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URBAN PATTERNS FOR

A GREEN ECONOMY

CLUSTERING FORCOMPETITIVENESS

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URBAN PATTERNS FORA GREEN ECONOMYCLUSTERING FOR

COMPETITIVENESS

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URBAN PATTERNS FOR A GREEN ECONOMY: CLUSTERING FOR COMPETITIVENESS

All rights reserved

United Nations Human Settlements Programme (UN-Habitat)P.O Box 30030 00100 Nairobi GPO KENYATel: 254-020-7623120 (Central Ofce)www.unhabitat.org

HS/045/12EISBN (Series): 978-92-1-133398-5ISBN (Volume): 978-92-1-132460-0

DISCLAIMER

The designations employed and the presentation of material in this report do not implythe expression of any opinion whatsoever on the part of the Secretariat of the UnitedNations concerning the legal status of any country, territory, city or area or of its authorities,or concerning the delimitation of its frontiers or boundaries, or regarding its economicsystem or degree of development. The analysis conclusions and recommendations of thispublication do not necessarily reect the views of the United Nations Human SettlementsProgramme or its Governing Council.

Cover photo: Thousands of young employees work in shifts covering 24 hoursat this call centre in Uberlândia, Brazil, answering customersscattered across the globe and strengthening the city’s positionas a logistics hub © UN-Habitat/Alessandro Scotti

ACKNOWLEDGEMENTS

Project Supervisor: Rafael TutsProject Manager: Andrew RuddProject Consultant: Mark SwillingCoordinating Author: Blake RobinsonPrincipal Author: Sara GrobbelaarCase Study Authors: Sara Grobbelaar, Sumetee Pahwa-Gajjar, Angie Reeve, Alexis

Schäfer, Mari Tomita, Pieter van Heyningen, Nick WrightLead Reviewer: Philip Monaghan, Gulelat KebedeGeneral Reviewers: Daniel Irurah, Gordon PiriePublication Coordinator: Ndinda MwongoGraphic Contributor: Richa JoshiEditor Victoria QuinlanDesign and layout: Godfrey Munanga

Printer: UNON, Publishing Services Section, NairobiISO14001:2004-certied

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Foreword

The city is one of the highest pinnacles ofhuman creation. Concentrating so manypeople in dense, interactive, shared spaceshas historically provided distinct advantages,that is, agglomeration advantages. Throughagglomeration, cities have the power to

innovate, generate wealth, enhance qualityof life and accommodate more peoplewithin a smaller footprint at lower per-capita resource use and emissions than anyother settlement pattern.

Denver

25

G r e e n

H o u s e

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Metropolitan region containment index (1995 - 2005)(difference in population growth rates between core and belt)

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Washington

Houston Frankfurt

Portland

London

HelsinkiBrussels

Chicago

Minneapolis

Dallas

Baltimore

PhiladelphiaPrague

San Francisco Hamburg

Berlin

Paris

Oslo Stockholm

1%0%-1%-2%-3%

R s q u a r e = 0 .5 0 3

Figure I: Greenhouse gas emissions and containment index for selected metropolitanregions

© Philipp Rode

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Or so they could. Increasingly, cities areforfeiting many of the benets thatagglomeration has to offer. Two meta-studies of urban land expansion have shownthat over the last two decades most cities

in the world have become less dense rather

than more, 1,2 and are wasting their potentialin ways that generate sprawl, congestionand segregation. These patterns are makingcities less pleasant and equitable places inwhich to live. They are also threatening the

earth’s carrying capacity. And they are most

Figure II: Average Built-up Area Densities in Three World Regions

Source: Making Room for a Planet of Cites, by Shlomo Angel, Jason Parent, Daniel L. Civco, and Alejandro M. Blei. © 2011. Lincoln Institute of Land Policy, Cambridge, MA.

2005

Eastern Asiaand the PacicSoutheast AsiaSouth and Central Asia

Western AsiaNorthern Africa

Sub-Saharan AfricaLatin Americaand the Caribbean

Europe and JapanLand-RichDeveloped Countries

1780

1400

1200

1000

800

600

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( p e r s o n s p e r

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-2001805 1830 1855 1880 1905 1930 1955 1980

ManilaAlgiers

Mumbai

Mexico CityWarsaw

Beijing ShanghaiCairo

Tel AvivTeheranIstanbul

BangkokMoscow

AccraLondon

Paris

Lagos

SydneyLos Angeles

JohannesburgSantiago

Chicago Kuwait City

Guatemala CityBuenos Aires

Source: Making Room for a Planet of Cites, by Shlomo Angel, Jason Parent, Daniel L. Civco, and

Alejandro M. Blei. © 2011. Lincoln Institute of Land Policy, Cambridge, MA.

Figure III: The General Decline in Built-Up Area Densities in 25 Representative Cities,1800-2000

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Global sample, 1990Global sample, 2000

Universe of cities i, 2000

i This refers to 3,646 large cities with a population of over 100,000 or more.

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acute in fast-growing cities, particularlythose with the lowest institutional capacities,weakest environmental protections andlongest infrastructure backlogs.

Increasingly, city managers wish to learnby example. Rather than more theory andprinciples, they want to know what hasworked, what has not, and which lessonsare transferrable to their own contexts.There is much information available, butlittle time. UN-Habitat has developed these“quick guides” for urban practitionerswho need condensed resources at theirngertips. The aim is to suggest patternsthat can help cities and city-regions regainthese inherent advantages in a time ofincreased uncertainty and unprecedenteddemographic expansion.

More than half the global population nowlives in towns and cities. By the year 2050,UN-Habitat research projects that thatgure will rise to two-thirds. This rapid,large-scale concentration of humanity in theworld’s cities represents new challenges foringenuity, and numerous opportunities toimprove the way in which human habitatsare shaped. Most of this population growthwill be in the cities of developing countries,which are expected to grow by an additional1.3 billion people by 2030, compared to 100million in the cities of the developed worldover the same period. 3

While urban population growth rates are

stabilizing in regions which are alreadypredominantly urban (such as Europe,North, South and Central America andOceania), regions with a higher proportionof rural population (such as Asia and Africa)are likely to see exponential rates of urbanpopulation growth in the coming years. 4 Most urbanization is likely to occur in citiesrelatively unprepared to accommodatethese numbers, with potential negative

repercussions for quality of life, economicdevelopment and the natural environment.

Although the percentage of the urbanpopulation living in slums worldwide hasdecreased, the absolute number of peopleliving in slums continues to grow. 5 No lessthan 62 per cent of all urban dwellers in

sub-Saharan Africa live in slums, comparedto Asia where it varies between 24 percent and 43 per cent, and Latin Americaand the Caribbean where slums makeup 27 per cent of the urban population. 6 If these growing cities are to be sociallysustainable, new approaches will berequired to integrate the poor so thatthe urbanization process improves inter-generational equity rather than entrenchingsocio-spatial fragmentation. Privatizedmodels of service delivery that discriminatebetween consumers based on their abilityto pay threaten to worsen inequalities, 7 andrequire carefully considered parameters toensure that the poor are not disadvantaged.

According to a recent World Bank study,urban population growth is likely to resultin the signicant loss of non-urban landas built environments expand into theirsurroundings. Cities in developing countriesare expected to triple their land areabetween 2005 and 2030, with each newcity dweller converting an average of 160metres 2 of non-urban land to urban land. 8 Despite slower population growth, cities inindustrialized countries are likely to see a2.5 times growth in city land areas over thesame period due to a more rapid decline inaverage densities when compared to their

developing country counterparts. 9 As builtenvironments become less dense and stocksof built up land accumulate, the amountof reproductive and ecologically bufferingland available for ecosystems and foodproduction is diminished, reducing the abilityof city-regions to support themselves. 10

While international trade has made itpossible for cities to meet their demands for

food, water and energy with imports fromfaraway lands, it is becoming increasinglyapparent that the appetite of the world’s

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4

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1,000900800700600500

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10U.S.A

San Francisco

Oslo New Zealand

Australia VancouverToronto

Canada

Hong KongShanghai

IndiaNairobiKenya

Human Development Index (HDI)

Sustainability target

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l o g

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/ c a p

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Bangkok

Norway

GermanyBerlin

Melbourne

Wellington

LondonUK

ChinaDelhiThailand

growing and increasingly afuent populationis coming up against limitations in theplanet’s ability to support human life onthis scale. It is estimated that our addictionto oil will result in a peak in oil extractionwithin the next decade, leading to dramaticincreases in the costs of fuel, mobility, foodand other imports. Greater demand forpotable water, combined with changingrainfall patterns, the depletion of aquifers

and pollution of groundwater, is likely tosee increasing competition for scarce freshwater resources, raising the possibility ofconict in the near future.

The ability of ecosystems to continueproviding biotic resources like wood, shand food, and to absorb manmade wastes- commonly referred to as the earth’s “bio-capacity” - is also diminishing. Comparing

global ecological footprints to the earth’savailable capacity shows that, at currentrates of resource use, we are exceeding bio-

capacity by 30 per cent, 11 and approximately60 per cent of the ecosystems we depend onfor goods and services are being degradedor used in an unsustainable manner 12 . Weare living off the planet’s natural capitalinstead of the interest from this capital, andthere are already signs of the devastatingeffect this will have on our societies andeconomies in depleting sh stocks, loss offertile soil, shrinking forests and increasingly

unpredictable weather patterns. 13

The global population is reaching a sizewhere cities need to start thinking beyondtheir immediate interests to consider theirrole as nodes of human consumption andwaste production in a nite planet that isstruggling to keep pace with humanity’sdemands. If cities are to survive, theymust acknowledge the warning signs of

ecosystem degradation and build theireconomies in a manner that respects andrehabilitates the ecosystems on which life

Figure IV: Ecological Footprint and Human Development Index for selected countriesand cities

© Philipp Rode

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depends. If cities are to prosper, they mustembrace the challenge of providing shelterand uninterrupted access to water, food andenergy and improve quality of life for all oftheir citizens.

The way in which city spaces, buildingsand infrastructural systems are planned,designed and operated inuences theextent to which they encroach on naturalecosystems, and locks them into certainmodes of consumption from which theystruggle to deviate. Urban activities havedirect and indirect consequences for thenatural environment in the short, mediumand long term, and their scale of inuencetypically extends far beyond the boundariesof what is typically considered to constitute“the city”. Managing the indirect, distantand sometimes obscured impacts ofcity decision making in an increasinglyglobalized world requires appropriategovernance mechanisms that improve cities’accountability for the resources they rely on.

As nexuses of knowledge, infrastructureand governance, cities represent a keyopportunity to stimulate larger scalechange toward green economies. In a worldwhere cities are increasingly competingagainst each other economically, whereweather patterns are unpredictable and lowresource prices can no longer be assumed,cities need to proactively shape theireconomies and operations in preparationfor an uncertain future. To manage risk in

a democratic manner, a balance will needto be struck between deliberative decisionmaking processes and centralized masterplanning. This can be done by empoweringplanning professionals to respond quicklyand effectively to evolving developmentswithout compromising longer term sharedvisions of a better city 14.

This guide is one of a set of four aimed at

inspiring city managers and practitioners tothink more broadly about the role of theircities, and to collaborate with experts and

interest groups across disciplines and sectorsto promote both human and environmentalprosperity. The guides are based on theoutputs of an expert group meeting hostedby UN-Habitat in February 2011 entitled

What Does the Green Economy Mean forSustainable Urban Development? Each guidefocuses on one of the following cross-cutting themes:

Working with Nature

With functioning ecosystems forming thefoundation for social and economic activity,this guide looks at how built environmentscan be planned to operate in collaborationwith nature. It looks at how to plan citiesand regions for ecosystem health, focusingon allowing sufcient space for naturalsystems to continue providing crucial goodsand services like fresh water, food, fuel andwaste amelioration.

Leveraging Density

This guide looks at the relationship betweenbuilt and natural environments from theperspective of cities, and considers how theirimpact on ecosystem functioning might bereduced by making best use of their landcoverage. Planning the growth of cities toachieve appropriate densities and providingalternative forms of mobility to privatevehicles help to slow urban expansion ontoecologically sensitive land, and can reducecitizens’ demand for scarce resources by

sharing them more efciently.

Optimizing Infrastructure

Considering urban infrastructure as thelink between city inhabitants and naturalresources, this guide looks at howinfrastructural systems can be conceiveddifferently in order to help all city residentsto conserve resources. It introduces new

concepts and approaches to the provision ofinfrastructural services, such as energy, waterand waste treatment, and demonstrates

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how infrastructure investments can act ascatalysts for urban sustainability.

Clustering for Competitiveness

Taking a broader perspective, this guidelooks at city regions and how they canbe more optimally planned to achieveeconomic objectives in a manner that doesnot waste local resources. It looks at how

competitive advantage can be achieved at aregional scale by encouraging cooperationbetween cities with complementary areasof specialization. It also considers howinnovation for green economic development

can be encouraged through the clusteringof industries, and through collaborationsbetween government, the private sectorand academia.

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Agglomeration economies: Advantagesthat arise from increased density of

economic activity.

Decentralization: The spread of poweraway from a major centre to other cities andregions.

Externality: Side effect or consequenceof an industrial or commercial activity thataffects other parties without this beingreected in the cost.

Globalization: The technological, politicaland economic changes resulting fromthe increasingly global nature of the wayactivities are carried out.

Infrastructure: The physical andorganizational structures needed for theoperation of a society or enterprise, orthe services and facilities necessary for aneconomy to function; this includes transportinfrastructure, universities, airports, ports,healthcare infrastructure.

Innovation: Innovation is the creation andsuccessful implementation of new ideasand inventions that make a real differencethrough the generation of tangibleoutcomes with social and/or nancial value.

Polycentricism: Principle of developingmultiple centres within a region to be

complementary in role through cityspecialization.

Strategic facilities: Facilities such asgood harbours, an international airport,universities and a nancial centre strengthenthe competitiveness of a city-region andsupport value chains throughout the area.

Triple helix collaboration / innovation:Triple helix collaborations / innovation referto collaborations / innovations where threehelixes namely government, industry andacademia play their specic roles.

Urbanization: Urbanization is the processin which the number of people living incities increases compared with the numberof people living in rural areas.

Glossary

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Contents

Foreword iiiGlossary ixChapter 1: Introduction 1Chapter 2: Green Development Challenges and Trends 5

2.1. Climate change is a serious risk to poverty alleviation 52.2. Urbanization, especially in developing countries, puts pressure on resources and

infrastructure 52.3. Decentralization policies have limited success 62.4. Economic growth: The economic crisis is seen by many in the developed

world as an opportunity for green growth2.5. Globalization has had profound impact on the role of cities in regional

development 62.6. Implications of global trends for green economic development 6

Chapter 3: Importance of Competitiveness for Green Development 93.1. The importance of transitioning to a green economy 93.2. Is competitiveness important and what plays a role in achieving a “sustainable

competitive advantage”? 123.3. The importance of inter-city networks and polycentric urban development in

achieving competitive advantage 14Chapter 4: Achieving Competitive Advantage 174.1. Approaching the design of initiatives for green economic development 18

4.2. Mechanisms for developing competitive advantage 19Chapter 5: Implementing Competitiveness 295.1. Organize and mobilize the stakeholders 295.2. Analysis 305.3. Develop the strategy and implementation plan 305.4. Implementation 315.5. Monitor and evaluate 31

Chapter 6: Case Studies 336.1. Collaborating for innovation at 22@Barcelona, Spain 336.2. Fostering innovation at Newcastle Science City, United Kingdom (UK) 356.3. Developmental Green Economy Strategy for Gauteng, South Africa 386.4. Delhi post Commonwealth Games: world–city or urban asco? 426.5. The Zurich Cleantech Innovation Park: Dübendorf a contested space 456.6. Clustering solar energy industries in Dezhou, China 496.7. Randstad: a polycentric urban region 536.8. Building a recycling industry at the Kitakyushu Eco Town Project 56

Chapter 7: Conclusion 61End Notes 63

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Passengers gather at Tetouan’s central bus station, which is the hub for public transport in this regionof Morocco © UN-Habitat/Alessandro Scotti

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CHAPTER 1: INTRODUCTION

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Introduction 1This quick guide develops an argument thatthrough strategic investment in physicalinfrastructure, in combination with thediversication of economies, cities willstart to play a specialised role in polycentricurban development. It is argued that anumber of green economy outcomes maybe reached through efciencies and sharedinfrastructure, rather than duplication. Thecentral concepts to this strategy are citycompetitiveness and local and regionaleconomic development. Furthermore,it is suggested that green economicdevelopment can be achieved through thedevelopment of green clusters and green

jobs. The guide mainly grapples with the

perceived trade-off between economicdevelopment and environmental protection.This is a key issue addressed in the guideand it explores pathways of how both ofthese goals may be achieved in union.

In Section 2 , this guide provides a briefoverview of key challenges facing city-regions and cities that are aiming to achievecompetitive advantage. The forces of

globalization are found to have an immenseeffect on the basis and level on which city-regions are competing. This increases the

need for regional planning and strategiccompetitiveness initiatives to position regionsto achieve green economic developmentand attract international investment.

In Section 3 , the concept of the greeneconomy is explained and the key risks andchallenges, especially for developing nations,are clearly articulated. The section providesa rationale for competitiveness as a strategyand also highlights clusters and polycentricurban development as key mechanisms forachieving competitive advantage.

