Key issues for global cities

Cities of Opportunity broadened its research in this edition, and focused particularly on enhancing three issues at the heart of city life: risk and resilience in terms of sustainability; public transit in terms of critical infrastructure; and taxes to pay the costs of community life.

Risk

Risk has pushed center stage among urban issues during the last decade, often with disruptive and frightening force in the form of extreme weather, terrorism, nuclear mishaps, and disease, to name a few threats. Awareness begins the preparedness process by sending a wakeup call to do what it takes. That can mean rethinking building and land use codes to accommodate shifting population and industrial patterns and environmental threats; employing advanced technology, engineering, and ecological techniques to better deal with risk; or aligning all the human and institutional forces in a city on a risk strategy and drilling on the details.

To gain a better sense of where our cities stand, we deepened our research on natural disaster exposure and preparedness, as well as security and disease vulnerability. The triple measure covers the range of modern urban risks, particularly focusing on the catastrophic events that threaten to jolt the global and regional business capitals in this study.

We find Tokyo registers top exposure to disaster, as well as top ability to deal with it. Tokyo, and Amsterdam with second highest natural disaster vulnerability but fifth highest preparedness, prove that resilience is not simply about building walls to keep out the sea. Resilience depends on vigilance, strategic preparation, technological expertise, governance, adaptability, and, perhaps most important, the resolve of institutions and the community to work together in a disciplined way as one unit.

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Margareta Wahlstrom, Urban Resilience: Aware, accessible, aligned

"Resliency is not a static condition. It’s very dynamic and progressive. And its on all levels—on a personal level, in the community, and on an institutional level... Real resiliency makes you less vulnerable beforehand."

Henk Ovink
The Netherlands, First special envoy for international water affairs

Public transit

Complaining about the daily commute can seem like an urban team sport. In fact, Bruce McCuaig, president and CEO of Metrolinx, created to coordinate transportation in greater Toronto, explains that “transit is such an intensely personal thing that everybody has an opinion.” Beneath the scrum of daily commuting, ineffective public transit costs cities today in efficiency and hinders opportunity tomorrow. This year, we aligned all variables relating to intracity transit within one category—transportation and infrastructure. We added traffic congestion and ease of commute to the mix to get an “on the ground” feel of reality. And we adjusted cost of public transport to reflect affordability, gauged by the local average hourly wages.

But no yellow bricks mark the road to urban transportation success. Each city faces its own challenges—organizing the system so downtowns, expanding metropolitan areas, and customers all feel well-served; planning for growth or contraction as shifting economic and employment, migration, birth, and aging patterns alter public transit needs; structuring fares, subsidies, and payment mechanisms easily and fairly; sustaining investment in development and maintenance over time; assuring frequent, reliable, safe, and convenient travel; improving the commuters’ journey and attracting more riders; artfully balancing local options among rail, subways, light rapid transit, cars, bikes, and walking, and nodes connecting the legs of the trip; and finding the best ways to measure success, so leading practices and sore spots are easy to discern.

Taxation

Taxes add another ingredient in the local recipe for success, and the tax system in our three top cities, London, Singapore and Toronto, compare well. An analysis of corporate total tax rate, personal rate, and tax efficiency shows Dubai, Hong Kong, and Singapore have the lowest rates and highest efficiency collectively. But London and Toronto are not far behind. However, it’s hard to take taxes out of the context in which they are paid in terms of economic, political, social, demographic, and environmental ecosystems and the needs of cities, their businesses, and citizens.

The tax picture in this edition builds from the corporate total tax rate included in previous reports. This time, we also engaged the PwC team that collaborates with the World Bank Group to produce the Paying Taxes report. It added personal tax and tax system efficiency to our evaluation in order to reflect the tax assessment on citizens and provide a broad sense of wider systems and process effectiveness. The study uses a measure of the total tax rate for a case-study company, along with the personal taxes of the employees in that company.

Overall, we see that approaches are driven by the local city environment, and it appears our cities are succeeding as business capitals that follow a wide range of tax approaches. Looking at the results of our tax variables overall, while Hong Kong is a fairly close second, Dubai leads all our cities in all three variables. Only three cities appear in the top 10 in all three variables (Dubai, Hong Kong, and Johannesburg), while six other cities appear in the top 10 in two of them (Singapore, Toronto, Jakarta, London, Seoul, and Kuala Lumpur).

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Rollie Quinn

Global Leader, Government & Public Services, PwC US

Hazem Galal

Cities & Local Government Sector Global Leader, PwC US

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