Enrique Peñalosa details how neither land nor capital but quality of life is now the key ingredient in economic growth.

Question: How can cities balance investment in public space with meeting other short-term financial goals?

Penalosa: I don't think that is a contradiction between economic growth and the public space.  First of all, I think the most crucial competitive factor in our time is not like it was in the past…land, or even, capital—but people, how to attract and retain the best qualified people.  So I would say the most crucial competitive issue in our time is quality of life.  And public pedestrian space is crucial for quality of life.  Public pedestrian space gives the city the quality it needs to retain great people, but also it's very important for the people who live there themselves, for the poor.  

So, I believe that there is no contradiction whatsoever in trying to have investment in some great public pedestrian space, but great public pedestrian space, however, different from most things governments do is not just a means.  Most things governments do are a means to economic development.  Governments invest in roads, in tunnels, in irrigation districts, in ports, in airports; because it is necessary for the country to produce material, goods, and services—but they are a means to an end. 

The end. What is the end?  The end is happiness.  In the case of public pedestrian space, it's a very peculiar good because it's an end in itself. 

I mean, just to have great public space makes people happier and creates more social integration.  Again, I believe it also creates economic development because actually –for example, if I ask some people to go live…some cities in the third world have serious problems, like Lagos in Nigeria.

If people want to get some person to go live in Lagos, some expert engineer in something, they will have to pay him very, very much to compensate for the hardships of being in Lagos. Instead, when people go to Paris, it happens the opposite. People are willing to take a reduction in their material well being. They go without a car; they go with a much smaller apartment, because the city gives them so much back. So, actually, to invest in a good city is good business. It's not robots making investment decisions. We need to make a city that is attractive too

The people we most want to have in a city are those who could actually go anywhere in the world they want because they are such good technicians or artists or professionals at whatever they do, that they could choose to go wherever they want. If we don't have a great city, they will leave.