For the first time in human history, the majority of the world’s population lives in cities. As more people populate urban centers, cities from Lagos to Detroit are rapidly changing– economically, politically, and socially. Even established cities, previously defined by critical infrastructural elements, are in flux and in need of maintenance. In the heart of New York City, World Policy Institute and the Roosevelt House Public Policy Institute hosted the event, “Making the Emergent City,” a panel discussion on the changing nature of urban centers. The event began to answer important questions such as: What role does the informal economy play in the urban landscape, and what role will it play in the near future?
Kavitha Rajagopalan, co-director of the World Policy Institute Emerging Cities program, led the discussion which featured Jill Simone Gross, associate professor of political science in the Department of Urban Affairs and Planning at Hunter College, Marc Norman, director of UPSTATE: Center for Design, Research, and Real Estate, and Emeka Okafor, co-founder and curator of Make Faire Africa. The panelists argued that city governments need to embrace informal sectors in order to sustain their growing populations.
Rajagopalan opened the discussion by asking the panelists to define the role of the informal economy in their respective cities of research. Informal economies, or economies that exist outside of government or official regulation, tend to be overlooked, noted Okafor. Nollywood, in Lagos, Nigeria, is the second largest filmmaking center in the world, second only to Bollywood. However, as Okafor points out, Nollywood is part of the informal economy. It began without institutional support and blossomed into the fastest producing cinema hub in the world. On average, it takes about ten days from production to market. And as of 2013, Nollywood was valued at approximately $5 billion.
Senior Fellow at World Policy Institute, Kavitha Rajagopalan along with the panel: Jill S. Gross, Marc Norman, and Emeka Okafor.
As a result of Nollywood’s high rate of return, the Nigerian government has begun to embrace Nollywood as part of the formal economy. In doing so, the government has reconfigured its GDP to reflect the inclusion of Nollywood, making Nigeria the biggest African economy today.
The informal economy offers many opportunities– not only throughout Africa, but across the world. And yet, politicians, business leaders, and experts, to the detriment of many cities, are only now starting to pay it proper attention.
Gross explained that while Nollywood has become the informal sector success story, not all economies have fared as well with local government. In London, where demand for housing exceeds availability, rents have become unaffordable– particularly for migrant populations. To survive, many people have moved into abandoned or rundown houses, transforming them into squatting facilities. However, such arrangements are illegal. Recently, the government has taken action against squatters, forcing them onto the street or imprisoning them.
England is not the only country struggling to embrace informal sectors of housing and employment. Many of its European neighbors struggle with the same issue, despite the fact that 20 to 30 percent of their economies are funded by informal financial practices. Okafor argued that to rectify this division, government bodies will need to acknowledge the critical importance the informal sector plays in the development of the city center (much like Nigeria did in its accounting of Nollywood).
Gross also explained that in the past, “the ultimate paradigm for cities was growth.” In other words, the goal of cities was to continually expand its borders and horizons. However, the panelists agreed that growth without sustainable infrastructure is truly problematic. They argued that policymakers need to reconsider growth as the end game and begin considering sustainable development through a union of formal and informal partnerships.
Norman noted that cities in upstate New York were one example of how these partnerships are being put into practice. After a decline in manufacturing jobs across upstate New York, local governments decided on a plan to reinvigorate their struggling economies. Building a series of prison facilities from Utica to Rochester, they hoped the money tied to prisoner upkeep would soon follow. While it provided short term economic relief, it was not a long term solution. Today, cities in upstate New York are beginning to explore more permanent solutions that take into account the opportunities readily available in the informal sectors.
To conclude the discussion, Gross noted that while in the past, the informal and formal sectors were considered at odds with one another, that dichotomy no longer exists. The only solution to sustainable economic growth will be an integration of both financial platforms.
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[Photos courtesy of Marguerite Ward]
Sarah Lipkis is an editorial assistant at World Policy Journal, where a version of this piece originally appeared. Special thanks to Michele Wucker, Kate Maloff and Yaffa Fredrick for their work on this program.
