GCF2016

Sayyidati Sadatina Rahmatullahi Anhu with Sayyid Stephen Sacker. Ladies and gentlemen, please welcome back to the stage Mr.

Stephen Sacker.

Good afternoon, Excellencies, ladies, gentlemen. It's a great pleasure for me to be back and back with another fantastic panel and a fascinating subject. As you can probably tell, From the rather wonderful backdrop there, we're going to be talking cities. We're going to be talking how cities work, how they need to work in the 21st century, and how to get from where we are now to where we need to be in terms of urban planning and the rollout of new cities. We're calling this the Building of Competitive Cities: How to Succeed in the Global Economy. I'm going to introduce my panel straight away and you'll see that it's got a fantastic amount of expertise, different perspectives on it. So welcome all panelists. Next to me, nearest to me is Mr. Amit Sharma, who is Managing Director of Tata Consulting Engineers with a long, long career in engineering, civil engineering, and construction all over the world. Next to Amit is Fahed Al-Rashid, I think many of you will know him. He is the rather high-profile, dare I say it, CEO and Managing Director of King Abdullah Economic City, known, I gather, to many of you as CAKE, which just goes to prove only in Saudi Arabia can you have your cake and eat it too. Yeah, it took me a long time to figure that one out, thank you. At least I got one giggle. Next to Fahd is Ahmed Al Yamani, who is Chief Operating Officer of Tacnia. Now, Tacnia is a company which works with tech companies, attracts tech companies. He, for this conversation also, it should be said, is a former Vice Secretary General of the Economic Cities Authority here in Saudi Arabia. Next up, we have Arturo Franco, who is a very renowned academic. He's based at the Technological Institute, the university there in Monterrey. He devotes a lot of his time and his thinking to the future of cities. So Arturo, welcome to you. And the last distinguished member of our panel is Ashraf Naguib, who is based in Cairo, I think regards himself as a global citizen, and runs the think tank on economic trade and business issues, Global Trade Matters. Ashraf, welcome to you. So ladies and gentlemen, give my panel a very warm hand, a warm welcome. We're calling this How to Succeed in the Global Economy in terms of building competitive cities. Panelists, I want to get all of you speaking early on, briefly if you would. What in your own individual views are the key ingredients of developing a successful city today? And we'll go along the panel, so Amit, you start.

Sure, thanks. 100 years back when cities were evolving, there was history behind it, and the connectivity was roads. Today, cities are about networked economy, it's about digital information that allows these cities to live and breathe. So I think the cities of the future can be created as a greenfield, but more importantly, 95% of that would be brownfield in terms of looking at the balance between the social infrastructure, physical infrastructure, and the economic infrastructure, and trying to balance this equation to ensure it's a sustainable city that attracts talent, that allows economic activity but also creates the next generation of entrepreneurs who live in the city and collaborate with cities worldwide. So the integration network approach and a more open manner in which diversity will have new ideas and new innovation will make these cities thrive and grow.

But do the cities we already have, Do they need to be fundamentally and completely rewired, their infrastructure gutted and begun again?

So we've been in recent times talking about smart cities, which is rewiring the existing infrastructure and trying to rebalance this in the ways of making the equation work between social, physical, and economic infrastructure. So for example, in the competitive index, today still New York and London top the chart, and the reason being they're able to rebalance this equation despite the digital disruption that the new economy is getting. They're still number one in terms of, you know, allowing labor to come in, allowing venture capitalists, entrepreneurs, and also embracing the digital transformation, whether it's in governance, education, or in the way a citizen of the city interacts with the government and regulatory bodies. And hence, rewiring is in fact happening as we speak. But what's more important is do we create a Hub model, or do we create brand new cities? And that's where the equation would be difficult to solve because we don't have an answer. It hasn't been done before. Most of the cities that grew in the last couple of years were historic cities of convenience.

Well, that's a rather wonderful cue into Fahd next to you who is boss of a new city, in fact, the flagship new city here in Saudi Arabia, which I believe is projected to have 2 million people. When are you going to reach that ambitious 2 million figure? Are you ever going to reach it or is it a fantasy?

