LocationsGetting Unstuck: Communities and Governments Drive Innovation for Transformative Change
April 28, 2025
If you think urban reinvention begins with external funding or technology, think again. It begins with some critical so-called ‘local ingredients’: political will and courage, local autonomy, and the ability to look at development issues differently.
As we work with cities, namely Dhangadhi, Pasig and Khulna, we are learning that reframing conversations around those ‘local ingredients’ are vital in igniting innovation and driving urban transformation.
Key Lessons on City-Led Innovation
1. Political Will and ‘Policy Entrepreneurs’
Reform-minded mayors and policy champions within departments (what we call ‘policy entrepreneurs’) play a critical role in unlocking bottlenecks and taking calculated risks. In Dhangadhi and Pasig, these individuals helped a mission-oriented approach into policy making. UNDP works to amplify their influence, helping create the institutional safety to experiment, iterate and scale.
2. Decentralization as a Minimum Condition, Not a Guarantee
Decentralization offers local governments proximity to citizens and assets, but without the "muscle" of sufficient fiscal space and institutional capacity— crucial elements that go beyond mere mandates—cities cannot effectively respond to evolving challenges. Through our portfolios, we are equipping cities to flex this "muscle" turning autonomy into transformative action, by aligning policy levers, planning instruments, and engaging citizens in governance processes.
3. Windows of Opportunity: Turning Crisis into Opportunity
Whether it’s the waste” bulge” in Pasig or shifting political dynamics in Khulna, moments of disruption create space to reimagine the rules. Our work with cities has reframed crises as entry points to tackle structural barriers, build new alliances, and shift urban trajectories.
4. The Portfolio Approach: Connecting Nodes Across Systems
Cities aren’t collections of siloed sectors; they are complex systems of actors, assets and interests. The portfolio approach helps reframe urban challenges as opportunities for strategic coherence, bringing together disconnected projects and partners under a shared ambition. In doing so, UNDP supports cities to become network orchestrators, not just service providers, rewiring relationships between departments, donors and communities.
5. Demonstrating What’s Possible: First Movers Unlock the Field
Transformative change rarely begins with consensus – momentum needs to be built. Most of the interventions started with early signals that shift perception of what’s possible. Whether it’s Pasig’s Innovation & Circular Economy (ICE) Hub or Dhangadhi’s plastic ban linked to women’s livelihoods, first bets have demonstrated proof of concept, inviting other to join and invest.
To better grasp these key lessons, read on.
These cities are not inherently lacking in resources, ideas, or ambition. Rather, they are trapped in a “deficit mindset”, assuming that transformation is only possible with large-scale external investments. Our work has shown that urban reinvention is not solely about overcoming gaps but about activating available assets, from political will to local innovation, and connecting them to new opportunities.
Dhangadhi, Nepal: Realigning Local Aspirations with Green Urban Transition
Reframing the Challenge: From Isolated Initiatives to an Integrated Green Transition
Dhangadhi Sub-Metropolitan City (DSMC) is one of the rapidly expanding cities in Nepal, both in terms of urbanization and population growth. However, the DSMC has faced growing climate risks (availability of water and productivity of peri-urban agriculture), a limited local economic base and a resulting increase of people leaving the city in search of better education, healthcare and jobs.
Recently, however, a series of pilot interventions has laid the groundwork for a broader shift around green transformation. These include the citywide plastic bag ban, training and support for women-led biodegradable product enterprises, the revival of ponds and canals to mitigate urban flooding, as well as the development of waste segregation and composting infrastructure. These actions connect environmental protection with a growing recognition that sustainability must be grounded in livelihood opportunities and economic value generation. The challenge now is how to sustain this momentum into green urban transition beyond the initial set of promising initiatives.
Adapting and Directing Differently Through a Portfolio Approach
The DSMC Municipality embarked on a journey with UNDP to transform the city by implementing a Green Transition Portfolio, to create a greener and more liveable city.
The portfolio helps the city translate their ‘Green, Clean, Safe, Bright Dhangadhi’ campaign by rethinking how assets, policies, and capabilities can be connected and activated through a series of interventions such as:
Regenerative agroecology and safe farming practices alongside urban greening that aligns ecosystem restoration along with income generation for farmers
Green job creation through introduction of innovative equipment and productive technologies, and sustainable business models in community-based leaf plate production;
Underused municipal facilities are being repurposed into production or learning hubs
Municipal subsidies are being restructured to support waste-to-value businesses, including women- and youth-led upcycling and composting enterprises
Governance mechanisms are reviewed to optimize municipal revenue generation and improve collaboration.
This new approach meant changing the city’s institutional set-up as well. The DSMC Municipality has established an internal cross-departmental portfolio team tasked to align joint planning, budgeting, and implementation across departments such as policy, environment, infrastructure, disaster management, women’s and enterprise development, as well as IT functions. This cross-departmental team helps overcome the siloed work of the past and enables the city to accelerate in achieving their vision.
