urbanization is increasing the complexity for urban development. There ..... and Outsourcing company that delivers solut
Our Cities, Our Future
www.wipro.com
Hariprasad Hegde
Table of Contents 3........................................................ Introduction 4........................................................ The Modern Day Architects 4........................................................ India’s Urban Burden 6........................................................ The Drivers of Change 6........................................................ The Role of Large Organizations
Introduction The world population has more than doubled in the last 50 years from 3.5 billion in 1960 to about 7 billion today. This is expected to continue. According to the UN, this number is expected to reach a whopping 9.2 billion by 2050. But our resources are not following the same expansion and inflation pattern. In fact if we continue to function the way we do today, our future will be highly unsustainable. What we do today will be the foundation of how our future will shape. Cities form the core of the holistic global development. This is where our future takes shape resting on the pillars of economic growth given the bustling activities of more than half the world’s population. But today cities are also home to our most pressing environmental challenges. It is in our hands to help the cities become more liveable, more competitive, and more sustainable. For the first time in history, more than 50% of the world’s population are living in urban areas. By 2030 this number will grow to 60%, and is expected to reach almost 70% by 2050. Since 2007, the balance of the world’s population has tipped from rural to urban. The number of hypercities, or metacities (the UN’s term for urban centres of more than 20m people) is growing, Tokyo, with its 35m people, is the largest; others in the metacity club include Guangzhou, Seoul, Mexico City, Delhi and Mumbai, with New York and São Paulo close behind. This grand urbanization is increasing the complexity for urban development. There is increasing pressure on our cities to deliver to this growing urbanization in terms of infrastructure and resources. But mindless investment in the growth and expansion of cities is not the solution. As our urban clusters are growing by the minute, a persisting question before all of us is: how do we make sure that the growth is sustainable?
Sustainability here includes good governance, environmental efficiency and green technology. To ensure a balanced future we will need to look at interlinked solutions across these three platforms and together they will enable a promising future. Today skyscrapers account for majority of a city’s energy consumption and greenhouse gas emissions. They are a major roadblock in sustainable development. But they also represent an enormous potential for energy savings and can be looked as an important contributor to sustainable city development. According to the “Liveable Cities”, an Economist Intelligent report, traffic and transport are the main concerns of citizens. Nearly 60% people would improve transport and roads before anything else to make their city less stressful and a better place to live. More than one-half would pay more, in tax or other ways, to get better roads and transit systems. According to the same report, more than 58% people consider the jobs market and cost of living top the list of factors considered important in making a city an attractive place to live. Our future cities need to be more efficient and sustainable i.e. minimize water usage, collect rainwater, and reuse and recycle water, renewable energy sources to power our cities making our dependency on fossil fuels negligible. Our future cities need to become virtual living organisms - seeing, hearing and thinking with the help of advanced technologies. The growing population, shrinking spaces and budgets along with the expectation of a higher quality of life, puts immense pressure on both infrastructure and environment. This paper attempts to look at solutions that will drive sustainable growth leading to smart future cities. 3
The Modern Day Architects
India’s Urban Burden
Great cities thrive when public policy, market forces and urban planning are aligned. In simple words, good governance, healthy economy and a futuristic approach. These three trends are the modern day architects defining what and where we are today.
The global urban population is expected to grow roughly 1.5% per year, between 2025 and 2030. As cities are growing at an alarming pace, the complexities around managing them and developing them are also increasing. Adding to this situation is the recent economic downturn and the need to tighten budgets. Urban policymakers are looking for ways to share the burden of city management and future planning. While the current metacities are independent social and economic units with vast populations and huge economies, politically they still remain inextricably connected to their hinterlands, dependent on national budgets with no autonomy to make decisions on key aspects of city economics and infrastructure. The quality of life of our future cities will depend on efficient, transparent and robust growth in the following areas:
Talking of good governance, there is widespread acceptance of democracy. Although how democracy can help our future cities become ‘fit’ is a complex and subtle process. Not very surprisingly, urban professionals strongly believe that it is largely up to their governments to shoulder the responsibility for the services that will contribute to smarter future cities. Yet citizens are not entirely happy with the way municipal governments are run. The political scientist Larry Diamond has written that “predatory, corrupt, wasteful, abusive, tyrannical, incompetent governance is the bane of development.” However, this doesn’t mean that democracy will automatically reduce corruption or produce good governance. Responsible governance requires political will, effective institutions, professional officials, and informed, alert, and aroused citizens. But without democracy none of these things are possible, and the absence of political and legal restraints will inevitably lead to disruptive forces posing a great threat to future development. The principal conclusion of the Human Development Report 2002, published by the United Nations Development Program, notes that “democratic governance can trigger a virtuous cycle of development – as political freedom empowers people to press for policies that expand social and economic opportunities, and as open debates help communities shape their priorities.” A healthy democratic society thriving on policies of good governance will automatically lead to a healthy economy. In fact, research has shown that democracy not only helps people influence government policy but aids development in even more fundamental ways by fostering productive economic activities. Richard Roll and John R. Talbott, in a study published in the Journal of Democracy (July 2003), conclude that more than 80 percent of the cross-country variation in per capita income growth among developing countries (using date compiled for 1995-99) can be explained by factors that are aspects of democracy, among them the presence of strong property rights, political rights, civil liberties, and press freedom. They also found that dramatic increases in per capita income in developing countries have tended to follow democratic events (such as the removal of a dictator), and that antidemocratic events have tended to be followed by a reduction in economic growth. The importance of a prosperous economy cannot be emphasized more for the development of desired future cities. A healthy economy in turn will foster better and smarter developmental initiatives, both on the part of the government and private organizations. Having an eye for the future and making space for upcoming needs will be the key to developing sustainable cities today. Any development around water, sanitation, energy, food, communications and mobility needs to be done bearing the future requirements in mind.
