Inspiring Future Cities & Urban Services

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Industry Agenda

Inspiring Future Cities& Urban Services

Shaping the Future of UrbanDevelopment & ServicesInitiative April 2016


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Contents

3 Foreword

6 Executive Summary

9 1. The Future of Cities

9 1.1 It’s an Urban World

10 1.2 Challenges Due to Urbanization

13 1.3 The Future of Cities

15 1.4 The Business of Running Cities: Urban Services

18 2. Enablers for Adopting New Models for Urban Services

18 2.1 Challenges19 2.2 Enablers

26 3. Accelerating Public-Private Partnerships for Urban Services

26 3.1 The Need for Collaboration

27 3.2 Risks in Public-Private Partnerships

28 3.3 Addressing Risks (Government-Initiated Actions)

29 3.4 Addressing Risks (Private-Sector-Initiated Actions)

30 3.5 Attracting Private Players

34 4. Roadmap for Urban Transformation

34 4.1 Approaches

35 4.2 Call for Action: The 10-Step Action Plan

35 4.3 Conclusion

37 Annex

38 Endnotes

40 Acknowledgements

© WORLD ECONOMIC FORUM, 2015 – All rights reserved.No part of this publication may be reproduced ortransmitted in any form or by any means, includingphotocopying and recording, or by any informationstorage and retrieval system.REF 250815

Prepared in collaborationwith PwC


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4 Inspiring Future Cities & Urban Services: Shaping the Future of Urban Development and Services Initiative

Core to the NUA is the promotion of mixed used space, which combinesresidential, commercial, industrial, ofce, or other land-use, with adequate spacereserved for public use. Mixed congurations contribute to urban productivityby making efcient use of a city’s resources, which, in turn, drive economicgrowth (locally and nationally), ultimately contributing to improved living standardsand prosperity. Mixed-use space also fosters local-level revenue generation,by adding value to public property and facilitating the establishment andsustainability of small and medium-sized businesses. This is especially importantfor small and informal sector enterprises, which dominate developing country

economies. The greatest opportunity to apply the NUA model is in countries where the formof a city is not yet ‘locked in’. Globally, some 60 per cent of the area expectedto be urban by 2030 remains to be built. The World Economic Forum estimatesthe corresponding infrastructure investment needed stands at USD 3.7 trillion peryear until 2050. What is still not counted is the quantity of urban value that can begenerated by such investments.

Public-private partnerships (PPPs) are a requirement for feasible solutions toaddress forthcoming urban demands. PPPs are an increasing source of nancefor large-scale infrastructure projects across energy, transport and other sectors.But, clearly, the value generated should be far greater than the costs. Therefore,a system of value sharing is needed to address the investment needs.

Current project designs frequently overlook the basics of urban nancing. In theend, few realize the value of new investments, with the public sector often leftholding a long-term maintenance tab they can rarely afford. This is an example ofthe privatization of prots and the “publication” of expenses.

The NUA calls for a step-change in investment behavior and approachesto PPPs. Project designs must factor in the longer-term nancial burden onmunicipal authorities, as well as opportunities for local-level revenue generationthat positively impact on wealth and livelihoods, as well as poverty reduction.

For their part, the public sector must adopt legal frameworks that create abusiness-friendly environment by providing investors with a level of predictability

in public policies and plans at both national and local levels. As seen in manydeveloping countries, the nancing provided by public sector and developmentbanks is insufcient and must be paired by private nance. In this regard, new,exible and innovative mechanisms for PPPs are urgently needed.

I congratulate WEF on pursuing this important topic, especially as we approachHabitat III. I invite all you to join us in Quito and take advantage of the opportunityto dene the transformative role of our cities and secure a new vision of the urbanenvironment for the 21st Century.


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5Inspiring Future Cities & Urban Services: Shaping the Future of Urban Development and Services Initiative


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Finally, a 10-step action plan is provided to help cityauthorities navigate the journey of urban transformation. The journey begins with cities identifying their DNA – theirdistinctive, key characteristics – and singling out theimportant challenges that need to be addressed to meetthe needs of all stakeholders. Cities then need to develop ashared vision by engaging citizens, the private sector, NGOsand academic institutions. Once the shared vision and keyperformance indicators (KPIs) are established, cities will then

need to prioritize goals to meet the KPIs. The programmedevelopment, regulatory changes, selection of standards,nancing and creation of funding mechanisms need to takeplace based on the cities’ vision. Success will be driven bylearning from other cities and experimenting to target quickwins with tangible outcomes that can build condenceamong stakeholders.

Report Structure

• Digital integration of services• "CityOps"• Public asset revitalization• Circular & sharing economy• Innovative public services

outsourcing• Demand-based pricing

structures

• Analysis: big data, open data,data analytics

• Sensing: Internet of Things,mobile-based sensing,location & condition sensing

• Sector specic: intelligenttransport, smart grid, healthmonitoring, citizen e-ID

• Smart regulations & agile,

transparent and city-scalegovernance• Visionary leadership &

capacity development• Integrated planning &

stakeholder engagement• Standards & reuse

• Public-sector engagement to

develop trust and contributetowards shaping regulations• Engagement with local

communities to addressconcerns

• Ethical conduct1.4.1 1.4.2 3.4 2.2

Issues & Challenges

Global urbanchallenges

PPP risks &participation

Challenges intransformation

A c c e

l e r a

t i n g

P P P s

1 0 - s

t e p a c

t i o n

p l a n

1.2

C i t y m a

t u r i

t y

m o

d e

l

1.3 3.5

3.2

4.2

4.2

2.1

1. Climate Change2. Environment management

(air, water, soil, noise)

3. Accessibility and mobility4. Economic development

5. Urban planning

1. Integrated planning

2. City vision development

3. Lack of coordination among differenttiers of governments

4. Budgetary constraints

5. Lack of transparency

1. Corruption risk/Market distortion2. Permi t risk

3. Cancellation and change of scope4. Community risk

5. Judicial

Triggers & Enablers for Urban Transformation

Trigger –Emerging business models

Trigger –Emerging technologies

Enabler –Government actions

Enabler –Private-sector actions

Tools for Transformation

A p p r o a c

h

4.1

Figure 1 highlights the report’s structure, and indicates the section covering each of the topics in detail.

Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC research


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8 Inspiring Future Cities & Urban Services: Shaping the Future of Urban Development and Services Initiative T h o m a s

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1.1 It’s an Urban World

Cities will witness an inow of 2.5 billion new urbandwellers by 2050, more than the current combinedpopulation of India and China.

From the late 18th century, the growth of modern industrytriggered massive urbanization and paved the way for new,great cities – rst in Europe, then in other regions – as newopportunities brought huge numbers of migrants from ruralcommunities into urban areas. In 1900, just 13% of peoplelived in cities; by 1950, the proportion rose to 29%.

The share of the world’s population living in urban areas isexpected to increase to 66% by 2050, adding 2.5 billionpeople to the urban population, with about 90% of theincrease concentrated in Asia and Africa. This geographicconcentration is already reected by the world’s mostpopulated urban agglomerations as of 2014 (Figure 2). Livingin cities allows individuals and families to take advantage ofopportunities arising from proximity, diversity and marketplacecompetition. The number of megacities has nearly tripledsince 1990; and, by 2030, 41 urban agglomerations areprojected to have populations of at least 10 million each.1

Cities are growing at a rapid rate, and with increasing urbanpopulations they need to be built faster and more effectively.Growing cities are not only dense in terms of land use,but their diverse social and economic fabric makes themchallenging to govern. Unlike nation states, thede-jure andde-facto boundaries of cities are different. The boundaries

where a functional (or economic) city begins and endsare difcult to dene, often creating friction between theadministrative entities that govern it.

While cities have provided economic opportunities tomigrants, they have also faced increased social segregationand acute shortages of physical and social infrastructure.Cities today must: – Plan for a sustainable and resilient future

– Balance economic and social development, as well asenvironmental protection

– Design solutions adapted to their local contexts, andenhance their character

1. The Future of Cities

1

22

23

24

25

26

27

28

29

30

24

5

789

10 12

13

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3

1990 2014 2030

10 mn. 20 mn. 30 mn.