Pasig, Philippines: Reimagining Waste as an Economic Asset
Reframing the Challenge: From Waste Management to Circular Economy Transition
Adapting and Directing Differently Through a Portfolio Approach
Reframing the policy challenge from solely an environmental challenge of waste to circular economy through joint portfolio allowed the Pasig city administration to reshape its development strategy and investment decisions. It is now dealing with its growing waste management challenge through economic reinvention, proactive city policies and resource allocation, private sector engagement, and citizens participation. It demonstrates how innovative public sector approaches, and an opportunity-driven mindset can transform waste from a burden into an economic asset.
The transition to a circular economy requires support in shaping this market and the pro-active role of the city government in that process. Pasig has achieved this by integrating waste-to-value strategies into its economic framework. Through Materials Recovery Facilities (MRFs) and partnerships with micro, small and medium enterprises (MSMEs), employing women, LGBTQIA+, and informal sector, the city is linking sustainability with business growth. By training MSMEs to use recycled materials in production and providing access to shared facilities and equipment, Pasig has brought about new business opportunities, proving that sustainable urban development is not just an environmental necessity but an economic opportunity.
Further to “greening” its SME incentive program and piloting localized green public procurement, Pasig has repurposed one of the idle warehouse spaces used as a waste transfer station into an Innovation for Circular Economy (ICE) Hub – for businesses to learn and grow. The city has also supported Circular economy fairs that have helped new private companies and entrepreneurs to feature their products but to also highlight that change is possible. Importantly, this transition is rooted in understanding citizens’ assets, needs and contexts, and looking into the ways how they can be part of this transition.
Khulna, Bangladesh: Putting People at the Center of Urban Renewal
Reframing the Challenge: Managing Climate Vulnerability through Localized Resilience and Growth
Khulna, a former jute-exporting hub, has long struggled with climate risks, economic stagnation and governance constraints. While the city boasts rich natural and cultural assets, urban sprawl and policy instability have limited its ability to leverage these resources. The focus of the portfolio work in Khulna is shaping a new vision for economic and environmental resilience. By focusing on the area’s blue economy, creating opportunities for the youth, and capitalizing on Khulna’s assets, the team is pursuing inclusive governance and green growth, as well as improving residents’ living standards.
Adapting and Directing Differently Through a Portfolio Approach
The Khulna Urban Renewal Portfolio aims to shift urban development from a purely government-led approach to a more decentralized model, empowering communities, especially youth, to actively participate in shaping their own future. By enabling citizens to co-create and co-invest in solutions for climate resilience, waste management, and improved service delivery, this shift seeks to unlock local knowledge, resources, innovation and commitment.
With the Sundarbans mangrove forest and rich heritage sites, the portfolio is exploring the development of community based eco-tourism initiatives, promoting heritage tourism, and investing in green infrastructure. Women in the Sundarbans area near Khulna are already leading mangrove restoration efforts, creating sustainable livelihoods through cooperatives that produce and market value-add mangrove products, showcasing how ecological restoration can drive economic resilience.
However, like many cities undergoing transformation, Khulna faces governance challenges, including leadership changes at the national level, and geopolitical changes that have deprioritized development financing. UNDP’s Khulna portfolio is designed to break away from top-down approaches, fragmented initiatives, and unsustainable, ad-hoc projects. This not only enhances policy coherence and efficiency—allowing stakeholders to do more with limited resources—but also makes development efforts more resilient to political and economic shocks.
Conclusion: Second-Tier Cities, First-Rate Futures
Often urbanization work is ignited by unfulfilled needs: fragmented decision-making, resource and capability gaps, political short-termism, and ever-growing demands across constituencies to name just a few. While those are legitimate concerns, engaging with cities and partners in joint portfolio work allowed us to collectively focus on another side of the equation:
Framing the direction as an opportunity to address shortcomings, bringing more policy coherence and seeding opportunities for change to generate positive economic outcomes, e.g. expanding from downstream waste management to the upstream new economic enterprises in Pasig.
Mapping out and rewiring relationships and available assets across the ecosystem: connecting different governmental departments on common issues and linking different city and donor activities, e.g. evolving partnerships with development partners focused on biomedical waste in Dhangadhi.
Developing new capacities within government and civil society partners through a systems-doing approach that is rooted in stronger engagement and participation, e.g. through activities such as sensemaking, more stakeholders can see where their works connect for impact.
The future of urban innovation won’t be written in metro centers alone. It will be also shaped in places like Dhangadhi, Pasig and Khulna, where the pressure to adapt meets the power of local leadership and creativity. These cities are not waiting for perfect conditions – they are innovating in the moment and moving ahead.
This blog was co-authored by Alex Oprunenco and Aisha Marzuki (UNDP Bangkok Regional Hub), Purnima Bajracharya (UNDP Nepal), Gwyneth Anne Palmos (UNDP Philippines) and Sarah Sabin Khan (UNDP Bangladesh).