This speech was delivered by BCA Chief Executive Jennifer Westacott at the Smart Cities Summit in Melbourne on 29 April 2016. 

Check against delivery. 

Summary of presentation

• Cities will be centres of competitive advantage and the innovation-led economy

• Competitive cities will be connected and driven by technology change, markets and consumers

• These changes mean we need to rethink how we govern and manage cities

• Four ideas

○ Infrastructure Australia should audit the technical capacity of the capital cities and identify what they need to do to meet the objective of a smart city

○ We need to preserve the functionality of existing and currently planned infrastructure (eg avoid aircraft movement restrictions at Badgery’s Creek airport and Kingsford Smith airport)

○ We need new planning instruments to develop major growth corridors and improve the certainty of efficiency of major project approvals

○ Reform city governance models to set out clear institutional and ministerial accountabilities for whole-of city development

Full Presentation

There is no agenda more important to the transitioning economy than the cities agenda

It captures everything about innovation-led growth

Cities are at the centre of the collaborative, connected, agile economy

All Australian cities need to think global, no matter what size they are, to capture opportunities from innovation and be a part of a stronger, transitioning national economy

In Australia

• We have always been heavily urbanised
  
  
• cities contribute 80 per cent of our GDP and employ 75 per cent of the workforce
  
  
• over the past 10 years, employment has grown 40 per cent faster in major urban centres than in the rest of Australia
  
  
• more than a third of all Australians live in Sydney or Melbourne
  
  
• Sydney and Melbourne are set to grow to 8 million by 2060

If we get the development of cities right the benefits will flow throughout the economy

Global cities around the world are highly productive and major centres for national economic output

• OECD finds doubling the size of a city increases output per capita by between 2 and 5 per cent.
  
  
• London’s economic performance, at 22% of UK GDP, is critical to the UK’s economy

Global urbanisation is progressing unabated:

• by 2050: two thirds of the global population will live in a city
   
• By 2025: 600 cities will be responsible for two-thirds of world economic growth

• 200 Chinese cities will be responsible for an estimated 30 per cent of global economic growth

I wish to make three observations and then present four ideas

Observation One

First observation, cities will be global centres of competitive advantage

People increasingly talk about doing business in Sydney or Melbourne, Brisbane or Perth, rather than in Australia

Shanghai is like a city- state, similarly people talk about doing business in Shanghai rather than China

Sydney and Melbourne should benchmark against comparable and competing cities around the world, rather than each other.

Fungible national borders are increasing competition for talent and investment between global cities

Observation Two

Competitive cities will be connected and driven by technology, markets and consumers

This has profound implications for how we plan and conceive our cities

The old model is to plan land use and transport so that it creates economic activity

This planning approach is rules based and drawings-based rather than driven by economic outcomes

We need to turn planning on its head

Economic output and liveability outcomes must drive land use and planning

Planning should:

• focus on positive economic and consumer outcomes
  
  
• guide, rather than determine, investment

Government’s should co-design cities planning with business to unlock business creativity and unleash the market

Governments can continue to try to determine development through rigid planning rules, but consumers and investors will find a way around it

Third observation

These changes mean we need to rethink how we govern and manage cities

Cities are complex systems requiring complex systems management as they grow

Governance and administration needs to reflect the entire, interconnected city.

Cities are global centres of economic activity, not villages

Sydney will struggle to do this well with 43 different councils

• OECD found for cities with similar population size, doubling the number of municipalities coincided with 6% lower productivity
   
• The productivity gap can be halved by instituting a governance body at the metropolitan level

A city-wide administration can implement city-wide technologies

• In Townsville, smart water metering is reducing household water consumption by between 15 and 30 per cent.
  
  
• In Brisbane, free-flowing tolling systems have reduced traffic accidents by 86 per cent.

City-wide administrations can create working conurbations that connect more people with jobs

• Western Sydney is increasingly interconnected with the rest of Sydney – local jobs have gone from 76 out of 100 jobs to 50 out of 100.

Four ideas

Idea One: Infrastructure Australia to audit the technical capacity of Australia’s capital cities and identify what they need to do to meet the objective of a ‘smart city’

What is each city’s technical readiness

Is the city enacting ‘open data’ policies

What can be learned from cities in other countries, for example, the UK transport systems catapult

Are cities prepared for the disruption that will occur if:

• 50 per cent of cars become electric and/or autonomous;
  
  
• we implement GPS user charging or tolling
  
  
• the use of automated drones expands, which removes vehicles from roads but creates new transport congestion in the sky
  
  
• when every piece of infrastructure is connected to the internet of things
  
  
• the use of broadband changes work patterns and transport requirements

The IA technology audits will help cities to plan and capitalise on these changes

Idea Two: We need to preserve the functionality of existing and planned infrastructure

do not impose a curfew or no-fly-zone at Badgery’s Creek airport

improve the efficiency at Sydney Airport by lifting the caps on landings

don’t restrict the capability of major sea-ports

preserve the large transport and housing corridors in cities

Idea Three: we need new planning instruments (there are two aspects)

Offer productivity payments for planning corridors in cities that enable large-scale transport, housing and other development

• Commit to integrated transport and land use planning and corridor reservation 
  
  
• Nationally, we should identify the seven greatest potential growth corridors in Australia and plan for them
  
  
• enable the market and the consumer to drive the development of the city as much as possible; what can government do to facilitate this
  
  
• put the consumer at the centre of planning and development 
  
  
• speed up approvals for investment in major corridors

Offer productivity payments for streamlined major project approvals processes

• reforms to major project approvals are essential if are to get the infrastructure and housing investments we need in a timely way
  
  
• Adopt a lead agency, single application, singe approval model for major projects

Idea Four: improved cities management

Reform city governance models to set out clear institutional and ministerial accountabilities for whole-of city development

Consider applying the Greater Sydney Commission model in other cities

Amalgamate local councils that lack sufficient scale for efficient operations or for undertaking strategic planning.