We're definitely going to reach it. When, nobody can tell you because cities grow according to global economic factors, macroeconomic factors as well as local. But I think this whole issue around cities and their competitiveness is very important. Cities are the most competitive space in the world. There are 247,000 cities that exist today. They compete for human resources, they compete for capital, and they definitely compete for corporate attention. Therefore, if you want to succeed— and by the way, most cities do not succeed and most cities, even existing ones, shrink sometimes, and we see what happened with Detroit, for example.

That's right.

So you really have to know what's your competitive niche, why do you exist, and continue to reevaluate this all the time. And it's all about governance. This is the big picture. Here's what we want to be. Is it succeeding? Is it not? What do we need to change? So this is the top-down view. You also need to have a bottoms-up view. You need to give the city back to the citizen. The ability to operate the city, to allow them to participate. By the way, this is really happening today around the world. With your mobile phone, you can take a photo of a pothole and send it to the municipality and tell them to fix it. This is the kind of technology that we're trying to install today in King Abdullah Economic City. The city has to also allow the citizen to succeed and thrive, so we focused a lot on entrepreneurship, on education, and on producing a lifestyle of art, culture, and culinary experiences that allow us to attract people.

It's not so easy though, is it, doing it from scratch, doing it without that sort of organic evolutionary thing that comes with human beings acquiring experience over generations? You are trying to do it literally from a drawing board.

Yes, and it was actually quite difficult. We've been at it for a decade and maybe now I can articulate only what we were trying to do. When you have a city existing like Riyadh or Jeddah, These are urban centers. And then you establish a new project that surrounds them. That's what we call a satellite city. It's hard but not that hard because you're attracting the demand that exists. What we have been doing over the past 10 years is inducing a new economic cycle that did not exist. That's why we focused on the port, building a port that is now 3 million containers, and by end of 2016 will be 4.5 million containers. We have attracted 120 companies. We are building residential units for all income levels. And this cycle is happening. Now, this is the hard infrastructure. You have the soft infrastructure, the focus on education, on tourism, on lifestyle, on healthcare, on education. All of these areas are what make a city alive, a place to be.

I want to come back to what you call the soft factors in the success and growth of cities because I think it's very important. Let's keep moving down the panel. I think we've got a question Over here. So, ma'am, you've got the microphone. If you wouldn't mind, tell us your name and ask your question.

Hi, my name is Tuba Çerekli, co-founder and CEO of Kutu Feriyada. I have two questions. One is around the notion of attracting the right individuals for the right cities, like Startup Chile, you know, cities based on economic and innovative diversity, whether or not that's a route to be pursued. If you're a city looking for artisans, should there be a special strategic package attracting those type of individuals and so on? The second one is on the point of Dr. Ahmed Yamani, walking in the shoes of the citizen and removing all roadblocks for the daily life of that citizen, whether it's education, healthcare, you know, surrounding necessary jobs and that creation of vibrancy in a city. Do we, when we design cities here in the Kingdom, walk in the shoes of the citizen and actually try and remove those roadblocks? And the final comment, if I may, is on how many Saudi urban planners do we have? Is that actually a specialty in our universities and colleges? Do we have active, you know, graduates from those, and are they working in city planning?

Thank you. Okay.

No, thank you very much. Well, there's a few questions there. Let's deal with them very quickly because we don't have so much time. What do you think of this idea of cities reaching out to very specific sectors of the population looking for particular skill sets, particular sorts of people rather than sort of a general inflow? Is that realistic? Is that in any sense being managed, engineered by cities? Anybody want to—

Recently, you know, when we're working with some municipal bodies, the whole notion of having cities around a particular theme has been challenged, and the reason being we're in a very globally connected world. Innovation, of course, is because of disruptions and change, and hence the cities have to be agile. They have to hedge their bets. As such, more of these cities today are looking at diversity, of areas they focus on. Hence, if you look at a successful city, for example, New York or Singapore, it has multiple areas— biotechnology, finance, think tanks in other areas. More of the recent discussion with the mayors and municipal bodies tell us that they would rather have a conglomeration and diversity of trades that the city will do.

