Last month I attended the Base Conference in Bradford, where Steve Wood – UK vice president for strategy at IBM and an alumnus of Bradford University School of Management – delivered a keynote speech as a sustainability speaker
He was asked to share his thoughts on cities of the future and how we build sustainably. This tied in well with the coming launch of Bradford’s new Sustainable Enterprise Centre.
Steve started his talk by mentioning the McKinsey report Urban world: Cities and the rise of the consuming class, published in June this year, which says that we are witnessing the most significant economic shift in history. He said that he sees the digital revolution being core to the creation of our cities of the future – as you might imagine since he works at IBM!
1. The world is moving to cities
China’s industrialisation alone is happening at 100 times the scale and 10 times the speed of the first country to urbanise – which of course was the United Kingdom in the industrial revolution, so clearly brought to life in the Olympic Games 2012 opening ceremony.
The world is moving to cities. 75% of the world’s population will reside in cities in the near future. Big cities.
440 of them, mostly in the emerging markets, will generate half of global GDP and double the associated infrastructure investment to $20 trillion by 2025.
McKinsey says that if this investment is handled badly then costly inefficiencies and practices will constrain future development. Conversely, those cities that build well-functioning and efficient environments will better attract skilled labour and competitive businesses.
Cities must plan and finance the urban environment for sufficient housing, effective transport, electricity, water, communications and other services and through smart regulation provide an environment that encourages entrepreneurialism and business investment.
And yet the vast majority of executives surveyed by McKinsey perceive the city as “an irrelevant unit of strategic planning”
2. IBM Smarter Planet strategy
In 2008, in the eye of the Financial Services storm, IBM shared a platform with President Obama to describe how the digital revolution would make a vital difference to transforming the global economy.
IBM’s Smarter Planet strategy is predicated on the convergence of Digital, Physical and Social infrastructures. And the focal point is the city – smarter cities.
What does IBM mean by smarter? They mean the world is getting smarter – not metaphorically, but literally. We are infusing intelligence in the way the world works.
The world is becoming INSTRUMENTED
The first transistor was 2.5cm2 and used in a hearing aid. Today 220m fit on a chip the size of a postage stamp. There are more than a billion transistors per human being, more transistors than grains of rice, and considerably cheaper.
These Instruments are INTERCONNECTED
Only 20 years ago there were very few connected computers – scientists had to travel the world to get time on individual machines. We are now well on our way towards a trillion connected devices.
These Interconnected Instruments are INTELLIGENT
It is now possible to fit a computer 1mm3 into the human eye to measure the symptoms of glaucoma.
The GlowCap is an instrumented, interconnected, intelligent, pill bottle. If you forget your medicine it will glow to remind you, if that doesn’t jog your memory it will buzz, if that fails it will phone you – and if that doesn’t get your attention it will probably call your mother!
Many cities of the future will be huge economic engines, but a billion new consumers do not automatically make a sustainable environment. Cities generate the vast bulk of the world’s CO2 emissions; consume 60% of all domestic water and squander 70% of electricity through inefficient grids. Escalating social health care demands; education and safety issues will not just magically appear in these new conurbations.
Old models simply won’t do. The pace is too fast, the problems too big, the complexity too great. It is the perfect opportunity for cities to lead new models of governance and collaboration.
Smarter cities, like the Glowcap, will be instrumented, interconnected and intelligent. They will drive the globally integrated digital economy.
Resources and investment will flow, faster than ever, not only to cities that offer cost advantages skills and expertise, but to those that offer smart infrastructure, efficient transport systems, secure trade lanes and reliable energy grids; inclusive governance, trusted markets and enhanced wellbeing.
3. Traffic congestion reduced
Physical infrastructure will be smarter – the USA alone loses $80bn a year to traffic congestion, as much as half on simply looking for somewhere to park.
In the UK a program designed to avoid the hazards of overflowing waste, “chipped” the humble wheelie bin to signal its readiness to be emptied. The unforseen benefit was that the bins self-managed their collection schedules reducing traffic by 25%.
Stockholm’s smart transport system cut traffic by 20%, emissions by 12% and added 40,000 users – yet unexpectedly reduced fatalities. Adopted against the wishes of retailers, sales actually rose.
Singapore Land Transport Authority’s smart card system doubled passenger capacity to 20 million fare transactions per day and cut fare leakage by 80%.
Imagine the economic, societal and environmental benefits of a truly integrated, adaptive self-managing transport system on our precious Island.
Digital infrastructure will be smarter – auto manufacturers are trialling vehicles capable of assessing accident damage, the likely injuries to occupants and automatically calling the necessary emergency services.
Oregon’s “Portland Plan” uses digital technology to model previously impossible systems scenarios to create a 25 year development plan.
IBM is embarking on a similar exercise in Birmingham and used the same principles in New Orleans to tear down the boundaries between multiple agencies in redeveloping the city plan after Katrina’s devastation.
4. Building low carbon economies
These complex interconnected systems create huge amounts of data and IBM’s smarter analytics capabilities accelerate city planning and development in moving from observation and insight to prediction and foresight.
The Leeds City Region’s Local Enterprise Partnership – the organisers behind the Bradford Base conference – has a vision to build “a world leading dynamic and sustainable low carbon economy that balances growth with a high quality of life for everyone”.
Steve Wood’s view is that the UK must lead this new revolution. We led the industrial revolution. It took 150 years.
The digital revolution has only just got going and in 15 years has reshaped the global economy. We are in a new era of computer science – an era of new capabilities, of complex ecosystems, new knowledge, new industries and instant global reach. In this era all things will change, all businesses, all professions, all walks of life. The very way we live in the only home we have.
So which economies could lead the digital revolution? And what chance is there of the UK showing the world how to create sustainable cities of the future? Is this a challenge for business management in the UK to achieve that?
Or is this all a pipe dream?
Please share your thoughts in the comment box below.
If you like this subscribe by leaving your email address in box at top right corner.
- Choosing an MBA that helps you make a difference
- Three reasons why industry should get involved with a university
- How can you speed up the innovation process in new product development?