Blog: Informal Economy and and Startup Culture in Cities

 

 

Our cities, their inhabitants, and our planet are in danger from cascading sets of urban woes including unsafe housing, rising waters, increased incidences of natural disasters, temperature extremes, inequitable development, insufficient infrastructure etc. The list of challenges can seem insurmountable, and it looks increasingly unlikely that they can be solved by governmental action alone.

Asia’s urban landscape

Private sector actors as diverse as PWC, Siemens and Nissan frequently promote the future-is-better-when-urban zeitgeist, evidenced by their increasing involvement with city networks such as the C40 or 100 Resilient Cities, and by their increasing investment in urban specific approaches and technologies. Cities are easy-to-target groups of consumers, and for this reason, all the more valuable as places, but also as vectors of business opportunities.

Cities are the ultimate paradoxical entities, where policy must strike a balance between encouraging individual trajectories while still investing in the value add of the common good.

The ‘youth bulge’ in Asia has contributed to the staggering rate of urban growth in recent years, with the region’s youth urban unemployment rate at a persistent low comparative to other regions of the world.

However, lived realities in many cities do not reflect this, partly because growth has been so rapid. In some cities as much as 60 per cent of the population, particularly the under 25s, are employed in the informal sector, and many people living in informal settlements are not even included in these figures. Cities have become very good at generating wealth, but urban wealth is consistently creamed off and captured within the private sector. Wages have remained extremely low in much of ASEAN, East and South Asia and the low unemployment rate masks the fact that millions of people are underemployed or employed part time in various sectors or activities.

Decision makers of all sectors must move beyond championing Asia as a vast pool of cheap labour. especially in an era when free trade is increasingly being challenged as a force for progress.

Investment in skills is key

The fiscal avoidance mechanisms used by large and small firms alike mean that profits are often barely captured by governments for public investment. At the same time companies complain of a deepening skills gap, often bemoaning that governments are not training people up to the high standards needed by their firms. Meanwhile rapid increases in mechanization mean many lower skilled positions are no longer needed.

 

Overall, significant investment in skills and training– both from the public and private sectors – is needed in order to coax investors into new markets and locations, and stoke wage levels.

Asia’s urban cultures are beguiling, despite their various challenges; fast paced, full of luxury stores but also street vendors and 24 hour night life. Seoul or Mumbai for many are now much more exciting than sleepy, and expensive London or Paris. Adding to this urban buzz in recent years has been the growth of the Asian tech movement, with regional players such as Lazada and Garena suggesting that consumers are hungry for tech, and that tech can also be a valid way of developing value-added for various sectors of the economy.

There is a lack of large, scaled startups in the region. The Financial Times argues this is primarily due to the oligarchic structure of the private sector. They imply that there is a gap in the market for new ways of considering and supporting new businesses and startups.

The role of entrepreneurs

Entrepreneurship is what is needed. We need to think local, tapping into the dynamic, youthful and flexible basics of the workforce. Connected to this, national and local governments must think creatively about how the informal and formal sectors could join forces, or complement one another, to bring about more equitable development. Finally, governments and the private sector must look at young people as a strength to be enriched and empowered.

An Asia-specific take on urban entrepreneurship is a good place to start. Connecting formal and informal, individual and shared goods, could help to provide a focus on the inbuilt advantages of the region’s young and increasingly urban workforce. The World Bank suggests that the skills that are needed for tech startups such as coding or open hardware development can now be acquired in a matter of weeks, while around 50 per cent of technology based startups do not even require a bachelor’s degree. A startup prototype can be developed for as little as 3,000 USD with nothing more than an internet connection. Broad based access to this type of skills development would seem like a crucial plank for any local or national development strategy.

Cities in various parts of the world are attempting to use the ‘innovation ecosystem’ model for developing local enterprises – an approach that looks at geographical clustering and the support of partnerships. Offering large cohorts of young people targeted apprenticeships in tech-oriented skills would be a lucrative form of investment for business as well as city and national governments, and crucially, support the notion of a localized investment in the sharing economy, and the overall knowledge economy. Connecting this movement to the growing social enterprises in the Asia region would also make good sense.