The key design principles that aredeveloped in Section 4 suggest a systems

and network approach coupled withthe adoption of supply-side, as well asdemand-side considerations for the designof interventions. The key mechanisms thatare suggested for the development ofcompetitive advantage are:

• Clustering, as this will provide a frameworkfor focused support for innovation activitiesand creating a competitive advantage.

These clusters need to be stimulated toexhibit self-exploration activities for greeneconomic development.

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CHAPTER 1: INTRODUCTION

3

good communication are amongst thefactors that have led to huge successesfor this project.

Lastly, Section 7 provides a short keysummary of the ndings and suggestedapproach.

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Shipping containers arranged in the newly built PTP commercial harbour in Johor Bahru, Malaysiawhich overlooks the Malaysia-Singapore Strait © UN-Habitat/Alessandro Scotti

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CHAPTER 2: GREEN DEVELOPMENT CHALLENGES AND TRENDS

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2This section provides a broad outlineof global macro-trends and what theirimplications are for cities and regions tocompete on the global stage. It highlights arange of global challenges, their impact oneconomic development and the implicationsfor competitiveness strategies.

2.1. Climate change is a seriousrisk to poverty alleviation

Climate change and shifting weatherpatterns have a global impact as they maycause:

• Threats to continued food production

with potential implications for creatingethnic tension, political conict and civilunrest;

• Rising sea levels potentially causingooding;

• Climate change-induced migrationleading to displacement of individuals;

•

Reduced bio-diversity in plants andanimals which in turn will affect therobustness of ecological systems;

• Threats to continued economicdevelopment in those developingcountries that are heavily dependent onnatural resources, especially agriculture,and that have constrained capabilities toadapt to the changing climate. 15

2.2. Urbanization, especiallyin developing countries,puts pressure on resourcesand infrastructure

The urbanization trend may result in anumber of difculties, such as: 16,17,18

• Inadequate infrastructure and planning

of infrastructure to cope with growingpopulations in cities;

• Emergence of slums and sub-standardhousing;

• Increased trafc and commuting times;

• Difculties with the timely access ofessential services; and

• Administrative difculties.

Green DevelopmentChallenges andTrends

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CLUSTERING FOR COMPETITEVENESS

These difculties may negatively impact oncities’ abilities to attract investment and onnew industries’ ability to establish themselves

in these areas; thereby negatively impactingon economic development prospects inthese locations.

2.3. Decentralization policieshave limited success

Many countries in the world are engagingin processes to decentralize functions frommajor centres. This process was originallyinitiated to have more equitable and efcientservice delivery by spreading functions suchas administration, political control andnance throughout a region or country. Theintention was also to improve policy-makingthrough increased public participation. Theeffectiveness of this policy may, however, bequestioned because capacity building andeffective management practices are lackingin many cases. 19,20

2.4. Economic growth: The economiccrisis is seen by many inthe developed world as anopportunity for green growth

Many administrations in the developed anddeveloping world see investment in a greeneconomy as an opportunity for renewedeconomic growth on environmentally andsocially sustainable grounds. Examples

include the United States, which includedenergy-saving technologies and greenactivities as part of their stimulus package. 21 Similar measures have been implementedin countries such as South Korea and SouthAfrica, where economic developmentstrategies increasingly include sustainabilitypractices and the establishment of non-

traditional sectors for a green economy.

2.5. Globalization has had profound

impact on the role of citiesin regional development

Globalisation has resulted in increasedinterconnectedness of cities across the globeand is increasing economic competitionbetween cities and regions. Cities need toreact to the trend by effectively managingand mitigating risks associated withglobalization. 22,23

2.6. Implications of global trends forgreen economic development

The combination of urbanization andglobalization and increased pressure foraccountability means that local governmentshave additional responsibilities. Questionsare asked about how to developeconomically in relation to the internationalcommunity, while governments are pushedto think about social justice and equity. 24

The importance of location is nowcentre stage in the debate on economicdevelopment. Contrary to some who believethat the effect of globalization and theimprovements in telecommunications willmake location, and therefore the city, lessimportant, many economic geographers,economists and policy-makers think that

the importance of location has actuallyincreased with globalization. It is generallybelieved that regional distinctiveness, andthus regional economic development, isincreasingly seen as the focus for increasedwealth creation and world trade. 25,26,27,28

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“In a global economy – which boasts rapidtransportation, high speed communicationsand accessible markets – one would expect

location to diminish in importance. But theopposite is true. The enduring competitiveadvantages in a global economy are oftenheavily localized, arising from concentrationof highly specialized skills and knowledge,institutions, rivalry, related businesses andsophisticated customers.” (Porter, 1998:90)

It is also increasingly acknowledged that byrelying on market forces alone the world willnot be successful in making the transition

to a green economy. The literature widelyacknowledges the various roles that willneed to be played by governments, industry,nanciers, academia and society. Manycountries have, therefore placed balancingeconomic growth with sustainabilitypractices and environmental protection ontheir development agendas.

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Highly dense, competitive urban spaces allow for specialization, as is the case in this informalneighbourhood in Onitsha, Anambra State, Nigeria © UN-Habitat/Alessandro Scotti

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Importance ofCompetitiveness forGreen Development 33.1. The importance of transitioning

to a green economy

The concept of the “green economy” isappealing because it aims to respond to thewide range of crises the world has facedrecently, namely climate change, food crisesand economic crises.

Although the perception may exist thatthe developed world has a large focus ontechnology for developing green economies;it has been increasingly acknowledged thatgreen economic development need not onlyfocus on high technology. Possibilities are alsoprogressively being sought to consider low

technology and high job creation industries.The frameworks for planning green economiestherefore now aim to include not only a focuson skills and technology development, butalso on factors for poverty alleviation. 29,30 TheWorld Economic and Social Survey 2011 31 provides insight into this line of reasoning:

“A global green technological transformation,greater in scale and achievable within a much

shorter time-frame than the rst industrialrevolution, is required. The necessary setof new technologies must enable today’s

poor to attain decent living standards, whilereducing emissions and waste and endingthe unrestrained drawdown of the Earth’snon-renewable resources.

“Staging a new technological revolution ata faster pace and on a global scale will callfor proactive government intervention andgreater international cooperation. Sweepingtechnological change will require sweepingsocietal transformation, with changedsettlement and consumption patterns andbetter social values.” 32

Green economic development sets out toprovide a solution to the perceived opposing

objectives of economic growth and povertyalleviation, and the protection of the world’secosystems. Core to this concept is therealization that the world needs a transitionfrom the current systems that caused crisesto an integrated system that “proactivelyaddresses and prevents crises”. 33

Much work has been done to understandwhat the pathways towards the green

economy may look like. Certain key enablingconditions are: 34

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• Establish sound regulatory frameworks;

• Focus government investment on areas

that will stimulate the greening ofeconomies and the further developmentof labour intensive industries;

• Limit government spending on industriesthat deplete natural capital;

• Promote taxes and market-basedinstruments to promote investmentin innovation and the greening ofindustries;

• Invest in skills development and capacitydevelopment and

• Strengthen international governance.

Useful ResourcesUNEP. (2011). GREEN economy: Pathwaysto Sustainable Development and PovertyEradication - A Synthesis for Policy Makers.Available at:http://www.unep.org/greeneconomy/ Portals/88/documents/ger/GER_synthesis_en.pdf

UN. (2011). Working towards a Balancedand Inclusive Green Economy: A UnitedNations system-wide perspective, preparedby the Environment Management Group.

Available at:h t tp : / /www.unemg .o rg /Po r t a l s /27 / Documents/IMG/GreenEconomy/report/ GreenEconomy-Full.pdf [Accessed on 27February 2012.]

3.1.1. What are green jobs?

Although no single and ofcial denitionfor green jobs exists, general agreement is

that green jobs are those that contribute

to the preservation and restoration ofenvironmental quality. These may include: 35

“…positions in agriculture, manufacturing,construction, installation and maintenance,as well as scientic and technical,administrative, and service-related activities,that contribute substantially to preserving orrestoring environmental quality. Specically,but not exclusively, this includes jobs thathelp to protect and restore ecosystems andbiodiversity; reduce energy, materials, andwater consumption through high-efciencyand avoidance strategies; decarbonisethe economy; and minimize or altogetheravoid generation of all forms of waste andpollution.” 36

A wide array of skills, educationalbackgrounds, and occupations comesunder the heading “green jobs”. Theymay exist in research and development;professional elds, such as engineeringand architecture; project planning andmanagement; auditing; administration,marketing, retail, and customer services;and in many traditional blue-collar areassuch as plumbing or electrical wiring. Green

jobs may also exist outside the privatesector, for example in government ofces(standard setting, rule-making, permitting,monitoring and enforcement, supportprogrammes, etc.), in science and academia,professional associations, and civil society

organizations (advocacy and watchdoggroups, community organizations, etc.). 37

The quality of these jobs is emphasized witha focus on adequate wages, safe workingconditions, limited travelling time to andfrom work (time, money, fuel and emissions)and access to organized labour. 38 Althoughno precise denition for green jobs exists yet,the United Nations Environment Programme

(UNEP) provides some guidance on these.(See Figure 3.1).

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As far as green jobs in the developed worldare concerned, analyses has focused onfactors such as changes in the total numberof jobs, underlying job movements fromone job category to another (e.g. changein job specications) and the quality of jobsthrough the transition to a green economy. 40

There is a lack of this kind of information fordeveloping countries, which poses difculties

for developing effective policy to transition toa green economy. This problem forms the basisof projects such as the International LabourOrganisation’s Global Green Jobs Programmethat is currently also investigating what thepolicy options for transitioning to a greeneconomy will mean for developing countries. 41

3.1.2. Challenges for transitioningto the green economy

Green economic development also entailsrisks and challenges, particularly for

Figure 3.1: Examples of green and decent jobs

Source: Figure copied from UNEP 39 , (2008). Green jobs: Towards decent work in a sustainable, lowcarbon economy.

developing countries. For these countrieseconomic development is feared to becomemore challenging. They are concerned thatgreen economic development would be usedto reinforce protectionist trends, it wouldhave additional restrictions and conditionsfor international nancial cooperation,and it may unleash new forces that couldreinforce inequalities. 42

A key risk for this approach is also that a“one size ts all” strategy may be adopted.Care should be taken to identify and dealwith trade-offs that need to be made invarious stages of development for a country.Environmental endowments and challengesdiffer widely between countries and shouldalso be considered. 43

The risks associated with the trade regime

include using the environment for tradeprotection; gaining market access underthe guise of green economic development;

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Figure 3.2: Key factors that play a role in city competitiveness

and subsidized production in the industrialworld without corrective measures fordeveloping countries. Other fears are that

developing countries may nd it difcult topromote domestic green economy sectors,or that technical standards are too high fordomestic exporters to meet. 44

3.2. Is competitiveness importantand what plays a role inachieving a “sustainablecompetitive advantage”?

As globalization and the transitioning toa green economy is causing cities andregions to increasingly compete witheach other, much academic and policyattention has been focused on the notion of“competitiveness” 45,46 .

Attempts have also been made tograpple with the perceived trade-offbetween economic development andenvironmental protection. 47 The paradigmof competitiveness has also seen amarked shift over the past few decades.Sustainability considerations in industrialpolicy and economic development have been

highlighted by some authors; for example,with the introduction of frameworks for“sustainable competitive advantage”. 48,49

The literature treats the denition ofcompetitiveness from two points of view:

• The spatial scale: This treatscompetitiveness on the geographicalscale, for example city, regional ornational competitiveness; 50,51,52,53,54 and

• The specialized functions space: Thisfocuses on the competitiveness of citiesor regions in terms of their functions,such as tourism, agriculture, nance ortechnology. 55

Factors that contribute to a location’scompetitiveness can be referred to as“location factors”. The following gureprovides an overview of a synthesis fromthe literature of selected factors that havebeen identied as playing a role in thedevelopment of a location’s competitiveness.

The literature acknowledges the centralrole that innovation, human capital and

Selected drivers of city competitiveness

Quality of Local governance

Capacity for self-explorationactivities

Infrastructure that support thevarious functions of the city(including strategic facilities)

Innovation

Human capital and skills

Historical legacy

M a c r o

/ n a t i o n a l e n v i r o n m e n

t

Citycompetitiveness

Selected preconditions forthe formation of clusters

Trust

Critical mass of rms

Geographical proximity

Entrepreneurial culture

Clustering and knowledgespill overs

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the existence of competition on the localmarket plays in establishing competitiveadvantage. The same could be said for

local governance. Globalization and theopenness of economies have also resultedin a situation where these key drivers havebecome more important. 56,57

History also matters because historicallegacy and agglomeration economies (i.e.advantages that arise from increased densityof economic activity) play an importantrole in driving competitive advantage. Twoways an agglomeration advantage could beachieved are: 58

• Clustering of companies and businessesin the same industry (localizationeconomies); and

• Clustering of rms and businessesin different industries (urbanizationeconomies).

There is widespread acknowledgement ofand interest in the adoption of clusteringstrategies and policies to overcome internalshortcomings to enable rms to join effortsand resources with other rms, universities,research councils and other public sectororganizations. Mostly due to the growingappreciation of the importance of innovationby academics and policymakers, there existsa belief that clusters may be one of the most

effective means of creating an environmentwhere innovation can be stimulated.

Infrastructure is also an important factordriving competitiveness. Strategic facilitiessuch as universities, harbours, ports etc.are widely believed to play a role in thecompetitiveness of a city. Infrastructure hasa large impact on the cost of doing businessand the quality of life that, in turn, play a

role in attracting skilled labour and rms tothe region. Strategic planning of facilities in

cities may also feature in a more coordinatedapproach towards development on theregional and national levels. 66,67

A stable macro environment is also importantin establishing conditions for growth andcompetitiveness. Also, it is important toensure that synergies between cities andneighbouring cities are planned for, becausesynergy must form part of an overarchingnational development plan. Therefore, theroles of national governments and provincial

governments may also be important irrespectiveof how effective local policies are. 68,69

When poor countries become richer thetendency is for their economies to becomemore diversied. 70 This expansion of activitiescarries on up to a relatively advanced level ofdevelopment. A country’s ability to expandthe number of activities in the economy is,therefore, key to development success in

developing countries, that is, its ability forself-exploration. 71

Localization of economic growth: basisfor the argument to develop clusters

Criticisms of the cluster approach by someacademics address the pitfalls of blindlyapplying this mechanism without properunderstanding of its limitations. It is, however,widely recognized that cluster-like processesand structures play a major role in shaping andreshaping regional competitive advantage. 59

There are few who do not acknowledge thepositive feedback about the existence ofclusters in a region and their ability to attractmore rms to the area. 60 The literature isalso clear on the need to establish new,specialized facilities and infrastructure tosatisfy cluster participants. Much workis being done on how clusters emergeand on what determines their long runevolution. 61,62,63,64,65

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3.3. The importance of inter-citynetworks and polycentric urbandevelopment in achieving

competitive advantage

As competition has shifted from the levelof the nation-state to the city-regionlevel, attention has also shifted towardsunderstanding spatial conguration andlinkages between cities within a region. It iswidely believed that the strategic planningand development of synergies and linkagesbetween cities may contribute to ndingnew areas of competitive advantage and tomarketing city-regions internationally. 74,75,76

Policymakers and planners have also startedto recognize that the coherent congurationof polycentric urban regions (PUR) may bean important focus area for policy makingand planning. If these activities are engagedin on a city-region level, this may counterbalance the negative impacts of citiescompeting with each other for high-levelservices, hi-tech industries, skilled labour,tourists and a marketable image. There maybe opportunities within the larger systemthat will be unused or wasted through, forexample, duplication. 77

The explicit design and planning of PUR hasbecome a feature in regional developmentstrategies in many European countriesthrough the inclusion of the polycentric

urban regions concept in the EuropeanSpatial Development Perspective. 78,79 Theseregional clusters of cities are not alwaysreferred to as PURs but are sometimes called“urban networks” or “city networks”. Thenetwork metaphor is often used to describethe complex nature and strong relationshipsthat exists between centres in PURs. 80

Case study: Delhi post CommonwealthGames: world–city or urban asco?

The hosting of mega sporting eventscan provide opportunities for strategicinvestments in infrastructure that allowcities to cater for increased visitors inthe short term while delivering ongoingbenets to permanent residents overthe longer term. Delhi’s hosting of theCommonwealth Games in 2010 was notfully realized as an opportunity to build itscompetitiveness; and a combination of poorplanning, mismanagement and corruptionresulted in delays, cost overruns, ecologicaldamage and transgressions of humanrights. While some strategic facilities, suchas the upgraded airport and the extensionto the Delhi metro, have strategic benets,the vast sums of money spent on the gameshave largely failed to address the severeand chronic gaps in the provision of basicservices to ordinary residents. (Full casestudy in Section 6.)

In developing countries however, it is oftenthe case that the returns on new activities aredifcult to gauge and therefore investmentin new industries or businesses is limited.Information externalities and coordinationexternalities are usually the main reasons forthis problem. 72

Governments, therefore, could support the

process of self-discovery and, to make thisworkable, a carrot and stick strategy bygovernment is suggested. The carrot will beto support new activities and the stick willbe the processes to phase out bad projects;it is suggested that support is subject toperformance requirements and the closemonitoring of these projects. 73

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The polycentric urban region concept andemergence of polycentric urban regions isdescribed by the following characteristics: 81,82

• Clustering and the existence of a setof urban centres, i.e. within a region anumber of cities will exist with a numberof industry clusters concentrated in andaround these centres.

