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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4 ways to get on with building Smart Cities. And the societal failure that stops us using them.

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(William Robinson Leigh’s 1908 painting “Visionary City” envisaged future cities constructed from mile-long buildings of hundreds of storeys 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 Smart City refuses to go away
In 2013 Adam Greenfield wrote “Against the Smart City”  in criticism of the large-scale corporate- and government-led projects in cities such as Masdar, Songdo and Rio that had begun to co-opt the original idea of “Smart Communities” and citizens, given a more powerful voice in their own governance by Internet communication, into what he saw – and what some still see – as a “top-down” approach to infrastructure and services divorced from the interest of ordinary citizens.

But despite regular reprisals of this theme accompanied by assertions that the Smart City is a misguided idea that is doomed to die away, notably last year in the UK’s Guardian newspaper, the Smart City has neither been abandoned as mistaken nor faded from prominence as it would have done by now if it were nothing but a technology buzzword. (Whether they have disappeared entirely or simply become everyday parts of the landscape, ideas that once dominated the technology industry such as “Service Oriented Architecture“, “Web 2.0” and “e-business” have risen to prominence and disappeared again within the lifetime of “Smart Cities”).

Instead, the various industry, community, political, academic and design interests associated with the Smart City idea have gradually learned how to combine the large-scale, intelligent infrastructures needed to support the incredible level and speed of urbanisation around the world with the accessible technologies that allow citizens, communities and businesses to adapt those infrastructures to their own needs and create more successful lives for themselves. As a consequence, new cities and new media organisations are still adding to those already debating the idea – I’ve received invitations to new events in the UK, Ireland, Malaysia, China and the Middle East already this year, and mainstream reputable sources such as the Daily Telegraph, Fortune magazine, the Economist and Forbes have covered the trend.

Yet despite all of this interest from industry and the public sector, the reality is that we still haven’t seen significant investment in those ideas on a sustainable basis.

If you read this blog regularly then you’ll know that I don’t believe that our primary focus for funding Smart City initiatives should be through the innovation funds provided by bodies such as Innovate UK or programmes such as the European Union’s Horizon 2020. Those are both great vehicles for driving innovation out of research organisations into business and public services; but for any city facing an acute challenge the bidding processes take too long and consume too many resources; the high levels of competition mean there can be a relatively low chance of receiving funds; and projects funded in this way often don’t solve the challenge of paying for the resulting solution on an ongoing basis. Most of the sustainable solutions that result from them are new business products and services: once the initial funded pilot with a local authority has finished, where does the money come from to pay for an ongoing commercial solution?

There are, however, a clear set of routes to securing sustainable investment that the most forward-looking cities have demonstrated. They don’t require cities to attract flagship technology industries to invest in them as proving-grounds for new products and services; they don’t require the inward investment that comes from international sporting and cultural events; and they’re not the preserve of rich or fast-growing capital cities on the international stage.

They do require senior city leaders – Mayors, Council Leaders and their Executive officers – to adopt and drive them; and they also require collaboration and partnership with other city institutions and with private sector suppliers.

And they require bravery, integrity and commitment from those private sector suppliers – such as my employer Amey – to offer new partnerships to our customers. Smart Cities won’t come about through us selling our products and services in transactional exchanges; they’ll come about through new partnerships in which we agree to share not just the responsibility to invest in technology and innovation, but also responsibility for the risks involved in achieving the objectives that cities care about.

But while these approaches to delivering Smart Cities will require hard and careful work, and real investment in collaboration, they are all accessible to any city that chooses to use them; and there’s no reason at all why that process can’t begin today.

Getting started: agreeing on aspirations

The starting point to putting a Smart City strategy in place is to create a specific, aspirational vision rooted in the challenges, opportunities and capabilities of a particular place and its communities, and that can win support from local stakeholders. I have seen (broadly) two types of Smart Cities visions of this sort created over the last few years.

1. Local Authority visions for digital services and infrastructure

Many local authorities have developed plans for smart, digital local services, coupled with plans for regional investment in infrastructure (such as 4G and broadband connectivity), digital skills and business-enablement. A good example is Hampshire County Council’s “Digital Hampshire” plan (Hampshire is a relatively large and economically healthy County in the UK with a population of 1.3 million and GDP just over £30billion).

One of the earliest examples was Sunderland’s “Economic Masterplan”, which which has driven around £15m of investment by the City Council so far, with further and potentially more significant initiatives now underway. (Sunderland are a medium-sized city in the UK, with a population of approximately 300,000. The city has been focussed for many years on modernising and diversifying its economy following the decline of the shipbuilding and coalmining industries. They are genuine, if often unacknowledged, thought leaders in Smart Cities).

2. City-wide or region-wide collaborative visions

In some cities and regions a wide variety of stakeholders, usually facilitated by a Local Authority or University leader, have developed collaborative plans including commitments and initiatives from local businesses, Universities, transport organisations and service providers as well as government agencies. These visions tend to contain more ambitious plans, for example the provision of “Smart Home” connectivity in new affordable housing developments, multi-modal transport payment schemes, local renewable energy generation schemes etc. London and Birmingham are good examples of this type of plan; and London in particular have used it to drive significant investments in Smart infrastructure through property development.

In both cities, formal collaborations were established to create these visions and drive the strategies to implement them – Birmingham’s Smart City Commission (which I’ve recently re-joined after having been a member of its first incarnation) and London’s Smart London Board (on which I briefly represented IBM before joining Amey).

Whether the first or the second type of plan is the right approach for any specific city, region or community depends on the level of support and collaboration amongst stakeholders in the local authority and the wider city and region – and of course, many plans in reality are somewhere between those two types. If the enthusiasm and leadership are there, neither type of plan need be a daunting process – Oxford recently built a plan of the second type from scratch between the City Council, local Universities and businesses in around 6 months by working with existing local partnerships and networks.

Moving forward: focussing on delivery and practical funding mechanisms

The degree to which cities and regions have then implemented these strategies is determined by how well they’ve focussed on realistic sources of investment and funding. For example, whilst some cities – notably Sunderland and London – have secured significant investments from sustainable sources rather than from research and innovation funds, many others – so far – have not.

I have probably tested some of my relationships with local authorities and innovation agencies to the limit by arguing repeatedly that many Smart City initiatives and debates focus far too much on applying for central Government funds and grants from Research and Innovation funding agencies; and far too little on sustainable business and investment models for new forms of city infrastructure and services.

I make these arguments because there are at least four approaches that any city can use to exploit existing, ongoing streams of funding and investment to implement a Smart City vision in a sustainable way – if their leaders and stakeholders have the conviction to make them happen; and because I passionately believe that these are the mechanisms that can unlock the opportunity for cities across the country and around the world to realise the huge social, economic and environmental benefits that technology developments can enable if they are harnessed in the right way:

  1. Include Smart City criteria in the procurement of services by local authorities to encourage competitive innovation from private sector providers
  2. Encourage development opportunities to include “smart” infrastructure
  3. Commit to entrepreneurial programmes
  4. Enable and support Social Enterprise

(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 as a condition of the award of a contract for provision of IT services to the centre, and arising from Sunderland’s Smart City strategy)

1. Include Smart City criteria in the procurement of services by local authorities to encourage competitive innovation from private sector providers

Sunderland City Council are at the forefront of investing in Smart City technology simply by reflecting their aspirations in their procurement practises for the goods and services they need to operate as a Council. They have included objectives from their Economic Masterplan in four procurements for IT solutions now, totalling around £15m – for example, the transformation of their IT infrastructure from a traditional platform to a Cloud computing platform was awarded to IBM based on IBM’s commitment to help the Council to use the Cloud platform to help local businesses, social enterprises, charities and entrepreneurs to succeed.

Whilst specific procurement choices in any given service are different in every case – whether to procure support for in-house delivery or to outsource to an external provider; or whether to form a PFI, Joint Venture or other such partnership structure for example – the principle of using business-as-usual procurements to invest in the Smart agenda is one that can be applied by any local authority or other organisation responsible for the delivery of public or city services or infrastructure.

This approach is dependent on the procurement of outcomes – for example, the quality of road surfaces, the smoothness of traffic flow, contributions to social mobility and small business growth – rather than of capabilities or resources. Outcomes-based procurements between competing providers create the incentive from the release of the tender through to the completion of the contract for private sector providers to invest in innovation and technology to deliver the most competitive offer to the customer.

Over the last 10 months in Amey, where many of our customer relationships are outcomes-based, whether they are with local governments, other public sector organisations or regulated industries such as utilities, I’ve rapidly put together a portfolio of Smart City initiatives that are supported by very straightforward business cases based on those commitments to outcomes. These initiatives are not just making our own operations more cost effective (and safer) – although they are doing both of those, and that’s what guarantees our ongoing financial commitment to them; they are also delivering new social insights, new forms of citizen engagement and new opportunities for community collaboration for our customers.

The stakeholders whose commitment is needed to implement this approach include Local Authority Chief Executives, Council Leaders, Cabinet members and their Chief Financial Officers or Finance Directors, as well as procuring Executives in services such as highways management, parking services, social care, health and wellbeing and IT. They can also include representatives of local transport organisations for initiatives focussed on transport and mobility.

I won’t pretend that an outcomes-based approach is always easy to adopt, either for local government organisations or their suppliers. In particular, if we want to apply this approach to the highest-level Smart City aspirations for social mobility, economic growth and resilience, then there is a need for dialogue between all parties to establish how to express those outcomes in a way that incentivises the private sector to invest in innovation to deliver them; and to do so in a way that both rewards them appropriately for their achievements whilst giving local government and the citizens and communities they serve good value for money and exemplary service.

In discussions at the last meeting of the UK Government’s Smart Cities Forum, recently re-convened after the general election, there was clearly an appetite for that discussion on both sides: but it needs a neutral, trusted intermediary to facilitate it. That’s not a role that anyone is playing at the moment – neither in government, nor in industry, nor in academia, nor in the conference circuit, nor in the various innovation agencies that are active in Smart Cities. It’s a role that we badly need one – or all of them – to step up to.

(The Urban Sciences Building at Newcastle Science Central, a huge, University-driven regeneration project in central Newcastle that combines facilities for the research and development of new solutions for urban infrastructure with on-site smart infrastructure and services)

2. Encourage development opportunities to include “smart” infrastructure
In 2012 after completing their first Smart City Vision, Birmingham City Council asked what was both an obvious and a fundamentally important question – but one that, to my knowledge, no-one had thought to ask before:

“How should our Planning Framework be updated to reflect our Smart City vision?”

Birmingham’s insight has the potential to unlock an incredible investment stream – the British Property Federation estimates that £14billion is spent each year in the UK on new-build developments alone. Just a tiny fraction of that sum would dwarf the level of direct investment in Smart Cities we’ve seen to date.

Birmingham’s resulting “Digital Blueprint” contains 10 “best practise recommendations” for planning and development drawn in part from a wider set that resulted from a workshop that I facilitated for the Academy of Urbanism, a professional body of town planners, urban designers and architects in the UK. The British Standards Institute has recently taken these ideas forward and published guidance that is starting to be used by other cities.

But progress is slow. To my knowledge the only example of these ideas being put into practise in the UK (though I’d love to be proven wrong) is through the Greater London Authority (GLA) and London Legacy Development Corporation (LLDC) who included criteria from the Smart London Plan in their process last year to award the East Wick and Sweetwater development opportunity to the private sector. This is a multi-£100million investment from a private sector pension fund to build 1,500 new homes on the London Olympics site along with business and retail space.

On behalf of IBM last year I contributed several Smart City elements of the winning proposal; it was astonishing to see how straightforward it was to justify committing multi-£million technology investments from the private sector in the development proposal simply because they would enable the construction and development consortium to win the opportunity to generate long-term profits at a much more significant level. Crucially, the LLDC demanded that the benefits of those investments should be felt not just by residents and businesses in the new development; but by residents and businesses in existing, adjoining neighbourhoods.

There is not much information on this aspect of the development in the public domain, but you can get some idea from this blog by the Master Planner subcontracted to the development. A similar approach is now being taken to an even larger redevelopment in London at Old Oak and Park Royal.

