Traditionally, business school curriculum has focused heavily on finance, economics, strategy, marketing and other pillars of the corporate world. These jobs are naturally appealing because the employers want to hire the best and the brightest and offer unique opportunities, very competitive salaries, and name brand pedigree. Students graduating with these backgrounds will most likely take jobs in “the city.”
The city may be a traditional destination for MBAs such as New York City, London, San Francisco, Los Angeles, Shanghai, or Paris. Perhaps, the city may be one of the recently developed business-friendly areas like Abu Dhabi or the Pearl River Delta Zone in China. Regardless, business students are attracted to dense metropolitan areas that offer the perks of mass transit, cultural access, diversity of food, and opportunities that are not available outside of metropolitan areas.
It is very difficult to think about business without thinking about cities. Some of the most successful entrepreneurial endeavours in recent years, including Uber, Lyft, and AirBnB, to name a few, have developed and grown as a response to issues of infrastructure and housing. However, the average business student does not have the opportunity to have a formal education in the business of cities.
How do cities develop? What makes one city successful while another city with the same climate fails? These are issues that in the past have been left to urban planners to consider. A Center of Research called The Urbanization Project at New York University’s Stern School of Business has decided to allow business students and economists to share the burden of determining what has made cities succeed in the past and what new cities will need in the future. The Urbanization Project, led by Professor Paul Romer, is an incubator for city and business growth with access to the top minds in urban development and economics.
The NYU Stern Urbanization Project estimates that the population of the world will more than double in the next 100 years, with the majority of the people moving to urban centers. The only way to deal with this population boom would be for existing cities to expand or for new cities to be built. The Urbanization Project is comprised of two initiatives.
One of the two initiatives, known as the Urban Expansion Initiative, helps cities plan ahead for growth. This is led by Solly Angel, a professor at NYU and an expert on urban development who has advised the United Nations, the World Bank, and the Inter-American Development Bank among other organizations. Professor Angel has published a number of books on urban expansion including Planet of Cities and The Atlas of Urban Expansion among others.
The second initiative is the Charter Cities initiative. This initiative focuses on new cities and creates options for urban world leaders to consider when creating or expanding cities. This initiative is headed up by Professor Romer, Director of the Urbanization Project and Director of NYU’s Marron Institute for Urban Management. Professor Romer, who has taught at Stanford University’s Business School, and the economics departments of UC- Berkeley, the University of Chicago and the University of Rochester, is a world-renowned economist whose Ph.D. thesis concerning economic growth resulting from intentional investment research and development is considered the foundation of the economic principle of endogenous growth theory. Professor Romer’s Charter Cities Project focuses on a developing country turning over responsibility for growth to a host country that would oversee political reform that leads to economic growth.
The scholars and staff of the Urbanization Project focus intensely on research and the economics of cities. Their work is published extensively in publications such as City Journal, The Economist, Monocle, Financial Times, and Fast Company. In addition, as part of the NYU Stern community, Urbanization Project staff or visiting scholars, will host frequent brown bag lunches to exchange ideas about city development with NYU’s diverse student body.
Inside the NYU Stern Classroom
Professor Romer not only leads the Charter Cities initiative, but also devotes time to teaching one of the most popular courses at NYU’s School of Business, Urban Systems. In this class, students are pushed to consider the business aspects of city planning and what makes a city appealing for a business to set up a headquarters. Topics cover the gamut from taxation, property value, housing costs, city incentives to areas that would be considered in the realm of the urban planner such as arterial roads, shape of blocks, and development.
Students in the class are not only encouraged to think about the economics of urban living, but also, at the end of the semester, either alone, or in teams, are expected to come up with a paper focusing on a current urbanization problem and determine an economic solution for the problem. One of the papers from the Spring 2014 semester, written by NYU Stern students Craig Johnson, David Baharestani and Laura Fox, resulted in a deal with Mexico City’s Urban Development and Housing Department to create affordable housing. Working with the Urbanization Project’s Alain Bertaud, the students created models to determine how zoning regulation impacts affordable housing in Mexico City. The students’ work resulted in the elimination of regulatory density restrictions.
During the Urban Systems course, students read numerous articles that concern shifts in urban density, the effects of concentrated wealth on an area, and recent developments in urban history. One of the most interesting texts discussed in the class was called How New York City Won the Olympics. This text highlighted visionary proposal by Dan Doctoroff, who at the time was a partner at Oak Hill Capital Partners, a prominent private equity firm and would later become Deputy Mayor under the Bloomberg Administration and then CEO of Bloomberg L.P., to fast track the transformation of New York City from what it was in 1994 to what it is today.
The NYU business students can learn from the paper just how much their current lives are affected by urban planning that was put into place almost two decades before. For example, the growth in waterfront property in Brooklyn and Queens was part of a business negotiation with the City of New York that resulted in the rezoning of industrial waterfront space, that for years only housed factories, to high rise condos that have a certain amount of space allotted to affordable housing. This not only helps to increase commerce in the outer boroughs where rental is cheaper, but also aids in reducing rent across the board (theoretically).
Additional readings and topics included the effect of morale on the police force as illustrated in current and former New York police commissioner Bill Bratton’s book Turnaround. Students learned and discussed the effects of eliminating low level crime, the broken windows theory, on general crime. For example, police stationed to eliminate turnstile jumpers resulted in a general decrease in murders and robberies due to the neighborhood’s knowledge that there was a police presence.
The Urbanization Project and the Urban Systems class offer NYU students a unique look into the future of cities as well as a greater understanding of what it will take to be successful in a more crowded world. For more information on the Urbanization Project, follow their blog here.