STATE OF THE WORLD'S CITIES 2012/2013 Prosperity

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Table 2.1.2 City-specific factors determining a city’s productivity Intrinsic (natural) productivity growth factors Extrinsic productivity growth factors Economies of scale Provision of urban services Agglomeration economies Matching Sharing Learning Technical efficiency Structural efficiency Land management policies Space efficiency Infrastructure investment Taxation Disaster prevention Operational efficiency Day-to-day urban management Service delivery Emergency management Institutional scaffolding Sound local institutions (e.g., decentralization) Sound governance Ease of doing business Quality of life (quality of education, safety, cultural life, liveliness) Attractiveness to knowledge-base industries Attraction and retention of the ‘creative class’ Learning-based efficiency Creativity and innovation Research and development and technological development Entrepreneurship vision Local leadership Local governance economies (Table 2.1.2). Other city-specific factors depend on the city’s ability to capitalize on the natural productivity potential of agglomeration economies (‘extrinsic cityspecific factors’). Intrinsic city-level factors15 One of the most obvious factors determining urban productivity is population growth. As a city’s population increases, so does the pool of workers and consumers. Agglomeration economies are the benefits firms derive from locating near customers and suppliers in order to reduce transport and communication costs and having access to a large labour pool. In larger cities, workers 41 FACT benefit from a wider range of potential employers, which lowers their risk of failure. Better matching between labour supply and demand results in greater flexibility, higher productivity and stronger growth for both workers and businesses. Cities also offer firms and residents access to a wider and better range of shared services and infrastructure. 16 Extrinsic city-level factors As cities continue to grow, higher productivity comes to depend on other factors, such as the ability of a city to maximize the technical efficiency of urban systems, both structural and operational. Effective management of agglomeration diseconomies – including congestion and rising input Productivity and the Prosperity of Cities The concentration of infrastructure, people as well as economic, social and cultural activities, leads to substantial benefits and efficiency due to agglomeration and scale economies. prices – enables the population and businesses to maximize their own productive potential. This has been the case in Mumbai, where serious attempts to create an international financial hub have been defeated by chaotic local transport conditions together with a prohibitive property (rental) market, with FACT POLICy Agglomeration economies give cities a competitive advantage over rural areas, as well as large cities over smaller cities. Agglomeration economies also benefit densely populated areas within cities. POLICy The structural productivity of cities in part rests upon an efficient supply of serviced land and reliable infrastructure, including transport, power, water and sanitation as will as ICT. These are critical enabling factors of urban development, as they constitute basic inputs of productive activity and, if deficient, constitute a limiting constraint on growth and private investment. Lack of adequate infrastructure severely hinders the structural productivity of cities, limiting their capacity to achieve full potential.
State of the World’s Cities 2012/2013 rents twice as high as Manhattan’s pushing major financial companies away from the city. 17 The sound POLICy operation of cities, which encompasses traffic to emergency management, transport Several cities are services, garbage collection, actively expanding and the provision of urban infrastructure as part services that offer critical of their development support to social and strategies. Kenya’s economic activities are capital Nairobi is important determinants of the operational productivity developing transport of cities. and communications infrastructure, with tangible results in terms of efficiency and productivity in various economic sectors. Similar efforts are underway in Guadalajara in central Mexico in a bid to attract more high-technology firms (electronics and communications). As a result, production structures are undergoing rapid change, and suburban landscapes with them. Figure 2.1.5 Factors hampering economic productivity per cent 40 35 30 25 20 15 10 5 0 Corruption/lack of good governance Lack of appropriate knowledge & skills development 42 For example, Rio de Janeiro’s newly established Operations Centre offers a glimpse of the way cities might be managed in the future. 18 Conceived as a city-wide decision-making mechanism for emergency situations based on real-time information, the centre integrates information from multiple departments and government agencies, Visual displays of data from various urban systems, including surveillance cameras, together with maps, news updates, information about incidents and even simulations, facilitate real-time monitoring and analysis. Although initially designed for forecasting floods and other emergencies, the Centre is also used for dayto-day management of urban functions. Similar projects have already been implemented in New York City and in Gauteng (South Africa). 19 With the decline of physical constraints on cities and communities as a result of technological progress in recent decades, creativity and innovation have arguably become major driving forces of productivity and economic growth in urban areas. Cost of conducting business De�cient infrastructure Weak public institutions Poor access to information Africa Asia LAC Arab States All regions
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
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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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