Urban Networks

Rethinking The City




1. Insight 2. Analysis 3. Transition 4. Solutions

• Engineered Systems • Urbanization • Closed & Open • City As A Platform
• Complexity • Globalization • Integrated Systems • Urban Ecology
• Evolution • Privatization • Reverse Technology • User Generated
• Development • Sustainability • Services Systems • City As A Service
• Contemporary • Technology • Adaptive Technology • The Adaptive City


 Introduction

The data on urbanization is in, and it clearly reveals that we are currently engaged in an intense process of
transforming the environment within which humanity lives. Over the course of a century - 1950 to 2050 - we are
transforming our environment from the natural rural habitat to an engineered urban habitat. This is a process of huge
transformation, disruption, and development, a process the bulk of which will largely be over within a few decades
from now, but how that process plays out is of critical importance to the future success of the global economy, society,
and environment.

We are living at a time where in principle we could, as never before in history, improve the quality of life for the
majority of people around the planet, but the challenges of realizing this are immense and the perils of fast paced
mass urbanization are becoming ever more apparent. Achieving sustainable solutions within our urban environment is
both a huge challenge - as it is systemic, inherently complex and multidimensional - but at the same time, it offers
huge leverage in our capacity to shape our future environment at a scale never seen before.

Changes in the past decades have worked to position urban centers at the core of the global economy and economic
development agenda, as the current shift towards an increasingly urbanized and globalized world constitutes a
transformation in the locus of power and capabilities towards urban networks. This rise of urban networks as the
architecture of globalization offers new ways to grow economies, to rethink sociopolitical organization and our
relationship to the natural environment.
Urbanization has helped millions escape poverty through increased employment opportunities, productivity, improved
quality of life and large-scale investment in infrastructure and services. Likewise throughout history cities have been
the locus of the open society, they are knowledge engines and creative hubs. Well designed infrastructure systems
facilitate economies of scale, reduce the costs of trade, and are thus central to specialization and the efficient
production and exchange of goods and services.

Although urbanization has the potential to improve living conditions, many cities all over the world are grossly
unprepared for the multiplicity of challenges associated with this current process of urbanization; the list is daunting,
urban sprawl, public space, housing, mobility, energy, water, sanitation, crime, health, resilience.

The scale and pace of this urbanization process is an engineering challenge as the scale of infrastructure projects
has increased so called "megaprojects" are challenging our management and technical engineering capacities in new
ways. Urbanization is an economic and financial challenge as infrastructure has become privatized and increasingly
opened up to global capital markets, the development of financial vehicles that can effectively channel large global
flows of resources into local infrastructure solution that benefit the community has created significant complexity.

Likewise, rapid global urbanization is certainly a social challenge as more people crowd into more dense locations,
previously latent inequality and divisions within society come to the forefront, are accentuated and can create
sociopolitical instability. Finally, urbanization processes create huge environmental challenges as large scale
metropolitan areas become connected into planetary scale metabolic processes, taking in resources from around the
planet and having an environmental impact far beyond their small physical territory.
Urban centers are thus, both the cause and solution to many of the challenges of our time, they magnify global
threats such as economic inequality, climate change, water and food security and resource shortages, but also
provide a compact framework for addressing them.

The challenge of urbanism today is not just one of scale, speed and scarcity of resources but on a more fundamental
level, it is one of complexity. Cities are the center of civilization and thus express a complex set of social,
environmental and economic factors; these forces that shape our built environments come from very different realms
and often pull in very different directions. In an age of globalization and information technology, the urban equation
that we are dealing with today has become a lot more complex. This requires us to take our thinking to a new level of
abstraction, to bring more powerful theoretical and analytical tools to derive deeper insight and clarity; to try and
understand our urban environments as the complex engineered systems they are. For solutions to be realized every
dimension and aspect of this very complex network of interacting variables needs to be considered and considered as
a whole in order to achieve a comprehensive understanding.

This paper deals with the analysis of this current situation as it unfolds and asks the question what approach or set of
solutions would be appropriate for meeting the growing challenges and demands of a world that is rapidly urbanizing;
how can we expand our understanding of the rise of urban networks to rethink the city.
Section 1 | Insight
 Engineered Systems

Urban networks may be understood from many different dimensions and perspectives, social, environmental,
economic, cultural etc. but before anything urban infrastructure systems are engineered environments, they
represent the technological substrate that provides for the basic physical requirements of a society. It is thus
important to ground our analysis in these most basic aspects of infrastructure; on the one hand, human needs
and on the other, the engineered means through which we meet those needs.

Like all biological creatures, humans require an ongoing input of energy and resources from their physical
environment. We are persistently and actively engaged in trying to maintain and develop our access to the
resources required for self-preservation and development. Like all creatures, we manipulate and alter our
environment in order to achieve what is called homeostasis, that is to say, an environmental context that is
optimal for our self-preservation and well being. Humans have many physical requirements, such as food,
shelter, heating and cooling, lighting, transport, communications etc.

Through our capacities of advanced cognition, we are able to engineer solutions to these physical requirements.
We can conceive of desired optimal future states and use reason to try and achieve these through a sequence
of strategic actions; this process may be called engineering. The word engineering comes from the word
meaning "clever solutions". In its essence, it is about developing systematic methods for solving some given
constraint. Technology is the embodiment of these systematic solutions within a physical form that can then
perform the set of stages required to resolve the constraints whenever required.
“Technology, like art, is a soaring exercise
of the human imagination” - Daniel Bell, Sociologist
Technology is "a means to fulfill a human purpose." In this way, we can then think about technologies as
systems, in that they have some input of resources and they perform a function on these inputs in order to
produce some desired output.

With functionality and throughput, we get what we call emergence. When we are enabled by a system of
technologies that are working effectively they support society in functioning at new levels of organization.
Technology offers the possibility for us to be more productive and live a better quality of life. Infrastructure
systems like transportation and electrical power networks enable other technologies to function more efficiently.
In this way, we get emergence as we move up the different levels to our technological substrate, and thus
infrastructure systems that form the base of this can have a powerful leveraging effect, where when you invest
one dollar in infrastructure you can get 3 dollars worth of overall economic value back.

No matter the scale, complexity or sophistication of the technology we are talking about - whether we are trying
to keep ourselves warm, build a website or move millions of people around a city every day - we are always
dealing with these same basic features to technology. That is, that we wish to get from one state to another
more desirable state and there will be some environmental constraints that we need to overcome in order to
achieve this. There will be a large possibility space for how we do this, but through engineering we rationalize
the process to develop an optimal, automated solution that we call technology. This technology is a system that
performs a function. It performs this function only ever to a limited extent, and thus generates entropy during its
operation. Its degree of efficiency and the environmental conditions define its degree of sustainability. When
many technologies work together as an integrated system we get emergence as new levels of organization
emerge to create multilevel technologies; this is the technical substrate that our societies depend upon.
 Complexity
To understand the current evolution in our technology infrastructure it is important to make the distinction
between more elementary and more complex systems of technology. Like all systems technologies can be
simple linear systems or complex nonlinear systems and the behavior, properties, features and dynamics
change in fundamental ways as we go from one to the other.

More basic technologies - examples of which might include, a hammer, bowl or table - have the characteristics
of being composed of a limited finite amount of interacting components. Because of this, it is often possible to
define a fixed boundary for these simple systems. They are what we call well-bounded, meaning that we can tell
exactly what is part of the system and what is not. A corollary to this is that these systems are monolithic,
meaning that all subsystems and components are constrained by one top down design pattern. Individual
components have a well-defined function that is constrained within strict operating parameters governed by the
system’s overall design. Think about a wheelbarrow, it has a limited number of well-defined parts that interact in
a specified fashion all contained within one overall design pattern. Linear systems likewise have a relatively low
level of connectivity between components and components typically interact in a well-defined linear fashion.
                    
Complex engineered systems - such as urban networks - are qualitatively different from these linear
technologies. Complex engineered systems are open systems, meaning that they have such a high level of
interaction with their environment, that their boundary is not well defined. Added to this, they are composed of
very many elements. We may be talking about millions, billions or even too many components for us to be able
to quantify in any meaningful way - as would be the case for a large urban area. The system is likewise
dynamic, i.e. components are coupling and decoupling from the system as it constantly changes, like the load
balance on an urban transport system.
These complex engineered systems - like airports, national transport systems, energy grids or cities - are deeply
interconnected and interdependent on their environment. At this critical level of connectivity and
interdependence, the system becomes more open than closed and it is defined less by its boundary and more
by the flow of resources through the system.            
           
In complex systems, components interact in a nonlinear network pattern. Processes stop happening in a single
linear direction but instead become multi-directional as many different processes and functions are taking place
within a parallel architecture. They interact across and between processes and domains in a network fashion. A
metro area is a composite of many overlapping parallel infrastructure systems from transportation and water
supply to the electrical power grid and telecommunication networks.

The components in the system are not just interacting across domains but also across scales. Complex
engineered systems are what are called systems of systems. They have a multi-layered hierarchical structure,
as elements form part of subsystems, which form part of larger systems, which in turn form part of a system of
systems, and all forms part of an environment. A town is part of a regional urban network, which is part of a
national urban network, which is part of continental or global networks.

Unlike more basic technologies, that are homogeneous systems, these complex engineered systems are
composite entities made up of many different elements and subsystems - heterogeneous components that were
never really designed to work together. The system is distributed out, no one is really in control, and the whole
thing is really just a network of connections. A large urban center is the product of thousands or even millions of
different actors; businesses deciding what projects to invest in, public administrators deciding which initiatives to
support, citizens choosing where to live and send their children to school etc. The components in the system are
largely autonomous, they are not fully constrained by the system.


Complex Engineered Systems

Key Components
 Evolution
Like all complex systems, our urban infrastructure has developed through an evolutionary process over a prolonged
period. Evolution is a process of development that acts on technologies on all scales. An electrical power grid is a
good example, since its inception in the Industrial Age, electrical grids have evolved from local systems that serviced
a particular geographic area to wider expansive networks that incorporate multiple areas, typically covering a whole
nation. At no point was there the option to simply build the whole national electrical infrastructure from start as a
homogeneous system.

These massive networks, like power grids and global supply chains, illustrate why evolution is very important within
complex systems. Because they are too complex to build from start, we never get a clean slate; one person or
organization could not create the Internet with all its content. These things only really get created by many different
actors with different local level agendas. Think about a city like Saint Petersburg, this could not be created by
developing a master plan and building the whole thing in one go from start. These things get built over a prolonged
period of time, primarily due to the local incentives of individuals and local organizations as they act and react to each
other’s behavior, self-organizing to create patterns of coordination, which both compete and cooperate to eventually
give us some kind of emergent global coordination. And all the time, evolution is acting on the system in order to
define which patterns of organization are best suited and which are not. 

Individual component parts of our engineered environment don't exist in isolation. They are part of a whole ecosystem
of other technologies, organizations, and processes and their utility is not just defined by how well they operate in
isolation but also defined by how well they fit into that environment. For this reason, it is not always the most efficient
solutions that get adopted but instead those that fit in with existing processes and people's way of doing things.
Technologies and services today rarely stand alone. They more often form part of service networks that deliver
functionality, and thus their effectiveness is also largely in their capacity to interoperate with other technologies and
provide a required differentiated function within these service systems that make up our urban environment.
“We will build more infrastructure in the next 40
years alone than has been built in the past 4,000”
-  Parag Khanna CAG
 Premodern

The evolution of our technology infrastructure can be understood as the story of the design and development of
ever larger networks of technology through which we engineer the world around us, in creating ever larger more
complex artificial environments. Thus the development of our technology infrastructure has taken us from the
earliest hand tools - consisting of just a few elements combined into a single stand alone solution - to the vast
interconnected infrastructure systems of today that network thousands and millions of different components.
Over the course of thousands of years, we have gone from the first engineered environments composed of a
few discreet hand tools and small shelters built around the individual and small community, to the complex urban
networks of today that enable the global economic processes that support billions of people.

Just 12 thousand years ago as few as four million people inhabited the Earth; nomads that roamed the land
following the seasons. The first humans being nomadic would have lived almost completely without fixed
technology infrastructure, simply using hand tools. The first usage of technology would have been simply the
appropriation of objects in our environment - such as stones - to be used as extensions of our body in
performing certain activities, such as grinding flower or chopping down trees. Being nomadic the technology of a
Stone Age society consists of a very limited number of discrete tools - for the most part, prehistoric communities
remained completely dependent upon manpower.

In response to the warming climates at the end of the last ice age, from about 10,000 years ago, some groups
adapted to the changing environment in new ways. This would lead to the first major paradigm shift in the way
people lived and their technology environment, what we call the neolithic revolution.
The Neolithic Revolution was the first major technology revolution, the critical turning point would have been the
development of permanent settlements; permanent shelters like huts, fireplaces, wells, and storage areas, are
the most basic form of infrastructure. Nomads had limited understanding of ownership but sedimentary people
need stockpiles to survive and they create systematic solutions for the provisioning of their basic material needs,
huts for shelter, clothes, wells for water, agricultural systems for food, fixed and permanent walk ways,
differentiated buildings for congregation and ceremony, and all of these would be integrated within small
communities, creating the first infrastructure systems.

These agricultural systems provided the foundation for the development of a fix and expanding urban
infrastructure. The potential for surplus food brought about with sedentary agriculture meant for the first time a
stable food supply for society. This, in turn, enables the development of increased population leading to a
greater division of labor, trade and advanced socioeconomic systems of organization.

The permanent settlement of humans within fixed communities led to prolonged and sustained technological
and economic innovation giving rise to what we call advanced civilization. Advances in agriculture, irrigation
systems, the harnessing of animal muscle as an energy source and population density would lead to the
formation of large settlements in the form of hamlets which evolved into towns and even cities as the first
empires formed. During this time, with agriculture, crop selection, the clearing of land, the building of structures
and whole irrigation systems we started to engineer our environments like never before. We built the first human
designed landscapes and environments in the form of urban centers.
Map of the world showing approximate centers
for the origins of agriculture and urban centers
 Modern Era
Throughout history the evolution of our engineered environment has been directly related to our knowledge of the
physical natural environment around us. The development of our technology infrastructure happens through a
process called STEM - standing for Science, Technology, Engineering, and Mathematics. New theoretical models
created in mathematics become applied to better understand our natural environment, which is then re-designed
through engineering and re-built as technology. For much of human history, our scientific knowledge was very limited
in scope and depth. The great expansion of this knowledge that happened during the scientific revolution laid the
foundations for the massive explosion in technological change, that is a hallmark of the modern era.

The modern era was marked by the rise of a new form of theoretical and technical knowledge about our natural
environment. The development and application of abstract mathematical modeling enabled us to build greatly more
powerful scientific frameworks for understanding the natural environment than had ever been used before. A central
part of this cultural transformation of the scientific revolution was the idea that this knowledge should be applied to the
engineering of our environment towards the betterment of the human condition; building bridges, curing diseases and
enabling commerce. This much deeper understanding of our physical environment - that modern science brought -
enabled a new level in our capacity to engineer that environment and gave rise to what has come to be called the
industrial revolution.

The Industrial Age was the age of machines. As we tapped into a new energy source technology became alive, no
longer dependent upon human and animal energy sources, we could develop larger and larger mechanical systems
powered by artificial energy sources. Instead of technology being built around people - as with the hand tool -
increasingly people based their work around machines, as people became operators of large industrial machinery
and production processes. In the textile mills of England, one person operating a machine could do the work of what it
took 50 people to do prior.

