What global citizens want: Economic opportunities with quality of life

By offering incentives for manufacturing a single product in a district, the focus is on drawing in economic activity and aggregating services to allow smooth functioning in the selected area. (Representative image)

About 48 percent of global citizens are planning to migrate to a new metropolitan area than the one they occupy currently. And only eight cities received a higher ranking from their citizens in 2022 than in 2021. India is currently witnessing the largest rural-urban and inter-city migration in its history. It will soon house over 40-50 percent of its population in urban agglomerations. In this context, the second BCG Cities of Choice report holds the key to empirical urban issues and solutions.

Historically rural populations migrate to urban centres in search of jobs. Therefore, its economic identity is very important. London and New York held their top two positions in the 79-city, 50,000-respondent BCG report. The World Bank estimates that cities occupy only two percent of the earth’s surface, but generates about 80 percent of the world’s GDP.

This is an opportunity for India where over 4,800 cities are being master planned and large sums of money allocated to putting in place its physical infrastructure such as water, power, sewage and garbage disposal mechanisms as well as roads and connectivity. Urban planning was identified in Budget 2022 as a thrust area in the transition from organically grown, unplanned cities to resource-allocated, planned urban centres. In Budget 2023, the government announced the Urban Infrastructure Development Fund (UIDF) to utilise the priority sector lending shortfall. Managed by the National Housing Bank, this fund’s basic aim is to create urban infrastructure in tier 2 and tier 3 cities.

Five Parameters

The BCG report focussed on five parameters on which cities have to perform to be ranked in its list of cities of choice for citizens. These are economic opportunities, quality of life, social capital, interactions with authorities and speed of change. As India plans its new rung of Tier 2 and Tier 3 cities, it is absolutely imperative to define the economic drivers of each. States such as Uttar Pradesh have already come out with policies such as One District One Product.

By offering incentives for manufacturing a single product in a district, the focus is on drawing in economic activity and aggregating services to allow smooth functioning in the selected area. I saw China doing this in Shanghai in the early 2000s. Puxi was then its main commercial district while Pudong was a dirty wharf area. By cleaning up the wharf and drafting an incentive policy for financial institutions to set up shop there, the waterfront was transformed into a financial district with a social and cultural angle as well.

Agile Planning

As Indian masterplans its 4,800 AMRUT (Atal Mission for Rejuvenation and Urban Transformation) cities, the starting point needs to be an economic driver identification. As the BCG report found out, economic activities form the backbone of growth. However, planning today cannot be the 20-year mega plans of yesteryears. It needs an agile and responsive city management which can easily accommodate the social and economic aspirations of its citizens.

Why does the BCG report find 48 percent of citizens wanting to move from the cities they are currently staying in? Unlike earlier long-tenure jobs, today's employers don’t offer job security and workforces would rather keep upgrading skills and moving to cities where their new skills can fetch more creative work profiles and remuneration. Therefore, the city has to customise its services to a rapidly evolving citizenship of which a majority is floating through for the tenure of the current job.

Climate change is another big change maker. Water bodies cannot be destroyed with gay abandon and sewerage let out into rivers that pass through. The entire focus of the River Cities Alliance is the learning from cleaning the mighty Ganga. Efforts are on to restore water body stretches that pass through urban areas.

In the absence of a loyal citizenry, city governance has to accommodate water plans in its mission statements. This often has economic implications. Varanasi, for instance, found that after one-time spending to clean the water body, the influx of tourists and workers to the city, actually adds rupees to the city’s coffers and promotes economic activity for the private sector and entrepreneurs. Economic activity has been identified by BCG as a key factor in the ranking of Cities of Choice by citizens.

Economy vs Quality of Life

The report found that megacities of 10 million people or more showed below-average in economic opportunities. But these and the next category of cities with 3 million plus populations did not fare well in the speed of change and social capital. Middleweights of less than three million population fared the best with  above-average quality of life scores.

Indian cities of Bengaluru, Mumbai and Delhi did not fall into these three categories but were listed as developing cities, which were identified for their high speed of change but lower quality of life.

However, there is a lesson from the global cities for India to learn from. After the pandemic when people fled large cities to smaller ones during the lockdown, many realised the value of better quality of life. A global consultancy major found a large part of the workforce opting for smaller cities during the opening up of offices post-pandemic. What started as small outpost offices of the Gurgaon branch in Jaipur and Lucknow, found so much traction that the entire building was taken up in Jaipur. Clearly, the quality of life in smaller cities with economic opportunities matters to people.

Even though London and New York retained their top slots as cities of choice, BCG questioned their ability to remain there because of the lower rating on the speed of change. Smaller cities, if better governed, can attract newer citizens such as retirees. They have money to spend and a propensity for enjoyment but also need specific services such as safety and health.

If the lessons from the global study can be utilised by rapidly growing urban centres in India, we may well see migration of choice towards better-governed cities ranking high in quality of life.

E Jayashree Kurup is a writer and researcher in the urban space. She is Director, Real Estate & Cities, Wordmeister Editorial Services. Views are personal, and do not represent the stand of this publication.