If cities in the UK and beyond are to take advantage of this potentially incredibly powerful mechanism, then we need to win over some crucial stakeholders: Local Authority Directors of Planning, regional development agencies, property developers, financiers and construction companies. Local Universities can be ideal partners for this approach – if they are growing and investing in new property development, there is a clear opportunity for their research departments to collaborate with property and infrastructure developers to create Smart City environments that showcase the capabilities of all parties. Newcastle Science Central is an example of this approach; it’s a real shame that elsewhere in the UK some significant investments are being made to extend University property – often on the basis of increased revenues from student fees – with no incorporation of these possibilities, at the same time that those same Universities’ own research groups are making countless bids into competitive research and innovation funds.

3. Commit to entrepreneurial programmes

[Priya Prakash of the entrepreneurial company Design 4 Social Change describes a project she is leading on behalf of Amey to improve citizen engagement with the services that we deliver for our customers]

Many Smart City initiatives are fundamentally business model innovations – new ways of combining financial success and sustainability with social, economic or environmental improvements in services such as transport, utilities or food. And most business model innovations are created by startup companies, funded by Venture Capital investment. Air B’n’B and Uber are two often-cited examples at the moment of how quickly such businesses, based on new, technology-enabled operating models, can create an enormous impact.

What if you could align that impact with the objectives of a city or region?

The “Cognicity” programme run by the Level 39 technology incubator in London’s Canary Wharf financial district has achieved this alignment by linking Venture Capital- and Angel-backed startup companies to the infrastructure requirements of the next phase of development at Canary Wharf. The West Midlands Public Transport Executive Centro and Innovation Birmingham have agreed a similar initiative to advance transport priorities in Birmingham through externally-funded innovation. Oxford are pursuing the same approach through their “Smart Oxford Challenge” in partnership with Nominet, a trust that supports social innovation. And Amey and our parent company Ferrovial are similarly supporting a “Smart Lab” in collaboration with the University of Sheffield and Sheffield City Council.

A variety of stakeholders are vital to creating entrepreneurial programmes that succeed and that crucially can attract finance to support the ideas that they generate – endless unfunded civic hackathons create ideas but too often fail to have an impact due to a lack of funding and a lack of genuine engagement from local authorities to adopt the solutions they make possible. Innovation funding agencies, especially those with a local or social focus are vital; as are the local Universities, technology incubators and social enterprise support organisations that both attract innovators and have the resources to support them. Finally, where they exist, local Angel Investors or Venture Capital organisations have an obvious role to play.

(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.)

4. Enable and support Social Enterprise

The objectives of Smart Cities (which I’d summarise for this purpose as “finding ways to invest in technology to enable social, environmental and economic improvements”) are analogous to the “triple bottom line” objectives of Social Enterprises – organisations whose finances are often 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. An international example that began in the UK is the Impact Hub network, a global community of collaborative workspaces. The Impact Hub network has worked with a variety of national and local governments to create support programmes to encourage the formation of socially innovative and responsible organisations.

Social Enterprise UK help and support authorities seeking to work with Social Enterprises in this way through their “Social Enterprise Place” initiative; Oxfordshire was the first County to be awarded “Social Enterprise County” under this initiative in recognition of their engagement programme with Social Enterprise.

Another possibility is for local authorities to work in partnership with crowdfunding organisations. Plymouth City Council, for example, offer to match-fund any money raised from crowdfunding for social innovations. This approach can be tremendously powerful: whilst the availability of match-funding from the local authority attracts crowdfunded donations, often sufficient funds are donated through crowdfunding that ultimately the match funding is not required. Given the sustained pressure we’re seeing on public sector finances, this ability to enable a small amount of local authority investment go a very long way is really powerful.

The stakeholders whose commitment is required to make this approach effective include local authorities – whose financial commitment to support new ideas is vital – as well as representatives of the Charitable and Social Enterprise sectors; businesses with support programmes for Social Enterprise (such as Deloitte Consulting’s Social Innovation Pioneers programme); and local incubators and business support services for Social Enterprise.

Why Smart Cities are a societal failure

Market dynamics guarantee that we’ll see massive investment in smart technology over the next few years – the meteoric rise of Uber and Air B’n’B is just one manifestation of that imperative. Consider also how astonishing your SmartPhone is compared to anything you could have imagined a few years ago – and the phenomenal levels of investment in technology that have driven that development; or how quickly the level of technology available in the average car has increased – let alone what happens when self-driving, connected vehicles become widely available.

But what will be the result of all that investment?

Before the recent UK general election, I admonished a Member of Parliament who closed a Smart Cities discussion with the words “I don’t suppose we’ll be talking about this subject for a couple of months now; we’ve got an election to consider” with the response: “Apple have just posted the largest quarterly profit in Corporate history by selling mobile supercomputers to the ordinary people who vote for you. Why on earth isn’t the topic of “who benefits from this incredibly powerful technology that is reshaping our society” absolutely central to the election debate?” (Apple’s results had just been announced earlier that day).

That exchange (and the fact that these issues indeed barely surfaced at all throughout the election period) marks the core of the Smart Cities debate, and highlights our societal failure to address it.

Most politicians appreciate that technology is changing rapidly and that these changes merit attention; but they do not appreciate quite how fundamentally important and far-reaching those changes are. My sense is that they think they can deal with technology-related issues such as “Smart Cities” as self-contained subjects of secondary importance to the more pressing concerns of educational attainment, economic productivity and international competitiveness.

That is a fundamentally mistaken view. Over the next decade, developments in technology, and the way that we adapt to them, will be one of the most important factors influencing education, the economy and the character of our society.

Let me justify that assertion by considering the skills that any one of us will need in order to have a successful life as our society and economy develop.

It is obvious that we will need the right technical skills in order to use the technologies of the day effectively. But of course we will also need interpersonal skills to interact with colleagues and customers; economic skills to help focus our efforts on creating value for others; and organisational skills to enable us to do so in the context of the public and private institutions from which our society is constructed.

One single force is changing all of those skills more rapidly than we have ever known before: technology. When the Millennium began we would not have dreamed of speaking to our families wherever and whenever we liked using free video-calling, and we could not have started a business using the huge variety of online tools available to us today. From startups to multinational corporations, we are all comfortable building and operating companies that use continually evolving technology to coordinate the activities of people living in different countries on different continents; and to create innovative new ways of doing so.

Whatever you think are the most important issues in the world today, if you are not at least considering the role of technology within them, then you will misunderstand how they will develop over time. And the process of envisioning and creating that future is another way to define what we mean by Smart Cities and smart communities: the challenges and opportunities we face, and the changes that technology will create, come together in the places where we live, work, travel and play; and their outcomes will be determined both by the economics of those places, and by how how they are governed.

Unfortunately, most of us are not even engaged with these ideas. A recent poll conducted by Arqiva on behalf of YouGov found that 96% of respondents were unaware of any Smart City initiatives in the cities they lived in. If ordinary people don’t understand and believe in the value of Smart Cities, they are unlikely to vote for politicians who attempt to build them or enact policies that support them. That lack of appreciation represents a failure on the part of those of us – like me – who do appreciate the significance of the changes we’re living through to communicate them, and to make an effective case to take decisive action.

As an example of that failure, consider again Birmingham’s thought-leading “Digital Blueprint” and it’s ten design principles. To repeat, they are “best practise recommendations”: they are not policies. They are not mandatory or binding. And as a consequence, I am sorry to say that in practise they have not been applied to the literally £billions of investment in development and regeneration taking place in the city that I live in and love.

That’s a lost opportunity that greatly saddens me.

[Drones co-operate to build a rope bridge. As such machines become more capable and able to carry out more cheaply and safely tasks previously performed by people, and that are central to the construction and operation of city infrastructure and services, how do we ensure that society at large benefits from such technology?]

As a society we cannot afford to keep losing such opportunities (and Birmingham is not alone: taking those opportunities is by far the exception, and not the rule). If we do, our aspirations will be simply be overtaken by events, and the consequences could be profound.

Writing in “The 2nd Machine Age”, MIT Professors of Economics Andy McAfee and Erik Brynjolfsson argue that the “platform business models” of Air B’n’B and Uber are becoming a dominant force in the economy – they cite the enormous market valuations of corporations such as Nike, Google, Facebook and Amazon that use such models, in addition to the rapid growth of new businesses. Their analysis further demonstrates that, if left unchecked, the business models and market dynamics of the digital economy will concentrate the value created by those businesses into the hands of a small number of platform creators and shareholders to a far greater extent than traditional business models have done so throughout history to date. I had the opportunity to meet Andy and Erik earlier this year, and they were deeply concerned that we should act to prevent the stark increase in inequality that their findings predict.

These are innovative businesses using Smart technology, but those social and economic outcomes won’t make a smart world, a smart society or Smart Cities. The widespread controversy created by Uber’s business model is just the tip of the iceberg of the consequences that we could see.

As I’ve quoted many, many times on this blog, Jane Jacobs got this right in 1961 when she wrote in “The Death and Life of Great American Cities” that:

“Private investment shapes cities, but social ideas (and laws) shape private investment. First comes the image of what we want, then the machine is adapted to turn out that image.”

We have expressed over and over again the “image of what we want” in countless aspirational visions and documents. But we have not adapted the machine to turn out that image.

Our politicians – locally and nationally – have not understood that the idea of a “Smart City” is really a combination of technology, social, environmental and economic forces that will fundamentally transform the way our society works in a way that will change the life of everyone on this planet; that the outcomes of those changes are in no way understood, and in no way guaranteed to be beneficial; and that enacting the policies, practises and – yes – laws, to adapt those changes to the benefit of everyone is a defining political challenge for our age.

I am not a politician, but this is also a challenge for which I accept responsibility.

As a representative of business – in particular a business that delivers a vast number of services to the public sector – I recognise the enormous responsibility I accept by working in a leadership role for an example of what has become one of the most powerful forces in our economy: the private corporation. It is my responsibility – and that of my peers, colleagues and competitors – to drive our business forward in a way that is responsible to the interests of the society of which we are part, and that is not driven only by the narrow financial concerns of our shareholders.

There should be absolutely no conflict between a responsible, financially successful company and one that operates in the long term interest of the society which ultimately supports it.

But that long-term synergy is only made real by a constant focus on taking the right decisions every day. From the LIBOR scandal to cheating diesel emissions tests it’s all too obvious that there are many occasions when we get those decisions wrong. Businesses are run by people; people are part of society; and we need to treat those simple facts far more seriously as an imperative in everyday decision-making than we currently do.

It is inevitable that our world, our cities and our communities will be dramatically reshaped by the technologies that are developing today, and that will be developed in the near future. They will change – very quickly – out of all recognition from what we know today.

But whether we will honestly benefit from those technologies is a different and uncertain question. Answering that question with a “yes” is a personal, political, business and organisational challenge that all of us need to face up to much more seriously and urgently than we are have done so far.

Reclaiming the “Smart” agenda for fair human outcomes enabled by technology

(Lucie & Simon’s “Silent World“, a series of photographs of cities from which almost all trace of people has been removed.)

Over the last 5 years, I’ve often used this blog to explore definitions of what a “Smart City” is. The theme that’s dominated my thinking is the need to synthesise human, urban and technology perspectives on cities and our experience of them.

The challenge with attempting such a broad synthesis within a succinct definition is that you end up with a very high-level, conceptual definition – one that might be intellectually true, but that does a very poor job of explaining to the wider world what a Smart City is, and why it’s important.

We need a simple, concise definition of Smart Cities that ordinary people can identify with. To create it, we need to reclaim the “Smart” concept from technologies such as analytics, the Internet of Things and Big Data, and return to it’s original meaning – using the increasingly ubiquitous and accessible communications technology enabled by the internet to give people more control over their own lives, businesses and communities.

I’ve written many articles on this blog about the futile and unsophisticated argument that rages on about whether Smart Cities should be created by “top-down” or “bottom-up” approaches: clearly, anything “Smart” is a subtle harmonisation of both.

In this article, I’d like to tackle an equally unconstructive argument that dominates Smart Cities debates: are Smart Cities defined by the role of technology, or by the desire to create a better future?

