The State Department is engaging the world’s growing cities like never before. A top U.S. diplomat explains why.

Booming cities are driving global economic growth in many parts of the world. We live in an age of extraordinarily rapid urbanization: The number of people living in cities is predicted to grow by more than 2.5 billion over the next 40 years—mostly in emerging countries such as China, India, Brazil, Indonesia, Nigeria, and Mexico. Much of this growth will occur in places that were small towns or modestly-sized cities only a few years ago, but are now on the way to becoming much larger than New York or Los Angeles.

To take advantage of this dramatic change in the world's largest emerging countries, U.S. international economic policy must undergo an equally dramatic change. The State Department has launched several new initiatives to increase our understanding of, and engagement with, these new hubs of economic growth and innovation. Our goal is to strengthen ties with key political and business leaders in a widening number of growing metropolitan centers—we can no longer focus only on capitals or a few traditional business centers. (Many of the cities we are focusing on are highlighted in the McKinsey Global Institute's recent report on these growing cities and "the rise of the consuming class.")

How well these cities cope with the challenges of urbanization will have a profound impact on the political, economic, and social stability of their countries. For growing urban areas, infrastructure is a top priority—energy-efficient buildings and transportation, modern airports, advanced power facilities, new harbors, and 21st century telecommunications. U.S. businesses have enormous expertise in these areas, and can play a highly constructive role in helping these cities meet their needs. The growth of such sectors in these cities presents huge opportunities for our firms—large multinationals as well as small and medium sized companies. And American officials are offering them our strong support.

U.S. officials are also actively encouraging growing cities and provinces to vigorously protect intellectual property, avoid discriminatory procurement practices, and ensure that investment rules are fair and transparent. Such reforms would enable them to improve their business environments—as well as significantly strengthen opportunities for U.S. companies. If these cities and provinces are to be able to compete successfully for more international investment, particularly in innovative industries, their business climates will need to achieve high standards and they will need to encourage their national governments to achieve high standards as well.

Moreover, as cities gain greater economic power, they will also gain greater political power. Indeed, many of today's local leaders will be tomorrow's national leaders. For example, a large portion of China's new leadership previously held high-level provincial jobs, and Mexican President Enrique Peña Nieto earlier served as governor of the state of Mexico. Thus, influencing leaders of emerging cities, states and provinces to adopt better economic practices now—based on market-oriented rules and norms—could result in better national practices over time.

To more fully understand this urbanization phenomenon, I make a point of visiting rising metropolises on my travels. On my last trip to China, I went to Hefei (a city of 3.4 million people) and Nanjing (7.2 million). In both cities, I engaged provincial and municipal officials on a range of economic issues similar in nature to those I discussed at the national level—the need to ensure a level playing field for investors, the importance of strong intellectual property rights protection, avoiding discrimination in government procurement, cooperation on anti-pollution and clean energy initiatives, and collaboration with American educational institutions. In Hefei, I also visited one of our "eco-partnerships"—a venture between the Hefei University of Science and Technology and the Ohio State University to develop electric vehicle technologies. During my recent trips to India, in addition to spending time in New Delhi and Mumbai, I also visited two other rapidly growing cities—Chennai (a city of 4.6 million people) and Agra (1.7 million).

The State Department is playing a key role in enlarging the multi-level, sub-national dimension of our international economic policy, but we know that the most dynamic part of this effort will not come from Washington. Instead, the broadest and deepest engagement will come from intensified interaction between leaders of America's cities and states and their counterparts in emerging countries. Many of our mayors and governors have been actively engaged for years, frequently leading large business delegations to promote export opportunities and emphasize the advantages their cities and states offer for foreign investment. To further these efforts, we have launched a U.S.-China Governors Forum to enable our governors to increase cooperation with their Chinese counterparts. We also have facilitated visits by chief ministers and trade delegations of Indian states to the United States and supported trips by U.S. governors to India. And during the third U.S.-India Strategic Dialogue in June 2012, both sides agreed that a "conversation between cities" should take place this year to accelerate efforts to address urban challenges of the 21st century. The State Department's special representative for Global Intergovernmental Affairs has energetically led this effort as well as sub-national dialogues in other important countries.

In addition to exchanges, we are connecting American businesses directly to our ambassadors and country teams in emerging economies. For example, our "Direct Line to American Business" facilitates conference calls between U.S. business leaders and American embassies to discuss commercial opportunities on a country-by-country basis. Local leaders from the United States and those from emerging nations can learn from one another by sharing experiences in such areas as urban design, transportation efficiency, and innovative environmental solutions. Many already participate in the C40, a global initiative led by New York City Mayor Michael Bloomberg to curb carbon emissions.

The bottom line is that booming urbanization abroad provides enormous opportunities for American business. Our embassies, consulates, and officials in Washington are helping U.S. companies engage with rapidly growing cities, states, and provinces. And we in the State Department, along with our colleagues in the Commerce Department and other agencies, are working with America's mayors and governors as they seek to establish new economic relationships. These efforts will not only strengthen the American economy, they will also broaden and deepen ties between these countries and the United States.

Robert Hormats is Under Secretary of State for Economic, Energy, and Agricultural Affairs.

This article was originally published in the Diplomatic Courier's November/December 2013 print edition.

Photo: André Natta (cc).

But it’s difficult to think about value when we have no buoy for understanding it outside our traditional lenses: for example, our time, our job, and what others tell us they are worth in cash. This, largely, is the world’s paradigm for value so far. But understanding what value really means changes everything—and will be at the center of the decentralized revolution in global coordination that will unfold over the next decade. So, where do we begin?

Let’s start with gold.

