoughts of Intellectual Capital, University of Lund. for cities; In 1998, Professor Edvinsson received the “The Global Brain of the Year” award • Build the next level of public trust into from Brain Trust in Great Britain for his cities of the future, together with research and development; and political leadership and professional management; • Robert and Janet Denhardt, Professors at University, Department • Help to create excellence in the cities, of Public Affairs in Phoenix, Arizona, and their services and businesses; USA.

10 The vision for cities 11 12 Cities of the future Chapter 2 The way to the future in cities

In this chapter we set out the importance of having a holistic view on how to approach the future. We think leadership is the key to managing all the capitals mentioned in Chapter 1. Effective leadership, and the use of social intelligence provide the solid base for the necessary vision and ideas to take cities forward.

CitiesThe way of theto the future future in cities 13 Cities of the future - global competition, local leadership

Navigating into the future the city? Finally there is route and speed: requires an open mind and how quickly and by which path will we reach our destination? To create a vision leadership and a dream takes time, but there is no A cynical attitude among some time to wait. The journey to the future has experienced leaders is that the future is already started. simply a recycling of old ideas and concepts under different and new names. The navigation process depends on how This philosophy and approach says that we consider our position today and what the future is behind us. There is nothing kind of approach we will use to reach our new to come, and no expectation of real future vision. Below are four different change in the future. approaches to navigating in relation to the surrounding world: Change is real and the demands of the future are pressing on us all. We need Inactive No interpretation of trends leaders with the vision and the dreams that will empower and inspire people. Reactive Responding to the Rapidly changing modern societies are agenda of others creating a need for strategic development Proactive Make detailed plans for that offers constant innovation and a renewal of processes and peoples’ the future and set trends attitudes. It is important that a city’s Interactive Shape and respond to leaders are able to see things in a new changing trends over time way. Strategic social analysis and intelligence involves learning from the past but, most importantly, understanding The leaders of tomorrow need the right the likely direction of the future. Social approach to the journey as they try to intelligence is an area of vital importance understand and adapt their course related to what we call city intelligence. according to trends forecast for the future. When conditions change, leaders must An intelligent community has to be able to respond immediately. Is it time to sail see what happens through time, that is against the wind for a while, but then analyse, reach conclusions and define its change again? During this process the present reality. They need to develop their leader needs to develop a “mental GPS” strengths and eliminate their weaknesses. based on intelligence gathered from a That is how we create visions, ideas, and wide variety of sources. Knowledge a strategy; and consequently how we navigation is one relevant term in this create and prepare for the future. It is context. essential that a has the power to implement all this. Some city This way of working is possible only if governments stay in the analytical phase there is a clear-cut appreciation of the and never move on to formulating and direction to take – which, in turn, requires implementing their visions and dreams. a strong vision linked to committed leadership and a well-managed Governments leading a city towards an organisation. To achieve this, leaders have uncertain future are like the navigators of a to analyse both from the outside in (global ship. The crew and passengers comprise trends and tendencies) and from the their citizens, employees and customers. In inside out (visions for the city and its this way, navigation is very similar to the organisation). leadership of a large organisation or a city. The first concern is strategic position, where are we right now? The next consideration is destination, where are we going? What are our visions or dreams for

14 The way to the future in cities Communication is vital to achieving a demanding citizens. Cities need to think common understanding of why social of their citizens as ‘consumers’, and Strategic questions: intelligence and analysis are so important. ensure that public services match the Some of the reasons for their importance standards of the very best in the private • In what areas is your city in a lead include: sector. position? (closer to the future) than your “competing” cities?; • Creating intellectual and practical Merging readiness for the future; Many areas of life are merging together in • Do you and your leadership group • Creating strategic advantage; new ways. This is happening within cities have an interactive approach to and nations (e.g. ); with strategic navigation, which means • Facilitating a creative discussion of the technologies like Hi-Tec, Bio-Tec and understanding what’s going on in interpretation of trends (opportunities medicine; between cultures and values; your environment, and trying to and threats); and between work and leisure; and between interpret what it will mean for the the public and private sectors in public • Helping leadership to explain the need private partnerships (PPP). Regionalisation organisation in the future?; for ongoing change in the organisation. is another practical implication of this process. • Has your city developed a strategic Mega trends affecting the tool for “city intelligence”?; and Acceleration strategic agenda in cities How much of your working time do Speed is increasing in all areas of life. This • A mega trend is one that affects the you spend thinking about the future? majority of areas of civil, business and is often driven by information and public life. It creates consequences communication technology (ICT) and the everywhere and for everyone, not least for search for growth. Citizens and customers cities. Some examples include: want on-line access to all public and private services, and the ‘democratic Globalisation / Glocalisation dialogue’ increasingly demands rapid exchange of information between The global economy is becoming truly government and citizens. integrated. Today’s simultaneous global and local focus creates a new framework Hi – Tech of ideas and opportunities. Global companies and economies work in local Technology is creating many new competition, within global structures. This possibilities in the public sector. Access to is sometimes called “Glocalisation”. When high-speed information has revolutionised a big company either arrives or leaves a global culture. Technology has city, it affects many areas of life for the implications for the delivery of all existing city and its citizens. New international services including administration, networks and cooperation between cities , healthcare, communication, can create significant strategic transportation and many more. In the advantages. At the same time we need to future we will also see more and more of consider the new anti-globalisation the science of robotics in the public movement. sector. Intelligent houses used in the care of the elderly are just one example. Individualism Hi – Touch Individualism has become an increasingly important social trend. We see it in In the modern society the “hardware” of marketing, with developments like “one- technology must go together with the to-one” and relationship marketing “software” of emotions, nostalgia, values, instead of strategies that focus on groups. and design, visions and Today we talk about the “I – generation”, dreams. The environmentally-friendly, which means people who are: safe, secure and aesthetic city is individualistic, informal, informed, imperative for modern civic pride. interactive and international. This Achieving this balance creates significant phenomenon has an important impact on challenges for city leaders in the future. the dialogue between the city and its

The way to the future in cities 15 Cities of the future - global competition, local leadership

Changing demographics harnessed. Often migrants bring a wealth The issue of an ageing population will have of skills to their new but often a major impact across the globe. The their qualifications and training are not United Nations HABITAT report shows that recognised by their destination country. the number of people aged 65 and older For example, they may not be eligible to will rise from 15% to 27% of the total work in their profession or sector without population in the developed world. In the re-training. As a consequence many high developing world it will rise from 6% to skilled workers often end up in low paid 14%. The highest birth rates are found in jobs in their new country. the developing world, arguably in those Whilst migration has an impact on least able to support their existing employment issues, it also has an impact population. By contrast, in many developed on issues of social cohesion and countries the birth rates have fallen inclusiveness. The global mobility of dramatically, and consequently there are labour and capital has been on-going for fewer economically active people. The many centuries but it has intensified over World Future Society reports that the recent decades. Global migration has workforce will shrink by 1% per year, over both positive and negative impacts on a the next ten years. From 2030 this is wide range of issues including social forecast to increase to 1.5% per annum. capital, identity and knowledge.

Urbanisation These global mega trends create both The United Nations HABITAT report 2004 opportunities and threats. This means that predicted that by 2030 around 60% of the the strategic agenda of tomorrow is a world’s population will live in a city. It is unique interpretation of these trends and also relevant today to talk about a trend their impact on the city in practical terms. called “metropolitanisation”. This term The issues are complex and changes refers to the growing influence of large happen rapidly. cities on the economic health and prosperity of wider and in some The following challenges will have a cases nations. As David Miller, of significant impact on cities: Toronto, expresses it: “When Toronto was • Ageing population causing increased sick the whole country caught a cold”. In financial burdens on health and that instance, the national economy of systems; shrunk by approximately 1% because of the SARS outbreak in Toronto. • Economic restructuring, increased and the end of ‘life- Strategic questions: Migration long’ working; Urbanisation is also linked to increased • What indicators do we look for in our • Disasters including natural global migration. Each and every one of research and analysis?; catastrophes, terrorism and epidemics the cities we spoke to cited increasing (HIV/ AIDS, Avian Flu); • What do we see around the corner?; migration as a major issue. There is no doubt that increased migration presents • Crime (not least economic), safety and • What do the trends mean for the major challenges around social cohesion, security; city/community as a whole?; and integration and employment. However, it also presents great opportunities as cities • Migration and immigration (people and • How do we develop a strategic city capitalise on “knowledge migration”. knowledge), segregation and poverty; compass (intelligence system) that One aspect of knowledge migration is the • Social cohesion and equality; helps us understand and act on expertise and experience that is lost when changes in the world, before it is too companies relocate or outsource parts of • and from both the local late? their business. Another factor to be considered is how knowledge and skills of and global perspective; immigrant communities can be

16 The way to the future in cities • Environmental management – pollution • Privatisation and outsourcing, including in all its forms, waste and lack of water; partnerships (PPP);

• Energy consumption and energy ; • Effective e-government and ‘24-hour’ citizen-focussed access; • Provision of good quality ; • Creating new arenas for dialogue • Connectivity – effective public transport between the city and its stakeholders; and electronic motorways; • New approaches in leadership and • Competition between cities and management – territorial or community regions, nationally and internationally – leadership. Leaders must provide a “city branding” and marketing; and vision and strategy for the whole community not just the administrative • Need for better dialogue between organisation; and citizens and city employees and the city leadership. • ‘ Entrepreneurial prototyping’ or the concept of piloting initiatives to test Examples of internal or organisational their effectiveness before making global trends with relevance to cities are: wholesale change.

• Financial pressures and the need for A good example of entrepreneurial new revenue streams; prototyping is the Swedish city of Gavel. In order to create growth and strategic • The need for new accounting models development in the city and in the , and greater transparency; the city has developed a model that • Creating confidence and building integrates the city and its public public trust through citizen companies, private companies, the engagement and dialogue; university, the non-profit sector and the citizens who all make a special • Improving performance and the contribution to the city and the region. delivery of efficient and effective The relationships are underpinned by services; shared values and attitudes, which are • Decentralisation with accountability; considered as important elements for success, as illustrated in figure 4 below.

Private University Renewal through sector Supporting role prototypes and attitude

City government

Facilitate Open dialogue Non-profit Enthusiasts associations Citizens

Figure 4: Values and attitudes underpinning successful relationships

The way to the future in cities 17 Cities of the future - global competition, local leadership

Summary of key challenges Financial capital Strategic questions: facing cities All cities face the pressure to do more with less, and to find new sources of • How do you facilitate creativity and From our conversations with city leaders revenue. Partnerships with the private innovation in your organisation and and managers we have been able to sector and outsourcing are becoming city?; and identify a number of common challenges more common, and cities need to find that cities are facing and responding to. ways to capture the risk-sharing and How does your city manage the These correspond to the management of • financial benefits that working with the the various types of capital analysed in issues of contemporary society and private sector can deliver. Cities are under this report and can be understood in the economy and how is it preparing pressure to be more transparent and to terms of: for the challenges to come? implement accounting models that Intellectual and social capital provide them with this ability. Cities everywhere recognise the Vision – the ticket to the future challenges in ensuring that they can The problem with good ideas and strong attract and foster the people, skills and vision is that realising them involves a lot capabilities they need to prosper in the of hard work. Leaders have to turn their knowledge economy. City administrations vision into reality. Actions are critical. need to become facilitators of change and Vision without action is meaningless. provide leadership. The municipality needs to provide the Democratic capital circumstances in which citizens and businesses can fulfil their potential. To create public trust and enhance their accountability, cities need to encourage Cities need both strong and interesting dialogue between citizens and leaders, vision and dreams for the future. These and to find new forums for collaboration need to be communicated to the citizens in between city leaders, city employees and order to inspire people with what cities can citizens. achieve, with them, in the future. So the “multi-mutual” benefits for strong visions in Cultural and leisure capital a city could be described as: Cities are competing at a regional, • Motivating people by giving hope and national and international level with one belief for the future; another to attract visitors, new residents and investment. They need to create and • Giving the organisation direction; maintain a distinctive and powerful brand. • Giving inspiration for new challenges; Environmental capital • Agreeing a common description of a Cities need to provide a clean, green and desirable future; and safe environment and deal with pollution in all its forms, manage waste and water • Providing a strategic position in resources. marketing, communicating and branding the city. Technical capital All cities face the problem of ensuring that We are entering a new paradigm of their infrastructure can support the rapidly society that requires new ways of thinking developing needs of their citizens and and acting. Futurist professor Rolf Jensen businesses in the city. Transport and from in identified a affordable housing are pressing issues in new type of emerging society that he calls many cities. Building appropriate the “Dream Society”. This society technological infrastructure, such as emphasises story telling, culture, values broadband, is also vital in terms of serving and ethos. In this society of the future a citizens more effectively and efficiently. city needs to emphasise its cultural heritage in order to distinguish itself from

18 The way to the future in cities other cities and to attract citizens. This How do leaders create the visions that will requires professional skills in involve new actors and people from communication and emotional different areas of society, with new intelligence. An intelligent city takes these agendas in new areas and new ways of factors into consideration by looking into working? its past for stories that will ‘touch citizens’ hearts’ and by engaging the ‘storytellers’ Leaders must have the courage to try new that will create culture and strengthen the ideas and to encourage robust dialogue sense of community spirit in the city. between politicians, administrators, Taking a diagrammatic approach to this companies, associations, and individuals. shows the history of this society gradually They need to create meeting places or developing as described below. arenas where those stakeholders can exchange their ideas. In researching this Type of Society Most important report, we have seen how many cities asset have organised those different stakeholders in order to create a vision for Hunter Wild animals their cities. Numerous cities place a strong emphasis on facilitating this Agriculture Animals & land creative process, as the examples Industrial Iron and steel overleaf illustrate. Information Data Knowledge Creativity & innovation Experience Vision & dreams

The same report describes the most important and fastest growing markets. These are very important for every city with a goal to become one of the cities of the future. The markets and driving forces are:

Market Driving force The markets of The experience adventure society The market of The tiredness of fellowship individualism The market for The ageing care population The who am I The identity crisis market among youth The market for The search for peace of mind happiness and health The market for The need to tell the conviction right stories

The way to the future in cities 19 Cities of the future - global competition, local leadership

City of – The blue and reduced the number of school leavers green city by improving the social standing of teachers and increasing their “City of Oslo towards 2020 is participation in school administration” simultaneously the environmental city, the cultural city and the knowledge – Planning for the city. The environmental city is about future maintaining City of Oslo’s "blue-green” distinctiveness arising from its “City Plan 2010 sets out Melbourne City proximity to both the fjord and the Council's vision for the next 10 years. forest. The knowledge city is about Leaders wish to see a thriving and taking advantage of and developing and the council is the lead we already have on the working with all its stakeholders to realise competition as one of the best- this vision and simultaneously pursue: educated people in . The • economic prosperity; cultural city points forward. Our aim is • social equity; and to become Europe’s cultural capital in 2011, and a grand development is • environmental quality. taking place in the form of cultural Melbourne has already made many institutions in the city ie the building of positive changes to the natural and a new Opera house." physical environment, to the City's Barcelona – City of knowledge culture, to the way it does business, and the way it values the community. “The vision of Barcelona in 2015 is that The Council has adopted a set of of a city characterised by the following: strategic directions to realise this An economy based on the vision. These directions are organised development of a value-added and around four themes: innovative culture depending on the growth of new industries: audiovisuals, • Connection and accessibility; design, etc. New uses of transport • Innovation and business vitality; based on the improvement of mobility. • Inclusiveness and engagement; and An education system that can guarantee proper training for our • Environmental responsibility.” human resources, having notably

From city intelligence to , Professor of regional economic intelligent cities development at Carnegie Mellon University in , recognises the rise of the Today, many cities have formulated creative class of scientists, engineers, strategies for transforming themselves architects, educators, writers, artists, and into a ‘knowledge´ or ‘creative’ city. These entertainers. The creative class is concepts are driven by rapid economic characterised by creativity, individuality, and societal change. In these modern diversity, and merit. Creative people have cities citizens’ knowledge, creativity and specific demands of a city. They want innovation are identified as the driving action and experience, a dynamic place force of wealth creation. Knowledge cities which offers them the opportunity to be value the quality and density of creative, the possibility of expressing educational and research excellence and themselves and the chance to develop as of redeveloping old industrial areas into individuals (Florida, 2002). Either called centres for knowledge workers. knowledge workers or the creative class, these are the people that the modern city Creative cities make an effort to provide the tries to attract: those that will contribute stimulation, diversity and richness of most to the city’s development. experiences for their citizens. Richard

20 The way to the future in cities An intelligent city is a work in progress An intelligent city needs to have that tries to connect the past, present-day sustainability factors like those that made Intelligent cities and future. The concept embraces many Ragusa one of the first intelligent cities in An example of an intelligent city is aspects of sustainable cities from history, history. the Republic of Ragusa identified by the current knowledge and creative Professor Stefan Dedijer, an innovator society, and an estimation of what lies Other qualities are also necessary. For the of social intelligence, as one of the ahead. Each city should learn from its Dream Society, one of the most important first intelligent cities in history. past and historical heritage. But lessons aspects for the future of city is meeting Though little known, the Republic of are available from other cities as well. places. An intelligent municipality needs to create the context where knowledge Ragusa, between the 14th and 19th Research has shown that the following workers can exchange their ideas and centuries, enjoyed an impact far factors have been decisive for the success engage their creativity. beyond its apparent size or power. of intelligent cities (Radovanovic, 2004): Ragusa was a city-state on the east An intelligent leadership also needs to coast of the Adriatic Sea that • Political stamina and government understand the extent of the stock of the sustained independence through five engagement; city’s most important resource; intellectual centuries despite being throughout its • Organised Intelligence and Security; capital. Mapping intellectual capital history an easy target for the great • The Spirit of Ragusa and cohesiveness enables a city leadership to allocate its expansionist powers including (see opposite); resources more effectively and manage Venice, and the Ottoman and them appropriately. A rating of intellectual Hapsburg empires. The city is • Diversity; capital is also likely to be used by interesting because it exemplified • Rich cultural life; international companies as an important sustainable development, skilfully tool for selecting an international leveraged from the city’s intellectual • Scientific environment and knowledge destination for investment. capital and organised municipal tradition; and intelligence. Ragusa had one of the • Favourable geographical position and Figure 5 shows some of the main first examples of organised municipal infrastructure for transport and characteristics of an intelligent city: intelligence in the world. All citizens communication. abroad served as the “eyes and ears” of the municipal government to collect strategic information that could be traded or used in contacts Knowledge economy The Dream and Informational Society Society with the great powers.

Factors: Factors: Factors: Knowledge Creativity Storytellers Human intellect Creative class Story/legend Innovation Creative milieu IC mapping Meeting place Real city Social intellect Virtual city Virtual/real

Knowledge Creative Intelligent City City City

RAGUSA • Municipal intelligence • Intelligent Leadership engaged with specific roles Organised intelligence • Mapping of IC Government engagement • Good story to create spirit and The spirit/homogeneity homogeneity • Networking arena and activities • Virtual/real city Source: Radovanovic, D. (2004)

Figure 5: Characteristics of an intelligent city

The way to the future in cities 21 Cities of the future - global competition, local leadership

Cities need to be oriented towards the implement numerous small initiatives. future; to sense and analyse what will be Therefore each city has to develop its important tomorrow. To find out what to USP (Unique Selling or Strategic Points). expect in the future they need to gather data that enables them to create In building a USP, cities bolster their scenarios and estimate future trends. chances of winning the competition to Every city needs an engaged leadership attract the people, businesses and events to motivate its citizens and create a spirit, that together will help to create a which sees everybody wishing to prosperous future. contribute, and feel both satisfied with The qualities, institutions and attitudes and part of that community. that can help to create a city’s USP Intelligent leadership should engage include: individuals that will have specific • Historical events – fundamental to the development roles, as the City of culture and story of the city; Barcelona did by assigning a special councillor to promote the ‘City of • Physical landmarks – buildings and Knowledge’ concept. All incumbents in architecture; these specialist roles should actively work on the networks that are essential for • Cultural institutions and sport teams, organised intelligence, creativity and the including events and exhibitions; development of intellectual capital. All city • Nature, environment and climate; sectors and arenas are as small “islands” of intelligence gathering information for • Demographic structure; their own purposes. The trick is to join them together and foster collaboration. So • Traditions and civic culture, attitude, it is time to go from city intelligence to spirit and mindset; intelligent cities. • Knowledge centres – universities;

Creating a corporate identity • Approach to the future – openness; and brand in the city • Approach to “different” people - The big cities of today and tomorrow inclusiveness; operate in a constant condition of competition. They compete for positioning • Global connections – networks and and attractiveness through strategic city diversity; branding. Michael Porter said the “strategy is playing a different game to • Interactivity – between the city and your competitors” In other words, every corporate society; city needs to find ways to be unique, and • Speed of communication – feedback to develop an interesting profile that puts between leadership in the city it in pole position. It needs to stand out organisation and citizens; from the crowd to maximise the attention it receives. To do this it needs to create • Adaptability – degree of innovation and values that set it apart from its development; and competitors. • Attractiveness to people, companies This requires strategic thinking on all and money (not least venture capital). levels and in all dimensions. The well- known military leader General Von We have observed a growing trend Klausewitz defined strategy as the “art of amongst cities to opt for a brand or image knowing how to win a war and tactics as which emphasises quality of life – clean, the way of organising the divisions and green, safe and peaceful environments – troops in a battle”. Cities need to have not normally associated with the bustling visions and dreams before they try to .

22 The way to the future in cities Cities of the future need The leadership process Strategic question: leaders of the future The elements that are particularly In our experience it is people that make important in the leadership process are: • What are the components of your city brand (strategic assets) and the difference. So it follows that the cities • Confidence and integrity; of the future need the leaders of the what makes you different from • True communication and open future. other cities? dialogue; The number-one task for today’s and • Relations built upon trust and empathy; tomorrow’s leaders is to “put people first”. This is done by developing a leadership • Personal and professional authority; style that addresses the needs of both and city employees and citizens, making both • Fellowship (helping each other). groups happy by fulfilling their personal dreams and visions for the city. City Creative leaders with a passion for their leaders therefore have one of the future’s task offer a bright future. Successful most important roles. They have the mayors, city managers and other top opportunity to create growth and leaders in cities integrate both strategic development for the broadest number of management (direction) and leadership organisations, businesses and individuals (relationship) to provide the framework for with a stake in the future. success and the means to achieving it.

The word leadership, which has its origin Good leaders inspire and empower the in “leading” and synonymous with “guide people around them by creating and and standard – bearer”, speaks for itself. developing an energising culture. The Other definitions of leadership can be: paradigm of the future requires leaders that can show leadership in a number of • “An ability to realise an intention or different ways. vision and to retain it, to turn that which was just an idea into reality”; These include:

• “A creative and open process creating • Intellectually – thinking in new and a life-giving servant relationship better ways in order to challenge the between people, while fulfilling a organisation around them; personal vision”; and • Professionally – understanding the balance between needs and resources • “To energise the people”. in the public sector; The interesting paradox with leadership is • Socially – exemplifying how to build, the relationship between leading and establish and maintain good following: relationships (culture) in working • If no one is leading, no one can follow; groups and networks; and • Emotionally – having the ability to empathise with people’s feelings in a • If no one is following, no one is leading. constructive way; and These two statements underline that • Culturally – having the sensitivity to leadership is relationship based. create cities for all cultures that exist in harmony.

The way to the future in cities 23 Cities of the future - global competition, local leadership

Chief/Decision maker

Integrated and personal Model/ Re-establisher/ leadership Standard- Limit settler bearer - adapted to the situation

Servant/Coach

Figure 6: Leadership roles

How do these leaders reach these heights? Cultural development What does it require from them in their own development? Using the experiences A leader creates and affects the culture in gleaned from PwC's leadership the organisation. One of the most development program for city managers, important roles for leaders is to create a called “Leaders of the Future”, we see a manageable, creative and positive culture. pattern, which is illustrated in figure 6 above. Good leaders have the capacity to But how do leaders get the most out of integrate different roles and attitudes in their their employers? Mr. Frank Fairbanks the leadership. At the same time they have an city manager of Phoenix, Arizona states, ongoing dialogue with the people they are “Our task as leaders is to acknowledge leading based upon trust. This enables the peaks of our people’s working lives”. City of Phoenix – Vision & them to make decisions regarding future Which provides a good example of how a Values directions in the short and long term. Also leader creates a positive culture. to set limits when needed, even when there • We are dedicated to serving our is a risk of being unpopular. Leaders need to look beyond their own customers; organisation, and learn from the The challenge is “simply” to apply the experience of others. Many leaders focus • We value and respect diversity; right attitude to a unique situation or to a on the importance of explaining the unique person. existing corporate culture to new people. • We work as a team; This is of course important, but not To personalise this type of leadership enough. Leaders need to find a balance • We each do all we can; requires managing oneself, and a good between maintaining the existing culture understanding of your personal leadership • We learn, change and improve; and encouraging new thoughts, which style; including the way you learn, communi- means accepting renewal. • We focus on results; cate, manage conflict and lead others. The most important task for city leaders is The most evident trend in leadership is • We work with integrity; and to understand and integrate the internal organisational development or what’s and external perspective offered by social • We make Phoenix better. called value-based leadership. The city of intelligence into their vision for the future, Phoenix in USA has a series of value and to create ‘opportunity space' for This requires a deep understanding statements as the base for how the citizens and employees to innovate. of existing and desirable cultures in corporate leadership and all employees the organisation. should think and act in their daily work (see opposite).

24 The way to the future in cities Conclusion Leadership – An example Strategic questions: Effective leadership is critical for the • How do you implement your successful and sustainable development from Sweden. personal leadership in relation to of our cities. Leaders need to set a clear In one of the biggest in yourself and the organisation?; vision for the future and steer their Sweden, PwC was asked to analyse and organisations and communities towards sickness rate and reasons for that vision and those goals. They must • Do you have a big difference absences from work in the forecast and interpret trends, and create between the existing and desired organisation. The results were very opportunities for growth and culture in your organisation? clear. In the departments with development. Similarly, they must respond leaders who care, see and listen to to the global, national and local the people, the sickness rate was challenges to sustain a high quality of life considerably lower. Another key for their citizens. Leaders have a key role factor in creating a healthy to play in developing the strong brand and department was the opportunity for rich cultural scene, which can elevate everyone to have influence over their cities on to the global stage. work.

The way to the future in cities 25 26 Cities of the future Chapter 3 Managing capitals

This chapter of our report sets out some of the key challenges that city governments face in anticipating and responding to the needs and demands of their communities. To be able to address these challenges, city governments need to operate as efficiently and effectively as possible, embracing modern management practices and promoting a culture that secures excellence in all areas of activity while continuously seeking to improve.

Managing capitals 27 Cities of the future - global competition, local leadership

Introduction ensure that employees have the right skills to manage new programmes and City governments are complex organisations new ways of delivering services. Without that have to meet the needs of a great many these, people employed by the city different, and sometimes competing, become a “wasting asset”, with dire stakeholders. To achieve their goals, they consequences for city services. have to develop and adapt new organisational models and incorporate new Efficiency: Human resource (HR) processes information and communications need to be efficient, both in terms of costs technologies to help them manage change and responsiveness. Line managers need effectively. To become high-performing to take direct responsibility for people organisations, city governments must management, with central HR providing a develop – and in some cases transform – strategic and advisory role. Cities have to their capabilities in line with the dynamic be responsive to change, and this means global environment in which they operate. that they must have swift and efficient recruitment processes and they also need Just how successful city governments are to have the right redeployment / in meeting these challenges is largely processes. People management - dependent on how competent they are in Customisation: It is necessary to have HR Hull , UK managing internally three capitals in particular: policies and processes in place for different groups of staff. Four possible Background: As part of its broader • People; programme of improvement Hull City approaches to people management are • Property; and Council required a review of the skills and set out in figure 7 below. competencies across its workforce, • Processes. There may be a case for managing groups including all grades of staff and all service of workers as being in any of the 'People areas. The aim of this review was to enable People as a ', ‘People as an asset', the Council to improve its approaches to Without the services of motivated, skilled and 'Caring Employer' quadrants. workforce development. Part of our work and well-managed people, city However, inappropriate approaches to included a review of approaches to governments will flounder regardless of people management can lead to people workforce development in other local the quality of their vision and ambitions. drifting to the 'Low interest' quadrant – authorities to identify best practice and Good practice in people management falls the one quadrant that can never be conduct a formal bench-marking exercise into three key areas: effective and sustainable. using quantitative data. What we did: We carried out a Investment: people require careful The case study opposite shows how we comprehensive review of skills and management and significant investment in helped the government of a large city in competencies across the Council and training and development. Cities need to the UK to develop its workforce. local government more widely, using a range of research tools. We then made a number of recommendations to help High People as a commodity People as an asset improve skill and competency levels within the Council. Following our report we were Job not a career A career for good people invited back to develop a competency Performance at all costs Business and people framework for the Council in which we development aligned consulted widely with employees across the Council. Low interest Caring employer Outcome: We are in the process Just a job A job for life implementing our Competency Frame- Performance focus work in three pilot sites across the Council Low job satisfaction Seniority over performance in areas including Performance Low High Management and Recruitment. Our wider People focus recommendations are also being implemented as part of the Council’s Figure 7: Approaches to people management recovery programme.

28 Managing capitals Property • Strong business processes including supply chain management, customer Case study - UK Municipal Land and buildings are arguably the most relationship management, financial Authority visible and identifiable aspect of front-line management, performance services and a major influence on how management, data management, Over recent years this authority has city governments are perceived. They programme management and risk taken a stepped approach to improving provide the facilities for conducting management; and its buildings. This has included: business and are essential for supporting • Sourcing the right expertise and • Reorganising corporate governance the technology, business processes and capacity to deal with both the strategic arrangements to create a senior- cultural change required to raise a city and day-to-day management. officer steering group responsible for government’s performance. property assets and investment They are also inextricably linked with city Processes strategy; regeneration. City governments need efficient and • Outsourcing property services to the Poor property asset management means: effective processes in place to secure an private sector; appropriate return on their investment in • Challenging the rationale of • Significant wasted resources – annual people and property. There are a number continuing to own property, resulting investment and expenditure on of particular areas where city in a significant disposal programme; property is a significant cost for city governments should aim to have in place and governments where land prices are “best-in-class” processes to get the most • A property improvement programme relatively high; out of their assets and to drive and linked to community regeneration, • Non-compliance with buildings and support a culture of continuous which includes bringing many services workplace statutory and regulatory improvement: together under one roof and investing codes such as health and safety; • Programme and project management in modern office workspace that (PPM); supports new ways of working. • Disruption to service delivery if the • Performance management; physical infrastructure fails or does not support business processes; and • Procurement; • Risk management; and • Staff dissatisfaction leading to • Reputation and brand management. problems with staff retention and recruitment.

Good property asset management and planning in city government cuts across departmental, administrative and geographic boundaries. It includes: • Strong governance for corporate property asset management, including the active involvement of senior officers and elected members; • A corporate asset strategy that responds to the property implications of the corporate vision and sets out a co-ordinated medium to long term investment, divestment and management plan; • Regular challenge of property needs and options for meeting future requirements together with a transparent framework for prioritising projects;

Managing capitals 29 Cities of the future - global competition, local leadership

Programme and project Professional skills in urban and Programme management - management (PPM) metropolitan issues, more efficient use of of resources and more transparency in A recent global study by PwC shows that Islington management practices are essential for the balance between service delivery improving the living conditions in big cities (operations) and projects within One city authority that has benefited in the next few years.” But even where a organisations (whether public or private from an investment in programme clear vision and strategy is in place the sector) is shifting over time. The pressure management is the London Borough two are often disconnected. The path that to deliver change, to be seen to be of Islington. Through the challenges should ensure each and every project responsive to increasingly sophisticated of the UK government initiatives, contributes to realising the objectives and customer demands, to be proactive and Comprehensive Performance benefits outlined in the strategy is unclear. flexible is shifting the balance towards Assessment (CPA), Best Value and more project-based working. Good programme management addresses ambitious policy initiatives, the this by providing a structured framework London Borough of Islington faced In many instances city government has for defining and implementing change the biggest change agenda in its lagged behind the private sector and within the organisation. A corporate recent history. some central government bodies in programme office, used in conjunction responding to this change of emphasis. In response Islington generated a with other activities such as training and Capacity, in terms of the skills required to large number of initiatives or the introduction of controls and deliver projects, is often inadequate as is projects, embedded within the supporting systems, is one of the most the senior management capacity to plan, Council’s Improvement Plan and in effective methods of embedding PPM in steer and lead across large portfolios of its “Big Projects” programme. PwC the organisation. Through our extensive projects. The centrality of this ability is supported them in the establishment experience of setting up, running and emphasised by Martus Tavares, Secretary of a corporate programme office that supporting programme management for Economy and Planning of the State of worked at the heart of the systems in city government we have when he says “Without a vision programme to ensure accurate developed a model that demonstrates of the future and a focus on long-term management information was how a corporate programme office can be planning, we will not be able to make best provided to the right individuals to used to monitor and support effective use of the scarce resources available. make the right decisions to steer, PPM within the organisation. manage issues and address risks. The programme office was able to offer challenge and support to project teams, sponsors and senior management to ensure that issues were dealt with and that the overall understanding, skills and therefore capacity were being developed across the Council. Project management tools, templates and training were also developed to underpin these behavioural developments.

Islington’s Corporate programme Office is seen as a best-practice example that has supported the London Borough of Islington to improve their performance and CPA rating.

30 Managing capitals Performance management Successful performance management requires: Performance management - Effective performance management lies at NYC the heart of all good councils and • Clear, well communicated and well underpins the delivery of improved local understood priorities to set common One of the most successful examples services. If you don’t know how good or goals for all to work to; of performance management systems bad you are, you can’t identify the scope • Alignment of human, financial and seen in the public sector is Comstat, for improvement. The changing climate of physical resources to those priorities; a data-driven approach to measuring municipal government means that the crime and police performance in • A focused set of performance management of performance now requires tackling it. Comstat’s use in New York indicators, and realistic but challenging a more sophisticated approach – one that has been seen as a vital element of targets to motivate staff to deliver looks to measure outcomes rather than the substantial reduction in crime that improvements; inputs, and one that is readily has transformed New York from a communicated to all. • Clear accountability and responsibility; major crime centre to one of America’s safest cities. • Regular review of performance; and • Clear actions to improve performance Comstat was introduced to New York where needed. by Commissioner William Bratton in 1994. The system records every Figure 8 below describes a framework of instance of crime, from low-level to performance management that draws serious, in every police and together these key elements into a cycle once a week the heads of each of continuous service improvement. precinct are asked to explain their performance in front of their fellow senior officers. When it was first introduced, Comstat met with significant resistance from some officers, but has now gained wide acceptance as a powerful tool for Strategy and measuring and improving objectives performance. Comstat’s success in New York has been replicated by Take Indicators action forces throughout the . What do we and targets want to achieve? How will we know when we have achieved it? Evaluate What are we going to do to performance achieve it? Roles and and responsibilities sustainability How do we improve our performance?

Progress Embed tracking processes

Figure 8: Framework for Performance Management

Managing capitals 31 Cities of the future - global competition, local leadership

Procurement Attitudes and culture – perception of Procurement - London procurers of the role of the supply base Effective procurement is one of the Borough of Southwark hallmarks of all successful organisations. Entry and exit barriers – costs of A good example of a city authority entry/exit, understanding cost profile, A simple, yet comprehensive, approach is adopting this kind of approach is the fixed costs etc, turnover of suppliers London Borough of Southwark. shown in Figure 9 below Short term versus long term contracts – Within this methodology is the implicit We supported the Council by: reflecting certainty of requirement and need to understand the market conditions level of demand. Impact of R&D. • Writing and developing the reflecting the fact that achieving effective Council’s draft Procurement deals is dependent upon a number of ‘Best Value’ deals is not simply about Strategy; issues that impact at the market level. securing the deals with the lowest unit These issues include: • Assisting in the drafting and cost and assuming people will use them. In any purchaser/supplier relationship developing of the Council’s Procurement policy and practice – attitude there is a need to strike the right balance procurement guidance; and and process adopted by procurers between buyers; and sellers’ motivations. • Assisting in the review of the Efficiency versus diversity – Appropriate In applying contracts it is critical to procurement related sections of level of aggregation, optimising economies understand the relative importance of the Council’s standing orders and minimising diseconomies, diversity of supply influences upon the purchaser and how recommending improvements to base, choice, standardisation, replication these can be balanced with the influences allow them to conform with good upon the supplier. practice Regulation – flexibility of response, level We then undertook a full-scale review of administrative/bureaucratic burden to identify quick wins to release cash to the frontline, this included identifying and benchmarking key Phase III Driving contract adoption categories and identifying Phase I Identify and quantify Procurement infrastructure the savings opportunity opportunities to use reverse auction  Alignment of people, Procurement analyser technology to drive savings. PwC processes and money provided project management organisation e  th Extract and support throughout the project. PwC  Identification and p I. categorise spend e F e  implementation of in Analyse by has a team of procurement specialists K performance d . business, supplier, with the experience to undertake a I measures I t I h category, location review of processes in this area and  Ensuring e etc. identify substantial cost savings. appropriate m  Establish the true

technology o

n weight of buying

e power y Phase II Getting the II contracts right . G in the first place e t the money Strategic sourcing  Identify potential suppliers  Understand market opportunities  Analyse and understand business requirements  Negotiate preferential deals

Figure 9: The procurement cycle

32 Managing capitals Risk management when deployed independently and in isolation of other key organisational In dealing with the change agendas facing functions, are quite simply less effective cities today, effective management of risk than they could or should be. can help cities demonstrate customer service excellence and compliance with A fully-integrated approach helps to form central government guidelines, whilst at the an ethical and operational backbone, and same time achieving wider city objectives. ensures better horizon scanning of emerging risks, proper probity of risks In the past, risk management, with partners and contractors and full organisational governance and compliance assessment of risks to the public. The have generally been viewed and managed framework for risk integrates risk, as discrete areas. However, this approach governance and compliance with controls, often results in accountability and standards and legislation and is illustrated communication gaps, as well as confusion. in figure 10 below: City-wide risk management approaches

Emerging standards

E a m y nd e og n rg Setting objectives, tone, re l e in o w tu n g policies, risk appetite and l h r s u c e t accountabilities. c te q a u n Monitoring performance. g d Governance i d n r i n e a l Identifying and assessing a m r b d risks that may affect the s a e s

s n n ability to achieve e t E Enterprise

s c objectives and

o risk management r determining risk response

P strategies and control activities.

Compliance Operating in accordance with objectives and ensuring adherence with laws and regulations, internal Extended enterprise policies and value chain and procedures, and stakeholder commitment.

Ethical culture

Figure 10: Risk management

In short, what this means is that risk management is most effective when combined with a range of organisational governance and compliance activities, and linked to the achievement of performance objectives.

Managing capitals 33 Cities of the future - global competition, local leadership

Reputation and brand management Reputation is an asset with a value which can rise and fall. It consists of two principal ingredients: a city government’s actual performance; and stakeholders’ perceptions of it (the latter being more powerful). Sound reputation management, therefore, focuses on improving both performance and the city government’s relationships with its key stakeholders (see figure 11 below).

Reputational management Policy development and performance improvement

Outcome

Communications and stakeholder engagement - Reception +

Start

- Reality +

Figure 11: Reputation Management

The product of good reputation to greater scrutiny and regulation, and management is trust – there is little tolerance of mistakes – or the public sector equivalent of shareholder even of good cities “coasting”. Individual value. Once earned, this serves as a citizens are empowered, active often on reservoir of goodwill and understanding, single issues, and now demand evidence which can be drawn on in a crisis. before believing. Funded through , municipal authorities operate in an arena Brand is the experience employees and which rapidly becomes emotionally customers get from an organisation, and charged. In short, they need a “licence to the associations it evokes. Brand is the operate” from the public. city government’s persona, and a positive brand means the government lives by a City government communications budgets set of values of which residents approve. are increasing, as city leaders buy into these arguments. The stakes in the reputation game have recently risen steeply. Municipal A good reputation can be created and authorities, as an example, now have built, not just defended. Managing greater freedoms and a higher profile in reputation divides between promotional their community; but they are also subject and protective work. The promotional

34 Managing capitals aspect is linked to the city government’s • Supported by a tested plan for crises. desire for self-improvement. Case study - It needs to be seen as a process, not an Mistakes to avoid in city reputation I AMsterdam – Building a brand event. This balance between these management include: aspects is analogous to the balance ‘I AMsterdam’ is the motto that the • Regarding reputation (or between proactive and reactive city has created to express its vision communications or PR) as a superficial, communications. of the city and its people. The city cosmetic, short-term or tactical activity; has developed a branding strategy City authorities will know of the mounting • Allowing words or claims to get ahead that puts people at its centre and research evidence that there are of reality – creating mismatch which emphasizes the attractions of demonstrable links between residents undermines the city’s credibility; Amsterdam as a place to live, to feeling well informed by their city work, to invest and visit. government, and higher levels of • Allowing gaps to develop between customer satisfaction. The principal stakeholder expectation, and actual The campaign seeks to bring out the drivers of positive perceptions among performance; and diversity and innovation of residents are street-scene services which Amsterdam’s people and stress how they can see; good communication and • Failing to identify key stakeholders, and these qualities manifest themselves in explanation; and whether they feel the thus failing to communicate with them. the creative, intellectual and cultural authority delivers value for money. outputs readily associated with the “A reputation arrives on foot, but leaves city, as well as the technical prowess Good practice in City authority reputation by racehorse.” (Chris Cramer, CNN) that the city demonstrates in its management requires it to be: infrastructural innovations – such as City’s should be mindful that just one the way that it handles its water and incident, or the actions of one employee, • Led by real behaviour and actual its status as a centre for hi- can undo years of effort spent carefully performance, part of ’DNA’, not by technology and research. words and claims; building a good reputation. The campaign uses the people of • Within a framework of communications Amsterdam in the role of and risk management strategies; ‘I AMbassadors’ to personalise the • Supported by informed staff acting as city’s promotion and connect visitors “ambassadors”; to the experience of real citizens, living, working and playing in the city. • Long-term, strategic in outlook, and sponsored by top management; Why 'I AMsterdam'?

• Based on an understanding of who Preliminary research indicated that stakeholders are and the best channels the motto, now registered as a for engaging with them; trademark, was an eye-catching and memorable theme that emphasised • Meaningful consultation with feedback Amsterdam’s strengths. The brand leading to action; and now supports a global campaign and is used across the city’s promotional activities and with a number of partners from businesses, cultural organisations and others seeking to promote the city.

