This article about inclusive growth in cities is part of the series
‘One Year After: Urban Learnings from a year of pandemic’
— by anteverti team
In addition to the dramatic loss of human lives linked to the Covid-19 pandemic, the health crisis is also having a clear impact on the global economic system. In the European Union, the socio-economic consequences of Covid-19 have been dramatic — Its GDP has fallen by 7’4% in 2020, while the unemployment rate, after a slight recovery in the third and fourth quarters of 2020, was still at 7’5% at the end of the year, a percentage point higher than a year before.
What lies before us as we head into recovery? The fight against this crisis must be viewed as a shared responsibility at all levels of government. We have an opportunity to establish solid alliances and take advantage of financial resources to move towards a digital era with a low-carbon and climate-resistant economy, improving the well-being of residents by supporting inclusive growth now and in the future.
In this new context, we have identified four areas of opportunity for cities to reach that horizon.
The European Funds: a unique opportunity
In Europe, especially SMEs — which are at the core of its economy —, have seen how their overall profitability has notably decreased, and their financial burden and indebtedness has increased accordingly. Those companies related to the automotive industry, food services, hospitality, recreational activities, retail or culture and arts, have been some of the most hit by the pandemic. On the other hand, those related to the health sector, food production or construction, have been less affected due to their more stable or even increasing demand during that period. Nonetheless, there is a growing concern among SMEs, and also among big companies, on their insolvency and the chances of bankruptcy in the short term.
In that context, the European economy is at a crossroads. That is, having to face the possibility of losing part of its productive industry and therefore entering into a recession; or on the contrary, rethinking its economic model by promoting solutions that facilitate a coming back to a growing path, ensuring the health of its companies.
To overcome this situation, shared to a different extent among the EU’s member states, the European Recovery Funds, or Next Generation EU, are born from the states’ joint will to strengthen the European economy, making it more resilient and sustainable. The funds represent an opportunity for achieving a paradigm shift towards a new production-consumption model based on digitalization, ecology and inclusion.
In this new model, both cities and productive sectors acquire a leading role: local public administration by promoting policies that favour network economies and scale advantages in densely populated environments, industries investing for a change in the economic model based on increased productivity that takes into account circularity criteria. In turn, this process will only be possible by integrating new technologies into the production process, but also into the provision of basic services such as health, education or water and energy supply; by transitioning businesses and companies towards a digital world; and by boosting the acquisition of digital and technological skills among citizens.
a pillar underpinning the new model
Digital economy is booming. Digital solutions and technologies are increasingly being understood as key ingredients to improve productivity, foster sustainable growth, create better opportunities and build more inclusive societies. The European Union, through its Digital Europe Programme, prioritizes the digitization of companies and institutions, and it also focuses on digital training and capacitation of the European society.
During Covid-19 times, this digital transition has been accelerated due to the emerging needs both in terms of production and consumption. In the first case, remote work is one of the most paradigmatic examples of what the pandemic has implied for the productive sector. In the case of consumption, the example are online sales; which not only have increased during pandemic, but in some cases have been the only channel between companies and consumers and between administrations, the public services providers, and citizens.
In the midst of this transition, societies are faced with an unprecedented opportunity to open the door to a new economic model in which the digital economy will be one of its fundamental pillars. The efforts should be specially focused on overcoming some of the main digital challenges: building legal and institutional environments that favours the proliferation of digital and innovative business models while protecting citizens’ rights; digitalizing small businesses, for instance through shared online platforms; and increasing digital knowledge and professional skills of the whole population to ensure that the new model is built upon inclusivity, collaboration, and creativity.
Women must be
at the forefront of the digital economy
Women are leading the fight against Covid-19 — they represent 70% of the health and social sector workforce around the world. However, the effects of the pandemic could reverse the progress that has been made on gender equality as many challenges remain such as the unequal distribution of unpaid care work, especially in developing countries. Moreover, new technologies are changing the nature of work in an extraordinary way, offering new opportunities — but also showing the need to accelerate progress in gender equality. Women are still underrepresented in science, technology, engineering, and mathematics, key sectors anticipating job growth.