Population

1-Tokyo,2-Delhi,3-Shanghai,4-Ciudad de México (Mexico City),5-São Paulo6-Mumbai (Bombay),7-Kinki M.M.A. (Osaka),8-Beijing,9-New York-Newark 10 -Al-Qahirah (Cairo),11 -Dhaka,12 -Karachi,13 -Buenos Aires,14 -Kolkata (Calcutta)15 -Istanbul,16 -Chongqing,17 -Rio de Janeiro,18 -Manila,19 -Lagos,20 -Los Angeles-Long Beach-Santa Ana,21 -Moskva (Moscow),22 -Guangzhou,23 -Kinshasa24 -Tianjin,25 -Paris,

26 -Shenzhen,27 -London,28 -Jakarta,29 -Seoul,30 -Lima

Figure 2: Global Footprint – The 30 Most Populated Urban Agglomerations (as of 2014)

Source: Data from United Nations, Depar tment of Economic and Social Affairs, Population Division. “World Urbanization Prospects, the 2014 Revision”, Highligh2014


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1.2 Challenges Due to Urbanization

The environment, climate change and economicdevelopment emerge as common challenges aroundthe globe.

Cities around the world are confronted with many problems,such as trafc congestion, inadequate energy, lack of basicservices, informal dwellings, poor management of naturalhazards, crime, environmental degradation, climate change,poor governance, urban poverty, informal economy andunplanned development. Often city administrators havelittle control over population growth. Hence, some of themajor challenges are effectively monitoring the change inpopulation and being able to respond through planning andinfrastructure development (Figure 3).

Environmental management and economic developmenthave emerged from a myriad of problems as common onesaround the world. Increasing climate variability and extremeweather events are expected to severely affect cities, withoods and droughts prediected to grow in both magnitudeand frequency. In urban areas, heat stress, extremeprecipitation, inland and coastal ooding, drought andwater scarcity pose risks that are amplied for those lackingessential infrastructure and services.

The economic recovery after the nancial crises of 2008has been slow, with various regions around the globeexperiencing localized crises. While cities continue to driveeconomic growth, the business environment for investmentin urban infrastructure and services remains challenging. Although both the environment and economy haveconsistently appeared among top regional challenges in theWorld Economic Forum’s Global Survey on Urban Services2,the survey’s participants expect greater transformation in theenvironment than in the economy (Figure 4).

Figure 4 maps urban challenges against the extent ofperceived transformation. While a correlation exists globallybetween the signicance of urban challenges and theperceived transformation, some urban domains, such as“economy” and “institution”, do not show a perception oftransformation commensurate with the extent of challenge

(with lesser transformation expected). The respondents believe that, over the next ve years,maximum transformation will take place in developingeconomies across urban domains such as urban planning,infrastructure (buildings, waste, water, power and energy)and social services (health, safety and inclusion), whereasin developed economies, maximum transformation isanticipated in the environmental domain.

City administrations will need to give special attention tourban domains such as culture and leisure, e-governmentservices and institutional set-up, as survey respondentsdo not perceive a great extent of transformation. Urbandomains traditionally under the public sector will requirefurther investment to create a fullling experience for urbanresidents. Administrators will have to respond quickly tomodify policies and gain a competitive edge in a globalworld where cities are competing for investment by offeringenhanced infrastructure and providing incentives. Even witha growing urban population, talent continues to remain anissue in the developing world, and cities will need to nurturelocal talent to remain competitive worldwide.

City administrations alone cannot address the challengesposed by rapid urbanization, and are increasingly relying oncitizens, the private sector, NGOs and academic institutions

to provide complementary skills and resources.

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1.2.1 Urban Stakeholders and the Implications ofUrbanization

Governments, businesses, citizens and civil societywill need to work in synergy to address urbanchallenges.

As urban demands and complexity of infrastructure andservices grow, the resources required to tackle them (e.g.knowledge, nance, legitimacy) are increasingly spreadacross many different stakeholders. In such a scenario,partnerships and “co-production” have increasing relevance.While good partnerships bring additional capabilities, theytake time and effort to mature. Trust, mutual understandingand experimentation make them function. – Global citizens are seeking enhanced interaction and

multi-layered experiences, with technology the keyenabler of cultural exchange and engagement. Citizensare emphasizing access over ownership, and areparticularly attuned to sustainability issues, expectinggoods and services to be produced and deliveredresponsibly. Government agencies can capitalize on theincreased awareness and accessibility of urban residentsto elicit a higher level of engagement and communityparticipation, to facilitate co-creation and to reduce thecommunity risks in urban development initiatives.

– Businesses are fostering a global collaborative mindset. They are forging new bonds within both the working andsocial environments to understand the urban system andcreate products and services relevant to urban residents.Preferring digital channels, entrepreneurs are changinghow excess capacities are utilized in an urban context.City leaders can unleash the dormant capacity withinurban areas while engaging with businesses, and makethe city adapt quickly in order to address migration and

demographic changes.

– Multilateral organizations and donor agencies havecrucial roles as urbanization advances at a rapid pace. Achieving the sustainable development goals will requireinclusive partnerships that provide collective, cross-border solutions for eradicating poverty, stimulatingeconomic progress and environmental sustainability, anddeveloping inclusive societies.

– Public policy typically lags behind urbanization. As aresult, basic services are often inadequate for the migrantpopulation and urban poor; moreover, the latter oftendon’t have a say in the urban planning process.NGOs are beginning to nd a niche for themselves byfacilitating conversations that haven’t occurred. Thus,they help the urban poor to articulate their concernsto people in power and thereby encourage equitabledevelopment.

– The shifting urban economic landscape is creating newchallenges for city leaders and national governmentsaround the globe. In developed countries, largecities looking to sustain growth need to forge closecommercial links with the emerging market economiesthat are reshaping the urban world. To ensure strongnational and regional growth, regional and nationalgovernment agencies will have to work along with citieson economic development, housing and social policies.National governments are likely to recognize the growingpower of cities as they play a crucial role in shapingforeign relations and economic policies.

Each city’s distinctive character develops over years throughinteraction among stakeholders over formal and informalcommunication channels. However, the key ingredients fora thriving city remain the same: cities fundamentally createbetter economic opportunity that brings people togetherfrom different walks of life. These people add value tocities’ economic, social and infrastructural dimensions. Thefollowing sections explore important characteristics of futurecities – characteristics that are being driven by innovations.



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1.3 The Future of Cities

To attract talent and investment, cities will need tobe sustainable, citizen centric, economically vibrant,accessible, resilient, well governed and responsive.

In the distant future, urban infrastructure and services willbe a function of the way technology and, more importantly,business models evolve. However, future cities are expectedto exhibit the following characteristics: – Sustainable : Such a city demonstrates balanced

accomplishment of social and economic development,environmental management and effective urbangovernance.

– Citizen centric : The focus in this city is on the physical,mental and social well-being of individuals and society,encompassing many factors (life satisfaction, physicalhealth, psychological state, level of independence,education, wealth, religious beliefs, local services andinfrastructure, employment, social relationships andcultural perspectives, among others).

– Economically vibrant : Such a city attracts investments,facilitates business, nurtures indispensable assets (itswell-educated people), improves productivity, promotesgrowth and expands opportunities for all stakeholders.

– Accessible : All sections of society in an accessible citycan live independently and participate fully in all aspectsof life. This city ensures that people with special abilitiesand the vulnerable section of society have equal accessto all services provided.

– Resilient : Such a city enhances the capacity ofindividuals, communities, institutions, businesses andsystems to survive and adapt while they experiencechronic stress and acute shock across health, theeconomy, infrastructure and environment.

– Well governed : This city optimally utilizes resources toeffectively realize the short- and long-term agenda ofits development, while achieving greater transparencyin public decision-making and establishing institutionalaccountability.

