German Gref. Cities 2011. Twelve Urban Trends of Critical Importanve to Russia

German Gref,President and Chairman of the Board of Sberbank Russia, for the Moscow Urban Forum

CITIES 201112

OF CRITICAL IMPORTANCE TO RUSSIA

URBAN TRENDS

Russia’s cities is being impacted by all of the key trendsinfluencing the development of today’s global cities.

AEROTROPOLISDEVELOPMENT CORPORATIONS

SHRINKING CITIESSTRATEGIC PLANNING

CITY 3.0

URBANIZATIONEVENT ECONOMY

NEW URBANISM SMART GROWTHCITY BRANDING

DEINDUSTRIALIZATIONGENTRIFICATION

METROPOLIZATIONCITY 1.0

CITY 2.0

PUBLIC SPACES

1. URBANIZATION

Urbanization of world economy and population iscontinuing to grow.

Over 50% of the world’s population lives in cities.Over 60% will live in cities by 2025.

Urban population expanded 4 times since 1950.80% of global GDP is produced in cities.The world’s 600 largest cities produce 60% of global GDP.20% of total world population is settled in those 600 cities.The world’s 100 largest cities will account for 35% of global GDPgrowth by 2025*

Dubai(UAE)

19900.370 mlnresidents**

20031.204 mlnresidents**

20071.870 mlnresidents**

McKinsey Study “Urban World: Mapping the Economic Power of Cities”**censuses in 1985; 2005; 2010

74% of the Russian population lives in cities.Only one-third of Russian urban population lives in large cities.Small cities will continue to suffer population losses,Millionaire cities will continue to grow at their cost.

Saint Petersburg, 4.868 mln people

Moscow, 11.551 mln people Novosibirsk, 1.475 mln people

2. METROPOLIZATIONExpansion and transformation of large cities into vast economicregions encompassing significant swaths of surroundingterritory.

METROPOLIS[from the Ancient Greek: μητρόπολις literally: “mother city”]- region comprising a densely-populatedurban core and more sparsely-populatedsurrounding areas. The entire territoryfeatures an integrated infrastructure,industrial and residential structure.

There is a trend towards concentration of theurban population within major cities andreduction of the relative population share ofsmall towns continues in Russia.

Metropolization in Russia led to the collapse of all major cities.It is a result of city growth that was guided last 20 years by thecommercial interests of developers, not the strategic planning.

Motor vehicle traffic resulting from commuter migration

Map of commuter traffic from the Moscow suburbs into the downtown area between 08:00 and 10:00

Large-scale, unbalanced development of Greater Moscow

• How city growth can bedecentralized?

• Which functions drivingthe city’s collapse shouldbe transferred to newterritories?

• How can business interestin the development ofMoscow’s new territoriesbe generated?

• How can Moscow’senvironmental problemsbe solved?

MoscowAmalgamation with new

territories will proceed on the basis of decisions adopted by the governmental authorities

of two of the Russian Federation’s constituent

entities: the City of Moscow and Moscow Region

Current territory of Moscow

New city limits(as of August 2011)

Territory of Kaluga Region

Population centers

СП – rural centers ГП – urban centersExpansion plan of Moscow’s city limits (2011)

3. SHRINKING CITIES- worldwide trend towards the population loss and economicdecline of the majority of small and medium-sized cities. InRussia part of those cities defined as monocities.

DETROIT, USA2011

In Russia, several hundreds of small and medium-sized cities arein danger zone due to their heavy dependency on exhaustingraw natural resources, or technologically obsolete industries.

KARABASH, Chelyabinsk RegionCenter of copper smelting industry, Declared as an “ecological disaster zone” in 1996 by order of the RF Ministry of the Environment. Since 1989, the city’s population has fallen by 12% to 15,057 residents.

IULTIN, Chukotka Autonomous District Center of tin and tungsten mining industry.1994 – mining wound down due to unprofitability.1995 – city of the many thousands was officially disbanded.

The risk of shrinkage can threat even industrial areas of large cities. Russian cities have to elaborate the approaches of renovation of unused industrial sites.

MURMANSKSince 1989, the city’s population has dropped by 34% to 307 664 residents.Together with its surrounding area, Murmansk is an important strategic center in Russia’s Northwest. Following dramatic budgetarycutbacks for the Russian Armed Forces in the 1990s, many bases were disbanded and the towns surrounding military facilitiesabandoned.

