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The Relevance of Urban Dynamics to Singapore’s Success Story:
Lessons for Moving Beyond the Crisis'
John Richardson
Visiting Professor, Institute of Water Policy and Global Asia Institute
Lee Kuan Yew School of Public Policy, National University of Singapore
(On leave from the School of International Service, American University)
469C Bukit Timah Road #02-01
Oei Tiong Ham Building
Singapore 259772
+65 65164204
jrich@american.edu
Ong Ling Lee Elizabeth
Lee Kuan Yew School of Public Policy, National University of Singapore
469C Bukit Timah Road #02-01
Oei Tiong Ham Building
Singapore 259772
+65 91262345
g0805178@nus.edu.sg
Keywords: Urban dynamics, sustainability, overshoot and collapse, Singapore, equilibrium
Abstract
This paper seeks answers to a question implicit in the theme of The 28" International System
Dynamics Conference Program: “how can humankind move “Beyond the Crisis” towards
political economies that are more resilient, sustainable and humane?” Its focus is cities, which
are seen both as the principal loci of the crisis and pointing paths to moving behind it. Those
concerned with urban challenges need new ways of viewing the problems they face. In seeking
new ways, they should consider what Dr. Louis Alfeld has called “perhaps the most insightful
System Dynamics application ever developed”: Jay Forrester’s urban dynamics model. This
representation of cities as living systems seeking equilibrium with their environments offers
lessons that are timeless and needed. A notable development success story, Singapore illustrates
applications of these lessons by leaders who were not even familiar with Forrester’s work. This
further highlights the value and contemporary relevance of the worldview of the urban dynamics
model.
' This paper has been accepted for presentation at The 28" International System Dynamics Conference in Seoul
Korea, July 25-29, 2010. Since the work is ongoing and this draft is preliminary, please do not reproduce or share it
without permission. An enumeration of funding support and acknowledgement of many whose personal assistance
has been invaluable is quite lengthy and so we have chosen to provide those details in a concluding footnote.
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Introduction: Moving Beyond the Crisis
What is “the crisis” that humankind must move beyond?
This paper seeks answers to a question implicit in the theme of The 28" International System
Dynamics Conference Program: “how can humankind move “Beyond the Crisis” towards
political economies that are more resilient, sustainable and humane?” Its focus is cities, which
are seen both as the principal loci of the crisis and pointing paths to moving behind it. Our point
of departure is two memorable addresses delivered by Dennis Meadows at The oF System
Dynamics Conference. (Dennis Meadows, 2009a, b) Both drew lessons from a professional
lifetime in which defining “the crisis”, understanding its dynamics, pointing out pathways that
might lead beyond it and persuading policy makers to follow them, have been major priorities.
His advocacy role began with publication of The Limits to Growth (Donella Meadows, et. al.,
1971). Now, in presentations throughout the world,” he is drawing lessons from the third
iteration, Limits to Growth: The 30-Year Update (Donella Meadows, et. al., 2004). Often, he
begins with the “reference scenario” from The Limits to Growth. A modified version of this,
used in one of his addresses (Meadows, 2009c) is shown in Figure 1 below.
The Reference Scenario
Original
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, Population
2 Pollution
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Comparing this scenario with present global trajectories of population, non-renewable resource
use, pollution and humanity’s ecological footprint in relation to the earth’s carrying capacity, he
? We have viewed several of these presentations, either personally or on line and also disc!
personally with Professor Meadows.
ed the issues they raise
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concludes that “things seem to be developing more rapidly than we (the authors of The Limits to
Growth) expected” (in 1972). If one seeks to describe “the crisis” humankind must move
beyond, a comparison of The Limits to Growth reference scenario with corresponding trajectories
of real-world data is a good place to begin.
“Reference mode” graphs, as such diagrams are sometimes called, do not provide an explanation,
of course. Explanation requires System Dynamics models that reproduce behavior modes of
interest. When one provides explanations of problematic behaviors (such as those depicted in
The Limits to Growth reference scenario), especially to non-modelers, one often highlights
important themes that the model depicts, rather than focusing on more technical details of the
model structure. Such themes typically emphasize dominant positive feedback loops that
generate exponential growth or collapse and dominant negative loops that generate goal-seeking
or resistance to interventions and delays that produce misperceptions at decision points and
unstable behaviors such as oscillations, overshoot and collapse.’
Explanations of the crisis provided by global models: overshoot and collapse
Explanations of the crisis provided in Limits to Growth: The 30-Year Update trace their origins
to a preliminary model, World1, which was first sketched out by Jay Forrester on a return flight
after meetings with leading Club of Rome members in Switzerland (Forrester, 2007a). This led
to the World2 model described in World Dynamics (Forrester, 1971), and the World3 model
described in The Limits to Growth and subsequent iterations. What is remarkable about this
body of literature, now spanning nearly 40 years, is the degree to which explanations of the crisis
emphasized in Forrester’s original work have been repeatedly echoed in subsequent iterations, in
many other publications by the same authors and in publications by authors who have built other
global models as well. (Donella Meadows, 2007)
Though the models and generated scenarios are viewed as complex by many, the fundamental
explanation of the crisis that all provide is not: the source of the crisis is the physical, ecological,
and social pressures being generated by exponential growth in population, capital, the extraction
of finite resources and the waste products human society generates on a finite planet.
It is hard to improve upon the powerful metaphor that Jay Forrester, writing in 1971, chose to
capture the challenge he saw humankind facing at that time:
“People are in the position of a wild animal running from its pursuers. We still have some space,
natural resources and agricultural land left. We can avoid the question of rising population as
long as we can flee into the bountiful reservoir that nature has provided. But the reservoir is
limited. Exponential growth cannot continue. The wild animal flees until he is cornered, until he
has no more space. Then he turns to fight, but he no longer has room to maneuver. He is less
able to forestall disaster than if he had fought in the open while there was still room to yield and
to dodge.”(p. 124)
Among those who acknowledge that there is a crisis and that the root cause of the crisis is
pressures generated by the exponential growth of population, consumption and pollution, there
are two other areas of consensus. The first is that the behavior modes of growth must be
replaced by behavior modes of equilibrium. The Limits to Growth authors emphasized that this
does not mean that human activities not requiring a large flow of irreplaceable resources or
> See Donella Meadows (2008, pp. 44, ff.) and for a more comprehensive discussion of the relationship between
feedback loop structures and behavior, Richardson (1991).
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producing severe degradation — for example: education, music, art, religion and basic scientific
research — could not continue indefinitely (p. 176, ff.). The second is that “any deliberate
attempt to reach a rational state of equilibrium by planned measures, rather than by chance or
catastrophe must ultimately be founded on a basic change of values and goals at individual,
national and world levels.” (Executive Committee of the Club of Rome, 1972 p. 188)
Club of Rome Executive Committee Members, along with many who created global models and
sought to publicize their results, believed that presentation of model results, coupled with a
growing weight of evidence confirming the results, would change attitudes. They believed that
changes in attitudes would produce changes in policies and that there was sufficient time to
mitigate the social and political-economic momentum impelling humankind toward overshoot
and collapse. Dennis Meadows reports that 40 years of experience provides little evidence to
support that view. He now observes: “If you marshal enough facts to disprove an objection, then
the critics will just find another objection. There are an infinite number of objections, so you are
never going to come to the end of the process.” Here is his current appraisal of the
circumstances facing humankind given in a recent address: (Meadows, 2009c, Slide 4)
* Growth has continued until we are now past sustainable levels.
* Global society will change more over the next 20 years than in the past 100.
¢ There is a need to design policies for what is coming, not what has been.
* Climate change and resource scarcity, especially fossil fuels and water will be the main
forces for change.
¢ The most important scarcity is the absence of a longer-term perspective,
* Many indicators point to the conclusion that we have reached overshoot, sooner than
anticipated. Where we once only had models, we can now get confirmation from the
newspapers.
Manifestations of the crisis: global and universal problems
What are those seeking to play a role in helping humankind move ‘beyond the crisis’ to do in the
light of this somewhat pessimistic appraisal? Dennis addressed this question in an address to a
Ph.D. Student Forum entitled “Opportunities for a Career Modeling Limits to Growth 2010-
2030” at the 27” conference. He sees two classes of problems that humankind will face as the
pressures created by overshoot, leading to collapse, intensify with unpredictable consequences.
Global problems affect everyone and can only be solved by international effort. These include
climate change, ocean fish depletion, nuclear proliferation, and, we would add, stabilizing the
international financial system. Universal problems affect everyone but can be solved by local
efforts. We would particularly emphasize scarcity of water and the rising costs of energy,
population growth, migration, chronic poverty and social instability created by rich countries,
and the rich within all countries, to protect their way of life in a time of increasing social
turbulence, at the expense of the poor.
Seeking solutions: preventive and adaptive policies
Meadows has also identified two broad classes of solutions for addressing global and universal
problems. Preventive policies are intended to avoid future problems. Adaptive policies are
intended to reduce the harmful consequences of problems already being experienced. Preventive
policies require the longest time horizon. Much of global modeling has been directed at
promoting preventive policies, intended to solve global problems with global leaders (including
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President and Prime Ministers of major powers) as the target audience, but the results from these
efforts have been disappointing. Sustaining consistent policies is difficult when there are seismic
shifts in a nation’s ideological terrain, as in the United States, when national administrations
change. Failure to address global problems with preventive policies imposes the need for
institutions lower down in the decision-making “food chain” to respond with adaptive policies.
For example, the low-lying Republic of the Maldives is responding to global warming by
creating an artificial island, adjacent to her international airport that is several meters higher
above sea level than the island on which her capital, Male, is located. Along with those of other
island nations, her pleas in international forums to make preventive policies addressing global
warming a priority have mostly fallen on deaf ears.*
While global problems must be addressed at a global level, universal problems may be addressed
with both preventive and adaptive policies and such policies may be implemented at various
levels. Meadows argue that, paradoxically, it is at the level of individuals and families that,
when given the opportunity, time horizons may be most future-oriented. Parents are concerned
with the welfare of their children and, often, their grandchildren as well. Confucian traditions
that have been influential in China and among Chinese diaspora communities place a strong
emphasis on intergenerational responsibility. (D.C. Lau, trans., 1979; Lee Kuan Yew, 2000, esp.
Chapt. 7) But individuals and families have the fewest resources and are in the weakest position,
relative to challenges posed by overshoot and collapse, to implement preventive and adaptive
policies. Normally, the best they can do is to sporadically mobilize collective effort to pressure
political and business leaders. The inability of international and national organizations to cope
with universal problems matches their inability to cope with global problems and for the same
reasons.
Meadows’s intermediate and most promising remaining category is “communities” and we
include cities as well. These fall in a middle ground. While their time horizon may be shorter,
their resources are greater than those of individuals. Cities and communities may offer greater
hope of moving beyond the crisis, but policy failures at the community and city level are also
major contributors to overshoot and the potential for collapse. While the problems that cities
represent may be matters of global concern, they are of even greater concern to their own
citizens. Nowhere is this more true that in the growing megacities of Asia.
Using Cities as a Focusing Lens
We believe cities can provide a focusing lens to sharpen our understanding of how the human
race can better respond to the threat posed by global overshoot and impending collapse. They are
major sources of the problem, and as Dennis Meadows argues, they may also provide feasible
and practical points of leverage for those seeking solutions. What are the challenges and
opportunities that cities pose?
Unprecedented urbanization
Urbanization has been occurring at an unprecedented scale. Cities have grown in importance as
key drivers of economic growth in their regions and countries, with rapidly growing industry-
and service-related economies providing employment opportunities for millions of people. The
* Richardson viewed this island, Hulhumale, and discussed global warming with Maldives government and business
leaders during a brief consulting visit to the Republic in summer 2006.
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21* century has been named “The Century of the City” (UN- Habitat, 2008/9), reflecting the
prominent place that cities occupy in the global economy as well as the fact that cities are now
populated by more people than ever before than in humankind’s history. Today, there are more
than 400 cities with a population of over 1 million, compared to only 16 such cities in 1900. 50%
of the world’s population now lives in cities, compared to 30% in 1950, 14% in 1900 and 3% in
1800. Migration into cities is most rapid in developing countries, with an average of 5 million
new city residents every month. (Population Reference Bureau, 2009)
The consequences of urban growth
This unprecedented growth of cities - both in the number of cities and the sizes of their
populations — has two major consequences. Firstly, cities are placing greater strains and
demands than ever before on the earth’s resources. Cities occupy only 2% of the world’s land,
but consume 75% of its resources. 60% of the earth’s water, 75% of the world’s energy and 76%
of industrial wood use is consumed by cities. (Hargroves and Smith, 2005) If every member of
the human race shared the earth’s resources equally, the sustainable footprint would be about 1.8
hectares per person. The average ecological footprint in rural People’s Republic of China (PRC)
is 1.6, but in Shanghai it is already 7.0 and in a typical United States city, it is 9.7. Cities also
generate 75% of the earth’s wastes, such as air pollutants, solid waste, GHGs and toxic effluents.
This includes nearly 80% of the world’s carbon dioxide (CO2) emissions.
Secondly, with exponentially rising populations and limited resources, cities themselves are in
danger of overshoot and collapse. The strains and pressures of uncurbed population growth have
already taken their toll on many cities. In Asia, more than half of all city residents lack a reliable
drinking water source. Untreated industrial wastes pollute local drinking water supplies and
contaminate food sources such as coastal fisheries. Globally, poor environmental conditions are
responsible for 25% of preventable health problems. Two-thirds of those impacted are children.
Dire housing shortages have led to rising numbers of slum dwellers in these cities. Poverty,
traffic congestion and deteriorating infrastructure are common not just in cities in the developing
world, but in the developed world as well. (Managing Asian Cities, 2008)
Thus, cities are central to the issue of global environmental sustainability. The lower the
capability of cities in withstanding the pressures of urban expansion, the greater their negative
impact will be on the earth, and the slimmer our chances are of collective survival as a human
race. Unless city leaders build their capability to cope with pressures of urban expansion, the
collapse of cities will occur sooner, preceding and precipitating an eventual collapse at the global
level.
Looking to cities for answers
Many cities have endeavored to strengthen their adaptive capacities, usually through devoting
resources to alleviate the effects of urban pressures or to avert crises triggered by them. In the
late 1980’s, the South Korean government sponsored one of the largest environmental clean-up
programs in Asia to restore the supply of potable water from the Han River, which had for
decades been a receptacle for urban and industrial refuse. (Roberts and Kanaley 2006, p. 3)
Faced with inter-district problems of transportation, waste, drainage and water supply, Sleman, a
district in southern Java, took a leadership role in developing stronger and more institutionalized
cooperation with the Regency of Bantul and the city of Yogyakarta. Together, they set up a joint
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secretariat, Kartamantul (from the names Yogyakarta, Sleman and Bantul) that has since found
many effective solutions for their urban woes (Roberts and Kanaley, 2006, p. 178-179). While
strengthening urban management processes is necessary, remedies must be more fundamental
and far-reaching. In seeking remedies, we must delve deeper, to grasp at the societal motivations
and values that have driven humankind into this unsustainable pattern of collective behavior in
the first place. As Jay Forrester proposed in his paper “Should we save our cities?”, a long-term
remedy is one that would involve “the generation of laws, attitudes, morality, and folklore that
will establish the most desirable of the feasible equilibrium societies.” (Forrester, 1972, p. 61)
Donella Meadows et. al. suggest “changing the information links in a system: the content and
timeliness of the data that actors in the system have to work with, and the goals, incentives, costs
and feedbacks that motivate or constrain behavior.” (Meadows D.H., 1992, p. 191)
Cities may offer a point of entry by which we can deepen our understanding of the situation at
hand and move closer towards sustainable remedies. The manifestations of overshoot and
collapse are more immediate and visible in cities than at the national or global levels. In
response to these manifestations, cities exhibit a range of coping behaviors and capacities.
Leaders and inhabitants have vastly different stances and approaches towards urban expansion
and sustainability, and have encountered vastly different outcomes. Most importantly,
underlying these distinctions in approaches and outcomes are the goals and values linked to the
differing political and socio-cultural contexts of cities.
Do these goals and values extend to the well-being of present and future generations? How
consistently are these goals and values applied in the way the city is governed? Is there a sense
of collective ownership of and responsibility towards the global issues? Is there a willingness
and ability to take stock, reassess past decisions and adapt to soon-emerging and future changes
and trends? Seeking answers requires that cities be understood as complex, living systems,
interacting with their environment, with their populations and physical infrastructures tracing
development trajectories over decades (Seetharam and Yuen, 2010, esp. Chapts 1 & 11). But
tools to facilitate such understanding are rarely encountered and even more rarely used
effectively. One of the most powerful - the model described by Jay Forrester in Urban
Dynamics (1969) - has mostly faded from view, even among members of the System Dynamics
modeling community. Those seeking to guide and lead their cities “beyond the crisis” must give
serious attention to the lessons and analytical tools that Urban Dynamics has to offer.
Lessons from Jay Forrester’s Urban Dynamics
The rise and fading from view of urban dynamics
While the 21" Century may be labeled “The Century of the City,” the issues raised in the UN-
Habitat report, State of the World’s Cities 2008/9, are not new. Many echo concerns that
preoccupied US political leaders and urban planners in the mid to late 1900s. They were
captured in the title of Edward Banfield’s 1970 classic, The Unheavenly City (Banfield, 1970)°
and in the bleak appraisal of the 1968 (US) Kerner Commission Report: “Our nation is moving
toward two societies, one Black, one White — separate and unequal.”
It was in this climate that 8 year Boston Mayor John F. Collins, who had chosen not to run for re-
election, accepted a one-year MIT appointment as Visiting Professor of Urban Affairs. His
5 Though Banfield’s appraisal was less pessimistic than the title suggested
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presence catalyzed extended discussions between Jay Forrester and urban political leaders,
leading to the publication of Urban Dynamics (Forrester, 1969). It was the first widely
circulated application of Industrial Dynamics to a non-private-management problem (Forrester
2007, pp. 348-349). The public attention it received, the positive response accorded it by many
policy-makers and the hostility accorded it by many academics presaged similar reactions that
would greet World Dynamics and, on a much larger scale, The Limits to Growth.
In “Urban Dynamics: The First 50 Years” (Alfeld 1995), Dr. Louis E. Alfeld, who directed urban
dynamics research and applications for MIT’s System Dynamics Group recounts the story of this
work, during the relatively short period of time when it was a subject of interest among those
concerned with urban development. He describes five urban planning projects in five different
cities that produced mixed results, highlighting successes, shortcomings and useful lessons
learned. His appraisal of the model is compelling: “It is..., perhaps the most insightful System
Dynamics application ever developed.” (1995, p. 199) But it was subjected to scathing criticism
by more traditional modeling communities, including members of a US Department of Housing
and Urban Development (HUD) committee tasked to appraise it. Those who might have been its
defenders were preoccupied, in wider forums, with resisting similar assaults by critics of World
Dynamics and The Limits to Growth. There is a note of pathos in his description of how the
urban dynamics model faded from view: (/bid.).