– Responsive : To consume its available resources in thebest way possible, such a city enables all stakeholdersto use data collected by digital infrastructure to spotpatterns, identify problems and make real-time decisions.

– Planned : This city strengthens its local economy bycreating a master plan that integrates all urban domains,and offers enough exibility to make amendments to theplan when external conditions change or when innovativesolutions emerge.

Cities would move through stages of development (Figure 5)in the journey to attain or strengthen these characteristics,particularly the six key levers of governance, planning, urbanservices, collaboration, technology use and sustainabledevelopment. These stages are described as: – Rudimentary : battling to meet demand and supply

– Functional : meeting residents’ essential needs andstarting to adopt modern solutions

– Integrated : meeting the aspirational needs of allstakeholders and adopting a holistic approach towardsurban development

– Scalable : being ready for new challenges that emergeon the horizon and adapting quickly to address thesechanging scenarios

Cities can use the six levers in this “city maturity” modelto navigate through the stages. Moreover, by using thetechnology lever or a combination of them, they may beable to leapfrog stages. Again, the use of levers will needto be adapted to the cities’ distinctive contexts in order tostrengthen their DNA while navigating through the stages ofdevelopment.


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Gazing into the crystal ball: What does the future holdfor cities and urban dwellers?

Over the past couple of decades, urban service delivery haschanged because of technology, with cities now providingurban services on demand and independent of where theirresidents are located. Disruption in technology and businessmodels will help to further improve the provision of servicesand the use of infrastructure. Such innovation is a greatopportunity for cities in both developing and developedcountries to leapfrog stages of maturity and mode – froma “rudimentary” or “functional” city to an “integrated” or“scalable” one. At the same time, city administrators andurban residents must not look at technology as a panaceafor all their problems; a myriad of reforms across the areasof governance, regulation, institutional capacity and public-private collaboration will be required in the drive to improvedelivery of urban services. Cities as presently conceived areunsustainable, but cities are also the key to sustainability. A combination of strong leadership, new technologiesand bottom-up innovation can propel cities towards urbantransformation and achieve more with less in an environmentwhere resource constraints are increasing.

Rudimentary Functional Integrated Scalable

Structures exist,cites are not empoweredor equipped

Structures exist,empowered (in silos) butnot equipped

Agile governancestructure, adaptive tonew operating models

Integrated structures withadequate capacity

Organizationstructures

Process optimized,situation awareness,data-driven decisions;Smart regulations to accommodatedisruptive business models

Adoption of technology for criticalfunction and enterprisemanagement; Public-privatepartnership frameworks adopted

Limited adoption of technologyand few public-privatepartnerships

Truly digital delivery, preemptiveservices, prescriptive analytics;Public-private partnerships pipelineavailable and limited acceptance ofdisruptive business models forurban services

Technology andbusiness models

No/few linkagesbetween people,

processes and systems

Linkages between people,with few linkages in

processes and systems

Digital collaboration(government, citizens,private sectcor, NGOs,

academia)

Extensive linkages(people, system,processes) and

stakeholder collaboration

Collaboration andengagement

Unplanneddevelopment withinadministrative areas

Planned development,with siloed planningapproach

Metropolitan plans inconjunction with adjoiningareas

Integrated planning foradministrative areas

Planning

Basic survival needs metin terms of water, waste& sanitation, and shelter

Power, transportation,healthcare and educationneeds met

Scalable infrastructure forquality of life, green space,culture & elderly care

Mass transit, advancededucation, etc. foreconomic competivenessUrban services

Access to basic servicesUrban poverty alleviation

Energy efficiency,Social cohesion, reuseand recycling

Social safety, prepare forclimate change, addressageing

Renewables, greendevelopment, addressclimate change

Sustainabledevelopment

Figure 5: Stages of Urban Development

Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative & PwC research

1.4 The Business of Running Cities: UrbanServices

The “business of running cities” is complex, covering awide range of domains such as mobility, infrastructure

(buildings, energy, water, waste management), socialservices (health, safety, security, welfare), the environment(ecological preservation, resource management), knowledgeand skills (education, skill development), and culture(culture and leisure facilities, public spaces, tourism). It alsoinvolves a large number of stakeholders in the planning andadministrative process, including national, regional and localgovernments, and a number of beneciaries and partners,such as citizens, the private sector and NGOs. City planningand administration have changed signicantly in the lastdecade with the rise of technology; disruptive businessmodels and technological solutions can enable the sharingof data across domains and help cities build situationalawareness.


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1.4.1 New Business Models

Cities will need to adopt new business models andtechnology to transform themselves and continuouslyimprove.

A new trend emerging in the business of running cities, withtechnology as an important component, is the innovativebusiness models that are disrupting the way urban servicesare delivered.3 How urban infrastructure and services arebeing managed has attracted increased private-sectorand entrepreneurial interest. Cities are constrained by bothbudgets and capacity to offer services over digital channels. The private sector is enabling cities to adapt faster, using itsinnovation and agility through the following models: – Digital “integrated city” services : In several cities

developed over decades, the physical integration ofinfrastructural components is difcult; however, digitalintegration is possible. Digitally integrated infrastructurecomponents, such as water, storm water, sewage,power, waste management and roads, not only bringeconomies of scale, but also enhance service delivery forcitizens, who now get a one-stop shop to meet all theirneeds.Example : Barcelona’s mWallet programme intends todevelop a new information technology (IT) applicationand smart services for virtual payments through smartphones, or “mSmart City”, aiming to integrate urbanservices through a single-channel technology interface.4

Example : Kalundborg, Denmark, has integrated wasterecycling into the local industrial system. The cityintegrates energy management across power, water,heating, transport and building systems through anopen, intelligent platform. Any generator or aggregatorcan use the platform to offer demand response capacityto grid operators looking to manage uctuations in power

supply or reduce the need for network reinforcement.Similarly, Aarhus, Denmark, has transformed awastewater plant into a combined heat and power plant,converting the conventionally energy-consuming facilityinto an energy-generating facility.4a

– “CityOps” (city operations) as a service : The digital

solutions driving improvements in physical efciency areincreasingly available “as a service”, thus transferringupfront capital investment into operational expenses. This enables city administrators to take more risks andimplement solutions rapidly.Example : Norfolk County Council (UK) was facingbudgetary constraints, with its IT budget consumedby existing service. It used a cloud-based model totransform municipal service delivery and achieve anoverall saving of $10 million. The solution introducedtechnologies, such as big data and the cloud, totransform how internal departments collaborate.5

– Public asset revitalization : Cities are converting“dead assets” that consume resources, such as lightpoles, into assets that can attract substantial revenuethrough value-added services, such as sensing ambientconditions for air quality, weather and parking spots.Such services, coupled with digital advertising platforms,are enabling cities to capitalize on unused capacitywhile adopting more economically and environmentallysustainable means of providing the original functions.Example : The Array of Things is an urban sensingproject in Chicago (USA) where a network of interactive,modular sensor boxes will be installed on streetlightsto collect real-time data on the city’s environment andinfrastructure (parking spaces). The switch to LED

technology provides an opportunity to turn streetlightsfrom a “dead asset” into a “live” one.6

– The circular and sharing economy : Traditionalconsumption patterns follow the “take-make-dispose”economic model, which leads to intensive use of


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materials and energy.7 Moving towards a circulareconomy will help to reduce the use of resources andcut emissions. Many city residents are reducing wastedcapacity when commuting by using websites to carpool,or even giving up car ownership altogether in favour ofweb-facilitated car-sharing clubs. Opportunities exist toexpand the sharing principle to providing physical, socialand recreational infrastructure.Example : Peerby, a service started in the Netherlands,lets users share seldom-used goods and tools through aneighbourhood peer-to-peer borrowing service.8 Zipcar,another case, allows commuters to rent a car for hoursor days on the go through a web and app-enabledbooking service.9

