Citizen Today

8/6/2019 Citizen Today

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Ci izenToday

Citiesfor citizens

State of the citiesLessons from around the world

Cleaning upThe future is green

Crunch timeCity finance in focus

Specialedition

April 2011


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A warm welcome to this special edition of Citizen Today, Ernst & Youngs magazine for our

government and public sector clients around the world. Recent incidents across the globe,

from natural disasters to citizen unrest, demonstrate the volatility of the 21st century world

in which we live. In our interconnected world, such incidents serve to remind us all of our

collective vulnerability to unpredictable events.

In this, our seventh edition, we report on the findings of our year-long examination into the

biggest challenges facing urban communities around the globe.

While all cities are different, there is no doubt that ours is an increasingly urban world.

Shifting economic power from West to East and North to South has increased both the

number and the sophistication of urban centers in emerging markets. Globalization, too, has

meant that cities are more interconnected than ever before as capital and people move freely

between them. As a result, the competition for talent and capital between cities worldwide is

surging only those centers that adapt quickly to these changing trends and demographics

will prosper.

Ernst & Youngs global Government & Public Sector team has interviewed more than 70 city

leaders from around the world, including mayors, chief executives and their implementation

teams. We have investigated what drives city leaders, how they see their city developing andhow they are shaping their cities to be fit for the future. In this edition of Citizen Today, we

consider our findings.

We look at how cities have a deepening commitment to sustainability, recognizing the many

benefits that a green economy can bring. We examine the growth of new financial centers

and the prospects for economic growth and jobs across the European Union. The challenge of

ensuring Paris transport system is fit for the 21st century also comes under our microscope.

We investigate the civic stories of London, Los Angeles and Bogot; three cities of differing

histories and size, but with shared ambitions and hopes for the future. And in our regular

Hot off the press pages, we highlight recent thought leadership from Ernst & Young.

Ernst & Young would like to take this opportunity to thank all the respondents for taking

the time to participate in our survey. We are also delighted to receive your feedback andsuggestions for the magazine. We look forward to receiving your suggestions, as well as offers

to contribute your own insights.

Welcome

About Ernst & Young

Ernst & Young is a global leader in assurance, tax,transaction and advisory services. Worldwide, our141,000 people are united by our shared valuesand an unwavering commitment to quality. Wemake a difference by helping our people, our clientsand our wider communities achieve their potential.

Ernst & Young refers to the global organization ofmember firms of Ernst & Young Global Limited,each of which is a separate legal entity.Ernst & Young Global Limited, a UK companylimited by guarantee, does not provide servicesto clients. For more information about ourorganization, please visit www.ey.com

2011 EYGM Limited.

All Rights Reserved.EYG no. FK0013

Assurance | Tax | Transactions | Advisory

Ernst & Young

In line with Ernst & Youngs commitment to minimize its impact onthe environment, this document has been printed on paper with ahigh recycled content.

This publication contains information in summary form and istherefore intended for general guidance only. It is notintended to be a substitute for detailed research or theexercise of professional judgment. Neither EYGM Limited

nor any other member of the global Ernst & Young organizationcan accept any responsibility for loss occasioned to any personacting or refraining from action as a result of any material in thispublication. On any specific matter, reference should be made to theappropriate advisor.

The views of third parties set out in this p ublication are not

necessarily the views of the global Ernst & Young organization or itsmember firms. Moreover, they should be seen in the context of thetime they were made.

www.ey.com

Philippe

Peuch-Lestrade

Global Government & Public Sector Leader

1126944.indd (UK) 04/2011. Artwork by Creative Service Group.


3/40April 2011

Contents

03

04Cities for citizens: mapping

the future

We set out the results of Ernst & Youngs

investigation into the biggest challenges

facing 21st century cities

19

A city on the move

We speak to Bogot leader Yuri Chilln

Reyes about his citys civic and economic

resurgence in recent years

22London calling

Citizen Today examines why London

Mayor Boris Johnson believes Londoners

can be confident about their citys future

29City spotlight: Mexico City

Marcelo Ebrard, Mexico Citys Mayor since

July 2006, tells Citizen Today about his

role and his plans for the future

30

Clean and green: the future

of cities

How cities can harness the potential

of clean technology is one of the many

challenges uniting civic leaders aroundthe world

32Competing for growth,

cooperating for balance

Why greater collaboration will ensure

that cities around the world will grow

and develop

3536

38

City spotlight: Curitiba

We talk to Luciano Ducci, Mayor of the

Brazilian city of Curitiba, about the

continuing evolution of his city

Hot off the press

A look at recent thought leadership

from Ernst & Young

Spotlight on Germany

Introducing Ernst & Youngs

Government & Public Sector service

line in Germany

14

Cities of gold

The leaders of some of the most admired

cities in our survey explain their success

16Paris moving story

Citizen Today talks to Maurice Leroy and

Jean-Paul Huchon about Grand Paris,

a massive investment program that will

transform the journeys of commuters and

tourists in the French capital region

08The vision thing

We reveal some of the aims and

aspirations of city leaders from around

the world

10

A city where the world

comes together

We talk to Antonio Ramn Villaraigosa, Jr., the

41st and current Mayor of Los Angeles, about

his role and his plans to shape the citys future

City spotlight: Perth

Lisa Scaffidi, Lord Mayor of Perth, talks to

Citizen Today about the future for her city13


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Twenty-first centurycities face unprecedented

challenges as the twintrends of globalizationand urbanization have

increased the competition

for talent and capital.Here, we set out the

results of Ernst & Youngsglobal tour of City Halls

around the world

Cities for citizens:

mapping

the future


5/40April 2011 05

Ours is an increasingly urban world. In 1950,only 29% of the worlds population was classedas urban dwellers; by 2050, the UnitedNations predicts that this will have risen to69% regionally, this figure will be 90% in NorthAmerica, 88% in Latin America, 84% in Europeand 75% in Oceania.

Ernst & Young believes that such changingdemographics, twinned with rapidly shiftingeconomic power from developed to emerging

markets, and diminished financial budgets,means that more is now depending on thedecisions taken by city leaders than ever before.But what are todays generation of mayors andtheir deputies thinking? What drives them? Howdo they see their cities developing as they seek tobalance economic and infrastructure investmentwith sustainable development?

Such questions underpinned Ernst & Youngsinvestigation into the biggest challenges facingurban communities around the world. As part ofthis year-long project, our Government & PublicSector teams have interviewed more than 70 cityleaders from around the world, including mayors,chief executives and their implementation teams,to uncover their ambitions and targets; theirchallenges and priorities.

State of the cities

While every city is different, globalization, in allof its forms, has meant that cities all over theworld are more interconnected than ever before.As capital and people move freely, city leadersare now striving to attract talent and investment,and to provide a sustainable, vibrant communityfor their citizens to live, work and play. Successfulcities that can attract both talented people andinward investment will be high-performing,

balanced and creative, under good economicleadership, have a highly skilled pool of humancapital, high levels of innovation and good qualityof life.

Yet at this time of intense competition, resources primarily due to the deep impact of thefinancial crisis are increasingly scarce. Thedegree of financial resource a city can securefrom its citizens, the governance hierarchy,donors and investors is dependent on a numberof factors. These include the population size andmigration into and out of the citys borders. If acitys leaders are viewed positively by citizens andprospective citizens, this will impact demand and

migration levels.The success of a city leaders strategy will beshaped by the current state of the city and itsleadership whether aspirations or ambitionsare shared or bought into by the citys diversespectrum of stakeholders (see diagram below),and whether a city has the ability to generate theresources needed to achieve its ambitions in asustainable manner.

But while each faces a unique mix of multipleand competing stakeholders, there are someunderlying themes that universally apply in termsof applying an urban strategy to increase a citysattractiveness to business and investors. Thepriority actions fall into four key categories:

Introduce powerful, accountable leadershipand governance

Build stakeholder confidencethrough delivery

Harness popular support and drive change

Embrace the future and step ahead

However, it is vital that these actions are backedby robust analysis and insight in order to sellthe vision to all stakeholders and transformthe ambition into reality by securing the rightresources.

Citizens

How

do cities

become/stay

competitive?

Investors

Donors

Existingbusinesses

Newbusinesses

Governancehierarchy

Body politic

The body politic comprises thepolitical and administrative mixture

that governs and manages the city.

Existing businesses help ensurethe city can maintain itself

financially through the provisionof jobs for citizens and by paying

corporate and employee taxes.

