Cities and business development
Urbanization’s complex challenges are resulting in a new breed of global specialists such as Greg Clark , the founder of the Business of Cities, a London-based urban advisory service. Clark is not an urban planner, a government official, an economist, a real estate developer or an academic. Instead, he is what might be called a business planner for cities; i.e., an independent urban practitioner with strategic thinking and hands-on experience in helping cities grow around the world. Clark was in Mumbai to speak at a half-day symposium on South Asian development, organized by JP Morgan and The Asia Society in December, where Mumbai: India’s Global City , a report co-authored by Clark, was released. He spoke to Mint on the sidelines of the conference.
Expertise in 100 cities
“My interest is really the intersection of place, capital and leadership, and how those things come together. And the way I work is that rather than having one job, I spend a lot of time occupying thought leadership roles, almost in part-time basis, in places like the Organisation for Economic Co-operation and Development (OECD), the World Bank, the Brookings Institution, the Urban Land Institute, and I find that a more fulfilling way to work.”
Raised in London, Clark went on to live in Mexico City and New York for a year each after graduating from high school. “It fuelled my love for very big cities. I am really a man who likes 10 million-plus cities,” says Clark. After completing his first degree in social and political sciences in Cambridge, he worked “at places like the London Docklands Development Corp., and the Greater London Enterprise Group and I got very much involved as practitioner in the business of making and building London, remaking and rebuilding London”.
Working with local city institutions was an interesting choice for a Cambridge-educated graduate with little urban experience. “They had a lot of good technical staff, planners, engineers, financiers, accountants. What they didn’t really have is people, who could develop strategy, develop collaborative relationships with other bodies, and could think about other sources of opportunity and resource for London Dockland. So, I was put in charge of the international programme for London Docklands, which is very interesting. I did that for four years,” Clark explains.
After a Harkness Fellowship to New York in city planning, Clark says he spent a lot of time “just getting to know North America” and came back to work in London with local development authorities, where he eventually became the director of strategy for London. “So, I was in charge of the economic strategy, the land-use strategy and everything else for Greater London.” In 2004, he decided to move towards what he calls a portfolio life, “because I was getting lots of opportunities to do things from the OECD and the World Bank, and I just thought that actually there is another career here, which is, rather than have one job, have 10 jobs”, he summarizes.
Through these organizations, Clark estimates that “I am probably one of the few people to have worked in 100 cities. I tend to work with leadership in cities and that might be public sector leadership, or it might be business leadership. And so, recently, I was chairman of the strategic plan for Sao Paulo and I am now chairman of the international committee on the strategic plan for New York, and I am doing something similar in Oslo, Vienna and Turin. I have led 29 different OECD reviews of different cities. So, I am like the peer reviewer for cities, the person who knows lots of places.”
The business-cities relationship
Clark says there are six visible trends underlining the relationship between business and cities. First, “cities are becoming emerging markets for business, that’s partly to do with urbanization, particularly population growth in cities, but the growth of the consumption class in cities means that for many businesses, cities are the emerging markets, not nations”.
The second big trend, according to Clark, “is the re-urbanization of business. That the old models about business separating itself from the city, trying to find a separate hygienic location is over. Business is moving back into cities”. This would appear to be more relevant to developed nations, rather than developing nations.
Third, “the global rise in the traded urban services. Urbanization is itself now an industry. So, if you are now in architecture, engineering, energy, waste, construction, infrastructure or logistics, you are part of an urban services cluster that is now highly traded. And some cities, such as London and Singapore are becoming experts in city-making and city-building”, he observes, adding that related to this is the phenomenon that “some global firms are deciding that the core business that they are in is city-building and city-making, for example, Siemens, Arup, GE and Philips. These are the big companies that make cites, and I think they are also increasingly realizing that knowledge gained in one place is tradable in another”.
Fourth, he notices that “cities are playing a renewed role in driving business innovation, particularly any kind of innovation that requires agglomeration advantages and interactions between people, the use of digital platforms or anything that requires a company to test products in one place to use in many places. Then obviously, the multi lingual cosmopolitan cities are the places where that happens. So, there is a big growing role of cities as part of the innovation platform for business.”
The fifth big trend “seems to be the internal restructuring of companies around these opportunities. So, I do a lot of work with businesses on how to reorganize for cities”, Clark says, describing a very interesting notion.
“So, the sixth one is about the businesses adopting the city brands. And there are lots of examples of that, whether it’s liveable cities or global cities or sustainable cities.”
Building leadership for cities
Although these trends seem positive, and suggest an expanding intersection between cities and business, Clark notes there are fundamental challenges, starting with the fact that “most cities are growing, or have already grown, beyond their geographical borders and most cities have challenges and problems that are greater than the competencies of the institutions that they have.”