4. DEINDUSTRIALIZATIONBy the end of XX century, the industries were taken away fromthe territories of most global cities. Post-industrialredevelopment of those sites made a huge impact on citiesgrowth.

MOSCOW, 1920former brewery turned “Moskovskaya Bavaria” Winery Complex.

MOSCOW, since 2007“Vinzavod” Center of Modern Art.

The world has amassed a wealth of experience in terms of theeconomic development of the service sector and creativeindustries based on the redevelopment of old industrialfacilities. Those lessons should be learned, because Russiancities will have to enter the period of mass deindustrialization.

BARCELONA, 1970Cement plant

BARCELONA, 1975Architectural offices, expo sites, apartments, hotel rooms, gardens

Beyond the fostering of creative industries and the service sector, the post-industrial redevelopment of industrial zones can also involve the formationof international financial centers, innovation centers and global universities.

LONDON, 1980Docklands in London – the biggest port in the world

LONDON, 2011London’s new business district, a major international financial center

Industrial belt of Moscow occupies near 20% of its territory. The experienceof redevelopment of former industrial zones is formed in Moscow. It rangesfrom very negative to quite interesting even within the scope of globalstandards.

MOSCOW, until 2004Garages at the site of the “KrasniyOktyabr” Factory

MOSCOW, 2010“Strelka” Institute for Media, Architecture and Design; public space

5. CITIES 1.0, 2.0, 3.0In the second half of the XX Century, global cities fundamentally changed their development ideology, coming to embrace the concept that cities should provide people with a high quality of life. The global leaders didn't stop there – having their vision on further development in terms of growing into spaces, in which certain social groups find it convenient to live and work. This is how global metropolises become network cities.

CITIES 3.0Cities of the future Post-informational cities Product – cultural codes, communications NETWORK CITIES

CITIES 1.0Modern Russian cities – work cities

Product – infrastructureCITIES OF MACHINES

CITIES 2.0Modern European cities

“Liveable” cities Product – dwelling place

PEOPLE CITIES

Direction 2 –Outpacing

development

Direction 2 –Catch-up

development

Most Russian cities still remain collapsed industrial cities. Many Europeancities are developing as ideal spaces for living. Global leaders pick andchoose the residents, investors and tourists who share their vision.

KRASNOYARSK, 1.0 BERLIN, 2.0 SINGAPORE, 3.0

transportationinfrastructure

communicationshousing and public

utilitiescatering

jobsfinancial security

housing commerce

security

small business opportunity

public transportationeducationcommunications

environment cultural sites (museums, galleries)

technology

personal development

cultural environmentcultural heritage

aestheticspublic spaces

international communications

telecommunications

civil libertiesIT-infrastructure

congress-and-expo infrastructure

6. SMART GROWTHThe collapse of uncontrollably expanding cities formed the global demand forthe theory of Smart Growth, which is characterized by the pursuit of sustainabledevelopment and uses a comprehensive approach to the development ofinfrastructure, office and residential real estate, and public spaces.

Office/commercial development - collapse of the city’s

transportation infrastructure;- reduced quality of life

chaotic, unbalanced development

residential development

territorybrownfieldgrayfieldgreenfield

smart growth

comprehensive territorial analysis in the context of the city’s urban-planning development

creation of transportation and pedestrian infrastructure, parks and public spaces, preservation of historical environment

balanced model of territorial development

sustainable urban development, increased quality of life

Smart growth is based on the 10 basic principles of the New Urbanism. Thisis the ideology of the compact “pedestrian” city or district featuring theservices residents need – and often jobs within walking distance of home.

Pedestrian accessibility

Connectivity

Multifunctionality and diversity

Diversified and mixed development

High-quality architecture and urban planning

Traditional neighbourhood structure

High density

Green transportation

Sustainabledevelopment

QUALITY OF LIFE: taken together, these principles create a high quality of life and allow for theformation of comfortable residential areas, populated by more stable and highly-developed communities.

7. MARKETING AND BRANDING OF CITIES AND PLACES

Increased competition among cities for residents, tourists and investors hasfocused the sharp attention on the need for the professional branding ofplaces, just like the branding of goods and services is done for the commercialmarkets.