"Already the steam-engine works our mines, impels our ships, excavates our ports and our
rivers, forges iron, fashions wood, grinds grain, spins and weaves our cloths, transports the
heaviest burdens, etc. It appears that it must some day serve as a universal motor, and be
substituted for animal power, waterfalls, and air currents" - Sadi Carnot, Engineer
This harnessing of new energy sources within large machines that would then batch process manufactured goods for
the masses became the engine behind the industrial age. Industrial machines moved to the center of economic
activity and people organized their work processes around them. The harnessing of this new energy source through
large machines moved our economies and technology towards a standardized batch processing model built around
the machine; the epicenter of which was the factory.

In the late 1700s and early 1800s, large buildings called factories began to appear along rivers in Europe and North
America. The creation of factories was a turning point in human society, economy and the structure of our engineered
environment. New housing had to be built near factories and as this happened cities rapidly grew in size, while rural
population decreased.

The only solution to the rise in population and the emergence of a mass society was to harness the power of
machines and batch processing to provide for their needs. At this time the environment within which the mass of
people lived changed from one that was built around the individual and the community, to urban areas based on mass
production and the provisioning of standardized goods and services.

Our technology infrastructure became defined by mechanized systems that automated physical activities by fueling
them with artificial energy sources; this enabled a new scale to our engineered environment as urban centers greatly
expanded. Before 1800 there was always less than 10 percent of people living in cities and there was no net
urbanization, however, this started to change in a substantive way by the end of the century.
 National Infrastructure

The development of industrial economies went hand in hand with the development of the nation state as the
socioeconomic organizational unit of the modern era. During the 19th and 20th century centralized national
governments worked to leverage these new industrial technologies to develop integrated national infrastructure
systems. The use of steam engines to bring artificial energy sources to mass transport began to integrate the
infrastructure of whole national economies.

These emerging national infrastructure systems started locally around the new industrial cities - sewage systems,
urban water systems formed, intercity rail roads in England, regional power grids in the US etc. Eventually, the nation
state developed into the social welfare model and began to recognize the inextricable linkage between their industrial
infrastructure and the welfare of the mass of their people and they began in earnest to start to build whole national
infrastructure systems. Across Europe and the US national infrastructure networks were developed during the 19th
and early 20th century. National railways, national road systems like the interstate highways in the US, national water
systems, telephone networks, centralized broadcast media for the whole nation etc.

Being seen as critical to the welfare of their people, governments typically took on the funding, ownership, and
operation of these large monopolistic infrastructure networks. Large bureaucratic government departments were set
up - the department of water, energy, transport, department of housing and planning etc - that took responsibility for
the management of this infrastructure. During the 20th century - as many nations gained independence from
colonialism, as strong centralized communist political regimes focused on industrialization came to power across
Eurasia, and as the countries of Europe set about rebuilding their infrastructure - the model of centralized government
funding and building out an integrated large national infrastructure system became extended to virtually all parts of
the planet, with hugely varying degrees of success, often greatly dependent on the quality of government.
"Modernism in Urban Planning  opted for the mechanization of the city, the functionality, the order,
the zoning…to bring order in the city and conceive it as a machine that works according to specific
rules. This is the vision of the masters of the Modern movement. This vision will influence the urban
planning of the remaining part of the century”- Luca Onniboni Archiobjects
The industrial paradigm became most clearly applied to urban development in the modernist movement and the
Charter of Athens, which essentially called for a total remaking of cities in the industrial world; to make them more
rational and efficient. The modernist movement in architecture and urban planning advocated for the ordered spatial
differentiation in housing, work, recreation, and transport and their interconnection via personal mobility and
roadways.

The vision was that a city could be organized to work like a beautiful machine. It is important to remember that in the
1930s the city was seen as overcrowded, dark and actually negative in terms of well-being; the modernists wanted to
banish this "evil". The modernist movement believed in the ideals of the machine age, in rational principles, and
wanted to apply these to cleaning the city up by taking all the different functions and separating them out. Putting
people to sleep in one place, to work in another and to be entertained in another, and then connecting them by large
motorways with cars, this was the view of the modernist movement; making the city as a machine, putting people in
tower blocks and having a uniform shape so that you could get fresh air and improve the health of the people. The
Charter of Athens model is of great interest to the private sector in terms of promoting land investment and
speculation. It is a very easy way to deal with cities rather than the messier organic integrated way that we might find
in pre-existing cities.

The modernist paradigm from the 1920s and 1930s went on to influence the development of sprawling, tall, car-
centric cities between freeways that ultimately would come to be exported to all areas of the world. Many of the
principles of the 1930's modernist vision remain quite dominant today, the notion that there is a central business
district in one place, housing in another place, commerce another, all linked by large freeways.
 Contemporary

By the later half of the twentieth century, the technology infrastructure of the advanced nations had reached a level of
maturity that offered widespread material affluence. But just as this model was reaching maturity a new set of
technologies were maturing based on the processing and exchange of information. The rise of the personal computer
and global telecommunication networks would give rise to new systems of organization that went beyond that of the
nation state. Global networks of information, goods, and money started to become the dominant organizational
structure for economies around the world.

In the same way that our technology infrastructure changed as we moved into the modern era - as it became
formulated in terms of large machines harnessing artificial energy sources - today again the very nature of technology
is evolving and changing with this new set of information technologies. Technology, that was traditionally considered a
physical thing, is now becoming more about algorithms and services. Technology is no longer just a one-off object or
a machine that performs some physical operation, as we network our world placing sensors and actuators in all kinds
of objects, technologies are becoming more like systems for executing on algorithms to deliver services.

These technologies enable us to transcend traditional physical barriers as they morph into ever larger networks that
expand out to the global level. Through leveraging these new possibilities of information technology our economic
systems of organization are being restructured into global networks of production and exchange, transcending the
confines of the nation state. These global flows of information, goods, and finance have come to find their home in
urban centers that are reshaping the nation state as systems of economic organization.
The global economy is going through a monumental transformation from an industrial and agricultural model to an
information service based model; services, like finance, ICT, logistics, real estate, legal and public services are
coming to dominate what economies do and are. These services are distinctly urban phenomena and this is working
to shift the locus of economic activity from the territorial space of the nation to urban centers. Cities are the spatial
concentration of the integral activities of a services economy, innovation, knowledge exchange, creativity, culture,
tourism, university research centers, and they are the locus of face to face contact that is of value for many of these
activities. The shift in economic activity and organization towards services and global networks combines with rising
population and urbanization to take us into what has been called the "urban age".
Section 2 | Analysis
In this section, we will be taking a look at the major trends that are working to shape our technological infrastructure
and urban environment and drive their increased complexity as we transit further into the 21st century. These major
processes of change can be encapsulated within the overarching transition that the global economy is currently going
through, from being predominantly an agricultural and industrial economy to becoming a post-industrial service and
information economy.  The deep transformation to our underlying technology base that is being brought about by the
rise of information technology coupled with the proliferation of global interconnectivity is reshaping what our global
economy is and does.

Societies and economies around the world are being transformed from being primarily organized around physical
agricultural and industrial processes - within the context of the national territory that supported and organized those
operations - and instead moving to the delivery of services; the processing of information and knowledge which is no
longer defined by physicality and the logic of territoriality but instead the compact space of urban environments are
becoming the locus of this new mode of economy.

In the past decades, we have created a new economic system of organization in the form of global supply networks
which are supported by the physical structure of urban networks. Around the world, people are flocking to cities as
points of access into these emerging global networks and the opportunities they provide, but many are ill prepared for
the scale of the process that is underway. When managed effectively these urban centers can be systems for
connecting people and providing them with opportunities, as we have seen with the development of urban Asia. In
China, a coalescence of urbanization and massive economic growth helped pull 680 million people out of extreme
poverty. But in other parts of the world urbanization has been a force for exclusion, as exemplified by the over 60% of
Sub-Saharan African people believed to live in slums. Below we explore five major processes of change that are
taking us into this new reality of urban networks as the emerging geography of our global economy.
 Sustainability
Information Tech

Primary factors shaping

the future of our urban
environment

Privatization

Urbanization

Globalization
 Urbanization

The world is undergoing the largest wave of urban growth in history. The epic scale of this process of change should
not be under estimated, quite literally the native environment of the majority of humans is switching from that of the
natural environment to that of the engineered environment of urban centers; as we have recently hit the inflection
point of more than half of the world’s population now living in urban centers.

For almost all of human history, urbanization has not risen above 10% with no overall process of net urbanization
taking place. According to UN data, still, at the beginning of the 1900s the urban population of the world was only
about 10%, by 1950 this had reached 30%, by 2010 it hit 50% and will reach an estimated 65-70% by 2050.
In absolute figures - according to the UN Population Division - the global urban population has increased by a factor
of five, from 0.7 billion in 1950 to 3.9 billion in 2014 with 6.3 billion people are projected to live in urban settlements by
2050. Likewise according to UN data 1.4 million people per week are moving into urban areas around the globe.

The urban areas of Africa and Asia will absorb nearly all of the projected growth of the world population. Of the 2.5
billion new urban dwellers anticipated by 2050, 90 per cent will live in Africa and Asia with China, India, and Nigeria
being the primary locus of this process. A major theme here is the emergence of the megacities, particularly in the
developing economies. According to the World Cities Report, megacities are defined as having 10 million or more
inhabitants. In 1995, there were 14 megacities; by 2015 that number had risen to 29. This trend will continue in the
coming years as several large cities in Asia, Latin America and Africa are projected to become megacities by 2030.
               
 Source: LSE Urban Age

This helps to illustrate how not only is the pace and scale of this urbanization process unprecedented but also the
economic conditions. Until recently urbanization largely happened within countries with relatively high GDP, what has
changed in the past decades is that it is happening in nations with very low GDP, Africa being a classic example;
these nations are the least well equipped economically to deal with it. While in Asia urbanization is typically strongly
correlated with increases in GDP - which make for better outcomes - Africa's cities in terms of population have grown
but its economy has not kept pace.
Africa is about 40% urban while income is about 1100 dollars, in comparison when Asia reached 40% urbanization it
had incomes at 3500 dollars per capita - according to research by the World Bank and LSE. The explanation they
give for this being that Africa is more closed off to the global economy, having little FDI and native goods of value to
trade on the global market, while cities in Asia are not constrained by their national confines but are better connected
to the global economy.

Cities that fail to meet the aspirations of the millions who are migrating in search of better opportunities run the risk of
congestion, pollution, and insufficient public services, becoming barriers to growth.  Many major urban centers in the
developing south are struggling to keep up with urbanism. Cities, once they hit a certain size, need an amount of
capital investment in transit, in homes, in basic public goods to make them functional, otherwise, the cost of
congestion will override any productivity gains the city can deliver; the person to infrastructure ratio goes down and
that is what we see in the struggling urban centers of Africa, the infrastructure to person ratio is far lower than in other
parts of the world. The main point is that they are not connected into the global supply chains required to provide the
capital.

The failure for urban centers to keep up results in urban sprawl, as the city spreads out, making it increasingly
inefficient and unmanageable. Well designed cities that are compact, connected and coordinated - being integrated
around mass public transport - can create cities that are economically dynamic, offer opportunities to their people and
are energy efficient. Cities that are dense with well-functioning infrastructure - like Hong Kong where commute times
average around 11 minutes - can be highly efficient systems while cities that come to sprawl become increasingly
inefficient and unmanageable. According to research - Global Urban Land Expansion - China, and Africa have
experienced the highest rates of urban land expansion. Across all regions and for all of the last three decades, urban
land expansion rates are higher than or equal to urban population growth rates, suggesting that urban growth is
becoming more expansive rather than compact.
"The demographics of the world today show us that in the next 30 to 40 years we will see the
doubling of the world urban population...we will build more cities, more infrastructure, more housing
more basic services than has been built since the beginning of humanity...... we will be building more
human settlements than we have since the beginning of human history and if we get that right we
have every hope of achieving sustainable development for everybody, if we do it wrong we are in
very very serious trouble… we have one chance to get the future of our urban world right and only
this chance in the next thirty years" - Nicholas You, Urban Specialist
This expansion may be turned ‘peripherization’, which is characterized by huge urban areas with illegal arrangements
of land use. Moreover, this is combined with a general lack of infrastructure, public facilities and basic services; such
as improved drinking water and proper sanitation. One of the main factors of ‘peripherization’ is the denial of fixed
land rights to the urban poor, as can be witnessed in urban expansion in developing countries.

For example, urban development in Mexico City has resulted in a sprawling urban environment with air pollution and
major traffic congestion. Research by the newspaper El Universal found that on average, residence of the city spend
2.5 hours each day commuting. Research by urban planners at MIT showed that within the space of just one year -
between 2015 and 2016 - travel times in Mexico City increased by 5%. At the same time, it is costly: as much as 40%
of an annual middle-class salary can be spent on transportation costs.

Urban Density
Source: LSE Urban Age
The huge migration into African cities appears to overwhelm government planners and policy makers with the
outcome being that slum dwellers currently account for 70% of urban population, with these African urban centers
having the highest inequality in wealth in the world according to a UN Habitat report.

Urban infrastructure is currently increasing massively in scale, research (Seto et al 2012) estimates a 3-time increase
in urban land from 2000 to 2030.  Reports by the IEA project a huge increase in the number of cars as they grow from
around 1 billion currently to around 3 billion in 2050. Although it should be stressed that these figures are highly
debatable given current changes in technology, however, it is the baseline for a lot of developmental scenarios of
various government and private organizations, infrastructure projects that are being rolled out and car companies
projections. If such a figure is to be considered it is hugely problematic for the future of the urban environment; cars
consume a lot of space, infrastructure and of course, it would create huge environmental challenges.

Cities drive economic and social development as hubs of commerce, transportation, government, communication,
and manufacturing. However, unplanned rapid urbanization can lead to an expansion of urban slums, exacerbating
poverty and inequality, thwart efforts to expand or improve basic infrastructure and deliver essential services, and
threaten the environment.

The urban slums of developing nations are growing in a significant way, UN-Habitat states that the number of people
living in slum conditions has grown from  650 million in 1990 to 760 million in 2000 and by 2017 nearly 1 billion people
live in slums, and that number could double by 2030 under a business as usual scenario according to the UN Human
Settlements Program's report. Figures provided by the Human Settlements Program indicate the level of need in the
teeming cities of the developing world. Nearly 30 percent of those cities have neighborhoods so dangerous they are
considered no-go areas for the police and only about a third of the cities actually treat their wastewater.
"There's a problem that I would call the 3 S, the scale, speed and scarcity of means with which
we will have to respond to this phenomenon has no precedent in history, for you to have an
idea out of the 3 billion people living in cities to day 1 billion  is under the line of poverty by
2030 out of the 5 billion people that will be living in cities 2 billion are going to be under the
line of poverty, that means we are going to have to build a 1 million person city per week”
- Alejandro Aravena Architect
 Globalization
Globalization is creating a new level of socioeconomic and technological organization to our world. On a purely
theoretical level globalization involves the proliferation of global interconnectivity that results in the differentiation of
components in relation to each other and the formation of some overall system of organization. Increased
interconnectivity creates global network structures of differentiated components that are interdependent in delivering
some over all process or organization. These global networks become the dominant mode and structure for the
organizing of society, economy and technology infrastructure. Components that were previously defined within the
context of the national economy and national infrastructure system become disaggregated as components become
made available for reconfiguration and operationalized via global networks supported by information technology.

The basic logic of these global networks is that of the market system. This logic is realized via the mechanisms of the
financial system, global corporate structures, and global supply chains. On a purely physical level, these global
networks that make up the process of globalization are operationalized via urban networks. Major urban centers that
have the infrastructure - social, economic and technological - become the physical embodiment of these networks.

