Empowering urban ecosystems: City leaders are nurturing diverse partnerships to solve pressing issues
Insights from the Deloitte-ThoughtLab 2024 Global City Leaders Survey
In 2011, Houston had the largest homeless population in the United States. Fast forward to today, the city achieved a staggering 64% reduction in homelessness.1 One key to Houston’s turnaround is the remarkable collaboration of more than 100 partners across various sectors.2
Houston’s success underscores a potentially important lesson for urban centers globally—the power of collective action.
Cities today are often besieged by a wave of complex challenges—such as climate change, public health, public safety, congestion, and housing insecurity (figure 1)—that no single entity can tackle alone. Tackling these issues generally demands a concerted effort that transcends the capabilities of individual jurisdictions, agencies, communities, or industries. Adopting a holistic approach can fuel a seamless collaboration among multiple government agencies, the private sector, nonprofits, and the communities most directly impacted.3
Between June and July 2024, Deloitte and ThoughtLab conducted a global survey of 250 city leaders to examine the progress cities are making in operationalizing their future-ready plans (methodology). The study dives deeper into how city leaders are fostering partnerships and tapping into a broader urban ecosystem to address urban challenges. City leaders are tapping into diverse partnerships to solve key urban challenges, including building climate resiliency, accelerating AI transformation, bridging the talent gap, and improving citizen engagement.
City leaders are shaping diverse, nontraditional partnerships
The survey reveals a growing trend among city leaders to pursue collaborations and partnerships with a diverse range of stakeholders from both the commercial and nonprofit sectors. City leaders seem particularly interested in engaging with startups and tech companies, with 81% of those surveyed expressing a desire to partner with these entities. Additionally, many city leaders are keen on forming alliances with financial institutions, corporations and businesses, academia, community organizations, and nonprofit organizations (figure 2).
This inclination toward diverse partnerships underscores a strategic shift toward leveraging varied expertise and resources to address urban challenges and drive innovation.
City leaders are addressing pressing challenges and improving mission outcomes through partnerships
One of the key tenets of modern-day urban problem-solving is don’t do it alone. Today, cities grapple with a multitude of challenges that local governments may not have the capacity or the know-how to solve alone. The aim—to find workable solutions, tap into the expertise of other stakeholders, and build a broader ecosystem of partners to have a lasting impact. So, what actions are city leaders taking to address some of the most pressing challenges facing their cities?
Forging partnerships to overcome obstacles in future-ready city plans
The survey asked city leaders to report the biggest obstacles in implementing their city’s future-ready plans and the ways they are overcoming these obstacles. The responses were captured in open, free-text comments. Some of these comments (of about 35 city leaders) highlighted the ways in which city leaders are building partnerships to address key challenges. An analysis of these free-text comments highlights surveyed city leaders’ growing interest in seeking partnerships to explore alternative funding and financing, support technological upgradation, drive sustainability and infrastructure modernization, and enhance skills development (see figure below).
Building climate resiliency
The increased frequency of events like floods, hurricanes, wildfires, and heat waves continues to disrupt the delivery of essential services like water, power, and mobility in cities. The economic impact of such extreme weather events can be huge. This year, till August 2024, alone, there were 20 storms, wildfires, and other disasters in the United States that each caused damages exceeding US$1 billion.4 The economic and human toll of such events is compelling many city leaders globally to prioritize climate resilience—the ability to respond to and recover from the extreme effects of climate change.5
Our survey indicates city leaders are taking steps to reduce greenhouse gas emissions, setting citywide emissions targets, and facilitating the green-energy transition through renewable incentives and investments.
Currently, 65% of city leaders are working with stakeholders across sectors to build resilience in city infrastructure and systems. Take Copenhagen, for example, which has set an ambitious climate goal of being carbon-neutral by 2025. The city’s sustainable development efforts, including advanced air quality–measurement systems, smart streetlights, and alternative transportation modes, have been highly commended. Copenhagen’s Project Air View was crucial in improving air quality and was a unique partnership involving a private company, university researchers, and the local government.6
A street view car with air quality–measurement technology was used to collect pollutant data across the city. The data helped create a hyperlocal map, identifying areas with high pollution problems.7 The initiative played a key role in helping city leaders make informed decisions and develop clean air policies to cut carbon emissions.8
Many cities are also creating climate and sustainability leadership roles in government; 34% of respondents appointed dedicated executives to oversee environmental sustainability. These leaders cannot do it alone. According to Deloitte’s 2024 US Public Sector CxO Sustainability survey, 40% of local government sustainability executives seek to enhance collaboration with the private sector.9 By working with diverse stakeholders, leaders in these positions can spearhead ambitious climate-related strategies, helping make city operations and infrastructure more resilient to climate change.
Driving AI adoption and transformation
Adoption of AI, generative AI, and other AI-enabled technologies is a top-of-mind issue for city leaders globally. There is a growing interest, and anxiety in some cases, in finding ways to select the right technology, build pilots to test efficacy, and scale to other parts of the city. Many city leaders seem to understand the potential value of AI technologies, with 51% of surveyed city leaders reporting use of AI to extract more insights and value from data.
By analyzing and summarizing large volumes of customer data, personalizing service delivery, and improving customer experience, AI can improve how cities provide services to residents and businesses. In government operations, AI can drive efficiency and productivity by automating repetitive tasks, streamlining back-end processes, and allowing government employees to focus on more high-value, intuitive, and creative work.10
However, to successfully leverage AI technologies, city leaders must ensure the availability of high-quality data. Consequently, city leaders in our survey are taking various steps to build a strong data foundation to support their future goals. Seventy-one percent are gathering and integrating data from across departments and silos, and 63% are collecting a range of data of different types from multiple sources. To tap into varied sources of data, city leaders should consider building partnerships across governmental boundaries and jurisdictions.