Managing capitals 35

Cities of the future Chapter 4 Capitals, the key issues

In this chapter we examine each of the capitals in more detail. Exploring the key issues that city leaders and managers need to address, including; 4.1 Intellectual and Social capital 4.2 Democratic capital 4.3 Cultural and leisure capital 4.4 Environmental capital 4.5 Technical capital 4.6 Financial capital

Capitals, the key issues 37 4.1 Intellectual and social capital

Introduction This section brings together the elements that, taken together, create and influence a Cities are engaged in a global competition city’s stock of intellectual capital, including: for investment. The calibre, educational achievement and the creativity of their • Human capital; citizens are therefore vital in each city’s • Social capital; efforts to attract new businesses and • Organisational capital; people to fuel their prosperity. • Process capital; and Mrs Monica Mæland of the City of • Innovation capital. Bergen, , identifies this phenomenon as a global trend and says: What is intellectual capital? “Globalisation and increased international A city’s intellectual capital is a combination mobility in higher education create of its human and organisational capitals. In challenges to the city’s ability to attract the knowledge economy, human capital and keep talented and highly qualified represents one of the most important young people, and to secure the high sources of value. It provides knowledge, levels of expertise which make the city an creativity and the ability to innovate. attractive place for commercial Organisational capital refers to all non- development.” human stocks of knowledge embedded in This section of our report examines the hardware, software, databases and the factors that influence a city’s stock of concepts and values, organisational intellectual capital, some of the challenges structures and guiding principles of that cities face in managing and maximising organisations or companies that support it and the strategies that various cities have people’s everyday work (Bonfour & adopted to meet those challenges. Edvinsson, 2005). A number of different factors influence a Mapping and measuring intellectual city’s ability to grow and nurture its capital provides valuable information capabilities. These include, amongst about the skills and resources available others, welfare provision, the creation of within both government organisations and formal and informal networks to exchange the general population. With this knowledge and ideas, knowledge information, governments are better management, policies to help immigrants placed to take strategic decisions about to integrate as well as encouraging their use of resources and to plan the voluntary initiatives. economic growth of their city.

Intellectual capital

Human Organisational capital capital

Social Innovation Process capital capital capital

Source: IC – Navigator – Leif Edvinsson modified by Dragana Radovanovic (2005)

Figure 12: Components of intellectual capital

38 Capitals, the key issues To illustrate the factors, which contribute cluster in the health industry. Recognising to the development of intellectual capital, these strengths helps drive the strategy we have drawn on the IC Navigator-model for economic growth and attract developed by Professor Leif Edvinsson of investment to the city. Intellectual Capital at Lund University, as illustrated in figure 12. Most private and public organisations do not measure the real value of their The lower tier of the model shows three intellectual capital. They traditionally think different types of capital each of which of assets in terms of financial reserves or supports the development of human and tangible such as buildings organisational capital including: and IT hardware. Moreover, budget restraints in many organisations, Strategic questions: Social capital comprising both formal and especially in the public sector, have led to informal social networks including the poor levels of investment in intangible Has your city understood, measured interaction among citizens and social assets such as knowledge, research and and mapped its intellectual capital? Do connectivity. development, learning and alliances and you invest in right skills and knowledge networks for social innovation. of your citizens? Process capital involving both human and organisational capital. It is process capital However, an increasing number of not-for- that makes the most of the investment profit organisations, cities and countries made in social capital. are working on mapping and measuring their intellectual capital. The first country Innovation capital refers to how the city to apply the intellectual capital paradigm renews and adapts its human and on a national level was Sweden in 1996 organisational capital to the demands of followed by , , Denmark, the rapidly changing global economic Norway, and some Middle Eastern environment. countries. Other countries, such as The nature of the interaction between Australia, Canada, and these three capitals will determine the have also begun measuring intellectual strength and extent of human and capital. The results of their efforts and the organisational capital present in any lessons learned will be of great value to organisation or city, which in turn will modern cities across the globe (Bonfour & determine the overall level of intellectual Edvinsson 2005). capital. Human capital Intellectual capital has a significant impact on the productivity and competitiveness In an interview conducted for this report, Mayor Nakada of the city of Yokohama of cities and regions, and nations as a Strategic questions: whole. Cities explicitly recognise this, and remarked that one of the most important issues facing cities today is “to realise a have developed policies that are designed Who do you wish to attract to your society which makes the most of its to improve their competitive position, city? What do those people look for in citizens’ potential”. This is a view that is such as Valencia’s which aims to “foster a city? the creation of companies in the sectors echoed by the other city leaders and closest to the knowledge economy and to officials we interviewed for this report. provide opportunities to all in order to There is little doubt that one of the main access information and knowledge responsibilities for governments is to technologies.” invest in people's skills and competencies in order to nourish the human capital of ’s aim is to position the city in the city. A city, after all, is made up of the growth markets of the future. To do this people who live and work in it. city managers have identified a critical In our model of intellectual capital, human mass of core competencies in the sectors capital refers to staff within public sector of information technology, communication organisations, as well as citizens and technology and media, as well as medical customers. It is important for any city to systems, traffic engineering and optical understand and map its knowledge and systems. Berlin also has an outstanding competencies.

Capitals, the key issues 39 Cities of the future - global competition, local leadership

Cities need to attract creative talent to live watch); and in the city and to work in public sector • Physical and mental health (i.e. through organisations and the local economy. It is sport and volunteering). important that governments create relationships with citizens and potential One of the most prominent experts in citizens in order to attract the optimum social capital, Professor Robert D. spread of skills across the population. Putnam, defines the idea of social capital as social networks and the associated The evolution of the knowledge economy norms of reciprocity that create value for and the focus on human capital and people who are involved in them. Putnam intellectual capabilities demands a greater identifies formal and informal forms of understanding of a city’s ‘softer’ assets. It is social capital. Examples of formal social of course more difficult to measure an capital include societies, clubs and intangible asset such as intellectual capital. special interest organisations that have The evidence suggests that most cities do formal membership structures. Informal not record or measure it. What is evident, social capital refers to social gatherings at however, from our conversations with city restaurants and bars, for example. Both leaders, is the increasing competition forms of social capital involve networks between cities to attract skilled, offering people the possibility of entrepreneurial people to live and work in interaction, to understand each others’ their cities. For example in , needs and to help each other and their Australia, the city council has set out a communities in general. number of initiatives aimed to make the city itself an ‘employer of choice’, and in a Research shows that a low crime rate in a similar vein, the CEO of the city of , neighbourhood is connected with how Frank Edwards says: “The war for talent is many neighbours are on first-name terms a challenge for most businesses, including with each other. Social networks bring the city of Perth itself.” great value for the people directly involved An essential task for cities, therefore, is to and for society in general. For instance, understand what it is that makes them although an individual is not part of the attractive to the right people and how to network, by living in a neighbourhood with ensure that those qualities are maintained. high social capital where people look after each other, he or she feels safe in the Social capital neighbourhood, i.e. their home has been protected by the social capital of the Social capital builds up when people interact community (Putnam R, 2005). within social networks. Social networks in turn provide substantial assets both for Social capital is critical for understanding individuals and for communities. For the development of a city or a region. This instance, using networks for sharing both capital increases efficiency through trust personal and municipal intelligence is one of and honesty, and it encourages better the most effective ways of keeping up with performance as well as encouraging people changing times. Further, it is generally known to honour commitments voluntarily. These that the communities we live in can affect factors can reduce transaction costs our productivity and quality of life. In associated with monitoring, negotiating, environments where social capital is high, litigating and enforcing formal agreements citizens feel safe and well looked after and but they are totally dependent on the social view government as being more effective. capital of the workforce and citizens.

There is a strong correlation between high The welfare challenge and social levels of social capital and positive connectivity experiences of: Levels of voluntary participation in • Education and employment; community activities and in local democracy • Housing, transport and ; have fallen in many modern cities. In general people view themselves as customers much • Crime and community safety (i.e. more than shapers of society, a view

40 Capitals, the key issues echoed by the Chief Executive of Brisbane the issues facing city governments. In City Council, Jude Munro: “The city of , high mortality rates, due to HIV/ Brisbane is also experiencing a growing AIDS, are one of the main issues for many inwardness which manifests itself in metropolitan authorities. ”The Municipality decreased levels of volunteerism and social has identified the scourge of HIV/AIDS as concern for others, along with a greater a primary business imperative,” notes focus on self and family.” Duma Nkosi, Executive Mayor of Ekurhuleni Metropolitan Municipality. In many cities the level of social capital amongst citizens is decreasing. The Fundamental structural changes to the citizens’ philanthropic generosity and social global economy and labour markets have connectivity is lower today than in the past. altered the employment base in many Many authors argue that this trend must be cities, often leading to problems with high reversed in order to create and sustain a levels of unemployment. For example, the good quality of life. David Pitchford, Chief Financial Clerk of , Josef Melbourne’s Chief Executive, warns: “A Kramhöller, notes the impact of new major challenge for any city is to maintain political and economic realities in Europe social equity and avoid a polarised society. as having a particular effect in Vienna Decreased interaction among a city’s “Due to different cost levels between population can increase social problems and the new member states, and divide its community.” outsourcing and relocation will increasingly take place. This is especially Over the next two decades the number of likely with migration of multinational economically active people – in other words enterprises to cheaper Eastern European those paying tax – will decrease. At the locations and is a key issue.” same time, the number of people depending on public welfare will increase, There is increasing competition between which means many governments will not be cities to attract high-value, high- able to meet the costs of traditional welfare businesses in services such as research services without raising taxes significantly. and design, new technologies, financial and media industries. At the same time, Using social capital as an instrument to many cities have seen their traditional tackle socio-economic problems is nothing manufacturing base eroded and with it new for city governments. The City Manager many skilled jobs, only for them to be of , Sweden, is considering using replaced by low-paid service jobs. volunteers to provide community and welfare services. This is already common These problems in themselves are nothing practice in Milan, , where volunteers new. City leaders, therefore, must deliver 25% of welfare services. constantly look for new ways to sustain economic development and growth. “Poverty in the areas surrounding the city Social capital offers one way of means that there is a trend to urban addressing these challenges. migration and this movement of poor people from outlying areas into the city Building social capital places a strain on the city’s ability to manage it,” says Ms. Vuyo Zituman, In order to stimulate citizens to create Acting Municipal Manager of Nelson informal types of social capital, city Mandela Metropolitan Municipality. governments need to provide a variety of Poverty is a fact in many big cities in the meeting places for citizens and government world. Urbanisation and concentration of staff. Meeting places can be real, for the people in to the cities only makes the example city-centre entertainment zones or situation more difficult. cultural quarters or virtual, for example web- based forums, and community websites. Improving is a significant welfare challenge. Significant increases in Increasing investment in social capital, the risk of epidemics, ageing populations especially in poorer or more deprived and increased problems due to work , can lead to improvements related stress and burnout are some of in the overall quality of life. Engaging with

Capitals, the key issues 41 Cities of the future - global competition, local leadership

citizens makes people feel involved in the Increased migration means that many decision-making process and promotes immigrants leave valuable ‘connections’ increased responsibility for local services behind and therefore experience isolation and the local environment. Increased when they first arrive in a new country. participation often leads to increased levels Migrant groups often minimise their loss of of collective action. It has been proven that social capital by choosing to congregate high levels of social capital lower the gap together in enclaves. Most cities display between the ‘haves’ and ‘have nots’ in this pattern of segregation in terms of society (Putnam, 2005). migrant settlements, which ultimately leads to isolation and poor interaction between Building social capital does not require the different communities. It is essential for significant financial investment on the part city governments to provide new ways of of city governments. There are many connecting people in a diverse society in examples of neighbourhood actions order to develop democracy by increasing where cities play the role of facilitator the social capital of citizens and celebrating Strategic questions: rather than the provider of services. For the diversity of modern multicultural cities. instance, in the city of Phoenix, Arizona, How can citizens be engaged in the there are around 900 neighbourhood development of the city? Has your city groups working on different social issues. Organisational capital developed an inclusive plan that The city of Vancouver has won a United Organisational capital includes research addresses the needs of all citizens? Nations award for Innovation in Public and development programmes, systems Service for its Neighbourhood Integrated of education, fiscal policies, Team that helps Vancouver procurement policies, and management residents solve difficult issues in their tools. neighbourhood. The program involves more than 200 city staff within 16 teams More importantly, it refers to representing different areas of the city. organisational culture and leadership. In They work with residents to help solve the context of a city, organisational culture problems with buildings, garbage, noise illustrates the city’s image and core or illegal activity. The City Manager of values. Having a positive and attractive Vancouver, Judy Rogers, describes it as image and set of values is widely “an ideal way to integrated citizens and recognised as a key factor for prosperity. staff to come together to problem solve.” One city that has attempted to change The negative side of social capital is that radically its organisation and process is it can lead to insular behaviour and lower Barcelona. Using ICT, the city has designed levels of tolerance for other groups and its services around the needs of its citizens communities. To counter this, city leaders rather than the organisational imperatives of need to promote tolerance and openness the administration itself. This means that, and facilitate integration. As Catarina for example, city services and information Dahlöf, Acting CEO of says: are available through one web portal that “We need to counteract segregation of connects citizens and government together. people from other countries and cultures Technology has been used to engineer a that come to, or are already established, new form of social fabric in the city, one in the city”. Developing social capital can that puts citizens’ needs above all others. help to tackle problems of unemployment Other cities are also using IT in this way. and other social problems and increase Liverpool City Council has embarked on a prosperity. Research has shown that a considerable programme of networking that lower level of social capital among links citizens to information and services immigrant groups is one of the reasons for through one portal encouraging the city’s higher unemployment. The social unrest in citizens to interact with the city government during the autumn of 2005 could to provide feedback and establish a be linked to the French government’s lack genuine dialogue with city leaders. of investment in building social capital in certain communities.

42 Capitals, the key issues Process capital Global knowledge sharing and Process capital is the essence of an production organisation’s competitive advantage. Knowledge creation depends on Difficult to replicate, it is an organisation’s successful information sharing and the soul and image. Process capital helps a cross-fertilisation of ideas. Global trends city to develop and maximise its show that time spent in formal education organisational capital. Process capital is increasing and young, educated people refers to the internal processes used by are increasingly mobile. an organisation and its staff, including “The challenge is to get the population to learning and creating knowledge, building reach their full potential where knowledge social capital and trust and innovation, and education are concerned,” says the processes of recruitment and leadership mayor of the city of Amsterdam. and business processes. This capital is essential for a city to differentiate its self Another important skill of citizens that from other global cities. Process capital is facilitates integration and globalisation a capital that makes a city unique. and also enriches diversity is multi- lingualism. With a series of organisational changes, the city of Gothenburg, Sweden, has Most major cities have hugely diverse blazed a trail for others to follow in the populations, which simultaneously present way that it has reorganised its processes them with both challenges and to focus on sharing information, and opportunities. “Increased travelling means developing a common picture of the city’s that the world is getting smaller, and organisation by offering support to the young people in particular are moving city’s managers and maintaining quality around the whole world. As a result, there standards. The city has chosen to make a is a greater understanding of different strong commitment to management, cultures.” Bosse Sundling, City Manager signalled by its decision to open a of Stockholm. development centre for about 1700 city Many ethnic groups experience segregation managers, and a number of measures and high levels of unemployment, which aimed at improving the management can increase tensions between different network. According to the city’s CEO, groups. However, the opportunities “The main purpose of the reform is to presented by increasing diversity are improve the efficiency of the organisation substantial. Different communities can and to strengthen inhabitants’ influence enrich the cultural heritage of the city and on the city’s undertakings.” new skills can boost the local economy and Organisations can generate competitive go some way to address the problems of advantage by developing a creative an ageing population. One of the most environment where ideas can flow freely significant advantages is the flow of and the processes described above come knowledge that comes to the city creating together in a creative culture. This might new ideas, leading to new business growth mean encouraging the use of external and and employment. All of which contributes more informal meeting places. For to the overall prosperity of the city. instance, in cafés or bars where In an increasingly competitive environment, individuals have the opportunity to the ageing workforce is a specific problem exchange ideas, away from the confines for public sector organisations. Many face of the traditional work place. losing significant knowledge and expertise One of the most important processes in unless they invest in developing new skills city management when it comes to the and capacity and nurturing future leaders intellectual capital and its process capital and managers. The city manager of the city is knowledge management. of , David Jongen, expresses the concerns of city leaders in affluent countries when he says: “There is a major risk of a knowledge drain to low-wage

Capitals, the key issues 43 Cities of the future - global competition, local leadership

countries and a lack of the innovation that Nations Public Service Awards to draw Innovation - Frankfurt is necessary to create a high-quality attention to public services that One city which has explicitly knowledge economy.” demonstrate the development of innovative practices and improvement of efficiency and acknowledged the role of innovation The balance and spread of economic effectiveness. The awards also highlight in developing its economy and power between cities in the knowledge best practice in recruitment and retention infrastructure is Frankfurt. Petra Roth, economy can be achieved by within public sector bodies. The awards the Mayor of Frankfurt, explains: emphasising and sustaining the city’s were made for the first time in 2003, uniqueness and by constantly innovating “Frankfurt has increasingly focusing on best practices and innovations cities’ intellectual capital. distinguished itself as a scientific in the public sector all over the world. centre. Enormous investments into the development of university and Innovation capital Conclusion technical college made by the Increased global competition between In an interview conducted for this report the government of Hesse, have enabled a cities has increased the focus on city manager of Malmö, Sweden said: “It is leap in quality in the scientific- developing and maintaining intellectual possible to make a turnaround from being technological infrastructure. The capital. No city can afford to neglect the an industrial city on a downward trend to ongoing improvement in the quality of revitalisation and innovation of its most becoming a blossoming city.” But to do job offers increases the attractiveness essential capital. The need for renewal is this, cities need to attract the right kind of of the location for enterprises brought into sharper focus with economic people – the right mix of intellectual and operating in the science-oriented restructuring and the transition from social capital – to ensure success. To growth industries. Through its new industrial to knowledge-based economies. sustain and develop intellectual and human innovation centre, Frankfurt enjoys a Creativity and innovation create capital cities must adapt and prepare for worldwide reputation in competitive advantage. Due to their size the future. Global economic pressures have biotechnology; by settling specific and diversity, big cities are one of the increased competition and, therefore, the areas of the pharmaceutical industry, main sources of innovation. competition to attract and retain the right Frankfurt is on the way to re- The city of Vancouver understands the skills and people. obtaining its former position in the significant connection between innovation production of pharmaceuticals.” To compete in a rapidly changing global capital and human capital. The city’s economy, cities have to understand the motto is: ‘Empowered by innovation’ City resources that they will need in the future. Manager, Judy Rogers, explains their In an economic environment that is success: “Vancouver recruits outstanding increasingly dependent on knowledge, people and lets them do their jobs. They intellectual and social capitals are likely to are continually offered jobs by other cities be among the most significant assets that for much more money – few leave, annual a city possesses. They will need turnover is less than 3%.” strategies to help them develop, attract There are numerous examples from history and retain those assets and in doing so that prove that the right combination of ensure that all citizens feel engaged and physical and intellectual capital helps cities enthused by the city and seek to apply to become wealthy and powerful. their own best efforts to its successful Nevertheless, many cities have failed to development as a place to work and live. capitalise by not adapting to changes and It is essential that city leaders effectively allowing their intellectual capital – creative and efficiently manage all capitals that and entrepreneurial people – to leave. support intellectual capital in order to In recognition of the important and global create sustainable development and a nature of the value of intellectual capital the good quality of life in cities. United Nations Department of Economic and Social Affairs established the United

44 Capitals, the key issues 4.2 Democratic capital

Achieving prosperity through engage their citizens, governments need the optimisation of democratic to address the root causes of disillusionment with the political process capital and in doing so rebuild their holding of This section examines the trends that are ‘democratic capital’ that is held in trust. driving democratic capital in the political The impact of globalisation and increased decision-making processes in cities. The mobility can lead to a sense of interaction among citizens (society), the fragmentation. City governments therefore influence of economy and politics, and also have to introduce new democratic the alignment of the respective aims and strategies that can help create a sense of requirements of these different elements coherence and vision for their city and all helps to shape the ability of a city to of its inhabitants. compete in the global economy. All the city leaders interviewed for this report Three major trends are emerging that, stressed the qualities of collaboration and taken together, provide city governments participation as essential to their cities’ with the tools to bring all the players in a success. city’s future together. These are: Cities need to find ways to combat some • The drive for greater transparency and of the negative trends associated with the better communication; ever growing scale of large cities in the • The creation of new forms of democratic 21st century. Increased individualism and participation; and the concomitant decline in shared social • The development of partnerships values – as pointed out by among others between private and public sectors and Brisbane’s CEO Jude Munro – are issues citizens (see figure 13 below). that have to be addressed through new In this chapter we examine how these forms of participation and engagement identified trends can help city governments that ‘reconnect’ citizens to their city. to rebuild their democratic capital and Political apathy is a major problem for all examine some of the specific initiatives local and national governments and falling implemented in cities around the world that voter numbers tell their own story. To re- directly address these challenges.

Economy

Interaction Major trend 1: Major trend 3: Transparency Partnership

The city

Interaction

Interaction Society Politics Major trend 2: Participation P ros trol perity ic con through optimising democrat

Figure 13: Interactions between politics, society and economy with the three major trends to optimise democratic capital

Capitals, the key issues 45 Cities of the future - global competition, local leadership

Trend 1: The push for greater that permits anyone to ask him a direct transparency question about any topic of concern and of course permits thousands of listeners to The push for transparency comes from a hear the explanation of the issue and the number of different sources. The answer to the question. ‘information age’, powered by the Internet, has created unparalleled access The Mayor of Yokohama believes sharing to information about almost everything information is “an important part of the and increasingly transparency is a vital process of establishing credibility and building block of trust between individuals ensuring constructive dialogue.” and organisations. Trust and Using ICT as a platform for greater accountability are inextricably linked and transparency is a strategy that is being so the creation and maintenance of trust adopted by cities around the world in is a key challenge for cities that want to response to citizens’ demands for more be accountable to their citizens, the information about the performance of the economy and society. Transparency is officials they elect to run their cities and dependent on two-way communication provide public services. More than simply flows between city governments and the providing information, cities are using people who live and work in those cities. technology to enhance their accountability Trust-based relationships are more effective by giving citizens direct access to officials and efficient. To create trust, the and creating dialogue with them. accountable city government provides its An accountable state reflects and citizens and other stakeholders with accommodates citizens’ needs and information about financial results, and also concerns by using methods such as e- about its plans and goals, setting out communication based complaint decisions, how they are taken, and the management, opinion research, surveys of results achieved – good as well as bad. An minority subgroups. However, dialogue accountable government reports regularly with citizens is not enough: governments and publicly about its performance. must respond to citizens’ input. Local Yokohama, Japan, is developing a policy of governments have to accept a new disclosure that aims to keep citizens and relationship which sees information other stakeholders informed of the city’s flowing from departments to citizens and finances and its performance in meeting then back again to reinforce the strategic budgetary goals. According to the Mayor, or leadership role of government. Hiroshi Nakada: “It is important that the Rather than being organised from the point and citizen share of the view of the administration and its information. By doing so, the public requirements, the citizens and their needs administration will gain credibility and make become the organising principle for services it possible to have constructive discussions and information. Citizen-centricity is a key with citizens. We are trying to share trend in the development of transparent and information with citizens by announcing accountable city government. It is a trend financial conditions (which are not always that cities all over the world are responding sound) in a way that it easy for them to to. In Morón, , , new understand.” This includes disclosure about institutional arrangements are helping the the city’s indebtedness, and the financial city to tackle problems in a collective forecasts for the next five years – the first undertaking with its citizens, as the Mayor, such disclosure in Japan. Martin Sabbatella, describes: “The residents Trust-based relationships are supported by of Morón have supported a process of strong two-way communication processes transformation that grants them greater that permit citizens to both receive and participation in public matters. These factors access information and enable them to converge on the need for an extensive present their views and hear the views of political and institutional reform that the other citizens of the communities in guarantees total transparency, both for the which they live. The Mayor of New York residents of Morón and for those that do holds a weekly phone-in radio programme business in the city.”

46 Capitals, the key issues The Mayor of the city of Toronto in Trend 2: Optimising democratic , Canada has held his “Listening to participation Toronto” sessions in which thousands of individuals have been directly engaged in Voter participation and participation in debating and helping to set the city’s political parties, particularly in the west, priorities for the coming years. have both been declining in recent years. To counter this apparent apathy, modern Financial transparency is a key element cities need to address new forms of for a modern marketplace of innovation, participation. They need to encourage and applies equally to public sector citizens, associations, networks, interest bodies as private businesses. Public groups and neighbourhoods to participate entities including cities are therefore in the political decision-making process. moving to adapt modern accounting standards based on those used in the Single issues, rather than ideologically- private sector. The International Public based traditional politics, are increasingly Sector Accounting Standards (IPSAS), as the driver of political participation and the only international accounting standard debate. City governments need to reflect tailored to public sector needs, are this changed reality in their engagement increasingly being used throughout the with citizens. Whenever major city issues world. They help to facilitate the exchange are at stake, concerned citizens should be of financial information among society, able to participate formally and informally economy and government. The IPSAS- through so-called deliberative assemblies. standards bring a fair view to the financial Some examples of these are the round statements of public entities and can tables in the former German Democratic contribute to trust and help provide a Republic and the local Agenda-21- positive rating for a city. It makes financial Process in Barcelona, enacted statements comparable, improves the since the beginning of the nineties. basis for making sound political choices Other new forms of participation include; and helps ensure that public funds are User Boards in Denmark and Sweden that deployed more effectively. involve individuals or interest groups in the decision-making process; Finland’s Youth Guidelines for greater Councils or Citizens’ Written Motion, to transparency which local authorities must respond if supported by 2% of the population; Freedom of information is an important Consultative Forums, as used in the UK, base for citizen empowerment, providing , and the Netherlands which information and transparency give representation during the planning The accountable state takes its citizens process to specific categories of citizens seriously. It informs them about the city’s such as the disabled, women, those on performance comparing its original plans low-incomes, and foreigners; and to the actual results achieved. In the Partnership Boards in Ireland. accountable state, transparency is a These examples of constructive fundamental element of building trust interaction combine the professional Financial transparency can be optimised knowledge of administrators with the by using the new public accounting citizens’ grassroots understanding of the standards (IPSAS). These standards problem ‘on the ground’. City inhabitants Strategic questions: model external reporting on internal are not seen merely as a voter and/or a What plans does your city have to use reporting and deliver information that customer, but also as an active participant technology to enhance transparency citizens and the economy really need in and as co-producers in political decision- and create constructive dialogue with order to assist them in making effective making. Successful cities need to citizens? How will information and decisions. The municipal Finance promote public policies that regard dialogue be made relevant and Management Act in enforces citizens as more than simply consumers accessible to all citizens? transparency through a strict reporting of public services. They need to view schedule. citizens holistically, as important

Capitals, the key issues 47 Cities of the future - global competition, local leadership

participants in the implementation and be very involved. We have programs to realisation processes of government. In work with communities to solve problems this way, citizens feel that they are taken at a local level. We are very consultative seriously and encouraged to play a more and the Internet is playing a big role in the active and responsible role. consultative process.”

Creating new platforms for The benefits of democratic participation through the Internet include the participation permanent availability of information, the The Internet has ushered in a whole new possibility of visualisation and interactivity, way of communicating and sharing fast updating and feedback and low information. Smart e-communication, based access barriers. However, e-participation on advanced Internet technology, can can disadvantage underprivileged citizens simplify the participation process. The with no access to the Internet. For those digitalisation of politics with the on-line people not to become even further presence of parties and institutions (e.g. disadvantaged by the digital divide, cities national assemblies, www.nationalrat.ch), need to take steps and make investments and discussions with politicians (e.g. to provide e-literacy skills and access for candidate domains, www.politarena.ch) the whole population. play an important role in enhancing citizens’ The most evolved form of direct democratic participation. E-communication participation in the political decision- can simplify contact between citizens and making process is the direct democracies the city government, create easier access seen in and some US states. to relevant information, promote This direct form of democratic transparency and speed up access to participation enhances legitimacy. officials. One specific example of this new However, in some cases it may slow type of citizen participation over the web is innovation, so all forms of direct e-voting. Swiss communities carried out a democratic rights need to be assessed successful e-voting test in . The test carefully within the prevailing political and shows that e-voting is feasible and efficient, cultural context. even under high standards of quality and security. The government of Geneva had to In Swiss cities, all legislative decisions by ensure the technical standards for security parliament are submitted to a referendum and data protection. They guaranteed voter (legislative referendum right; mandatory or identification and the secrecy of the ballot. after collection of signatures). This test also took place in September Furthermore, eligible voters can decide on 2004 on a national level. They guaranteed bigger investments in infrastructure voter identification and the secrecy of the (financial referendum) or other decisions ballot. of parliament. Voters in Swiss cities decide for instance how much in taxes Other cities are investigating the potential they are willing to pay. City governments of other communication platform – such have to convince citizens in public as mobile telephones – to increase citizen debates about the need for a tax increase participation and engagement. Barcelona, or the impossibility of a tax cut. As an Spain is developing a model of ‘m- example, the city of Berne voted on 27th government’ that will allow citizens to February 2005 against a state initiative participate in debates and policy that proposed to reduce taxes by 10%. decisions via their mobile phones and to Berne’s citizens feared that the measure interact with the administration through would mean an unacceptable cut in public the use of SMS and MMS messaging. services. Judy Rogers, City Manager of Vancouver, Canada, describes Vancouver as a “wired Democratic participation and democracy in city”, and explains how this is used by the general need to be seen not only within the city to help create a sense of involvement. city but also within the whole . “Our citizens are offered opportunities to Cities need to have an effective voice within

48 Capitals, the key issues the nation state. They should also be city and to have a voice in helping to empowered with sufficient autonomy to decide how those issues are dealt with by Community engagement and make their own decisions, but should also their government. Citizens should decide be entitled to participate adequately in the about most important questions that devolution - , UK decision-making processes at the higher affect them not only where they live, but Big changes are happening in the way levels of the nation state (regions, central also where they work. that the city of Birmingham, UK is run. government). In developed federal states, Devolution, or localisation, means local the voice of the cities should not be Empowerment: Cities should be empowered with sufficient competencies people get to play a bigger part in restricted to a merely regional level. Cities decisions that affect their lives – and should have direct access to national and resources to fulfil their tasks and should have the ability to participate in they get the power to help put in place government when issues that impact them and monitor a variety of services. directly arise. and influence the decision-making process at higher levels of government. The City Council is devolving a Democratic renewal Trend 3: Creating new forms of proportion of its powers to eleven In our highly mobile society citizens often District Committees and re-organising live and work in different political partnership many local services into District communities. They may, for instance, live In the near future, increased demands on Offices, each with a District Director. in the and work in the city. The public services caused by among other During 2004, each District will develop problem is that these citizens are things an ageing population, coupled with its own service plans. Councillors and interested in participating politically in decreasing revenues as the tax base council staff will work with local both places, but can only become declines, mean that cities will no longer residents, the health, police and fire politically active in the place they live. be able to fulfil all their public service services and voluntary and community New policies have to find solutions to this, obligations on their own. Dwindling organisations to produce a Community in order to determine how political resources and more demanding citizens Plan for the area. participation can accommodate mobility who take an increasingly consumerist and how political participation can be attitude to the services their city provides, At the same time the centre of the enhanced in these rapidly developing means that new ways of financing and council will play a more strategic role circumstances. providing public services must be found. –re-organising central staff into five City governments therefore have to look strategic directorates. The aim of these Guidelines for more beyond their traditional role and develop changes is to: participation collaboration and partnerships with the private sector and citizens themselves. • Provide council services that respond more quickly to local needs; Interaction: The declining attractiveness of City governments have to find ways to traditional forms of political participation • Create opportunities for local people attract people and businesses that will needs to be addressed with new and to get involved in running their local allow their cities to compete in the global active forms of interaction. area and their local services; and economy. A thriving local economy • Provide a more streamlined and Combine representative democracy with benefits everyone who lives and works in effective strategic authority for the forms of direct participation: Electoral and the city, and so the private sector has a city. participatory democracy should not be in direct interest in finding ways to work with conflict but ought to reinforce one another the city government to achieve mutually so that politicians and citizens develop beneficial outcomes. This calls for new mutual . Balancing and calibrating forms of partnership in which the public the different forms of democratic and private sectors find new ways to work participation is a key success factor for together. Judy Rogers, City Manager of optimising democratic capital. Vancouver, Canada, believes that the effort to create new forms of working is an More is not always better - effective imperative for all city governments: “We participation: Participation should be must understand how to partner with the made more effective through a focus on private sector. Governments cannot bear higher quality and less quantity, with all the burdens of development; the public citizens getting maximum benefit from a private partnership model is a way to minimal input of their time. Citizens have a create development. Governments can right to understand the issues facing their learn a lot from the private sector.”

Capitals, the key issues 49 Cities of the future - global competition, local leadership

Public Private Partnerships New forms of partnership are emerging in cities around the world. These often Strategic questions: Public Private Partnerships (PPPs) have involve trilateral cooperation to address What are the best channels available to developed considerably in recent years certain aspects of public life, for example, engage with different groups of throughout the world. PPPs can help to the use to which public spaces within a citizens? How can these be made reduce costs and improve efficiency by city are put. Rather than the more familiar relevant so as to maximise citizens’ using shared resources, allocating risks bi-lateral partnerships between state and active participation in the decision- better, and by taking a life-cycle approach private sector or the government and making process? and process-orientation to the delivering citizens, groups from all three sectors are of public services. The major potential of coming together to create new ways of PPP can be found in a wide variety of approaching public issues. In Stockholm, different areas where the public sector Sweden, a number of project managers has traditionally provided services. These have been appointed to develop include construction, (for example the partnerships within local communities. By building of new schools in London visiting informal meeting places such as achieved by collaboration between local coffee-shops project managers ask education authorities and private sector people about their problems and what businesses), transportation, regional they suggest as solutions. The project- development and regional promotion, manager tries to create a group around a health care, culture, defence, sports, specific issue. The citizens play a role in a education and e-government. partnership with the local government to According to David Jongen, City Manger of improve their own situation. Groups may The Hague, The Netherlands, city councillors focus on more sporting facilities, cultural and officers have actively participated in the matters, street improvement, or more play development of the strategy. The council facilities for children. Regardless of their meets with industry and commercial sector specific aims, these groups formulate both in formal (the full council in discussion proposals which are then discussed at a with individual (international) companies) and joint meeting also attended by local in informal (via business circles through the politicians. Aldermen and civil servants) settings. During Initiatives to create new forms of these meetings, the future of the city of The partnership like these introduce a broader Hague and the role of businesses are view to aspects of public life and are often discussed. Contacts with citizens are mainly capable of reaching innovative and community-focused and are channelled creative solutions. By empowering people through a series of talk sessions, but also from specific groups to get involved in the take place at the hall with resolution of social and public issues, presentations from citizens and these initiatives encourage self-reliance neighbourhood platforms. This input is used and responsibility. in the strategy process. Of course, these partnerships have to be Civil partnerships piloted with professionalism and suitable However, sharing responsibility should not caution. Risks have to be managed and simply take place in partnerships between efficiency and effectiveness of the private and public sectors. Citizens too arrangements evaluated carefully, need to become involved. A modern city especially in projects that demand large needs a renewal of “civic pride”, a vital investments of both time and money. element of democratic capital in modern However, many cases prove that cities. This means that civil society has to be investments in new forms of partnership mobilised in the common interest. People can provide “value for money” and have to be remotivated to engage in tangible benefits. Partnerships between activities that generate wide social benefits. players from government, the private As local communities become more sector and citizens can enhance the fragmented as a result of greater mobility, future success of cities. city government has a role to play to encourage citizens to participate in the public interest.

50 Capitals, the key issues Guidelines for creating Conclusion partnerships How can these major trends (transparency, participation and partnership) best be Efficiency: Co-operation with social promoted? They need to be communicated groups facilitates the implementation of within the three elements of society, the policy. economy and politics and to be embedded and realised in common projects. Tasks and Legitimacy: The involvement and backing responsibilities need to be allocated, not of different groups creates broad only between the three elements, but also agreement and backing for decisions. between the different levels of government Addressing complexity: Through from the local to the national levels. partnerships with different economic and Broad discussion of their impact on each social groups, problems can be viewed major set of stakeholders will help to holistically. entrench them further and foster the Motivation: The motivation for traditional development of bilateral and trilateral political participation has declined. relationships. In order to engage all three Partnerships, however, offer strong different elements in the pursuit of incentives to benefit society and the transparency, participation and economy, and also for smaller groups to partnership it is important to show the influence political decision making. benefits that each will receive.

Political engagement: Democracy is City governments need to ask themselves strengthened by the executive co- how transparent they are now, and what Strategic questions: potential they see for greater operating with the different interest groups Could your city work better with transparency. They need to ask if within the wider economy and society. private sector organisations? What communication flows are truly two-way or are the specific areas / services in Innovation: Innovation is also a key to if they are dominated by an outflow that which partnership could be most responding to citizen concerns about new smothers the input from, or listening to, effective? To what extent do forms of partnerships. Many different citizen voices. City governments need to community and other groups feature models have emerged around the world develop their understanding of different in your partnership strategies? and democratic capital is strengthened forms of democratic participation and see when cities work with citizens to find the how they might work in the specific right model for their circumstances. context of their city. Do you understand the different forms of direct-democracy? New platforms for engagement and dialogue – such as the Internet – also need to be examined and made to work in the unique conditions and context of each individual city.

Capitals, the key issues 51 4.3 Cultural and leisure capital

Introduction How does a city create an image for itself? What makes it stand out from the Cities today each seek to create their own rest? One of the leading contemporary unique identity and to build and develop thinkers on city development and city the experiences that they offer to visitors planning is Richard Florida. His recipe for and residents alike. Cultural and leisure success is quite simple: it consists of facilities go beyond art galleries, opera attracting the best human capital. Florida houses or museums. Today’s cities make claims that creative cities are a virtue of their atmosphere, their heritage characterised by their ability to: and nightlife. But more than this, they develop an intangible quality of creativity • Attract new technology; and innovation. Cities as diverse as • Attract young talent; and Vancouver in Canada, Reykjavik in Iceland and Barcelona in Spain are reaping the • Provide a tolerant environment. benefits of the strategies they have put in Richard Florida calls these the three T’s or place to attract dynamic and creative 3T. Individual individuals and businesses. adventures Cities with these characteristics build their This section examines some of the growth on creating industries such as challenges that cities face in the creation , ICT, art and design, advertising and promotion of their unique identity and and media, research and education, and the competition to attract creative and Culture other forms of cultural production and innovative people and businesses. There Artand leisure Business . Creative people are mobile are various strategies that cities can and cosmopolitan, they want urban pursue in building their store of cultural lifestyles, are career-orientated and and leisure capital and this section looks innovative, and use the city as the main at the implications of different choices arena for their leisure activities. City - identity and the way that different cities around the world have developed their own So, cities of today must compete to cultural planning. attract creative individuals and investors Figure 14: Components of cultural and who will help to define and promote the leisure capital Building the city brand city. In successful cities, culture and business Tolerance and openness are central and come together. Forward-looking, dynamic important qualities. In contradiction of cities capitalise on their appeal to both much mainstream urban planning, Richard visitors and potential residents and Florida warns that subsidising large businesses as good places to live, work sporting facilities, making conditions and invest. All these ingredients come favourable for establishing out-of-town together in the city’s brand. The brand of a shopping malls and other car-based city can be made up of many different businesses, are the wrong route to go influences: the businesses developing or down. According to Florida, this is a choosing to locate there, an ‘underground’ recipe for failure rather than success. culture or cultural artefacts and institutions. Take Seattle on the North-West Pacific The possibility of attracting creative coast of the US. Seattle has a highly visible, capital is dependent on long-term strong brand. It owes as much to Microsoft strategic cultural planning. The conditions as it does to the ‘grunge’ music of bands for this are best seen in larger cities. But like Nirvana or the coffee shop the idea of the creative city is not one phenomenon epitomised by the global exclusively for the large metropolitan domination of Starbucks. Seattle’s brand is centres. The ideas can easily be adjusted an amalgam of influences and associations to smaller cities’ or communities’ that add up to a unique and instantly particular characteristics. recognisable whole.

52 Capitals, the key issues It is broadly agreed that people Cultural strategies increasingly want authentic, cultural Many cities have expectations of rapid, experiences, and that the city’s public economic gains from their cultural areas are subject to a wider variety of strategy, but few succeed from this uses than was the case 15-20 years ago. Strategic question: starting point. In general, city developers More and more people prefer to live in and their consultants operate with one of What are the distinctive characteristics central, attractive residential environments three development strategies: of your city, and how can they be and to spend their leisure time in exciting harnessed to generate the right city spaces. Conservation and cultural The lighthouse strategy – development of approach to cultural development and monuments are, as a consequence of an iconic cultural attraction such as the to build your city brand? this, assigned an increasingly important Guggenheim museum in Bilbao or the role in city politics and city planning. Opera house in .

During the past 20 years cultural planning The specialisation strategy – development in cities and regions has become a big of an attractive or specific industry profile business all over the world. Today, cities based on, for example ICT innovation are referred to as branded goods, in stark (), finance and film (Toronto, contrast to the more modest promotion of Cannes), festivals (the carnivals in Trinidad earlier times. However, transferring a and ) theory wholesale from consumer goods to cities can be complicated. An easier form The generator/dynamo strategy – of branding is to base it on a place’s development of a profiled local unique characteristics or advantages. As specialisation, preferably with possibilities Martus Tavares, Secretary for Economy for governmental investment and support, and Planning of the State of São Paulo for example research parks, IT or biotech suggests, city branding requires a environments, or headquarter complexes different strategy to its consumer (e.g. clusters such as Silicon Valley or equivalent, covering a wider range of France - national strategy for seven potential ‘customers’; “The key external industry clusters). challenge is marketing the city, promoting a positive image to attract and retain talented people, existing business and investment opportunities; and tourists.”

A city’s distinctive characteristics or advantages can be rooted in history (which sometimes needs to be rediscovered) or they can be of more recent origin. Many cities have initiated strategic projects to develop cultural or lifestyle qualities: a broad spectrum of cultural events and institutions, sporting arenas, festivals and diverse urban recreation (parks, waterfronts, café- culture), new residential areas, aesthetic upgrading of the city’s public spaces and conservation of important building environment/architecture. The question is when cities follow almost identical strategies, can they all enjoy the same level of success?