On the macro level, these urban centers become nodes within the global network of cities that provide the services
required to operate these information based networks. On the micro level, they function as the hubs within regional
networks that reach into the territory of the location linking them into global networks. The rise of these global
networks during the later half of the 20th century was made possible through a reconfiguration of the national
socioeconomic model of organization that prevailed until that time. The neoliberal economic paradigm that arose as
the ideological underpinnings of the development of these global networks was explicit about the need to remove the
state from the control of economic organization.
Through privatization, ownership and operations of much of the economy and infrastructure of the nation state was
moved into the realm of the market. Through the reduction of trade barriers and the harmonization of jurisdictions,
these components could then be connected into global networks manage via multinational corporate structures and
made available for investment via the global financial system. A network of some 100 global cities are now
understood as the landing points for global networks of finance and the hubs for global logistics networks, forming the
physical backbone to the process of globalization.

Intensifying connections between cities are one of the key expressions of contemporary globalization and the global
cities that have arisen over the past decades are the leaders in this connectivity. A myriad of overlapping and
intersecting flows – of ideas, knowledge, people, money, transactions, goods – link not only major cities and city-
regions, but an increasing number of
diverse places and ecologies into
expanding global economic, social,
political and cultural networks of
organization. Some cities – called the
world or global cities – have become key
strategic sites in the circuits of global
capital, while others remain largely
‘switched-off' from these dominant
economic flows. Within these global
urban networks, not all urban centers are
equal: London and New York, for
example, define a powerful central axis
in contemporary economic globalization;
cities like Taipei and Shenzhen are major nodes in the supply network for high-tech electronics, while cities like
Geneva and Nairobi are important nodes in global civil society networks. The past few decades has witnessed a huge
proliferation of global urban networks that are now much thicker and deeper than previously was the case.
This is not just a global city story small and medium sized cities are more and more connecting across boundaries on
a multiplicity of issues. Understanding the emergence, dynamics, and geographies of these multiple global urban
networks has, thus, become of key interest in the area of urban research over the past two decades. The persistent
growth in population and size of cities has had many consequences. one of the most important is in their powers and
functions. As cities grow, and spread out over the land, they have been the recipients of a worldwide trend to devolve
power from the national to the local level.
As cities have become interconnected within these networks - and to identify themselves increasingly in relation to
their peer cities around the world instead of with their national economy - they have, both come to take on more
power and influence over their own operation and the operation of the global economy. They have also come to
differentiate themselves within these global networks and increasingly compete with other cities - for the location of
headquarters of transnational corporations, for hosting international agencies, for large conventions, for tourist
streams, for major events such as the Olympics or the World Cup, or for major political meetings. Under the UN
Habitat’s governing Council in 2007 and 2009, countries were encouraged to operate in adherence with the principle
of subsidiarity, according to which “public responsibilities should be exercised by those elected authorities, which are
closest to the citizens.” which works to move authority from the national to the regional and city authorities.
What has occurred with globalization might be described as global urbanism, a strategy that involves narrating a city
in a particular way in order to position it strategically in relation to global flows of capital. With the globalization of
cities, we get the notion of global urbanism where cities attempt to position themselves strategically in a global
network via some kind of a narrative, for example, eco-city, financial hub, creative city, smart city etc. They do this
with the objective of gaining recognition and attracting more resources within these networks; whether that is human
capital and talent, foreign direct investment, tourism etc.
"Since roughly the 1970s I would argue there's been a dramatic proliferation
of local regulatory experiments around the world. There's obviously a long
history of experimentation in governance at the local level but I would argue
that the intensity of such experiments has grown since the 1970s, of
experiments mobilized from below without necessarily being directly
coordinated by national governments or even provincial and regional
governments, in the context of a quest to position a locality or a city in the
global system” - Neil Brenner Harvard Graduate School of Design
Globalization is a process of developing global networks of economic organization that transcend the national system
of organization. Prior to the relatively recent changes in transport and information technology, today’s networks and
chains consisted of unconnected sub-networks and sub-chains. The ongoing developments in transport and
information technology have facilitated the linking together of these components. As a result, information can be
passed from point-of-sale through the network to factories in other parts of the world. Policies and inputs themselves
have come to be bound together in networks, whether they be social, operational, facilitatory or physical networks
which, in turn, interact or are linked together to form the overall chain or network. These developments in logistics are
at the center of the division of the productive process and regional production networks that are linked together via
urban centers.

As these supply networks develop the success of major urban centers comes to more and more depend on the
connectivity within those networks rather than on the national system. The nation system still matters for providing
basic infrastructure for the urban center - law, energy infrastructure, security, education system etc. but it is no longer
sufficed. On the local level large urban centers now have extensive labor, real estate, industrial, agricultural, financial
and service markets that spread over the jurisdictional territories of several municipalities; in some cases, cities have
spread across international boundaries. plagued with fragmentation, congestion, degradation of environmental
resources, and weak regulatory frameworks, city leaders struggle to address demands from citizens who live, work,
and move across urban regions irrespective of municipal jurisdictional boundaries. The development of complex
interconnected urban areas introduces the possibility of reinventing new mechanisms of governance as the
authorities of these cities often lack the power to raise the revenues to finance infrastructure. When governance
capacity is weak and constrained, cities are limited in their abilities to take programmatic action. Large and small
cities are expanding and merging to create urban settlements in the form of city-regions or urban corridors as
exemplified by the Tokyo-Osaka metro corridor or the Randstad area in northern Europe, which create new forms of
economic organization.
"The critical thing is that these metropolitan regions are connected between each of them in
global networks of multimodal connection and communications. They are all connected, so all
the wealth, investment, power, of the planet are being sucked into these metropolitan regions
that are connected and which are leaving the rest of the planet increasingly depopulated,
disinvested and abandoned literally, but under their strong influence" - Manuel Castells Sociologist
As economies shift from being industrial to post-industrial services economies a new strategic role is given to cities as
they become the locus of high value added services. Whereas the agricultural revolution and the industrial revolution
required a large physical space within which to operate the information services economy does not. The physical
space of the industrial age economy was rooted in the traditional national territory; the industrial technologies of the
automobile, electrical power grid, water systems and centralized broadcast media supported the nexus of relations
making up the national economic system. But the information society is inherently global in nature, information
enables people to connect into ever larger networks, and those global networks come to increasingly define the urban
space as opposed to the national economy out of which they originally formed. The services sector happens in cities,
all of the activity that has now become the dominant source of value added within advanced economies no longer
requires so much the physical territory of the nation in the way that he industrial economy did, but instead they need
to be connected into global networks and to function within those networks. It is cities that enable them to do this and
thus urban centers become the locus of the services economy, no longer requiring the same organizational structures
as the industrial economy that depended upon and endorsed the national system of governance. Urban centers
increasingly form nodes in global networks and thus operate based upon the logic of those networks.

While with the industrial technologies of the automobile and broadcast media, the mass society of the nation state
occupied an in-between space neither, local nor global, the network society is at the same time global and hyper-
local. This is expressed by urban centers, they are both hyperlocal - occupying a very small territory relative to the
nation - and global. Increasingly people live in two parallel worlds, that of physical atoms and that of information
networks, and the city is where those two become one as it provides optimal connectivity into networks but also all of
the required physical needs within a compact local space.
This new geometry creates new opportunities and challenges that need governance structures and operational
structures that are aligned with this new context. The current issue we face is that cities still exist and operate within
the national regulatory framework - which is designed according to the logic of its fixed territorial space - when
increasingly our economy and society operate based upon global networks anchored in cities. These networks are
increasingly bypassing the national territory altogether creating a new kind of global and local space that requires a
new organizational paradigm to structure and enable. As the age of urban networks develops over the coming
decades, the divide between the logic of territory and that of networks will only grow and this will create increasing
stresses along different dimensions.

Increasingly cities and governments are saying different things. 60% of Londoners wanted to stay in the EU, cities like
Barcelona and Paris had a very strong disagreement with the refugee policies made by their nations and the union as
a whole and are building an alternative network of cities that want to be an open place for the refugees. These cities
though do not have anything like the budget of the EU or their parent countries, however, at the end of the day, it is
largely these cities that have to deal with the real consequences. The Mayor of Paris got fed up with refugees living
on the streets and decided to build a center for them without the support from the government; a hard dispute
between the metro and the government ensued. Likewise, we saw the same conflict in North America between major
urban centers, like New York, and the US government over the 2017 immigrant travel ban.

"If we want to transform the real situation we are living in in the 21st century, which is not the urban
age but the Metropolitan age, we have to create a new power, a new metropolitan power which is of
course a single power of cities, but also a collective power of all the alliance of metropolitans”
- Jean-Louis Missika Deputy Mayor of Paris
There are currently huge changes in demographics and migration flows taking place that will reshape economic
structures around the world; cities are at the center of these changing flows of people and demographics. While the
nation state governance structure works on a logic of citizen and foreigner, territory and border, much of which is
ideological in nature, urban networks have to deal with the reality of these changes. The current situation is that small
and medium size cities in parts of the world like Northern Germany or Southern Italy are becoming desolated for lack
of inhabitants, while at the same time there are huge inflows of young migrants. Much of this migration is illegal
meaning it goes under the radar of the nation state, but at the same time cities have to deal with the real
consequences of these changes.

There is a huge mismatch between the reality of economic power, technological capabilities, the everyday lived
experience of the majority of people on the planet, and social governance structures that are a legacy of a world that
is fast disappearing. This miss match will create huge disruption and challenges going forward because it is a
paradigm shift from one organizational pattern to another.

This discontinuity between these global networks and the spatial logic of the industrial age economy is nowhere more
strongly expressed than in cities which create a whole new set of challenges surrounding governance. Such issues
are not always easy to see but they permeate all aspects of the development of our urban infrastructure, as
governance is something that permeates all areas.
"I think the world is evolving as a network of trading cities... I think new institutions are going to
evolve domestically and globally that basically help leverage the assets of what are the engines of
our global economy and the centers of trade and investment, I am not sure they are going to look
like the old institutions, I don't think they will be deliberative bodies I think they will be action
orientated, pragmatic, problem solving institution's" - Bruce Katz Brookings Institute
 Privatization & Financialization
Modern industrial economies and their infrastructure were developed within the context of the nation state and
evolved into monopolistic and monolithic structures. A major part of the process of globalization, as it has played out
over the past decades within many post-industrial economies, has been the process of privatization. From England to
New Zealand, infrastructure systems have become disaggregated, decoupled from the nation state and increasingly
reintegrated into global networks that are managed by multinational corporations, whether we are talking about water
systems, highways, airports or bridges.

In the UK alone, some 56% of water assets, all of the UK’s major airports, most ports and all passenger rail rolling
stock now sit within specialist infrastructure investment vehicles - according to PwC's global infrastructure investment
report. This is resulting in a much more complex landscape with many different actors both private and public, as
infrastructure systems such as the telecommunication and power grids of Western Europe no longer stop at borders
but increasingly form part of multinational networks composed of many different stakeholders. China is a case in
point. The country boasts a massive pipeline of projects and local operators and investors are rapidly gaining
valuable experience. As the government continues to encourage their State Owned Enterprises and private sector to
compete in open market tenders, these capabilities are starting to influence international competitions.

Many factors point to the conclusion that we might be coming to the end of the nation state industrial development
model. The view that governments are the best finance providers, managers, and builders of infrastructure is starting
to appear no longer sustainable as the need for infrastructure far outstrips government capacity. Infrastructure is
critical to the continued development of the global economy. For every pound spent on infrastructure, it generates on
average 3 pounds increase in future GDP, but the World Economic Forum estimates that there is currently a one
trillion dollar gap in infrastructure spending.
A large investment of infrastructure is needed that governments cannot afford anymore. Just to keep pace with
projected global growth between now and 2030, the world will have to spend $57 trillion on roads, bridges, ports,
power plants, water facilities, and other forms of infrastructure. That’s nearly 60 percent above the amount spent in
the last 18 years and more than the estimated value of today’s infrastructure.

To become part of global supply chains, it is essential to invest in infrastructure. China, in particular, has built a
sprawling network of ports, canals and the like across the world to acquire and transport natural resources. By
contrast, in developed nations, especially the US, infrastructure is aging and underfunded with some 25% of US
bridges considered deficient and in need of repair.

Urban FDI 2003-2013 UN-Habitat

"With so much effort being put

towards improving project
development and increasing
finance capacity, why are so
many projects stuck? In many
cases, the problem has been
related to funding. Simply put,
infrastructure project pipelines
around the world have remained
blocked because governments
are still struggling to decide how
to pay for the assets and
services that must be delivered”
- KPMG, Emerging Trends in Infrastructure 2017
Key to achieving this is private finance and what are called Public Private Partnerships (PPP). There is no shortage of
private finance in the capital markets. When governments provide good regulatory frameworks capital is attracted.
Pension funds, insurance companies, and sovereign wealth funds are all looking for stable investments with
predictable long-term returns, the kind that infrastructure projects are well suited to provide. But there is a need for
new models surrounding how technology infrastructure is brought into being in the age of globalization. The challenge
is making projects investable as many governments start experimenting with PPPs. Often what we see is a situation
where governments cannot deliver the required infrastructure while at the same time private investors have the
resources but there is a lack of appropriate frameworks for channeling those resources effectively towards the
required needs.

Public private partnerships offer huge potential, but this is a brave new world in many ways. Our global financial
system is not a stable system by any means. Placing critical assets under its guidance can create risks and miss
alignments between private and public interests. This is an area of huge opportunity with a large demand side as a
billion more consumers come into the global economy over the next 10 years, and there is no shortage on the supply
side in the private financial capital markets. It is a question of getting the political, administrative and financial
frameworks to work, and to work together; bridging the gap between politics and economics, the tension between
balance sheets and politics, public and private. But new innovative business models like that which was used to
provide the Mass Transit Rail of Hong Kong have proven that it is possible to develop projects that are both profitable
for private investors and effective at providing public services.
PPPs are more complex than the traditional government provided approach and thus may often require more mature
regulatory and administrative capabilities. Another study shows that “water and sanitation privatization in developing
countries” had taken place in 90 countries, in 87 state or provincial jurisdictions, and in 504 local governments during
the period 1990-2011. But experience with the hybrid model of privatization among low-income countries has been
disappointing.
"What is at the root of these dysfunctions and
discontinuities is the current model of development? the
model is a result of relentless globalization, the unfettered
transformation of cities into sources of private gain, a
declining attention to public space and community
benefit, and rapid technological change which in the end
increases connectivity while it diminishes accountability"
- UN, Urbanization and Development Report
The financialization of real estate and infrastructure projects that we have seen since the liberalization of capital
markets may offer new opportunities and solutions but it also creates its own challenges. The financial system
operates according to a certain internal logic; a logic that is global and focused on ROI, but the projects that it funds
exist within real local communities that themselves operate on a different logic, and the two often conflict. The classic
example of this is the elevated price of property in global cities like Hong Kong, London, and Vancouver, where global
real estate investment is creating a huge miss match with the local requirements of the people and pushing them out
of the city.

The rise of global finance has changed the form of investment in urban development, with significant results for how
urban networks have evolved over the past decades. This dynamic is described by the sociologist and urbanist
Richard Sennett of LSE in his work where he makes a distinction between what he calls core investing and
opportunity investing. Opportunity investing is endogenous and at least somewhat local. An investor or business sees
an opportunity in the city for the development of some infrastructure and then invests in a project to deliver that
solution that is required by the local environment. In contrast, core investing is a product of the global financial
system, where an investor has a certain amount to invest and specifies an investment vehicle that would suit their
interests. They look for specific projects that may suit their financial needs - such as a building of 20 stories with high
building quality on prime real estate. The investor then may look for that in Mumbai, but if that doesn't work out may
go to Brazil or somewhere else.
Richard Sennett argues that this is how, in this huge urban explosion which is happening today around the world,
most of the building is occurring and it results in making cities what he calls "closed systems" in the sense that they
are not reactive to anything local, on the ground, it is simply responding to financial needs of investors. He elaborates
that whereas opportunity investing was the model for the cities developed in much of America and some parts of
Europe up to the 1980s financialization has now changed this to core investing and the result is a homogeneity of
built urban form, where it is harder and harder to know when you get off an airplane whether you're in Frankfurt or in
Shanghai or São Paulo. The reason for this, he argues, is that globalization has essentially standardized the kinds of
building topologies that are used globally. In this way, cities become investment vehicles instead of responding to the
endogenous needs of the people.


