Tag: inequality

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Swap smart city for inclusive city

Last year I wrote 24 short essays about smart cities. They are collected in an e-book, that can be downloaded for free here. What to expect?

Smart city tales

For more than 10 years, ‘smart’ has been a ‘leitmotif’ for tackling urban problems. Companies such as IBM and Cisco, and later also Apple, Amazon and Google all emphasised that technology is the key to their solution. Many city administrators, entrepreneurs and young starters felt attracted to this idea.

But why these blinkers? Anyone who focuses blindly on technology as the solution to contemporary problems will quickly lose sight of the problems themselves. They underrate the problems caused by technology itself and also that for many problems other solutions than technological ones are indispensable.

Some examples of problems that make people worried

  • Will I come around with my income?
  • Do I find an affordable house?
  • Is there still work for the children?
  • Is the air that I breathe healthy?
  • Why is my manager so unreasonable?
  • How secure is the internet?
  • Who will take care of my mother later?
  • Can I trust what I eat?
  • Developments are all going too fast for me
  • Who is actually in charge
  • Does a world war will break out?
  • Does my child like to go to school
  • Who can I still trust?
  • Can I still say what I think?
  • Is my country still my country?
  • Why do top managers earn so much money?

Core values

Reducing these problems to four categories proved to be helpful:

  • Threat to basic needs
  • Pillage of the earth
  • Injustice
  • Abuse of technology and data

Each of these categories also refers to core values ​​that in mutual connection will improve the quality of life in a country and the happiness of its inhabitants.

Inclusive growth

 Well-being

The satisfaction of our basic needs such as livelihood, housing, education, health care, social contacts and personal growth. There is still a lot to improve here.

 Sustainable prosperity

The earth has all the ingredients for a healthy and even prosperous life for us and our offspring. This requires a circular economy based on reuse of resources, the elimination of CO2 emissions, and a less materialistic attitude. The awareness is growing, there is still a lot to do.

Justice

The fact that we live together with others is of vital importance, whether it is a partner, family, the street, the city or the country. The quality of our social life depends on the mutual acceptance of equality and diversity and the balance between give and take. Here too, humanity still has a lot to learn.

Digital connectivity

Just like all forms of technology, computerization is able to support the other core values, but is also a value in itself. ICT adds a new dimension to human creativity and inventiveness and can improve the quality of our lives. However, the virtues of digital connectivity ought not to be appropriated by certain groups. Interoperability, ‘edgeless computing’, ‘blockchain’ and the use of open software standards and open data can contribute to prevent this.

The four core values ​​can be at odds with each other, but also reinforce each other. In the latter case, I refer to inclusiveness.

In each of the 24 short essays the ‘smart city idea’ as a starting point. Sometimes politicizing, for example when it comes to the way the big technology companies take control of society, but also anecdotal, for instance in the smart cities cases like PlanIT Valley near Porto, but also very practical, for example in introductions to circular construction, electricity-generating windows and the storage of energy.

In the final essay I propose to replace the idea smart with inclusive growth. To become more concrete about what that means, I have drawn up a charter that every city or region in the world can use. I already recognize the quest for inclusiveness of a number of cities such as Barcelona, ​​Amsterdam, Copenhagen, Melbourne and Seoul. However, these and all others ones still have a long way to go.

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How stupid can ‘smart cities’ be ?

home for every new yorker
Demonstration for affordable housing – Photo: Getty Images

Smart cities intent deploying big data, information and communication technology to become more sustainable and livable. At best, they proceed not only in favour of their citizens but together with them in the first place. In addition, they enable citizens to develop initiatives of their own. So far so good.

Who is invited to the party?

The question is arising: who are those citizens? Or using Suketu Mehta’s words: Who is invited to the party? After all, making a living in big cities becomes unattainable for many. Buying an apartment in New York City is virtually beyond reach even for double-income couples. Not to speak about renting one. A mattress in a room in Chinatown NYC during an eight hours timeslot a day, costs you $ 200 a month.

Chinatown

Chinatown apartments – Photo: Getty Immages

Already now 50 percent of households in NYC spend more then 30 percent of their income at housing. Thirty percent of all households spend more than half of their income. As a consequence, 14 million households in the USA have already moved out of urban areas during the last decade. In the same period in Chicago only, the number of school children decreased by 145,000. We are in the middle of a large-scaled process of de-urbanization.

The real estate revolution

Saskia Sassen has been studying real estate in world cities since the eighties. Throughout this period, the size of speculative investments has increased annually. Over the past five years, rise has been spectacular. In 2015, it went up to $ 1 trillion, compared with ‘only’ $ 600 billion in 2014. More striking is that nowadays real estate transactions often include whole territories, for instance old industrial areas or railway yards. The purpose of these investments is demolishing existing structures and erecting fancy offices and expensive apartments. A recent example is the acquisition of Atlantic Yards in NYC for $ 5 billion. Currently a territory with small industries and homes. They will be replaced by fifteen giant apartment complexes.

Atlantic Yards

Atlantic Yards, NYC – Photo AP

A similar phenomenon can be observed in London. The sale of entire areas – for instance the area of the Battersea Power Station –  is accompanied by the privatization of public space. Granary Square near Kings Cross station is one of the biggest London ‘pops’ (private-owned public spaces) with its own rules and guards.