“The past twenty-five years have not treated Urban Dynamics kindly. Had HUD initially
endorsed it, urban dynamics might have become the institutional foundation for the training of a
new generation of urban leadership. Instead, it has become a curiosity, a relic of the past that few
have heard of and most dismiss. But it is too early, I think, to write it off, to consign urban
dynamics to the archives of academia. Although I mourn its history, I firmly believe in its
future.”
A less-than-comprehensive but revealing search using Google and Google Scholar confirms
Alfeld’s appraisal. There are few references after the 1970s.° Even in the System Dynamics
Review, recent references are sparse and of historical interest, with only one exception (Eskinasi
et. al., 2009). Thus, we must assume that knowledge of the Urban Dynamics model and its
insights is somewhat limited, even among at least younger members of the System Dynamics
Community. A brief recapitulation is necessary, before highlighting important lessons that this
pioneering work emphasizes.
The Urban Dynamics model structure
Urban Dynamics sought to explain and offer remedies to problems faced by many US cities
where a period of growth had been followed by a stagnant and often blighted equilibrium. The
city modeled was generic, but similar in broad outline to those whose problems motivated the
project. Forrester argued that “when first modeling a social system, it is usually best to model
the general class of system rather than a specific system... this means a model to represent the
processes common to all urban areas rather than to represent those of a specific area.” (1969, p.
14). The city’s land area is 100,000 acres or about 400 km? (which compares with Singapore’s
land area of about 580 km” at the time of independence.) In the model’s 250-year run that serves
as a baseline for subsequent 50-year runs that examine policy options, its population peaks at
about 5.5 million and then declines to about 5.1 million (1969 p. 4).
° There are other references to “urban dynamics” that have nothing to do with Forrester’s work and do not cite it.
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The city exists as a “complex, self-regulating system” functioning in a state of equilibrium with
in “environment” that is assumed to be both “limitless” and a point of reference (p. 17). By
choosing this representation, Forrester focuses attention on how the attractiveness of the city, as
it develops, differs from the “normal” circumstances of the environment.’ When the city is more
attractive to investors, developers and migrants of different classes, inward flows of resources
and population increase. When it is less attractive, inward flows decrease and become outward
flows. Thus, dynamic behavior trajectories of a city are partly explained by the fact that it is an
equilibrium-seeking system, vis a vis its environment.
An important implication of this view echoes findings from Forrester’s earlier modeling of
instabilities in corporate growth trajectories, in relation the markets they serve. He found that it
was the behavior of decision-makers within the corporation that explained those instabilities,
though they were often attributed to external factors not under the decision-makers’ control.
(Forrester, 1962, 1975, 2007, p. 348) Similarly Forrester emphasizes that cities are, in large
degree, responsible for their own destinies. Whether they are vibrant and regenerating or
stagnant and decaying, whether they serve the well-being of their residents well or badly will be
largely due to decisions made by leaders and residents within the city.
Forrester represents the social/economic structure of his city as interrelationships between three
sectors — enterprise, housing and people — and between these sectors and its environment. Since
links between the population and other sectors are strongest and population behavior modes are
strongly emphasized in the policy analysis discussions, it is useful to describe this section first.
Urban Dynamics provides one of relatively few examples of a social class structure in the
System Dynamics literature. While respective class members do not earn income, the relative
value-added of their respective contributions to the city is clear. Managerial-professional class
members work preponderantly in high value-added industries (new enterprises) and live
preponderantly in premium housing (assessed value US$30,000). They have smaller families
(average size 5) and relatively low birth rates (average 7.5 per 1000 families, per year). Since
city revenues come from property taxes, personal income is not recognized explicitly. However,
premium houses (and new enterprises) have the highest assessed valuation and pay the highest
taxes. The cost of providing city services to managerial-professional families for city services is
relatively modest (only $750 per family, per year). When growth peaks in the city, managerial-
professionals comprise about 12% of the work force.
Labor class members comprise the major portion of the work force in all enterprises. They live
preponderantly in worker housing. They have slightly larger families (average size 6) and higher
birth rates (average 10 per 1000 families per year). The cost of providing city services to these
families is nearly double the cost for managerial-professional families ($1,200 per family per
year). When growth peaks in the city, labor-class members comprise nearly 60% of the work
force.
Underemployed class members comprise about 30% of the work force at the peak period and live
preponderantly in underemployed housing (assessed value $5,000). They have larger families
(average size 8) and higher birth rates (average 15 per 1000 families per year). Because of this
7 These circumstances are represented in the model as “normal” constants influencing inflow and outflow rates to
the model’s level (stock) variables. The city’s stocks of industry, housing and population in different categori
represented as levels. See our discussion of the model’s enterprise, housing and demographic sectors, below.
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demographic profile and their lower incomes,® the cost of providing city services to
underemployed families is twice that of worker families ($2,400 per family per year) and more
than three times that of managerial-professional families.
The structures of the enterprise and housing sectors are, as noted, somewhat less rich in detail.
Their primary function is to provide jobs for the city’s population, places for families to live and
tax revenues to support city services. Forrester’s city does not have an economy in any
conventional sense. Enterprises do not produce goods and services. Jobs available depend on the
number of industry units in the city. The enterprise sector is divided into new enterprises
(assessed value $500,000 per unit), mature businesses (assessed value $300,000 per unit) and
declining industries (assessed value $100,000). In addition to paying higher taxes, newer
industries benefit the city more by employing more members of all classes. In particular, new
enterprise units employ 4 managerial-professionals. Declining industries employ only one.
Just as the process of growth produces a vibrant city, generously populated with managerial-
professionals, the aging of housing and enterprise units contributes to stagnation and decay.
Alfeld describes this process as a “filter-down’” mechanism (1995, p. 203). Each year, under
“normal” conditions, 8% of new enterprises decline and become mature businesses, 5% of
mature businesses become declining industries and 3% of declining industries are demolished.
Similarly, 3% of the premium housing stock obsolesces and becomes worker housing, 2% of
worker housing becomes underemployed housing and 2% of underemployed housing succumbs
to “slum housing demolition.” (Forrester, 1969, Appendix A, pp. 133, ff.) The rates of decline
and obsolescence vary depending on the city’s economic vitality, including employment
opportunities, and especially its demographic mix.
Growth, stagnation and policy experiments in Professor Forrester’s city
Urban Dynamics described results from three sets of simulation runs. In the first, the model was
run for a 250-year period, generating reference mode graphs that picture growth and stagnation.
Growth begins slowly but accelerates exponentially, as confidence in the city and its future rises.
It peaks at about 100 years. New industries move in, attracted by available land. The economy
is vibrant and a magnet for managerial professional class members and workers. Housing is
constructed to meet their needs. City revenues are plentiful and tax rates are relatively low. It
reaches a peak after about 100 years.
The growth period is followed by one in which available land for new construction is nearly
filled. Industry ages, the quality of the housing stock declines and the city’s tax base erodes as
the needs of its burgeoning underemployed population grow. A shortage of high quality housing
and job opportunities cause some of the more mobile and productive residents to move
elsewhere. High land costs, high taxes and declining quality of life within the city deter new
industries from considering the city as a place of opportunity. But underemployed families
continue to move in, attracted by cheap housing and generous city services, including welfare.
The growing political clout of the underemployed ensures that services for the poor continue to
receive high priority even though high taxes and deteriorating services make the city less and
less attractive for new enterprises and managerial-professionals. Eventually the social/political
economy of the city settles into a period of stagnant equilibrium with little new enterprise, few
8 Again, family income is not explicit in the model. It is assumed to be low based on the housing that lower c!
families can afford.
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amenities, and a large politically influential underemployed population, living in overcrowded,
substandard housing. It was the widespread prevalence of such conditions in US cities that
motivated Forrester’s and Collins’ collaboration to create the urban dynamics model.
Using the stagnant equilibrium conditions as a point of departure, Forrester then simulated
remedial programs, in model runs spanning an additional fifty years. These were typical of those
being implemented by many cities. Mostly, such programs targeted poor people (underemployed
workers and their families in the model). Most programs had failed to produce the results
intended. Forrester hoped that the model-generated scenarios would help to explain why.
Programs included creating jobs, job training, an external subsidy to provide higher quality city
services and low-cost housing construction. To forestall possible criticism by program
proponents (though this strategy failed), he made unrealistically generous assumptions about the
effectiveness of such programs and their costs.
Without exception, results of the simulated programs mimicked the results of the real ones.
They did not improve matters; they made things worse. In a later reflection, Forrester
summarized the bottom line conclusion to which all the scenarios generated by these programs
pointed. “Urban Dynamics showed that all of the major urban policies that the United States was
following lay somewhere between neutral and detrimental, from the viewpoint either of the city
as an institution or from the viewpoint of the low-income, unemployed residents (2007, p. 249).”
This led to one of his most profound insights about complex systems: counterintuitive behavior.
He wrote: “From all normal personal experience, one learns that cause and effect are closely
related in time and space. A difficulty or failure of the simple system is observed at once. The
cause is obvious and immediately precedes the consequence.
“But in complex systems, all of these facts become fallacies. Cause and effect are not
related in either time or space... the complex system is far more devious and diabolical
than merely being different from the simple systems with which we have experience.
Though it is truly different, it appears to be the same. In a situation where coincident
symptoms appear to be causes, a person acts to dispel the symptoms. But the underlying
causes remain. The treatment is either ineffective or actually detrimental. With a high
degree of confidence we can say that the intuitive solutions to the problems of complex
social systems will be wrong most of the time. Here lies much of the explanation for the
problems of faltering companies, disappointments in developing nations, foreign
exchange crises and the troubles of urban areas.” (p. 110).
Forrester’s third set of simulations experimented with programs that seemed, in the light of the
previous failed experiments, to be more promising candidates for catalyzing urban renewal.
Among the most successful were those that made more land available for the development of
new industry — declining industry demolition and slum housing demolition. When programs to
discourage the construction of worker housing were added to the mix (for example, through
zoning restrictions), there were further improvements in economic vitality. Paradoxically, the
amount of worker housing available actually increased because of increased demand due to more
favorable economic conditions and job opportunity. Ensuring that land for industrial
development is available, ensuring a high quality housing stock and reducing housing
availability for underemployed families that have few jobs or job prospects, were demonstrated
to be areas of particularly high leverage.
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Urban dynamics was subject to harsh criticism because of policies that were interpreted as
discriminating against the poor, many of whom, in the United States, were African American.
But in Chapter 7 of Urban Dynamics, Forrester makes it clear this is not the case. An implicit
goal, he emphasizes must be to “restore economic vitality [to cities] and absorb the present
underemployed groups into the mainstream of productive activity ...The policies for controlling
population balance that the city must establish are not antisocial. No purpose is served by
operating a city so that it is a drain on the economy of the country and a disappointment and
frustration to its occupants.” (pp. 115-116)
Urban Dynamics was published more than forty years ago. But the ensuing years have not
altered the truth or importance of its central message. In an “Afterword” for a forthcoming book
(Seetharam and Yuen, 2010), Forrester writes:
“...A city is a complex system that must remain in balance with its environment. Policies
that are intended to improve the quality of urban life in the short term will disrupt the
balance in ways that are counteracted by population inflows. As my book Urban
Dynamics makes clear, many well-intended urban renewal policies implemented during
the 1950s and 1960s actually created poverty and urban stagnation. The alternative
approach is to decide what mix of desirable and undesirable characteristics a city is to
have and still remain in balance with its environment. There can be many different kinds
of cities. But every realistically possible city must have undesirable characteristics that
are sufficiently strong to balance the attractiveness of the desirable characteristics. The
most important step in arriving at a feasible plan is to decide what negative
counterbalancing forces are to be activated.”
Nine lessons that Urban Dynamics teaches
What basic lessons can be gained from Urban Dynamics that may be of benefit to cities
elsewhere and especially cities in Asia? Most are implicit in our discussion. However, a
summary will be useful.
1. A major goal of a city’s leaders and the policies they implement should be the well-being of
its people; rich and poor alike. This is the fundamental value that underlies Forrester’s policy
experiments. Cities that are “a source of disappointment and frustration to its inhabitants”
should not be an option.
2. What is meant by “well-being”? This can be a subject of endless debate, but the value
system underlying the simple social/political economy Urban Dynamics portrays is fairly
straightforward. It is implicit in the notion of relative attractiveness. A city that is
characterized by high levels of well-being is one that — at a minimum - provides decent jobs,
decent housing, and opportunities for upward mobility. It is a city where the number of
wealth-generating managerial-professionals is significant, where worker class members are
predominant and the number of underemployed is relatively small.”
° Obviously the urban dynamics model omits many possible dimensions of well-being or what is often called
‘livability’ in rankings of cities. See for example the listing given in the Bloomberg-Mercer 2007 ranking. Our
purpose in this paper is not to enter into that debate but only to suggest how a scenario outcome for a hypothetical
city might be judged better or worse in the context of values that to us seem implicit in the urban dynamics model.
We do acknowledge that this may be controversial as, indeed, was Urban Dynamics itself.
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3. A city is master of its own destiny. It is the responsibility of city leaders to sustain a
symbiotic relationship with its environment. Over time, the environment will change in ways
that are both favorable and unfavorable to the city. To sustain the well-being and vibrancy of
its people, the city must be adaptable and resilient.
4. An important requisite for sustaining the city’s well-being (not the only requisite) is wealth.
Given that Forrester’s city has no oil reserves, diamonds or any other natural resource, its
only source of wealth is the productivity of its enterprises and the tax base its stock of
housing provides. These depend, in turn on the productivity of its people.
5. Individuals differ in their capacity to produce wealth. Forrester offers no theory why this is
so; he simply incorporates this reality into his model. One might assume that differences are
partly innate, partly determined by motivation and partly determined by favorable or
unfavorable circumstances. The model assumes that educational opportunities and the
opportunities created by a vibrant economy can increase upward mobility, which will in turn
be manifest in increased productive capacities. Wealth creation, properly managed in an
urban context, is a positive feedback loop.
6. In designing the tax structure of a city, and providing amenities to its residents, one must
strike a balance between incentivizing those capable of producing wealth with low taxes and
providing amenities that meet the needs of all. If the gap between rich and poor is too wide,
the result can be social instability. If too narrow, the result can be an exodus of the city’s
most productive residents and stagnation.
7. The greater an individual’s productive capacity, the greater his or her discretion in choosing a
place to live. New enterprises too, have discretion in determining in which cities they will or
will not locate. City leaders must take this into account. Forrester gives little attention to the
mobility of mature and declining industries. However, we have seen that these, too, are
making location decisions based on relative attractiveness. Forrester would probably argue
that an exodus of mature and declining enterprises, creating opportunities for new enterprises
to move in and encouraging city leaders to find them, benefits the city.
8. Long-term planning is important. This is because the nature of complex systems, programs
and plans that seem promising in the short term are often counterproductive in the longer-
term. Similarly, the objectives of long-term plans often seem counterproductive in the short
term. One can derive immediate satisfactions by charging goods and entertainment to one’s
credit card but eventually “the bills fall due”.!° It is the responsibility of political leaders to
make tough decisions that give priority to the long-term over the short term.
9. Most important is the relative attractiveness principle. This is the fundamental principle of
Urban Dynamics, emphasized once again in Professor Forrester’s “Afterword”. It is so
central and, in our view, so important, that it merits a reiteration, in somewhat different
language, from a Donella Meadows Global Citizen Column. She was writing about the
decision of community leaders in Woodstock, Vermont (USA), not to expand the two-lane
highway leading to their town, despite pressure from commercial developers to do so. (1991;
2002, p. 137)
'° This a common metaphor used to make the point. We believe we first heard it us
during a personal conversation with Professor Forrester, but can’t remember the spec:
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“The attractiveness of a place is a complex combination of climate, economy, amenities
and scenery. No one can define attractiveness exactly, but people make up their minds
about it every day by deciding to move from Hartford or Boston or Westchester County
to Vermont (that’s the direction they are moving now). Millions of human judgments
weigh Vermont’s clean air against Boston’s job market and Manhattan’s cost of living.
The very different mixes of attractiveness and unattractiveness in those places may seem
incommensurable, but people make their comparisons and move around until
attractiveness evens out everywhere.”
Urban Dynamics is about the way cities could be, but more important, it is about the realities of
cities whose attributes are shaped by human decisions but also the dynamic properties of cities as
complex systems. Acknowledging realities may be difficult, whether these be the realities of
limited urban land or a finite planet. By way of illustration, Forrester describes a conversation
with an MIT colleague, a social scientist, shortly after Urban Dynamics was published. “It
doesn’t make any difference whether you are right or wrong,” the colleague opined, “the results
are unacceptable.” (2007, p. 348)
Forrester’s view of realities, even “unacceptable” ones, is different, perhaps reflecting a
childhood growing up on a Nebraska cattle ranch. “A ranch is a crossroads of economic forces,”
he writes. Supply and demand, changing prices and costs, and economic pressure of agriculture
became a very personal, powerful and dominating part of life. Furthermore, in an agricultural
setting, life must be very practical. It is not theoretical, nor is it conceptual without a purpose. It
is a full time immersion in the real world.” (2007)
For many, especially many in academic settings and in national leadership roles, the realities of
relative attractiveness, physical limits and overshoot Forrester described in Urban Dynamics and
World Dynamics 40 years ago remain abstractions to be debated rather than realities that must be
faced. For Singapore’s leaders, the challenges they faced in August 1965, when irreconcilable
differences with Malaysian Federation leaders thrust independence upon them, made things
different.
Singapore’s Success'' and Urban Dynamics
Singapore’s independence day did not herald a success story
Reading Lee Kuan Yew’s description of events surrounding independence and the immediate
problems he faced, one is reminded of Dennis Meadows’s descriptions of challenges leaders and
peoples might face during a period when one or more major global systems collapsed due to
overshoot. The problems were unanticipated, multifaceted, immediately threatening and without
precedent. Singapore was cut off from its economic hinterland and from the role she had played
as a regional entrepot since Sir Stamford Raffles founded the colony in 1819. Trade had
dwindled to a trickle as Malaysia and Indonesia sought alternatives to an independent Singapore
and threatened military intervention. Unemployment was 14% and rising, creating stresses in
Singapore’s multi-communal society that threatened law and order (Lee Kuan Yew, 2000, p. 23).
' We have borrowed from the title of Henri Ghesquiere’s fine book (2007) for this section’s heading, though our
brief discussion omits many important issues he rai Richardson also had the opportunity to sit in on his class,
“Singapo Development: A Comparative Perspective.’ Our understanding of Singapore was greatly enriched by
the experience.