In an age of privatization and financialization, scholars are becoming increasingly interested in the question who owns
the city, most notably in the work of Saskia Sassen. In infrastructure projects, like the development of the financial
district at Canary Wharf, the Mass transit system of Singapore, or large shopping centers, we see the concept of
private and public space being blurred; the public becomes private and the private becomes public, while at the same
time the logic of finance becomes more pervasive in the development of such spaces.

The urban space has always been a place of struggle for power between different actors over who should have
control and influence in that territory. Throughout history, urban centers have been the home of the dominant sources
of power within society, with the buildings exhibiting the power of those dominant actors; whether this was the church,
government buildings or other monuments. With economic globalization and privatization, power has shifted in a
substantive way to market actors and the control over the urban space is now realized through privatization, which
opens it up to management via the financial system.

Over the past decades, the center of our iconic global cities has become the locus of corporate headquarters and
financial centers. With the rise of economic globalization a new level of organization has formed with vastly more
resources moving around in its networks than existed in any one nation. The multinational corporations and financial
institutions that manage and operate these networks become the dominant actors. This power is exhibited in the
global city which has come to be shaped by those powerful actors according to their logic and to accommodate their
needs. Suffice to say the financialization of real estate and urban centers has created a huge disjunction between the
local needs of communities and those of these private actors, which of course creates many issues. We currently
have no response to this issue of the financialization of urban centers.
"Today’s large-scale corporate buying of urban
space in its diverse instantiations introduces a
de-urbanising dynamic. It is not adding to mixity
and diversity. Instead it implants a whole new
formation in our cities – in the shape of a tedious
multiplication of high-rise luxury buildings. One
way of putting it is that this new set of implants
contains within it a logic all of its own – one which
cannot be tamed into becoming part of the logics
of the traditional city" - Saskia Sassen Sociologist
These processes of urbanization, privatization, financialization, and globalization are also linked to the current
emergence of so-called mega projects. With the increasing size of urban populations, the capacity to tap into the
global financial system for large capital investments, the privatization of infrastructure, and the ever growing
sophistication of our technological means, has come an increase in the complexity of projects, with megaprojects
becoming more prominent.
According to the Oxford Handbook of Megaproject Management, "Megaprojects are large-scale, complex ventures
that typically cost $1 billion or more, take many years to develop and build, involve multiple public and private
stakeholders, are transformational, and impact millions of people." The growing list of megaprojects includes tunnels,
bridges, dams, aerospace missions, highways, airports, hospitals, skyscrapers, cruise ships, wind farms, information
systems, Olympic Games, particle accelerators, entire new cities, artificial islands and more. Gone are the days
where people are impressed by projects costing $10-$50 million or even $100 million. We are witnessing an
explosion in the number of $1 billion plus projects with some, like the artificial archipelago being built in Azerbaijan,
Turkey’s massive Urban Renewal project in Istanbul, and the new construction of Masjid Al Haram in Saudi Arabia
each estimated at over $100 billion.

However, all is not well with these megaprojects, as they have been thwarted on all sides. According to research by
McKinsey & Company, more than half of megaprojects go significantly over time and over budget. There are
numerous examples of failures in megaprojects around the world. For example, a 6.5 billion euro train station
development is underway in Stuttgart in Germany. This infrastructure project, which is the largest in the country, will
consist of taking most of the city's train system underground. The German state has now been fighting over the
project for over 20 years with different political parties coming and going and much opposition from the public. The
budget estimated at 4.5 billion euros in 2009 is estimated now at 6.5 billion euros, likewise it is expected to run two
years over date. Boston's "Big Dig" project is another example running 9 years overdue and at 220% of initial cost.
Sydney's opera house 10 years late 1,400% over budget.
"The projects that are coming to market aren't the right projects, too many projects are coming to market,
they are the wrong projects, but if we could get the right projects, designed in the right way and executed at
the right cost we could attract the right capital. It [infrastructure] is an industry that has not improved
productivity in 30 years, in fact, it is the only industry we have looked at that has not improved in over 30
years, why is that? What is happening when every other industry can improve productivity and this one
cannot? That is just one of the opportunities in infrastructure that says it is time to rethink infrastructure”
- Jimmy Hexter McKinsey & Company
Large urban infrastructure project suffer from a multiplicity of incentive misalignments and megaprojects, by their
nature, are particularly vulnerable to this. Bent Flyvbjerg of Oxford University notes how leaders on these large
projects have an incentive to overstate income, underestimate costs, and exaggerate future social and economic
benefits due to lack of accountability and risk-sharing mechanisms.

Mega projects represent massive capital investments that a multiplicity of actors are interested in getting their hands
on. They represent long term desirable projects for consultants, architects, construction companies, and many other
enterprises. Likewise, engineers are attracted to megaprojects because they wish to work on iconic projects that tell a
story and leave a legacy. Citizens likewise are attracted to such large projects that may give their city prestige, and
large projects are often sold to them as necessary for making the city competitive, iconic and attractive on the global
stage. 


Politicians want to get reelected and that means building things like stadiums, convention centers, and large new
bridges, they are not so interested in updating the water pipes that may be greatly more functional but less
prestigious and with less exposure. The net result can be monumentalism, forgetting that the real city is humanity and
thinking that the real city is the structures and
people start to build for the sake of looking at Cross-border investment in U.S. real estate
Source: Real Capital Analysis Inc & Bloomberg
shiny towers rather than building for the actual
human needs. What is often missing in all of
this is someone asking whether the money
could be spent better.
"Our research suggests up to 40 percent of global infrastructure and capital project
investment is poorly spent because of bottlenecks, lack of innovation, and market
failures" - McKinsey, Global Infrastructure Initiative

Added to all of this is the fact that projects of such large funding are honey pots for corruption. This is not just in
countries with weak governance i.e. developing economies, but we can also see it in developed economies. For
example, the siphoning off of EU funding into Italian road development by the mafia, or in the case brought by the US
again Siemens where the investigators said that the company paid an estimated $1.4 billion in bribes to government
officials in Asia, Africa, Europe, the Middle East and Latin America, “unprecedented in scale and geographic reach.”

Sufficed to say the development of large infrastructure systems through the centralized model is full of many biases
that work to diverge resources, time and energy into a multiplicity of directions other than actually delivering the really
basic infrastructure that is needed. A massive amount of infrastructure needs building around the world but we are
now in the curious and paradoxical position where more and more megaprojects are being proposed despite their
consistently poor performance against initial forecasts of budget, schedule, and benefits.
"The battle for a sustainable future will be won or it will be lost in cities"
- Eugenie Birch Penn Institute for Urban Research
 Sustainability
The challenge of achieving sustainability, both social and environmental, within our urban environments is at the
same time a huge challenge - as it is systemic, inherently complex and multidimensional - and a huge leverage point.
Our world would be a radically different place if a few large urban centers around the world - from the slums of
Jakarta to Lagos to the ghettos of Los Angeles and Mexico city -  were functioning, thriving, equitable urban systems
integrated with their natural ecosystem. There are two axes of social inclusion and environmental sustainability right
at the heart of the future of cities.

The rise of large urban centers is directly connected to very complex environmental transformations that take place
far beyond the confines of the urban center. Urban networks are the fabric of the Anthropocene; a concept that
expresses the massive transformation in the relationship between human engineered environment and that of the
natural environment.

As we have developed the global cities network and built out the global supply chain, major urban centers have
become vast systems whose metabolic demands stretch beyond the borders of nations into geographic areas around
the planet. They pull in the physical resources they required to support themselves, water, food, materials, energy
and produce huge amounts of waste, in "take, make and dispose" processes of the industrial age linear model.

Urban centers around the planet occupy only 3% of global land areas but consume 75% of natural resources. They
are responsible for 50% of global waste, produce around 70% of all carbon emissions. Cities account for between 60
and 80 % of energy consumption. To give some indication of the scale of resource demand in the current urbanization
process, in the years between 2011 and 2013 China used more cement than the US used in the whole of the 20th
century and in just a five year period it used the same amount of steel as the whole of the US in the 20th century.
Environmentally, the current model of urbanization engenders low-density suburbanization— largely steered by
private, rather than public interest, and partly facilitated by dependence on car ownership; it is energy-intensive and
contributes substantively to climate change. Many of the factors relating to the sustainability of our urban centers are
closely connected to the density of the urban environment.
Over the past century, there has been a constant trend of declining density in virtually all cities in the world. For
example, Rwanda's capital Kigali grew over the past 15 years at 1.2% in terms of population but the urban footprint at
the same time grew at 3.5% per year, so there is a decline in density. This has implications on different dimensions,
economic because of reduced economies of scale in public services, it has social consequences because loss of
density also leads to segregation and it has environmental consequences for the increase in the size of urban foot
print and emission per capita.

The paradigm of urban development that rose during the 20th century was one designed for a stable and fixed
environment, it took little account of major changes within the environment. The system was designed around
centralization and dependency of the periphery in order to achieve economies of scale by concentrating resources,
with an emphasis on separation of functional domains - residential, commercial areas, office blocks etc - and
connection via roads. This traditional model creates many dependencies and those dependencies reduce the
system's resilience in times of shock.

Sprawling cities where residents are dependent on personal mobility to obtain basic provisions in far off places of the
city are a critical vulnerability many populations around the world face today as the impact of environmental
degradation is set to only increase in the coming decades. Suffice to say we often do not account for major
environmental changes in urban development, we do not factor in the cost of the dependencies our urban designs
create and this is a huge vulnerability and source of instability in our urban networks.
"Urbanization...involves a variety of social, territorial
transformations, transformations of landscape and
environment that occur in order to support the growth of
an agglomeration, so large scale planetary and
metabolic flows are mobilized in order to create the
giant mega cities that occupy so much of our attention
and we need to bring those metabolic flows, those
transformations of territory, of landscape and
environment beyond the city, into our discussion about
governance… the broader ways in which regions
territories and landscapes are operationalized in order
to support big cities, big mega cities issues of food,
energy, water, materials, labor and waste… those are
planetary issues, planetary scale transformations are
occurring in order supply cities on each of those axes”
-  Neil Brenner, Harvard
Socially, our current model of urbanization in many places around the world generates multiple forms of inequality,
exclusion, and deprivation, which creates spatial divisions in cities, often characterized by slum areas or gated
communities in places like São Paulo or Johannesburg. Cities face growing difficulties in integrating migrants and
refugees so that they equitably share in the economic, social and cultural resources of the city, and thus have a sense
of participation. Inequality is now recognized as a major emerging urban issue, as the gap between the rich and the
poor in most countries is at its highest levels since 30 years.
Thomas Piketty in his book, Capital in the Twenty-First Century, shows that the level of inequality in the US has been
growing significantly since the 70s. Likewise, income inequality in emerging economies such as India, South Africa,
China and Colombia has been rising since the 1980s. Inclusive growth is a major challenge that we are far from
achieving. Over the decades, developing economies have been getting better at achieving growth, but have seen the
benefits of that growth concentrated in the upper levels of the income distribution.

From an economic perspective, the challenges of providing livelihoods for low skilled workers remains in many
countries. The model of urbanization is unsustainable due to widespread unemployment especially among the youth
and the existence of unstable and low-paying jobs. The world's 30 richest countries are home to just 2% of slum
dwellers; in contrast, 80% of the urban population of the world's 30 least developed countries live in slums. Although it
should be noted that not all slum dwellers are poor, unplanned, unsanitary settlements lacking basic infrastructure,
threaten political stability and are creating the climate for an explosion of social problems.
Increasingly environmental and social sustainability are becoming linked and seen as no longer nice things to have
but instead actual security issues. Environmental degradation is changing ecosystems around the world, these are
ecosystems that small scale subsistence farmers are dependent upon when they change and people can no longer
continue with their traditional ways of life this often leads to migration into cities which are ill prepared for them the net
result being that they end up in slums. As the environmental crisis unfolds going forward this linkage will very likely
become stronger and more critical.
"The other issue I think which is a social bomb waiting to explode is that if cities like Mumbai,
if cities like Lima, if cities like Jakarta continue growing at the level that they are where more
than half the population lives in slums it is only a matter of time that you will have massive
social confrontation" - Professor Richard Burdett, LSE

As the world becomes more interconnected what happens in the slums of Mumbai or Lagos no longer stays there. In
a world where a pandemic can spread to any part of the world in just two days, lack of running water and poor
hygiene conditions in those slums becomes a security issue for everyone. For instance, in 2003, the SARS virus that
originated in the Guangdong province of southern China, spread to 30 countries around the world over a 6-month
period killing 916 people and infecting 8,422 people before it was contained.

As connectivity increases and we experience more shocks of this kind people will increasingly recognize that what
happens in the growing slums of these megacities actually affects their lives.
All these issues both environmental and social are becoming more interconnected, complex and no longer something
that can be pushed beyond some boundary or sealed off from the rest of the world. Threats are coming from the
growing slums of the megacities in the developing economies but with the rise of terrorism in urban Europe we can
see that really it is everywhere; in the most sophisticated cities of Paris and London as well as Mumbai and Manila.

Cities are increasingly becoming targets of terrorism as they provide high levels of visibility and impact as a result of
their social, political, and economic centrality. High concentrations of people and complex infrastructure leave cities
vulnerable to potentially devastating attacks and disruptions to critical services. The growth of terrorism and its
impacts on civilian lives in cities is clearly demonstrated by the over five-fold increase in deaths related to terrorism in
the past 15 years according to The Global Terrorism Index.
"The new thing here is that the environmental crisis is not just a green thing for
the ministry of the environment, now the environmental crisis is connected to a
security threat, the map of water shortages is exactly the same with conflicts and
the consequences of migration, so now the report is not coming from the
ministry of the environment but from the ministry of defense in the US, so now it
is not just a hippy environmental thing about saving the planet, now it is a
security threat" - Alejandro Aravena Elemental
 Information Technology
Technology is not what we seek but it is how we seek, delivering quality of life for people is what we seek, but
technology is how we make that possible, new technologies liberate us from traditional constraints and make it
possible to try and achieve the desired ends through new ways and approaches. A new wave of technology based
upon the processing and exchange of information are starting to get wide spread adoption and this is creating many
new possibilities for the development of an alternative paradigm for delivering infrastructure.

The application of information technology to our broader physical environment is resulting in what we call the Internet
of Things(IoT). The Internet of Things is truly a new technological paradigm, a new era in how we develop technology
in the Information Age and it is a whole new level of complexity that goes far beyond the systems we build during the
Industrial Age.
The Internet of Things is an emerging platform built on the internet for processes and devices to communicate via
common protocols. The Internet of Things enables our technologies to both process information individually through
microprocessors and to interact with each other - machine to machine - within telecommunications networks and for
us to collect information about the operations; to analyze that data and use it to optimize systems. IoT enables both
basic control processes, automation of our physical technology and coordination between different systems.

