Socially Inclusive Urban Transformation After the Great Recession

Demographic Decline, Population Aging, and Modern Financial Approaches to Urban Policy

“…Although the notion of interlinked assets is intuitively obvious, specific analysis in the academic literature is limited, as well as practical, replicable applications in cities affected by demographic change and population decline. The design of a tailored strategy to inform investment decisions in these cities should be underpinned by city diagnostics examining, for instance, “how the existing skill mix correlates with city demography and how aging may affect the city skill endowment in the medium to long term, and whether migrants will be able to re-place the gap in younger population cohorts to preserve or improve the skill mix and maintain competitiveness and the required cash-generation capacity” (Leanza and Carbonaro 2016b, 188). In an agglomeration framework, the only synthetic, but partial manifestation of the performance of these interlinked assets are the local real estate cash flow and capitalization effects (Gordon and McCann 2000) and cities which are highly diversified in sectoral terms offer financial diversification possibilities for reducing risk.…”

“…In terms of strategic financial investing in support of urban policy, it will be therefore critical for the urban policy manager interested in strategic investing to have an understanding of where the value creation opportunities lie within the city, and how civic economy institutions and the nonprofit sector can help when public resources are unable to assist in the traditional way. This is just as true in declining cities as it is in growing cities, but it is also rather more difficult, challenging, and urgent in the case of declining cities with a weak demographic structure (Leanza and Carbonaro 2016b).…”

“…Within regional science, systems of cities are typically discussed from the perspective of rank size rules and hierarchies, but except for insights from a few lines of research, rarely are they considered from the perspective of city assets and their implications on the financial viability of local settlement systems. However, as a result of the growing financialization, global interconnectedness, and convergence/divergence processes, such an asset type of approach is essential for urban and regional policy-making, which aims to move away from purely grant-based funding structures (Leanza and Carbonaro 2013, 2016b). Adopting this asset-based vision in the third section allows us to consider the likely financial implications of unbalanced urban development patterns across systems of cities, and in particular those associated with demographic decline and population aging.…”