IESE Cities in Motion

ABOUT US

   IESE Cities in Motion Strategies is a research platform launche jointly by the Center for Globali- zation and Strategy and IESE Business School’s Department of Strategy.

    The initiative connects a global network of experts in cities and specialist private companies with local governments from around the world. The aim is to promote changes at the local level and to develop valuable ideas and innovative tools that will lead to more sustainable and smarter cities.

    The platform’s mission is to promote the Cities in Motion model,

 with an innovative approach to city governance and a new urban model for the 21st century based on four main factors: sustaina- ble ecosystem, innovative activities, equality among citizens, and connected territory.

OUR MODEL: CITIES IN MOTION. CONCEPTUAL FRAMEWORK, DEFINITIONS AND INDICATORS

Our platform proposes a conceptual model based on the study of a large number of success stories and a series of in depth interviews with city leaders, entrepre- neurs, academics and experts linked to the develop- ment of cities.

Our model proposes a set of steps that include diagnosis of the situation, the development of a strategy, and its subsequent implementation. The first step to giving a good diagnosis is to analyze the status of the key dimensions, which we will set out below along with the indicators used to calculate the CIMI.

 

HUMAN CAPITAL

The main goal of any city should be to improve its human capital. A city with smart governance must be capable of attracting and retaining talent, of creating plans to improve education, and of promoting creativity and research.

 

Table 1 sets out the indicators used in the human ca- pital dimension, along with their descriptions, units of measurement, and information sources.

 

While human capital includes factors that make it more extensive than what can be measured with these in- dicators, there is international consensus that level of education and access to culture are irreplaceable components for measuring human capital. One of the pillarsof human development is human capital and,given that the Human Development Index published annually by the United Nations Development Program (UNDP) in cludes education and culture as dimensions, it is valid to regard these indicators as factors explaining the differences in human capital in a city.

 

To define the human capital dimension, the CIMI includes the nine variables detailed in Table 1. All these variables are incorporated into the index with a positive sign due to their contribution to the development of the dimension.

RECOMMENDATIONS AND CONCLUSIONS

The CIMI synthetic index allows us, through an objective calculation

methodology, to compile a ranking of cities taking into account various aspects. The different di- mensions analyzed offer a broad and holistic vision of what a city represents, while allowing greater unders- tanding

 of its composition and its evolution over time.

 

The results of the index and our experience of using it to assess different cities allow us to make the following recommendations and reach some significant conclu- sions:

 

· Size matters – although not so much. This new edi- tion of the CIMI

makes clear that large cities occupy leading positions in the ranking.

The first 10 positions are held by megacities such as New York, London, Paris, Tokyo and Seoul. However, among the top po- sitions some medium-sized cities stand out such as Amsterdam, Melbourne and Copenhagen and even some small cities, as in the cases of Reykjavik and Wellington. These results show that size is not a pre- requisite for achieving top positions in the ranking.

 

· Finding the right balance is a complex (and perma- nent) process. The report’s dynamic analysis indica- tes that only a select number of cities are capable of doing well in all the dimensions. (Cities such as Amsterdam, Seoul and Melbourne stand out.) Many cities struggle to balance their performance across different dimensions but often lose that battle. For example, when analyzing the relationship between mobility and the environment, we can see how several Chinese cities perform relatively well in their mobilityand transportation model but fail in 

the environmen- tal dimension. These cities could use as benchmarks other cities in the region (such as Seoul), which are able to perform

well in both dimensions, and identify practices applicable to their situation. Something si- milar comes to light when studying the relationship between the economy and social cohesion. It can be observed here that there are many cities that have high economic levels (in average terms) but at the same time are more inequitable and unequal. This aspect, which seems prevalent in large cities (such as Hong Kong, New York, Los Angeles and London), must be managed properly as it can lead to tensions and conflicts between different strata in society. Todo so, it is essential to identify where the “trade-offs”are and to look for creative ways to resolve them. Undoubtedly, one ofthe great challenges for cities is to transform themselves into urban centers that are simultaneously prosperous, equitable and inclusive. This goal is essentially a permanent and long-term process.

 

· Need for an overview. Related to the previous point, the CIMI makes

 clear that it is not enough to be good in only one dimension.

There are cities that are at the top of the ranking in some dimensions.

This is the case of Montevideo, Bangkok, Kiev and Doha,which do

re- latively well in the dimensions of the environment, in- ternational outreach, urban planning, and technology respectively but in the overall ranking are located in positions 100, 90, 113, and 111.These are the cities that 

we have called “unbalanced” in the analysis of variance. The recommendation for these cities is that, if they seek to play in the big leagues, they should be capable of reaching acceptable minimums in the dimensions

as a whole. This message must also reach those cities that understand technology as the main (or only) ingredient of a smart city and do not take into account other critical dimensions that define the urban situation.

 If they do not see the whole picture, it will be difficult for them to become smart.

 

· The need for a long-term view. Cities need to define their identity and establish a strategic plan. One of the most important (and most difficult) questions a city has to ask itself is: What kind of city do you want

in thefuture? The answer to this question will not only define the identity of the city but also set out the path of transformation that it must

 travel to achieve that iden- tity. That is, it must consider what its strategic plan will be. A sound strategic plan will prevent changes that veer away

 from the city’s identity as circumstan- ces or governments change.

