FCC CITIZEN SERVICES
THE ECONOMIST INTELLIGENCE UNIT
Around the world, urban infrastructure is aging and populations are surging, forcing today’s city leaders to make tough decisions about infrastructure that will impact generations to come. These choices will define the legacy they leave and whether they are able to position their cities to thrive in the future. But they also have to make these choices within the confines of limited city budgets that must simultaneously address the need for new or upgraded transport, water, energy, IT and waste systems. Such financial strains often lead to frustrating compromises, and city leaders must be ready to defend their choices to public and private stakeholders, to ensure they have buy-in for these investments. In many cases, “selling” these projects to cash-strapped taxpayers is a major obstacle, as city leaders try to convince citizens to support an expensive urban project that may disrupt their environment and take years to complete.
To overcome these financial and social obstacles, many city leaders are seeking private-sector collaborators to take advantage of innovative financing and project-delivery solutions. They are also creating platforms that allow citizens to share their feedback, learn about how resources are being allocated and weigh in on which projects should be funded. Such relationship management may require extra time in the early phases of these projects, but they can streamline delivery in the long run and help city leaders maintain on-going support.
These obstacles to infrastructure development can seem insurmountable, but they must be addressed if cities want to be well positioned for the future. As Michael Häupl, mayor of Vienna, asserts, “Infrastructure development is an opportunity for growth and competitiveness, but also for creating and preserving jobs, especially in challenging economic times.” Keeping these systems and services operational, and readying them for the next generation, is a constant challenge.
In developed-nation cities, roads, waterways, sewers systems and energy grids are often decades old and many have long since passed their expected life cycles. These aging systems were built with out-of-date technology, and are experiencing an increasing need for maintenance and upgrades to keep them operational.
“Well developed cities face the challenge of retrofitting infrastructure that no longer fits the purpose,” says Mark Watts, executive director of C40 Cities Climate Leadership in London, a network of leaders from the world’s megacities taking action to reduce greenhouse-gas emissions. Many of these cities have been in reaction mode, repairing water mains, power grids and roads as problems occur. But to position themselves for the future, city leaders need to think more strategically, Mr Watts says. “They need a new blueprint. They can’t just follow what other cities have done in the past.”
What is required is the implementation of new technologies designed to support future populations with environmentally sustainable solutions. From clean energy, to cities redesigned with rapid transit in mind, these systems will require innovative thinking and strong leadership to realise these projects. “These are huge decisions that will have implications for decades,” says Dan Hoornweg, professor and research chair at the University of Ontario Institute of Technology, and former lead advisor, on sustainable cities to the World Bank. “Infrastructure is like the bones of the city, so you’ve got to make choices with the long view in mind.”
In emerging markets, city leaders are facing an even bigger challenge, as rapid population growth pushes already insufficient infrastructure further beyond its capacity. These pressures result in massive congestion, over-tapped water systems, and unreliable access to energy and IT. There is a vital need to reduce waste; this includes both the inefficient use of infrastructure systems and the amount of waste produced by city residents. “The planet is reeling from the collective impact of cities,” Mr Hoornweg says. And as urban populations continue to grow, the pressure on city leaders to build sustainable high-performing infrastructure systems and services is only going to increase. “If we don’t get new cities right, and fix the existing cities, we’re screwed.”
This is especially true for leaders in the cities where these systems are breaking down. According to our survey, citizens and business leaders overwhelmingly blame city leaders for poor infrastructure maintenance, citing lack of political will, lack of skills among officials, and poor governmental effectiveness for these problems. And the worse off a city’s infrastructure is, the less faith citizens have in their leaders. Among those who live in cities where infrastructure is viewed as inadequate today, more than half cite “corruption or misuse of funds” as a leading impediment. This should be a wake-up call to city leaders that they need to demonstrate better leadership, greater transparency and more accountability for their infrastructure decision making. Citizens and business executives would also prefer to see city leaders invest in maintenance of existing systems and services, more than emphasising investment in brand new infrastructure, which generally comes with a much higher price tag.
The most innovative city leaders have gotten in front of these challenges by using lessons learned from their global peers, partnering with citizens and the private sector to implement sustainable solutions that reduce congestion and system failures, while improving quality of life for people and businesses. These choices are not always easy and often face social opposition, but, when leaders promise, and then deliver, long-term value for the community, they are able to transform their urban infrastructure and position the city for a more prosperous and sustainable future.
Download full version (PDF): Urban Infrastructure Insights 2015
About FCC Citizen Services
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FCC is the parent company of one of Europe’s leading citizen services groups, operating in sectors such as environmental services, water, and infrastructure.
About The Economist Intelligence Unit
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We are the research and analysis division of The Economist Group, the sister company to The Economist newspaper. Created in 1946, we have nearly 70 years’ experience in helping businesses, financial firms and governments to understand how the world is changing and how that creates opportunities to be seized and risks to be managed. A British company, we are intensely global. We service clients across the world from our 40 offices, our staff speak over 25 languages and we embrace foreign cultures with a passion.
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