A three step manifesto for a smarter, fairer economy

(United States GDP plotted against median household income from 1953 to present. Until about 1980, growth in the economy correlated to increases in household wealth. But from 1980 onwards as digital technology has transformed the economy, household income has remained flat despite continuing economic growth)

(United States GDP plotted against median household income from 1953 to present. Until about 1980, growth in the economy correlated to increases in household wealth. But from 1980 onwards as digital technology has transformed the economy, household income has remained flat despite continuing economic growth. From “The Second Machine Age“, by MIT economists Andy McAfee and Erik Brynjolfsson, summarised in this article.)

(Or, why technology created the economy that helped Donald Trump and Brexit to win, and why we have to fix it.)

The world has not just been thrown into crisis because the UK voted in June to leave the European Union, and because the USA has just elected a President whose campaign rhetoric promised to tear up the rulebook of international behaviour (that’s putting it politely; many have accused him of much worse) – including pulling out of the global climate accord that many believe is the bare minimum to save us from a global catastrophe.

Those two choices (neither of which I support, as you might have guessed) were made by people who feel that a crisis has been building for years or even decades, and that the traditional leaders of our political, media and economic institutions have either been ignoring it or, worse, are refusing to address it due to vested interests in the status quo.

That crisis – which is one of worklessness, disenfranchisement and inequality for an increasingly significant proportion of the world’s population – is real; and is evident in figures everywhere:

… and so on.

Brexit and Donald Trump are the wrong solutions to the wrong problems

Of course, leaving the EU won’t solve this crisis for the UK.

Take the supposed need to limit immigration, for example, one of the main reasons people in the UK voted to leave the EU.

The truth is that the UK needs migrants. Firstly, with no immigration, the UK’s birth rate would be much lower than that needed to maintain our current level of population. That means less young people working and paying taxes and more older people relying on state pensions and services. We wouldn’t be able to afford the public services we rely on.

Secondly, the people most likely to start new businesses that grow rapidly and create new jobs aren’t rich people who are offered tax cuts, they’re immigrants and their children. And of course, what will any country in the world, let alone the EU, demand in return for an open trade deal with the UK? Freedom of immigration.

So Brexit won’t fix this crisis, and whilst Donald Trump is showing some signs of moderating the extreme statements he made in his election campaign (like both the “Leave” and “Remain” sides of the abysmal UK Referendum campaign, he knew he was using populist nonsense to win votes, but wasn’t at all bothered by the dishonesty of it), neither will he.

[Update 29/01/17: I take it back: President Trump isn’t moderating his behaviour at all. What a disgrace.]

Whatever his claims to the contrary, Donald Trump’s tax plan will benefit the richest the most. Like most Republican politicians, he promotes policies that are criticised as “trickle-down” economics, in which wealth for all comes from providing tax cuts to rich people and large corporations so they can invest to create jobs.

But this approach does not stand up to scrutiny: history shows that – particularly in times of economic change –  jobs and growth for all require leadership, action and investment from public institutions – in other words they depend on the sensible use of taxation to redistribute the benefits of growth.

(Areas of relative wealth and deprivation in Birmingham as measured by the Indices of Multiple Deprivation. Birmingham, like many of the UK's Core Cities, has a ring of persistently deprived areas immediately outside the city centre, co-located with the highest concentration of transport infrastructure allowing traffic to flow in and out of the centre.)

(Areas of relative wealth and deprivation in Birmingham as measured by the Indices of Multiple Deprivation. Birmingham, like many of the UK’s Core Cities, has a ring of persistently deprived areas immediately outside the city centre, co-located with the highest concentration of transport infrastructure allowing traffic to flow in and out of the centre)

Similarly, scrapping America’s role in the Trans-Pacific Partnership trade deal is unlikely to bring back manufacturing jobs to the US economy at anything like the scale that some of those who voted for Donald Trump hope, and that he’s given the impression it will.

In fact, manufacturing jobs are already rising in the US as the need for agility in production in response to local market conditions outweighs the narrowing difference in manufacturing cost as the salaries of China’s workers have grown along with its economy.

However, the real challenge is that the skills required to secure and perform those jobs have changed: factory workers need increasingly technical skills to manage the robotic machinery that now performs most of the work.

Likewise, jobs in the US coal industry won’t return by changing the way the US trades with foreign countries. The American coal mined in some areas of the country has become an uncompetitive fuel compared to the American shale gas that is made accessible in other areas by the new technology of “fracking”. (I’m not in favour of fracking; I’d prefer we concentrate our resources developing genuinely low-carbon, renewable energy sources. My point is that Donald Trump’s policies won’t address the job dislocation it has caused).

So, if the UK’s choice to leave the EU and the USA’s choice to elect Donald Trump represent the wrong solutions to the wrong problems, what are the underlying problems that are creating a crisis? And how do we fix them?

The crisis begins in places that don’t work

When veteran BBC journalist John Humphreys travelled the UK to meet communities which have experienced a high degree of immigration, he found that immigration itself isn’t a problem. Rather, the rise in population  caused by immigration becomes a problem when it’s not accompanied by investment in local infrastructure, services and business support. Immigrants are the same as people everywhere: they want to work; they start businesses (and in fact, they’re more likely to do that well than those of us who live and work in the country where we’re born); and they do all the other things that make communities thrive.

But the degree to which people – whether they’re immigrants or not – are successful doing so depends on the quality of their local environment, services and economy. And the reality is that there are stark, place-based differences in the opportunity people are given to live a good life.

In UK cities, life expectancy between the poorest and richest parts of the same city varies by up to 28 years. Areas of low life expectancy typically suffer from “multiple deprivation“: poor health, low levels of employment, low income, high dependency on benefits, poor education, poor access to services … and so on. These issues tend to affect the same areas for decade after decade, and they occur in part because of the effects of the physical urban infrastructure around them.

eu-uk-regional-funding

(The UK’s less wealthy regions benefit enormously from EU investment; whilst it’s richer regions, made wealthy by London’s economy, are net contributors. The EU acts to redistribute UK taxes to the regions that need them most, in a way that the national Government in Westminster does not)

The failure to invest in local services and infrastructure to accommodate influxes of migrants isn’t the EU’s fault; it is caused by the failure of the UK national government to devolve spending power to the local authorities that understand local needs – local authorities in the UK control only 17% of local spending, as opposed to 55% on average across OECD countries.

Ironically, one of the crucial things the EU does (or did) with the UK’s £350 million per week contribution to its budget, a large share of which is paid for by taxes from London’s dominant share of the UK economy, is to give it back to support local infrastructure and projects which create jobs and improve communities. If the Remain campaign had done a better job of explaining the extent of this support, rather than trumpeting overblown scare stories about the national, London-centric economy from which many people feel they don’t benefit anyway, some of the regions most dependent on EU investment might not have voted to Leave.

Technology is exacerbating inequality

We should certainly try to improve urban infrastructure and services; and the “Smart City” movement argues for using digital technology to do so.

But ultimately, infrastructure and services simply support activity that is generated by the economy and by social activity, and the fundamental shift taking place today is not a technological shift that makes existing business models, services or infrastructure more effective. It is the transformation of economic and social interactions by new “platform” business models that exploit online transaction networks that couldn’t exist at all without the technologies we’ve become familiar with over the last decade.

Well known examples include:

  • Apple iTunes, exchanging music between producers and consumers
  • YouTube, exchanging video content between producers and consumers
  • Facebook, an online environment for social activity that has also become a platform for content, games, news, business and community activity
  • AirBnB – an online marketplace for peer-to-peer arrangement of accomodation
  • Über – an online marketplace for peer-to-peer arrangement of transport

… and so on. MIT economist Marshall Van Alstyne’s work shows that platform businesses are increasingly the most valuable and fastest growing in the world, across many sectors.

The last two examples in that list – AirBnB and Über – are particularly good examples of online marketplaces that create transactions that take place face-to-face in the real world; these business models are not purely digital as YouTube, for example, arguably is.

But whilst these new, technology-enabled business models can be extraordinarily successful – Airbnb has been valued at $30 billion only 8 years after it was founded, and Über recently secured investments that, 7 years after it was founded, valued the company at over $60 billion – many economists and social scientists believe that the impact of these new technology-enabled business models is contributing to increasing inequality and social disruption.

As Andy McAfee and Erik Bryjolfsson have explained in theory, and as a recent JP Morgan survey has demonstrated in fact (see graph and text in box below), as traditional businesses that provide permanent employment are replaced by online marketplaces that enable the exchange of casual labour and self-employed work, the share of economic growth that is captured by the owners of capital platforms – the owners and shareholders in companies like Amazon, Facebook and Über – is rising, and the share of economic growth that is distributed to people who provide labour – people who are paid for the work they do; by far the majority of us – is falling.

The impact of technology on the financial services sector is having a similar effect. Technology enables the industry to profit from the construction of increasingly complex derivative products that speculate on sub-second fluctuations in the value of stocks and other tradeable commodities, rather than by making investments in business growth. The effect again is to concentrate the wealth the industry creates into profits for a small number of rich investors rather than distributing it in businesses that more widely provide jobs and pay salaries.

Finally, this is also ultimately the reason why the various shifting forces affecting employment in traditional manufacturing industries – off-shoring, automation, re-shoring etc. – have not resulted in a belief that manufacturing industries are providing widespread opportunities for high quality employment and careers to the people and communities who enjoyed them in the past. Even whilst manufacturing activity grows in many developed countries, jobs in those industries require increasingly technical skills, at the same time that, once again, the majority of the profits are captured by a minority of shareholders rather than distributed to the workforce.

(Analysis by JP Morgan of 260,000 current account customers earnings from 30 sharing economy websites over 3 years. Customers using websites to sell labour do not increase their income; earnings from sharing economy websites simply replace earnings from other sources. Customers using sharing economy websites to exploit the value of capital assets they own, however, are able to increase their income. This evidence supports just one of the mechanisms explored by Andy McAfee and Erik Brynjolfsson through which it appears that the digital economy is contributing to increasing income inequality)

(Analysis by JP Morgan of 260,000 current account customers’ earnings from 30 sharing economy websites over 3 years. Customers using websites to sell labour do not increase their income; earnings from sharing economy websites simply replace earnings from other sources. Customers using sharing economy websites to exploit the value of capital assets they own, however, are able to increase their income. This evidence supports just one of the mechanisms explored by Andy McAfee and Erik Brynjolfsson through which it appears that the digital economy is contributing to increasing income inequality)

That is why inequality is rising across the world; and that is the ultimate cause of the sense of unfairness that led to the choice of people in the UK to leave the EU, and people in the USA to elect Donald Trump as their President.

I do not blame the companies at the heart of these developments for causing inequality – I do not believe that is their aim, and many of their leaders believe passionately that they are a force for good.

But the evidence is clear that their cumulative impact is to create a world that is becoming damagingly unequal, and the reason is straightforward. Our market economies reward businesses that maximise profit and shareholder return; and there is simply no direct link from those basic corporate responsibilities to wider social, economic and environmental outcomes.

There are certainly indirect links – successful businesses need customers with money to spend, and there are more of those when more people have jobs that pay good wages, for example. But technology is increasingly enabling phenomenally successful new business models that depend much less on those indirect links to work.

We’re about to make things worse

Finally, as has been frequently highlighted in the media recently, new developments in technology are likely to further exacerbate the challenges of worklessness and inequality.

After a few decades in which scientific and technology progress in Artifical Intelligence (AI) made relatively little impact on the wider world, in the last few years the exponential growth of data and the computer processing power to manipulate it have led to some striking accomplishments by “machine learning”, a particular type of AI technology.

Whilst Machine Learning works in a very different way to our own intelligence, and whilst the Artificial Intelligence experts I’ve spoken to believe that any technological equivalent to human intelligence is between 20 and 100 years away (if it ever comes at all), one thing that is obvious is that Machine Learning technologies have already started to automate jobs that previously required human knowledge. Some studies predict that nearly half of all jobs – including those in highly-skilled, highly-paid occupations such as medicine, the law and journalism- could be replaced over the next few decades.

(Population changes in Blackburn, Burnley and Preston from 1901-2001. In the early part of the century, all three cities grew, supported by successful manufacturing economies. But in the latter half, only Preston continued to grow as it transitioned successfully to a service economy. From Cities Outlook 1901 by Centre for Cities)


(Population changes in Blackburn, Burnley and Preston from 1901-2001. In the early part of the century, all three cities grew, supported by successful manufacturing economies. But in the latter half, only Preston continued to grow as it transitioned successfully to a service economy. If cities do not adapt to changes in the economy driven by technology, history shows that they fail. From “Cities Outlook 1901” by Centre for Cities)

Über is perhaps the clearest embodiment of these trends combined. Whilst several cities and countries have compelled the company to treat their drivers as employees and offer improved terms and conditions, their strategy is unapologetically to replace their drivers with autonomous vehicles anyway.

I’m personally convinced that what we’re experiencing through these changes – and what we’ve possibly been experiencing for 50 years or more – is properly understood to be an Information Revolution that will reshape our world every bit as significantly as the Industrial Revolution.

And history shows us we should take the economic and social consequences of that very seriously indeed.

In the last Century as automated equipment replaced factory workers, many cities in the UK such as Sunderland, Birmingham and Bradford, saw severe job losses, economic depression and social challenges as they failed to adapt from a manufacturing economy to new industries based on knowledge-working.

In this Century many knowledge-worker jobs will be automated too, and unless we knowingly and successfully manage this huge transition into an economy based on jobs we can’t yet predict, the social and economic consequences – the crisis that has already begun – will be just as bad, or perhaps even worse.

So if the problem is the lack of opportunity, what’s the answer?

If trickle-down economics doesn’t work, top-down public sector schemes of improvement won’t work either – they’ve been tried again and again without much improvement to those persistently, multiply-deprived areas:

“For three generations governments the world over have tried to order and control the evolution of cities through rigid, top-down action. They have failed. Masterplans lie unfulfilled, housing standards have declined, the environment is under threat and the urban poor have become poorer. Our cities are straining under the pressure of rapid population growth, rising inequality, inadequate infrastructure, and failing systems of urban planning, design and development.”

– from “The Radical Incrementalist” by Kelvin Campbell, summarised here.

One of the most forward-looking UK local authority Chief Executives said to me recently that the problem isn’t that a culture of dependency on benefits exists in deprived communities; it’s that a culture of doing things for and to people, rather than finding ways to support them succeeding for themselves, permeates local government.

This subset of findings from Sir Bob Kerslake’s report on Birmingham City Council reflects similar concerns:

  • “The council, members and officers, have too often failed to tackle difficult issues. They need to be more open about what the most important issues are and focus on addressing them;
  • Partnership working needs fixing. While there are some good partnerships, particularly operationally, many external partners feel the culture is dominant and over-controlling and that the council is complex, impenetrable and too narrowly focused on its own agenda;
  • The council needs to engage across the whole city, including the outer areas, and all the communities within it;
  • Regeneration must take place beyond the physical transformation of the city centre. There is a particularly urgent challenge in central and east Birmingham.”

One solution that’s being proposed to the challenges of inequality and the displacement of jobs by automation is the “Universal Basic Income” – an unconditional payment made by government to every citizen, regardless of income and employment status. The idea is that such a payment ensures a good enough standard of living for everyone, even if many people lose employment or see their salaries fall; or chose to work in less financially rewarding occupations that have strong social value – caring for others, for example. Several countries, including Finland, Canada and the Netherlands have already begun pilots of this idea.

I think it’s a terrible mistake for two reasons.

Firstly, the proposed level of income – about $1500 per month – isn’t at all sufficient to address the vast levels of inequality that our economy has created. Whilst it might allow a majority of people to live a basically comfortable life, why should we accept that a small elite should exist at such a phenomenally different level of technology-enabled wealth as to be reminiscent of a science fiction dystopia?

Andy McAfee and Erik Brynjofflsson best expressed the second problem with a Universal Basic Income by quoting Voltaire in “The Second Machine Age“:

“Work keeps at bay three great evils: boredom, vice, and need.”

A Universal Basic Income might address “need”, to a degree, but it will do nothing to address boredom and vice. Most people want to work because they want to be useful, they want their lives to make a difference and they want to feel fulfilled – this is the “self-actualisation” at the apex of Maslow’s Hierarchy of Needs. Surely enabling everyone to reach that condition should be our aspiration for society, not a subsidy that addresses only basic needs?

Our answer to these challenges should be an economy that properly rewards the application of effort, talent and courage to achieving the objectives that matter to us most; not one that rewards the amoral maximisation of profits for the owners of capital assets accompanied by a gesture of redistribution that’s just enough to prevent civil unrest.

(Maslow's

(Maslow’s “Hierarchy of Needs”)

Three questions that reveal the solution

There are three questions that I think define the way to answer these challenges in a way that neither the public, private nor third sectors have yet done.

The first is the question at the heart of the idea of a Smart City.

There are a million different definitions of a “Smart City”, but most of them are variations on the theme of “using digital technology to make cities better”. The most challenging part of that idea is not to do with how digital technology works, nor how it can be used in city systems; it is to do with how we pay for investments in technology to achieve outcomes that are social, economic and environmental – i.e. that don’t directly generate a financial return, which is usually why money is invested.

Of course, there are investment vehicles that translate achievement against social, economic or environmental objectives into a financial return – Social Impact Bonds and Climate Bonds, for example.

Using such vehicles to support the most interesting Smart City ideas can be challenging, however, due to the level of uncertainty in the outcomes that will be achieved. Many Smart City ideas provide people with information or services that allow them to make choices about the energy they use; how and when they travel; and the products and services they buy. The theory is that when given the option to improve their social, economic and environmental impact, people will chose to do so. But that’s only the theory; the extent to which people actually change their behaviour is notoriously unpredictable. That makes it very difficult to create an investment vehicle with a predictable level of return.

So the first key question that should be answered by any solution to the current crisis is:

  • QUESTION 1: How can we manage the risk of investing in technology to achieve uncertain social, economic or environmental aims such as improving educational attainment or social mobility in our most deprived areas?

The international Smart City community (of which I am a part) has so far utterly failed to answer that question. In the 20 years that the idea has been around, it simply hasn’t made a noticeable difference to economic opportunity, social mobility or resilience – if it had, I wouldn’t be writing this article about a crisis. Earlier this year, I described the examples of Smart City initiatives around the world that are finally starting to make an impact, and below I’ll describe some actions we can take to replicate them and drive them forward at scale.