• Interaction among centres, the level ofeconomic interaction or linkage amonga given set of centres.

• Centre specialization; the centres havespecialized economic structures.

A number of potential advantages may arisewith the emergence of polycentric urbanregions: 83

1. Greater agglomeration or externaleconomies for businesses may beachieved from the potential to effectivelypool assets spread across the region.

2. Functional specialization may arise fromencouraging interaction between centresin a region. If such specializations arecomplementary rather than competitive,the polycentric urban region may benetbecause the region could host a broaderrange of higher quality, metropolitanservices to businesses, households,consumers, workers and tourists. This

larger variety of services availableto businesses and universities andother stakeholders may create furtherfavourable conditions for innovation andwould be an advantage in competing forinvestments in the region.

3. Regional planning may also result inan improvement in the quality of open

space and improved spatial diversity.Through planning, uncontrolled urbansprawl could be avoided and the “green

(and blue) networks” may be protected.This however requires a co-ordinatedpolicymaking process from a regionalrather than a local perspective.

Key challenges to this approach

Care should be taken with the potentialadvantages mentioned above that mayresult in attractive outcomes but may alsohave certain drawbacks. For instance, eventhough the coordination of the developmentof complementary facilities may result inhigher variety of services, it may also requireindividual cities or centres to make somesacrices by subordinating their own intereststo the greater regional good. 84 An exampleof this is that a city may be asked from aregional level to lose a vocational traininginstitute or specialized medical service to anearby city. The risk is that the city will notbe compensated for the loss of this service. 85

This makes the development and existenceof a regional framework for cooperationand coordination very important in dealingwith these kinds of trade-offs. Without sucha process or framework, local interests willprevail over the regional good which willblock the exploitation of regional potentialadvantages. 86

Recommended readingMeijers, E. (2007). Synergy in PolycentricUrban Regions Complementarity, OrganisingCapacity and Critical Mass. PhD thesis. DelftUniversity. Available at http://repository.tudelft.nl/view/ir/uuid%3A983e9c4b-1cce-447d-bc56-9ca21ac46c21/

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The market area of Onitsha, Anambra State, Nigeria is strategically located at one of the onlybridges crossing the Niger River, in this case the Transafrican Highway© UN-Habitat/Alessandro Scotti

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AchievingCompetitiveAdvantage 4This section provides recommendations onthe approach, mechanisms and governanceframework that need to be implementedto develop a competitive advantage and/ornd new areas of competitive advantage.

Approach: This section provides guidanceon the analytical framework and approachto be adopted in designing initiatives todevelop and nd new areas of competitiveadvantage.

Mechanisms: A number of mechanismsto achieve a competitive advantage aredeveloped. These include polycentric urbandevelopment, the implementation of green

Goal of Initiatives

City competitivenessinitiatives

Approach• Systems and network

approach• Supply and demand side

considerations

Regionalcompetitiveness

initiatives

Finding new areasof competitive

advantage

Principals for competitiveness

Mechanisms

Governance framework

Strategic investment in strategicfacilities and infrastructure

Support of innovation activities

Clustering for green economicdevelopment

Strengthen triple helixcollaborations

Capacity development

Managing the transition

Creative governance

Figure 4.1: Framework for principles

jobs for green clusters and strengtheningof knowledge infrastructure and linkagesbetween helixes to support innovation.

Governance framework: Governance ofthese measures is important as this addressesthe framework from which government willstimulate and coordinate such activities.Capacity development, creative governanceand transition management principles aresuggested.

The following sections now carefully unpackthese principles and provide guidance onconcepts for planners and strategists.

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Elements Generic systems denition Innovation system

Components Operating parts of the systemand consists of input, process andoutp ut

Organisations e.g. rms, governmentdepartments, research councils, universities

Attributes Properties of the componentswhich characterise the system

Institutional environment - the character andproperties of the organisations e.g. absorptivecapacity, R&D capacity

Relationships The links between componentsand attributes

Linkages between organisations

4.1. Approaching the designof initiatives for greeneconomic development

4.1.1. The systems and networkviews should be adopted asan analytical framework

The systems and network views havebeen widely adopted in current academicliterature on economics. This is alsotrue for the literature on local economicdevelopment (LED) or local and regionaleconomic development (LRED). A widerange of academic disciplines haveinuenced this eld of study and ideashave been adopted from disciplines suchas economic geography, urban planning,economic sociology, public administrationand decentralization, systems thinking andregional economics. 87,88,89

The development of thinking along theselines shows how the understanding oflocal and regional economic developmenthas evolved; it now acknowledges that aneconomy consists of networks and dynamicsystems of linkages that shape how peoplethat operate in these systems make decisionsand act. This has given rise to the concepts of“systemic competitiveness” and “systems ofinnovation”, which have become prevalentin innovation and economic developmentthinking and practice. 90,91,92

Of particular importance is that the systemsapproach aids in directing the analysis anddetermining what type of support needs

to be set up at which level (local/regional/ national/transnational) and what thepossibilities for inter-regional cooperationare. This approach also helps to developan analytical framework for identifying andanalysing systemic weaknesses.

Illustrating the concept: Systems ofinnovation

According to Blanchard and Fabrycky, 93 systems consist of components withattributes and relationships between them.By using the systems view of innovation, theelements of a system of innovation can bedened by the following:

The systemic approach of innovation isbased on the perception that innovationsare ultimately brought about by the variousorganizations and the relationships betweenthem.

Recommended readingRücker, A., and Trah, G. (September 2006).Local and Regional Economic Development(LRED) Conceptual Framework, Challengesand Principles. Available at http://led.co.za/ sites/led.co.za/les/documents/204.pdf

Table 4.1: Dening the elements of an innovation system

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CHAPTER 4: ACHIEVING COMPETITIVE ADVANTAGE

19

4.1.2. Demand-side and supply-sideconsiderations are importantto design interventions

The systemic view also goes beyond thelinear view in that it acknowledges the casefor government intervention not only on thesupply-side but also on the demand-side. 94

In the process of developing and designingpolicies for driving green economicdevelopment, it is important to have asystematic analysis of demand side (forexample, rms and their global competitionchallenges and consumer innovation needs)and the supply side (for example, technologydevelopment, skills development,technology transfer) to develop a robustand balanced regional competitivenessstrategy. Interventions need to be designedto ensure that both the demand-side as wellas the supply-side is stimulated. With theincluded focus of demand-side interventionsthe ability of the region to support self-exploration activities may be stimulated,thereby fostering a diversied economy.

Although historically most countrieshave been more focused on supply-sideinterventions, the tendency worldwide is

also increasingly to develop strategies andmechanisms to support the demand sideof the equation. As an example, countriessuch as the United Kingdom have explicitlyincluded it in its innovation strategies.Measures such as public procurement areeffectively used to stimulate demand forinnovation outputs. 95

4.2. Mechanisms for developingcompetitive advantage

4.2.1. Regional competitive advantage:Generate synergies betweencentres through cooperationand complementarity

The key rationale for polycentric urbandevelopment is that in regional development,one city could not provide a complete rangeof economic functions, urban facilities orresidential and business environments. Thiscould be better achieved through strategicdesign and the coordination of developmentof specialized facilities within a region,thereby creating synergies between centres.

Synergy in polycentric urban regions isgenerated through: 96

• Complementarity: The interplay of

regional demand for more specializedservices through the differentiation ofeconomic and functional roles of citiesfor facilities.

• Co-operation: The development of aregional organizing capacity throughwhich co-operation in the developmentof polycentric development can takeplace (discussed in more detail in the

governance framework section).

It is argued that through the development

The Newcastle Science City is an exampleof how innovation can be stimulated byfocusing on supply-side as well as demand-side measures. Its approach to creating new

high technology companies was to focuson the training and mentoring of youngentrepreneurs (i.e. a supply side intervention)to seek new technologies to meet identiedmarket needs (i.e. a demand-led approach).The programme, entitled the “NewcastleInnovation Machine”, has achieved greatsuccesses and resulted in the formationof many new companies. It is, however,an expensive model and it will take some

years before the long-term success can beevaluated. (Full case study in Section 6.)

Case study: Fostering innovation atNewcastle Science City, England

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• “Two hospitals are complementarywhen they provide for different medicalspecializations, or specialize in different

kinds of treatment – for instance,standardized routine operations versusspecialized knowledge / intensive carewhile serving more or less the sameregion.” 101

• “Two or more residential areas arecomplementary when they offer differentresidential milieus, thus providingalternatives to match the differentpreferences of a regional population.” 102

In order to achieve synergistic relationshipsbetween centres or cities in a polycentricregion, connectivity between specializedcentres is important because the successof such a strategy hinges on the ability ofcitizens to gain access to the services.

The following key design principles forpolycentric urban development can besummarized (Grant Thornton, 2010):

• Functional specialization: For eachcentre a specialization needs to bedeveloped based on its key competences;

• Ease of accessibility: Free ows ofpeople and goods between centresare important. Therefore connectivityin terms of transport and information

ows between nodes in the polycentricnetwork needs to be established;

• Cooperation and interaction: Aregional cooperative capacity is of highimportance as key planning and designdecisions needs to be coordinatedbetween many parties. Cooperation,complementary in existence and synergyneed to be carefully dened and fostered

through the development of a regionalcooperative capacity on many levels.

of complementary functions in the citiesin a region, citizens will be able to haveaccess to a wider range of functions. This

is because the demand market for suchservices is the region, which is larger thanthe city, and will therefore give rise to asituation where more specialized, diverseand higher quality services and functionscould be developed. Because of the physicalseparation of urban centres and rms, suchadvantages could be described as “regionalexternalities”. Through this, new areas ofcompetitive advantage may be discoveredas complementarity is strongly linked toagglomeration economies. 97,98

Although complementarity is a vagueconcept, (Meijers, 2007; Camagni andSalone, 1993), it is often cited in academicwritings and policy documents. It can bedened as a result of supply and demand.For a number of centres to be consideredcomplementary, two preconditions need tobe satised (Meijers, 2005):

• Differentiation: The cities or centresneed to be differentiated in terms ofurban functions or activities.

• Overlap of geographical marketsof demand: The geographical marketsof demand for these urban functions/ activities or places must at least partlyoverlap. Urban functions/activities in one

centre or city should provide services tobusiness or households also making useof functions/activities in other centres.

Examples of complementarity. 99

• “Two universities are complementary ifthey offer different academic education,while at the same time they recruitstudents from more or less the same

region.”100

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Policies%20Whitebook.html

Solvell, O., Lindqvist, G., Ketel, C. (2003).

The Cluster Initiative Green Gook.Stockholm: BrommaTryck. Available: http:// www.cluster-research.org/greenbook.html

Each cluster is unique and the concept canbe applied differently in various situations.However, the White Book of cluster policiesoutlines seven elements for the notionof clusters. Not all the elements need tobe present in each cluster, nor are theynecessarily desirable. The central theme,however, is the importance of innovationand the stimulation of such activities: 105

• Geographical concentration: Hardfactors, such as external economies ofscale, as well as soft factors, such asa learning region and processes andsocial capital, make rms locate in ageographic location;

• Specialization: There is a specializedcore activity to which actors in the clusterare related;

• Multiple actors: Apart from rms,a wide range of actors form part ofa cluster, such as public authorities,academics, nanciers, and institutionsfor collaboration;

• Competition and co-operation: Theactors in the cluster are related toeach other through competitive andcooperative activities; for example,they compete in the market place butcollaborate on product development;

• Critical mass: This is needed to achievethe inner dynamics of cooperation andcompetition;

• The cluster life cycle: Cluster initiativesare not temporary phenomena but have

4.2.2. Clusters provide a frameworkfor focused support for greeneconomic development

Through the systems view, clusters ofinnovative activity that may have competitivepotential can be distinguished. If potentialstrong inter-rm clusters can be identied,public authorities are presented with aframework for focussed support efforts,alongside generic support actions. 104

The following key readings may providedetailed overviews of various approachesand policies available to cluster policymakers and implementation professionals.

Recommended readingAndersson, T., Serger S., Sörvik, J.,Hansson, W. (2004). The Cluster PoliciesWhitebook, International Organization

for Knowledge Economy and EnterpriseDevelopment (IKED). Available: http://www.iked.org/Publications%20-%20Cluster%20

The Randstad case study shows that through

the creation of synergies in a region, apolycentric urban region could indeed bemore than the sum of its parts throughcomplementarity and cooperation. The casestudy shows that: 103

• The rst mechanisms through whichsynergy could be achieved (namelycooperation) is increasingly prevalent inthe Randstad region. Through formal andinformal networks, a regional organizingcapacity has been established;

• The second mechanism through whichsynergy could be created (namelycomplementarity) reveals that keycities each perform distinct roles withinthe region specializing in commercialservices, manufacturing and transport,public administration, or trade andeducation. (Full case study in Section 6.)

Case study: Randstad, the Netherlands

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a life cycle and a long term survival goal;they continuously have to adapt andchange;

• Innovation: Innovation is key tothe survival and continued existenceof clusters as there is continuedtechnological, commercial and/ororganizational change.

The following key principles for clusterformation for green clusters for green jobsis extracted from the literature:

1. Achieve consensus with stakeholdergroups and investors: Robuststakeholder management andconsultation needs to be done to ensurethat consensus is achieved regionallyon what is required for a fundamentaltransformation of the regional economyto a green economy.

2. Base strategies on robust calculations: Robust cost-benets analysis need tobe done to understand the concretecosts and benets of pursuing a greeneconomy agenda in the full senseof the term. This step is key towardsachieving consensus and to motivateimplementation projects.

3. The stimulation of self-explorationactivities: It is important to keep in

mind that history matters and it takesconsiderable sustained investment forclusters to develop. For this reason itis suggested that to establish greenclusters for green jobs, existing clustersin regions should be assisted to performself-exploration activities to nd newareas of competitive advantage.

4. Consider development of non-

traditional sectors: A strategy forgreen economic growth may consider

cluster development drives in non-traditional sectors to the economy fordeep structural transformation towards

green economic development.

5. Green nance and attraction ofinvestment into green clusters: Through attracting investment fromlocal municipalities, as well as largenanciers, clusters may be developed tofeed into wider industrial supply chainsas a progressive conversion towards thegreen economy.

6. Stimulation of demand-side forgreen products: Illustrated throughthe Dezhou Solar Valley case study,the demand for solar products withinthe city provided the solar clusterwith valuable opportunities to testand implement their products fordemanding customers.

Clusters initiative designers and managersalso need to be cognisant of the risksand pitfalls with clusters. The followingsummarizes some of the key areas ofconcern and problems that may arise: 106

• Vulnerability: Through clusterspecialization, vulnerabilities may beinvoked because technological changes,shifts in the economy or customerneeds may undermine the competitive

advantages of clusters.

• Lock-in effects: Risks may arise if thereis excessive reliance on existing contactsand networks and external linkages arenot maintained or developed. This mayresult in lock-in effects and a lack of newideas and practices into the cluster.

• Rigidities: Dense existing networks and

structures make it more difcult to re-orientate the cluster and make structuraladjustments.

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• Decrease in competitive pressures:Through cooperation between rms,the level of competition may decrease,

which may result in social inefcienciesor that stakeholders may block the entryof newcomers.

• Self-sufciency syndrome: If actorsin a cluster become accustomed topast successes they may fail to noticechanging trends.

• Inherent decline: Because social capitalmay be the driving force for shapinga cluster, it may also be the factorthat destroys it. When a successfulcluster generates higher factor costs,the neighbourhood may experienceincreased property prices and outsidersmay be excluded.

4.2.3. Adopt the principles of knowledgecreation and continuous learningto stimulate innovation

Regions are increasingly under pressure toadopt the same principles of knowledgeintensive rms namely: 107

• Pressure for continuous improvement;

• Demand for knowledge creation andnew ideas; and

• Support of organizational learning.

In order for regions to adopt theseprinciples they need to in effect become“learning regions” and develop a seriesof infrastructures to support the ow ofknowledge ideas and learning.

Recommended readingRutten, R., Boekema, F. (2007). The

Learning Region. Cheltenham: Edward ElgarPublishing Limited

The Kitakyushu Eco-Town Project is anindustrial park that has become known for itsexpertise in waste minimization. Since 1997,the park has aimed to achieve zero emissionsand zero waste by using all waste as materialsin other industries, thus closing resource loopswithin the park. Taking advantage of the factthat the eco-town is a cluster of different

recycling and reuse factories, residue fromone factory is, in turn, used as inputs forother factories. Unusable industrial wastesare processed for re-use or used to generateelectricity. The eco-town is characterized bystrong collaboration between government,industry and academia, and is used as a sitefor research and product development inwaste treatment and recycling technologies.(Full case study in Section 6.)

Case study: Building a recycling industryat the Kitakyushu Eco Town Project, Japan

Case study: Clustering solar energyindustries in Dezhou, China

The development of the Dezhou Solar Valleyis an example of city scale clustering aroundgreen technology – in this case solar energy.Driven largely by Himin – the world’s largestmanufacturer of solar thermal tanks – thedevelopment has transformed the localeconomy from agriculture to research,manufacturing and education in solartechnologies. It is currently the largest solarthermal research and development centre inChina, with over 120 solar energy enterprisesand annual renewable energy sales revenuesof USD 19 billion. As a showcase for solartechnologies, the city has also stimulateddemand for the products it manufactures;for example, 95 per cent of new homes inDezhou’s urban communities have solar waterheaters installed. (Full case study in Section 6.)

