This much the development community knows to be true: the world is urbanizing and globalizing at a breakneck pace. By 2050, 2 billion new people will live in cities, largely driven by growth in small and medium-sized cities in Africa and Asia. As a result of this shift, built up areas will triple and requirements for housing and infrastructure — schools, transport, utilities and basic services — will continue to increase.
Faced with this level of need, city governments around the world should act now to seek to optimize increasingly limited resources and better plan for more economically vibrant, inclusive, liveable, and resilient cities. Building thriving cities requires long-term evidence-based planning, implemented through near-term action plans that are monitored, tracked, and grounded in data. Core to the effectiveness of these efforts are strong governance systems and city leaders who have access to the approaches and tools needed to make better policy decisions, enabled through new collaboration models.
Given this changing urban landscape, what is an effective role for the development community in supporting cities to address urbanization and globalization? Specifically, how do we help confirm that collaboration, governance, and capacity are enabled through innovative insights and that technology and tools are increasingly available to city government partners? And how can we help cities track and sustain their increased performance?
Even with the best intentions in mind, when policymakers lack the proper analytical tools to inform their decisions and evaluate options, the resulting development policy can be costly or even harmful, three experts from Deloitte Consulting LLP write in this exclusive commentary.
New collaboration models and citizen-inclusive governance approaches using new technologies and tools are being driven by private sector actors like the Rockefeller Foundation, Bloomberg Philanthropies and Vulcan Philanthropies. The development community has a role to play in transferring these innovative approaches into longer-term, sustainable initiatives through existing collaborations with national and municipal government entities. More resources, time, and a consolidation of efforts could allow for better knowledge sharing across cities globally, better systems for governance, and better development outcomes.
The development community, along with private sector partners, should consider focusing on four priorities as guideposts in developing cohesive and proactive agendas to improve urban development and governance capabilities:
1. Design technical assistance programs that embrace new tools.
Donors should introduce new technologies to cities as a part of technical assistance programs to drive specific outcomes. Data analytics can help cities prioritize and monitor their impact on performance. For example, simple radio frequency identification systems on a waste collection fleet can be used for identification of at-risk areas, asset route optimization, and baselining for longer-term strategic planning around community circumstances.
Development actors should consider the following when designing these new technologies: governance frameworks for management and information sharing, coordination among donors to leverage leading practices, and localization so that tools are targeted to the correct spectrum of needs.
2. Encourage cities to focus on accountability, transparency and citizen participation.
The rapid spread of mobile technology and social media in developing countries have opened up new sources of user data and created fresh opportunities for evidence-based decision making and human-centered design. CitiStat in Baltimore, for instance, is a pioneer model of data tracking for performance enhancement. The program reduced absenteeism, saving $13.2 million for the city government in its first year, and tracked performance indicators of public services to develop maps of underperforming areas to help the municipal government prioritize. Building on the CitiStat model, Deloitte recently piloted a similar approach in Amman, Jordan, called “CityPerform” — a data-driven performance management system in solid waste management.
Crowdsourcing also allows for a bottom-up approach to human-centered design. In a fascinating example of “digital democracy” now underway, Mexico City is engaging directly with its citizens to provide input on a new draft Constitution through a petition process, and is also allowing citizens to make direct annotations on proposed language online. The prevalence of mobile phones in developing countries provides an opportunity to adopt this technology to improve city services with real-time user feedback, collecting data for policies and services with a better chance of creating the intended impact.
3. Use outcome-based aid to inspire new ways of achieving development results.
Beyond new technology, the development community can utilize existing innovative finance tools such as social impact bonds and incentive prize design. These can help spur programs with a focus on measurable outcomes through donor-funded competitions across cities. Social impact bonds — public-private collaborations where private investors fund programs that requires the government service provider to agree to specific performance indicators — shifts focus toward service performance and delivery while allowing service providers more freedom to execute their programs. If goals are reached, the government will pay back the bond with added returns; otherwise, the investment is marked off as a donation or grant.
Incentive prize design is another innovative finance mechanism that can be utilized by the development community to reward results instead of approaches. With a desired outcome in mind, prizes connect complex problems with problem-solvers who are outside of government’s traditional procurement and research grant systems. Bloomberg Philanthropies’ Mayors Challenge is one example that embodies these principles to encourage the generation of bold ideas to solve urban challenges. Domestically, Vulcan Philanthropy is partnering with the Department of Transportation to host a SMART City Challenge where more than 70 midsized cities in the U.S. will compete for a $50 million prize towards implementing a low-carbon transportation strategy for the winning city. Well-designed prizes also raise awareness and inspire change through effective communication.
4. Invest in and curate a global knowledge platform.
Lessons learned through technology-driven interventions need to be available to other city leaders and change-makers globally. Growing a global knowledge platform (virtual or physical) can break down information silos and democratize the processes and results. The development community’s existing global resources, government collaborations, and reach represent untapped potential to expand access to new insights and lessons learned, as well as increase exposure to specific actors.
