Meeting the Smart City challenge in an era of global change

This is the text of the keynote presentation I gave at the University of Leeds Business School Festival of Ideas on 28th February 2018.

Introduction

Thank you for all making the journey to be here today, battling the snow and the ceaseless Siberian wind – “The Beast from the East”. Many of us working on the cities agenda are at this time also feeling buffeted by the winds of economic and technological change, which are causing huge disruption, and creating huge risks as well as new possibilities for our cities.

In this talk I will try to answer the question of what are the main trends and drivers for change affecting our cities in the UK, particularly our Core Cities (our second tier cities), recognising London has a different position amongst cities in the world?

I will talk about what does this mean for the ‘Smart Cities’ agenda in a city such as Leeds

I will argue that:

a) We need a new definition of ‘Smart Cities’ which puts people, human capital and governance at its heart; and

b) We need to move away from a focus on the ‘what?’ of Smart Cities to the ‘why?’ and in particular. I will argue that in the past, the; what’ has generally been firms and people in the digital sector installing clever digital hardware. But in the future, it needs to be about how of: all of us shaping our cities need to embrace the digital and data agenda – a principle of; digital by default’ and how we need to focus on the economic and social outcomes that can be driven by technology and change.

I will talk about the drivers of change affecting cities such as Leeds today, and what I think we need to do to respond to them. But I will start by going back 140 years in the history of Leeds. Because the fact is that our cities have always been adapting, growing and innovating in the face of disruption.

Image-1

The Leeds Innovation District – creating a 21st century science park in Leeds City Centre 

The City of the Past

It is 1888 and a young man from France who had moved to Leeds created the world’s first moving image, filming traffic on Leeds Bridge. Louis Le Prince had moved to Leeds because of the city’s capabilities in engineering-he joined the firm Whitely Partners of Hunslet, manufacturers of values and computers – and in – what would be today called the “creative industries” – the Leeds Technical School of Art had been founded in 1871.

It was a time of great innovation and change. Four years earlier a Polish refugee opened a stall in Kirkgate Market in Leeds, and in 1894 he went into partnership with a cashier from local wholesale company. Their names were Michael Marks and Thomas Spencer, and their slogan was “don’t ask the price; it’s a penny”.

In the three previous decades a new railway station, Leeds Central, was opened joined by the LNWR and North-Eastern Railway, which would go on to become the busiest transport hub in the north of England.

Some of the world’s most prestigious and productive workspaces had been created, such as Temple Works, Tower works and Alf Cook’s Print Works, setting new standards in workplace and production design and technology, and the productivity and welfare of the workforce.

In 1874 the Yorkshire College of Science opened with the support of local industry, teaching experimental physics, mathematics, geology, chemistry, biology, textiles and engineering and in 1887 (a year before Le Prince’s breakthrough) the college merged with counterparts in Manchester and Liverpool to form the Victoria University, before gaining its royal charter as the University of Leeds in 1904.

Clothworkesr.JPG

Clothworkers Court was the first building of the Yorkshire College of Science (photo taken the day of my lecture, which was in the University of Leeds Great Hall in this building). 

The Leeds General Infirmary, which had been established in 1771 moved to its current site on Great George Street. The magnificent building was designed by George Gilbert Scott, who was advised by a nurse and social reformer called Florence Nightingale.

And in 1858 the new Leeds Town Hall was opened by Queen Victoria. It was the largest crowd to gather on the streets of Leeds, a record that stood for another 158 years until in 2015 an even larger crowd watched, at the same location, the start of the world’s largest annual sporting event, the Tour De France. The building of the Town Hall symbolised the rise in importance of the Leeds Corporation, building on its powers granted to it in the 1942 Leeds Improvement Act to regulate and invest in streets, lighting, sewerage, building regulations and street cleaning.

So why is this relevant to the issues our city faces today? Think about the issues and trends at the time: rapid technological change, innovation and interconnected industries, new communications systems, the role of education and colleges and universities, businesses investing in skills and in premises to boost their productivity; a city that was open to talent, to innovators and entrepreneurs from across the world; a focus on the health and well-being of the population; investment in infrastructure; and new forms of government and city leadership.

The City of Today – Drivers for Change

I believe there are seven main trends and drivers for change having cities such as Leeds today: rapid economic change; the growing importance of human capital – a skilled workforce; the trend of agglomeration (supported by connectivity); huge technological disruption; environmental shocks which make resilience a major issue; health and well-being; all of which have implications for city governance.