Capitals, the key issues 53 Cities of the future - global competition, local leadership

In addition, some cities use large one-off Another approach – the generator strategy events, such as the summer/winter – is to initiate co-operation with local Olympics (London 2012), the World Cup in businesses or cultural/artistic soccer (South Africa 2010), or the World phenomenon that have in some way Expo () to kick start global become famous nationally and/or attention. For many, these events internationally. Peter Jackson, director of represent an opportunity to make a major The Lord of the Rings trilogy, has done difference to their cities, as Robin , something unlikely in his home city of Mayor of the London Borough of , , a city of Newham, explains: “the majority of 26 900,000 inhabitants, but not one sports competitions in the London 2012 previously considered a world cultural Olympics will take place in Newham. capital. Many of the new, state-of-the-art venues will be retained after the Games for The director has built a permanent facility community as well as elite sporting uses, there, perhaps the world’s most and new housing and business parks will sophisticated filmmaking complex. He abut what will be the largest public park deliberately sited it in New Zealand to be built in the UK since the 19th because he realised what many American century. The council is determined to cities discovered during the ‘90s: seize the opportunity to build a paradigm-busting creative industries sustainable, inclusive community with could single-handedly change the ways wide-ranging social and economic cities flourish and drive dynamic, benefits for the borough’s residents.” widespread economic change. He realised Larry Campbell, the Mayor of Vancouver, that with the allure of the Rings trilogy, he adds that winning the 2010 Winter could attract a diversely creative array of Olympics has placed the city at the centre talent from all over the world to New of global focus: “the 2010 Winter Zealand; the best cinematographers, Olympics are having a big impact on costume designers, sound technicians, Vancouver – bigger than perhaps many computer graphic artists, model builders, thought. People all over are talking and editors and animators. wanting to come here to see what it is all The strategy of specialisation has been about. They are having a huge impact in used to powerful effect in the very north bringing recognition to Vancouver”. of Finland, in the city of Oulu, just a few It may be tempting for many cities to miles south of the Arctic Circle. The city choose the lighthouse strategy as Bilbao has set out a plan to become a city of hi- did. But before throwing themselves into tech innovation and attract new this, they ought to pause to study that businesses to base themselves there. The city’s political progress before the project Smart Oulu project has created a range of was initiated. In Bilbao’s case, IT-based initiatives that link houses, understanding of the past enabled a businesses and public institutions restatement of the future through dialogue together to foster innovation. The strategy with the citizens and the city. At the same is paying off and Oulu is attracting a time, cities should think through the considerable number of hi-tech consequences an attraction like the businesses to the frozen north. Guggenheim Museum will have on the local city culture. The most important message with regards to cultural planning is the importance of the city being itself and not simply trying to copy others. To see the value in the city’s ‘natural’ qualities and attributes can often be the best starting point for any strategy.

54 Capitals, the key issues Creating the experience An influx of creative professionals into a economy city often gives rise to gentrification of The encounter between people who seek specific inner-city locations and city experiences and cities which want to offer planners, naturally enough, are keen to them, creates the ‘experience economy’. encourage this phenomenon. Many cities The experience economy has its origin in in recent years have seen previously semi- an economy where cultural life and abandoned and down-at-heel areas industry meet productively. This economy reinvigorated by the arrival of young and is built on the added value which affluent people. Places like the East creativity brings to both new and more in lower Manhattan, New York, traditional . Shoreditch in London, the waterfront in Entertainment, toys, amusement, tourism, Barcelona and the King’s Cross area in sport, textile and clothing are included in Sydney have all been transformed in this, in addition to the more traditional recent years with the arrival of creative cultural industries. and professional people. Gentrification can put a city on the global radar, but it is The driving force in this economy is the not without its challenges and these are actual experience, independent of where recognised by many city authorities. it is created and communicated, whether Sydney’s Lord Mayor, Clover Moore “In through museum, theatre, festivals, order to cater to this increasingly creation of identity, storytelling or urbanised population ...the branding. City developers should tailors its policies toward a city of , deconstruct the contents of the to include the diverse needs of its experience people seek in their city in constituency.” order to analyse its characteristics, and then use this knowledge in the strategic To be truly successful, all inhabitants need process of city development. This to be involved and engaged. Cities keen understanding plays into the creation and to encourage gentrification also need to strengthening of a city’s brand. The mayor bear in mind the feelings and aspirations of Frankfurt, Petra Roth, says “In times of of the original inhabitants of the areas financial , the cultural and social undergoing gentrification. How, for facilities and preserving a high quality of example, can cities reach people who are life in the city require engagement by both Strategic questions: not used to participating, or people who citizens and enterprises”. City planners What are the qualities, experiences feel that society has failed them? In these need to understand the associations that and associations that form your cases, the gentrifying process can often people have with their city, where these city’s brand? How can these be be accompanied by a sentiment that the come from and how they can be strengthened and promoted? city has lost its ‘soul’ or that the changes leveraged to further the city’s ushered in reduce the city’s diversity. development. When immigrants, for example, are pressured out of city centres due to the increase in real estate prices, the Understanding real ‘creativity’ consequences are not only a reduction of in city development diversity, but also diminished chances of The scientist and author Charles Landry interaction. High levels of diversity and the emphasises various examples of resulting exchange of views fuel misunderstood creativity and strategic innovation. Cultural differences must not dilemmas that can be encountered when be perceived as unchangeable, but as trying to exploit a city’s culture and leisure dynamic measures which are affected by capital. Creativity is an elusive quality that encountering the ‘other’. The is hard to pin down. It is a set of attitudes ‘homogenising’ tendency inherent in and behaviours that manifests itself in gentrification needs to be carefully different ways through both individual and managed so that diversity is kept alive. collective actions.

Capitals, the key issues 55 Cities of the future - global competition, local leadership

City planners need to be careful that they Key questions for cultural Strategic questions: are clear about the creativity present in planning their city and its basis in the real fabric What kind of people do you want to and life of the city itself. They need to The emerging trend, for cultural capital attract to your city? How will you make sure that they help to create the variously described as cultural planning, ensure that what you offer corresponds conditions in which their city’s real urban planning or cultural regeneration, is to their needs and wants? creativity can prosper, and must be wary playing an increasingly influential role in of pursuing false visions of their city’s true cities’ plans for the future. Linked to the creative image. development of cities, , industrial areas and dockland areas, the goal of this There are many questions to consider development is to create growth and when thinking about cultural planning. encourage activity in the service and Who controls the creative economy? knowledge industries, creative activity and Should the focus be on consumption, to create an environment that will attract participation or production? How “the creative class”. accessible should public projects and institutions be? Should the focus be on Cities wishing to embark on this journey the safe side, or should one dare to be need to ask themselves some innovative? Should the focus be on fundamental questions. They need to contemporary art or artistic heritage? understand how the cultural and leisure Which tourists does the city wish to qualities and characteristics that their city attract to see the art? Should the focus be offers can be developed to create an on city centres or the remote parts of the offering that is unique and differentiated city? from other cities. They need to understand who it is they wish to attract Cities have to examine their own city’s and how they can enthuse and engage unique virtues and base their strategies different parties in the city to help on the assets they have in order to implement their plans. With this develop them further. Creativity is not a understanding they need to secure buy-in quality that can be manufactured or to their plans and determine the tools and ‘bought in’. But it can, once identified, be methods that they can use to turn their nurtured and helped to flourish. At its vision into a reality. best, the cultural institutions can be places that inspire all people to new and “The most important task for city leaders free thinking, says Landry. is to understand and integrate the internal and external perspective offered by social intelligence into their vision for the future, and to create 'opportunity space' for citizens and employees to innovate.”

Conclusion There is no single blueprint for success that cities wishing to become thriving centres for culture and leisure can pursue.

But as this chapter shows, there are strategies that cities can adopt to accelerate their progress. However, none of these should be undertaken without a careful examination of the unique qualities that make each city what it is and how these can best be put to work. It may be that a high- profile event will draw the world’s gaze to a city. But what is it that will keep their attention once the event has ended?

56 Capitals, the key issues 4.4 Environmental capital

Introduction the city itself. The ‘ecological footprint’ of a city – the area of productive land and Good environmental management is vital aquatic ecosystems needed to produce its for the economic and social vitality of our resources and process its waste – goes cities, both now and in the future. Across well beyond local and even national the globe, people are increasingly aware boundaries. For example, one estimate of of the quality of their local environment, the ecological footprint of London puts it at especially in major urban areas, and the 125 times the surface area of the city itself. impact it has on their quality of life.

In this section we examine some of the City goals - clean, safe and environmental issues and problems faced attractive by our major cities. We also examine how some city governments have developed environmental policies and initiatives to tackle these problems and improve the quality and sustainability of their local Safe environments.

This section examines the key goals and the challenges that city governments face Environmental in improving their environmental capital. It capital focuses on three goals: Clean • Clean; • Safe; and Functional • Attractive.

This section also addresses challenges of managing environmental capital, in Figure 15: Components of environmental particular: capital • Joined-up policy; and • Partnerships. Challenges of creating a clean city Air quality and pollution levels have a Cities and environment - major impact on environmental quality in urban areas. Traffic is a major contributor Strategic question: managing competing demands to air pollution. In densely populated The concentration of activity within cities areas, for example, many housing What are the principal challenges that places an enormous burden on the local developments are located close to your city faces in balancing the environment. Governments face motorway networks which cause high demands of economic development competing demands to provide; levels of pollution. with environmental impacts? • Easy access to the workplace – a high In Europe, the number of children suffering quality infrastructure network for both from asthma has trebled in the last 30 public and private transport; years. Other allergies and diseases such as • A clean, green, safe and attractive leukaemia are also on the increase. living environment; and Scientific evidence has linked the rise of such conditions with environmental factors. • High quality recreational space including Preliminary estimates by the World Health parks, sports and shopping facilities as Organisation (WHO) suggest that almost well as a vibrant cultural scene. one third of the global burden of disease City governments must ensure that they can be attributed to environmental risk balance the needs of citizens with the need factors. to grow the local economy. Of course, the environmental impact of large urban areas is not confined to the geographical limits of

Capitals, the key issues 57 Cities of the future - global competition, local leadership

Noise pollution is also an important factor Challenges of creating an attractive city Reducing emissions - in local environmental quality. Noise There is no doubt that citizens desire Melbourne ‘pollutants’ can range from traffic noise, to 'clean' and 'safe' cities in which to live. noise generated in recreational The is acting on However, a pleasant physical environment and entertainment zones to noise from environmental issues and challenges alone is not enough to create a vibrant neighbours. by aiming for Net Zero Emissions by world city. On the contrary, a city’s character and vitality is determined by the 2020. It is also sensitive to the global Maintaining a clean city also involves underlying set of values which contribute issue of access to water and plans to maintaining public or private spaces – to the overall ‘attractiveness’ of the city. reduce water consumption by 12% dealing with litter, illegal dumping of waste by 2020. The City is also introducing and other environmental blights such as The overall attractiveness of a city or sustainable water polices, guidelines graffiti. Industrial and other activities have space is influenced by many social and and training across the city. caused major pollution of soil and economic factors, its cultural and groundwater. The costs of remediation historical heritage as well as a sense of Under construction next door to the and re-development of polluted areas can local style; in short, the city’s brand. Some , the new Council be very high. Groundwater pollution is of these factors include the availability of Administration building, CH2, has especially hazardous as it affects drinking parks and open spaces. Parks and open been awarded Australia’s first six-star water. spaces are important meeting places, green rating and is set to become the providing a tranquil haven, free from the greenest multi-story office building in Challenges of creating a safe city hectic pace of urban life and its the world, a feat people everywhere In recent years the issue of community environmental and noise pollution. will want to see in action. safety has risen up the political agenda. Environmental quality also has an impact Perceptions of rising crime levels and an on the value of property and can play a increased fear of crime have prompted major role in attracting new investment many cities to put extra resources and into the city. New ‘light’ industries, such new measures in place to tackle criminal as financial and IT businesses are often activity and to improve the quality of the attracted by the quality of the local physical environment. The threat of environment, as this will often have an international terrorism has also led to affect on the availability of skilled labour more ‘disaster planning’ resources and the potential to attract the right skills devoted to preparing for major incidents into the area to support growth. such as bombs or gas attacks. Investments in civic design and Environmental risks and also environmental improvement have taken on pose major issues for cities. Increased new importance in the last ten years. urbanisation in some areas has meant Much of the improvement has been that population centres are situated near directed towards creating safer and to high risk industrial activities. As a cleaner public spaces and residential consequence, if a major disaster were to areas, with an increased emphasis on occur, such as the chemical leak in creating pedestrian zones, cycle paths, , or the Bijlmerramp, cleaner public transport, waste water (Schiphol Airport) air crash in the programmes and energy strategies Netherlands, large numbers of people to improve the overall quality of the would be at risk. environment for residents and visitors. Environmental and other problems often Managing such risks and ensuring overlap in urban areas. Older districts, adequate measures are put in place to with tenement housing and high building deal with disasters is difficult. City densities, score poorly on various fronts governments are often accused of paying and environmental, social-economic and little attention to such risks when they health problems are often compounded in make decisions about major new housing these districts. The alternative of green developments, for example. Governments urban environments and village-like are also accused of failing to ‘join up’ their neighbourhoods are perceived to be individual policies and strategies at the better places to live and improvements to local level to manage risks which critics which all city planners should aspire. say lead to poorly integrated responses and bad planning decisions.

58 Capitals, the key issues Managing environmental capital Poor internal communication and integration often leads to poor policy Strategic questions: in cities making. Local governments in cities How are environmental considerations Cities have employed a range of technical around the world are making efforts to integrated into all areas of your city’s solutions to address environmental achieve better integration of all the policy decision making and planning? How problems. Making optimum use of areas that impact the environment. Mayor are the goals of a clean, safe and available space is a clear priority. Public of , Gèrald Tremblay, defines attractive city communicated across all transport, subsurface parking and use of sustainable development as “Countries activities and departments? roofs as gardens are examples of efficient and cities, particularly those that offer an and environmental friendly use of space in environment and a better quality of life, cities. In order to manage increasing that take a balanced approach to volumes of traffic, cities have invested in economic vitality, social equity, their physical infrastructure by widening environmental protection and respect for and building new highways and tunnels or the needs of future generations will be have implemented fiscal measures, such best equipped to deal with worldwide as London’s Congestion Charge, to competition.” persuade drivers to use alternative forms of transport for their journeys into and Effective needs to around the city. integrate environmental considerations in its early stages. Good urban planning can Underground transport systems have lead to sustainable, mixed use, attractive been used for many years as ways to developments. maximise space. The underground transportation of hazardous substances is It is essential for national governments to also an increasingly attractive option and incorporate environmental considerations the automotive industry is now producing into their economic, planning and other cleaner and less noisy cars. Industrialists policies. In Europe, city governments are also being encouraged by local, receive specific funds to integrate national and international policies to environmental aspects into physical become ‘cleaner’ too. planning, and performance is managed by Environmental management setting out specific targets. For example - New York But, despite all these positive targets for sustainable business parks or developments, many governments wish to embedding infrastructure into the Successful examples in urban move faster and take more radical steps landscape. environmental management include to improve the urban environment. To do increases in resource efficiency, this, they need to examine how Challenges to integrated policies are: reductions in waste generation and government policy and services are improvements in infrastructure for • Mainstreaming environmental designed and implemented and in . particular how two key trends – joined up considerations into strategy and policy and delivery and working in delivery. City governments are often The Land Acquisition Program (LAP) partnership – can help them take a more very large organisations and it is is a key component of New York effective approach to environmental difficult to achieve joined-up policy and City’s comprehensive efforts to management. practice; protect and enhance the quality of its water supply, ensuring clean and safe • Co-ordinating the planning process of water for future generations as well as Joined-up policy and delivery city governments is also is a major current consumers. Land acquisition challenge. Strategic business plans, A city’s environmental capital is closely and proper stewardship can protect spatial and long term financial plans connected to local, national and natural resources that filter pollutants need to be aligned and implemented in international spatial and social policies. before they reach reservoirs. a joined up and co-ordinated way. Sustainable urban development is a Acquisition of sensitive areas near Budgets and operational plans must widely used term in city policy making watercourses, whether through also be linked to the overall vision and and physical planning. But integrating outright purchase or through strategy to ensure focus on achieving policy and delivery is difficult because city conservation easements, can prevent real outcomes; governments themselves are often the introduction of new sources of organised around separate service ‘silos’. pollution.

Capitals, the key issues 59 Cities of the future - global competition, local leadership

• Environmental considerations must Public private partnership also be factored into the development Public private partnerships between the of the long-term vision for the city. This local authority and private sector should cover both the local liveability businesses or consortia are increasingly aspirations for the city as well as the used to address issues of environmental wider global environmental factors; and urban planning. • Environmental performance Citizen participation management and effective monitoring systems are also crucial in ensuring Many citizens would like to be more that goals are realised. involved in the decisions which affect their neighbourhoods and quality of life. Stockholm’s environmental policy However, too often citizens feel that Public private partnership attempts to address these issues by decisions are made for them without their for waste processing - ensuring that all of the city’s departments views being considered. Of course, most conduct their activities with environmental cities have very diverse populations with a Amsterdam issues to the fore. The city’s procurement wide range of ‘communities of interest’. It Mayor Cohen of Amsterdam policies, for example, are designed to is therefore important for governments to illustrated how the city government promote environmentally responsible consult widely with their citizens to was successfully using a public products and services throughout the city. engage them in debates and to capture private partnership to finance a new the range of views across the population. and modern Waste processing plant Working in partnership Asking for citizens’ views is not enough – governments must also act on them. in the city. The plant itself is viewed Integrated policies alone are not sufficient as unique because it has very low to maintain and enhance the Projects that involve citizens do not CO2 emissions. The financing for the environmental capital of cities. City necessarily require significant investment project is also innovative. 78 of the governments must demonstrate their to achieve substantial impacts. In 370 million euro investment costs leadership by balancing the needs of key Yokohama, Japan, for example, the city were supplied by two Dutch , stakeholders and must work in has launched a “Yokohama G 30 Rabo and Triodos Bank, as a partnership with, amongst others, the campaign” that is encouraging citizens so-called "Green fund". The Waste private sector to achieve their objectives. and companies to recycle and reuse as plant got a "green certificate" from much of its refuse as possible. The city the Dutch national Government and The city of Zurich works intensively in has also introduced a successful customers of the banks can buy different kinds of partnership. The local campaign that aims to reduce the use of green shares. The result is a very government of Zurich works with private air conditioning by persuading people to innovative new plant with a very big business to further promote the economic resist turning thermostats below 28 reduction of Greenhouse gasses and power of the city through the ‘Greater degrees and to encourage government low costs of waste management for Zurich Area Standortmarketing (location and private sector employees to adopt the citizens of Amsterdam. With an promotion)’ Foundation which was causal dress in the summer months to estimated 780,000 euros saved established in November 1998 in Zurich. help keep them cooler. The results have Mayor Cohen believes the project The founders’ intention was to emphasise been impressive. Energy consumption for resulted from good cooperation that the promotion and development of an Yokohama City Hall fell by 60% following between the authorities and the two economic region can only be successful the scheme’s implementation and the banks. through an active public private government intends to repeat the partnership. They also felt that it was programme annually. necessary to strengthen the economic multi-cantonal region of the Greater Barcelona, Spain has created a 10-step Zurich Area and position it internationally. citizen commitment to sustainable The city of Zurich also maintains development under the aegis of Agenda partnerships with other similar cities 21, devised at the Earth summit in Rio de including , Vienna, , Gratz, Janeiro in 1992. A system of broad and Kunming () as consultation throughout the city was well as other cantons in Switzerland to conducted and the resulting feedback and share knowledge and benchmark suggestions incorporated in the city’s services. environmental commitments.

60 Capitals, the key issues The commitments range from pledges to Conclusion protect open spaces and biodiversity to To achieve the vision of the clean, green Strategic question: reducing the city’s impact on the planet. and attractive urban environment, citizens How are all stakeholders – including The role citizens can play in improving the must have access to high quality government, business and citizens – quality of cities cannot be amenities and services. Managing the encouraged to participate in policy underestimated. Citizens know their quality of environmental capital requires a making and implementation to achieve neighbourhoods very well, are involved in broad view on the connections between environmental goals? their community and can play an different policies and balancing the needs important role in maintaining the living of key stakeholders. environment and highlighting priorities for Sustainable development can only be action. Citizens who feel involved in their achieved if governments work together communities often behave more with their citizens to establish and agree responsibly towards them. the vision and priorities for their cities and Partnerships are becoming more and work with partners in the public and more common in developing strategic private sector to integrate policy and policy that will affect the city. However, it delivery at the local level. Working is also important to encourage joint together with integrated policies and working across organisational boundaries through different stakeholders is the key within government to implement policies to maintaining and improving and plans. For example, organisations can environmental capital in our cities. pool budgets and involve local citizens in making decisions on how these resources should be spent in local communities. Pooled budgets can lead to significant efficiency savings and less duplication in services.

Capitals, the key issues 61 4.5 Technical capital

Introduction what they have achieved in the past but need to be prepared for the next wave. Cities have become nodes of dense networks exchanging investment, The city of Valencia, Spain, summarises information, goods and people. They have the key success factors of a city today: also become poles of innovation and knowledge management through access • Easy access to markets, suppliers and to information technology. customers; • Transport connections to other cities For cities, the use of technical capital is and internationally; twofold. On the one hand, technology provides opportunities to improve the • Quality of telecommunications; and efficiency and the effectiveness – and • Urban mobility. sometimes the extent – of services provided. On the other hand, it represents The technical capital of a city comprises a new and growing market that is three principal components as shown in attracting significant investment. Cities figure 16: want to take advantage of this growing market and want to attract new • Organisational Capital (OC) including businesses. In order to be attractive, organisational structure, networks, city therefore, cities have to provide best-of- management structure; breed technical communications and • Technology, including E-Government, information technology infrastructure. communication and information The introduction of new technologies is technology and systems; and also driven by factors such as research & • Infrastructure, including transport, development, innovation and knowledge energy, water distribution and building management. With increasing competition infrastructure. between countries, cities cannot rely on

Technical capital

Organisational IT/IS Infrastructure capital E-Government

Energy Transportation Buildings

Road Industrial

Culture and Rail leisure

Water Services

Air Housing

Figure 16: Components of technical capital

62 Capitals, the key issues There are clearly overlaps with other electronic transactions between capitals. For example, energy governments, citizens and businesses. requirements impact on environmental capital, and culture and leisure require G2G e-government involves sharing data buildings to operate in. The development and facilitating the exchange of of democratic capital is directly linked to information between government the opportunities provided by the IT- agencies and departments. This involves solutions and networks that come both intra- and inter-agency exchanges at together in the form of e-government. the national level, as well as exchanges between the national, provincial, and local In this chapter, we examine the different levels. As the city manager of The Hague, issues that cities face today in maximising The Netherlands, describes it: “The their technical capital and how they are development of e-government and ICT responding to these challenges and plays a major role in our ambition to be opportunities. the most customer-focused municipality in 2006. Our role will be mainly Organisational capital facilitative.” Organisational capital in this context is G2C: Government to citizen what is left when the staff go home at the end of day. The intangible elements of Citizens increasingly want to be treated organisational capital are research like customers. Their access to programs and development, systems of information and communication education, fiscal policies and public technologies in other areas of life raises procurement policies. The tangible their expectations of public services, and aspects include everything that is owned so they expect cities to follow the move by the city such as buildings, electronic into technology in order to improve or networks and other tangible goods. extend their services. The growing demands on the public sector come at a Technology (E-Government) time of stagnant economic growth in most industrialised countries. This means that Today, cities cannot afford to ignore the the public sector has to respond by advantages of new technologies. “These learning to do more with less and one of technological advances arise from the the best ways to do this is by improving intensification of economic globalisation their efficiency and productivity by using and increased competition between ICT networks. For example, the city of companies and ” says ’s Zurich, Switzerland, in response to this Councillor of Economy and Citizen important trend has defined a vision of Involvement. how it sees the development of its Cities are a key institution in the life of administrative role: “The goal is an their citizens, and as expressed by city efficient, process-oriented and lean leaders in Madrid “Cities are the first, administration which at the same time is most recognisable and perhaps most service-oriented and populist.” Similarly, closely felt levels of administration for the Luxembourg is aiming to provide ‘one- citizen, they are the simplest vehicles for stop-shopping’ for citizens by creating a relating to a global arena.” One new way central agency (Biergercenter) and its of responding to this statement is by virtual equivalent (the eBiergercenter) to developing e-government solutions. provide simpler, more direct relationships between the city and its citizens. G2G: Government-to-government. In practical terms, cities are looking at In many respects, the G2G solutions form improving how requests/documents can the backbone of e-government. Some be processed more effectively and observers suggest that enhancing accurately by the administration. governments’ internal systems and Electronic document management and procedures is a prerequisite for successful workflow allows, for example, a written

Capitals, the key issues 63 Cities of the future - global competition, local leadership

request that is transferred to an G2B: Government to business Strategic questions: administration by a business or citizen to But e-government is not just good for be digitalised at 9:00 am, available Do citizens enjoy convenient, one-stop citizens – business will receive benefits immediately to a qualified agent for access to services and information? To too. Businesses would welcome lower processing, available for validation at what extent are services organised compliance costs. Like citizens, 11:00 am, and with a response sent on according to citizens’ needs, as businesses want government to deliver the same day. The benefits are improved opposed to the administration’s own information and services in an easier, service quality and improved efficiency, requirements? Is the public sector cheaper, more accessible and responsive, transparency, consistency and culture keeping pace with technological integrated, and customer-oriented way, so collaboration as well as traceability of change? they can more easily meet their legal and actions from start to finish. regulatory obligations.

Local and central governments are The G2B sector includes both the sale of increasingly focusing on the outcomes surplus government goods to the public, (the impact of their services) as well as as well as the procurement of goods and the outputs (how they deliver them), to services. Although not all are directly achieve better results for their citizens. dependent on the use of information Achieving an outcome-based approach technology, several different procurement means that separate agencies need to methods are used in relation to the G2B work more effectively across their sector. Performance-based contracting is traditional boundaries and collaborate a method by which the payment made to with other agencies, stakeholders and the contractor is based on the actual their customers. goals and outcomes of the job. Share-in- Savings contracts are those in which the In response to this, governments are contractor pays for the up-front costs of a developing new measures of performance project, such as the installation of a new that focus on outcomes. New Zealand, for computer system, and receives payment example, has established a set of criteria passed on the savings generated by that it will use to measure the success of switching from the previous system. its e-government initiative:

• Citizen convenience and satisfaction - Information technology and Services provided anytime, anyhow, systems anywhere. People will have a choice of channels to government information “As ICT affects almost every aspect of our and services that are convenient, easy lives Toronto makes a point of being at to use and deliver what they want; the centre of this kind of development.” David Miller, Mayor, Toronto, Canada. • Integration and efficiency - Services that are integrated, customer-centric Technological change is only a part of and efficient. Information and services achieving these goals, and the Internet will be integrated, packaged, and will not fully replace all the traditional presented to minimise cost and ways that governments and citizens improve results for people, businesses, interact. On its own, technology does not and providers; and guarantee better public sector • Participation in government - People performance. Success also depends on will be better informed and better able making ongoing improvements to the to participate in government. design, operation and culture of the public sector, so that it can better respond to citizens’ changing demands.

Governments’ awareness of the importance of e-government to improve the delivery of public services has come about as a result of two related phenomena.

64 Capitals, the key issues First, the pace of globalisation has Communication interwoven intra-country trade, investment The Internet, and its associated and finance opportunities into technologies and business models, is international networks, with cities seeking profoundly affecting the way government, new ways to provide more competitive business and people interact. Government products and services. Secondly, is adapting to this new environment in a advances in Information Technology (IT) way that will eventually transform how it and Information Systems (IS) have operates. presented new approaches to the integration of these networks and the The Internet is a means for a city to reach improvement of the efficiency of citizens (current and potential) as well as businesses and services worldwide. businesses (current and potential). The web site of a city often now extends the In the process, the revolution in public administration services to information technology has made households. For example, allowing a unprecedented amounts of information citizen to request a birth certificate over available around the globe, leading to an the Internet is a time saver for the citizen expanded global marketplace for goods, and the administration. services and ideas. To be successful in this new environment Cities all over the world are recognising governments need to work together more the power of these communication tools, effectively, sharing resources and providing access to learning and integrating their services. People and knowledge infrastructure, and forming businesses will then have a better, more cross-boundary virtual communities for consistent experience of government. This collective action. At the same time, approach will also help reduce the costs people are becoming aware of the of delivering services online and through immense opportunities presented by other channels. virtual global networks for reforming political, economic and social power structures.

Government and employees

InfoComm education Knowledge management Government Robust Infocom infrastructure and Operational efficiency improvement management Technology experimentation Electronic service delivery

Government Government and citizens and business

Source: Strategic Programmes of – The e-government Action Plan (2000–2003)

Figure 17: Integrating e-government actions

Capitals, the key issues 65 Cities of the future - global competition, local leadership

Infrastructure This view is confirmed by the city of Barcelona, Spain: “…we must create The of a city can be mobility and transport networks that can organised into transport and logistic cover the entire and guarantee infrastructure, energy and water the existence of basic infrastructures for infrastructure and last, but not least, the the flow of goods and people.” building infrastructure. Increasing urbanisation in most cites is On a strategic level, cities have moved raising the demand on inner-city from ad-hoc planning to a more integrated transportation and traffic organisation. and strategic approach to urban Even for cities experiencing de- infrastructure planning. This approach urbanisation, transportation and traffic is a makes it easier to plan ahead, taking into hot topic for people living outside but Strategic question: account all the issues and constraints, travelling regularly into the city. How to provide a good transport and and helps in finding the right solutions. logistics infrastructure to respond to an The days when cities could plan their Many cities are confronted by traffic increasingly mobile population and to development without having the complete congestion and are trying to respond with attract businesses? and overall picture and without attempting the construction of new roads, expansion to look into the future are over. There are of airports, bridges, etc. One such is the many examples of this forward looking, city of , and integrated approach: which sees this as an urgent priority, says City Manager Bojan Stanojevic: “Belgrade • In South Africa, The Nelson Mandela needs a thorough reorganisation of traffic, Metropolitan Municipality has which implies construction of a ring-road, developed a business plan entitled the and several bridges.” Others are trying to Infrastructure Development Plan (IDP); find the right balance between the and different existing means of transportation • To plan for the future, the city of in order to alleviate this issue. Luxembourg is mapping out a strategy Transportation is, of course, also a source in the form of an urban development of pollution and noise that affects quality plan which includes traffic organisation, of life in the city. The recent increase in construction and urban development energy costs, caused by the sharply rising projects. of oil, is a more recent issue that strongly affects the transport system. Transport Citizens are concerned or are sensitive to all these issues as they affect their well- The population of most cities is being, as the example of Zurich, increasingly mobile. Being aware of this Switzerland, shows: “The challenges of change, the need to provide an city mobility are summarised in three infrastructure that supports this trend is – action areas: mobility strategy, noise for all cities – a significant challenge. protection and infrastructure projects for Cities need to manage the flow of people traffic. Traffic in the city of Zurich was to and from the city and also the traffic viewed as the biggest problem in the generated by the exchange of goods and 2003 resident survey: traffic jams, tough services arising from the city’s role as a traffic, high noise level and air pollution.” marketplace. Indeed, a critical success factor for many cities involves finding the Individual transportation by road is probably best way to leverage the logistic and the most inefficient means, but remains the transport network in order to attract most flexible. Unfortunately, road traffic is businesses for the sake of the economic limited by the capacity of existing roads development of the city. This is a view and parking space, which, quite often, shared by the leaders of the city of cannot be expanded further or can only be , Spain: “The key is having very expanded at the cost of losing space for open cities with good transport structures residential or commercial buildings. Hence, in which anyone can do business.” many cities are increasing parking prices or introducing measures like London’s, UK,

66 Capitals, the key issues Congestion Charge in order to encourage Energy supply the use of public transportation. Air travel is Nobody denies that energy infrastructure Strategic questions: also limited by the size of airports, many of is critical for every city and demand is Is there still a need for an effective which cannot be expanded significantly due increasing constantly. Some cities have solution to traffic organisation? Are to the noise they generate and the lack of experienced blackouts which took people, some familiar forms of transport available space. In response to these as well as energy suppliers, by surprise enjoying a new lease of life? constraints, some familiar but neglected and confirmed the lack of reliability of the forms of transport like trams are enjoying a energy supply and the extent to which our . Trams are enjoying a new dependence on abundant energy has lease of life in Bordeaux, Lille, , South, grown. Manchester, London and other cities across France and Europe. Some cities (like Luxembourg) are still the sole supplier of energy (gas and Many cities, such as Krakow, , electricity) to households and companies Belgrade, , Dar-es- within the city’s . They manage the Salaam, Sao Paulo or the City of Morón, entire distribution network and sometimes Buenos Aires still need radical the production of energy. The deregulation improvement to their transport of this market poses a serious threat to infrastructure to make sure that it can those cities. Providing energy services cope with the demands of the present used to be a profitable business, used to and provide solutions to the visions that cover deficits from other services like those cities have for their respective public transportation. As profit margins futures. Many of these cities are decrease, those cities will have to find dependent on external financing and new ways to finance their budgets. international donors to support their infrastructure development. Water distribution and treatment In many cases, the decision to move Fresh water is one of the most basic some facilities to the city centre asks needs, but it does not enjoy the same cities to revisit their transport visibility as other services. But the supply infrastructure. The City of Oslo, Norway, of both freshwater and sewage treatment which plans to move the university and are prerequisites for any city. Both research communities to the city centre, is services require an important distribution confronted with this situation: the City of network as well as storage and treatment Oslo will have a unique challenge to build capabilities; facilities for which most cities up a social infrastructure and a well are responsible. functioning transport and public transport Most cities view these services as a cost system. centre as they fail, in most cases, to be Strategic question: A few cities have very special financed by the prices or fees that cities Some cities are responsible for water requirements like hosting the Soccer ask for these services. In addition, cities distribution and treatment. Do prices World Cup or the Olympic games. These and usually do not account need to be adapted to cover the overall cities view this as an opportunity and are for their investments in this infrastructure costs of the infrastructure? planning on leveraging these occasions in (no depreciation of the assets). Prices are order to develop their infrastructure: therefore set at a level that is too low to South Africa, hosting the Soccer World cover the overall costs related to the Cup 2010, will make Johanesburg water infrastructure. The European fundamentally different. These differences Commission has set up a directive with will come from significant infrastructure the objectives of improving water quality development in the areas of roads, water and decreasing pollution in rivers and and electricity, amongst others. underground waters by 2015. This can only be achieved if the price of the water In the end, it all comes down to serving service covers the cost. Therefore, the the citizens. Providing a good and reliable prices of this service need to be redefined transport infrastructure in the city is one by taking into account the overall costs of way of helping cities to connect with their the water infrastructure. Much work is still citizens. ahead in order to move in that direction.

Capitals, the key issues 67 Cities of the future - global competition, local leadership

Building Infrastructure Hopefully, more cities will be able to use Strategic question: Buildings and their infrastructure are their legacy in this way so that the advantages of the past can be re-used to How are infrastructure development probably a city’s most visible assets. The prepare and develop a prosperous future. plans mapped against anticipated social, political, cultural and administrative economic development? functions of a city all need buildings to Conclusion operate in. Investments in a city’s infrastructure are key to facilitate The demands on a city’s infrastructure economic growth, including investments today exceed simply the provision of in residential infrastructure. Decent transport and – although these housing is one of the fundamental represent a still considerable challenge in conditions for life and a key objective for their own right. Infrastructure now also many city governments as shown for includes information technology and example by the city of Nizhny Novgorod communications that link the city with in : “Our main objective is to citizens and businesses. provide for comfortable living conditions for city dwellers.” Citizens now expect fast, responsive service from government, and want to be Many cities face significant challenges to able to transact their dealings with the city their efforts to provide affordable and online, efficiently and effectively. comfortable housing. Increased land Businesses are attracted to cities that prices, for instance, is certainly an issue offer them sophisticated communications when considering building new infrastructure, along with efficient infrastructures. Ever increasing land prices transport and logistics. are impacting housing and living costs and could act as brakes on the In combination these pressures mean that development of a city. The city of Madrid, cities have to find new ways to develop Spain, faces such a situation and views their infrastructure in an integrated way. “the evolution of land prices (residential/ They have to develop new partnerships, industrial/tertiary) as a critical factor in collaborations and ways of working that absorbing, attracting and retaining can help them to deliver infrastructure economic activity and population”. solutions that are efficient, environmentally sustainable and cost- Nevertheless, other circumstances are effective. allowing cities to redevelop and reinvigorate previously neglected areas, and in doing so to create new housing and social infrastructure. As cities change from having an industrial base to a service driven economy, former industrial areas can be used for other purposes, such as housing. The example city of Oslo, Norway, shows how the city government re-designated the existing infrastructure by leveraging the history and the spirit of the city: “For City of Oslo, the term ‘city by the fjord’ is a metaphor for this transformation, where former dock areas are converted into living and business spaces. We have prepared for 40,000 homes during the next ten years and are arranging a great house-building project.”

68 Capitals, the key issues 4.6 Financial capital

Every city is different in appearance and The situation for African cities is by far atmosphere. So, too, is each in its more dramatic. Despite some financial finances. Differences in the structure of support from national governments or government, the financial system of each donor agencies – usually only for the country and the revenue streams available initial construction of facilities, not their to the municipality create broad on-going operations – municipal differences in the financial structure of authorities must rely overwhelmingly on every city. fees, tariffs and local taxes, mainly property taxes. The current situation Through such taxes, the better-off sectors Despite different financial systems most of society – those able to own taxable cities have one thing in common – property – help pay for services that increasing financial pressures and a drive benefit a broader layer of the population, to deliver value for money in public including some of the poor. service delivery. Actually collecting all the taxes that could Across Europe, and in other parts of the be paid, let alone expanding the tax base, world, there is a wave of decentralisation as is not easy. Property valuations are often national governments offload more incomplete and out of date, while it is very responsibility for public services onto local/ difficult to value property in unplanned city governments (to name a few: Vienna, residential areas, since legal ownership is Liège, Belgrade, Yokohama, Perth, City of poorly documented. Many taxpayers are Moron, Buenos Aires). Meanwhile, rising also reluctant to pay what they owe, unemployment strains local social services especially if corruption is widespread. while hurting tax receipts. As a consequence Milan could face a downgrade In the USA, communities ranging from of its municipal bonds, while Lille, France's and Buffalo to and San fourth-largest city, has asked for emergency Diego are also experiencing difficulties, as aid. Even wealthy Stockholm, Sweden, may illustrated in figure 18. The common trend have to raise taxes because of runaway for cities since the 1980s has been one of spending on health care. declining federal support – from the Reagan Administration to the present day. German cities are most at risk in Europe because so much of their tax income is tied to business profits, which can fluctuate dramatically from year to year. Berlin, for example, is burdened by crippling interest payments on past borrowing. The city is currently seeking assistance from the federal government in the form of debt relief. In France and Italy, by comparison, city budgets depend primarily on real estate taxes, where receipts are more stable.

So far, Europe's urban financial woes are visible mostly in small ways, such as peeling paint in school hallways or overflowing rubbish bins in public parks.

Capitals, the key issues 69 Cities of the future - global competition, local leadership

3.0

2.5

2.0

1.5

% 1.0

0.5

0

-0.5

-1.0 1996 1997 1998 1999 2000 2001 2002 2003 2004*

* Budgeted Source: National League of Cities

Figure 18: Declining fortunes: % change in contrast dollar revenue for US cities

How did American cities – or all other There are also problems with local taxes. cities worldwide – arrive at this point? Many cities rely too heavily on either a Most obviously, any sluggishness in the sales or , further exposing economy hit cities all over the world really them to swings in the economy. These hard, raising expenses and holding down taxes have not in all cases kept pace with revenues. For example, city hospitals face demographic and economic changes. For much higher costs when residents lose example, a growing proportion of those their jobs and, with them, their health with jobs in the city now live in the insurance. The same job losses can mean suburbs meaning that, while they spend unpaid taxes. their days in town, their property taxes go to another local government. Similarly, the Soaring compensation for municipal sales-tax base is shrinking. In 1960, employees has become a nationwide goods (which are taxed) represented problem as well. Such cities as about 60 percent of all sales in the United , San Diego and all States versus 40 percent for services find themselves saddled with high (which usually are not taxed). Today, that personnel costs and staggering unfunded ratio has flipped. Surging online sales also pension liabilities. Unlike corporations, cut into city revenues by reducing the which must put money into their pension demand for outlets. plans when assets fall below a certain level, city governments are free to Short term solutions contribute when they want to. The resulting temptation is to grant generous The answer to such tax problems seems benefits today and push the liabilities into straightforward – cities need to recalibrate the future. their revenue sources. This requires reforms but change can be hard and These days, cities cannot rely on support longsome. Politics often blocks efforts from the states or the federal government. and restrictions may result from taxpayer revolts. Hence, instead of solving the problem, most cities react in an ad hoc manner with temporary solutions that only push the problems into the future.