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Singapore’s water supply came across a causeway from Malaysia. Lee had youthful memories
of how Japanese soldiers had cut off Singapore’s water supply, demoralizing British defenders
and forcing them to surrender (Lee Kuan Yew, 1998, p. 22). Three years earlier, in speeches
supporting a vote favoring independence, Lee had argued that Singapore could not be viable on
its own; that its future lay with Malaysia. Now, newspapers in Australia and London echoed his
views (2000, pp. 19-20). The challenge Singapore’s leaders and her people faced, as
independence was announced, was survival. Lee writes:
“We had to create a new kind of economy, try new methods and schemes never tried
before anywhere else in the world because there was no other country like Singapore...
We had to make extraordinary efforts to become a tightly knit, rugged and adaptable
people who could do things better and cheaper than our neighbors... We had to be
different.” (2000, pp. 23-24)
While Singapore faced daunting challenges, she was not entirely devoid of advantages, as Henri
Ghesquiere has noted. Most inhabitants were recent immigrants and while the society lacked
cohesiveness, it was not weighed down by a historical legacy of “internal divisiveness that
comes from old injustices.” A predominantly immigrant population might be prepared to
abandon old habits and seize new opportunities. Its traditional role as an entrepot center for the
British Empire (though hostile neighbors were committed to supplanting this role) bequeathed
financial and communications institutions supporting trade to the new nation. Ghesquiere also
notes British legacies such as English as the working language (though mostly among the elite),
a functioning civil service, strong educational institutions and ‘rule of law’ of traditions (2007, p.
41-42). Of course, many British colonies began life as new independent states with comparable
or far greater advantages, and many fewer disadvantages. Putting those advantages to good use
was the challenge.
Singapore succeeded. It now ranks as one of the richest countries in the world, in terms of per-
capita purchasing power parity (Ghesquiere, 2007, p. 13) and one of the most livable cities in
Asia (Business Week Interactive, 2007). Its top rankings in many categories — attractiveness for
business, community health, public safety, freedom from corruption, rule of law, best
international airline and airport, are almost accepted as routine (though used by Singapore’s
political leaders to motivate her people to continue striving for excellence). Today, many
dismiss Singapore as a special case from which little can be learned. We disagree. In 1965, no
one would have pointed to Singapore as a success story from which lessons could be drawn.
The Singapore story viewed through a lens of literature and personal experience
This section emphasizes facets of that success story that are relevant to the issues raised above.
Our goal is to highlight aspects for readers who are unfamiliar with Singapore’s post-
independence history or only know it as a caricature, perhaps from one or two critical newspaper
articles or even a short visit as a tourist. A brief reflection on why we chose Singapore and how
we have chosen to portray it may be in order. We believe Singapore’s rags-to-riches
transformation embodies principles and practices that can be applied in other settings. Many
correspond to principles emphasized by Jay Forrester, based on an analysis of his generic city,
the Urban Dynamics model. For other cities whose leaders face daunting challenges, though
some different than those Singapore faced, this offers hope.
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We also chose Singapore because we live there. One author is a lifetime resident, the other a
very recent arrival who is viewing Singapore with new eyes, albeit eyes sensitized by field
research in other Asian cities with very different development experiences. In our description,
scholarly accounts and personal reflections are intermingled.
The terrain we briefly survey has, of course been surveyed by others in greater depth than this
paper allows. Lee Kuan Yew’s remarkable two-volume autobiography (1998, 2000) provides a
rich chronicle by one of the world’s remarkable political leaders. Henri Ghesquiere’s volume,
Singapore's Success (2007) provides a refreshingly clear and succinct account of Singapore’s
economic development. Kenneth Paul Tan’s edited volume, Renaissance Singapore?: Economy,
Culture and Politics (2007) demonstrates that criticism of Singapore from within the country is
not out of bounds, especially when pursued with civility and good humor. Neo Boon Siong’s
and Geraldine Chen’s Dynamic Governance offers a unique ‘insider’ perspective on Singapore’s
successes. Obviously we cannot give full justice to these works, and many others. We are also
aware that Singapore has its critics. For those interested, Rodney King’s The Singapore Miracle:
Myth and Reality catalogues critics’ major concerns. Responding to them is not our purpose here.
Promoting economic development
Those describing Singapore’s success most commonly highlight economic development. From
1965 through 2005, economic growth averaged at 8.5%. (Ghesquiere, 2007, p. 13) Most
noteworthy during this period was the implementation of a planning process that was sensitive to
changes in global economic circumstances and flexible in seeking out ways to capitalize on them
that would work to Singapore’s advantage.
Ghesquiere describes the strength of this process as an ability to reframe objectives in order to
overcome a succession of “binding constraints” that threatened to curb economic growth. (pp.
82-86; Palmade, 2005) Thus, “during 1967-73 Singapore opted for export-oriented
industrialization, focused on the production of labor-intensive, low value-added items” while
investing in petroleum refining and chemicals. “The 1973-84 period targeted economic
restructuring with technological catch up.” The binding constraint of “insufficient indigenous
entrepreneurship” was overcome by providing conditions that would persuade multinational
corporations to locate in Singapore. Among these were creation of the Economic Development
Board that provided high-quality one-stop service to potential investors (Lee Kuan Yew, 2000,
pp. 77, ff.) and a the National Trade Unions Congress, which, with the backing of new
legislation, ensured strike-free labor relations (Ibid, p. 108, ff.). Few stones were left unturned
that would attract profitable new enterprises and skilled managerial-professionals to staff them.
When the 1985 recession revealed “the danger of excessive concentration of exports in a few
sectors,” Singapore embarked on a new 12-year strategy emphasizing economic diversification,
sector wise and geographically. ...The focus turned to leveraging the city’s locational advantage
and trade expertise to successfully develop air transportation, telecommunications, logistics,
shipping and cargo-handling facilities.” Conference facilities and business centers were also
emphasized (Ghesquiere 2007, p. 84). Between 1985 and 1997, tourist arrivals increased from
about 3 million to more than 7 million. (Singapore Tourist Board 2000, p. 24)
12 . al : .
The italics for emphasis in this section are the author’s.
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Singapore weathered the 1997-1998 Asian financial crisis with no major dislocations (Lee Kuan
Yew, 2000, pp. 101, 202). However, this motivated another reassessment and new priorities,
emphasizing the strengthening of Singapore an “advanced and globally competitive knowledge
intensive economy. Ongoing restructuring (aimed) to ensure long-term competitiveness...”
Singapore sought to become “a key node in a global network of people and ideas” with emphasis
placed on “marketing and design services and on making Singapore a choice location for
international events.” (Ghesquiere 2007, p. 84-85)
Free market principles have been at the heart of Singapore’s economic development strategy
since Lee Kuan Yew first sought advice from former UNDP consultant Albert Wisenmius on
industrialization, fiscal and monetary policies.’ Success in implementing these principles is
confirmed by international rankings. Singapore was ranked no. 2 on the Heritage Foundation
Index of Economic Freedom for 2010 (Heritage Foundation, 2010), no. 1 on the World
Economic Forum’s Global Enabling Trade Report for 2009 (World Economic Forum, 2009), and
no. 2 in the Economic Integration Index of the Pacific Economic Council. (Chen Bo and Woo,
2008)
These rankings must not, however, obscure the disciplined role played by Singapore’s
government in ensuring the stability and predictability that its “clients”, top executives of
multinational corporations, required. (Lee Kuan Yew, 2000, pp. 73-88; Ghesquiere, pp. 87-97)
Moreover, the government did not shrink from establishing publicly-held corporations, where
attractive niches beckoned, and managing them profitably. The term “profitable public
corporation” is not an oxymoron in Singapore. Singapore Airlines, regularly ranked by
international travelers as #1, is the best-known example, but by no means the only one.
A not-unrelated factor setting Singapore apart is the high salaries, probably the highest in the
world, paid to senior public officials. These are intended to ensure that the government can
compete with the private sector for top talent and that ‘revolving door’ practices such as in the
US, where officials use government jobs as stepping-stones to high salaried private-sector
positions in the private sector are avoided. Salaries are set at two-thirds of the amount paid to
occupants of comparable positions in the private sector as determined by income tax returns.
(Lee Kuan Yew, 2000, p. 195). The high salaries are coupled with draconian, effective measures
to ensure “clean government”, administered by an independent public commission. (Ibid., p. 188,
ff.)
The government’s role in ensuring non-confrontational labor relations has already been
emphasized. This was one element in a set of pragmatic policies that also included free trade and
monetary policy that sustained a stable currency. Fiscal, discipline, with strong safeguards
against deficit spending, contributed to low inflation. Ghesquiere terms this approach ‘pragmatic
policy adaptation’, noting that it was not so much the framing of development plans as their
consistent implementation that set Singapore apart. He concludes: “Singapore’s development
experience by contrast (with those of other developing countries) shows many instances of
policies that were highly predictable. They were carefully engineered to be mutually reinforcing,
creating virtuous cycles”. (p. 90)
8 Wisenmius advised Singapore’s government, serving in a in a pro-bono capacity, for 23 years.
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Ensuring the well-being of Singapore’s people
We began our discussion of Singapore’s success with economic growth because it is as a leading
free market economy (and one of the world’s best tourist and shopping destinations) that
Singapore is best known. But we do not believe Singapore’s leaders ever viewed economic
development as an end in itself. Rather, it has always been seen as a prerequisite to realizing two
strategic priorities, which were viewed as interrelated. The first was securing the well-being of
all Singaporeans in their daily lives. The second was securing national survival in a world
viewed as economically and politically turbulent and in a region populated by neighbors with
hegemonic aspirations that viewed Singapore, with its majority Chinese population, as an alien
presence.
Economic growth provided the resources that made policies intended to enhance well-being
possible. Because this paper focuses primarily on lessons to be learned from Singapore’s
development as a city, minimal attention will be given to the geopolitical considerations
impacting on Singapore’s development, though successful management of geopolitical
challenges was obviously essential to Singapore’s success. For those interested, a good place to
begin is with Lee Kuan Yew’s masterful treatment of the subject in Part II of the second volume
of his autobiography. (Lee Kuan Yew, 2000)
Academics and development practitioners have debated the meaning of human well-being for
decades. The goals of PAP leaders were practical and concrete. Priority was given to public
security, housing, water and sanitation, health care, education and job opportunities. Later, public
transport and creating physically appealing public spaces (“Clean and Green Singapore”) were
added to the list.
Singapore’s achievements on these dimensions of human well-being are comparable to its
economic development achievements. The 2008 Mercer Survey ranked Singapore go” among the
World’s safest cities (Best City Reviews, 2008). On Transparency International’s Corruption
Perceptions Index (2009), Singapore ranks #3.'° Clean water and sanitary facilities are available
to every Singaporean. The estimated infant mortality rate in 2009 was 2.3, one of the lowest in
the world. Life expectancy for both males and females is over eighty years. Adult literacy is
over 92%, up from less than 65% in 1960. Nearly 90% of Singaporeans have secondary or
higher educational qualifications.'° This year, television reports are describing Singapore’s
current unemployment rate at just slightly higher than 2%.
Singapore’s higher education policies provide a good example of how government planners
linked programs to improve human well-being with national economic development objectives.
Ghesquiere describes how in the 1960s, the national educational goal was to produce skilled
artisans and technicians and avoid turning out unemployable white-collar graduates (2007, p.
77). When expanding higher education became a priority, entering classes were kept small to
ensure high quality. Admission requirements were rigorous. Generous scholarships were
awarded, but quickly withdrawn from students who did not perform at a high standard. Emphasis
'4 This view was reaffirmed by journalist Tom Plate in a recent book that reports on two lengthy days of interviews
he held with former Prime Minister Lee Kuan Yew (2010).
& Rankings of other Asian countries are Hong Kong #12, Japan #17, Taiwan #37, South Korea #39, Malaysia #56,
India #84, and Indonesia #111. The United Kingdom ranked #17; the United States #18.
'© These data are from a database we have compiled using data from the Singapore Department of Stati:
(Singstat online) and the World Bank World Development Indicators, online.
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was given to curricula in science, engineering, information technology and management to meet
the needs of Singapore’s expanding high-technology economy (Ghesquiere, 2007, p. 78).
The PAP leadership’s commitment to human well-being reflected its origins as a socialist
party.!7 But its philosophy differed radically from that of the OECD countries, which in 2001
expended more than 13% of GDP on welfare, while Singapore expended less than 1%. Its
approach more closely reflected Jay Forrester’s hotly criticized recommendations that welfare
programs for the underemployed be limited. Lee Kuan Yew writes (2000, p 126): “We noted by
the 1970s that when governments took primary responsibility for the basic duties of the head of
the family, the drive in the people weakened. Welfare undermined self-reliance. The handout
became a way of life.”
Singapore’s alternative was the Central Provident Fund (CPF), a program of government-
mandated savings over which workers had control and which was intended for retirement and
home ownership. Like Singapore’s health care system (see Ghesquiere, 2007, pp. 67, ff.) the
CPF system places maximum emphasis on individual discretion, individual responsibility and the
operation of market mechanisms to influence user choices. These principles are illustrated
particularly well in an innovation that is distinctively Singaporean and, once again, consistent
with Urban Dynamics. We refer to programs that have resulted in widespread home ownership
of government constructed and managed “public housing”.
Balancing commercial and housing demands on the land
As a small island state, Singapore has severe physical constraints to contend with. Leaders have
had to set aside sufficient land for businesses, financial centers and industries while at the same
time making sure that the needs of the population for housing, open space and recreation are met.
Despite a population density of 7,022 per sq km, one of the world’s highest, only 15% of
Singapore’s land has been allocated to housing and only 17% to recreational and community
needs. The rest is used for commerce (4%) and industry (10%), infrastructure, utilities and
transport (17%) and reservoirs, defense facilities, and cemeteries and undeveloped land (37%).
Plans are underway to set aside an ample proportion of the latter to support high-technology
commercial development (Economic Strategies Committee (ESC) Subcommittee Report, 2009).
How has Singapore overcome the obstacle that Forrester targeted as one of the major
impediments to sustaining a vital economy: the preponderance of substandard housing attracting
the underemployed? In 1960, only 9% of Singapore’s population occupied public housing and
much of the city’s housing stock resembled the overcrowded deteriorating stock of
underemployed housing described in Forrester’s hypothetical city. Today, an astonishing 82% of
Singaporeans live in “Housing Development Board” apartments (HDB flats) clustered in high-
density public residential estates. HDB flats are ubiquitous in Singapore’s landscape (though
less so in areas most commonly frequented by short-term visitors). A second statistic is equally
astonishing to those familiar with the failed public housing projects in large US cities and on the
outskirts of cities in Russia and former Communist bloc countries: virtually all of the HDB flat
residents are homeowners.
' The PAP was a member of the Socialist International until 1976 when it withdrew to avoid expulsion on the
grounds of suppressing independent labor unions and freedom of the press (Ghesquiere, 2007, p. 79).
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For Lee Kuan Yew, the opportunity for near universal home ownership was a key element in his
plans to build a stable society based on shared responsibilities and shared commitments. He
writes:
“My primary preoccupation was to give every citizen a stake in the country and its future.
I wanted a home-owning society. I had seen the contrast between blocks of low-cost
rental flats, badly misused and poorly maintained and those of house-proud owners, and
was convinced that if every family owned their own home, the country would be more
stable. ...Ifa soldier’s family did not own their own home, he would soon conclude that
he would be fighting to protect the properties of the wealthy. I believed this sense of
ownership was vital for our new society with no deep roots or common historical
experiences.” (2000, p. 117)
When the program was created, HDB flats were targeted for lower and middle-income residents
with means-tested subsidies provided to those who could not otherwise afford home ownership.
This practice has continued, though as Singapore has become wealthier, the value of flats has
appreciated. Housing Development Board staff are continually adjusting rules and procedures to
strike a balance between allowing for the operation of market forces and keeping the program
true to its objectives, though in a very different Singapore than when it was created.
Flats are located in public housing estates, each of which is equipped with amenities such as
markets and food centers, schools, community or regional libraries, places of worship, shopping
and entertainment complexes and parks. They seek to achieve the ambience of small
communities — often there are also government-sponsored community centers. High quality
maintenance is also a priority. Upgrading of these flats and estates is ongoing. Singapore’s
efficient public transport system provides easy and affordable access for residents to commute
and travel to other parts of the city.
Land use planning has been greatly facilitated by another distinctive Singapore characteristic.
Passage of the 1966 Land Acquisition Act began a process through which Singapore’s
government now owns about 90% of the total land area (Ghesquiere, 2007, p. 80). Balancing the
limited supply of land with competing demands has only been possible through combining
officials’ integrated, long-term approach to land use and infrastructure planning with major
demolitions. But commercial development has by no means been the only priority.'* For
instance, park connectors have been built to allow the public to travel between parks on foot,
bicycles and rollerblades. New integrated activity hubs are being developed to spatially distribute
economic activities. Government planners have now initiated plans to measure land productivity
in terms of its yield, using indicators such as jobs, spillover and value capture per hectare. (ESC
Subcommittee Report, 2009)
Ensuring public confidence and stability through strong and sustained leadership
Prime Minister Lee Kuan Yew set the tone for self-confident, decisive leadership, asserting
authority and helping to develop the country in tangible ways that improved citizens’ lives. He
resisted external pressures to adopt the liberal democracy of the West, which he felt was
inappropriate to Singapore’s culture and level of development. He believed that what the people
'8 See Lee Kuan Yew, 2000, p. 231. Lee writes that to construct Changhi Airport (rated in 2010 as the world’s best
by international travelers), “we demolished hundreds of buildings [and] exhumed thousands of graves... For an
airport of that size, the normal construction time was 10 years. We completed it in six.”
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want is good government, not a particular form of democracy that had evolved in a very different
context. (Han et. al., 1998, p. 376) He pointed to the failures of democracy in most post-colonial
states, especially multi-ethnic ones. A good government, he asserted, is one “which is honest,
effective and efficient in protecting its people, and allowing opportunities for all to advance
themselves in a stable and orderly society, where they can live a good life and raise their children
to do better than themselves.” (Ibid. p. 380 and also see Lee Kuan Yew, 2000, Chapts. 9 & 14)
The People’s Action Party (PAP) has ruled Singapore since self-rule was granted in 1959. Its
world ranking of 81 (just below Albania) on the Economist Intelligence Unit’s 2008 Index of
Democracy and comparably low rankings on other similar scales contrasts with its high rankings
in other areas. However, PAP leaders take pride in this continuity in office. They believe it has
been a key factor in sustaining the coherent policies and long-term planning that have been keys
to Singapore’s success. They argue that this achievement, which has been ratified in successive
elections, affirms their approach to promoting Singaporean’s well-being and retaining public
trust. (Lee Kuan Yew, 2000, 143, ff.)
