U.N. Secretary-General Ban Ki-moon (second from left) attends the opening of the U.N. Conference on Housing and Sustainable Urban Development. Also on the podium: Joan Clos (left), secretary-general of HABITAT III and executive director of the United Nations Human Settlements Programme; Rafael Correa (center), president of the Ecuador; and Peter Thomson (right), president of the seventy-first session of the General Assembly. Photo by: Eskinder Debebe / U.N.

Fresh after Habitat III and its host of guidelines for sustainable urban development, business leaders running private companies working in the sector have mixed reactions to the adoption of the landmark U.N. agreement.

More than 170 countries officially accepted a set of global guidelines for sustainable urban development known as the New Urban Agenda at the conclusion of the Habitat III summit held in Quito, Ecuador, last month.

But reaction to the NUA from private sector companies working on urban development has been varied and, while some see it as a positive step towards more sustainable cities, many had little concrete knowledge about Habitat III and its rea- world implications.

Devex spoke to a variety of businesses and industry professionals at a conference held in Chicago last week on the topic of how U.S. companies can tap into the “smart cities” emerging market. The event was hosted by the U.S. Commercial Service, which promotes export opportunities for small and medium-sized companies.

A smart city is a model of urban design which integrates approaches in information and communication technology and internet of things to build and run a city more sustainably and efficiently. For example, sensors installed in parking spaces to monitor parking availability and alert drivers to free spaces, smart highways which use sensors and video to monitor traffic and weather and send warning signals and diversions to drivers, sensors in buildings and bridges to monitor vibrations and report back on the structure’s health or warn of natural disasters.

This new method of urban design thinking can be used to retrofit existing cities and in the design of new ones, the majority of which are cropping up in developing countries as a way for countries to jolt their economies and attract greater foreign investment.

The NUA was designed to provide a common understanding and commitment from countries about how to ensure existing and emerging cities are sustainable, equitable and resilient. This is seen as vital in the face of rapidly urbanizing populations across the world — 70 percent of the world’s population is expected to be living in cities by 2030.

U.S. businesses are keen to get a slice of the smart city pie, but most of the businesses Devex spoke to on the sides of the event knew little or nothing about Habitat III, despite it aiming to be at the center of future urbanization policy around the world.

“There are so many U.N. events it’s hard to keep track, I didn’t know about Habitat III,” admitted one technology officer from a major multinational company, who did not wanted to be quoted by name out of commercial sensitivities.

Those who had followed the U.N. gathering tended to be from larger organizations playing more of an oversight role. Philip Bane, managing director of the Smart Cities Council, an advisory and advocacy group to inform the sector, offered an explanation for the private sector’s ignorance about the summit.

“I think the U.N. Habitat work is really well-intentioned but it’s divorced from commercial reality, there’s a huge cultural divide between the public sector and the commercial sector,” he said.

Bane also said the location of the conference, may have played a factor with private sector players, and compared it with last year’s well-attended climate change summit in Paris, COP21.  “You don’t get the audience in Quito that you would in Paris,” he said.

Ellis Juan, representing the Inter-American Development Bank, said he had attended Habitat III and for him the major issue is governance and how smart cities are managed and how to make sure residents are at the center, “We cannot have smart cities without smart citizens,” he said.

Scott Sklar, president of the Stella Group, a clean energy technology strategic marketing and policy firm, said he’d followed the U.N. summit “closely” and saw huge potential for business to do “innovative work” in small and medium-sized cities where there is room for “high risk-taking since there are higher potential rewards.”

For those who Habitat III passed by, most preferred not to be quoted due to business concerns. One delegate from a multinational company specializing in infrastructure and technology projects, admitted that from a business owner’s perspective, pure return on investment was still the deciding factor when it came to urban design — not development aims.

“There are lots of things we’d like to do that benefit poorer people but we just can’t get the support from our shareholders to do it. Until there’s a business case it won’t happen,” he said.

Another attendee specializing in trade with the Philippines, said infrastructure projects in the country were done through public-private partnerships with little regard to social or environmental concerns such as those outlined at Habitat III.

“In Manila, procurement is all about documents and about protecting the government from contractors who can’t complete their contracts, it’s not about the community or about social impacts,” she said.

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About the author

  • Sophie Edwards

    Sophie Edwards is a Reporter for Devex based in London covering global development news including global education, water and sanitation, innovative financing, the environment along with other topics. She has previously worked for NGOs, the World Bank and spent a number of years as a journalist for a regional newspaper in the U.K. She has an MA from the Institute of Development Studies and a BA from Cambridge University.