70 Capitals, the key issues One way could be to accept higher debt and minimal cost, regardless of what the levels, although this has its own service is? Or are partnerships with limitations. In the USA, cities have already private investors a more likely solution for accrued an enormous debt burden to services in which the city does not have a finance their day-to-day operations- in core competency? Should, for example, some cases reaching constitutional debt the city of , South Africa, limitations. The same has happened in cover all aspects of energy, water and most European cities. In , former waste management or would it be Chancellor Schröder drew derision from cheaper and more effective if a German mayors when he offered to partnership with a private investor was provide low-cost loans. Many cities are established? The city of Dar-es-Salaam, already so heavily indebted that state , has enacted a number of such authorities, who issue debt on behalf of arrangements, and the Mayor Kleist Sykes municipalities, will not let them borrow says: “The recent spate of privatisations any more. of public utilities, notably electric power and water, are too recent to be rated Hence, almost all cities are responding by unqualified successes, but all the signs cutting back personnel and government are that they will eventually benefit the spending in areas other than public safety, less privileged inhabitants of Dar and curtailing capital and infrastructure allow the City Council to focus on other investment, raising user fees and charges, pressing issues.” and drawing down contingencies, or rainy day funds, which cities set aside for Longer term solutions emergencies. This leads us to the next section, which In response to the deteriorating fiscal examines how cities can address the condition of cities in the USA: problems of resource gaps – between income and expenditure and how they • 47% of all cities increased fee rates in can make their resource allocation and 2003; planning as efficient as possible. • 30% reduced city employment; Cities have a wide range of possible • 29% imposed new fees or charges on instruments to choose from when it services; comes to the question of improving their financial situation. In addition to the • 21% reduced actual levels of capital already mentioned short term solutions, spending; and local governments need to seek out revenue sources not tapped before. • 11% reduced city service levels. Public private partnership What services do cities actually As the public sector continues to seek need, what must they offer? alternative means to fund the Further increasing fee rates and reduced development and rebuilding of essential city service levels raise the question – infrastructure and services, it has what services can and should a city increasingly turned to innovative project provide in the 21st century? finance, and hybrid public and private debt financing models, like a Public In general, cities provide a large and Private Partnership (PPP). diverse range of services. Most of them supply and administrate the vast majority A PPP is a partnership between the public of public goods such as safety, education, and private sector for the purpose of healthcare and social welfare to their delivering a project or service which was inhabitants. In an age of specialisation, is traditionally provided by the public sector. a city always in the position where it is The PPP process recognises that both the able to deliver all services at best quality public sector and the private sector have

Capitals, the key issues 71 Cities of the future - global competition, local leadership

certain advantages relative to the other in Outsourcing/privatisation the performance of specific tasks, and can enable public services and Another point to consider is the question infrastructure to be provided in the most of a total transfer of services by entering economically efficient manner by allowing arrangements with third parties who have each sector to do what it does best. Many invested in developing process and cities are exploring the possibilities of service excellence. The city government PPP, summed up by Ms Inger Nilsson, can take advantage of this investment by City Manager of Malmö, Sweden, who contracting with third party suppliers says that funding city projects “will –who remain accountable to the city – to increasingly be addressed by solutions execute specific services and functions, based on partnership in various forms to often at a lower cost to the city. solve different issues. The municipality will Such services range from back office no longer be solely responsible for processing through to parking everything as it is to some extent today.” management and street cleaning. For example, municipalities like Hamburg, Germany, have privatised former public companies, such as the Hamburg Federal State Hospital, and , , which privatised its garbage collection in the central business district. Services now performed by private contractors have

Case study - Public private partnerships, London, UK One of the largest and most complex public infrastructure projects of recent times was the London Underground Public Private Partnership. In short, the PPP structure divides the London Underground into four parts for the next 30 years – three private sector infrastructure companies, or Infracos, and a public sector operating company, namely London Underground.

The three Infracos take control of London Underground’s assets – the trains, tracks, tunnels, signals and stations – which are effectively privatised for the next 30 years. London Underground will manage the PPP contracts and provide train operators and station staff.

The delivery dates for, as an example, new trains and refurbished stations have already been agreed and are written in the PPP contracts.

PPPs are all about negotiating deals that are good for both sides. The private sector wants to earn a return on its ability to invest and perform. The public sector wants contracts where incentives exist for the private sector supplier to deliver services on time and to specified standards year after year. In that, the public sector shares an absolute identity of interest with private financiers whose return on investment will depend on these services being delivered to those standards.

Central to any successful PPP initiative is the identification of risk associated with each component of the project and the allocation of that risk factor to either the public sector, the private sector or perhaps a sharing by both. Thus, the desired balance to ensure best value (for money) is based on an allocation of risk factors to the participants who are best able to manage those risks and thus minimize costs while improving performance.

72 Capitals, the key issues saved Chicago, USA, taxpayers millions – The situation requires more transparent including custodians, office-product cost budgeting in order to improve Financial management - purchases, tyre collection, towing and strategic planning with operative and City of traffic signal design. democratic controlling processes; a point Westminster council has an exemplary echoed by Mr Elmar Ledergerber, record in delivering good quality, cost However, there are risks and president of the city of Zurich, effective services, and was awarded shortcomings. In Nairobi, Kenya, for Switzerland, “There is an impetus towards the prestigious ‘Council of the Year’ example, private contractors operate a generally recognised quality standard Award in 2004. mainly in middle and higher-income areas, for accounting for the public sector. In where residents can afford to pay. In other particular, planned changes will result in Keeping local taxes as low as cities, private taxis and bus companies greater reliability and transparency in the possible is a key part of the council’s are more expensive, and only serve the reporting of financial performance.” agenda. On-going financial pressures lucrative routes. The goal is the implementation of full- across local government means that costing for all products and services. At the council needs to seek ever more Run the city like a business present, the different accounting and innovative and creative ways to While politicians score points with calls controlling techniques of many cities and deliver its services. Innovative "to run government like a business," after organisations are not transparent. It is outsourcing arrangements mean that Election Day they find it’s just not almost impossible to see if costs can be 60 services, employing 400 people, possible. lowered because public departments are are now delivered by the private not able to calculate the true costs of their sector and a customer call centre, Government officials have many "bosses" products. It is therefore also very difficult which has handled four million calls in to consult before making decisions, from to evaluate any outsourcing of production. the first two and a half years, ad hoc committees to legislators to providing a high quality service to citizens themselves; they find it is What are needed are integrated cost citizens. The council is also extremely difficult to manage career accounting systems. Cities that implement investigating options where it can workers whom they did not hire, and cost accounting will gain a much clearer ‘trade’ services, that is, to deliver and cannot fire; from their first days in office, overview of cost drivers within the manage services on behalf of other they find themselves in crisis management administration and its tasks, and find public sector bodies. mode; and the incentives that create ways to drive change towards cheaper efficient businesses – cash bonuses, service delivery. raises, promotions – do not always exist By using this method, city governments in government. can define their services in terms of When government fails, it cannot simply inputs, outputs and outcomes. As hang an "out of business" sign in the front previously noted, measuring outcomes window. The troubled government cannot across government operations is simply stop providing services – from becoming ever more important to repairing roads to preventing crime – that demonstrating policy effectiveness to are still needed. citizens.

However, these differences do not mean In balancing financial considerations, government leaders cannot share short term pressures have to be weighed business’s entrepreneurial spirit. Any against long term pressures. A good institution – public, private or non-profit – example is public investment in long term should be innovative. Any agency can necessities, such as education, versus provide incentives for improved employee short term requirements such as the output (such as new duties or greater financing of current infrastructure projects. influence over decisions). All successful Financial planning and allocation can be organisations must strive for efficiency better accomplished if founded on a solid and financial discipline. base of current costing.

This leads us to the point: if there is a silver lining to the crisis, it is that hard times are forcing financial discipline on city governments.

Capitals, the key issues 73 Cities of the future - global competition, local leadership

Conclusion Master plan The analysis clearly illustrates that big cities worldwide face a vast range of e.g. financial challenges, some unique to Thriving economic climate certain countries or cities, others common to many areas. All cities need to address High quality government services the questions of what services to provide and how they can finance their provision, Leadership among benchmark cities while at the same time investing in the future that they want to offer to their citizens tomorrow.

To find a reasonable solution to these Goals inherent tensions requires a process of e.g. change management, including a profound analysis of the status quo Provide and maintain first rate (especially of the numbers), and a infrastructure thoughtful planning and management Ensure City’s long-term financial consultation. The analysis and ability to deliver involvement of the various stakeholders should be part of this process. Attract and retain a prosperous business community A working group should generate a vision, which sets out goals and tasks. Ensure attractive and well The plan should outline what needs to be maintained City done and how to do it in order to ensure that the city grows in an orderly, well thought out fashion and that the needs of the city will be met. It should not be seen as a static blueprint of how to get to a Tasks specific end point. It is more a living e.g. document that provides continual Define and develop revenue guidance for the work of the city's leaders strategies to enhance the City’s and staff. economic base Such a process is challenging of course. It Evaluate and recommend revenue shows the big picture and gives clear and enhancement and cost reduction easily communicated guidance for the strategies to improve the financial work of the city's leaders and staff. In strength of the City addition, cities should try to learn from the experiences of others, examine and Provide prudent financial benchmark the own plans against the management and facility success and failures of others. This will maintainance to support a first-rate also help them to develop and implement infrastructure thriving economic financial structures that meet their present climate and future needs.

PPP Outsourcing Financial discipline

74 Capitals, the key issues

Cities of the future Chapter 5 Summary and conclusions

In the preceding chapters we have examined some of the trends and developments that are shaping the future of cities around the globe. Though context has substantial bearing on the precise form in which these trends manifest themselves – every city is different after all – we see some significant common themes emerging.

Summary and conclusions 77 Cities of the future - global competition, local leadership

Global trends accountability required to make sure that their engagement with citizens (both on Aside from a city’s physical infrastructure an individual and corporate level) can and geographical location, its most inspire confidence and trust to create the obvious characteristic is its people. And sense of partnership that cities need to there are some significant forces shaping deliver their visions for the future. the future of people in all cities. An ageing population in many parts of the world is Leadership is a critical quality within creating a demographic pressure and cities. Strong, courageous and some tough economic challenges that all imaginative leaders are needed to make city governments have to face. sure that the futures that cities have Communities are becoming more envisioned for themselves can be realised, fragmented, as individualism and with all citizens participating and actively consumerism are increasingly dominant engaged with the collective effort to modes of behaviour. Faced with the embrace and react positively to the global increasingly global influences that are trends sweeping the world’s cities. shaping the way people live and work, cities have to find ways to understand and Challenges: global and local react to their citizens’ needs and No city is exempt from the challenges that preferences in rapidly changing globalisation has created. Competition circumstances. between cities is intense. Environmental The world is getting faster. Change threats are increasing and security is a happens more rapidly than ever before major concern for city-dwellers and high-technology is now one of the everywhere. most powerful drivers of that change. City economies that have relied on the Cities have to learn how to embrace the industrial certainties of the past now find possibilities of new technology in order to themselves vulnerable to new competitors create thriving communities in which offering cheaper labour. Cities, in the west employment can flourish and citizens can in particular, have to make sure that what make use of the opportunities for they offer fits the aspirations of the people interaction and dialogue with their city that will bring creativity and innovation that new technology creates. At the same with them to help transform their cities. time cities must be careful not to leave The shift to a knowledge-based economy people behind – the digital divide may be requires cities to attract and develop invisible but it can create very real innovative businesses and individuals who problems if cities are not able to address can help them move towards sustainable the differences between the digital ‘haves’ growth and new jobs. and ‘have nots’. Citizens are increasingly consumerist in More people live in cities than ever before. their attitude to city services, and yet Increased urbanisation, and the revival of there is also a tendency towards political previously abandoned areas of cities, apathy and cynicism. This is brings great opportunities but is not demonstrated in the generally low without its challenges. turnouts at municipal and city elections. Cities are faced with a greater diversity of City responses populations, so that they have to develop Cities need to establish a dialogue with new ways of integrating and including their citizens and create mechanisms and increasingly varied groups of people. structures that make them more accountable and open to the changing The city is beginning to change its role demands they face. Public trust is a key from one of provider of services to one issue for cities and they are developing whereby it facilitates the collaboration and the corporate governance structures that partnerships required to deliver services. will deliver the transparency and The focus of city administrations is

78 Summary and conclusions moving away from their own strengths lie, both in a local setting and a organisational imperatives to a citizen- global context, and where more centred approach that places citizens, encouragement and intervention is and their needs, at the centre of all needed to develop their intellectual service provision. capital. The city government can demonstrate its leadership by actively In the light of these challenges cities need pioneering the way that it introduces to develop their visions and then create innovation around the services it provides the appropriate structures, governance and by doing so can help to foster a and environment in which those visions creative culture. City leaders need to can be realised. To do this, they need to participate and interact directly with the understand the assets – or capitals – that source of their future intellectual and they have and how these can be creative wealth and act as facilitators of developed and directed to take the city the content that the new economy of forward on its journey to the future. experience and knowledge demand.

Managing capitals The strength of a city largely resides in its people. If a vision for the future is to be In this report, we have analysed the successfully realised then all citizens need assets that a city has (or needs to to feel included in and consulted about develop) and grouped them into the their place in that future. Better forums for following types of capital: interaction and the exchange of ideas and • Intellectual capital and social capital; views are needed. A sense of ownership and inclusion can be fostered by • Democratic capital; encouraging local, neighbourhood initiatives that celebrate the achievements • Cultural and leisure capital; of citizens who have responded to • Technical and environmental capital; and challenges in a positive and creative way. The search for good examples should be • Financial capital. made as widely as possible and city leaders should make opportunities to Whilst each of these capitals requires share their experiences and learn from the specific knowledge and skills to develop good practice of their peers all over the them effectively, there are some clear world. principles for managing capitals. These include having a clear focus on people, Democratic capital property and processes within the framework of sound corporate One common problem that all cities face governance and robust risk management. is the lack of citizen participation in the Citizens must be involved and consulted decision-making process, through both so that they feel moved to participate in formal and informal political mechanisms. the efforts to realise the city’s vision. Effective engagement can be developed by making government more transparent These factors all need to be borne in mind and directly accountable. when looking at the different capitals set Communications technology can speed out below. this process up and any number of methods, from online forums to voting by Intellectual and social capital SMS text message, can pull people closer into the political process. Understanding To compete in the global knowledge the needs of different city stakeholders economy, cities have to ask the right and forging partnerships with them is an questions about what the future holds for important step towards fostering civic them. By doing this, the resulting insight pride among all citizens. and analysis should provide cities with an accurate evaluation of where their

Summary and conclusions 79 Cities of the future - global competition, local leadership

Cultural and leisure capital Financial capital A city’s brand reflects and embodies the All governments face the challenge of associations that arise from its physical, having to do more with less. The cultural and intellectual assets. approach to financial management is Understanding the characteristics of each therefore critical. Cities need to – and the interplay between them – helps investigate potential sources of revenue cities to develop their brand strength. To and work to ensure that they explore new develop their cultural and leisure capital, and better ways of driving value from the cities need to identify and attract the services that they offer citizens. range of talented creative people that can Performance management is critical to contribute to the knowledge and this, and so is the way that financial data experience economy. Attracting the right is collected and analysed. Both have a mix of sporting, cultural, business and direct bearing on a city’s ability to make political events can also act as a platform improvements to its services and derive for enhancing a city’s brand and greater value from the financial costs that promoting it to a wide audience. Cities it bears to provide them. need to recognise the diversity of cultural capital that accompanies the increasingly A plan, with clearly delineated goals and broad spectrum of people which the tasks and activities required to immigration introduces. Immigrants need achieve them is essential, as is the to be made to feel welcomed and ‘at communication of the plan using language home’ in order to ensure that the city can that can be easily understood. benefit from the wealth of experience and Addressing the different capitals innovation they represent. summarised above raises a number of key challenges that all cities must respond to Technical and environmental in order to realise their own vision of the capital future. Strategic questions Cities’ futures must be sustainable. And Perhaps the most important that means ensuring that the infrastructure recommendation for addressing these Some pertinent questions to ask about on which a city depends is built with their challenges is to keep asking – and the future include: environmental impact as a primary seeking answers to – questions about the consideration. Public transport, energy • What are we looking for?; future of the city. Advice and insight that supplies, water and waste management may contribute to answering them is • What do we see?; are all essential to the continued worth seeking out, wherever it may come prosperity of a city, so it is imperative that from. • What does the future mean to us, our city leaders ensure that all their policies city and our citizens?; reflect environmental criteria and that they As the above summary and the preceding are implemented through joined-up policy chapters show, cities are hugely complex • What do we want?; and conducted through partnerships. organisations that involve collaboration between – and the interaction of – a wide • What do we do?; The city has a role to play in developing variety of organisations and individuals. technical capital by investigating ways to • Is this a good development?; deliver the services and content which The next section in this document • Who will do it?; comprise e-government. City contains brief interviews with different city governments should look at e-government leaders around the world. We asked them • Who can we collaborate with? and communications technology at all about the challenges their cities face – levels: from government to government both external and internal – how they are • Who can help us?; (G2G), government to citizens (G2C) and responding to them and what their plans • Where can we find knowledge and government to business (G2B). are for the future. Their responses provide best practice that will guide us?; a fascinating and varied account of the and vast array of challenges and opportunities that make cities the dynamic • What resources are required? environments they are today.

80 Summary and conclusions 81 Cities of the future - global competition, local leadership Cities of the future Part 2 Cities in focus

Part 2 of this document contains a brief summary of the interviews with each of the 44 city leaders and managers who took part in this study. We asked them about the challenges their cities face – international and national, external and internal – how they are responding to them and what their plans are for the future. Their responses provide a fascinating and varied account of the vast array of challenges and opportunities that make cities the dynamic environments they are today.

Cities in focus 83 84 Cities in focus List of participating cities

Amsterdam, The Netherlands Malmö, Sweden Barcelona, Spain Melbourne, Australia Belgrade, Serbia and Montenegro Montreal, Canada City of Bergen, Norway Manguang, South Africa Berlin, Germany Nelson Mandela Metropolitan Municipality, South Africa Birmingham, Nizhny Novgorod, Russia Brisbane, Australia City of Oslo, Norway City of Morón, Buenos Aires, Argentina Perth, Australia Dar-es-Salaam, Tanzania Phoenix, United States of America Ekurhuleni Metropolitan Municipality, South Africa Sao Paulo, Brazil eThekwini Municipality (City of ), South Africa Stockholm, Sweden Frankfurt, Germany Sydney City, Australia Gothenburg, Sweden Sydney State, Australia The Hague, The Netherlands Toronto, Canada Johannesburg, South Africa Tshwane, South Africa Jundiai, Brazil Vancouver, Canada Krakow, Valencia, Spain Liége, Vienna, Austria London Borough of Newham, United Kingdom Warsaw, Poland London, City of Westminster, United Kingdom Yokohama, Japan Ville de Luxembourg, Luxembourg Zaragoza, Spain Madrid, Spain Zurich, Switzerland

Cities in focus 85 Amsterdam

Interview with Mr Job Cohen, Mayor of the City of Amsterdam

Mr Job Cohen Mayor of the City of Amsterdam

The City of Amsterdam

From Amsterdam’s point of view, Global and international trends The cities in the Randstad cannot solve the problem of accessibility large cities have no choice but to Competition between large cities will on their own; so co-operation is more compete. In The Netherlands the increase globally. Asia, and China in appropriate than mutual competition. The particular, will become an extremely large cities will also have to cities in question are already consulting important region. Trading relations with cooperate to deal with the about the problems that they share, and Asian countries will therefore become very will step up their efforts to arrive at a international competition, important. International migration will also common approach. Each city will have to particularly from Asian cities. By remain an issue. Furthermore, the develop its own profile and specialisation. specialising and focusing on the European Union will gain more and more Specialisation already comes naturally to city’s unique qualities prominence as a regulator. the cities to some extent: Amsterdam hopes to compete in In our view, large cities have no choice boasts a major port, The Hague has the areas such as education, but to take part in this competition. In International of Justice and knowledge and tourism. The aim doing so, Amsterdam will focus on its Amsterdam is known for its cultural is to be a creative centre of unique qualities. assets, its airport, financial centre and expertise where unique talents high-quality knowledge economy. can develop their full potential. Internal trends Key themes for Amsterdam are: What comes into play here is the To deal with the international competition education, knowledge and tourism. The total range of facilities that the it is important for the Dutch cities to work challenge is to get the population to reach city has to offer. Job Cohen closely together. The heavily urbanised their full potential where knowledge and explains how Amsterdam hopes western part of The Netherlands forms a education are concerned; only then will connection of cities called the ‘Randstad’. we be able to put this country on the map to achieve all this. One of the big problems caused by as a bastion of knowledge and skills and urbanisation is traffic congestion. I AMsterdam is the motto of the compete in an international context. The geographical location of The Netherlands city because the citizens are the in Europe is excellent, although the city.

86 Cities in focus Cities of the future - global competition, local leadership

country is also vulnerable to shifting trade Internal challenges flows. We will therefore have to focus on The external developments mentioned trade. We have traditionally been skilled at above necessitate further modernisation current and new trade routes and good at of the city’s internal organisation. languages. We will have to keep working Customer satisfaction is not bad, but on these strengths and improve them should always be one of our priorities; our where possible. service provision has to further improve. Amsterdam’s strength lies in its position We must maximise the potential offered as a hub. Key concepts are accessibility, by ICT solutions. well-educated staff, expert knowledge Staffing policy has to be aimed at the and multilingualism. recruitment, selection and training of critical and politically aware civil servants. External challenges The Netherlands is a policy-focused Safety and security issues will continue to country and there are not enough effective take centre-stage; they have always been implementation agencies: such agencies important. Choosing between two should be mean and lean. opposing approaches is absolutely out of the question. Preventive measures (prevention of crime coupled with Priorities for the next decade integration into society) as well as The aim is to be a creative centre of repressive measures (tough action, expertise where unique talents can immediate action against extremists) are develop their full potential. What comes necessary. into play here is the total range of facilities that the city has to offer: universities (and Our environment (global warming and hospitals) in Amsterdam, culture, finance, rising sea levels in particular) demands the development of the banks of the special attention. This is not an issue, IJ river and tourism, of course. Further however, that can be solved by local innovation is encouraged through authorities; it is rather a responsibility for ‘Platform’ (consultation between large governments at other levels. cities) and through other platforms. This The city may well, however, suffer the innovation in fact affects the Randstad consequences. conurbation as one large municipality. An urgent question is whether energy To achieve this vision a long-term suppliers can keep up with the steep rise strategic whitepaper has been developed. in demand (inflow) and whether waste processing (outflow) can remain well This document has been developed organised. The waste processing plant in together with the business community, Amsterdam, and its financing, serves as institutions (e.g. universities) and citizens. an excellent example to other large cities. Further development of the vision is Social developments and the fight against effectively an iterative process, through crime and congestion (infrastructure) will which the vision is constantly fine-tuned. continue to pose challenges to large cities. Creative developments partly arise due to the opportunities offered by the city.

Encouraging innovation can influence such spontaneity. Collaboration with other partners, some of whom are corporations, is also very important to the development of specific areas.

Cities in focus 87 Barcelona

Interview with Strategic Metropolitan Planning Office, City Council of Barcelona

Joan Clos Mayor of Barcelona

Barcelona waterfront, Spain

The information obtained in the Global and international trends The city of Barcelona must be understood within its metropolitan context and, interview refers to the city of There are three major issues that will accordingly, we must create mobility and Barcelona in its metropolitan affect the city in the next ten years. These transport networks that can cover the refer to the position of the Barcelona context. This is because the entire territory and guarantee the economy in a globalised scenario, representatives of the City existence of basic infrastructures for the physical and virtual connectivity and flow of goods and people. Likewise, the Council of Barcelona thought it social cohesion. more appropriate for its availability of telematic-based connectivity Strategic Metropolitan Planning The globalisation process is changing the infrastructures constitutes a key element Office to be the source of location of economic activity, affecting in being able to recruit the parts of the productive processes that have high information. many areas and leading to an economic transition. Some of the key areas are the added value. steady loss of those parts of the Finally, a change is taking place in the Thus, we should highlight the production process lacking added value social and demographic basis of the city fact that the activity of the and the adaptation of the human of Barcelona and the as resources base to the requirements of Strategic Metropolitan Planning a whole that is linked to the phenomenon globalisation. Office goes beyond the area of of immigration. In this area, the challenges intervention of the Barcelona Concerning physical and virtual relate to the fight against discrimination City Council per se, acting connectivity, the growth of the city and and the social exclusion of immigrants. basically as a frame of the creation of a proper economic reference for the development transition must assure the existence of the of municipal policies. infrastructures and installations needed to meet the basic requirements of mobility, accessibility and connectivity.

88 Cities in focus Cities of the future - global competition, local leadership

Internal trends Nevertheless, Barcelona is experiencing a At the political level we will need to degree of malaise in terms of its develop leadership both at the strategic At the national level, the issues that will articulation of an urban development and operational level. For the former, the affect the city are particularly the transfer model and model for economic and idea will be to define citizen-based of financial resources from the Regional technological growth. Thus, the city has strategies, while the latter will consist of Government and the National moved from a centralised perspective putting them into practice. Administration, as well as taking over and without strengthening the web of nuclei exercising the key powers over integration The reputation and prestige of the City that make up the metropolitan area. On and the regulation of immigration, safety, Council of Barcelona will probably depend the other hand, we see a lack of education and government housing. in the next 10 years on the following convergence of targets emanating from issues: At the local level, the key issues are the the public and private sectors in terms of governability of the metropolitan area in the city’s development model. • Accessibility to the administration by terms of politics, leadership and citizens through a motivated civil organisation. Of special note are critical Consequences for the city service; aspects such as education, high numbers At this time, at the political, business and Quality of the cityscape and leaving secondary education, and the • civil society levels everyone is aware that maintenance of public spaces; need to strengthen innovation. there is a certain crisis in the development • Clarity and transparency as seen by In terms of innovation, the challenges are in model and that there is a need to link the business people in terms of business having the necessary institutions (science new projects to the private sector and the opportunities; and installations, technology transfer) that citizen. require public investment, especially with Capacity for dialogue, absorbing In this context, the value of internal • the support of public-private ventures. immigration and cosmopolitanism. initiative, as one of the city’s strengths, constitutes an asset recognised by all the “In conclusion, the main challenge for External and internal challenges agents, particularly at the business and Barcelona is to deal successfully with the At the external level, competition not only cultural level. To this we can add the transition from an industrial economy to a flows from a European environment, but is esteem in which the city’s inhabitants and new model of urban development, based now international. This has introduced a institutions hold their city. on the knowledge economy.” series of extremely important challenges for Barcelona in terms of attracting Priorities for the next decade investment opportunities and developing The vision of Barcelona in 2015 is that of new activities requiring a flexible a city characterised by the following: organisation of society in terms of leadership and the creation of integration • An economy based on the development dynamics in the metropolitan area. of a and innovative culture depending on the growth of new With regards to business recruitment, industries: such as audio-visual, design, Barcelona is well positioned in terms of the etc; dynamics of economic growth, which is a strength for dealing with the challenges in • New uses of transport based on the this area. The social fabric of Barcelona is improvement of mobility; and highly participatory, and more than willing An education system that can guarantee to get involved in policies and initiatives • proper training for our human resources, that are launched by public and private administrations and bodies. One of the having notably reduced the number of current challenges is to link the new school leavers. projects that are being launched by the From the point of view of promoting the municipal government to the citizenry in city, the strategy must centre on order to make private and public efforts networking internationally in order to converge. Thus, of special note is the fact assure the links needed to develop that Barcelona is to a great extent “a self- specific activities, for example, the made city”, having developed its own identification of opportunities in certain economic fabric rooted in the city. industries such as aerospace and bio- medicine.

Cities in focus 89 Belgrade

Interview with Mr Bojan Stanojevic, City Manager, City of Belgrade

Mr Bojan Stanojevic, City Manager, City of Belgrade

The City of Belgrade, Serbia and Montenegro

Belgrade (Beograd) has about Global and international trends In the political sense, it is necessary to divide political functions from state 1.6 million inhabitants. It is The global or international trends that will functions, to do this a more professional located in the south-east of affect the city in the future are: change in administration is needed. In the the GDP structure, development of the Europe, on the Balkan administrative sense, the biggest problem is service sector, development of housing Peninsula, at the confluence of the low level of salaries in the construction, increase in the need to administration, which acts as a discincentive the Sava and Danube rivers. It communicate and development of the to existing employees and deters those who is one of the oldest cities in traffic infrastructure. Europe and since ancient times may be seeking employment. The solution has occupied an important to both problems lies in decentralisation and Internal trends in setting new criteria for the functioning of position as an intersection The main local trends in the region are the state administration. between the roads of Eastern stabilisation of the political situation and and Western Europe. We privatisation of the public sector. Relevant corporate governance issues are: interviewed the City Manager the new organisation for the state The major internal challenges which the administration, restructuring of the public Mr Bojan Stanojevic and asked city is facing arise from: the reorganisation sector and partnership between the him about the challenges he of the administration and the introduction private and public sectors. faces and how Belgrade is of a more qualified structure in the city responding to them. administration. Furthermore, there is a The law and the internal regulations define challenge to reduce the number of recruitment in the city. Reporting is in employees in the city administration and need of standardisation and further restructure the public companies. If the development. Performance management restructuring of the city administration is graded internally and externally (within does not take place, the development of the administration and by the citizens). the city will slow down. The city is currently developing the mechanisms for risk management in business.

90 Cities in focus Cities of the future - global competition, local leadership

External challenges Priorities for the next decade The key social issues that will affect the Belgrade needs a thorough reorganisation municipal government are: the local of traffic, which implies construction of a economy, traffic, social politics, healthcare ring-road, inner ring-road and several politics and safety. bridges, as well as three lines of the light metro. All this will create conditions for Belgrade’s external challenges are: the attracting investment, simplify procedures application of international standards in for issuing building permits and changes the city administration, attracting foreign in the city’s economy. The service sector investment and increasing the possibilities will generate 70-80% of social product in for external financing of infrastructure Belgrade. development projects. We are hoping to build a brand that will The development of corporate social position Belgrade as the capital of South responsibility is still in the early phase but East Europe. The brand will be developed is being further stimulated by the by creating special privileges for investing presence of big international companies in Belgrade with this business philosophy. A large number of local companies support the The city authorities need to adopt a humanitarian aid campaigns organised by service-oriented approach to citizens, as the city. well as achieve European standards of service delivery. The influence of political Consequences for the city parties on local politics must also be decreased and the process of The process of decentralisation must decentralisation on the state level must happen quickly so that local authorities also be completed. achieve similar levels of autonomy to those achieved by other local authorities The main financial challenge is how to in the European Union and the USA. provide the finance for infrastructure development in the next 10 years and At the moment not all the necessary how to build a medium-term and a long- economic instruments for shaping policy term financial management system for the are at the city's disposal. In particular, the city. city lacks control over fiscal instruments. The central authorities still have the most influence, so for local governments greater authority would help them to speed up the regulatory process and adopt new regulations that that will have a positive influence on the city's economic development.

Cities in focus 91 City of Bergen

Interview with Mrs Monica Mæland, Chief Commisioner of the City of Bergen

Mrs Monica Mæland, Chief Commissioner of the City of Bergen

The City of Bergen, Norway

City of Bergen is the second We talked to Monica Mæland, Global and international trends largest city in Norway with about the chief Commissioner of the Increasing global mobility of labour and 240,000 citizens. Nearly 25,000 city of City of Bergen, about the capital is one of the most significant students are enrolled at the challenges for the future and their global and international trends. Universities of City of Bergen. consequences for the city. Businesses change ownership and so management, expertise, production and The city is the port to the Her aim is to keep City of Bergen workplaces move. This influences the Norwegian fjords and is an old as an international city able to city’s industrial base and, through this, a Hanseatic city with long meet citizens’ needs and give central part of its financial base. international traditions. Today City them security. Development in international agreements of Bergen is a modern centre such as the EFTA and WTO, will also have with great marine, maritime and significant consequences for the city in general terms. oil industries. City of Bergen is one of the few cities in the world Globalisation and increased international which is governed by a mobility in higher education also create parliamentarian model where the challenges to the city’s ability to attract city Council elects a City and keep talented and highly qualified young people and secure the high levels Government. of expertise which make the city an attractive place for commercial development.

92 Cities in focus Cities of the future - global competition, local leadership

Global digital development will have a Consequences for the city Citizens’ engagement will converge with significant impact on municipal services, their interests as consumers. Their To meet this situation the city has and these developments create new confidence in politicians will be related to changed both its political and possibilities with regards to: how well they believe their consumer administrative structure by eliminating the needs are met. The challenge for organisation. The municipality • Change and improved communication politicians’ will be to understand and is now organised into two levels of with its citizens; and satisfy consumer needs and communicate government. The city has, to an increased this to citizens. • Methods to provide services, including extent, become an engager of external the possibility of producing digital service providers, creating a more services for other municipalities, or competitive environment for service Priorities for the next decade outsourcing production of digital provision. In the next ten years the city of City of services to producers in other parts of Bergen will engage in the following In the future, the introduction of new the world. specific tasks and projects: digital solutions to increase administrative Internal trends efficiency, communication with citizens • New Public Management; and other aspects of service provision will City of Bergen is and shall develop as The increase in the need for be very important. Services for children, • regionalisation caused by the the elderly and people in need of medical an international city; development of common labour and services will be strengthened as primary • The development of the cultural sector housing markets between the big city and tasks. as a central part of the development of the surrounding municipalities is an the city; and important development. The importance Mrs Mæland is keen to create active of municipal borders will decrease and interaction with educational • The municipality shall appear as a great improvements in infrastructure establishments, local and non-local modern service producer which meets within the transport sector will – in the investors surrounding municipalities, citizens’ needs and provides them with future – strengthen the regional industry and commerce and through this security. It is important that the perspective. engage them in working on the business municipal is seen as being among the plan to strengthen the ability of the city best-governed cities. New ways of organising and operating and its surroundings to meet the external service production – increased and internal challenges. outsourcing of service production and the progress of the municipal as the engager, The scenario for “City of Bergen scenarier as opposed to producer of services – is 2020” constitutes an important part of this an important trend for the future. process. The city government will have an important role as an advisor or External and internal challenges coordinator for business development. It will lay out the grounds and conditions for Local investors are conservative with network cooperation, and actively regards to their participation in local participate in such networks. An example commercial development through, for of this network cooperation is “Education example, an investment fund. This City of Bergen” where the municipality situation weakens the foundation of and higher education establishments are commercial development and can also co-operating to meet targets for increased restrict contributions from investors national, international and global mobility beyond the region. and competition within higher education. Demographic developments mean that The city’s corporate sector has a strong the city faces significant challenges to tradition of CSR. Mrs Mæland believes finance services to meet the needs of its that this influences citizens’ attitudes to changing population. At the same time the politicians. Increasingly, citizens see city has a large accumulated economic themselves as consumers of municipal deficit, which in itself provides the city services. with a significant challenge.

Cities in focus 93 Berlin

Interview with Harald Wolf, Mayor and Senator for Economics, Employment and Women’s Issues in Berlin

Mr Harald Wolf, Mayor and Senator for Economics, Employment and Women’s Issues in Berlin

View of Berlin skyline

Berlin is a city of many faces. Global and international trends • The expansion of the European Union It is the largest city in Germany After forty years of division, the reunified means a chance and a challenge at the and is aiming to use its high city of Berlin is on its way to retaining its same time. Berlin is moving into the degree of creative potential in position among the leading capitals of the geographical center of the EU; at the coming years to make a mark world. Main factors influencing political same time, the acceding countries for itself as a city of knowledge and entrepreneurial activities will be represent new competitors on existing and as a centre of excellence ongoing globalisation with increasing markets. Berlin has the chance to redevelop regional economic for the health industry. Berlin competitive pressures, the expansion of the European Union, the trend to an interdependencies that were destroyed is also seeking to re-establish by the German and European division itself once again as a major information society and the demographic development. and the consequences of the Second world city after forty years World War; and of German division. Berlin • In this way, globalisation as well as the growing significance of knowledge as • As in the rest of Europe, demographic recognises that its most developments in Germany are important assets are its people an economic factor will benefit locations with a highly qualified characterised by a shift in the age and its extraordinary attraction workforce potential. As growing structure of society whereby Berlin, to young people from all over competitive pressure endangers however, is only affected to a lesser the world. Together Berlin and employment in traditional sectors, extent because of its high level of its people will be able to meet action has to be taken against a attractiveness for young people and it the challenges of the 21st polarisation of the employment system; can expect a stable development in century. population for the foreseeable future.

94 Cities in focus Cities of the future - global competition, local leadership

Internal trends In the field of traffic and mobility, Berlin city for some years, relies on also combines extraordinary research and empowerment and activation of people In view of the federal structure of development competence with a strong and protagonists within an area. The new Germany and, in particular, due to its own business potential in the sectors of education act delegates more historical development, Berlin can not automotive engineering, railway traffic, responsibility to the schools enabling claim a position that is comparable with aviation and space flight as well as in the them to develop a profile as a center of that of other European capital cities. For interface to information technology in social life and mutual encounter within the this reason, the city is resolutely relying on telematics. city quarter, whereby companies and firms its own strengths that above all lie in the are also integrated. immense potential of science and External and internal challenges research, culture and creativity. The focus A fundamental requirement for a here will be on markets where growth can Berlin is faced with the challenge of successful city development, however, is be generated through innovation. mastering economic structural change to overcome unemployment. The creation under the increasingly difficult conditions of sufficient jobs through increasing the In order to be able to bundle these of the globalised markets while at the competitiveness of the city, therefore, has strengths, Berlin is focussing on areas same time securing social cohesion within absolute priority. where a market potential fits with the the city under conditions of an extremely city’s technological competence. These restrictive budget situation. Despite a high Shoulder to shoulder with the citizens, fields were identified in a widespread level of unemployment and increasingly trade and industry, science and politics, discussion process between politics, apparent poverty, Berlin is nevertheless a Berlin will be able to position the city as a trade and industry, science and the city that offers its citizens an desirable place to live and a future- citizens of Berlin – and they enjoy a high extraordinarily high degree of security and oriented metropolis in Europe. degree of acceptance. The areas of attractive living conditions. competence are: • biological and medical engineering; The high level of indebtedness of the city, however, represents a particular risk that • information technology, communication will have to be reduced to an acceptable technology and media; amount through consistent budgetary • traffic engineering; and restraint and with the help of the federal • as well as the optical technologies, government and the solidarity of the micro and nanotechnology. German federal states.

Berlin is one of the leading cities in the Consequences for the city fields of biological and medical engineering. Its established scientific In order to overcome these challenges, it infrastructure provides an excellent value will be essential for Berlin to develop a added chain for research, pharmaceutical, higher degree of public involvement biological and medical engineering though new forms of participation by its companies. This is one of the main citizens. Berlin has to develop into a city reasons why a large number of private of civil involvement, marked by companies as well as public institutions responsibility and initiative. In some city have settled here. districts, there are already some measures, projects in this direction and Advanced competencies in the fields of initial steps which are being taken information and communication towards a “citizens’ budget”. Co- technology also provide an important determination by citizens in the stimulus for the culture and media distribution of resources in the interest of industry. The combination of its rich the community should provide Berlin’s cultural heritage and the unlimited creative residents with a new form of identification potential of the city’s residents and those with political decisions. A package of laws that come to the city from all over the for the introduction of plebiscitary world, provides a rapidly growing elements such as referendums at district economic source of energy for this level is also close to ratification. “Area important sector. management”, which has been practiced in particularly disadvantaged areas of the

Cities in focus 95 Birmingham

Interview with Cllr. Mike Whitby, Leader Birmingham City Council, UK

Councillor Mike Whitby, Leader Birmingham City Council

Selfridges alongside St Martin’s Church, Birmingham Bullring

Birmingham is a thriving, multi- In the last decade Birmingham Global and international trends racial city at the economic has adapted and witnessed an A key challenge for Birmingham is how to heart of the West Midlands, amazing transformation, with define itself as a major centre of with a population close to a the renaissance of the city commerce and culture and to become a million people. Its economic centre, considerable growth catalyst and engine for both city and regional prosperity. role and prosperity were and improvements in the city’s originally based upon the competitiveness. However, not Leaders acknowledge that Birmingham manufacturing industry, all communities or areas have needs to develop a powerful and however rapid worldwide benefited from this economic internationally renowned brand and are economic change in the 1970s prosperity, and the focus of looking to other similar cities such as Barcelona and Lyon to learn from their and 1980s caused massive recent years has been to experiences of building distinct decline in manufacturing spread this prosperity, through international identities. employment, with serious creating flourishing impact on the economic life of neighbourhoods across the For the city and region to prosper internationally, Birmingham must become the city, and a disproportionate city, where people want to live, the natural hub of the region, bringing impact in areas. work and invest. together the strengths and assets of the West Midlands region into a unique and more powerful offering.

Current economic growth forecasts for the city predict employment and economic growth will outstrip the UK national average up to 2015. Such a turn around has been remarkable. However, to deliver

96 Cities in focus Cities of the future - global competition, local leadership

these positive trends, it will be essential to retail, entertainment and cultural facilities, Priorities for the next decade ensure that the pipeline of regeneration which have all helped to retain top talent. Birmingham’s Local Strategic Partnership projects continues to produce major For example, the Birmingham Bull Ring has set out a vision for the city: investment. retail development has received 52 international accolades within 12 month of Birmingham as a city of national and Success will also depend on capitalising opening and attracted 37M visitors. international significance, at the heart of on global relationships and links that are the West Midlands – a city that attracts unique to Birmingham. City leaders have Patterns of employment will continue to investment and jobs; identified three strategic ‘relationships’ change. There will be fewer jobs in which could lead to bilateral benefits and manufacturing and more in services. More Birmingham as a city made up of many increased prosperity, including: jobs will require high levels of knowledge flourishing neighbourhoods, whose and skills, and Birmingham's prosperity residents benefit from the city's economic Chicago – learning from Chicago’s will depend on attracting and keeping importance – a city where the differences experience of successfully celebrating and such jobs and the people who can do between the most and least deprived are harnessing cultural diversity and, learning them. The city will need to act to prevent being reduced. lessons from its recent economic in key public sector services – renaissance; teachers, doctors, nurses and carers.

Northern India – building on the strong Decent homes and quality of life is also a cultural, financial and trade links between key issue. The Council manages 70,000 the city’s large Indian population and the homes in the city. It is vital that these emerging economic powerhouse; provide quality living to support social cohesion and harmony and for individual China – (particularly in Southern citizens to feel a part of the city agenda. China) – building on links with Chinese students, residents and the large investors Maintaining and building positive who are key stakeholders in many city relationships between city government and developments. local citizens is also a key priority. Birmingham is the largest local authority in External and internal challenges the UK, serving a diverse population – There is a need to improve transport some with great wealth and others in systems to prevent congestion blocking absolute poverty – with a diverse ethnic economic growth. Improving transport mix. As such, it is vital that citizens feel that links – within the city and expanding the the delivery of local services and the International Airport – is important to supporting governance arrangements is ensure that Birmingham is not only responsive to their needs. accessible as a city and city region, but To address this Birmingham is developing also as a gateway/hub to other parts of a model of governance based on 11 the UK and the world. districts or (vibrant villages) to ensure it The challenge of ensuring equality at the connects and listens to its communities. same time as respect for diversity must In terms of internal challenges, leaders continue to be a high priority. Social recognise that there is a need to define inclusion, social cohesion and and develop ‘team Birmingham’. opportunities that are available to all Essentially this should include all the continue to be major tests of success. agencies associated with the city (both One of Birmingham’s greatest assets is public and private sector) in addition to high quality education. Joined up thinking the voluntary sector – which should work and action have meant the city has been together (in partnership arrangements) to able to retain many of its high quality deliver quality services. graduates. For example, previously derelict National fiscal pressure also means that parts of the city have been regenerated and the authority must continue to manage its now provide modern and desirable living finances prudently and ensure value for space for young professionals. Coupled money in the delivery of high quality with this is the development of world class public services.

