According to a new report released by City Observatory, US cities have officially reversed a 50-year trend towards decentralization.
We know that urban living has been seeing a renaissance over the last decade or so, but as recently as 2002 - 2007 (pre-Great Recession), the suburbs and peripheral areas were still seeing significantly higher job growth: 1.2% per year in the periphery versus 0.1% in the city center. The “city center” is defined as a 3 mile radius around the center of the city in this study.
However since 2007 things have flipped:
Chart Source: City Observatory
Why is this happening? Here’s a snippet from City Observatory:
The strength of city centers appears to be driven by a combination of the growing attractiveness of urban living, and the relatively stronger performance of urban-centered industries (business and professional services, software) relative to decentralized industries (construction, manufacturing) in this economic cycle. While it remains to be seen whether these same patterns continue to hold as the recovery progresses, (the latest LEHD data on city center job growth are for calendar year 2011), there are structural forces that suggest the trend of center-led growth will continue.
In some ways, it just makes intuitive sense. People started returning to cities and so the jobs followed (although there were also structural changes to the economy).
The big question, however, is whether this trend will continue? My bet is on yes. What do you think?
Earlier this month a team consisting of Benjamin Barber (who is author of If Mayors Ruled the World: Dysfunctional Nations, Rising Cities), Richard Florida (who is Director of the Martin Prosperity Institute here at the University of Toronto), and Don Tapscott (who is a leading authority on innovation) released a research report advocating for a global network of cities that they’re calling a “Global Parliament for Mayors.”
Here’s a snippet from the press release:
“Nation-states work together through multi-lateral agreements and global institutions in an effort to solve global problems. But states have limitations, and their cooperative efforts in our new era of interdependence and globalization are increasingly insufficient and even ineffective and outmoded,” say the three prominent researchers. A Global Parliament of Mayors represents a new type of governance network – one with enormous potential.
“Our proposed parliament would operate as a global urban network with a vibrant online community that collaborates on key issues 365 days a year,” they say. “Multi-stakeholder governance has come of age and is now fully independent from control by any government, or governmental organizations like the UN.”
And if you dive into their report, you’ll find the following 5 reasons for why they believe a Global Parliament for Mayors (GPM) makes sense:
Global migration to cities. Most people live in cities, so it makes sense to concentrate problem-solving capabilities there.
Urban predisposition for problem-solving. Cities are entrepreneurial, close to the people and richly connected to a wide variety of stakeholders. They have a history of cooperation and pragmatic problem-solving.
A need for experimentation with new governance models. Traditional models of state-based global governance have struggled to advance effective solutions to many global problems, so there is an urgent need to experiment with new models. The GPM is the most promising.
Digital networks. Online collaboration technology makes it possible to operate a largely virtual parliament that would not only be more cost-effective, but more transparent, inclusive and productive.
Digital citizens. There is a large, educated and motivated population of digital citizens that could be tapped to improve urban governance.
In principle, I agree with the direction. And I feel that way because of the two major shifts outlined above: More people are living in cities (a trend that all urbanists talk about ad nauseam) and digital networks are having a disruptive effect on the way we run companies and live our lives.
I’ve talked before about how the internet is causing a decentralization of value creation (see Airbnb, YouTube, and so on) and so I think it only makes sense that our governance structures will inevitably go through a similar transformation.
The governance models that we are living with today were put in place during a time when the world was a different place. At one point, nation-states were the de facto way to effectively organize ourselves on a global stage – probably because there wasn’t any other reasonable alternative.
But today, we are connected and interdependent in entirely new ways. And so the opportunity in front of us is to create a governance structure that leverages the progress and innovation that’s happening in cities, everywhere.
If cities are our most important economic unit, then mayors are arguably some of our most important leaders. So it behooves us to figure out how to give them the frameworks and forums to best do their job.
I’m convinced that city building – like probably every other industry – is going to get a lot more data driven. Yesterday I wrote about how driverless cars are collecting exact replicas of our cities as a result of the 3D scanning that they do. And today I learned about an interesting new startup called Placemeter.
Basically it works like this: If you have a window (at home, at the office, or wherever) that faces onto a lively street, Placemeter will pay you to setup a smartphone in that window as a “meter.” The going rate is up to $50 per month and they’ll even provide you with the necessary suction cups.
Through video, your phone will then start collecting anonymous data about that street’s activity levels: the number of people, cars, and so on. Below is a video of what that output looks like. Notice that it’s even collecting the number of people that go into each of the stores. Click here if you can’t see the video below.
//player.vimeo.com/video/69091237
To make money, Placemeter plans to sell (or is already selling) this data. And their goal is to “make your city better” by specifically improving the way that pedestrian spaces are designed. There are of course lots of other use cases for data like this (such as seeing how busy that bar is across town), but their primary goal appears to be around city building. At least that’s the case right now.
Not surprisingly, there are concerns about privacy. But I’m sure they’ll be able to work around that. All of the data they collect is anonymous and they don’t save any of the footage that they receive from the meters. Their system just extracts the relevant data points and then automatically deletes the video.
What’s also interesting to me about this startup, though, is that it’s yet another example of decentralized value creation. Just like Airbnb empowered anyone with a spare room to run their own bed and breakfast and YouTube empowered anyone with some talent (or a funny cat) to create engaging content, Placemeter is allowing anyone with a window and a view to connect and contribute to a network of urban sensors.
And it works because the marginal cost of adding a new meter to their network is relatively low. Especially if you compare it to what it might cost for a municipality to setup and manage a similar – albeit centralized – system. It’s a totally different cost structure. So when we talk about smart cities and data driven city building, we’re really talking about networks and an environment of decentralized inputs.
It’s a pattern that keeps coming up as a result of the internet. If you start watching for it, I’m sure you’ll see it.
Image: Flickr