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Traditional mass production region design principles

Basis of competitiveness

Production systemMass production• Physical labour as a source of value• Separation of innovation and production

Manufacturing infrastructure Arm’s length supplier relations

Human infrastructureLow-skill and low-cost labour• Taylorist workforce• Taylorist education and training

Physical infrastructure Domestically oriented physical infrastructure

Governance system • Adversarial relationships• Command and control regulatory framework

Learning region design principles

Sustainable advantage based on:• Knowledge creation

• Continuous ImprovementKnowledge-based production• Continuous creation• Knowledge as source of value• Synthesis of innovation and production

Firm networks and supplier systems assources of innovation

• Knowledge workers• Continuous improvement of human resources• Continuous education and training

• Globally oriented physical andcommunication infrastructure

• Electronic data exchange

• Mutual dependent relationships• Network organizations• Flexible regulatory framework

Comparative advantage based on:• Natural resources

• Physical labour

Policies need to be designed to address therequirements for the learning region andthe principles of continuous learning anddevelopment. The following gure, adaptedfrom Rutten and Boekema, 108 provides asummary of the shift in focus for variousinfrastructure development initiatives.

Regions are increasingly required to build andmaintain new regional infrastructures whichcan support knowledge-based productionsystems. The triple helix framework is a usefulparadigm for better understanding the roleuniversities, public sector and industry playin supporting innovation within a region. 110

• Universities have started to play amore important role in the incubationof technology-based rms and inknowledge exchange activities suchas consulting, contract research andexecutive education through whichinnovation in a region is supported. Thishas given rise to the “entrepreneurialuniversity”, which performs an activerole within a regional economy to make

productive use of academic knowledge.

• As the private sector rms raise theiractivities to become more knowledgeintensive, these rms start to move closerto an academic model, through whichthey engage in higher levels of trainingand in sharing of knowledge which veryoften strengthen their relationships withthe university sector.

• In addition to its traditional role ofregulator, within a triple helix framework agovernment acts as a public entrepreneurand venture capitalist and providesassistance in the form of supply-side aswell as demand-side interventions tostimulate innovative activity.

Key to strengthening the knowledgeexchange activities in regions is therefore thestrengthening of triple helix collaborations,as is clearly illustrated in the 22@ Barcelonaand Newcastle Science City case studies.

4.3. A governance framework for drivinggreen economic development

Figure 4.3 provides a summary of the keygovernance principles to be implemented

Source: Figure adapted from Rutten et al 109

Figure 4.2: Infrastructure design principles for a learning region

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for driving the development of a greeneconomy. The following sections shortlyexplain the rationale and provide insight

into each of these areas:

4.3.1. Creative governance canstimulate innovation andcreativity in a region

Key to development success is the ability of aregion to engage in self-exploration activitiesand to be innovative. The principles of creativegovernance may enhance the capacity of theregion to stimulate such activities.

The role of governments in fostering anenvironment for creativity and the supportof innovative activities could be achievedthrough the implementation of creativegovernance principles. Governments couldimprove their potential to foster creativityin social and economic dynamics and tocreatively transform their own capacities.A multi-level approach to the variousdimensions of urban governance issuggested, through which certain qualitiesof activities could be identied to encouragecreativity and innovation.

The basic principles of creative governanceare outlined in Figure 4.3 where a numberof categories of the multi-layer approach are

outlined. The following provides context tothese principles: 113

• Building blocks: The choice ofstakeholders and arenas wherediscourse takes place should be openand diverse. Stimulating and welcominginteractive processes should underpinthe mechanisms through whichnegotiations, planning, strategizing ordiscussions take place.

• Governance processes: The principleof diversity and mutual awareness ofstakeholder groups and networks isimportant for fostering a creative milieu.Practices and regulatory processesshould be supportive of experimentationand self-regulation.

• Governance culture: The governanceculture should speak to the openmindedness and openness to diversityand experimentation that underpins thegovernance processes mentioned above.

Creative governance principles

Building blocks

• Groups: Diverse range of actors• Arenas: Open and diverse arenas• Interactive practices: Stimulating, welcoming, respectful and

knowledgeable ambiences; insurgent potentials

Governance processes• Networks and Coalitions: Diverse and mutually aware, loosely

coupled and uid• Stakeholder selection processes: Open and transparent• Discourses: Open minded, inclusive and informative• Practices: Facilitative and experimental practices supportive of

self regulation• Principles: Laws, competences and resource ow principles that

value local initiative and encourage experiment

• Appreciation of diversity, focus on performance not conformance• Identity and open negotiation of values and ethics with

encouragement of open-minded tolerance and sensitivity• Self-regulative and distributive, supportive and constraining

Governance culture

Capacity development

• Strategic planning capacity: Develop capacity and mastertechniques for developing strategies for competitive advantage

• Regional organizing capacity: Develop a capacity to organize onall levels to foster ability to drive regional development agenda

Managing the transition

• Analytical approach: Develop scenarios• Inclusivity: Take a multi-domain view geared towards being

inclusive of the views of a number of actors• Long term thinking: The approach enables policy-makers to

foster long-term thinking in short-term policy-making• Focus on right level: Transition management enables processes

to be addressed on the correct level and solutions to be found onthe right scale

• Actionable tasks: An actionable set of tasks to government on

how to “stimulate, mediate, engage in brokering services, createthe right conditions, enforce its laws and engage in steering.”

Figure 4.3: Principles for governance for creativity

Source: Principles adapted from Healy (2004), 111 Loorbach (2010) 112

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Recommended readingHealy, P., (2004). Creativity and urban

governance, Policy Studies, 25(2). pp. 87-104.

4.3.2. Development of a regionalorganizing capacity andstrategic planning capacity

Capacity development needs to take placeto be able to develop actionable strategiesand achieve agreement and coordination.

• City-level competitive advantage: First and foremost, it is important todevelop a strategic planning capacity ifthe region wants to be able to exploitexisting competitive advantages andto develop new ones. It is thereforeimportant to have established strategicplanning capabilities and to masterstrategic planning techniques andmethodologies.

• Regional competitive advantage: Tobe able to exploit the theoretical benetsof polycentric urban developmentthe active development of a regionalorganizing capacity is required. Toachieve synergies between centres, ahigh level of interaction will be neededbetween actors who should be able andwilling to adjust their internal prole andexternal behaviour. This means that theregion needs to develop the ability to

coordinate regional co-operation, debate,negotiation and decision-making. 114

Key challenges in developing a regionalorganizing capacity were extracted fromevidence from four polycentric urbanregions in North-West Europe. These casesshowed that building a regional organizingcapacity is affected by a number of spatial-functional, political-institutional and cultural

factors. Major constraints in these caseswere institutional fragmentation and a lackof association with the region.

4.3.3. Managing the transitionand stakeholders

Greening economies are prone to resistancefrom many different actors; so effectivechange management of transitions isrequired. Transition management has beendeveloped as an interdisciplinary eld andis believed to be an effective approachto deal with the governance of societalproblems that are complex in nature. 115,116 This approach has found traction especiallyin policy documents in the Netherlands,Belgium and the United Kingdom, and hasbeen used to address areas such as energy,building, health care, mobility and watermanagement. 117

The fourth Dutch National EnvironmentalPolicy Plan provides guidance regardingwhat is required for the management of atransition: 118

• “Make use of tools such as scenariosto deal with uncertainties and tocommunicate potential outcomes” 119 ;

• “The approach takes a multi-domainview and is geared towards including theviews of a number of actors” 120 ;

• “The approach enables policy-makers tofoster long-term thinking in short-termpolicy-making” 121

• ”Transition management enablesprocesses to be addressed at the correctlevel and solutions to be found on theright scale” 122 ; and

• “An actionable set of tasks togovernment on how to “stimulate,mediate, engage in brokering services,create the right conditions, enforce its

laws and engage in steering”123

.

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27

Central to transition management is the beliefthat change is dependent on the mechanismof co-evolution of society and technology.

A useful analytical framework for analysinghow these transitions occur is the Multi-LevelPerspective (MLP). Through this framework,three levels of transition are identied: 124

• Niche innovations: Niches refer toinnovations as well as socio-economicand political opportunities for deployingthe innovations. This means practicallythat for a transition to occur the nicheinnovations need to go through a processwhere learning-by-doing and price-performance improvements need to takeplace so that it becomes economicallyand politically feasible.

• Regime: A regime change is required for atransition to occur which refers to factors

under the control of actors in the system.This practically implies that changes inrules, technologies and social networks as

well as behaviour will need to take place.• Landscape: The landscape level refers to

factors that are beyond the control of actorsin the system where transition needs tooccur. This may include macro-economicfactors, climate change, socioeconomictrends, macro-political developments aswell as deep cultural patterns. The factorson this level are the factors that putpressure on the system to change. Existingpractices in regimes may be destabilizedand also provide opportunities for nichesto become accepted.

The following table from Kern 125 providesinsight into what this framework practicallywould mean for a transition in energy systems.

Niche learning processese.g. learning processeshave stabilized in adominant design

price-performanceimprovementse.g. price-performanceimprovements have beenmade and are believed tocontinue to improve

support frompowerful groups

establishingmarket nichese.g. innovationis used in marketniches

Regime Changes in rulese.g. belief systems, problemagenda’s, guiding principles,search heuristics; relationships,behavioral norms; regulations,standards, laws

Changes intechnologiese.g. in the case ofelectricity: resources,grid, generation plants

Changes insocial networkse.g. new marketentrants gain inimportance comparedto incumbents

Landscape macro-economic trendse.g. globalization, oil crisis

socio-economic trendse.g. recessions,unemploymentdevelopments

macro-politicaldevelopmentse.g. the ‘philosophy’behind policy making

deep culturalpatternse.g. trend towardsmore ‘individualization’

Source: Copied from Kern 126

Table 4.3: Summary of the multi-level perspective applied to energy systems

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Thousands of young employees work in shifts covering 24 hours at this call centre in Uberlândia,Brazil, answering customers scattered across the globe and strengthening the city’s position as alogistics hub © UN-Habitat/Alessandro Scotti

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29

This section provides key action points forthe implementation of a green economicdevelopment strategy. Government couldadopt certain best practices through whichthe desired results of increased regionalcompetitiveness, innovativeness andtransition to a green economy could beachieved.

5.1. Organize and mobilize thestakeholders

The rst step of the process is to identify themost important institutions that are directlyor indirectly involved in the competitivenessproject. This is the organisational element ofthe stakeholder management process of theproject and care should be taken to ensurethe group includes public, non-prot and

private sector representatives.

During this step, an information campaignshould be launched and stakeholdersshould be informed of the project. Widestakeholder inputs should be soughtto ensure that a variety of views areconsidered. This phase focuses on achievingcooperation and coordinating the partnersthat will be involved in the project.

Key questions that need to be asked are:• Can you ascertain that stakeholder

groups agree that there is a need forthe suggested proposal and that acompetitiveness strategy for a greeneconomy should be developed?

• Are the various stakeholder groups willingand able to collaborate constructively?

• Is there agreement on how intellectualproperty issues will be dealt with in thecase of the development of new ideasthrough collaborations between theprivate sector and the public sector?

When identifying stakeholders, the followingpotential stakeholder groups should beconsidered:

• Public authorities involved in regional

and economic development.

• Specialists and associations withexpertise in competitiveness strategydevelopment, economic development,industry knowledge, sustainability andnancing.

• Representatives from local andinternational non-governmental

organizations whose work addresseslocal needs and challengesamongst marginalized groups.

ImplementingCompetitiveness 5

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• Community organizations and unionswho might play a role in mobilizingsupport for the shared vision amongst

the public and workers.

The key competences that are requiredduring the rst step include:

• Networks and networked individualsshould be included to ensure stakeholdersare engaged with and involved;

• Creative governance principles shouldbe adopted in setting up the stakeholdergroups to be inclusive and open todiversity; and

• A regional organizing capacity is requiredat this stage as cooperation and buy-inshould be achieved for the initiatives.

5.2. Analysis

This phase will entail a systematic analysisof sectors and areas where competitiveadvantages from a green economyperspective may be achieved. Through thesystems approach, the systemic weaknessesin the regional innovation system should beidentied and analysed as follows:

• A project leader should be identied todirect the analysis and serve as a liaisonor coordinator.

• The analytical framework for theanalysis needs to be developed, afterwhich researchers or consultantswill develop a detailed analysis andsuggested recommendations for thecompetitiveness strategy.

• The resulting report needs to bedisseminated to stakeholders and

facilitators.

• A workshop needs to be conducted todiscuss ndings and get stakeholderinputs.

• There should be a presentation,discussion and review of the matrix ofstrengths and weaknesses in the eldsof analysis of the local and regionaleconomy.

The key competences that are requiredduring the second step include:

• Systems and network approachcompetencies.

• Strategic planning capacity is required.

• Practical and in-depth familiarity withthe region, institutions and innovationsystem.

• Analytical competences and masteringof analysis techniques.

5.3. Develop the strategy andimplementation plan

During the third step of the process thereneeds to be stakeholder agreement on thefollowing:

• Priorities need to be dened;

• The key interventions that will beimplemented must be designed;

• Project and initiative champions need tobe identied;

• Implementation plan developmentneeds to take place; and

• Funding required and green nance

needs to be organized to set up projectsand clusters.

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31

Stakeholder involvement in this step is ofhigh importance as it is during this stepthat interventions are identied that would

address economic issues and build onopportunities. Furthermore, initiatives wheresmarter, less frequent interventions can beimplemented should be considered becausemost governments are cash strapped.Implementable strategic initiatives need tobe developed that should also include:

• Timelines;

• Resource requirements; and

• The identication of responsible people.

The key competences that are requiredduring this step of the project include:

• Systems and networks thinkingapproaches to design initiatives.

• Implementation knowledge to ensurethat points are actionable.

• Transition management skills and capacityto manage stakeholders.

5.4. Implementation

The implementation step of a competitivenessstrategy lies at the core of achievingsuccessful green economic development.

The requirements for successfulimplementation are:

• Agree on clearly articulated plan withstakeholders. This plan should includeclear tasks for the implementation phase.As discussed in the previous section, thiswill include clear action points as well asbudget requirements.

•

Ensure that a monitoring and evaluationmechanism is agreed on and is put inplace. This is important for ensuring

progress is tracked and success storiesdisseminated.

•

Training and coaching of staff duringthe process as capacities in participatoryplanning and implementation is requiredfor successful implementation.

5.5. Monitor and evaluate

Monitoring is an important managementtool supporting implementation. Properlydone, it tells all groups involved in the localeconomy whether the initiatives are ontrack. There are two kinds of monitoring:the monitoring of activities and impactassessment. The major difference betweenthem is in their focus and scope:

• Monitoring of activities determinesservice delivery performance. This istypically measured over the short- tomedium-term.

• Impact assessment analyses the effectof interventions on the system. This isusually measured over the medium- tolong-term.

When designing a monitoring and evaluationsystem the following need to be considered:

• Dene or develop indicators to assessperformance or impact.

• Integrate feedback mechanismsinto stakeholder groups and widercommunity.

• Identify critical success factors.

• Share and highlight achievements andaccomplishments.

•

Discuss activities which achieved criticalsuccess factors.

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New Delhi

DezhouKitakyushu

Gauteng

Lilongwe

Barcelona

RandstadZurich

Newcastle Upon Tyne

Quick Guide 4: Clustering for Competitiveness

Singapore

Marianhill

Lagos

Soa

Linköping

Curitiba

Quick Guide 3: Optimising Infrastructure

Portland

Bangkok

Newcastle

Rio de Janeiro

Ouagadougou

Cairo

Freiburg

Isfahan

Medellín

Quick Guide 2: Leveraging Density

Hangzhou

Seoul

Nueva Vizcaya

Cape Town

Dar es Salaam

Berlin

New York

Quick Guide 1: Working with Nature

Zagreb

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6.1. Collaborating for innovationat 22@Barcelona, Spain

In just over a decade, the old Poblenoudistrict of Barcelona has been transformedinto an iconic model of sustainable urbanregeneration, innovation and interactivelearning for the twenty-rst centuryknowledge economy. i This now ultramodern city and innovative district was,for more than a 100 years, the heart ofBarcelona’s industrial economy. The gradualdilapidation of this old industrial districtbetween 1960 and 1992, the year of theBarcelona Olympics, motivated authoritiesto further investigate transforming the

remaining area of Poblenou, meaning “newvillage” into a sustainable urban economicnode. The need to uplift this city areaand enhance its international reputationas an economic destination was clear 127 and would build upon the post-Olympiccity competitiveness strategy. The 22@Barcelona management company wasformalized in 2000 to oversee developmentof the new area. It responsibilities included

i Most information that is not sourced directly is takenfrom the comprehensive website explaining the 22@Barcelona project in detail. To view this site please visit:www.22barcelona.com

“project management; planning promotion,design, construction and managementof infrastructures, urban facilities, publicspaces; and national and internationalpromotion of industrial and productive[sectors], as well as driving business creation[and] activities linked to ICT.” 128

The motivation for the project was morethan a conventional urban regenerationproject, and the city council began by asking:What measures can be taken to improveand increase the interactions between theinternational community and the local rmsand institutions in Barcelona? 129 The long-term strategic thinking involved productive

partnerships between ten universities, thegovernment and the city council, leading tothe sustainable urban design of a modernand productive economic space for life-long learning, working and living. 130 Theobjectives of the initiative were clear – toprovide a city-centre location for innovation,economic clustering and to become aninternational business destination. The 22@initiative was born. Part of the strategy was

to make the space attractive to international,national and local businesses through theprovision and design of state-of-the-art

Case Studies 6

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infrastructure, facilities for and access toknowledge institutions, research centresand technology transfer ofces, all in one

accessible location.