Our infrastructure is becoming increasingly instrumented, sensors that enable the capturing of all sorts of data are
being integrated across different infrastructure systems providing critical information about their operation. This
information is then fed into cloud data centers for advanced analytics to operate on it in order to draw insight into the
workings of various complex engineered systems. Sensors on bridges feed in data about its physical condition, a
camera on a highway feeds in information about the traffic flow and meters record the use of water or energy in real
time.
For example, the Union Pacific Railroad placed infrared thermometers, microphones and ultrasound scanners
alongside its tracks. These sensors scan every train as it passes and send readings to the railroad’s data centers,
where pattern-matching software identifies equipment at risk of failure. Increasingly, these systems will be connected
to cloud platforms in order to run more advanced kinds of analytics and machine learning algorithms, as major
corporations such as General Electric and Cisco invest heavily in this technology.

"Technology really hasn't played an awfully large role in the development and operation of
infrastructure over the last 30 years it's mostly been about concrete and rebar, but what we're
seeing today is an increase in micro devices" - Stephen Beatty, KPMG

Information systems also play an increasingly important role in coordinating, load balancing and optimization between
disparate systems. Information technology enables different systems to communicate with each other and to operate
as integrated systems towards delivering a combined service.    

Information technology is enabling a massive process of convergence between disparate systems. This is most
evident in the example of media were virtually all mediums have converged upon the single digital format, editable
through the computer and exchangeable through the internet. All mediums that were previously different - television,
cassette tapes, radio, video etc - have now converged on a single platform and can all be accessed through the
internet via a mobile phone; information technology has this same convergence effect across many domains.


Whereas the different infrastructure systems that run our urban environment may have been designed and operated
previously in isolation, with the implementation of IoT they will all converge upon single common platforms; as all this
information is brought into data centers and on to the same platforms for cross coordination. This integration through
information systems is clearly the way forward but it also creates huge engineering challenges, the kind that we have
not really faced before. Our technology base is becoming rapidly more complex with the ongoing integration of
information systems with all areas of infrastructure. Information technology may ultimately be the only solution to the
complexity we face in our engineered environments but at present, it is a major driver of increased complexity as we
move farther into this world of cyber-physical systems.

Today the information revolution is driving rapid technological change, as we live in environments that are
increasingly technology saturated. As the large physical technologies of the Industrial Age give way to the algorithmic
technologies of the Information Age our technology landscape is evolving into one characterized by cyber physical
systems. We are building a whole new dimension to our infrastructure, an information counterpart.

General Electric's concept of the "digital twin" is a good illustration of this. A traditional industrial enterprise building
very large physical infrastructure assets now calls itself a "digital industrial company". Their products are now
surrounded by sensors and controllers that can pull in a massive amount of data from a jet engine, MR scanner or
gas turbine with this being fed into a unique model for each product called the digital twin, an almost one-to-one
information counterpart for each product upon which analytics can be performed to provide feedback to optimize the
physical system's operation. Likewise, a 3D scanner can now be connected to a drone and flown into a building to
collect a full 3 dimensional model of it. All this data and information creates new opportunities but likewise system
integration is becoming more challenging as infrastructure become cyber physical in nature.
"No longer are we an industry that delivers physical infrastructure, we are now an
industry that delivers both physical infrastructure and digital asset information.
This requires engineers with a different set of skills, the capacity to work across
disciplinary boundaries, to situate their deep knowledge in a broader context. It
requires design engineering and construction organizations that can manage
people, concrete and IT with all of the complexity that brings"
- Professor Jennifer Whyte Imperial College London
Technology is now becoming all pervasive in people's lives and intertwined with the social domain in new ways. This
makes the question of the relationship between people and technology more explicit than ever. We are increasingly
recognizing that technology is not just about machines and engineering that the social aspect has to be incorporated
along with considerations for how the two interact.

Post-industrial service and information economies require a new set of skills and human capital based on innovation,
entrepreneurship, education and knowledge, none of which really happens without the engagement of the subjective
and qualitative dimension of people. This requires us to go beyond the technocratic paradigm of industrialism and
recognize the importance of the social dimension within our engineered environment. To build this next generation of
complex sociotechnical systems, in turn, requires engineering based upon diverse skill sets and cross-domain
competencies in both technical domains, social science, and humanities. It requires inter-domain engineering teams.
Again this is another vector that greatly increases the complexity of our engineered environment through an increase
in the nonlinear-networked interactions between the social and technical domains.

The smart city concept has huge potential to create much more livable environments but at the same time, it also has
the potential to turn those environments into systems of mass surveillance, control, and alienation. The Internet of
Things will be the ultimate global panopticon, privacy under the Internet of Things may become meaning less as we
know it. As the mayor of Rio de Janeiro Eduardo Paes said since they have a centralized citywide command center
installed by IBM "the operation center allows us to have people looking into every corner of the city, 24 hours a day,
seven days a week."
The idea of the Smart City arose and became prominent around 2008 being particularly driven by private enterprise
as the solution to the new urban challenges of traffic and environmental challenges. The consulting companies and IT
companies selling smart city solutions are quick to tell us of the benefits of such systems and mayors are quick to
jump on board as "smart" is clearly the future. What is often missing in this equation, though, is a critical assessment
of the potential social downsides. Information systems can be used in a multiplicity of very complex and subtle ways
to affect people's behavior and to limit their possibilities without them even being aware of it. All of the data, analytics
and computing power can become focused on optimization without consideration for a broader set of values and
interests that the citizens may have.

Typically centralized solutions are sold that remove data, insight and choices from citizens without them even being
aware of it and concentrate power in new ways. Many processes and activities can be safely automated, but many
also intersect with people's individual autonomy and require their awareness and input. The line between the two
often goes unidentified in the pursuit of efficiency. This is not sustainable as IoT proliferates along this direction
people will increasingly feel constrained by the technology and react to that in a negative way. Technology should be
used to empower citizens but often smart city IoT solutions assume they are passive operators, simply desiring
optimal efficiencies while centralized data centers and algorithms make all the decisions.
Smart cities are valuable technologies but building out this IoT infrastructure based purely on a technocratic logic will
lead to alienating environments and socially unsustainable solutions with consequential backlash from society.
Engineering this rapid development of IoT is not just a technical engineering challenge it is also a sociotechnical
challenge.
"Because most of the smart systems that are being sold, very profitably, are something that tends to
close the city in, they are systems of control rather than enablement, for me the question is how can
we better use the technology that we have at hand, how can we make use of big data intelligently to
empower people rather than disempower them...how to use the technology so you get a richer
picture of the city" - Richard Sennett LSE
Information systems that are increasingly integrated with advanced analytics and smart systems create new
questions of security and control. As our most basic infrastructures systems become connected up to common
platforms and operated via centralized algorithms they become critically dependent upon information systems and out
of this entirely new security vulnerabilities arise.

We should not be naïve about the scale of the risk involved as our critical infrastructure becomes automated,
networked and remotely controlled via common IP platforms. A single premium-class automobile may contain close to
100 million lines of software code that are executed on 70 to 100 electronic control units networked throughout the
body of the car. Today a typical car’s airbag, steering, and brakes can all be hacked and controlled through the
Internet for malicious ends. Control systems in nuclear power plants can be broken into and with the roll out of IoT
platforms software will soon be permeating all types of technologies as our critical infrastructure becomes
increasingly dependent upon it.

Likewise with the rise of smart systems connected up to automated systems we are currently going through a
massive transfer of control over the basic physical operation of our environment; from people to algorithms. In the
coming decades more and more control processes will be given over to software systems but also these systems will
operate more and more complex control processes. Today the control process of production lines are often
automated, the physical operations to whole mass transit rail systems such as that of Dubai have been automated,
soon vehicle operations will be controlled via algorithms. This level of automation requires a new and more holistic
understanding of control processes and how they are exercised through a hierarchical structure.
"And that is what I want
you to ask yourself as well,
do we want to live in a city
where we are constantly
forced to be efficient"
- Eva Blum-Dumontet Privacy International
hazards that have significant consequences lying ahead.
In a world of mass automation and smart systems security is more
than just ensuring prevention of hackers from breaking into a system. It
is ultimately about the appropriate use of control and power, and with
this next generation of information systems we are consolidating and
handing over an extraordinary amount of power to these automated
algorithms. A system is only really in control when awareness,
responsibility, and power are all aligned. This means the exercising of
control through a multi-tier framework with more intelligent and aware
systems guiding systems that are lower in their capability for
information and knowledge processing. We are yet very far from
understanding or developing appropriate models for ensuring the
alignment and appropriate structures through which control can be
exercised in a world of automated systems but it is certainly something
we will be learning about in the coming decades, with many potential

IoT and smart cities are a key component in the solution to the current challenges we face in the development of our
infrastructure, but the road we are currently on is one that is by default centralized and that has the potential to turn
cities into environments of mass surveillance and systems of mass control through algorithms, that is not a world
anyone really wants to live in. One needs to ask the question are we able to build out this IoT infrastructure in a safe,
sustainable way that respects people and takes them into a world that they would like to live in. It is certainly
debatable as to whether the road we are on with IoT would deliver those results. This should be identified as an
Section 3 | Transition
unresolved issue whose implications may have great significance.
As a recent report by the World Cities Report recognizes "Cities are operating in economic, social, and cultural
ecologies that are radically different from the outmoded urban model of the 20th century... Many cities all over the
world are grossly unprepared for the challenges associated with urbanization" and "The current model of urbanization
is unsustainable in many respects."

The challenges of cities are changing rapidly - as we use more of the finite resource of water, as we create more
waste, as more people join the urban environment, as inequality grows - we are going to have to think very differently
about how to solve the problems, our tendency is to think about solving problems the way we have always done
them, but there is a completely different degree of complexity that has now emerged here in the 21st century.

Our previous analysis of the current process of urban development around the world reveals that the way we did
things in the past will not be sufficed to provide solutions to the scale and complexity of current and future challenges.
Quite simply, there are not enough resources to respond to the demand and thus there needs to be a paradigm shift
in how we approach the future development of urbanization. In this section, we trace some of the major dimensions
along which our paradigm for urban development will be transformed in the coming decades in responding to the new
context.

It is important to recognize that we no longer have the capacity and resources to control and impose solutions in the
way that we did in the past. In order to access the resources required to deal with the challenges there needs to be a
shift from closed centralized systems - that harness the resources of the few - towards open distributed systems that
can harness the resources of everyone.
The emphasis shifts from a few centralized organizations pushing out solutions to passive end users, towards the
development of open platforms that build synergies between different stakeholders. A shift from trying to achieve
improved results through centralization and specialization, towards accessing more resources by including more
stakeholders and building systems of coordination between them that enable synergies and effective outcomes
through integration. This means a shift towards working with the inherent evolutionary potential of this process that is
unfolding instead of resisting it. Moving from a model of stipulating specific outcomes and inputting large amounts of
energy in trying to control the components towards that predefined result and instead looking first at the inherent
propensity of the users; the inherent resources in the system and how to create the context that will leverage those
resources towards desired emergent outcomes.

Technology enables us to achieve optimal ends in new ways and this requires us to rethink how we deliver solutions.
Information technology is what enables services and outcomes where we no longer need to think that for every need
there must be a new product delivered, but instead, we can begin to ask how can we deliver the outcome as a
service. The services paradigm is truly a new approach that looks at the world in terms of integrating existing
resources to deliver the solution without creating more stuff and this shift from "things" to services and outcomes will
be key to rethinking how we achieve desired results.

The services model is an innovation model, as it shifts the paradigm from mass to innovation; from responding to
challenges through the provisioning of more resources to the more intelligent design of systems. The shift in the
structure of urban development from one that is based around using more mass as the solution to challenges, to one
that has the built in structure to be able to use intelligent design as the solution. This means a focus on agile systems
that are designed to be redesign in harnessing continuous innovation so that they are regenerative over time instead
of degenerative.
"Channel this huge force and capacity of people
to provide themselves with the right environment,
what technicians will have to do, and people in
positions of power have to do, is provide the
frame to coordinate and channel that individual
capacity” - Alejandro Aravena, Elemental
 From Machines to Ecosystems

The first thing to recognize is that we are in a macro process of transformation from the Industrial Age to an
Information Age. This transformation implies a reconfiguration of all of our systems of organization; social, economic,
technological and environmental. In the same way that we can now see how the transition from a pre-modern to a
modern society over time reconfigured all of our systems of organization, the current transition that we are going
through will do the same over the course of the coming decades. This is to recognize that the solutions we developed
in the Industrial Age will be replaced by a new set of solutions that are aligned with the new context enabled by
information networks. Thus in order to develop solutions that are aligned with this new context - and thus will prevail -
it is necessary to both recognize the current Industrial Age system of organization and to identify the new set of
organizational structures that are now possible and to then extend this to understand what it means in the context of
our urban infrastructure.

The industrial economy is a mass economy, it is involved in the processing of physical objects for the provisioning of
basic services for a mass of people. The function of the process of industrialization is to improve the basic material
standard of living for the mass of people. This is/was achieved through the centralization of resources,
standardization and batch processing in order to achieve economies of scale, which could reduce cost per unit and
thus provide the basic physical requirements of a mass society at a cost they could afford. We applied this same
centralized model to all aspects of society, economy, and technology infrastructure; from factories for manufacturing
to schools for education and centralized administration for governance. This model was first developed in Europe and
then the US where it achieved the desired result - to a certain extent - and because of that has been since exported
globally to virtually all areas of the planet.
 However, this model has inherent limitations that can be avoided while the system is limited in scope, but which have
become revealed as we are currently in a massive expansion of the system, scaling it up to a truly global level. With
the current process of globalization, we are essentially trying to scale the model from approximately providing for 1.2
billion in developed countries, to the other 6.3 billion people on the planet. This is a huge scaling up process that we
are currently going through in the coming decades; cities are at the heart of this dynamic.

"What we should be focusing on is not grand scenarios, but

how we exploit the evolutionary potential of the present"
- Mark Swilling Center of Complex Systems in Transition
The essential structural characteristic of the systems of organization that we developed during the Industrial Age is
that they are centralized. It is this centralization process that enabled the engine of the Industrial Age - batch
processing and economies of scale. However, centralized systems have inherent limitations, primary among these is
their operational scale. Centralized hierarchical structures have both an upper and lower limit to their operation, what
is called the Coasean Ceiling and Coasean Floor. The Coasean Ceiling is the scale above which the centralized
hierarchical model becomes inefficient due to the formation of bottlenecks and hierarchical layers of administration.
Likewise, the Coasean Floor is the point below which the transaction costs of a particular type of activity, no matter
how valuable to someone, are too high for a standard institutional form to pursue. These limitations prevent
centralized hierarchical systems, of all kind, from operating effectively both above and below a certain scale and thus
limit the range within which we can effectively organize society, economy and technology infrastructure with such a
model.
At a certain scale, it is required to make the paradigm shift from a centralized architecture to a distributed model of
organization. At what point distributed systems of organization become more efficient than centralized systems
depends both on the scale of the system, on the cost of connectivity, the complexity of the environment, and on the
capacity for automated large scale dynamic coordination. With globalization - which increases the scale and
complexity of the environment - and information technology - that reduces the cost of distributed connectivity and
adds the capacity for automated large scale dynamic coordination through software systems - we are currently going
through a tipping point in this dynamic and that means a major and ongoing deep structural transformation that we
are currently in the midst of. The world of tomorrow will be different from the world of yesterday and for solutions to
work they will have to be aligned with this new structural paradigm of the Information Age, that of information
networks.
 From Closed to Open Urban Systems

The age of urban centers as the dominant socioeconomic and technological structure of organization is coming
fast and governance structures need to adapt and evolve to meet that new reality. The new organizational
structure that is aligned with these changes is that of the network. The fundamental organizational shift that
takes place across all domains is the shift from the centralized hierarchical closed form of organization of the
Industrial Age, to the open distributed network structure of the Information Age, and this applies equally to all
domains, society, economy, technology, and socioecological systems.

