The Resilience Dividend
April 11, 2014
Good morning. Thank you for that kind introduction.
What a week. The flow of ideas and thinking has been inspiring and energizing. But our work isn’t done yet. And I am pleased that we can cap off this week with a day dedicated to resilience, orienting us to the crucial decisions that must be made to help cities adapt and evolve in the face of extraordinary pressures. It’s the first time that the World Urban Forum has included resilience as a dialogue. So, in many ways, today is a historic occasion, and one, frankly, whose time has come.
Let me strongly assert, in fact, that all of the issues we’ve discussed so far—from equity, to urban planning and design, to safety, law and innovative financing—will be more successful and long-lasting if done through the lens of building urban resilience—which we define 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.
One might argue that there have always been shocks, floods, landslides, destructive wildfires, acts of terror, a sudden infrastructure collapse, or pandemics throughout history. Similarly, cities have throughout the ages confronted chronic stresses, which are more slowly-developing than shocks but equally devastating.
But four things make the shocks and stresses of today different. First, is the rate at which change is occurring, second is globalization, third is the immense scale of growing urbanization around the world, and fourth is climate change.
Never before has humanity faced risks at such a scale as it does today. With a global population climbing towards a peak of 9 billion by mid-century, most of whom will live in cities, in increasingly fragile ecosystems, the sheer number of people at risk at any given time or place is unprecedented. Combined with climate change—the “great threat multiplier”, and a globalized, hyper-connected world, I don’t have to tell this crowd that these place new social, fiscal and political pressures on urban systems.
But the moment we are now living in also presents us with the unprecedented ability to deploy new technologies and data systems to better assess and understand threats, analyze populations that will be most impacted by those threats, provide information feedback loops that allow for rapid decision-making and change even during shocks, and build strategies that are protective and allow for quicker and safer rebound. These are the critical characteristics of resilience.
For an example of what resilience-building can achieve, look no further than outside the conference center’s doors.
Not so long ago, Medellín was trapped in a downward spiral of violence and poverty, amid the daily tragedies of murder, corruption, drugs, absence of services, and economic disparity. Over the years, the government had tried a number of efforts to loosen the grip of violence and crime in the city, from military interventions to incarceration. Then, in the 1990s, Medellín recognized that it had the capacity to experiment, innovate, and empower people who were devoted to changing their neighborhoods and reclaiming their city. And so they began to try different ideas and investments that would create community cohesion, increase job creation, and connect fractured communities to greater opportunities.
Because resilience isn’t just about hard infrastructure and building codes—it has a strong social and community component as well.
Outside, you can see these manifestations of resilience all around us. You see innovative infrastructure—transportation options, such as the gondolas or the escalator climbing the hill to Comuna 13, that connect isolated communities with economic centers, which provide not only greater daily mobility and critical evacuation routes, but have been designed with access to a variety of services including community centers, public art, health care facilities, and schools. This system isn’t only about moving people, it is about being adaptive, resourceful, and inclusive, all resilience characteristics.
While the physical infrastructure of the city that has been transformed, you can also feel the difference in the attitudes and hopes of its people. Of course, the people of Medellín have always been proud and resourceful—but now they have the infrastructure, the amenities, and the investment from the government to make them more resilient as well. That doesn’t mean bad things won’t happen in the future.
The collapse of the residential towers late last year was a stark reminder, and the city continues to deal with ongoing environmental challenges such as landslides. Building resilience starts with acknowledging that we can’t always predict or prevent catastrophe from happening. But it includes the equally strong assertion that we can have some measure of control over how much physical damage it causes or how significantly it disrupts people’s lives and livelihoods, particularly the poor and the vulnerable who are most impacted by these events.
And that brings me to an important distinction. Resilience is not just urban renewal packaged with new bells and whistles. While urban renewal helps to transform a city to operate on its highest levels on a good day, urban resilience ensures that a city can continue to operate on its worst days. And it’s not just about keeping bad things out. Resilience-building is also a lever for unlocking greater economic development and business investment, as well as improved social services and more broadly shared prosperity.
This is what we call the the “resilience dividend“. And it has two components:
First, it refers to the difference between how disruptive a shock or stress might be to a city that has made resilience investments compared to where city would be if it hasn’t invested in its resilience.
Second, it describes the co-benefits that investing in resilience can yield to a city: job creation, economic opportunity, social cohesion and equity.
For a city to realize the resilience dividend requires upfront investment both in terms of financing and resources. It requires innovation to solve for known vulnerabilities but also for variables unknown. It requires engaging civil society and community leaders. And it takes partnerships with the private sector. In turn, cities will see direct economic benefits.
No doubt, new or upgraded infrastructure does require upfront investment. But that investment creates jobs today and in the long run it’s a money saver. For example, in a study that looked across U.S. government agencies involved in disaster risk management activities, researchers found that $1 spent on preparedness can amount to $15 in savings in future losses. Of course, the upfront investments to take the necessary hard and soft measures can carry a high price tag—cash that many governments don’t have. But one way governments are unlocking capital is through innovative financing and public-private partnerships for infrastructure.