Each city will coexist with local,state, regional and nationalgovernment in a governancehierarchy that encapsulatesthe degree of devolved power/delegated authority thecity retains.

New businesses will appeal tocapital for investment (their life

blood) in order to create jobsand wealth.

Donors represent a potential resourcepool for cities to compete for. Theycomprise international organizationssuch as the World Bank, as well as non-government organizations (NGO) like

philanthropic foundations.

Investors will consider the balance of risk versus reward from the

city debt they purchase and/or the business ventures they back.

The citizen is the lifeblood of every city all will have their hopes and aspirations

for a brighter future. Their leadersmust lay the foundations for themto want to live, work and play in

the city, or they will migrate.


6/40

The survey resultsWe devised two survey question sets on thedeveloping agenda for city leaders around theworld. The first was for the city mayor, or a chiefexecutive the person with the vision to builda brighter future and the second was for theirstrategy or finance director; the person whowill oversee the planning and execution from anoperational and financial perspective. The resultsfall broadly into five categories.

Vision

Asked to list their three main reasons for takingthe job, the city leaders we spoke to put forward

an eclectic mix of motivations. It is interestingto note that fewer than 10% gave answersthat could be seen as furthering their ownpolitical careers.

As for their vision for the city, tackling socialinequality and reinventing their city as a globalcenter of excellence shared top billing. Thesetargets were then followed by sustainability andeconomic development.

We also asked what these leaders wantedtheir cities to be famous for 10 years hence.Much like the results of the question regardingwhy they took the job, we received a range ofpersonal commitments.

StrategyThe question How on track are you tosuccessfully delivering the current strategyresulted in divergent results between mayorsand their deputies. The mayors are clearly moreoptimistic, reflecting the fact that they tend tobe politicians and perhaps less risk averse thanpublic servants, who were more cautious in theirresponses. For example, some 50% of mayors

said they were between 51% and 75% in terms oftheir progress, whereas only 32.4% of deputiesshared this assessment.

According to our research, the key activitysupporting these strategies is infrastructure andenvironmental improvement, with 66.7% of ourrespondents citing this as a key priority. This wasfollowed by building a city brand (57.8%).

Ernst & Young believes that robust financialmanagement is critical to the successfulexecution of policy priorities, as well as theday-to-day running of a city. Managing resourceseffectively and striking a fine balance betweenincome and expenditure requires a high degreeof competency and capability, much as onewould expect to find in a well-run corporateorganization except in this instance theshareholders are citizens.

Looking at how a citys strategy is financed inmore detail, our survey asked for an estimationof how it will be funded, and where the currentbudget comes from. The largest source is, andis expected to continue to be, citizen taxation,followed by national governments and thenbusiness taxation. Financial sustainability is vital,and robust financial management capability isessential to enable city policy-makers to modeldifferent funding scenarios and consider theimplications they raise.

Sustainability and economic development

As is made clear in the analysis on pages 3031of this edition of Citizen Today, the priority givenover to sustainable development by todays civicleaders is one of the most striking outcomesof this research. With 84% of respondentsrevealing that they have a specific sustainabledevelopment policy in place, a number ofdifferent implementation activities are occurring.

These include:New transportation systems (84%)

Emission reductions (78%)

Energy reductions (70%)

Renovation of existing buildings (70%)

Green promotion campaigns (65%)

These results underline how many cities, andindeed many countries, have come to viewgreen jobs as a central part of their economicrecovery plans. Increasingly, they believe thata competitive advantage can be gained bydeveloping a city knowledge base to leverage intoother markets.

City issuesAlthough the strong recovery we saw in theemerging markets contrasted with a slower oneacross the developed world, wherever a cityis located, its leaders have been tapping intosupport from national governments and financialinstitutions in a bid to restore fiscal strength.

We looked at what city leaders see as their mostpressing and challenging policy areas. Reflectingthe straitened economic times in which we live,economic progress and development emerged asa key priority.

However, the diversity of responses underlinedhow important it is for a mayor to gather a team

of like-minded experts to deliver their priorities.While no politician should be expected to masterevery detail surrounding each of their policyagendas, it is incumbent on them to attracthigh-caliber specialists in their field to drive eachpolicy forward.

Cities for citizens: mapping the future

Ambition/aspirationDefined as the cleararticulation of a futurestate bought into by allstakeholder groups. Tomake the journey to thefuture state a reality,it will be championedby great leadership,embraced by the bodypolitic and supportedby the governancehierarchy, donors andinvestors.

City sustainabilityDefined as the abilityof a city to manageand grow its resourcebase social, economicand environmental. Asustainable city will bewell run and financiallysound, growing in sizeby citizen numbersand businesses locatedthere, and in harmonywith its local/regionalenvironment.

Ambition/aspiration

City sustainability

Incremental

Stymied

Transformational

Visionary Embrace

the futureto stretch

ahead

Harnesspopular

support anddrive change

Buildstakeholderconfidence

throughdelivery

Introducepowerful,

accountableleadership and

governance Ambition/aspiration

City sustainability

Incremental

Stymied

Transformational

Visionary Pull ahead

and stayahead

Popularsupport but noleadership toharness it and

move up

Actionneeded to

back up thewords and

move across

Re-energizewith

leadership andmove up

Why do cities need to change and move toward thetop right corner?


7/40

It is equally important for them to build effectiveand efficient working relationships withpublic servants in each city. Very often, theseindividuals possess the experience and expertisethat can make the difference between aneffective execution of a policy, and a policy whichhas minimal impact.

Governance, accountability andstakeholder engagement

In response to the question on How is the voiceof the citizen represented, and how frequentlycan they be heard? we learn that some 26% ofcity leaders in our survey are not directly elected,31% of respondents do not elect local/districtcouncils, and 51% do not utilize communityaction committees. When asked who held themto account a board of directors, an executive

committee, an elected legislature and citizens itwas surprising to find out that only 71% andnot 100% of respondents stated they were heldto account by citizens. Such a finding serves tohighlight the diversity that courses through citysystems wherever their geographic location.

The priority given to

sustainable development

by todays civic leaders is

one of the most strikingoutcomes of this research

SummaryWhat do these results mean?

So what has our research uncovered? We believe that there are seven key insights whichhave emerged.

Competition for resources is global, not local, because people and capital are highly mobile.1.City leaders must therefore outline a vision that appeals to citizens and investors alike, inorder to attract and retain the resources they need for the city to grow.

The respective size of a city is not important; all have the capacity to deliver a vision and2.

attract resources, and in doing so become the best that they can be. The vision and thestrategy needed to deliver it must be sustainable and ambitious and underpinned bystrong leadership.

However, many cities and national governments continue to face intense funding difficulties3.as a result of the financial crisis. Because financial sustainability is vital, a mixture of differentfunding mechanisms both public and private must be considered.

Consequently, a world-class financial management capability is essential. Managing the4.numbers, modeling options, optimizing resources these will enable city policy-makers toassess different funding scenarios and consider the implications they raise.

Some cities have pinned their hopes on large infrastructure projects; to kick-start economic5.activity, and to attract business, investors and talent. But the competition for capital anddevelopers is now global, and investor appetite will not meet current demand. So city brand iscritical, and a unique offering may be the deciding factor.

Prioritizing the allocation of resources to meet strategic goals is needed, along with innovative6.

thinking about service design and delivery models. Income earning city enterprises, eitherco-owned and or co-delivered with the private sector, are a better way to generate funds thanraising taxes.

Investors and donors, as well as businesses and citizens, will expect city leaders to ensure that7.maximum stakeholder value is assured. A world-class financial management capability willbuild stakeholder confidence in the leadership and the administration, which must strive to betransparent in its reporting and welcome accountability to citizens its voters. If it is doing agreat job, it should tell the voters and welcome the scrutiny that will follow.

In undertaking this survey, Ernst & Young selected respondents from a wide range of cities fromaround the world, as the summary below of certain of their characteristics demonstrates.

The population size of the city or urban areas surveyed varied from 350,000 to 8.8 million and some cities were quite specific about not including the population of the wider metropolis.The average was 2.75 million.

The employment base within our sample of cities ranged from 250,000 to 4.5 million, withthe average being 1.4 million.

Migration into the city from outside on a daily basis for work varied from 50,000 to 1.26million, with an average of 425,000.

The budgets available to city leaders to run these cities ranged from US$33.5m toUS$40,425m, with the average being around US$8,040m (all local currencies were convertedinto US dollar equivalents to allow comparisons to be made).

