3 minute read 26 Apr 2018

How public and private sector collaboration can help overcome the challenges of urbanization

By

George Atalla

EY Global Government & Public Sector Leader

Working with governments to address complex issues and build a better working world.

3 minute read 26 Apr 2018

Working together, governments, businesses, and entrepreneurs can help cities meet the needs of their growing populations.

One of the great demographic stories of recent years has been the urbanization of the world.

In the developing world, we’ve seen a largely rural population move to the urban areas in search of opportunities and jobs. The effect of this has been extraordinary. In 1950, the world’s three biggest cities were New York, London and Tokyo. In 2000, they were Mexico City, Sao Paulo and Tokyo. In 2050, they are predicted to be Mumbai, Delhi and Dhaka in Bangladesh.

Urban renewal

In the developed world, it has been more a case of a return to the city, or urban renaissance.  After World War II, as the suburbs boomed, the urban cores of many western cities became depopulated – and often, very run down and neglected. In the early 90s, this trend reversed. Nowhere has this been more visible than in places like London and New York. Famously, London’s 1939 population peak of 8.6 million wasn’t reached again until 2015.

In both the developed and developing world, the draws that cities exert are broadly similar. Cities offer jobs and many industries tend to cluster in them. A case in point is the technology sector’s presence in both San Francisco and Bangalore. But urban living may also be viewed as more exciting and interesting than living in the suburbs or countryside. There are not only more economic opportunities in cities, there are more social and cultural ones, too.

Urban challenges

The pressures this influx places on cities are similar the world over (if often different in degree). They include spiralling property prices and increased pollution. Stress is placed on transport networks and infrastructure.

One approach to helping cities manage these challenges is to use technology to make our cities smarter. By this we mean bringing governments, businesses and entrepreneurs together. We mean fostering decent living conditions, affordable housing and good jobs. We mean building human cities, providing public transportation, and encouraging green spaces, walking, and cycling. And we mean building resilient cities that can cope with challenges ranging from climate change to political disruption.

Entrepreneurs and businesses are a crucial part of this. They create jobs that are key to our urban centers. Moreover, the technological disruptions they help to bring to market change the way we live and work. According to EY’s EY Growth Barometer: How is the middle market forging new strategies for growth out of seismic change?, more than 52% of entrepreneurs believe that technology is changing the world more than globalization, demographic shifts and workplace change. However 90% of them also see uncertainty as providing growth opportunities – and start-ups based in the UK are particularly positive on this.

Cable car in Rio de Janeiro, Brazil

Government as an enabler…

Our report, Beyond Digital Disruption: policy action to grow digital entrepreneurship, suggests that governments can do a lot to help entrepreneurs and growing businesses. And, in doing so, can help cities’ economies provide the jobs and the amenities that their populations need. Wherever possible, governments should:

  • Invest in the ecosystems and networks which provide skilled workers.
  • Help build financing infrastructure which supports small firms and they can open up access to cross-border capital.
  • Build the large-scale physical capital such as transport links, which helps cities to function.

…for businesses to help solve the problems

However, we see this very much as partnership. Entrepreneurs and businesses don’t just create wealth and jobs – they also play a huge part in solving the problems that many of our cities face.

Much urban pollution is created by vehicles and fossil fuels. The success of clean energy is down to both government initiatives and highly innovative businesses. Fossil fuels will be with us for a while but innovation, not legislation, will likely lead the way to where we go next.

Similarly, we can expect huge changes in transportation. Ride-sharing companies have already rewritten the rules of urban transportation once. It is very likely that, in the coming years, self-driving cars will do it again. This is likely to be far more fundamental and will result in less congestion and pollution and even strangely empty roads – as the average car spends 95% of its time parked.

With the Internet of Things (IoT) upon us, we are also going to see a second great wave of smartness as the objects that surround us become intelligent and networked. This is likely to change urban life at least as much as the original internet did. For smart cities and those who live and work in them it’s been an amazing 20 years - and the next 20 years is likely to be even more amazing.

EY World Entrepreneur of the Year 2017™ Forum convened the world's leading entrepreneurs and businesses to discuss how uncertainty can be seized to find the best opportunities for growth. Join the conversation by following #WEOY, #BetterQuestions, #GrowthBarometer and visiting betterworkingworld.ey.com.

Summary

In an ever more urban world, governments, businesses and entrepreneurs need to work together to address emerging challenges.

About this article

By

George Atalla

EY Global Government & Public Sector Leader

Working with governments to address complex issues and build a better working world.