It’s clear to me that anything that’s really “Smart” must combine both of those ideas.

In isolation, technology is amoral, inevitable and often banal; but on the other hand a “better future” without a means to achieve it is merely an aspiration, not a practical concept. Why is it “Smart” to want a better future and better cities today in a way that wanting them 10, 20, 50 or 100 years ago wasn’t?

Surely we can agree that focussing our use of a powerful and potentially ubiquitously accessible new technology – one that’s already transforming our world – on making the world a better place, rather than just on making money, is an idea worthy of the “Smart” label?

In making this suggestion, I’m doing nothing more than returning to the origin of the term “Smart” in debates in social science about the “smart communities” that would emerge from our new ability to communicate freely and widely with each other following the emergence of the Internet.

Smart communities are enabled by ubiquitous access to empowering technology

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 – the speed of a brisk walk. By contrast, in January 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.

(In the 1960s, the mobile phone-like “communicators” used in Star Trek were beyond our capability to manufacture; but they were used purely for talking. Similarly, while William Gibson’s 1980s vision of “cyberspace” was predictive and ambitious in its descriptions of virtual environments and data visualisations, the people who inhabited it interacted with each other almost as if normal space has simply been replaced by virtual space: there was no sense of the immense power of social media to enable new connections.)

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. Along with mobile devicese-commerce technology and analytics, social media has made it dramatically easier for individuals, communities and small businesses anywhere around the world with the potential to transact with each other to make contact and interact without needing the enormous supply chains and sales and marketing channels that previously made such activity the prerogative of large, multi-national corporations.

It was in a workshop with social scientists at the University of Durham that I first became aware that “Smart” concepts originated in social science in the 1990s and pre-date the famous early large-scale technology infrastructure projects in cities like Masdar and Songdo. The term was coined to describe the potential for new forms of governance, citizen engagement, collective intelligence and stakeholder collaboration enabled by Internet communication technologies. The hope was that new forms of exchange and contract between people and organisations would create a better chance of realising the underlying outcomes we really want – health, happiness and fulfilment:

“The notion of smart community refers to the locus in which such networked intelligence is embedded. 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.”

(Amanda Coe, Gilles Paquet and Jeffrey Roy, “E-Governance and Smart Communities: A Social Learning Challenge“,  Social Science Computer Review, Spring 2001)

But technology’s not Smart unless it’s used to create human value

It’s no surprise that technology companies such as Cisco, Siemens and my former employer IBM came to similar realisations about the transformative potential of digital technology in addressing societal as well as business challenges as technology spread from the back office into the everyday world, leading, for example, to the launch of IBM’s “Smarter Planet” initiative in 2008, a pre-cursor to their “Smarter Cities” programme.

Let’s pause at this point to say: that’s a tremendously exciting idea. A technology company – Apple – recently recorded the largest corporate profit in the history of business. Microsoft’s founder Bill Gates was just recognised as the richest person on the planet. Technology companies make enormous profits, and they feed significant portions of those profits back into research and development. Shouldn’t it be wonderful that some of those resources are invested into exploring how to make cities, communities and people more successful?

(The Dubuque water and energy portal, showing an individual household insight into it's conservation performance; but also a ranking comparing their performance to their near neighbours)

(The Dubuque water and energy portal, showing an individual household insight into it’s conservation performance; but also a ranking comparing their performance to their near neighbours)

IBM, for example, has invested millions of dollars of effort in implementing Smarter Cities projects in cities such as Dubuque through the IBM Research “First of a Kind” programme; and has helped over a hundred cities worldwide develop new initiatives and strategies through the charitable “Smarter Cities Challenge” – advising Kyoto on how to become a more “walkable” city, for instance.

So what’s the problem?

Large technology corporations are often criticised in debates on this topic for their size, profitability and “top-down” approaches – and the local authorities who work with them are often criticised too. In my experience, that criticism is based on an incomplete understanding of the people involved, and how the projects are carried out; and I think it misses the point.

The real question we should be asking is more subtle and important: what happens to the social elements of an idea once it becomes apparent to businesses both large and small that they can make money by selling the technologies that enable it?

I know very well the scientists, engineers and creatives at many of the companies, social enterprises and government bodies – of any size – who are engaged in Smart Cities initiatives. They are almost universally extremely bright, well intentioned and humane, and fully capable of talking with passion about the social and environmental value of their work. “Top-down” is at best a gross simplification of the projects that they carry out, and at worst a gross misrepresentation. Their views dominated the early years of the Smart Cities market as it developed.

But as the market has matured and grown, the focus has switched from research, exploration and development to the marketing and selling of well-defined product and service offerings. Amidst the need to promote those offerings to potential customers, and to differentiate them against competitors, it’s easy for the subtle intertwining of social, economic, environmental and technology ideas to be drowned out.

That’s what led to the unfortunate statement that armed Professor Adam Greenfield with the ammunition he needed to criticise the Smart Cities movement. A technology company that I won’t name made an over-reaching and mis-guided assertion that Smart Cities would create “autonomous, intelligently functioning IT systems that will have perfect knowledge of users’ habits” – blissfully ignoring the fact that such perfection is scientifically and philosophically impossible, not to mention inhuman and undesirable.

As a scientist-turned-technologist-turned-wannabe-urbanist working in this field, and as someone who’s been repeatedly inspired by the people, communities, social scientists, social innovators, urban designers and economists I’ve met over the past 5 years, I started writing this blog to explore and present a more balanced, humane vision of a Smart City.

Zen and the art of Smart Cities: opposites should create beautiful fusions, not arguments

Great books change our lives, and one of many that has changed mine is “Zen and the Art of Motorcycle Maintenance” by Robert M. Pirsig. Pirsig explores the relationship between what he called “romantic” perspectives of life, which focus on emotional meaning and value “quality”, and “rational” perspectives, which focus on the reasons our world behaves in the way that it does and value “truth”. He argues that early Greek philosophers didn’t distinguish between “quality” and “truth”, and that by considering them together we can learn to value things that are simultaneously well-intentioned and well-formed.

This thinking is echoed in Alan Watts’ “The Way of Zen“, in which he comments on the purpose of the relentless practise of technique that is part of the Zen approach to art that:

“The very technique involves the art of artlessness, or what Sabro Hasegawa has called the ‘controlled accident’, so that paintings are formed as naturally as the rocks and grasses which they depict”

(Alan Watts, “The Way of Zen“)

In other words, by working tirelessly to perfect their technique – i.e. their use of tools – artists enable themselves to have “beautiful accidents” when inspiration strikes.

(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.)

Modern technologies from social media to Smartphones to Cloud computing and Open Source software are both incredibly powerful and, compared to any previous generation of technology, incredibly cheap.

If we work hard to ensure that they can be used to access and manipulate the technologies that will inevitably be used to make the operations of city infrastructures and public services more efficient, then they have incredible potential to be a tool for people everywhere to shape the world around them to their own advantage; and for us to collectively create a world that is fairer, healthier and more resilient.

But unless we re-claim the word “Smart” to describe those outcomes, the market will drive our energy and resources in the direction of narrower financial interests.

The financial case for investment in Smart technologies is straightforward: as the costs of smartphones, sensors, analytics, and cloud computing infrastructure reduce 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.

So how can we adapt that investment drive to create the outcomes that we want?

Can responsible business create a better world?

Some corporate behaviours promote these outcomes, driven by the voting and buying powers of citizens and consumers. Working for Amey, for example, my customers are usually government organisations who serve an electorate; or private sector companies who are regulated by government bodies. In both cases, there is a direct chain of influence leading from individual citizen needs and perceptions through to the way we operate and deliver our services. If we don’t engage with, respect and meet those needs and expectations, we will not be successful. I can observe that influence at work driving an ethic of service, care and responsibility throughout our business at Amey, and it’s been an inspiration to me since joining the company.

UniLever have taken a similar approach, using consumer desires for sustainable products to link corporate performance to sustainable business practices; and Jared Diamond wrote extensively about successful examples of socially and environmentally sustainable resource extraction businesses, such as Chevron’s sustainable operations in the Kutubu oilfield in Papua New Guinea, in his book “Collapse“. Business models such as social enterprise and the sharing economy also offer great potential to link business success to positive social and environmental outcomes.

But ultimately our investment markets are still strongly focused on financial performance, and reward the businesses that make the most money with the investment that enables them to grow. This is why many social enterprises do not scale-up; and why many of the rapidly growing “sharing economy” businesses currently making the headlines have nothing at all to do with sharing value and resources, but are better understood as a new type of profit-seeking transaction broker.

Responsible business models are a choice made by individual business leaders, and they depend for their successful operation on the daily choices and actions of their employees. They are not a market imperative. For as long as that is the case, we cannot rely on them to improve our world.

Policy, legislation and regulation

I’ve quoted from Jane Jacobs on many occasions on this blog that “private investment shapes cities, but social ideas (and laws) shape private investment”.

It’s a source of huge frustration to me that so much of the activity in the Smart Cities community ignores that so obviously fundamental principle, and focuses instead on the capabilities of technology or on projects funded by research grants.

The recent article reporting a TechUK Smart Cities conference titled “Milton Keynes touted as model city for public sector IoT use” is a good example. Milton Keynes have many Smart City projects underway that are technologically very interesting, but every one of them is funded by a significant grant of funds from a central government department, a research or innovation funding body, or a technology company. Not a single project has been paid for by a sustainable, re-usable business case. Other cities can aspire to emulate Milton Keynes all they want, but they won’t win research and innovation funding to re-deploy solutions that have already been proven.

Research and innovation grants provide the funding that proves for the first time that a new idea is viable. They do not pay for that idea to be enacted across the world.

(Shaleen Meelu and Robert Smith with Hugh Fearnley-Whittingstall at the opening of the Harborne Food School. The School is a Community Interest Company that promotes healthy, sustainable approaches to food through courses offered to local people and organisations)

(Shaleen Meelu and Robert Smith with Hugh Fearnley-Whittingstall at the opening of the Harborne Food School. The School is a Community Interest Company that promotes healthy, sustainable approaches to food through courses offered to local people and organisations)

Policy, legislation and regulation are far more effective tools for enabling widespread change, and are what we should be focussing our energy and attention on.

The Social Value Act requires that public authorities, who spend nearly £200 billion every year on private sector goods and services, procure those services in a way that creates social value – for example, by requiring that national or international service providers engage local small businesses in their supply chains.

In an age in which private companies are investing heavily in the use of digital technology because it provides them with by far the most powerful tool to increase their success, surely local authorities should fulfil their Social Value Act obligations by using procurement criteria to ensure that those companies employ that same tool to create social and environmental improvements in the places and communities in which they operate?

Similary, the British Property Federation estimates that £14 billion is invested in the development of new property in the UK each year. If planning and development frameworks oblige that property developers describe and quantify the social value that will be created by their developments, and how they will use technology do so – as I’ve promoted on this blog for some time now, and as the British Standards Institute have recently recommended – then this enormous level of private sector investment can contribute to investing in technology for public benefit; just as those same frameworks already require investment in public space around commercial buildings.

The London Olympic Legacy Development Corporation have been following this strategy in support of the Greater London Authority’s Smart London Plan. As a result, they are securing private sector investment in deploying technology not only to redevelop the Olympic park using smart infrastructure; but also to ensure that that investment benefits the existing communities and business economies in neighbouring areas.

A Smart manifesto for human outcomes enabled by technology

These business models, policy measures and procurement approaches are bold, difficult measures to enact. They are not as sexy as Smartphones, analytics and self-driving cars. But they are much more important if what we want to achieve are positive human outcomes, not just financially successful technology companies and a continuous stream of research projects.

What will make it more likely that businesses, local governments and national governments adopt them?

Citizen understanding. Consumer understanding. A definition of smart people, places, communities, businesses and governments that makes sense to everyone who votes, works, stands for election, runs a business, or buys things. In other words, everyone.

If that definition doesn’t include the objective of making the world a healthier, happier, fairer, more sustainable place for everyone, then it’s not worth the effort. If it doesn’t include harnessing modern technology, then it misses the point that human ingenuity has recently given us a phenomenal new toolkit that make possible things that we’d never previously dreamt of.