Asia’s tech developers need to do things in their own way to create a strong set of urban startups and entrepreneurs. While local versions of Uber, Airbnb or Seamless have successfully sated the appetite for ride sharing or food delivery, an approach that broadens our understanding of the Asian consumer and his urban context could provide fertile ground for new tech development, but also for new forms of solidarity.

The concept of the ‘sharing economy’ could be extended to thinking across the various types of Asian entrepreneurship and public participation. The concept of sharing urban goods such as cars or homes or office space brings in the notion that cities are not just spaces for ownership, they are dynamic spaces that can be shared and used in multiple layers and ways. Asian cities work very differently to others in the world, and the pace of change also means that new opportunities abound. The challenge is making sure that citizens benefit from this in a way that also makes sense for cities themselves as economic entities.

A few ideas have been outlined here, but it is clear that the informal economy of Asia’s cities is crying out for ways of participating in the tech revolution as it matures. Think about what the map of Ulan Bataar or Bangkok would be if they included its informal transport options. Consider how street vendors could adapt their offering to cater to the health-conscious middle classes.

Rather than formalizing the informal, the time has come to utilize the ingenuity of the startup movement and the informal economy as engines for economic co-creation, and inclusion.

About us

Working for Cities (WfC) was set up by a group of urban development professionals in 2014. Based out of Hong Kong, the firm’s experience is based on extensive project work for the cities of Asia-Pacific, by far the world’s most populous and urbanized region. The firm works worldwide, but with its roots firmly anchored in an intimate understanding of the Asian urban experience, inspiring and spurring the firm’s methods and approaches. 

Director

Nicholas Taylor has a Dual Masters in Urban Policy and Planning  (LSE and Sciences Po Paris) and works on a variety of urban development challenges. Ranging from sustainable housing, urban design, urban climate change resilience or heritage management and conservation he maintains a keen interest in innovative methods of urban strategy and management. He currently collaborates with UNDP for the development of their Sustainable Development Goal urban strategy, with the Rockefeller Foundation’s Asian Cities and Climate Change Initiative (ACCCRN) while he also supports Oxfam’s Urban Inclusive Economies initiative. Prior to this Nicholas worked with UN-ESCAP on Smart Infrastructure projects with the Government of India (2014) and coordinated the Asia Pacific Urban Forum (2015). Before moving his base to Asia, Nicholas worked for a leading architecture and urban planning practice between Paris and Beijing and before that, worked on Latin American and  cultural African heritage management out of UNESCO’s Headquarters in Paris.

Advisors

Dr Shipra Narang Suri is an urban planner with a Ph.D. in Post-War Recovery Studies from the University of York, UK. She is a Vice-President of the International Society of City and Regional Planners (ISOCARP), responsible in particular for technical cooperation and projects. Shipra has extensive experience in advising national and local governments, as well as private sector organisations and networks, on issues of urban planning and management, good urban governance and indicators, livability and sustainability of cities, urban safety, women and cities, as well as post-conflict/ post-disaster recovery. She is the co-Chair of the World Urban Campaign, a platform that brings together a large array of global organisations to advocate for sustainable urbanisation. In April 2015, Shipra was elected Vice-President of the General Assembly of Partners, a platform established to bring stakeholder voices to Habitat III and in the drafting of the New Urban Agenda. GAP has emerged as the leading stakeholder mechanism to engage in Habitat III. Shipra has worked with the United Nations, specifically, UN-HABITAT, UNDP, and UNESCO, as well as international NGOs and private sector organisations, for nearly two decades, and is currently based in Delhi. She has just finished developing a global strategic framework on Cities for Children for World Vision International and is working on a National Governance Assessment Framework for UNDP and the Prime Minister’s Office, Government of Bangladesh. She has worked across Asia, Africa, South Eastern Europe and the Middle-East. She is an Associate (Visiting Fellow) at the Department of Politics, University of York (U.K.), and has also lectured at several universities in India, Europe and the US. 

