Public sector can’t deliver New Urban Agenda alone, World Economic Forum warns
When New York City decided to offer public Wi-Fi kiosks on city streets, it turned to Sidewalk Labs, whose parent company, Alphabet, also owns tech behemoth Google. The resulting digital infrastructure, called LinkNYC, was designed to bridge the gap between Internet haves and have-nots.
The venture cost city taxpayers nothing. Under the terms of the deal, Sidewalk Labs will absorb the cost with revenue from digital advertising and data collection from users.
This kind of partnership will be key to implementing the United Nations’ suite of new agreements to improve life in cities around the world, according to a new report from the World Economic Forum. “Harness Public-Private Cooperation to Deliver the New Urban Agenda” argues that to deliver on the outcome of last year’s Habitat III conference on the future of cities, the world must look not to national governments but to private enterprise.
“Urbanization dynamics have evolved over time and call for a transition from the business-as-usual approach of [the public sector] being the sole bearer of transformation to a more collaborative approach enabling the private sector, civil society and academia,” the report states.
The World Economic Forum’s Shaping the Future of Urban Development and Services Initiative prepared the report. Its findings are based in part on previous research arguing that the private sector is better equipped to deliver on the full spectrum of the urban value chain, from planning to design to financing to implementation to monitoring. Already, the private sector invests USD 120 billion annually in urban infrastructure, but estimates suggest that USD 78 trillion is needed over the coming decade.
Consequently, the report calls for an “enabling environment” that will allow broader private-sector participation in urban infrastructure delivery. Such a plea differs from the debate leading up to Habitat III, when cities demanded an enabling environment that would allow them to access international finance.
Instead, the new report calls for governments to set up business-friendly systems with clear guidelines for how the private sector can engage with the public sector in a transparent manner that fosters trust and mutual cooperation. The World Economic Forum cites South Africa’s 1999 Public Finance Management Act and subsequent Public-Private Partnership Manual as a model for what such an environment could look like.
Brazil, meanwhile, offers the opposite approach, with engineering and construction firms caught up in a massive public-sector bribery scandal. Now, the Brazilian judicial system must force the company that won a public bid to renovate Maracanã Stadium for the 2014 Olympics to maintain the facility.
No quick fix
Other than legislation, the report also argues for the importance of strong public institutions that engender trust with private-sector partners and endure over time, even when political administrations change, in order to provide continuity during complex, multi-year projects.
The forum’s researchers are open-minded, however, about how projects can be financed. They address new types of finance such as “social impact” bonds, pooled funds and crowdfunding. In 2015, for instance, Rotterdam unveiled a bridge financed by individual contributions, reportedly the world’s first crowdsourced public infrastructure.
The report comes at a time when cities and countries are still grappling with the New Urban Agenda, the 24-page voluntary agreement adopted at Habitat III. (See the agenda’s full text here.) The private sector was not strongly represented during Habitat III, with many major infrastructure providers absent.
But the World Economic Forum hopes to jump-start private-sector participation as attention shifts to the implementation of the New Urban Agenda. Alice Charles, who leads the WEF’s urban initiative, argues that the new report provides “a taxonomy of recommendations, with reference cases from around the world, to build effective public-private cooperation and help the public sector understand the convergence of the outcomes of the multiple global frameworks”.
The litany of examples offers plenty food for thought but not necessarily any quick fixes. “The recommended actions in this report appear simple to adopt but are challenging to implement,” the report concludes. “Cities, the private sector and civil society must work together and proactively play their part to make it happen.”
Providing free Wi-Fi in public spaces offers an illustrative example. Such an effort would hit targets in many of the global frameworks, but New York City’s experiment was not without problems. During the beta phase, for instance, with 400 of an eventual 7,500 kiosks rolled out, homeless users reportedly hogged the new infrastructure for hours at a time, and some were caught watching illicit content on busy city streets. As a result, the Internet browsing feature was turned off.
The kiosks still offer Internet-enabled services such as local maps and hotspots for users to browse the Internet on their own devices. Most importantly, Sidewalk Labs and the New York City government did not engage in a public dispute over who was at fault for what many see as an obvious design flaw.
Instead, they worked out the kinks together. Last month, LinkNYC celebrated the participation of over a million users.