Further, they maintain that even with one party, the political succession in the nation is
systematically and painstakingly planned, with peaceful handovers and ex-Prime Ministers
remaining in the cabinet as influential members. This protects Singapore from the destabilizing
and unpredictable leadership changes that have damaged other developing countries. New
leaders are untiringly sought, rigorously tested and groomed; the criteria for their selection are
their powers of analysis, sense of reality, imagination, quality of leadership and dynamism. Most
important of all are their character and motivation, “because the smarter a man is, the more harm
he will do society”. (Han et. al. p. 338; also see Lee Kuan Yew, 2000, Chapts. 15 & 41)
Engaging the people’s hearts and minds
Singapore’s stability and success would not have been possible without strong support from her
citizenry. Government leaders invest considerable time and effort in communicating goals,
priorities, values and policy rationales to the public. Feedback from the public is invited through
multiple channels, though civil society organizations common in the US and Europe are not
major players. The mass media is expected to play a supportive role in doing this, as well as in
reinforcing, not undermining the cultural values and social attitudes being inculcated in schools
and universities. Its potential to raise the standards of living in the nation by cultivating a quest
by the people for the attainment of knowledge, skills and disciplines of advanced countries is
also tapped. (Han, et. al., p. 427)
To engage the hearts and minds of the citizenry, and in particular to share with the post-
independence generation the history and struggles of the nation, the present threats and
opportunities and her hopes for the future, the National Education (N.E.) program was launched
in schools in 1997 as a government-led initiative. The N.E. messages are discussed in class, and
lessons and applications are drawn from a wide range of contexts within the academic and co-
curricular programs of the schools. The messages are: (Ministry of Defence Nexus website,
accessed 19" March 2010)
1. Singapore is our homeland; this is where we belong.
2. We must preserve racial and religious harmony.
3. We must uphold meritocracy and incorruptibility.
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4. No one owes Singapore a living.
5. We must ourselves defend Singapore.
6. We have confidence in our future.
Not long ago, The Institute of Policy Studies, a research institute of The Lee Kuan Yew School
of Public Policy, sponsored a day-long conference on strengthening Singapore through long-term
planning, with wide public involvement. The emphasis was on building community as an
essential ingredient of development. The conference was sponsored by 20 organizations, mostly
corporations, attended by nearly 300 business and civic leaders and held at a downtown five-star
hotel. The Prime Minister spoke for 40 minutes and answered questions for another 30. Seated
next to us was the head of the Sony Corporation for Southeast Asia. Community building is
taken seriously in Singapore.
Cultivating and maintaining social cohesion in a multi-communal society
One of the most oft-repeated messages from political leaders to the people emphasizes the issue
of fostering social cohesion, which is seen as the bedrock for Singapore’s future as a nation.
Communalism was the issue that broke apart the Malaysian Federation. In other Asian nations,
most notably Sri Lanka, it has fostered divisiveness and sapped promising economic
development initiatives. In Singapore, political appeals based on communalism are forbidden. In
Malaysia, preferential treatment for Malay citizens is government policy. At the time of the
breakup, Prime Minister Lee highlighted the problem by noting that a statement of government
policy on communal issues in Singapore would be viewed as treason in Malaysia and that a
statement of government policy on communal issues in Kuala Lumpur would be viewed as
treason in Singapore.
Singapore’s population is a melting pot of immigrants from different racial, cultural and religious
affiliations and backgrounds. Singapore’s leaders were mindful of the dangers communal
conflict posed from the outset. (Lee Kuan Yew 2000, Chapts | and 6). S. Rajaratnam,
Singapore’s first Minister for Foreign Affairs and the author of the nation’s citizen pledge said,
“the communal problem...must be and will always remain one of the major problems which, if
we do not resolve intelligently, could break our society, especially of an independent Singapore.”
(Kwa, 2006, p. 155)
The stakes are high: situated in the Malay Archipelago, and the only Asian nation outside of
China (including Taiwan) with a predominantly Chinese population, Singapore has been
described as a “juicy Chinese nut in a Malay nutcracker”. This is apt, as the city-state is
sandwiched between two much larger neighbors who have at various periods in history been
openly antagonistic in their policies and stances towards her. Perceived injustice towards
Singapore’s small Malay population might well trigger hostility and aggression from these
quarters. (Singh, 2007, pp. 9-10)
Courting and controlling immigration
This goal of sustainable social cohesion has been extended to foreigners working in Singapore
and permanent residents in the city-state. This matter is especially critical to a country like
Singapore, which has one of the highest percentages of foreigners in the world. A third of
Singapore’s total population of 4.99 million is foreigners working in Singapore. Of the
remaining 3.73 million, 14.3% are permanent residents and 85.7% are citizens. (Singapore
Statistics Online, accessed 19" March 2010)
22.
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Immigration policies are regarded by Singapore’s leaders to be of critical importance to the
nation’s survival. The city-state faces an impending working population decline due to a very
low total fertility rate of 1.23, further aggravated by having one of the fastest ageing populations
in the world. In tandem with efforts to promote marriage and parenthood to boost her
distressingly low fertility rate, Singapore’s leaders have chosen to recruit foreign talent using the
job opportunities created by its high-performing economy and high quality of life as recruiting
tools. These policies have so far engineered a doubling of Singapore’s immigration rate from
7.98 per thousand in 2002 to 14.3 per thousand in 2008. There was an average of 48,300 new
permanent residents over a five-year period from 2003 to 2007. A target of 20,000 new citizens
has been set, in anticipation of the shrinking of the resident population from 2025 when deaths
outstrip births. (Hussain, 2010)
The rationale Singapore’s leaders have given for this aggressive intake of foreigners is that
immigrants make up for the children that Singaporeans are not having, address the threat of a
declining economy with a shrinking labor force and reduce the future burden of young
Singaporeans. (Oon and Goh, 2009) This is the unequivocal message that has been continually
communicated to the citizenry in a bid to help them understand the intents of their leaders and to
address their concerns about the impact that newcomers may have on their lives and those of
their children.
Nevertheless, measures have been put in place to control the size and nature of the immigrant
pool. Only those who increase the average level of competence of Singaporeans are accepted;
they must have skills and at least secondary, preferably tertiary education. (Oon and Goh, 2009)
Care is taken to monitor the intake of immigrants so that the racial balance in the city-state is not
upset. Housing regulations prevent enclaves of immigrants of the same race or nationality from
forming, and newcomers are educated on social norms. In addition to such attempts to preserve
the character and values of Singapore society, Singaporean’s interests are protected with
measures targeted at widening the gaps in benefits between those accorded to permanent
residents and citizens in the areas of housing, education and healthcare. (Hussain, 2010)
This highlights an awareness of the social and physical limits faced by the city-state in receiving
immigrants. The adverse impact that a dependence on foreign labor has on industrial operations
and productivity levels has also been recognized. Levies were raised early this year to reduce
industries’ reliance on foreign labor, and 5.5 billion Singapore dollars has been earmarked for
use over the next five years to upgrade the skills of Singaporean workers and raise their
productivity. Notwithstanding this, the government leaders continue to uphold their stance: that
the city needs people with entrepreneurial abilities and higher skills to grow the economy and
create jobs and income growth for lower-skilled workers. (Shanmugaratnam, 2010)
Singapore’s Finance Minister, Tharman Shanmugaratnam, made this clear in an article which he
wrote for the national paper:
“Slow growth will make everybody worse off, but it will have the harshest impact on
those at the bottom.
“Our basic approach therefore must be to maximize opportunities for all Singaporeans —
opportunities to get a good education, to work or to start a business, to retrain and
upgrade, to own a home and raise a family in a community they feel they belong in.
23
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“We should never reduce the incentive for people to work and to make the most of their
skills and talents. That has to be the basis for our society, for how we keep our economy
growing, and for how we must strive to raise living standards for all Singaporeans
including those in our lower-income groups.” (Shanmugaratnam, 2010)
Developing a strategy for sustainable development
Singapore’s approach to the use of land exemplifies an overall sustainable development strategy.
This strategy was developed over the past forty years and grew out of necessities dictated by
limited land and no natural resources.
It is based on an integrated, long-term and comprehensive planning approach that involves
technical agencies across ministries coming together to plan land use and infrastructure, and
water and energy management and use. Secondly, this is supported by the use of a highly
pragmatic approach to achieving environmental sustainability outcomes through the use of the
most viable and cost-effective methods and breakthrough innovations in technology.
A third element in this strategy is the willingness to make difficult trade-offs. Singapore’s
Minister for National Development, Mr. Mah Bow Tan, explains it this way: (Ministry of
National Development website, accessed 3 March, 2010)
“Tough trade-offs between the needs of the economy and housing, between housing and
conservation, and between development and preservation of nature areas must continue to be
made, especially in a small and resource scarce city-state like ours. We want a virtuous cycle
of economic growth and a higher quality of the living environment supporting each other,
and not place one objective before or at the expense of the other.”
Water management — an illustration of Singapore’s sustainable development strategy
Singapore’s management of water provides an apt illustration of this three-pronged sustainable
development strategy. It may serve as a model, for cities and nations facing limited supplies that
have been an issue for Singapore since Independence Day. To ensure a clean and reliable supply
of potable water, Singapore has had to substantially increase the number and size of water
catchment areas and prevent the collected water from leaking away or being polluted. Such an
exercise was large-scale as it affected land use, transport planning, water treatment, sanitation
and sewerage, and involved close collaboration between the Public Utilities Board (PUB) and
other government agencies.
Earlier experiments with recycling water were abandoned because the process was expensive and
unreliable. However, with breakthroughs in water technology, a new water reclamation study
was set up in 1998, leading to the production of recycled water (NEWater). NEWater is
produced using a purification process using dual-membrane and ultraviolet technologies to
transform wastewater to high purity water suitable for human consumption and industrial use. As
NEWater is purer than tap water, it is more cost-effective to use, as water fabrication and
semiconductor plants no longer have to incur the costs of purifying tap water for their use.
Tough tradeoffs were involved in Singapore’s water management policies. Currently, she has
fifteen reservoirs (including Marina Barrage — the first reservoir in the city) which together
occupy very substantial portions of the city-state’s land (Lee, 2005). The view among
Singaporeans is that a cutoff of the water supply from Malaysia would incur costs and require
24
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adjustments but not jeopardize the nation’s survival. Through technology, disciplined
management and conservation, the threat to Singapore posed by the limited availability of water
has been overcome.
Notwithstanding this, one of the targets that the Singapore government has set for 2030 is the
reduction of domestic consumption to 140L per person per day. Other targets include achieving a
35% improvement in energy efficiency and attaining a recycling rate of 70%. In addition, 70% of
all journeys will be made via public transport by 2030 (Sustainable Blueprint Report, 2009).
Singapore’s success and Urban Dynamics
We have found no evidence that Lee Kuan Yew and his colleagues were aware of Urban
Dynamics or World Dynamics in making the decisions that guided Singapore’s development.’
But they have coped with challenges of scarce water and scarce land. They have curbed
population growth and avoided many of the pitfalls about which Urban Dynamics warns. In the
45 years since independence, they have implemented policies that have secured the well-being of
Singapore’s people. They have been sensitive to the need for resiliency in the face of challenges
that physical limits and the uncertainty of the wider world posed.
If one compares the lessons of Urban Dynamics with the policies of Singapore’s leaders during
the last 45 years, the correspondences are significant. Singapore’s leaders have been foresighted
about the need to balance short-and long-term priorities. They have been realistic in balancing
the strengths and shortcomings of human nature. They have provided rewards for those talented
individuals who could create value in public and private spheres, while not closing off
opportunities for upwardly mobile members of the working and underemployed classes. They
have achieved goals that are judged by many to be prerequisites for attaining well-being and
development: a quality of life that is physically secure and a government that is free of
corruption. Their planning encompasses a time horizon as long as fifty years and is taken
seriously. Long-term plans are adjusted in response to changing conditions, but not in response
to shifting ideological and political winds. For these reasons, Singapore’s society and political
economy may be more resilient than most in moving beyond the crisis. This will not necessarily
involve a willingness to change programs and policies that have worked in the past. It will
involve being alert to new global economic, ecological and political challenges. It will involve
‘beating the competition’ in order to ensure Singapore’s survival and the well-being of its
people.
Conclusion: Messages for Singaporean Leaders and Singaporeans
A paper’s conclusion should have an audience in mind and should be clear about what its authors
wish audience members to learn or what actions they wish them to take. In the foreseeable
future, we anticipate there will be opportunities to present the ideas described in this paper to
groups in Singapore that are concerned with long-term planning. There may also be meetings
with those holding similar positions in cities other than Singapore, but facing very different
'° & conversation with a senior government official who worked closely with Prime Minister (now Minister Mentor)
Lee confirmed this.
25
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challenges. We also intend to communicate with members of the System Dynamics community,
taking advantage of whatever venues and opportunities offer themselves. Since our Singapore
meetings are coming first, we have chosen to target that audience with our conclusions.
Messages for others are implicit in what we have written. However, we will direct more explicit
messages toward them in later iterations.
Message 1. Warnings about impending global-scale problems should be taken seriously.
Creating systems that will scan for early warnings of overshoot and collapse should be a
priority.
Perhaps the most important message for Singapore audiences, both governmental and academic,
is the one with which we began this paper. There is a global-scale crisis. The causes of the
crisis, writ large, are the high probabilities of overshoot and collapse. Among the consequences
about which we can be certain are rising energy prices and the consequences of global warming,
including rising sea levels and more turbulent weather patterns whose character and impact
cannot yet be fully anticipated. Most likely, by mid-century, there will also be significant
political and economic turbulences to which Singapore must adapt.
Message 2. Singapore is as well positioned to deal with potential crises as any city or
nation, but needs to further build upon its strengths of adaptability and resilience, as well
as future scanning and planning institutions that emphasize the long term.
At the Singapore Perspectives conference alluded to earlier, Prime Minister Lee Hsien Leong
offered a telling characterization of his nation’s position. As an actor on the world stage, he said,
“we are a bantamweight.” Candidly acknowledging this reality has been another of Singapore’s
strengths. As a ‘bantamweight’ nation facing a future with strong elements of unpredictability,
Singapore’s leaders should continue to emphasize the fundamental goal of enhancing the well-
being of her people. Policies should continue to be flexible in seeking an appropriate balance
between incentivizing the most able in the society and ensuring that all Singaporeans feel they
have a stake in their community. Leaders should be alert to pressures from more wealthy
Singaporeans for changes that may lead to the inter-generational “systems-trap” of “success to
the successful” (Donella Meadows, 2008. P. 150). An example would be creating circumstances
in employment and especially education where children of the well-to-do were able to advance
on the financial and influential coat-tails of their parents’ achievements, rather than by their own
merit. They should continue to ensure that the best and brightest are incentivized to join the
government service. They should sustain Singapore’s commitment to financial resilience and
strengthen early warning systems to detect instabilities in the global financial system. They
should sustain and strengthen mechanisms for environmental scanning and long-term planning
that have served Singapore so well.
Message 3. System dynamics modeling can help and, in particular, should become an
integral part of Singapore’s primary and secondary education requirements.
Through the efforts of Daniel Kim (2002) and others, principles of organizational learning and
systems thinking, grounded in Peter Senge’s path-breaking work (2006), have made considerable
headway in Singapore. System Dynamics modeling is less well known. Jay Forrester has
questioned the utility of “systems thinking” that is not grounded in System Dynamics Modeling.
We agree with Forrester that raising consciousness about properties of complex systems with
26
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systems thinking approaches is useful, but believe that the full value of this will only be realized
if more rigorous training in System Dynamics modeling is made available.
For a country like Singapore, with her emphasis on capitalizing on new opportunities, providing
leadership and being better than the competition, the breakthroughs in teaching System
Dynamics modeling at the primary and secondary level, exemplified by work of the Learning
Exchange Network offer particularly exciting possibilities. The notion that System Dynamics
modeling might be required in the curricula of every primary and second school student in
Singapore is not out of the question. How would a city and nation be changed by an entire
generation of young men and women for whom the lessons of system dynamics modeling were
integral to their world view? This might be exactly what bantamweight Singapore will need to
do to prosper as brilliantly in the 21“' Century as it did in the 20".
Message 4. Singapore’s leaders and people should consider the challenge of creating and
modeling a paradigm that offers a compelling alternative to humanity’s current growth-
oriented one.
Lastly, we believe there is a new opportunity that awaits Singapore. Having provided the world
with a path-breaking model for moving “from third world to first”, there is a possibility it could
offer the world a similarly path-breaking model of an equilibrium society. From the early days
of global modeling, proponents of sustainability have known that fundamental changes in
attitudes would be essential if humanity was to move beyond the crisis. But we have failed
utterly in our efforts to create and market a compelling paradigm emphasizing equilibrium that
could compete effectively with dominant paradigms emphasizing consumption-based growth.
“Paradigms are the sources of systems,” Donella Meadows has emphasized. “From them, from
shared social agreements about the nature of reality, come system goals and information flows,
feedbacks, stocks, flows and everything else about systems.” (Donella Meadows, 2008, p. 163).
While no paradigm of an equilibrium society has yet caught public attention, there is one that is
more compelling than most. It is found in the conclusion of Beyond the Limits, the book
describing the second iteration of World3. (Donella Meadows, et. al. 1991) Among the most
important elements are these:
¢ Sustainability, efficiency, justice, equity and community as high social values.
¢ Leaders who are honest, respectful and more interested in doing their jobs than keeping
their jobs.
¢ Material sufficiency and security for all, with low death and birth rates and stable
populations.
¢ Work that dignifies people instead of demeaning them. Some way of providing incentives
for people to give their best to society and be rewarded for doing so, while still ensuring that
all people will be provided for sufficiently under any circumstances.
¢ An economy that is a means and not an end, one that serves the welfare of the human
community and the environment rather than demanding that the community and the
environment serve it.
¢ Political structures that permit a balance between short-term and long-term considerations.
Some way of exerting political pressure on behalf of the grandchildren.
¢ High skills on the part of governments and citizens in the art of non-violent conflict
resolution.
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¢ Reasons for living and thinking well of oneself that do not require the accumulation of
material things.
We have been familiar with this list for many years, but not until now had we considered it in the
context of Singapore. While her commitment to a growth-oriented paradigm is still evident, on
many elements of this list Singapore already scores well, better than most cities and nations.
Moreover, we are not saying that the vision in Beyond the Limits of an equilibrium society will
provide the needed basis for paradigm change. We are saying there is a need to create an
alternative paradigm of an equilibrium society. Such a paradigm must demonstrate that
sustaining high levels of human well-being that does not depend on exponentially growing
consumption of material resources, in a turbulent world of overshoot and collapse, is possible.
That is Singapore’s next challenge — and opportunity.”°
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56. Transparency International, 2009. Corruption Perceptions Index 2009. Berlin.
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New York.