We hope the results of the survey will help provide city leaders everywhere with the knowledge

and insights required to influence the developing city agenda.

To read more, visit www.ey.com/government

April 2011 07


8/40

The visionWhat motivates someone to take the

job of mayor? In many cases, they will

stand for election to secure a popular

mandate, and be open to media

scrutiny not all of it pleasant. We

asked each mayor or city leader this

question, and it is interesting to note

that fewer than 10% gave answers

that could be seen as furthering their

own political careers. They gave a

variety of reasons for why they took

on their current role, a selection of

which we recorded (anonymously) in

three broad categories.

The diversity of these responses is perhaps somewhat surprising. After all,

as Marc Lhermitte makes clear on page 24 of this edition of Citizen Today,

irrespective of their size and location, cities today are facing the similar challenges

of spurring economic growth while addressing climate change and the public

deficits caused by the financial crisis.

The range of ideas and ambitions reflects two realities. Firstly, city leaders are

different. What drives them, and what gets them to work every day, differs from

city to city. And secondly, cities themselves are different. While obviously sharing

some similar characteristics, their individual strengths, social mix and variety of

resources within their borders means that no two cities are the same.

To deliver change and make a difference

I think the opportunity of being a mayor gives you a chance to implement everythingyou wanted to toward transforming a city.

To build the citys economic capacity up to a world-class level.

To continue bringing innovation to public management.

I wanted an opportunity to be involved with change, improvement and re-direction,especially enterprise services.

To deliver a better form of governance model the Council is currently not optimizedfor decision-making.

My experience in public administration led me to assume a personal commitment to the

building of a different future for the city.

To get this city moving which was my campaign slogan.

To ensure that the city is a growth engine for the entire region.

This city is already great but still has great potential; economically, socially, culturally.

To contribute in an effective way to change our political and organizational culture.


9/40April 2011 09

thingA personal affinity with the city

This is my city. I have a tremendous opportunity to make an impact and a difference inthe community I love.

I have worked in this city for 25 years: being its mayor is one of the most demanding jobsin the country.

It is an honor to be Mayor of one of the worlds leading cities.

To do something for my home city, to help shape it.

I love politics, I love my country, and I love my city.

A passion for servingA public service ethos combined with a passion for strategy.

I love public service I have spent 18 years in an elected office.

A great personal challenge as it is the most exciting political position in our country.

My previous success in business proved to me that I can set and attain ambitious goals so I decided to go for it.

My strong political vocation.

Normal political career planning.


10/40

A city

wherethe world

comestogether

Antonio Ramn Villaraigosa, Jr., the 41stand current Mayor of Los Angeles, tellsErnst & Young about his role and his plansto shape the citys future

What makes a global city? Is it a citys heritage? Its worldwide fameand reputation? Its pioneering infrastructure and economy? Or, moresimply, does it come down to that difficult-to-define X-factor, that certaincombination of resources, skills and talent that attracts businesses, tradeand people to a citys borders time and time again?

Whatever the precise criteria, the city of Los Angeles, California, has longbeen a member of this select grouping. And for Antonio R. Villaraigosa, thecitys Mayor since 2005, the opportunity to lead the city in which he wasborn represents a dream come true.

My grandfather arrived here 100 years ago, he says. He came here withthe shirt on his back, built up a small business which became a very thrivingbusiness before he lost everything in the Great Depression. But Americahas been good to me and to my family. I dont have any complaints aboutbeing Mayor. I love what I do. I embrace the challenges that come with this

job, particularly during the worst economic crisis since the Depression. I

embrace the challenges without reservation; this is a great city and I feelvery fortunate to be in this job. I certainly dont have any problem gettingout of bed in the morning!

Photograph courtesy of David Starkopf and Office of the Mayor of Los Angeles


11/4011April 2011

Los Angeles facts

Totaling 469 square miles, the Los Angeles five-county area has apopulation of almost 20 million. It includes Los Angeles, Riverside,Ventura, Orange and San Bernardino counties. If the five-countyLos Angeles area were a state, it would be the fourth largest in theUnited States.

When Los Angeles was founded in 1781, 44 people (14 families)lived in El Pueblo de Nuestra Seora la Reina de Los Angeles dela Porcincula (Town of Our Lady the Queen of the Angeles of theSmall Portion). The population grew, but the name shrank to simplyLos Angeles.

Los Angeles has more than 80 stage theaters and 300 museums,more than any other US city.

Source: US Census Bureau and LA Tourist Authority

Villaraigosas career in public service began in1994, when he was elected to the CaliforniaState Assembly and, four years later, hiscolleagues elected him the first AssemblySpeaker from Los Angeles in 25 years. Hewas already well versed in navigating politicalchallenges, having been elected president ofa local union representing civil rights workersand lawyers in six states at the age of just 25.He is clear, though, that the position of Mayoris unrivaled.

In my opinion, there is no better public serviceposition, he says. This is because, particularlyif you are mayor of a global city like Los Angeles,you can actually make an impact in a way that is

very different to what you would be able to do asa legislator. You can actually see the things youpropose be delivered very quickly. The difference

is that when youre Mayor, you are up close withthe people, you are in the neighborhoods. As a

result, youre more focused on practical solutionsto problems than you might be if you wereworking in a state capital or national capital.

When asked why he chose to run for themayoralty, Villaraigosa is keen to highlight thecitys depth of diversity. I think the biggestreason was that this is a city where the worldcomes together, he says. This is the mostdiverse city in the United States; there are 200languages and 37 nationalities. I ran because Ifelt we needed a leader who could unite us undera common purpose of taking forward LA as thecity of Americas hope and future.

LAs geographic location and ability to act as ahub for goods and people is also crucial, he adds.I feel like we are the Venice of the 21st century;the largest port in the United States of America,the worlds busiest origin and destination airport;

a portal to the East and South. There was a realopportunity for us to take our rightful place as acity of Americas hope and promise.

If you are mayor of a globalcity like Los Angeles, you

can make an impact in a

way that is very different to

what you would be able to

do as a legislator


12/40

A city where the world comes together

Policy priorities

Upon his election, Villaraigosa made publicsafety one of his top priorities. In 2005, LAspolice force of approximately 9,100 officers wastasked with patrolling a city with approximatelyfour million residents and, with this in mind, theMayor has sought to recruit 1,000 more policeofficers, in so doing building the force to itslargest size in history.

Crime is down every year since Ive beenMayor, he says proudly. When I was elected,the homicide rate was 488 homicides; lastyear, it was at 287. The authors of a Harvardstudy last year concluded that the Los AngelesPolice Department enjoys more support acrossevery community including ethnic minoritycommunities than they have any time inmodern history.

Asked to pinpoint the main factors behind

this success, he highlights the communityinvolvement. Our police forces motto is Toprotect and serve, he replies. We put as mucheffort into serving as we do the protecting.Our policing model is very heavily dependenton community policing and collaborating withour communities. For example, our anti-gangefforts are considered among the best practicesin the country. Our Summer Night Lights (SNL)program keeps parks open till midnight fromWednesday to Sunday during the summer. The24 participating parks up from 8 since itslaunch in 2008 attracted 700,000 people,

leading to a 57% reduction in gang-relatedhomicides in SNL neighborhoods.

Education, though, is the No. 1 item in his in tray.While my priority is public safety, my passionis public education, he says. Since Ive beenMayor, we have doubled the number of charter

schools [independent public schools that arefree to be more innovative and held accountablefor improved student achievement] in the city ofLos Angeles, and we have more than any otherschool district in the country. I selected thelowest performing schools in Los Angeles andover the last two years we have outperformedthe school district and the state on the academicperformance index. We know that we can makestrides and improve academic performance if youset high expectations and involve parents andteachers in decision-making.

Going green

One of the international images of Los Angeles together with more positive scenes such as theHollywood sign and the glorious Pacific Oceanbeaches is, or used to be, the smog that oftenclogged the downtown skies. Perhaps usingsuch evidence of pollution as a call to arms,Villaraigosa has made clean technology and theenvironment major planks of his policy agenda.

Five years ago, we said we would make LA thecleanest and greenest city in the country, hesays. Weve gone from 3% renewable power to20%. We recycle more trash (65%) than any cityin the United States, we use the same amount ofwater as we did 32 years ago, and we conserve19 times the energy we did five years ago.Our effort to clean up our port is the most farreaching in the world: we have reduced dieselemissions by trucks by 80% and we met the Kyototargets for reducing greenhouse gases four years

ahead of schedule. So there are a number ofareas where LA is absolutely leading the way.