Urban Planning & Design
Urban Capacities & Resources
QUALITY OF LIFE
Empowered & Legitimate Political Representation
Transparency, Accountability & Participation
As our cities continue to grow, it is clear that in the future they will need more autonomy in managing their affairs and achieving the goals set in the above mentioned parameters. Today even global trade centres such as London and New York are dependent on the state to sign the decrees and chequebook on vital issues such as public transport, healthcare and the environment. In the coming future, the tug-of-war policy will become more fervent as civic authorities will try to meet the enormous demands of increasing infrastructure. As more than half the world’s population lives in cities and continues to grow, it becomes important that they have a bigger say in national planning and resource policy and more power to implement their own policies. India has realised that the choices it makes to manage its urbanization will have a lasting impact on its economic future. So while traditionally India has always focused on rural development, it is now taking corrective steps to manage its cities and plan better for future cities. India sought to correct the lack of coordination between urban planning and local governance through the adoption of the 74th Constitutional Amendment Act (CAA) in 1992, which proposed that Urban Local Bodies (ULBs) be established and strengthened in order to improve the quality of the urban environment, provide services in a more responsive and effective manner, and enhance participation of local stakeholders in decision-making processes. The amendment has been
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described as -“…the first serious attempt to ensure stabilization of democratic municipal government through constitutional provisions.” (Savage and Dasgupta 2006: 43). Having said that, the urban local bodies need to be both empowered and legitimate to meaningfully discharge their role as local self-governments. The figure below (from the Annual Survey of India’s City-Systems - 2013) illustrates how some leading cities of India compare with their global counterparts in effective city management owing to more autonomous city councils.
Based on the same report, 70 percent of net new employment will be generated in cities. This clearly emphasizes the urban movement of India. Decentralization is seen as a panacea for a host of problems of governance thrown up by economic globalization the world over. The Government of India made the first formal attempt at decentralization through the 73rd and 74th (Constitutional) Amendment Acts of 1992. Jawaharlal Nehru Urban Renewal Mission (JNNURM) is a
3.2
1.9
4.1
2.2
2.6
4.5
4.0
4.3
3.8
3.8
3.2
9.4
9.3
Ahd
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Empowered and Legitimate Political Representation
Indian cities have weak Mayors and Councils. The Mayor is directly elected only in three out of the eleven cities surveyed (in the illustration above) and has less than a five-year term in six cities. In Bangalore, the term of the Mayor is just one year. Similarly, the Council and the ULB handle very few critical functions. According to the ASICS Survey- 2013, out of a select ten critical functions, all from Schedule XII to the Constitution (Seventy-fourth) Amendment Act, 1992 and recommendations of the Second Administrative Reforms Commission (SARC), the best Indian city in this respect handles only five. In comparison, New York and London handle all ten. It is clear that the way our future cities are growing and shaping up, they will need more autonomy for managing their affairs.
unique project launched by the government of India in 2005, dedicated at the redevelopment of India’s 65 cities. As India has traditionally primarily focused on the development of rural areas, JNNURM is seen as an earnest effort to address the unplanned growth of urban India. JNNURM aims at creating ‘economically productive, efficient, equitable and responsive Cities’ by a strategy of upgrading the social and economic infrastructure in cities.
With its 1.2 billion-plus population in diverse corners of the country, India is a story of rapid economic growth and the challenge is to ensure this growth carries forward to benefit the coming generations. With rapidly increasing urbanization, India’s major cities are facing great social issues including housing problems, waste disposal and shortage of electric power. According to the United Nations, by 2025, Delhi (32.9 million) and Mumbai (26.6 million) will be the second and fourth largest urban agglomerations in the world.