I think it should go something like this:

“Smart people, places, communities, businesses and governments work together to use the modern technologies that are changing our world to make it fairer and more sustainable in the process, giving everyone a better chance of a longer, healthier, happier and more fulfilling life.”

I’m not sure that’s a perfect definition; but I think it’s a good start, and I hope that it combines the right realisation that we do have unprecedented tools at our disposal with the right sentiment that what really matters is how we use them.

(I’d like to thank John Murray of Scottish Enterprise for a useful discussion that inspired me to write this article)

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.

Six ways to design humanity and localism into Smart Cities

(Birmingham’s Social Media Cafe, where individuals from every part of the city share their experience using social media to promote their businesses and community initiatives. Photograph by Meshed Media)

The Smart Cities movement is sometimes criticised for appearing to focus mainly on the application of technology to large-scale city infrastructures such as smart energy grids and intelligent transportation.

It’s certainly vital that we manage and operate city services and infrastructure as intelligently as possible – there’s no other way to deal with the rapid urbanisation taking place in emerging economies; or the increasing demand for services such as health and social care in the developed world whilst city budgets are shrinking dramatically; and the need for improved resilience in the face of climate change everywhere.

But to focus too much on this aspect of Smart Cities and to overlook the social needs of cities and communities risks forgetting what the full purpose of cities is: to enable a huge number of individual citizens to live not just safe, but rewarding lives with their families.

Maslow’s Hierarchy of Needs identifies our most basic requirements to be food, water, shelter and security. The purpose of many city infrastructures is to answer those needs, either directly (buildings, utility infrastructures and food supply chains) or indirectly (the transport systems that support us and the businesses that we work for).

Important as those needs are, though – particularly to the billions of people in the world for whom they are not reliably met – life would be dull and unrewarding if they were all that we aspired to.

Maslow’s hierarchy 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). These are the more elusive qualities that it’s harder to design cities to provide. But unless cities provide them, they will not be successful. At best they will be dull, unrewarding places to live and work, and will see their populations fall as those can migrate elsewhere. At worst, they will create poverty, poor health and ultimately short, unrewarding lives.

A Smart City should not only be efficient, resilient and sustainable; it should improve all of these qualities of life for its citizens.

So how do we design and engineer them to do that?

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

Tales of the Smart City

Stories about the people whose lives and businesses have been made better by technology tell us how we might answer that question.

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 colleague Andy Stanford-Clark has helped an initiative not only to deploy smart meters to measure the energy use of 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 compaign to halve bus fares in the area.

There are countless other examples. Play Fitness “gamify” 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 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.

(Top: Birmingham's Masshouse Circus roundabout, part of the inner-city ringroad that famously impeded the city's growth. Bottom: This pedestrian roundabout in Lujiazui, China, constructed over a busy road junction, is a large-scale city infrastructure that balances the need to support traffic flows through the city with the importance that Jane Jacobs first described of allowing people to walk freely about the areas where they live and work. Photo by ChrisUK)

(Top: Birmingham’s Masshouse Circus roundabout, part of the inner-city ringroad that famously impeded the city’s growth until it was demolished. Photo by Birmingham City Council. Bottom: Pedestrian roundabout in Lujiazui, China, constructed over a busy road junction, is a large-scale city infrastructure that balances the need to support traffic flows through the city with the importance that Jane Jacobs first described of allowing people to walk freely about the areas where they live and work. Photo by ChrisUK)

A tale of two roundabouts

History tells us that we should not assume that it will be straightforward to design Smart Cities to achieve that objective, however.

A measure of our success in building the cities we know today from the generations of technology that shaped them – concrete, cars and lifts – is the variation in life expectancy across them. In the UK, it’s common for life expectancy to vary by around 20 years between the poorest and richest parts of the same city.

That staggering difference is the outcome of a complex set of issues including the availability of education and opportunity, lifestyle factors such as diet and exercise, and the accessibility of city services. But a significant influence on many of those issues is the degree to which the large-scale infrastructures built to support our physiological needs and the demands of the economy also create a high-quality environment for daily life.

The photograph on the right shows two city transport infrastructures that are visually similar, but that couldn’t be more different in their influence on the success of the cities that they are part of.

The picture at the top shows Masshouse Circus in Birmingham in 2001 shortly before it was demolished. It was constructed in the 1960s as part of the city’s inner ring-road, intended to improve connectivity to the national economy through the road network. However, the impact of the physical barrier that it created to pedestrian traffic can be seen by the stark difference in land value inside and outside the “concrete collar” of the ring-road. Inside the collar, land is valuable enough for tall office blocks to be constructed on it; whilst outside it is of such low value that it is used as a ground-level carpark.

In contrast, the pedestrian roundabout in Lujiazui, China pictured at the bottom, constructed over a busy road junction, balances the need to support traffic flows through the city with the need for people to walk freely about the areas in which they live and work. As can be seen from the people walking all around it, it preserves the human vitality of an area that many busy roads flow through. 

We should take insight from these experiences when considering the design of Smart City infrastructures. Unless those infrastructures are designed to be accessible to and usable by citizens, communities and local businesses, they will be as damaging as poorly constructed buildings and poorly designed transport networks. If that sounds extreme, then consider the dangers of cyber-stalking, or the implications of the gun-parts confiscated from a suspected 3D printing gun factory in Manchester last year that had been created on general purpose machinery from digital designs shared through the internet. Digital technology has life and death implications in the real world.

For a start, we cannot take for granted that city residents have the basic ability to access the internet and digital technology. Some 18% of adults in the UK have never been online; and children today without access to the internet at home and in school are at an enormous disadvantage. As digital technology becomes even more pervasive and important, the impact of this digital divide – within and between people, cities and nations – will become more severe. This is why so many people care passionately about the principle of “Net Neutrality” – that the shared infrastructure of the internet provides the same service to all of its users; and does not offer preferential access to those individuals or corporations able to pay for it.

These issues are very relevant to cities and their digital strategies and governance. The operation of any form of network requires physical infrastructure such as broadband cables, wi-fi and 4G antennae and satellite dishes. That infrastructure is regulated by city planning policies. In turn, those planning policies are tools that cities can and should use to influence the way in which technology infrastructure is deployed by private sector service providers.

(Photograph of Aesop’s fable “The Lion and the Mouse” by Liz West)

Little and big

Cities are enormous places in which what matters most is that millions of individually small matters have good outcomes. They work well when their large scale systems support the fine detail of life for every one of their very many citizens: when “big things” and “little things” work well together.

A modest European or US city might have 200,000 to 500,000 inhabitants; a large one might have between one and ten million. The United Nations World Urbanisation Prospects 2011 revision recorded 23 cities with more than 10 million population in 2011 (only six of them in the developed world); and predicted that there would be nearly 40 by 2025 (only eight of them in the developed world – as we define it today). Overall, between now and 2050 the world’s urban population will double from 3 billion to 6 billion. 

A good example of the challenges that this enormous level of urbanisation is already creating is the supply of food. 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 Feeding the 7 to 10 billion people who will inhabit the planet between now and 2050, and the 3 to 6 billion of them that will live in dense cities, is certainly a challenge on an industrial scale. 

In contrast, Casserole Club, the Northfield Eco-Centre, the Chale Project and many other initiatives around the world have demonstrated the social, health and environmental benefits of producing and distributing food locally. Understanding how to combine the need to supply food at city-scale with the benefits of producing it locally and socially could make a huge difference to the quality of urban lives.

The challenge of providing affordable broadband connectivity throughout cities demonstrates similar issues. Most cities and countries have not yet addressed that challenge: 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.

In his enjoyable and insightful book “Smart Cities: Big Data, Civic Hackers, and the Quest for a New Utopia“, Anthony Townsend describes a grass-roots effort by civic activists to provide New York with free wi-fi connectivity. I have to admire the vision and motivation of those involved, but – rightly or wrongly; and as Anthony describes – wi-fi has ultimately evolved to be dominated by commercial organisations.  

As technology continues to improve and to reduce in price, the balance of power between large, commercial, resource-rich institutions and small, agile, resourceful  grassroots innovators will continue to changeTechnologies such as Cloud Computing, social media, 3D printing and small-scale power generation are reducing the scale at which many previously industrial technologies are now economically feasible; however, it will remain the case for the foreseeable future that many city infrastructures – physical and digital – will be large-scale, expensive affairs requiring the buying power and governance of city-scale authorities and the implementation resources of large companies.

But more importantly, neither small-scale nor large-scale solutions alone will meet all of our needs. Many areas in cities – usually those that are the least wealthy – haven’t yet been provided with wi-fi or broadband connectivity by either.  

(Cars in Frederiksberg, Copenhagen wishing to join a main road must give way to cyclists and pedestrians)

(A well designed urban interface between people and infrastructure. Cars in Frederiksberg, Copenhagen wishing to join a main road must give way to cyclists and pedestrians passing along it)

We need to find the middle ground between the motivations, abilities and cultures of large companies and formal institutions on one hand; and those of agile, local innovators and community initiatives on the other. The pilot project to provide broadband connectivity and help using the internet to Castle Vale in Birmingham is a good example of finding that balance.

And I am optimistic that we can find it more often. Whilst Anthony is rightly critical of approaches to designing and building city systems that are led by technology, or that overlook the down-to-earth and sometimes downright “messy” needs of people and communities for favour of unrealistic technocratic and corporate utopias; the reality of the people I know that are employed by large corporations on Smart City projects is that they are acutely aware of the limitations as well as the value of technology, and are passionately committed to the human value of their work. That passion is often reflected in their volunteered commitment to “civic hacking“, open data initiatives, the teaching of technology in schools and other activities that help the communities in which they live to benefit from technology.

But rather than relying on individual passion and integrity, how do we encourage and ensure that large-scale investments in city infrastructures and technology enable small-scale innovation, rather than stifle it?

Smart urbanism and massive/small innovation

I’ve taken enormous inspiration in recent years from the architect Kelvin Campbell whose “Massive / Small” concept and theory of “Smart Urbanism” are based on the belief that successful cities emerge from physical environments that encourage “massive” amounts of “small”-scale innovation – the “lively, diversified city, capable of continual, close- grained improvement and change” that Jane Jacobs described in “The Death and Life of Great American Cities“.

We’ll have to apply similar principles in order for large-scale city technology infrastructures to support localised innovation and value-creation. But what are the practical steps that we can take to put those principles into practise?

Step 1: Make institutions accessible

There’s a very basic behaviour that most of us are quite bad at – listening. In particular, if the institutions of Smart Cities are to successfully create the environment in which massive amounts of small-scale innovation can emerge, then they must listen to and understand what local activists, communities, social innovators and entrepreneurs want and need.

Many large organisations – whether they are local authorities or private sector companies – are poor at listening to smaller organisations. Their decision-makers are very busy; and communications, engagement and purchasing occur through formally defined processes with legal, financial and confidentiality clauses that can be difficult for small or informal organisations to comply with. The more that we address these barriers, the more that our cities will stimulate and support small-scale innovation. One way to do so is through innovations in procurement; another is through the creation of effective engagements programmes, such as the Birmingham Community Healthcare Trust’s “Healthy Villages” project which is listening to communities expressing their need for support for health and wellbeing. This is why IBM started our “Smarter Cities Challenge” which has engaged hundreds of IBM’s Executives and technology experts in addressing the opportunities and challenges of city communites; and in so doing immersed them in very varied urban cultures, economies, and issues.

But listening is also a personal and cultural attitude. For example, in contrast to the current enthusiasm for cities to make as much data as possible available as “open data”, the Knight Foundation counsel a process of engagement and understanding between institutions and communities, in order to identify the specific information and resources that can be most usefully made available by city institutions to individual citizens, businesses and social organisations.

(Delegates at Gov Camp 2013 at IBM’s Southbank office, London. Gov Camp is an annual conference which brings together anyone interested in the use of digital technology in public services. Photo by W N Bishop)

In IBM, we’ve realised that it’s important to us to engage with, listen to and support small-scale innovation in its many forms when helping our customers and partners pursue Smarter City initiatives; from working with social enterprises, to supporting technology start-ups through our Global Entrepreneur Programme, to engaging with the open data and civic hacking movements.