Villaraigosa, who is becoming President of USConference of Mayors in June, believes theenvironment is a perfect example of how citiescan prove more adept than national governments

in addressing a challenging issue. I think citiesin the United States and around the world areincubators of innovation, he says. They arefilling a vacuum left by national governmentsthat have often failed or been slow to act in timesof change and crisis. Look at the Copenhagenconference in December 2009. There, you sawmayors try to outdo one another and proposinginitiatives to address climate change while federalgovernments were scrambling to do as little asthey could to address this crisis.

Among the more recent environmentally friendlyinitiatives in LA is the citys bike plan, which theMayor says has largely been inspired by similar

programs in Copenhagen, Bogot and MexicoCity. The plan which was unanimously approvedby the city council sets a long-term goal ofsome 1,680 miles of interconnected cycle pathsand calls for 200 miles to be added every fiveyears. The city currently has fewer than 400miles in a patchwork of segments.

Clean technology, too, is crucial to the citysfuture, adds the Mayor. We are also thecleantech capital of the United States and arelaunching a lot of clean technology initiativesin the city, he says. His vision is to establish aClean Tech Corridor and, in doing so transformthe downtown industrial core into an incubatorfor green jobs and technology. The Corridor

will bring together researchers, designers andmanufacturers dedicated to the developmentof clean technology products and solutions toclimate change challenges.

Future goals

Mayor Villaraigosa believes his city can lookto the future with confidence, even thoughitsfinances like so many other cities andgovernments have been seriously impactedby the depth and scale of the financial crisis.Although a recent report from City ControllerWendy Gruell that revealed the city is facinga US$350m deficit in the next fiscal yearunderlined the scale of the challenge, the Mayor

is keen to highlight LAs enduring strengths.In the future, I think you will see LA continueto build on its role as the mover of people andgoods, he predicts. We move 44% of all theseaborne goods entering the United States. Weare the largest port complex in the United States,and more people come here and leave here viaour airport than any other in the United States.Ours is the sixth busiest airport in the world forpassengers and ranks 13th in the world in aircargo tonnage handled.

We are the small business capital of the UnitedStates. Were the minority business capital too asmany of our immigrants start small businesses

here more so than in any part of the UnitedStates. So we need to continue to nurtureinnovation and entrepreneurship in this city. Andour diversity and proximity to the East and Southmeans that as Asia rises, so too will Los Angeles.

I feel like we are the Venice

of the 21st century; the

largest port in the United

States of America, the

worlds busiest origin and

destination airport; a portalto the East and South

I think cities in the United

States and around the

world are incubators

of innovation


13/40


14/40

Cities of goldBarcelonaBarcelona emerged as the most admired city inour survey by some distance. Some, but not all,of the reasons given reflect how the city used itsOlympic legacy to accelerate city development.For example: A similar scale used for OlympicGames to develop, drive entrepreneurshipstrongly, strong focus on job creation and urbanrenewal. The city is also seen as a step forwardcompared to the rest of all Latin cities and agreat example of a global city at a regional level

with a good talent attraction policy.

Jordi Hereu, Mayor of Barcelona:

The metropolises of our times are admiredwhen they become places where people livewith a free and open spirit, and when peoplesee progress in their personal or professionalaspirations. Whether they are visitors at a tradefair or entrepreneurs in a technology center,cities offer the people a physical, social andsymbolic environment that they see as optimalfor their projects. When a cycle closes and citiesgrow in parallel, it is thanks to the progressof people.

Barcelona has been very successful thanks tocontinued efforts to maintain its attractiveness,both in terms of its physical assets (internationalconnections, public space, housing andinnovative technological districts) and interms of social issues (quality cultural offer,cohesive social values, shared values), thepromotion of institutions that have a globalinterest, everything from FC Barcelona to thesystem of universities and business schools.

The world positioning of Barcelona has beenhelped by hosting big, worldwide sports, cultureand business events, like the Olympic Games,the Final Four, the World Mobile Congress orSonar festival.

CopenhagenCopenhagens success in achieving a high degree of sustainability hasprompted much admiration from around the world. The city is admired forthe way it has successfully managed a structural change without losing itsown special character. It has adopted an interactive approach to engagingwith its citizens, especially about development and the environment. Long-term goals have been formulated and communicated to support long-termdecisions, such as the desire to be carbon-neutral by 2025.

Frank Jensen, Lord Mayor of Copenhagen:

Im extremely happy to be recognized for our green efforts and forour ability to involve the citizens. We are committed to involving theCopenhageners face to face not least in the development of our city.

A case in point is the development of a whole new carbon dioxide-neutralarea, Nordhavn, where we encourage the local people to provide input.It is important to bear in mind, by the way, that Copenhagen has a longtradition of collective solutions. One example is district heating, where thepublic sector provides an infrastructure that is so financially attractive andso up to date in terms of climate standards that 98% of the Copenhagen

population has chosen to join it. The district heating system is one ofthe main reasons why we have been able to reduce carbon dioxideemissions by 20% over the past 10 years. We are now building on thatsuccess to introduce district cooling, which also has the potential to exciteinternational interest and attention.

We keep the commitment of the Copenhageners by working to provide agood everyday life where it is easy to be climate friendly: we build bicyclelanes, we establish waterfront baths and we lay out new beaches. Weare also planning to establish a ski slope on the roof of our new wasteincineration plant. That is how we combine modern solutions with qualityof life.

Our goal is to turn Copenhagen into the first carbon dioxide-neutral capitalin the world. We plan to use this to attract green investments and facilitatepartnerships between Danish and international universities, businesses andus as local authorities. We want not only to develop the city in a climate-neutral direction we are also going to invite the world to test tomorrowsgreen city solutions in Copenhagen. We want Copenhagen to be one of theworlds leading green laboratories, stimulating Danish growth businessesand attracting international investments and knowledge environments.


15/4015April 2011

As part of our survey, we asked civic leaders which cities they view astheir role models. Here, representatives from some of the most admiredcities explain the stories behind their success

MelbourneMelbournes cultural strengths were frequentlycited by city leaders. The citys arts, cultureand food, and the promotion of the cityas a destination for events is seen as aprincipal driver for development. Its transportinfrastructure, too, is praised as one of thereasons that the city attracts big businessstakeholders.

Robert Doyle, Lord Mayor of Melbourne:

Melbourne is very proud to be judged one of theworlds most admired cities. Among the crucialfactors in our success, our diversity stands out.This is a tolerant, welcoming, multi-faith city,home to people from more than 200 nations.

Style and substance define the Melbourne of2011. While our economic and social offer issecond to none, we are also enriched by artists,performers and writers of global renown.

Certainly, ours is a city with a huge enthusiasmfor sport; but in fact more people attend culturaland artistic events in our city.

Significantly, Melbourne is a serious place todo business, and also a wonderful place to live.We are nimble and open to change. Take a lookat our history. The City of Melbournes coatof arms, with its symbols of a bull, a sheepsfleece, a whale and a ship under sail, reveals ourpast dependence on primary industries. In themid-19th century, gold rush prosperity built themagnificent architecture that is still a hallmarkof our city. By the 21st century, Melbournehas become a globally recognized knowledgecity higher education, clean technology,

biotechnology, advanced manufacturing andcreative industries will drive our economy,complemented by all the attractions of a stylishand cultured city.

MunichMunich stands out from several impressive German cities by virtue of itsability to think strategically, according to our survey. Munich knows howto focus. Viewed as a model of innovation policy, the citys knowledgeeconomy has left it positioned as a high-tech and creative city.

Christian Ude, Mayor of Munich:I am pleased and, of course, heartened to know that the city of Munichattracts the interest of so many civic leaders. Economic success is a keyfactor if we are to ensure that people from different nations, cultures andreligions can live together peacefully, today and in the future. However,the rapid growth of the city also presents us with some major challenges.We have to ensure that the balance between economic prosperity and asustainable quality of life is maintained.

We have set ourselves ambitious goals. For example, we want to enhanceour childcare system, particularly day-care nursery places. This will helpease the competing demands of career and family. In addition, we wantto develop a better early assistance for children from socially deprivedareas a move which will help tackle social cohesion by mitigating theeffects of increasingly disparate incomes. We also want to offer our citizens

affordable accommodation and further enhance mobility within the city,as the public transport system is reaching its limits, both financially and interms of capacity.

Sport and culture, too, are important aspects of our plans for the future.We hope to host the 2018 Winter Olympics and want our city to continueto be seen as a center of music, literature, learning and research.