As per the information in the JNNURM mission brochure as launched by the authorities, cities and towns account for 30 percent of the country’s population, contributing 50–55 percent of the gross domestic product (GDP). The degrading conditions in cities have forced the government to rethink their strategies to adhere to the socio-economic objectives of the country.
India is set to be the next superpower that held a steady growth rate during the recent recession. But unplanned growth has taken a toll on urban India. According to the ASICS-2013, Indian cities compare very poorly in the four basic parameters of city-systems against their global counterparts.
India has been termed as a ‘reluctant urbaniser’. According to McKinsey’s recent report, India’s urban awakening: Building inclusive cities, sustaining economic growth, in the next 15-20 years, 590 million people will live in cities, nearly twice the population of the United States today.
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City-wise ASICS scores on a scale of 0-10
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NYC
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Urban Planning and Design (UPD)
2.5
2.9
2.2
3.9
2.9
2.5
2.8
4.2
2.6
0.7
2.5
8.8
8.8
Urban Capacities and Resources (UCR)
2.5
0.9
2.2
2.9
2.1
2.4
1.8
2.0
2.7
2.6
2.4
9.9
8.1
Empowered And Legitimate Political Representation (ELPR)
3.2
1.9
4.1
2.2
2.6
4.5
4.0
4.3
3.8
3.8
3.2
9.4
9.3
Transparency, Accountability and Participation (TAP)
1.5
3.0
2.9
1.2
4.4
1.2
3.1
2.9
3.3
3.2
1.4
8.9
8.1
The Drivers of Change Our cities are growing at an ever-increasing speed and the forces of change are being unleashed on several fronts - demographic, environmental and economic. While some urban policymakers have the resources to meet these challenges, others are struggling to cope with the strains these pressures are placing on infrastructure and services. There is an urgent need for major infrastructure investments in the right direction. This becomes an even more challenging task in times of restricted budgets. There is a need to acquire and adhere to new services and business models to be able to take constructive steps towards our future cities. The Organization for Economic Cooperation and Development estimates that required investments for road, rail, telecommunication, electricity and water infrastructure will reach $71 trillion worldwide by 2030, which is about 3.5% of global GDP. Power and transportation will be the key focus areas for future cities consuming a great share of this investment. Looking at the finer nuances, the priorities of developed countries may be different from those of emerging economies, but they share an overall need for serious infrastructure investment. According to McKinsey’s recent report, India’s urban awakening, in the coming 15-20 years in India, 700-900 million square meters of commercial and residential space needs to be built – or a new Chicago every year. Given the challenges before our cities for future growth, the message for policymakers is clear—they cannot do it alone. While there is a need to make our cities more autonomous, the role of individuals cannot be left out to make their cities attractive places to live. Civic authorities need to harness the energies of all the individuals and businesses flocking into their metropolises. There is a need to foster the innovative spirit of social entrepreneurs who can step in with new solutions to meet demands for services and infrastructure. Social entrepreneurship will play a very important role in future cities. Mumbai is an example of the same where civic services are minimal and the gap between rich and poor enormous. Entrepreneurs have stepped in to
establish an ambulance service which operates on the principle that those who can afford to pay for it do so. Policymakers must increase their political clout by forming productive partnerships with the private sector and civil society groups. Business and government corporations must act as the vehicles of change. Today, there is an increase in the social scrutiny and organizations must leverage this for constructive outcomes.