More widely, it is often talented, individual leaders who overcome the barriers to engagement and collaboration between city institutions and localised innovation. In “Resilience: why things bounce back“, Andrew Zolli describes many examples of initiatives that have successfully created meaningful change. A common feature is the presence of an individual who shows what Zolli calls”translational leadership“: the ability to engage with both small-scale, informal innovation in communities and large-scale, formal institutions with resources.

Step 2: Make infrastructure and technology accessible

Whilst we have a long way to go to address the digital divide, Governments around the world recognise the importance of access to digital technology and connectivity; and many are taking steps to address it, such as Australia’s national deployment of broadband internet connectivity and the UK’s Urban Broadband Fund. However, in most cases, those programmes are not sufficient to provide coverage everywhere.

Some businesses and social initiatives are seeking to address this shortfall. CommunityUK, for example, are developing sustainable business models for providing affordable, accessible connectivity, and assistance using it, and are behind the Castle Vale project in Birmingham. And some local authorities, such as Sunderland and Birmingham, have attempted to provide complete coverage for their citizens – although just how hard it is to achieve that whilst avoiding anti-competition issues is illustrated by Birmingham’s subsequent legal challenges.

We should also tap into the enormous sums spent on the physical regeneration of cities and development of property in them. As I first described in June last year, while cities everywhere are seeking funds for Smarter City initiatives, and often relying on central government or research grants to do so, billions of Pounds, Euros, and Dollars are being spent on relatively conventional property development and infrastructure projects that don’t contribute to cities’ technology infrastructures or “Smart” objectives.

Local authorities could use planning regulations to steer some of that investment into providing Smart infrastructure, basic connectivity, and access to information from city infrastructures to citizens, communities and businesses. Last year, I developed a set of “Smart City Design Principles” on behalf a city Council considering such an approach, including:

Principle 4: New or renovated buildings should be built to contain sufficient space for current and anticipated future needs for technology infrastructure such as broadband cables; and of materials and structures that do not impede wireless networks. Spaces for the support of fixed cabling and other infrastructures should be easily accessible in order to facilitate future changes in use.

Principle 6: Any development should ensure wired and wireless connectivity is available throughout it, to the highest standards of current bandwidth, and with the capacity to expand to any foreseeable growth in that standard.

(The Birmingham-based Droplet smartphone payment service, now also operating in London, is a Smart City start-up that has won backing from Finance Birmingham, a venture capital company owned by Birmingham City Council)

Step 3: Support collaborative innovation

Small-scale, local innovations will always take place, and many of them will be successful; but they are more likely to have significant, lasting, widespread impact when they are supported by city institutions with resources.

That support might vary from introducing local technology entrepreneurs to mentors and investors through the networks of contacts of city leaders and their business partners; through to practical assistance for social enterprises, helping them to put in place very basic but costly administration processes to support their operations.

City institutions can also help local innovations to thrive simply by becoming their customers. If Councils, Universities and major local employers buy services from innovative local providers – whether they be local food initiatives such as the Northfield Ecocentre or high-tech innovations such as Birmingham’s Droplet smartphone payment service – then they provide direct support to the success of those businesses.

In Birmingham,for example, Finance Birmingham (a Council-owned venture capital company) and the Entrepreneurs for the Future (e4F) scheme provide real, material support to the city’s innovative companies; whilst Bristol’s Mayor George Ferguson and Lambeth’s Council both support their local currencies by allowing salaries to be paid in them.

It becomes more obvious  why stakeholders in a city might become involved in collaborative innovation when they have the opportunity to co-create a clear set of shared priorities. Those priorities can be compared to the objectives of innovative proposals seeking support, whether from social initiatives or businesses; used as the basis of procurement criteria for goods, services and infrastructure; set as the objectives for civic hacking and other grass-roots creative events; or even used as the criteria for funding programmes for new city services, such as the “Future Streets Incubator” that will shortly be launched in London as a result of the Mayor of London’s Roads Task Force.

In this context, businesses are not just suppliers of products and services, but also local institutions with significant supply chains, carbon and economic footprints, purchasing power and a huge number of local employees. There are many ways such organisations can play a role in supporting the development of an open, Smarter, more sustainable city.

The following “Smart City Design Principles” promote collaborative innovation in cities by encouraging support from development and regeneration initiatives:

Principle 12: Consultations on plans for new developments should fully exploit the capabilities of social media, virtual worlds and other technologies to ensure that communities affected by them are given the widest, most immersive opportunity possible to contribute to their design.

Principle 13: Management companies, local authorities and developers should have a genuinely engaging presence in social media so that they are approachable informally.

Principle 14: Local authorities should support awareness and enablement programmes for social media and related technologies, particularly “grass roots” initiatives within local communities.

Step 4: Promote open systems

A common principle between the open data movement; civic hacking; localism; the open government movement; and those who support “bottom-up” innovations in Smart Cities is that public systems and infrastructure – in cities and elsewhere – should be “open”. That might mean open and transparent in their operation; accessible to all; or providing open data and API interfaces to their technology systems so that citizens, communities and businesses can adapt them to their own needs. Even better, it might mean all of those things.

The “Dublinked” information sharing partnership, in which Dublin City Council, three surrounding County Councils 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.

(I was delighted this year to join Innovation Birmingham as a non-Executive Director in addition to my role with IBM. Technology incubators – particularly those, like Innovation Birmingham and Sunderland Software City, that are located in city centres – are playing an increasingly important role in making the support of city institutions and major technology corporations available to local communities of entrepreneurs and technology activists)

In a digital future, the more that city infrastructures and services provide open data interfaces and APIs, the more that citizens, communities and businesses will be able to adapt the city to their own needs. This is the modern equivalent of the grid system that Jane Jacobs promoted as the most adaptable urban form. A grid structure is the basis of Edinburgh’s “New Town”, often regarded as a masterpiece of urban planning that has proved adaptable and successful through the economic and social changes of the past 250 years, and is also the starting point for Kelvin Campbell’s work.

But open data interfaces and APIs will only be widely exploitable if they conform to common standards. In order to make it possible 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.

Some open source technologies will also be pivotal; open source (software whose source code is freely available to anyone, and which is usually written by unpaid volunteers) is not the same as open standards (independently governed conventions that define the way that technology from any provider behaves). But some open source technologies are so widely used to operate the internet infrastructures that we have become accustomed to – the “LAMP” stack of operating system, web server, database and web progamming language, for example – that they are “de facto” standards that convey some of the benefits of wide usability and interoperability of open standards. For example, IBM recently donated MQTT, a protocol for connecting information between small devices such as sensors and actuators in Smart City systems to the open source community, and it is becoming increasingly widely adopted as a consequence.

Once again, local authorities can contribute to the adoption of open standards through planning frameworks and procurement practises:

Principle 7: Any new development should demonstrate that all reasonable steps have been taken to ensure that information from its technology systems can be made openly available without additional expenditure. Whether or not information is actually available will be dependent on commercial and legal agreement, but it should not be additionally subject to unreasonable expenditure. And where there is no compelling commercial or legal reason to keep data closed, it should actually be made open.

Principle 8: The information systems of any new development should conform to the best available current standards for interoperability between IT systems in general; and for interoperability in the built environment, physical infrastructures and Smarter Cities specifically.

(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)

Finally, design skills will be crucial both to creating interfaces to city infrastructures that are truly useful and that encourage innovation; and in creating innovations that exploit them that in turn are useful to citizens.

At the technical level, there is already a rich corpus of best practise in the design of interfaces to technology systems and in the architecture of technology infrastructures that provide them.

But the creativity that imagines new ways to use these capabilities in business and in community initiatives will also be crucial. The new academic discipline of “Service Science” describes how designers can use technology to create new value in local contexts; and treats services such as open data and APIs as “affordances” – capabilities of infrastructure that can be adapted to the needs of an individual. In the creative industries, “design thinkers” apply their imagination and skills to similar subjects.

Step 5: Provide common services

At the 3rd EU Summit on Future Internet, Juanjo Hierro, Chief Architect for the FI-WARE “future internet platform” project, identified the specific tools that local innovators need in order to exploit city information infrastructures. They include real-time access to information from physical city infrastructures; tools for analysing “big data“; and access to technologies to ensure privacy and trust.

The Dublinked information sharing partnership is already putting some of these ideas into practise. It provides assistance to innovators in using, analysing and visualising data; and now makes available realtime data showing the location and movements of buses in the city. The partnership is based on specific governance processes that protect data privacy and manage the risk associated with sharing data.

As we continue to engage with communities of innovators in cities, we will discover further requirements of this sort. Imperial College’s “Digital Cities Exchange” research programme is investigating the specific digital services that could be provided as enabling infrastructure to support innovation and economic growth in cities, for example. And the British Standards Institute’s Smart Cities programme includes work on standards that will enable small businesses to benefit from Smart City infrastructure.

Local authorities can adapt planning frameworks to encourage the provision of these services:

Principle 9: New developments should demonstrate that they have considered the commercial viability of providing the digital civic infrastructure services recommended by credible research sources.

Step 6: Establish governance of the information economy

From the exponential growth in digital information we’ve seen in recent years, to the emergence of digital currencies such as Bitcoin, to the disruption of traditional industries by digital technology; it’s clear that we are experiencing an “information revolution” just as significant as the “industrial revolution” of the 18th and 19th centuries. We often refer to the resulting changes to business and society as the development of an “information economy“.

But can we speak in confidence of an information economy when the basis of establishing the ownership and value of its fundamental resource – digital information – is not properly established?

(Our gestures when using smartphones may be directed towards the phones, or the people we are communicating with through them; but how are they interpreted by the people around us? “Oh, yeah? Well, if you point your smartphone at me, I’m gonna point my smartphone at you!” by Ed Yourdon)

A great deal of law and regulation already applies to information, of course – such as the European Union’s data privacy legislation. But practise in this area is far less established than the laws governing the ownership of physical and intellectual property and the behaviour of the financial system that underlie the rest of the economy. This is evident in the repeated controversies concerning the use of personal information by social media businesses, consumer loyalty schemes, healthcare providers and telecommunications companies.

The privacy, security and ownership of information, especially personal information, are perhaps the greatest challenges of the digital age. But that is also a reflection of their importance to all aspects of our lives. Jane Jacobs’ description of urban systems in terms of human and community behaviour was based on those concepts, and is still regarded as the basis of our understanding of cities. New technologies for creating and using information are developing so rapidly that it is not only laws specifically concerning them that are failing to keep up with progress; laws concerning the other aspects of city systems that technology is transforming are failing to adapt quickly enough too.

A start might be to adapt city planning regulations to reflect and enforce the importance of the personal information that will be increasingly accessed, created and manipulated by city systems:

Principle 21: Any information system in a city development should provide a clear policy for the use of personal information. Any use of that information should be with the consent of the individual.

The triumph of the commons

I wrote last week that Smarter Cities should be a “middle-out” economic investment – in other words, an investment in common interests – and compared them to the Economist’s report on 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.

One of the major drivers for the current level of interest in Smarter Cities and technology is the need for us to adapt to a more sustainable way of living in the face of rising global populations and finite resources. At large scale, the resources of the world are common; and at local scale, the resources of cities are common too.

For four decades, it has been widely assumed that those with access to common resources will exploit them for short term gain at the expense of long term sustainability – this is the “tragedy of the commons” first described by the economist Garrett Hardin. But in 2009, Elinor Ostrum won the Nobel Prize for economics by demonstrating that the “tragedy” could be avoidedand that a community could manage and use shared resources in a way that was sustainable in the long-term.

Ostrum’s conceptual framework for managing common resources successfully is a set of criteria for designing “institutions” that consist of people, processes, resources and behaviours. These need not necessarily be formal political or commercial institutions, they can also be social structures. It is interesting to note that some of those criteria – for example, the need for mechanisms of conflict resolution that are local, public, and accessible to all the members of a community – are reflected in the development over the last decade of effective business models for carrying out peer-to-peer exchanges using social media, supported by technologies such as reputation systems.