P

hotograph:MichaelNagy/PresseamtM

nche


16/40

Paris may thrill and enchant visitors fromaround the world but, like so many other

cities, needs to upgrade its transportnetwork to safeguard its future prosperity.

Here, French leaders Maurice Leroy andJean-Paul Huchon talk to Patrice Lefeuabout Grand Paris, a 32b investment

program that will transform the journeys ofcommuters and tourists alike

Paris movingstory


17/4017April 2011

Paris, City of Light, is not resting on its laurels.Notwithstanding its enduring status as an iconicworld city, its civic leaders are currently hard atwork planning its next stage of development as itevolves into a metropolis fit for the demands ofthe 21st century.

The plan, entitled Grand Paris, has beenfour years in the making. In 2007, PresidentNicolas Sarkozy set out plans to establish anew comprehensive development project ofGreater Paris, inviting ten architectural firmsto consider how to turn the French capital into amodel super-city, uniting center and suburb, anda driver of Frances economic growth. Sustainabledevelopment, improved housing and bettertransport links between Paris and its suburbs arethe three themes binding the projects together.Transport, the projects first chapter confirmsFrench Minister for Urban Affairs MauriceLeroy, is of fundamental importance for threeprincipal reasons.

Firstly, we have to modernize the existingtransport system of le-de-France [one of Francesadministrative regions and primarily made up ofthe Paris metropolitan area] to quickly improvethe quality of life for Parisien commuters, whoare affected by transport issues every day,he says.

Secondly, we had the largest public debate tohave taken place in Europe, lasting six months,and it clearly demonstrated that inhabitants ofthe region want their elected representatives,whatever their political affiliation, to cometogether to share a vision, and that is exactlywhat we have achieved with Jean-Paul Huchon[Chairman of the Regional Council of le-de-France]. And finally, the agreement lays down thefoundations for the Grand Paris Express, the newtransport network which will be the backbone ofthe Grand Paris development.

Huchon, too, is keen to stress that the projectamounts to a revolutionary change fortransport in the region. We are going to

allocate 12b for modernizing the transportnetwork, relieving the pressure on individuallines, improving the regional RER orbital train

line routes and constructing new modes oftransport, such as tramways, he says. We willalso invest more than 20b in delivering thefuture automatic mtro system. This system,which will link important business and residentialareas such as Versailles and the Charles de GaulleAirport, as well as the suburbs, will be made up ofa new train line approximately 140km in lengththat will operate 24 hours a day.

Huchon adds that the new system is specificallydesigned to cater to the needs of communitiesacross the region not just those in Paris itself.Marne-la-Valle, Saint-Denis, Orly and Roissyare linked to the capital by just a few kilometersof bypass. We expect more than one milliontravelers to use this bypass every day. The wholeregion of Paris is affected. And the renovationand extension to the west of the rapid transitRER and RER E lines, respectively, will completelychange transport conditions which are in partlamentable for inhabitants of the outer ringof Paris.

Economic boost

Underpinning this massive investment is theshared recognition among French leaders thata modern and efficient transport network isfundamental to strong economic development.All of the public players have talked to eachother and how we have moved away from astrictly political approach to get to the crux ofthe matter: the common interest, points outLeroy. That was my primary aim, to bring allof the interested parties together, regardless oftheir political affiliations.

It is perfectly true that the next key chapter ofthe Grand Paris project is economic developmentand creating jobs, continues Leroy. In fact, weaim not only to boost economic development,but also to improve employment, housing andthe quality of life in general around the capital.The transport network will be a frameworkaround which the peripheral areas will develop tocreate a city of the 21st century, the global city

envisaged by the French President. Beyond that,we know that the dynamism provided by GrandParis will benefit our country as a whole.

Capital gains

The transport network will

be a framework around

which the peripheral areas

will develop to create a cityof the 21st centuryMaurice Leroy

Creating good conditions

for employees is an absolute

prerequisite for a major

metropolisJean-Paul Huchon

Maurice Leroy

(right)


18/40

For Huchon, it comes down to the simple fact thatits the people that give an area its wealth. Headds: Creating good conditions for employees isan absolute prerequisite for a major metropolissuch as le-de-France, which is the largest regionin Europe and an international economic center,

not to mention the fact that it is also the mostpopular tourist destination in the world. This is asignificant asset for attracting new investments,creating new jobs and strengthening the dynamicdevelopment of the region around Paris.This translates as 30,000 jobs per year, thedevelopment of SMEs and large corporations andsupport for innovation and new technologies.

But its also an important project to tackle the

issue of housing by creating more than 60,000housing units per year. Furthermore, the futureof our region will benefit from the reduction ingreenhouse gases by a quarter between nowand 2030. This is huge; we are talking about thefuture of 11 million people who will be affected inthe region of Paris.

Vision for the future

The passion that Leroy and Huchon have forboth the project and Paris itself is unmistakable.Paris is a magical city for the whole world, theCity of Lights, swathed in history and prestige,

says Leroy. However, in terms of development,nothing can be taken for granted. Internationalcompetition is fierce, and numerous areas

are emerging worldwide, enjoying incrediblegrowth. In particular, I think of Asia in thiscontext. Exploiting and developing the numerousattributes of the capital region to allow Franceto maintain its position in terms of internationalcompetition. This is the real aim of Grand Paris.

This is the reason why the French Presidentwants us to extend our vision to include theperiphery, wants us to move beyond thetraditional boundaries of Paris, and wants us tobuild a global city, a city of the 21st century. Aglobal city is one where exchanges take place, acity of knowledge and cultural diversity, a spaceconnected to regional and global exchangenetworks, which values the potential and wealthof its suburbs and peripheral areas while strivingfor international economic development; GrandParis is a global project!

With construction having already started,the timeline for the project is ambitious but

deliverable, believes Huchon, with the first newline operational in 2017. Work has startedon the northern railroad bypass, known asTangentielle Nord, between Sartrouville in lesYvelines and Noisy-le-Grand in Seine-Saint-Denis,with eight tramways either under constructionor being extended, and work on extending theautomatic mtro line 14 will begin in the fallof 2011, he says. So the foundation stonehas already been laid; however, it is up to us topress ahead with our efforts and deliver on ourcommitment. And I am sure that in some ways,that is when the most difficult part will start.

Attracting internationalinvestment

Once the construction has been completed,the projects leaders believe Paris will be betterplaced for future success in all its forms, asLeroy explains. Today, France is an interestinglocation for numerous investors. But will thesame be true of tomorrow? Considering how fastthings are changing, we could have reason todoubt this, unless we question it every day. GrandParis is not only a new transport network, itsalso a vision for the next century. In this context,we have identified project areas to spearheadFrances competitive position, rather than simplyrestructuring a new city on the foundations of theold one.

In fact, we reject the idea that Paris is an ultra-specialized city; we intend to create a city whichcovers a diverse pool of excellence. That is whyservices for companies with high value addedand the Dauphine university will be set up aroundthe district of La Dfense. In the Seine valley,around the port at Achres and Cergy-Pontoise,a collection of eco-industries will spring up.Plateau de Saclay will become one of the mostimportant scientific and technological centersin the world. A biotech valley with laboratoriesand pharmaceutical companies will developaround Evry.

Elsewhere, the east of Paris will be home to alarge industrial and scientific area dedicated to

construction, maintenance and city services. Thevisual creation industry will center around Plaine-Saint-Denis, complementing the establishment ofthe Condorcet campus dedicated to humanitiesand social sciences. In Le Bourget and extendingover to Roissy and Villepinte there will be acenter dedicated to aviation and training in thesector, allowing the development of internationaltrade and the logistics industry. By the timeits completed, the Grand Paris project will havecreated almost a million new jobs and broughtabout an essential new form of growth growthlinked to the knowledge-based economy,says Leroy.

The stage is set, then, for the next chapter inParis illustrious history. Haussmanns greatwork of the 19th century gave Paris the facewe recognize today and tomorrow peoplewill talk about Grand Paris, concludes Leroy.This is a project in which we invest our will,our determination and our energy to lay thefoundations for the best possible future.

Everyone is welcome to join in on this adventure.Its a process of opening up to everyone, andthats why I would like to give this message to allof your readers: welcome to France, welcome toGrand Paris!

Exploiting and developing

the numerous attributes

of the capital region to

allow France to maintainits position in terms of

international competition.

