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16 November 2013

Future Cities (2)

Tag(s): Politics & Economics, Sustainability
In last week’s blog I covered the subject of the City Growth Commission launched at the Royal Society of Arts. This week I want to return to the subject of cities as covered in an Economist event: The Infrastructure Summit; Future Cities, Smart solutions, Connections and Networks. For some reason I received a VIP invitation to attend this conference but I was pleased to go as it covered a wide range of topics. It brought together business leaders, policy-makers and influential thinkers to explore the subject of urbanisation. It set out to discuss how cities will evolve to address new economic, social, demographic and environmental challenges, and what impact this will have on business. It celebrated urban ingenuity and wrestled with the issues facing politicians, businesses and citizens. Most interestingly it suggested, to me at any rate, that many of the problems of sustainability may be solved by cities rather than by nation states.

Future trends

Benjamin Barber, Walt Whitman Professor Emeritus at Rutgers University, opened the conference by telling us that the nation state is increasingly dysfunctional. Cities are rising while states are failing due to endemic characteristics. In an interdependent world we face many cross border issues be it global warming, Al Qaeda, pandemics, immigration or the internet. We confront these threats with eighteenth century independent states which are incapable of cooperation. Cities can’t close down like the US government just did. The famous Mayor of New York City, Fiorello LaGuardia said “There’s no republican or democratic way to pick up the garbage.” Mayors are more likely to behave independently and have to be pragmatic. Thus democracy is still working in American cities where trust for mayors is typically between 70 and 80% while for Congress it is now down to 8%.

Pippa Malmgren, an adviser to some of the world’s leading asset managers who has also served as Financial Market Advisor to the White House, gave an investor’s perspective. Every industrialised country has debt that can’t be paid down. The policy responses to this are limited. You can default, the Argentine solution; you can agree to pay, but not now, the Greek solution; you can put your citizens through austerity, the British option; you can inflate the currency, i.e. quantitative easing, the US (and British) solution; or you can devalue, everyone’s solution. Most people under the age of 55 except citizens of Argentina, Brazil, Romania and Zimbabwe have not seen real inflation. Capital, particularly from sovereign wealth funds, is heading into major cities, notably London, and it invests in hard assets e.g. transport infrastructure and housing.

Matthew Pencharz, Mayoral Advisor on the environment at the Greater London Authority, welcomes this. He can’t see the state building council houses at the rate that was achieved under Harold Macmillan in the 1950s. Instead foreign investment is driving out the British from London but you can’t turn the tap off. London is now unlocking public brownfield sites and releasing it for affordable housing.

Jaana Remes, a Principal at the McKinsey Global Institute, who has led its research on productivity, urbanisation, competitiveness and growth since 2003, now looks at the shifting economic power of cities across the globe. She sees that cities identify their collective global chains and so she thinks the future will be more like the Hanseatic League with groupings of global cities trading with and investing in each other. She points out that 40% of national government’s expenditure on infrastructure is wasted and much of this would be better handled locally by cities.

Marc Watts leads Arup’s work for clients like the C40 Cities group, the Clinton Climate Initiative and the Mayor of Copenhagen’s Green Growth Programme. Previously he was for eight years climate change and sustainable transport adviser to the Mayor of London. He believes that mayors are grasping the nettle of environmental protection and climate change unlike nations. Cities are unlikely to wage war or impose tariffs on each other. Instead they collaborate as, for example, through the C40 Cities group. The C40 are actually a group of 58 affiliated cities that account for 18% of global GDP and 1 in 12 of people worldwide. While they recognise that each city in the C40 is unique in its infrastructure and progress in addressing climate change, C40 works to empower cities to connect with each other and share technical expertise on best practices. They have taken 4,734 collective actions to combat climate change.[i]

Ricky Burdette, Professor of Urban Studies at the London School of Economics, told us that in 1900 only 10% of the world’s population lived in cities. This had reached 50% by 2007 and would be 75% by 2050. It was not just the scale of change that was significant but also its pace. 33% of urban dwellers live in slums, often right next to the very wealthy, and thus there is a social time bomb ticking. But as the quality of life rises so does the use of energy. If everyone behaved like the USA then we would need 5 earths. Cities already account for 75% of CO2 emissions but some set a good example. Copenhagen and Stockholm perform well while the density in Hong Kong means the average commute is only 11 minutes. London now has 930 km of cycle ways.

Smart Cities

Peter Madden is the recently appointed CEO of the Future Cities Catapult which, set up by the Technology Strategy Board, is positioning itself as a global centre of excellence on urban innovation.[ii] It will be a place where cities, businesses and universities can come together to develop solutions to the future needs of our cities. Peter pointed out that cities are dysfunctional. We cool buildings in a way that heats their surroundings. We make things easy for the car with consequences for our health.