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The Relevance of Urban Dynamics to Singapore’s Success Story:
Lessons for Moving Beyond the Crisis'
John Richardson
Visiting Professor, Institute of Water Policy and Global Asia Institute
Lee Kuan Yew School of Public Policy, National University of Singapore
(On leave from the School of International Service, American University)
469C Bukit Timah Road #02-01
Oei Tiong Ham Building
Singapore 259772
+65 65164204
jrich@american.edu
Ong Ling Lee Elizabeth
Lee Kuan Yew School of Public Policy, National University of Singapore
469C Bukit Timah Road #02-01
Oei Tiong Ham Building
Singapore 259772
+65 91262345
g0805178@nus.edu.sg
Keywords: Urban dynamics, sustainability, overshoot and collapse, Singapore, equilibrium
Abstract
This paper seeks answers to a question implicit in the theme of The 28" International System
Dynamics Conference Program: “how can humankind move “Beyond the Crisis” towards
political economies that are more resilient, sustainable and humane?” Its focus is cities, which
are seen both as the principal loci of the crisis and pointing paths to moving behind it. Those
concerned with urban challenges need new ways of viewing the problems they face. In seeking
new ways, they should consider what Dr. Louis Alfeld has called “perhaps the most insightful
System Dynamics application ever developed”: Jay Forrester’s urban dynamics model. This
representation of cities as living systems seeking equilibrium with their environments offers
lessons that are timeless and needed. A notable development success story, Singapore illustrates
applications of these lessons by leaders who were not even familiar with Forrester’s work. This
further highlights the value and contemporary relevance of the worldview of the urban dynamics
model.
' This paper has been accepted for presentation at The 28" International System Dynamics Conference in Seoul
Korea, July 25-29, 2010. Since the work is ongoing and this draft is preliminary, please do not reproduce or share it
without permission. An enumeration of funding support and acknowledgement of many whose personal assistance
has been invaluable is quite lengthy and so we have chosen to provide those details in a concluding footnote.
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Introduction: Moving Beyond the Crisis
What is “the crisis” that humankind must move beyond?
This paper seeks answers to a question implicit in the theme of The 28" International System
Dynamics Conference Program: “how can humankind move “Beyond the Crisis” towards
political economies that are more resilient, sustainable and humane?” Its focus is cities, which
are seen both as the principal loci of the crisis and pointing paths to moving behind it. Our point
of departure is two memorable addresses delivered by Dennis Meadows at The oF System
Dynamics Conference. (Dennis Meadows, 2009a, b) Both drew lessons from a professional
lifetime in which defining “the crisis”, understanding its dynamics, pointing out pathways that
might lead beyond it and persuading policy makers to follow them, have been major priorities.
His advocacy role began with publication of The Limits to Growth (Donella Meadows, et. al.,
1971). Now, in presentations throughout the world,” he is drawing lessons from the third
iteration, Limits to Growth: The 30-Year Update (Donella Meadows, et. al., 2004). Often, he
begins with the “reference scenario” from The Limits to Growth. A modified version of this,
used in one of his addresses (Meadows, 2009c) is shown in Figure 1 below.
The Reference Scenario
Original
Today
Report
1
= Industrial Output
, Population
2 Pollution
4
seed Resources
2 ——— { Food
4 } or " i
1900.00 2
Page 1 Sun,
Je ?
State of the World
Figure |
Comparing this scenario with present global trajectories of population, non-renewable resource
use, pollution and humanity’s ecological footprint in relation to the earth’s carrying capacity, he
? We have viewed several of these presentations, either personally or on line and also disc!
personally with Professor Meadows.
ed the issues they raise
Draft. Please do not reproduce or share without permission.
concludes that “things seem to be developing more rapidly than we (the authors of The Limits to
Growth) expected” (in 1972). If one seeks to describe “the crisis” humankind must move
beyond, a comparison of The Limits to Growth reference scenario with corresponding trajectories
of real-world data is a good place to begin.
“Reference mode” graphs, as such diagrams are sometimes called, do not provide an explanation,
of course. Explanation requires System Dynamics models that reproduce behavior modes of
interest. When one provides explanations of problematic behaviors (such as those depicted in
The Limits to Growth reference scenario), especially to non-modelers, one often highlights
important themes that the model depicts, rather than focusing on more technical details of the
model structure. Such themes typically emphasize dominant positive feedback loops that
generate exponential growth or collapse and dominant negative loops that generate goal-seeking
or resistance to interventions and delays that produce misperceptions at decision points and
unstable behaviors such as oscillations, overshoot and collapse.’
Explanations of the crisis provided by global models: overshoot and collapse
Explanations of the crisis provided in Limits to Growth: The 30-Year Update trace their origins
to a preliminary model, World1, which was first sketched out by Jay Forrester on a return flight
after meetings with leading Club of Rome members in Switzerland (Forrester, 2007a). This led
to the World2 model described in World Dynamics (Forrester, 1971), and the World3 model
described in The Limits to Growth and subsequent iterations. What is remarkable about this
body of literature, now spanning nearly 40 years, is the degree to which explanations of the crisis
emphasized in Forrester’s original work have been repeatedly echoed in subsequent iterations, in
many other publications by the same authors and in publications by authors who have built other
global models as well. (Donella Meadows, 2007)
Though the models and generated scenarios are viewed as complex by many, the fundamental
explanation of the crisis that all provide is not: the source of the crisis is the physical, ecological,
and social pressures being generated by exponential growth in population, capital, the extraction
of finite resources and the waste products human society generates on a finite planet.
It is hard to improve upon the powerful metaphor that Jay Forrester, writing in 1971, chose to
capture the challenge he saw humankind facing at that time:
“People are in the position of a wild animal running from its pursuers. We still have some space,
natural resources and agricultural land left. We can avoid the question of rising population as
long as we can flee into the bountiful reservoir that nature has provided. But the reservoir is
limited. Exponential growth cannot continue. The wild animal flees until he is cornered, until he
has no more space. Then he turns to fight, but he no longer has room to maneuver. He is less
able to forestall disaster than if he had fought in the open while there was still room to yield and
to dodge.”(p. 124)
Among those who acknowledge that there is a crisis and that the root cause of the crisis is
pressures generated by the exponential growth of population, consumption and pollution, there
are two other areas of consensus. The first is that the behavior modes of growth must be
replaced by behavior modes of equilibrium. The Limits to Growth authors emphasized that this
does not mean that human activities not requiring a large flow of irreplaceable resources or
> See Donella Meadows (2008, pp. 44, ff.) and for a more comprehensive discussion of the relationship between
feedback loop structures and behavior, Richardson (1991).
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producing severe degradation — for example: education, music, art, religion and basic scientific
research — could not continue indefinitely (p. 176, ff.). The second is that “any deliberate
attempt to reach a rational state of equilibrium by planned measures, rather than by chance or
catastrophe must ultimately be founded on a basic change of values and goals at individual,
national and world levels.” (Executive Committee of the Club of Rome, 1972 p. 188)
Club of Rome Executive Committee Members, along with many who created global models and
sought to publicize their results, believed that presentation of model results, coupled with a
growing weight of evidence confirming the results, would change attitudes. They believed that
changes in attitudes would produce changes in policies and that there was sufficient time to
mitigate the social and political-economic momentum impelling humankind toward overshoot
and collapse. Dennis Meadows reports that 40 years of experience provides little evidence to
support that view. He now observes: “If you marshal enough facts to disprove an objection, then
the critics will just find another objection. There are an infinite number of objections, so you are
never going to come to the end of the process.” Here is his current appraisal of the
circumstances facing humankind given in a recent address: (Meadows, 2009c, Slide 4)
* Growth has continued until we are now past sustainable levels.
* Global society will change more over the next 20 years than in the past 100.
¢ There is a need to design policies for what is coming, not what has been.
* Climate change and resource scarcity, especially fossil fuels and water will be the main
forces for change.
¢ The most important scarcity is the absence of a longer-term perspective,
* Many indicators point to the conclusion that we have reached overshoot, sooner than
anticipated. Where we once only had models, we can now get confirmation from the
newspapers.
Manifestations of the crisis: global and universal problems
What are those seeking to play a role in helping humankind move ‘beyond the crisis’ to do in the
light of this somewhat pessimistic appraisal? Dennis addressed this question in an address to a
Ph.D. Student Forum entitled “Opportunities for a Career Modeling Limits to Growth 2010-
2030” at the 27” conference. He sees two classes of problems that humankind will face as the
pressures created by overshoot, leading to collapse, intensify with unpredictable consequences.
Global problems affect everyone and can only be solved by international effort. These include
climate change, ocean fish depletion, nuclear proliferation, and, we would add, stabilizing the
international financial system. Universal problems affect everyone but can be solved by local
efforts. We would particularly emphasize scarcity of water and the rising costs of energy,
population growth, migration, chronic poverty and social instability created by rich countries,
and the rich within all countries, to protect their way of life in a time of increasing social
turbulence, at the expense of the poor.
Seeking solutions: preventive and adaptive policies
Meadows has also identified two broad classes of solutions for addressing global and universal
problems. Preventive policies are intended to avoid future problems. Adaptive policies are
intended to reduce the harmful consequences of problems already being experienced. Preventive
policies require the longest time horizon. Much of global modeling has been directed at
promoting preventive policies, intended to solve global problems with global leaders (including
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President and Prime Ministers of major powers) as the target audience, but the results from these
efforts have been disappointing. Sustaining consistent policies is difficult when there are seismic
shifts in a nation’s ideological terrain, as in the United States, when national administrations
change. Failure to address global problems with preventive policies imposes the need for
institutions lower down in the decision-making “food chain” to respond with adaptive policies.
For example, the low-lying Republic of the Maldives is responding to global warming by
creating an artificial island, adjacent to her international airport that is several meters higher
above sea level than the island on which her capital, Male, is located. Along with those of other
island nations, her pleas in international forums to make preventive policies addressing global
warming a priority have mostly fallen on deaf ears.*
While global problems must be addressed at a global level, universal problems may be addressed
with both preventive and adaptive policies and such policies may be implemented at various
levels. Meadows argue that, paradoxically, it is at the level of individuals and families that,
when given the opportunity, time horizons may be most future-oriented. Parents are concerned
with the welfare of their children and, often, their grandchildren as well. Confucian traditions
that have been influential in China and among Chinese diaspora communities place a strong
emphasis on intergenerational responsibility. (D.C. Lau, trans., 1979; Lee Kuan Yew, 2000, esp.
Chapt. 7) But individuals and families have the fewest resources and are in the weakest position,
relative to challenges posed by overshoot and collapse, to implement preventive and adaptive
policies. Normally, the best they can do is to sporadically mobilize collective effort to pressure
political and business leaders. The inability of international and national organizations to cope
with universal problems matches their inability to cope with global problems and for the same
reasons.
Meadows’s intermediate and most promising remaining category is “communities” and we
include cities as well. These fall in a middle ground. While their time horizon may be shorter,
their resources are greater than those of individuals. Cities and communities may offer greater
hope of moving beyond the crisis, but policy failures at the community and city level are also
major contributors to overshoot and the potential for collapse. While the problems that cities
represent may be matters of global concern, they are of even greater concern to their own
citizens. Nowhere is this more true that in the growing megacities of Asia.
Using Cities as a Focusing Lens
We believe cities can provide a focusing lens to sharpen our understanding of how the human
race can better respond to the threat posed by global overshoot and impending collapse. They are
major sources of the problem, and as Dennis Meadows argues, they may also provide feasible
and practical points of leverage for those seeking solutions. What are the challenges and
opportunities that cities pose?
Unprecedented urbanization
Urbanization has been occurring at an unprecedented scale. Cities have grown in importance as
key drivers of economic growth in their regions and countries, with rapidly growing industry-
and service-related economies providing employment opportunities for millions of people. The
4 Richardson viewed this island, Hulhumale, and discussed global warming with Maldives government and business
leaders during a brief consulting visit to the Republic in summer 2006.
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21* century has been named “The Century of the City” (UN- Habitat, 2008/9), reflecting the
prominent place that cities occupy in the global economy as well as the fact that cities are now
populated by more people than ever before than in humankind’s history. Today, there are more
than 400 cities with a population of over 1 million, compared to only 16 such cities in 1900. 50%
of the world’s population now lives in cities, compared to 30% in 1950, 14% in 1900 and 3% in
1800. Migration into cities is most rapid in developing countries, with an average of 5 million
new city residents every month. (Population Reference Bureau, 2009)
The consequences of urban growth
This unprecedented growth of cities - both in the number of cities and the sizes of their
populations — has two major consequences. Firstly, cities are placing greater strains and
demands than ever before on the earth’s resources. Cities occupy only 2% of the world’s land,
but consume 75% of its resources. 60% of the earth’s water, 75% of the world’s energy and 76%
of industrial wood use is consumed by cities. (Hargroves and Smith, 2005) If every member of
the human race shared the earth’s resources equally, the sustainable footprint would be about 1.8
hectares per person. The average ecological footprint in rural People’s Republic of China (PRC)
is 1.6, but in Shanghai it is already 7.0 and in a typical United States city, it is 9.7. Cities also
generate 75% of the earth’s wastes, such as air pollutants, solid waste, GHGs and toxic effluents.
This includes nearly 80% of the world’s carbon dioxide (CO2) emissions.
Secondly, with exponentially rising populations and limited resources, cities themselves are in
danger of overshoot and collapse. The strains and pressures of uncurbed population growth have
already taken their toll on many cities. In Asia, more than half of all city residents lack a reliable
drinking water source. Untreated industrial wastes pollute local drinking water supplies and
contaminate food sources such as coastal fisheries. Globally, poor environmental conditions are
responsible for 25% of preventable health problems. Two-thirds of those impacted are children.
Dire housing shortages have led to rising numbers of slum dwellers in these cities. Poverty,
traffic congestion and deteriorating infrastructure are common not just in cities in the developing
world, but in the developed world as well. (Managing Asian Cities, 2008)
Thus, cities are central to the issue of global environmental sustainability. The lower the
capability of cities in withstanding the pressures of urban expansion, the greater their negative
impact will be on the earth, and the slimmer our chances are of collective survival as a human
race. Unless city leaders build their capability to cope with pressures of urban expansion, the
collapse of cities will occur sooner, preceding and precipitating an eventual collapse at the global
level.
Looking to cities for answers
Many cities have endeavored to strengthen their adaptive capacities, usually through devoting
resources to alleviate the effects of urban pressures or to avert crises triggered by them. In the
late 1980’s, the South Korean government sponsored one of the largest environmental clean-up
programs in Asia to restore the supply of potable water from the Han River, which had for
decades been a receptacle for urban and industrial refuse. (Roberts and Kanaley 2006, p. 3)
Faced with inter-district problems of transportation, waste, drainage and water supply, Sleman, a
district in southern Java, took a leadership role in developing stronger and more institutionalized
cooperation with the Regency of Bantul and the city of Yogyakarta. Together, they set up a joint
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secretariat, Kartamantul (from the names Yogyakarta, Sleman and Bantul) that has since found
many effective solutions for their urban woes (Roberts and Kanaley, 2006, p. 178-179). While
strengthening urban management processes is necessary, remedies must be more fundamental
and far-reaching. In seeking remedies, we must delve deeper, to grasp at the societal motivations
and values that have driven humankind into this unsustainable pattern of collective behavior in
the first place. As Jay Forrester proposed in his paper “Should we save our cities?”, a long-term
remedy is one that would involve “the generation of laws, attitudes, morality, and folklore that
will establish the most desirable of the feasible equilibrium societies.” (Forrester, 1972, p. 61)
Donella Meadows et. al. suggest “changing the information links in a system: the content and
timeliness of the data that actors in the system have to work with, and the goals, incentives, costs
and feedbacks that motivate or constrain behavior.” (Meadows D.H., 1992, p. 191)
Cities may offer a point of entry by which we can deepen our understanding of the situation at
hand and move closer towards sustainable remedies. The manifestations of overshoot and
collapse are more immediate and visible in cities than at the national or global levels. In
response to these manifestations, cities exhibit a range of coping behaviors and capacities.
Leaders and inhabitants have vastly different stances and approaches towards urban expansion
and sustainability, and have encountered vastly different outcomes. Most importantly,
underlying these distinctions in approaches and outcomes are the goals and values linked to the
differing political and socio-cultural contexts of cities.
Do these goals and values extend to the well-being of present and future generations? How
consistently are these goals and values applied in the way the city is governed? Is there a sense
of collective ownership of and responsibility towards the global issues? Is there a willingness
and ability to take stock, reassess past decisions and adapt to soon-emerging and future changes
and trends? Seeking answers requires that cities be understood as complex, living systems,
interacting with their environment, with their populations and physical infrastructures tracing
development trajectories over decades (Seetharam and Yuen, 2010, esp. Chapts 1 & 11). But
tools to facilitate such understanding are rarely encountered and even more rarely used
effectively. One of the most powerful - the model described by Jay Forrester in Urban
Dynamics (1969) - has mostly faded from view, even among members of the System Dynamics
modeling community. Those seeking to guide and lead their cities “beyond the crisis” must give
serious attention to the lessons and analytical tools that Urban Dynamics has to offer.
Lessons from Jay Forrester’s Urban Dynamics
The rise and fading from view of urban dynamics
While the 21" Century may be labeled “The Century of the City,” the issues raised in the UN-
Habitat report, State of the World’s Cities 2008/9, are not new. Many echo concerns that
preoccupied US political leaders and urban planners in the mid to late 1900s. They were
captured in the title of Edward Banfield’s 1970 classic, The Unheavenly City (Banfield, 1970)°
and in the bleak appraisal of the 1968 (US) Kerner Commission Report: “Our nation is moving
toward two societies, one Black, one White — separate and unequal.”
It was in this climate that 8 year Boston Mayor John F. Collins, who had chosen not to run for re-
election, accepted a one-year MIT appointment as Visiting Professor of Urban Affairs. His
5 Though Banfield’s appraisal was less pessimistic than the title suggested
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presence catalyzed extended discussions between Jay Forrester and urban political leaders,
leading to the publication of Urban Dynamics (Forrester, 1969). It was the first widely
circulated application of Industrial Dynamics to a non-private-management problem (Forrester
2007, pp. 348-349). The public attention it received, the positive response accorded it by many
policy-makers and the hostility accorded it by many academics presaged similar reactions that
would greet World Dynamics and, on a much larger scale, The Limits to Growth.
In “Urban Dynamics: The First 50 Years” (Alfeld 1995), Dr. Louis E. Alfeld, who directed urban
dynamics research and applications for MIT’s System Dynamics Group recounts the story of this
work, during the relatively short period of time when it was a subject of interest among those
concerned with urban development. He describes five urban planning projects in five different
cities that produced mixed results, highlighting successes, shortcomings and useful lessons
learned. His appraisal of the model is compelling: “It is..., perhaps the most insightful System
Dynamics application ever developed.” (1995, p. 199) But it was subjected to scathing criticism
by more traditional modeling communities, including members of a US Department of Housing
and Urban Development (HUD) committee tasked to appraise it. Those who might have been its
defenders were preoccupied, in wider forums, with resisting similar assaults by critics of World
Dynamics and The Limits to Growth. There is a note of pathos in his description of how the
urban dynamics model faded from view: (/bid.).
