Cities are complex living organisms. Collectively, they appear as a network of distinct places and agglomerations of people that foster growth and human connection. Individually, they are relentlessly competing within a global economic marketplace, increasingly driven by the measure of a city’s economic activity – Gross Domestic Product (GDP). This concept surfaced in the 1940s, after a period of global turmoil following two world wars and the Great Depression, but is it still a viable barometer of success? Politicians have long looked to economic growth to set policy and measure how citizens fare, but it has often spurred short-sighted decisions with long-term consequences.
Today’s cities require new ways of seeing as they face rapid change and increased complexity, compounded by wealth inequality, fragile political relationships and climate change. Like living organisms, cities must continually evolve and adapt to survive, so they need metrics that address the issues of today to truly capture value for tomorrow. According to the New Economics Foundation (NEF), “the economic equivalent of a compass should meet everyone’s basic needs, delivered through five pillars; good jobs, wellbeing, environment, fairness and health.”
The resilient cities of tomorrow understand that governments need to support their people first and foremost. By 2030, single-person households will see faster global growth than any other household typology, possibly compounding the growth in loneliness and putting a strain on mental health programs and community services. However, governments can’t focus solely on wellbeing – they need to support and empower businesses and individuals to step-up and drive policy change. Solving complex public problems and fostering community requires stimulating local economies not only financially, but socially, culturally and environmentally.
With 80% of global GDP generated in urban centres, it’s clear that cities are homes for big business, but is it useful to think of cities as big businesses themselves? The similarities are far and wide – from management structures and financial models to the desire to foster and support their populations. For the people making decisions about cities, every experience that makes a place more desirable, liveable or destinational needs to be underpinned by the fact that it is profitable (or at the very least, not an exercise in hemorrhaging money).
So, over the next few months, we’ll be looking at all things City Business. To kick things off, we explore the places and people delivering on New Economics: from New Zealand’s Wellbeing Budget and Austin’s cultural transformation to how one man took the whole of Helsinki out for a meal.
2019 Wellbeing Budget, New Zealand
Rising like a beacon amid populist times, New Zealand is one of the first nations in the world to boldly redefine what success means for its nation. In 2019, they introduced a Wellbeing Budget focused on ensuring wellbeing more than improving GDP. According to Prime Minister Jacinda Ardern, “politics needs to be more altruistic, and more long-term, to address the deep-rooted challenges we’re grappling with as the economy changes.” Philosophically, it’s a vision that appeals to many people, but practically it’s a budget that has been stringently and methodically approached. It ensures all government spending be filtered across five wellbeing goals: investing in mental health, improving child wellbeing, assisting indigenous communities, building an innovative sustainable economy and prioritising the health and education of all its people.
Across New Zealand cities, 50–80% of people experience mental distress. In the nation’s capital, it’s estimated that 20% of people experience addiction challenges from mental illness – spurring a series of challenges like homelessness in the absence of adequate treatment. In support of the Wellbeing Budget, a recent government report found that by embracing the bigger picture, for instance with depression, $1 spent in treatment will increase productivity gains by $2.50 and save the government $1.50 in physical health care costs.
Cities don’t only need to make short-term profits; they also need to mitigate long-term loss. While the evolution from a more traditional capitalist model may be an arduous journey that will take time, persistence and courage – it’s a necessary recalibration of economics for the 21st century.
As an international benchmark for media and industry festivals, SXSW attracts around 400,000 people to Austin every March to share ideas on technology, music, film and innovation. Though it’s a global phenomenon that plays an important role in shaping Austin’s future, it started much more humbly. In the late 1980s, in a deep period of financial crisis for the city, a band of locals from the offices of The Austin Chronicle saw potential in uplifting the economy through Austin’s thriving music scene. They saw the city as suffering from a lack of global visibility and sought to produce an event that, according to Roland Swenson, CEO of SXSW, would “bring the outside world to Austin for a close-up view”. Fast forward 32 years and the local economy was stimulated by $350.6 million in 2019 alone. This figure measures economic growth through both direct and indirect financial measures: event attendance impact, consumer impact and operational impact.
Beyond traditional economics, SXSW continues to shape Austin’s evolution. It influences city policy, shapes city infrastructure and encourages culture to seep through into surrounding neighbourhoods. In the same spirit, brands and businesses are coming together to ensure they’re leaving a lasting positive legacy on the city. Spotify House enlisted local non-profits to design and build their latest SXSW activation out of recyclable materials, which was later repurposed into recording studios for a local school. Sure, the financial impact is impressive, but to measure true impact, it’s necessary to look at the cultural and social impact in its entirety.
Restaurant Day, Helsinki
In 2011, opening a restaurant in Helsinki was an ordeal marred by bureaucracy and processes that made it an unrealistic venture for sole traders. Enter Timö Santala, a Finnish creative producer and event organiser who started looking for a solution while bogged down by the task. Frustrated by the red tape involved in opening a restaurant, he banded together with friends to launch an underground food movement for amateur restaurateurs across the city. The movement rapidly tracked support from the local community, and rather than forcibly shutting it down, the city worked with Timö to mitigate risks and help grow the community initiative.
Pekka Sauri, Helsinki’s Deputy Mayor maintains, “Restaurant Day is a prime example of urban culture created by residents and supported by the city. It has shown everybody that community can organise events without supervision and has helped bring the community and the city together.” It’s proof that governments succeed when they empower their citizens. Restaurant Day delivered tangible economic outcomes through an increase in local businesses and helped shape the city’s masterplan by prioritising walkable and cyclable urban environments. Perhaps most importantly, the initiative fostered organic community networks and relationships, neighbours became friends, and uplifted informal social support systems by minimising the need for government community services.
The effects of Restaurant Day are now felt around the globe. Eight years on, the event spans 68 countries, has served-up over 1.8 million meals worldwide and supports more than 16,000 temporary restaurants across local neighbourhoods, public parks, sidewalks, boats and people’s homes. It’s a great display of the quality of life and spirit of living together that you only witness in thriving urban cores. A long-standing host in Prague summarised: “We live in such a busy time, increasingly living alone and disconnected, we barely know who lives in our apartment building. Restaurant Day is one of the best opportunities to get to know each other and feel like a community.”
Shenaz Engineer is a Researcher & Strategist at Right Angle Studio. A Brisbane local, her innate curiosity and fascination for cities has seen her live across Amsterdam, Shanghai, New York, Paris and now Sydney. With a background in both business and design, she continues to collaborate with curious minds from different industries across the world, and has received both national and international awards for her work. Fascinated by the intersection of culture, architecture, health and technology, she is passionate about creating inclusive cities and crafting places for people.