The second question is inspired by the work of the architect and town planner Kelvin Campbell, whose “Smart Urbanism” is challenging the decades of orthodox thinking that has failed to improve those most deprived areas of our cities:

The solution lies in mobilising peoples’ latent creativity by harnessing the collective power of many small ideas and actions. This happens whenever people take control over the places they live in, adapting them to their needs and creating environments that are capable of adapting to future change. When many people do this, it adds up to a fundamental shift. This is what we call making Massive Small change.”

from “The Radical Incrementalist” by Kelvin Campbell, summarised here.

Kelvin’s concept of “Massive Small change” forms the second key question that defines the solution to our crisis:

  • QUESTION 2: What are the characteristics of urban environments and policy that give rise to massive amounts of small-scale innovation?

That’s one of the most thought-provoking and insightful questions I can think of. “Small-scale” innovation is what everybody does, every day, as we try to get by in life: fixing a leaky tap, helping our daughter with her maths homework, closing that next deal at work, losing another kilogram towards our weight target, becoming a trustee of a local charity … and so on.

For some people, what begin as small-scale innovations eventually amount to tremendously successful lives and careers. Mark Zuckerberg learned how to code, developed an online platform for friends to stay in touch with each other, and became the 6th richest man on the planet, worth approximately $40 billion. On the other hand, 15 million people around the world, including a vast number of children, show their resourcefulness by searching refuse dumps for re-usable objects.

Recent research on the platform economy by the not-for-profit PEW Research Centre confirms these vast gaps in opportunity; and most concerningly identifies clear biases based on race, class, wealth and gender.

The problem with small-scale innovation doesn’t lie in making it happen – it happens all the time. The problem lies in enabling it to have a bigger impact for those in the most challenging circumstances. Kelvin’s work has found ways to do that in the built environment; how do we translate those ideas into the digital economy?

The final question is more subtle:

  • QUESTION 3: How do we ensure that massive amounts of small-scale innovation create collective societal benefits, rather than lots of individual successes?

One way to explain what I mean by the difference between widespread individual success and societal success is in terms of resilience. Over the next 35 years, about 2 billion more people worldwide will acquire the level of wealth associated with the middle classes of developed economies. As a consequence, they are likely to dramatically increase their consumption of resources – eating more meat and less vegetables; buying cars; using more energy. Given that we are already consuming our planet’s resources at an unsustainable rate, such an increase in consumption could great an enormous global problem. So our concept of “success” should be collective as well as individual – it should result in us moderating our personal consumption in favour of a sustainable society.

One of the central tenets of economics for nearly 200 years, the “Tragedy of the Commons“, asserts that individual motives will always overwhelm societal motives and lead to the exhaustion of shared resources, unless those resoures are controlled by a system of private ownership or by government regulation – unless some people or organisations are able to own and control the use of resources by others. We’ll return to this subject shortly, and to its study in the field of Evolutionary Social Biology.

Calling out the failure of the free market: a Three Step Manifesto for Smart Community Economies

If we could answer those three questions, we’d have defined a digital economy in which individual citizens, businesses and communities everywhere would have the skills, opportunities and resources to create their own success on terms that matter to them; and in a way that was beneficial to us all.

That’s the only answer to our current crisis that makes sense to me. It’s not an answer that either Brexit or Donald Trump will help us to find.

So how do we find it?

(The White Horse Tavern in Greenwich Village, New York, one of the city’s oldest taverns. The rich urban life of the Village was described by one of the Taverns’ many famous patrons, the urbanist Jane Jacobs. Photo by Steve Minor).

I think the answers are at our fingertips. In one sense, they’re no more than “nudges” that influence what’s happening already; and they’re supported by robust research in technology, economics, social science, biology and urban design. They lay out a three step manifesto for successful community economies, enabled by technology and rooted in place.

But in another sense, this is a call for fundamental change. These “nudges” will only work if they are enacted as policies, regulations and laws by national and local governments. “Regulation” is a dirty word to the proponents of free markets; but free markets are failing us, and it’s time we admitted that, and shaped them to our needs.

A global-local economy

Globalisation is inevitable – and in many ways beneficial; but ironically the same technologies that enable it can also enable localism, and the two trends do not need to be mutually exclusive.

Many urban designers and environmental experts believe that the best path to a healthy, successful, sustainable and equitable future economy and society lies in a combination of medium density cities with a significant proportion of economic activity (from food to manufacturing to energy to re-use and recycling) based on local transactions supported by walking and cycling.

The same “platform” business models employed by Über, Airbnb and so on could in theory provide the new transaction infrastructure to stimulate and enable such economies. In fact, I believe that they are unique in their ability to do so. Examples already exist – “Borroclub“, for instance, whose platform business connects people who need tools to do jobs with near neighbours who own tools but aren’t using them at the time. A community that adopts Borroclub spends less money on tools; exchanges the money it does spend locally rather than paying it to importers; accomplishes more work using fewer resources; and undertakes fewer car journeys to out-of-town DIY stores.

This can only be accomplished using social digital technology that allows us to easily and cheaply share information with hundreds or thousands of neighbours about what we have and what we need. It could never have happened using telephones or the postal system – the communication technologies of the pre-internet age.

This could be a tremendously powerful way to address the crisis we are facing. Businesses using this model could create jobs, reinforce local social value, reduce the transport and environmental impact of economic transactions and promote the sustainable use of resources; all whilst tapping into the private sector investment that supports growing businesses.

But private sector businesses will only drive social outcomes at scale if we shape the markets they operate in to make that the most profitable business agenda to pursue. The fact that we haven’t shaped the market yet is why platform businesses are currently driving inequality.

There are three measures we could take to shape the market; and the best news is that the first one is already being taken.

1. Legislate to encourage and support social innovation with Open Data and Open Technology

The Director of one of the UK’s first incubators for technology start-up businesses recently told me that “20 years ago, the only way we could help someone to start a business was to help them write a better business plan in order to have a better chance of getting a bank loan. Today there are any number of ways to start a business, and lots of them don’t need you to have much money.”

Technologies such as smartphones, social media, cloud computing and open source software have made it possible to launch global businesses and initiatives almost for free, in return for little more than an investment of time and a willingness to learn new skills. Small-scale innovation has never before had access to such free and powerful tools.

(The inspirational Kilimo Salama scheme that uses

(The inspirational Kilimo Salama scheme that uses “appropriate technology” to make crop insurance affordable to subsistence farmers. Photo by Burness Communications)

These are all examples of what was originally described as “Intermediate Technology” by the economist Ernst Friedrich “Fritz” Schumacher in his influential work, “Small is Beautiful: Economics as if People Mattered“, and is now known as Appropriate Technology.

Schumacher’s views on technology were informed by his belief that our approach to economics should be transformed “as if people mattered”. He asked:

“What happens if we create economics not on the basis of maximising the production of goods and the ability to acquire and consume them – which ends up valuing automation and profit – but on the Buddhist definition of the purpose of work: “to give a man a chance to utilise and develop his faculties; to enable him to overcome his ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.”

Schumacher pointed out that the most advanced technologies, to which we often look to create value and growth, are in fact only effective in the hands of those with the resources and skills required to use them – i.e. those who are already wealthy. Further, by emphasising efficiency, output and profit those technologies tend to further concentrate economic value in the hands of the wealthy – often specifically by reducing the employment of people with less advanced skills and roles.

His writing seems prescient now.

A perfect current example is the UK Government’s strategy to drive economic growth by making the UK an international leader in autonomous vehicles, to counter the negative economic impacts of leaving the European Union. That strategy is based on further increasing the number of highly skilled technology and engineering jobs at companies and research insitutions already involved in the sector; and on the UK’s relative lack of regulations preventing the adoption of such technology on the country’s roads.

The strategy will benefit those people with the technological and engineering skills needed to create improvements in autonomous vehicle technology. But what will happen to the far greater number of people who earn their living simply by driving vehicles? They will first see their income fall, and second see their jobs disappear, as technology firstly replaces their permanent jobs with casual labour through platforms such as Über, and secondly completely removes their jobs from the economy by replacing them with self-driving technology. The UK economy might grow in the process; but vast numbers of ordinary people will see their jobs and incomes disappear or decline.

From the broad perspective of the UK workforce, that strategy would be great if we were making a massive investment in education to enable more people to earn a living as highly paid engineers rather than an average or low-paid living as drivers. But of course we’re not doing that at all; at best our educational spend per student is stagnant, and at worst it’s declining as class-sizes grow and we reduce the number of teaching assistants we employ.

In contrast, Schumacher felt that the most genuine “development ” of our society would occur when the most possible people were employed in a way that gave them the practical ability to earn a living; and that also offered a level of human reward – much as Maslow’s “Hierarchy of Needs” first identifies our most basic requirements for food, water, shelter and security; but next relates the importance of family, friends and “self-actualisation” (which can crudely be described as the process of achieving things that we care about).

This led him to ask:

“What is that we really require from the scientists and technologists? I should answer:

We need methods and equipment which are:

    • Cheap enough so that they are accessible to virtually everyone;
    • Suitable for small-scale application; and
    • Compatible with man’s need for creativity”

These are precisely the characteristics of the Cloud Computing, social media, Open Source and smartphone technologies that are now so widely available, and so astonishingly powerful. What we need to do next is to provide more support to help people everywhere put them to use for their own purposes.

Firstly, Open data, open algorithms and open APIs should be mandatory for any publicly funded service or infrastructure. They should be included in the procurement criteria for services and goods procured on behalf of the public sector. Our public infrastructure should be digitally open, accessible and accountable.

Secondly, some of the proceeds from corporate taxation – whether at national level or from local business rates – should be used to provide regional investment funds to support local businesses and social enterprises that contribute to local social, economic and environmental objectives; and to support the regional social innovation communities such as the network of Impact Hubs that help such initiatives start, succeed and grow.

But perhaps most importantly, those proceeds should also be used to fund improvements to state education everywhere. People can only use tools if they are given the opportunity to acquire skills; and as tools and technologies change, we need the opportunity to learn new skills. If our jobs – or more broadly our roles in society – are not ultimately to be replaced by machines, we need to develop the creativity to use those tools to create the human value that technology will never understand.

It is surely insane that we are pouring billions of pounds and dollars into the development of technologies that mean we need to develop new skills in order to remain employable, and that those investments are making our economy richer and richer; but that at the same time we are making a smaller and smaller proportion of that wealth available to educate our children.

Just as some of the profits of the Industrial Revolution were spent on infrastructure with a social purpose, so should some of the profits of the Information Revolution be.

2. Legislate to encourage and support business models with a positive social outcome

(Hancock Bank’s vault, damaged by Hurricane Katrina. Photo by Social Stratification)

The social quality of the behaviour of private sector businesses varies enormously.

The story of Hancock Bank’s actions to assist the citizens of New Orleans to recover from hurricane Katrina in 2005 – by lending cash to anyone who needed it and was prepared to sign an IoU – is told in this video, and is an extraordinary example of responsible business behaviour. In an unprecedented situation, the Bank’s leaders based their decisions on the company’s purpose, expressed in its charter, to support the communities of the city. This is in contrast to the behaviour of Bob Diamond, who resigned as CEO of Barclays Bank following the LIBOR rate-manipulation scandal, and who under questioning by parliamentary committee could not remember what the Bank’s founding principles, written by community-minded Quakers, stated.

Barclays’ employees’ behaviour under Bob Diamond was driven purely by the motivation to earn bigger bonuses by achieving the Bank’s primary objective, to increase shareholder value.

But the overriding focus on shareholders as the primary stakeholder in private sector business is relatively new. Historically, customers and employees have been treated as equally important. Some leading economists now believe we should return to such balanced models.

There are already models of business – such as “social enterprise” – which promote more balanced corporate governance, and that even offer accreditation schemes. We could incentivise such models to be more successful in our economy by creating a preferential market for them – lower rates of taxation; preferential scoring in public sector procurements; and so on.

An alternative is to use technology to enable entirely new, entirely open systems. “Blockchains” are the technology that enable the digital currency “Bitcoin“. The Bitcoin Blockchain is a single, distributed ledger that records every Bitcoin transaction so that anyone in the world can see it. So unlike the traditional system of money in which we depend on physical tokens, banks and payment services to define the ownership of money and to govern transactions, Bitcoin transactions work because everybody can see who owns which Bitcoins and when they’re being exchanged.

This principle of a “distributed, open ledger” – implemented by a blockchain – is thought by many technology industry observers to be the most important, powerfully disruptive invention since the internet. The Ethereum “smart contracts” platfom adds behaviour to the blockchain – open algorithms that cannot be tampered with and that dictate how transactions take place and what happens as a consequence of them. It is leading to some strikingly different new business models, including the “Distributed Autonomous Organisation” (or “DAO” for short), a multi-$million investment fund that is entirely, democratically run by smart contracts on behalf of its investors.

By promoting distributed, non-repudiatable transparency in this way, blockchain technologies offer unprecedented opportunities to ensure that all of the participants in an economic system have the opportunity to influence the distribution of the benefits of the system in a fair way. This idea is already at the heart of an array of initiatives to ensure that some of the least wealthy people in the world benefit more fairly from the information economy.

Finally, research in economics and in evolutionary social biology is yielding prescriptive insights into how we can design business models that are as wildly successful as those of Über and Airbnb, but with models of corporate governance that ensure that the wealth they create is more broadly and fairly distributed.

In conversation with a researcher at Imperial College London a few years ago, I said that I thought we needed to find criteria to distinguish “platform” businesses like Casserole Club that create social value from those like Über that concentrate the vast majority of the wealth they create in the hands of the platform owners. (Casserole Club uses social media to match people who are unable to provide meals for themselves with neighbours who are happy to cook and share an extra portion of their meal).

The researcher told me I should consult Elinor Ostrom’s work in Economics. Ostrom, who won the Nobel prize in 2009, spent her life working with communities around the world who successfully manage shared resources (land, forests, fresh water, fisheries etc.) sustainably, and writing down the common features of their organisational models. Her Nobel prize was awarded for using this evidence to disprove the “tragedy of the commons” doctrine which economists previously believed proved that sustainable commons management was impossible.

(Elinor Ostrom working with irrigation management in Nepal)

(Elinor Ostrom working with irrigation management in Nepal)

Most of Ostrom’s principles for organisational design and behaviour are strikingly similar to the models used by platform businesses such as Über and Airbnb. But the principles she discovered that are the most interesting are the ones that Über and Airbnb don’t follow – the price of exchange being agreed by all of the participants in a transaction, for example, rather than it being set by the platform owner. Ostrom’s work has been continued by David Sloan Wilson who has demonstrated that the principles she discovered follow from evolutionary social biology – the science that studies the evolution of human social behaviour.

Elinor Ostrom’s design principles for commons organisations offer us not only a toolkit for the design of successful, socially responsible platform businesses; they offer us a toolkit for their regulation, too, by specifying the characteristics of businesses that we should preferentially reward through market regulation and tax policy.

3. Legislate for individual ownership of personal data, and a right to share in the profits it creates. 

Platform business models may depend less and less on our labour – or at least, may have found ways to pay less for it as a proportion of their profits; but they depend absolutely on our data.

Of course, we – usually – get some value in return for our data – useful search results, guidance to the quickest route to our journey, recommendations of new songs, films or books we might like.

But is massive inequality really a price worth paying for convenience?

The ownership of private property and intellectual property underpin the capitalist economy, which until recently was primarily based on the value of physical assets and closed knowledge, made difficult to replicate through being stored primarily in physical, analogue media (including our brains).

Our economy is now being utterly transformed by easy to replicate, easy to transfer digital data – from news to music to video entertainment to financial services, business models that had operated for decades have been swept away and replaced by models that are constantly adapting, driven by advances in technology.

But data legislation has not kept pace. Despite several revisions of data protection and privacy legislation, the ownership of digital data is far from clearly defined in law, and in general its exchange is subject to individual agreements between parties.

It is time to legislate more strongly that the value of the data we create by our actions, our movement and our communication belongs to us as individuals, and that in turn we receive a greater share of the profits that are made from its use.

That is the more likely mechanism to result in the fair distribution of value in the economy as the value of labour falls than a Universal Basic Income that rewards nothing.

One last plea to our political leaders to admit that we face a crisis

Whilst the UK and the USA argue – and even riot – about the outcomes of the European Union referendum and the US Presidential election, the issues of inequality, loss of jobs and disenfranchisement from the political system are finally coming to light in the media.

But it’s a disgrace that they barely featured at all in either of those campaigns.

Emotionally right now I want to castigate our politicians for getting us into this mess through all sorts of venality, complacency, hubris and untruthfulness. But two things I know they are not – including Donald Trump – are stupid or ignorant. They surely must be aware of these issues – why will they not recognise and address them?

Robert Wright’s mathematical analysis of the evolution of human society, NonZero, describes the emergence of our current model of nation states through the European Middle Ages as a tension between the ruling and working classes. The working classes pay a tax to the ruling classes, who they accept will live a wealthier life, in return for a safe and peaceful environment in which to live. Whenever the price paid for safety and peace grew unreasonably high, the working classes revolted and overthrew the ruling classes, resulting eventually in a new, better-balanced model.

Is it scaremongering to suggest we are close to a similar era of instability?

(Anti-Donald Trump protesters in San Jose, California in June. Trump supporters leaving a nearby campaign rally were attacked)

(Anti-Donald Trump protesters in San Jose, California in June. Trump supporters leaving a nearby campaign rally were attacked)

I don’t think so. At the same time that the Industrial Revolution created widespread economic growth and improvements in prosperity, it similarly exacerbated inequality between the general population and the property- and business-owning elite. Just as I have argued in this article, that inequality was corrected not by “big government” and grand top-down redistributive schemes, but by measures that shaped markets and investments in education and enablement for the wider population.

We have not yet taken those corrective actions for the Information Revolution – nor even realised and acknowledged that we need to take them. Inequality is rising as a consequence, and it is widely appreciated that inequality creates social unrest.

Brexit and the election of Donald Trump following a campaign of such obvious lies, misogyny and – at best – narrow-minded nationalism are unprecedented in modern times. They have already resulted in social unrest in the form of riots and increased incidents of racism – as has the rise in the price of staple food caused by severe climate events as a vast number of people around the world struggle to feed themselves when hurricanes and droughts affect the production of basic crops. It’s no surprise that the World Economic Forum’s 2016 Global Risks Report identifies “unemployment and underemployment” and “profound social instability” as amongst the top 10 most likely and impactful global risks facing the world.