“The past twenty-five years have not treated Urban Dynamics kindly. Had HUD initially
endorsed it, urban dynamics might have become the institutional foundation for the training of a
new generation of urban leadership. Instead, it has become a curiosity, a relic of the past that few
have heard of and most dismiss. But it is too early, I think, to write it off, to consign urban
dynamics to the archives of academia. Although I mourn its history, I firmly believe in its
future.”
A less-than-comprehensive but revealing search using Google and Google Scholar confirms
Alfeld’s appraisal. There are few references after the 1970s.° Even in the System Dynamics
Review, recent references are sparse and of historical interest, with only one exception (Eskinasi
et. al., 2009). Thus, we must assume that knowledge of the Urban Dynamics model and its
insights is somewhat limited, even among at least younger members of the System Dynamics
Community. A brief recapitulation is necessary, before highlighting important lessons that this
pioneering work emphasizes.
The Urban Dynamics model structure
Urban Dynamics sought to explain and offer remedies to problems faced by many US cities
where a period of growth had been followed by a stagnant and often blighted equilibrium. The
city modeled was generic, but similar in broad outline to those whose problems motivated the
project. Forrester argued that “when first modeling a social system, it is usually best to model
the general class of system rather than a specific system... this means a model to represent the
processes common to all urban areas rather than to represent those of a specific area.” (1969, p.
14). The city’s land area is 100,000 acres or about 400 km? (which compares with Singapore’s
land area of about 580 km” at the time of independence.) In the model’s 250-year run that serves
as a baseline for subsequent 50-year runs that examine policy options, its population peaks at
about 5.5 million and then declines to about 5.1 million (1969 p. 4).
° There are other references to “urban dynamics” that have nothing to do with Forrester’s work and do not cite it.
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The city exists as a “complex, self-regulating system” functioning in a state of equilibrium with
in “environment” that is assumed to be both “limitless” and a point of reference (p. 17). By
choosing this representation, Forrester focuses attention on how the attractiveness of the city, as
it develops, differs from the “normal” circumstances of the environment.’ When the city is more
attractive to investors, developers and migrants of different classes, inward flows of resources
and population increase. When it is less attractive, inward flows decrease and become outward
flows. Thus, dynamic behavior trajectories of a city are partly explained by the fact that it is an
equilibrium-seeking system, vis a vis its environment.
An important implication of this view echoes findings from Forrester’s earlier modeling of
instabilities in corporate growth trajectories, in relation the markets they serve. He found that it
was the behavior of decision-makers within the corporation that explained those instabilities,
though they were often attributed to external factors not under the decision-makers’ control.
(Forrester, 1962, 1975, 2007, p. 348) Similarly Forrester emphasizes that cities are, in large
degree, responsible for their own destinies. Whether they are vibrant and regenerating or
stagnant and decaying, whether they serve the well-being of their residents well or badly will be
largely due to decisions made by leaders and residents within the city.
Forrester represents the social/economic structure of his city as interrelationships between three
sectors — enterprise, housing and people — and between these sectors and its environment. Since
links between the population and other sectors are strongest and population behavior modes are
strongly emphasized in the policy analysis discussions, it is useful to describe this section first.
Urban Dynamics provides one of relatively few examples of a social class structure in the
System Dynamics literature. While respective class members do not earn income, the relative
value-added of their respective contributions to the city is clear. Managerial-professional class
members work preponderantly in high value-added industries (new enterprises) and live
preponderantly in premium housing (assessed value US$30,000). They have smaller families
(average size 5) and relatively low birth rates (average 7.5 per 1000 families, per year). Since
city revenues come from property taxes, personal income is not recognized explicitly. However,
premium houses (and new enterprises) have the highest assessed valuation and pay the highest
taxes. The cost of providing city services to managerial-professional families for city services is
relatively modest (only $750 per family, per year). When growth peaks in the city, managerial-
professionals comprise about 12% of the work force.
Labor class members comprise the major portion of the work force in all enterprises. They live
preponderantly in worker housing. They have slightly larger families (average size 6) and higher
birth rates (average 10 per 1000 families per year). The cost of providing city services to these
families is nearly double the cost for managerial-professional families ($1,200 per family per
year). When growth peaks in the city, labor-class members comprise nearly 60% of the work
force.
Underemployed class members comprise about 30% of the work force at the peak period and live
preponderantly in underemployed housing (assessed value $5,000). They have larger families
(average size 8) and higher birth rates (average 15 per 1000 families per year). Because of this
7 These circumstances are represented in the model as “normal” constants influencing inflow and outflow rates to
the model’s level (stock) variables. The city’s stocks of industry, housing and population in different categori
represented as levels. See our discussion of the model’s enterprise, housing and demographic sectors, below.
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demographic profile and their lower incomes,® the cost of providing city services to
underemployed families is twice that of worker families ($2,400 per family per year) and more
than three times that of managerial-professional families.
The structures of the enterprise and housing sectors are, as noted, somewhat less rich in detail.
Their primary function is to provide jobs for the city’s population, places for families to live and
tax revenues to support city services. Forrester’s city does not have an economy in any
conventional sense. Enterprises do not produce goods and services. Jobs available depend on the
number of industry units in the city. The enterprise sector is divided into new enterprises
(assessed value $500,000 per unit), mature businesses (assessed value $300,000 per unit) and
declining industries (assessed value $100,000). In addition to paying higher taxes, newer
industries benefit the city more by employing more members of all classes. In particular, new
enterprise units employ 4 managerial-professionals. Declining industries employ only one.
Just as the process of growth produces a vibrant city, generously populated with managerial-
professionals, the aging of housing and enterprise units contributes to stagnation and decay.
Alfeld describes this process as a “filter-down’” mechanism (1995, p. 203). Each year, under
“normal” conditions, 8% of new enterprises decline and become mature businesses, 5% of
mature businesses become declining industries and 3% of declining industries are demolished.
Similarly, 3% of the premium housing stock obsolesces and becomes worker housing, 2% of
worker housing becomes underemployed housing and 2% of underemployed housing succumbs
to “slum housing demolition.” (Forrester, 1969, Appendix A, pp. 133, ff.) The rates of decline
and obsolescence vary depending on the city’s economic vitality, including employment
opportunities, and especially its demographic mix.
Growth, stagnation and policy experiments in Professor Forrester’s city
Urban Dynamics described results from three sets of simulation runs. In the first, the model was
run for a 250-year period, generating reference mode graphs that picture growth and stagnation.
Growth begins slowly but accelerates exponentially, as confidence in the city and its future rises.
It peaks at about 100 years. New industries move in, attracted by available land. The economy
is vibrant and a magnet for managerial professional class members and workers. Housing is
constructed to meet their needs. City revenues are plentiful and tax rates are relatively low. It
reaches a peak after about 100 years.
The growth period is followed by one in which available land for new construction is nearly
filled. Industry ages, the quality of the housing stock declines and the city’s tax base erodes as
the needs of its burgeoning underemployed population grow. A shortage of high quality housing
and job opportunities cause some of the more mobile and productive residents to move
elsewhere. High land costs, high taxes and declining quality of life within the city deter new
industries from considering the city as a place of opportunity. But underemployed families
continue to move in, attracted by cheap housing and generous city services, including welfare.
The growing political clout of the underemployed ensures that services for the poor continue to
receive high priority even though high taxes and deteriorating services make the city less and
less attractive for new enterprises and managerial-professionals. Eventually the social/political
economy of the city settles into a period of stagnant equilibrium with little new enterprise, few
8 Again, family income is not explicit in the model. It is assumed to be low based on the housing that lower c!
families can afford.
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amenities, and a large politically influential underemployed population, living in overcrowded,
substandard housing. It was the widespread prevalence of such conditions in US cities that
motivated Forrester’s and Collins’ collaboration to create the urban dynamics model.
Using the stagnant equilibrium conditions as a point of departure, Forrester then simulated
remedial programs, in model runs spanning an additional fifty years. These were typical of those
being implemented by many cities. Mostly, such programs targeted poor people (underemployed
workers and their families in the model). Most programs had failed to produce the results
intended. Forrester hoped that the model-generated scenarios would help to explain why.
Programs included creating jobs, job training, an external subsidy to provide higher quality city
services and low-cost housing construction. To forestall possible criticism by program
proponents (though this strategy failed), he made unrealistically generous assumptions about the
effectiveness of such programs and their costs.
Without exception, results of the simulated programs mimicked the results of the real ones.
They did not improve matters; they made things worse. In a later reflection, Forrester
summarized the bottom line conclusion to which all the scenarios generated by these programs
pointed. “Urban Dynamics showed that all of the major urban policies that the United States was
following lay somewhere between neutral and detrimental, from the viewpoint either of the city
as an institution or from the viewpoint of the low-income, unemployed residents (2007, p. 249).”
This led to one of his most profound insights about complex systems: counterintuitive behavior.
He wrote: “From all normal personal experience, one learns that cause and effect are closely
related in time and space. A difficulty or failure of the simple system is observed at once. The
cause is obvious and immediately precedes the consequence.
“But in complex systems, all of these facts become fallacies. Cause and effect are not
related in either time or space... the complex system is far more devious and diabolical
than merely being different from the simple systems with which we have experience.
Though it is truly different, it appears to be the same. In a situation where coincident
symptoms appear to be causes, a person acts to dispel the symptoms. But the underlying
causes remain. The treatment is either ineffective or actually detrimental. With a high
degree of confidence we can say that the intuitive solutions to the problems of complex
social systems will be wrong most of the time. Here lies much of the explanation for the
problems of faltering companies, disappointments in developing nations, foreign
exchange crises and the troubles of urban areas.” (p. 110).
Forrester’s third set of simulations experimented with programs that seemed, in the light of the
previous failed experiments, to be more promising candidates for catalyzing urban renewal.
Among the most successful were those that made more land available for the development of
new industry — declining industry demolition and slum housing demolition. When programs to
discourage the construction of worker housing were added to the mix (for example, through
zoning restrictions), there were further improvements in economic vitality. Paradoxically, the
amount of worker housing available actually increased because of increased demand due to more
favorable economic conditions and job opportunity. Ensuring that land for industrial
development is available, ensuring a high quality housing stock and reducing housing
availability for underemployed families that have few jobs or job prospects, were demonstrated
to be areas of particularly high leverage.
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Urban dynamics was subject to harsh criticism because of policies that were interpreted as
discriminating against the poor, many of whom, in the United States, were African American.
But in Chapter 7 of Urban Dynamics, Forrester makes it clear this is not the case. An implicit
goal, he emphasizes must be to “restore economic vitality [to cities] and absorb the present
underemployed groups into the mainstream of productive activity ...The policies for controlling
population balance that the city must establish are not antisocial. No purpose is served by
operating a city so that it is a drain on the economy of the country and a disappointment and
frustration to its occupants.” (pp. 115-116)
Urban Dynamics was published more than forty years ago. But the ensuing years have not
altered the truth or importance of its central message. In an “Afterword” for a forthcoming book
(Seetharam and Yuen, 2010), Forrester writes:
“...A city is a complex system that must remain in balance with its environment. Policies
that are intended to improve the quality of urban life in the short term will disrupt the
balance in ways that are counteracted by population inflows. As my book Urban
Dynamics makes clear, many well-intended urban renewal policies implemented during
the 1950s and 1960s actually created poverty and urban stagnation. The alternative
approach is to decide what mix of desirable and undesirable characteristics a city is to
have and still remain in balance with its environment. There can be many different kinds
of cities. But every realistically possible city must have undesirable characteristics that
are sufficiently strong to balance the attractiveness of the desirable characteristics. The
most important step in arriving at a feasible plan is to decide what negative
counterbalancing forces are to be activated.”
Nine lessons that Urban Dynamics teaches
What basic lessons can be gained from Urban Dynamics that may be of benefit to cities
elsewhere and especially cities in Asia? Most are implicit in our discussion. However, a
summary will be useful.
1. A major goal of a city’s leaders and the policies they implement should be the well-being of
its people; rich and poor alike. This is the fundamental value that underlies Forrester’s policy
experiments. Cities that are “a source of disappointment and frustration to its inhabitants”
should not be an option.
2. What is meant by “well-being”? This can be a subject of endless debate, but the value
system underlying the simple social/political economy Urban Dynamics portrays is fairly
straightforward. It is implicit in the notion of relative attractiveness. A city that is
characterized by high levels of well-being is one that — at a minimum - provides decent jobs,
decent housing, and opportunities for upward mobility. It is a city where the number of
wealth-generating managerial-professionals is significant, where worker class members are
predominant and the number of underemployed is relatively small.”
° Obviously the urban dynamics model omits many possible dimensions of well-being or what is often called
‘livability’ in rankings of cities. See for example the listing given in the Bloomberg-Mercer 2007 ranking. Our
purpose in this paper is not to enter into that debate but only to suggest how a scenario outcome for a hypothetical
city might be judged better or worse in the context of values that to us seem implicit in the urban dynamics model.
We do acknowledge that this may be controversial as, indeed, was Urban Dynamics itself.
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3. A city is master of its own destiny. It is the responsibility of city leaders to sustain a
symbiotic relationship with its environment. Over time, the environment will change in ways
that are both favorable and unfavorable to the city. To sustain the well-being and vibrancy of
its people, the city must be adaptable and resilient.
4. An important requisite for sustaining the city’s well-being (not the only requisite) is wealth.
Given that Forrester’s city has no oil reserves, diamonds or any other natural resource, its
only source of wealth is the productivity of its enterprises and the tax base its stock of
housing provides. These depend, in turn on the productivity of its people.
5. Individuals differ in their capacity to produce wealth. Forrester offers no theory why this is
so; he simply incorporates this reality into his model. One might assume that differences are
partly innate, partly determined by motivation and partly determined by favorable or
unfavorable circumstances. The model assumes that educational opportunities and the
opportunities created by a vibrant economy can increase upward mobility, which will in turn
be manifest in increased productive capacities. Wealth creation, properly managed in an
urban context, is a positive feedback loop.
6. In designing the tax structure of a city, and providing amenities to its residents, one must
strike a balance between incentivizing those capable of producing wealth with low taxes and
providing amenities that meet the needs of all. If the gap between rich and poor is too wide,
the result can be social instability. If too narrow, the result can be an exodus of the city’s
most productive residents and stagnation.
7. The greater an individual’s productive capacity, the greater his or her discretion in choosing a
place to live. New enterprises too, have discretion in determining in which cities they will or
will not locate. City leaders must take this into account. Forrester gives little attention to the
mobility of mature and declining industries. However, we have seen that these, too, are
making location decisions based on relative attractiveness. Forrester would probably argue
that an exodus of mature and declining enterprises, creating opportunities for new enterprises
to move in and encouraging city leaders to find them, benefits the city.
8. Long-term planning is important. This is because the nature of complex systems, programs
and plans that seem promising in the short term are often counterproductive in the longer-
term. Similarly, the objectives of long-term plans often seem counterproductive in the short
term. One can derive immediate satisfactions by charging goods and entertainment to one’s
credit card but eventually “the bills fall due”.!° It is the responsibility of political leaders to
make tough decisions that give priority to the long-term over the short term.
9. Most important is the relative attractiveness principle. This is the fundamental principle of
Urban Dynamics, emphasized once again in Professor Forrester’s “Afterword”. It is so
central and, in our view, so important, that it merits a reiteration, in somewhat different
language, from a Donella Meadows Global Citizen Column. She was writing about the
decision of community leaders in Woodstock, Vermont (USA), not to expand the two-lane
highway leading to their town, despite pressure from commercial developers to do so. (1991;
2002, p. 137)
'° This a common metaphor used to make the point. We believe we first heard it used system dynamics context
during a personal conversation with Professor Forrester, but can’t remember the specifics.
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“The attractiveness of a place is a complex combination of climate, economy, amenities
and scenery. No one can define attractiveness exactly, but people make up their minds
about it every day by deciding to move from Hartford or Boston or Westchester County
to Vermont (that’s the direction they are moving now). Millions of human judgments
weigh Vermont’s clean air against Boston’s job market and Manhattan’s cost of living.
The very different mixes of attractiveness and unattractiveness in those places may seem
incommensurable, but people make their comparisons and move around until
attractiveness evens out everywhere.”
Urban Dynamics is about the way cities could be, but more important, it is about the realities of
cities whose attributes are shaped by human decisions but also the dynamic properties of cities as
complex systems. Acknowledging realities may be difficult, whether these be the realities of
limited urban land or a finite planet. By way of illustration, Forrester describes a conversation
with an MIT colleague, a social scientist, shortly after Urban Dynamics was published. “It
doesn’t make any difference whether you are right or wrong,” the colleague opined, “the results
are unacceptable.” (2007, p. 348)
Forrester’s view of realities, even “unacceptable” ones, is different, perhaps reflecting a
childhood growing up on a Nebraska cattle ranch. “A ranch is a crossroads of economic forces,”
he writes. Supply and demand, changing prices and costs, and economic pressure of agriculture
became a very personal, powerful and dominating part of life. Furthermore, in an agricultural
setting, life must be very practical. It is not theoretical, nor is it conceptual without a purpose. It
is a full time immersion in the real world.” (2007)
For many, especially many in academic settings and in national leadership roles, the realities of
relative attractiveness, physical limits and overshoot Forrester described in Urban Dynamics and
World Dynamics 40 years ago remain abstractions to be debated rather than realities that must be
faced. For Singapore’s leaders, the challenges they faced in August 1965, when irreconcilable
differences with Malaysian Federation leaders thrust independence upon them, made things
different.
Singapore’s Success'' and Urban Dynamics
Singapore’s independence day did not herald a success story
Reading Lee Kuan Yew’s description of events surrounding independence and the immediate
problems he faced, one is reminded of Dennis Meadows’s descriptions of challenges leaders and
peoples might face during a period when one or more major global systems collapsed due to
overshoot. The problems were unanticipated, multifaceted, immediately threatening and without
precedent. Singapore was cut off from its economic hinterland and from the role she had played
as a regional entrepot since Sir Stamford Raffles founded the colony in 1819. Trade had
dwindled to a trickle as Malaysia and Indonesia sought alternatives to an independent Singapore
and threatened military intervention. Unemployment was 14% and rising, creating stresses in
Singapore’s multi-communal society that threatened law and order (Lee Kuan Yew, 2000, p. 23).
' We have borrowed from the title of Henri Ghesquiere’s fine book (2007) for this section’s heading, though our
brief discussion omits many important issues he rai Richardson also had the opportunity to sit in on his class,
“Singapo Development: A Comparative Perspective.’ Our understanding of Singapore was greatly enriched by
the experience.