Of course, there are many people and communities who have championed and practised the common ownership of resources regardless of the supposed “tragedy” – not least those involved in the Transition movement founded by Rob Hopkins, and which has developed a rich understanding of how to successfully change communities for the better using good ideas; or the translational leaders described by Andrew Zolli. But Elinor Ostrum’s ideas are particularly interesting because they could help us to link the design, engineering and governance of Smarter Cities to the achievement of sustainable economic and social objectives based on the behaviour of citizens, communities and businesses.

Combined with an understanding of the stories of people who have improved their lives and communities using technology, I hope that the work of Kelvin Campbell, Rob Hopkins, Andrew Zolli, Elinor Ostrum and many others can inspire technologists, urban designers, architects and city leaders to develop future cities that fully exploit modern technology to be efficient, resilient and sustainable; but that are also the best places to live and work that we can imagine, or that we would hope for for our children.

Cities created by people like that really would be Smart.

Creating successful Smart Cities in 2014 will be an economic, financial and political challenge, not an engineering accomplishment

Why insurers, pension funds and politics will be more important to Smart Cities in 2014 than “Living Labs” or technology.

(The 2nd Futurama exhibition at the 1964 New York World’s Fair. In 50 years’ time, how will we perceive today’s visions of Smart Cities? Photo by James Vaughan)

I hope that 2014 will be the year in which we see widespread and large-scale investments in future city technology infrastructures that enable sustainable, equitably distributed economic and social growth. The truth is that we are still in the very early stages of that process.

In 2012 I spoke with a Director at a financial consultancy who’d performed a survey of European Smart City initiatives. She confirmed something that I suspected at the time: that the great majority of Smart City initiatives up to that point in the mature markets of Europe and North America had been financed by research funding, rather than on a commercial basis.

Four trends characterised the subsequent development of Smart Cities throughout 2013. Firstly, emerging markets continued to invest in supporting the rapid urbanisation they are experiencing; and businesses, Universities and national governments in developed nations recognised the commercial opportunity for them to supply that market with “Smart” solutions.

Secondly, it remains the case that the path to growth for undeveloped nations is still extremely slow and complex; so whilst there is private sector and national government interest in investing in those nations – IBM’s new Research centre in Nairobi being an example – many “smart” initiatives are carried out at small scale by local innovators, the third sector or development agencies.

In Europe and North America, a third trend was the continuing announcement of investments by the European Union and national governments in the applied research and innovation agenda in cities – such as the EU’s Horizon 2020 programme, for example.

Perhaps most importantly, though, the final trend was for cities in Europe and North America to start to make investments in the underlying technology platforms for Smart Cities 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 improved 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.

This trend to create business cases for investment from normal operating budgets or infrastructure investment programmes is important not only because it shows that these cities are developing the business models to support investment in “Smart” solutions locally, where the finances associated with rapid economic growth and urbanisation are not present; but also because (at the risk of simplifying a challenging and complex issue) some of those business models might serve as a template for self-sustainable adoption in less developed nations.

(Downtown Cambridge, Ontario. Photo by Justin Scott Campbell)

Whilst the idea of a “Smart City” has been capturing the imagination for several years now, the reality is that many cities are still deciding what that idea might mean for them. For example, London’s “Smart London Board” published it’s Smart London plan in December, following Birmingham’s Smart City Commission report earlier in the year. And most cities who are considering such plans now or who have recently published them are still determining how to put the finance in place to carry them out.

Will “Living Labs” be the death of Smart Cities?

A concept that I see in many such plans that is intended to assist in securing finance, but that I think risks being a distraction from addressing it properly, is the “Living Lab”. 

Living labs emerged as a set of best practises for carrying out applied research into consumer or citizen services with a focus on collaborative, user-centred design and co-creation. Many cities are now seeking to win funding for their Smarter Cities initiatives by offering themselves as “Living Labs” in which consortia constructing proposals for applied research funding can carry out their activities.

The issue is not that Living Lab’s aren’t a good idea – on the contrary, they are undoubtably a very good set of prescriptions for carrying out such research and design successfully. The problem is that there are now so many cities intending to follow this approach that it no longer makes them stand out as particularly effective environments in which to perform research.

Research programmes will continue to fund the first deployments of new Smart City ideas and technology; but competition for those funds will be fierce. Cities, universities and companies that bid for them will invest many months – often more than a year – in developing their proposals; and in competitions, most entrants do not win.

The real need in cities is for the development and regeneration of infrastructure. There are certainly research topics concerning infrastructure that will attract funding from national and international government bodies; but those funds will not support the rollout of citywide infrastructure to every city in every country.

(Birmingham's new city-centre tram)

(Birmingham’s new city-centre tram is an infrastructure investment that will contribute to the same objectives as the city’s Smart City vision.)

The big questions for European and American cities in 2014 are then:

Will they continue to invest resources competing for applied research and innovation funding, limiting the speed at which the widespread deployment of new infrastructure will take place?

Or will they focus on developing independently viable business cases for investment in the infrastructure to support their
Smarter City visions?

There’s a real need for clarity about these issues. Whilst the enormous level of innovation funding being made into smart buildings, smart transport and smart cities by the EU Horizon 2020 programme and national equivalents such as the UK’s Technology Strategy Board will stimulate the field and fund important demonstration projects that deliver real value, these bodies will not pay for all of our cities to become Smarter.

The same is true for the research investments made by commercial organisations including technology companies such as IBM. Commercial research investments fund the first attempts to apply technology to solve problems or achieve objectives in new ways; those that succeed are subsequently deployed elsewhere on a commercial basis.

The risk is that in seeking investment from research programmes, we become distracted from addressing the real challenge: how to make the case for private sector investment in new technology infrastructures based on the economic and social improvements they will enable; or on the direct financial returns that they will generateIn the UK, for example, a specialist body in Government, Infrastructure UK, coordinates private sector funding for public infrastructure. And if we can persuade property developers of the value of “Smart” technologies, then cities could benefit from the enormous investments made in property every year that currently don’t result in the deployment of technology – the British Property Federation, for example, estimate that £14 billion is invested in the development of new space in the UK each year.

(This pedestrian roundabout in Lujiazui, China, constructed over a busy road junction, is a large-scale city infrastructure that balances the need to support traffic flows through the city with the importance that Jane Jacobs first described of allowing people to walk freely about the areas where they live and work. Photo by ChrisUK)

This is an opportunity we should treat with urgency. Whilst public sector finances are under immense pressure, the vast wealth held in private investment funds is seeking new opportunities following the poor returns that many traditional forms of investment have yielded over the last few years. There is a lot of work to do between the stakeholders in cities, government and finance before these investment sources can be exploited by Smart Cities – not least in agreeing reasonable expectations for how the risks and returns will be measured and shared. But I personally believe that until we do so, we will not be able to properly finance the development of our next generation of cities.

As Jane Jacobs wrote in her seminal 1961 work “The Death and Life of Great American Cities“:

“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.”

Overcoming these challenges won’t be easy, and doing so will require each of the various stakeholder organisations facing them to take bold steps this year.

Local Government

Whilst their finances throughout the developed world have been under severe pressure for a long time now, local government bodies are still responsible for procuring a significant volume of goods and services. Smart Cities will only become a reality when local authority visions for the future are reflected in procurement practises and scoring criteria for contracts issued today. It’s only very recently that procurements for contracts to build, update and manage physical infrastructures such as roads and pavements have been based on outcomes such as minimising congestion or increasing the overall quality of performance throughout the lifetime of the asset within the contract value, rather than on securing the maximum volume of concrete (or number of traffic wardens).

Outcomes-based procurements are challenging to be sure, both for the purchaser and the provider; especially so when they are for such new solutions. But service and infrastructure providers will only be motivated to propose and deliver innovative, smart solutions when they’re rewarded for doing so.

Local authorities can also exploit indirect mechanisms such as planning and development frameworks. I worked last year with one authority which asked how its planning framework should evolve in order to promote the development of a “Smart City”, and published a set of 23 “Design principles for a Smarter City” as a result. They require that investments in property also deliver technology infrastructures such as wi-fi, broadband, open-data, and multi-channel self-service access.

(An analysis based on GPS data from mobile phones of end-to-end journeys undertaken by users of Abidjan’s bus services. By comparing existing bus routes to end-to-end journey requirements, the analysis identified four new bus routes and led to changes in many others. As a result, 22 routes now show increased ridership, and city-wide journey times have decreased by 10%. The techniques and technologies behind the project build on those developed for projects in Dubuque, Istanbul and Dublin.)

Private Sector

The technology companies associated with Smart Cities have sometimes been criticised for focussing too much on the technology that can be applied to city infrastructures, and not enough on the improvements to people’s work and lives that technology can enable, or on the business cases for investing in it.

To make the business case clearer, 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 I’ll be contributing along with representatives from many of the other companies that provide technology and infrastructure for Smart Cities to the TSB’s Future Cities Catapult’s finance initiative.

But we also need to respect the principles of Living Labs and the experience of urban designers – not least the writing of Jane Jacobs – which reflect that our starting point for thinking about Smart Cities should be the everyday lives and experiences of individual citizens in their family lives; at work; and moving through cities. In one sense, this is business as usual in the technology industry – “user-centered design“, “use cases” and “user stories” have been at the heart of software development since the 1980s. So one of our challenges is simply to communicate that approach more clearly within our descriptions of Smart Cities. This is a topic I’ve written about in many articles on this blog that you can find described in “7 Steps to a Smarter City“; and that I tried to address in IBM’s new Smarter Cities video.

The other challenge is for technology companies to become more familiar and expert in the disciplines associated with good quality urban design – town planning, architecture, social science and the psychology of human behaviour, for example. This is one of the reasons why IBM started the “Smarter Cities Challenge” programme through which we have donated our technology expertise to 100 cities worldwide to help them address the opportunities and challenges they face; and in so doing become more familiar with their very varied cultures, economies, issues and capabilities. It’s also why I joined the Academy of Urbanism, along with representatives of several other technology companies.

We also need to embrace the “Smart Urbanism” thinking exemplified by Kelvin Campbell. Kelvin’s “Massive / Small” approach is intended to design large-scale urban infrastructures that encourage and support “massive” amounts of “small-scale” innovation. I think that’s an extremely powerful idea that we should embrace in Smarter Cities; and that translates directly to the practise of providing open-standard, public interfaces to city technology infrastructures – open data feeds and APIs (“Application Programming Interfaces”), for example – that not only reduce the risk that city systems become “locked-in” to any proprietary provider; but that also open up the power of large scale technology systems and “big data” sources so that local businesses, innovators and communities are able to adapt public infrastructures to their own needs. I think of these interfaces as creating an “innovation boundary” between a city’s infrastructure and its stakeholders.

(George Ferguson, Mayor of Bristol, one of the few cities in the UK with an elected Mayor with significant authority and responsibility. His salary is paid in the city’s local currency, the Bristol Pound, rather than in the national currency. His red trousers are famous. Photo by PaulNUK)

Central Government

In most countries in the developed world – i.e. those which are not being driven by rapid urbanisation today because they urbanised during the Industrial Revolution – the majority of Smart City initiatives that have momentum are driven by Mayors convening city stakeholders and institutions to co-create, finance and deliver those initiatives. Correspondingly, in countries without strong mayoral systems – such as the UK – progress can be slower. Worryingly, Centre for Cities’ recent Outlook 2014 report pointed out that only 17% of funding for UK cities comes from locally administered taxation, as opposed to the OECD average of 55%.

To risk stating the obvious, every city is different, and different in very many important ways, from its geographical situation to its linkage to national and international transport infrastructure; from its economic and business capabilities to the skills and wealth of its population; from its social challenges and degree of social mobility to its culture and heritage. Successful Smart City initiatives are specific, not generic; and the greater degree of autonomy that cities are allowed in setting strategy and securing financing, the greater their capability to pursue those initiatives. Programmes such as “City Deals” and the recent reforms resulting from Lord Heseltine’s “No Stone Unturned” report are examples of progress towards greater autonomy for the UK’s cities, but they are not enough.

