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The new localism

The New Localism

By Bruce Katz & Jeremy Nowak  

Read more of Prospect’s “Data as infrastructure” report

The nature and locus of power is shifting in the world due to profound demographic, economic, and social forces. Cities have become the go-to level of society for solving the problems characteristic of modern life: economic competitiveness, poverty, the challenges of social diversity, and the imperatives of environmental sustainability. They also have become increasingly responsible for financing the future through investments in innovation, infrastructure and inclusion, the fuel for long-term economic competitiveness and social mobility.

This emerging framework of multi-sectoral and networked governance is we call the “New Localism.” “New Localism” has emerged in its most dramatic form in the United States due to the exceptional level of partisanship and the resulting withdrawal of the federal and state governments as reliable partners.

Today, progress is coming from a group of vanguard cities and metropolitan regions that are inventing new models of growth, governance, and finance.

To spur innovative growth, public, private and civic investors in cities such as Cincinnati, Pittsburgh and St Louis are making those cities global centers of technology driven sectors like medical devices, robotics and genomics by sharpening relationships between universities, companies, entrepreneurs and business incubators. Like Detroit
100 years ago and Silicon Valley 60 years ago, those cities are leveraging their distinctive advantages to be on the ground floor of technologies that will generate growth, wealth and jobs for decades to come.

These economic growth initiatives are being designed and delivered through new forms of governance that align the distinctive perspectives of government, business, philanthropy, university, and the broader community. In Chattanooga, Indianapolis, and San Diego the public, private and civic spheres are joining forces at the city and metropolitan scale to catalyse new economy shaping efforts, measure progress and champion success. This is community organising at the highest level, showing that in cities and other localities, unlike higher levels of government, it is difficult to know where the public sector ends and the private and civic sectors begins. Cities, in short, are networks, not governments.

Becoming global leaders also means identifying new ways to finance the future, particularly given the limits of conventional finance and the public sector. Despite local fiscal stress, the response in recent years to raising new public dollars for infrastructure and inclusion has been nothing short of remarkable.

“The emergence of ‘New Localism’ is partly due to the abdication of higher levels of government”

Over the past three election cycles, for example, voters in cities and metropolitan counties have approved billions of dollars for infrastructure investments that range from transit extensions to rail station redevelopment to road modernisation. In the 2016 election cycle alone, voters from Los Angeles and Seattle to Wake County North Carolina and Indianapolis approved nearly $200bn in additional taxes to spur ambitious transit and more sustainable patterns of development. At the same time, ballot initiatives passed in Broward County, Florida, Dayton, Ohio, King County, Washington and San Antonio, Texas are generating hundreds of millions of dollars in local revenues to provide children with high quality early education and other proven investments in young adults.

“New Localism,” however, extends far beyond traditional forms of public finance. Networks of public, private, and civic actors are trying to fill the void left by national governments with a wide array of innovative approaches to problem solving. Non-profit philanthropies in Pittsburgh have essentially replaced the state government as the go-to source of risk capital for investments in critical intermediaries like business incubators and technology clusters. Cities like Denver and Washington, DC are using the appreciation in real estate value to help pay for transformative infrastructure projects, the remake of Union Station and the deck-over of a portion of a 1960’s freeway respectively. Business leaders such as Dan Gilbert in Detroit and Paul Allen in Seattle are playing the role of catalytic developers and restoring downtowns to prior glory, while other tech entrepreneurs like Don Katz in Newark are using their capital to seed start-ups and entice employees to live in the city.

The emergence of “New Localism” is partly due to the abdication of higher levels of government, stymied by partisan gridlock and angry populism. But it is also a product of a restructuring economy that revalues proximity, density and multi-disciplinary innovation and new technological advances that give city leaders the data and evidence they need to design and deliver customised solutions that work. A nimble and networked economy rewards communities that are similarly nimble and networked while dramatically expanding the range of solutions that are available.

“New Localism” reflects a new horizontal rather than vertical mechanism for how societies solve hard problems. Cities are constantly crafting new ways of addressing challenges that are urgent, immediate and often highly visible. Solutions that are concrete, imaginative and tested on the ground do not stay local for long. Rather they are captured and codified and then adapted and tailored to other cities, taking into account the different economic and social starting points and fiscal conditions of different cities. Cities may be on their own, given the abdication of responsibility by national governments and states, but they are not alone. Other cities are continuously inventing solutions that are ripe for replication.

The rise of “New Localism” is a reminder that the power of cities and counties is not like the power of nations or states. It is grounded in markets and civics more than constitutions or charters. It is multi- rather than mono-sectoral. It is defined by pragmatism rather than strait jacketed partisanship. And it is enmeshed in global flows of capital, labour, products, ideas and practices.

The 21st century has often been described as an Urban Age. “New Localism” represents the means by which the full potential of this new urban order can be realised.

On the 3rd of October, Prospect launched Data as Infrastructure. This special report grew out of a series of high-level roundtable meetings over the summer which brought together government, private businesses and the third sector to look at how data is already being used to improve people’s lives and how it has the potential to do so much more.

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