Cities in focus 97 Brisbane

Interview with Jude Munro, Chief Executive Officer, Brisbane City Council

Jude Munro, Cheif Eperating Officer of the

The City of Brisbane, Australia

Brisbane, the capital of Global and international trends The global threat of terrorism is felt in Brisbane, specifically in the reallocation of Queensland, is a city of 1.6 Changing global demographics, including major national funds to mitigate risk and the million people and Australia’s the potential of worldwide skill shortages city’s economy, like many others, is also and the international issue of the ageing third largest city. It is a young affected by the global rise in oil prices. and culturally diverse population are key trends impacting the population of Brisbane and influencing the population on Australia’s East strategic direction of the business Internal trends Coast. community. An ageing population may Environmental issues such as climate result in escalating health costs and an change impact productivity in Brisbane. This article is based on a increased need for age-specific housing Both the financial and ecological value of conversation with Jude Munro, as well as labour and skills shortages. land and water assets is diminishing as the resources are run down. Chief Executive Officer (CEO) of The emergence of China and India as the City of Brisbane. economic superpowers is a growing Human and development capital is influence and CEO Jude Munro notes the draining from long established, non- reliance of Australia’s national economy metropolitan regions and Ms Munro notes on developing world commodities to the inefficiencies of cities driven by sprawl support developed world lifestyles. and a lack of national policy or direction on the issue. Post war and urban The new international economic driver of planning left the city with low population quality of life is informing the development density, but high road provision, which of housing and residential development in has resulted in both and the Brisbane and is providing a new focus for culture of the car. business.

98 Cities in focus Cities of the future - global competition, local leadership

Today, Brisbane has a strong population Issues and consequences and high levels of migration growth. Brisbane City Council has an increased Households are tending toward smaller focus on strategic alliances including units and are increasingly diverse in their public/private partnerships, partnering and configuration. The city is becoming more . There is also cosmopolitan, displays an increasing recognition of sustainability, co-production diversity of housing and offers greater and ecological services as key principles recreational and lifestyle options. for city governance. Pockets of social exclusion are emerging Congestion and private and public across Brisbane (as across other transport provisions are key concerns and comparable cities in Australia) and the the city is focused on boosting green rapidly increasing cost of housing is transport (buses, bikes and walking) and accelerating the divide between the haves is implementing Transit Oriented Design and the have nots. and other significant changes to urban The city is also experiencing a growing form. There is a focus on major infra- ‘inwardness’ which manifests in structure planning and resourcing, with an decreased levels of volunteerism and emphasis on neighbourhood planning. social concern for others, along with a Natural resource conservation is a priority greater focus on self and family. as the city seeks to implement water conservation and reuse, a CNG bus fleet External and internal challenges and waste reduction management. More residents, businesses and Brisbane City Council is also interested in transactions combine to give Brisbane an encouraging civic participation and increasing revenue base. These economic informed debate on the city’s future, as changes have resulted in rising affluence well as upgrading its own workforce skills which is driving higher expectations of with the deliberate goal of being an infrastructure, services and facilities ‘employer of choice’. amongst the population. The city’s challenge is to meet the rapidly increasing pressures on infrastructure, utilities and Priorities for the next decade natural resources. Brisbane’s priorities for the next decade focus on sustainability, accessibility, Jude Munro feels Brisbane will be partnering, creating alliances and regional challenged by an emerging skills shortage collaboration. from 2010 and beyond as the baby boomer generation retires. Brisbane’s competitive The City of Brisbane has created Living in advantage will stem from an ability to Brisbane 2010 which aims to ensure attract talent to the city in the face of Brisbane is a great city to live in, now and emerging skill and labour shortages. in the future. Together with the community, the city is working towards a The strategic planning process in vision for Brisbane’s future as: Brisbane is making good progress and there is a high level of resident • An accessible city; satisfaction in the city. However, the • An active and healthy city; three-tiered government system (federal, • A city designed for subtropical living; state and city) adds complexity to the governing mix and decreases • A city of inclusive communities; coordination. Brisbane City Council has • A clean and green city; responsibility for the entire city area which • A creative city; makes the city unique in Australia as other city councils have responsibility for the • A regional and world city; and central business district alone. • A smart and prosperous city.

Cities in focus 99 City of Morón, Buenos Aires

Interview with Dr Martin Sabbatella, Mayor of Morón, Buenos Aires

Dr Martin Sabbatella, Mayor of Morón, Buenos Aires

The City of Morón is part of the Global and international trends Internal trends Metropolitan Area of Buenos The principal external factors that have From a social point of view, the situation Aires – an urban spread of 24 influenced the development of Morón in is worrying. A large part of Morón’s plus the Federal the past decade can be summarised as: population live in poverty and a fifth of the workers are unemployed. Capital of the Argentine • The international insertion of the Federal Republic, inhabited by Government with other countries in the From an economic point of view, the approximately 13 million region, especially the MERCOSUR; impact on the industrial base of the City people. of Morón during the 1990s generated by • The renegotiation of external debt with foreign competition caused the city to private creditors, as a result of default, transform from an industrial base to the and the refinancing of debt payments most important commercial center of the with multilateral credit organisations Western region of the metropolitan area of which delayed the disbursement of new Buenos Aires. funds; From an organisational point of view, the • The impact of the Argentine economic administration faces an important crisis on the levels of poverty and challenge to achieve a labour identity and unemployment which are at the same to improve communications among all the levels as the country average, even levels of the ’s administration. though the population of the city has a higher social and economic level than The inadequacy of the drainage (58% of the country average; and the territory lacks drains and 28% lacks drinking water) and street and road • The upturn of the economy that infrastructure (10% of the territory lacks occurred in recent years after departing paved streets) is a matter of permanent from the monetary convertibility with the concern, but we are on the road to an corresponding devaluation of the peso imminent solution. with respect to the US dollar.

100 Cities in focus Cities of the future - global competition, local leadership

To overcome these needs, the residents of From a regional point of view it will be Priorities for the next decade Morón have supported a process of important that the changes generated in The city has developed an action plan for transformation that grants them greater Morón are supplemented by urban and the next decade, concentrating its efforts participation in public matters and have social changes in the environment so that on: been and are amenable to the idea of they do not constitute barriers that smother building a city of the future as an urgent, our possibilities of economic, social and • Widening the coverage of the networks comprehensive task that depends on all. cultural growth. Today these issues do not of basic infrastructure of drinking water, appear problematic, but are approached sewers and paving; All these factors converge on the need for with much interest and responsibility by the • Doubling the number of public green an extensive political and institutional city through permanent exchange with spaces currently existing; reform that guarantees total transparency, other municipalities as well as the both for the residents of Morón and for Provincial and Federal Governments. • Increasing home ownership by those that do business in the city. They developing mechanisms for financing need clear and honest rules of the game The administration has been modifying the home ownership and eliminating shanty to carry out their projects. commitment of public employees to their or emergency neighbourhoods; work through a better system of salaries, External and internal challenges improvements in labour conditions and the • Generating urban developments example of the community leaders. (shopping complexes and housing) for In the coming ten years the most delicate sectors with higher purchasing power in issues will mainly involve security, quality The Mayor has dedicated the first stages the central area of Morón, extending education, work, the environment, the role of his administration to work intensely in urbanisation of the central area east and of women, opportunities for the young the fight against corruption embedded in and care for the elderly. the local government and with the west of ; generation of mechanisms to promote the Improving Healthcare by widening the To face these challenges, the City of • participation of the civil community in the Morón places great emphasis on values Single Municipal that design and implementation of government such as social integration, transparency in encompasses the services of the action. the handling of public resources, Central Hospital of the City (Hospital promotion of citizen participation, the This has allowed Morón to be identified by Ostaciana B. De Lavignolle) and of 15 search for institutional quality, efficiency in its neighbours as well as by the press and health centers in the neighborhoods and performance and equitable advancement. by local, national and international leaders increase the coverage of the health as a place where transparency and civil centers, increasing them to 25 centers; The administration of the commune participation are effective and efficient for interprets the expression “development” • Applying policies to improve the the resolution of problems of the in a wide sense, encompassing the environment; commune. This issue constitutes an economic aspect as well as health, important starting point for the city that • Working with national railway integration of women and young people they want to create. companies to improve their installations and the integration of all social levels in in the commune, especially the railway the activities of the municipality. In recent years the local government has stations; been firmly involved in economic In line with this conceptual foundation, the development; and interchange with the • Starting up new branches within the city defines its development depending on economic and social players is intense and commune to enhance internal joint actions between the public and private productive. The latter have warmly communications and with other sectors, between the state and the economic received the proposals of the Strategic players that can and wish to invest. communes; and Development Plan submitted in mid-May Strengthening and deepening the 2005 by the community government and in • Consequences for the city general, nearly all sectors of Morón are process of municipal decentralisation Morón is defining its identity as a city for promoting participation in social and urban that began in 2003 in search of the coming decades, and in doing so, is projects. improving the democratic participation carrying out activities to define the of the citizens of Morón through the attributes of its civil society, the design of Additionally, to attract investments, the implementation during 2006 and 2007 community government is using its government and the mechanisms of of units of community management, management tools to support participation/ communication between the where citizens can exercise their development, such as the allocation of commune and the citizens that inhabit it; political rights in a more direct manner. paying attention to their needs, their land uses or tax incentives, which promote rights, their interests and their integration. investment and generate employment.

Cities in focus 101 Dar-es-Salaam

Interview with Mr Kleist Sykes, Mayor of Dar-es-Salaam

The City of Dar-Es-Salaam, Tanzania

From a small town of 3000 We talked to Kleist Sykes, Dar- Global and international trends inhabitants in the 1860’s, Dar- es-Salaam’s energetic mayor The progressive globalisation of world es-Salaam has grown to be the and his City Planner Raphael trade should work in Dar-es-Salaam’s largest city in Tanzania and the Ndunguru, to ask them how favour over the next 10 years. Dar has the country’s industrial and they planned to address this biggest port in East Africa handling transit goods bound for its landlocked commercial heart with an challenge and realise their neighbours in Central Africa, as well as its estimated population of 3.2 vision for the city in 2015. own agricultural and mineral exports. The million, growing at the rate of port serves the and faces 4.2% per year. Struggling with South and South across the diminishing contributions from Indian Ocean, which makes it a natural central government revenues, entry point to Africa for these potential powerhouses of manufacturing. Roads the city nonetheless manages within Tanzania are generally good and to provide basic services for innovative financing is revitalising the most of its citizens. The railway system. accelerating rate of migration into the city from rural areas In the run-up to 2015, Dar-es-Salaam should benefit from the new scaling up of will however, put severe strains international donor funding to the African on the infrastructure and the continent, as advocated by the UN- social fabric of the city over the sponsored Millennium project and the next 10 years. Commission for Africa and agreed by the G8 Summit in July 2005.

102 Cities in focus Cities of the future - global competition, local leadership

New paradigms in global tourism are Three of the paramount challenges for Dar- The City Council is taking a consultative making East Africa a magnet for tourists es-Salaam over the next ten years all derive approach to the problems of unplanned from all over the world, including from the projected expansion of the city: housing and slum clearance. While some countries such as China and India. Dar- public transport, non-planned housing and of the international donors prefer the es-Salaam must meet the challenge of solid waste management. The 100,000 cars option of upgrading slum dwellings, the transforming itself from a staging post for in the city today, which already cause Mayor and Council believe that the the fabulous game parks and Zanzibar, to significant traffic jams, could rise to 500,000 construction of low-cost housing using a tourist destination in its own right. in ten years. Unless properly managed, this private sector funds, offers a more volume of private cars will seriously impede sustainable solution and allows for the Internal trends the ability of the taxi-vans (daladalas) and installation and monitoring of the buses to ferry people to and from work. infrastructure that will reduce The 150,000 people swelling Dar-es- Today around 70% of Dar’s inhabitants live environmental and health hazards in the Salaam’s population every year is the one in unplanned housing, much of it in poor future. In the quest for appropriate pervasive internal trend that conditions all condition and nearly all of it, unplumbed for environmental management systems, the the others. Most of the new urban solid waste, which creates serious health Council is working closely with UN Habitat migrants come from the rural areas of the and environmental problems. and the Safer Cities Programme, the country and are often ill equipped to deal Canadian-led, global network of city with the new rhythms of urban life. As managers. Brokering public-private they also lack the skills to join the formal Meeting the challenges partnerships around solid and liquid waste economy, the informal sector is Mayor Sykes and Raphael Ndunguru disposal will remain a priority for the ballooning, which deprives the City share a strong vision for their city which Council in the medium term. Council of financial resources to provide includes promoting transparency, integrity basic education and healthcare services. and inclusiveness in city governance, raising the physical standard of living for Priorities for the next decade The recent spate of privatisations of citizens and making Dar-es-Salaam an • Aggregate the powers of the three public utilities, notably electric power and attractive and pleasant place in which to municipal councils and the City Council water, are too recent to be rated live and spend leisure time. unqualified successes, but all the signs for more coherent, transparent and are that they will eventually benefit the To try and lessen its dependence on decisive governance; less privileged inhabitants of Dar and diminishing central government resources, • Manage rural-urban migration through allow the City Council to focus on other the government, along with a pool of an inclusive system of governance and pressing issues. development partners, has set up the Local partnerships with NGOs, community- Government Reform Project (LGRP). The based organisations and the private External and internal challenges project is searching for innovative ways of financing essential social services. To sector; Central Government and Local Authorities address the issue of the diffusion of Mobilise the private sector to remove will need to recognise that rural-urban • management and decision making across migration is a national issue and work and reconstruct slums and install waste the three municipalities, the LGRP is closely together to address the problems disposal systems; and looking into ways of integrating some of in a holistic manner. Recent belt- their functions and making local • Bring the Dar-es-Salaam Rapid tightening by the central government has government more inclusive by actively Transport System (DART) to a contributed to the shrinking of the City involving women’s organisations, youth and successful conclusion and undertake Council’s resources. other civil society organisations. related work to make life better for both Administratively, Dar-es-Salaam was quite inhabitants and tourists in the city For public transport, Mayor Sykes has recently split into three municipalities, centre. come up with a masterful scheme. each with its own , and Borrowing from the experience of his friend Mayor Sykes and the City Council will coordinated by the City Council led by the Enrique Penalosa, ex-Mayor of Bogota in continue to consult with their peers in Mayor. This arrangement may not reflect , and working with minimal funds other cities around the world to find the the current needs of the city as a whole from the , Mayor Sykes plans to smartest and most appropriate solutions and certainly slows down the decision- install bus trains in the city. These will be to assure Dar’s quality of life for the next making process in the areas of resource cheap enough to discourage cars from the 10 years. allocation. centre of town. The resulting decongestion of the city centre will allow other plans for the enhancement of city life, to go forward.

Cities in focus 103 Ekurhuleni Metropolitan Municipality

Interview with Mr Duma Nkosi, Executive Mayor of Ekurhuleni Metropolitan Municipality

Mr Duma Nkosi, Executive Mayor, Ekurhuleni Metropolitan Municipality

Ekurhuleni Metropolitan Municipality The Gilooly’s interchange

The latest city population figure Global and international trends Internal trends stands at 2.5 million people The issue of well-being linked to poverty is a key internal trend that inhabiting an area of 1889 square is one we share with our neighbouring has to ensure that a world-class kilometres, 23% of the of countries. An integrated response to metropolitan municipality within the ’s gross geographic HIV/AIDS and the successful control of African context is built. This city will have the pandemic in other African countries product is generated in Ekurhuleni. to integrate communities and break racial will impact on the city in the future. The and ethnic barriers. Tackling poverty head The Executive Mayor recently successful implementation of an on through development in line with the immunisation programme for children ushered in what he termed “the year targets and programmes emanating from against diseases such as malaria and the World Summit on Sustainable of popular mobilisation to advance polio is critical to the wellbeing of the Development is also a major trend. the vision of the Freedom ”. continent. In addition, the manner in He stated; “It was 50 years ago that which opportunistic infections from External challenges South Africans with passion to build HIV/AIDS are treated will also pose major and develop our country come challenges to the city over the next Ekurhuleni has a number of key strengths. decade. It has well-established transport and other together to adopt the Freedom infrastructure, a strong manufacturing Charter when they met in Kliptown Socio-economic issues relate to crime base in a period when this sector is in 1955”. and violence. Drug trafficking is a major expanding reasonably vigorously in South crime issue. Africa (despite current declines associated The mayor said the task now was with the strong rand), and an outstanding South Africa is no longer isolated, but is a to lead the people to achieve the location in the country’s economic major player in the global economy. heartland with a key airport linking goals of the Charter in the interests Ekurhuleni needs to understand the Southern Africa to the rest of the world. of people of all races, colours, environment and respond accordingly. genders, ages and places. Ekurhuleni means place of peace.

104 Cities in focus Cities of the future - global competition, local leadership

But there are drawbacks. Its location near Consequences for the city Priorities for the next decade Johannesburg results in many activities that would normally take root in a and degeneration of the city is Greater co-operation between Tshwane, metropolitan area the size of Ekurhuleni a major challenge. Intensive research has Johannesburg and Ekurhuleni Metros is being drawn across the boundary into been completed in the Ekurhuleni region to needed. Similar challenges are experienced Johannesburg or Tshwane. A number of identify areas requiring particular attention. and lessons may be learnt from these the industrial areas, such as the Alrode- This has resulted in a deliberate effort to metros in terms of tried and tested systems, Wadeville corridor, contain a relatively uplift and upgrade those needy areas programmes and procedures. Ring-fencing high proportion of older and declining through projects such as, inter alia, the electricity and the establishment of the industries. Much of the infrastructure is Inner City Housing Project in Germiston and Regional Electricity Distributor will impact on old and decaying. The disparate planning other similar initiatives in the hubs of municipalities significantly. Effort must be of the past has not supported the Ekurhuleni’s various urban areas. made to ensure that this initiative works. emergence of agglomeration economies, Increased poverty and underdevelopment The responsibility of Ekurhuleni Metro is to with highways serving to move traffic pose further challenges. Various projects create the space for innovation and co- across the area rather than within it. There have been initiated to address poverty and ordinate initiatives relating to economic is an extensive rail network, yet it is access for all to basic services in the region. growth and development of the city. relatively under utilised. Initiatives such as agri-farms and urban Ekurhuleni Metro needs to look at innovative There are three key economic challenges: agriculture are spearheading efforts to put and creative ways of promoting job creation. an end to poverty, unemployment and • Ensure that the competitiveness of the Trade-offs with business needs to be looked malnutrition in all areas within Ekurhuleni. lead sectors in the economy is at. protected and promoted, and new An increase in the mortality rate due to businesses are attracted HIV/AIDS and its consequences is Implementation of service delivery in accordance with the principles of Batho • Seek new foci for economic growth, probably one of the most severe challenges facing the city. The Pele (consultation, service standards, particularly for SMEs, which are Municipality has identified the scourge of access, redress, value for money, etc) to be employment generating while expanding HIV/AIDS as a primary business institutionalised. A call centre for Ekurhuleni opportunities and overall availability of imperative and has created an HIV/AIDS is to be set up and the creation of customer resources Council as a means to manage the fight care centres are all initiatives to ensure the • Enhance the livelihoods and facilitate against this disease. The HIV/AIDS Council enhancement of quality of service delivery. the subsistence economy of the large is tasked with devising strategies and proportion of the population who are programmes to fight the disease at the One of the major institutional challenges unlikely to be drawn into the more workplace and within the community. faced by Ekurhuleni Metro is the formal economy, or the SMEs. implementation of the Municipal Finance The Financial sustainability of the Metro Management Act. This Act places From a social perspective, the most has weakened and as result innovative financial management responsibilities on significant challenges are the high HIV/AIDS means to deal with this have been each and every senior manager within the infection rates in the area, the high crime developed. Initiatives include the levels, the high levels of racially aligned implementation of a Revenue organisation. Heads of Department must inequality, and the social instability Enhancement and Cost Reduction ensure that they manage their financial associated with the rapid urbanisation and Project, Restructuring of Municipal Bus resources in terms of the Act. poverty talking place in the area. Operations, Programme to address unaccounted for water, compilation of Internal challenges income differential plan, customer audit for water and electricity services. The major challenge is to create a single identity in the context of the collection of a number of different towns. Diversity management, changing service needs, system compatibility, culture and scale of services pose institutional challenges to the municipality. At the same time, there are severe financial constraints.

Cities in focus 105 eThekwini Municipality (City of Durban)

Interview with Dr Michael Sutcliffe City Manager, eThekwini Municipality

Dr Michael Sutcliffe, City Manager, eThekwini Municipality

eThekwini Municipality, South Africa

The city of Durban, situated The municipal government handles Global and international trends alongside the Indian Ocean Rim on a budget of R12 billion annually, In the past decade, Durban has emerged as east coast of South Africa is the and delivers service to diverse one of the fastest growing cities within the gateway to Africa. It is an communities and businesses. Like Southern African Development Community economically vibrant, politically its domestic sister cities, eThekwini (SADC) region and currently enjoys sister- stable and culturally diverse African set out on a challenging new with several big cities around the city with a population of more than journey after the political and world. 3M people. In 1996, the new constitutional changes in the 1990s. Competition between international cities is democratically elected political The city manager, Michael Sutcliffe, increasing globally and Durban is gearing leadership, reinstated the city’s explains how Durban hopes to up to meet the challenges of operating as a historical name, eThekwini, an achieve its post-apartheid through its various agencies, and isiZulu meaning for “city by the challenges, targets and socio- in particular its international affairs office water”. economic benchmark. based at the city hall.

On the horizon, the construction, in a few Durban is a major transit point for years’ time, of a multi-billion rand, world- international imports and exports, class airport, the King Shaka International operating one of the busiest ports Airport, named in memory of the legendary on the continent and strengthened Zulu warrior-king, will present the city with by excellent rail and road networks the best opportunities and potential to into the Gauteng, South Africa’s transform into a leading global player in the economic heartland. region.

106 Cities in focus Cities of the future - global competition, local leadership

Internationally, the buzzword is to create The exotic, countryside location of the new Priorities for the city in the next smart cities with global linkages and sound Sibaya Casino and Resort, the Suncoast decade sister-city exchanges and goodwill. In South Casino, a redeveloped Point Waterfront, Durban’s socio-economic thrust and energy Africa, this means that we must clearly uShaka Marine World and large shopping as a forward-looking and progressive city define the priorities for growth and develop- malls, and many other places of interests, revolves around its 2020 Vision, ment while ensuring that we address poverty certainly makes Durban an attractive conceptualised under the political and the provision of basic services that were stopover for business and pleasure. leadership of the executive mayor, Mr largely denied to previously disadvantaged Thembinkosi Obed Mlaba and a 200- African people in the apartheid era. Internal Trends member council. These twinned objectives are not mutually In a transformational and developmental The visioning statement, adopted within the exclusive: instead of seeing poverty as a mode, the new role of municipalities must developmental context, and against the problem, we should approach it as a ensure that we structure the growth path for backdrop of the historical backlogs created challenge to bring those previously the future. What we do today, will define by the apartheid legacy, is aimed at fast- excluded from the mainstream of our whether or not our children will realise their tracking Durban into a truly African city that society, more directly into the growth and dreams, aspirations and hopes in a non- will provide: development path. racial, non-sexist democracy. adequate safety and security for its Like other sister cities in South Africa, we Municipal governments are but a part of the • citizens and local and international are faced with huge developmental issues, broader picture of local governance. Our tourists and visitors; often referred to as "pockets of wealth in a success will depend on the degree to which sea of poverty" and we are committed to we can build public-private sector • create employment for majority of the making our cities better places for all who partnerships between business, labour and economically marginalized black people civil society. live in them. • alleviate rampant poverty; Within our spirit and social slogan of Batho Since our dramatic gallop from an apartheid- • provide housing solutions; and Pele (Putting People First), our main based society to democracy, the most • Promote an integrated approach to the challenge is to define a specific important and wonderfully exciting change is scourge of the HIV-AIDS pandemic, and developmental path and then stick to it. that the city now belongs to all its residents other diseases such as tuberculosis and The biggest problem we face today is that and the people of South Africa as a whole. malaria. we react to any and every 'problem' that As a municipal entity, we encourage our The key priorities for Durban is to realise its confronts us. employees to pledge themselves to: 2020 vision, prepare for the 2010 FIFA Soccer World Cup and tackle crime and the Against this landscape, we are believing in the organisational culture and rampant spread of HIV-Aids, while dealing implementng a broad-brush approach to ethos of eThekwini, while remaining with domestic backlogs such as housing, attract more and more tourists and boost committed to serving the people of the water and sanitation, poverty and diseases investor confidence in conjunction with our municipality and ensuring they work to among the poorest of the poor in the black dynamic, internationally linked agencies, build a better life for all on the principles of population. Durban Africa and the Durban Investment good governance and service excellence. Promotional Agency. The challenge is to External challenges Urban renewal and the retention of the build on the well established popularity of established and formal business sector, the City with domestic tourists and attract Durban faces the challenge of combating operating alongside the burgeoning greater numbers of international travellers crime and international and continental informal sector or “second economy” in and businesses. drug rings operating the city, while adopting harmony within the city precincts, are some a more humane approach to the flood of of our key challenges in the overall thrust of A big plus to our international portfolio is illegal immigrants and informal settlements making Durban a safer city while providing our world-class conferencing facility, the within the CBD. the best economic, social and employment International Convention Centre, inspired by opportunities for all our stakeholders. South Africa’s readmission to the world and Climate changes is a priority on the agenda supported by the eThekwini Municipality, and the city is collaborating with Other social challenges include integrating and the venue for the Commonwealth international agencies in terms of this and communities, breaking down racial and Heads of Government, World Racism the effects of greenhouse gas emissions ethnic barriers and promoting a rainbowism Conference and several other high-profile while looking at strategies to reduce the “One City, Many Cultures” policy. international conferences and banqueting number of private vehicles heading for the highlights. city daily.

Cities in focus 107 Frankfurt

Interview with Petra Roth, Mayor of Frankfurt

Petra Roth, Mayor of Frankfurt

View of Frankfurt skyline

Frankfurt is the most Global and international trends National and local trends international city in Germany Globalisation progresses and increases Based on its natural location advantages, standing out in terms of its the pressure on modernisation. Change Frankfurt expects to be able to derive cosmopolitan nature, tolerance and adjustment have become normality. above-average benefits from the growing and high quality of life. Its The importance of knowledge as a attractiveness of Germany for foreign production factor is growing further. direct investment. As an important specific location advantages Converting technical progress and know- exhibition centre Frankfurt has make it very attractive to how into marketable products and traditionally participated intensely in foreign investors. The current services and into cost-saving procedures international trade. Through the expansion of the airport will will become the crucial factors in the expansion of the airport, the gateway secure its position as the value added process. function of the Frankfurt Rhein-Main area gateway to the Rhein-Main is gaining in importance Europe-wide in Big cities are facing growing respect of growth, jobs and the area and its importance for the requirements in order to stay attractive as strengthening of the diverse economic European market. Frankfurt a place to live and work while securing structure. The presence of the Stock offers a combination of social cohesion. Making available Exchange and the European Central attractive economic location, adequate budgets for economic and Bank additionally enhance Frankfurt's cultural variety and well- social infrastructure as well as for reputation as an international financial measures to promote quality of life puts centre. developed social cohesion. great strain on the financial power of cities as revenues often stagnate or even In addition to this, Frankfurt has decline. increasingly distinguished itself as a scientific centre. Enormous investments into the development of the university and technical colleges made by the government of Hesse have enabled a

108 Cities in focus Cities of the future - global competition, local leadership

leap in the quality of the scientific- Consequences for the city technological infrastructure. The ongoing As the most international German city, improvement in the quality of job offers Frankfurt has for a long time distinguished increases the attractiveness of the itself through its cosmopolitanism and location for enterprises operating in the tolerance. The integration of its foreign science-oriented growth industries. fellow citizens is an important task which Through its new innovation centre, the city has tackled proactively, for Frankfurt enjoys a worldwide reputation in example through its department of biotechnology; by focusing on specific multicultural affairs. areas of the pharmaceutical industry, Frankfurt is on the way to re-obtaining its Forces of economic growth have to be former position in the production of identified and mobilised to support the pharmaceuticals. diversity of the economic structure and to improve the earnings situation. One of the The fostering of the relationship between identified measures is the reduction of the the city and its citizens in the areas of trade tax, subject to the expectation that business, culture and social issues has a the losses in income will be more than longstanding tradition in Frankfurt and will compensated by the quantity effect. certainly be continued. More and more Another measure is the reorganisation of enterprises are aware that social cohesion administration. Furthermore, initiatives in a city is an important quality. Frankfurt's such as the regional reform to strengthen sponsorships and foundations are of the whole Rhein-Main area, and a joint particular significance. local marketing and promotion of the cultural environment have to be External challenges developed consistently. In times of tight finances the development of cities cannot be seen in isolation from Priorities in the next decade the general economic development of the The central social question of the next country. Delays to the modernisation of decade is seen in the fight against Germany's economy and the subsequent unemployment, since it is the heaviest losses in growth would confront Frankfurt burden on a city's social climate. with considerable problems as well. New Increased efforts to re-integrate burdens on municipalities require an unemployed and particularly long-time appropriate financial support by the unemployed persons are a focus of Federal Government and the Länder. municipal social policy. Job promotion through the creation of favourable local Internal challenges conditions is at the forefront. The aim is to further strengthen Frankfurt Infrastructure policy and retaining the as the centre of one of the most dynamic nearly 45,0000 enterprises located in the regions in Europe and as the motor for the region, as well as the settling of new firms development of the Frankfurt Rhein-Main and specific structural development area in economic, cultural and social projects are intended to strengthen the respects. Frankfurt shall be associated economic power of the city. Besides this, with the attributes of a city of science and the engagement of citizens and education, innovative industries, mobility enterprises for the benefit of common and logistics as well as attractive cultural welfare is to be enhanced further. and leisure-time facilities and low unemployment.

In times of financial shortage the cultural and social facilities and the preservation of the high quality of life in the city requires engagement by both citizens and enterprises.

Cities in focus 109 Gothenburg

Interview with Catarina Dahlöf, Acting Chief Executive Officer, City of Gothenburg

Catarina Dahlöf, Acting Chief Executive Officer

(Photo: Linus Meyer/ kamerareportage)

The City of Gothenburg, Sweden

The Port of Gothenburg is Global and international trends Internal trends situated on the west coast of Regional enlargement will be of vital Regional enlargement is also a local trend. Sweden, and is the leading port importance to Gothenburg. Attracting Gothenburg functions as a growth engine in Scandinavia. In 2004, further investment and ensuring that for the rest of the communities in the Gothenburg was voted Growth existing businesses, particularly service region. Future investment in infrastructure sector businesses stay in the area will be will open up the city’s labour market to Municipality of the year in essential to maintain economic growth in the whole region. We recognise the need Sweden. The city had gone the local economy. to work with neighbouring municipalities from being an industrial city in to develop a mutual understanding and crisis to an engine for growth, A particular priority must be to develop encourage the exchange of ideas – we both regionally and nationally. high technology and quality services. This cannot afford to act in isolation. Another is an arena in which the City of Reasons for its success include major issue for the city is the development Gothenburg can both compete and of the harbour’s logistics and security close cooperation with industry collaborate. The global issues of the facilities. The forecasted demographic and commerce and other environment and security and the changes for in the next 10 to 20 years will municipalities; efforts to development of the experience industry influence all sectors of society. We are enhance its attraction through a are other key trends. Globally, there is a seeing society accelerate, previously range of cultural services and trend for the shift of competence and the separate institutions are merging. Citizens, development of technology to the integration measures and new staff and stakeholders have increasingly southern hemisphere’s growing high expectations of their public services thinking behind the provision economies, which have in a surprisingly and we must respond to provide equal, and delivery of municipal short passage of time been able to rapid and efficient access to services. services. establish organisations delivering high quality services and products.

110 Cities in focus Cities of the future - global competition, local leadership

When it comes to leadership, it is We will concentrate on alternative Priorities in the next decade fundamentally important to establish a investments in increased collaboration People in Gothenburg have the right mix common picture and develop an between different levels of society – trade of conditions to live a good life. Our vision understanding of the system where the and industry and non-profit organisations. is a city of solidarity and sustainability vision – the ‘thought model’ – structure We need to examine rules and regulations where everybody is needed and has and the behaviour of the organisation that prevent flexibility and look for opportunities to develop their lives. In our communicate. We have to create alternative sources of finance. We need to city of the future we will turn segregation leadership that can translate pictures in move people from dependence on social into integration. the organisation into practical intelligence. welfare to employment. We must develop dialogue in all segments City of solidarity – a city where all Municipalities will merge for increased • and develop new meeting places and citizens feel that they have an important support capacity. This raises the question arenas with different people from different role and that they are needed. A city backgrounds. Common values provide an about the most effective unit for with a common sense of responsibility, important platform for creating this administration and how to develop the engagement and belief in the future; leadership. government’s role for maximum democratic impact. • Sustainable city – a city that bases its External challenges Consequences for the city development on maintaining and An external challenge from a growth developing the good city, its character perspective is to achieve a long-term New channels for communication and and identity without impeding dialogue are needed in order to engage sustainable balance in all parts of society. development for future generations; and The city has to manage the demographic with all our stakeholders. shift that will influence all social sectors Integration – all citizens of the city of Transparency is essential for the • and the life phases of all citizens. The city Gothenburg are participating in building development of the democratic process. needs to retain and develop its In order to share a common culture – the our society. Everyone in our city has a attractiveness as a labour market and a vision must be more global and responsibility for democracy and to city for events and commerce. The brand multidimensional to reflect current respect human rights. Through of Gothenburg is the city of events. realities. narrowing the chasms and resisting This also means investment in the segregation we can shorten the way to development of clusters in order to We need to counteract segregation of integration. develop experienced industry, trade and people from other countries and cultures shipping and logistics and safety. This that come to, or are already established, Today, the city of Gothenburg has an investment in the service sector is in the city. We need to develop the right economy in balance. But the challenges of expected to have a positive impact on the conditions for college and university big demographical changes will have to be labour market, not only in volume but also students, and build technical clusters to managed over the next 10 years. Today in terms of attracting young people. support the development of the harbour. there is the space to try different pilot We also need to focus on: city planning, models to gain experience, create Communication between politicians and developing the city centre with functioning alternatives and stand steady in the citizens will develop new channels, e.g. local markets and excellent presence of change. We cannot stand still through IT. The 24-hour society will create communications within the city as well as but instead we need to make quality other demands on content and in the region. changes, test out different ideas and accessibility. There will be a tendency to create the right political response to the investigate individual questions of fact challenges that lie ahead. rather than a dialogue of ideological general character.

The city needs to develop new partnerships and ways of collaborating with the police, public prosecutors and other local public sector organisation. This partnership approach also needs to happen on a regional basis. We must find a balance between growth, sustainable environment and infrastructure.

Cities in focus 111 The Hague

Interview with Mr David Jongen, City Manager of the City of The Hague

Mr David Jongen City Manager of the City of The Hague, The Netherlands

Peace Palace, The Hague

Together with Vienna and Global and international trends Energy supply and climate change are issues that should not be discounted Geneva, The Hague is known Global economic development is a key either. The production of sustainable for the UN-activities taking trend. Outsourcing to low-wage countries energy will be an important issue in the will strongly influence the economic place within its borders. next few years. The Hague wants to build on position of Western European cities. These cities face considerable socio- its image of the international economic problems, and a strong Internal trends city of justice and peace. economy is required to address them. The consequences of international There is also a major risk of a knowledge differences and terrorism strongly affect According to David Jongen, drain to low-wage countries and a lack in public safety and its perception by people city manager of the city of The Western Europe of the innovation locally. To become a stable society, the Hague, innovation, integration necessary to create a high-quality integration of foreigners is necessary. knowledge economy. of social and economical Although the influx of foreigners has Another important international trend is of decreased over the past few years in The issues, citizen participation and Hague, it is still considered a priority for the excellent public services are course the recent accession to the European Union of a number of countries, government. This calls for a strong key issues for the Hague. which will result in larger migratory flows. government. A strong economy can also Within The Netherlands the integration of help in this respect. An ageing population foreigners in society is a major issue at and the size and make-up of the working the moment. population are problems that the economy will need to deal with in the next few decades.

112 Cities in focus Cities of the future - global competition, local leadership

External and internal challenges Consequences for the city • Ensuring that the City of The Hague comes to occupy a different position in The only way to address the developments The external developments outlined above the area; described above, and to address the will impact on the: international competition between cities, is • Focusing on communities; • Development of a high-quality workforce for the four large Dutch cities in the western with different skills. This is translated • Becoming the most customer-focused urbanised part of the Netherlands (i.e. into recruitment and HR policy for municipality in 2006, delivered through Amsterdam, Rotterdam, and The current staff; one-stop shops and e-government; Hague) to work in close cooperation. These cities will have to develop a joint strategy, • Further participation in InAxis, a • Implementing targeted competence while retaining their own individual images. programme set up by the Dutch management; government to promote innovation in Cooperation is also very important in the • Conducting adequate financial the larger urban centres through the greater area around The Hague. management. Efficiency will become development of tools (such as the Cooperation between local authorities in this more and more important; and innovation monitor, expert support, area has been difficult, but this is now experiments). The Hague plays a • Leadership based on accountability, changing. A joint 2020 strategy for the area pioneering role in this regard; transparency and integrity. is being prepared. This strategy will initially cover spatial planning but will be broadened • Development and implementation of a to cover social and economic issues as well. comprehensive policy. This means that municipal services will have to work The Hague wants to build on its image of together and resolve area and an international city of justice and peace. community-specific problems. This This will impact on both the quality of life certainly applies to the more physical it offers and its international and social services; and competitiveness. The associated risks are a physical lack of space, controllability of • The city’s financial position. This aspect, immigration from the new EU Member which is reflected in reduced tax States and cooperation with the other revenues, fewer subsidies and a local authorities in the area. decrease in proceeds from the sale of land, will need to be considered. Development of sufficient knowledge and innovation in the area are preconditions in Priorities in the next decade this regard. The Netherlands is currently losing its position as an innovative country. To meet the challenges facing The Hague, The Westland area is a good example of it will focus on the branding of the city, developing innovation; it is situated near the execution of the joint strategy and the The Hague and is a centre of bio- improvement of municipal organisation technology. In the fields of greenhouse and services. The following points in horticulture and bio-technology, the particular will be priorities: Westland is an example to the world. • The brand “International City of Justice Other challenges are: and Peace.” International lobbying will achieve the aim of persuading • Prevention of segregation (ethnic as well international organisations active in this as income-related); field to relocate to The Hague. It is also • Increase in the city’s customer focus. In very important that The Hague should 2006, The Hague aims to become the further develop relevant international most customer-focused city in the education; Netherlands. The development of e- government and ICT play major roles in • Fleshing out the 2020 strategy together this ambition. This has been fleshed out in with the greater The Hague area, which programmes. It is also a factor in hiring will result in large-scale urban renewal new staff; and with mixed-income and ethnically integrated communities. Public Private • Citizen involvement, immigrants as well as Partnership is a very important success natives, in the development and factor in these efforts; implementation of policies, but also in maintaining facilities in their own communities.

Cities in focus 113 Johannesburg

Interview with Mr Pascal Moloi, City Manager, Johannesburg

Mr Pascal Moloi, City Manager, Johannesburg

The City of Johannesburg South Africa

As the destination for the FIFA Global and international trends The emerging global city perspective as espoused by the Province of Gauteng and Soccer World Cup in 2010 – There is an increasing debate about the its municipalities, places the long term the first time it will be staged in form that city administration will take in view of the city in a different light. It the future. We are witnessing the Africa – Johannesburg will see envisages greater coordination, development of more complex city its profile raised in the next few cooperation and integration between the regions and a single-tier of metropolitan city and key stakeholders. Stakeholders years. The World Cup will also government, away from the district include other spheres of government, provide the impetus to improve municipalities of the past. the city’s infrastructure and the business and communities. The city expects a significant boost perspective does not in the short term Internal trends suggest any changes in the institutions of to its economy. South Africa hosting the FIFA Soccer government but suggests greater impact World Cup tournament in 2010 will make of government offerings to make cities We spoke to Pascal Moloi, City Johannesburg a fundamentally different more globally competitive. The world cup Manager of Johannesburg place. These differences are driven by offers a pilot project to foster such a about his hopes for the city and significant infrastructure development in, perspective. amongst others, the areas of roads, water the challenges it faces to make and electricity as a result of the them a reality. tournament being held here.

New and improved economic nodes will be created within the city, particularly around areas central to the hosting of the World Cup.

114 Cities in focus Cities of the future - global competition, local leadership

External challenges Priorities in the next decade Public safety is a major issue for The city government sees itself as Johannesburg, as is the provision of creating a role whereby rather than simply public transport. One other strong delivering services in the traditional way, it external influence is the extent to which facilitates development and economic trade and investment responsibilities are growth. arranged and devolved between national, provincial and local government. At As part of the drive towards achieving this present, control over trade and investment vision, the city – under the guidance of predominantly takes place at a national or the Mayor – has created forums for provincial level. However, with greater different stakeholders to engage with the integration, such responsibilities may be city. These forums include active shared and be more influenced by plans consultation with business, labour, and strategies of the cities. It will be property owners and informal traders. possible for the city to develop an From a significantly divided city five years integrated package of incentives to help ago, a 2030 vision has been drafted and create a city that is both more attractive translated into a five year Integrated and competitive economically. Development Plan. The IDP is reviewed annually. Internal challenges We have also undertaken a number of The key issues facing Johannesburg are surveys to assess citizens’ perceptions of crime, housing, HIV and Aids, other health the level of services we offer and the issues and unemployment. Each of these extent to which the citizens have trust in issues touches the communities that the their local government. Trust is a key government serves and together they issue, and we are working on a number of represent fundamental challenges for programmes to improve reliability, billing which the city is developing specific accuracy and are improving call centres programmes. and facilities for citizens to interact with Given its importance to the country as a the city government. whole, Johannesburg’s economic These efforts, among others, have seen development is seen in a different context rela-tionships with citizens improve than is the case with smaller cities. The significantly over the last five years and city authorities work closely and we expect them to improve still further. extensively with the Provincial Government to collect information and Ultimately Sub-Saharan Africa needs a conduct surveys in order that the strong Johannesburg, and alternative and problems we face can be better innovative thinking is required to meet the understood. challenge. Investors want reliability, coherent leadership and strong governance. The city has been working with government departments, including the Department of Trade and Investment and the National Treasury, to foster the plans for the city’s economic development.