In their concrete form, these information networks are called

platforms. Platforms harness the underlying change brought about
in an information network society, that of very low cost peer-to- "If the industrial revolution was
peer global interconnectivity and the capacities of the organized around the factory, today’s
microprocessor to enable the development of ever more changes are organized around these
sophisticated algorithmic software systems for automating the digital platforms, loosely defined.
coordination between very large combinations of people and Indeed, we are in the midst of a
resources. reorganization of our economy in
Whereas our traditional systems of organization are based upon which the platform owners are
the centralization of resources within formal organizations that are seemingly developing power that may
coordinated by people through a fixed line of authority, platforms be even more formidable than was
are distributed networks that connect people peer-to-peer while that of the factory owners in the early
coordinating exchanges via algorithms - in the way that platforms industrial revolution" - Martin Kenney, John
like Airbnb does for accommodation, Uber for transport or Youtube Zysman, The Rise of the Platform Economy
for media.
The platform model opens up the provision of services to the many, instead of the few centralized organizations.
It switches the management and provisioning of services from centralized monolithic organizations to open
market-based networks enabling the small contribution of many. The shift in basic organization of infrastructure
delivery going forward needs to be from one composed of many closed organizations, to one of open platforms
that enable organization at different scales and of different resources through the interaction between
components and self-organization.

This shift to the platform model often involves a reconfiguration of the basic structure of organizations from a
monolithic form towards a more modular structure. Instead of having one monolithic organization we simply
create networks for connecting different service providers. Platforms represent the structural transformation that
is required to enable systems where anyone can provide services, this may be large companies, public
organizations or individuals. Without this change in mindset and ensuing change in organizational design, the
system will remain in a model where users are dependent and providers are overloaded by demand and under
resourced.  

The shift from a monolithic service provider to a more market like structure is likewise a key enabler of
innovation. Closed systems, monopolies, and dependencies are a recipe for removing innovation, while open
systems with a multiplicity of providers competing is a recipe for innovation. Ultimately we are trying to shift the
model from decreasing returns on inert physical systems, to increasing returns through harnessing the
innovation capacity of all, and platforms provide the basic organizational infrastructure to do that and set the
stage for the emergence of solutions.
"I often think about our highway system
and one of our recourses to congestion is
to add another lane, because you add
another lane more cars can flow. It turns
out it doesn't work that way, more cars fill
in that space, more cars change lanes
causing more congestion ultimately, that's
a 20th-century solution. The 21st century
solution is thinking about cars differently,
do we need to own cars? Will cars drive
themselves? Will we use cars on demand,
that's thinking differently, that's thinking
21st century”- Jonathan Reichental CIO City of Palo Alto
 From Component Parts to Integrated Systems

As urban populations increase from 4 billion to 6 or 7 billion over the next 30 years, the world will need to almost
double its urban capacity by 2050. There is neither the time nor money to produce the required infrastructure
conventionally through large-scale engineering solutions, the focus needs to shift to the better use of existing
infrastructure through the intelligent design of integrated systems and this means moving from a world of siloed
components towards one of integrated systems.

The Industrial Age model to design and management was siloed in nature, we had a department for energy, a
department for water, transport etc. The end result of this approach to development is a fractured, compartmentalized
world, where different systems exist in isolation from each other. The modernist vision of the 20s and 30s extended
this to the development of whole cities that were compartmentalized and connected by the motor car. The result of
this is many linear processes without feedback and coordination across disparate systems.

The model of the future needs to be one based on the principles of compact, inclusive and connected. The emphasis
has to shift from delivering solutions by creating more "mass" to delivering solutions through creating synergies
between things, that make the whole system more efficient and thus deliver more with less. This is a shift from
optimizing components in isolation - bigger streets, more parking, more housing - to optimizing for the connections
and synergies between things.

In the Industrial Age, we built individual systems but today's technology of information enables us to connect between
those systems to achieve optimization, not just of things, but optimization of the synergies between different systems;
from designing linear flows to circular processes. We need to start thinking about cities as systems of systems and
looking at the whole system is how these different subsystems interrelate, that is, do they interact in a constructive or
 a destructive fashion. For example, is the airport in our metro built right beside a major residential area, resulting in
noise pollution, a destructive relationship that reduces the functionality of the whole system?

Processes that were designed in isolation to function in a linear fashion lack integration with other systems in their
environment. The result is a "dead-end effect" and the production of waste that will be destructive to some other
subsystem, rendering the whole system less functional. For example, when we build large tarmac surfaces that can
not absorb rainwater, the result is a high level of runoff that needs to be dealt with by the waste water system. This is
often the case when we use a reductionist design paradigm, it results in a focus on the individual components without
full regard for how these components integrate to give us the functionality of the whole system. Thus, we often end up
with optimal solutions on the micro level but sub-optimal solutions on the macro scale.

"The last three hundred years of city

building across Europe and North
America has really been run by a kind
of ordered formal system of planning
run by engineers and architects
and... town planners but the new
decade is more about how do you
work collaboratively in networks"
- Stephen Narsoo, Kite Pty ltd
When components interact in a constructive fashion, we get synergies. They complement and enable each other. We
can think about the use of greenways and parks to absorb carbon emissions in a city, the coordination between
consumers and producers of electricity on a smart grid, or the schedule coordination between different modes of
transportation; these are examples of synergies.

Through synergies, we get the emergence of new levels of organization and global functionality. Ultimately all of this
technology and infrastructure that constitutes our metro areas is about delivering a material quality of life to citizens.
Material quality of life is not a single product or thing, it is about everything working together so that we get the
emergence of a seamless set of services enabling end users to live a high material quality of life. These different
types of relations and interactions are a defining factor in whether these infrastructure systems can deliver this
emergent macro scale functionality. Synergies within complex engineered systems require both intelligent design and
the use of information technology to coordinate different systems in real-time.

Key to achieving effective and sustainable results is factoring in all relevant processes. Urban centers are complex
systems with a multiplicity of different processes taking place - ecological, technological, economic, social and cultural
- creating synergies means asking how these things can work together. Typically we try to optimize for a single
outcome in isolation, in so doing push problems into other domains. We might create super efficient high-density
housing but if that works to reduce the social networks and social capital in the community it has not achieved
effective overall results. We might achieve high levels of foreign investment and lots of shiny skyscrapers but does
that come at the cost of the local culture.

The central shift in our focus here is from optimizing for the unidimensional component parts of the urban system, to
optimizing for the interconnections and synergies between them, which in turn requires multi-dimensional,
multifunctional systems and looking at the networks of connections between them.
"We are trying to help cities move from a situation
of sprawl, segregation, and congestion to a
situation of compact, integrated and connected
urban development" - Raf Tuts UN-Habitat
 From Infrastructure to Reverse Infrastructure

As the scale of slums rises in the coming decades from 1 billion in 2010 to a projected 3 billion in 2050, half of our
urbanization in the future will be self-built environments. This is new and it means that self-built environments are no
longer a marginal factor, they are becoming central to the development that is happening. Some of these self-built
urban environments are now as large as a million people, as in Mexico City. 62 percent of GDP in Africa is in the
informal economy, 80-90 percent of financial exchanges in India are not recorded in any fashion.

The scale of informality in the urban environment going forward is on a new level and this change necessitates a
recalibration of our thinking about development. We have gone from an age of ignoring informal settlements, to
removing and resettling them, to tolerance because they were getting too big to resettle, to trying to improve them as
happens a lot in Latin America. The latest approach is to start to anticipate them, recognizing that governments will
not have the resources to build housing and provide all the infrastructure for them.

Vast amounts of energy and resources at present are being expended on preventing people from doing what they
naturally do. Instead of trying to push out solutions to people, it is possible to both conserve on the expenditure of
existing resources and harness new resources by working with what they are doing, not assuming that we have the
answers. If we look at many slums around the world, such as the Favelas in Rio, what we see is that in fact over time
the living conditions of people often gets better, not through some exogenous implementation but through an
endogenous process. In research by Janice Perlman over the course of 40 years, in the informal settlements of the
favelas of Rio, she reveals how over generations - even though widespread social discrimination remained - the
residence educational levels had risen and material conditions had improved with this happening largely
endogenously.
The reverse infrastructure paradigm asks how can we work with the process of urbanization as it is happening, not try
to impose some abstract master plan, but look at the actual processes that people are going through and ask how
can we enable that process, how can we build platforms that harness people's energy and resources instead of trying
to deliver finished solutions. This is a move from the formal linear world of urban design, that has prevailed during the
modern era, to a hybrid model that works with the synergies between developers and end user.

The systems we have developed during the modern era are centralized, the management and structures of
coordination are designed for one way exchange, from producer to consumer. Going forward we need to shift to a
nonlinear model, where service provision and consumption can flow in a networked fashion from many to many.
Increasingly productive capacity no longer requires monolithic centralized systems but instead, we find that new
technologies - like solar cells, mobile phones or grow systems - make it possible for end users to be both producers
and consumers and this is a potential game changer if it can be harnessed effectively. Solar cells and wind turbines
are a good example of this as they push productive capacity out to the edges of the network, reducing dependencies
on the centralized system. These distributed systems necessitate a much more complex form of coordination and
management which requires the use of platforms that enable automated dynamic coordination via market systems
and software.

In many cases, it is now cheaper, cleaner and easier to create electricity on the location as opposed to a centralized
system. In light of these new possibilities we need to take seriously the costs of centralized solutions, shifting to a
new level of thinking where we do not, by default, rapidly converge upon centralized projects as the only solution, but
move our thinking up a level to identify all possible solutions, both centralized and decentralized, or a hybrid of the
two, and make a full costs analysis of the benefits of each. Closing our eyes to the failures and risks of megaprojects
and hoping all will go fine is not a solution, all of the risks and costs of centralized systems need to be factored in.
"The current dominant paradigm of contemporary infrastructure design is that of Hughesian large-
scale technical systems (LTSs). However, we see unprecedented infrastructures emerging that are
not owned by governments or large businesses. They are not governed centrally or controlled top-
down by government or industry as telecommunications, energy networks, and railways, for
example, have been for decades. Instead, they are owned and developed by individual citizens or
small businesses yet manage to mushroom into local, regional and even global infrastructures.
Examples are Wikipedia, networks of privately owned solar energy systems, and citywide Wi-Fi
networks. These user-driven, self-organizing, decentralized infrastructures, or inverse
infrastructures, as Vree named them, reflect a radical alternative to the model of complex LTSs"
- Introducing Inverse Infrastructures Tineke M. Egyedi, Donna C. Mehos and Wim G. Vree
As we have noted the development of monolithic centralized infrastructure may achieve economies of scale quickly
and easily, but they also have many issues with misalignment of incentives. They also have many governance
challenges because they are a one size fits all solution, trying to fit many people into a single mold, as the projects
get larger we are trying to fit more people into a single solution and this creates greater challenges in trying to get
everyone to agree. Distributed solutions can avoid this, empower people, and work to realign responsibilities and
incentives placing them on the individual instead of deferring them to the centralized organization.

Our current model of development - where we aggregate the resources of the many, give them to a few
administrators to decide on and push out solutions to end users - creates many misalignments of incentives and
responsibility. End users shift responsibility to the centralized authority which results in the loss of a huge resource in
the system; namely the end users responsibility and engagement. While at the same time the centralized organization
has certain interests and incentives that may not be aligned with those of the community as a whole. Pushing
capabilities and responsibility out to the edge of the network works to better align these, placing benefits and costs
with the individual and reducing the negative externalities in the system.  

The ultimate aim of user generated systems is to harness all the resources available to the community, this does not
just mean as many people as possible but also harnessing their engagement along as many dimensions as possible,
recognizing the social and cultural capital within the group and how to leverage that towards engagement and optimal
outcomes.
"The underlying parameters of infrastructure planning have changed. For the past 50 years, the
common wisdom has been that bigger populations require more roads, bigger generation capacity
and more transit, all macro solutions and quite appropriate given a ‘fixed’ technology solution
(such as suburbs and the automobile) and ‘fixed’ consumer behavior. But over the past decade,
both technology and consumer behavior have begun to change. Changes in the way consumers
now interact with infrastructure are turning common wisdom on its head. Infrastructure planners
are struggling to keep up…Over the coming year, we expect governments to take a more ‘bottom-
up’ approach to infrastructure planning and development, taking the time to understand the
changing demands of both current users and future generations to help shape their infrastructure
agendas" - KPMG A Global Infrastructure Perspective
 From Products to Services

With new technologies now available we are no longer constrained to old solutions and this means we can go
back to basics, asking what is the outcome that we desire and then look at the full set of possibilities that may
enable that. Too often we confuse the means with the ends. We are very familiar with a standard set of Industrial
Age solutions for the given challenges of housing, transport, energy etc. and we focus on those means instead
of thinking about the outcome. As soon as we talk about transport we think of roads or trains, when we talk
about electricity we think of power stations and power lines, we talk about water and think of plumbing, in none
of these occasions do we really start from the beginning and focus on what is the problem and what is the
outcome we need to deliver, instead we focus on the means, building more infrastructure to provide for more
people.

We are moving into a services economy and services are all about functionality and outcomes instead of
physical mass. Information technology is in fact what enables us to do away with much of the traditional means
through which we have provided solutions; information technology enables us to reorganize what we already
have so as to deliver real outcomes instead of just more products.

This requires that we change our perspective from physical things to the services that they provide, no longer
thinking that people need cars and start thinking they need a mobility service; instead of thinking they need a
house, think accommodation service. This may sound somewhat trivial but it helps to shift the focus to outcomes
and enable us to innovate in the means through which we deliver those outcomes, it also helps to shift the
equation from a dynamic of competition over zero-sum physical resources to collaboration over shared services.
The services paradigm helps us to stay asking the question what is the real issue that we should be addressing.
Too often we are focused on proxies instead of the real thing, we focus on GDP instead of quality of life because
increases in GDP was all that we could deliver in the industrial model, but now we see that that was not really
what people wanted. When we stay asking the question of what is it that is really needed then we can stay
bypassing traditional constraints and find new ways to achieve the same outcome while doing away with much
of what we previously needed to achieve it.

By turning systems into services we unlock massive amounts of resources that were previously locked up in the
product-ownership model. There are vast amounts of un-used or under-used resources in a given city that are
hidden away through the product ownership model, by re-conceptualizing them as services and building IT
enabled platforms huge amounts of accommodation, food, energy, transport and other resources can be
unlocked.

"We need to drive utilization of any assets and we need

to start feeling very uneasy about a power drill that is
only used for three minutes a year, which is the
average, and third we need to sell performance, not
products we need to sell kilometers not tires, we need
to sell mobility not automobiles, we need to sell
connectivity not iPhones and we need to sell health,
not food" - McKinsey Global Institute
Technology is not an end in itself, it is an enabler of an outcome. Achieving the quantum leap that the move into
the services economy can enable means differentiation between what is an enabler and what is the outcome,
and making sure not to confuse the two. Cities are means to ends, not ends in themselves, they are means to
achieving a quality of life for their citizens.

The services paradigm is focused on the outcome by asking first how can we solve the problem through
innovation and information, rearranging existing capabilities more efficiently. This means are real recalibration in
terms of asking what is needed and looking at all the resources that exist, be they public or private, then asking
how one can unlock those resources and focus them on the outcome in the most effective way.