Gold is an inherent value. When backing a market, gold allows us to grow a balanced economy well into the trillions. But why does it allow for massive stable markets to form around it? It is gold's permanence that creates stability. We understand that gold will always have value, because it is inherent in all of us, not just in one part of the world, but everywhere, not just today, but tomorrow and for the long haul.

In the 1930s when the gold standard was removed, we learned that the U.S. dollar didn’t need gold to back its economy to flourish. We learned that it was just a symbol for U.S. citizens to decentralize their coordination around the United States economy.

It turns out, common agreement is a philosophy for building shared economy.

And so it seems inherent value is a marker for us to begin exploring what the future could look like—a future beyond gold and the existing realm of credit. And so what else has inherent value? Is education as valuable as gold? What about healthcare? What about a vote that can’t be tampered with? What about an ID that can’t be stolen or erased? What about access to nutrition or clean water? You will find value everywhere you look.

It turns out, we’ve already done the legwork necessary to uncover the most elemental inherent values: The Sustainable Development Goals are commitments grown out of the drive to bring to life basic tenets of the Universal Declaration of Human Rights—the closest possible social contract we have to a global, common agreement.

We’ve already agreed, as a global community, to ensure inclusive and equitable access to quality education. We’ve already agreed to empower all women and girls, to ensure pure and clean water access for all, to promote health at all stages of life, and to end hunger.

We’ve already agreed.

Our agreements are grounded in deep value centers that are globally shared, but undervalued and unfulfilled. The reason for this is our inability to quantify intangible value. All of these rich, inherent values are still nebulous and fragmented in implementation—largely existing as ideals and blueprints for deep, globally shared common agreement. That is, we all agree education, health, and equality have value, but we lack common units for understanding who and who is not contributing value—leaving us to fumble in our own, uncoordinated siloes as we chase the phantoms of impact. In essence, we lack common currencies for our common agreements.

Now we find ourselves at the nexus of the real paradigm of Blockchain, allowing us to fuse economics with inherent value by proving the participation of some great human effort, then quantifying the impact of that effort in unforgeable and decentralized ledgers. It allows us to build economic models for tomorrow, that create wholly new markets and economies for and around each of the richest of human endeavors.

In late 2017 at the height of the Bitcoin bubble, without individual coordination, planning, or the help of institutions, almost $1 trillion was infused into blockchain markets. This is remarkable, and the revolution has only just begun. When you realize that Blockchain is in a similar stage of development as the internet pre-AOL, you will see a glimpse of the global transformation to come.

Only twice in the information age have we had such a paradigm shift in global infrastructure reform—the computer and the internet. While the computer taught us how to store and process data, the Internet built off that ability and furthered the conversation by teaching us how to transfer that information. Blockchain takes another massive step forward—it builds off the internet, adding to the story of information storage and transfer—but, it teaches us a new, priceless and not yet understood skill: how to transfer value.

This third wave kicked off with a rough start—as happens with the birth of new technologies and their corresponding liberties. Blockchain has, thus far, been totally unregulated. Many, doubtless, have taken advantage. A young child, stretching their arms for the first couple times might knock over a cookie jar or two. Eventually, however, they learn to use their faculties—for evil or for good. As such, while it’s wise to be skeptical at this phase in blockchain’s evolution, it’s important not to be blind to its remarkable implications in a post-regulated world, so that we may wield its faculties like a surgeon’s scalpel—not for evil or snake-oil sales, but for the creation of more good, for the flourishing of commonwealth.

But what of the volatility in blockchain markets? People agree Bitcoin has value, but they don’t understand why they are in agreement, and so cryptomarkets fluctuate violently.  Stable blockchain economies will require new symbolic gold standards that clearly articulate why someone would agree to support each market, to anchor common agreement with stability. The more globally shared these new value standards, the better.

Is education more valuable than gold? What about healthcare or nutrition or clean water?

We set out in 2018 to prove a hypothesis—we believe that if you back a cryptocurrency economy with a globally agreed upon inherent value like education, you can solve for volatility and stabilize a mature long lasting cryptomarket that awards everyone who adds value to that market in a decentralized way without the friction of individual partnerships.

What if education was a new gold standard?

And what if this new Learning Economy had protocols to award everyone who is helping to steward the growth of global education?

Education is a mountain. Everyone takes a different path to the top. Blockchain allows us to measure all of those unique learning pathways, online and in classrooms, into immutable blockchain Learning Ledgers.

By quantifying the true value of education, a whole economy can be built around it to pay students to learn, educators to create substantive courses, and stewards to help the Learning Economy grow. It was designed to provide a decentralized way for everyone adding value to global education to coordinate around the commonwealth without the friction of individual partnerships. Imagine the same for healthcare, nutrition, and our environment?

Imagine a world where we can pay refugees to learn languages as they find themselves in foreign lands, a world where we can pay those laid off by the tide of automation to retrain themselves for the new economy, a world where we can pay the next generation to prepare themselves for the unsolved problems of tomorrow.

Imagine new commonwealth economies that alleviate the global burdens of poverty, disease, hunger, inequality, ignorance, toxic water, and joblessness. Commonwealths that orbit inherent values, upheld by immutable blockchain protocols that reward anyone in the ecosystem stewarding the economy—whether that means feeding the hungry, providing aid for the global poor, delivering mosquito nets in malaria-ridden areas, or developing transformative technologies that can provide a Harvard-class education to anyone in the world willing to learn.

These worlds are not out of reach—we are only now opening our eyes to the horizons of blockchain, decentralized coordination, and new gold standards. Even though coordination is the last of the seventeen sustainable development goals, when solved, its tide will lift for the rest—a much-needed rocket fuel for global prosperity.

“Let us raise a standard to which the wise and the honest can repair.”  —George Washington
The views presented in this article are the author’s own and do not necessarily represent the views of any other organization.