The success of the project was primarilydue to a collaborative approach betweenthe essential stakeholders. Initially thegovernment and universities partnershipsplayed a larger role, with industry and theprivate sector becoming more involvedover time. This is typical of a government-university-industry or “triple-helix”programme, which in itself becomes asystem of collaboration, knowledge-sharing,learning and innovation contributing toprivate sector growth.

twenty-rst century knowledge economy aspresent in 22@Barcelona. Leydesdorf 132,133

explains the role of universities as producers

of novelty, which is benecial for industrywho translate this into wealth, whilegovernments play a normative or regulatoryrole. All of these factors were considered inthe design of the 22@Barcelona innovationdistrict and included both institutional andspatial agglomeration considerations. Theten universities with more than 25 000students and researchers each interacted andengaged with the private sector businesses,professionals and industry, which wasdeliberate by design. The close proximityof knowledge institutions, work and livingspaces created a culture of entrepreneurship,innovation and catalyzed innovationthrough a continuous cross-pollination ofideas and ows of knowledge, aided bythe high-tech and sustainable infrastructurein place. The 22@Barcelona concept alsoincluded a professional network to facilitateand ensure social innovation. The essentialingredient of venture capital also made 22@Barcelona a true “Technopole” in the wordsof Manuel Castells. 134 Castells emphasisesthe factors of production, which includeaccess to nancing and venture capital. Healso mentions the importance of creatingspaces for skilled people to engage witheach other and for providing infrastructurefor ows of knowledge, such as informationand communication technology (ICT), which

would result in a modern innovation milieu.The 22@Barcelona concept captured eachof the specications and characteristicsconsidered to be important by Castells.

22@Barcelona focuses on ve knowledge-intensive economic clusters or sectors,strategically positioned to share knowledgeand ideas leading to innovation. Thisknowledge and experience sharing

environment is stimulated via the strategicdesign and provision of formal and informalnetworking spaces to fast track a culture of

Figure 6.1 depicts the different phases and

scope of involvement in the collaborativenetwork between university, governmentand industry with regard to the inception,launch, growth and maturity phase of aknowledge-economy project such as the22@Barcelona innovation district. Initiallythe role of industry is minor, but it growssteadily through increased benets ofknowledge exchange, becoming the mainplayer within the growth and maturation

phase of such a project. The role ofuniversities and access to knowledge isvital for the high-tech industries of the

Figure 6.1: Growth cycle of Industry aspart of university-government-industrycollaboration

Source: Adapted from Etzkowitz, Parellada &Pique (2007) 131

!

!

!!

!

I I I II I I V Cash

Flow

Time

Factor

Inception Launcing Growth Maturity

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CHAPTER 6: CASE STUDIES

innovation. The various sectors include ICT,media, biomedical, energy and design. Thescale of the 22@Barcelona project spans

more than one hundred city blocks, with atotal planned revitalization area of almost200 hectares; it also includes 114,000 m 2 ofgreen space; 145,000 m 2 of new space forfacilities and ofces; an estimated 130,000new jobs were created; and the total costof the project to date is USD 235 million(EUR 180 million). See below for a summaryof the improvements made for this districtbetween 2000 and 2010, highlighting themost important successes of the project:

• The urban regeneration of 65 per cent oforiginal Poblenou area, (115 city blocks).

• 10 universities with more than 25,000students each.

• 12 Research and Development andtechnology transfer centres.

• 1,502 companies established between2000 and 2010.

• 44,600 workers in these 1,502companies, of which 32,300 carry out22@Barcelona activities.

• One in two companies in 22@Barcelonahave more than 50 per cent universitygraduates on staff.

• 22@Barcelona is a benchmark for boththe International Association of Scienceand Technology Parks (IASP) and TheCompetitiveness Institute (TCI).

The project was designed to facilitate andenhance innovation in the city of Barcelonathrough social, technical and economicinteractions and engagement between

strategic economic clusters, businessprofessionals and academics. Among theproject’s main successes was the long term

vision in which the city participated andits ability to collaborate on achieving acollective vision. This vision was linked to

sustainability and innovation as the primarythemes and objectives, but there were alsosector-specic focus areas. Capitalizingon this and through knowledge spillovers,22@Barcelona has become one of the mostfavourable business locations in the world ina short space of ten years.

6.2 Fostering innovation atNewcastle Science City,United Kingdom (UK)

Worried by the growing disparity ineconomic growth between the south andthe north of England, the then BritishChancellor, Gordon Brown, created therst wave of UK Science Cities in 2005 toaccelerate economic renewal in Manchester,Newcastle and York. The initiative was to bedriven by the relevant Regional DevelopmentAgencies (or RDAs, an executive agency ofthe government with substantial budgets) aspart of their wider investment programmesin technology. Underpinning this investmentwas a belief that the northern UK cities hadsuffered because government investmentin science and technology was almostexclusively concentrated in the south ofEngland. In the particular case of NewcastleScience City this instruction from centralgovernment tted well into the Regional

Development Agency’s existing investmentprogramme that had created industriallyorientated research centres in greentechnologies close to the city of Newcastle.Historically, Newcastle is also typical of manynorthern cities in having relatively low levelsof educational attainment in sciences andbelow average rates for formation of newcompanies.

This intervention by Gordon Brownwas unexpected by all of the RegionalDevelopment Agencies who were challenged

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to come up with investment programmes veryrapidly. Drawing on regional developmentconcepts such as the Triple Helix approach,

the North-East Regional DevelopmentAgency (in whose area Newcastle lies)rapidly began to engage with the two localresearch universities, Newcastle Universityand, to a lesser extent, Durham University(who promptly disengaged as a result oflocal sub-regional rivalries). The RegionalDevelopment Agency also worked closelywith the civic authorities of Newcastle(Newcastle City Council) to ensure that therewas close alignment of city and regionalstrategies. At this stage, a small number ofprominent local industrial leaders were alsoinvited to become involved to advise theemerging initiative on potential areas forbusiness growth.

This process led to the development ofa prospectus for Newcastle Science Citythat was aimed at persuading the centralgovernment to increase the agencybudget so that the identied investmentprogramme involved additional funding(rather than redirecting existing investmentprogrammes). This additional investmentwas predicated on achieving a substantialnumber of new jobs primarily through thegeneration of new companies. Unfortunately,this prospectus was unsuccessful leaving theby now established Newcastle Science Citypartnership under-funded from its inception.

The Newcastle Science City partnership had avery clear philosophy of action from its outset– it aimed essentially to use the world-classresearch capability of Newcastle Universityas a catalysing force to increase businessinvestment in new emerging technologies,attract inward investment and generateeconomic growth through innovation. Inparallel, the importance of engaging the

public and, in particular, inspiring children tohigher attainment in science was identied.This was linked to the university by using

leading research scientists as public speakersand leaders of school engagement events.In return for the academics’ open attitude,

investment programmes were put in placeto provide new research facilities whereindustrial and academic researchers couldcome together to work on new opportunities.In essence, these programmes were designeddeliberatively to bring to life the triple-helixmodel at the individual facility level throughthe creation of these translational spaces ii.Another mechanism has been the creationof the “Professors of Practice” role withinNewcastle University whereby a small numberof professorial positions were created thatfunctioned in a triple-helix mode rather thanin conventional academic roles. As the namesuggests, the Professors of Practice are notstandard academics but rather boundarycrossing individuals (largely from businessbackgrounds) whose role is to enhancecollaboration between the academic baseand industry. This approach has proved highlybenecial but it has also been extremelychallenging for the university to accommodateand support such a novel role.

Given global competition, it was alwaysrecognized that all of the activities ofNewcastle Science City should focus onparticular areas of research strength, whichshould be both areas of world-class expertiseand also of emerging commercial opportunity.Initially, four topics were chosen (ageing,

regenerative medicine, energy and molecularengineering) although this was changed tothree (ageing, sustainability and regenerativemedicine). Each of the science theme areasdeveloped investment programmes thatwere designed to supplement existingresources and to attract collaboration withrelevant leading companies.

In parallel with these science investment

programmes, the initiative has alsoundertaken a large urban land development

ii Spaces that span the boundaries of academia and industry

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adjacent to the main Newcastle Universitycampus. This 81,000m 2 (20 acre) landdevelopment has taken place on a

browneld site purchased on a joint basis bythe three primary Science City partners (theuniversity, the City Council and the RegionalDevelopment Agency). The developmentis conceived to be a location where thetriple-helix model can be grown on a largerscale and thus will supplement the smallerscale implementation described above.The development has now nished phase1 (with the creation of a new UniversityBusiness School) and will soon proceed tophase 2, in which new university researchfacilities in sustainable technologies will becreated alongside collaborating companies.

In addition to this 81,000m 2 (20 acre)development, a signicant redevelopmentof the University’s Campus for Ageing andVitality has been done. This is also situatedon a browneld site in the urban coreof the city but is located approximately1.5 km north of the city centre. Again,the development is based on the sameconcept; namely the creation of translationalfacilities in which academic researchers cancollaborate with industry. Interestingly, theageing topic developments are particularlymulti-disciplinary in nature involving closecollaboration between medical doctors, bio-scientists, electronics and computer expertsand people from a number of other disciplines.

A strong focus on engagement with groupsrepresenting older citizens has also beena key feature and an enabler of success indeveloping new commercial opportunitiesand attracting industrial participation.

The professional team recruited to runthe Newcastle Science City initiative alsoundertook a highly innovative initiativedesigned to create new high technology-

based companies. This approach wasbased on a highly structured programmeof mentoring of young entrepreneurs who

are tutored not to nd applications for newtechnology but rather to do the opposite – toseek new technology for indentied market

needs. This programme, the NewcastleInnovation Machine, has been very successfuland has led to the formation of numerousnew companies. It is, however, an expensivemodel and it will take some years before thelong-term success can be evaluated.

Looking back over the ve years of theinitiative, much has been achieved. Forexample, the establishment of the Campusfor Ageing and Vitality has led both tospectacular research wins (including a recentseries of awards totalling over USD 47million [GBP 30 million] from the central UKauthorities that have effectively designatedNewcastle as the UK’s centre of excellence inageing research) but also inward investmentfrom major multinational companies. It is alsonoticeable that many local technology basedcompanies have grown substantially overthis period. Another clear win has been theowering of relationships between the civicand university authorities as a result of theclose collaborative work at many levels. Thesubstantial investments in new translationalresearch facilities have also paid dividends inattracting the involvement of industry.

One of the most complex aspects of theinitiative has been the difculties introducedby European Union (EU) regulations

governing state aid to businesses, which,by and large, prevent direct governmentassistance to individual companies. Thisinhibits the creation of triple-helix typestructures within the EU because it restrictsthe project structures that can be adoptedwhen government support is provided. In asense this strikes a blow at the heart of theScience City concept, which is based on stateinvestment to catalyse industrial investment.

Interestingly, this problem is also evident inthe difculties experienced by the coalitiongovernment in the UK through their

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Regional Growth Fund initiative. It is alsoclear that the recent recession in the UK hasmade conditions more difcult for schemes

such as the Science Cities – both in theshort term through making companies lesslikely to invest, but also through the morepernicious long-term eroding of condenceand aspiration in the local population.Despite these difculties, the NewcastleScience City Partnership remains strong andcommitted to long term collaboration andthe fundamental aims of the initiative.

6.3. Developmental GreenEconomy Strategy forGauteng, South Africa iii

In 2009, South Africa’s Gauteng province,the country’s smallest, yet most denselypopulated region, iv made the rst of seriesof policy and strategic commitmentstowards a greener economy, and adoptedthe Developmental Green Economy Strategyfor Gauteng (DGESG). The province’sDepartment of Economic Developmentrequested the strategy in response toresearch showing that other parts of theworld were responding to the globaleconomic crisis by investing in green jobsand industries as potential drivers of theeconomic recovery. This research, doneby the Gauteng City-Region Observatory(GCRO), found that “green” technologies,low carbon economics and sustainable

growth were to be the context of a post-crisis economy. 135 The strategy, prepared bythe Gauteng City-Region Observatory on

iii This case study draws on rst-hand experience of theadvancement of the Developmental Green Economy forGauteng. For more information, see www.gcro.ac.za/ project/strategy-development-green-economy

iv The province of Gauteng, with an urban population of justover 11 million in 2011, is the smallest, yet most denselypopulated, region in South Africa. Covering 18 179km2 ithas an average population density of just over 600 personsper square kilometre. The wider functional economy of

the Gauteng City-Region includes the prominent cities ofJohannesburg and Pretoria, and other outlying but stillsignicant urban centres, to make the largest contributionof Gross Value Added (GVA) (33%) nationally.

behalf of the province, was the rst step byGauteng to conceptualize these sustainableeconomic options. Over the past two years

the strategy been the basis for increasinglymore sophisticated debates around thegreen economy, the development of everclearer policy statements, and the earlyimplementation of promising greening work.

For an economy whose foundations have beenbuilt on commodity extraction and resource-intensive manufacturing and exports, thestrategy provided a transformative economicapproach based on initiatives in a rangeof non-traditional sectors and clusters.Importantly, the strategy argued that a greeneconomy is not an additional set of industryclusters deserving targeted support, whileleaving dirty options still being pursuedelsewhere 136 . Instead, as a “green jobs”strategy prioritizing sustainable development,it argued for over-arching investments in non-traditional sectors of food, energy and watersecurity, zero waste and sustainable mobility,all in-turn underpinned by programmesfor “sustainable human settlements” and“resource efciency”. 137

The strategy-work included detailed studiesand scenario modelling on the application ofgreen economy initiatives to local contexts.On the basis of this it was able to profferconcrete targets of how economic growth canbe boosted through reducing environmental

costs. For instance, using comparativeanalyses of the costs and job creationpotential of 15 per cent energy efciencyversus 20 per cent energy efciency targetby 2025, the strategy shows the feasibilityand potential impact of concentrated solarpower and other alternative energy initiativeson labour income and economic return oninvestment. 138 According to the strategy’s2025 baseline estimate, the potential energy

cost savings are USD 2 billion (ZAR 16 billion)per annum while up to USD 79 million(ZAR 624 million) in revenue could be added

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to the economy annually. 139 Table 6:1 showsthat these are relatively cheap, economicallyfeasible and employment-generatingbenets considering it would only costGauteng USD 1.65 million (ZAR 13 million) ayear to establish such a programme.

A similar set of robust calculations weredone for, inter alia, local food production,energy efciency, and waste and transport,providing the rst real attempt to understandthe concrete costs and benets of pursuinga green economy agenda in the full senseof the term.

The primary signicance of the DevelopmentalGreen Economy Strategy for Gauteng wasthat it proposed to the Gauteng ProvincialGovernment (GPG) and its partners – whetherthese be players from industry, civil societyorganizations or other arms of government– a way to select, and create a fusion of, aninterconnected set of green clusters thatmight drive investment, innovation and job

creation.141

The particular focus on industriesand technologies in non-traditional clustersthat do more with less resources, and those

that protect basic human requirementssuch as food and water, which are elevatedas economic sectors in themselves, was aprogressive step for a government strategy. Thisis particularly so in a region where the economyis historically based on minerals extraction, andthe upstream and downstream manufacturingand nancing related to mining. 142 It thereforeheld out the promise of a deeper structuraltransformation of the regional economy. Assuch, the strategy captured the attentionof provincial government departments andlocal municipalities nancially reliant onthe endlessly expanding growth in sales

of resource-consuming services, such aselectricity and water.

While the strategy was well received ingovernment, it did not translate intoimmediate implementation as much asmight have been expected. Instead, theGauteng Provincial Government askedfor more clarity in the form of more policywork and, subsequently, a more detailed

programme design to implement thestrategy’s recommendations.

