AS the Brexit deliberations unfold, the conventional wisdom is that the future of Britain will be decided by a small number of national elected officials responsible for negotiating the contours of the final relationship between Britain, Europe and the rest of the world. The Brexit game, one would conclude, is a game played exclusively by the few and the powerful.
Yet the 21st century no longer plays by the conventional, top-down rules of the 20th century. In The New Localism: How Cities Can Thrive in the Age of Populism, we lay out the parallel operating system that is emerging in the world today, one driven, designed and delivered by cities. This new global urban order requires that cities and regions – like Leeds, Sheffield, Hull and Yorkshire – acquire more formal governmental powers through devolution and exercise new market and civic powers through evolution.
The new order has several characteristics. First, cities and their multi-sectoral networks are exercising the agency they have to design and deliver (and often finance) initiatives that enhance their distinctive competitive position and leverage their special competitive advantages. These efforts – a particular sectoral initiative in one city, a customized skills initiative in another – can and must happen irrespective of Brexit or other changes in the rules of the market game by national governments. Most if not all of these efforts can be orchestrated at the local and metropolitan level, if institutions and leaders collaborate to compete.
Second, cities exist within and transcend nations and national borders. Given their indisputable role as engines of national economies and centres of global trade and investment, cities conduct business with other cities and a broad array of global entities around the flow of capital, ideas, people, services and goods. These relationships are affected by the rules of trade, exchange and migration set by national governments but those rules shape rather than stop interaction. Finally, we are re-entering a world where networks of cities trade together, share lessons together and increasingly come together to affect rules and practices on issues as disparate as climate change, refugee migration and technological adaptation and deployment. Think of this as a modern Hanseatic League which is taking shape with the formation of revitalised urban networks.
The upshot of all this is that cities need to maximize their power in the face of populist demagogues and disruptions.
In countries like the UK – highly centralised and compartmentalised – that means, first and foremost, the devolution of powers from central government. The election of city mayors and metro mayors – and the flexibility enabled by City Deals – has been an important step forward in most parts of England.
With notable achievements already visible on a world stage, and Sheffield City Region now in the process of electing a mayor, Leeds as a city, and also Yorkshire generally, needs to move beyond fragmentation and become true leaders in this area. And the major cities and region need to be given a broad array of revenue raising capabilities – from basic taxes to ballot-box referenda to value capture mechanisms like tax increment financing and public asset corporations. Yet the devolution of formal government powers is not sufficient to enhance urban resilience and performance. New Localism celebrates the rise of cities as organic multi-sectoral networks, not as the mere representation of local government and elected officials. What is needed, therefore, is the evolution of new governance arrangements to complement and supplement the expanded powers of local government.
The US and Northern Europe boast excellent examples of formal entities – Indianapolis’ Central Indiana Corporate Partnership, St. Louis’ Cortex Innovation Community, Copenhagen’s City & Port Development Corporation, Kommuninvest in Sweden – that have been endowed with public, private and civic capital and the ability to invest, move markets and solve hard problems.
The Age of Populism – Brexit in Britain, Trump in the United States – is not only undermining political stability and, in some cases, altering basic rules of market engagement. It is also creating an opening for a wholescale redefinition of city power and practice and a new global architecture of urban intermediaries and institutions. A new 21st century global urban order is being made alongside the 20th century network of nation-states.
Bruce Katz and Jeremy Nowak are authors of The New Localism: How Cities Can Thrive in the Age of Populism published by Brookings Institution Press.