Brexit and Donald Trump are not crises in themselves; but they are symptoms of a real crisis that we face now; and until we – and our political leaders – face up to that and start dealing with it properly, we are putting ourselves, our future and our childrens’ future at unimaginable risk.

Thankyou to the following, whose opinions and expertise, expressed in articles and conversations, helped me to write this post:

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Why Smart Cities still aren’t working for us after 20 years. And how we can fix them.

(The futuristic "Emerald City" in the 1939 film "The Wizard of Oz". The "wizard" who controls the city is a fraud who uses theatrical technology to disguise his lack of real power.)

(The futuristic “Emerald City” in the 1939 film “The Wizard of Oz“. The “wizard” who controls the city is a fraud who uses theatrical technology to disguise his lack of real power.)

(I was recently asked to give evidence to the United Nations Commission on Science and Technology for Development during the development of their report on Smart Cities and Infrastructure. This article is based on my presentation, which you can find here).

The idea of a “Smart City” (or town, or region, or community) is 20 years old now; but despite some high profile projects and a lot of attention, it has so far achieved relatively little.

The goal of a Smart City is to invest in technology in order to create economic, social and environmental improvements. That is an economic and political challenge, not a technology trend; and it is an imperative challenge because of the nature and extent of the risks we face as a society today. Whilst the demands created by urbanisation and growth in the global population threaten to outstrip the resources available to us, those resources are under threat from man-made climate change; and we live in a world in which many think that access to resources is becoming dangerously unfair.

Surely, then, there should be an urgent political debate concerning how city leaders and local authorities enact policies and other measures to steer investments in the most powerful tool we have ever created, digital technology, to address those threats?

In honesty, that debate is not really taking place. There are endless conferences and reports about Smart Cities, but very, very few of them tackle the issues of financing, investment and policy – they are more likely to describe the technology and engineering solutions behind schemes that appear to create new efficiencies and improvements in transport and energy systems, for example, but that in reality are unsustainable because they rely on one-off research and innovation grants.

Because Smart Cities are usually defined in these terms – by the role of technology in city systems rather than by the role of policy in shaping the outcomes of investment – the idea has not won widespread interest and support from the highest level of political leadership – the very people without whom the policy changes and investments that Smart Cities need will not be made.

And because Smart Cities are usually discussed as projects between technology providers, engineers, local authorities and universities, the ordinary people who vote for politicians, pay taxes, buy products, use public services and make businesses work are not even aware of the idea, let alone supportive of it.

("Visionary City" by William Robinson Leigh)

(William Robinson Leigh’s 1908 painting “Visionary City” envisaged future cities constructed from mile-long buildings of hundreds of stories connected by gas-lit skyways for trams, pedestrians and horse-drawn carriages. A century later we’re starting to realise not only that developments in transport and power technology have eclipsed Leigh’s vision, but that we don’t want to live in cities constructed from buildings on this scale.)

The fact that the Smart Cities movement confuses itself with inconsistent and contradictory definitions exacerbates this lack of engagement, understanding and support. From the earliest days, it has been defined in terms of either smart infrastructure or smart citizens; but rarely both at the same time.

For example, in “City of Bits” in 1996, William Mitchell, Director of the Smart Cities Research Group at MIT’s Media Lab, predicted the widespread deployment of digital technology to transform city infrastructures:

“… as the infobahn takes over a widening range of functions, the roles of inhabited structures and transportation systems are shifting once again, fresh urban patterns are forming, and we have the opportunity to rethink received ideas of what buildings and cities are, how they can be made, and what they are really for.”

Whilst in their paper “E-Governance and Smart Communities: A Social Learning Challenge“, published in the Social Science Computer Review in 2001, Amanda Coe, Gilles Paquet and Jeffrey Roy described the 1997 emergence of the idea of “Smart Communities” in which citizens and communities are given a stronger voice in their own governance by the power of internet communication technologies:

“A smart community is defined as a geographical area ranging in size from a neighbourhood to a multi-county region within which citizens, organizations and governing institutions deploy and embrace NICT [“New Information and Communication Technologies”] to transform their region in significant and fundamental ways (Eger 1997). In an information age, smart communities are intended to promote job growth, economic development and improve quality of life within the community.”

Because few descriptions of a Smart City reflect both of those perspectives in harmony, many Smart City discussions quickly create arguments between opposing camps rather than constructive ideas: infrastructure versus people; top-down versus bottom-up; technology versus urban design; proprietary technology versus open source; public service improvements versus the enablement of open innovation – and so on.

I haven’t seen many political leaders or the people who vote for them be impressed by proposals whose advocates are arguing with each other.

The emperor has no wearable technology … why we’re not really investing in Smart Cities

The consequence of this lack of cohesion and focus is that very little real money is being invested in Smart Cities to create the outcomes that cities, towns, regions and whole countries have set out for themselves in thousands of Smart City visions and strategies. The vast majority of Smart City initiatives to date are pilot projects funded by research and innovation grants. There are very, very few sustainable, repeatable solutions yet.

There are three reasons for this; and they will have serious economic and social consequences if we don’t address them.

Firstly, the investment streams available to most of those who are trying to shape Smart Cities initiatives – engineers, technologists, academics, local authority officers and community activists – are largely limited to corporate research and development funds, national and international innovation programmes and charitable or socially-focussed grants. Those are important sources of funding, but they are only available at a scale sufficient to prove that good new ideas can work through individual, time-limited projects. They are not intended to fund the deployment of those ideas across cities everywhere, or to construct new infrastructure at city scale, and they are not remotely capable of doing so.

(United States GDP plotted against median household income from 1953 to present. Until about 1980, growth in the economy correlated to increases in household wealth. But from 1980 onwards as digital technology has transformed the economy, household income has remained flat despite continuing economic growth)

(United States GDP plotted against median household income from 1953 to present. Until about 1980, growth in the economy correlated to increases in household wealth. But from 1980 onwards as digital technology has transformed the economy, household income has remained flat despite continuing economic growth. From “The Second Machine Age“, by MIT economists Andy McAfee and Erik Brynjolfsson, summarised in this article.)

Secondly and conversely, the massive investments that are being made in smart technology at a scale that is transforming our world are primarily commercial: they are investing in technology to develop new products and services that consumers want to buy. That’s guaranteed to create convenience for consumers and profit for companies; but it’s far from guaranteed to create resilient, socially mobile, vibrant and healthy cities. It’s just as likely to reduce our life expectancy and social engagement by making it easier to order high-fat, high-sugar takeaway food on our smartphones to be delivered to our couches by drones whilst we immerse ourselves in multiplayer virtual reality games.

That’s why whilst technology advocates praise the ingenuity of technology-enabled “sharing economy” business models such as Airbnb and Uber, most other commentators point out that far from being platforms for “sharing” many are simply profit-seeking transaction brokers. More fundamentally, some economists are seriously concerned that the economy is becoming dominated by such platform business models and that the majority of the value they create is captured by a small number of platform owners – world leaders discussed these issues at the World Economic Forum’s Davos summit this year. There is real evidence that the exploitation of technology by business is contributing to the evolution of the global economy in a way that makes it less equal and that concentrates an even greater share of wealth amongst a smaller number of people.

Finally, the similarly massive investments continually made in property development and infrastructure in cities are, for the most part, not creating investments in digital technology in the public interest. Sometimes that’s because there’s no incentive to do so: development investors make their returns by selling the property they construct; they often have no interest in whether the tenants of that property start successful digital businesses, and they receive no income from any connectivity services those tenants might use. In other cases, policy actively inhibits more socially-minded developers from providing digital services. One developer of a £1billion regeneration project told me that European Union restrictions on state aid had prevented them making any investment in connectivity. They could only build buildings without connectivity – in an area with no mobile coverage – and attempt to attract people and businesses to move in, thereby creating demand for telecommunications companies to subsequently compete to fulfil.

We’ll only build Smart Cities when we shape the market for investing in technology for city services and infrastructure

In her seminal 1961 work “The Death and Life of Great American Cities“, Jane Jacobs wrote that “Private investment shapes cities, but social ideas (and laws) shape private investment. First comes the image of what we want, then the machinery is adapted to turn out that image.”

Cities, towns, regions and countries around the world have set out their self-images of a Smart future, but we have not adapted the financial, regulatory and economic machinery – the policies, the procurement practises, the development frameworks, the investment models – to incentivise the private sector to create them.

I do not mean to be critical of the private sector in this article. I have worked in the private sector for my entire career. It is the engine of our economy, and without its profits we would not create the jobs needed by a growing global population, or the means to pay the taxes that sustain our public services, or the surplus wealth that creates an ability to invest in our future.

But one of the fallacies of large parts of the Smart Cities movement, and of a significant part of the overall debate concerning the enormous growth in value of the technology economy, is the assumption that economic growth driven by private sector investments in technology to improve business performance will create broad social, economic and environmental benefits.

There is no guarantee that it will. Outside philanthropy, charitable donations and social business models, private sector investments are made in order to make a profit, period. In doing so, social, economic and environmental benefits may also be created, but they are side effects which, at best, result from the informed investment choices of conscientious business leaders. At worst, they are simply irrelevant to the imperative of the profit motive.

Some businesses have the scale, vision and stability to make more direct links in their strategies and decision-making to the dependency between their success as businesses and the health of the society in which they operate – Unilever is a notable and high profile example. And all businesses are run by real people whose consciences influence their business decisions (with unfortunate exceptions, of course).

But those examples do not in any way add up to the alignment of private sector investment objectives with the aspirations of city authorities or citizens for their future. And as MIT economists Andy McAfee and Erik Brynjolfsson, amongst others, have shown, most current evidence indicates that the technology economy is exacerbating the inequality that exists in our society (see graph above). That is the opposite of the future aspirations expressed by many cities, communities and their governments.

This leads us to the political and economic imperative represented by the Smart Cities movement: to adapt the machinery of our economy to influence investments in technology so that they contribute to the social, economic and environmental outcomes that we want.

A leadership imperative to learn from the past

Those actions can only be taken by political leaders; and they must be taken because without them developments and investments in new technology and infrastructure will not create ubiquitously beneficial outcomes. Historically, there is plenty of evidence that investments in technology and infrastructure can create great harm if market forces alone are left to shape them.

(Areas of relative wealth and deprivation in Birmingham as measured by the Indices of Multiple Deprivation. Birmingham, like many of the UK's Core Cities, has a ring of persistently deprived areas immediately outside the city centre, co-located with the highest concentration of transport infrastructure allowing traffic to flow in and out of the centre.)

(Areas of relative wealth and deprivation in Birmingham as measured by the Indices of Multiple Deprivation. Birmingham, like many of the UK’s Core Cities, has a ring of persistently deprived areas immediately outside the city centre, co-located with the highest concentration of transport infrastructure allowing traffic to flow in and out of the centre)

For example, in the decades after the Second World War, cities in developed countries rebuilt themselves using the technologies of the time – concrete and the internal combustion engine. Networks of urban highways were built into city centres in the interests of connecting city economies with national and international transport links to commerce.

Those infrastructures supported economic growth; but they did not provide access to the communities they passed through.

The 2015 Indices of Multiple Deprivation in the UK demonstrate that some of those communities were greatly harmed as a result. The indices identify neighbourhoods with combinations of low levels of employment and income; poor health; poor access to quality education and training; high levels of crime; poor quality living environments and shortages of quality housing and services. An analysis of these areas in the UK’s Core Cities (the eight economically largest cities outside London, plus Glasgow and Cardiff) show that many of them exist in rings surrounding relatively thriving city centres. Whilst clearly the full causes are complex, it is no surprise that those rings feature a concentration of transport infrastructure passing through them, but primarily serving the interests of those passing in and out of the centre. (And this is without taking into account the full health impacts of transport-related pollution, which we’re only just starting to appreciate).

Similar effects can be seen historically. In their report “Cities Outlook 1901“, Centre for Cities explored the previous century of urban development in the UK, examining why at various times some cities thrived and some did not. They concluded that the single most important influence on the success of cities was their ability to provide their citizens with the right skills and opportunities to find employment, as the skills required in the economy changed as technology evolved. (See the sample graph below). A recent short article in The Economist magazine similarly argued that history shows there is no inevitable mechanism that ensures that the benefits of economic growth driven by technology-enabled productivity improvements are broadly distributed. It cites huge investments made in the US education system in the late 19th and early 20th Centuries to ensure that the general population was in a position to benefit from the technological developments of the Industrial Revolution as an example of the efforts that may need to be made.

Why smart cities are a political leadership challenge

So, to summarise the arguments I’ve made so far:

From global urbanisation and population growth to man-made climate change we are facing some of the most serious and acute challenges in our history, as well as the persistent challenge of inequality. But the most powerful tool that is shaping a transformation of our society and economy, digital technology, is, for the most part, not being used to address those challenges. The vast majority of investments in it are being made simply in the interests of profitable returns. Our political leaders are not shaping the markets in which those investment are made, or influencing public sector procurement practises, in order to create broader social, economic and environmental outcomes.

So what can we do about that?

We need to persuade political leaders to act – the leaders of cities; of local authorities more generally; and national politicians. I’m trying to do that using the arguments set out in this article, approaching “Smart Cities” not as a technology initiative but as a political and economic issue made urgent by imperative challenges to society.

I can imagine three arguments against that proposition, which I’d like to tackle first, before going on to talk about the actions that we need those leaders to take.

(Population changes in Blackburn, Burnley and Preston from 1901-2001. In the early part of the century, all three cities grew, supported by successful manufacturing economies. But in the latter half, only Preston continued to grow as it transitioned successfully to a service economy. From Cities Outlook 1901 by Centre for Cities)


(Population changes in Blackburn, Burnley and Preston from 1901-2001. In the early part of the century, all three cities grew, supported by successful manufacturing economies. But in the latter half, only Preston continued to grow as it transitioned successfully to a service economy. If cities do not adapt to changes in the economy driven by technology, history shows that they fail. From “Cities Outlook 1901” by Centre for Cities)

The first argument is: why focus on cities? What about the rest of the world, and in particular the challenges of smaller towns, which are often overlooked; or rural regions, which are distinctive and deserve focus in their own right?

There are two replies to this argument. The first is that cities do represent the most sizeable challenge. Since 2010, more than half the world’s population has lived in urban areas, and that’s expected to rise to 70% by 2050. Cities drive the majority of the world’s economy, consume the majority of resources in the most concentrated way and create the majority of the pollution driving climate change. By focussing on cities we focus on most of our challenges at the same time, and in the places where they are most concentrated; and we focus on a unit of governance that is able to act decisively and with understanding of local context.

And that brings us to the second reply: most of the arguments I make in this article aren’t really about cities, they’re about the need for the leaders of local governments – cities, towns and regions – to take action. That applies to any local authority, not just to cities.

The second counter-argument is that my proposal is “top-down” and that instead we should focus on the “bottom-up” creativity that is the richest source of innovation and of practical solutions to problems that are rooted in local context.

My answer to this challenge is that I agree completely that it is bottom-up innovation that will create the majority of the answers to our challenges. But bottom-up innovation is already happening everywhere around us – it is what everyone does every day to create a better business, a better community, a better life. The problem with bottom-up innovation doesn’t lie in making it happen; it lies in enabling it to have a bigger impact. If bottom-up innovation on its own were the answer, then we wouldn’t have the staggering and increasing levels of inequality that we see today, and the economic growth created by the information revolution would be more broadly distributed.

Ultimately, it’s not the bottom-up innovators who need persuading to take action: they’re already acting. It’s the top-down leaders and policy-makers who are not doing what we need them to do: setting the policies that will influence investments in digital technology infrastructure to create better opportunities and support for citizen-led, community-led and business-led innovation. That’s why I’m focussing this article on those leaders and the actions we need them to take.

The third argument works similarly to the second argument, and it’s that we should be focussing on people, not on technology and policy.

Yes, of course we should be focussing on people: their creativity, the detail of their daily lives, and the outcomes that matter to them. But two central points to my argument are that digital technology is a new and revolutionary force reshaping our world, our society and our economy; and that the benefits of that revolution are not being equitably distributed. The main thing that’s not working for people right now is the impact of digital technology on society, and the main reason for that is the lack of action by political leaders. So that’s what we should concentrate on fixing.

Finally, I can summarise my response to all of those arguments in a simple statement: first we have to persuade political leaders to act, because many of them are not acting on these issues at the moment; and then we have to persuade them to act in the right way – to support bottom-up innovation through investment in open technology infrastructures and to put the interests of people at the heart of the policies that drive and shape that investment.

(Innovation Birmingham's £7m "iCentrum" facility will open in March 2016. It will small companies developing smart city products and services will have the opportunity to co-develop them with larger organisations such as RWE nPower, the Transport Systems Catapult and Centro (Birmingham’s Public Transport Executive) – see, e.g., https://ts.catapult.org.uk/-/centro-and-the-transport-systems-catapult-to-run-intelligent-mobility-incubator-within-innovation-birmingham-s-8m-icentrum-buildi-1 )

(Innovation Birmingham’s Chief Executive David Hardman describes the £7m “iCentrum” facility which will open in March 2016 to local stakeholders. It will offer entrepreneurial companies opportunities to co-develop smart city products and services with larger organisations such as RWE nPower, the Transport Systems Catapult and Centro, Birmingham’s Public Transport Executive)

Learning from what’s worked

This might all sound rather negative so far; and in a sense that’s intentional because I want to be very clear in my message that I do not think we are doing enough.

But I have a positive message too: if we can persuade our political leaders to act, then it’s increasingly clear what we need them to do. Whilst the majority of “Smart City” initiatives are unsustainable pilot and innovation projects, that’s not true of them all.

In the UK, from Sunderland to London to Newcastle to Birmingham there are examples of initiatives that are supported by sustainable funding sources and investment streams; that are not dependent on research and development grants from national or international innovation funds or technology companies; and that essentially could be applied by any city or community.

I summarised these repeatable models recently in the article “4 ways to get on with building Smart Cities. And the societal failure that stops us using them“:

1. Include Smart City criteria in the procurement of services by local authorities to encourage competitive innovation from private sector providers. Whilst local authority budgets are under pressure around the world, and have certainly suffered enormous cuts in the UK, local authorities nevertheless spend up to billions of pounds sterling annually on goods, services and staff time. The majority of procurements that direct that spending still procure traditional goods and services through traditional criteria and contracts. By contrast, Sunderland, a UK city, and Norfolk, a UK county, have shown that by emphasising city and regional aspirations in procurement scoring criteria it is possible to incentivise suppliers to invest in smart solutions that contribute to local objectives.