Mark Fallon, the European Managing Director of CH2M Hill, said that technology enables better design with improved safety and less intrusion. It operates at the intersection between the physical and the social sciences. When authorities wish to build infrastructure they need to make the case per se, not just the Keynesian case. However, the emphasis is on the avoidance of negatives rather than the achievement of best possible outcomes. For example, the consultation on the long-awaited upgrade to Bazalgette’s sewer system ran to 48,000 pages.

Ed Parsons is a geospatial technologist with Google. (These days there is always a representative of Google at conferences I attend.) He said we have to focus on the user. Agencies release a lot of information, much of which is useless. Some is helpful but is already being used. Google looks at the intersection of the physical and the virtual world where information can solve problems. For example it is tracking hundreds of thousands of mobile phones moving around to provide journey time information.

Transport Infrastructure

Tim O’Toole, Chief Executive of FirstGroup, was previously MD of London underground. His firm employs 120,000 in various countries and seeks to keep people moving and cities prosperous. (as a regular passenger on First Capital Connect I’m glad of that but must say that he does not always succeed!) He thinks competing systems are the future and points out that there has been a 73% increase in passenger journeys since the privatisation of British Rail. There will be increasing collaboration over ticketing and information of which price is just one thing that will drive behaviour.

As Managing Director, Planning at Transport for London, Michèle Dix was responsible for the successful strategy to cope with the extra demands the 2012 Olympic Games placed on London’s transport network. She is now thinking about the significant increases of population forecast for London which are the equivalent of two Birminghams being placed on London. Either we need more space or smarter use of our transport infrastructure.  We must also recognise that new systems don’t reduce demand for travel; they may increase it by making it easier.

Energy

Charbel Aoun of Schneider Electric, Simon Hill of Opower and David Helliwell of Pulse Energy held a debate on Energy and Sustainability. Simon thought that you need to keep engaging with consumers to get lasting effects. You also need to change the debate from ‘cost of energy’ to ‘cost and use of energy’. David thought that people get nervous over the idea of Smart Grids. In North America utilities that have marketed the concept of Smart Grids have generally failed. One company that introduced it but without emphasis has succeeded. But sadly most utilities know little more about their customers than what rate they’re on. Charbel agreed that cities don’t like the idea of becoming ‘Smart’ because they’re not dumb. But Transport, Energy, Security and Safety involving information technology are all happening. A questioner challenged these three experts on the little progress the energy industry was really making in sustainability but all had answers at least for their own businesses. For example Simon pointed out that for most countries the peak points in energy consumption are serviced by the dirtiest sources. So if you can shave the peak points you can reduce carbon emissions. His firm which runs the largest behavioural science project in the industry had saved 3 billion kilowatt hours working with its utility partners.[iii]

Stian Berger Røsland, Governing mayor of the city of Oslo, was invited to conclude the conference. He had been first elected to the Oslo City Council aged 23 and made quite an impression. The region of Oslo accounts for 50% of Norwegian GDP and has interests in Finance, Shipping & Maritime, ICT, Life Sciences, Energy and the Creative industries.  The city’s population of 623,000 is set to grow by 200,000 by 2030 and this is his biggest challenge. Further this population is increasingly multi-cultural and 42% of those starting elementary school today come from a non-Norwegian background.

Mr Røsland’s vision for Oslo is Smart, Safe and Green with a commitment to life-long learning. He looks for smart solutions with innovation in business and through innovative procurement, the use of electronic services and new technology. He is introducing smart homes with zero energy buildings. He has built the world’s largest optical-sorting plant for waste recycling and also Europe’s most modern bio-gas plant. While Norway benefits from oil production he has set the target to reduce Greenhouse gas emissions by 50% by 2030 and to be climate neutral by 2050. He has set the specific target of reducing GHG emissions from all transport by 50% by 2030 and 7% of all cars are already electric. The city’s electricity comes from hydropower while heating is powered by heat from burning sewage and domestic waste. Some of this waste is imported from the UK.

He knows that a relatively small city with great gifts from nature can take risks as it can afford to fail. For example, the decision to build a plant for the processing of waste was taken when the technology was not fully developed. Now other cities can copy his model. Such good work is shared throughout the C40 of which Oslo is a member and at last is being acknowledged by the United Nations who recognised the role of cities in its latest document on climate change for the first time.
I had a long chat afterwards with Mr Røsland and congratulated him on his fine example., While the overall picture is mixed I came away thoroughly encouraged by the example of Oslo and some others and think that while the UN festers and most of the developed nations pretend they are doing something about climate change some cities actually are and through their networks have the mechanism to pass this on down the line.

Copyright David C Pearson 2013 All rights reserved



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