Bogotá's future is bright and orange

For years, Bogotá’s Bronx district stood out as a striking illustration of the neglected city centre. Drug deals and associated crime flourished unhindered by seemingly indifferent security authorities – both the army and the police have key stations in the area. 

After first regaining control of the block and then demolishing it, the municipality now has an ambitious regeneration vision to turn the former ghetto into a creative district, and it is now hoped that the ascent of Iván Duque to the country's presidency could give new impetus to the city’s hopes of creating a flourishing ‘orange’  economy (a local term that encompasses the creative industries). 

As Juan Miguel Durán Prieto, economic development secretary of Bogotá’s city government, explains: “Mr Duque has been championing the development of the orange economy in his time as a senator, and the city government is matching the presidency’s vision to develop Bogotá’s potential in a more articulated way. We are not inventing anything new, just strengthening a base that already exists.” 

Creative solution

Outside a troubled city centre that has been left behind by wealthier and safer outer areas after years of underinvestment, Bogotá’s 10 million population and vast talent pool provide fertile ground for the development of a local orange economy.

“We are betting big on this sector,” says Juan Gabriel Perez, executive director of local investment promotion agency Invest in Bogotá. “Bogotá is already one of the top three destinations in Latin America for foreign investment into creative industries. Our aim is to groom talent and entrepreneurs in this sector, and attract capital.”

Spanish production company Grupo Secuoya made Bogotá its Latin American base at the beginning of 2018, building up new momentum for the local audiovisual industry, which is also hosting the filming of major US productions by the likes of Netflix and Amazon. As testament to the sector’s increasing global profile, Embrace of the Serpent – filmed mostly in Colombia's Amazoniá region – was the first ever Colombian movie to be nominated for best foreign film at the 2016 Oscars. 

Overall, the city is closing in on established heavyweights such as São Paulo and Mexico City as top Latin American destination for investment into creative industries, according to greenfield investment monitor fDi Markets. At a city level, there are about 11,000 creative industry firms already active across the city, generating 3% of its GDP. 

Get smart

The development of a flourishing orange economy fits Bogotá’s overall smart specialisation strategy, launched in 2015. This identified five macro sectors to pin the cities’ future fortunes on: bio-industries, business services, becoming a knowledge hub, sustainable development and creative industries. 

The strategy aims to give the city new economic momentum and improve its business environment in the wake of the past decade’s rise up the regional rankings for economic attractiveness. This success mirrors Colombia’s fast-paced economic growth, particularly at the height of the commodity boom between 2011 and the first half of 2014.

The development of local free-trade zones (FTZs – Colombia has 39) has been a major element of success in unleashing the city’s potential for foreign and domestic investment. The fiscal incentives offered to companies operating in an FTZ regime have proven particularly successful in a country with a relatively burdensome corporate income tax regime compared with other major economies in the region. 

Colombia’s standard corporate income tax stands at 33%, while the rate for companies in an FTZ is 20%. The Zona Franca de Bogotá (ZFB) is one of the most successful, having attracted FDI of about $200m in its 20 years of operations and creating 90,000 direct and indirect jobs. More than half of its companies operate in the logistics sector, but a growing proportion are now exporting business services.

“We are trying to align with the city’s smart specialisation strategy, betting on sectors such as pharma, cosmetics, science and technology, the orange economy, logistics and e-commerce,” says Juan Pablo Rivera. “Besides, the new government has shown commitment to develop further FTZs and make them a pillar of the national development." He adds that the group plans to file an application for a new zone in the municipality of Cota by the end of 2018.

Get moving

Private investment has typically outpaced public investment in Bogotá over the years, causing major dysfunctions in areas such as mobility. Once considered a bold experiment, the city's bus rapid transport system, the Transmilenio, now appears overcrowded and slow. Ride-hailing apps such as Uber or the local Cabify still operate in the shadows as local regulators prefer not to regulate rather than antagonise the taxi lobby. 

Things may be at a turning point, however, as the city is finally moving forward with a long-awaited project for a metro line that would take the pressure off the roads. A cable car system is also under development in the district of Ciudad Bolivar. 

In addition, after fixing its general security problems, the city government is addressing the remaining pockets of crime and violence scattered across the city and is turning to private investors for help – the development and management of the Bronx could be given to a private operator.

“At this particular moment in time, we are investing a lot of money in regenerating [the area],” says Mr Durán. “The idea is that public investment by the municipality becomes a trigger for private investment.”

In this way, Bogotá is aiming to replicate the successful regeneration of Medellín, which bet heavily on public investment and culture to relaunch a city that for a large part of the 1990s had fallen into the hands of narcotraffickers. While large parts of central Bogotá still appear neglected and seem a long way from being regenerated, others, such as the Bronx or the touristic Candelaria district, are slowly being upgraded as the municipality tries to make up for the failures of the past few decades to invest and thus attract business to the capital.