STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

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1,200 1,000 Figure 2.1.3 Urbanization and GDP per capita in selected countries 800 600 400 200 0 350 300 250 200 150 100 50 0 1880 1960 USA Brazil 1965 1970 1890 1900 1910 1920 1930 1940 1975 1980 regional factors; and city-level factors that affect the city’s production function, such as physical infrastructure, growth management, human capital, and innovative and entrepreneurship spirits. ExTERNAL FACTORS External factors are largely beyond cities’ orbits of influence. Some of the differences in productivity among cities are explained by external factors, such as geographic location, as well as regional and national comparative advantages (Table 2.1.1). In terms of geographic location, coastal areas and river deltas have been preferred locations for cities. Currently, 14 of the world’s 19 largest cities are port cities, which benefit from lower shipping costs and access through wider markets. 12 Natural beauty and warmer weather also give 1985 1990 1995 1950 1960 1970 1980 1990 2000 2010 2000 2005 2010 39 1960 1960 1965 1965 1970 1970 1975 1975 Productivity and the Prosperity of Cities 1980 1980 GDP per capita Note: Both time series are indexed to 100 in the initial year. The y value of each series shows the percentage change with respect to the base year. GDP per capita is in constant 2000 USD. Source: Source: UNDESA (2012) urbanization; World Bank (2012) GDP per capita. 350 300 250 200 150 100 50 0 2,250 2,000 1,750 1,500 1,250 1,000 750 500 250 0 Kenya China 1985 1985 Urbanization cities a comparative advantage, and have served to spur the growth of resort cities around the world, from the French Riviera to Punta del Este (Uruguay), Eilat (Israel), Jurmala (Latvia) or Las Palmas (Canary Islands). The importance of Cities located national comparative POLICy in countries advantage is illustrated by with a well-educated labour the fact that, while 22 of force, sound infrastructure, the top 30 largest urban mature financial markets, stable political systems and areas (by population) were firmly grounded market located in emerging or mechanisms have higher developing economies in productivity than those 2008, only seven emerging located in countries that do economy cities ranked not offer these conditions. among the top 30 in terms 1990 1990 1995 1995 2000 2000 2005 2005 2010 2010
State of the World’s Cities 2012/2013 of urban GDP. The group included Mexico City, São Paulo, Buenos Aires, Moscow, Shanghai, Mumbai and Rio de Janeiro, but no Middle Eastern or African cities. The average GDP per capita of these emerging/developing country cities tends to be substantially smaller than that of developed cities (Figure 2.1.4). Subsequent expansion in individual cities triggered the emergence of ‘city clusters,’ spurring the growth of second-tier cities such as Tianjin, Shijiazhuang and Tangshan, which respectively developed around Beijing; Zhuhai, Dongguan and Foshan around the provincial capital of Guangzhou; and Suzhou, Wuxi and Hangzhou in close proximity to Shanghai. These city clusters generated agglomeration economies at the regional level, expanding opportunities for trade and enhancing their (and their entire region’s) attractions for investors. 13 This cumulative effect has resulted in dramatic differences in productivity between coastal cities and their counterparts in the hinterland, with the growth differential surpassing 6 per cent, and the per capita fiscal revenues between the richest and the poorest provinces increasing from a ratio of 2:1 to 19:1. 14 In China, national FACT policies have played a key role in improved productivity in coastal cities. Three Table 2.1.1 External factors determining a city’s productivity Geographical Physical attributes comparative Climate advantage Location (e.g., ports, rivers) decades ago, China Natural endowments initiated policies designed Soils to promote economic growth in those cities through a combination of industrialization and financial incentives, putting them in a better position to compete for Regional comparative advantage Minerals Energy Natural beauty Archeological heritage Economic opportunities Access to markets, investors and skills Regional hubs and/or clusters foreign investment and infrastructure spending. National comparative Level of development Pool of labour, skills, scientific and advantage technological capital Social conditions (e.g., poverty, inequality) Economic infrastructure Institutional conditions Sound institutions Sound governance Political stability Maturity of financial markets Economic policies Ease of doing business Investment attractiveness Macroeconomic stability vision National leadership Figure 2.1.4 Population, GDP per capita and total GDP for selected metropolitan areas (2008) 2008 GDP per capita (Thousands US$ PPPs) 100 CITy-LEvEL FACTORS AFFECTING URBAN PRODUCTIvITy Cities play a key role in determining their own productivity, since many factors that affect urban productivity play out at the city level. Some of these factors are intrinsic to all urban areas – occurring naturally such as agglomeration and scale 90 Boston 80 70 60 Atlanta 50 40 Houston Paris 30 Buenos Aires 20 Istanbul 10 Cairo 0 Lagos Karachi 0 5 10 40 Los Angeles 15 Shanghai New York Sao Paulo** Mexico City Dhaka Mumbai (Bombay)**** 20 25 2008 Population (Millions) 30 35 Sphere surface represents total urban GDP (2008 US$bn PPPs) ** New data found from national data sources on GDP per capita in all major Brazilian Cities including Sao Paulo and Rio de Janeiro. **** New data found from national data sources on GDP per capita in Mumbai (as well as Delhi, Bangalore and Kolkata in full rankings). Source: Data from PricewaterhouseCoopers (2009) Tokyo 40 45
Page 1 and 2: PRODUCTIVITY ENVIRONMENTAL SUSTAINA
Page 3 and 4: Copyright © United Nations Human S
Page 5 and 6: Foreword This is a time of crises.
Page 7: Acknowledgements CORE TEAM Director
Page 11 and 12: Chapter 1.1 Conceptualizing Urban P
Page 13 and 14: State of the World’s Cities 2012/
Page 35 and 36: Part Two
Page 37 and 38: Chapter 2.1 Productivity and the Pr
Page 39: State of the World’s Cities 2012/
Page 49 and 50: Chapter 2.2 Urban Infrastructure: B
Page 69 and 70: Chapter 2.4 Equity and the Prosperi
Page 79 and 80: Chapter 2.5 Environmental Sustainab
Page 89: Part Three Policies for Prosperous
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91 From Comparative Advantage to Ur
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Urban planning can contribute to th
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participation and erodes the relati
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providing adequate infrastructure a
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urban poor, particularly in slums a
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cities, the business environment is
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Chapter 3.2 Innovating to Support t
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Innovating to Support the Transitio
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model to rebuild local government a
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exceptions, modern urban planning h
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Working on the five ‘spokes’: I
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As suggested earlier, it is in the
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Urban Planning/Design & Prosperity
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Box 3.2.3 Individual versus collect
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uilding codes to support urban refo
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10 Government of Singapore (2010) S
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Table 1 City Prosperity Index and c
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Table 2 Proportion of urban populat
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Urban Slum Population at Mid-year b
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Country/City BRAzIL City Population
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Country/City Table 4 City Populatio
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Country/City City Population of Urb
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Country/City InDIA Table 4 City Pop
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Country/City IRELAnD City Populatio
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Country/City myAnmAR City Populatio
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Urban Population (’000) Level of
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STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

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