Is your city's economy resilient?
Hurricanes, flooding, and earthquakes are major disasters that get people thinking about their and their city's resilience. Nevertheless, cities face many smaller shocks and stresses, such as income disparities and other inequities that require resilience-building capacity on a day-in and day-out basis. This is why the Rockefeller Foundation began their 100 Resilient Cities (100RC) initiative to help build urban resilience.
The Rockefeller Foundation defines urban resilience as "the capacity of individuals, communities, institutions, businesses, and systems within a city to survive, adapt, and grow no matter what kinds of chronic stresses and acute shocks they experience." In today's environment, resilience is critical for sustainability. In fact, these two concepts are close cousins. Sustainable practices will not be sustained if one is not resilient to the shocks and stresses faced. Similarly, sustainable practices can contribute to being more resilient by not eroding critical resilient capacities. According to the Dow Jones Sustainability Indexes (DJSI), corporate sustainability is defined as "a business approach that creates long-term shareholder value by embracing opportunities and managing risks deriving from economic, environmental, and social developments." Even though the DJSI definition of sustainability focuses more on shareholder pressures and goals, these two words-resilience and sustainability-are defined very similarly. According to the Center for Resilience at the Ohio State University, "resilience provides an operational tool for recognizing, improving, and measuring corporate sustainability." IHS Markit takes corporate sustainability very seriously, as demonstrated by its inclusion in the Dow Jones North America Sustainability Index for five years in a row; hence, it is a natural fit for IHS Markit to be a Platform Partner in the Rockefeller Foundation's 100RC initiative. As a Platform Partner, IHS Markit works with Chief Resilience Officers (CROs) to help them benchmark their economic resilience and provide insight on opportunities to foster inclusive growth in their cities. This information is used by CROs and their stakeholders when developing their Resilience Strategy.
This past July, IHS Markit participated in the 100RC Global Summit in New York City. The Summit brought together the CROs in the 100 Resilient Cities, their deputies, and representatives from the Platform and Strategy Partners. There, IHS Markit heard first hand some of the challenges cities face and ways that CROs are working to overcome them with city stakeholders. For example, in many cities historical redlining has created pockets of poverty.1 As a result, CROs are rethinking land use and working with the private sector to invest in historically under-invested communities.
As one of the few partners that provide economic analysis and forecasting capabilities for cities, IHS Markit presented its view of economic resilience in the break-out session "Building Economic Resilience in Low Income Communities." In this session, we heard case studies from CROs of Louisville, Kentucky; Norfolk, Virginia; and Berkley, California. Each of these cities struggles with concentrations of poverty that makes the city less resilient. When a shock happens, these inequities become even more apparent, as strains on social services and government budgets are more acutely felt. Additionally, rising standards of living are leaving disadvantaged groups behind. These groups often find themselves living in areas that are separated from economic opportunities, either by physical barriers such as highways and rivers or by employment barriers such as mismatches in education, skills, and job opportunities. We learned how these disparities can arise due to, among other things, insufficient engagement with communities. The Summit shared good practices of how to engage with communities, including the Boston CRO, who boarded public buses to talk with people rather than having formal meetings that are burdensome for people to attend. It was truly inspiring to hear the many ways CROs are working in their cities and overcoming the silos that have formed.
As part of being a 100 Resilient City, the CRO in each city develops a comprehensive resilience strategy for the city. Our work as a Platform Partner is to provide information and insight into a city's economic structure. We also break down the data to give a view on which racial groups are over- or underrepresented in occupations and what industries in the city are over- or underperforming relative to the United States as a whole. We show which industries might provide opportunities based on its forecasted growth, especially wage growth, and which occupations these industries employ. Marrying this with information on how racial groups are represented in those occupations helps to identify opportunities to close gaps by, for example, developing more targeted workforce development programs.
Through our work with the 100 Resilient Cities and similar projects, IHS Markit has also found there is a need for timelier, local, and disaggregated data with an ability to project this data forward to identify future trends. With these projections, cities would be able to do more informed strategy planning by testing the effect of potential programs, initiatives, and investments on their socioeconomic path. Doing this requires bringing together and overlaying disparate data sources, as well as identifying new data sources that can be used as inputs for predictive analytics. Leveraging our economic forecasting capabilities and datasets, IHS Markit is in the process of developing such a tool to help cities benchmark and develop their economic strategies. In this effort, we are engaging with other researchers, data providers, and informed organizations that are also working on these data issues.
As Ede Ijjasz-Vasquez from the World Bank said at the Summit, "Resilience will be a competitive issue for cities." Many of the cities in the 100RC program face the challenge of economic inequality. In our increasingly mobile world, harnessing the potential of all individuals in a city will be critical for cities to continue to thrive. Our Economic and Country Risk practice has been focused on helping companies, cities, and organizations achieve competitive advantages through advanced insight and forecasting. This is why we are continuing to develop tools that will enable clients to manage the complexity of their modern economies by identifying the sources of their economic resilience and opportunities to strengthen them.
1"Redlining is the practice of denying or limiting financial services to certain neighborhoods based on racial or ethnic composition without regard to the residents' qualifications or creditworthiness. The term 'redlining' refers to the practice of using a red line on a map to delineate the area where financial institutions would not invest."
Karen Campbell is a Principal Consultant on the Economics & Country Risk team at IHS Markit.
Posted 24 October 2017