Matthew Sarsycki holds a Master in City and Regional Planning, and is an urban development professional specializing in urban resilience and risk management. Matthew has career experience in North America, Latin America and Asia-Pacific working on a range of disaster risk reduction and climate change adaptation projects. He has worked in the Asia-Pacific region for three years and is responsible for the management of a range of urban risk and resilience initiatives, research outputs and capacity development design for national and local government authorities. During this time, he has gained a wide range of experience collaborating with UN agencies, international donors, NGOs and various governmental entities including UNESCO, the Ministry of Foreign Affairs - Norway, IFRC and Mandalay City Development Committee (Myanmar).

Research and Knowledge

At Working for Cities, we design, develop and implement robust research and knowledge tools that aim to provide insight into complex city issues along with new approaches to their management and development. Our research and knowledge services include: 

  • Feasibility studies, project review and reporting

  • Guideline documents relating to service provision in rapidly expanding, informal areas along the urban periphery

  • Baseline studies and research using a variety of qualitative and quantitative research, including interview, focus groups, desk review and statistical analysis

  • Coordinating practical and hands-on research projects that take consideration of on-the-ground realities

  • Guidelines and methodologies for municipalities, including toolkits and training manuals

  • Documenting best practices in order to catalyze and upscale practical action.

Please contact us if you’re interested in our research and knowledge production services.

 

 

 

Stakeholder engagement

At Working for Cities, we believe that knowledge and understanding of urban issues already exists amongst actors at the local level. However, the true challenge lies in synthesizing and communicating common interests across a diverse group of stakeholders. With this in mind, we develop a number of services aimed at engaging any and all groups involved in urban development.

Services can include:

  • Stakeholder mapping

  • Hosting and facilitating collaborative events amongst public-private stakeholders

  • Organizing and enhancing public fora aimed to bring about critical and cross-cutting issues

  • Designing and facilitating digital media tools and strategies for enhanced public participation

  • Engaging the informal sector through new technologies to enhance an understanding of their communities

Please contact us if you’re interested in our stakeholder engagement services.

Capacity development

At Working for Cities, we believe our work is not complete until the knowledge and skills developed during a project have been transferred to end users. In this regard, we have developed a number of interactive training methods and programs which strengthen our client’s knowledge and skill base in a way that considers unique interconnectedness of cities.

Our capacity development services focus on building capacity among participants to deliver concrete solutions with immediate applicability to real world problems that urban professionals face in the field. Our capacity development and training programs can include:

  • Expert led, multi-day workshops

  • Webinars and E-Learning opportunities  

  • Field visits and interactive, hands-on learning opportunities

  • Peer to peer skills training and information exchange

  • City-to-city cooperation

  • Organic knowledge capture systems within urban organizations and programmes

  • City executive-specific training programmes

Please contact us if you’re interested in our capacity development services.

Our philosophy

 

At Working for Cities, we believe that the city is a unique system, unlike any other form of organization, corporation or activity. A city is not a place, it is not a business, it is not an administration. We see the city as a dynamic system through which humans realise and act out their diverse aspirations, their goals and needs in life.


Cities tend to be splintered into sectors and industries, but Working for Cities takes an approach that seeks to synthesize rather than separate. Cities are the ultimate complex system and our working methods reflect this.The products and services, tools and models we develop are all tailored to the unique realities and logics of cities. By deploying a multi-disciplinary mindset that operates across sectors, systems and groups, we generate integrated solutions that really work for cities.

Monitoring and assessment

At Working for Cities, we aim to provide municipal, national and international clients with a range of innovative monitoring and assessment tools and services that aim to measure, manage and optimise change and impact in cities. Our monitoring and assessment services can operate within multi-sectoral projects, programmes and policy while optimizing synergies across systems.

Specifically, at Working for Cities, we can:

  • Develop tailored monitoring programs and indicators for urban initiatives

  • Assess and analyze the impact of urban initiatives

  • Set and measure target reach across systems and sectors

  • Develop comprehensive three-dimensional assessment frameworks and apply these frameworks to various urban projects and programmes

  • Undertake evaluation both of single sector and multi-sector urban initiatives.

Please contact us if you’re interested in our monitoring and assessment services.