Example : In South Korea, Seoul’s metropolitangovernment has announced a new initiative, SharingCity Seoul. The government sees “sharing city” as anew alternative for social reform that can simultaneouslyresolve many of the city’s economic, social andenvironmental issues. It would create new businessopportunities, recover trust-based relationships andminimize wastage of resources. Sharing allows thecommunity to gain more benets with fewer resources,since it enhances their usefulness.10

– Innovative public services outsourcing : Cities alreadyhave the economic rationale and technological ability tooutsource management processes, enabled through theInternet of Things (IoT), data analytics and visualizationtechnologies. This is similar to the private sector’sleveraging of information, communications technology(ICT) and skilled labour over the last decades. Cities aremoving operations and functions to places where workcan be done more efciently. Outsourcing is furtherbacked by outcome-based contracts and service-

level agreements rather than by traditional methods ofprocuring goods and services. As a result, the privatesector has become an equal partner in achieving thenecessary social and economic outcomes.Example : In the United Kingdom, London’s leading busoperator, Arriva London, has a long-term outsourcingcontract for management of core bus operations suchas crew scheduling, operational stafng, on-bus revenueaccounting, performance monitoring and mileageplanning.11

– Pricing structures for peak load distribution :Designed to meet peak demand, urban infrastructureoften remains idle when demand is off peak. Congestioncharging, and dynamic pricing based on demand andconsumption patterns, can average out the peaks,thereby reducing the need to develop additionalinfrastructure while the average demand grows. Citiesare looking increasingly to optimize their existingresources and use the excess capacities while theybattle with budgetary constraints to fund capital projects.Example : In Israel, the fast lane project in Tel Aviv usesdynamic tolling (where the charges are determined inreal time); as lane usage increases, toll prices increaseas well. Carpooling is encouraged by waving the toll forvehicles with three or more passengers, and part of therevenue from the collected toll nances a free commuter

bus.12

– City advisory : Some cities are better than others at,for example, urban planning, mobility planning andprogramme management. Some may want to emulatehow others have tackled a particular issue. Cities

typically are willing to share their best practices, and,while most are already freely sharing ideas with others,some are starting to sell their best practices to otherlocal governments.Example : Local Government Denmark has been activein projects across Asia, Africa and Latin America,offering services such as decentralization strategies,local government nance, support to local governmentassociations, intermunicipal cooperation and publicparticipation.13


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Madrid: Improving Private-SectorProvisioned Urban Services with TechnologyPlatform

Madrid has been a torch-bearer in using public-privatepartnerships for provisioning key urban services such aswater supply, waste management, transport, street lightingand tree maintenance. While depending on the privatesector for urban service delivery, contract governance andperformance management is crucial, the city administrationalso has to ensure that standards set for key performanceindicators are met repeatedly.

An integrated view of all urban services is required toeffectively manage private provisioning of services. TheCity of Madrid implemented an intelligent technologyplatform called as MiNT (Madrid Intelligence) that allows formanagement of service providers and communication withcitizens. A key feature of the solution is a mechanism wherecitizens can provide immediate feedback about a serviceor event in the city with their location details. The platformintegrates data from citizens with data captured throughsensors, cameras and IoT (Internet of Things) devices togenerate a comprehensive view of city services.

The platform is built on a database of more than 5 millioncity assets and provides a real-time city view, enablingbetter responses to service requirements. The platformprovides a mechanism to measure and analyse more than300 performance indicators across urban domains andincentivizes service providers through better compensationfor higher quality of delivery. This contributes to improvedquality of life in the city as private agencies responsiblefor management make their best effort to improve servicebenchmarks for better compensation.

Datasets created on account of city functions hold immensevalue and can be used to constantly analyse and improve

city operations across all domains. The case study highlightsthe benets of progressive technology in enhancing urbanservices, and that transferability is high for cities that havea mature urban services system and data available on coreinfrastructure and services.

(This case study was provided by IBM Corporation)


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While the use of technology varies across developing anddeveloped countries, city administrators are increasinglylooking at the following technologies to identify solutions totheir urban challenges (Table 1):

Top 10 Technologies Driving Transformation

I n t e g r a t e d C i t

y & C

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m y

S h a r i n g

& C i r c

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s o r y S e r v i c e s

I n n o v

a t i v e

P u b l

i c

S e r v i c

e s O

u t s o u r

c i n g

Urban domainsexpected to

undergotransformation

- Power/energy- Transportation- e-government services- Water- Waste

- Transportation- e-government services- Citizen engagement- Urban planning- Power/energy

- Transportation- Urban planning- e-government services- Innovation and entrepreneurship- Power/energy

- Transportation- Power/energy- Waste- Water- Education

BigData

Internetof Things

Data AnalyticsPredictive & Prescriptive

Mobile devicebased sensing

IntelligentTransport

Open Datain Government

SmartGrid

Location & Condition Sensing

Technologies

Citizene-ID

MobileHealth

Monitoring

1.4.2 Technologies Driving Urban Transformation

Technology has been one of the drivers of transformation(Figure 6) and is likewise driving the emergence of the newurban services paradigm.

Figure 6: Top 10 Technologies Driving Transformation

Source: World Economic Forum, Shaping the Future of Urban Development &Services Initiative, Global Survey on Urban Services (Oct.-Dec. 2015)


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Sensors (for improving situational awareness)

Internet of Things Deployed sensors (hooked on the internet) and advanced computing are making the physical assets of the utilities networkmore intelligent and driving responses based on the ambient conditions. The IoT is nding use across asset performance,maintenance and visibility, as well as through eet operations and customer metering, thereby impacting the entire chain ofutilities. For example, in Queensland (Australia), Unitywater cut its direct water losses by 1 billion litres in one year, saving $1.9million; it reduced the time required to detect and resolve network events by two-thirds, and increased availability by almost20%.14

Mobile-based sensing

Citizens Connect is a mobile application developed at the Boston (USA) Mayor’s Ofce of New Urban Mechanics (MONUM)that allows residents to report public issues directly from their smartphones into the city’s work-order management system. Those issues go immediately to the right person in City Hall to x the problem. This application has been adopted by manyother cities throughout the state of Massachusetts and across the United States.15

Location &condition sensing

Japan has deployed a solution that gathers information on disasters from sources such as surveillance cameras, water-levelgauges, rain gauges and seismometers, and processes the data at a command centre. If analysis suggests that evaluation isrequired, multiple agencies (police, re brigade, army and hospitals) are informed, using various communication channels to savepeople’s lives.16

Street Bump, a project of Boston’s MONUM, helps residents improve their neighbourhood streets. Volunteers use the StreetBump mobile app to collect road condition data while they drive. Boston aggregates the data across users to provide the citywith real-time information for xing short-term problems and planning long-term investments.17

Data (for improving decision-making)

Big data The city of Auckland (New Zealand) uses big data – from business transactions, video streams and sensor data to social mediafeeds such as tweets – to manage its transport system on a day-to-day basis. The big data solution operates on real time ontens of thousands of video streams to detect a range of information, including number plates, vehicle demographic analysis andintelligent scene analysis for many moving vehicles. All of this is integrated with multiple, disparate physical security, building andtrafc management control and monitoring functions. Government organizations can thus make instant conceptual and contextualassociations between disparate pieces of data and are able to respond in the most efcient way possible.18

Data analytics Utilities have begun applying differential rates based on in-depth consumer analysis, consumption patterns of users and efciencylevels of the network. The consumption data also allows users to monitor rates and save money by shifting use away fromtimes when utility rates are high. Consumption analytics are supporting the distributor to determine the right user charges fornormalizing peak loads.