2. Encourage development opportunities to include “smart” infrastructure. Investors invest in infrastructure and property development because it creates returns for them – to the tune of billions of pounds sterling annually in the UK. Those investments are already made in the context of regulations – planning frameworks, building codes and energy performance criteria, for example. Those regulations can be adapted to demand that investments in property and physical infrastructure include investment in digital infrastructure in a way that contributes to local authority and community objectives. The East Wick and Sweetwater development in London – a multi-£100million development that is part of the 2012 Olympics legacy and that is financed by a pension fund investment – was awarded to it’s developer based in part on their commitments to invest in this way.

3. Commit to entrepreneurial programmes. There are many examples of new urban or public services being delivered by entrepreneurial organisations who develop new business and operating models enabled by technology – I’ve already cited Uber and Airbnb as examples that contribute to traveller convenience; Casserole Club, a service that uses social media to connect people who can’t provide their own food with neighbours who are happy to cook an extra portion of a meal for someone else, is an example that has more obviously social benefits. Many cities have local investment funds and support services for entrepreneurial businesses, and Sunderland’s Software Centre, Birmingham’s iCentrum development, Sheffield’s Smart Lab and London’s Cognicity accelerator are examples where those investments have been linked to local smart city objectives.

4. Enable and support Social Enterprise. The objectives of Smart Cities are analogous to the “triple bottom line” objectives of Social Enterprises – organisations whose finances are sustained by revenues from the products or services that they provide, but that commit themselves to social, environmental or economic outcomes, rather than to maximising their financial returns to shareholders. A vast number of Smart City initiatives are carried out by these organisations when they innovate using technology. Cities that find a way to systematically enable social enterprises to succeed could unlock a reservoir of beneficial innovation, as the Impact Hub network, a global community of collaborative workspaces, has shown.

How to lead a smart city: Commitment, Collaboration, Consistency and Community

Each of the approaches I’ve described is dependent on both political leadership from a local authority and collaboration with regional stakeholders – businesses, developers, Universities, community groups and so on.

So the first task for political leaders who wish to drive an effective Smart City programme is to facilitate the co-creation of regional consensus and an action plan (I’m not going to use the word “roadmap”. My experience of Smart Cities roadmaps is that they are, as the name implies, passive documents that don’t go anywhere).

I can sum up how to do that effectively using “four C’s”: Commitment, Collaboration, Consistency and Community:

Commitment: a successful approach to a Smart City or community needs the commitment, leadership and active engagement of the most senior local government leaders. Of course, elected Mayors, Council Leaders and Chief Executives are busy people with a multitude of responsibilities and they inevitably delegate; but this is a responsibility that cannot be delegated too far. The vast majority of local authorities that I have seen pursue this agenda with tangible results – through whichever approach, even those authorities who have been successful funding their initiatives through research and innovation grants – have appointed a dedicated Executive officer reporting directly to the Chief Executive and with a clear mandate to create, communicate and drive a collaborative smart strategy and programme.

Collaboration: a collaborative, empowered regional stakeholder forum is needed to convene local resources. Whilst a local authority is the only elected body with a mandate to set regional objectives, local authorities directly control only a fraction of regional resources, and do not directly set many local priorities. Most approaches to Smart Cities require coordinated activity by a variety of local organisations. That only comes about if those organisations decide to collaborate at the most senior level, mutually agree their objectives for doing so, and meet regularly to agree actions to achieve them. The local authority’s elected mandate usually makes it the most appropriate organisation to facilitate the formation and chair the proceedings of such fora; but it cannot direct them.

Consistency: in order to collaborate, regional stakeholders need to agree a clear, consistent, specific local vision for their future. Without that, they will lack a context in which to take decisions that reconcile their individual interests with shared regional objectives; and any bids for funding and investments they make, whether individually or jointly, will appear inconsistent and unconvincing.

Community: finally, the only people who really know what a smart city should look like are the citizens, taxpayers, voters, customers, business owners and employees who form its community; who will live and work in it; and who will ultimately pay for it through their taxes. It’s their bottom-up innovation that will give rise to the most meaningful and effective initiatives. Their voice – heard through events, consultation exercises, town hall meetings, social media and so on – should lead to the visions and policies to create an environment in which they can flourish.

(Birmingham's newly opened city centre trams are an example of a reversal of 20th century trends that prioritised car traffic over the public transport systems that we have realised are so important to healthy cities)

(Birmingham’s newly opened city centre trams are an example of a reversal of 20th century trends that prioritised car traffic over the public transport systems that we have re-discovered to be so important to healthy cities)

Beyond “top-down” versus “bottom-up”: Translational Leadership and Smart Digital Urbanism

Having established that there’s a challenge worth facing, argued that we need political leaders to take action to address it, and explored what that action should be, I’d like finally to return to one of the arguments I explored along the way.

Action by political leaders is, almost by definition, “top-down”; and, whilst I stand by my argument that it’s the most important missing element of the majority of smart cities initiatives today, it’s vitally important that those top-down actions are taken in such a way as to encourage, enable and empower “bottom-up” innovation by the people, communities and businesses from which real cities are made.

It’s not only important that our leaders take the actions that I’ve argued for; it’s important that they act in the right way. Smart cities are not “business as usual”; and they are also not “behaviour as usual”.

The smart cities initiatives that I have been part of or had the privilege to observe, and that have delivered meaningful outcomes, have taken me on a personal journey. They have involved meeting with, listening to and working with people, organisations and communities that I would not have previously expected to be part of my working life, and that I was not previously familiar with in my personal life – from social enterprises to community groups to individual people with unusual ideas.

Writing in “Resilience: Why Things Bounce Back”, Andrew Zolli observes that the leaders of initiatives that have created real, lasting and surprising change in communities around the world show a quality that he defines as “Translational Leadership“. Translational leaders have the ability to overcome the institutional and cultural barriers to engagement and collaboration between small-scale, informal innovators in communities and large-scale, formal institutions with resources. This is precisely the ability that any leaders involved in smart cities need in order to properly understand how the powerful “top-down” forces within their influence – policies, procurements and investments – can be adapted to empower and enable real people, real communities and real businesses.

Translational leaders understand that their role is not to direct change, but to create the conditions in which others can be successful.

We can learn how to create those conditions from the decades of experience that town planners and urban designers have acquired in creating “human-scale cities” that don’t repeat the mistakes that were made in constructing vast urban highways, tower blocks and housing projects from unforgiving concrete in the past century.

And there is good precedent to do so. It is not just that the experience of town planners and urban designers leads us unmistakably to design thinking that focusses on the needs of the millions of individual citizens whose daily experiences collectively create the behaviour of cities. That is surely the only approach that will succeed; and the designers of smart city technologies and infrastructures will fail unless they take it. But there is also a long-lasting and profound relationship between the design techniques of town planners and of software engineers. The basic architectures of the internet and mobile applications we use today were designed using those techniques in the last decade of the last millennium and the first decade of this one.

The architect Kelvin Campbell’s concept of “massive/small smart urbanism” can teach us how to join the effects of “top-down” investments and policy with the capacity for “bottom-up” innovation that exists in people, businesses and communities everywhere. In the information age, we create the capacity for “massive amounts of small-scale innovation” if digital infrastructures are accessible and adaptable through the provision of open data interfaces, and accessible from open source software on cloud computing platforms – the digital equivalent of accessible public space and human-scale, mixed-used urban environments.

I call this “Smart Digital Urbanism”, and many of its principles are already apparent because their value has been demonstrated time and again. These principles should be the starting point for adapting planning frameworks, procurement practises and the other policies that influence spending and investment in cities and public services.

Re-stating what Smart Cities are all about

Defining and re-defining the “Smart City” is a hoary old business – as I pointed out at the start of this article, we’ve been at it for 20 years now, and without much success.

But definitions are important: saying what you mean to do is an important first step in acting successfully, particularly in a collaborative, public context.

So I’ll end this article by offering another attempt to sum up a smart city – or community – in a way that emphasises what I know from experience are the important factors that will lead to successful actions and outcomes, rather than the endless rounds of debate that we can’t allow to continue any longer:

A Smart City or community is one which successfully harnesses the most powerful tool of our age – digital technology – to create opportunities for its citizens; to address the most severe acute challenges the human race has ever faced, arising from global urbanisation and population growth and man-made climate change; and to address the persistent challenge of social and economic inequality. The policies and investments needed to do this demand the highest level of political leadership at a local level where regional challenges and resources are best understood, and particularly in cities where they are most concentrated. Those policies and investments will only be successful if they are enabling, not directing; if they result from the actions of leaders who are listening and responding to the people and communities they serve; and if they shape an urban environment and digital economy in which individual citizens, businesses and communities have the skills, opportunities and resources to create their own success on their own terms.

That’s not a snappy definition; but I hope it’s a useful definition that’s inclusive of the major issues and clearly points out the actions that are required by city, political, community and business leaders … and why it’s vitally important that we finally start taking them.

 

6 inconvenient truths about Smart Cities

(When cities forget about people: La Defense, Paris, photographed by Phil Beard)

(I recently took the difficult decision to resign from IBM after nearly 20 years to become IT Director for Smart Data and Technology for Amey, one of the largest infrastructure and services companies in the UK, and a subsidiary of the Ferrovial Group. It’s a really exciting opportunity for me to build a team to create new Smart City services and infrastructures. If you’d like to work in the Smart Cities field, please have a look at the roles I’m hiring for. I’ll be continuing to write the Urban Technologist, and this seemed a good point to share my view of the current state of the Smart Cities movement.)

The last year has shown a huge acceleration of interest and action in the Smart Cities market – in the UK, and around the world. What has long been a topic of interest to technology companies, academics, urban designers and local authorities was covered extensively by mainstream media organisation such as the BBC, the Independent newspaper, New Statesman magazine and marketing magazine The Drum.

But what progress has been made implementing Smart Cities ideas?

In the UK, many local authorities have implemented Open Data portals, usually using Open Source platforms such as CKAN and investing a few £10,000s of resources. These are important first steps for building the ecosystems to share and build new service models using data. Some cities, notably Glasgow and Milton Keynes, have been successful deploying more sophisticated schemes supported by research and innovation grants – though as I pointed out last year, exciting as these initiatives are, research and innovation funds will not scale to support every city in the country.

Further afield, local authorities in Europe, the United States and Asia have constructed more substantial, multi-million Euro / Dollar business cases to invest their own funds in platforms that combine static open data with realtime data from sensors and infrastructure, and which use social media and smartphones to improve engagement between citizens, communities, businesses and both public- and private-sector service providers. The Center for Data Innovation recently wrote a nice summary of two reports explaining the financing vehicles that these cities are using.

This has not happened in the UK yet to the same extent. The highly centralised nature of public sector spending means that cities here have not yet been able to construct such ambitious business cases – Centre for Cities’ report “Outlook for Cities 2014” highlighted this as a general barrier to the UK’s cities carrying out initiatives to improve themselves, and reported that UK cities have autonomy over only about 17% of their funding as compared to an average of 55% across countries represented by the OECD.

As more city deals are signed and the city devolution agenda progresses, this will start to change – but I think that will still take a long time to happen.

(The London Underground is just one example of a transport operator using technology to help it operate more efficiently, safely and effectively)

Where similar technology platforms and channels of engagement are nevertheless starting to appear in the UK is through business cases based on efficiencies and increased customer satisfaction for private sector organisations that offer services such as transportation and asset management to cities, citizens and local authorities.

This approach means there’s even more of a need for collaboration between stakeholders in local ecosystems in order to establish and express common objectives – such as resilience, economic growth and social mobility – which can then guide the outcomes of those smart services through policy tools such as procurement practises and planning frameworks. Recent recommendations from the British Standards Institute on the adaptation of city planning policy to enable the Smart City agenda have highlighted the need for such collaboration.

As a consequence of this increased activity, more and more people and organisations of every type are becoming interested in Smart Cities – from oil companies to car manufacturers to politicians. This broadening of interest led to some extraordinary personal experiences for me last year, which included discussing Smart Cities with ex-US Vice President Al Gore (whose investment company Generation IM explores opportunities to invest in assets, technologies and developments that promote sustainability) and very briefly with the UK’s Princess Anne, a supporter of a leadership training scheme that will focus on Smart Cities this year.

But to be honest, I still don’t think we have really understood what a “Smart City” is; why it’s one of the most important concepts of our time; or how we can turn the concept into reality broadly and at scale.

I’ll explore six “inconvenient truths” in this article to describe why I think that’s the case; and what we can do about it:

  1. The “Smart City” isn’t a technology concept; it’s the political challenge of adapting one of the most powerful economic and social forces of our time to the needs of the places where most of us live and work.
  2. Cities won’t get smart if their leaders aren’t involved.
  3. We can’t leave Smart Cities to the market, we need the courage to shape the market.
  4. Smart cities aren’t top down or bottom up. They’re both.
  5. We need to tell honest stories.
  6. No-one will do this for us – we have to act for ourselves.

1. The “Smart City” isn’t a technology concept; it’s the political challenge of adapting one of the most powerful economic and social forces of our time to the needs of the places where most of us live and work

(Photograph of Macau in the evening by Michael Jenkin illustrating some the great complexity of cities: economic growth, social inequality and pollution)

One topic that’s endlessly revisited as more and more people encounter and consider the idea of a Smart City is just how we define that idea. The best definition I thought I had developed is this, updated slightly from the article “7 Steps to a Smarter City“:

A Smart City systematically creates and encourages innovations in city systems that are enabled by technology; that change the relationships between the creation of economic and social value and the consumption of resources; and that contribute to achieving a vision and clear objectives that are supported by a broad and active collaboration amongst city stakeholders.

But such definitions are contentious. Most obviously there’s the basic issue of whether “smart” implies a central role for digital technology – every technology company takes this approach, of course – or whether it’s simply about being more creative in the way that we manipulate the resources around us to achieve the outcomes we desire, whether that involves digital technology or not.

More broadly, a “city” is such a terrifically broad, complex and multi-disciplinary entity – and one whose behaviour is the aggregate of the millions of individual behaviours of its inhabitants, both enabled and constrained by the environment they experience – that it’s pretty much impossible to create any concise definition without missing out something important.

And of course those who live or work in towns and rural areas raise the challenge that limiting the discussion to “cities” omits important stakeholders from discussions about our future – as do those concerned with the national infrastructures that are not located wholly in cities, but without which neither cities nor any other habitations could survive as they do today.

I don’t think we’ll ever achieve a formal, functional definition of a “Smart City” that everyone will agree to. Much as the popularity of the term “Web 2.0” between (roughly) 2003 and 2010 marked the period in time when interest in the internet re-emerged following the “dot com crash“, rather than defining a specific architecture or group of technologies, I think our interest in “Smart Cities” is best understood as the consequence of a period in history in which a large number of people became aware of – and convinced by – a set of inter-related trends:

In this context, it’s less useful to attempt to precisely define the concept of a smart city, and more important to encourage and enable each of us – every community, city, government and organisation – to develop our own understanding of the changes needed to overcome the challenges and take the opportunities before us, and of the rapidly evolving role of technology in doing so.

Why is it so important that we do that?

In their report “Cities Outlook 1901“, Centre for Cities explored the previous century of urban development in the UK, examining why at various times some cities thrived and some did not. They concluded that the single most important influence on the success of cities was their ability to provide their citizens with the right skills and opportunities to find employment, as the skills required in the economy changed as technology evolved.

The challenges faced by cities and their residents in this century will be unlike any we have faced before; and technology is changing more quickly, and becoming more powerful, than it ever has before. Creating “Smart Cities” involves taking the right political, economic, social and engineering approaches to meeting those challenges.

Cities that do so will be successful. Cities that don’t, won’t be. That is the digital divide of the 21st Century, and for everyone’s sake, I hope we are all on the right side of it.

2. Cities won’t get smart if their leaders aren’t involved

(The Sunderland Software Centre, a multi-£million new technology startup incubation facility in Sunderland’s city centre. The Centre is supported by a unique programme of events and mentoring delivered by IBM’s Academy of Technology, and arising from Sunderland’s Smart City strategy)

Let me tell a short tale of two cities and their Smart transformations.

For a long time I’ve written occasional articles on this blog about Sunderland, a city whose leaders, people and social entrepreneurs have inspired me. Sunderland is one of the very few cities in the UK who have spent significant sums of their own money on Smart City projects and supporting technologies, justified by well-constructed business cases. They have publicised investments of well over £10 million, most recently including their visionary “City Intelligence Hub” initiative.

The seeds of the Intelligence Hub idea were apparent when I first worked with the Council, as can be seen from an article written at the time by the Council’s Chief Executive, Dave Smith, for the Guardian’s Local Government Network Blog, explaining why data and Open Data are crucial to the future of effective, transparent public services.

It is no coincidence at all that one of the cities that has been boldest in investing in technology to support its economic, social and environmental objectives has a Chief Executive who shows belief, leadership and engagement in the ideas of Smart Cities.

Milton Keynes have approached their Smart City agenda in a different way. Rather than making significant investments themselves to procure solutions, they have succeeded in attracting enormous investments from technology companies, universities and innovation bodies to develop and test new solutions in the city.

It is similarly no coincidence that – like Bristol, London and Glasgow, to name just three more – Milton Keynes Council have senior leadership figures – initially the then Chief Executive, Dave Hill, followed by Director of Strategy, Geoff Snelson – who regularly attend Smart Cities conferences and government bodies, and who actively convene Smart Cities collaborations. Their very visible presence demonstrates their belief in the importance of Smart City approaches to those organisations seeking to invest in developing them.

A strategy to transform the operations of a local authority (or any other organisation) using technology, and to re-invest the savings achieved by doing so into new services and initiatives that create economic growth, social mobility and resilience is not going to succeed without direct Executive leadership. Similarly, technology vendors, service providers and research funding bodies are most attracted to invest in developing new ideas and capabilities in cities whose most senior leaders are directly seeking them – they all need the outcomes of their investment to achieve real change, and it’s only through the leaders that such change will happen.

For the most part, where this level of leadership is not engaged I have not seen cities create business cases and issue procurements for Smart City solutions, and I have not seen them be successful winning research and innovation investments.

Finally, let’s be really clear about what most of those city leaders need to do: they need to follow Sunderland’s lead, not Milton Keynes’s.