Cities in focus 115 Jundiai

Interview with Mr Ary Fossen, Mayor of the City of Jundiai

Ary Fossen, Mayor of the City of Jundiai

City Hall of Jundiai

Jundiai is located 63 kilometres At the same time, there has Global and international trends north from São Paulo City in never been so much effort The contemporary changes to the world south eastern Brazil. The main dedicated to improving the have been affecting the cities directly, and industries include steel, textiles, quality of city life. New planning therefore cannot be considered wine, hardboard, cement, and tools, urban interventions, and adjustments to the economical globalization, but instead multiple pottery. Jundai is one of the greater levels of involvement by changes with structural effects. The cities that make up the São the citizens are all driving statistical numbers are significant: in Paulo City , improvement. 1990, there were 2.4 billion people living the biggest industrial area in in urban centers in the world, in only eight South-America. We talked to Mayor Ary Fossen years this number has jumped to 3.2 about the challenges for billion. The cities of today consume three quarters of the world’s energy and are The cities of the world are Jundiai and their strategies for responsible for at least three quarters of experiencing constant and the future. the global pollution. The city is rapid change and forecasting responsible for the majority of the world’s future needs is becoming industrial consumption. In the developed increasingly difficult. nations the population is declining, in contrast to the developing nations, where the population is rising. Due to this population explosion in the urban centers in the developing nations adding to the economical development and migration of population leaving the rural regions has lead these cities to a rapid expansion.

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The majority of this population lives in External challenges Issues such as traffic congestion are irregular land occupations, where potable among the items on the current city • Population growth in the urban cities water, water treatment, and electricity are agenda due to the high number of due to the migration of people from the non-existent. vehicles per inhabitant and the complex interior. Increasing the risk of urban city road network. Other issues include quality of life degradation; If the cities represent the smallest scale transportation, law and order, water on which the environmental challenges • Difficulty in monitoring urban land treatment services and health. are identified, it should be the first place occupation; to address these same issues. • Unsustainable exploitation of natural preservation areas; Internal trends • Law and order problems due largely to In Brazil, even though population growth the proximity of the city of Jundiaí to is predicted to fall by 2025, the high rates two major urban centers (Campinas and of recorded: 61%, in 1975; São Paulo); and 81%, in the year 2000; and estimated growth of 88 - 94% in 2020 • Create public participation channels, to (Environmental Ministry, 2000) means that provide the development of a political our cities will face continued pressues. culture, consolidating the principles of This rapid urbanisation, characterised by democracy and transparency. disorganised growth, imposes several problems on cities, such as difficulties in Internal challenges planning and in providing services to meet growing demand, obsolete • Need for coordinated regional action to infrastructure, and consequent recuperate and protect the hydrological degradation of urban natural environment. reserves that are of public interest; These tendencies justify investment in • Lack of clear land occupation criteria to sustainable planning for cities. The prevent clandestine land occupation; current urban challenge is the organisation of space, not to suppress, • The existence of considerable urban but to provide a dialogue channel vacant areas that contribute to high between different ethnic groups, social costs for maintenance; classes, styles, permitting communication • Increase in the amount of traffic in the between public and private spaces, and city center. The city center is no longer revitalizing the relationship between the an end point for the traffic path but a individual, the collective and nature. transition place; therefore there has been a tremendous increase in traffic, In terms of Jundiaí, where these noise and air pollution; and tendencies are under control, at least for now, one important latent issue is the • Increase the development of tourism. necessity to integrate the city to the region. This integration should take place Priorities for the next decade in the problematic management issues, The environment is by far the greatest such as, water treatment, health, issue of 21st century. The Agenda 21, transportation, and law and order. Cities, approved by the United Nations for with smaller economies, and Environmental Development (Rio-92), has consequently less power to resolve their included clandestine land occupation as own issues, end up depending on the an environmental problem, since it is services of neighboring cities that have directly related to natural environment more resources to offer, and this is the degradation and loss. Land occupation case of Jundiai. Regional integration is management is a city priority. one of the challenges that the city of Jundiai faces today and in the future.

Cities in focus 117 Krakow

Interview with Mr Tadeusz Trzmiel, Vice President of the City of Krakow, Poland

Mr. Tadeusz Trzmiel Vice President of the City of Krakow, Poland

City of Krakow – main market square

Krakow, a city with a Global and international trends Internal trends population of 760,000 people One of the most important trends is The major internal trends effecting Krakow and 170,000 students, is the globalisation. One aspect of that process are inward investment, the increased centre of Poland's cultural and that will affect the city of Krakow to a importance of suburbs and the scientific life and a dynamic great extent over the next 10 years is the improvement in infrastructure. Inward expansion of the European Union. By investment is seen as a very important centre for the region's allowing new states in, the EU has tool, which ensures economic economic development. become a very powerful, widespread and development and links Krakow to the Benefiting from its location and competitive (both internally and externally) common EU and global markets. The historical inheritance, Krakow organisation. The extension of the EU will importance of the suburbs has grown aims to become a Central stimulate international and interregional rapidly during the last 10-15 years mainly European metropolis and the cooperation. It will also give a chance for due to the development of shopping less developed countries to achieve the centres, leisure facilities and housing, biggest tourist city in Poland. required level of development in a much which significantly increased the number shorter period of time. Poland, and of people leaving the city to live there. An We talked to Tadeusz Trzmiel, Krakow in particular because of its improvement in infrastructure is a crucial the Vice President of the city of location and attractiveness, should openly internal trend and a precondition for the Krakow, about the external and welcome the bigger market as it brings city’s prospects. internal trends and their more opportunities than threats. influence on the city in the near External and internal challenges future as well as in the longer One of the major external challenges the term. His priority is to promote city faces is the growing competition from Krakow as an excellent place other European cities. The changing legal to invest, visit and live. environment (mainly caused by Poland’s accession to the European Union in May 2004) is also an important external trend.

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A major internal challenge the city faces is culture, some of Krakow’s most important the lack of updated special development strengths are: a high level of education at plans. In some city districts this the universities, highly qualified people represents a real barrier to growth and and the high credit rating of the city development. Other challenges include (BBB+) which enables access to domestic ineffective co-operation between the and international financial markets. The education system and business and the strengths should continue to be slow transfer of technologies. There are developed to the benefit of the city and its also insufficient attractive employment citizens. opportunities for young people. This has Although in Krakow there is a relatively resulted in the migration of a number of low level of unemployment, there is still a skilled and talented young people to lack of attractive employment offers for Warsaw or other European Union cities. young people. Therefore Krakow will Another important internal challenge is the emphasise bringing in new investment poor quality of housing estates built in the and consequently creating new, attractive 1960s and 1970s. jobs. Consequences for the city Priorities for the next decade The city of Krakow needs to work out a long-term programme for sustainable and As specified in the updated strategy for balanced growth. Krakow is updating its the city in the next 10 years the priorities vision and strategy. of Krakow will include the following tasks and projects: The vision for Krakow for the next 10 years is as follows: "Krakow, a city • Promotion of Krakow as the biggest encouraging civic pride, guaranteeing its tourist centre in Poland: Krakow will inhabitants a high standard of living and cooperate with local and foreign demonstrating sustainable development - advertising agencies and media houses a European metropolis and competitive to effectively promote the city. These hub of a modern economy based on activities will encourage scientific and cultural opportunity" tourists to come to Krakow and to extend the time they spend here; The vision has been developed as a result of a diagnosis of the current situation in • Development of stronger relationships the city and an analysis of its strengths, between the city authorities and the weaknesses, threats and opportunities. local community; We have also consulted widely with a Addressing key social issues: building range of organizations and of course • citizens to develop this vision. Local the feeling of safety among citizens politicians, staff and representatives from through limiting crime, supporting local the business community were invited to entrepreneurs in investing processes, update the Strategy of Krakow, providing and improving public transport; and expertise and input on the issues that • Enhanced cooperation between central matter most to them. government and local authorities in In view of the increasing global three main areas: infrastructure, culture competition between regions and cities, and environmental protection to Krakow needs to promote itself more maximise the benefits available from effectively. The intention is to create a accession to the European Union. modern brand for Krakow that will be associated with a good place for investment, visiting and living. Apart from being a city of national inheritance and

Cities in focus 119 Liège

Interview with Mr Jean-Christophe Peterkenne, Head of Strategy, City of Liège

The City of Liège, Belgium

Liége is the chief town of the In a region in the process of Global and international trends province of Liége, with more complete renewal, Liège has After more than 30 years of major change than 1 million inhabitants. Liège unveiled a city project for 2003- in the industrial landscape, Belgian is also the centre of substantial 2010 and its vision for the institutions and the European social, economic and academic province for 2020. We environment, the city of Liége faces two main challenges: how to transform its activities. Nearly 60% of the interviewed Mr Jean- political ideals into practical actions to European Union’s purchasing Christophe Peterkenne, Head benefit its citizens; and how to promote power is concentrated in a of Strategy, City of Liège, on the city in an increasingly international radius of 500 kilometres. This the major challenges and environment. radius, known as the Euregio opportunities this historical city These changes also bring a number of Meuse-Rhin, includes the faces and how it is responding opportunities through, among others: the province of Liège, the to them. slow but inescapable process of re- of in urbanisation; clustering with the Belgium and in the neighbouring cities beyond Belgium’s Netherlands, and Aachen in borders; the growth of a new economic Germany, and shows the sector; and the availability of new efficient infrastructures to attract entrepreneurs. To importance of this European take advantage of these opportunities, the region. city will need to reposition itself relative to its bordering regions, while using the budget and resources of a middle-class city.

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Internal trends Consequences for the city All these activities require stringent supervision, a new type of collaboration In view of these challenges, the city drew In this difficult environment the city has between the plan’s architects, and a lot of up a strategic plan to be achieved by taken a pro-active stand. By drawing on creativity and entrepreneurial spirit. 2010. The plan revolves around 10 major its strengths and support from various themes and 16 clear objectives, to be academic institutions through which new achieved under various action plans. The economic activities have been derived, it Priorities for the next decade architects of the project and the city’s has taken full advantage of opportunities In the next decade, and probably beyond, officials worked together to come up with in the logistics sector and successfully the city will continue to work on the a series of key words that the plan following themes: encapsulated: cleanliness, security, promoted the city’s vibrant culture, which mobility, dynamism, teaching, culture and is rooted in the region’s idyllic landscape. • General modernisation of its operations, tourism, solidarity and tolerance, including ensuring professionalism Some new infrastructure has been built. internationalisation, and importantly, among its staff; This includes new entertainment centres, quality public services. The latest a new TGV station will be fully operational Improvement of the quality of services development is an essential • and the establishment of new rearrangement of the city’s services, by 2007, an upgraded airport and a real which involves the development of a logistics centre. The city’s academic infrastructure; quality culture, the modernisation of institutions have also merged to exploit • Alignment of the city’s actions and functioning processes and the fully . The city’s plans with the political outlook of its decentralisation of some services. services are continually improved and citizens; modernised, with an emphasis on security Finalisation, acceleration and actual Internal and external challenges and cleanliness. • operation of big infrastructure works, In this changing environment, the city The city’s citizens are being mobilised as which will inject vitality into the city, needs to modernise its services, well. Their awareness of the importance of boost its attractiveness, and bring it particularly as more than one-third of its the financial institutions has increased and closer to the bordering regions and state employees are due to retire soon. A they have been supportive of further even its more distant neighbouring group of state directors, led by the initiatives such as Liège 2020 or the European countries; secretary-general, are in charge of the Euregio. A master plan for economic city’s principal functions and are development was drawn up some years • Search for positive cooperation on the spearheading this transformation. ago and has gained widespread ‘Big Liège’ development, with the Departments are being re-grouped by acceptance and is picking up speed. Walloon region which will be services. We are paying particular a major source of finance, and the attention to the valuations involved and cross-bordering territories, which have are focusing first on a general-level set already experienced the benefits of up. It is important to recognise that some tools of modernisation have to be set up such cooperation; and progressively. • Strengthened collaboration between the public, part government-owned, In dealing with the city’s external economic, financial and academic challenges, the plan promotes the agents. establishment of modern infrastructure, moves closer to the province, sensitising Finally, Mr Peterkenne concludes; “At the the Walloon region, and integration in cornerstone of the region the city of Liège cross- processes, such as in the is ready for new challenges”. Euregio.

A major challenge is also to achieve these objectives with a relatively modest Liége - strategically located at the crossroads of Belgium, the Netherlands and Germany budget, given that the Belgian economy is currently undergoing adjustment.

Cities in focus 121 London Borough of Newham

Interview with Sir Robin Wales, Mayor of the London Borough of Newham

Sir Robin Wales, Mayor of the London Borough of Newham

View of Stratford’s new underground station

The London Borough of The borough will be the home Global and international trends Newham is a thriving area of the London 2012 Olympic Establishing Newham and Stratford in which is undergoing a Games, providing the focus for particular as a first class tourism and remarkable transformation – an ambitious programme of international business destination lies at rapidly emerging as a centre of regeneration across the the heart of the council’s plans. Stratford is set to become the new international commerce and culture. borough. gateway to London with a new Situated just three miles east of International Passenger Station – the first the financial heartland of the Regeneration and ensuring London stop on the Channel Tunnel Rail , Newham is one there is a lasting legacy for Link – is now under construction. From of the most ethnically diverse local people is at the heart of 2007, high-speed trains will arrive from areas of the UK. Newham Council’s plans. Sir and the continent in two hours and 15 minutes. Robin Wales, Mayor and member of the Board for the Borough leaders hope that passengers 2012 Olympic Bid, talked to us arriving at Stratford will choose to stay in about the opportunities and one of the many new and enjoy the challenges facing Newham. burgeoning nightlife and entertainment in Stratford’s fast developing cultural quarter. The new Stratford City development providing 4,500 new homes and a retail development, married with its existing historic town centre, will ensure Newham becomes a vibrant, international area of opportunity adding a new dimension to London’s world city status.

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The majority the 26 sports competitions in Driving forward the development of the The council places great emphasis on the London 2012 Olympics will take place borough is the Newham 2010 Partnership. listening to and understanding its in Newham. Many of the new, state-of- Bringing together business leaders, public communities. A network of community the-art venues will be retained after the agencies and community representatives, forums ensures that the people of Games for community as well as elite each member is working towards a Newham are centrally involved in shaping sporting uses, and new housing and common vision: “By 2010 Newham will be their future and creating an environment in business parks will abut what will be the a major business location, a place where which they want to live. The council also largest public park to be built in the UK people choose to live and work.” places great emphasis on researching the since the 19th century. needs of the community, especially on Major employment growth is occurring in matters relating to access to work. The The council has been instrumental in the hospitality, tourism, retail, Mayor believes that this information is ensuring the London bid was successful. construction, engineering and architecture vital in helping to shape policy and local A key partner in the bid team, it enabled sectors. As local companies grow and services to meet the needs of the citizens. and facilitated land acquisition and fresh businesses arrive, attracted by the . Sir Robin Wales is in affordable office space and extensive Transforming Newham has required no doubt that the games provide a unique transport infrastructure, job opportunities sustained efforts from its leaders and opportunity for Newham, but he also are increasing steadily. citizens. Sir Robin Wales believes that it is recognises the responsibility that the his role as the directly elected Mayor to council and its partners face in ensuring Through the Access to Jobs Partnership, provide good quality leadership to the world class facilities are delivered on time employment and business organisations local community and to hold elected and on budget. The Mayor is confident are coordinating their efforts to ensure representatives and partners to account. that the games will be a credit to the that local people have the skills necessary Newham is only one of eleven Olympic movement, but he is also to take advantage of these opportunities to have a directly elected local Mayor, this determined that they provide long lasting through innovative education and training he believes has been helpful in providing benefits for the people of East London. initiatives. increased legitimacy with local partners. The council’s business development team Internal and external challenges focuses on key growth sectors (creative Priorities for the next decade Tackling the gap between poverty and industries, construction and Clearly, the decision to award the Olympic wealth is a major challenge for Newham. manufacturing) and assists local firms to Games to London offers a once in a The changing nature of employment, capitalise on the extra trade that generation opportunity to transform the international migration and a traditional regeneration brings to the borough. landscape and lives of the people who low skill economy has meant that Through specialist business support and live and work in Newham. Newham has suffered disproportionate supply-chain development, together with levels of unemployment and social regular workshops, business forums, The council is determined to seize the deprivation compared to the rest of the showcase opportunities and a opportunity to build a sustainable, UK. Newham is one of the most deprived comprehensive business directory, the inclusive community with wide-ranging boroughs in the UK. Across, the borough, team provides a range of services to social and economic benefits for the more than 100,000 adults are on benefits businesses, whether established or start- borough’s residents. and almost two thirds of children grow up up and helps them to maximise their in poverty. Newham also has one of the growth and competitiveness. youngest and most diverse populations in Just as the economy is improving, so is the UK. Over 40% of the 254,000 people the social infrastructure, with more are under 25 years old and more than 100 affordable housing, better leisure facilities, languages are spoken locally – from new schools and improved transport links Albanian to Zhuang. all contributing to a better quality of life New infrastructure, new businesses and for residents. The borough now boasts thousands of new homes have begun to some of the country’s fastest improving transform the landscape in Newham. schools and Newham Council is Providing access to these new jobs, skills increasingly recognised for its innovative for work and affordable housing are key approach and quality services. priorities for the council.

Cities in focus 123 London, City of Westminster

Interview with Interview with Cllr Simon Milton, Leader of Westminster City Council

Cllr Simon Milton, Leader of Westminster City Council

The City of Westminster, London, UK

Westminster City Council is the The greatest challenge for Global and international trends local authority serving the heart Westminster is to reconcile the The pressures that London and the City of of London. It includes the need to provide a first class Westminster in particular face are not capital’s principal areas of quality of life for residents with unique, but it has to be acknowledged government, shopping, the need to accommodate and that it does share particular characteristics and challenges with a entertainment and tourism and meet the requirements of its small group of world cities including, the headquarters of many visitors. We spoke to Cllr among others, Tokyo, New York and innumerable commercial and Simon Milton, Leader of . The council has always sought professional organisations Westminster City Council about to forge partnerships and learn from the together with extensive how the council is responding experiences of others and recently carried residential areas of all types. to this challenge. out a ‘peer’ review of its performance with , USA. It has also undertaken The resident population is the Global City Management Survey with around 220,000 but it is 42 other cities to identify common estimated that about 1 million interests and best practice in managing people set foot in Westminster global cities. at some time during the day. It As the UK’s political and tourism centre, is also one of the UK’s premier Westminster is particularly vulnerable to tourist destinations, and it is terrorist attack, as the events of 7th July estimated that 95% of Britain’s 2005 sadly confirmed. The Council along annual 28M tourists pass with public sector partners had been through the city. working hard to ensure that the city was as prepared as possible for any eventuality. All of London’s emergency services and local authorities have been

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universally praised for their swift, calm residents have equal opportunity and The council has also invested heavily in and professional response to the attacks. access to quality services, jobs and new technology to achieve efficiency and The city council and partners now have an affordable homes forms the second part productivity gains, for example staff have on-going task to ensure residents and of the council’s agenda. been provided with hand held computers visitors feel confident to live, work and to record and process information as they visit London. Access to affordable housing is a work on-site, saving substantial time and particular issue for Westminster residents. resources. The council also places strong Internal and external challenges The council has set a new £100m plus emphasis on performance management, fund for affordable housing as a result of setting challenging targets to manage Westminster is a vibrant 24-hour city, with the sale of property assets elsewhere in costs downwards whilst still achieving the largest night time economy in Europe. the city. The fund, is the largest affordable good quality outcomes for its citizens. The streets around entertainment zones housing fund ever created in the UK. can be very noisy and there are increasing Administered by a charitable trust, the Priorities for the future levels of anti-social behaviour often driven fund will be targeted at providing a range by alcohol abuse. The centre piece of the of new housing opportunities in addition Civic Renewal, the five-year programme, council’s agenda is maintaining order – to those offered by other public sector provides a platform through which the tackling crime and the fear of crime. providers. The fund will allow the council Council will regenerate the social, Programmes such as CivicWatch – a to move away from the traditional social economic and physical infrastructure programme to tackle anti-social behaviour housing tenure to more innovative of Westminster and make Westminster an and poor environment – and a new anti- schemes promoting home ownership, example of world-class city management. social behaviour hotline help council staff shared ownership, supported housing for to respond quickly and effectively to older people and other forms of incidents. intermediate housing.

The council has also recently entered into In order to tackle the pockets of severe an innovative partnership with British deprivation amongst Westminster’s Telecom, Intel and Cisco to create a minority ethnic communities, the council ‘Wireless City’ which allows Closed Circuit is setting up a new Minority and Smaller Television (CCTV) cameras and noise Business Council. The council believes monitoring equipment to operate over a the best way to raise people out of wireless network. This means that the deprivation is to give them renewed hope system is flexible enough to respond to and a greater stake in the future welfare of sudden outbreaks of criminal activity. New their own neighbourhoods. cameras and equipment can be installed at very short notice and low cost. Westminster council has an exemplary record in delivering good quality, cost Improving the local environment is effective services, and was awarded the another key part of the council’s agenda. prestigious ‘Council of the Year’ Award in Using innovative Global Positioning 2004. Systems (GPS) technology developed specifically for the council, the council can Keeping local taxes as low as possible is track and monitor all cleansing vehicles as the third part of the council’s agenda. On- they collect rubbish from across the city, going financial pressures across local allowing refuse collection teams to government means that the council needs respond to problems as they happen. to seek ever more innovative and creative ways deliver its services. Innovative Westminster has an extremely diverse outsourcing arrangements mean that 60 population. 51% of residents were born services, employing 400 people are now outside the UK, 30% of the population are delivered by the private sector and a from black and ethnic minority customer call centre, which has handled communities and over 150 languages are four million calls in the first two and a half spoken. Westminster contains some of years, providing a high quality service to the UK’s most prosperous citizens. The council is also investigating neighbourhoods, but there are also high options where it can ‘trade’ services, that levels of social deprivation. Fostering is, deliver and manage services on behalf good community relations and ensuring of other public sector bodies.

Cities in focus 125 Ville de Luxembourg

Interview with Mr Georges Fondeur, City Chief Secretary, Ville de Luxembourg

Mr Paul Helminger, Mayor, Ville de Luxembourg

Photos by Robert Theisen and Francois Buny © copyright Phototheque de la Ville de Luxembourg

The City of Luxembourg is the We talked to the City Chief Key challenges capital of the Grand of Secretary, Mr Georges Fondeur • Deploying eGovernment by connecting Luxembourg. The city has about the city branding, the people and simplifying interaction with the city; 85,000 inhabitants of whom future challenges and trends for • Alleviate traffic congestion; 60% originally come from the city. outside of the Grand Duchy. • Stimulating life in the city (attracting residents to live in the city centre); About 120,000 people from the • The impact of deregulation in the neighbouring states of Belgium, energy market and the consequences France and Germany flow into for city revenues (the city is the main the city each day for work. The energy provider); city government has an overall • Managing costs and improving productivity; and budget of €600 Million and employs 3,300 people. • Attracting qualified and experienced employees.

The city is governed by the city Luxembourg is a city with a rich history council (27 members) and the (founded in 963) and it boasts many city board (7 members) which is remnants of its turbulent past such as a fortress (now a UNESCO World Heritage chaired by the Mayor Mr Paul site). The historic setting, the proximity of Helminger. its neighbouring countries (France, Germany, Belgium), the cultural offerings

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and happenings, the international External and internal challenges Priorities for the next decade business environment with its multicultural Deregulation of the energy market is the To plan for the future, the city of workforce, the attractive business most important financial challenge for the Luxembourg is mapping out a strategy in environment, as well as the presence of city of Luxembourg. Indeed, the city was major EU institutions: these are all the form of an urban development the sole supplier of electricity and gas reasons why the city of Luxembourg plan (IVP: Integratives Verkehrs- und within the city’s borders and generated attracts people from all over the world. Landesentwicklungskonzept), which substantial turnover and profit from this includes traffic organisation, construction activity. In the 2005 budget, revenues and urban development projects. In order Branding the city from energy (including water) represent to exploit synergies, this plan is being Besides being an important financial the second largest source of income for centre, the city sees its attractiveness in the city, only second to commercial taxes. developed in close cooperation with two areas: tourism and art & culture. neighbouring cities. The development of The city currently employs about 3300 the University of Luxembourg will Mr Helminger has put every effort into people and strongly encourages its staff be another key priority on the city developing the cultural offerings in the city to enrol in vocational training programmes management’s agenda, which should (“life-long learning”) thus encouraging by creating “ Ville d’expositions” – a foster the development of of exhibitions. Luxembourg city was employees to develop. Nonetheless, into a city of sciences and research. the European City of Culture in 1995 and attracting highly qualified and experienced will be again in 2007, together with other people from outside for high-ranking jobs cities located in neighbouring countries represents a real challenge for the city. (what is known as “La grande région”). To The city of Luxembourg has about 85,000 further promote and develop its brand, the inhabitants, but during the day businesses city has decided to create the job of “city attract around 120,000 additional people. manager”. This person will be responsible This fluctuation of people has an impact for the coordination of all these cultural on social life, being very busy throughout activities and events. the day but less active in the evening. In comparison with its nearest neighbours This is partly compensated by the and competitors (Nancy, Trier, presence of a large international Saarbrücken), Luxembourg is the only city community (60% of the 85,000 inhabitants that does not yet have a fully operational are foreigners) bringing life and diversity university. Evidently, the lack of students to the city in the evening. negatively impacts social life in the city. In order to alleviate heavy daytime traffic, This has changed recently with the the city tries to push for an increasing use creation of the University of Luxembourg, of public transportation by defining which should help attract a new several measures (no free parking). Today, population of students and young people. public transportation represents more than 25% of traffic (with the exception of Global trends: eGovernment and one area). the relationship with local citizens The city also focuses on the environment The city increasingly sees the citizen as a by working on the production of low customer, and all the services offered by emission vehicles for public transportation the city are being centralised to simplify (buses) and by using new technologies to dealings with the city. A central agency has produce heat and electricity, generating been created (“Biergercenter”) to serve as a 30-35% fewer emissions than traditional “one-stop shop” for citizens. This service technologies. will be further developed through the creation of a virtual city (eBiergercenter) offering more flexibility and interactivity through the use of the Internet.

Cities in focus 127 Madrid

Interview with Mr Ignacio Niño, General Co-ordinator of Economics, Madrid City Council

Miguel Angel Villanueva, Councillor of Economy and Citizen Involvement. Madrid

The City of Madrid by night

In the last four years alone, We talked to Ignacio Niño, the Global and international trends Madrid has gained 300,000 General Co-ordinator of The unstoppable technological advances more inhabitants and currently Economics at Madrid City in transport and in information and ranks third among European Council about future challenges communication technologies (ICT), deriving cities in terms of population. and their consequences for the from the intensification of globalisation and the increased competition amongst 15% of the population is Spanish capital. His aim is to companies and territories, is one of the foreign. It is among the top-10 see Madrid as a truly international trends that will affect the city cities in Europe in terms of the cosmopolitan city with a of Madrid over the next 10 years. level of education achieved by dynamic international image, International competition will be especially its citizens, with 25% of whilst at the same time being stiff in the financial sector, ICT, advanced Madrid’s inhabitants holding at the service of its citizens, business services and research activities. At the same time, migratory pressure will university degrees. with their increased continue to grow, with Madrid as a gateway participation in municipal for American, North African and Sub- The vision for the city is for affairs. Saharan African migration. The context of Madrid to become a increased global competitiveness, together sustainable, cohesive and with a rise in world economic deregulation competitive place for business will strengthen the challenge of internationalisation for companies and and pleasure. cities. In particular, Madrid will have to find its “place in the sun” facing emerging territories in Asia (especially China and

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India), Eastern Europe and , The most important internal challenges habitat through rehabilitation of the city based on differentiation, quality and focus on the successful integration in the centre, the recovery of pavements and innovation strategies. Tourism will also be a city of the increasing immigrant population the re-balancing of immigration by key activity in continuous growth, in line (along with their religious and cultural districts/quarters; with the increase in world income. Cultural values) and on the greater involvement of and economic differences between regions civil society in the government of the city. • Competitiveness: Madrid capital will and cultures across the world will continue focus on R&D and innovation, the to be an important factor that will threaten Consequences for the city development of new competitive the security and safety of the inhabitants of industries such as life sciences and The key to respond to these challenges is all major world cities. materials sciences, the promotion of the the implementation of public policies by city as a logistics nexus between the city government. However, these new Internal trends challenges are receiving insufficient Europe, Latin America and Africa. One A major internal trend is the increase in land attention via the provision of budget important strategic objective is to prices as a critical factor in absorbing, allocations, compared to traditional become the head office of international attracting and retaining economic activity challenges such as security and cleaning. bodies and a European “economic” and population. In addition, the integration In other words, the budget is not growing meeting point: business tourism centre, of immigration is critical for preserving the proportionally in line with the rapid trade fairs, events; and quality of urban life and harmonious development of these new challenges. In addition, work will be done for Madrid coexistence between different groups in all • mechanisms will have to be to become the South European centre districts of the city. The ageing of the local more flexible, in order to meet these new population is another factor determining for design and fashion. challenges. business activity and future investments in A sustainable, cohesive, competitive the city. In order to attract investment and The participation of citizens in municipal Madrid will be a lighthouse, a “quality people to Madrid, issues/factors of affairs will be promoted, together with the circle” of development in three dimensions: congestion such as environmental quality, creation of social councils as participatory economic, social and human, in both the traffic problems, housing and business land bodies in local development policies. prices will have to be addressed by international and trans-national arenas. Active economic and city marketing investing in infrastructure and urban policies will be implemented, promoting Achieving these goals will see the city technology. No less important is the need Madrid’s key areas for its economic achieving its vision of: “Madrid as a for companies based in Madrid to evolve future: internationalisation, R&D, sustainable, cohesive and competitive city towards quality, innovation and the innovation, tourism promotion, appreciation of investment and R&D in in the international arena”. revitalisation of the urban centre, order to preserve a leading position for strengthening of trade, proximity, increase Madrid’s economy. The risk of institutional in economic information of the city, relocation is also undermining one of the dialogue and consensus with local substantial elements of the city: its status economic agents and co-ordination with as the country’s capital. other levels of administration.

External and internal challenges Priorities for the next decade The major external challenge the city faces In order to become a truly 21st century in order to address the above-mentioned , Madrid capital will place trends lies in positioning Madrid better in a particular emphasis on the following tasks more globalised world in which cities are and projects: competing more and more for investment, tourists and the organisation of events. This • Environmental sustainability: mainly positioning will include the creation of a through covering over the M30 brand image for the city in line with the type Motorway, which implies recovering the of city to be promoted: modern, open, Manzanares river and creating a bicycle sustainable and participatory, facing the ring road, and the promotion of public challenges of innovation, greater capacity transport networks; to attract capital and greater effort in gaining a position internationally. • Social cohesion: territorial balance between the districts, citizen participation and recovery of the urban

Cities in focus 129 Malmö

Interview with Ms Inger Nilsson, City Manager of City of Malmö

Ms Inger Nilsson, City Manager of City of Malmö, Sweden

Malmo “Turning Torso” Photo: Lisbeth Svensson

Malmö is the third largest city We asked Ms Inger Nilsson, Global and international trends in Sweden. It has a City manager of City of Malmö, Internationalisation and regionalisation are metropolitan population of about the most imperative the most apparent trends. Today and in about 498,000. Malmö is also a issues and visions of the city of the future we will interact more and part of the Öresund region that Malmö, both for today and for exchange experiences with other municipalities that are similar to us or includes about 3.5 million the future. have the same problems/opportunities as inhabitants. Today, Malmö is we do. There is a great deal to learn from undergoing a transition from an other municipalities. The fact is that they industrial city to a city of are all public organisations with much in knowledge. Older industries common so the opportunities to learn have been replaced by something new are endless. For example, the City of Malmö has about 500 investments in new technology politicians while Copenhagen has 55. The and high calibre training question is: are we more democratic then programmes. Malmö University, they are? Probably not. Consequently, the which opened in 1998, is most important thing becomes not to Sweden's latest venture in the speak the same language (e.g. Swedish) field of higher education, but to talk the same municipality language. Another important trend is accommodating some 15,000 growing collaboration with the non- students. municipality stakeholders (companies, associations, universities, citizens and unions.

130 Cities in focus Cities of the future - global competition, local leadership

Internal trends with such projects as the Turning Torso, the West port and others. These trends The population’s increased and growing will increasingly be addressed by mobility is one of the emerging trends due solutions based on partnership in various to the development of infrastructure (the forms to solve different issues. The Öresund bridge, the Metro). After the fall municipality will no longer be solely of the Soviet Union the possibilities of responsible for everything as it is to some regionalisation have been increased. From extent today. being a municipality at the border of Europe we have now become a central For example, shared construction projects place in a very interesting region. between the municipality and a building contractor will achieve a mutually External and internal challenges beneficial outcome for both parties using The most significant challenges in the city the most efficient means. of Malmö include: security, public safety, Two key trends are influencing Malmö’s housing problems, educational citizens: they are paying more attention to achievement and jobs for everyone. the important issues of the day and want Crucial for the city of Malmö will be how to make an impact; and they are escaping government management changes and from the city for the perceived relative how it will affect the city. The possibilities “safety” of places like Vellinge, Hörby. lie in workforce reserves management that can decrease the unemployment rate and Priorities for the next decade the dependence on social aid. The threats To create employment, safety, education are that immigrants will not be • successfully integrated into the labour and housing for everyone; market and that public safety will • Maintain the region’s attractiveness; diminish. • Make sure that the all players There are inconsistencies in government (companies, associations, citizens and decisions today, which affect the unions etc) have the necessary support municipalities’ ability to plan for the future. in order to deal with new trends; This must be improved. The Influence politics on a national level council “Region Skåne” is a relatively new • development which has yet to find its (economic and educational policy). In right shape. In line with the trend seen order to face new trends and to meet elsewhere in Europe, regions will become upcoming needs, Malmö has started a more important. Consolidation of project “Welfare for Everyone”; municipalities will be more common. • By implementing projects such as “Welfare for Everyone“, creating job Consequences for the city opportunities and securing public safety Failing to create jobs for all immigrants to ensure that insecurity and, in the long could lead to a feeling of insecurity run, even terrorism and other among these people. The population international problems do not gain a composition in Malmö City has been foothold. influenced by the internationalisation process, which has brought both All municipalities stand on the same problems and opportunities. Despite the ground: namely, creating maximum negative side of internationalisation, youth welfare for all their citizens. culture has been strengthened (University of Malmö and Lilla Torget with its coffee houses) in terms of belief in the future and

Cities in focus 131 Mangaung

Interview with Mr Mojalefa Matlole, City Manager, City of Mangaung

Mr Mojalefa Matlole, City Manager, City of Manguang

City of Manguang

Situated in the heart of South Mojalefa Matlole, City Manager Global and international trends Africa, Mangaung Municipality of Mangaung, shared his ideas There is a worldwide move towards the is home to a rich cultural about the future of the city with decentralisation of government, with an lifestyle and is a recognised us. accompanying need for the increased melting pot of creative ideas involvement of the citizenry in the and expression. With a activities of the municipality. We believe population of over 750, 000 that governments need to decentralise people, its boundaries span power to local government. 2 6,363 km and include In this era of globalisation, cities are more , SA’s sixth city, than likely to compete with each other for which is also the capital of the investments. The fact that investors can province. be attracted by various technological means will not only provide for intense “Hospitable city”, “the competition between cities, but also for congress city”, “the total city” many more opportunities to attract and “the city of roses”. All investors. these designations indicate that The growing prominence of cities, as well it is a city in which not only as the role that they can play in the residents, but also visitors and economies of national states, could well tourists can feel at home. play a pivotal role in the rise or decline of national states.

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Internal trends A major internal challenge that we will We foresee that there will be a heightened face is a resource capacity at a financial level of awareness amongst citizens with South Africa is currently experiencing a level. There is a need to have the regard to their rights and obligations. Our consolidation of service delivery at a necessary political and ad-ministrative aim is to foster a city of citizens that have regional level. We are seeing this in the coherence, resolve and the will to deal great civic pride, responsibility and a fields of electricity distribution, water, with this challenge. strong partnership ethos, with a vibrant sanitation and the district health system. cultural life. Citizens must participate Social challenges currently centre on Consequences for the city actively and trust their service providers, crime and safety, increased urbanization If the city does not deal with the who must operate with a culture of and sprawl, and sustainable development. challenges it faces, it will become transparency and accountability. There is a massive migration to the urban uncompetitive as a city and will be unable In a South African context, we expect a centres of the coun-try, which will to attract investment. There will be an gradual phasing out of provincial inevitably lead to the escalation of the increase in the level of poverty as well as government that will be replaced by level of poverty. in the unemployment rate. As faith in their stronger local government, which will We expect a significant increase in the leadership and in the government have a stronger focus on both number of people that will be dependant structures erodes, public unrest becomes development and the economic sector. on the informal business sector which, a very real risk. Through our “Mangaung Compact” we coupled with the high unemployment rate, Mangaung is responding to the challenge are beginning to involve both the private will inevitably result in a housing shortage. by continuing with our strategy of bottom- and the non-profit sectors for the Public Health remains a major concern – up planning, which is also used for spatial betterment of our economic growth. We not only the HIV and AIDS pandemic (the development planning. need to enter into partnerships with the rate of infection in our province is On a political level we have signed the private sector in order to finance our estimated at around 30%), but also other “Mangaung Compact”, which aims to infrastructure. illnesses such as tubercu-losis and ensure a harmonious working relationship We have recently established a malaria. between the city, the provincial Knowledge Management Centre, which government, the and External and internal challenges has strong ties with the SA Cities Network the private sector in addressing the and the Development Bank of South One of the biggest challenges that we challenges that face the city. Africa. Sharing of knowledge, innovation face is in the field of intergovernmental We are also embarking on an institutional and best practice are key to our future co-ordination, both as an approach and and financial reform programme in order success. as a strategy. This is due to the fact that to stabilize the organisation and to put it we have to drive co-ordination with both As we realise that the challenges facing on a good financial footing. Unlike in the the provincial government and the district cities globally are similar, we will all be past, we visualise a greater role for the municipality on the issue of how we deal able to learn from each other. city in the area of economic development. with matters of government as well as ensuring that the different governmental Promotion of the city and priorities for the institu-tions do not duplicate services. A next decade part of this daunting task is to deal with the powers and functions of the different Our vision is for Mangaung to be spheres of government. recognised nationally and internationally as a safe and attractive place to live, work A further challenge is around the issue of and invest by 2015. capital investment, as we need to inject more funding into our infrastructure, which We have already embarked on an in turn is supposed to drive the economy aggressive marketing strategy under our of the city. pay-off line of “city on the move”.

Cities in focus 133 Melbourne

Interview with David Pitchford, Chief Executive, City of Melbourne

David Pritchard, Chief Executive, City of Melbourne

View of Melbourne skyline

Melbourne is the capital of Global and international trends Despite the advent of international terrorism Melbourne continues to attract Victoria and the host of the Global economic, industrial and political international students. Other international 2006 Commonwealth Games. trends affect the economic and social concerns such as the SARS outbreak had climate of the City of Melbourne and With 3.6 million residents, it is a short-term impact on the level of inform its vision for the future. also Australia’s second largest corporate travel and tourism, but city and a vibrant centre of China has become the outstanding international visitor numbers recovered commerce and innovation. success story of our times and, in the quickly and have continued to grow. next decade, will likely become the world’s third largest economy. This article is based on the Internal trends response from Mr David Melbourne is the only Australian city with The Central City’s population has doubled Pitchford, Chief Executive, City a dedicated office in and the sister- over the last ten years and is projected to city relationship generates solid financial of Melbourne. double again over the next 20 years. This and social rewards. It has taught will increase pressure on the environment. Melbourne a great deal about the benefits Reducing water use, energy consumption of building global relationships. and greenhouse gas emissions are critical External agencies consistently rate to the city’s sustainability. Melbourne as one of the world’s most The Docklands development will also be liveable cities. Its inclusive, cultural life is completed and handed back to the City of one of its key competitive advantages. Melbourne from the State Government in Melbourne is also a global attraction for 2008, giving the city a major waterfront learning and knowledge, home to nine and doubling the size of the central universities and 32% of Australia’s business district. international students.

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In 2006, Melbourne will host the Common- Mr Pitchford believes that care must also Under construction next door to the Town wealth Games, which will bring 90,000 be taken to protect the unique feel of the Hall, the new Council Administration overseas and interstate visitors and present city, its streetscape, active spaces and building, CH2, has been awarded the city to a billion television viewers. wonderful parks. Australia’s first six-star green rating and is Financial issues impact the City of set to become the greenest multi-story Melbourne and the Council faces pressure Priorities for the next decade office building in the world, a feat people to keep local taxes low. Adding to this The next decade will see many everywhere will want to see in action. pressure is cost shifting by State established cities face the social change Government to local government. The city is and economic challenges created by an assessing the potential to increase revenue ageing population, skills shortages, from sources other than local taxation. immigration and population movements. In addition to keeping taxes low, the city is also focused on providing quality services The City of Melbourne has produced the tailored to the needs of the community. City Plan 2010 which sets out the City’s vision and agenda for the future. Its vision External and internal challenges is for a thriving and sustainable city, achieved by the simultaneous pursuit of A major challenge for any city is to economic prosperity, social equity and maintain social equity and avoid a polarised society. Decreased interaction environmental quality. amongst a city’s population can increase The city’s business focus is on innovation social problems and divide its community. and specialisation in its areas of Accessibility is also an important issue for comparative advantage including, Melbourne as the number of visitors to financial services, advanced the city each day is ten times the number manufacturing, life sciences, bio- who live in it. Visitor numbers increased technology, education, environmental 25% over the last four years and are management, health, and tourism. projected to increase by 17% over the next four years. In order to be competitive in the knowledge The council’s aim is to maximise sector, Melbourne will need to support its opportunities for all members of the highly skilled workforce and ensure it has community to enter the city and expand the ability to respond quickly to change. transport options. It is focussed on reducing It is also essential to ensure the city through traffic and commuter car use. remains safe, attractive, inclusive and a great place to live. Consequences for the city The council must continue to develop and But we need to build on our quality of life offer programmes to support businesses and set new benchmarks in sustainability, both locally and in export markets by liveability, creativity, innovation, education, using its information, contacts, experience safety and prosperity. and infrastructure. The City of Melbourne is acting on As the city’s residential population increases, environmental issues and challenges by noise pollution becomes a greater concern. aiming for Net Zero Emissions by 2020. It is Noise management initiatives and control also sensitive to the global issue of access guidelines are underway. to water and plans to reduce water Estimating the needs for future services consumption by 12% by 2020. The City is and infrastructure development is also a also introducing sustainable water polices, challenge, particularly given central guidelines and training across the city. Melbourne’s rapid development and population growth.

