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The Role of Finance and Private Investment in Developing Sustainable Cities
Author(s) -
Macomber John
Publication year - 2011
Publication title -
journal of applied corporate finance
Language(s) - English
Resource type - Journals
eISSN - 1745-6622
pISSN - 1078-1196
DOI - 10.1111/j.1745-6622.2011.00343.x
Subject(s) - urbanization , investment (military) , capital (architecture) , business , scarcity , government (linguistics) , economics , economic growth , politics , finance , private sector , private capital , sustainable development , development economics , market economy , foreign direct investment , political science , linguistics , philosophy , archaeology , law , history , macroeconomics
Three trends will drive urban investment, development, and entrepreneurship in the next two decades. The first is urbanization; over the next twenty years, the number of people living in cities will double. Second, shared resources like clean water, clean air, energy, and places to put solid waste are already scarce, and urbanization will only exacerbate shortages. Third, almost no local or national government can mobilize both the capital and the political consensus to make investments in the infrastructure that will lead to more effective use of these resources. This article argues that there is a largely unrecognized opportunity for the private sector to engage in selective investments that can help cities limit the effects of these trends. Investors and entrepreneurs can make money in ways that achieve more productive use of these scarce “public goods;” and by so doing, they can make cities more economically competitive as well as more livable. In making his argument, the author provides a tour of three “new” Asian cities, two of which are held up as models for future development.