The research and innovation funding from the EU and the UK that Milton Keynes has attracted will only fund  projects that explore for the first time the capabilities of new, technology-enabled approaches to urban challenges. Those funding sources will not support the widespread deployment of successful approaches in cities around the UK and around the world.

The vast majority of cities will only benefit from Smart Cities initiatives by financing them through robust business cases based on a combination of financial efficiency and social, environmental or economic value – as Sunderland and some cities outside the UK are already doing.

Cities won’t get smart if their leaders aren’t involved in actively driving their institutions to adopt new business cases and operating models. Those that don’t risk leaving the fate of their cities not to chance; but to “the market”.

3. We can’t leave Smart Cities to the market, we need the courage to shape the market

(Photograph by Martin Deutsche of plans to redevelop Queen Elizabeth Park, site of the 2012 London Olympics. The London Legacy Development’s intention, in support of the Smart London Plan, is “for the Park to become one of the world’s leading digital environments, providing a unique opportunity to showcase how digital technology enhances urban living. The aim is to use the Park as a testing ground for the use of new digital technology in transport systems and energy services.”)

As I wrote in my last article on this blog, as the price of digital technologies such as smartphones, sensors, analytics, open source software and cloud platforms reduces rapidly, market dynamics will drive their aggressive adoption to make construction, infrastructure and city services more efficient, and hence make their providers more competitive.

But those market dynamics do not guarantee that we will get everything we want for the future of our cities: efficiency and resilience are not the same as health, happiness and opportunity for every citizen.

If we are to achieve those objectives, then we need the right policy environment – at national and local level – to augment the business case for efficient, resilient “smart city” infrastructures to ensure that they are deployed in a way that makes them open to access and adaptation by ordinary people, businesses and communities; and so that they create the conditions and environment in which vibrant, fair digital cities grow from the successful innovations of their citizens, communities and businesses in the information economy.

In far too many discussions of Smart Cities I hear the argument that we can’t invest in these ideas because we lack the “normalised evidence base” that proves their benefits. I think that’s the wrong view. There are more than enough qualitative examples and stories that demonstrate that these ideas have real value and can make lives better. If we insist on moving no further until there’s a deeper, broader corpus of quantified evidence, then there’ll be no projects to deliver the evidence – a chicken and egg problem.

Writing in “The Plundered Planet”, the economist Paul Collier asserts that any proposed infrastructure of reasonable novelty and significant scale is effectively so unique – especially when considered in its geographic, political, social and economic context – that an accurate cost/benefit case simply cannot be constructed in advance based on comparable prior examples, because those examples don’t – and never will – exist.

Instead we need policy legislation to recognise the importance of digital infrastructure for cities so that it becomes a “given” in any public service or infrastructure business case, not something that has to be individually justified.

This is not a new idea. For example, the Economist magazine wrote recently about the efforts involved in distributing the benefits of the industrial revolution to society at large rather than solely to business owners and the professional classes.

More specifically to cities, in her seminal 1961 work “The Death and Life of Great American Cities“, Jane Jacobs wrote that:

“Private investment shapes cities, but social ideas (and laws) shape private investment. First comes the image of what we want, then the machinery is adapted to turn out that image. The financial machinery has been adjusted to create anti-city images because, and only because, we as a society thought this would be good for us. If and when we think that lively, diversified city, capable of continual, close- grained improvement and change, is desirable, then we will adjust the financial machinery to get that.”

The “anti-city images” Jacobs was referring to were the vast urban highways built over the last half century to enable the levels of road traffic thought to be vital to economic growth. Since Jacobs’ time, a growing chorus of urbanists from Bogota’s ex-Mayor Enrique Penalosa to town planner Jeff Speck, architect Jan Gehl and London’s current Mayor Boris Johnson has criticised those infrastructures for the great harm they cause to human life – they create noise, pollution, a physical barrier to walking through our cities, and too often they injure or kill us.

Just as Jacobs reminded us to focus on the nature of individual human life in order to understand how cities should be built, Dan Hill of the Future Cities Catapult wrote as long ago as 2008 on the need to understand similar subtleties in the application of digital technology to cities.

Fifty years after she wrote, we should follow Dan’s example and take Jane Jacobs’ advice.

4. Smart cities aren’t top down or bottom up. They’re both.

(The SMS for Life project uses the cheap and widely used SMS infrastructure – very much the product of “top-down” investment – to create a dynamic, collaborative supply chain for medicines between pharmacies in Africa – a “bottom-up” innovation. Photo by Novartis AG)

In case it wasn’t really clear last time I wrote about it (or the time before that), I am utterly fed up with the unconstructive argument about whether cities are best served by “top down” or “bottom up” thinking.

It’s perfectly obvious that we need both: the “bottom up” creativity through which everyone seeks to create a better life for themselves, their family, their business and their community from the resources available to them; and the top-down policies and planning that – when they work best – seek to distribute resources fairly so that everyone has the opportunity to innovate successfully.

It’s only by creating harmony between these two approaches that we will shape the market to create the cities we want and need.

Over the last few years I’ve been inspired by extraordinary thinkers from many disciplines who have tackled the need for this balance. Some of them are creating new ideas now; others created amazing ideas years or decades ago that are nevertheless imperative today. All of them are worth reading and learning from:

  • The economist E F Schumacher, who identified that investment in the distribution and accessibility of “appropriate technologies” was the best way to stimulate and support development in a way that gave rise to the broadest possible opportunities for people to be successful.
  • Andrew Zolli, head of the philanthropic PopTech foundation, who describes the inspiring innovators who synthesise top-down and bottom-up approaches to achieve phenomenal societal changes as “translational leaders” – people with the ability to engage with both small-scale, informal innovation in communities and large-scale, formal institutions with resources.
  • Jan Gehl who inspired the “human scale cities” movement by relating the scale of city structures –  from pavements to housing blocks to skyscrapers – to the human senses, and the nature of our lives and movement.
  • And, of course, Jane Jacobs, whose book “The Death and Life of Great American Cities” was the first written in the context of modern society and cities to point out that cities, however vast their physical size and population, can only ever be understood by considering the banal minutiae of the daily lives of ordinary people like you and I – why we walk along this street or that; how well we know our neighbours; how far it is to walk to the nearest school, shop or park; and whether we and our families feel happy and safe.

5. We need to tell honest stories

(Photograph by Meshed Media of Birmingham’s Social Media Cafe, where individuals from every part of the city who have connected online meet face-to-face to discuss their shared interest in social media.)

Any “smart city” initiative that successfully uses digital technology to create a financially sustainable social, economic or environmental improvement, in a particular physical place and on behalf of a particular community, must draw together skills from a wide variety of disciplines such as architecture, economics, social science, psychology and technology. Experts from these disciplines use a vast and confusing array of language and terminology; and all of us are frequently guilty of focussing on the concerns of our discipline, rather than communicating the benefits of our work in plain language.

The leaders of city institutions and businesses, who we are asking to take the courageous and forward-looking decisions to invest in our ideas, are understandably not familiar with this torrent of technical terminology, which can easily appear to be (and too often is) jargon; and new ideas that appear to be presented in jargon are unlikely to be trusted.

Simon Giles of Accenture was quoted in an article on UBM’s Future Cities site as saying that the Smart Cities industry has not done a good enough job of selling the benefits of its ideas to a wide audience. Simon is a very smart guy, and I think that’s a challenge we need to face up to, and start to tell better stories about the differences Smart Cities will make to everyday lives.

In the Community Lover’s Guide to Birmingham, for example, Nick Booth describes the way his volunteer-led social media surgeries helped the Central Birmingham Neighbourhood Forum, Brandwood End Cemetery and Jubilee Debt Campaign to benefit from technology.

Another Birmingham initiative, the Northfield Ecocentre, crowdfunded £10,000 to support their “Urban Harvest” project. The funds helped the Ecocentre pick unwanted fruit from trees in domestic gardens in Birmingham and distribute it between volunteers, children’s centres, food bank customers and organisations promoting healthy eating; and to make some of it into jams, pickles and chutneys to raise money so that in future years the initiative can become self-sustaining.

In the village of Chale on the Isle of Wight, a community not served by the national gas power network and with significant levels of fuel poverty, my IBM colleague Andy Stanford-Clark has helped an initiative not only to deploy solar panels and smart meters to generate energy and measure its use by each household; but to co-design with residents how they will use that technology, so that the whole community feels a sense of ownership and inclusion in the initiative. The project has resulted in a significant drop in rent arrears as residents use the technology to reduce their utility bills, in some cases by up to 50 percent. Less obviously, the sense of shared purpose has extended to the creation of a communal allotment area in the village and a successful campaign to halve bus fares to nearby towns.

There are countless other examples. Play Fitnessgamify” exercise to persuade children to get fit, and work very hard to ensure that their products are accessible to children in communities of any level of wealth. Casserole Club use social media to introduce people who can’t cook for themselves to people who are prepared to volunteer to cook for others. The West Midlands Collaborative Commerce Marketplace uses analytics technology to help it’s 10,000 member businesses work together to win more than £4billion in new contracts each year. … and so on.

None of these initiatives are purely to do with technology. But they all use technologies that simply were not available and accessible as recently as a few years ago to achieve outcomes that are important to cities and communities. By understanding how the potential of technology was apparent to the stakeholders in such initiatives, why it was affordable and accessible to them, and how they acquired the skills to exploit it, we can learn how to design Smart Cities in a way that encourages widespread grass-roots, localised innovation.

It’s vital that these stories are honest and grounded in reality. London School of Economics Professor Adam Greenfield rightly criticised technology companies that have overstated (and misunderstood) the potential benefits of Smart Cities ideas by describing “autonomous, intelligently functioning IT systems that will have perfect knowledge of users’ habits”. No-one trusts such hyperbole, and it undermines our efforts to communicate sensibly the very real difference that sympathetically applied technology can make to real lives, businesses, communities and places.
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6. No-one will do this for us – we have to act for ourselves

Harborne Food School

(The Harborne Food School, started by Shaleen Meelu in 2014, as a community business initiative to promote healthy, sustainable approaches to food)

No single person or organisation can shape the Smart Cities market so that it delivers the cities that we need. Local governments have the ethics of civic duty and care but lack the expertise in financing and business model innovation to convert existing spending schemes into the outcomes they desire. Private sector corporations as institutions are literally amoral and strongly incentivised by the financial markets to maximise profits. Many social enterprises are enormously admirable attempts to fuse these two models, but often lack the resources and ability to scale.

Ultimately, though, all of these organisations are staffed and run by people like you and I; and we can choose to influence their behaviour. Hence my new employer Amey measures itself against a balanced scorecard that measures social, environmental and wellbeing performance in addition to financial profits; and my previous employer IBM has implemented a re-use and recycling system so sophisticated and effective that only 0.3% of the resources and assets that reach the end of their initial useful life are disposed of in landfill or by incineration: the vast majority are re-used, have their components re-manufactured or materials recycled.

Most of us won’t ever be in a position to determine the reporting model or approach to recycling of corporations as large as Amey or IBM. But all of us make choices every day about the products we buy, the organisations we work for, the politicians we vote for, the blog articles we read, share and write and the activities we prioritise our resources on.

Those choices have real effects, and digital technology gives us all the opportunity for our choices to have more impact than ever before. This blog, which costs me nothing to operate other than the time it takes me to write articles, now reaches thousands of readers in over 150 counties. Air BnB took 2 years to accumulate the same number of rentable rooms that it took the Hilton Hotel chain 50 years to build.

It has never been easier to express an opinion widely or create a new way of doing things. That’s exactly what Shaleen Meelu did when she started the Harborne Food School to promote healthier, more sustainable approaches to food, with the support of Birmingham’s Smart City community. It’s an opportunity all of us should seize; and it’s absolutely the best opportunity we have to create better cities and a better world for ourselves.

Smart Digital Urbanism: creating the conditions for equitably distributed opportunity in the digital age

(The sound artists FA-TECH [http://fa-tech.tumblr.com/] improvising in Shoreditch, London. Shoreditch's combination of urban character, cheap rents and proximity to London's business, financial centres and culture led to the emergence of a thriving technology startup community - although that community's success is now driving rents up, challenging some of the characteristics that enabled it.)

(The sound artists FA-TECH improvising in Shoreditch, London. Shoreditch’s combination of urban character, cheap rents and proximity to London’s business, financial centres and culture led to the emergence of a thriving technology startup community – although that community’s success is now driving rents up, challenging some of the characteristics that enabled it.)

(I first learned of the architect Kelvin Campbell‘s concept of “massive/small” just over two years ago – the idea that certain characteristics of policy and the physical environment in cities could encourage “massive amounts of small-scale innovation” to occur. Kelvin recently launched a collaborative campaign to capture ideas, tools and tactics for massive/small “Smart Urbanism“. This is my first contribution to that campaign.)

Over the past 5 years, enormous interest has developed in the potential for digital technologies to contribute to the construction and development of cities, and to the operation of the services and infrastructures that support them. These ideas are often referred to as “Smart Cities” or “Future Cities”.

Indeed, as the price of digital technologies such as smartphones, sensors, analytics, open source software and cloud platforms reduces rapidly, market dynamics will drive their aggressive adoption to make construction, infrastructure and city services more efficient, and hence make their providers more competitive.

But those market dynamics do not guarantee that we will get everything we want for the future of our cities: efficiency and resilience are not the same as health, happiness and opportunity for every citizen.

Is it realistic to ask ourselves whether we can achieve those objectives? Yes, it has to be.

Many of us believe in that possibility, and spend a lot of our efforts finding ways to achieve it. And over the same timeframe that interest in “smart” and “future” cities has emerged, a belief has developed around the world that the governance institutions of cities – local authorities and elected mayors, rather than the governments of nations – are the most likely political entities to implement the policies that lead to a sustainable, resilient future with more equitably distributed economic growth.

Consequently many Mayors and City Councils are considering or implementing legislation and policy frameworks that change the economic and financial context in which construction, infrastructure and city services are deployed and operated. The British Standards Institute recently published guidance on this topic as part of its overall Smart Cities Standards programme.

But whilst in principle these trends and ideas are incredibly exciting in their potential to create better cities, communities, places and lives in the future, in practise many debates about applying them falter on a destructive and misleading argument between “top-down” and “bottom-up” approaches – the same chasm that Smart Urbanism seeks to bridge in the physical world.

Policies and programmes driven by central government organisations or implemented by technology and infrastructure corporations that drive digital technology into large-scale infrastructures and public services are often criticised as crude, “top-down” initiatives that prioritise resilience and efficiency at the expense of the concerns and values of ordinary people, businesses and communities. However, the organic, “bottom-up” innovation that critics of these initatives champion as the better, alternative approach is ineffective at creating equality.

("Lives on the Line" by James Cheshire at UCL's Centre for Advanced Spatial Analysis, showing the variation in life expectancy and correlation to child poverty in London. From Cheshire, J. 2012. Lives on the Line: Mapping Life Expectancy Along the London Tube Network. Environment and Planning A. 44 (7). Doi: 10.1068/a45341)

(“Lives on the Line” by James Cheshire at UCL’s Centre for Advanced Spatial Analysis, showing the variation in life expectancy and correlation to child poverty in London. From Cheshire, J. 2012. Lives on the Line: Mapping Life Expectancy Along the London Tube Network. Environment and Planning A. 44 (7). Doi: 10.1068/a45341)

“Bottom-up innovation” is what every person, community and business does every day: using our innate creativity to find ways to use the resources and opportunities available to us to make a better life.

But the degree to which we fail to distribute those resources and opportunities equally is illustrated by the stark variation in life expectancy between the richest and poorest areas of cities in the UK: often this variation is as much as 20 years within a single city.

Just as the “design pattern”, a tool invented by a town planner in the 1970s, Christopher Alexander, is probably the single most influential concept that drove the development of the digital technology we all use today, two recent movements in town planning and urban design – “human scale cities” and “smart urbanism” – offer the analogies that can connect “top-down” technology policies and infrastructure with the factors that affect the success of “bottom-up” creativity to create “massive / small” success: future, digital cities that create “massive amounts of small-scale innovation“.

The tools to achieve this are relatively cheap, and the right policy environment could make it fairly straightforward to augment the business case for efficient, resilient “smart city” infrastructures to ensure that they are deployed. They are the digital equivalents of the physical concepts of Smart Urbanism – the use of open grid structures for spatial layouts, and the provision of basic infrastructure components such as street layouts and party walls in areas expected to attract high growth in informal housing. Some will be delivered as a natural consequence of market forces driving technology adoption; but others will only become economically viable when local or national government policies shape the market by requiring them:

  • Broadband, wi-if and 3G / 4G connectivity should be broadly available so that everyone can participate in the digital economy.
  • The data from city services should be made available as Open Data and published through “Application Programming Interfaces” (APIs) so that everybody knows how they work; and can adapt them to their own individual needs.
  • The data and APIs should be made available in the form of Open Standards so that everybody can understand them; and so that the systems that we rely on can work together.
  • The data and APIs should be available to developers working on Cloud Computing platforms with Open Source software so that anyone with a great idea for a new service to offer to people or businesses can get started for free.
  • The technology systems that support the services and infrastructures we rely on should be based on Open Architectures, so that we have freedom to chose which technologies we use, and to change our minds.
  • Governments, institutions, businesses and communities should participate in an open dialogue about the places we live and work in, informed by open data, enabled by social media and smartphones, and enlightened by empathy.

(Casserole Club, a social enterprise developed by FutureGov uses social media to connect people who have difficulty cooking for themselves with others who are happy to cook an extra portion for a neighbour; a great example of a locally-focused “sharing economy” business model which creates financially sustainable social value.)

These principles would encourage good “digital placemaking“: they would help to align the investments that will be made in improving cities using technology with the needs and motivations of the public sector, the private sector, communities and businesses. They would create “Smart Digital Urbanism”: the conditions and environment in which vibrant, fair digital cities grow from the successful innovations of their citizens, communities and businesses in the information economy.

In my new role at Amey, a vast organisation in the UK that delivers public services and operates and supports public infrastructure, I’m leading a set of innovative projects with our customers and technology partners to explore these ideas and to understand how we can collaboratively create economic, social and environmental value for ourselves; for our customers; and for the people, communities and businesses who live in the areas our services support.

It’s a terrifically exciting role; and I’ll soon be hiring a small team of passionate, creative people to help me identify, shape and deliver those projects. I’ll post an update here with details of the skills, experience and characteristics I’m looking for. I hope some of you will find them attractive and get in touch.

