October 30, 2006
By Neil Fraser
The reason that I have embarked on the issue of benchmarking is that I am constantly asked, "So, how is the inner city doing?" That means that most people who are not actively involved in the inner city processes don't have a feel for progress.
My automatic answer is usually, "Great", which I measure in terms of investment coming into the inner city and my own perception of how we are doing in terms of the fight against crime and grime. However, as I've been suggesting over the past few weeks, investment and crime and grime are not the only determinants of how we are doing - especially when one listens to the new "city-speak" I referred to last week.
So, another discussion session in Portland caught my attention. It revolved around strategic frameworks and city visions. The city of Memphis showcased the process it had used to develop a shared community vision for the city centre, or downtown, and the five-year strategic plan that resulted. What was interesting for me was that each of the 10 priorities it had set to achieve over the next five years was turned into a number of strategies (nothing new in that) but which were then (a) benchmarked and (b) aligned to a number of specific "best practice" examples drawn from cities across the States.
It struck me that herein lay the problem with our own Inner City Urban Renewal Strategy. Although it has an overall objective that can be measured, albeit with difficulty, the "five pillars" or components that comprise the overriding strategy do not have benchmarks with which to measure their progress. The Johannesburg Development Agency (JDA) does have a set of performance indicators both for its own performance and for that of the inner city, but they are not directly related back to the "five pillars" of the Urban Renewal Strategy.
In addition, the performance of the JDA is not the sole determinant of the success of some of the benchmarks, which leaves the issue of accountability somewhat adrift.
Yet, our municipal staff works on a "scorecard" system of bonusing whereby employees are measured against pre-determined targets. This is somewhat unlike the private sector where the progress of the company (the City) determines at least the majority of extra remuneration. A company that is in the red will generally not pay bonuses at all, irrespective of the performance of its staff. That does not appear to be the case in the City.
So how do we measure the progress of the City and the inner city? After all, "the nucleus of any metropolitan area has a key role to play in its health. In metro areas, the greatest density of employment and population is generally in and around the central business district, which also serves as the hub of the metropolitan transportation system and the principal location for business, civic and cultural interactions."
National policy
Complicating the issue in our case is the lack of national urban policy. Cities are generally free to decide what benchmarks they feel will best reflect their progress or otherwise. By contrast, the centralised urban policy in the United Kingdom allows for the development of a Town and City Indicators Database, produced by three universities "to track progress and help us better understand change in urban areas".
The South African Cities Network (SACN) produces an excellent report that provides a myriad statistics that it has grouped under four areas, namely the productive city, the inclusive city, the well-governed city and the sustainable city. All of these are vital signs in the development of South African cities but the SACN plays it politically correct by not compiling indices for each of these four areas so one cannot really judge the individual performance and progress clearly.
As I mentioned a couple of weeks ago, new measures of cities' performances coming out of the CEOs for Cities organisation in the United States also focus on four aspects of cities: the talented city, the innovative city, the connected city and the distinctive city. From these they can measure metro performance and core vitality.
This is the rationale:
The talented city
The indispensable asset in a knowledge economy is smart people. Cities are places where people build knowledge through education and experience. Cities attract smart people and create opportunities for them to develop and apply what they know. Talent, which is measured by educational attainment, the number of creative professionals, the migration of well-educated young adults and the number of foreign-born college graduates, reveals the underlying intellectual capital a region can draw on to build its economy and to weather the inevitable shocks of competition and change.
The innovative city
The ability to generate new ideas and turn them into reality is a critical source of competitive advantage not just for businesses but for regions as well. Economies and regions advance by a process of trial and error. Those places that generate many trials of novel products and services are most likely to move ahead. Invisible and weightless, ideas can't be measured directly, but the footprints they leave in the economic landscape can be traced by counting numbers of patents, the monetary value of venture capital investments, the extent of personal entrepreneurship and the number of small businesses.
The connected city
Cities thrive as places where people can easily connect. These connections are of two sorts: the easy interaction of local residents and easy connections to the rest of the world. Both internal and external connections are important. Internal connections help promote the creation of new ideas and make cities work better for their residents. External connections enable people and businesses to tap into the global economy. Local connectedness is measured by looking at a diverse array of factors including voting, community involvement, economic integration and transit use. Measures of external connections include foreign travel, the presence of foreign students and broadband internet use.
The distinctive city
The unique characteristics of place may be the only truly defensible source of competitive advantage for regions. In a world of global competition, a strategy of "pretty much the same, maybe cheaper" is a recipe for mediocrity and economic stagnation. Measures of distinctiveness are inherently incomplete. Every city has it own unique characteristics for which there are few, if any, statistics. Initial measures of distinctiveness can be drawn from market data about consumer behaviour and its variance across metropolitan areas.
These four dimensions of City Vitals – talent, innovation, connections and distinctiveness – are important because they underpin urban prosperity. One must examine key indicators of economic wellbeing: per capita income provides a broad measure of overall living standards, while the poverty rate captures the extent of economic distress. Urban areas that do well in generating and attracting talent, encouraging innovation, building connections and capitalising on distinctiveness are the best positioned to improve the income of other residents and to reduce poverty, especially in the long run.
If we want to play with the big boys, in the world cities league, we better smarten up on how we measure ourselves and our progress.
Enjoy summer. Cheers, Neil
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