Open data Dublin (Ireland) intends to increase transparency and create opportunities to attract transnational companies and localbusinesses interested in urban technology through its Dublinked initiative. Dublinked is managed by a partnership of four citycouncils in Dublin’s region, a university and a major technology provider, which has recently opened a “smart city R&D centre”with 200 jobs in the city.19

Sector-specic

Intelligenttransport

Intelligent transportation systems (ITS) enable various users to be better informed and make safer, more coordinated and “smarter”use of transport networks. The systems include stand-alone applications such as trafc management systems, information andwarning systems installed in individual vehicles, and cooperative ITS (C-ITS) applications involving vehicle-to-infrastructure andvehicle-to-vehicle communications. Countries including Australia have developed a framework and endorse the use of ITS in all theirstates, cities and towns.20

Singapore has developed an Electronic Road Pricing System, which charges motorists based on usage of roads during peak hours. The system optimizes road usage with differential pricing based on local trafc conditions, prompting motorists to change their modeof transport, travel route and time of travel. The system not only makes the best of available capacity, but also has a greater socialbenet by reducing the loss of productive hours, environmental pollution, fuel consumption and adverse health effects.21

Smart grid The city of Chattanooga (USA) has provided its community with the latest technology-enabled, bre optic smart-grid energynetwork, a more secure, affordable and efcient power supply for homes and businesses throughout the city. Beyond energysecurity, the overall impacts were a reduction in energy consumption and cost-saving benets from reduced usage and demand-sensitive pricing. Over 20 large industries have signed up to “time-of-use” tariffs that will save those businesses $2.3 millioncollectively a year.22

Citizen e-ID Belgium’s Flemish region has implemented Maximum Data Sharing Between Administrations and Agencies, a platformthat enables once-only data collection. Citizens log on to the Flemish e-government services using electronic ID cards thatautomatically transfer data to the concerned state registry.23

Mobile health monitoring

3G-enabled monitoring devices are being used in Japan to measure blood pressure. The solution was primarily employed intemporary houses in the area impacted by the country’s 2011 earthquake. The wireless monitoring system helped to ensurepatients’ health and safety, manage and control lifestyle-related diseases such as hypertension, and enhance cooperation withlocal communities.24

Table 1: Technologies and Innovations for Solving Key Urban Challenges

Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative, Global Survey on Urban Services (Oct.-Dec. 2015)


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Chattanooga: Increasing Resilience byImplementing Smart Grid

Chattanooga is one of those cities that has often facedeconomic adversity, yet has managed to bring forth itspotential through the efcient use of its natural resources,technology and infrastructure. After the global economicrecession, Chattanooga needed funds to reinvigorate itseconomy to attract new businesses and provide the rightincentives and tools for the businesses to thrive. Thesefunds were made available through the national 2009Recovery Act to revitalize its economies in the wake of theglobal recession.

Chattanooga used this opportunity to develop a smart gridnetwork. The bre-optic smart grid energy network not onlyprovides secure, affordable and efcient power supply tohomes and businesses across the city, but also signicantlyreduces the energy consumption and carbon emissions inthe city. The resulting cost savings have been used by thegovernment in other initiatives such as city constructionprojects, which has improved the communities.

One of the key highlights of the success of this initiativewas when Chattanooga was hit by a series of tornadoes in

July 2011, leaving 77,000 homes without power. Throughthis smart solution, power was restored in two seconds toover 50% of homes; prior to the smart solution, it wouldhave taken 17 hours. Availability of information at a remote

location through the smart grid technologies preventedabout 250 service visits and signicantly speeded up therestoration process. About $1.4 million was saved becauseof the speedy and efcient restoration at the time of thesestorms.

The latest technology-enabled grid network enablesre-routing of power in the event of a fault and supportsisolating the event and reducing outages across the city.With the necessary information provided to the users onmanaging their energy consumption, they can limit the useof unnecessary energy consumption. Leveraging the latestenergy network technology, Chattanooga has successfully

increased resilience from power outages. A key takeawayof the case study is that use of similar smart technologysolutions can enhance operational efciency, reduce lossesacross urban domains such as energy, water and wastemanagement.

(This case was developed based on the report ,Investor Ready Cities, How cities can create and deliverinfrastructure value, published by Siemens, PwC, BerwinLeighton Paisner )


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Big Data for Water Management in theNetherlands

Water management is crucial in the Netherlands, where55% of the population reside in ood-prone zones andood risks affect up to 70% of GDP. Droughts also have animpact on the local economy with reduced power outputand agriculture production. Water management costs upto 7 billion euros and is expected to further rise by 2 billioneuros by 2020. The exposure to oods and droughts callsfor a dynamic mechanism for analysing ambient waterscenarios and predicting future scenarios to prepare foremergencies and improve response to water level variationsin accordance with local requirements.

The Netherlands has deployed a big data analytics solutionto enhance ood management and improve managementefciency in response to varying water resourcerequirements and to reduce costs in management of thewater system. The “Digital Delta” platform collates data froma sensor network and various existing sources to providea dashboard that helps in taking proactive measures toprevent disasters and environmental degradation. Whilethe immediate impact of this initiative is on the Dutch waterresource system (with a cost reduction of almost 15%), thebenets of better water management are felt by the powersector, agriculture sector and the built environment.

While the project is executed by the Dutch Ministry of Water,the initiative engages multiple stakeholders – universities (touse data to effectively maintain schedules while preventingoods), the private sector (to implement the technologysolution) and other government entities (to manage localwater conditions). The public-private partnership hasenabled the government to leverage the expertise ofthe private sector in data modelling and using intelligentplatforms for effective water management. The case studyshowcases how multiple stakeholders with complementaryresources can come together to implement technologysolutions that address a key urban challenge.

(This case study was provided by IBM Corporation)


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Auckland: Big Data Analytics for MobilityManagement

Auckland, on the North Island of New Zealand, is thelargest and most populous urban area in the country. Itis an emerging international city that is fast developing areputation for the quality of life it offers its residents. Thecity aspires to become the most liveable city in the worldby 2040 by improving mobility, housing, economy andenvironment. Auckland Transport is responsible for all ofthe region’s transport services, from roads and footpaths tocycling, parking and public transport.

The city has implemented a technology solution to obtainreal-time insights on trafc movements and support quickdecision-making. The big data solution enhances publicsafety and transport efciency by analysing a large volumeof structured and unstructured data. The system usesvideo analytics, automatic number plate recognition, vehiclemodel recognition, face recognition, demographic analysisand intelligent scene analysis to support decision-making. The stakeholders involved in the execution of the projectinclude Auckland Transport and its partner organizationsresponsible for control and monitoring functions of physicalsecurity (including surveillance), building management, trafcmanagement and computer-aided dispatch.

Further, Auckland Transport collaborated with the privatesector to design and implement the technology solution. Thetiered, open and fault-tolerant architecture of the solutionfacilitates replication across cities. The key takeaway is thatagencies must collaborate to use the same technologyinfrastructure and concerns of multiple departmental silosthrough a common solution.

(This case study was provided by Hewlett PackardEnterprise)


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Integrating Government Services in FlemishRegion

Flanders is the northern Flemish-speaking portion ofBelgium. More than 70 government agencies under theFlemish government oversee the education, culture,healthcare and international development of nearly 6 millioncitizens of the region. With several agencies involved ingovernment services, citizens had to approach multipledepartments for services. Flanders saw the opportunity tostreamline information ow and reduce operational dataefciency across agencies each time they interacted withcitizens.

The solution is based on the idea that services should beavailable easily with minimal effort and that no informationshould require submission twice. This was enabled througha platform that enables data exchange and provides asmooth experience to citizens. The Flemish governmentdesigned and built a platform named “Maximum DataSharing Between Administrations and Agencies” (MAGDA). The vision of this initiative was to re-engineer and digitizeprocesses in a manner that enables once-only datacollection for accurate and faster service delivery. As a partof the system, citizens log on to the Flemish e-governmentservices using electronic ID (e-ID) cards that automaticallytransfer data to the state registry.

Partnership with the private sector for its technologicalcapabilities was one of the key enablers for this project.Critical to the success of the project was the approachdevised by the Flemish government of using technologyto transition from a “pull” to a “push” model of informationexchange. The government was able to eliminate 250,000paper forms, thus saving costs on mailing. The MAGDAframework is recognized by the European Union as ane-government best practice and has received recognitionfrom other countries as well. Such solutions can enablegovernments to provide more services regardless of thebudgetary constraints.