Cities in focus 135 Montreal

Interview Gérald Tremblay, Mayor, City of Montreal

His Worship Mayor Gérald Tremblay, Mayor, Montreal

City of Montreal

Montreal’s architecture most But of course, it is Montreal’s International economic revealingly attests to the city’s 3.5 million people that best conditions dual personality: an exciting exemplify the excitement and Montreal’s economic development, like mix of European warmth and joie de vivre that make it all other large cities of the globe, is North-American modernity. happen. A fierce pride beats in inextricably linked to international Everywhere, lovingly preserved the French heart of North business conditions. The profound Victorian mansions, stately America. Montrealers work, rest changes brought about by the globalisation of the world’s economies buildings from past centuries, and play in a truly global have repercussions of varying degrees on and Beaux-Arts style multitude of languages and all countries and areas of activity. monuments blend with the cultures. Companies, cities, regions and countries long, cool lines of modern are all seeking to reposition themselves to . We spoke with Mayor Gérald best take advantage of the new world Tremblay about his vision for economic conditions. Montreal and about the Like other cities and regions, Montreal is challenges his city faces in the particularly affected by increasingly intense future.Global and international worldwide competition arising from freer trends trade; the metropolitisation of economies; the continuous technological development and distribution of information and communications technologies; the easy mobility of investments, capital and persons; the transition to a knowledge- based economy; and the importance of human capital.

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US economic conditions Internal trends The city must also tackle employment US economic conditions directly affect the The city of Montreal faces the following migration caused by factors such as: economic vitality of all major Canadian major internal challenges: • Low cost ; and cities, including Montreal. Increased • Low competitiveness and productivity, military spending and the burgeoning Socio-demographic trends even if Montreal is well-known for the budget deficit in the US is putting upward An ageing population is affecting Montreal quality of life it offers (quality pressure on interest rates. as in other major urban centres. In 1986, infrastructures, high level of safety, an Furthermore, this has weakened the US people in the over 65 age group effective mass transit system, quality dollar against other , including represented 12.8% of Montreal’s total healthcare, access to capital). This can population; however, this figure rose to the Canadian dollar which has shot up prevent the city from welcoming and 15% in 2001, a trend that continues. about 30% in recent months. Foreign retaining a qualified immigrant population investments in Canada and exports have An ageing population and slow to occupy value-added positions within been affected, not only by the increase in demographic growth in urban centres in key sectors of its economy. the value of the Canadian dollar, but by industrialised countries have forced the speed at which it has taken place, Another approach in increasing economic politicians to place more weight on which has prevented companies from growth is to offer major financial international (qualified) immigration and fine-tuning their strategies in time. the attendant consequences on housing incentives to attract companies, a strategy that has been noted with These conditions can have an impact on and social cohesiveness and integration. employment levels in the country. increasing frequency in the US. The ever-widening gap between social However, in 2004, the Canadian economy classes is another trend that is affecting At the same time, there is the serious performed very well, particularly due to and will continue to affect Montreal in issue of the underfunding of ’s sustained growth in the housing sector, terms of urban development and social universities. consumer demand and company cohesiveness. investments. In this connection, it must be This lack of funding could have an impact noted that the rise in the Canadian dollar over time on Montreal’s ability to fully gives a substantial advantage to External and internal challenges embrace the knowledge-based economy. companies that acquire goods and Montreal’s main challenge is to increase A different concern is Montreal’s services in the US to increase their economic growth to generate a gross overdependence on the US economy and productivity. domestic product (GDP) per capita susceptibility to its fluctuations. 42% (in greater than the continental average, value terms) of exports outside the city Sustainable development which requires it to: are destined to the US. The city’s Countries and cities, particularly those • Raise the rate of those holding university challenge is therefore to diversify its that offer an environment and a better degrees in the 25-and-over group; quality of life – while taking a balanced export markets by making itself better approach to economic vitality, social • Attract and retain new qualified known and improving its position equity, environmental protection and immigrants; elsewhere in the world in niches where it respect for the needs of future • Increase the business creation ratio; has comparative advantages. generations – will be best equipped to Improve first-line services to Current governance arrangements within deal with worldwide competition. • businesses; Canada represent a challenge to all cities in Canada. There is a clear mismatch In this respect, it is worth mentioning • Modernise urban infrastructures; Montreal’s Blue Network, Montreal’s between local government accountability Green Project, the protection of Montreal’s • Foster demographic growth; and the expectations of community historic and national district of Mount • Reduce the proportion of the population residents for a responsive government Royal, amongst others. Montreal is also that is economically fragile; and that will look after their interests. very well-known for its multiculturism. • Select excellent niches for exports, This challenge is exacerbated by the fiscal particularly in areas where demand from imbalance between local government the US is relatively strong and where responsibility for front-line social programs Montreal already is at an advantage. and the fiscal resources and fiscal capacity to address those responsibilities.

Cities in focus 137 Nelson Mandela Metropolitan Municipality

Interview with Ms Vuyo Zituman, Municipal Manager, Nelson Mandela Metropolitan Municipality

Ms Vuyo Zituman, Municipal Manager, Nelson Mandela Metropolitan Municipality

Nelson Mandela Metropolitan Global and international trends Internal trends Municipality (NMMM) includes The city faces a number of competitive The New Partnership for Africa’s Port Elizabeth, Uitenhage and challenges generated by global trends. In Development (NEPAD) is seen to be Despatch. Together they form particular, large emerging markets such as having a positive influence on the foreign the fifth largest city in South China and the Middle East are creating a direct investment (FDI) and opening more shift in the focus of foreign investment. At opportunities for trade.The local economy Africa with a population of 1.5 the same time, the exchange rate does have a more optimistic outlook, with million. We talked to Vuyo implications of the ZAR/$ are having an greater stability and positive national Zituman, the municipal impact on export competitiveness policies in terms of development, manager and asked her about especially for the automotive spare parts governance and general fundamentals the challenges the city faces industry which forms a considerable part such as all contributing to and its vision for the future. of the industrial base of NMMM. this. Political stability in South Africa also plays a significant role. Other hotspots around the world – for example the and conflict Strong and improving corporate zones – have also diverted attention and governance is also helping to create funds away from infrastructure positive perceptions about the requirements in South Africa. possibilities of trading and developing commercial relationships with businesses in the region.

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External challenges Priorities for the city in the next As mentioned previously, exchange rate decade volatility has a potentially damaging effect The city government is putting itself at the on the local economy in terms of the centre of development efforts for the ability to export. We are in competition region as a whole. Acting in the capacity with other cities, such as Durban and of ‘big brother’ the city is collaborating , for revenue from tourism and with its district neighbours to broaden, the ability to attract FDI. create and support regional economic The NMMM is also the centre for opportunities. This means promoting the economic and infrastructural through specific marketing in the region. This means that the city has campaigns aimed at attracting business to help its intra-provincial neighbours to and tourism to the city and its outlying become self-sufficient and viable regions. economies. But there is significant The city’s infrastructure also needs to be poverty in the region and this means that replanned to take account of the the efforts to help other communities expanding. The Infrastructure overcome these problems requires Development Plan (IDP) has been significant effort from the NMMM developed with the specific aim of government. tackling this challenge.

The city does not have a strong strategic Through intensive public participation with location as enjoyed by for instance stakeholders, the city has developed a Johannesburg or Cape Town, both of vision for 2020 that has an extensive list which are ‘gateways’ to the country. of the specific areas that the city wishes to improve, These include developing Internal challenges institutions, improving housing, placing an Poverty in the areas surrounding the city emphasis on the environment, boosting mean that there is a trend to urban tourism, enhancing public safety and migration and this movement of poor alleviating poverty. people from outlying areas into the city places a strain on the city’s ability to manage its infrastructure. The city’s infrastructure is sound, but is being severely tested by the changing needs of the city’s inhabitants and the rapid increase in demand arising from the population growth.

The city also needs to ensure that its skills base can be developed in line with the changing requirements of the relevant economic and industrial sectors.

Cities in focus 139 Nizhny Novgorod

Interview with Mr Alexander Konstantinovich Meleshkin, First Deputy Head of the Municipal Administration and Vice-Mayor of Nizhny Novgorod

Mr Alexander Konstantinovich Meleshkin, First Deputy Head of the Municipal Administration and Vice-Mayor of Nizhny Novgorod

City of Nizhny Novgorod

Nizhny Novgorod is the centre We spoke to Alexander Global and international trends of the TransVolga Federal Konstantinovich Meleshkin, Globalisation of business is one of the Region (one of Russia’s seven First Deputy Head of the most significant trends impacting the federal territories), capital of the Municipal Administration and development of Russian cities in general, Volgo-Vyatka economic region Vice-Mayor of Nizhny and Nizhny Novgorod, in particular. Nizhny Novgorod is perceived as an and of the Novgorod, and asked him attractive place for business by Russian Nizhny Novgorod Region. about the opportunities and and international companies alike due to Nizhny Novgorod is Russia’s challenges his city faces. its position in the centre of the TransVolga major industrial and scientific and its high industrial and city and rates among the top- research and development (R&D) five cities in terms of its potential. Many large companies, such as Lukoil, Bazovy Element and Intel, have population (1,350,000 people) already gained a foothold in the city and and industrial potential. others are reviewing possible options for entering the local and regional market. The arrival of major corporations facilitates higher economic and industrial growth. It also ensures new jobs, greater budget contributions and a higher employment rate. This trend will remain a driving force for the city’s development in the next decade.

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Internal trends solid foundation for the city’s economic Thus, in 5-7 years’ time, Nizhny Novgorod growth, including the development of Global, domestic and regional trends are should become a city of new housing science-intensive industry sectors. all interrelated. Positive national trends, blocks and new shopping and Planning the development of certain city include Russia joining the World Trade entertainment facilities: districts poses a problem because Organisation (WTO), which opens up new historically these districts have evolved • One of the priorities for the next decade international market prospects to local around major enterprises and growth is will be transport infrastructure companies. In addition, an improved closely linked to such enterprises’ development in order to support Russian taxation system and the development. dynamic growth of the city’s economy; expansion of major businesses in the local and and regional market ensure favourable conditions for the city’s development. Implications for the city • Social development also remains at the (Social projects implemented by local and Nizhny Novgorod’s geographical position top of the agenda for this period. international companies are also making and its economic and R&D potential an important contribution to positive creates favourable conditions for further socio-economic changes.) socio-economic growth. Nizhny Novgorod is the centre of the Local municipal authorities’ impact on Volgo-Vyatka economic zone and the economic growth rates largely tends to be capital of Povolzhye, and this high status of indirect nature due to the division of is another incentive for local business and municipal government development. The responsibilities between the city’s administration aims to meet the highest administration, regional and federal management standards and maintain the authorities and also because of funding city’s reputation as a constraints. To influence the economic capital not only on the regional, but also dynamics, the city government tends to on the federal level. provide indirect support to transparent businesses, such as lease extensions or Opportunities and challenges terminations, to ensure city budget cash The current realignment of responsibilities inflows. and resources between the city, regional As a result of growth in municipal and federal governments is a further employees’ remuneration, the city positive trend. The process targets streamlining the range of tasks and administration faces the task of efficient HR objectives to be tackled at each level and management based on up-to-date incentive ensuring that resources are available to and performance appraisal systems. achieve this. Once this process is completed, the city administration will be Priorities for the next decade able to solve the tasks falling to it in a more Nizhny Novgorod is a capital of efficient manner, as it will be empowered to • TransVolga Federal Region, and aims to use the necessary resources. However, while the process is still underway, the city’s maintain this status in the next decade, local authorities often have to take in particular, enhancing the city’s role in responsibility for certain tasks with the the regional economy and Russian resources being controlled by either the economy as a whole; and regional administration or the federal local • Construction objectives relate to authorities. This sometimes hinders efficient replacement of about 20% of the city’s solution of the issues. obsolete housing stock over the next The city’s high intellectual and R&D five to seven years. The expansion of potential (a great number of R&D major retail networks, including institutes, educational centres and a international ones, to the region involves highly-qualified population) serve as a construction of new shopping malls.

Cities in focus 141 City of Oslo

Interview with Mr Erling Lae, Chief Commissioner of City of Oslo

Mr Erling Lae, Chief Commissioner of City of Oslo

City of Oslo’s brand is ”The blue green city”

City of Oslo is the capital and Global and international trends the – are going through a transformation process because this the largest city in Norway with Perhaps the greatest change that has stage is passed. Without the industrial approximately 500,000 citizens. taken place in City of Oslo over the recent community, the life in cities is becoming decades is the change in the city’s size City of Oslo was the first city in more attractive. “ the world to introduce a and diversity. Today an estimated 140,000 of City of Oslo’s residents are born City of Oslo has formalised international parliamentary model of outside of Norway or one or both of their government (1986): the City cooperation with the other Nordic parents are born in another country. Over capitals. But, according to Mr Lae, Council elects a City half of these residents are immigrants “Copenhagen has turned their eyes south, Government (executive body) from non-western countries. City of Oslo while Stockholm and look east.” which answers to the City is rapidly becoming a multicultural city. Mr He mentions the cooperation with Council, just as a national Lae expects that migration will continue to Gothenburg in Sweden – a city only four be the single most significant global trend hours' drive away from City of Oslo and government answer to affect City of Oslo, and predicts that, to a national council. We talked with similar challenges: “We have an “City of Oslo will become an even more especially close cooperation based on a to Erling Lae, who has been the multicultural and heterogeneous city in the common interest in moving the centre of Chief Commissioner and head next 10 years”. gravity in Scandinavia north (from of City of Oslo’s city Copenhagen) and west (from Stockholm, The other international trend that engages Helsinki).” The cooperation focuses on the government since 2000. Mr Lae particularly is de-industrialisation. areas of transport, culture, business, “It was the growth of the industrial society research and development, education and that in fact created the city. Today City of tourism. Oslo – and many other cities, especially in

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Internal trends The City of Oslo is a large organisation Priorities for the next decade with approximately 40,000 employees. Increasing urbanisation is a trend affecting The vision for City of Oslo in the municipal This gives both economies of scale and City of Oslo as the biggest city in Norway, plan 2004 – “City of Oslo towards 2020” – disadvantages. One of the main but also as people move within the city challenges is to prevent the development sees the city in the future as: borders: “People want to live densely and of an excessive bureaucracy and to City of Oslo is like a magnet. We expect • The environmental city, emphasising the secure a clear role and share of to have a large increase in population in importance of maintaining City of Oslo’s responsibility: central city areas, while the growth in jobs “blue green” distinctiveness adjacent to will be more evenly distributed.“ “The parliamentary model of government the fjord and forest; has positive aspects which we have to The City of Oslo is experiencing a • The knowledge city, underlining the develop. Political responsibility is firmly constant, stronger and more detailed form competitive advantage of being one of placed and it counteracts any tendency to of central governmental steering through the most well educated people in increase bureaucracy. Our model of earmarked funds and regulations. The Europe; and government contributes to city’s freedom to control its own professionalising the political leadership. • The cultural city, working towards the development is decreasing as a result of In my opinion politicians should be aim of becoming Europe’s cultural this trend. strategic in their outlook, we should be capital in 2011, and a grand The demographic change due to an defining goals, not maintaining individual development and building of cultural ageing population is a trend which will interests. In a city like City of Oslo it will institutions in the city including the new become more significant in the coming cause problems if the politicians see opera house. decade, when the post-war baby boom themselves as ombudsmen, because it generation starts to retire. A more contributes to pulverising the model of multicultural City of Oslo also involves government.” social challenges, where the public services have to be adjusted to new Consequences for the city needs. Urbanisation and peoples’ wish to live in city centre has led to the transformation External and internal challenges of many former industrial areas into Mr Lae is concerned that the rest of residential zones. For City of Oslo, the Norway may fear the growth that is term “the city by the fjord” is a metaphor expected for City of Oslo. He mentions for this transformation, where former dock that the city council has initiated areas are converted into living and cooperation with surrounding business spaces. The city government is municipalities with the aim of achieving growth and progress for the greater City planning the construction of 40,000 new of Oslo area. This cooperation is focusing homes over the coming years. At the on establishing a superior area and same time, plans are being discussed to transport strategy for the region, move the university and research developing cooperation on innovation and communities into the city centre. a competitive business climate, international marketing of the region and a During Mr. Lae’s period as Chief joint exploitation of investments in social Commissioner, the City Government in infrastructure. City of Oslo has pursued a policy where municipal businesses have been As a former commissioner for social outsourced to the private sector. “We services, Mr Lae is particularly concerned clearly see public-private partnerships as about the need for a well-functioning a possibility to force investments and to social infrastructure. “Cities have always prepare for another pattern of payments. attracted people who are easily excluded But I believe it’s important to have a in transparent societies, and this is only reinforced by globalisation.” pragmatic view on the use of PPP and only use it where it gives real value-for- money for the city”, he says.

Cities in focus 143 Perth

Interview with Mr Frank Edwards, Chief Executive Officer of the City of Perth

Mr Frank Edwards, Chief Executive Officer, City of Perth, Australia

City of Perth

Perth is known as the “Heart & Global and international trends Internal trends Soul of Western Australia”. The global boom and bust cycle of the It is very risky for a major, capital city to Each day more than 100,000 resources sector has a major impact on be reliant on only one industry sector and workers and visitors commute the economic stability of Perth. Any trend the industry focus of Perth’s business to the city’s 1.75 million square in the sector globally and any changes in community is moving toward a broader ownership or focus internationally or basis than resources alone. metres of office space. domestically have real implications for businesses in Perth. Perth is facing emerging competition from We spoke to Mr Frank other cities in Western Australia, for Edwards, Chief Executive The international (and national) trend example, Joondalup, Mandurah, and Officer (CEO) of City of Perth toward high, and rising, energy costs is Gosnells. having an impact on business in Perth, about the city, and Australia’s both in terms of increased costs for the Currently, there is a lack of cooperation fastest growing local city and also increased demands on the between these cities and Perth. In the government population. resources sector. future, these developing centres will need to work together with Perth in order to Ageing workforce issues affect Perth in effectively decentralise and diversify the same way as they face other cities in business. the world. The problem will deepen as the population as a whole ages, but in Perth is experiencing a skilled worker Western Australia it is also a cyclical shortage and competition for workforce issue. share is intense. There are particular shortages in engineering, financial services, town planning and surveying.

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The war for talent is a challenge for most Priorities for the next decade Perth faces a number of significant businesses including the City of Perth environmental issues including air and The city of Perth’s vision for the future is itself. water quality. The city aims to ensure that that: “the city of Perth be widely acclaimed the continued development of Perth meets Environmental concerns are a as a city of regional and international the needs of today without compromising considerable issue for Perth and the city significance”. the needs of future generations – has implemented a variety of programmes economically, socially or environmentally. focusing on environmental issues, With the fastest growing population of any particularly in relation to water. in Australia, the main challenge for Perth is to provide a sound basis for the expansion of External and internal challenges corporate, retail and entertainment The City of Perth is constantly challenged businesses in the city. At the same time by the need for alignment between the account must be taken of the demographic three levels of government – local (or city), changes that will occur and the new state and federal. demands they will create for the city.

The final planning authority often rests not The growing city will have increased within the city but with the state demands for social amenities like libraries, government. This issue is felt most keenly senior’s centres and recreational facilities in areas of large scale development, while ensuring the needs of low income replacement of ageing public infrastructure earners and those with special needs are and railway line sinking. taken into account. Increase in residential living in the city means a greater emphasis The key financial challenge facing the City will be placed on intracity transport and city of Perth is to maintain the income it parking. creates. The main income streams are carparking, which generates approximately Perth’s development will be fuelled by 37% of city income and rates which economic growth in the state and new city generate around 43%. infrastructure including the $1.5 billion Australian dollar Metro Rail Project. The city of Perth has strong financial management systems in place and It is critical to the future development of considers itself to provide best practice Perth that the city strengthens existing standards in Australia. Compared with relationships and develops new many local government bodies, the city of partnerships with state and federal Perth is financially strong and has governments and the private sector in completed substantial forward planning. order to fund and implement development However, capital works and building and key projects. projects in the city face industrial relations issues and significant cost escalation. The City is well placed to attract the growing tourist dollar, with international Consequences/issues for the tourism to Western Australia expected to grow by an average of 7.3% over the next city decade. The completion of the Perth Perth is experiencing community demand Convention Exhibition Centre will give the for extra services not traditionally provided city more options in the high-value at the local government level. convention market. The city will focus on the development of enhanced tourism Trust and perception are also emerging amenities, including improved transport to issues for the city as the reputation of ensure the continued attraction of the tourist local government is rather low. The dollar. population also tends to be apathetic about local government and is only interested in what it’s not delivering.

Cities in focus 145 Phoenix

Interview with Mr Frank Fairbanks, City Manager, City of Phoenix, USA

Mr. Frank Fairbanks, the City Manager of the City of Phoenix

City Hall, Phoenix

The City of Phoenix is one of Global and international trends The city leadership continues to develop its capabilities through Mayor/City Council the fastest-growing cities in the Among the most significant global and and City Management staff USA. Phoenix is Arizona’s international trends or issues that will communication and collaboration. This is affect the city over the next 10 years Mr capitol and the sixth largest city further reinforced by defining and Fairbanks identifies: in the United States, with communicating a consistent set of values, almost 1.5 million residents. • Long term economic stability and a philosophy, attitude and approach. A The city has won many major dealing with the impacts of growth to further task is to look for ways that awards, including the Carl keep Phoenix liveable; and diverse city functions can collaborate and Bertelsmann Prize, a innovate, and create a supportive climate • Phoenix positioning itself for the future for change. prestigious international with regards to economic development, competition that recognises the transportation, and the environment. Phoenix has developed various best-run city government in the programmes that address issues facing world. Phoenix has been Internal trends the city. Block Watch and Graffiti Busters are some examples of the programmes identified as a leader in local The national and local trends that will that are designed to connect people in government management; affect the city in the next decade neighbourhoods and to increase trust particularly for its commitment according to Mr Fairbanks include: among citizens by encouraging them to make things happen to improve their to excellence, its focus on • Water resources; customer satisfaction, and its communities together. • Public safety; and high-quality and cost-effective A Block Watch Advisory Board encourages Efforts by federal and state services. • neighbourhood associations and block governments to reduce the city’s watches to network and share ideas, funding and authority. accomplishments and concerns.

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Providing these networks often gives Consequences for the city people a stronger sense of ownership in The key issues that will affect the city their neighbourhood, as well as drawing government over the next 10 years are: neighbours together in a common cause. The goals of the Graffiti Busters Programme • population growth; are to remove graffiti within 24 hours of • managing water resourtces; receiving a report from any city resident and to support a zero tolerance approach to • public safety; and graffiti in neighbourhoods. Graffiti is costly • inter-governmental cooperation. and destructive, and sends a message that the community is not concerned about the The city’s strength is expressed in a appearance of its neighbourhoods. comprehensive citywide Seamless Service programme and excellent communications External and internal challenges between departments. The Seamless Service programme’s mission is to provide Among the most important external the best possible service to citizens and challenges that the city of Phoenix will visitors – 24 hours a day. The Seamless face in addressing the trends and realising Service requires that all city employees are the government’s vision for the city are: aware of each others’ responsibilities and • Explosive population growth that will competences, that they listen carefully to cause affordability and quality of life residents and that they provide the services challenges; and that citizens need. The challenge of cultivating sustained • A weakness for the city arises from constituent awareness and involvement resource constraints. Recent rounds of on a wide range of issues. budget cuts have been managed well but Another challenge is that Arizona has one there are limited resources to maintain of the highest school drop-out rates in the much-needed programmes and to invest entire country and many of these students in new initiatives. . This can be seen as a significant threat to the long-term economic Promotion of the city and prospects for the city. In order to meet the priorities for the next decade challenge the city government established a According to Mr Frank Fairbanks, the City Phoenix drop out prevention task force that consisted of representatives from the of Phoenix will be promoted through education community, community leaders, strong customer service, responsiveness government and business leaders. and interactivity with citizens and constituent groups. These qualities will be The City of Phoenix has created numerous developed through active outreach by the boards and commissions to address many Mayor, City Council as well as high levels of the issues it faces. By involving the of citizen participation. public, it is able to understand better the issues that are important to the community. The government seeks to recognise and E-government initiatives aim to get citizens acknowledge its employees, creating trust and customers online, fast track services to and showing that it cares. A supportive the customers and citizens, to meet atmosphere for innovation continues with increased expectations around efficient the annual City Employee Excellence customer services. Awards recognising the best of the best. The city government keeps residents The city has also received numerous informed about issues, programmes and national and international honours for activities in their district through a local innovative city programmes. cable station. Channel 11 is a daily broad- cast of various programmes that highlight issues and events facing the city, public policy choices and human service issues.

Cities in focus 147 São Paulo

Interview with Martus Tavares, Secretary for Economy and Planning of the State of São Paulo

Martus Tavares, Secretary for Economy and Planning of the State of São Paulo. (Former Minister of Planning)

City of São Paulo

Situated 760m above sea level, expected, the most Global and international trends the city of São Paulo, in the cosmopolitan state in South • Greater community involvement; and state of São Paulo, represents America. With the country’s an area of approximately 1500 best infrastructure and a highly • Increased demands on governments by society. km2, consisting of 900 km2 of skilled labour force, São Paulo and a of can be called ‘Brazil’s Internal trends approximately 600 km2. São locomotive’. Accelerated urbanisation and Paulo overwhelms the senses • conurbation; with its sheer size. With 17 million inhabitants, it is the • State modernisation; and largest city in . • More transparency for government actions and state accounts. When describing São Paulo, the superlative form is a must. External and internal challenges It is the city with the country’s The preparation of long-term plans largest population, largest encompassing the characteristics and needs, not only of the municipality, but industrial complex, highest also of the whole metropolitan region is economic production, the one the greatest challenge for the managers of that receives the largest the major Brazilian cities. number of immigrants and as

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Management has become essentially The key external challenge is marketing reactive. Resources are focused on ‘fire- the city, promoting a positive image to fighting’ a range of existing problems. attract and retain talented people, existing Leaders and managers therefore do not business and investment opportunities have time to focus on developing a and tourists. strategic plan for the future of their cities and regions. Priorities for the next decade The end of the cycle of and The most urgent issues to be addressed the consequent economic stability in in the next few years in the major Brazilian Brazil eliminated one of the obstacles to cities are: drawing up a strategic plan for the future. Public transport – integration of urban However, the managers of Brazilian cities • and metropolitan transport systems to still face political instability, which makes long-term actions impracticable. increase their geographic coverage; • The expansion of the subway and Some steps have been taken towards railroad networks and the implantation guaranteeing the continuity of strategic of an efficient map to integrate public plans and projects such as the institution of a Pluriannual Plan (PPA) covering a transport are urgently needed; four-year period – three years of one • Waste management – modernisation of administration plus the first year of the waste process improving collection and next. But this is not enough. A forum has disposal; to be created to study alternatives capable of guaranteeing the delivery of • Safety and security – because of the long-term projects. direct impact on city life it is important to establish an integrated approach by There are, of course, budgetary federal, state and municipal authorities, difficulties, but solving many of the even if the primary responsibility lies problems confronting Brazilian cities with the federal government; depends on more than simply financial resources. • Improve flood monitoring and reduce risks; The problems often originate in the lack of an integrated vision, covering the needs • Preservation of the environment; and and characteristics of the whole • The creation of a geo-referenced metropolitan region. Often, a problem database including issues and service faced by one city may involve or have its offerings that can be used as a tool to origin in a neighbouring area. analyse and draw up a suitable masterplan should also be a priority for Consequences for the city the managers of the major cities. A series of focused actions has to be taken to confront these challenges by Without a vision of the future and a focus building capacity in the following areas: on long-term planning, we will not be able to make best use of the scarce resources • Definition of future scenarios; available. Professional skills in urban and • Urban planning in major ; metropolitan issues, more efficient use of resources and more transparency in Transparent and efficient management; • management practices are essential for • Resource management; and improving the living conditions in big cities • Budget control. in the next few years.

Cities in focus 149 Stockholm

Interview with Mr Bosse Sundling, City Manager of City of Stockholm

Mr Bosse Sundling, City Manager of City of Stockholm

The City of Stockholm, Sweden

Stockholm County Council’s Stockholm is an exciting but still a safe Global and international trends capital. It is beautiful, clean and tidy and domain covers the whole of Increased globel travel means the world is well maintained. It is also a modern city – Stockholm county which has getting ‘smaller’. Young people in well ahead in terms of IT development (i.e. particular are increasingly mobile and 1.8 million inhabitants. The Kista). In addition, it has a wide selection travel all over the world. As a result, region is the hub of the of cultural activities (The Pop City 2005, a people are developing a broader new modern arena for major events). Swedish economy. We met Mr understanding of different cultures. Bosse Sundling, City Manager The cities logo and trademark is the Saint Environment, health, female emancipation of City of Stockholm, and Erik which aims to promote Stockholm as and technical development (ICT) issues invited him to share with us his Northern Europe’s most exciting capital. have become increasingly important, observations on the main The city government has worked hard to alongside the problem of the widening trends and challenges that the create a distinctive image of city – with a disparity between the rich and the poor. city faces today and in the rich cultural life, fresh air and clean water future. – (an ecologically-tenable city). Internal trends One of the major trends affecting Stockholm is the provision of welfare. In about 15 to 20 years there will be fewer people of working age than there are today, and an increased number of people depending on welfare. In many sparsely- populated rural districts de-population has had a major impact. This creates the inevitable situation that only a few young people are providing care for several other elderly people. This is fast becoming a

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national social problem. Volunteers could Consequences for the city • It is important to find the right way to be one solution in the future as part of an All these challenges mean that the city manage, eg the budget document appeal to Swedes’ social responsibility. has to be extremely flexible. The elderly should be made simpler – by cutting population is decreasing, and we are down the document to half and limiting Regional cooperation will also become a having a baby boom. This means that we the number of commissions. We need an major feature. Both cities and county have unused premises for geriatric care at even more transparent budget process. administrative provinces will become less the same time as we have too few We have to focus on achieving target important due to modern communications. schools. To prevent such problems in the results and not just comparing results The county administrative provinces will future, we must plan carefully and take with previous years; disappear and will be replaced by another into consideration different alternatives. In structure. this case, we could use the same geriatric • The city has earmarked a sum of money care premises for preschool and school (SEK 2 billion over 4 years) for the Quality is an important issue. Public activities. general improvement of the council sector institutions must guarantee a high staff’s qualifications in a special standard of service. One way of doing this At the same time, we must be careful in foundation course in competence is by introducing IT solutions to help new managing transport and logistical issues (Kompetensfonden). We strive to be a businesses. For example, domestic help to prevent environmental problems. The good employer, offering great may be equipped with handheld city council should be organised in such a opportunities for all employees to computers so that they can visit different way so that it is quick to respond to challenges and can provide a high quality develop. Also trainee programmes are clients without having to return to their of life for its subjects. We should not shut available. In this area, there are 195 ‘base’ in between. They can also forward ourselves off from the public. Instead, we different projects aimed at creating reports and get information via their must be sensitive to the changes around those opportunities; and computers. This has resulted in increased us as well as in the world and work • Recruitment is a very important issue. efficiency savings. towards creating a city with functional We will need about 20 per cent more intelligence, able to cope with any modern personnel within the schools and the External and internal challenges challenge. social care services during the next ten The city of Stockholm needs to accommodate two different views: one Priorities for the next decade years. Ideally, the competence driven towards progress and another foundation course will make this easier. Areas that we are focusing on in the short driven towards maintenance of the term include: existing status quo. There is underlying conservatism, as summed up by the • Labour market/integration/emancipation common saying ‘things are as they are.’ are some of our overall tasks; Many people are disinclined to change The economy – the priority here is to their way of thinking on many issues, e.g. • keep it in balance. It is important to that geriatric care will invariably cost something even for the individual. The improve employment and to allay conflict between this conservatism and popular frustration. Another key issue is more progressive views, which is the how to employ immigrant labour natural product of a vibrant community, effectively; has caused a degree of social tension. • The city has to find new ways of At the same time, there is the problem of political promotion. We have to the generation born in the 1940s leaving approach the citizens directly and the the labour market. political parties have to sharpen up and change radically. The political system must be made a concern for everyone; • The city must establish new, modern and successful meeting points, eg to set up constructive dialogue with its citizens. We must find ways to encourage democracy through natural means;

Cities in focus 151 Sydney City

Interview with Clover Moore – Lord Mayor, Sydney City Council

Clover Moore, Lord Mayor, City of Sydney

City of Sydney

Sydney is Australia’s largest Global and international trends Changing population patterns affect Sydney and the international trend of and most densely populated International trends have a growing migration from rural and suburban areas city. Built around a beautiful influence on the increasingly globalised into cities is clearly reflected in Sydney’s community of Sydney. “There are other natural harbour, it is bursting expansion, particularly in the inner city. with life, energy and colour. cities in which to do business, but people from all over the world are attracted to Sydney, like other cities, is looking for We spoke with Sydney’s Lord living as well as working in Sydney,” the Mayor, Clover Moore, about its solutions to issues associated with an Lord Mayor said. ageing population and changing unique mix of history and her population demographics. vision for the future. Business visitors and tourists are crucial elements of Sydney’s economic life and the city focus is on maintaining growth in Internal trends numbers as well as attracting a diverse The number of workers, residents and mix of international and regional visitors. visitors to the central business district of Sydney rose dramatically through the The City of Sydney seeks to achieve 1990s. The growth continues today and commercial sustainability by creating a has increased demands on public liveable, vibrant city that is globally transport and changed the car, bus, rail competitive while maintaining its regional mix. There is also a growing demand for flavour. It also aims to foster a strong sense pedestrian and bicycle access to and of community and belonging alongside the from the city. expansion of international businesses.

152 Cities in focus Cities of the future - global competition, local leadership

There is a marked escalation in the In order for the city of Sydney to achieve Priorities for the next decade number of residents of central Sydney, its vision for Sydney’s future it must work The Lord Mayor’s vision for Sydney is a city most notably an increase in families with other councils in Sydney as well as that is “prosperous, vibrant and liveable”. settling in the inner city. state and federal governments. This is of particular importance to issues like The city aims to create a tolerant and In order to cater to this increasingly Sydney International Airport, Sydney diverse city with compassionate solutions urbanised population and to attract new Harbour and major developments on to complex inner city problems. residents, The City of Sydney publicly owned land. is encouraging more childcare places and The priorities for the next decade are: educational services, creating improved Issues and consequences Leadership and participation; leisure and community facilities and • adopting a more strategic approach to the The increasingly global nature of the city • Quality urban environments with city’s public domain. means inhabitants of Sydney are exposed consistent planning controls; to a more expansive lifestyle than in other Economic growth and development The Lord Mayor explained that the City of • cities of Australia. The city is responding Sydney tailors its policies toward a ‘City • Environmental leadership; to this with innovative public facilities of Villages’ to include the diverse needs of Community and social equity; including signature aquatic centres, • its constituency. refurbished hotels and shopping centres • Accessible, integrated and affordable transport; and Internal and external challenges and more accessible harbour foreshore recreational areas. • An improved public domain including Balancing the needs of residential and parks, foreshores and leisure facilities. business development in the city and The city of Sydney’s boundaries have The Lord Mayor believes it is a golden creating the right mix of retail, grown over the last few years to age for the city, “Sydney has political and recreational, entertainment and tourist incorporate areas surrounding the central economic stability combined with vision, facilities is an ongoing challenge for the business district. The city is now able to energy and commitment to the future.” City of Sydney. In providing for provide increased services to a larger and sustainable growth, a balance must be more diverse population and is in the struck between economic, social, cultural process of creating strategic planning and environmental dimensions. goals for the enlarged city. The appropriate mix of integrated Overhauling planning instruments and transport options across the city is critical, as is transportation in and out of the city creating a unified city plan is a key goal of itself. The city is also conscious of the the city and will provide more certainty to need to preserve and enhance the distinct the community as well as more strategic character of Sydney and protect the value decision making and transparency of of the city’s rich natural, cultural and government. urban heritage. The City is conscious of the need to A tri-tiered system of government strategically manage growth, particularly in operates in Australia, consisting of the key areas like the city to airport corridor and local tier (City Council), a state to ensure that development is government and the Commonwealth environmentally as well as economically (Federal) government. This system means sustainable. the city is not responsible for matters like public transport, but acts as champion for the interests of the central business district and its surrounds.

Cities in focus 153 Sydney State

Interview with The Hon. Robert (Bob) John Carr, MP Former Premier, Minister for the Arts, and Minister for , *

Hon. , Ex-Premier, New South Wales

Sydney Harbour

Sydney is the capital of New Global and international trends the proportion of people aged over 65 living in Sydney will increase from the South Wales (NSW) and a Growth in the South-East Asian current 1 in 8 to 1 in 3. thriving international city of economies has created clear more than four million opportunities for Sydney as a leading city “Environmental issues like global inhabitants. in the Asia-Pacific region. Sydney has warming, engage the city, as the become both an international and an community seeks alternatives to internationalised city. “We don’t think of We spoke with The Hon. Bob traditional energy sources. Increasing oil ourselves as competing with other cities prices and the impact of rising costs for Carr, the Former Premier of in Australia, but with cities like Singapore. trade are practical concerns for Sydney, New South Wales about the Shanghai, San Francisco and Vancouver” as is the threat of terrorism” says Mr Carr. city today and the Sydney of says Ex-Premier Bob Carr. tomorrow. International migration and the global Internal trends forces which impact population Sydney is justifiably proud of its robust movements are key influences of economy. It is a regional centre for Sydney’s growth strategies and the city’s international business, the highest value evolving demographics. International generating city in Australia and has an immigration numbers are set federally, but unemployment rate below that of the Sydney continues to attract the best and national average. to benefit from immigrants’ business and linguistic skills. “Our cultural diversity is a “Maintaining our economic competitiveness great asset”, says Mr Carr. Immigration is is critical. Our advantage is the relatively low also a possible solution to the cost of business real estate and our skilled international issue of the ageing personnel give us a great advantage in the population. By 2031, it is projected that region,” says Bob Carr.

* The current Premier of New South Wales is Morris Iemma.

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The management of future urban growth A cooperative working relationship The NSW Government is committed to which anticipates demographic changes between the state government and the ensuring that Sydney continues as the while maintaining the valuable landscapes Commonwealth government is seen as most robust economy in Australia. It will will be a challenge for Sydney. Long term crucial if NSW is to realise its vision for focus on manufacturing, transport, projections suggest the population of Sydney. For example, despite NSW’s storage and distribution activities which commitment to reducing greenhouse are located in industrial areas in Western Greater Sydney could grow from 4.1 million gases, it is restricted by the refusal of the Sydney, partly due to the expansion of the to 5 million by 2031. The population trend Commonwealth Government to sign the motorway networks. requires Sydney to consider how best to Kyoto Protocol. On the positive side, there distribute jobs to the western suburbs, are many projects on which the address housing needs and create a governments work cooperatively including balance between road and public transport. high-profile international conferences.

External and internal challenges Consequences/issues for the “Our challenges are those of growth,” city summarises Bob Carr. Sydney faces these challenges head on in the areas of public The State Government is developing a transport, housing, energy, healthcare Metropolitan Strategy which will guide (particularly increasing health costs linked growth and change in the Sydney with an ageing population) and Metropolitan Area over the next 30 years. maintaining quality public education. It responds to the issues facing Sydney and includes a plan for balanced growth The Ex-Premier believes, “the of within natural resources constraints. natural resources, particularly water is a challenge, and the break-up of the Water and power are two of the major Sydney water in new urban issues facing Sydney going forward. The release areas is one strategy designed to state government has responded with the provoke innovation. Employment and the Metropolitan Water Plan which is being employment mix are also concerns as implemented to chart the course towards traditional industries like manufacturing a sustainable and secure water system are overtaken by growth industries such as business and personal services. The and the Energy Directions White Paper city faces skills shortages in such will set clear policies for the future. as carpentry, metal engineering, electronics and construction.” Priorities for the next decade Aside from the critical concerns of water Transportation is a key issue for Sydney. and power, Bob Carr says, “a priority for “A major part of our transportation plan is Sydney is the implementation of the $2.5 billion Australian dollar project for improvements to the rail network in order untangling the rail network and new rail to provide robust reliability as well as rolling stock,” says Bob Carr. safety expectations. The state government is focused on The political and economic stability of developing and maintaining solid working Sydney ensures it will continue to be one relationships with organisations in the of the lowest risk business environments private sector, including those who own in the Asia Pacific. Its natural beauty and major infrastructure assets like Sydney’s world-class facilities guarantees it will also airport and arterial roads. Bob Carr says, continue to be a world-class tourist “public-private partnerships are working. destination.” We want a cooperative relationship and we want ventures to be successful. But we also want companies to contribute to the necessary infrastructure of the city.”

Cities in focus 155 Mr. David Miller, Toronto Mayor, City of Tor

Interview Mr David Miller, Mayor, City of Toronto

Mr. David Miller, Mayor, City of Toronto

Toronto, a “global village” of 4.7 million people.

Toronto is Canada's largest Toronto’s thousands of Global and international trends city, the centre of the fifth university and college students All mayors of global cities around the largest city region in North bring a special energy and world are pioneers facing the unique America and one of the most enthusiasm that provides the challenge that flows from the ever- ethnically diverse in the world, city with a palpable vibrancy. increasing scale of urbanisation and from the constant pressure of globalisation. representing virtually every And more than 1 million people This means that, for example in Canada country in the world. Attracting from all over the world visit the all mayors are pioneering new alliances between 70,000 to 80,000 new city on the edge of Lake and changing historical arrangements that immigrants each year, about Ontario each year. focus on the need for power sharing and 50% of the Greater Toronto revenue sharing agreements among all Area's growth results from We spoke with His Worship levels of government. international migration. Toronto Mayor David Miller about his International terrorism is an issue that is in many ways both a hub of vision for Toronto and about remains a challenge to all, and yet McLuhan’s global village in the challenges his city faces in individuals look to cities to protect them financial services, the future. and their families. Learning to mobilise communications and the local, regional and national resources to cope with such threats is a relatively creative and performing arts recent yet clearly critical challenge. and, at the same time, it is a village of the globe, with people from virtually every country of the world calling Toronto home.