Somebody mentioned Detroit before. Are you saying there's no future for What used to be called the Motor City or any city that defines itself by a particular industry?

That's a very good example, Detroit. The simple reason is that today when we say long-term planning and predictability of those plans, it's not 5 years or 10 years, it's 12 months. And hence, how do you run an institution that based on these forecasts and plans? City is like a living and breathing society that is comprising of various such investments and plans. If you're hedging your bets on a single particular trade, it's risky in today's world, and hence we talk about risk management strategies and diversifying. Cities and the mayors of today are also thinking like that, and hence to avoid the next Detroit and probably have a much diverse city ecosystem.

Well, let's go to a CEO of a city, Fahd, next to you. Fahd, I want you to address the two other points there. When you're thinking about the future of CAKE, are you really putting yourself into the mindset, the shoes of the average citizen resident using and living in your city? And talk to me too about the depth of talent in urban planning in Saudi Arabia today.

I think I talked about the 247,000 Cities around the world, most of them, the truth is, are very badly run. Most of them are horrid places to live because although their mayors will tell you that we look after the citizen because that's what they want to say, in reality they don't. Most mayors around the world, by the way, this is not only a Saudi problem, are appointed, and even the mayors are elected, are elected every 4 to 6 years. The problem is with cities that there is no feedback loop. If you don't like me as a mayor of a city, anywhere by the way, it's not only here, well, tell me in 4 years. And all I need is 51% of the vote to be back, and to get 51% of the vote, I have to get funding, therefore I have to get special interest, and the cycle continues.

That's the way we run countries too. I mean, if you're lucky, sometimes you don't even run countries on that basis. I mean, you have to be practical. You can't have a weekly referendum on whether the mayor should stay in power.

So let me tell you what I think. A city should not be seen as a political entity. A city is an execution. My job as CEO of King Abdullah Economic City is not to sit in my office. My job is to keep the city safe, to clean the streets, to make sure that the residents my customers are happy, and because I have to be doing this all the time. And the reason why I have to do this all the time, I actually have to attract people to come to the city. I have to talk about, to companies also, about what we're doing and what we're doing right and wrong. And you ask me, "What's your feedback loop?" It's completely unobvious, which is that we are listed. We have quarterly results. Every 3 months, I have to tell the world whether we are doing a good job or not a good job by whether people are actually buying our product. One quarter is missed is the one quarter I have to answer for. And this creates an immediate loop. Now, you ask, how can other cities do it? Well, we are doing a model now that's very interesting. We are applying the most ubiquitous form of democracy to our city. We are separating the development ownership from the operation. We are saying if you buy a square meter in Capital Economic City, you get a share. That share is in a company that does the operation. You elect a board, then that board elects a mayor like we do in general assembly of any company, by the way. We get in a general assembly, they elect a board, the board appoints a CEO. That CEO can be fired at any point. It's not a political assignment, appointment. It is an actual executive appointment. So we are applying a whole new different form of governance.

Okay. Very quickly then, just specifically, what level of talent do you see in urban planning in Saudi Arabia today?

Actually, it's significant. There is a lot of talent that is already existing. Because we have experience also in building cities from Jubail and Yanbu, from building our cities as well, and a lot of talent that's coming back after the scholarships, the King Abdullah Scholarship Program. But remember, if you want our cities to be global, this is also a global space, so you have to leverage talent from all around the world. Right now, for example, we have a program called The Perfect Home. We want to reinvent the home. On the basis of optimizing aesthetics, technology, cost-effectiveness, etc., and what we hired, 3 local firms to do it. We didn't go out externally because we believe a home as a unit has to reflect also the culture of the location.

Well, very quickly, seems to me there's an interesting question. Cities— some cities around the world have very definitely acquired a character that is different from the nation-state within which they exist. You could argue New