City Experiment Fund: The System Transformation Our Cities Need

By: Lejla Sadiku, Ray Boyle, Milica Begovic

Photo: Creative Commons CC0

Cities occupy only about 2% of Earth’s land area, but house between 60–85% of the world population. At a time of accelerated change — and with complex issues such as climate change, migration and inequalities challenging our ability to respond, cities are emerging as leaders. Because cities concentrate development challenges — access to services, participation in decisions, distribution of water and electricity — they also become a laboratory on how these can be addressed.

This blog marks the launch of our City Experiment Fund (CEF) — an initiative of UNDP and the Slovak Ministry of Finance, to support cities in the application of innovative approaches. We look at behavioral insights, new data and systems thinking, and horizon technologies such as artificial intelligence or blockchain. We hypothesize that this will make our cities more future-ready, and to do so, we are seeking to answer the following questions:

Photo: Chris Barbalis
  • What are the emerging risks that our cities are blind to?
  • Can we understand how climate change, inequality and migration interact with each other?
  • Where are the strategic points of intervention within complex systems that help us fundamentally address ‘wicked’ challenges as they play out in our cities?
  • How can we employ tools of inclusive innovation to meaningfully address them?

How is it to live in a city in Europe and Central Asia?

Around the world, this region included, we see trust in public, private and civic sectors decrease and existing governance mechanisms unable to respond to the complexity of current challenges.

2017 World Health Organization report found that of the 10 most polluted cities in Europe, 5 were based in the Western Balkans — 3 in the former Yugoslav Republic of Macedonia, and 2 in Bosnia and Herzegovina. Besides the physical health related impacts, studies show that the impact of exposure to high levels of toxicity is equal to losing one year of education while also affecting mental health. Our work in the city of Skopje found that exposure to toxic air and the associated health risks disproportionately affect poorer neighbourhoods.

At the same time, skyrocketing regional use of electricity for bitcoin mining outstrips national power consumption by 1000% in places like Kosovo* and Montenegro. These signals do not only raise issues about balancing development with well-being, but also the necessity to understand complexity and drive systems change — whether how to regulate emerging technologies or ensure just distribution of resources.

A World Bank analysis found that 61% of the cities in the region were in decline, losing on average 11% of their population, while population growth was increasingly concentrating in a fewer number of cities. In many of these cities, infrastructure is crumbling. Illegal construction is already suffering more severe damages from climate change related disasters and public services for the poorest groups are stretched thin.

Can infrastructure help us combat pollution (and other things)?

Photo: Chromatograph on Unsplash

To address the urgent nature of these issues, combined with our exploratory work on #NextGenGov during the Istanbul Innovation Days, our flagship event which this year focused on Next Generation Governance, we’ve identified 6 Zones of Experimentation (ZoX).

1: Municipal back office functions: Reimagining how the public sector functions and governs. For instance, how can we help governments look beyond budget categories and focus on solving broader issues, such as improving school readiness?

2. Well-being: Cities are like living organism that require a diversity of disciplines. For instance, making sure everyone is in good health implies looking at nutrition, pollution, access to public spaces and managing public health hazards to name but a few.

3. Arts, science and power: Can art and science help us translate the impacts of climate change into understandable and relatable issues? For instance, can dancers traveling along congested parts of cities, with costumes wired to a breathing and air pollution data sensors, influence behavioural change among residents?

Photos: Chuttersnap, Zhu Hongzhi, Rawpixel on Unsplash

4. Digital and platform economy: Disrupting traditional labor, redefining work and the workplace, and driving a new generation of opportunities across borders and digital divides. Research on digital economies shows that existing inequalities are likely to be replicated and exacerbated in the fourth industrial revolution, unless early interventions take place.

5. New Urban Infrastructure: Formalizing informal structures and systems in cities to do more with less and unlock investment in multi-use infrastructure. Physical infrastructure, like buildings, roads or water pipes, can actually be used for a multiplicity of purposes. An “urban curtain”, using micro-algae, placed at the Climate Summit in Dublin in 2018, captured CO2 from the atmosphere and stored it in real-time: approximately one kilo of CO2 per day, equivalent to that of 20 large trees.

6. Redefining and Restructuring the Commons — New definitions place the commons (water, air and land) in social and political context which then add data, education and cultural heritage and the internet to be understood also as commons. These require new governance mechanisms and engagement models. For instance how is our information managed when public goods are distributed by new actors we’re not so familiar with?

How will we drive systems transformation in cities?

With our City Experiment Fund, we want to address the gap that is appearing between emerging challenges and business-as usual by i) de-risking investment in innovation with catalytic funding, and ii) supporting cities with the tools and processes they need to prepare for the future. The fund will support interventions that cut across Zones of Experimentation and four domains where life in cities happens: public space, public administration, resident life and digital infrastructure.

Photo: _M_V on Unsplash

Unpacking complexity: Cities are often compared to living organisms in their interconnectedness and evolutionary drive to evolve. At the same time, we can now understand cities through the use of sensors, the Internet of Things, and satellite imagery. This enables us to start to identify non-obvious connections (i.e. how electricity patterns impact traffic) that illuminate emerging risks and opportunities and drive real-time governance of our cities.

New models of engagement: Residents’ engagement is at the heart of how problems are understood and can inform which solutions are designed. We do so by building on our experience, on working with largely decentralized, leaderless and agile civic actors, having engaged over 1500 young people in our regional data challenge, Ministry of Data, among others. We will be taking these lessons learned, and exploring cutting edge methods, like how AI can empower more engagement and more rational conversations, and virtual reality can power inclusive urban planning.

Alternative Finance: The SDG financing gap is 2.5$ trillion annually, and $1 trillion in infrastructure alone — the majority of which is in emerging markets. Since 2015, UNDP’s AltFin Lab has lead 35 crowdfunding campaigns at across 5 regions, mobilizing US$1.2 million, and catalyzing $7 million worth of ongoing campaigns.. We are currently designing 6 Social Impact Bonds in the Europe and Central Asia region. Whether we work on air pollution, or financial inclusion, designing adequate financial mechanisms is key in unlocking long-term change.

CEF is our call to action for exploration and learning, to navigate uncertainty and imagine a different future in our cities — more open, transparent and inclusive, where the benefits are more equitably distributed, and where we can live healthier and longer lives. This does not happen in isolation, but in conversation and through working together. Join us in this journey and follow what we learn on cityexperimentfund.com.

“We are called to be the architects of the future, not its victims.” — Buckminster Fuller

We welcome your ideas and feedback as we share emerging practices and insights. Let us know. Jump in. Connect.

Milica (milica.begovic@undp.org or @ElaMi5)

Lejla (lejla.sadiku@undp.org or @LejlaSadiku )

Ray (ray.boyle@undp.org or @CA_Ray)

The City Experiment Fund is a part of the Transformative Governance and Finance Facility II, which is funded by the the Slovak Ministry of Finance. The Project seeks to test out emerging technologies, financial mechanisms and innovative approaches in accelerating meeting the SDGs.

Link to presentation on future of cities

Link to presentation on city experiment fund timeline