Rockefeller Foundation’s 100 Resilient Cities initiative represents an example of a network that includes cities along a spectrum of capacity and size, such as Paris, Quito and Kigali, so that each can teach and learn from one another in the process of building urban resilience. Deloitte is supporting these efforts to develop resilience strategies that can build upon the type of knowledge sharing and lessons learned already taking place within the 100RC network.
Players in the global development ecosystem are increasingly recognizing the need for a different approach to actually achieve desired results. But how can we work together to shift the paradigm of capacity development to sustainable performance improvement? Three experts from Deloitte Consulting LLP give us their insights.
Urban challenges create a particular demand for better governance, accountability, and transparency because they reside at the intersection of economic, social, health and infrastructure sectors. City governments can position themselves at the center of a diverse set of stakeholders in order to lead resilience-building and innovation efforts, and in the process create more liveable, resilient communities, as well as stakeholder buy-in and more inclusive growth. In order to focus on outcomes, city governments should consider adopting innovative collaboration frameworks to enable evidence-based decision-making and leverage technological advances to drive toward improved performance.
There are two pathways to enhance the effectiveness of these frameworks:
First, strategic innovation collaboration frameworks should focus on pro-active collaboration — involving city government, donors, private sector, foundation/association, public sector and citizen actors. By including stakeholders from many perspectives, cities are able to identify critical urban challenges, develop time-bound action plans, define roles and responsibilities, and set clear performance requirements for cities to receive technical and financial backing.
Furthermore, by involving outside problem solvers in outcome-based aid and prize competitions, cities can benefit from innovative approaches and new perspectives while focusing on rewarding results, not approaches.
Second, effective innovation collaboration frameworks and interventions should be available as blueprints to inform future donor programming in other cities. Including these “success” stories within the global knowledge platform supports evidence-based policy delivery based on real-world test cases. Because of frameworks and interventions being shared more broadly, we expect to see increased city-to-city and peer-to-peer collaboration that is empowered through donor and other investment. Additionally, this global knowledge platform could provide an online marketplace for city collaboration, in which new performance-based models for addressing urban challenges could be showcased, disseminated, reimagined and implemented in other communities.
By emphasizing the role of city governments as critical points for connecting stakeholders within a community, and by encouraging knowledge sharing within a network of global cities, we have an opportunity to help improve stakeholder impact and accelerate the development of these cities. We are already seeing the value that disruptive technology and innovative models of attracting private finance can have on urban programs:C40 Cities Finance Facility, for example, provides funding and technical assistance to cities in the “global south” for preparing “green infrastructure” projects and helps connect them to private sector investors.
Other examples include theGlobal Infrastructure Hub, which enables city stakeholders to leverage its vast knowledge network consisting of information on currently financed infrastructure programs, databases of leading practices, and networks of consultants. By empowering city governments through strategic innovation collaboration frameworks, and sharing approaches on peer-to-peer platforms, we can create more economically vibrant, inclusive, liveable, and resilient cities.
Deloitte is embracing the shift toward outcomes and performance by bringing our strategy experience, project management frameworks, and experience working on infrastructure and capital projects to bear with innovative technology to urban challenges. With experience in more than 175 city-related projects in 58 countries around the world, Deloitte understands that public and private sector stakeholders should work together to provide cities with strategic services that help create urban spaces that are mobile, connected, prosperous, healthy, and inclusive.
How can we create better cities and move toward improved sustainable performance? Join the conversation by sharing your thoughts on these four mandates in the comments section below.
EDITOR’S NOTE: As used in this guest column, "Deloitte" means Deloitte Consulting LLP and Deloitte & Touche LLP, which are separate subsidiaries of Deloitte LLP. Please seewww.deloitte.com/us/about for a detailed description of the legal structure of Deloitte LLP and its subsidiaries. Certain services may not be available to attest clients under the rules and regulations of public accounting.
Steve Hamilton is a senior manager at Deloitte Advisory LLP in the Emerging Markets Practice based in Washington, D.C. Steve has more than 10 years of experience providing market, economic, strategic planning, and transactions support for large-scale infrastructure projects worldwide, including cities, special economic zones, ports and airports. He has worked in 17 countries in Africa, Asia, the Middle East, Latin America, as well as the United States and Mexico, for multilateral development banks, public and commercial clients. For Deloitte, Steve is focused on urban development and SMART cities, including developing and deploying new evidence-based approaches that support informed decision making by city leaders, citizens, and stakeholders. He is currently leading a SMART Border connected cities project on the U.S.-Mexico border and a project in Morocco that seeks to implement a new industrial land development and governance strategy for the country.
Jenny Dai is a business analyst at Deloitte Consulting LLP based in Washington, D.C. She supports a variety of government and nonprofit clients through strategic planning, performance management and process improvement. She has pursued her passions for urban development and social finance through field studies abroad and work with domestic nonprofits.
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