(This case study was provided by Hewlett PackardEnterprise)


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City administrators and other stakeholders need to makea concentrated effort to address the aspirational needs ofresidents. In their journey towards urban transformation, cityadministrations will encounter challenges such as budgetaryconstraints, inefcient governance structures, lack of leadershipand talent, sourcing risks, trust issues and external factorssuch as changing demographics. Smart regulations andeffective governance structures, and the development ofnimble institutions will be required to address these issues. Cityadministrators must demonstrate visionary leadership and think

beyond political tenures, while planning for a future city thataddresses the needs of all sections of society, irrespective oftheir social and economic status.

2.1 Challenges

Although the top challenges for transformation differ to anextent in developing and developed countries (Figure 7), thekey ones include the following: – Budget constraints : Cities have difculty raising taxes

and user charges. Moreover, with national and regionalgovernment allocations not increasing, they are ndingit more difcult to manage their nances and establish amechanism to fund infrastructure development.

– Governance : The functional city’s increasing populationand geographical footprint have not resulted in acommensurate increase in the geographical footprintof administrative boundaries. A lack of coordinationbetween national, regional and urban governments has

further exacerbated administrative issues, so that certainurban functions have deteriorated in the absence of asegregation of duty between entities.

– Leadership : Inadequate devolution of power to cityleaders and mayors has led to ineffective city leadership. An absence of strong leadership support leads to gapsin planning, prioritizing and implementing key projects.

– Talent : Without adequate technical and managerialtalent, cities have not been able to keep pace withthe increased demand for urban services, resulting ininadequate delivery of infrastructure and services.

– Demographics : Changing demographics – anincreased population in some cities, and an ageing onein others – has led to growing demand-supply gaps.

– Sourcing risks and trust : As cities have limitedresources, the private sector can contribute withinnovation and efciency. However, lack of trust in thesector has led to its limited engagement in deliveringinfrastructure.

The cities can address challenges in transformation byusing the levers such as organization structure, planning,collaboration and engagement (as indicated in Figure 5)

based on the stage of maturity. Each city needs to assessits existing level of maturity and take action to move orleapfrog stages. Technology infusion within each of thelayers will help cities make the transition faster.

2. Enablers for AdoptingNew Models for Urban

Services

1. Demographic challenges2. City vision development3. Budgetary constraints4. Lack of coordination between government agencies5. Integrated urban planning

6. Financing for urban development projects7. Migration and rise in population8. Policy distortions9. Inadequate citizen engagement10. Leadership support

1. Integrated urban planning2. Lack of transparency3. Lack of coordination between government agencies4. Unplanned growth/urban sprawl5. City vision development

6. City governance structures7. Budgetary constraints8. Migration and rise in population9. Inadequate public-private partnerships10. Access to talent

Figure 7: Regional Challenges in Urban Transformation

Source: World Economic Forum, Shaping the Future of Urban Development & Services Initiative, Global Survey on Urban Services (Oct.-Dec. 2015)

Developed countries

Developing countries


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2.2 Enablers

2.2.1 Regulatory Reforms to Accelerate Adoptionof New Models

Begin with fundamentals

Regulatory reforms begin with getting the fundamentalsright to create an environment where innovation thrives. Thefundamentals include: – Efcient and competitive taxation regime

– Healthy labour market– Trade policies that encourage foreign investment– Simple and transparent regulations and processes– Robust judiciary– Measures to meet the needs of vulnerable sections of

society

While focusing on fundamentals, national governmentsmust ensure that cities are not discriminated againstthrough policies favouring suburbs and rural areas. Althoughdevelopment in the hinterland is required to sustain acity, policy distortions in the form of subsidies that favourthe hinterland should only be taken up to address a direneed. With cities competing at the global stage to attractresources, they must be well integrated in the global valuechain through trade, direct and indirect foreign investment,tourism and foreign talent.Example : Through its external openness and free trade,Singapore is symbolic for cities that demonstrate howfundamental policy changes can usher in global playersand improve the standard of living for the local population.Using Singapore’s reforms as an example, Dubai (United Arab Emirates) has enabled 100% foreign ownership, easeda restriction on foreign exchange, simplied licensing andallowed accelerated development.24

Develop smart regulations

Cities need to adopt “smart regulations” to address changesbrought on by new models. Smart regulations do notnecessarily imply deregulation, but rather the establishingof principles on which regulations must be created to makethem more responsive and attuned to stakeholders’ needs. – Involve stakeholders in formulating regulations :

While dening regulations, all stakeholders across urban

domains – those directly or indirectly inuenced orimpacted by policy – must be involved at the beginningof the policy development cycle. This will allow a movetowards a solution-oriented policy design process. Citiescan develop comprehensive policies devoid of isolatedperspectives that often plague urban policies.

– Monitor impact and close feedback loops : Policesneed to be amended based on feedback received fromstakeholders following both roll-out and measurementof the impact. Feedback mechanisms provide citygovernments with tools to avoid the danger of too manyor very few regulations.

– Use ICT during the entire policy-making cycle : Open data and social media have helped with real-timesharing of data, and provided a channel for citizensand civil-society members to protest and raise theirconcerns. Local government can use the collaborativepower of social media to implement other tenets of smartregulations. Through social media, the local governmentcan close the information gap (often a source of mistrustamong stakeholders) and develop regulations built on

trust and mutual understanding. – Aim for sustainable outcomes : With climate change,the environment and changing social demographicsidentied as top issues around the world, social andenvironmental sustainability must be embedded in policyframeworks when creating regulations that impact cities.Example : The European Commission’s “BetterRegulation” intends to design European Union (EU)policies and laws so that they achieve their objectivesat minimum cost. It ensures that policy is prepared,implemented and reviewed in an open and transparentmanner, informed by the best available evidence andbacked up by involving stakeholders. To ensure that

EU action is effective, the commission assesses theexpected and actual impacts of policies, legislation andother important measures at every stage of the policycycle – from planning to implementation, to review andsubsequent revision.25

Safeguarding citizens’ privacy and security becomesimportant with the growing use of technology and newbusiness models for providing urban services. Cities areincreasingly employing data to make decisions through theuse of services supplied by the private sector; while doingso, cities must be cognizant of the shared data and potentialto monetize it. The key to building scalable cities is to ensureregulatory safeguards while providing an environment thatencourages innovation.


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2.2.2 Agile, Transparent and City-ScaleGovernance

City-scale governments

The rst step in establishing relevant governance structures isto decentralize power to city governments. A generally posi-tive move, it often results in coordination problems amongcity, regional and national governments. In the course ofdecentralizing, it is important to segregate responsibilitiesamong various levels of government, keep the overlaps to aminimum and ensure that city governments are scally capa-ble, empowered and equipped to plan and ensure success.

Across cities globally, the urban realm has expanded overdecades, leading to differences in a city’s administrative,geographical and economic boundaries. The economicboundary of an urban agglomeration can entail multipleadministrative boundaries, within which local governmentscompete for the same resources by offering incentives,leading to sub-optimal allocation of resources. This issue isfurther aggravated when regional or national governmentscarve out niche administrative bodies to address specicurban domains. If various areas of an urban agglomerationare to be developed coherently, programmes relevant tothe economic boundaries need to be developed understewardship of the regional or national governmentto ensure cooperation among agencies. Financialarrangements for allocating funds to administrative bodieswithin an economic city, commensurate to the numberof citizens (or other relevant parameters), need to beestablished while giving due consideration to externalities.

