Author and academic Bruce J. Katz, who also served in the first Obama administration as a senior adviser in Housing and Urban Development, explains the concept of New Localism, and how cities and towns must work collaboratively with innovators to deliver products and services that users really want.
The rise of populist fervor in the US, the UK and Europe masks a more structural reality: the nature and locus of power is shifting in the world due to profound demographic, economic, and social forces. Power is drifting downward from the nation-state to cities and metropolitan communities, horizontally from government to networks of public, private, and civic actors, and globally along transnational circuits of capital, trade, and innovation.
This emerging framework of multi-sectoral and networked governance is what we call the New Localism.
With national governments adrift, cities are grappling with some of the toughest challenges facing the world today including global competition, social inclusion, housing affordability and transportation mobility, demographic transformation, technological disruption and climate change. Today, progress is coming from a group of vanguard cities in the US and Northern Europe that are inventing new models to invest in innovation, infrastructure and inclusion, the fuel for long-term economic competitiveness and social mobility.
First, cities are organizing private and civic capital to commercialise research and spur the growth of entrepreneurial companies. In Indianapolis, the Central Indiana Corporate Partnership has raised hundreds of millions of private and civic resources for investment in companies and research institutes in the life sciences field, a competitive advantage of the metropolis and region. In St. Louis, the Cortex Innovation Community has used institutional capital from Washington University and other anchor institutions to build a globally recognised innovation district. These institutional models work because they deploy corporate, philanthropic and university resources through professionally managed entities that have clear missions and work in close cooperation with the public sector.
Second, cities are unlocking public wealth by leveraging the value of underutilised public assets to finance a wide range of transformative projects. In Copenhagen, CPH City and Port Development, acompany jointly owned by the municipal and national governments, has regenerated the historic harbour and used the revenue to service the debt on a city-wide transit system. In Hamburg, HafenCity Hamburg GmbH, a company fully owned by this historic city-state, is overseeing the largest inner-city regeneration effort in Europe through the redevelopment of former port and industrial sites. Both these cities are using the public asset corporate model to lead the transition to new sources of renewable energy and are using nature-based solutions to mitigate the effects of climate change and drive down carbon emissions.
Finally, cities are attracting voter support via public referenda for large-scale investment in infrastructure. Over the past three election cycles, for example, voters in US cities and metropolitan counties have approved hundreds of billions of dollars for infrastructure investments ranging from transit extensions to rail station redevelopment to road modernization. In the 2016 election cycle alone, voters from Los Angeles and Seattle to Wake County, North Carolina, and Indianapolis approved nearly $200bn (£141bn) in additional taxes to spur ambitious transit and more sustainable patterns of development.
These investment models represent a new way of governing and financing cities via networks of institutions and leaders that are less likely to be hijacked by partisan divisions and ideological polarisation than national and state governments. Increasingly, government, business, philanthropic, university, and community entities, rather than the public sector alone, are collaborating to forge solutions that are holistic, integrated and multidisciplinary. These efforts also build on the central insight that capital, in mature economies at least, is not the constraint. With the right institutions and instruments, vast amounts of capital are out there to be raised, connected and deployed.
Can UK cities be part of the New Localism wave? Beyond London, core cities like Birmingham, Bristol, Liverpool, Manchester and Sheffield start with strong anchor institutions, distinctive competitive advantages, strategic locations and quality places that can drive greater market investment and inclusive growth. To date, however, an overly powerful and meddling central government has meant that assets have been underleveraged and growth potential has gone unrealised. The introduction of metro mayors is a good start for Britain. But it must be coupled with the greater devolution of fiscal powers and enhanced focus on multi-sectoral collaboration.
In the end, Britain is more than Brexit, just as the US is more than Donald Trump. Unleashing New Localism – the power of cities – would help drive much needed investment and growth and restore balance to our national conversations.