At the same time, the ongoing digital transformation is also likely to confer positive benefits for women such as greater flexibility in work. Women are striving to be at the forefront of digital society and economy, cities and nations have an exceptional opportunity to empower women and advance towards inclusive growth.
Some key measures to move forward, as stated by the European Investment Bank should be: “the introduction of new gender metrics in all relevant EU programs, developing evidence-based policy support, a seal of excellence for investors rewarding gender-based investments, building a European network of “gender-conscious” investors to provide female founders with connections and funding opportunities, and exploring innovative financing solutions like “gender-bonds”. Coupled with this, governments should reinforce talent programs that promote women’s STEM-related skills, together with mentorship to facilitate opportunities in leading STEM-related jobs and entrepreneurship.
Upskilling, reskilling and new professional profiles for the future
The post-pandemic new economic model entails the need of completely new professional profiles. At the same time, improving human capital in terms of reskilling and upskilling people’s capacities towards technology and the digital world becomes a must.
Sustainability concepts such as reusing or recycling are at this core of this new model, as well as the fact of using new, innovative, and ecologically-friendly materials in different phases of value chains. Industries of all sectors are demanding professional profiles capable of putting the whole economy on the path of sustainability.
As already mentioned, digitalization and innovation are basic pillars not only for companies, but also for citizens to improve their quality of life – for instance when accessing basic services or when seeking for a job. In fact, the market is demanding a workforce with digital knowledge, both basic (office automation) and advanced (programming languages). Hence, while the impact of the pandemic has been unequal among geographies, economic sectors and population strata, most companies have been forced to improvise a leap towards digitalization.
Now, the challenge is to consolidate the accelerated digitization process that our society is living and foster the reskilling of workers and technological skills, so that we do not leave anyone behind. For instance, over the next few years, the demand for professional profiles related to cybersecurity and data management will keep increasing, even at a further level.
In terms of new economic activities, circular, blue and green economy will condition the appearance of new jobs, focusing on how to manage (produce-consume-reuse-recycle) food and organic waste streams consumer, goods during their lifetime; construction activities (i.e. introducing BIM solutions, energy efficiency solutions, and new and sustainable materials), among other fields. All of which will require human capital with technological and digital knowledge.🔴📊 We need post-#pandemic cities to create sustainable and #InclusiveGrowth – and here are 4 areas of opportunity for them to harness the full potential of #digitalization to reach that horizon | by @anteverti team · #OneYearAfter 👇🏽 Clic para tuitear
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About the authors
Albert Tapia is an expert in the analysis of new business models, in developing case studies on city issues and in H2020 European projects.
Since 2020, Albert has been working at anteverti as a consultant, doing qualitative and quantitative research in the field of smart cities and participating in the development of technical proposals and consulting projects for clients at the local, regional and international levels.
He holds a degree in Economics and a Master's degree in Smart Cities by the Universitat de Girona. He has previously worked for the PPP for Cities and the Public-Private Sector Research Center, both at the IESE Business School.
Carla Sanmartín is the Office Manager of anteverti since 2019, and her tasks are focused on promoting the good internal functioning of the company as well as its organization. Carla is the responsible for Administration and Management Assistance.
Her experience in financial companies and investment funds has provided her the opportunity to specialize in internal business organization, as well as in management assistance.
Carla holds a degree in Law (Universitat de Barcelona) with special mention in Business Law. She has worked in the private sector acquiring experience in different business branches such as administration, legal and accounting.
Alba Soler worked as a consultant at anteverti from 2018 to 2021, where she collaborated in international projects such as the 2035 Research, Development and Innovation Agenda for Argentina, the European GrowSmarter initiative or the Inter-American Development Bank Gobernarte Awards. Alba's expertise is concentrated on strategic and operational consulting, with a focus on new technologies and on digital transition towards the improvement of people s quality of life. She previously coordinated projects for the Catalan Government and local stakeholders such as Barcelona Metropolitan Transport Authority or the Catalan Waste Agency. In 2021, she joined the i2CAT Foundation as a Public Sector Innovation Business Development Consultant and Expert in Digital Transition.
Alba Soler holds a degree in Political Science (Universitat Pompeu Fabra and University of Kent) and a Master specialized in Economic Analysis for Public Policies (BCN Graduate School of Economics).