15% Target 2025 20% Target 2025

Business-As-Usual Gauteng Energy Consumption 2025 999.5 PJ 999.5 PJ

Energy saved through efciency 149.9 PJ saved in 2025 199.9 PJ saved in 2025

Energy cost saved R 12 billion / year(USD 1.4 billion)

R 16 billion / year(USD 1.9 billion)

Jobs creation potential 50 jobs/PJ14 50 jobs/PJ15

Jobs created by 2025 7,500 minimum 10,400 minimum

Monthly salary per technician R 5000(USD 595)

R 5000(USD 595)

Total yearly salary revenue in economy R 450 million(USD 54 million)

R 624 million(USD 74 million)

Total asset expenditure on energy efciency equipment ineconomy

Approx R7.5 billion per year(USD 0.9 billion)

Approx R10 billion/year(USD 1.2 billion)

Economic return on energy efcent initiatives Typically 2x on investmentover 4-6 years

Typically 2x on investmentover 4-6 years

Estimated cost to Province to establish programme R 10 million / yearUSD 1.2 million

R 13 million / yearUSD 1.5 million

Table 6.1: Comparative economic and employment potential based on a 16 per centrenewable target from predominantly Concentrated Solar Power (CSP) 140

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Table 6.2: Revised food security viability calculations iv,146

Segment 1 Segment 2 Segment 3 Segment 4 Total

Number of beneciaries 29,8810 43,140 43,140 64,710 44,9800

Area/beneciary in m 2 100 300 850 1,000 (1 ha) -

Reduced expenses/house hold v USD 19 (ZAR 150) USD 19 (ZAR 150) USD 19 (ZAR 150) ZAR 0.00 -

Income from surplus USD 0 (ZAR 0) USD 38 (ZAR 300) USD 108 (ZAR 850) USD 127 (ZAR 1,000) -

Total reduced expenses/month USD 5,681,200

(ZAR 44,821,500)

USD 820,200

(ZAR 6,471,000)

USD 820,000

(ZAR 6,471,000)

USD 0

(ZAR 0)

USD 7,321,100

(ZAR 57,763,500)Total income/ month USD 0 (ZAR 0) USD 1,640,200

(ZAR 12,942,000)

USD 6,561,000

(ZAR 51,768,000)

USD 24,603,900

(ZAR 194,130,000)

USD 32,812,300

(ZAR 258,840,000)Total area in ha 2,988.1 1,294.2 3,666.9 64,710 72,659.2

Months of full productivity 4 5 6 7

Months of 60% productivity 4 4 4 3

Months of 30% productivity 4 3 2 2

Annual benet/house hold USD 145

(ZAR 1,140.00)

USD 684

(ZAR 5,400)

USD 1,540

(ZAR 12,150)

USD 4,563

(ZAR 36,000)

Total annual benet in

million USD (million ZAR)

43.18 (340.64) 29.54 (232.96) 66.46 (524.15) 295.39 (2,329.56) 434.52 (3,427.31)

First, the idea of a “green jobs” strategy wastaken up in the Gauteng Employment Growthand Development Strategy (GEGDS), nalizedmid-2010. This envisaged an economyshifting to an endogenous growth trajectorybased primarily on “innovation, greengrowth and inclusivity”. As the overarchingeconomic strategy for the province, theGEGDS states that Gauteng will not providedecent work and economic opportunities forall unless it creates “a green, environmentallyfriendly economy, which capitalises on theenormous economic value to be gained byinvesting in green processes and products,and which uses existing resources in a

more efcient and sustainable manner, thusreducing the carbon footprint of Gauteng.Gauteng needs an economy based on greentechnologies, green jobs, green energy andgreen production processes that reducethe ever higher input costs stemming fromunsustainable resource use”. 143

Second, the policy foundations laid by the

v Calculated on an estimated USD 0.64 (ZAR 5) per household

saving per dayvi These calculations are based on a revision of assumptions

emanating from previous food security research. Seeoriginal documentation for detailed explanations.

Developmental Green Economy Strategyfor Gauteng and Gauteng EmploymentGrowth and Development Strategy werethen built on through the development, andformal adoption in mid-2011, of a GreenStrategic Programme (GSP) for Gauteng. Thisprovides programmatic detail to ll out theDevelopmental Green Economy Strategy forGauteng and Gauteng Employment Growthand Development Strategy. It is designedto inform the activities of departments andmunicipalities in Gauteng, so that all partsof government are working on the samegreen issues and towards the same greenobjectives. 144 The GSP takes forward the

DGESG message that there is a need for deepstructural transformation of the economy,and that this requires investment in non-traditional sectors, by proposing concreteinterventions in nine sectoral areas. Theseare: air quality, climate change, energy,economic development, food security, landuse, transport, water and sanitation andwaste. 145 The Green Strategic Programmealso integrated earlier calculations around

green economy initiatives to provide moresophisticated scenario modelling of localgreening potential and to augment the

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growing intelligence around the implicationsof integrated green jobs initiatives withinthe province. (See Table 6.2)

While this policy, strategy and programmedevelopment work has taken some timeto unfold, it has been paralleled by theimplementation of some pioneering greeninginitiatives, leveraged through resources fromagencies such as the Industrial DevelopmentCorporation (IDC) and the AutomotiveIndustry Development Centre (AIDC). Underthe auspices of the Automotive IndustryDevelopment Centre, for instance, a numberof green projects have coalesced aroundGauteng’s automotive cluster. For example,the centre has launched a liquid petroleumgas (LPG) mini-bus taxi conversion pilotprogramme, which has converted 150 taxisto operate dually on LPG gas and petrol.A second pilot project, run jointly with theCity of Tshwane, sees the extraction oflandll gas for local industrial use. A thirdlooks to the declassication of foundrysand, currently regulated as a toxic waste,so that it can be re-processed as an inputinto the construction industry. These and arange of other projects are driving changesin historically resource-intensive andwasteful industries. 147 Through attractinginvestment from local municipalities, as wellas large nanciers such as the IndustrialDevelopment Corporation, they are feedinginto wider industrial supply chains as a

progressive conversion towards green.

Another positive result of the provincialpolicy and strategy work is that it hasstimulated a green economy movementwithin local government, with a range ofmunicipalities working towards includingthe green economy in strategy and policyprocedures. Municipal interventions acrossthe province include, for example: proposals

for green economy by-laws in the City of

Tshwane’s Integrated Development Plan; vii,148 the development of green infrastructurein the City of Johannesburg’s Growth and

Development Strategy; and a “Green IQ”vision by West Rand District Municipalityto be the greenest municipality in SouthAfrica by 2016. This series of commitmentsintegrating the idea of the green economyinto the local government policy spacesuggests that municipalities are beginningto question how they can do businessdifferently. Although some of this progresshas occurred outside of the DevelopmentalGreen Economy Strategy for Gautengpolicy space, and often lacks the concretecalculations included therein, the translationof the green economy ideal into localintegrated development planning has thepotential to drive real shifts in the waysmunicipalities recongure infrastructure andservice delivery for sustainability.

Notwithstanding the importance of theprogress highlighted here, it is not yetclear whether Gauteng’s emerging policyconsensus around the green economycan ultimately cohere, and remaincohered, around a set of measurableand tangible commitments. For instance,will the underlying premise of both theDevelopmental Green Economy Strategyfor Gauteng, and its successor, the GreenStrategic Programme – that withoutinvestment in non-traditional sectors of

food security and waste a true greeneconomy cannot be achieved – beadequately absorbed in municipal planningprocesses? Between various provincialprogrammes, municipal investments andstimuli from funding agencies, the needfor a fundamental transformation ofthe regional economy off its resourceintensive base may dissipate in the face of

vii The IDP (Integrated Development Plan) is a tool used by

the South African Government to provide a framework foreconomic and social development within municipalities andpart of an integrated system of planning and service delivery(DPLG, 2000).

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implementation obstacles. The danger isthere will only be a few narrowly denedgreen economy projects to support new

businesses in easily identiable sectors, suchas alternative energy. The promise containedin the Developmental Green EconomyStrategy for Gauteng, successor strategicframeworks such as the Green StrategicProgramme, and inspiring initial projectsby the Automotive Industry DevelopmentCentre and others, is profound. But itremains to be seen whether the end resultwill be the desired fundamental structuraltransformation, across all sectors, towards asustainable economy.

6.4. Delhi post CommonwealthGames: world–city orurban asco? viii

The nineteenth Commonwealth Games(CWG–2010) hosted by the city of Delhi inIndia were hailed as successful, despite initialmedia reports covering the raft of security,venue and health problems associatedwith the sports infrastructure. The ten-dayevent was well-attended, with more than6,000 athletes and ofcials representing71 Commonwealth nations. India gave itsbest performance ever, by securing secondposition in the medal tally. However, ndingsof government-led inquiries, including theComptroller and Auditor-General’s Report,and the subsequent arrest of high-level

sports ofcials on corruption charges, pointto the fact that it was not a straightforwardvictory for the nation, or for the city.

This case study attempts to ascertainwhether the opportunity to host the thirdlargest multi-sporting event in the worldwas strategically used to develop Delhi’s

viii The author of this case study would like to thank AromarRevi, Jessica Seddon, Kavita Wankhade and Geetika Anand

of the Indian Institute for Human Settlements, India, forsharing their resources on the Delhi Commonwealth Gamescase study; and Debjani Ghosh of the National Institute ofUrban Affairs for her valuable input.

infrastructure and services and increasethe city’s competitiveness. Did a morevibrant, attractive and investment-friendly

metropolis result from the investments insporting venues and stadia, the upgradingand extension of transportation networksand city infrastructure, the construction ofthe new Games Village, and the renovationof historical buildings and architecturalheritage sites? A broader question iswhether huge events such as the CWG areappropriate vehicles of urban renewal indeveloping countries.

Delhi won the bid to host the Games,defeating a competing bid by the Canadiancity of Hamilton, in November 2003 onthe basis of a nancial guarantee bythe Government of India (GoI) and theGovernment of the National CapitalTerritory of Delhi (GNCTD). The damningCAG Report says that the seven-year periodfrom November 2003 to October 2010was not used effectively to plan the stateof the art city infrastructure for the Games.Delayed nancial approvals from variousgovernment agencies led to a bunching ofprojects towards the end, which, combinedwith decient and highly irregular contractmanagement, resulted in increased costs. 149 The original government budget for bothsports and non-sports Games infrastructurewas estimated at USD 236 million but thishad escalated to USD 3.6 billion by October

2010. This made the Indian Games themost expensive Commonwealth Gamesever; those in Manchester 2002 costapproximately USD 420 million, and thosein Melbourne in 2006 cost approximatelyUSD 1.1 billion!

The Games organizers argue that governmentfunds were well spent on transforming Delhiinto a “world-class city” with the acquisition

of a eet of 6,000 new environmentally-friendly buses, nine rapid transit corridors,60 new yovers, and several thousand

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The Delhi Metro was expanded to accommodate more people and boost the use of public transportduring the 2010 games © Flikr/Le Rétroviseur

kilometres of new roads. 150 The escalatedcosts, however, exclude investments madeby agencies such as the Delhi Metro RailCorporation and the Airports Authority ofIndia towards infrastructure upgrades inpreparation for the Games.

A large part of the Games’ expenses werefor increasing Delhi’s connectivity: globally,through airport upgrade; regionally,through extended metro lines between

Delhi and peripheral towns; and locally,within the city from the site of the GamesVillage and new sporting venues to thecity centre. The construction of Terminal 3,a two-tier building with over 130 check-incounters, 55 aerobridges, 30 aircraft baysand the capacity to cater to more than34 million passengers a year, was a high-value, strategic investment tied in with theGames. The expanded and upgraded Indira

Gandhi International Airport services not just Delhi, but the entire National CapitalRegion and increases the competitiveness of

the city as well as the region. In addition,Delhi acquired 193 kilometres of metro linesextending to the satellite cities of Gurgaonand Noida, and connecting the airport tothe city centre. Commentators are quick topoint out that these improvements wouldhave ensued regardless of 2010, but theGames served to deliver them over a muchshorter time period. 151,152

The vision for CGW-2010 was that it would

transform East Delhi, along River Yamuna,with improved transport connectivity tothe city centre and increased infrastructureinvestment; similar to the developmentof South Delhi in the run up to the 1982ASIAD Games, which were also hostedby Delhi.153 To contain spending by theIndian Government and Government ofthe National Capital Territory of Delhiwithin the connes of the administrative

region of Delhi, several planning andecological conventions were disregarded.An example of this was the initiative to

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beautify the roads, which was not partof Delhi’s existing City Development Planunder the GoI’s agship urban developmentand renewal programme. Street-scapingand beautication work were awarded atexorbitant costs and executed in an arbitrarymanner, with no common design guidelines.The Government of the National CapitalTerritory of Delhi did not get clearance fromthe Delhi Urban Arts Commission for thislargely consultant-driven intervention, nordid it coordinate with the relevant policedepartments to prepare for the impact of

the project on Delhi’s considerable trafc. 154 Secondly, locating the Games Village onthe bank of the River Yamuna violatedall ecological principles encapsulated inDelhi’s urban development policies. Gamesorganizers chose this last, undevelopedspace in the city for the Village, despite theriver being environmentally fragile, and thatpermanent construction on it would createthe potential for a city-scale disaster. 155

Construction of the Games Village alsoattracted the most serious criticisms levelled

against the hugely expensive event. Thesewere about the gross violation of the humanrights of the displaced poor who lived onthe site of the Village and in other informalsettlements, and the indignity suffered bythousands of disempowered constructionworkers who were paid below minimumwages. 156,157 Unfortunately, while instancesof greed and corruption, governanceand management failures, and the lackof accountability received considerablenational and global media attention; thehuman cost of the Games was largely

unaccounted for. 158

Despite the millions spent and the thousandsof people rendered homeless, the projectto transform a historic city into a modernmetropolis is still incomplete. Despite effortsto rush execution through a single (andexpensive) contractor, less than half of thebus shelters were constructed in time. TheGames failed to address severe and chronic

gaps in the provision of water, electricity,housing or sanitation services to the cityresidents. An expensive and irregularly

The Delhi Expressway Toll Gate © Wikipedia/ gurgaonshoppingmalls

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awarded contract for a water treatmentplant, constructed for the Games Villageand surrounding areas, is currently shut

down. The construction of a new, gas-based, 1,500 MW power plant, intendedto cover the energy-usage spike during theGames was delayed and not completed intime. 159 Strengthening of the power supplysituation in Delhi was also not achieved bythe distribution utility, primarily due to poorcontract management.

The most visibly incomplete city developmentproject initiated through the Games was therenovation and restoration of the centralbusiness district of Connaught Place.Built when the capital of British India wasmoved to New Delhi in 1942, ConnaughtPlace occupies a place of great pride andcultural afliation for Delhi’s citizens, themajority of whom descend from migrants tothe city during its centuries’ old existence.Connaught Place is a symbol of Delhi’sability to adapt and absorb each new culturethat has descended on it and has brandedit as part of the city’s heritage. Plagued byundue delays, mismanagement by the NewDelhi Municipal Corporation and uncheckedincrease in scope, the historic and elegantstructures of the business district will becovered in scaffolding and occupied byconstruction workers for at least three yearsafter the hosting of the Games.

In conclusion, the overall gains from thenewly-created infrastructure aimed atincreasing Delhi’s investment potential havebeen thwarted by the sizeable nanciallosses incurred by the state. This is in additionto the huge embarrassments faced due tounprofessional handling of the event. Theextension of Delhi Metro and upgrade of theairport are of great strategic value, becauseIndia aspires to hosting mega sporting events

in the future. However, if the disrepair andunder use of the world-class stadia built forthe 1982 ASIAD Games are any indicator, the

sports infrastructure built or renovated forCommonwealth Games is unlikely to be fullyused beyond the coveted sporting events.

Barcelona and Manchester are cities thatwere able to generate positive images onthe basis of successful hosting of megaevents. However, attempts at transferringsuch successes to a developing country areriddled with complex challenges, as thecase of the Delhi Commonwealth Gamesdemonstrates. The drive to elevate Delhi’scompetitiveness through ignominious levelsof state spending resulted in considerablehuman misery and ecological risk.

6.5. The Zurich CleantechInnovation Park: Dübendorfa contested space

The planned decommissioning of Dübendorfairbase in Zurich, Switzerland, by 2014 160 has resulted in debate, contestation andconceptualization about its future use.The idea to transform and develop this165 ha space into a novel urban hubfor sustainability and clean technology(cleantech) innovation features prominentlyin ideas on its future. ix The necessaryingredients and capacities for realizingthis vision are present. These characterizeZurich as a city and include: a growingwillingness in the nancial sector to investin green business and clean technology; 161

a high proportion of knowledge producers;universities, institutions and knowledge-industries; highly organized and effectivepublic and private institutions andpartnerships with a focus on “cleantech”and sustainability; some of the world’s mostprominent environmental organizations, forexample the World Wildlife Fund (WWF),the International Union for Conservation

ix An interview was conducted with Diego Salmeron – the

lead consultant on the project from LEP Consultants on18th November 2011. LEP is one of the main partners ofFFGS for this initiative. The interview was necessary as therewas little formal information available on the project.

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of Nature (IUCN) and the Foundation forGlobal Sustainability (FFGS) are present andinuential in this initiative.

This case study highlights how the rationalefor a cutting-edge and viable concept forsustainable urban innovation and cleantechdevelopment is being stalled by divergentstakeholder contestation and complexpolitical and administrative processes. Thesuccess of this high-level project has thepotential to not only become a beacon forsustainable development and cleantechinnovation but also to kick-start a neweconomic frontier in sustainability forSwitzerland and enable it to compete in theglobal green economy.

