Pictures of the Future    Spring 2007

Livable Megacities – Facts and Forecasts

In a Siemens-sponsored research project, 522 decision-makers from 25 of the world’s largest cities have for the first time provided detailed information on today’s most pressing urban problems, and the outlook for the future. Conducted by GlobeScan, an independent research institute, the study surveyed representatives of politics, city administrations, business, the media, and scientific institutes in the fall of 2006. At the same time, the consulting firm MRC McLean Hazel analyzed critical infrastructure sectors in eight of the 25 megacities, focusing on transportation, energy supply, water, health care, safety and security, and new approaches for urban financing and administration.

The megacities were divided into three categories: Emerging Cities such as Cairo, New Delhi and Lagos; Transitional Cities like Istanbul, Moscow and São Paulo; and Mature Cities such as London, New York and Paris. Although each city has its own unique problems that call for specific solutions, there are common trends. For example, most of those surveyed surprisingly expressed optimism about the future, and two-thirds of the respondents—in both Mature and Emerging Cities—believe their cities will successfully manage the next five years.

Economic growth and job creation have the highest priority for 81 % of those interviewed, while the most important infrastructure issue is transportation, which 27 % of those surveyed described as the number one factor for boosting their city’s competitiveness and appeal. That’s because congested streets and roads make life difficult and also have a negative impact on the economy. The Confederation of British Industry, for example, estimates that traffic jams in the UK alone generate an annual cost to the economy of $38 billion.

The next most important infrastructure issues are safety and security (9 %) and energy supply (6 %). Water and water sanitation were mentioned by only 3 % of respondents as an important competitive factor. This is surprising, given that the cost of inadequate supplies of clean drinking water and a lack of water treatment systems in developing countries amount to an estimated $170 billion per year, according to the World Health Organization (WHO). Moreover, the United Nations Development Program reports that over one billion people live more than 1 km away from the nearest source of clean drinking water. Europe and the U.S. aren’t immune to such problems, either; both need to overhaul water infrastructure systems that are in some cases a century old. Even in a highly developed city like London, one third of the total water supply today is lost due to leaky pipes—and the percentage is even higher in Emerging Cities such as Dhaka (62 %).

Mature Cities often have outdated infrastructure systems, while some types of infrastructure are not even present in developing countries and emerging markets. London’s subway system, for example, urgently needs to be overhauled and expanded, while Karachi, Pakistan, doesn’t even have a subway, which is why commuters can often be seen riding on the roofs of buses. Meanwhile, countries like India and China struggle with inadequate electrical capacity, which frequently leads to blackouts. Still, even the OECD countries need to invest approximately $4 trillion in power generation and transmission between 2002 and 2030, according to the International Energy Agency—and developing countries will need to spend a whopping $5.2 trillion.

Megacity demographic trends indicate an increasingly aging population and heightened demand for medical services. According to a study by the WHO, 130,000 people die in developing countries each year from the effects of urban air pollution alone. Mumbai now spends 25 % of its budget on health care, yet only one in five of its citizens receives proper medical attention. The main problems here are a lack of hospitals and doctors and an inefficient health care system. While investment is needed to create additional capacity, the quality of health care must also be improved and costs must come down. More preventive examinations and new information technologies, such as the electronic patient file, would be a good start here.

Safety and security are also keys to ensuring a good quality of life. Additional security personnel, better capacity for prosecution of crimes, and improved planning can make a positive contribution here. Gangs were cited by 36 % of respondents as the most serious problem in this area, and this applies especially to those from developing countries and emerging markets. Other dangers mentioned include terrorism and natural disasters. The general trend is toward crime prevention, with respondents tending to agree on the importance of investing in new technologies such as surveillance cameras linked with intelligent systems that automatically evaluate data.

Opinions differ on the topic of privatization. Most of the respondents predict infrastructure facilities and services will remain largely under the ownership and control of local authorities. The majority of those surveyed are open to the idea of public-private partnerships, though, with 70 % of politicians and public officials favoring the use of PPPs as a means of boosting infrastructure efficiency. In fact, they even believe this is more important than simply providing financing for infrastructure projects.

At the same time, even cities that have transferred the provision of services to private companies try to maintain as much control over them as possible. In general, the study shows that today’s urban officials understand that in the future their roles will change—from passive administrators to proactive managers of efficient services.
                                                                                                               Sylvia Trage