“Enterprise Cities” aim to emulate the success of places like Dubai.
With rates of urbanization increasing, the idea of “Enterprise Cities” is gaining ground as countries to rethink their approach to economic policy and the best strategies to promote broad-based job creation and growth.
Driven by industrialization and the search for better jobs, millions of people are moving from the countryside into cities. This is proving challenges for governments as it creates increased demand for public services and expensive infrastructure projects to meet the needs of citizens. Globalization is also increasing competition among countries to attract multinational companies and foreign direct investment.
Widespread reluctance to implement comprehensive reforms, as well as burdensome legal and regulatory regimes, are impediments to economic growth and entrepreneurship, leaving developing countries in a difficult situation.
Special zones with autonomous regulatory systems that bolster competition and foster the growth of competitive markets are one way to cut through the gridlock and bring prosperity to the burgeoning cities of the developing world.
Naledi Modisaatsone is a CIPE-Atlas Corps Think Tank LINKS Fellow at the Urban Institute.
Africa is in the news. The U.S.-Africa Leaders’ Summit is being held in August, the first of its kind. President Obama will be welcoming leaders from across the African continent to the nation’s capital in less than two months. The summit holds many promises; it could mark a turning point in U.S-Africa relations.
While there are many issues that can be discussed, not all of them should be on the agenda for this summit. To achieve the maximum benefits, it is very critical for African leaders to prioritize just what to put on agenda, and what to leave out. It is tempting to want to bring all the issues, but highly focused interactions are more successful. Topics for discussion should reflect the most critical issues regarding African economies and address challenges to sustainable growth and development.
One important issue is private sector development. Development finance and private sector entrepreneurship are powerful, but under-utilized, assets for development in Africa. While most countries have set goals for inclusive growth, they will not be achieved without better harnessing private sector resources that are ultimately the drivers of development.
Mathare slum in Nairobi, Kenya — one of the biggest in Africa. (Photo: IRIN)
Naledi Modisaatsone is a CIPE-Atlas Corps Think Tank LINKS Fellow at the Urban Institute
The concept of “smart cities” has become synonymous with developed countries. When people talk about smart cities they often mean high-tech urban innovators in North America, Western Europe or East Asia. Africa is not featured on the list.
This situation, however, has been changing following the recognition that smart city thinking is not necessarily about being high tech, but rather about cities that efficiently drive sustainable economic growth, competitiveness, prosperity and a better life for their citizens.
A report by Deloitte defines a smart city as “when investments in human and social capital, traditional (transport) and modern information and communications technology ICT infrastructure fuel sustainable economic development and a high quality of life, with a wise management of natural resources”. In that way Africa is right at the heart of the conversation.
The UN Habitat Global Activities Report 2013 states that in 2009, Africa’s total population for the first time exceeded one billion of which 395 million (or almost 40 per cent) lived in urban areas. Around 2027, Africa’s demographic growth will start to slow down and it will take 24 years to add the next 500 million, reaching the two billion mark around 2050, of which about 60 per cent will be living in cities. Africa should prepare for a total population increase of about 60 per cent between 2010 and 2050, with the urban population tripling to 1.23 billion during this period.
These demographic shifts will present policy makers in Africa with unprecedented challenges in handling of urbanization given that infrastructure networks and public services are already overwhelmed. African cities wishing to uplift their populations into the 21st century are going to have to start focusing today on what the city of tomorrow will look like.
How will Africa position its cities as drivers of sustainable growth using technology?
During the Cold War, countries throughout the developing world, especially in newly-independent South Asia and Sub-Saharan Africa, implemented socialist and statist economic models. However, as the public institutions in these fledgling nations were ill-equipped to administer state-centric economic structures, the adoption of such governance systems had, in the overwhelming majority of cases, devastating results.
In addition to setting back national economies by several decades, the rapid expansion of central government power and responsibility brought about the public sector pathologies still felt today, such as corruption, mismanagement and inadequate services. In recent decades, the vast majority of these countries have attempted to reform their economies to rely more on private sector enterprise and capital.
More recently, in an attempt to improve efficiency and service quality, many of these governments initiated decentralization programs wherein the burden of service delivery is shifted to sub-national levels of government. To be effective, decentralization requires increased capability and administrative capacity on the part of local governments. Within the international development community, therefore, there is a growing emphasis on public sector reform and capacity-building, especially at sub-sovereign levels of government.
At the start of the 20th century, 1 out of 8 people in the world lived in urban areas, and by the 1950s, it was nearly 1 in 3. Now, it is 1 in 2. In the coming decades, virtually all population growth will be in urban areas. In East Asia, the urban population is expected to increase by about 450 million people over the next two decades, meaning that a city the size of Paris will be added every month.
In South and Central Asia, the increase is expected to be nearly 350 million, and in Sub-Saharan Africa almost 250 million. Yet unlike the industrialized world where urbanization unfolded over many decades (thereby allowing public and private sector institutions to mature gradually), the process in developing nations is far faster and is unfolding against a backdrop of rapid population growth, lower incomes, and fewer opportunities for international migration.
While urbanization is a long-studied concept, it remains poorly understood. For increases in population density give rise to social, environmental and administrative challenges that are easily recognizable, such as public sanitation problems, inadequate supplies of formal housing, traffic congestion and crime. In other words, the “costs of grime, time and crime”.