The Masdar x sustainable city experience andsuccess in Abu Dhabi prompted leaders in

Zurich to consider replicating this on homesoil. The Foundation for Global Sustainability(FFGS), a primary stakeholder and leaderof the initiative, said: “The Dübendorfproject will be able to prot directly fromthe economic and technical know-howgained (in Masdar).” 163 Zurich is consideredto be a prime location for the nancing,innovation and development of cleantech,

x The Swiss are prominently involved in the design featuresof Masdar city and have a section of the developmentdedicated to Swiss cleantech production. See http://www.masdarcity.ae/en for further details.

sustainability enterprises and services for aglobal market. This is in particular because itharbours one of the world’s most advancednancial systems, with an increasing interestin providing venture capital and incubationfor cleantech and sustainability services. 164 The Swiss Federal Institute of Technology(ETH) Zurich supports the initiative. It is oneof the top technology focused researchuniversities in Europe and produces highquality graduates and skilled workers. Theknowledge, research and developmentindustry of Zurich is also in a prime position toengage in the cleantech industry and globalmarkets. This is supported by this statementsuggesting that: “The greater Zurich areaboasts outstanding pioneering institutions,where the best brains are at work in basicand applied science, creating a solid andexcellent foundation for cleantech.” 165

The Foundation for Global Sustainability xi initiated the Swiss Sustainability Initiative(SSI) and the Swiss Cleantech Associationwho partnered in driving the concept ofdeveloping cleantech innovation hubs andclusters in Zurich and other potential regionsin Switzerland. After the Swiss FederalGovernment announced that the Dübendorfairbase would be decommissioned by

xi Visit www.ffgs.org; and www.swisscleantech.ch for moreinformation.

Location and layout of the Zurich Cleantech Innovation Park © Foundation for Global Sustainability (FFGS) 2009 162

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2014, xii the site became a prime location forthe development of the Swiss SustainabilityHub, Zurich. Another group, the Stiftung

Forschung Schweiz (SFS), was also interestedin the site to develop a Swiss InnovationPark. Recently, these opposing forcesfound common ground and joined forcesto ofcially rename the initiative the “SwissCleantech Innovation-Park.” 166 Additionalstakeholders, who were either already in apartnership or formed a partnership withthe Foundation for Global Sustainability

joined the effort to transform this spacetowards this renewed goal. Among themwere politicians, entrepreneurs, the SwissFederal Institute of Technology University,the World Wildlife Fund (WWF) and othernon-governmental organizations; localgovernment agencies; consulting rms andothers already mentioned. Although theproject enjoys widespread support, its actualimplementation is not certain. This is for

xii Since this announcement in 2009, the Federal Government

and Swiss Air Force have reviewed this decision again.

several reasons: it is hindered by Switzerland’shighly regulated and complex administrativeprocesses and political procedures; not all of

the stakeholders are in favour of the project;and there needs to be a democratic processthat allows for contestation. 167

The project managers realized that therewould be stakeholder conict and theydeveloped a process of stakeholderclassication and engagement. Eventually,however, the complex political process ofdecision-making about the future use ofthe space took precedence, with manyalternatives being suggested, includingbuilding a Formula One racetrack.Complicating matters further was theadministrative process, which beganwith drawing up zoning capacities anddividing the space between three separatecommunes. The Swiss democratic systemrequires a unanimous decision for thezoning to be changed. 168 The canton ofZurich holds the executive power and also

Source: Author’s own; map from LEP consultants

Federal Government

Canton Zurich

Universities/ETH

Consultants (LEP)

EnvironmentalConsiderations

Societal Needs

NGO’s

Cleantech Sector

Green Economy

Economic Opportunity

Political Processes

Administration:Swiss Federal Government, Canton Zurich

& 3 communes divide the site

Volketswil Commune

DubendorfCommune

Wangen-Brustisellen

Commune

FFGS & Partners (WWF)(Swiss cleantech

Association)

STAKEHOLDERSINFLUENCES

Fig 6.2: Stakeholders and inuences on Swiss cleantech Hub concept

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therefore, represents a critical number ofcomponents and factors that may supportthe cleantech industry as well as sustainableindustry and services.

The project is unique because of the intentionto construct one of the rst innovation hubsin the world to focus on sustainability anduse the cleantech industry as the primarymandate. The institutional design of thesite itself will be attractive to a wide range

of stakeholders from an international levelto a local level. This includes internationaluniversities and large cleantech industries,some of which have already made adecision to base themselves in Zurich, xiii inanticipation of a fast developing locationfor sustainable industries. The site is alsodesigned to integrate the local contextsof business with a link to the city centre,as well as the natural surroundings in a

xiii Suntech, one of the world’s largest solar producers hasrecently located its EU headquarters to Zurich for this reason(Insight 2010).

Source: FFGS 2009 169

speaks on behalf of the owner of the site –in this case, the Swiss Federal Governmentand the Swiss Army. The realization of theconcept proposed by the Foundation forGlobal Sustainability as a cleantech hub willrequire careful stakeholder managementand lobbying of the various communes andgovernmental agencies. Figure 6.3 depictsthe complex stakeholder involvement, andadministrative and political processes thathave stalled the project.

In the context that the country is tryingto diversify its economy and become oneof the global leaders in cleantech, thepotential for the project and its implicationsfor Switzerland are substantial. Growinginterest in the global green economyinitiative has given cleantech a substantialboost. With the global nancial recession,Zurich’s nancial hub is seeking new

nancial and investment landscapes, andgreater interest in cleantech opportunitieshave emerged. The Dübendorf case study,

Figure 6.3: Linkages of the project on an institutional and geographic level

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sustainable way. The international airportis also close by, making it a nationally andinternationally accessible location with direct

transport routes. The hub itself is designedas a sustainable model and integrateswork, living and play areas, and will includeexisting surrounding communities in thedesign features. The hub is intended toattract a exible mix of knowledge intensivetenants with a focus on research anddevelopment, sustainability and cleantech.The presence of universities and researchcentres would enhance knowledge transferand innovation in this productive city space.A planned low energy infrastructure andan end-point personalized transport systemwould make it an attractive location forcleantech businesses. Additionally, Zurich’srenowned reputation as a stable, safe andefcient location centrally situated in Europealso creates a positive inuence. 170

A lesson learned from this case is relevant inthe context of a changing global economiclandscape, whereby an advanced city suchas Zurich is attempting to catalyze andconsolidate a new green economic sector ascleantech that culminates in an urban spatialdevelopment. Another important lesson isthat even though Zurich and Switzerlandhave all the required ingredients, expertiseand favourable business and innovationclimates, the project remains unconsolidateddue to complex stakeholder opinions and

political processes. This should be noted byother nations attempting similar projects.Careful consideration of the requiredingredients, the critical mass of componentsand a willingness to execute the project alsoneed to be placed in a context of anticipatedadministrative and political procedures andpotential stakeholder conict.

6.6 Clustering solar energyindustries in Dezhou, China

Dezhou, in the north-western Shandongprovince, is the largest solar thermalresearch and development centre in China,with over 120 solar energy enterprises andannual renewable energy sales revenues ofUSD 19 billion (CNY 120 billion). The solarthermal industry in Dezhou accounts for16 per cent of China’s market. 171 The city’sconstruction of a world-leading hub of solartechnology and manufacturing, known asthe “Solar Valley”, demonstrates how therenewable energy industry can catalyseeconomic development, and how industryand government can collaborate to optimizeeconomic, social and environmentaloutcomes. Based on California’s SiliconValley, the aim of the development is tocentralize solar technology research anddevelopment, manufacturing, education,capacity building and demonstration.Industry and government have investedover USD 740 million 172 to develop the SolarValley.

China’s rapidly growing demand for energypresents a signicant challenge to its futuredevelopment. Increasing demand along withlow electricity tariffs and poor efciencies inthe power sector has contributed to severeelectricity shortages in recent years, andspurred an interest in renewable energy

development and demand-side energymanagement. 173

Solar energy is a large and rapidly growingindustry in China. In 2009, there was atotal of 310 MW of solar photovoltaic (PV)capacity installed throughout the country,over double the amount in place the previousyear. In the same year, 42 million m 2 of solar

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Tours of the solar valley by solar buses © Ming. H. (2010)

hot water heater collectors were installed;an increase in capacity of 31 per cent to atotal of 135 m 2. China is now the world’s

largest PV producer, and can produce over40 million m 2 of solar water heating panelsper year. 174 China accounts for 70 to 80per cent of the global solar water heatingmarket, 175 and its market for solar waterheaters was estimated to be worth USD 5billion (CNY 32,000 million) in 2007.

Recent policy decisions in China outlineambitious plans to dramatically increasesolar targets to 10 GW of installedsolar capacity by 2015 (including 9 GWof solar photovoltaic installations and1 GW from solar thermal electric powergeneration), and 50 GW total installedcapacity by 2020. Given that the existinginstalled solar capacity is around 700 MW,this represents a capacity expansion of over1,000 per cent in just four years. 176

Dezhou’s solar thermal industry andassociated businesses employ almost athird of the local workforce (approximately800,000 people), and over 90 per cent ofhouseholds use a solar water heater. 177 However, even in Dezhou, the bulk of

electricity still comes from coal-red powerstations and it remains to be seen whetherits investments in solar technologies will be

sufcient to move the city towards a moresustainable energy mix as its economygrows. 178

The Solar Valley is a mixed-use development,incorporating apartments and parks, industry,educational facilities (including a solaruniversity), tourist attractions, and a sportsand entertainment complex within the 330hectare site. The Valley incorporates a widerange of solar technologies, such as waterheating, desalination and air conditioning,that brings together manufacturing,research and development, education andtourism around solar energy technologiesin a showcase of cutting-edge solarinnovation and economic revitalization. 179 As noted by Greg Bruce, Executive Managerof Integrated Sustainability Services atTownsville City Council, Australia: “Thescale and boldness of the development ofthe Solar Valley is simply remarkable. Havingvisited the Dezhou Solar Valley in 2008 and2010, I am simply staggered at the visionand action that is occurring here.” 180

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Dezhou Solar Valley © Ming. H. (2010)

Solar energy has become an integral part ofDezhou’s infrastructure and economy. Solarwater heaters are installed in 95 per cent ofnew urban communities in Dezhou, and 50per cent of surrounding towns, 182 The cityuses solar energy for applications rangingfrom street lighting to powering buildingsand tourist buses. In 2010, over USD 10million was spent installing nearly 100,000solar lights along Dezhou’s roads. 183 Thereare approximately 40 energy efcientbuildings in Dezhou, including hotels andmuseums, showcasing solar and energyefciency technologies such as solar heatedtoilet seats, solar heated pools and even a

solar-powered Tibetan prayer wheel. Energymanagement systems (EnMS) xiv have been

xiv An EnMS adopts a similar framework to the InternationalStandards Organization’s groups of standards on qualitymanagement (ISO 9001) and environmental management(ISO 14001), in which an iterative process of continualimprovement is undertaken to reduce the energy intensityof the organization. The EnMS requires the organizationto develop an energy efciency policy, to identify allenergy-consuming activities within the organization, tohighlight which of these have the greatest impact on theorganization’s energy consumption, and to develop policies

and procedures to reduce the energy consumption of theseactivities. Over time, the organization iteratively measurestheir progress and reviews these policies and procedures,and addresses an increasing number of their activities.

introduced in eight key energy-consumingcompanies (including iron and steel plants,coal-based power plants, paper-makingfactories, chemical factories, mechanicalplants and coal mines) as part of an initialpilot, with plans to expand this to otherenergy-consuming industries, as well asthe transport, construction and publicsectors. 184 As a result of the initial pilotEnMS programme in Dezhou, 63,000 tonsof coal and the equivalent of 160,000 tonsof CO 2 emissions have been saved. 185

The story of the Solar Valley is heavilyintertwined with that of the world’s leading

manufacturer of solar thermal tanks, Himin.The company has been highly successfulin developing and manufacturing costeffective solar thermal products and hasbeen instrumental in transitioning Dezhou’seconomy from agriculture to research,manufacturing and education. Building onthis success, the Chinese Government isinvesting funds and providing policy supportto develop the Solar Valley as a major

manufacturer of solar technologies, and tofurther stimulate the economy and catalyzemore sustainable development paths.

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Himin’s Solar Valley headquarters iscurrently the largest solar powered ofcebuilding in the world. 187 Himin is vertically

integrating components of solar technologyproduction, from research and development,to manufacturing, demonstration andpromotion, and is building capacity inDezhou for future innovation and technologydevelopment. Himin has invested over USD161 million to construct two demonstrationprojects in the Solar Valley, the “InternationalEnvironmentally-friendly Energy ConservationDemonstration Zone” and the “Chinese SolarEnergy Demonstration Town’. Himin has alsoestablished a university campus and trainingcentres for professional engineers, academicengineers and business managers in the solarthermal industry. 188

Himin’s founder, Huang Ming, is a strongadvocate for the role of business inpromoting sustainable, affordable solutions,enhanced by government regulation whennecessary, 189 and has been instrumentalin providing the momentum for the solarindustry in Dezhou and China, and indeveloping the vision for the Solar Valley.His broader vision is for many similardevelopments throughout China and therest of the world, enabling the transition toa solar powered sustainable future. 190

The success of Himin and the development ofthe Solar Valley is a reection of the relatively

unique level of cooperation betweengovernment and industry in China. Thegovernment has recently provided a range ofpolicies and incentives that have stimulatedthe development of the renewable energyindustry. Some of these are the RenewableEnergy Law (2006), National Action Plan onClimate Change (2007), 191 the Twelfth Five-year Plan, incorporating the Twelfth Five-year Plan on Greenhouse Emission Control xv

xv The Twelfth Five-year Plan on Greenhouse Emission Controlaims to reduce CO2 emissions per unit of GDP by 17 percent by 2015 from 2010 levels.

(2011), 192 and pilot carbon trading schemesfor the cities of Beijing, Tianjin, Shanghai,Chongqing and Shenzhen, and the provinces

of Hubei and Guangdong (announced in2012). 193 China’s signicant investment inscience and technology over the last 20 yearshas created the capacity and knowledgebase that has enabled it to become a globalleader in renewable energy innovation andmanufacture. It now dominates the globalmarket, harnessing its citizens’ skills in low-cost, efcient manufacture to produce highlycompetitive products.

Although the Solar Valley is still underconstruction and there appears to havebeen no formal evaluation of the project,there are a number of key lessons thatcan be learned from the case study. Thisdevelopment, along with others throughoutChina, is the result of the government’srecognition of energy as a strategic sectorfor economic development. The host ofpolicies and incentives aimed at increasingenergy efciency and conservation, coupledwith support for the renewable energysector, is indicative of the scale and breadthof political support needed to fosterthe growth of sustainable technologies.Furthermore, the growth of this industry andstrong nancial position of Chinese solartechnology companies at a time when manycountries are struggling to recover fromnancial crises shows how renewable energy

technologies can support local economicdevelopment and a green economy.Huang Ming advocates strongly for therole of industry in catalysing a sustainablerevolution, and his drive, vision and strategicinvestments have been fundamental to thedevelopment of China’s world-leading solarthermal industry. He frequently attests thathis company received minimal governmentsupport in its early days, and that this has

been a key factor of Himin’s success.194

Withits focus on developing cost-effective solarproducts that meet market needs, Himin

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was able to grow without governmentassistance. Huang Ming sees the commercialviability of solar technologies as being key

to the business’s success, and warns againsttoo much government support for solarindustries. 195

While the development of the DezhouSolar Valley appears to be rapid by westernstandards, it must be remembered that itfollowed two decades of capacity buildingby government and industry. Both investedheavily in research and development inenergy systems and have since capitalizedon China’s competitive advantage in cheapand efcient manufacturing. Due to China’sunique political and economic situation, thesecircumstances may not be fully replicableelsewhere, but this case indicates the scale atwhich change can take place given the rightmix of vision, determination and resources.

6.7. Randstad: A polycentricurban region

The Randstad is an urban constellationlocated in the western parts of theNetherlands. The name is derived from theDutch word “Rand”, which means “rim”and makes reference to the location ofthe Randstad along the edge of an opengreen area known as the “Green Heart”.Much of the Netherlands’ economic activityis in the Randstad region, accounting

for 45 per cent of national employmentand accommodating 44 per cent of thepopulation in less than 20 per cent of landarea. As depicted in Figure 6.4, the Randstadregion is formed by the four largest cities,namely Amsterdam, Rotterdam, The Hagueand Utrecht. The Randstad is composed ofa North Wing (Amsterdam, Utrecht andsurrounding cities) and a South Wing (TheHague, Rotterdam and surrounding cities).

With a host of smaller and medium-sizedcities in the region surrounding the fourlarge centres and the lack of a dominant

centre for political and economic activity,the Randstad is a classic example of apolycentric urban region. 196,197

In the last few hundred years, thedevelopment of the region has beencharacterized by highly fragmented politicaland administrative organization. 198 Morerecently however, the Randstad has benetedfrom a more coordinated approach towardsurban and regional planning, and the GreenHeart has been a central focus area forplanning policies since the 1950s. 199,200

The key rationale for polycentric urbandevelopment is that in regional development,one city could not provide a complete rangeof economic functions, urban facilities orresidential and business environments. Thiscould be better achieved through strategicdesign and the coordination of developmentof specialized facilities within a region,

Source: Copied from Meijers E (2007). Synergy

in Polycentric Urban Regions Complementarity,organising capacity and critical mass.PhD thesis.Delft University

Figure 6.4: Map of the Randstad region.

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thereby creating synergies between centres.

Synergy in polycentric urban regions is

generated through:201

• Complementarity: The interplay of regionaldemand for more specialized servicesthrough the differentiation of economicand functional roles of cities for facilities.