Central government will always have a significant role in funding the infrastructures that cities rely on, of course; whether that’s national infrastructures that connect cities (such as the planned “HS2” high-speed train network in the UK, or Australia’s national deployment of broadband internet connectivity), or specific infrastructures within cities, such as Birmingham’s new city-centre tram. And so just as local governments should consider how they can use procurement practises and planning frameworks to encourage investments in property and infrastructure that deliver “Smart” solutions, so central government should consider how the funding programmes that it administers can contribute to cities’ “Smart” objectives.

Financial Services

If the challenge is to unlock investment in new assets and outcomes, then we should turn to banks, insurers and investors to help us shape the new financial vehicles that we will require to do so. 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. These tools are the first step towards creating investment and insurance models for city infrastructures that will be exposed to new levels of risk; that will need to exhibit new levels of resilience; and that in turn may require Smart solutions to achieve them.

(Luciana Berger, Shadow Minister for Energy and Climate Change pictured talking to Northfield, Birmingham resident Abraham Weekes and James McKay, Birmingham City Council’s Cabinet Member for a Green, Safe and Smart city. Abraham lives in the house pictured, which has been fitted with exterior house covering, solar panels and energy efficient windows through the Birmingham Energy Savers scheme. Photo by Birmingham City Council)

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. And more locally, I’m proud to note that my home city of Birmingham is a pioneer in this area through the Birmingham Energy Savers project, financed through a mixture of prudential borrowing and private sector investment.

It has taken us too long to get to this point, but I’m encouraged that several initiatives are now convening discussions between the traditionally understood stakeholders in Smart Cities – local authorities, technology companies, universities and built-environment companies – and the financial sector. For example, in addition to the Future Cities Catapult’s financing programme, on March 13th, I’ll be speaking at an event organised by the Lord Mayor of the City of London to encourage the City’s financial institutions and UK city authorities to undertake a similar collaboration to develop new financing models for future city infrastructures.

Are Smarter Cities a “middle out” economic intervention?

In his 2011 Presidential Campaign speech Barack Obama promised an economic strategy based on “middle-out” economics – the philosophy that equitable, sustainable growth is driven by the spending power of middle class consumers, as an alternative to “trickle-down” economics – the philosophy that growth is best created when very rich “wealth-creators” are free to become as successful as possible.

As this analysis in “The Atlantic” shows, job creation does depend on the investments of the wealthiest; but also on the spending power of the masses; and on a lot of very hard work making sure that a reasonable portion of the profits created by both of those activities are used to invest in making skills, education and opportunity available to all. The Economist magazine made the same point in a recent article by reminding us of the enormous investments made into public institutions 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; though with only partial success.

(The discussion group at the #SmartHack event in Birmingham)

(The discussion group at the #SmartHack event in Birmingham, described in “Tea, trust and hacking – how Birmingham is getting Smarter“, photographed by Sebastian Lenton)

 Those ideas are reflected in what it takes to craft an investment in a technology-enabled Smart City initiative that successfully creates social and economic improvements in a city.

Whilst a huge number of effective “Smart” ideas will be created “bottom-up” by innovators and social entrepreneurs intimately familiar with specific local communities and context, those ideas will not succeed as well or rapidly as we need them to without significant investment in new infrastructures – such as wi-fi, broadband and realtime open data – that are deployed everywhere, not just in the most economically active areas of cities that reward commercial investment most quickly. Accessibility to these infrastructures creates the “innovation boundary” between city institutions and infrastructures, and local innovators and communities.

This is not an abstract concept; it is an idea that some cities are making very real today. For example, the “Dublinked” information-sharing partnership between Dublin County Council, three surrounding County Councils and the National University of Ireland now makes available 3,000 city datasets as “open data” – including a realtime feed showing the location of buses in the city. That’s a resource that local innovators can use to create their own new applications and services. Similarly, in Birmingham the “West Midlands Open Data Forum” has emerged as a community in which city local businesses and innovators can negotiate access to data held by city institutions and service providers.

(David Willets, MP, Minister for Universities and Science, launches the UK Government’s Smart Cities Forum)

At launch of the UK Government’s “Smart Cities Forum” last year, I remarked that we were not inviting key stakeholders to the Smarter Cities debate – specifically, banks, investors, insurers and entrepreneurs. Some of the initiatives I’ve described in this article are starting to address that omission; and to recognise that the most significant challenges are to do with finance, politics, social issues and economics, not engineering and technology.

And those are challenges that all of us should focus on. No-one is going to pay for our cities to become Smarter, more successful, more sustainable and fairer: we will have to figure out how to pay for  those things ourselves.

The sharing economy and the future of movement in smart, human-scale cities

("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.)

One of the defining tensions throughout the development of cities has been between our desire for quality of life and our need to move ourselves and the things we depend on around.

The former requires space, peace, and safety in which to work, exercise, relax and socialise; the latter requires transport systems which, since the use of horsedrawn transport in medieval cities, have taken up space, created noise and pollution – and are often dangerous. Enrique Penalosa, whose mayorship of Bogota was defined by restricting the use of car transport, often refers to the tens of thousands of children killed by cars on the world’s roads every year and his astonishment that we accept this as the cost of convenient transport.

This tension will intensify rapidly in coming years. Not only are our cities growing larger and denser, but according to the analysis of city systems by Professors Geoffrey West and Louis Bettencourt of the Los Alamos National Laboratory and Professor Ian Robertson’s study of human behaviour, our interactions within them are speeding up and intensifying.

Arguably, over the last 50 years we have designed cities around large-scale buildings and transport structures that have supported – and encouraged – growth in transport and the size of urban economies and populations at the expense of some aspects of quality of life.

Whilst standards of living across the world have improved dramatically in recent decades, inequality has increased to an even greater extent; and many urbanists would agree that the character of some urban environments contributes significantly to that inequality. In response, the recent work of architects such as Jan Gehl and Kelvin Campbell, building on ideas first described by Jane Jacobs in the 1960s, has led to the development of the “human scale cities” movement with the mantra “first life, then space, then buildings”.

The challenge at the heart of this debate, though, is that the more successful we are in enabling human-scale value creation; the more demand we create for transport and movement. And unless we dramatically improve the impact of the systems that support that demand, the cities of the future could be worse, not better, places for us to live and work in.

Human scale technology creates complexity in transport

As digital technology pervades every aspect of our lives, whether in large-scale infrastructures such as road-use charging systems or through the widespread adoption of small-scale consumer technology such as smartphones and social media, we cannot afford to carry out the design of future cities without considering it; nor can we risk deploying it without concern for its affect on the quality of urban life.

Digital technologies do not just make it easier for us to communicate and share information wherever we are: those interactions create new opportunities to meet in person and to exchange goods and services; and so they create new requirements for transport. And as technologies such as 3D printing, open-source manufacturing and small-scale energy generation make it possible to carry out traditionally industrial activities at much smaller scales, some existing bulk movement patterns will be replaced by thousands of smaller, peer-to-peer interactions created by transactions in online marketplaces. We can already see the effects of this trend in the vast growth of traffic delivering goods that are purchased or exchanged online.

Estimates of the size of this “sharing economy“, defined by Wikipedia as “economic and social systems that enable shared access to goods, services, data and talent“, vary widely, but are certainly significant. The UK Economist magazine reports one estimate that it is a $26 billion economy already, whilst 2 Degrees Network report that just one aspect of it – small-scale energy generation – could save UK businesses £33 billion annually by 2030Air B’n’B – a peer-to-peer accommodation service – reported recently that they had contributed $632 million in value to New York’s economy in 2012 by enabling nearly 5,000 residents to earn an average of $7,500 by renting their spare rooms to travellers; and as a consequence of those travellers additionally spending an average of $880 in the city during their stay. The emergence in general of the internet as a platform for enabling sales, marketing and logistics for small and micro-businesses is partly responsible for a significant rise in self-employment and “micro-entrepreneurial” enterprises over the last few years, which now account for 14% of the US economy.

Digital technology will create not just great growth in our desire to travel and move things, but great complexity in the way we will do so. Today’s transport technologies are not only too inefficient to scale to our future needs; they’re not sophisticated and flexible enough to cope with the complexity and variety of demand.

Many of the future components of transport systems have already been envisaged, and deployed in early schemes: elevated cycleways; conveyor belts for freight; self-driving vehicles and convoys; and underground pneumatic networks for recycling. And to some extent, we have visualised the cities that they will create: Professor Miles Tight, for example, has considered the future living scenarios that might emerge from various evolutions of transport policy and human behavioural choices in the Visions 2030 project.

The task for the Smarter Cities movement should be to extend this thinking to envision the future of cities that are also shaped by emerging trends in digital technology and their effect on the wider economy and social systems. We won’t do that successfully by considering these subjects separately or in the abstract; we need to envision how they will collectively enable us to live and work from the smallest domestic scale to the largest city system.

(Packages from Amazon delivered to Google’s San Francisco office. Photo by moppet65535)

What we’ll do in the home of the future

Rather than purchasing and owning goods such as kitchen utensils, hobby and craft items, toys and simple house and garden equipment, we will create them on-demand using small-scale and open-source manufacturing technology and smart-materials. It will even be possible – though not all of us will choose to do so – to manufacture some food in this way.

Conversely, there will still be demand for handmade artisan products including clothing, gifts, jewellery, home decorations, furniture, and food. Many of us will earn a living producing these goods in the home while selling and marketing them locally or through online channels.

So we will leave our home of the future less often to visit shops; but will need not just better transport services to deliver the goods we purchase online to our doorsteps, but also a new utility to deliver the raw materials from which we will manufacture them ourselves; and new transport services to collect the products of our home industries and to deliver supplies to them.

We will produce an increasing amount of energy at home; whether from existing technologies such as solar panels or combined heat and power (CHP) systems; or through new techniques such as bio-energy. The relationships between households, businesses, utilities and transportation will change as we become producers of energy and consumers of waste material.

And whilst remote working means we will continue to be less likely to travel to and from the same office each day, the increasing pace of economic activity means that we will be more likely to need to travel to many new destinations as it becomes necessary to meet face to face with the great variety of customers, suppliers, co-workers and business partners with whom online technologies connect us.

What we’ll do in the neighbourhoods of the future

As we increasingly work remotely from within our homes or by travelling far away from them, less of us work in jobs and for businesses that are physically located within the communities in which we live; and some of the economic ties that have bound those communities in the past have weakened. But most of us still feel strong ties to the places we live in; whether they are historical, created by the character of our homes or their surrounding environment, or by the culture and people around us. These ties create a shared incentive to invest in our community.

Perhaps the greatest potential of social media that we’re only begin to exploit is its power to create more vibrant, sustainable and resilient local communities through the “sharing economy”.

The motivations and ethics of organisations participating in the sharing economy vary widely – some are aggressively commercial, whilst others are “social enterprises” with a commitment to reinvest profits in social growth. The social enterprise sector, comprised of mutuals, co-operatives, employee-owned businesses and enterprises who submit to “triple bottom line” accounting of financial, social and environmental capital, is about 15% of the value of most economies, and has been growing and creating jobs faster than traditional business since the 2008 crash. There is enormous potential for cities to achieve their “Smarter” objectives for sustainable, equitably distributed economic growth through contributions from social enterprises using technology to implement sharing economy business models within their region.

Sharing economy models which enable transactions between participants within a walkable or cyclable area can be a particularly efficient mechanism for collaboration, as the related transport can be carried out using human power. Joan Clos, Exective Director of UN-Habitat, has asserted that cities will only become sustainable when they are built at a sufficient population density that a majority of interactions within them can be carried out in this way (as reported informally by Tim Stonor from Dr. Clos’s remarks at the “Urban Planning for City Leaders” conference at the Crystal, London in 2012).

The Community Lovers’ Guide has published stories from across Europe of people who have collaborated to make the places that they share better, often using technology; and schemes such as Casserole Club and Land Share are linking the supply and demand of land, food, gardening and cooking skills within local communities, helping neighbours to help each other. At local, national and international levels, sharing economy ideas are creating previously unrealised social and economic value, including access to employment opportunities that replace some of those traditional professions that are shrinking as the technology used by industrial business changes.