Example : Denmark went through a process to create largermunicipalities (the number of municipalities being reducedfrom 275 to 98) to improve their ability to handle the increas-ing number of municipal tasks, such as environmental con-

trol, adult education and specialized social services; and, toresolve issues closer to their source, within the cities. Re-ducing the number of municipalities also led to economiesof scale, as common functions such as wage administrationor customer service had to be performed at fewer places.26

Agility in governance

In a dynamic urban landscape where new challenges areemerging – physical and cybersecurity threats, migration,extreme weather events and disruptive technology – citygovernments have to become agile and resilient whenfaced with uncertainty. The governments need to pre-emptsituations through a well-dened process of continuouslyscanning the environment and gathering weak signalsbefore they become pervasive, in order to ensure timelyintervention. Moreover, such responses should be effectiveon a short-term basis without compromising the long-termneeds of the city and its stakeholders.

City governments will need to be the right size and to adjustquickly by redeploying resources across isolated organiza-tional elements, making use of external relationships withthe private sector, academia and civil society. Agility can beenhanced through co-creation and engaging stakeholders inservice innovation. A human capital strategy is necessary tocreate an agile city government, and should include equip-ping resources to work across functions and promoting aexible mindset, along with strong and effective leadership.Example : Sweden has established the Secretariat forthe Future to address emerging concerns such as greentransition, global cooperation, income distribution,demographics and welfare management. The secretariatintends to develop strategies and measures in areas ofsubstantial importance for the future, and to cooperate withbusinesses, researchers and civil society.27


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Invest in people

The public sector in general faces a challenge in attractingtalent. To attract technical and managerial talent to plan andoperate them, cities require the following: – Compensation structures on par with those of the private

sector and academic institutions– Competitive incentives and reward mechanisms

– Opportunities for continuous training – Clearly dened career opportunities

As cities adopt principles of co-creation, civic employees willincreasingly engage with stakeholders (other governmentbodies, the private sector, NGOs, citizens and academicinstitutions) to identify solutions that address urban issues.While performing this task, they need to have the knowledgeand information required to do the task effectively. Moreimportantly in a collaborative set up, soft skills in aspectssuch as empathy, negotiation and communication arerequired to achieve desired outcomes. Employees alsoneed regular motivation to operate with the positive attituderequired in public service.

Capacity development is a continuous process requiringleadership commitment, and is not just limited to developinga few specialists within civic administration. Traditionaltraining establishments play an important role in developingcapacity; however, administrations need to adopt newmodes of training, such as massive open online coursesthat provide specialized training, to gain expertise at therequired scale. Cities have often relied on external expertiseto perform specialized tasks, and have depended on theseexperts due to a lack of involvement. While this dependencycannot be eliminated overnight, city administrators need togain the knowledge required to manage and monitor theexperts, and adopt the principle of “management throughknowledge” rather than being limited to “management byauthority”. With cities adopting new models of urban servicedelivery, management through knowledge becomes all themore important to prevent vendor lock-ins and exerciseeffective control mechanisms.

New technology calls for new expertise; in an interconnect-ed world, city government’s ability to deliver efcient, reliableand secure services is a critical factor in business con-dence. Embracing the cyberworld, through sensors basedon the IoT, means opening up systems and processes toexternal suppliers, and accepting that the old boundariesare being swept away. Top levels of management need todrive this realization, with a need for greater awareness ofthe challenge at the leadership level. As it scales up on thetechnology curve, a city can only achieve its objectives bypaying attention to cybersecurity. Cities of the future willrequire cybersecurity experts to address new issues.

Invest in processes

Cities need to look again at the way internal processes areorganized and the way work gets done collectively withinthe organization. Management practices, procedures andorganizational structure (hierarchy and job description) mayrequire changes or adjustments while adopting a new wayof working. If it outsources activities, a city must establishrobust processes for managing risk, compliance, serviceand benets. If a city embraces digital platforms, practiceswill need to be adopted around data sharing, data securityand data privacy.

Agility is crucial when responding to unforeseencircumstances. Responses to natural disasters in recentyears, such as the tsunami on the coast of Japan, includedmobilizing the personnel, expertise and equipment of multipleagencies (among them foreign entities). Such ad hoc andunpredictable events require adaptable platforms that canbe tailored to individual and sometimes concurrent crises. Agile city governments need to respond quickly, shift theirfocus from regular operations to humanitarian operations and

communicate effectively in cross-agency efforts.Transparency in governance

Transparency is required to build trust and legitimacyamong stakeholders. Transparent governments can bettermanage citizen expectations and demands by proactivelysharing data. Transparency enabled through open dataallows for accountability and improved decision-making,and empowers communities to voice their opinion and act.Further, it allows for city administrators to explain difculttrade-offs made during the planning or procurementprocesses. City administrations need to adopt effectiveopen-data strategies to move beyond the mere release ofdata and ensure timeliness, reliability and quality of publiclyreleased information.Example : The New York City Mayor’s Ofce of Operationscreated the NYCStat Stimulus Tracker, an online tool tohelp the city track federal stimulus funds. The tool enablesresidents to follow the progress of stimulus funding on aproject, contract and payment level, and ties public outcomesto the money spent. The tool provides detailed, almostimmediate information on stimulus projects in eight areas:infrastructure, energy efciency, economic and workforcedevelopment, health and social support, education, publicsafety, neighbourhood stabilization and budget relief.28

Example : The Open Knowledge Foundation is an NGO thatpromotes transparency in the United Kingdom through theportal, Where Does My Money Go?, which provides visualrepresentation of public spending across various sectorsand regions.29 The city of Helsinki has developed a similarplatform to publish nancial statement information, budgetsand even individual transactions as open data.30

City governments will need to exhibit three characteristics –city scale, agility and transparency – to encourage adoptionof new business models for delivering urban services. Failureto showcase even one of the characteristics will lead tosolutions that are either not suitable for the urban scale ortake time to be adopted, or are not trusted by stakeholders,leaving them with little chance of acceptance.

2.2.3 Developing Institutional Capacity to DriveTransformation

Even with weak institutions, some cities can prosper for awhile. While a city scales up, however, such institutions willinhibit its growth and may even contribute to its decline. Hav-ing strong institutions at the outset, while a city is transitioningfrom being a rural area, is advisable, and becomes necessarywhen a city scales up. Municipalities with strong institutionsempower their employees to plan and manage the cities,

and further equip them with tools to carry out responsibili-ties. A city administration needs to invest in both people andprocesses in order to create institutions that can adapt to thechanges in how urban services are delivered.


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New business models will mean adopting more exible and responsive management styles for developing and managingcities. Institutional development includes addressing issues such as amending regulations that control nancialmanagement, reviewing borrowing and the capacity of civic bodies, and enhancing local government’s ability to negotiatecontracts and form partnerships with private enterprises and community organizations. Dealing with such institutionalissues will require political will and visionary leadership at the city level.Example : The city of Hong Kong faced a challenge with a lengthy process for providing construction permits. In orderto accelerate the procedure, the city changed its processes to adopt a single window system, which caters to buildingpermits. Further, a software system covering six government departments and two private utility vendors was developed toease coordination among agencies.31

Singapore: Building Expertise in WaterManagement

Since Singapore’s independence in 1965, watermanagement has been a top priority for the nation state,which has concentrated on being self-sustaining. Singaporetook a holistic view towards managing its water sector tobecome self-sustaining and create economic value out ofwater management. The “Four National Taps” long-termwater supply strategy and the “Active, Beautiful, CleanWaters” (ABC Waters) programme integrate the waterbodies with the surrounding environment.

Singapore’s sound water management is enabled throughseveral factors: – The ambition of making the country self-sustaining and

simultaneously tapping the economic potential of thewater sector to improve the country’s global standing inthis domain

– Heavy investment in R&D to improve its technologicalcapabilities in the water domain; Singapore is widelyknown as the global hydro-hub for water technologies

– Seamless coordination between government agenciesand a unied vision for the water sector helped toimplement the water programmes

As a result of the global image, private sector organizationsoperating in the water domain have ourished in Singapore,and have taken their expertise to other parts of the worldsuch as China and the Middle East. More than 100international projects valued at more than $10 billion havebeen bagged by Singapore’s water technology industry.Global cities can learn from the concentrated efforts ofSingapore to turn their vulnerability into an economicstrength while meeting the government’s social objectives ofwater supply.

