The Race between Cities.

photo credit: Niyantha

Urbanization is a chase for economic development and revenue generation for our states and cities. Urban areas are attempting to be magnets of growth, alluring the essential entrepreneurs and investments providing impetus for growth and development. This is the changing definition and spatial behavior of urbanization in the present and post globalization.

What exists today is “urban entrepreneurialism”, where cities compete for economic growth, restructure “growth machines” to enhance their “competitive edge” and defend old niches from global challenges or craft new opportunities from globalized markets (Leitner and Sheppard 1998). David Harvey defines it as ”that pattern of behavior within urban governance that mixes together state powers (local, metropolitan, regional, national or supranational) and a wide array of organizational forms in civil society (chambers of commerce, unions, churches, educational and research institutions, community groups, NGOs and the like) and private interests (corporate and individual) to form coalitions to promote or manage urban/regional development of some sort or other” (Harvey 2001:402-3).

Also the intensity of inter-urban competition has increased, enhancing the importance of turning “place-in-itself” into “place-for-itself”, particularly for middle-ranking cities with an opportunity to improve their significance for outside investors (Smart and Smart 2003). Urban entrepreneurialism is one response to an uneven negotiating table for capital and localities in an era characterized by enhanced mobility, due both to technological change and to governmental deregulation. The terms of exchange are structured by the “hyper mobility” of capital: if a city doesn’t play the game on capital’s terms, they are likely to lose investment, resulting in economic decline and out-migration. Those who go along with the demands of the dominant capitalist actors are more likely to obtain or retain investment and experience population and economic growth.

These Competitive Cities are fundamental not only for driving up the economic performance of regions but also for achieving wider policy goals about sustainable communities and greater social cohesion. Competitive cities are vibrant places where people want to live - and will come from many different backgrounds in order to do so.

Urban policy has often revolved around what has to be done in order to create “business-friendly” environments in these competing cities. These primarily include

• Financial incentives, subsidies, and public-private partnerships;
• Infrastructure, especially for information technology (e.g. smart buildings, smart cities, and fiber-optics backbones) and logistics (airports, freeways, ports, cyber ports);
• Institutional infrastructure: modifying regulations and free-trade zones, and reforms in intellectual property rights and transparency;
• emphasizing the development of the right kind of human capital and targeted expenditure in education;
• emphasizing social capital (networks, obligation and trust) and learning ecologies
• branding cities
• cultural strategies for a symbolic economy
• Paying attention to environment protection and pursuing sustainable development

This new entrepreneurial paradigm in spatial development has established itself in countries planning activities as a main reference. The new planning philosophy puts stress on market based approaches, vision building and integration of socio economic and environment preservation goals. One of tis important aims is to use business sector instruments to increase efficiency and develop a more project friendly environment.

Strategic planning which emerged from the practice of large corporations has become a main tool for government to integrate competitiveness concerns in spatial strategies. Its extension to the sub national levels including cities and metropolises has been reinforced in a majority of countries by a general move towards decentralization of policies and granting more responsibility to lower tiers of government, according to the subsidiary principle. Cities have gained more margin for maneuver while city region linkages were emphasis. Another feature of the new planning model is a more pluralistic approach by public authorities based on public private partnerships. The pressure from more collaborative processes involving a much wider range of interests has increased. Previously planning was in the hands of public agencies working for the construction of the welfare state and therefore mainly orientated towards the delivery of social services. It is clear that an important prerequisite to augment city competitiveness is to better exploit the knowledge, innovative capacities and commitment of a greater number of urban actors.

This means that cities embark on programmes to improve the quality of urban life through various policies which is now the activity of urban local governments

Bangalore has reached the stage where it is now competing with other Indian cities (like Hyderabad and Chennai) as well as Asian cities (like Manila and Kuala Lumpur) to attract and generate domestic and international activities and investments. This can only be possible if it can ensure a high level of “urban efficiency” which stems from the absolute understanding of the current spatial issues and infrastructure requirements along with a strong capacity to anticipate the various social and economic needs and requirements of the multi-dimensional society.
In the Indian scenario this has resulted in large scale investments in ‘Mega Projects’, most significantly in infrastructure which forms the basis for these types of projects. One example is the billion Rupies ‘mega-city project’ which focuses on modernizing Bangalore by urban renewal and urban design. The funds allocated to Bangalore’s core agencies are for constructing fly-overs, ring roads and other grade separators, for the provision of fibre-optic services in high value industrial areas and for the construction of a new international airport at Devanahalli, 30km north of Bangalore as well as construction of the six-lane Bangalore Devanahalli expressway.

These ‘Mega projects’ (primarily infrastructure) receive a sizable investment (~10%) of the gross fixed capital formation in India. These investments have been made by both the government (central and state) and the private sector wherein the proportion of private sector investment has been increasing over the years.

Hyderabad is also marketing itself as a choice destination for ITES companies. While Gujarat is betting to be the new Mumbai for India and has its GIFT to boast. What do these competitions really mean for the economic geography of the nation is yet to be understood. It is also to be realized that competition does have the potential to be fickle and change the locale too soon. Also since the thrust of development through means of private led investment is increasing, loans by ADB, IMF which also proliferate privatization, the effects of the urban developments needs to take care of its socio economic equality within the cities geography. On one hand where this impulse of developments is favoring the nation as a whole, it might create inequalities at a local level. This new way forward, with its great potentials can be a tool to mediate the needs of a global competitive city as well as managing the resources for all creating a quality life.

References

Globalization, Mega-projects and the Environment: Urban Form and Water in Jakarta- Mike Douglass, Globalization Research Center and Department of Urban and Regional Planning, University of Hawai’i

Bangalore: Globalisation and Fragmentation in India’s Hightech-Capital – Christoph Dittrich

The cultural turn in interurban competition: globalization and the commodification of diversity – Alan Smart

Governance, economic settings and poverty in Bangalore- Solomon Benjamin