8. PUBLIC SPACES- the most critical infrastructure element of City 2.0 – a city geared towardsthe individual and ensuring a high quality of life. Comfortable parks,boulevards, grounds and squares brimming with social and economic life – acharacteristic feature of global cities.

Public spaces are so important for global cities that they have priority overcommercial development within the brownfields renovation projects.

New York, 2009High-Line – Manhattan park located about 10 meters above ground level – until the 1980s, served as a line in the city’s elevated rail network. In the 1990s, it was decided to transform the line into a park path.

Soviet-era squares and boulevards failed to become fully-fledged publicspaces relevant to residents’ daily lives. Post-soviet cities will need to makequite an effort to fill their frequently-empty squares and parks with life.

DONETSK, Lenin Square KHABAROVSK, Lenin Square

While other global cities have been busy freeing-up their previously-developed territories to make way for new public spaces, Moscow hasmanaged to permit the commercial development of a whole range ofpriceless spaces in the city center.

MOSCOW, Manezh MOSCOW, Manezh

9. EVENT ECONOMYEconomic sector that becoming more and more significant to urbandevelopment. The event economy is used as a driver for the development ofmany territories through the attraction of investments and tourism flows.

MOSCOW, 1980Olympic Games

SINGAPORE, 2010Youth Olympic Games

Event economy has become a mainstay of development for many citiesin Europe and US throughout the post-industrial period.

museum capitalBilbao, SpainPopulation: 353,200 specialization: cultural and museum center

exhibition capitalHanover, Germany Population: 522,600 specialization: exhibitions, conferences, events

concert capitalVienna, AustriaPopulation: 1,670,300 specialization: music concerts (opera, philharmonic, etc.), museum exhibitions

Russia’s cities must develop their congress-and-exhibitioninfrastructure (hotels, expo-centers, congress centers) in orderto participate in the global event economy, which share is nowclose to 2% of global GDP

Entrance north

Entrancewest Entrance south

Metro Station

Vystavochnaya

PAVILION 5No. PAVILION No. 1PAVILION No. 2PAVILION No. 8

PAVILION No. 6“FORUM” PAVILION

PAVILION No. 3PAVILION No. 4PAVILION No. 7

Official catalogue

Guest registration

Administration

WCCafe

TelephoneFirst aid point

Bus stopSubway station

Expo customs point Currency exchange, ATM

Front officePolice

Level one

10. AEROTROPOLISFor any modern city, airport quality is of vital importance. For some globalcities, the airport enjoys a status of such prominence that they are calledaerotropolises – cities developing around and on the basis of airports.

Airports have emerged as the drivers of business and urban development in the 21st century, justas highways were in the 20th Century, railways were in the 19th Century, and seaports were in the18th Century. The aerotropolis is quickly becoming the focal point of urban activity, where airlinepassengers and local residents alike can work, shop, conduct business, dine, sleep and findentertainment options – all within 15 minutes of the airport.

The state of most Russian airports and their associated economies leaves something to be desired.

AMSTERDAM, Schiphol Airport Population: 780,152 Passenger turnover: 45.2 mln (2010)Schiphol – critical aviation gateway to Europe, along with Heathrow Airport in England, Frankfurt Airport in Germany, and Charles de Gaulle Airport in Paris

KAZAN, Kazan International Airport Population: 1,196,738 Passenger turnover: 958,600 (2010)Kazan’s only civil aviation airport. Kazan – Russia’s geographical center, with tremendous potential to develop into one of the country’s main transportation hubs.

11. STRATEGIC PLANNINGUrban planning has been called the most complex interdisciplinary field of study. Urbandevelopment depends on economics, politics, sociology, culture, science and technology. Urbanplanning at the end of the XX Century – beginning of the XXI Century has demanded dramaticqualitative improvements to the strategic planning of the world’s cities. In Russia, only twomajor cities (Kazan and Perm) enjoy European-quality strategies and master plans. Developinginternational-quality strategies for at least 15 of the country’s major cities is essential toensuring the competitiveness of the domestic economy.

strategic master plan of Perm, Russia (2010)

10. URBAN DEVELOPMENT CORPORATIONS

The complexity and sheer scope of urban and territorial transformation have createduniversal demand for Urban Development Corporations, which have assumed a central rolein organizing coordination between cities and investors and preparing sites for new types ofdevelopment.

Development strategy for the Thames Docks, managed by the London Development Agency, Great Britain