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Singapore’s water supply came across a causeway from Malaysia. Lee had youthful memories
of how Japanese soldiers had cut off Singapore’s water supply, demoralizing British defenders
and forcing them to surrender (Lee Kuan Yew, 1998, p. 22). Three years earlier, in speeches
supporting a vote favoring independence, Lee had argued that Singapore could not be viable on
its own; that its future lay with Malaysia. Now, newspapers in Australia and London echoed his
views (2000, pp. 19-20). The challenge Singapore’s leaders and her people faced, as
independence was announced, was survival. Lee writes:
“We had to create a new kind of economy, try new methods and schemes never tried
before anywhere else in the world because there was no other country like Singapore...
We had to make extraordinary efforts to become a tightly knit, rugged and adaptable
people who could do things better and cheaper than our neighbors... We had to be
different.” (2000, pp. 23-24)
While Singapore faced daunting challenges, she was not entirely devoid of advantages, as Henri
Ghesquiere has noted. Most inhabitants were recent immigrants and while the society lacked
cohesiveness, it was not weighed down by a historical legacy of “internal divisiveness that
comes from old injustices.” A predominantly immigrant population might be prepared to
abandon old habits and seize new opportunities. Its traditional role as an entrepot center for the
British Empire (though hostile neighbors were committed to supplanting this role) bequeathed
financial and communications institutions supporting trade to the new nation. Ghesquiere also
notes British legacies such as English as the working language (though mostly among the elite),
a functioning civil service, strong educational institutions and ‘rule of law’ of traditions (2007, p.
41-42). Of course, many British colonies began life as new independent states with comparable
or far greater advantages, and many fewer disadvantages. Putting those advantages to good use
was the challenge.
Singapore succeeded. It now ranks as one of the richest countries in the world, in terms of per-
capita purchasing power parity (Ghesquiere, 2007, p. 13) and one of the most livable cities in
Asia (Business Week Interactive, 2007). Its top rankings in many categories — attractiveness for
business, community health, public safety, freedom from corruption, rule of law, best
international airline and airport, are almost accepted as routine (though used by Singapore’s
political leaders to motivate her people to continue striving for excellence). Today, many
dismiss Singapore as a special case from which little can be learned. We disagree. In 1965, no
one would have pointed to Singapore as a success story from which lessons could be drawn.
The Singapore story viewed through a lens of literature and personal experience
This section emphasizes facets of that success story that are relevant to the issues raised above.
Our goal is to highlight aspects for readers who are unfamiliar with Singapore’s post-
independence history or only know it as a caricature, perhaps from one or two critical newspaper
articles or even a short visit as a tourist. A brief reflection on why we chose Singapore and how
we have chosen to portray it may be in order. We believe Singapore’s rags-to-riches
transformation embodies principles and practices that can be applied in other settings. Many
correspond to principles emphasized by Jay Forrester, based on an analysis of his generic city,
the Urban Dynamics model. For other cities whose leaders face daunting challenges, though
some different than those Singapore faced, this offers hope.
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We also chose Singapore because we live there. One author is a lifetime resident, the other a
very recent arrival who is viewing Singapore with new eyes, albeit eyes sensitized by field
research in other Asian cities with very different development experiences. In our description,
scholarly accounts and personal reflections are intermingled.
The terrain we briefly survey has, of course been surveyed by others in greater depth than this
paper allows. Lee Kuan Yew’s remarkable two-volume autobiography (1998, 2000) provides a
rich chronicle by one of the world’s remarkable political leaders. Henri Ghesquiere’s volume,
Singapore's Success (2007) provides a refreshingly clear and succinct account of Singapore’s
economic development. Kenneth Paul Tan’s edited volume, Renaissance Singapore?: Economy,
Culture and Politics (2007) demonstrates that criticism of Singapore from within the country is
not out of bounds, especially when pursued with civility and good humor. Neo Boon Siong’s
and Geraldine Chen’s Dynamic Governance offers a unique ‘insider’ perspective on Singapore’s
successes. Obviously we cannot give full justice to these works, and many others. We are also
aware that Singapore has its critics. For those interested, Rodney King’s The Singapore Miracle:
Myth and Reality catalogues critics’ major concerns. Responding to them is not our purpose here.
Promoting economic development
Those describing Singapore’s success most commonly highlight economic development. From
1965 through 2005, economic growth averaged at 8.5%. (Ghesquiere, 2007, p. 13) Most
noteworthy during this period was the implementation of a planning process that was sensitive to
changes in global economic circumstances and flexible in seeking out ways to capitalize on them
that would work to Singapore’s advantage.
Ghesquiere describes the strength of this process as an ability to reframe objectives in order to
overcome a succession of “binding constraints” that threatened to curb economic growth. (pp.
82-86; Palmade, 2005) Thus, “during 1967-73 Singapore opted for export-oriented
industrialization, focused on the production of labor-intensive, low value-added items” while
investing in petroleum refining and chemicals. “The 1973-84 period targeted economic
restructuring with technological catch up.” The binding constraint of “insufficient indigenous
entrepreneurship” was overcome by providing conditions that would persuade multinational
corporations to locate in Singapore. Among these were creation of the Economic Development
Board that provided high-quality one-stop service to potential investors (Lee Kuan Yew, 2000,
pp. 77, ff.) and the National Trade Unions Congress, which, with the backing of new legislation,
ensured strike-free labor relations (Ibid, p. 108, ff.). Few stones were left unturned that would
attract profitable new enterprises and skilled managerial-professionals to staff them.
When the 1985 recession revealed “the danger of excessive concentration of exports in a few
sectors,” Singapore embarked on a new 12-year strategy emphasizing economic diversification,
sector wise and geographically. ...The focus turned to leveraging the city’s locational advantage
and trade expertise to successfully develop air transportation, telecommunications, logistics,
shipping and cargo-handling facilities.” Conference facilities and business centers were also
emphasized (Ghesquiere 2007, p. 84). Between 1985 and 1997, tourist arrivals increased from
about 3 million to more than 7 million. (Singapore Tourist Board 2000, p. 24)
12 . lint :
The italics for emphasis in this section are the author’s.
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Singapore weathered the 1997-1998 Asian financial crisis with no major dislocations (Lee Kuan
Yew, 2000, pp. 101, 202). However, this motivated another reassessment and new priorities,
emphasizing the strengthening of Singapore an “advanced and globally competitive knowledge
intensive economy. Ongoing restructuring (aimed) to ensure long-term competitiveness...”
Singapore sought to become “a key node in a global network of people and ideas” with emphasis
placed on “marketing and design services and on making Singapore a choice location for
international events.” (Ghesquiere 2007, p. 84-85)
Free market principles have been at the heart of Singapore’s economic development strategy
since Lee Kuan Yew first sought advice from former UNDP consultant Albert Wisenmius on
industrialization, fiscal and monetary policies.’ Success in implementing these principles is
confirmed by international rankings. Singapore was ranked no. 2 on the Heritage Foundation
Index of Economic Freedom for 2010 (Heritage Foundation, 2010), no. 1 on the World
Economic Forum’s Global Enabling Trade Report for 2009 (World Economic Forum, 2009), and
no. 2 in the Economic Integration Index of the Pacific Economic Council. (Chen Bo and Woo,
2008)
These rankings must not, however, obscure the disciplined role played by Singapore’s
government in ensuring the stability and predictability that its “clients”, top executives of
multinational corporations, required. (Lee Kuan Yew, 2000, pp. 73-88; Ghesquiere, pp. 87-97)
Moreover, the government did not shrink from establishing publicly-held corporations, where
attractive niches beckoned, and managing them profitably. The term “profitable public
corporation” is not an oxymoron in Singapore. Singapore Airlines, regularly ranked by
international travelers as #1, is the best-known example, but by no means the only one.
A not-unrelated factor setting Singapore apart is the high salaries, probably the highest in the
world, paid to senior public officials. These are intended to ensure that the government can
compete with the private sector for top talent and that ‘revolving door’ practices such as in the
US, where officials use government jobs as stepping-stones to high salaried private-sector
positions in the private sector are avoided. Salaries are set at two-thirds of the amount paid to
occupants of comparable positions in the private sector as determined by income tax returns.
(Lee Kuan Yew, 2000, p. 195). The high salaries are coupled with draconian, effective measures
to ensure “clean government”, administered by an independent public commission. (Ibid., p. 188,
ff.)
The government’s role in ensuring non-confrontational labor relations has already been
emphasized. This was one element in a set of pragmatic policies that also included free trade and
monetary policy that sustained a stable currency. Fiscal, discipline, with strong safeguards
against deficit spending, contributed to low inflation. Ghesquiere terms this approach ‘pragmatic
policy adaptation’, noting that it was not so much the framing of development plans as their
consistent implementation that set Singapore apart. He concludes: “Singapore’s development
experience by contrast (with those of other developing countries) shows many instances of
policies that were highly predictable. They were carefully engineered to be mutually reinforcing,
creating virtuous cycles”. (p. 90)
8 Wisenmius advised Singapore’s government, serving in a in a pro-bono capacity, for 23 years.
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Ensuring the well-being of Singapore’s people
We began our discussion of Singapore’s success with economic growth because it is as a leading
free market economy (and one of the world’s best tourist and shopping destinations) that
Singapore is best known. But we do not believe Singapore’s leaders ever viewed economic
development as an end in itself. Rather, it has always been seen as a prerequisite to realizing two
strategic priorities, which were viewed as interrelated. The first was securing the well-being of
all Singaporeans in their daily lives. The second was securing national survival in a world
viewed as economically and politically turbulent and in a region populated by neighbors with
hegemonic aspirations that viewed Singapore, with its majority Chinese population, as an alien
presence.
Economic growth provided the resources that made policies intended to enhance well-being
possible. Because this paper focuses primarily on lessons to be learned from Singapore’s
development as a city, minimal attention will be given to the geopolitical considerations
impacting on Singapore’s development, though successful management of geopolitical
challenges was obviously essential to Singapore’s success. For those interested, a good place to
begin is with Lee Kuan Yew’s masterful treatment of the subject in Part II of the second volume
of his autobiography. (Lee Kuan Yew, 2000)
Academics and development practitioners have debated the meaning of human well-being for
decades. The goals of PAP leaders were practical and concrete. Priority was given to public
security, housing, water and sanitation, health care, education and job opportunities. Later, public
transport and creating physically appealing public spaces (“Clean and Green Singapore”) were
added to the list.
Singapore’s achievements on these dimensions of human well-being are comparable to its
economic development achievements. The 2008 Mercer Survey ranked Singapore go” among the
World’s safest cities (Best City Reviews, 2008). On Transparency International’s Corruption
Perceptions Index (2009), Singapore ranks #3.'° Clean water and sanitary facilities are available
to every Singaporean. The estimated infant mortality rate in 2009 was 2.3, one of the lowest in
the world. Life expectancy for both males and females is over eighty years. Adult literacy is
over 92%, up from less than 65% in 1960. Nearly 90% of Singaporeans have secondary or
higher educational qualifications.'° This year, television reports are describing Singapore’s
current unemployment rate at just slightly higher than 2%.
Singapore’s higher education policies provide a good example of how government planners
linked programs to improve human well-being with national economic development objectives.
Ghesquiere describes how in the 1960s, the national educational goal was to produce skilled
artisans and technicians and avoid turning out unemployable white-collar graduates (2007, p.
77). When expanding higher education became a priority, entering classes were kept small to
ensure high quality. Admission requirements were rigorous. Generous scholarships were
awarded, but quickly withdrawn from students who did not perform at a high standard. Emphasis
'4 This view was reaffirmed by journalist Tom Plate in a recent book that reports on two lengthy days of interviews
he held with former Prime Minister Lee Kuan Yew (2010).
& Rankings of other Asian countries are Hong Kong #12, Japan #17, Taiwan #37, South Korea #39, Malaysia #56,
India #84, and Indonesia #111. The United Kingdom ranked #17; the United States #18.
'© These data are from a database we have compiled using data from the Singapore Department of Stati:
(Singstat online) and the World Bank World Development Indicators, online.
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was given to curricula in science, engineering, information technology and management to meet
the needs of Singapore’s expanding high-technology economy (Ghesquiere, 2007, p. 78).
The PAP leadership’s commitment to human well-being reflected its origins as a socialist
party.!7 But its philosophy differed radically from that of the OECD countries, which in 2001
expended more than 13% of GDP on welfare, while Singapore expended less than 1%. Its
approach more closely reflected Jay Forrester’s hotly criticized recommendations that welfare
programs for the underemployed be limited. Lee Kuan Yew writes (2000, p 126): “We noted by
the 1970s that when governments took primary responsibility for the basic duties of the head of
the family, the drive in the people weakened. Welfare undermined self-reliance. The handout
became a way of life.”
Singapore’s alternative was the Central Provident Fund (CPF), a program of government-
mandated savings over which workers had control and which was intended for retirement and
home ownership. Like Singapore’s health care system (see Ghesquiere, 2007, pp. 67, ff.) the
CPF system places maximum emphasis on individual discretion, individual responsibility and the
operation of market mechanisms to influence user choices. These principles are illustrated
particularly well in an innovation that is distinctively Singaporean and, once again, consistent
with Urban Dynamics. We refer to programs that have resulted in widespread home ownership
of government constructed and managed “public housing”.
Balancing commercial and housing demands on the land
As a small island state, Singapore has severe physical constraints to contend with. Leaders have
had to set aside sufficient land for businesses, financial centers and industries while at the same
time making sure that the needs of the population for housing, open space and recreation are met.
Despite a population density of 7,022 per sq km, one of the world’s highest, only 15% of
Singapore’s land has been allocated to housing and only 17% to recreational and community
needs. The rest is used for commerce (4%) and industry (10%), infrastructure, utilities and
transport (17%) and reservoirs, defense facilities, and cemeteries and undeveloped land (37%).
Plans are underway to set aside an ample proportion of the latter to support high-technology
commercial development (Economic Strategies Committee (ESC) Subcommittee Report, 2009).
How has Singapore overcome the obstacle that Forrester targeted as one of the major
impediments to sustaining a vital economy: the preponderance of substandard housing attracting
the underemployed? In 1960, only 9% of Singapore’s population occupied public housing and
much of the city’s housing stock resembled the overcrowded deteriorating stock of
underemployed housing described in Forrester’s hypothetical city. Today, an astonishing 82% of
Singaporeans live in “Housing Development Board” apartments (HDB flats) clustered in high-
density public residential estates. HDB flats are ubiquitous in Singapore’s landscape (though
less so in areas most commonly frequented by short-term visitors). A second statistic is equally
astonishing to those familiar with the failed public housing projects in large US cities and on the
outskirts of cities in Russia and former Communist bloc countries: virtually all of the HDB flat
residents are homeowners.
The PAP was a member of the Socialist International until 1976 when it withdrew to avoid expulsion on the
grounds of suppressing independent labor unions and freedom of the press (Ghesquiere, 2007, p. 79).
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For Lee Kuan Yew, the opportunity for near universal home ownership was a key element in his
plans to build a stable society based on shared responsibilities and shared commitments. He
writes:
“My primary preoccupation was to give every citizen a stake in the country and its future.
I wanted a home-owning society. I had seen the contrast between blocks of low-cost
rental flats, badly misused and poorly maintained and those of house-proud owners, and
was convinced that if every family owned their own home, the country would be more
stable. ...Ifa soldier’s family did not own their own home, he would soon conclude that
he would be fighting to protect the properties of the wealthy. I believed this sense of
ownership was vital for our new society with no deep roots or common historical
experiences.” (2000, p. 117)
When the program was created, HDB flats were targeted for lower and middle-income residents
with means-tested subsidies provided to those who could not otherwise afford home ownership.
This practice has continued, though as Singapore has become wealthier, the value of flats has
appreciated. Housing Development Board staff are continually adjusting rules and procedures to
strike a balance between allowing for the operation of market forces and keeping the program
true to its objectives, though in a very different Singapore than when it was created.
Flats are located in public housing estates, each of which is equipped with amenities such as
markets and food centers, schools, community or regional libraries, places of worship, shopping
and entertainment complexes and parks. They seek to achieve the ambience of small
communities — often there are also government-sponsored community centers. High quality
maintenance is also a priority. Upgrading of these flats and estates is ongoing. Singapore’s
efficient public transport system provides easy and affordable access for residents to commute
and travel to other parts of the city.
Land use planning has been greatly facilitated by another distinctive Singapore characteristic.
Passage of the 1966 Land Acquisition Act began a process through which Singapore’s
government now owns about 90% of the total land area (Ghesquiere, 2007, p. 80). Balancing the
limited supply of land with competing demands has only been possible through combining
officials’ integrated, long-term approach to land use and infrastructure planning with major
demolitions. But commercial development has by no means been the only priority.'* For
instance, park connectors have been built to allow the public to travel between parks on foot,
bicycles and rollerblades. New integrated activity hubs are being developed to spatially distribute
economic activities. Government planners have now initiated plans to measure land productivity
in terms of its yield, using indicators such as jobs, spillover and value capture per hectare. (ESC
Subcommittee Report, 2009)
Ensuring public confidence and stability through strong and sustained leadership
Prime Minister Lee Kuan Yew set the tone for self-confident, decisive leadership, asserting
authority and helping to develop the country in tangible ways that improved citizens’ lives. He
resisted external pressures to adopt the liberal democracy of the West, which he felt was
inappropriate to Singapore’s culture and level of development. He believed that what the people
'8 See Lee Kuan Yew, 2000, p. 231. Lee writes that to construct Changhi Airport (rated in 2010 as the world’s best
by international travelers), “we demolished hundreds of buildings [and] exhumed thousands of graves... For an
airport of that size, the normal construction time was 10 years. We completed it in six.”
20
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want is good government, not a particular form of democracy that had evolved in a very different
context. (Han et. al., 1998, p. 376) He pointed to the failures of democracy in most post-colonial
states, especially multi-ethnic ones. A good government, he asserted, is one “which is honest,
effective and efficient in protecting its people, and allowing opportunities for all to advance
themselves in a stable and orderly society, where they can live a good life and raise their children
to do better than themselves.” (Ibid. p. 380 and also see Lee Kuan Yew, 2000, Chapts. 9 & 14)
The People’s Action Party (PAP) has ruled Singapore since self-rule was granted in 1959. Its
world ranking of 81 (just below Albania) on the Economist Intelligence Unit’s 2008 Index of
Democracy and comparably low rankings on other similar scales contrasts with its high rankings
in other areas. However, PAP leaders take pride in this continuity in office. They believe it has
been a key factor in sustaining the coherent policies and long-term planning that have been keys
to Singapore’s success. They argue that this achievement, which has been ratified in successive
elections, affirms their approach to promoting Singaporean’s well-being and retaining public
trust. (Lee Kuan Yew, 2000, 143, ff.)