From concrete to telepathy: how to build future cities as if people mattered

(An infographic depicting realtime data describing Dublin - the waiting time at road junctions; the location of buses; the number of free parking spaces and bicycles available to hire; and sentiments expressed about the city through social meida)

(An infographic depicting realtime data describing Dublin – the waiting time at road junctions; the location of buses; the number of free parking spaces and bicycles available to hire; and sentiments expressed about the city through social media)

(I was honoured to be asked to speak at TEDxBrum in my home city of Birmingham this weekend. The theme of the event was “DIY” – “the method of building, modifying or repairing something without the aid of experts or professionals”. In other words, how Birmingham’s people, communities and businesses can make their home a better place. This is a rough transcript of my talk).

What might I, a middle-aged, white man paid by a multi-national corporation to be an expert in cities and technology, have to say to Europe’s youngest city, and one of its most ethnically and nationally diverse, about how it should re-create itself “without the aid of experts or professionals”?

Perhaps I could try to claim that I can offer the perspective of one of the world’s earliest “digital natives”. In 1980, at the age of ten, my father bought me one of the world’s first personal computers, a Tandy TRS 80, and taught me how to programme it using “machine code“.

But about two years ago, whilst walking through London to give a talk at a networking event, I was reminded of just how much the world has changed since my childhood.

I found myself walking along Wardour St. in Soho, just off Oxford St., and past a small alley called St. Anne’s Court which brought back tremendous memories for me. In the 1980s I spent all of the money I earned washing pots in a local restaurant in Winchester to travel by train to London every weekend and visit a small shop in a basement in St. Anne’s Court.

I’ve told this story in conference speeches a few times now, perhaps to a total audience of a couple of thousand people. Only once has someone been able to answer the question:

“What was the significance of St. Anne’s Court to the music scene in the UK in the 1980s?”

Here’s the answer:

Shades Records, the shop in the basement, was the only place in the UK that sold the most extreme (and inventive) forms of “thrash metal” and “death metal“, which at the time were emerging from the ashes of punk and the “New Wave of British Heavy Metal” in the late 1970s.

G157 Richard with his Tandy

(Programming my Tandy TRS 80 in Z80 machine code nearly 35 years ago)

The process by which bands like VOIVOD, Coroner and Celtic Frost – who at the time were three 17-year-olds who practised in an old military bunker outside Zurich – managed to connect – without the internet – to the very few people around the world like me who were willing to pay money for their music feels like ancient history now. It was a world of hand-printed “fanzines”, and demo tapes painstakingly copied one at a time, ordered by mail from classified adverts in magazines like Kerrang!

Our world has been utterly transformed in the relatively short time between then and now by the phenomenal ease with which we can exchange information through the internet and social media.

The real digital natives, though, are not even those people who grew up with the internet and social media as part of their everyday world (though those people are surely about to change the world as they enter employment).

They are the very young children like my 6-year-old son, who taught himself at the age of two to use an iPad to access the information that interested him (admittedly, in the form of Thomas the Tank Engine stories on YouTube) before anyone else taught him to read or write, and who can now use programming tools like MIT’s Scratch to control computers vastly more powerful than the one I used as a child.

Their expectations of the world, and of cities like Birmingham, will be like no-one who has ever lived before.

And their ability to use technology will be matched by the phenomenal variety of data available to them to manipulate. As everything from our cars to our boilers to our fridges to our clothing is integrated with connected, digital technology, the “Internet of Things“, in which everything is connected to the internet, is emerging. As a consequence our world, and our cities, are full of data.

(The programme I helped my 6-year old son write using MIT's "Scratch" language to draw a picture of a house)

(The programme I helped my 6-year old son write using MIT’s “Scratch” language to cause a cartoon cat to draw a picture of a house)

My friend the architect Tim Stonor calls the images that we are now able to create, such as the one at the start of this article, “data porn”. The image shows data about Dublin from the Dublinked information sharing partnership: the waiting time at road junctions; the location of buses; the number of free parking spaces and bicycles available to hire; and sentiments expressed about the city through social media.

Tim’s point is that we should concentrate not on creating pretty visualisations; but on the difference we can make to cities by using this data. Through Open Data portals, social media applications, and in many other ways, it unlocks secrets about cities and communities:

  • Who are the 17 year-olds creating today’s most weird and experimental music? (Probably by collaborating digitally from three different bedroom studios on three different continents)
  • Where is the healthiest walking route to school?
  • Is there a local company nearby selling wonderful, oven-ready curries made from local recipes and fresh ingredients?
  • If I set off for work now, will a traffic jam develop to block my way before I get there?

From Dublin to Montpellier to Madrid and around the world my colleagues are helping cities to build 21st-Century infrastructures that harness this data. As technology advances, every road, electricity substation, University building, and supermarket supply chain will exploit it. The business case is easy: we can use data to find ways to operate city services, supply chains and infrastructure more efficiently, and in a way that’s less wasteful of resources and more resilient in the face of a changing climate.

Top-down thinking is not enough

But to what extent will this enormous investment in technology help the people who live and work in cities, and those who visit them, to benefit from the Information Economy that digital technology  and data is creating?

This is a vital question. The ability of digital technology to optimise and automate tasks that were once carried out by people is removing jobs that we have relied on for decades. In order for our society to be based upon a fair and productive economy, we all need to be able to benefit from the new opportunities to work and be successful that are being created by digital technology.

(Photo of Masshouse Circus, Birmingham, a concrete urban expressway that strangled the citycentre before its redevelopment in 2003, by Birmingham City Council)

(Photo of Masshouse Circus, Birmingham, a concrete urban expressway that strangled the city centre before its redevelopment in 2003, by Birmingham City Council)

Too often in the last century, we got this wrong. We used the technologies of the age – concrete, lifts, industrial machinery and cars – to build infrastructures and industries that supported our mass needs for housing, transport, employment and goods; but that literally cut through and isolated the communities that create urban life.

If we make the same mistake by thinking only about digital technology in terms of its ability to create efficiencies, then as citizens, as communities, as small businesses we won’t fully benefit from it.

In contrast, one of the authors of Birmingham’s Big City Plan, the architect Kelvin Campbell, created the concept of “massive / small“. He asked: what are the characteristics of public policy and city infrastructure that create open, adaptable cities for everyone and that thereby give rise to “massive” amounts of “small-scale” innovation?

In order to build 21st Century cities that provide the benefits of digital technology to everyone we need to find the design principles that enable the same “massive / small” innovation to emerge in the Information Economy, in order that we can all use the simple, often free, tools available to us to create our own opportunities.

There are examples we can learn from. Almere in Holland use analytics technology to plan and predict the future development of the city; but they also engage in dialogue with their citizens about the future the city wants. Montpellier in France use digital data to measure the performance of public services; but they also engage online with their citizens in a dialogue about those services and the outcomes they are trying to achieve. The Dutch Water Authority are implementing technology to monitor, automate and optimise an infrastructure on which many cities depend; but making much of the data openly available to communities, businesses, researchers and innovators to explore.

There are many issues of policy, culture, design and technology that we need to get right for this to happen, but the main objectives are clear:

  • The data from city services should be made available as Open Data and through published “Application Programming Interfaces” (APIs) so that everybody knows how they work; and can adapt them to their own individual needs.
  • The data and APIs should be made available in the form of Open Standards so that everybody can understand it; and so that the systems that we rely on can work together.
  • The data and APIs should be available to developers working on Cloud Computing platforms with Open Source software so that anyone with a great idea for a new service to offer to people or businesses can get started for free.
  • The technology systems that support the services and infrastructures we rely on should be based on Open Architectures, so that we have freedom to chose which technologies we use, and to change our minds.
  • Governments, institutions, businesses and communities should participate in an open dialogue, informed by data and enlightened by empathy, about the places we live and work in.

If local authorities and national government create planning policies, procurement practises and legislation that require that public infrastructure, property development and city services provide this openness and accessibility, then the money spent on city infrastructure and services will create cities that are open and adaptable to everyone in a digital age.

Bottom-up innovation is not enough, either

(Coders at work at the Birmingham “Smart Hack”, photographed by Sebastian Lenton)

Not everyone has access to the technology and skills to use this data, of course. But some of the people who do will create the services that others need.

I took part in my first “hackathon” in Birmingham two years ago. A group of people spent a weekend together in 2012 asking themselves: in what way should Birmingham be better? And what can we do about it? Over two days, they wrote an app, “Second Helping”, that connected information about leftover food in the professional kitchens of restaurants and catering services, to soup kitchens that give food to people who don’t have enough.

Second Helping was a great idea; but how do you turn a great idea and an app into a change in the way that food is used in a city?

Hackathons and “civic apps” are great examples of the “bottom-up” creativity that all of us use to create value – innovating with the resources around us to make a better life, run a better business, or live in a stronger community. But “bottom-up” on it’s own isn’t enough.

The result of “bottom-up” innovation at the moment is that life expectancy in the poorest parts of Birmingham is more than 10 years shorter than it is in the richest parts. In London and Glasgow, it’s more than 20 years shorter.

If you’re born in the wrong place, you’re likely to die 10 years younger than someone else born in a different part of the same city. This shocking situation arises from many, complex issues; but one conclusion that it is easy to draw is that the opportunity to innovate successfully is not the same for everyone.

So how do we increase everybody’s chances of success? We need to create the policies, institutions, culture and behaviours that join up the top-down thinking that tends to control the allocation of resources and investment, especially for infrastructure, with the needs of bottom-up innovators everywhere.

Translational co-operation

Harborne Food School

(The Harborne Food School, which will open in the New Year to offer training and events in local and sustainable food)

The Economist magazine reminded us of the importance of those questions in a recent article describing the enormous investments made in public institutions such as schools, libraries and infrastructure in the past in order to distribute the benefits of the Industrial Revolution to society at large rather than concentrate them on behalf of business owners and the professional classes.

But the institutions of the past, such as the schools which to a large degree educated the population for repetitive careers in labour-intensive factories, won’t work for us today. Our world is more complicated and requires a greater degree of localised creativity to be successful. We need institutions that are able to engage with and understand individuals; and that make their resources openly available so that each of us can use them in the way that makes most sense to us. Some public services are starting to respond to this challenge, through the “Open Public Services” agenda; and the provision of Open Data and APIs by public services and infrastructure are part of the response too.

But as Andrew Zolli describes in “Resilience: why things bounce back“, there are both institutional and cultural barriers to engagement and collaboration between city institutions and localised innovation. Zolli describes the change-makers who overcome those barriers as “translational leaders” – people with the ability to engage with both small-scale, informal innovation in communities and large-scale, formal institutions with resources.

We’re trying to apply that “translational” thinking in Birmingham through the Smart City Alliance, a collaboration between 20 city institutions, businesses and innovators. The idea is to enable conversations about challenges and opportunities in the city, between people, communities, innovators and  the organisations who have resources, from the City Council and public institutions to businesses, entrepreneurs and social enterprises. We try to put people and organisations with challenges or good ideas in touch with other people or organisations with the ability to help them.

This is how we join the “top-down” resources, policies and programmes of city institutions and big companies with the “bottom-up” innovation that creates value in local situations. A lot of the time it’s about listening to people we wouldn’t normally meet.

Partly as a consequence, we’ve continued to explore the ideas about local food that were first raised at the hackathon. Two years later, the Harborne Food School is close to opening as a social enterprise in a redeveloped building on Harborne High Street that had fallen out of use.

The school will be teaching courses that help caterers provide food from sustainable sources, that teach people how to set up and run food businesses, and that help people to adopt diets that prevent or help to manage conditions such as diabetes. The idea has changed since the “Second Helping” app was written, of course; but the spirit of innovation and local value is the same.

Cities that work like magic

So what does all this have to do with telepathy?

The innovations and changes caused by the internet over the last two decades have accelerated as it has made information easier and easier to access and exchange through the advent of technologies such as broadband, mobile devices and social media. But the usefulness of all of those technologies is limited by the tools required to control them – keyboards, mice and touchscreens.

Before long, we won’t need those tools at all.

Three years ago, scientists at the University of Berkely used computers attached to an MRI scanner to recreate moving images from the magnetic field created by the brain of a person inside the scanner watching a film on a pair of goggles. And last year, scientists at the University of Washington used similar technology to allow one of them to move the other’s arm simply by thinking about it. A less sensitive mind-reading technology is already available as a headset from Emotiv, which my colleagues in IBM’s Emerging Technologies team have used to help a paralysed person communicate by thinking directional instructions to a computer.

Telepathy is now technology, and this is just one example of the way that the boundary between our minds, bodies and digital information will disappear over the next decade. As a consequence, our cities and lives will change in ways we’ve never imagined, and some of those changes will happen surprisingly quickly.

I can’t predict what Birmingham will or should be like in the future. As a citizen, I’ll be one of the million or so people who decide that future through our choices and actions. But I can say that the technologies available to us today are the most incredible DIY tools for creating that future that we’ve ever had access to. And relatively quickly technologies like bio-technology, 3D printing and brain/computer interfaces will put even more power in our hands.

As a parent, I get engaged in my son’s exploration of these technologies and help him be digitally aware, creative and responsible. Whenever I can, I help schools, Universities, small businesses or community initiatives to use them, because I might be helping one of IBM’s best future employees or business partners; or just because they’re exciting and worth helping. And as an employee, I try to help my company take decisions that are good for our long term business because they are good for the society that the business operates in.

We can take for granted that all of us, whatever we do, will encounter more and more incredible technologies as time passes. By remembering these very simple things, and remembering them in the hundreds of choices I make every day, I hope that I’ll be using them to play my part in building a better Birmingham, and better cities and communities everywhere.

(Shades Records in St. Anne's Court in the 1980s)

(Shades Records in St. Anne’s Court in the 1980s. You can read about the role it played in the development of the UK’s music culture – and in the lives of its customers – in this article from Thrash Hits;  or this one from Every Record Tells a Story. And if you really want to find out what it was all about, try watching Celtic Frost or VOIVOD in the 1980s!)

12 simple technologies for cities that are Smart, open and fair

(Fritz Lang’s 1927 dystopian film Metropolis pictured a city that exploited futuristic technologies, but only on behalf of a minority of its citizens. Image by Breve Storia del Cinema)

Efficiency; resilience; growth; vitality. These are all characteristics that cities desire, and that are regularly cited as the objectives of Smarter City programmes and other forward-looking initiatives.

But, though it is less frequently stated, a more fundamental objective underlies all of these: fairness.

The Nobel Prize-winning economist Joseph Stiglitz has written extensively about the need to prioritise fairness as a policy and investment objective in a world that in many areas – and in many cities – is becoming more unequal. That inequality is demonstrated by the difference in life expectancy of 20 years or so that exists between the poorest and richest parts of many UK cities.

I think the Smart Cities movement will only be viewed as a success by the wider world if it contributes to redressing that imbalance.

So how do we design Smart City systems that employ technology to make cities more successful, resilient and efficient; in a way that distributes resources and creates opportunities more fairly than today?

One answer to that question is that the infrastructures and institutions of such cities should be open to citizens and businesses: accessible, understandable, adaptable and useful.

Why do we need open cities?

In the wonderful “Walkable City“, Jeff Speck describe’s the epidemiologist Richard Jackson’s stark realisation of the life-and-death significance of good urban design. Jackson was driving along a notorious 2 mile stretch of Atlanta’s 7-lane Buford highway with no pavements or junctions:

There, by the side of the road, in the ninety-five degree afternoon, he saw a woman in her seventies, struggling under the burden of two shopping bags. He tried to relate her plight to his own work as an epidemiologist. “If that poor woman had collapsed from heat stroke, we docs would have written the cause of death as heat stroke and not lack of trees and public transportation, poor urban form, and heat-island effects. If she had been killed by a truck going by the cause of death would have been “motor vehicle trauma”, and not lack of sidewalks and transit, poor urban planning and failed political leadership.”

(Pedestrian’s attempting to cross Atlanta’s notorious Buford Highway; a 7-lane road with no pavements and 2 miles between junctions and crossings. Photo by PBS)

Buford Highway is an infrastructure fit only for vehicles, not for people. It allows no safe access along or across it for the communities it passes through – it is closed to them, unless they risk their lives.

At the same time that city leaders are realising more and more that better planning is needed to create more equal cities, so it  is imperative that the digital infrastructures we deploy in cities are accessible and useful to citizens, not as dangerous to them as Buford Highway.

Unfortunately, there are already examples of city infrastructures using technologies that are poorly designed, that fail to serve the needs of  communities, or that fail in operation.

For instance, a network of CCTV cameras in Birmingham were eventually dismantled after it was revealed they had been erected to gather evidence of terrorist activities in Birmingham’s Muslim communities, rather than in support of their safety. And there have been many examples of the failure of both public sector agencies and private companies to properly safeguard the data they hold about citizens.

Market failures can result in the benefits of technology being more accessible to wealthier communities than poorer communities. For example,  private sector network providers will not deploy connectivity in areas which are insufficiently economically active for them to make a profit, and Government funding is not yet sufficient to close the gap. And community lenders, who typically offer loans at one-tenth to one-hundredth the cost of payday lenders, have so far lacked the resources to invest in the online technology that makes some payday loans so easy to take out – though this is starting to change.

One of the technology industry’s most notorious failures, the Greyhound Lines bus company’s 1993 “Trips” reservations system, made a city service – bus transport – unusable. The system was intended to make it quicker and easier for ticket agents to book customers onto Greyhound’s buses. But it was so poorly designed and operated so slowly that passengers missed their buses whilst they stood in line waiting for their tickets; were separated from their luggage; and in some cases were stranded overnight in bus terminals.

In the 21st Century, badly applied digital technology will create bad cities, just as badly designed roads and buildings did in the last century.

(The SMS for Life project uses the cheap and widely used SMS infrastructure to create a dynamic, collaborative supply chain for medicines between pharmacies in Africa. Photo by Novartis AG)

Smart Cities for the digitally disconnected

It’s possible to benefit from Smart city infrastructures without being connected to the internet or having skills in digital technology – Stockholm’s road-use charging scheme reduces congestion and pollution for everyone in the city, for example.

But the benefits of many Smart systems are dependent on being connected to the internet and having the skills to use it. From the wealth of educational material now available online (from the most sophisticated Harvard University courses to the most basic tutorials on just about any subject available on YouTube), to the increasing role of technology in high-paid careers, it’s absolutely obvious that the ability to access and use the internet and digital technologies in the future will be a crucial component of a successful life.