This is the real aim of

Grand ParisMaurice LeroyThe foundation stone has

already been laid. However,

it is up to us to press ahead

with our efforts and deliver

on our commitment. And

I am sure that in some

ways, that is when the most

difficult part will startJean-Paul Huchon

Patrice Lefeu is an executive director withErnst & Young. Based in Paris, he works in theGovernment & Public Sector practice.


19/4019April 2011

Capital gains

Bogot, capital of Colombia, is experiencinga civic and economic resurgence. Here, citydeputy leader Yuri Chilln Reyes, tells Luz

Mara Jaramillo about the reasons for itssuccess and ambitions for the future

A cityon the move


20/40

The transformation of Bogot, the capital ofColombia, from a city beset by crime and disorderinto a thriving, bustling metropolis is one of therecent success stories of Latin America. Whileglobal attention has focused more on its neighborBrazils stunning economic surge, Colombiasresurgence, too, has been impressive. Bogot, solong ravaged by violent conflict involving armedgroups and drug cartels, is now on the up. Itsperformance has roots in the citys ability to look

to the future, as well as its leaders determinationto establish it as a magnet for commercial andeconomic development. Thats according to YuriChilln Reyes, Secretary General of the Office ofthe Mayor of Bogot.

In 2010, Bogot occupied the eighth place inthe ranking ofAmrica Economa Intelligence ofthe best cities to do business in Latin America,he says. From this perspective, we understandthe need to make Bogot a capital that projectsitself internationally every day, so that it gainsposition progressively, as a city that is a businessplatform in the region. It has everything tobe so.

We are planning for our city to be recognizedas one of the top five most important businesscenters in Latin America, and the most importantin the Andean region and the Caribbean, as wellas a leader in the quality of life that it offers itsresidents. It will thus become a city that attractsa large influx of tourists, which will serve as aprimary engine of development for the country.

City vision

Chilln Reyes, aged 47, looks at his role as oneof transformational leadership. I want to helpbuild a different future for Bogot, for Colombiaand our people, he says. I identify myself witha vision of public management that seeks to

combine the exploitation of global advantagesand advances in infrastructure, technology andeconomic progress, with the requirements ofsocial justice and the principles of equity andsolidarity as central components of citizenship.

It is clear that Chilln Reyes has highexpectations for the continued growth of hiscity, one that befits Colombias status as thefourth-largest country in South America, thesecond-largest population and richly endowedwith unexploited substantial oil reserves andnatural resources. We want ours to be aninclusive city, one that guarantees equity andthe full enjoyment of human rights, he says. Inpractical terms, this will be expressed in equalityof opportunity for all, a reduction in poverty,an increase in freedoms and appropriationof the benefits of development. Ultimately,we would be a city making progress, focused

on placing economic growth at the service ofhuman development.

With this goal in mind, Chilln Reyes and hiscolleagues are placing great importance ontechnological development, positioning Bogotas an important center of high-tech advances anda provider of cultural, tourism and commercial

services. In addition, the infrastructure,public services, security, mobility and regionaldevelopment system will be served by highenvironmental sustainability, and managementand planning institutions of renowned quality andefficiency, he continues. Broad participation bythe private sector will be achieved, serving as anexample on the continent of strategic alliancesfor progress, growth and social justice.

Beyond borders

In a move that echoes the dissolution ofeconomic borders around the world, Bogots

leaders are keen to strike strong relationshipswith its neighbors, both in Colombia and

Bogot 1993

A city at the heart of Colombias drug

trafficking epidemic. As a result, violence

was surging, jumping from 22 homicides

per 100,000 inhabitants in 1985 to 80

homicides per 100,000 people in 1993,

according to Colombias Institute for Legal

Medicine and Forensic Science.

Bogot 2011

A city transformed. In addition to strong

investment in infrastructure, and a deep

commitment to sustainability, crime rates

have plunged and it has become one of the

most attractive cities in Latin America to do

business. How has this change come about?


21/4021April 2011

further afield. The completion of the processof integrating Bogot with its neighboringmunicipalities is crucial for the economic, socialand political future of the countrys centralzone, which will maintain its strength as the

economic axis of Colombia, explains ChillnReyes. During the past few years, Bogot andits area of influence have attracted 60% of theforeign investments coming to Colombia, whichhave been focused on the acquisition of existingcompanies and the exploitation of the largedomestic market.

More than 600 multinationals and morethan 2,000 companies with foreign capitalparticipation are located in the area comprisingBogot and its adjoining municipalities. TheGDP of the region is more than US$44b, whichis similar in magnitude to that of Ecuador, andexceeds that of countries such as Costa Rica,

Uruguay, El Salvador, Panama and Bolivia.

The Capital Region is at the center of economicactivity and business in Colombia, accounting for21% of the population and one-third of nationalGDP. The new business developments have astrong export-oriented service component,including call centers, software and technologycompanies, transportation and logistics, aerialmaintenance, health services and education. Atthe same time, new investments are being madein the citys surrounding areas in high added-value manufacturing and agribusiness.

One of the reasons for the citys progress is themodel of cooperation between the public andprivate sectors, recognized as one of the mostsuccessful in Latin America, adds Chilln Reyes.

Internationally, Bogot is perceived to havemade substantial improvements in its security,business environment, connectivity and qualityof life.

City comparisons

Yet while advances have been made, ChillnReyes pinpoints four cities (Santiago de Chile,So Paulo, Buenos Aires and Montevideo) fromwhich many lessons can be drawn. They areleading cities in the Latin American economicsphere, especially the productive service sector,he says. They also have a great capacity for

attracting large multinational companies byoffering them stability in terms of taxation andsecurity for their investments and workers.And the quality of life that they offer to theirresidents, together with the fact they are citieswith broad tourism potential, explains whythey have become established as leaders inLatin America.

And as for Bogots global city competitors,Chilln Reyes cites Panama City [a city whosestrategic location is favorable to the groupingoffinancial and tourism firms that provideservices to companies] and Lima, in Peru [a verydynamic economy, particularly in its industrialsector, and hosts a great number of services,especially those related to the financial andtourism sectors.]

Sustainable development

Largely due to the environmental challenges ofrecent years, Bogots current civic leadershiphas made sustainable development a priority.The commitment that our Government hasassumed for the protection and the recoveryof the environment is unquestionable,asserts Chilln Reyes.

The integral strategy to reduce air pollution,

which includes the improvement of the quality of

the diesel that is consumed in our capital, showssignificant reductions in particulate matter, oneof the main pollutants. Other programs includea massive planting of trees in public spaces, theeffective control of discharge in our main riversand the protection of our wetlands.

Looking to the future

For Chilln Reyes and his colleagues, much oftheir current work is focused toward the year2019, which is when Colombia will celebrate twocenturies of independent political life. This isa historic and symbolic event that will invite us

to refl

ect on our potential and future, he says.This entails long-term planning to progressivelyattain multiple goals and objectives such as thestrengthening of the integrated transportationsystem, which will involve the development oflarge-scale projects.

Chilln Reyes is keen to stress that this visionhas captured the imagination of Bogotsresidents. It has been built with the needs andexpectations of citizens in mind. The citizensseek a city that provides them with a betterquality of life through access opportunities forall and the enjoyment of rights. Accordingly, thecitizen is treated as an individual with rights andas the epicenter of State action to guarantee

minimum basic rights. The citizen is also viewedas an active participant who has, in additionto rights, responsibilities to contribute to thepolitical process.

Chilln Reyes is right to assert that Bogotsresurgence can be traced to a number of factors.The future, too, seems bright. Bogot and itsregional area of influence can successfully buildtheir future, concludes Chilln Reyes.

This requires making the most of theircompetitive advantages in exports, theprovision of services, and knowledge industries.We will also be encouraging the creation ofmicrobusinesses in order to generate self-

sustaining employment, promoting competitivestrategies with specialized talent, and continuingto promote peaceful coexistence in society.

Capital gains

Bogot facts

Population: 7,379,000

Elevation: 2,546 meters

City mayor: Samuel Moreno Rojas, who waselected to a 200812 term.

Business ranking: Bogot is the eighth mostcompetitive city for doing business in LatinAmerica.

Source: 2010 edition ofAmrica Economa Intelligence

Annual city budget: US$6,2b [2010]


22/40

London, under Mayor Boris Johnsons leadership, aims to be the best big

city in the world. Its quite an ambition. After all, think of the prevalence of

incredible cities around the world, each of which boasts an array of highlyindividual characteristics that make them truly outstanding places to live

and work. From Sydneys beautiful harbor, to the dynamism of New York, to

the sheer energy and ambition of Shanghai, there is certainly no shortage of

cities to aspire to.