156 Cities in focus ronto Cities of the future - global competition, local leadership

Internal trends Current governance arrangements within Priorities for the next decade Canada represent a challenge to all cities One major challenge is democratic There is no doubt that economic trends in Canada. There is a clear mismatch renewal in large-scale municipal are reinforcing societal changes and that between local government accountability organisations, since people look to the as national boundaries become less and the expectations of community city council to solve problems and help critical for major jurisdictions around the residents for a responsive government deal with issues that affect their lives and globe, cities will become more significant. looking after their interests. This challenge their neighbourhoods in a meaningful and is exacerbated by the fiscal imbalance direct way. Toronto continues to enjoy a The 21st Century belongs to the cities of between local government responsibility rich diversity of cultural neighbourhoods. the world. We can see in Canada that for front line social programmes and the The truly amasing thing is that these over the past 100 years we have moved fiscal resources and fiscal capacity to disparate cultures mix together in ways from a rural agrarian economy to a address those responsibilities. People of you simply cannot find anywhere else in dynamic global reach economy based, in the City of Toronto know that the buck the world. Each cultural district is made our case, on financial services, stops here and so the challenge is to up of a mix of people from different communications, information technology, make sure that the fiscal buck stops here cultures, speaking different languages. media production and manufacturing and to meet that responsibility. Language, culture and colour are symbols assembly operations with world mandates for products and services. These of pride in our multicultural city. Toronto has a history of welcoming the economic activities are based world to join this global village. The This trend to greater diversity seems set predominantly in cities. Our experience challenge is to build on that tradition and to continue for the foreseeable future. has shown that our nation’s economic to let it renew and energise the Toronto of health is critically dependent on its cities. tomorrow. External and internal challenges For example during the SARS outbreak two years ago, when Toronto got sick, the Major challenges facing the City of Consequences for the city whole country caught a cold. It is Toronto include environmental issues such These challenges mean that we are the estimated that the national economic as water quality of the Great Lakes. As a government of choice for the people of growth in Canada was reduced by more waterfront city Toronto has a clear interest this city. They look to us to make a real than 1 per cent as a result. in ensuring the quality and accessibility of difference in their neighbourhoods and its drinking water supply. Great Lakes Toronto is a city that benefits from a vital their lives. They look to us to actually water quality is a continental issue and civic engagement of people from all walks solve problems, to make Toronto a better Toronto will play a role that extends of life, new and old Canadians and that is place in which to live, work and raise a beyond its geographic boundaries. what is making Toronto a great city. We family, and they want to be engaged in want to share that best practice with other Toronto continues to do what it can to that process. This is our commitment and cities around the world. protect and preserve a clean environment it means that we must re-engage the but ultimately these issues can only be residents of Toronto with their city. The We want to learn from others as well. For successfully addressed in concert with people of Toronto are optimistic, full of example, Alegre is the leader in our local, provincial, national and energy and ready to do what it takes to participatory budgeting. Toronto has continental neighbours; an immensely make their city thrive. Over the past year achieved one of the highest standards of challenging situation in which the people we have held two “Listening to Toronto” engaging its residents in its processes. of the City of Toronto expect their sessions. More than two thousand people government to be active players. participated in helping set the city’s priorities. That is an astonishing number Public transit operations and of people to come out on their own time infrastructure are the first answers on on Saturday and Sunday afternoons and most individuals’ minds when the issue of this shows that people really want to be a what to do to improve air quality and part of municipal government. This is our transportation arises. Yet, frustratingly tradition and it is our strength in Toronto – there is not a full recognition of the critical people really welcome participation and role that public transit plays at the local, actively and respectively engage in the regional and even national level. Public process. transit is delivered locally and local governments need the resource base to deliver in that role.

Cities in focus 157 City of Tshwane Metropolitan Municipality

Interview with Mr Blake Mosley-Lefatola, Municipal Manager, City of Tshwane

Mr. Blake Mosley-Lefatola, Principle Manager, City of Tshwane

City of Tshwane, South Africa

The administrative capital of The nicest time to visit is Global and international trends South Africa, /Tshwane spring, when in October more Globalisation has resulted in ever lies about 50 km north of than 70,000 Jacaranda trees increasing competition for investment, Johannesburg with a are in full bloom. Then the which is no longer limited to national population of over 2.2 million. whole town is one big purple- boundaries. The major environmental challenges facing the planet has seen It is quite easy for the visitor to coloured and sweet-smelling environmental protection groups gaining find his or her way through the sea of blossoms. The exotic prominence, and in the process the city, which is laid out like a trees were imported from South capability to exert ever-increasing chess board. Pretoria lies America some 100 years ago pressure on cities. 1367m above sea level and is and gave the town its A global world also means that the world surrounded by protecting nickname: "Jacaranda City." eco-nomic growth rate has the potential mountains. The climate is to limit or boost local GDP. subtropical with hot, wet summers and relatively mild, Internal trends dry winters In line with the rest of the country, increased unemployment, urbanisation and HIV and Aids pose significant challenges to the city, as do crime and transportation. The City of Tshwane Metropolitan Municipality (CTMM) is also seeing an influx of people from neighbouring coun-tries, often illegally.

158 Cities in focus Cities of the future - global competition, local leadership

Coupled to the social challenges, a lack of In order to address these challenges, the Openness and transparency is some of suf-ficient financial resources to maintain city has developed a City Development the values and attributes of the CTMM existing infrastructure and eradicate Strategy as an instrument of intervention. and this will require a citizen engagement service delivery backlogs, hampers With a 20 year vision driven by the process that is credible. development. National restructuring Muncipal Manager, it provides a initiatives, among them the establishment framework for economic growth, making Citizens can only understand the of Regional Electricity Distributors (REDs), the city sustainable and equitable through challenges the city face if they are may eventually have an impact on the pro-poor policies, strategies and action. In informed and it is also of importance to cities income. addition to this strategy, a long-term obtain the needs and priorities for service financial strategy has been developed as delivery from citizens as these will direct Human resource development and a financial plan to achieve the desired the strategies that the municipality capacity building remains a significant outcome. developed. challenge. The vision of the city is to be the leading Successful cities do not simply happen, External and internal challenges Afri-can capital city of excellence, one they are the result of deliberate actions. that empowers the community to prosper Creating successful cities requires careful Ever increasing governance complexity in a safe and healthy environment. The planning and integrated efforts in key and legislative changes exert significant vision was develo-ped through an areas that are identified with all pressure on the city’s resources. Low interactive process that involved the local stakeholders, and takes into account the levels of payment for services by politicians and the senior mana-gement of needs of the people and economy. To consumers continue to strain the city’s the municipality and was communicated achieve all of this requires a well financial resources. to all stakeholders through community developed intergrated development plan that will ensure that the needs of the The city does benefit from a stable political meetings. communities are attended to. and workforce environment and must find ways to leverage the opportunity to develop Promotion of the city and CTMM into the intellectual capital of Africa. priorities for the next decade The foundations are there: the city hosts The city has developed a marketing some of the largest and most important strategy that focuses on the various universities on the continent and is home to segments in the market. The city is most of the research institutions in South promoted through various publications, Africa. The City is also host to all Embassies events, Mayoral events and cam-paigns, and foreign missions in South Africa. attendance of international and natio-nal Lack of financial, human resource and tourism events. The brand for the city is: skills capacity is the single largest A City at work and a City on track. The challenge facing the city and threatening brand of the city was an initiative by the its sustainability. Executive Mayor of the CTMM.

On the positive side the city possesses a It is a legislative requirement that the sta-ble institutional framework (albeit not municipality must make public the annual the most optimal one), a currently sound budget and invite communities to submit financial position and a well defined vision representations, which the Mayor must and city strategy. respond to. The CTMM has developed a public participation process through a Consequences for the city ward committee system where communities have the opportunity to Failure to respond to the challenges will interact with the municipality. The inevi-tably threaten the financial viability of Executive Mayor also on a regular basis the city, resulting in increased service held “IMBIZO’S” com-munity meetings to costs. This will deter investors and listen to members of the community. The influence local economic growth interaction with communities is going to negatively. Eventually the city will be be a critical aspect for the CTMM in the unable to provide all citizens with access next 10 years as the buy-in into the city to services, which has serious social and development strategy will be required for political consequences. the success thereof.

Cities in focus 159 Vancouver

Interview with His Worship, Larry Campbell, Mayor, City of Vancouver

His Worship, Larry Campbell, Mayor, City of Vancouver

photo credit: City of Vancouver

Vancouver is surrounded by Vancouver is home to a Global and international trends water on three sides and multitude of cultures and The emergence of Pacific-Rim economies overlooked by the Coast Range languages from around the as powerful forces to be reckoned with, – mountains that rise abruptly world. The City of Vancouver as opportunities for development as well to more than 1,500 m. Its values this diversity, and as challenges to manage ensure Vancouver is well placed to preserve and climate is one of the mildest in considers it a source of our enhances its special qualities of Canada. Archaeological strength, vitality and prosperity. independence, welcoming and sharing evidence shows that coastal Vancouver is the largest city in that makes it unique. Indians had settled the the Province of British Vancouver area by 500 BC. Columbia, and the third largest • The US, our biggest trading partner, may be going into a silo mode, and this in Canada. Vancouver, will force us to look elsewhere for With a present population of Canada’s jewel city on the trading partners. Other nations are about 560,000 (estimated), Pacfic Rim, already benefits encountering the same thing; Vancouver lies in a region of from its special relationships • China will be important for Vancouver more than 2 million people. with the global cities: Los and the rest of Canada. Instead of silos Angeles; Guangzhou; we need to look outward, be more open Yokohama; ; and and have less protectionism; . • Environmental issues, especially global warming, are not unique to Vancouver but are critical to maintaining the Vancouver’s quality of life; and

160 Cities in focus Cities of the future - global competition, local leadership

• Vancouver is experiencing an economic External and internal challenges Vancouver plays a special role in British boom provided by the international Columbia and Canada and the senior Vancouver is a great city, but if we are not focus of the 2010 Winter Olympic levels of government are beginning to careful we could lose everything we have games. We will all be challenged to understand that special role. Our Prime that contributes to our unique quality of welcome the world while maintaining all Minister maintains relationships directly life here in the city. In particular, we need that is special about our city. with the mayors of major cities. to solve our transit issues and reduce green house gas emissions to protect the Internal trends Concrete changes to powers and environment. resources are needed to enable Major internal challenges facing the city of Vancouver to fulfill its role and vision that Increased population density brings Vancouver include: has been created with the broadest of change: fewer private gardens, less green public participation. • Sustainable development. We must have space, and other changes (some less a mix of all strata of income levels in our desirable). Vancouverites don’t all see this city. This may mean subsidies in some as a big city – because it does not feel Consequences for the city cases, for example housing. We need to like one when you live here. Frankly, I These challenges mean that Vancouver increase the variety and affordability of believe that is what many people love must: housing in the city of Vancouver; about this great city of Vancouver. World Recognise that the 2010 Winter travel, and my 20 years as a coroner, • • Greater population density beyond the Olympics are having a big impact on downtown core – the present trend and gives me a somewhat different Vancouver – bigger than perhaps many model of single homes on large lots is perspective. Vancouver is a global city, thought. People all over are talking and not sustainable; make no mistake about it. wanting to come here to see what it is • Transit issues – both in the city and the Our regional governance structure needs all about. They are having a huge improvement if it is to serve the needs of region – are growing each day. This impact on bringing recognition to the people of the Greater Vancouver issue is one that confronts individuals Vancouver; almost everyday and so it is a priority to Region. It might work better to look at the be addressed; regions north of the Fraser River and • Continue to take a leadership role within south separately. the region, particularly when dealing • Retention, and growth of our industrial with transit issues, environmental issues land base, especially the Port of The ideology in our regional municipalities and governance issues to ensure that Vancouver, is an issue that must also be must change. All the infrastructure and the unique characteristics that make our addressed. After all, historically that is services one sees in the dense downtown city and its surrounding region so why Vancouver came to exist; core cannot be supported by single family liveable are preserved, protected and homes on quarter lots. • Environmental responsibility enriched; (stewardship), especially in greenhouse It seems that cities can talk together more gas emissions. We need to improve the • Continue to ensure that the city respects easily than many nations. On my recent and strengthens its neighbourhoods, the environment while at the same time visit to we spoke about pollution, basic building blocks of any great city diversifying our parks and public places; the Olympics Games, other ideas of around the world; • Proper transportation is critical, both for common interest to our two global cities. the city and region. This means putting As mayors we are able to freely share • Strengthen Vancouver’s role in public transit ahead of cars. Vancouver ideas and offer assistance at the city level economic development, especially must take a leadership position in the around the globe; and we do. given its position as Canada’s Jewel region and the nation. We simply have City of the Pacific Rim; and I believe that cities have moved beyond to reduce reliance on the automobile in traditional boundaries into economic • By no means last, welcome visitors and the city and Greater Vancouver Region; policy and governance issues that affect new residents from around the world • We need to strengthen our their nations and the world. with open arms and warm hearts to neighbourhood centres, improve make sure they feel that special community safety and better target our For example, I belong to a group called Vancouver welcome from the first Mayors for Peace. As the organisation’s community services; and moment they set foot on our soil. Our name suggests, mayors of global cities people are, after all, our greatest source • We must make sure that we involve the are tackling issues that are beyond the of strength, vitality and prosperity for people of Vancouver in the process of traditional range of city issues. We are redirecting resources as we set our uniquely positioned to bring influence to the future. priorities together. global issues; and so we do.

Cities in focus 161 Valencia

Interview with Juan Eduardo Santón, Director of Innovation and Society of the City of Valencia

Ms. Rita Barberá Nolla, Mayor of Valencia, and Mr. Juan Eduardo Santón Moreno, Director of Innovation and the Information Society, Valencia

Approximately 800,000 citizens Global and international trends Internal trends live in Valencia the In the era of globalisation, network One important internal trend is ethnic third largest city in Spain. management, and the information and diversity and the management of multi- Almost 90,000 students are knowledge society, the emerging, culturalism that comes naturally to a city registered at Valencia fundamental role played by cities as nodal undergoing major growth through points for the exchange of economic migratory movements. Additionally, we are universities and 1.1 million flows, people, and information in the going to see phenomena such as the tourists from around the world world system has been widely recognised. increase in the powers of regional visited the city in 2004. According to Juan Eduardo, the challenge governments and, accordingly, of the facing Valencia in this context is to be municipalities, and even the creation of We spoke to Juan Eduardo capable of capturing and retaining these greater spaces for private initiative. Santón, Director of Innovation flows, and reinforcing its importance in this international system of cities or in its Internal and external challenges and the Information Society of own system of cities of reference. Valencia and spokesman for From an internal point of view there is a the Strategies and The city of Valencia must aim its efforts at series of challenges such as: the attracting companies, new economic availability of qualified personnel; easy Development Centre of access to markets’, suppliers and Valencia (CE&D) a body created activities, the head offices of international institutions, as well as improving the consumers; access to transport links to by the City Council of Valencia quality of life of its citizens. other cities; the development of quality and made up of the city’s major telecommunications networks; economic and social agents. commercial real estate prices; the availability of office space; urban mobility; quality of life of employees and environmental quality. These are points that the City Council of Valencia is striving to improve.

162 Cities in focus Cities of the future - global competition, local leadership

The most important external challenge, Consequences for the city after Valencia was named as host city for New urban governance arrangements the 2007 Americas Cup, has been how to have put in place a new form of capitalise on the media-related, economic and social impacts of an event of this government that broadens the challenge nature. The city also faces the need to to traditional politics. The new undertake activities complementary to the arrangemennts encourage partnership Americas Cup aimed at achieving a higher and joint action between different social level of economic and social and institutional agents. development. To do so, the CE&D has set up three projects: The government recognises its role in building public interest and consensus • Marketing the city in collaboration with amongst citizens and businesses to plan business groups, institutions and and deliver services to the public. universities, to present the city as a place to create, invest, visit and live in, Priorities for the next decade addressed especially to technologically The maximum priority of the CE&D for the orientated and advances services next decade is to continue the progress of companies; the city throughout the period from 2005- • Development of a culture involving the 2015. In this context, the CE&D is working citys’ inhabitants, which can give on setting a strategy for this period by consistency to a feeling of belonging identifying the main projects for 2007- and trust in the city’s future, facilitate 2015. In other words, the idea is to the positive development of the project, promote and strengthen a culture of and, especially, “unleash” skills and participation amongst the main agents in progressive energy in all areas; and the city and the inhabitants in general, based on the presentation of an initial • Hosting the Americas Cup, advance in strategy that will be debated, expanded, welfare for all, making sure that the and agreed by a wide majority of citizens benefits for the city reach everyone and through a broad participatory process. foster international solidarity. This preliminary strategic approach includes the vision of the city, “Towards Additionally, in order to give continuity to the City of the New Renaissance of the city’s progress during the period from Humanism in the Info-global Era”, and six 2004-2007 and 2007-2015, the CE&D strategic axes that correspond to the plans to undertake the following projects: areas in which a city wishes to make • Tourism 2007: in order to expand what progress: Valencia has to offer as a city of culture, • City of the Knowledge Economy; conventions and business; • Mediterranean Orientation Centre; • Info-Investment: in order to provide information by economic sector and • City of Urban Development and their investment opportunities; European Culture; • Centre for Fostering the Knowledge • City that Strengthens the Independent Economy: to foster the creation of Solidarity of All; and companies in the sectors closest to the • Benchmark City for New Urban knowledge economy and to provide Governance. opportunities to all in order to access information and knowledge technologies; and • Support for key infrastructural projects.

Cities in focus 163 Vienna

Interview with Mr Josef Kramhöller, Chief Financial Clerk of Vienna

Mr Josef Kramhöller, Chief Financial Clerk of Vienna

City of Vienna

Vienna is not only the largest He pointed out that the city is Global and international trends city in Austria but also its strictly regulated by central European enlargement in 2004 had, and capital with about 1.7 million government - with strict fiscal still has, a significant impact on Vienna. inhabitants. Due to its rules and a strong focus on the As a result of its geographical location geographical location in the cost structure of ther city and historical background, the city is a melting pot of citizens from new and old eastern part of the country and administration and services. member states, who increasingly its historical development commute across borders. Due to different (Austro-Hungarian Monarchy), However, the key issue for the cost levels between Austria and the new the city is seen as the gateway city administration is to ensure member states, outsourcing and to Central and Eastern Europe that the basic needs of every relocation will increasingly take place. This (CEE). citizen will be satisfied in all is especially likely with the migration of multinational enterprises to cheaper areas and domains. Eastern European locations and is a key We talked to Mr Josef issue for Vienna. Other trends are the Kramhöller, Chief Financial ageing population and weakening family Clerk of Vienna, and ties, which result in a growing municipal interviewed him about the budget for social help and welfare as the future challenges and the need for more residential homes for elderly and nursing homes rises. consequences for his city.

164 Cities in focus Cities of the future - global competition, local leadership

Internal trends The related risks are a possible downturn Priorities for the next decade in the housing market and affordability. For Vienna, it is increasingly necessary to The following are major priorities and Vienna’s strength is its sound financial maintain or even expand the public visions for Vienna for the next decade, base, especially compared to other which were developed in the city transport network as more and more federal states. (Note: Vienna is not only development plan and finalised in detail citizens of Vienna will not be able to afford the capital of Austria but also represents by experts in the administration according their own car and the proportion of elderly an individual federal state). to politically predetermined requirements: people in the population is growing. Thus, As the predominant urban centre in Austria, about EUR 3.6B is being spent on the 4th • Vienna will become an example of Vienna attracts many immigrants from expansion stage of the subway to develop environmental protection within its national and inter-national territories, many peripheral areas. financial possibilities (e.g. construction of whom are financially dependent on the of a third incineration plant); Furthermore, the educational level of the state, causing increased pressures on the Viennese population is very high, resulting cities finances and services. Furthermore, • Vienna stands for a balance between in an excess supply of highly-qualified the responsibility for the construction and affordability and high standards maintenance of federal roads was labour. regarding housing stock (e.g. the transferred from the federal authorities to avoidance of slums and ghettos; a New practices in public management, e.g. each federal state. Consequently, the social mix on the one hand but the introduction of flatter management respective roads have to be financed by the attracting socially stable and financially structures are aimed at improving the city of Vienna as the federal authorities will sound inhabitants); performance and efficiency of the municipal not pay beyond 2008. • Vienna city council aims to create and administration. However, a key issue Meeting the challenges maintain employment (e.g. establishing regarding personnel policy in administration a foundation, which encourages the in Austria is the legally limitations on The city of Vienna is intensifying its efforts settlement of high-tech enterprises); reducing staff numbers. Many organisations to motivate its citizens to engage in have are over-staffed, which of course municipal issues. These efforts include • Vienna will achieve a permanently means inflated costs. Due to the social placing a post-box for complaints in the balanced administrative budget (e.g. function of local authorities, rationalisation city hall, special complaint-oriented engaging in Public Private Partnerships departments, special services for citizens only if the realisation of the project is goals are sometimes not pursued as and increasingly citizen-friendly impossible otherwise); and stringently as in the private sector. administrative processes. Furthermore, the municipal administration will become more • Vienna is to outsource tasks only when External and internal challenges decentralised. In general, the population economically positive effects will be The two major challenges for the city are regards Vienna as a city with a well-working achieved. to maintain the current high educational and functioning administration. standards and to attract international enterprises to keep their production sites Consequences for the city in Vienna. In this context, public In regular negotiations with the federal procurement law in Austria is regarded as authorities the city often has a relatively conservative, with strict interpretations. weak position. The Austrian Financial Furthermore, ongoing outsourcing creates Act assigned significant a more liberal entrance to the market as competencies to the federal authorities, seen with the outsourcing of museums which, for instance, are now allowed to and the Stadtwerke Holding AG demand 35% cost contribution when (municipal utilities). international organisations are settled in We see major opportunities for Vienna Vienna. Regarding education, the include: implementation of the legally required • developing its housing stock; minimum number of pupils per class, would lead to laying off significant • playing a key role as an administrative numbers of teachers, thus contradicting centre for companies active in CEE the city’s intentions and visions. countries; and

• attracting high-tech companies.

Cities in focus 165 Warsaw

Interview with Mr Slawomir Skrzypek, Deputy Mayor, City of Warsaw

Mr. Slawomir Skrzypek, Deputy Mayor of the City of Warsaw

City of Warsaw

Warsaw, the capital of Poland We talked to Slawomir Skrzypek, Global and international trends and its largest city, is located the Deputy Mayor of Warsaw The event that has and will have the on both sides of Vistula river, about the future challenges and greatest impact on Warsaw is the approximately 350 kilometres their consequences on the city. enlargement of the European Union. from both the Carpathian His motto for the coming years Poland’s accession to the EU in May 2004 not only made Warsaw face new mountains and the Baltic Sea. is making Warsaw not only an challenges but has also created Its population is estimated at open and friendly city but also a unprecedented opportunities for the city. almost 1.7 million with an urban city that is comfortable and full For Warsaw – a city chaotically rebuilt agglomeration of approximately of prospects, and one that from ruins – the financial possibilities 2.4 million people. The city, people want to live and work in. offered by aid funds are enormous. also the capital of Masovian Furthermore, the use of European aid funds offers a major chance to resolve Voivodship, is home to many many infrastructural and transport industries (manufacturing, steel, problems, and Warsaw has already electrical engineering, embarked on some of these initiatives. automotive), and comprises 73 higher education institutions Our long-term aim is to increase Warsaw’s role in Europe. The capital city of Poland and over 30 theatres. should be one of the ten most important European cities, but to achieve this will be a long and difficult process. Currently, we compete with local centres, i.e. and .

166 Cities in focus Cities of the future - global competition, local leadership

We are also carefully observing what is using its services may in future lead to External and internal challenges going on to the east of Poland. All the many problems, the first and foremost – consequences for the city former USSR Republics represent an being financial problems, as nearly 30% enormous market for Poland and the of personal income taxes are consumed The major external challenges of the city European Union. The city of Warsaw sees by the budget. Thus, there is a significant concern the construction of the road and its future role as a bridge between the EU difference between the number of people highway system (realised by the General and Eastern Europe, as a gateway for actually using the city’s infrastructure and Directorate for State Roads and operations in the east, including the the number of taxpayers financing it. Highways), including the Warsaw ring . road. Additionally, the “equalising subsidy” has Furthermore, global events are developing a large impact on the capital city’s The major internal challenges are in such a way that it seems necessary to budget. Due to high taxes, Warsaw pays addressing the land ownership issues in consider strengthening the security an enormous contribution to the state Warsaw and using the well-developed measures in the city. This relates primarily budget for the development of the poorer train communication network in the city. to preparing the citizens of Warsaw for regions, amounting to roughly, PLN 470 A SWOT analysis is the next step after crisis situations which are related to million per annum. This type of “Robin preparing the Report on the State of the global terrorism. Hood” contribution significantly reduces City in developing the Strategy for the the city’s investment capabilities. Development of Warsaw until 2020. Internal trends The population structure by level of Demographic processes will probably education has a significant impact on the Priorities for the next decade have the largest impact on the future city’s future character as well. The share The city of Warsaw is in the process of development of Warsaw. In Warsaw we of people with a university-level education preparing a development strategy. The can already see the processes typical for in Warsaw is the highest in Poland (24%); document will comprise the period up to large cities taking place, e.g. de- it is also rather high compared to other year 2020. urbanisation. The most recent Central European cities. Therefore we are Statistical Office forecast to the year 2030 counting on the local population to enable Five strategic goals have been set: states that the number of people living Warsaw to draw investors looking for • Improving quality of life and security of within the boundaries of Warsaw will highly qualified staff. decrease. At the same time, there is Warsaw citizens; The comparatively good situation in the increased migration to Warsaw of people • Strengthening the citizens’ sense of Warsaw labour market is deepening the seeking to make a new life. Currently, identity by cultivation of tradition, already huge differences in the standard Warsaw is a city where it is relatively easy culture development and stimulation of of living in the Mazovian Voivodship. to find a job, therefore people from all social activity; over the country are trying to make the Warsaw and its direct vicinities are most of the situation and move in. On the developing more and more intensely, • Development of metropolitan functions basis of the census, the Department of becoming more affluent, while the reinforcing Warsaw’s position at the the Chief Architect of the City tried to boundaries of the province are regional, national and European level; calculate how many people live in increasingly feeling the backwash effect Warsaw. It transpired that there was a that ‘washes’ the development resources • Development of modern economy significant number of people working in from the region into the city. based on knowledge and scientific the ‘black economy’. At the same time, research; and On the positive side, changes in financing other research shows that every day over the city investments as a result of • Establishing sustainable spatial order in half a million people come into Warsaw, European accession are providing a boost Warsaw. including 300,000 who come in to work. to the city. The city is counting on the This shows that there are certainly more When discussing the vision for Warsaw absorption of EU funds to accelerate local than 2 million people in Warsaw. today, we see a future financial centre in development and to enable several our part of Europe, a city with hi-tech The decrease in population connected investments to be completed which could industry, attractive to investors and with de-urbanisation, together with a not otherwise be realised or would have citizens. simultaneous increase in the number of to be suspended. people coming into Warsaw or temporarily

Cities in focus 167 Yokohama

Interview with Mr Hiroshi Nakada, Mayor, City of Yokohama

Hiroshi Nakada, Mayor, City of Yokohama, Japan

Yokohama Landmark Tower

Yokohama is the largest city in Global and international trends Yokohama participates in the ‘City Net’, which is an inter-city cooperation network Japan with approximately 3.5 One of the most significant international in the Asia-Pacific area. million citizens. With a unique trends to affect Yokohama over the next historical background, the city 10 years is the increasing focus on Internal trends has been known as “the compatibility between environmental issues and economic activity. This issue is gateway to foreign countries” Recent reform by the Koizumi cabinet has important not only on a global scale but is impacted on the relationship between the since Japan opened up 150 equally significant for local government central and local governments, and years ago after a long period of units. promoted decentralisation of power and operating a closed-door policy. devolution-related issues. This movement On a global basis, developing countries will strengthen the principle of the should not rely on old methodologies that complementary nature of the relationship Yokohama today is full of may have worked in the past working for between governments, where the central enterprising minds eager to the now developed countries. Instead, government only deals with issues developing and developed countries take advantage of the city’s beyond the ability of the local should collaborate to form a sustainable unique position in the its governments. ambitions for the future. society, helping each other to solve environmental problems and to achieve In addition, Yokohama needs to find a further development of the global new sense of value that is not simply the We talked to Hiroshi Nakada, economy. wealth brought by economic the young and enthusiastic development. Rather the city should Yokohama is similar to other major cities mayor of the city of Yokohama, pursue harmonisation and balance of abroad such as , San Diego, and interviewed him about the economy and environment. Lyon and Shanghai in some ways. By future challenges that the city concluding agreements with these cities, will face and their expected Yokohama has exchanged information impact. with, and learned from them. Additionally,

168 Cities in focus Cities of the future - global competition, local leadership

External and internal challenges A shift from the centralised administration Priorities for the next decade to the decentralised one by the The major external challenges that the city Yokohama has a clear vision for the next empowerment of lower officials is urgently faces when addressing the trends ten years. It aims to transform itself into: needed to provide quick solutions to the mentioned above largely stem from the citizens’ immediate problems and A ‘Life-Enhanced City’ – by supporting fact that an overwhelmingly large number • challenges (with ultimate responsibility of people maintain the traditional idea that the activities, creativity and ingenuity of remaining at the top). Decentralisation economic development makes citizens individuals, NPOs and private companies should be pursued on the basis that both happy. There is therefore real difficulty in so that citizens can live a fulfilling life; the top and lower levels share a common persuading people to accept that sense of values and goals. • An ‘Environmental City’ – by taking economic development does not equate necessary actions to reduce the use of to happiness, because Yokohama has Concern over safety in the city is also materials and encouraging citizens to achieved such development. increasing. For the first time in 2003, the re-use and to recycle to protect the city’s anti-crime program became the The biggest internal challenge relates to environment for future generations; and citizens’ top priority as indicated in the the scale of the city authority. The Yokohama Annual Citizens Survey. • A ‘Unique City’ – a developed city organisation employs 33,000 staff- the Citizens voluntarily organise anti-crime where both people and information largest in Japan. Because of it’s size patrols in various areas of the city. move freely, and yet each area of the administrative reform will be difficult. city retains and takes pride in its unique Regarding environmental issues, It is also important that local government characteristics. Yokohama is promoting various programs engages in full disclosure. As the such as the ‘Yokohama G30’ campaign This vision is outlined in the administration gains credibility, citizens throughout the city, which encourages administration’s mid-term policy plan. In will actively take part in constructive citizens to reduce their garbage by 30%. particular, we are working to make discussions with the government. Yokohama the city in which individuals Yokohama’s officials are going to manage can reach their full potential. the city in collaboration with citizens Impact on the city under a new initiative – ‘new public’ – As long as developed countries around rather than rely on existing methods to the world fail to understand that economic provide public services in response to development does not equate to diversified needs. They recognise their happiness, no real change can be social responsibility for policy-making and achieved. And as hard as Yokohama the reasons for the very existence of the might try to make progress in this area, it administration. is very difficult to achieve much alone. So far, the private and public sectors have been clearly distinguished. However, once After taking into consideration the private entities start participating in the environmental issues, Yokohama aims to ‘new public’ initiative, they too will need to create better conditions for companies’ recognise their accountability and social economic activities than other cities. responsibilities as a matter of course. However, there is a concern that this could result in intense competition to attract A leader’s role is to raise issues, make enterprises unless the concept that and put into practice decisions, and to ‘economic development does not equate take final responsibility. This is not a new to happiness’ is shared nationwide. idea, but has yet to be fully realised in the political and administrative scene in One of Yokohama’s roles is to send out Japan. It is hoped that this problem will that message. be solved in the near future.

There is no doubt that values will continue to diversify. Leaders will be required to demonstrate more accountability and to be able to explain their actions. Power- based leadership, which simply gives directions, will not work.

Cities in focus 169 Zaragoza

Interview with Mr Juan Alberto Belloch, Mayor, City of Zaragoza

Mr Juan Alberto Belloch, Mayor, City of Zaragoza

City of Zaragoza

Zaragoza is the capital of the Global and international trends Internal trends regional government of Aragón. One global trend that could impact most The modernisation of management is one It has a population of 640,000 significantly on the city of Zaragoza in the of the internal trends that will have the inhabitants, approximately 50% next 10 years is sustainability (of the largest effect on Zaragoza. There is a of the entire population of the urban model and its services) both in growing demand by the citizens (and economic and environmental terms. understandably so) for proper region. It is an industrial city, management of the city’s assets by its with strong professional, This pressure will intensify due to changes municipal government and for tourism and cultural roots. to the concept of . In the 19th effectiveness and efficiency in the city’s century jurisdiction was an issue argued financing systems. Given the city’s We spoke with Juan Alberto by nation states. In the 21st century, increasing and varied needs, more work however, jurisdiction has become an issue needs to be done in these areas. Belloch, the mayor of disputed by cities. This has led to an Zaragoza, about the future increase in the vulnerability of cities, Another major trend that will affect challenges facing Zaragoza and which makes it important for them to have Zaragoza is the increased representation how they will be met. a clear growth strategy. of the large Spanish cities at the state level, relating to the power of the state, In Zaragoza’s case, the management of its especially in issues such as tax. “From an economic point of cultural diversity, the collaboration view, the size of a state is between the public and private sectors, unimportant in a globalised participatory budgets and the shifting of world. What is key is having power from the state to the city will be very open cities with excellent key matters to address. At the same time, we should not ignore the issues of communications in which security or natural resources such as anyone can do business” – water (which will form the basis of Juan Alberto Belloch. Zaragoza’s image at the 2008 World’s Fair).

170 Cities in focus Cities of the future - global competition, local leadership

External and internal challenges Another way to achieve these growth vectors is to capitalise on the image of The main challenge that Zaragoza faces in Zaragoza as a city with a relatively the medium and long term is the danger moderate cost of living and an excellent of industrial relocation. Following the university. This combines to create a inclusion of the eastern European knowledge society and gives the city a countries in the EU, the cost of labour in competitive edge. Zaragoza is no longer as competitive as it was. Therefore, we need to change our The proper functioning of the city is based mentality and find alternatives to drive the on the development of political leadership economy, such as by increasing the and management, founded on three economic weight of the service sector. pillars: enhanced communications; greater At the same time, the internal challenges effectiveness and agility in performance of that Zaragoza faces are mainly related to municipal duties, and transparency in the management of the cultural changes management. These priorities link in with of a society in which traditional values key social issues such as the regulation of have to coexist with more modern values. mass transit and private traffic, the Extremely helpful to this task is the city’s increase in social spending and the sophisticated public university, which is management of multi-culturalism. where the future of the city lies. Another strategic challenge is the fact that Priorities for the next decade Zaragoza is a medium-sized city, which, in In the next ten years, the city of Zaragoza spite of having an excellent quality of life, aims to: does not generate sufficient markets for • Grow, while maintaining a high degree many activities. A very important global of social cohesion and qualify of public lifestyle change is taking place (for services; example, the increase in the number of people moving from city to city and • Increase the economic weight of the country to country, the increase in cultural service sector relative to industry; levels and bilingualism). This has generated a rapid process of ongoing • Increase employment skills; modernisation in Zaragoza, and all its possible accompanying defects. • Successfully organise the 2008 World’s Fair and use this as a platform for positioning the city; differentiating itself Consequences for the city in Spain, Europe and the world; and The most significant consequence of the making the city an attractive site for trends in Zaragoza is that we must adapt more events in the future; ourselves to the growth vectors of the 21st century economy. These growth vectors • Facilitate the inclusion of immigrants can be classed into three groups: a into the life of the city, to improve the knowledge economy, proper functioning of city’s overall economy; and the city (good services and an increase in • Complete other important projects, such financing) and, finally, improved quality of as Milla Digital, Plaza, AVE. life. To achieve these objectives, Zaragoza Politicians, local leaders and other needs to create a brand image whose stakeholders in general all believe that the success is based on the city’s strategic city will successfully carry out its projects positioning rather than mere marketing. in the coming years. We are optimistic and fully confident about the future. For this it is hoped that the 2008 World’s Fair, like the Milla Digital project, will act as drivers for both the city and its citizens.

Cities in focus 171 Zurich

Interview with Mr Elmar Ledergerber, President of the City of Zurich

Mr Elmar Ledergerber, President of the City of Zurich,

City of Zurich with the river Limmat in the foreground

Approximately 365,000 citizens We talked to Elmar Global and international trends from more than 150 countries Ledergerber, the President of One of the most significant trends that will live in Zurich, Switzerland’s the City of Zurich, Switzerland, impact on the City of Zurich over the next largest city. Each day, more and asked him about the future 10 years is the ongoing progress of than 160,000 commuters from challenges and their globalisation. This results in increased competition from low-wage countries, throughout Switzerland and consequences for the city that particularly in the area of services, but Southern Germany stream into he leads. His aim is to keep all also for example in engineering. This the city to work. Nearly 40,000 residents content and able to increasing competition leads to increased students are enrolled at enjoy the qualities of the city. pressure on in Zurich. The eastern Zurich’s universities. And more expansion of the European Union is a than 1 million visitors from further change that will have a major impact on the city. Furthermore, higher across the world come to the resource costs and crude oil prices will city at the edge of the Lake result in an increase of energy costs that Zurich each year. will have an effect on the transport system, traffic and the economy in general. Not to be forgotten are the impacts of terrorism and the associated security requirements upon social relations within the city.

172 Cities in focus Cities of the future - global competition, local leadership

Internal trends Consequences for the city Priorities for the next decade An important internal trend is The City of Zurich should be committed to The priorities for the city over the next ten urbanisation. Zurich, like other big cities, the principle of sustainability. This years include in particular: has a suction effect which will continue commitment means that economic, • New Public Management; despite the fact that the city has partially environmental and social concerns are all joined together with other regions in equally taken into account. Zurich’s • IPSAS: There is an impetus towards a Switzerland. The city aims for generational strength as a business location, and generally recognised quality standard for equality, growth and restructuring to the particularly as a financial centre, should accounting for the public sector. In benefit of the middle class. Zurich’s continue to be developed. In the area of particular, planned changes will result in population is the only one growing in IT and IT-associated companies, there are greater reliability and transparency in the Switzerland. In particular, Zurich is a lot of new companies that must be reporting of financial performance; and popular with well-educated people. At the offered good basic conditions. In general, • Greater cooperation with private same time, the percentage of families Zurich should allow development businesses to further enhance the living in the city is declining slightly. No possibilities for new jobs. In the area of economic wealth of the city. Working less important is the trend for greater apprentice training, improvements are still with bodies in the “Greater Zurich Area” immigration, and movement into needed so that companies can hire more and the Cantons, the city is identifying Switzerland will continue, particularly due apprentices. The appreciation of CSR areas for development such as to the strong image that Switzerland (corporate social responsibility) is growing “Machine in the Garden” to enhance the has. Cultural conflicts are also associated among businesses within the city with city’s environment. with these movements and they must be many companies taking their social managed. responsibility seriously. Continued investment in the city’s External and internal challenges infrastructure is of great importance. This In addressing these important global and includes investment in the areas of internal trends, the city faces some culture, sports and education as well as significant external challenges. Some of the the transportation sector. In addition, principal challenges arise from the investment in private housing as well as in requirements of the cantons and offices is needed. Effective childcare is Switzerland’s position outside the European seen as one of the most important Union. Another external challenge is the advantages of the City of Zurich. The city excessive amount of legal regimentation already co-finances a large number of and the political system that means even existing nursery schools. Now the “small” adjustments require a public vote challenge is to promote innovative and / or the legitimacy of a referendum. childcare models. Certain city areas also need to be redeveloped, and for the The major internal challenge the city faces education and research sector, an is the fact that every fourth job is linked to expansion of the university is planned the financial sector or an industrial sector (every third student in Switzerland studies closely associated with the financial in Zurich). In addressing all of these sector. As much as 30% of the creation of challenges and opportunities, the value in Zurich comes from the financial inclusion of different stakeholders (e.g. sector. Therefore, the financial centre is companies, corporations) is seen as very simultaneously a cluster risk and a cluster important. benefit. Other challenges are the greatly increased demands on public services (such as infrastructure, the healthcare system, education, public transportation). The rise in demand contrasts with the stagnant economic growth that has dominated Switzerland during and since the 1990s. The ratio of government expenditure in relation to GDP restricts the room for manoeuvre.

Cities in focus 173 Cities of the future Appendix 1

Lead authors

A wide range of representatives from PwC Big Cities Network have contributed to the production of this document. It would not be possible to list the names of all those who have contributed so generously to the project. Instead a list of the lead authors is set out below. If you would like any further information, please contact the relevant person listed below.

Urs Bolz Maria_Luz Castilla Porquet Trygve Sivertsen Director Director Director Berne, Switzerland Barcelona, Spain City of Oslo and Tønsberg, Norway +41 31 306 82 41 +34 93 253 27 00 +47 9526 0981 [email protected] [email protected] [email protected]

Andrew Ford Josef Rakel Jan Sturesson Partner Partner Partner London, United Kingdom Düsseldorf, Germany Lund, Sweden +44 20 7213 5239 +49 981 2215 +46 46 286 93 39 [email protected] [email protected] [email protected] +46 705 69 37 37 Michael Gourley Dragana Radovanovic Partner Associate Peter Teunisse Toronto, Canada Lund, Sweden Director + 416 365 2767 + 46 46 286 93 23 Utrecht, The Netherlands [email protected] [email protected] +31 30 219 46 82 [email protected] Ciara Magee Albert Sieverdink Manager Partner Jean-Luc Toussing London, United Kingdom Amsterdam, The Netherlands Supervisor Expert +44 207 212 3585 +31 70 342 6010 Grand Duchy of Luxembourg [email protected] [email protected] +352 49 48 48 1 [email protected]

174 Cities in focus Cities of the future Appendix 2

Bibliography

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