This afternoon after a delicious lunch I attended a panel at the UCLG World Congress of Local and Regional Leaders congress on what kind of investment do we need for the city? The session convened an excellent group of speakers from the public and private sectors to discuss a few key issues including:
- What are the best sectors to invest in to advance equitable economic opportunity?
- How to best balance public and private partnerships
What makes cities more competitive and innovative?
- What are things that are working well in Bogota and what can be improved in the innovation/investment front?
The session featured the following speakers:
Freddy Castro, Secretariat for Economic Development, Bogota
Juan Gabriel Perez, Executive Director Invest in Bogota
Andres Mendoza Pena, Global Expert AT Kearney
John Means, Partner, Mckinsey Global Initiative
Elena Bourganskaia, Director, Global Water and Infrastructure, IFC
Luis Guillermo Plata, President, ProBogota
Jorge Vergera, Director of Technology, IBM Colombia
One of the central questions most speakers addressed is what are the key sectors to invest in cities in emerging markets to leverage economic opportunity and growth. John told a powerful story when he was recently talking with a colleague who asked him what is the best sector to promote overall growth in emerging cities. Initially he said all sectors, but after careful thought and reviewing recent research from McKinsey, he stated that the world is facing an investment imperative and needs to put much greater resources to creating opportunity for migrants, unemployed youth and women. Instead of seeing these groups as challenges or a threat, he stressed (based on data and research) that these groups could serve as linchpin for positive and sustainable economic growth in cities.
McKinsey has been working with a group of global mayors who collaborated to develop a set of principles about how cities can respond ethically to the migrant crises. They came up with two guiding principles. First, migrants are a fact meaning that we cannot stop migration. Second if cities work to integrate migrants in a holistic manner, they produce much greater benefits for society than the cost.
The issue of youth under or unemployment is a huge challenge to urban areas and the global economy. The ILO estimates that 75 million youth are unemployed with a global average of 12.6% (in some regions it is over 25%). The number of underemployed is much, much higher. Paradoxically, many employers McKinsey has surveyed indicate they cannot find talent for open positions. John outlined a number of steps that McKinsey has done (as well as others) to foster greater economic opportunity for youth. A central approach is to better link employers and workforce or education programs to ensure there is a stronger match between training and the marketplace.
The Mckinsey Social Initiative recently launched an independent nonprofit, Generation, a global youth employer program that draws on their research on education and employment. It is an intensive program that works closely with employers, educators, government, youth and provides intensive training and wrap around support for youth including during the first few months of employment. The program has had tremendous success with over 90% of participants securing positions. In addition, many participating employers have become more open to hiring based on skills/competency rather than only formal educational qualifications.
John stressed that having greater gender parity would produce tremendous economic benefits. Although women make up more than half of the world’s population, they only contribute 38% of GDP. McKinsey has estimated that achieving greater economic and social parity would contribute 12 trillion to the global economy. Moreover, if true gender parity were achieved, something he acknowledged is challenging, the total contribution would be closer to 28 trillion.
Freddy Castro stressed how the mayor and city of Bogota is striving to attract increased investment to advance a better city for everyone. This is one of the challenges that emerged is how to attract greater private sector investment, while at the same time ensuring that the benefits/impact don’t only go to a small segment of the population. Many speakers talked about the need to ensure people aren’t left out. However, much more is needed to better link investment to opportunity for all. Does this mean that there should be an emphasis on investing that includes outreach to more marginalized communities which can be challenging? Or that an increased % of city budget may go to ensure greater equality? What are the indicators of ensuring that increased investment creates more sustainable and equitable jobs? These are issues that many cities are struggling with. Of course increased investment is key in a globalized and competitive economy, but not all investment is equally beneficial. It would have also been interesting if time had permitted to hear what investment the speakers would say Bogota shouldn’t pursue or that could actually do harm.
Andres presented research that AT Kearny has been doing on global cities and innovation. The Global Cities index ranks the top cities in the world based on business activity, human capital, information exchange, cultural experience and political engagement, this is the Global Cities Index. Within this index Bogota ranks 57th. The city has strong ratings on human capital, infrastructure (although traffic is one of the cities major issues and much work remains to be done, Andres stressed progress has been made and the city will start building a metro and continue to expand transport options), but needs work in other areas such as information access, strengthening global reach of universities, and security.
Andres concluded hit talk about the importance of innovation and entrepreneurship for Bogota specifically and for urban areas in general. He emphasized three key ingredients to fostering an innovation hub including:
A long term plan – if not a long term plan will always be catching up
Collaboration between public and private sectors is key
Balancing growth and inclusion will ensure communities are not left behind – As you move the city forward you have to make sure you don’t leave any citizens behind.
At the end of the conversation speakers agreed the importance of public and private partnerships (to break out of siloed thinking), and to ensure education is providing skills needed for employment (and working with employers) and work on ensuring people aren’t left behind. Juan and Luis talked about their work attracting investment from overseas to match local companies and scale economic opportunities in city.
As someone who has been coming to Colombia/Bogota for almost 20 years, it is clear the city has made great strides in growing its economy, becoming a startup/tech hub in Latin America, has a very strong cultural infrastructure and is striving to make progress in transport and on inequality (huge gaps remain). Foreign investment has been growing and Bogota is the focus of much of the capital flow coming into the country. The challenge will be striving to ensure that the investment in the country is more long-term patient capital that helps support sustainable growth and opportunity. It is important to remember, investment is not a magic panacea that can fix the challenges of any one city or country, but smart investment based on strategic thinking and partnership is an important step. Elana from the IFC provided a wonderful insight when she stated (based on input from one of her colleagues, note I am paraphrasing here). I don’t want to hear what are your values in the abstract (as many leaders do talk about growth, justice and equality), instead show me your budget which can show your values and priorities are put into action.