To do this one needs to understand the whole and how the parts fit into the whole in delivering the required
outcome. Again this requires a shift towards the platform model to be achievable because it is not about creating
solutions oneself but instead about creating the connections for others, aligning incentives and resources so that
they can be harnessed to deliver overall effective outcomes.
"This is what innovation is about it is
nothing more than rearranging
ingredients, it is not about inventing
something new, if you have a drop in
oil price and you have to find a way to
manage your projects more efficiently,
it means just a willingness to look at
all the ingredients that you have got
available and seek a new arrangement
that makes those ingredients more
valuable" - Luke Williams NYU Stern
 From Fixed Assets to Adaptive Systems

The urban environments that we engineered during the 20th century were fundamentally static in their nature.
These infrastructure systems were designed for stable and predictable environments, they operate within a well
defined "normal' set of parameters and resist change. This makes them inert, non-responsive and degenerative
over time; we build a road once and then it goes through a linear lifecycle degrades every year. Today the
combination of a changing environment and new possibilities enabled by IT means that we need to switch the
focus towards adaptive systems that are able to respond to changes within their environment.

The application of information technology to the urban environment is creating the smart city, but we have to ask
how smart is this city, is it just transferring "smartness" from citizens to algorithms and technology. Smartness
should not be just about technology it is about making every aspect of the infrastructure system adaptive and
responsive.

True adaptive capacity in our urban environments would be about things interacting with each other, peer-to-
peer so that they can self-organize to find optimal outcomes. Too often we use IT for quite the opposite,
continuing along the centralized route, aggregating data, processing it according to black box algorithms and
pushing it out to determine the operations of the city and its citizens without them being aware of it. The ultimate
result of this is in many ways a city that is less adaptive and more impersonal; in this respect, it might be good to
keep in mind that the best cities are not the most efficient they are cities that are dynamic with lots of interaction
between people.
For the smart city revolution to be something sustainable the "smartness" needs to be applied in a wholistic way,
infused into every aspect of the city, this means data and information being exchanged and processed by
computers in order to optimize systems dynamically, but it also means ideas and knowledge to make the city
something that engages people in thinking and responding to their environment, making them more aware and
responsive to what is happening around them. Smart cities should make people smarter, they should be
platforms that enable people to create their own ways of life and not just determine their actions. Harnessing the
computational capacity of computers while bypassing the intelligence of people will lead to far from optimal
outcomes.

"There are two responses... one of them is

the engineer's response to take the data
look at the system as it exists and design a
new way for it to work to optimize the
system, the other response is more of a
people-centric one, more of a bottom-up
response and through creating the data and
visualizing it we can actually hope to
promote behavioral change" - Matthew Claudel
MIT
With the rise of smart systems and machine learning, we are increasingly recognizing that the future is about the
relationship between computers and humans, rather than a focus on one or the other in isolation. This requires a
shift in focus in our engineering to look more at the interaction between people and their technological
environment; what is called sociotechnical systems.

Sociotechnical systems is an approach to the study and design of complex organizations and technologies that
recognizes the interaction between people and technology as a defining factor in the overall system's makeup
and functioning. This is both on the micro-level of how an individual interacts with a particular technology in a
linear fashion - where we are interested in interface design and user experience - but also on the macro level,
referring to the complex nonlinear interactions between society's infrastructure and its sociocultural domains.
The ultimate functioning of almost all of our urban systems will involve the interaction between people and
technology. Whether we are talking about a sidewalk, a car or a subway station, the end throughput to the whole
process requires these two elements to function together, and sociotechnical systems builds upon systems
theory to look at how the whole thing works together in effecting a joint outcome.

When we over-emphasize the technical domain we may end up with a very technically efficient system but it will
also be alienating, leaving people feeling disenfranchised and ultimately result in disengagement. Inversely,
when we give precedence to the social domain we can get a lack of technical efficiency and incapacity to
automate basic processes. Developing integrated socio-technical systems requires a balance of both, and
importantly the integration between them through interfaces that are able to translate the language of one
domain into another.
"I think the most fascinating thing
nowadays is that as never before we are
witnessing and experiencing 21st-
century software and we are taking
advantage of them through prehistoric
hardware, our bodies haven't changed in
thousands of years, but even more
importantly the fact that our hardware,
the way we relate not only to technology
but to others, is still very primitive face-
to-face contact...the forces that drive the
way we live together in cities are very
primitive, archaic, I would call it even
emotions fear, anger, resentment, desire,
hope. So we will have while dealing with
cities to be able to combine state of the
Art knowledge [and tools]... but know
that the way we will relate to them is
through this prehistoric hardware and I
think that this polarity, it is part of the
potential fertility" - Richard Sennett LSE
The urban systems we have developed have evolved to become highly unsustainable and critically vulnerable to the
changes in the environment. Much of this is again a function of the lack of adaptive capacity and dependency upon a
limited fixed set of environmental conditions while current changes are presenting us with the occurrence of more and
more events outside of this normal range of conditions.

Adaptive capacity is constrained by dependencies; structures that are dependent upon many fix input values are
inert, they can not adapt because they require a fixed input of various resources. For example, our modern
infrastructure systems have developed to become highly dependent upon a particular subset of energy and resource
inputs. This has become a key source of vulnerability as everything from plastic to shampoo to hairspray to
transportation to electrical generation to all forms of manufactured products, are dependent upon a stable input of
petroleum.

To date, we have not seen the need for adaptive capacity and thus have not recognized the cost of these kinds of
dependencies. We have built cities that are dependent on long and complex supply chains that stretch around the
world; for the sake of saving a few cents on the cost of an apple or a t-shirt, we have created long complicated supply
chains that cities are now dependent upon. To take the idea of adaptive capacity seriously requires identifying the
dependencies that create inertia and then factor this in the cost benefit equation.
"When we look at building the resilience of a city, it is that
you want to be enabling self-organization, as you see it in
nature, that kind of connected organic growth that you see
in nature" - Mary Rowe New Orleans Institute
Of major significance here is removing our dependency upon centralized systems, as this is the key factor creating
inertia. It is important to recognize that centralization creates dependencies and those dependencies have a cost in
terms of reducing the system's adaptive capacity. The default use of centralized systems during the Industrial Age has
in many ways created a huge debt that we inherit today. We may still be largely unaware of the vulnerabilities and
cost of these centralized systems but it is something that will be increasingly revealed to us in the coming decades.

Resilience is directly correlated to adaptive capacity in that it involves a recognition that one can not resist all
eventualities, but instead the system needs to be able to absorb them and transform itself in response and thus go
through a process of adaptation. Resilience analysis then requires a critical assessment of the social, economic,
energy, materials and other metabolic networks of the urban system to identify the dependencies. The critical change
that needs to come about here is the recognition of the need for adaptive capacity on all levels, across all dimensions,
and the cost of centralized dependency and the inertia that it creates; both physical but also social in people's
deferred sense of responsibility and action. By understanding the linkages within the system, the value of adaptive
capacity and the cost of centralized dependencies we are then in a better position to factor this into decision making
and help to make decentralized solutions more viable in terms of their costs and benefits.
Section 4 | Solutions
As we have previously covered the challenge going forward is no longer about how we can provide all of the
infrastructure and services that will be required for this massive scaling up in our urban environment, but instead how
can we create the frameworks that enable and channel the resources of people towards optimal emergent outcomes.
The first structural change that comes about in this respect is the shift from the centralized organization to open
platform model. The platform itself is not designed to provide solutions it is designed to provide the basic reusable
building blocks that people can use to create their own solutions and the connectivity with which to interact with
others and self-organize towards optimal emergent overall outcomes. Turning the provision of services from a closed
bureaucratic model to an open market model where anyone can provide the service.

The platform model is based on making a distinction between what are basic common services on the platform level
and what are user-generated applications. The platform model provides generic common infrastructure and generic
building blocks that the users can then use to build their owns solutions. One example of this would be incremental
housing. Instead of trying to formally plan and build infrastructure and all the utilities required for a new urban
settlement we could in stead simply look at the land as a platform. We may know that new people are going to move
into an area around a city but do not have the resources to provide the full set of services for them. When we look at
this from the platform model, we can create the layout plan for the city, simply marking where the streets, parks and
residential plots will be. People then move in and can purchase a plot at low cost with nothing on it. People start with
nothing, you find a space, buy a brick a day, pay as you go and after a few weeks you have enough bricks to build a
room. This approach harnesses the bottom-up drives of the individual by reducing the threshold to the lowest level,
with that threshold being adjustable depending on the economic level of the locality and people.
An example of this approach can be seen in projects in Sri Lanka that started in the 1970s with houses that had just
roofs but today have grown into normal neighborhoods. Whole unofficial areas in the city of Lima have been built in
this incremental fashion. Lima expanded into the countryside with squatter invasions that were planned via street
grids with 200-meter scale plots, the result is that 30 years later these are bustling neighborhoods where houses cost
up to $40,000. This is an example of recognizing the evolutionary potential of the system, what people are doing and
working with that natural propensity not against it; how do we create platforms that enable them to do what they are
doing but in a way that will create synergies and lead to constructive outcomes as in these examples.

"We won't be able to solve the problems of the

amount of people coming to cities unless we
deliver incremental open systems to channel
people's own capacity instead of resisting,
seeing people as part of the solution and not
as the problem" - Alejandro Aravena Elemental
Another good example of this is in Chile where in 2003 100 families were rehoused with the help of the architectural
practice Elemental. The available budget was $7,500 a home, including the cost of land, an amount that would have
paid for only 30 square meters of living space. Elemental decided to spend the money on what they called “half a
good house”, rather than a whole bad house, which meant providing a structure with the basics of plumbing and
shelter, which residents could then expand using their own labor and skills. The architects’ generic structures rapidly
became filled in with multiple materials and window types that reflected the different skills and aesthetics of the
inhabitants, and the different means available to them. We can then note how this approach helps to move away from
the mono-dimensional one size fits all design as users are creating their owns space it creates the opportunity for a
multiplicity of designs and aesthetics. We are trying to shift the emphasis towards modular scalable solutions with low
thresholds to entry. Instead of large monolithic structures imposed as a one size fits all, the emphasis shifts to asking
how can we create small very basic modular building blocks that people can then build upon and plug together to
achieve those large structures in an evolutionary process over time.

In order to avoid the massive amount of people that get affected by large monolithic projects - and thus the massive
amount of people we need to bring to the table and try and all  get to agree on one single outcome that will fit all - we
are trying to shift this to a much more loosely coupled model through autonomous modularization where the end user
has the very most basic modular components to provide for themselves, but can then choose if they wish to connect
those into larger networked structures on demand to achieve economies of scale. One example of this would be a
smart grid. Instead of collecting huge sums for a centralized power plant - having to get everyone to agree on where it
should be, whether it should be nuclear or coal, having environmentalist complain, having to get farmers to agree to
have power lines run across their land along with the many other stakeholders - one can create modular systems
through alternative energy technologies, using the money to instead provide people with a very basic distributed
energy system that they can then expand upon and build a smart grid platform so that people can choose if they want
to connect to others for the buying and selling of energy on demand.
"Local governments have to see themselves as platforms managing the citizen's
expectation and ensuring both public and private spaces remain urban commons,
this is why the concept of open source and interoperability must be extended to
urban planning" - Jean-Louis Missika Deputy Mayor Paris
With the platform model, the emphasis switches to working with people's inherent drives and interests and the
challenge becomes one of aligning their incentives with that of the whole. As we start to move away from the
centralized model towards the decentralized platform model this also means that we lose a certain direct control over
the development of the system and we have to approach the guidance of the urban environment through an indirect
approach of designing systems through the intelligent use of information and people's innate incentives.
Platforms create optimal outcomes and value by connecting people, providing them with information so that they can
coordinate and achieve optimal outcomes without those outcomes being pre-specified. These platforms are
essentially markets for enabling everyone to be a potential producer of value and exchange that directly peer-to-peer.
This requires that we recognize all of the value within the system, every dimension to an urban environment that
contributes towards creating a functional living space; natural capital, economic capital, social capital and cultural
capital. The function of the platform is to provide the information resources for people to recognize and develop this
multiplicity of value sources that help to make the community a functional one and all of the activities that contribute
or deplete from those resources, we then create a platform
where people can exchange that value.
Social networking is one technology that can enable this,
social networks define a type of value in the form of social
capital. People care hugely about their social and cultural
capital, what other people think of them and their
connections with other people. When you put up a billboard
saying not to do something people just ignore it, people don't
respond well to signs telling them not to do things, what they
do respond to is social interaction with their peers and
community, that if you do this then you will get these points
or this credit or your profile in the community will improve.
Transparency and providing people with information are critical. For example, we see this in a project in the UK where
simply by giving people information about the amount of energy they are using in an accessible way their
consumption was reduced by almost half. It went down further when they painted the amount of energy a house was
consuming on the road outside of the house so that everyone could see what others were using and there was now a
social aspect to this as people started to compete towards reducing their consumption and emissions. Here again, we
can see how this is about information, transparency and creating platforms for connecting people peer-to-peer and
harnessing their incentives.
Providing people with information through apps and using social media is just the start, going forward blockchain
technology allows us to set up token economies for any kind of value - natural capital, social capital etc - for that to be
securely recorded and exchanged in a distributed fashion. You can create a token economy around anything that has
value. For example, in a community watch group, people would gain tokens by providing any services that contributed
to the security of the community while others who wish to avail of that service must pay with tokens, this gives the
token's value in that they can be exchanged for traditional currencies. 

As another example, we might think of the collection of waste, if the removal of waste from a community costs the
authorities something they could create a token economy where anyone can earn tokens by doing anything that
produces less waste - whether that is collecting and disposing of other peoples' waste or producing less waste
oneself - thus working to harness the local incentives of the individuals to achieve optimal outcomes instead of those
outcomes being specified and imposed by the authority. If these token economies are well designed they can work to
place cost and benefits on the individuals who are taking the actions thus making the system self-regulating, instead
of authorities having to monitor the system and impose sanctions and rewards that members try to avoid. Blockchain
token economies can increasingly be used to manage and grow any resource within a community enabling
individuals within the community to provide services. The workings of token economies is yet not well understood, but
this is an area that is expanding rapidly and in the coming years we will see many new solutions of this kind
emerging.
"What is clear in any case, particularly with
infrastructure is that the scarcest resource is
not money but coordination, cities express the
fact that what we will have to do to be able to
respond to the challenge is coordinate not just
money but the operations of all the different
stakeholders and agencies in the city”
- Alejandro Aravena, Elemental
 Urban Ecosystems

Urban Ecology is an approach to urban development that focuses on the combined interactions between three
interacting components, the social, the built, and the biophysical. This systems approach views the city as an urban
system and focuses not so much on what's happening within a particular component but rather the ecology of the
entire city as an ecosystem. In this view, the city is an ecosystem of many different interacting parts, asking how can
we use information based platforms to identify those parts and try to build positive synergies while reducing negative
synergies.

To give a concrete example of the effects of negative synergies we can look at a research project - Appleyard
University of California Press 1981 - conducted more than 30 years ago looking at how close or far away people on a
given street felt to each other. In looking at one street, that was a low traffic zone with 2000 vehicles per day,
researchers found that when they interviewed people along that street they said that they had more friends and
acquaintances on the street, they would also say that their home was a broader or bigger place with more public
space when compared to another street that had heavy and fast traffic of 16000 vehicles per day.

This illustrates how optimizing in isolation can create negative synergies that result in a depletion of social capital.
The idea that we can focus on specific areas to optimize for a single outcome has its limitations when looked at
through the lens of synergies and full cost accounting. Placing the opera hall in one part of the city for culture,
housing in another for accommodation and work areas in another, and seeing urban design as an equation of simply
optimizing for all of these components, results in suboptimal overall outcomes as it destroys the synergies between
components.
Key to a thriving urban ecosystem is recognizing all of the different value sources and processes that go into creating
a thriving urban environment. This requires expanding the spectrum of what we are dealing with when talking about
urban development, not just about basic needs but also about a broader set of values and aspirations. These should
no longer be seen as a "nice to have" but in fact critical to the overall success of the engineered environment, in that
they enable us to bring to the table a broader set of motives and interests and thus harness more of the resources of
the end user.