Smart cities won’t be fair cities if we take connectivity and skills for granted. Worldwide, fully one-third of the population has never been online; and even in as rich and advanced a country as the United Kingdom, 18% of adults – a fifth of the voting population – have never used the internet. At the risk of generalising a complex issue, many of those people will be those that Smart City services should create benefits for if they are to contribute to making cities fairer.

After legal challenges from private sector providers, the UK Government’s plan to assist cities in funding the deployment of ubiquitous broadband connectivity has been replaced by a voucher scheme that subsidises businesses connecting to existing networks. The scheme will not now directly help to improve broadband coverage in those areas that are poorly served because they are economically relatively inactive – precisely the areas that need the most help.

There’s been a lot of discussion of “net neutrality” recently – the principle that on the Internet, all traffic is equal, and that there is no way to pay for certain data to be treated preferentially. The principle is intended to ensure that the benefits of the internet are equally available to everyone.

But net neutrality is irrelevant to those who can’t access the internet at all; and the free market is already bypassing it in some ways. Network providers who control the local infrastructures that connect homes and businesses to the internet are free to charge higher prices for faster connections. Wealthy corporations and governments can bypass parts of the internet entirely with their own international cable networks through which they can route traffic between users on one continent and content on another.

Governments in emerging economies are building new cities to house their rapidly urbanising populations with ubiquitous, high-speed connectivity from the start. The Australian government is investing the profits from selling raw materials to support that construction boom in providing broadband coverage across the entire country. The least wealthy areas of European cities will be further disadvantaged compared to them unless we can find ways to invest in their digital infrastructure without contravening the European Union’s “State aid” law.

Technology as if people mattered

The UK’s Government Digital Service employ an excellent set of agile, user-centric design principles that are intended to promote the development of Smarter, digitally-enabled services that can be accessed by anyone anywhere who needs them, regardless of their level of skill with digital technology or ability to access the Internet.

The principles include: “Start with needs”; “Do the hard work to make it simple”; “Build for inclusion”; “Understand context”; and “Build digital services, not websites”.

(An electricity bill containing information provided by OPower comparing one household’s energy usage to their neighbours. Image from Grist)

A good example of following these principles and designing excellent, accessible digital services using common sense is the London Borough of Newham. By concentrating on the delivery of services through mobile telephones – which are much more widely owned than PCs and laptops – and on contexts in which a friend or family member assists the ultimate service user, Newham have achieved a remarkable shift to online services in one of London’s least affluent boroughs, home to many communities and citizens without access to broadband connectivity or traditional computers.

Similar, low-tech innovations in designing systems that people find useful can be found in some smart meter deployments.

In principle, the analytic technology in smart meters can provide insights that helps households and businesses reduce energy usage – identifying appliances that are operating inefficiently, highlighting leaks, and comparing households’ energy usage to that of their neighbours.

But most people don’t want to look at smart meter displays or consult a computer before they put the washing on or have a shower.

In one innovative project in the village of Chale, these issues were overcome by connecting analytic technology to a glow globe in the lounge – the globe simply glows red, orange or green depending on whether too much energy is being used compared to that expected for the time of day and year. A similarly effective but even more down-to-earth approach was adopted by OPower in the US who reported that they have helped households save 1.9 terawatt hours of power simply by including a report based on data from smart meters in a printed letter sent with customers’ electricity bills.

There are countless other examples. During peak traffic periods, Dublin’s “Live Drive” radio station plays a mixture of 80s pop music and traffic information derived from sophisticated analytics developed by IBM’s Smarter Cities Research team based on data from road sensors and GPS beacons in the city’s buses. And in India’s rural Karnataka region, which lacks internet infrastructure and where many workers lack literacy skills, let alone access to computers and smartphones, the benefits of online job portals have been recreated using “spoken web” technology using the existing traditional analogue telephone network.

(The inspirational Kilimo Salama scheme that uses

(The inspirational Kilimo Salama scheme that uses “appropriate technology” to make crop insurance affordable to subsistence farmers. Photo by Burness Communications)

In Kenya, Kilimo Salama has made crop insurance affordable for subsistence farmers by using remote weather monitoring to trigger payouts via Safaricom’s M-Pesa mobile payments service, rather than undertaking expensive site visits to assess claims. And the SMS for Life project in Tanzania uses the cheap and widely used SMS infrastructure to create a dynamic, collaborative supply chain for medicine between rural pharmacists.

These are all examples of what was originally described as “Intermediate Technology” by the economist Ernst Friedrich “Fritz” Schumacher in his influential work, “Small is Beautiful: Economics as if People Mattered“, and is now known as Appropriate Technology.

12 “appropriate technologies” for Smart Cities

Schumacher’s views on technology were informed by his belief that our approach to economics should be transformed “as if people mattered”. He asked:

What happens if we create economics not on the basis of maximising the production of goods and the ability to acquire and consume them – which ends up valuing automation and profit – but on the Buddhist definition of the purpose of work: “to give a man a chance to utilise and develop his faculties; to enable him to overcome his ego-centredness by joining with other people in a common task; and to bring forth the goods and services needed for a becoming existence.”

Schumacher pointed out that the most advanced technologies, to which we often look to create value and growth, are in fact only effective in the hands of those with the resources and skills required to use them- i.e. those who are already wealthy; and that by emphasising efficiency, output and profit they tend to further concentrate economic value in the hands of the wealthy – often specifically by reducing the employment of people with less advanced skills and roles.

In contrast, Schumacher felt that the most genuine “development ” of our society would occur when the most possible people were employed in a way that gave them the practical ability to earn a living ; and that also offered a level of human reward – much as Maslow’s “Hierarchy of Needs” first identifies our most basic requirements for food, water, shelter and security; but next relates the importance of family, friends and “self-actualisation” (which can crudely be described as the process of achieving things that we care about).

This led him to ask:

What is that we really require from the scientists and technologists? I should answer:

We need methods and equipment which are:

    • Cheap enough so that they are accessible to virtually everyone;
    • Suitable for small-scale application; and
    • Compatible with man’s need for creativity

(Maslow’s Hierarchy of Needs, image by Factoryjoe via Wikimedia Commons)

I can’t think of a more powerful set of tools that reflect these characteristics than the digital technologies that have emerged over the past decade, such as social media, smartphones, Cloud computing and Open Data. They provide a digital infrastructure of appropriate technologies that are accessible to everyone, but that connect with the large scale city infrastructures that support millions of urban lives; and they give citizens, communities and businesses the ability to adapt city infrastructures to their own needs.

I can think of at least 12 such technologies that are particularly important; and that fall into the categories of “Infrastructures that matter”; “Technologies for everyone”; and “The keys to the city”.

Infrastructures that matter

1.Broadband connectivity

I’ve covered the importance of broadband connectivity, and the challenges involved in providing it ubiquitously, already, so I won’t go into detail again here. But whether it’s fixed-line, mobile or wi-fi, its benefits are becoming so significant that it can’t be omitted.

2. Cloud computing

Before Cloud computing, anyone who wanted to develop a computing system for others to use had to invest up-front in an infrastructure capable of operating the service to a reasonable level of reliability. Cloud computing provides a much easier, cheaper alternative: rent a little bit of someone else’s infrastructure. And if your service becomes popular, don’t worry about carrying out complex and costly upgrades, just rent a little more.

Cloud computing has helped to democratise digital services by making it  it dramatically easier and cheaper for anyone to create and offer them.

Technologies for everyone

3. Mobile and Smart phones

In 2013, the number of cellphone subscriptions worldwide surpassed the number of people who have ever owned fixed line telephones.

In the developed world, we’re conscious of the increasing power of Smartphones; and Councils such as Newham are exploiting the fact that many people who lack the desire or resources to purchase a computer and a broadband connection possess and use relatively sophisticated Smartphones through which they access digital services and content.

But in some countries in the developing world, the real story is simply the availability of the first basic infrastructure – voice calls and SMS – that’s available to almost everyone, everywhere. According to one report, access to a basic mobile phone is more common than access to a toilet with proper drainage. In his TEDGlobal 2013 talk, Toby Shapshak described how entire business infrastructures and supply chains are being built upon SMS and similiarly “appropriate” technologies – to the extent that 4o% of Kenya’s GDP now passes through the M-Pesa mobile payments service offered by Safaricom. Banks, technology entrepreneurs, governments and others in the developed world are looking to this wave of innovation as a source of new ideas.

4. Social media

In his 2011 book “Civilization“, Niall Fergusson comments that news of the Indian Mutiny in 1857 took 46 days to reach London, travelling in effect at 3.8 miles an hour. By Jan 2009 when US Airways flight 1549 crash landed in the Hudson river, Jim Hanrahan’s message on Twitter communicated the news to the entire world four minutes later; it reached Perth, Australia at more than 170,000 miles an hour.

Social media is the tool that around a quarter of the world’s population now simply uses to stay in touch with friends and family at this incredible speed.

At a recent Mayoral debate on Smarter Cities, Ridwan Kamil, Mayor of Bandung, Indonesia, described how he has nurtured an atmosphere of civic engagement, trust and transparency by encouraging his staff to connect with the city’s 2.3 million Twitter-using citizens through social media. By encouraging citizens to report issues online and by publishing details of city spending, Mayor Kami has helped to combat corruption and improve public services. Montpellier in France is engaging with citizens through social media in a similar way, asking them to explore data about their city and suggest ways to improve it. And the ambitious control room set up in Rio de Janeiro by Mayor Eduardo Paes to help manage the city during the current World Cup uses social media not just as one of the information feeds that provides insight into what is happening in the city, but to keep citizens as well informed as possible.

The “Community Lovers Guide“, of which 60 editions have now been published across the world, contains stories of people and projects that have improved their communities. The guide is not concerned directly with technology; but many of the initiatives that it describes have used social media as a tool for engaging with stakeholders and supporters.

And we increasingly use social media to conduct business. From e-Bay to Uber, social media is being used to create “sharing economy” business models that replace traditional sales channels and supply chains with networks of peer-to-peer transactions in industries from financial services to agriculture to distribution to retail. Nearly 2 billion of us now regularly use the technologies that allow us to participate in those trading networks.

5. The touchscreen

Three years ago, I watched my then 2-year-old son teach himself how to use a touchscreen tablet to watch cartoons from around the world. He is a member of the first generation to grow up with the world’s information literally at their fingertips before they can read and write.

The simplicity of the touchscreen has already led to the adoption of tablet computers by huge numbers of people who would never have so willingly chosen to use a laptop computer and keyboard. As touchscreens and the devices that use them become cheaper and cheaper, many more people who currently don’t choose to access online content and services will do so without realising it, simply by interacting with the world around them.

We will rapidly develop even more intimate interfaces to technology. Three years ago, scientists at the University of Berkely used computers attached to an MRI scanner to recreate moving images from the magnetic field created by the brain of a person inside the scanner watching a film on a pair of goggles. And last year, scientists at the University of Washington used similar technology to allow one of them to move the other’s arm simply by thinking about it. Whilst it will take time for these technologies to become widely available – and there are certainly ethical issues concerning their use that must be addressed in the process – eventually they will make an important contribution to making information and the ability to communicate widely even more accessible than today.

6. Open Source software

Open Source software is one of the very few technologies that is free in principle to anyone with the time to understand how to use it. It is not free in the medium or long-term – most organisations that use it pay for some form of support or maintenance to be carried out on their Open Source systems. But it is free to get started, and the Open Source community is a great place to get help and advice whilst doing so.

My colleagues around the world work very hard to ensure that IBM’s technologies support open source technology, from interoperating with the MySQL database and CKAN open data portal; to donating IBM-developed technologies such as Eclipse, MQTT and Node-RED to the Open Source community; to IBM’s new “BlueMix” Cloud computing platform for developers which is built from Open Source technology and offers developers 50 pre-built services for inclusion in their Apps, many of which are open source.

Not all technology is Open Source, and there are good reasons why many technology companies large and small invest in developing products and services for cities that use proprietary software – often, simply to protect their investment. For as long as those products and services offer valuable capabilities that are not available as open source software, cities will use them.

But it is vital that city systems incorporating those technologies are nevertheless open for use by open source software, simply to make them as widely accessible as possible for people who need to adapt them to their own needs.

7. Intelligent hardware

The emergence of the internet as a platform for enabling sales, marketing and logistics over the last decade has enabled small and micro-businesses to reach markets across the world that were previously accessible only to much larger organisations with international sales and distribution networks.

More recently, the emergence and maturation of technologies such as 3D printingopen-source manufacturing and small-scale energy generation are enabling small businesses and community initiatives to succeed in new sectors by reducing the scale at which it is economically viable to carry out what were previously industrial activities – a trend recently labelled by the Economist magazine as the “Third Industrial Revolution“.

Arduino, an Open Source electronics prototyping platform, and the Raspberry Pi, a cheap and simple computer intended to simplify the process of teaching programming skills, provide very easy introductions to these technologies; and organisations such as Hub Launchpad and TechShop make it possible for entrepreneurs and small businesses to explore them in more depth.

The keys to the city

8. Open APIs 

An “API” is an “Application Programming Interface“: it is a tool that allows one computer system – such as an Open Source “app” written by an entrepreneur or social innovator – to use the information and capabilities of another computer system – such as a traffic information system for a city’s transport network.

For example, Amazon make an API available to developers that exposes all of the capabilities of Amazon Marketplace – from listing products, to changing prices to despatching goods to customers. Whilst these features are not free to use, they offer one way for businesses to create new online shops extremely quickly,  linked to a fulfilment operation to support them.

Open APIs are a tool that can make digital city infrastructures open to local innovation, and allow citizens, businesses and communities to adapt them to their own needs. For instance, Birmingham’s Droplet, a SmartPhone payment service that encourages local economic growth by making it easy to pay for goods and services from local merchants, offer a developer API to allow their fast, cheap payments system to be included in other city services.

A Smarter City infrastructure whose IT systems offer APIs to citizens, communities and businesses can be accessed and adapted by them. It is the very opposite of Atlanta’s Buford Highway.

(The UK’s Open Data Institute’s 2013 Summit. The ODI promotes open data in the UK and shares best practise internationally. Photo by the ODI)

9. Open Data

The Open Data movement champions the principle that any non-sensitive data from public services and infrastructures should be freely and openly available. Most such data is not currently available in this form – either because the organisations operating those services have yet to adopt the principle, or because the computer systems they use simply were not designed to make data available.

There are many reasons to support the idea of Open Data. McKinsey estimate its economic value to be at least $3 trillion per year, for example.

But perhaps more importantly, Open Data is a fundamental tool for democracy and transparency in a digital age. Niall Firth’s November 2013 editorial for the New Scientist magazine describes how citizens of developing nations are using open data to hold their governments to account, from basic information about election candidates to the monitoring of government spending.

The “Dublinked” information sharing partnership, in which Dublin City Council, three surrounding local authorities and  service providers to the city share information and make it available to their communities as “open data”, is a good example of the benefits that openness can bring. Dublinked now makes 3,000 datasets available to local authority analysts; to researchers from IBM Research and the National University of Ireland; and to businesses, entrepreneurs and citizens. The partnership is identifying new ways for the city’s public services and transport, energy and water systems to work; and enabling the formation of new, information-based businesses with the potential to export the solutions they develop in Dublin to cities internationally. It is putting the power of technology and of city information not only at the disposal of the city authority and its agencies, but also into the hands of communities and innovators.

10. Open Standards

Open Data and Open APIs will only be widely used and effective in cities across the world if they conform to Open Standards that mean that everyone, everywhere can use them in the same way.

In order to do something as simple as changing a lightbulb, we rely on open standards for the levels of voltage and power from our electricity supply; the physical dimensions of the socket and bulb and the characteristics of their fastenings; specifications of the bulb’s light and heat output; and the tolerance of the bulb and the fitting for the levels of moisture found in bathrooms and kitchens. Cities are much more complicated than lightbulbs; and many more standards will be required on order for us to connect to and re-configure their systems easily and reliably.

Open standards are also an important tool in avoiding city systems becoming “locked-in” to any particular supplier. By specifying common characteristics that all systems are required to demonstrate, it becomes more straightforward to exchange one supplier’s implementation for another.

Some standards that Smarter City infrastructures can use are already in place – for example, Web services and REST that specify the general ways in which computer systems interact, and the Common Alerting Protocol which is more specific to interactions between systems that monitor and control the physical world. But many others will need to be invented and encouraged to spread. The City Protocol Society is one organisation seeking to develop those new standards; and the British Standards Institute recently published the first set of national standards for Smarter Cities in the UK, including a standard for the interoperability of data between Smart City systems.

(Photo of the Brixton Pound by Charlie Waterhouse)

11. Local and virtual currencies and trading systems

Local trading systems use paper or electronic currencies that are issued and accepted within a particular place or region. They influence people and businesses to spend the money that they earn locally, thereby promoting regional economic synergies.

Examples include the Bristol Pound; the Droplet smartphone payment scheme in Birmingham; and schemes based on the bartering of goods, money, time and services, such as time banking. Some schemes combine both elements – in Switzerland, a complementary currency, the Wir , has contributed to economic stability over the last century by allowing some debt repayments to be bartered locally when they cannot be repaid in universal currency.

As these schemes develop – and in particular as they adopt technologies such as smartphones and Open APIs – they are increasingly being used as an infrastructure for Smarter City projects in domains such as transport, food supply and energy.

Smarter Cities will succeed at scale when we discover the business models that convert financial payments and investments into social, economic and environmental improvements in the places where we live and work. I can’t think of a more directly applicable tool for designing those business models than flexible, locally focussed currencies and payment infrastructures.

12. Identity stores

In order to use digital services, we have to provide personal information online. What happens to that personal information once we have finished using the service?

Social networks such as Facebook regularly cause controversy when they experiment with new ways to use the data that we freely share with them; often granting them extensive rights over that data in the process.

Our use of technologies such as social media, Smartphones and APIs creates a mass of data about us that is often retained by the operators of the services we use. Sometimes this is as a result of deliberate actions:  when we share geo-tagged photos through social media, for example. In other cases, it is incidental. The location and movement of GPS sensors in our smartphones is anonymised by our network providers and aggregated with that of others nearby who are moving similarly. It is then sold to traffic information services, so that they can sell it back to us through the satellite navigation systems in our cars to help us to avoid traffic congestion.

Organisations of all types and sizes are competing for the new markets and opportunities of the information economy that are created, in part, by this increased availability of personal information. That is simply the natural consequence of the emergence of a new resource in a competitive economy. But it is also true that as the originators of much of that information, and as the ultimate stakeholders in that economy, we should seek to establish an equitable consensus between us for how our information is used.