London, though, has many fans, and rightly so. One of the worlds greatest

and most successful cities, it is a global leader in business and finance and

is the engine of the UK economy. Combine its famous river Thames and its

preponderance of parks and green spaces with visitor and retail attractions

without peer, it is perhaps no surprise that London is regularly ranked as the

No. 1 city for travelers worldwide. And all this with the Olympic Games in

2012 still to come.

The Mayors role as the executive of Londons strategic authority is to

promote economic development and wealth creation, social development

and improvement of the environment. Before using many of his powers,

the Mayor must consult with Londoners, and in all cases the Mayor must

promote equality of opportunity.

The Mayor has a duty to set out plans and policies for London covering

transport, planning and development, housing, economic development and

regeneration, culture, health inequalities, and a range of environmentalissues including climate change, biodiversity, ambient noise, waste disposal

and air quality. Together, these plans and policies must also contribute

to sustainable development and the health of Londoners. The Mayor

also has various other duties in relation to culture and tourism, including

responsibility for Trafalgar Square and Parliament Square.

Its a job Johnson has taken to with panache. Having been born in New York,

he moved with his family to London when he was five years old and he has

repeatedly made clear his admiration for the city he has governed since May

Crossrail, involving the construction of

twin tunnels under central London, will link

Heathrow Airport, the West End, the City of

London and Canary Wharf


23/40

However, the Mayor and his advisors are keen to stress that the Olympics

make up just one part of his overall vision for London. The Mayor wants

London to be a fair city, to make sure young people in London have the

same access to choices, chances and support, says Jeremy Skinner, senior

manager for Economic and Business Policy. He envisions a city that is still

growing and developing indeed, one of the few growing cities in the West.

Londons population and economy will grow, and the city will evolve in order

to accommodate that growth.

For example, the Canary Wharf quarter in the east of the city, once a

derelict dockyard, began with a large national newspaper group moving

in. It then evolved into a financial district, and is now a massive retail

space. Further evidence of this continuing growth lies in the development

of schemes like Crossrail (in addition to Londons existing transport

infrastructure). Crossrail, involving the construction of twin tunnels under

central London at a projected cost of 16b, will link Heathrow Airport, the

West End, the City of London and Canary Wharf and is scheduled to be fully

operational in 2017. It is expected to create 70,000 jobs over the lifetime of

the project.

Crossrail is perhaps the most high-profile example of the current program

of investment in Londons transport system. As the citys commuters will

attest, the daily journey to and from work is often a struggle; with seats at a

premium whether one travels by train, bus or underground. With Londons

population expected to grow by 1.3 million over the next 20 years, extra

investment is evidently vital. One area of focus for the Mayor is London

Underground, where the current renovation program will, when complete,

provide an extra 30% capacity.

Cycling, though, is where Johnson himself a keen cyclist is most closely

identified. Under his administration, hundreds of millions of pounds are

being spent on bicycle routes, bicycle parking, education programs, adult

and child bicycle training and events. The most notable though is a bicyclehire scheme which successfully launched last year. When complete, it will

provide 6,000 bikes from 400 docking stations across 9 London boroughs

and the Royal Parks. The bikes are free for the first 30 minutes of use.

Keeping a city moving is undoubtedly crucial for any mayor, but for London

it is especially important, given the competition that exists between leading

world cities. We need to be able to attract the best and most highly skilled

people to London from around the world, adds Skinner.

Financial services are, and always will be, a core industry for us. So we

need to ensure a global level playing field, a stable industry and to build on

and promote the fantastic business case for doing business with, and being

in, London. And even with the public finances very stretched, to enhance

our status we need sufficient funds to provide the foundations for continued

economic growth and ensuring that opportunity extends to all Londoners.

2008. Underpinning his administrations actions is the ambition bring out

the very best in London helping its companies to grow, its communities to

thrive and its people to prosper.The environment, too, is taking precedence. As part of the Mayors

sustainable development policy, there is a formal commitment to reduce

Londons carbon emissions by 60% from 1990 levels by 2025. Johnson also

wants to encourage activity and investment in projects designed to tackle

climate change in order to demonstrate their deliverability and commercial

viability to the private sector. This will have the triple effect of boosting

Londons low carbon economy, creating jobs and tackling climate change.

Capital gains

Mayor of London Boris Johnson says

he has the most brilliant job in British

politics. Here, Harriet Walker examines

why he believes Londoners can beconfident about their citys future

Londoncalling

There is a formal commitment to reduce

Londons carbon emissions by 60% from

1990 levels by 2025

A bicycle hire scheme was successfully

launched last year. When complete, it will

provide 6,000 bikes from 400 docking

stations across nine London boroughs and

the Royal Parks

Boris Johnson, Mayor of London:

Its an honor to be Mayor of one of the worlds leading cities,

particularly leading up to the Olympic Games in 2012.

London is an amazing city but we can learn from others. We

would like to have the dynamism of New York, the civility of

Vienna, the spectacular setting of Sydney and the joie de vivre

of Paris. We are also keeping a close eye on the new kids on the

block such as Sydney and Singapore.

I am excited about the future. In 10 years time, I want

Londoners to be able to look back at the Olympic Games and

remember how it exceeded expectations; for large employersto all be paying a living wage and therefore for London

to be making a genuine contribution to fairness; crime to

have continued its downward trend; and for the young to be

continuing to engage with the economy, for example, to be the

best city in the world for school results.

April 2011 23

Boris Johnson

Harriet Walker is a senior executive at Ernst & Young in the UK.


24/40

Los Angeles, London and Paris. Three globalcities. Three sets of challenges. And three sets ofleaders who are committed to using the powersof their office to grow and strengthen their citiesfor the future.

On the face of it, Paris and London have much

in common. And its absolutely true that thesetwo great capital cities share many similarities.In addition to their geographic proximity, bothshare world-leading arts and culture and diversebusiness services and are principal recipients ofinward investment, to name but a few.

But, as our analysis on the preceding pagesdemonstrates, they are also facing parallelchallenges such as creaking infrastructureand wide disparities of income among theircitizens. Transport, it seems, is viewed as a keyremedy; both Londons Crossrail and the GrandParis project will create tens of thousands ofconstruction jobs, spur investment and open up

previously less accessible areas of the two cities.A mini-globalization, if you will.

And Los Angeles, too, is also prioritizinginvestment in its transport system, with itsmayor, Antonio Ramn Villaraigosa, Jr.,implementing a bike plan which sets a long-termgoal of some 1,680 miles of interconnected cyclepaths and calls for 200 miles to be added everyfive years. In addition, he cites LAs geographiclocation and ability to act as a hub for goods andpeople as integral to the citys future: I feel likewe are the Venice of the 21st century; the largestport in the United States of America, the worldsbusiest origin and destination airport; a portal tothe East and South.

This example, one of many, serves todemonstrate that irrespective of a citys size or

geographic location, todays generation of civicleaders are more often than not facing similarpriorities and frustrations.

Certainly, theirs is not an easy job. How tonavigate the complex maze of driving economicgrowth, while at the same time addressing the

challenges of climate change and the aftermathof the global financial crisis and huge publicdeficits, are questions that have taxed the finestand brightest of both the public and privatesectors the world over. And, unfortunately, thereis no easy answer.

Our examples of Los Angeles, London and Parisdo suggest, however, that achieving economicprosperity and sustainable growth are goals thatare largely dependent on the specific actionsand policies stemming from local and regionalgovernments. Effective leadership, then, is vital.So what does this mean in practice?

The best city leaders have to possess a variety

of talents and strengths. Though crucial,theres more to it than effectively staffingan organization and setting a challenging,yet deliverable, policy course. Effectivecommunication and not just to the media is nowadays a prerequisite. With capital andinvestment flowing in multiple directions, mayorsneed to be able to project and sell their city to avariety of international and competing audiences.

Take Londons Boris Johnson, for example,who frequently travels to other countries in abid to encourage investment into his city. Nodoubt he would see this as a core aspect to hisdetermination to help Londons companies togrow, its communities to thrive, and its peopleto prosper.

Among the key success factors for thetransformation of Paris and its region is theshared vision among all public stakeholders thatFrances capital must invest to remain one of thetruly global cities. Whatever the differencesof opinion among public leaders at national,

regional and local levels there has been,and will certainly be, a continued ambition tomake it work for the benefit of citizens andcompanies. And, luckily, we can observe thatall public leaders have sought to minimize theirpolitical differences and now share the samecommitment to renovate the urban environment,engage in sustainable agendas in transportationand energy, and invest in clusters of economicdevelopment and advanced research.