Revenue-earning businesses are a necessary component of vibrant communities, at a local neighbourhood scale as well as city-wide. At the Academy of Urbanism Congress in Bradford this year, Michael Ward, Chair of the Centre for Local Economic Strategies, asserted that “the key task facing civic leaders in the 21st Century is this: how, in a period of profound and continuing economic changes, will our citizens earn a living and prosper?”

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

So whilst we work remotely from direct colleagues, we may chose to work in a collaborative workspace with near neighbours, with whom we can exchange ideas, make new contacts and start new enterprises and ventures. As the “maker” economy emerges from the development of sophisticated, small-scale manufacturing, and the resurgence in interest in artisan products, community projects such as the Old Print Works in Balsall Heath, Birmingham are emerging in low-cost ex-industrial space as people come together to share the tools and expertise required to make things and run businesses.

We will also manage and share our use of resources such as energy and water at neighbourhood scale. The scale and economics of movement of the raw materials for bio-energy generation, for example, currently dictate that neighbourhood-scale generation facilities – as opposed to city-wide, regional or domestic scale – are the most efficient. Aston University’s European Bio-Energy Research Institute is demonstrating these principles in the Aston district of Birmingham. And schemes from the sustainability pilot in Dubuque, Iowa to the Energy Sharing Co-operative in the West Midlands of the UK and the Chale community project on the Isle of Wight have shown that community-scale schemes can create shared incentives to use resources more efficiently.

One traditional centre of urban communities, the retail high street or main street, has fared badly in recent times. The shift to e-commerce, supermarkets and out-of-town shopping parks has led to many of them loosing footfall and trade, and seeing “payday lenders“, betting shops and charity shops take the place of traditional retailers.

High streets needs to be freed from the planning, policy and tax restrictions that are preventing their recovery. The retail-dominated highstreet of the 20th century emerged from a particular and temporary period in the evolution of the private car as the predominant form of transport supporting household-scale economic transactions. Developments in digital and transport technology as well as economy and society have made it non-viable in its current form; but legislation that prevents change in the use of highstreet property, and that keeps business taxes artificially high, is preventing highstreets from adapting in order to benefit from technology and the opportunities of the sharing economy.

Business Improvement Districts, already emerging in the UK and US to replace some local authority services, offer one way forward. They need to be given more freedom to allow the districts they manage to develop as best meets the economic and social needs of their area according to the future, not the past. And they need to become bolder: to invest in the same advanced technology to maximize footfall and spend from their customers as shopping malls do on behalf of their tenants, as recommended by a recent report to UK Government on the future of the high street.

The future high street will not be a street of clothes shops, bookshops and banks: some of those will still exist, but the high street will also be a place for collaborative workers; for makers; for sharing and exchanging; for local food produce and artisan goods; for socialising; and for starting new businesses. We will use social media to share our time and our resources in the sharing economy; and will meet on the high street when those transactions require the exchange of physical goods and services. We will walk and cycle to local shops and transport centres to collect and deliver packages for ourselves, or for our neighbours.

The future of work, life and transport at city-scale

Whilst there’s no universally agreed definition, an urban areas is generally agreed to be a continuously built-up area with a total population of between 2,000 and 40 million people; living at a density of around 1,000 per square kilometre; and employed primarily in non-agricultural activities (the appendices to the 2007 revision of the UN World Urbanisation Prospects summarise such criteria from around the world; 38.7 million is estimated to be the population of the world’s largest city, Tokyo, in 2025 by the UN World Urbanisation Prospects 2011).

(An analysis based on GPS data from mobile phones of end-to-end journeys undertaken by users of Abidjan’s bus services. By comparing existing bus routes to end-to-end journey requirements, the analysis identified four new bus routes and led to changes in many others. As a result, 22 routes now show increased ridership, and city-wide journey times have decreased by 10%.)

That is living at an industrial scale. The sharing economy may be a tremendously powerful force, but – at least for the foreseeable future – it will not scale to completely replace the supply chains that support the needs of such enormous and dense populations.

Take food, 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.

Until techniques such as vertical farming and laboratory-grown food become both technically and economically viable, and culturally acceptable – if they ever do – cities will not feed themselves. And these techniques hardly represent locally-grown food exchanged between peers – they are highly technical and likely to operate initially at industrial scale. Sharing economy businesses such as Casserole Club, Kitchen Surfing, and Big Barn will change the way we distribute, process and prepare food within cities, but many of the raw materials will continue to be grown and delivered to cities through the existing industrial-scale distribution networks that import them from agricultural regions.

We are drawn to cities for the opportunities they offer: for work, for entertainment, and to socialise. As rapidly as technology has improved our ability to carry out all of those activities online, the world’s population is still increasingly moving to cities. In many ways, technology augments the way we carry out those activities in the real world and in cities, rather than replacing them with online equivalents.

Technology has already made cultural events in the real world more frequent, accessible and varied. Before digital technology, the live music industry depended on mass-marketing and mass-appeal to create huge stadium-selling tours for a relatively small number of professional musicians; and local circuits were dominated by the less successful but similar-sounding acts for which sufficiently large audiences could be reached using the media of the time. I attempted as an amateur musician in the pre-internet 1990s to find a paying audience for the niche music I enjoyed making: I was not successful. Today, social media can be used to identify and aggregate demand to make possible a variety of events and artforms that would never previously have reached an audience. Culture in the real-world is everywhere, all the time, as a result, and life is the richer for it. We discover much of it online, but often experience it in the real world.

(Birmingham’s annual “Zombie Walk” which uses social media to engage volunteers raising money for charity. Photo by Clare Lovell).

Flashmobs” use smartphones and social media to spontaneously bring large numbers of people together in urban spaces to celebrate; socialise or protest; and while we will play and tell stories in immersive 3D worlds in the future – whether we call them movies, interactive fiction or “massive multi-player online role-playing games” – we’ll increasingly do so in the physical world too, in “mixed reality” games. Technologies such as Google Glasscognitive computing and Brain/Computer Interfaces will accelerate these trends as they remove the barrier between the physical world and information systems.

We will continue to come to city centres to experience those things that they uniquely combine: the joy and excitement of being amongst large numbers of people; the opportunity to share ideas; access to leading-edge technologies that are only economically feasible at city-scale; great architecture, culture and events; the opportunity to shop, eat, drink and be entertained with friends. All of these things are possible anywhere; but it is only in cities that they exist together, all the time.

The challenge for city-scale living will be to support the growing need to transport goods and people into, out of and around urban areas in a way that is efficient and productive, and that minimises impact on the liveability of the urban environment. In part this will involve reducing the impact of existing modes of transport by switching to electric or hydrogen power for vehicles; by predicting and optimising the behaviour of traffic systems to prevent congestion; by optimising public transport as IBM have helped AbidjanDublin, Dubuque and Istanbul to do; and by improving the spatial organisation of transport through initiatives such as Arup’s Regent Street delivery hub.

We will also need new, evolved or rejuvenated forms of transport. In his lecture for the Centenary of the International Federation for Housing and Planning, Sir Peter Hall spoke eloquently of the benefits of Bus Rapid Transit systems, urban railways and trams. All can combine the speed and efficiency of rail for bringing goods and people into cities quickly from outlying regions, with the ability to stop frequently at the many places in cities which are the starting and finishing points of end-to-end journeys.

Vehicle journeys on major roads will be undertaken in the near future by automated convoys travelling safely at a combined speed and density beyond the capability of human drivers. Eventually the majority of journeys on all roads will be carried out by such autonomous vehicles. Whilst it is important that these technologies are developed and introduced in a way that emphasises safety, the majority of us already trust our lives to automated control systems in our cars – every time we use an anti-lock braking system, for example. We will still drive cars for fun, pleasure and sport in the future – but we will probably pay dearly for the privilege; and our personal transport may more closely resemble the rapid transit pods that can already be seen at Heathrow Terminal 5.

Proposals intended to accelerate the adoption of autonomous vehicles include the “Qwik lane” elevated highway for convoy traffic; or the “bi-modal glideway” and “tracked electric vehicle” systems which could allow cars and lorries to travel at great speed safely along railway networks or dedicated “tracked” roads. Alternative possibilities which could achieve similar levels of efficiency and throughput are to extend the use of conveyor belt technology – already recognised as far more efficient than lorries for transporting resources and goods over distances of tens of miles in quarries and factories – to bring freight in and out of cities; or to use pneumatically powered underground tunnel networks, which are already being used in early schemes for transporting recyclable waste in densely populated areas. Elon Musk, the inventor of the Tesla electric supercar, has even suggested that a similar underground “vacuum loop” could be used to replace long-distance train and air travel for humans, at speeds over 1000 kilometres per hour.

The majority of these transport systems won’t offer us as individuals the same autonomy and directness in our travel as we believe the private car offers us today – even though that autonomy is often severely restricted by traffic congestion and delays. Why will we chose to relinquish that control?

(Optimod's vision for integrated, predictive mobile, multi-modal transport information)

(Optimod‘s vision for integrated, predictive mobile, multi-modal transport information)

Some of us will simply prefer to, finding different value in other ways to get around.

Walking and cycling are gaining in popularity over driving in many cities. I’ve personally found it a revelation in recent years to walk around cities rather than drive around them as I might previously have done. Cities are interesting and exciting places, and walking is often an enjoyable as well as efficient way of moving about them. (And for urbanists, of course, walking offers unparalleled opportunities to understand cities). Many of us are also increasingly conscious of the health benefits of walking and cycling, particularly as recent studies in the UK and US have shown that adults today will be the first generation in recorded history to die younger than their parents because of our poor diets and sedentary lifestyles.

Alternatively, we may choose to travel by public transport in the interests of productivity – reading or working while we travel, especially as network coverage for telephony and the internet improves. As the world’s population and economies grow, competition and the need to improve productivity will lead more and more of us to this take this choice.

It is increasingly easy to walk, cycle, or use public or shared transport to travel into and around cities thanks to the availability of bicycle hire schemes, car clubs and walking route information services such as walkit.com. The emergence of services that provide instant access to travel information across all forms of transport – such as the Moovel service in Germany or the Optimod service in Lyon, France – will enhance this usability, making it easier to combine different forms of transport into a single journey, and to react to delays and changes in plans whilst en route.

Legislation will also drive changes in behaviour, from national and international initiatives such as the European Union legislation limiting carbon emissions of cars to local planning and transport policies – such as Birmingham’s recent Mobility Action Plan which announced a consultation to consider closing the city’s famous system of road tunnels.

(Protesters at Occupy Wallstreet using digital technology to coordinate their demonstration. Photo by David Shankbone)

Are we ready for the triumph of the digital city?

Regardless of the amazing advances we’re making in online technology, life is physical. Across the world we are drawn to cities for opportunity; for life-support; to meet, work and live.  The ways in which we interact and transport ourselves and the goods we exchange have changed out of all recognition throughout history, and will continue to do so. The ever increasing level of urbanisation of the world’s population demonstrates that there’s no sign yet that those changes will make cities redundant: far from it, they are thriving.

It is not possible to understand the impact on our lives of new ideas in transport, technology or cities in isolation. Unless we consider them together and in the context of changing lifestyles, working patterns and economics, we won’t design and build cities of the future to be resilient, sustainable, and equitable.  The limitation of our success in doing that in the past is illustrated by the difference in life expectancy of 20 years between the richest and poorest areas of UK cities; the limitation of our success in doing so today is illustrated by the fact that a huge proportion of the world’s population does not have access to the digital technologies that are changing our world.

I recently read the masterplan for a European city district regarded as a good example of Smart City thinking. It contained many examples of the clever and careful design of physical space for living and for today’s forms of transport, but did not refer at all to the changes in patterns of work, life and movement being driven by digital technology. It was certainly a dramatic improvement over some plans of the past; but it was not everything that a plan for the future needs to be. 

Across domains such as digital technology, urban design, public policy, low carbon engineering, economic development and transport we have great ideas for addressing the challenges that urbanisation, population growth, resource constraints and climate change will bring; but a lot of work to do in bringing them together to create good designs for the liveable cities of the future.

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