state of the world's cities 2012/2013 - United Nations Sustainable ...

Chapter 2.1Productivity and theProsperity of CitiesEnhancing urban productivity is clearly desirable, as itimproves competitiveness and, ultimately, the prosperity ofany city. More productive cities are able to increase outputwith the same amounts of resources, generating additionalreal income that can raise living standards through moreaffordable goods and services. More specifically, theextra income and municipal revenue generated throughproductivity will enable any city to provide more, betterservices, such as housing, education and health services,social programmes and expanded infrastructure networksto support both productive and leisure activities.Urban productivity refers to the efficiency with whicha city transforms inputs into outputs. However, becauseof limited data, gross domestic product (GDP) per capitais commonly used as a proxy for urban productivity, witha city’s GDP measuringlocal production ofRaising urban goods and services andpolicy productivitythe population servingis not a goal in itself, buta critical starting pointas a proxy for inputsto provide residents with related to human capital.decent income for theirHowever, it is importantbasic needs and adequate to emphasize that, despiteliving standards. 1its expediency, GDPpolicyCities are naturally more productive than rural areas,as they benefit from larger pools of labour and talent,together with concentration efficiencies for both producers andconsumers, and a more fluid exchange of ideas and innovations. 2per capita fails fully to reflect the complex dynamicsdetermining urban productivity.Rising Urbanization and IncreasingProductivityAs countries become more urbanized, both urbanand national productivity will increase. As shown inFigure 2.1.1, rising urbanization and per capita incomewent hand in hand for the world as a whole over thepast five decades. While the share of urban populationsworldwide increased from 33 to 51 per cent between 1960and 2010, per capita income increased by 152 per cent –from USD 2,382 to USD 6,006 – over the same period. 4However, as shown in Figure 2.1.2, the positive linkbetween urbanization and national productivity holdsmainly for high- and middle-income countries, signalinghealthy urbanization dynamics fueled by prosperouscities acting as magnets for rural migration. Low-incomecountries display a more mixed trend. While these countriesas a whole experienced a fast pace of urbanization from1960 onward, GDP percapita remained largelyunchanged, and evenIn OECDdecreased, particularly FACT countries, thebetween 1970 and theGDP per capita is, onyear 2000. This wouldaverage, 64 per centhigher in towns andsuggest that, rather thancities than in ruralbeing attracted by betterareas. Similarly, ineconomic opportunitiesEuropean cities within urban areas (demandpopulations overpull’), rural migrantsone million, averagewere only seeking refugeGDP per capita is25 per cent higher thanfrom famine, war or otherin the EU as a whole,calamities in what is often and 40 per cent higherreferred to as ‘supply push‘ than that of their homeurbanization. 5nations. 336