The power of three: the city’s key to ensuring a prosperous future
Cities around the world are growing fast. Between 2016 and 2050, the global urban population is set to increase by about 2.5 billion people. By the time this century reaches its halfway point, two-thirds of the world’s 9 billion people will live in urban areas.
As centers for people and economic activity, cities are substantial drivers of economic performance. The OECD estimates that metropolitan areas with more than 500,000 residents currently drive 55% of GDP and more than 60% of economic growth in OECD countries. And with additional growth expected, greater financial rewards are sure to follow.
We’re already seeing the emergence of smart technologies answering many of the challenges presented by the influx of these new urban citizens. The technology market for global smart cities is estimated to reach US$1.3 trillion by 2020. This opportunity is unheralded.
But let’s be clear, cities are at a tipping point. There are significant demographic challenges quickly rising to the surface associated with this population boom. Already, increasing populations are limiting scarce natural resources, creating demographic shifts and putting a squeeze on infrastructure and social welfare programs. The simple answer for this: greater opportunity brings greater risk.
The priority therefore is to achieve sustainable, inclusive growth. To create sufficient horsepower, this effort must be a collaborative effort of the public and private sectors so that policies, solutions and technologies are established to ensure cities survive, adapt and grow.
In other words, a city’s fate will be determined by how well businesses, governments and entrepreneurs all work together to transform and equip the urban ecosystem of the future. At EY, we call this working group the “Power of Three.”
These players all act as vital agents of change by developing new products and services, implementing more efficient production methods, and creating new business models and industries. They generate jobs, support local communities and build prosperous societies.
To achieve a lasting impact, governments, businesses and entrepreneurs must put the citizen at the center. Cities, after all, are for their citizens and cannot grow and thrive without them. Citizens should feel connected to their city — through infrastructure and digital delivery, physical and social interaction, and emotional engagement.
We cannot expect technology to solve everything alone.
This is where the Power of Three comes in. Government, business and entrepreneurs can work together to redefine connection — to each other and to the city’s infrastructure and institutions, for example — to drive smart strategies for resilient growth.
In these collaborations, governments, businesses and entrepreneurs each have several burning considerations like:
Governments
For governments, it will be imperative to develop organizational structures to support the use of big data and smart decision-making tools to assist with technology integration and policy execution. This will include governance and systems for cross-functional collaboration in municipalities. It will also include investing in the right talent and tools to adopt emerging capabilities.
Businesses
For businesses to invest at scale they must explore the right mix of collaboration like initiating public-private-partnerships or developing municipality partnerships that balance risk-sharing structures and incentive schemes with mutual payoff.
Entrepreneurs
For entrepreneurs they must reimagine how things are done in urban environments, with new data providing a springboard for start-ups to launch and scale new businesses.
For example, the next evolution of the sharing economy in cities is ripe for entrepreneurs to seize and shape into viable smart and resilient products and services. The surge in urban living and environmental pressures, as well as the changing citizen demands that accompany these trends, are also critical problems that entrepreneurs can address through solutions that rethink how cities meet residents’ demands.
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Smart and resilient approaches to urban development demand the Power of Three. The shared mission is to create a city of well-connected, prospering citizens to support the city’s long-term growth and sustainability. With residents’ experience and well-being as a starting point, government, business and entrepreneurs can work together to redefine citizens’ connection with their cities.
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For further discussion – I will be hosting a panel discussion at this year’s EY World Entrepreneur of the Year Awards on Friday 10 June 2016 at 07:30 CET which will focus on how we can harness the power of entrepreneurs, corporations and governments to create smarter, more resilient cities. Please join the discussion on Twitter @EY_EOY, @EY_Growth and @EY_GovtPublic.
The views reflected in this article are the views of the author and do not necessarily reflect the views of the global EY organization or its member firms.
About George Atalla
Partner & Global Leader, Government & Public Sector at EY
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Hello, my concern is the leadership of my small city. There does not seem to be sufficient effort to draw new business. The leaders are not elected officials, other than the inexperienced Council Members, and I have not seen growth in the 9 years of me living there. I read in the local newsletter that we have been granted additional Federal support and approved for larger signage for businesses, but things seem to be the same, no growth. Do you have any advice for a concerned residence on this matter?