A different approach is being taken by organisations such as MyDex. MyDex are a Community Interest Company (CIC) who have created a platform that allows users to securely share personal information with digital service providers when they need to; but to revoke access when they have finished using the service.

Incorporation as a Community Interest Company allows MyDex:

“… to be sustainable and requires it be run for community benefit. Crucially, the CIC assets and the majority of any profits must be used for the community purposes for which Mydex is established. Its assets cannot be acquired by another party to which such restrictions do not apply.”

(From the MyDex website, http://mydex.org/about/ensuring-trust/).

As a result of both the security of their technology solution and the clarity with which personal and community interests are reflected in their business model, MyDex’s platform is now being used by a variety of public sector and community organisations to offer a personal data store to the people they support.

MyDex’s approach to creating trust in the use of personal data is not the only one, but it is a good example of a business model that explicitly addresses and prioritises the interests of the individual.

(The town plan for Edinburgh’s New Town, clearly showing the grid structure that gives rise to the adaptability that it is famous for showing for the past 250 years. Image from the JR James archive)

Smart Digital Urbanism

Architects and city planners such as Kelvin Campbell, founder of the Smart Urbanism movement and Jan Gehl, who inspired the “human-scale cities” movement have been identifying the fine-grained physical characteristics of large-scale urban environments that encourage vibrant communities and successful economies through the daily activities of people, families, communities and businesses.

A good example is provided by Edinburgh’s “New Town”, regarded as a masterpiece of urban planning that has proved adaptable and successful through the economic and social changes of the past 250 years. It has frequent road crossings, junctions and side-streets that slow down traffic; provides stopping opportunities for traffic and crossing opportunities for people, encouraging businesses to thrive; and has a mixture of small and large premises for a variety of businesses to occupy.

Smarter cities will not be fairer cities unless we identify and employ technologies for building them that create similar openness and accessibility for digital services and information. That’s precisely what I think Open Data, mobile phones, virtual currencies and the other technologies I’ve described in this article can achieve.

I can’t think of a more exciting idea than using them to address the economic, social and environmental challenge of our time and to build better cities and communities for tomorrow.

What’s the risk of investing in a Smarter City?

(The two towers of the Bosco Verticale in Milan will be home to more than 10,000 plants that create shade and improve air quality. But to what degree do such characteristics make buildings more attractive to potential tenants than traditional structures, creating the potential to create financial returns to reward more widespread investment in this approach? Photo by Marco Trovo)

(Or “how to buy a Smarter City that won’t go bump in the night”)

There are good reasons why the current condition and future outlook of the world’s cities have been the subject of great debate in recent years. Their population will double from 3 billion to 6 billion by 2050; and while those in the developing world are growing at such a rate that they are challenging our ability to construct resilient, efficient infrastructure, those in developed countries often have significant levels of inequality and areas of persistent poverty and social immobility.

Many people involved in the debate are convinced that new approaches are needed to transport, food supply, economic development, water and energy management, social and healthcare, public safety and all of the other services and infrastructures that support cities.

As a consequence, analysts such as Frost & Sullivan have estimated that the market for “Smart City” solutions that exploit technology to address these issues will be $1.5trillion by 2020.

But anyone who has tried to secure investment in an initiative to apply “smart” technology in a city knows that it is not always easy to turn that theoretical market value into actual investment in projects, technology, infrastructure and expertise.

It’s not difficult to see why this is the case. Most investments are made in order to generate a financial return, but profit is not the objective of “Smart Cities” initiatives: they are intended to create economic, environmental or social outcomes. So some mechanism – an investment vehicle, a government regulation or a business model – is needed to create an incentive to invest in achieving those outcomes.

Institutions, Business, Infrastructure and Investment

Citizens expect national and local governments to use their tax revenues to deliver these objectives, of course. But they are also very concerned that the taxes they pay are spent wisely on programmes with transparent, predictable, deliverable outcomes, as the current controversy over the UK’s proposed “HS2” high speed train network and previous controversies over the effectiveness of public sector IT programmes show.

Nevertheless, the past year has seen a growing trend for cities in Europe and North America to invest in Smart Cities technologies from their own operational budgets, on the basis of their ability to deliver cost savings or improvements in outcomes.

For example, some cities are replacing traditional parking management and enforcement services with “smart parking” schemes that are reducing congestion and pollution whilst paying for themselves through increased enforcement revenues. Others are investing their allocation of central government infrastructure funds in Smart solutions – such as Cambridge, Ontario’s use of the Canadian government’s Gas Tax Fund to invest in a sensor network and analytics infrastructure to manage the city’s physical assets intelligently.

The providers of Smart Cities solutions are investing too, by implementing their services on Cloud computing platforms so that cities can pay incrementally for their use of them, rather than investing up-front in their deployment. Minneapolis, Minnesota and Montpelier, France, recently announced that they are using IBM’s Cloud-based solutions for smarter water, transport and emergency management in this way. And entrepreneurial businesses, backed by Venture Capital investment, are also investing in the development of new solutions.

However, we have not yet tapped the largest potential investment streams: property and large-scale infrastructure. The British Property Federation, for example, estimates that £14 billion is invested in the development of new property in the UK each year. For the main part, these investment streams are not currently investing  in “Smart City” solutions.

To understand why that is the case – and how we might change it – we need to understand the difference in three types of risk involved in investing in smart infrastructures compared with traditional infrastructures: construction risk; the impact of operational failures; and confidence in outcomes.

(A cyclist’s protest in 2012 about the disruption caused in Edinburgh by the overrunning construction of the city’s new tram system. Photo by Andy A)

Construction Risk

At a discussion in March of the financing of future city initiatives held within the Lord Mayor of the City of London’s “Tommorrow’s Cities” programme, Daniel Wong, Head of Infrastructure and Real Estate for Macquarie Capital Europe, said that only a “tiny fraction” – a few percent – of the investable resources of the pension and sovereign wealth funds often referred to as the “wall of money” seeking profitable long-term investment opportunities in infrastructure were available to invest in infrastructure projects that carry “construction risk” – the risk of financial loss or cost overruns during construction.

For conventional infrastructure, construction risk is relatively well understood. At the Tomorrow’s Cities event, Jason Robinson, Bechtel’s General Manager for Urban Development, said that the construction sector was well able to manage that risk on behalf of investors. There are exceptions – such as the delays, cost increases and reduction in scale of Edinburgh’s new tram system – but they are rare.

So are we similarly well placed to manage the additional “construction risk” created when we add new technology to infrastructure projects?

Unfortunately, research carried out in 2013 by the Standish Group on behalf of Computerworld suggests not. Standish Group used data describing 3,555 IT projects between 2003 and 2012 that had labour costs of at least $10 million, and found that only 6.4% were wholly successful. 52% were delivered, but cost more than expected, took longer than expected, or failed to deliver everything that was expected of them. The rest – 41.4% – either failed completely or had to be stopped and re-started from scratch. Anecdotally, we are familiar with the press coverage of high profile examples of IT projects that do not succeed.

We should not be surprised that it is so challenging to deliver IT projects. They are almost always driven by requirements that represent an aspiration to change the way that an organisation or system works: such requirements are inevitably uncertain and often change as projects proceed. In today’s interconnected world, many IT projects involve the integration of several existing IT systems operated by different organisations: most of those systems will not have been designed to support integration. And because technology changes so quickly, many projects use technologies that are new to the teams delivering them. All of these things will usually be true for the technology solutions required for Smart City projects.

By analogy, then, an IT project often feels like an exercise in building an ambitiously new style of building, using new materials whose weight, strength and stiffness isn’t wholly certain, and standing on a mixture of sand, gravel and wetland. It is not surprising that only 6.4% deliver everything they intend to, on time and on budget – though it is also disappointing that as many as 41.4% fail so completely.

However, the real insight is that the characteristics of uncertainty, risk, timescales and governance for IT projects are very different from construction and infrastructure projects. All of these issues can be managed; but they are managed in very different ways. Consequently, it will take time and experience for the cultures of IT and construction to reconcile their approaches to risk and project management, and consequently to present a confident joint approach to investors.

The implementation of Smart Cities IT solutions on Cloud Computing platforms  by their providers mitigates this risk to an extent by “pre-fabricating” these components of smart infrastructure. But there is still risk associated with the integration of these solutions with physical infrastructure and engineering systems. As we gain further experience of carrying out that integration, IT vendors, investors, construction companies and their customers will collectively increase their confidence in managing this risk, unlocking investment at greater scale.

(The unfortunate consequence of a driver who put more trust in their satellite navigation and GPS technology than its designers expected. Photo by Salmon Assessors)

Operational Risk

We are all familiar with IT systems failing.

Our laptops, notebooks and tablets crash, and we lose work as a consequence. Our television set-top boxes reboot themselves midway through recording programmes. Websites become unresponsive or lose data from our shopping carts.

But when failures occur in IT systems that monitor and control physical systems such as cars, trains and traffic lights, the consequences could be severe: damage to property, injury; and death. Organisations that invest in and operate infrastructure are conscious of these risks, and balance them against the potential benefits of new technologies when deciding whether to use them.

The real-world risks of technology failure are already becoming more severe as all of us adopt consumer technologies such as smartphones and social media into every aspect of our lives (as the driver who followed his satellite navigation system off the roads of Paris onto the pavement, and then all the way down the steps into the Paris Metro, discovered).

The noted urbanist Jane Jacobs defined cities by their ability to provide privacy and safety amongst citizens who are usually strangers to each other; and her thinking is still regarded today by many urbanists as the basis of our understanding of cities. As digital technology becomes more pervasive in city systems, it is vital that we evolve the policies that govern digital privacy to ensure that those systems continue to support our lives, communities and businesses successfully.

Google’s careful exploration of self-driving cars in partnership with driver licensing organisations is an example of that process working well; the discovery of a suspected 3D-printing gun factory in Manchester last year is an example of it working poorly.

These issues are already affecting the technologies involved in Smart Cities solutions. An Argentinian researcher recently demonstrated that traffic sensors used around the world could be hacked into and caused to create misleading information. At the time of installation it was assumed that there would never be a motivation to hack into them and so they were configured with insufficient security. We will have to ensure that future deployments are much more secure.

Conversely, we routinely trust automated technology in many aspects of our lives – the automatic pilots that land the planes we fly in, and the anit-lock braking systems that slow and stop our cars far more effectively than we are able to ourselves.

If we are to build the same level of trust and confidence in Smart City solutions, we need to be open and honest about their risks as well as their benefits; and clear how we are addressing them.

(Cars from the car club “car2go” ready to hire in Vancouver. Despite succeeding in many cities around the world, the business recently withdrew from the UK after failing to attract sufficient customers to two pilot deployments in London and Birmingham. The UK’s cultural attraction of private car ownership has proved too strong at present for a shared ownership business model to succeed. Photo by Stephen Rees).

Outcomes Risk

Smart infrastructures such as Stockholm’s road-use charging scheme and London’s congestion charge were constructed in the knowledge that they would be financially sustainable, and with the belief that they would create economic and environmental benefits. Subsequent studies have shown that they did achieve those benefits, but data to predict them confidently in advance did not exist because they were amongst the first of their kind in the world.

The benefits of “Smart” schemes such as road-use charging and smart metering cannot be calculated deterministically in advance because they depend on citizens changing their behaviour – deciding to ride a bus rather than to drive a car; or deciding to use dishwashers and washing machines overnight rather than during the day.

There are many examples of Smart Cities projects that have successfully used technology to encourage behaviour change. In a smart water meter project in Dubuque, for example, households were given information that told them whether their domestic appliances were being used efficiently, and alerted to any leaks in their supply of water. To a certain extent, households acted on this information to improve the efficiency of their water usage. But a control group who were also given a “green points” score telling them how their water conservation compared to that of their near neighbours were found to be twice as likely to take action to improve their efficiency.

However, these techniques are notoriously difficult to apply successfully. A recycling scheme that adopted a similar approach found instead that it lowered recycling rates across the community: households who learned that they were putting more effort into recycling than their neighbours asked themselves “if my neighbours aren’t contributing to this initiative, then why should I?”

The financial vehicles that enable investment in infrastructure and property are either government-backed instruments that reward economic and social outcomes such as reductions in carbon footprint or the creation of jobs ; or market-based instruments  based on the creation of direct financial returns.

So are we able to predict those outcomes confidently enough to enable investment in Smart Cities solutions?

I put that question to the debating panel at the Tomorrow’s Cities meeting. In particular, I asked whether investors would be willing to purchase bonds in smart metering infrastructures with a rate of return dependent on the success of those infrastructures in encouraging consumers to  reduce their use of water and energy.

The response was a clear “no”. The application of those technologies and their effectiveness in reducing the use of water and electricity by families and businesses is too uncertain for such investment vehicles to be used.

Smart Cities solutions are not straightforward engineering solutions such as electric vehicles whose cost, efficiency and environmental impacts can be calculated in a deterministic way. They are complex socio-technical systems whose outcomes are emergent and uncertain.

Our ability to predict their performance and impact will certainly improve as more are deployed and analysed, and as University researchers, politicians, journalists and the public assess them. As that happens, investors will be more willing to fund them; or, with government support, to create new financial vehicles that reward investment in initiatives that use smart technology to create social, environmental and economic improvements – just as the World Bank’s Green Bonds, launched in 2008, support environmental schemes today.

(Recycling bins in Curitiba, Brazil. As Mayor of Curitaba Jaime Lerner started one of the world’s earliest and most effective city recycling programmes by harnessing the enthusiasm of children to influence the behaviour of their parents. Lerner’s many initiatives to transform Curitaba have the characteristic of entrepreneurial leadership. Photo by Ana Elisa Ribeiro)

Evidence and Leadership

The evidence base need to support new investment vehicles is already being created. In Canada, for example, a collaboration between Canadian insurers and cities has developed a set of tools to create a common understanding of the financial risk created by the effects of climate change on the resilience of city infrastructures.

More internationally, the “Little Rock Accord” between the Madrid Club of former national Presidents and Prime Ministers and the P80 group of pension funds agreed to create a task force to increase the degree to which pension and sovereign wealth funds invest in the deployment of technology to address climate change issues, shortages in resources such as energy, water and food, and sustainable, resilient growth. My colleague the economist Mary Keeling has been working for IBM’s Institute for Business Value to more clearly analyse and express the benefits of Smart approaches – in water management and transportation, for example. And Peter Head’s Ecological Sequestration Trust and Robert Bishop’s International Centre for Earth Simulation are both pooling international data and expertise to create models that explore how more sustainable cities and societies might work.

But the Smart City programmes which courageously drive the field forward will not always be those that demand a complete and detailed cost/benefit analysis in advance. Writing in “The Plundered Planet”, the economist Paul Collier asserts that any proposed infrastructure of reasonable novelty and significant scale is effectively so unique – especially when considered in its geographic, political, social and economic context – that an accurate cost/benefit case simply cannot be constructed.

Instead, initiatives such as London’s congestion charge and bicycle hire scheme, Sunderland’s City Cloud and Bogota’s bikeways and parks were created by courageous leaders with a passionate belief that they could make their cities better. As more of those leaders come to trust technology and the people who deliver it, their passion will be another force behind the adoption of technology in city systems and infrastructure.

What’s the risk of not investing in a Smarter City?

For at least the last 50 years, we have been observing that life is speeding up and becoming more complicated. In his 1964 work “Notes on the Synthesis of Form“, the town planner Christopher Alexander wrote:

“At the same time that the problems increase in quantity, complexity and difficulty, they also change faster than ever before. New materials are developed all the time, social patterns alter quickly, the culture itself is changing faster than it has ever changed before … To match the growing complexity of problems, there is a growing body of information and specialist experience … [but] not only is the quantity of information itself beyond the reach of single designers, but the various specialists who retail it are narrow and unfamiliar with the form-makers’ peculiar problems.”

(Alexander’s 1977 work “A Pattern Language: Towns, Buildings, Construction” is one of the most widely read books on urban design; it was also an enormous influence on the development of the computer software industry).

The physicist Geoffrey West has shown that this process is alive and well in cities today. As the world’s cities grow, life in them speeds up, and they create ideas and wealth more rapidly, leading to further growth. West has observed that, in a world with constrained resources, this process will lead to a catastrophic failure when demand for fresh water, food and energy outstrips supply – unless we change that process, and change the way that we consume resources in order to create rewarding lives for ourselves.

There are two sides to that challenge: changing what we value; and changing how we create what we value from the resources around us.

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(“Makers” at the Old Print Works in Balsall Heath, Birmingham, sharing the tools, skills, contacts and ideas that create successful small businesses in local communities)

The Transition movement, started by Rob Hopkins in Totnes in 2006, is tackling both parts of that challenge. “Transition Towns” are communities who have decided to act collectively to transition to a way of life which is less resource-intensive, and to value the characteristics of such lifestyles in their own right – where possible trading regionally, recycling and re-using materials and producing and consuming food locally.

The movement does not advocate isolation from the global industrial economy, but it does advocate that local, alternative products and services in some cases can be more sustainable than mass-produced commodities; that the process of producing them can be its own reward; and that acting at community level is for many people the most effective way to contribute to sustainability. From local currencies, to food-trading networks to community energy schemes, many “Smart” initiatives have emerged from the transition movement.

We will need the ideas and philosophy of Transition to create sustainable cities and communities – and without them we will fail. But those ideas alone will not create a sustainable world. With current technologies, for example, one hectare of highly fertile, intensively farmed land can feed 10 people. Birmingham, my home city, has an area of 60,000 hectares of relatively infertile land, most of which is not available for farming at all; and a population of around 1 million. Those numbers don’t add up to food self-sufficiency. And Birmingham is a very low-density city – between one-half and one-tenth as dense as the growing megacities of Asia and South America.

Cities depend on vast infrastructures and supply-chains, and they create complex networks of transactions supported by transportation and communications. Community initiatives will adapt these infrastructures to create local value in more sustainable, resilient ways, and by doing so will reduce demand. But they will not affect the underlying efficiency of the systems themselves. And I do not personally believe that in a world of 7 billion people in which resources and opportunity are distributed extremely unevenly that community initiatives alone will reduce demand significantly enough to achieve sustainability.

We cannot simply scale these systems up as the world’s population grows to 9 billion by 2050, we need to change the way they work. That means changing the technology they use, or changing the way they use technology. We need to make them smarter.

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