“Increasingly, the role of leadership in cities is to overcome weaknesses and failures in the institutional framework and to do that in ingenious and inventive ways. So that’s all about building coalitions. That’s all about strategic planning. That’s all about collaborative exercise. That’s all about moving away from silos, that’s all about finding catalysts that will make people work together. That’s all about focusing on the citizen and not on the institution. That’s all about making the place, the thing that’s important, not the institutions that think they are in charge of it. So, there is a whole kind of leadership mindset in cities that’s about trying to move beyond, in a way from the rigidities of the institutional framework which changes only slowly always and instead to find a common endeavour to which multiple parties can be recruited.
“Now in some cases, that leadership comes from a person who has got the job as a leader like the mayor or there is something else, but in many cases, the situation is so dysfunctional, that the mayor, him or herself of the core city of the metropolitan area can’t take a lead. And in that environment, it is other players who often have to. One of the groups that I spend a lot of time with are the increasing number of business leadership organizations that are sort of concerned corporate citizens, some of them may also be rent-seekers. But not all of them are,” Clark explains, adding that other sources of city leadership could include universities, or community organizations.
“My core proposition to you would be that managing in the new cycle of urbanization is all about integrated leadership, integrated strategy...all institutional frameworks are fragmented and very few of them fit the purpose. The key role of leadership is to overcome that institutional fragmentation. And that means you have to be clever to be inventive and innovative. Leadership can come from politicians and often does but not always, and other kinds of leaders are capable of providing it. And so when I go into a city to work with them, I am asking myself all of those questions. What’s part of my diagnostic framework? What does work here, what doesn’t work here,” he emphasizes.
A fundamental institutional deficit is a universal problem, Clark goes on to state. “I think it’s less than 1 per cent of all of the cities in the world that have got the right government framework. I think 60% or 70% of them have to make it work by putting things together in ways that they are not designed to. City government was designed to deal with 19th century problems and is trying to do with 21st century problems.
“I visit 100 cities every year that are making a bad institutional framework work by having good leadership that overcomes silos and creates coalition and all of those things we described. And 30% of the places I go to, that coalition is not yet in charge. And what is still in charge is the fragmented, self-interested, institutional framework. And in that environment, progress only happens either slowly or accidentally or through one of the catalysts.”
Clark clearly sees himself as the catalyst in many situations. “I often am invited to cities when they got this problem, as a typical phone call. ‘We have got a problem, can you come and talk to our leaders. We want to work together’. That’s typical invitation for me. When I go to see them, I talk to them about being kind of coordination-on and coordination-off. And I talk about the cost of being coordination off.”
“The cost of being coordination-off is that everybody is a big fish in the small pond and that pond’s getting dry. You are running out of resources because you are not collaborative or the competition is doing better than you and, therefore, you tend to be losing your talented population. You tend to find fewer businesses are coming; you tend to find investors are less interested because they can’t scale up.
“So you have to expose to the leadership of the fragmented place, the costs of fragmentation. And you can do that with evidence, you can do that with persuasion, you can do it with comparison, but you have to expose them to a sense of risk.
“And the sense that somehow they are responsible for not just their own institution, which might be a city government or might be a transport authority or might be a planning commission. But actually, that they share some responsibility for the total outcome. You have to get them to there. If you get them to there, they may not be able to do governance reforms very quickly, may be legally too difficult. In many countries in Latin America, and in Africa, it’s legally very, very difficult to do governance reforms. So, what you have to do is collaborative projects,” he describes.
“There are many ways that you can motivate the leaders to change behaviour and then incentivize them to do that and then crystallize new arrangements by providing opportunities for them to work differently. That can happen,” he details.
Clark’s insight has direct relevance for Mumbai. “Mumbai has got a huge range of assets, it has got an amazing dynamism and energy about it. And it’s got a whole range of things going for it, but things are not organized for Mumbai to succeed. You need to do long-term infrastructure here. Trying to accommodate too many things in a small space, this city needs to be a much bigger city, much more enabled by infrastructure that works and not just transport.”
He is equally forthright about the prospect of smart cities as a perceived panacea of India’s urban woes. “I think being smart is certainly not a bad thing. Using digital platforms and ICTs (information and communications technology) and other kinds of technologies to provide better services to citizens, or to make systems in the city work better. To provide real-time data so that you can observe and manage things better. To enhance transparency and all of that is a good thing. But I would say that what is often conceived as smart cities agenda is not on its own the solution to India’s challenges. And I would have thought that there are other complimentary mechanisms you’d also need.”
“One is obviously the need to recognize metropolitan areas and the need for them to have coordinated leadership. Another one is to keep going with what I think is a very promising initiative that India has, which is the industrial corridor that links cities together. That’s a very promising thing. Another one would of course be moving towards longer-term financing mechanisms for municipalities. Another one would be to have a national framework that recognizes that India’s global success is going to be not just about technology, but it’s also going to be about having great cities.” An apt conclusion for a promising set of beliefs about the power of urban transformation.
This is the fifth in the six-part series.