Strategic plans must be unique and individual for each city. This means that cities must escape the one-size-fits-all approach. The CIMI makes

clear that there is no single model of suc- cess. The cities that top the

ranking are not identical but prioritize various dimensions. (See the graphical analysis appendix.) There are various ways through which a city can succeed in getting to the top of the index.

· The first step is a good diagnosis. One of the first ac- tivities

 in any strategic definition is to understand the place in which we find ourselves. In this regard, the CIMI can be used as a diagnostic tool to carry

 out a first assessment of the current status of the city in the different dimensions of our model. The CIMI allows a quick X-ray to be taken of the 

cities, identifying their strengths and pointing out places where there is

room for improvement.

 

· The benchmark as the beginning of change. 

The ability to compare165 cities across nine different dimensions 

allows us to identify those that perform best in the different areas of the city. In this sense, cities that find themselves lagging behind or stagnant in one or more dimensions can study the best cities in each category to identify the best practices that allow them to perform better. This comparison will allow cities to start moving in the right direction. That said, it must be borne in mind that, while the challenges facing cities are global, their effects are local. Therefore, the benchmark should serve as a source of inspiration rather than as a road map for action. In this regard, IESE Cities in Motion has produced a seriesof books– available on Amazon that identify good practices across the different dimensions and we invite readers to read them.

 

· The CIMI is not a “beauty contest.” It has surprised us how many cities included in the index are more concerned about their position in the ranking than the analysis that can be derived from it. Our perspective is that the value of the CIMI lies not only in its ability to identify strengths and weaknesses but also in its tem- poral component, 

which enables identification of the direction in which each city ismoving.

In this regard, our recommendation to urban managers is thatthey pay

more attention to the trend (dynamic analysis) than to the position.

 

· Collaboration as the cornerstone of success. 

Our experience from IESE Cities in Motion and the as- sociated platform PPP for Cities (www.pppcities.org) tells us that the cities that do best in the ranking un- derstand fully that the challenges facing cities are too big to be tackled individually. Collaboration is needed between different social partners, whether these be public, private, educational institutions, or nonprofit organizations. This collaboration can take on various formats (from PPP to collaborative economy struc- tures) but they are essential for achieving

 long-term success. The notion of collaboration and cooperation should be extended within city councils themselves, where there are often “silos” that prevent people from seeing the relationships and the possible synergies that  can  occur  among  the different dimensions of ourconceptual model. In addition, collaboration must befluid between residents and the administration because otherwise any solutions that

might be adopted will not be efficient when it comes to responding tothereal needs of the community. Finally, we ask that ci ties collaborate with each other, especially those that, in addition to their proximity, share infrastructures and services. Collaboration will make them more efficient urban systems.

 

· There are many good cities but the perfect city does not exist. 

It is very difficult for a city to maximize all the dimensions. Even those

cities in the top positions  of the rankings have weak points. For example, cities such as London and New York have a long way to go in the social cohesion dimension. These cities have been classified as “differentiated” cities and we recommend that they make the most of the advantages they have in the dimensions where they are leaders in order to progress in the positions where they are lagging behind. For example, a city can make the most of its technological leadership to improve its en- vironmental dimension. In addition, for the cities that we have classified as “balanced,” the main recom- mendation is that they should not rest ontheir laurels.

Despite their more harmonious growth, they still have room for improvement.

 

· Change is slow for most cities. While our temporal analysis of the CIMI indicates that there are cities ca- pable of making great progress in a relatively short time and of moving to higher positions quickly (Milan, A Coruña, Birmingham), in general it shows us that, for most of the cities, a city’s position in the ranking have not changed significantly from one year to the next. This is due, to a large extent, to the time that projects of any magnitude need to crystallize. There- fore, when seeking to generate changes needed to become smart and sustainable, cities should adopt long-term policies as soon as possible, especially those cities that are the worst placed and that we have called “stagnant”

 in our analysis. There are many cit- ies that still have problems when

 it comes to dealing with the major challenges of cities, including: the lack of collaboration between public and private bodies, civic institutions and the public; the impossibility of promoting new business models that provide financ- ing for new businesses; and a shortsighted vision of smart cities.

      The urbanization process is one of the most significant challenges of

 the 21st century. As the world population moves toward cities, existing problems grow and new ones are generated that, in addition, are influenced pro- foundly by the globalization process.This trend means a closer

relationship between global dynamics and cities, generating local impacts: effects on the economy, de- mographics,social divisions or environmental impacts.

 

      Despite these challenges, cities and their leaders should understand the positive aspect that cities have. From our perspective, the city offers a much more delimited sphere of action, which enables work to be done

 more directly for people’s benefit. However, urban managers must take a step back and analyze their problems, try to discover what other cities do, and learn what good practices are being carried out elsewherein the
world. The day-to-day management of a city makes it difficult for cities to
ask themselves how to promote the positive effects of the urbanization process and how to reduce the negative ones. That is why, from the IESE
 Cities in Motion platform, we aim to create awareness andgene- rate
 innovative tools to achieve smarter governments. With thisindex, we hope to have contributed to this goal.