The world is living in a phase of ‘unprecedented uncertainty’, but European cities could emerge as winners if local authorities and the private sector work together to meet the challenges, delegates heard at the high-level seminar that concluded EXPO REAL on Friday.

joseph stiglitzrs

Joseph Stiglitzrs

‘The rules-based economic order created 75 years ago is under attack, and the attack is coming from the direction that was least expected, the US administration,’ said Joseph Stiglitz, professor at Columbia University and winner of the Nobel Prize for Economics. ‘But this gives Europe an opportunity to go in a different direction.’

Global supply chains and financial markets have evolved on the basis that borders would not matter, but protectionist tendencies are now undermining that assumption, Stiglitz said. It is up to European authorities to forge a different path: ‘Times of risk and uncertainty are also times to grab the opportunities, provided decisions are guided by careful analysis.’

To give a concrete example, one of the biggest and unstoppable trends is urbanization. The challenge for authorities is to create sustainable, connected, technological cities that people will want to live in, and the challenge for investors it to identify the changes in the location of economic activity and pick out the winning cities of the future.

In Europe, cities are realising that they have bargaining power in managing and steering change, provided they connect and cooperate with one another, and networks are already emerging.

Brexit
Even a problematic event like Brexit can be turned into an opportunity, said Greg Clark, global advisor, The business of cities: ‘The unintended consequence of Brexit is a stronger cities system in Continental Europe, with connections they did not have before. We are seeing it with Hamburg, Amsterdam, Stockholm and dozens of other cities that are leading the change.’

Europe can take a leadership role in sustainability, economic growth and urban development, using technological advances to improve transport links, connectivity and the environment, he said: ‘If cities take a leadership role, then Europe could win the new industrial revolution.’

A positive example of what is possible when cooperation works comes from the US, where a new green city is being built on the outskirts of Austin, Texas. ‘It will provide affordable housing because the land is cheap, but it relies on the city authorities to provide the infrastructure links and on private companies to choose to invest,’ said Lorenz Reibling, chairman of Taurus Investment Holdings, who is leading the project. ‘In this case, Google chose to invest millions of its own money to provide ultra fast fibre broadband to the new city, helping it be a place people want to live and work.’

In order for that positive vision to become reality, much more integration is needed, warned Mahdi Mokrane, head of research & strategy for Europe, LaSalle Investment Management: ‘At the moment it is impossible to have a pan-European residential strategy because rules and regulations are different not just from country to country but also from city to city in the same country, so the system is deeply inefficient.’