(This case was developed based on the report, iUrban,inspire, innovate, implement , published by Euricur, PwC,IHS)


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2.2.4 Visionary Leadership for the Cities ofTomorrow

Singapore’s success story shows the vital role thatleaders play in shaping the development trajectory; theyset a far-sighted aspirational goal for the city and drove asingle-minded and practical approach towards the vision. The governance structure and the extent of a leader’s ormayor’s empowerment denitely have an impact on a city’sleadership. However, important characteristics that civicleaders need to exhibit, such as pragmatism, business-friendliness and a can-do attitude, remain consistentirrespective of the governance structure. Leaders need to: – Develop a culture and mindset of agility among employees – Promote the measurement of performance – Create structures that reward impacts on the urban

environment (rather than rewarding outputs)

Wear multiple hats to balance internal and externalissues

City leaders have to balance both internal and external is-sues, as cities are increasingly engaged in the global prod-ucts and services value chain. The leaders need to exertinuence both internally (inuencing the leadership team andthe people in the civic body) and externally (the surround-ing environment, citizens and their expectations). This re-quires not only having a high level of awareness of local andglobal environments, but also evaluating new prospects andthreats against the city’s vision and plans. To accomplish thebalancing act of tackling internal and external issues, cityleaders must assume different roles within and outside theorganization, based on the situation. These roles include: – Decision-maker : City leaders should make data-driven

decisions and encourage civic ofcials to do the same(though all data may not always be available). Astechnology is already widely adopted, and with the driveto increase legitimacy and transparency, city leaderscan increasingly make data-driven decisions rather thanthose based on “gut feelings”.

– Public servant : Non-linear communication channelscan enable city leaders to connect directly with citizensto address their concerns and raise their views on keyissues about their urban environment. Technology nowenables leaders to reach out to their constituents directlyat a personal level and develop trust.

– Standard-bearer : City leaders must establish personalstandards of ethical leadership, effective managementpractices and moral behaviour as examples for otherofcials. Adherence to those standards leads to trust andopenness to full the vision.

– Boundary setter : By leveraging sharing and collaborativeplatforms, city leaders can communicate the clear ethicalboundaries that ofcials and stakeholders must followwhen dealing with civic ofcials, and take appropriateaction against violations.

Adopt new models for delivering urban services

City leaders must benchmark their cities against the verybest, particularly those in urban services delivery. Barcelona, Amsterdam and Singapore, for example, have set globalbenchmarks for using technology to understand ambientsituations and make data-driven decisions. Importantly,while cities embark on adopting new business models

for delivering urban services, city-level leaders musteffectively distribute their responsibilities and authorityamong individuals who exert different types of power (e.g.institutional, technical, nancial). A common purpose anddistributed leadership capacity will eventually allow a city’sleadership to bring in the required agility to promptly react tochanging circumstances.

The leaders need to weigh the risk of taking no action

against the risk of making decisions with potentiallyunknown implications. City leaders need to be strong anddecisive in pushing through the desired transformation,take calculated and well-informed risks and guard againstassuming the default position of risk aversion.

A good city leader not only energizes the organization, butalso creates meaning with context, moving people to actionto jointly achieve the shared vision. Such a leader needsto create a legacy and a framework in order to ensure thatfuture leaders can draw on the foundation while making keychoices.

As a leader, am I:

– Creating an organizational culture developed on diversityand not on standardization or “group think”?

– Managing from the standpoint of relationship and notposition, and developing management methods basedon dialogue?

– Developing the ability to give and take authority withthe purpose of creating high legitimacy, both outwardstowards the surrounding environment and inwardstowards the organization?

– Being clear about the vision, goals and direction of theorganization I am leading?

– Developing my employees and their competencies? – Creating a climate of openness and trust for dialogue,

even in difcult and complicated matters? – Being courageous enough to take responsibility for my

own and my employees’ successes and failures? – Working from the basis of a strong personal

commitment, and prepared to make decisions andreconsider them?

– Being aware of, and alert to, the surroundingenvironment and inclined to innovation?32


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2.2.5 Stakeholder Engagement

The growing urban demands and capacity spreadacross stakeholders (spanning city, regional and nationalboundaries) underline the growing relevance of partnershipin urban management. Cities need to become more porous,and reach out to the private sector, NGOs, academicinstitutions and citizens across different organizational levels.With cities adopting new models of service delivery, as inthe sharing economy and circular economy, which dependon double-sided networks of buyers (service consumers)and sellers (service providers), increased stakeholderengagement is even more important for reaching criticalmass. Developing long-lasting partnerships is difcult,but it offers better guarantees of sustainable outcomes.Such collaborative effort results in identifying impactsacross domains, and contributes towards mobilizingcomplementary resources such as knowledge, nance andmanpower.

Collaboration is essential for a city’s sustainabledevelopment. Good collaboration requires trust, mutualunderstanding and exibility/capacity to try out newapproaches.

What can stakeholders bring to the table?

– Academic institutions : The performance of citiesincreasingly relies on their backbone of educationand research, and educational and research institutesdepend on cities to attract top talent. Knowledgeinstitutes increasingly see urban environments asresearch subjects in their own right, and cities canbenet from their own problem-solving capacity. A citymust develop a local think tank or leverage a global thinktank to engage academics and enhance collaboration inthe urban development process.

– Citizens : For many cities, the norm among citizensincludes a greater awareness of their rights, betteraccess to information through technology and higherexpectations of service levels. Citizens are callingout for increased transparency and accountability asgovernments grapple to rebuild trust and legitimacy at alllevels. Involving citizens to the greatest extent possibleoften results in bringing novelty and identifying previouslyhidden problems and opportunities.

– Non-governmental organizations : Involving non-protorganizations and NGOs proved relevant in many of theprojects analysed, such as where these stakeholdersacted as brokers, with a degree of independence tocarry projects through to completion and to encouragethe right partnerships.

– The private sector : Private-sector participation canrange from entrepreneurs with disruptive businessmodels to large multinational corporations. The privatesector can support city administrations throughspecialized competencies, innovation and nancingcapabilities. Many private-sector organizations are willingto invest in urban environments to cement their corestrategies and make prots. A city benets from theoperational efciency and improved service delivery thatthese stakeholders provide.Example : In South Africa, Cape Town’s central businessdistrict (CBD) was struggling with high levels of crimeand gang violence, with many “high risk, no-go” areasnegatively impacting the city’s economic growth. Acollaboration between public- and private-sectorstakeholders helped to develop, promote and manageCape Town’s central city. The Central City ImprovementDistrict’s (CCID) vision is to provide an inclusive, vibrantand sustainable city centre. CCID has an effectiveoperational structure, a clearly dened business plan andstrong performance management measures in place,facilitating effective transparency and accountability toenable it to achieve its objective of improving safety inthe CBD.33

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Enhancing collaboration using ICTs

ICTs can be used to collect and disseminate information from stakeholders to diminish gaps in the traditional ways ofobtaining feedback. This real-time feedback can be used during the following phases: – Budgeting – to encourage participation – Planning – to get the necessary buy-in from stakeholders – Project preparation – to reduce the risk to communities – Operations – to engage citizens in the audit process

– Impact assessment – to evaluate the service deliveryExample : The cities of Boston and Atlanta (USA) use coUrbanize, a city development platform that aims to helpcommunities and developers build better cities together. The project sites help developers distribute information and gatheronline feedback from residents and community stakeholders. When project information is easily accessible, communitiescan avoid costly misunderstandings, and more people can participate in the process.34

Example : Melbourne (Australia) has developed a new website, Urban Forest Visual, which details the location, genus andlifespan of the city’s urban forest by precinct. The interactive tree map allows users to explore Melbourne’s tree data, learnmore about the life expectancy and diversity of trees in the city, and submit questions.35

Helsinki: Open Data for CollaborativeGovernance

Massive datasets are created in the course of governmentoperations; however, these datase

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Inspiring Future Cities & Urban Services