Further, they maintain that even with one party, the political succession in the nation is
systematically and painstakingly planned, with peaceful handovers and ex-Prime Ministers
remaining in the cabinet as influential members. This protects Singapore from the destabilizing
and unpredictable leadership changes that have damaged other developing countries. New
leaders are untiringly sought, rigorously tested and groomed; the criteria for their selection are
their powers of analysis, sense of reality, imagination, quality of leadership and dynamism. Most
important of all are their character and motivation, “because the smarter a man is, the more harm
he will do society”. (Han et. al. p. 338; also see Lee Kuan Yew, 2000, Chapts. 15 & 41)
Engaging the people’s hearts and minds
Singapore’s stability and success would not have been possible without strong support from her
citizenry. Government leaders invest considerable time and effort in communicating goals,
priorities, values and policy rationales to the public. Feedback from the public is invited through
multiple channels, though civil society organizations common in the US and Europe are not
major players. The mass media is expected to play a supportive role in doing this, as well as in
reinforcing, not undermining the cultural values and social attitudes being inculcated in schools
and universities. Its potential to raise the standards of living in the nation by cultivating a quest
by the people for the attainment of knowledge, skills and disciplines of advanced countries is
also tapped. (Han, et. al., p. 427)
To engage the hearts and minds of the citizenry, and in particular to share with the post-
independence generation the history and struggles of the nation, the present threats and
opportunities and her hopes for the future, the National Education (N.E.) program was launched
in schools in 1997 as a government-led initiative. The N.E. messages are discussed in class, and
lessons and applications are drawn from a wide range of contexts within the academic and co-
curricular programs of the schools. The messages are: (Ministry of Defence Nexus website,
accessed 19" March 2010)
1. Singapore is our homeland; this is where we belong.
2. We must preserve racial and religious harmony.
3. We must uphold meritocracy and incorruptibility.
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4. No one owes Singapore a living.
5. We must ourselves defend Singapore.
6. We have confidence in our future.
Not long ago, The Institute of Policy Studies, a research institute of The Lee Kuan Yew School
of Public Policy, sponsored a day-long conference on strengthening Singapore through long-term
planning, with wide public involvement. The emphasis was on building community as an
essential ingredient of development. The conference was sponsored by 20 organizations, mostly
corporations, attended by nearly 300 business and civic leaders and held at a downtown five-star
hotel. The Prime Minister spoke for 40 minutes and answered questions for another 30. Seated
next to us was the head of the Sony Corporation for Southeast Asia. Community building is
taken seriously in Singapore.
Cultivating and maintaining social cohesion in a multi-communal society
One of the most oft-repeated messages from political leaders to the people emphasizes the issue
of fostering social cohesion, which is seen as the bedrock for Singapore’s future as a nation.
Communalism was the issue that broke apart the Malaysian Federation. In other Asian nations,
most notably Sri Lanka, it has fostered divisiveness and sapped promising economic
development initiatives. In Singapore, political appeals based on communalism are forbidden. In
Malaysia, preferential treatment for Malay citizens is government policy. At the time of the
breakup, Prime Minister Lee highlighted the problem by noting that a statement of government
policy on communal issues in Singapore would be viewed as treason in Malaysia and that a
statement of government policy on communal issues in Kuala Lumpur would be viewed as
treason in Singapore.
Singapore’s population is a melting pot of immigrants from different racial, cultural and religious
affiliations and backgrounds. Singapore’s leaders were mindful of the dangers communal
conflict posed from the outset. (Lee Kuan Yew 2000, Chapts | and 6). S. Rajaratnam,
Singapore’s first Minister for Foreign Affairs and the author of the nation’s citizen pledge said,
“the communal problem...must be and will always remain one of the major problems which, if
we do not resolve intelligently, could break our society, especially of an independent Singapore.”
(Kwa, 2006, p. 155)
The stakes are high: situated in the Malay Archipelago, and the only Asian nation outside of
China (including Taiwan) with a predominantly Chinese population, Singapore has been
described as a “juicy Chinese nut in a Malay nutcracker”. This is apt, as the city-state is
sandwiched between two much larger neighbors who have at various periods in history been
openly antagonistic in their policies and stances towards her. Perceived injustice towards
Singapore’s small Malay population might well trigger hostility and aggression from these
quarters. (Singh, 2007, pp. 9-10)
Courting and controlling immigration
This goal of sustainable social cohesion has been extended to foreigners working in Singapore
and permanent residents in the city-state. This matter is especially critical to a country like
Singapore, which has one of the highest percentages of foreigners in the world. A third of
Singapore’s total population of 4.99 million is foreigners working in Singapore. Of the
remaining 3.73 million, 14.3% are permanent residents and 85.7% are citizens. (Singapore
Statistics Online, accessed 19" March 2010)
22.
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Immigration policies are regarded by Singapore’s leaders to be of critical importance to the
nation’s survival. The city-state faces an impending working population decline due to a very
low total fertility rate of 1.23, further aggravated by having one of the fastest ageing populations
in the world. In tandem with efforts to promote marriage and parenthood to boost her
distressingly low fertility rate, Singapore’s leaders have chosen to recruit foreign talent using the
job opportunities created by its high-performing economy and high quality of life as recruiting
tools. These policies have so far engineered a doubling of Singapore’s immigration rate from
7.98 per thousand in 2002 to 14.3 per thousand in 2008. There was an average of 48,300 new
permanent residents over a five-year period from 2003 to 2007. A target of 20,000 new citizens
has been set, in anticipation of the shrinking of the resident population from 2025 when deaths
outstrip births. (Hussain, 2010)
The rationale Singapore’s leaders have given for this aggressive intake of foreigners is that
immigrants make up for the children that Singaporeans are not having, address the threat of a
declining economy with a shrinking labor force and reduce the future burden of young
Singaporeans. (Oon and Goh, 2009) This is the unequivocal message that has been continually
communicated to the citizenry in a bid to help them understand the intents of their leaders and to
address their concerns about the impact that newcomers may have on their lives and those of
their children.
Nevertheless, measures have been put in place to control the size and nature of the immigrant
pool. Only those who increase the average level of competence of Singaporeans are accepted;
they must have skills and at least secondary, preferably tertiary education. (Oon and Goh, 2009)
Care is taken to monitor the intake of immigrants so that the racial balance in the city-state is not
upset. Housing regulations prevent enclaves of immigrants of the same race or nationality from
forming, and newcomers are educated on social norms. In addition to such attempts to preserve
the character and values of Singapore society, Singaporean’s interests are protected with
measures targeted at widening the gaps in benefits between those accorded to permanent
residents and citizens in the areas of housing, education and healthcare. (Hussain, 2010)
This highlights an awareness of the social and physical limits faced by the city-state in receiving
immigrants. The adverse impact that a dependence on foreign labor has on industrial operations
and productivity levels has also been recognized. Levies were raised early this year to reduce
industries’ reliance on foreign labor, and 5.5 billion Singapore dollars has been earmarked for
use over the next five years to upgrade the skills of Singaporean workers and raise their
productivity. Notwithstanding this, the government leaders continue to uphold their stance: that
the city needs people with entrepreneurial abilities and higher skills to grow the economy and
create jobs and income growth for lower-skilled workers. (Shanmugaratnam, 2010)
Singapore’s Finance Minister, Tharman Shanmugaratnam, made this clear in an article which he
wrote for the national paper:
“Slow growth will make everybody worse off, but it will have the harshest impact on
those at the bottom.
“Our basic approach therefore must be to maximize opportunities for all Singaporeans —
opportunities to get a good education, to work or to start a business, to retrain and
upgrade, to own a home and raise a family in a community they feel they belong in.
23
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“We should never reduce the incentive for people to work and to make the most of their
skills and talents. That has to be the basis for our society, for how we keep our economy
growing, and for how we must strive to raise living standards for all Singaporeans
including those in our lower-income groups.” (Shanmugaratnam, 2010)
Developing a strategy for sustainable development
Singapore’s approach to the use of land exemplifies an overall sustainable development strategy.
This strategy was developed over the past forty years and grew out of necessities dictated by
limited land and no natural resources.
It is based on an integrated, long-term and comprehensive planning approach that involves
technical agencies across ministries coming together to plan land use and infrastructure, and
water and energy management and use. Secondly, this is supported by the use of a highly
pragmatic approach to achieving environmental sustainability outcomes through the use of the
most viable and cost-effective methods and breakthrough innovations in technology.
A third element in this strategy is the willingness to make difficult trade-offs. Singapore’s
Minister for National Development, Mr. Mah Bow Tan, explains it this way: (Ministry of
National Development website, accessed 3 March, 2010)
“Tough trade-offs between the needs of the economy and housing, between housing and
conservation, and between development and preservation of nature areas must continue to be
made, especially in a small and resource scarce city-state like ours. We want a virtuous cycle
of economic growth and a higher quality of the living environment supporting each other,
and not place one objective before or at the expense of the other.”
Water management — an illustration of Singapore’s sustainable development strategy
Singapore’s management of water provides an apt illustration of this three-pronged sustainable
development strategy. It may serve as a model, for cities and nations facing limited supplies that
have been an issue for Singapore since Independence Day. To ensure a clean and reliable supply
of potable water, Singapore has had to substantially increase the number and size of water
catchment areas and prevent the collected water from leaking away or being polluted. Such an
exercise was large-scale as it affected land use, transport planning, water treatment, sanitation
and sewerage, and involved close collaboration between the Public Utilities Board (PUB) and
other government agencies.
Earlier experiments with recycling water were abandoned because the process was expensive and
unreliable. However, with breakthroughs in water technology, a new water reclamation study
was set up in 1998, leading to the production of recycled water (NEWater). NEWater is
produced using a purification process using dual-membrane and ultraviolet technologies to
transform wastewater to high purity water suitable for human consumption and industrial use. As
NEWater is purer than tap water, it is more cost-effective to use, as water fabrication and
semiconductor plants no longer have to incur the costs of purifying tap water for their use.
Tough tradeoffs were involved in Singapore’s water management policies. Currently, she has
fifteen reservoirs (including Marina Barrage — the first reservoir in the city) which together
occupy very substantial portions of the city-state’s land (Lee, 2005). The view among
Singaporeans is that a cutoff of the water supply from Malaysia would incur costs and require
24
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adjustments but not jeopardize the nation’s survival. Through technology, disciplined
management and conservation, the threat to Singapore posed by the limited availability of water
has been overcome.
Notwithstanding this, one of the targets that the Singapore government has set for 2030 is the
reduction of domestic consumption to 140L per person per day. Other targets include achieving a
35% improvement in energy efficiency and attaining a recycling rate of 70%. In addition, 70% of
all journeys will be made via public transport by 2030 (Sustainable Blueprint Report, 2009).
Singapore’s success and Urban Dynamics
We have found no evidence that Lee Kuan Yew and his colleagues were aware of Urban
Dynamics or World Dynamics in making the decisions that guided Singapore’s development.’
But they have coped with challenges of scarce water and scarce land. They have curbed
population growth and avoided many of the pitfalls about which Urban Dynamics warns. In the
45 years since independence, they have implemented policies that have secured the well-being of
Singapore’s people. They have been sensitive to the need for resiliency in the face of challenges
that physical limits and the uncertainty of the wider world posed.
If one compares the lessons of Urban Dynamics with the policies of Singapore’s leaders during
the last 45 years, the correspondences are significant. Singapore’s leaders have been foresighted
about the need to balance short-and long-term priorities. They have been realistic in balancing
the strengths and shortcomings of human nature. They have provided rewards for those talented
individuals who could create value in public and private spheres, while not closing off
opportunities for upwardly mobile members of the working and underemployed classes. They
have achieved goals that are judged by many to be prerequisites for attaining well-being and
development: a quality of life that is physically secure and a government that is free of
corruption. Their planning encompasses a time horizon as long as fifty years and is taken
seriously. Long-term plans are adjusted in response to changing conditions, but not in response
to shifting ideological and political winds. For these reasons, Singapore’s society and political
economy may be more resilient than most in moving beyond the crisis. This will not necessarily
involve a willingness to change programs and policies that have worked in the past. It will
involve being alert to new global economic, ecological and political challenges. It will involve
‘beating the competition’ in order to ensure Singapore’s survival and the well-being of its
people.
Conclusion: Messages for Singaporean Leaders and Singaporeans
A paper’s conclusion should have an audience in mind and should be clear about what its authors
wish audience members to learn or what actions they wish them to take. In the foreseeable
future, we anticipate there will be opportunities to present the ideas described in this paper to
groups in Singapore that are concerned with long-term planning. There may also be meetings
with those holding similar positions in cities other than Singapore, but facing very different
'° & conversation with a senior government official who worked closely with Prime Minister (now Minister Mentor)
Lee confirmed this.
25
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challenges. We also intend to communicate with members of the System Dynamics community,
taking advantage of whatever venues and opportunities offer themselves. Since our Singapore
meetings are coming first, we have chosen to target that audience with our conclusions.
Messages for others are implicit in what we have written. However, we will direct more explicit
messages toward them in later iterations.
Message 1. Warnings about impending global-scale problems should be taken seriously.
Creating systems that will scan for early warnings of overshoot and collapse should be a
priority.
Perhaps the most important message for Singapore audiences, both governmental and academic,
is the one with which we began this paper. There is a global-scale crisis. The causes of the
crisis, writ large, are the high probabilities of overshoot and collapse. Among the consequences
about which we can be certain are rising energy prices and the consequences of global warming,
including rising sea levels and more turbulent weather patterns whose character and impact
cannot yet be fully anticipated. Most likely, by mid-century, there will also be significant
political and economic turbulences to which Singapore must adapt.
Message 2. Singapore is as well positioned to deal with potential crises as any city or
nation, but needs to further build upon its strengths of adaptability and resilience, as well
as future scanning and planning institutions that emphasize the long term.
At the Singapore Perspectives conference alluded to earlier, Prime Minister Lee Hsien Leong
offered a telling characterization of his nation’s position. As an actor on the world stage, he said,
“we are a bantamweight.” Candidly acknowledging this reality has been another of Singapore’s
strengths. As a ‘bantamweight’ nation facing a future with strong elements of unpredictability,
Singapore’s leaders should continue to emphasize the fundamental goal of enhancing the well-
being of her people. Policies should continue to be flexible in seeking an appropriate balance
between incentivizing the most able in the society and ensuring that all Singaporeans feel they
have a stake in their community. Leaders should be alert to pressures from more wealthy
Singaporeans for changes that may lead to the inter-generational “systems-trap” of “success to
the successful” (Donella Meadows, 2008. P. 150). An example would be creating circumstances
in employment and especially education where children of the well-to-do were able to advance
on the financial and influential coat-tails of their parents’ achievements, rather than by their own
merit. They should continue to ensure that the best and brightest are incentivized to join the
government service. They should sustain Singapore’s commitment to financial resilience and
strengthen early warning systems to detect instabilities in the global financial system. They
should sustain and strengthen mechanisms for environmental scanning and long-term planning
that have served Singapore so well.
Message 3. System dynamics modeling can help and, in particular, should become an
integral part of Singapore’s primary and secondary education requirements.
Through the efforts of Daniel Kim (2002) and others, principles of organizational learning and
systems thinking, grounded in Peter Senge’s path-breaking work (2006), have made considerable
headway in Singapore. System Dynamics modeling is less well known. Jay Forrester has
questioned the utility of “systems thinking” that is not grounded in System Dynamics Modeling.
We agree with Forrester that raising consciousness about properties of complex systems with
26
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systems thinking approaches is useful, but believe that the full value of this will only be realized
if more rigorous training in System Dynamics modeling is made available.
For a country like Singapore, with her emphasis on capitalizing on new opportunities, providing
leadership and being better than the competition, the breakthroughs in teaching System
Dynamics modeling at the primary and secondary level, exemplified by work of the Learning
Exchange Network offer particularly exciting possibilities. The notion that System Dynamics
modeling might be required in the curricula of every primary and second school student in
Singapore is not out of the question. How would a city and nation be changed by an entire
generation of young men and women for whom the lessons of system dynamics modeling were
integral to their world view? This might be exactly what bantamweight Singapore will need to
do to prosper as brilliantly in the 21“' Century as it did in the 20".
Message 4. Singapore’s leaders and people should consider the challenge of creating and
modeling a paradigm that offers a compelling alternative to humanity’s current growth-
oriented one.
Lastly, we believe there is a new opportunity that awaits Singapore. Having provided the world
with a path-breaking model for moving “from third world to first”, there is a possibility it could
offer the world a similarly path-breaking model of an equilibrium society. From the early days
of global modeling, proponents of sustainability have known that fundamental changes in
attitudes would be essential if humanity was to move beyond the crisis. But we have failed
utterly in our efforts to create and market a compelling paradigm emphasizing equilibrium that
could compete effectively with dominant paradigms emphasizing consumption-based growth.
“Paradigms are the sources of systems,” Donella Meadows has emphasized. “From them, from
shared social agreements about the nature of reality, come system goals and information flows,
feedbacks, stocks, flows and everything else about systems.” (Donella Meadows, 2008, p. 163).
While no paradigm of an equilibrium society has yet caught public attention, there is one that is
more compelling than most. It is found in the conclusion of Beyond the Limits, the book
describing the second iteration of World3. (Donella Meadows, et. al. 1991) Among the most
important elements are these:
¢ Sustainability, efficiency, justice, equity and community as high social values.
¢ Leaders who are honest, respectful and more interested in doing their jobs than keeping
their jobs.
¢ Material sufficiency and security for all, with low death and birth rates and stable
populations.
¢ Work that dignifies people instead of demeaning them. Some way of providing incentives
for people to give their best to society and be rewarded for doing so, while still ensuring that
all people will be provided for sufficiently under any circumstances.
¢ An economy that is a means and not an end, one that serves the welfare of the human
community and the environment rather than demanding that the community and the
environment serve it.
¢ Political structures that permit a balance between short-term and long-term considerations.
Some way of exerting political pressure on behalf of the grandchildren.
¢ High skills on the part of governments and citizens in the art of non-violent conflict
resolution.
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¢ Reasons for living and thinking well of oneself that do not require the accumulation of
material things.
We have been familiar with this list for many years, but not until now had we considered it in the
context of Singapore. While her commitment to a growth-oriented paradigm is still evident, on
many elements of this list Singapore already scores well, better than most cities and nations.
Moreover, we are not saying that the vision in Beyond the Limits of an equilibrium society will
provide the needed basis for paradigm change. We are saying there is a need to create an
alternative paradigm of an equilibrium society. Such a paradigm must demonstrate that
sustaining high levels of human well-being that does not depend on exponentially growing
consumption of material resources, in a turbulent world of overshoot and collapse, is possible.
That is Singapore’s next challenge — and opportunity.”°
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