Granary Square, Kings Cross London – Photo: John Sturrock (the Gardian)

Booming housing costs: A global phenomenon

Booming housing costs are a global phenomenon. Even a sharp rise in rentals (sometimes 300%) indicates the beginning of gentrification in the favelas in Rio de Janeiro, which have become safer places due to pacification programs. The next next step will be large scale housing in cheap high-rise apartment buildings, as happened happening in many Asian cities. Leaving a lot of empty space for prestigous destinations.

The tragic human cost of smartification

In Africa, the process of smartification also took off. A number of smart cities are being built from ‘scratch’, for instance Eko-Atlantic City in Lagos (Nigeria). Bulldozers and police force are mighty tools in the process of their creation. Recently, the High Council of Nigeria has stopped the demolition of Mpape, a neighborhood of at least 300,000 inhabitants adjacent to the capital city of Abuja, because of the absence of any prospect of rehousing of the expelled residents.

The abolition of Otodo Gbame, Lagos (Nigeria) – Photo: Common Edge

In the end, the result of unbridled speculation might be that only the rich will benefit from smartification. Amsterdam too must be vigilant. During 2013 – 2014, property sales to investors increased by 248%. In 2016, the average price for housing increased by almost 23% compared with 2015 . Affordable rental is virtually non-existant.

Because of the exclusion of a large group of citizens, the process of smartifcation is at risk turning into a proces of foolification. Foolish cities are sterile cities, inhabited by a rich cosmopolitans. Without young people socializing at in the squares, craftsmen in their workshops, middle classes people in their shops and a diverse and plural group of inhabitants, they will become dead cities, in spite of all smart technology.

This is the second of a sequence of six reviewing aspects of the smartification of cities. Fiction or reality, mission or marketing, progress or illusion. This article has already been posted in The Smart City Hub.

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Own country second, world first!

Redeeming the losers of globalization

Multinational companies[1] worldwide earned gold money in the years 1980 – 2013. In 2013 their profit after tax reached $ 7200 billion, almost 10% of the gross national product of the world. Half of the 2013 profits belong to North American and West European corporations[2]. The tremendous increase in profits is a direct consequence of globalization: The expanding global trade of goods and services at ever-lower prices, made possible by global competition, automation, offshoring, and low cost of raw materials[3].

Samenleving - olifantscurve

The question is who has benefited most from the increased wealth and who least? For many years the Serbian-American economist Branco Milanovic has focused  on answering this question[4]. He divided the world population into 10 groups for 30 consecutive years: The poorest 10%, the second-poorest 10% and so on. He calculated the change in income for each of these groups within this period. The graph below depicts the outcomes. This graph is called the elephant curve because of the eye-catching similarity with the back of an elephant.

The-Elephant-Curve

Worldwide, there are two groups of winners and two groups of losers.

The winners:

  • The richest 5% of the world, the 1% richest in particular. Half of the benefits of economic growth went to this group. Fabulously wealthy people can be found in all countries. However the majority are living in North America and West Europe.
  • The middle class within Asian countries. Its income increased about 200 to 300%. Hundreds of million people are involved, but the total monetary value of this growth is relatively limited as incomes were low.

The losers:

  • The poorest 10% of the world population. This group has gained nothing in 30 or more years. In the Republic of Congo, the average real income remained unchanged in 100 years due to corruption, self-enrichment by the rulers, natural disasters and wars.
  • The middle class in the rich countries. This group has also seen no progress in 30 years. As a matter of fact, many jobs were lost due to offshoring and automation in particular. Many people who belonged to the middle class in the end of the 20th century now have to settle for a job in the lowest paid sector. Here they enter into competition with migrants, who belong to the other group of losers.

Samenleving - wrong side of capitalism

Social democracy in Western countries has failed to notice this structural change and as a consequence its voters left for the extreme right or the extreme left. In the USA, the frustrated middle class helped Donald Trump to power and in the UK it voted for Brexit.

Policy makers in Western countries can learn from the elephant curve. Among others, the following policy measures will support the revitalization of the middle class worldwide:

  • Reduction of difference in status and income between jobs
  • Redistribution of jobs through a reduction of working hours and flexible retirement, supplemented with the option of a basic-income
  • Fair tax payment by companies, among others to co-finance the external effects of automation.
  • Realistic prices for raw materials and agricultural products for the benefit of the workers in poor countries and the farmers in rich countries
  • Supporting entrepreneurship in developing countries
  • Discouraging labour migration, among others to limit brain-drain
  • Continued support for peacekeeping in conflicts around the world, therefore strengthening UN rather then NATO.

In the long term fighting inequality is in everyone’s interest.

[1] Included are listed and unlisted companies with a turnover of at least $ 200 million. See: https://hbr.org/2015/10/the-future-and-how-to-survive-it

[2] Companies around the world still make huge profits, but the share of ‘Western countries’ has decreased as the distribution over the world of production is becoming more evenly . Further, especially in Western countries small innovative companies take over part of the production of the powerful but rather inflexible multinationals.

[3] He is from 2014 professor at New York University and was a researcher at the World Bank. For a recent interview: Humo February 8, 2017: https://blendle.com/getpremium/item/bnl-humo-20170207-132032

[4] Where necessary, he further subdivided these groups.