How do we create cities that are catalysts for growth and prosperity on the global scale? How do we overcome the complexities of urbanization to develop effective digital and transportation infrastructure? How do we create sustainable and resource-efficient metropolitan regions?
The Innovation City event held at MaRS Discovery District on July 18 and 19 brought together international leaders from the public and private sectors to address these questions and more.
As the sessions progressed, a key impediment to capturing the innovative potential of cities emerged: funding.
Unlocking the flow of capital
The need for new, collaborative means of financing city building and regional development is clear. As Anthony Lacavera, chairman and CEO of Globalive Communications, put it, there is a tendency to “give a little to everyone, but not enough to anyone.” New funding models can unlock the flow of capital into urban regions and help catalyze innovation, but first we need to determine what those models should look like. This is where social finance can play an increasing role in shaping the growth and betterment of cities.
There are social and environmental problems entrenched in the design of the built environment, from the effect of transportation infrastructure on productivity and access to employment to marginalization in inner and outer suburbs and access to affordable housing. Improvements in a city’s design and increased investment in its infrastructure can have multiple effects on the quality of life of its citizens.
Impact investing activities already play a role in mitigating the social and environmental issues faced by cities, but it can play a greater role in the urban planning and design sector by enabling participatory design and mobilizing private capital toward the good of a city.
Social finance in action
Poplarise, an online platform that brings together developers, residents and businesses to develop local projects, launched earlier this year in the United States and transformed the public consultation process of city building.
Its momentum led the way for Fundrise, a newly launched online crowd-funding platform that allows individuals to invest in local real estate and businesses, and earn a financial return while shaping the landscape of their city. The platform allows investors to browse investment offerings in their city and take an equity stake in the development of a new project. Fundrise is still in the early stage of its development (with equity offerings only in Washington, DC), but its platform can be a model for solving local issues through collaborative design and investment in cities, while providing ownership to local citizens.
Crowd-funding urban design is just one of the models in which social finance can address the financial capital needs of the modern metropolis. Similarly, individually offered social finance products, such as the Centre for Social Innovation’s Community Bonds, further demonstrate the role that social finance can have in shaping the community and economic development of our cities.
But what’s next?
The Innovation City brought to light the critical issues faced by cities and presented opportunities for the innovative cities of the future. From the dynamic uses of big data to the importance of a city’s livability, the dialogue that took place over the two-day event encouraged critical thinking and creative solutions in the urban age.
As we begin to think about how to catalyze growth and prosperity, and how to address sustainability and resource planning, we also need to think about how our solutions and ideas can be funded. Whether it is to build digital and transportation infrastructure, construct affordable housing or create public spaces, our ability to innovate how we fund our solutions will be a testament to our ability to build innovative cities.
Collaborative funding models, such as crowd funding and community bond offerings, are just some of the ways in which social finance can be a tool for igniting urban innovation.
Impact investing is changing the way in which various industries and sectors do business. It can also change the way we build cities. We just have to give it the key.