Every component in the urban system should be assessed along all value
dimensions that it is adding or depleting from and how that system interrelates
with other components to create positive or negative synergies. When we start
to bring a full value approach to urban development mono-functional systems
come to be seen a suboptimal compared to systems that can deliver a
multiplicity of value sources all at once or over time. A billboard that also works
as a seat for people to sit on, a building roof that works as garden space, an
old train track that is revamped as a jogging area and exhibition space for
sculptures, a wall that can house plants on it, pathways that can capture run off
water, a wall that captures and turns fog into water, cities that tell stories in their
architecture, houses that double as offices. In Manila they have turn water
bottles into solar light bulbs, India is building roads from plastic waste.

This enables a multiplicity of processes to take place within the same location,
thus removing the need to create a whole dedicated area for them. It works to
integrate areas and create neighborhoods, removing people's dependency on
going to specific centralized locations for certain activities - who needs a gym
when you have cycle lanes for people to get exercise on their way to and from work, likewise, you probably won't
need so many hospitals to deal with people from obesity related illnesses. When you conduct a full value analysis
these kinds of things start to come to the forefront and change the equation under which decisions get made.

In the challenge of city density is also the opportunity for creating multifunctional systems where different processes
work to fuel each other. Urban systems can be self-sustaining systems but this requires local feedback loops between
the different components so that they can adapt to each other and create positive synergies. Information is the means
through which they do that, in that it enables elements to adapt to each other's behavior and create synergies. Again
this will be a key part of the smart city concept, as once connectivity and information processing is distributed out in
the city we can start to really identify better how things are working together or not as the case may be. For example,
the issue of rush hour traffic congestion is one of negative synergies where everyone is trying to occupy the same
state at the same time which creates gridlock. In Germany, IT enables new adaptive signaling systems which means
trains can run much closer together creating synergies
so that more trains can run on the same tracks.

Likewise much of our existing infrastructure — our

roads, our transit networks, our electricity generation
and our airports, to name but a few — are designed to
meet peak demand. Rather than build entirely new
capacity to meet ever-higher peaks, governments at all
levels are now thinking about ways to smooth out the
peaks by using adaptive pricing or staggered work days,
which are ways of turning negative synergies into
positive synergies, so as to do more with less.
In the world of distributed platforms patterns of order emerge through the process of self-organization and feedback
loops are key to the dynamics of this process. Without nonlinear interactions and feedback loops, self-organization
doesn’t really happen. For example, negative feedback is a self-organizing mechanism for load balancing. If we think
about a toll booth on a highway, the system has a certain load, and as new cars approach they navigate towards the
booth with the least load. Because of negative feedback, the more cars there are at a particular booth the less likely a
new car will be to enter that lane and vice versa. There is no one coordinating this process, the load balance is an
emergent phenomenon of self-organization through negative feedback, and it works to balance and stabilize the
system.
               
Adaptive pricing is an example of using information to alter the incentives of people towards creating synergies, by
putting prices up on a toll bridge during peak demand or increasing electricity during peak hours we are optimizing for
the interaction between users, there is an information feedback dynamic between the technology, people's use of it
and the overall management systems that can work to create optimal outcomes. Developing functional urban
ecosystems is about recognizing the different processes taking place and building these feedback loops so as to
enable the urban environment to manage itself; this is the opportunity that we now have as we build out this IoT
infrastructure in cities.
"It is time that we think about bringing nature back into our cities, ecological landscape is
about mimicking the functions of forests and wetlands and open spaces to service our city to
cleanse our city...why can’t we be building wetlands in our cities such that they provide a
much greater biodiversity, ecosystems services interns of as cleansing water, interns of a
fantastic place for us to create a sense of community and a sense of place, why aren’t we
thinking about creating systems like that throughout our cities such that all green space have
function beyond being green spaces, beyond it looking good" - Tony Wong, Water Sensitive Cities
 User Generated Services

A whole new set of technologies are emerging that go beyond the industrial paradigm to create a new
distributed architecture to our infrastructure. Distributed energy generation, electric vehicles, thin film solar cells,
mobile phones, 3D printing, organic farming, grow systems and many other alternative technologies run contrary
to the Industrial Age model of a dependency upon a very limited set of mass production systems.

These new distributed technologies need to be combined with new organizational structures for them to meet
the critical mass that is often required. In this respect, the blockchain will be a key technology enabling the
sharing of resources on demand. The blockchain is a secure shared database of ownership and system for
validating exchanges of value peer-to-peer. Likewise, smart contracts can be programmed on the blockchain to
automate transactions and specify all sorts of rules for those exchanges.

This makes it possible to easily create a database of ownership, which would be important for many cities in
developing economies. Keeping track of who owns what pieces of land is still a complicated process and the
World Bank estimates that 70% of the world’s population lacks access to land titling. In many developing
economies the formal legal systems have problems incorporating informal systems of ownership and keeping
track of them, likewise, they suffer from corruption and miss trust. Sweden is the country that’s furthest along in
putting land registries on a blockchain, but Honduras and Georgia are following. Dubai is leading the way for
cities, by 2020 they plan to have 100% of government services and transactions happen on the blockchain.
The blockchain is critical to enabling user-generated processes because it enables open systems where people
have access to one common database and can trust their peers without need for centralized authority. In such a
way it enables people to set up their own networks of exchange and have access to common information via the
blockchain.

The key organizational change that the blockchain enables is that it takes the data that is currently hidden away
inside of many different closed organizations and puts it out into one shared database that anyone who is given
access can use. This means that people can then build their own solutions on top of that, thus enabling
permissionless innovation.

“Smart contracts, a feature of “Bitcoin

2.0” technologies such as Ethereum,
could soon operate on the Internet of
Things (IoT), control objects in the
physical world, and power a new
decentralized version of the sharing
economy, for example sharing services
similar to Uber and Airbnb that operate
in pure P2P mode without centralized
management” – Bitcoin Magazine
Likewise, the blockchain enables trustless and frictionless automated exchanges between people. This greatly
reduces the barriers and friction to sharing private resources. Platforms like Airbnb and Uber brought down the
transaction and coordination costs for sharing private resources and thus tapped into under-utilized resources,
but the blockchain can automate this whole process and remove the centralized platform making it possible to
reduce the barriers to the fluid and dynamic sharing of resources much lower. The blockchain applications that
are currently being built make it virtually free to set up networks for the dynamic exchange of resources - like
bikes or accommodation - offering the potential to unlock greatly more resources than the sharing economy
currently does.

One example of this is what is called a Slock, a door lock that is connected to a smart contract on the blockchain
that controls when and who can open the lock. One of the developers of Slock Christoph Jentzsch described its
workings as such: “The owner of a Slock can set a deposit amount and a price for renting his property, and the
user will pay that deposit through a transaction to the Ethereum blockchain, thereby getting permission to open
and close that smart lock through their smartphone.” Such technology bridges the blockchain and the physical
world through the use of automated smart contracts, thus enabling the frictionless and automated temporary
exchange of assets such as bikes, parking lots or rooms.
In the combination of blockchain applications for enabling local peer-to-peer networks of exchange with new
distributed technologies like solar cells, we can see a whole new vision of user-generated systems for the
provision of core services in a distributed model.
"So this promises a new model for building infrastructure which is crowd-based, where you stop
thinking of infrastructure as being an investment with high capital expenditure and start thinking of
it as, well, there is some underlying infrastructure, there are some roads but how do we layer on top
of that enough so that people will start sharing commercially the resources they have to create new
collective capacity, you can think of this applying to parking spots, it is already applying to demand
spikes during sports events like Airbnb picking up a whole lot of the excess demand during the
Olympics" - Arun Sundararajan NYU
 City As A Service

The industrial model was based around economies of scale that drove centralization but the world of connectivity
shifts us away from economies of scale to economies of reusability. The engine of the industrial model was
centralization to achieve economies of scale which meant that everyone could have their own, car, tv, house etc. the
result being a mass consumer society. The engine of the Information Age is rapid iteration and duplication a zero-
marginal cost. When one person can create a file and at the click of a button duplicate it many times and send it to
millions of people around the planet at virtually zero cost, that those people can then use it and duplicate it again at
no extra cost, then the value is in this reusability.

In order to harness this capacity though, we have to turn physical systems into services by giving them an information
layer that makes them capable of connecting into networks and offering their usage as a service. This model is long
since understood in software development where it is called services oriented architecture. Instead of building a
whole new system from the ground up each time, we defined existing resources as services and then build networks
for aggregating those resources around the end user's needs.

Service systems integrate many different components and coordinate them into seamless processes built around the
end user. For example, instead of paying separately for fuel, insurance, car, parking space etc. users can purchase
integrated mobility services from different service providers who work to bring those different parts together for them.
This is an architecture optimized for user-generated systems and the sharing of resources. People just have to make
whatever resource that they have available as a service via an online platform, organizations can then build networks
that combine those resources into a finished service system that the end user accesses typically via a mobile device.
Service systems engender a whole different paradigm in how we develop and deliver solutions, most of all they
require a relentless focus on outcomes and asking what is needed by the end user. The end requirement of a city is a
high quality of life for its citizens, we can then work backwards from this asking what existing components need to be
brought together so as to deliver that service. This is a shift from a push model of pushing out solutions, to a pull
model, where we first gain a deep understanding of the needs and then pull together the resources - that typically
already exist - so as to deliver the service required.

Focusing on services helps to shift the model towards outcomes and innovation. As an example, we can think about
the Colombian city of Medellin's transport service, a city that has won awards for its innovations. When they first
looked into how to provide transport for their city a Japanese construction company told them the best way was to
build a number of large elevated expressways through the city to provide additional road capacity, they decided to
scrap this and focus on the end users needs and what resources were available, in the end they created a mass
transit system out of an inexpensive bus metro network that used existing roadways.

As the complexity of our technology infrastructure and engineered environment unfolds, there needs to be a counter-
balancing force of integration for the end user - or else their experience becomes too fractured and complicated - and
that is what service systems offer as they integrate disparate discrete components around the user through the use of
information technology; stitching parts together and adapting them to the specific needs of the end user. Here again,
the technology of the smart city comes into play in the use of situational and contextual data so as to adapt and
coordinate available resources into a single process in response to the user's particular needs.
In today’s new “solution economy,” solving social problems is
becoming a multidisciplinary exercise that challenges businesses,
governments, philanthropists, and social enterprises to think
holistically about their role and their relation to others—not as
competitors fighting over an ever-shrinking pie, but as potential
collaborators looking to bake something fresh that serves as many
stakeholders as possible - Deloitte Press
 The Adaptive City
The integration of information technology with the urban environment will enable urban systems that are inherently
dynamic in nature and responsive. The key structural change that needs to come about is the move from
infrastructure that is designed to be static to one that is instead designed to respond to change. Key to achieving this
will be shifting to the new design paradigm of event driven architecture. Event driven architecture goes hand in hand
with the platform-user generated-services model in that it is a design approach where components respond to events
over time so that modular parts can be pulled together into services to meet the end user's needs at the right place
and right time.

Instead of building a fix centralized monolithic structure that degrades over time we are trying to shift solutions into
the space of distributed modular components that can be combined and delivered as a service on demand. With IoT,
the sensing and communications between devices and technologies will be pervasive and when this is coupled with
blockchain technology it can automatically manage the sharing of those resources, enabling an event driven
architecture to become the primary method through which services are delivered.  

When we start putting chips in all kinds of devices and objects, instrumenting our technologies and putting
smartphones in the hands of many, the world around us stops being dumb and static and starts being more dynamic,
adaptive, and things start happening in real-time. For example when the lights in the street are instrumented with
sensors and actuators they no longer need a person to turn them on, instead, they wait in what is called a restless
state, listening for some event to occur and then can instantly respond. This is in contrast to many of our traditional
systems where the components are constrained by some centralized coordination mechanism with information often
having to be routed from the local level to a centralized control mechanism, then batch processed and returned to the
component to respond after some delay.
Event driven architecture is very well suited to the loosely coupled structure of urban systems as it does not require
that we define a well bounded formal system of which components are either a part of or not, instead components
can remain autonomous being capable of coupling and decoupling into different networks in response to different
events, thus components can be used and reused by many different networks.

Likewise, this design paradigm is particularly versatile. Event driven architecture allows systems to be constructed in
a manner that facilitates greater responsiveness because event driven systems are, by design, normalized to
unpredictable, nonlinear and asynchronous environments they can be highly versatile and adaptable to different
circumstance. This approach is also inherently optimized for real-time analytics. Within this architectural paradigm, we
have a much greater capacity to find, analyze and then respond to patterns in time before critical events happen.
Whereas traditionally we spend a lot of time analyzing data about things that happened last week or last month, an
event driven architecture enables a more preemptive world where patterns leading to dysfunctional activity are
identified beforehand.

With the current development of smart cities, the event driven design paradigm is being applied to areas of city
infrastructure from traffic management to protection from storms and flooding, but it is not just relevant to a city's
technology infrastructure it should be considered in all aspect of designing the urban environment.
"There is a need for transformation and this transformation will come
from moving from a reactive way of managing our infrastructure
systems to proactive, from having a subjective assessment of their
conditions to having an objective and data-driven assessment, and
making decisions with limited information towards complete situation
awareness" - Burcu Akinci, Carnegie Mellon University
Conclusion
As we have tried to illustrate in this paper the urban equation is becoming much more complex and as a response,
our thinking needs to evolve, giving up the idea that there may be one solution, one organization, one technology, or
policy that will turn the tide and start to focus on the major structural transformations in our approach to urban
development that need to come about, to make the current journey we are on lead to sustainable outcomes.

As we have highlighted in this paper, the critical change in development model needed in order to scale the system in
a sustainable and inclusive way is a shift from the centralized model to the decentralized model. Instead of focusing
on economies of scale through centralization and mass production, as per the industrial model, shifting to delivering
solutions by harnessing individually small amounts of resources from the mass of people towards providing collective
services. Focusing on pushing resources out to the edges of the network where people can create their own
solutions, recombining these via platforms to deliver them on demand at scale. Thus opening up service provision to
the mass of people in a distributed modular fashion, removing the bottlenecks of the centralized model and potentially
harnessing vastly more resources closer to the point of demand in a more flexible model.

In an age of information and services our urban environments no longer need to be inert monolithic structures with
one size fitting all, the city can be formalized as a service enabling us to shift from the model of "mass" to the model
of innovation. Everything that is of value in the urban system serves some function and thus delivers a service, by
thinking "innovation first" and focusing that relentlessly on the issue at hand, we can conceptualize the urban
environment as a service and shift from producing more concrete and steel structures to really delivering outcomes
and quality of life.
When all these architectural patterns are applied to the development of urban environments in a holistic way it truly is
a paradigm shift away from the static, centralized, monolithic, mass, compartmentalized systems, that we know so
well, towards the dynamic, decentralized, modular, user-generated urban environment that would be required to move
in the direction of a more sustainable process of urban development. This same model can be applied to all areas of
infrastructure provision, from housing to telecommunications, to transport, to the provisioning of public spaces.
A Complexity Labs Publication
Curated by Joss Colchester
info@complexitylabs.io
 Reference Notes
Globalization
Parag Khanna on Connectography

Richard Sennett: The City as an Open System

Urbanization
Our urbanizing world - the United Nations

A Meta-Analysis of Global Urban Land Expansion

World Bank - Africa’s Cities, Opening Doors to the World

World Cities Report 2016: Urbanization and Development – Emerging Futures

Environment
Mark Swilling - The efficiencies of density


Investing in Urban Resilience