• Co-operation: The development of aregional organizing capacity throughwhich co-operation in the developmentof polycentric development can takeplace (discussed in more detail in thegovernance framework section).

It is argued that through the developmentof complementary functions in the citiesin a region, citizens will be able to haveaccess to a wider range of functions. Thiswill be achieved as the demand market forsuch services is the region, which is largerthan the city, and therefore will give rise toa situation where more specialized, diverseand higher quality services and functionscould be developed.

The Randstad region’s four biggest citieshave different specialization areas whichdemonstrate complementarity: 202

• Amsterdam’s specializes in commercialservices, including nancial

intermediation, information andcommunications technology, publishingand printing, culture and sports.

• Rotterdam has economic specializationin areas of manufacturing andtransport, mostly due to its port. It isalso home to heavy industries suchas the petrochemical and chemicalindustries, and the manufacturing of

fabricated metal products and transportequipment. The city also has a vibrant

waterborne transport network andauxiliary transport industries, as well asconstruction and public utilities sectors.

• The Hague, which is the seat ofgovernment, is particularly dominant inpublic administration. It is also a centrefor agricultural activity, mostly due to thepresence of agricultural interest groups.

• Utrecht is relatively strong in wholesaletrade and education.

Empirical evidence shows that there is atrend towards diminishing complementarityin economic roles between the four maincities in the Randstad region. The divideof the Randstad into a North- and South-Wing also shows that there is substantiallyhigher complementarity in the North Wing.It could, however, be noted that there issubstantial division of labour (an essentialingredient for complementarity) betweenthe three largest cities, which each specializein commercial services (Amsterdam),manufacturing and transport (Rotterdam) orpublic administration (The Hague). 203

As far as administrative infrastructureis concerned, there are three tiers ofgovernment in the Netherlands, namelynational, provincial and municipal. Dealingwith spatial trends and forces in a cohesiveway is complex because the Randstad region

stretches over four provinces. This hashighlighted the need to develop a capacityfor cooperation and multilevel governanceacross public and private players. 204

Many cooperative networks have beendeveloped in the Randstad region toaddress the lack of administrative capacitybetween municipal and provincial levels,and provincial and national level. Around

the four largest cities in the Randstad, city-regions were formed where cooperation

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platforms have been created to addressissues such as transport, trafc, regionalspatial development, housing, employment,

economic affairs and youth welfare.205

An example of networks where formalcooperation has been established betweenthe four provinces, regional authorities andmajor cities is the “Bureau RegioRandstad”(Randstad Agency). The key objectives of thisagency are to develop the Randstad as a highquality urban and rural environment and toimprove the international competitivenessof the region. 206

An informal cooperation platform hasemerged in conjunction with the formalcooperation network of the RandstadAgency, which is called the Delta MetropolisAssociation. Initially founded by a number ofmunicipalities and chambers of commerce,the Delta Metropolis Association is an opennetwork that now includes members suchas housing corporations, organizations ofthe agriculture and horticulture branches,an employer’s organization, the transportsector, environmental organizations andwater boards. This cooperation platform’smain function is to provide members witha platform to discuss and lobby for theinterests of the Randstad region. 207

The cooperation networks discussed mainlydeveloped from a bottom-up process where

actors within the region initiated theseplatforms; that is, it was not implementedby a higher level of government. Thenetworks in the region provide Randstadwith a solid regional organizing capacity.Recognition of the “region” as a suitablescale for competitiveness, and evidenceof the benecial synergies that arisefrom a coordinated approach, have ledto the re-examination of intra-regional

interdependencies, which in turn has resultedin higher levels of cooperation. 208,209,210.

See the following paper for an empiricalanalysis and evidence of synergy in theRandstad:

Meijers, E. (2005). Polycentric Urban Regionsand the Quest for Synergy: Is a network ofcities more than the sum of the parts? inUrban Studies , 42 (4), pp. 765-781.

The current trend in academic literature is thatthe network metaphor is increasingly beingused to describe inter-urban relationships.Analysis of the synergy concept andtransferring it to spatial phenomena suchas the polycentric urban region shows thatthe interactions and nature of relationshipsbetween cities determine whether synergiescan be created on a regional level. 211

This case study shows that through thecreation of synergies in a region, a polycentricurban region, could indeed be more than thesum of its parts through complementarityand cooperation. In summary the case studyshowed that: 212

• The rst mechanism through whichsynergy can be achieved (namelycooperation) is becoming increasinglyprevalent in the Randstad region.Through both formal and informalnetworks a regional organizing capacityhas been established;

• The second mechanism through which

synergy could be created (namelycomplementarity) reveals that the keycities each perform distinct roles withinthe region, specializing in commercialservices, manufacturing and transport,public administration, or trade andeducation.

Considering the trend of diminishingeconomic complementarity between the

four main cities in Randstad, the questionarises whether the mechanisms of reducedcomplementarity and increased coordination

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Birds’ eye view of the Kitakyushu Eco-Town © Kitakyushu City 2011

contribute to achieving synergies in thisregion. Further research is required toprovide more clarity on this area. 213

Finally, it can be concluded that whereinter-urban relationships traditionally havebeen dened in terms of hierarchy, thecurrent trend in the Randstad is thathorizontal, network-like relationships areincreasingly seen. Through complementarityand cooperation, a new model of spatialorganization emerges referred to as anetwork urban structure. It could beconcluded that a network urban structure inurban regions could be benecial to createsynergies. 214

6.8 Building a recycling industryat the Kitakyushu EcoTown Project 215,216,217

The Kitakyushu Eco-Town Project is a 2,000ha industrial park built on a landll site facingthe Hibiki Sea on the northern outskirts ofKitakyushu City, Japan. Started in 1997, itsaim is to achieve zero emissions and zerowaste by using all waste as materials inother industries, thus closing resource loopswithin the park.

Kitakyushu Eco-Town came about inresponse to the city’s history as a leadingindustrial hub throughout Japan’s pre-war

industrialization, followed by economicgrowth in the 1960s. Since its rst steelplant opened in 1901, Kitakyushu washome to many heavy industries, such aschemicals, steel, glass, cement, bricks, andpower generation. With the growth ofsuch industries, pollution became a seriousproblem. Skies were lled with “sevencolours of smoke” due to red iron oxideparticles and dust from coal. The nearbysea was dubbed the “sea of death” after astudy revealed that not even bacteria couldsurvive in its toxic waters.

In the wake of a movement to clean up theenvironment driven by women’s groups, thecity and local companies started taking actionto reduce pollution in the 1960s. Actionsincluded the signing of voluntary pollutionprevention agreements between the city andcompanies. These stipulated targets morestringent than regulatory standards; thedredging of sludge from the “sea of death”;the creation of a pollution surveillance centreto check air quality; and the passing of aPollution Prevention Ordinance in 1971. By

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© Kitakyushu City 2011.

the 1980s the situation had greatly improved,and Kitakyushu’s air and water achieved therequired national environment standards. The

city’s success in improving its environmentwas highly regarded both domesticallyand internationally, and it recognized withawards such as the Global 500 Award fromUNEP in 1990, and the United Nations LocalGovernment Honours at the 1992 EarthSummit in Rio de Janeiro, Brazil.

In the early 1990s, Kitakyushu’s mayorstarted thinking about the next challengefor the city: how to combine environmentalpolicy with industry. This coincided withdiscussions on how to make best use of itsHibiki landll site. Study groups met withinthe city administration, incorporating not

Figure 6.5: Kitakyushu City overcomingheavy pollution

© Kitakyushu City 2011

Education and Basic Research

• Establishment of an environmental policyconcept

• Basic Research, human resource training• Base for industry – academia cooperation

Technology and PracticalResearch

• Aid for practical research• Incubation of local enterprises

Commercialization• Various recycling projects and Implementation

of environmental business• Aid for small / medium size enterprises and

venture enterprises

Kitakyushu Science andResearch Park

and others

and others

and others

Practical Research Area Comprehensive EnvironmentalIndustrial Complex

Hibiki Recycling Area

Hibikinada East Area

Other Areas

• University of Kitakyushu, Faculty ofEnvironmental Engineering, GraduateSchool of Environmental Engineering

• Kyushu Institute of Technology,Graduate School of Life Science andSystems Engineering

• Waseda UniversityGraduate School of I nformation,

Production and Systems

Universities

Research Institutes• Waseda University,

Information, Production and SystemsResearch Centre

• Fukuoka Research Institute forRecycling Systems

A complex of recycling factoriesPET, home appliances, ofce equipment,

automobiles, orescent tubes, medical instruments,construction waste, complex core facility, nonferrousmetals, PCB-polluted soil purication

Local SME and venture enterprises(cooking oil, organic solvents, used paper etc)Automotive dismantlers and used parts dealers

Reycling PlantsSludge, metals, waste wood, vending machines etcWind power plants

Recycling / Reuse plants• Styrene foam, ofce equ ipment, foaming inhibitor,

melting furnace y ash, plastic containers and

packages, food waste

Fukuoka University, Institute forRecycling & Environmental ControlSystemsKitakyushu Institute of Technology,Eco-Town Practical Research FacilityNippon Steel Engineering Co. Ltd.Kitakyushu Environmental TechnologyCentre

Practical test site of the FukuokaResearch Centre for Recycling SystemsPractical research in various elds• Waste disposal site management• Proper disposal of hard-to-handle

waste

• Waste recycling technologyKitakyushu Eco-Town Centre

Comprehensive Development of Basic Research, Technological Development,Practical Research and Commercialization

Figure 6.6: Kitakyushu City’s Environmental Industry Promotion Strategy

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only the environment department, but alsothe economic department. The 1990s sawthe enactment of basic legal frameworks

for recycling and resource managementin Japan, including the Recycling Law(1991), Container and Packaging RecyclingLaw (1995), and the Electric HouseholdAppliance Recycling Law (1998). Together,they obliged industries, governments andconsumers to reduce material usage, thuscreating a market for recycling technologies.Companies like Nippon Steel were alsolooking for new business areas as globalcompetition pressured heavy industriesto promote rationalization and efciency.Environmentally-friendly industries wereidentied as a key area of opportunity,and stakeholders from industry, researchinstitutions and government joined forcesto create the Kitakyushu EnvironmentalIndustry Promotion Council.

When the Ministry of International Tradeand Industry (MITI) and the Ministry ofWelfare set out their Eco-Town Initiativeaims of for zero emitting societies throughthe strengthening of recycling industries in1997. Kitakyushu was ready to put its ideasinto action. Initially, many companies tookadvantage of MITI’s Eco-Town grant, whichwas provided for setting up systems (e.g.research to inform planning, engagementwith citizens etc.) and constructinginfrastructure for new companies.

There are two main zones withinKitakyushu’s Eco-Town. The rst is thePractical Research Area where industry /academia / local government institutionsconduct research and development in wastetreatment and recycling technologies. Thesecond is the Comprehensive EnvironmentalIndustrial Complex, where newly developedtechnologies are brought to market. Inside

the Comprehensive Environmental IndustrialComplex is the Hibiki Recycling Area, where

the city provides business sites for long-termleasing to enable small and medium-sizedenterprises to venture into environment-

related industries.

Kitakyushu Eco-Town is characterized bystrong collaboration between government,industry and academia. Situated close tothe Eco-Town is the Kitakyushu Scienceand Research Park, where universities andresearch institutions themed around theenvironment and information generatenew research and build human resources.Universities in the Kitakyushu Science andResearch Park received support from theMinistry of Education, Science, Sports andCulture’s subsidy for pioneering academicinstitutions.

Kitakyushu’s answer to waste managementwas to create a system whereby energyand materials are exibly shared byindividual enterprises in different industrysectors. Taking advantage of the fact thatthe Eco-Town is a gathering of differentrecycling and reuse factories, residue fromone factory is, in turn, used as materialat a different factory. Unusable industrialwastes discarded from enterprises withinthe Eco-Town (mainly residual substancesfrom recycling and automobile shredderdust) are sent to the complex core facility,where they are processed by melting. Inthis treatment process, molten material is

recycled as slag and metals and the powergenerated during the process is supplied toenterprises in the Eco-Town area. With thisprocess, Kitakyushu is able to raise materialproductivity, recycling and reuse rates, andin turn lower nal waste volumes.

Kitakyushu City’s strategy of comprehensivedevelopment and support resulted in manyinnovations in the recycling industry. For

example, Kitakyushu was the rst city inJapan to start the reuse of orescent tubes,

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and its recycling rate for automobiles isan impressive 99 per cent (exceeding the95 per cent recycling rate targeted by the

Japanese Government for achievement by2015). According to a survey done in 2006,during its rst six years, the constructionand operation of Kitakyushu Eco-Town isestimated to have generated USD 1.34billion (JPY 109.3 billion) in direct andindirect investments, and created 6,470

jobs. 218

Kitakyushu’s success can be attributed to acombination of the following factors:

1. Accumulation of technologies andhuman resourcesThe use of existing industrialinfrastructure and technologicalcapabilities accumulated throughoutKitakyushu’s history as a manufacturingcentre acted in its favour. Thetechnologies, human resources andculture developed while combatingheavy pollution in the area also playedan important role.

2. Timely national policy and subsidiesNew national policies helped topromote new industries like recycling,and timely subsidies encouraged civilenterprises to take on the risks ofentering new elds.

3. Communication Kitakyushu was very careful tocommunicate information about theEco-Town to the public throughout itsdevelopment. In principle, all facilitieswere open to public, helping to createthe understanding necessary to buildsupport for new waste treatmentplants.

4. Clustering The clustering of similar businessesallowed them to benet from shared

efforts to communicate and negotiateon behalf of their industry.

5. MotivationHaving experienced rsthand thehardships associated with extremepollution, there was a strongappreciation for the need to improvethe environment, which helped to aligninterest groups toward these goals.

Having managed to achieve many of its initialEco-Town Project Plan goals long before2005, Kitakyushu City started drawing up itsPhase 2 Plan in 2002. xvi Phase 2 includes newstrategies not only to promote recycling, butalso for various environmental projects suchas energy and resource conservation thatpromote a more sustainable local society. Forexample, the city has built a “Next GenerationEnergy Park” within the Hibiki landll site topromote the use of solar photovoltaic panels,wind power and coal gasication. KitakyushuCity has also been working on the GreenCorridor Project, aimed at harmonizingnature within this industrial city throughthe involvement of non-prot organizationsand citizens in the creation of green spacesin the city and educational programmes,amongst other initiatives. In 2011, the citywas selected for inclusion in Japan’s “Future

City” initiative, recognizing the GreenCorridor Project and others promoting thedevelopment of a Smart Community asexamples of environmental excellence.

xvi Some projects introduced above – e.g. the complex corefacility – are projects that will be completed in Phase 2.

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The development of the city of Uberlândia, Brazil is strongly tied to its geographical position.Located at a crossing point for roads connecting Brazil’s main coastal cities with the interior,Uberlandia is considered the local capital of logistics © UN-Habitat/Alessandro Scotti

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7Conclusion

This quick guide provided insight into theapproach, mechanisms and governanceframework to achieve green economicdevelopment. The guide mainly grapples withthe perceived trade-off between economicdevelopment and environmental protection.This is a key issue addressed in the guide andit explores pathways of how both of thesegoals may be achieved in union.

Approach: The quick guide suggests theanalytical framework and approach to beadopted for designing initiatives to developand nd new areas of competitive advantage:

• The systems and network view should be

adopted as a guide to design strategiesand support structures;

• Demand-side and supply-sideconsiderations are important andshould be considered in the design ofmechanisms and support structures.

Mechanisms: A number of mechanismsthrough which competitive advantage may

be achieved were discussed. In summarythese include the following:

• Polycentric urban development principlesshould be adopted on a regional scale.Synergies between centres could becreated through cooperation andcomplementarity;

• The mechanism of clusters is suggestedbecause this will provide a framework forfocused support for innovative activitiesand create a competitive advantage.These clusters need to be stimulatedto exhibit self-exploration activities forgreen economic development;

• The strengthening of knowledgeinfrastructure and linkages between

helixes to support growth in clustersfor economic development is suggestedas a key mechanism for supportinginnovation in these clusters.

Governance framework: Governanceof these measures is important becausethis addresses the framework from whichgovernment will stimulate and coordinatesuch activities. The following key principles

are suggested for a governance frameworkto optimise benets from the abovementioned mechanisms:

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• Capacity development: Stimulate thedevelopment of a regional organizingcapacity and strategic planning capability

to ensure regional green economicdevelopment goals are reached;

• Creative governance: Governancemechanisms should be designed in away that innovation and creativity in theregion is stimulated to encourage self-exploration activities for nding newareas of competitive advantage;

• Managing the transition andstakeholders: The process of greeningeconomies is likely to meet resistance

from many different angles, thereforechange management of transitions isrequired. Many stakeholders are involvedin green economic development projectstherefore careful management of suchstakeholders are also important.

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217 The Ministry of Economy, Trade andIndustry. (2007). Eco Town Projects /Environmental Industries in Progress:5. Available: http://www.meti.go.jp/ policy/recycle/main/3r_policy/policy/ pdf/ecotown/ecotown_casebook/ english.pdf [Accessed August 2011.]

218 The Ministry of Economy, Trade andIndustry. (2007). Eco Town Projects /Environmental Industries in Progress:5. Available: http://www.meti.go.jp/

policy/recycle/main/3r_policy/policy/ pdf/ecotown/ecotown casebook/

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