This shared interest in promoting economic andsocial development is reflected by the evidentpassion each set of leaders clearly has for theirrespective cities. Mayor Villaraigosas joy, inparticular, comes through loud and clear: I lovewhat I do ... I embrace the challenge withoutreservation; this is a great city and I feel veryfortunate to be in this job.

In the final analysis, perhaps this zeal, thisambition, this essential aim of making a city thebest it can possibly be, is the crucial componentbehind the success of any city administration.Without it, the chance of delivering real changefor the better recedes into the distance.

Urban visionThe civic stories of Los Angeles, London

and Paris demonstrate that whiletodays civic leaders need to possess a

multitude of skills, a genuine passionfor their city is absolutely fundamental,

says Marc Lhermitte

Capital gains

Marc Lhermitte is a partner with Ernst & YoungAdvisory. He advises corporate clients oninternational location strategies and public sector

clients on economic development, real estate andcompetitiveness issues.


25/4025April 2011

Once upon a time, the mayor of every city with aspirations to becoming aWorld City and the premiers of most countries believed that developing

a large and expanding financial services sector was a primary strand ofeconomic and social policy. It was believed that whereas domestic banksandfinancial services companies were to be nurtured and encouraged fortheir contribution to the real economy, additional prizes lay in developingan international financial services capability that would lure mobile globalfirms, talent and capital.

The attractions are obvious. Financial services generate significant skilledemployment opportunities for citizens and are pretty much pollution-free.The cluster effects can be immensely important, as financialfirms producea requirement for everything from accountants, consultants and lawyersto printers, taxi drivers and restaurateurs. In London, for example, it isestimated that the financial sector (the City) generates almost US$20b inannual demand for non-financial services companies. The corporate andpersonal taxes paid by the sector and its employees are immensely valuableto city treasurers and finance ministers alike, as are the contributions to

social and political causes. Furthermore, like hosting the Olympic Games,having a strong and flourishing financial services center puts you on themap and burnishes your international prestige and reputation.

Boon or burden?The scale of the financial crisis has notstopped cities competing with each otherto become international financial centers,says Philip Middleton


26/40

So whats not to like? The financial crisis highlighted some of the potentialdownsides to overenthusiastic expansion into financial services. For a start,dealing with failed or failing firms on your patch can be messy, expensiveand corrosive to domestic public opinion. The expected tax revenues maydisappear if firms make losses, or indeed if globally mobile businessesdecide to fold their tents and disappear elsewhere. The newly heavy andintrusive hand of global regulatory reform in financial services is expandingacross borders and in some fields trumping sovereign freedom of action.In raising standards, transparency and costs of operating financial servicesbusinesses across the globe, governments and regulators are effectivelyputting certain types of business model out of business (brass plate, laxregulation, generous tax regime, lack of curiosity about activities) and

reducing the opportunity for differentiation in others. In an age of austerityin many countries, voters are also starting to question whether financialinstitutions and their employees should be given preferential treatment,and whether the risks of hosting major financial institutions outweighthe benefits.

Hence, the debate over the desirability and extent of the financial servicessector has become rather more nuanced than in the past, and politicalconsiderations have become as important as economic ones. Nevertheless,the desire to build new international financial centers seems unabated, withcities as diverse and important as Moscow, Doha, Toronto and Frankfurtannouncing their strengths as financial services hubs and as potential peersof the traditional centers of world financial markets, London, New York andHong Kong. As we witness a shift in global capital markets and growth awayfrom the West and toward other fast-growing economies, it is clear that newcenters of financial power whether in the Middle East, Far East or BRICs(Brazil, Russia, India and China) are emerging and with them new cities asfinancial services hubs. Consequently, there is no lack of cities seeking to

develop their onshore and offshore financial services capabilities.

What is the recipe for success? Some cities,owing to accident of geography and time zone,or to a significant business and industrialeconomy on their doorstep, will have naturaladvantages and a significant volume of captivefinancial services from which to start. Otherswill have little other than a pleasant climate andan accommodating government. In all cases,an exercise in segmentation will be requiredto identify natural strengths and weaknesses,and to chart the scope of the possible. Somethings are absolutely indispensable, includinga well-educated, flexible and English-speakinglabor pool and the ability to import key skills and

workers; an excellent physical infrastructure; ahigh quality of life; and a stable and predictablepolitical and fiscal regime. Interestingly, whereas

low corporate (and personal) taxes are highly desirable in attractingmobilefinancial services businesses, it would seem that this business prizepredictability and stability above all.

Increasingly, the quality of the overall regulatory regime will be crucial, andjurisdictions that seek to offer a regulatory regime that differs substantiallyfrom emerging international norms will have to offer significant advantagesin other areas to retain attractiveness. As cooperation, standardization,and transparency between governments and international bodies increasein the field of financial sector regulation and fiscal regimes, the scope forregulatory arbitrage, while still present, will be squeezed. In addition, thequality and activities of the regulators themselves, and the transparency,cost and perceived equity of the legal regime within which they operate,are crucial.

Despite predictions that advances in communications and information

technology would sweep away the need for physical concentrations offinancial sector expertise, it seems that precisely the reverse is happening,and that the clusters associated with the financial sector are growingboth in size and number. It is true that a whole new raft of considerationshave arisen in the wake of the financial crisis, but the attractions ofhosting financial services hubs are appealing to many city and nationalgovernments, and we continue to see new opportunities emerging aroundthe world.

The desire to build new international

financial centers seems unabated with

cities as diverse and important as Moscow,

Doha, Toronto and Frankfurt announcing

their strengths as financial services hubs

Whereas low corporate (and personal) taxes

are highly desirable in attracting mobile

financial services businesses, it would

seem they prize predictability and stability

above all

Philip Middleton leads Ernst & Youngs EMEIA Financial Services Governmentpractice, working with governments and regulators across the region on issuesrelating to financial sector strategy.


27/40

Limited access to bank finance across Europe hasresulted in a dramatic reduction in the numberof regeneration and urban development projectsbeing taken forward in city regions across Europe.These projects play a vital role in the sustainableredevelopment of the urban landscape. Theprimary project sponsor is often the public sectorbut the new austere funding environment meansthat these bodies are increasingly unable tocommit funding, exacerbating the slowdown inthe delivery of projects.

The European Investment Bank (EIB) and theEuropean Commission, with support fromthe Council of Europe Development Bank, areresponding to the funding challenge by utilizinga number of innovative financial engineeringinstruments under the initiative for JointEuropean Support for Sustainable Investment in

City Areas (JESSICA).For Rakesh Bhana and Gianni Carbonaro, whoserve as part of the JESSICA Task Force at the

EIB, the potential of the initiative is substantial;it offers Member States the opportunity totransform some of its Structural Funds thatare usually deployed as grants into repayableand recyclable assistance for PPPs and otherprojects delivering sustainable urban renewaland development. The resources drawn downinto Urban Development Funds (UDFs) from theStructural Funds can be match funded by theMember State or through other investors tocreate the capitalized fund.

Nurturing

sustainableEuropean citiesSupporting economic growth and jobs across the EuropeanUnion represents a vast challenge. Philip Milne speaks tothe JESSICA Task Force from the European Investment

Bank about a new form of financial instruments developedto help fund and kick-start urban development projects

27April 2011

European cities must

manage a range

of demographic,

economic, social and

environmental challenges


28/40

We are working to develop an investmentapproach where revenue-generating projectscan utilize JESSICA support as part of the overallfunding package, they explain. Where eligibleurban projects are unable to attract the requiredprivate sector investment, JESSICA financingcan help address the problem by increasing thesupply of investment capital this can take anumber of forms, from equity, to either junior or

senior debt or the provision of guarantees.JESSICA was initially developed as a concept in2006 and has since become increasingly relevantto member states with the drying up of publicand private sector financing seen on account ofthefinancial crisis. Notably, the 2008 publicationof the Economic Recovery Plan, which addressedthe challenges of the current economic climate,noted that flexible funding mechanisms suchas JESSICA could be important tools to supporturban regeneration.

According to the JESSICA Task Force, keyobjectives include to leverage private capitalinto projects and at the same time to increasethe efficiency of public funding, adds Bhana.From dramatic demographic shifts, to hikes inenergy prices,

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