For example, in the United States, several western states have organized a regional infrastructure exchange that seeks private investment in shared public works projects, such as water systems, transportation and electric grids.In another example, The Rockefeller Foundation recently teamed up with the White House, the U.S. Conference of Mayors, and innovators in the private sector to fund an initiative called RE.invest, which is supporting US cities to establish a new form of public-private partnerships that will help them package portfolios of investments aimed at building more resilient infrastructure. With the help of leading engineering, law, and finance firms, the cities will be able to use public resources more efficiently to leverage private investments in—for example—better water re-capture infrastructure.
Businesses, too, have self interest in building resilience in the communities where they operate.
According to World Bank data, 25 percent of small businesses that fail after a major disruption never re-open their doors. More than half of the companies in the S&P Global 100 have reported experiencing the effects of extreme weather and climate, or say they expect to in the next 5 years. Which is why we expect businesses will increasingly look at resilience as a factor in deciding where to invest or locate their operations.
For example, when leaders at Deutsche Bank were choosing among cities in India, to locate their next operations center, they observed something that differentiated Pune: an unusual commitment among city and state officials to taking resilience seriously, both in terms of their awareness of potential shocks and stresses and in the way they had prepared to respond to emergencies. This included everything from ensuring continuity of transportation to maintaining power supplies. Deutsche Bank also observed a stronger social fabric among city residents, compared to other potential locations they scouted, which minimized the potential for the kind of disruptions that can bring a city to a grinding halt.
That’s one example of the resilience dividend in action. Another example is the market that resilience activities are beginning to open up for businesses who are innovating products and services from new technologies, to new insurance products.
For example, we’re seeing great potential with advances in 3-D printing, whether it’s to manufacture emergency shelters on-site using the very debris left behind by hurricanes, earthquakes, and the like… or to reinforce the waterfront as is happening in New York City harbor, or to keep a local factory humming when distribution chains are interrupted in other parts of the world, disruptions like we saw after the Japanese earthquake in 2011.
And governments must focus not just on infrastructure, but on creating the right environment for fostering resilience-building innovations.
Last month, President Obama announced that the U.S. government is working with high-tech powerhouse companies such as Google, Microsoft and Intel to create and develop solutions that would integrate big data with tools that communities can use to become more resilient—from sensors on city buses, to simulations that help people better understand the threats of coastal flooding. Catalyzing a sustainable market for these kinds of solutions is one of the goals of the 100 Resilient Cities Challenge, our $100 million urban resilience commitment that Rockefeller launched last year on our Centennial.
The concept is simple—we believe that by creating a market for resilience products and services in 100 cities, more companies will be incentivized to push the limits of technology and innovation. Of course, that goal is complementary to our driving ambition behind this initiative: helping 100 cities around the world increase their resilience to shocks and stresses and leverage public finance and the resources of the private sector to do so.
We opened the challenge last August, and received more than 400 applications from around the world. In December, we announced the first group of 33 cities, Medellín among them. By 2015, all 100 cities will be chosen, and each will receive four types of support:
First, support to hire and empower a City Chief Resilience Officer, or CRO, a central point of contact within each city to coordinate, oversee and prioritize resilience activities. Yesterday, Mayor Gaviria and I announced Medellín’s CRO, Santiago Uribe Rocha, and many others will be announced in the coming weeks. The second benefit cities will receive is support for that Chief Resilience Officer to lead stakeholders in the development of their resilience strategy. Third, cities in this Network will have access to a platform of services leveraging resources significantly beyond our $100 million to support the implementation of the resilience strategy, including solutions that integrate Big Data analytics, technology, resilience land use planning, infrastructure design, and new financing and insurance products.
Our partners so far include Swiss Re, Palantir, the World Bank, Architecture for Humanity and the American Institute of Architects, Sandia National Laboratories, and we will be announcing more soon.
And fourth, cities will become members of the 100 Resilient Cities Network, which will provide support to member cities, share new knowledge and resilience best practices and foster new connections and partnerships. We know there are many other networks, doing truly great, important work. We are not looking to replicate or replace those efforts. Rather, we hope urban resilience can become a useful concept for other alliances, to produce multiple wins for our cities and the businesses and people who call them home.
In our early weeks, we are finding this is indeed a coalescing force. For example, the Byblos, Lebanon, workshop not only attracted Army and Air Force generals, the mayor of Tripoli, and officials from the Prime Minister’s office, it also included representatives from all sectors, including university heads, entrepreneurs, the harbormaster, an elderly nun. We were also joined by the UNDP/ISDR and the Red Cross, who pledged partnership and support. This spirit of community, collaboration and partnership is the premise and the promise of resilience.
We hope you will join us—either by applying for the Resilient Cities Challenge, partnering with our platform, or simply by applying a resilience lens to your own work.
And in the meantime, we look forward to a productive dialogue and exchange of ideas today.