To fully unlock AI's potential across urban domains, cities should embrace public-private partnerships. Currently, 54% of city leaders are fostering AI ecosystems and public-private partnerships to drive AI adoption—that number is expected to increase to 76% in the next three years.
Moreover, the most cutting-edge research and development in AI technologies is probably happening outside governmental boundaries. In Australia, about 75% of the national road network is managed by local governments.11 These roads require continuous upkeep and maintenance, which can be complex, expensive, and dangerous to human life, if not done in time. The city of Canterbury Bankstown is piloting a new AI technology to improve its road maintenance services jointly with Transport for NSW and the Institute of Public Works Engineering Australasia.12
The tool detects road-safety issues like broken signage, faint line markings, and potholes. It can prioritize them for maintenance workers based on severity and safety risk. Eventually, the city wants to use this technology for preemptive road maintenance to reduce costs and repair time, prevent accidents, and improve overall road safety.13
City leaders also expressed a strong willingness to work with different stakeholders to help ensure the responsible use of AI. This means working with government and non-government partners to build AI policies, governance processes, regulatory approaches, and usage standards (figure 3).
Exploring new and diverse avenues to fund technology
As city leaders experiment, pilot, and implement AI technologies, many face data-privacy and security concerns, insufficient technical expertise, and significant budget constraints. Today, 24% of city leaders cite funding shortage as a challenge that must be overcome to fully leverage technology’s benefits.
In addition to government borrowing, they are actively pursuing public-private partnerships, philanthropic organizations, and multilateral organizations to fund technological investments. Over the next three years, they plan to increase funding from these sources and diversify their technology fund pool (figure 4).
Bridging the skills gap
Sixty-nine percent of city leaders surveyed identified reskilling and upskilling the workforce as a significant challenge (figure 5). More than half called out the digital and data skills gap in their cities. Surveyed city leaders are also concerned that their workforce may lack the necessary innovative thinking, problem-solving capabilities, and collaboration skills.
Here too, ecosystem partners can help plug the gap by reskilling government workforce in specific areas. With the passage of the Infrastructure Investment and Jobs Act (IIJA) in the United States, there was an urgent need to help smaller cities get trained in grant writing. Developing a stronger grant application can increase the probability of cities receiving federal funding for IIJA infrastructure projects.
Bloomberg Philanthropies’ Bloomberg City Network helped to plug this specific skill gap in some cities. Its Local Infrastructure Hub supported more than 700 small and mid-sized cities through grant application boot camps. These boot camps trained city officials in developing strong, competitive grant applications and improving technical writing to tap into the new federal funding sources.14
As seen earlier in figure 2, 66% of city leaders are keen on partnerships with academic institutions and research organizations. Academic institutions can provide city leaders innovative thinking approaches, research expertise, data analysis, and additional resources to support their future-ready plans. For example, the city of Toronto’s knowledge exchange platform, CivicLabTO, connects the city with eight local academic institutions. This platform allows city leaders to present challenges while academics contribute relevant research and innovative solutions. During COVID-19, this initiative enabled the rapid formation of multi-disciplinary teams to respond to emerging challenges.15
Improving citizen engagement
City governments and residents can have a complex relationship. At the basic economic level, residents pay taxes and expect local governments to use these funds to improve infrastructure, services, and their overall quality of life. But at a deeper level, this relationship can become more of a partnership. The level of civic participation and engagement is an important indicator of a thriving urban society; it is paramount that cities nurture and enhance the level of participation and engagement with their residents.
Apart from town hall meetings and surveys, which can be crucial for including citizens in decision-making, digital technologies can help cities cast a wider net to gather citizen feedback and co-create services and solutions. During the pandemic, digital participation platforms flourished and proved helpful in collecting input.
According to our survey results, 58% of cities partner with communities, businesses, and schools, to tackle local issues (figure 6). Moreover, it's important to reach members of marginalized and at-risk communities to ensure their needs are included in city initiatives. The Cherokee Nation, a sovereign tribal government in the Southeastern United States, created a portal called Gadugi, which means “working together” in Cherokee. Launched for COVID-19 assistance and contact tracing, the portal can authenticate citizenship, connect users with assistance and resources, identify scholarship opportunities, and much more.16
Additionally, 67% of cities are using digital platforms to communicate with citizens and provide better access to services. Wokha, a city in the Indian State of Nagaland, developed a Smart AI-based Assistant for Timely Help & Interface (or “SAATHI”) chatbot. It started as an engagement platform but now serves as a one-stop platform for residents to receive government services, consolidating over 40 services to enable easy access to essential government services. It also allows the city to run important campaigns and provide vital information to citizens, allowing two-way, round-the-clock communication between the government and citizens.17
Moving forward: Steps city leaders can take to build diverse and thriving partnerships
- Create structures to cultivate private sector participation. With the growing number of complex problems that cities face today, city leaders should adopt a network mindset to think beyond the walls of agency and even of government. They can use their authority to create favorable regulations and policies and cultivate the skills needed to bring more stakeholders to the table.
- Align the interests of diverse stakeholders. City leaders recognize and value the expertise and competence diverse stakeholders bring. However, building an effective coalition needs innovative financial approaches that align the economic incentives to achieve common goals.
- Move from compliance to collaboration. City leaders should play the role of an ecosystem integrator and allow stakeholders to design their own solutions without insisting on rigid practices. Instead of controlling what services providers deliver, they can ask providers to propose services and resources that provide better outcomes.
- Involve people closest to the problem. With their first-hand experience of the problem, local community groups can provide deep, localized knowledge to help city leaders better understand the unique challenges. City leaders can also engage local communities to build meaningful relationships and attract private players. Projects with positive social outcomes can appeal to community members and businesses with social responsibility goals.