Role of Large Organizations Role of large organizations.To coax and wrestle the best out of a city, and contain its worst tendencies, urban policymakers must themselves possess large measures of creativity and a wide innovative streak. The people and business thriving in the urban centres will define the future of social, smart and sustainable cities. Today, we live in a world of constraints. The resources around us are fast depleting. The advancements in technology translates to growing energy consumption levels. The global energy consumption level is predicted to grow by 56% from 630 quadrillion Btu in 2010 to 820 quadrillion by 2040. What does this mean for global organizations that operate on large footprints? Of the world’s 100 largest entities, 51 are now corporations. For a sustainable future, it is critical for these large organizations to lead the way. Businesses will have to rapidly redesign value chains to increase efficiency / reduce consumption and dependence on ‘constrained resources’. There is a lot that organizations can do to create a ‘just, equitable and socially and ecologically sustainable’ society. At Wipro, which has been part of Dow Jones Sustainability Index consistently for 3 years and a sector leader in 2012, 83 percent of the waste and 32 percent water is recycled. With 19 certified facilities and over 5.7Mn sq. ft of built-up space, Wipro holds one of the largest Corporate Portfolios of Green Buildings. Wipro has also been making Carbon disclosures for the last 5 years and is part of the Carbon Disclosure Leadership Index (CDLI) 2012 – comprising 51 companies from 6
across the world and the only one based in India. Wipro’s sustainability initiatives are comprehensive and inclusive and cut across - Ecology, Workplace and Employee Advocacy, Customer Stewardship, Supply Chain and Public Regulation and Policy. India is the country with highest withdrawal/usage of ground water. More than ½ the water used comes from ground water in the country. It is estimated that in the next decade, 50% of ground water blocks across the country will be in a critical condition. Wipro for its planned offices has embarked on projects that will reduce its Water footprint by 75% and its 6 MW Solar project that is underway is the largest roof top project in the country. There are two motives sustainability strategies: Ecological Motives • Conserving Energy
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Businesses need to acknowledge the fact that they do not exist in a vacuum and are a part of the larger society around them. It is imperative for them to act in the larger interest of society and integrate action within businesses. Also the policymakers need to engage with stakeholders (govt, academia, community) in a holistic manner. What constitutes a city? The people who live in it, their economic dependence, their social connections and their environmental integration. So it is clear that the for developing successful, desirable and sustainable future cities, the onus lies on each one of us to play our role efficiently. A city... is the pulsating product of the human hand and mind, reflecting man’s history, his struggle for freedom, his creativity, his genius—and his selfishness and errors.— US planning pioneer Charles Abrams Destinies of our Cities and Businesses are deeply interlinked. Let our future cities tell the successful story of our journey into time.
• Conserving Resources • Reducing Pollution • Reducing Waste Economic Motives • Generating Revenue • Cost-reducing Potential
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References www.who.int/gho/urban_health/situation_trends/urban_population_growth_text/en/ www.mckinsey.com/insights/economic_studies/global_cities_of_the_future_an_interactive_map www.en.wikipedia.org/wiki/Jawaharlal_Nehru_National_Urban_Renewal_Mission www.europeanvoice.com/GED/00020000/22400/22491.pdf www.mckinsey.com/insights/urbanization/urban_awakening_in_india Annual Survey of India’s City-Systems - 2013 Liveable Cities - Challenges and opportunities for policymakers: A report from the Economist Intelligence Unit
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About the Author Hariprasad Hegde, Global Head – Operations, Wipro Ltd. Hari is ‘Global Head – Operations’ of Wipro Ltd., a US$ 7.5 billion IT and Consulting Services provider with its presence in 57 countries. Hari, in his present role, is responsible for all of the Supply-chain and Operations functions; this among others includes the ‘Global Procurement Organization’ of the corporation and functions responsible for ‘Creation of New Infrastructure’. Wipro has built more than 16Mn sq. ft. of office space and holds one of the largest Corporate Portfolios of Green Buildings globally. Hari has contributed significantly in creation of these facilities & campuses. He also built ‘Wipro Water’ – the water business of Wipro; scaled it up and led the business till 2012. He champions many sustainability initiatives for Wipro. Hari is on CII’s (Confederation of Indian Industry) Karnataka State and Southern Regional Council and leads its ‘Water Task Force’. He is on National Water Council and on other consultative groups on Energy and Green Buildings. He was a core member of Planning Commission’s industry working group on ‘Land & Water’ and ‘Green Manufacturing’ for the 12th ‘Five Year Plan’. He is on the Governing Council of ‘Electronic City Industrial Township Authority’ that runs the newly formed autonomous industrial town; a recent progressive attempt by the Government at ‘local self-governance’.
Hari brings significant understanding and expertise on micro and macro issues of managing water in a rapidly urbanizing world and experience of dealing with challenges related to large scale commercial development in Indian cities. Emerging trends and Future solutions in the area of sustainability, water, energy and mobility are his areas of work and he has spoken at National and International forums on these subjects. Mr. Hegde received his degree in Mechanical Engineering from Jawaharlal Nehru University; he resides in Bangalore.
About Wipro Council for Industry Research The Wipro Council for Industry Research, comprised of domain and technology experts from the organization, aims to address the needs of customers by specifically looking at innovative strategies that will help them gain competitive advantage in the market. The Council, in collaboration with leading academic institutions and industry bodies, studies market trends to equip organizations with insights that facilitate their IT and business strategies. For more information please visit www.wipro.com/insights/business-research/
About Wipro Ltd. Wipro Ltd. (NYSE:WIT) is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better. Wipro delivers winning business outcomes through its deep industry experience and a 360 degree view of “Business through Technology” - helping clients create successful and adaptive businesses. A company recognized globally for its comprehensive portfolio of services, a practitioner’s approach to delivering innovation and an organization wide commitment to sustainability, Wipro has a workforce of 140,000 serving clients across 57 countries. For more information, please visit www.wipro.com
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