Economy

We are seeing the emergence of new sectors. Leeds made the transition from a predominantly manufacturing economy (although manufacturing remains a significant employer) to one where financial and services drove economic growth in the 1990s and the 2000s. But the city’s economy is changing again. Following a period of rapid private sector jobs growth between 2010-15 (including the fastest amongst any UK city 2014-15) in 2015-16, the last year for which statistics are available, there was a small decrease in private sector jobs in the city. If you get beneath the surface of the statistics for that year, there are some interesting dynamics. Manufacturing employment, in line with long-run trends, continued to fall. But there were also falls in employment in financial and professional services, the drivers of growth in the Leeds economy in recent decades. there was rapid growth in sectors such as digital, low carbon, medical devices, and the creative industries. The emergence of the creative and digital sector in our cities – what Doug McCwilliams has called the “Flat White Economy” has been phenomenal.

The geography of innovation is changing. Knowledge intensive jobs are coming back into our city centres. Many people predicted that technology would result in the death of cities; we would stay at home and work remotely. But as the economy has become more specialised and knowledge based, firms want to be located in city centres where there are high densities of face-to-face contact between people and knowledge producing firms and institutions (such as universities, hospitals and government). They want to be where skilled people can collaborate, compare and compete in close proximity to each other. As Bruce Katz has said, people are no longer driving to out-of-town office and science parks where they do research and development and keep their ideas secret within their buildings. They are coming into city centres (increasingly using public transport or walking and cycling) where they are sharing their ideas in the hyper-caffienated spaced between the buildings. These densities of activity are supported by rail and public transport networks which enable firms to access a skilled workforce across a wide area.

We are seeing the increasing importance of interconnected industries. Increasingly, successful cities are ones with diverse economies. Economic diversity builds resilience. In an era of great uncertainty it pays not to have all your economic eggs in a single basket. and as the boundaries between sectors become more blurred, it where different economic activities come together we are seeing innovation and growth, for example in Fintech, Manuservices, and Industry 4.0.

Picture1

Interconnected Industries – it is where sectors come together is where we are seeing new high-growth economic activities emerge (diagram by Tom Bridges)

We also now have the productivity puzzle. Whilst job creation has been strong in Leeds, and in other major UK cities, in recent years. Productivity has flat-lined since the recession of 2008. There are many theories on why this is. The finger of blame has been pointed at: insufficient investment in R&D; poor education outcomes and a broken skills system; a failure to scale-up enough fast growth firms; the long-tail of small firms that are not productive enough; British managers – who like some British drivers – are not as good as they think they are; a failure to measure the modern economy accurately; poor infrastructure and sites and premisses. My own view, for what it is worth, is that the problem is not any one of these things; it is a combination of all of them.

We are also seeing a new urban divide. A divide between the successful global cities and everywhere else, between resurgent Core Cities – the main regional hubs – and smaller towns and cities which lack economic scale, diversity, and in some cases connectivity, and we are seeing widening inequalities within cities. Even within successful cities there are widespread and long-standing issues of deprivation. Poverty is no longer an issue synonymous with unemployment; it is now an issue affecting many working people. We have seen a rise in low paid jobs – for example there are 80,000 jobs in Leeds which pay less than the “Real Living Wage” (the level recommended by the Living Wage Foundation). Many of these roles are insecure, part-time with limited prospects of career progression.

We are seeing polarisation of the labour market with increases in low-paid, low-skilled occupations, increases in highly skilled professional roles, but jobs in intermediate level occupations not increasing to the same extent, and in some cases declining. The rungs on the ladder of career progression are moving further apart, or in some cases are being taken away all together.

Human Capital

Cities no longer gain competitive advantage from their location relative to natural resources. Their economic success depends on the skills, creativity and innovation of their workforce and institutions.

This means education and skills need to be central to any city economic strategy. This is particularly the case in the north of England, where even at nursery age educational attainment for our young people already lags behind their counterparts in London. That north-south divide in educational attainment, school performance and skill levels is repeated at every age and qualification level, and the gap is greater for people from deprived backgrounds. It is entirely right that city leaders in the North and the Northern Powerhouse Partnership are setting out proposals to improve schools and get our young people ready for the world of work.

Cities also need to focus on attracting and retaining a skilled workforce. In the 19th and for much of the 20th centuries the workforce followed the corporation; in the 21st century knowledge economy the corporation follows the skilled and creative workforce. This means a city’s quality of life, its cultural offer, and having housing supply of the right quantity, quality, and range become must-have features, not nice-to-haves, for economic growth.

Agglomeration and Connectivity

It also means successful cities need good connectivity. The transport network enables firms to access a skilled workforce, markets and knowledge producers, and it enables people to access jobs.

Some commentators have argued that the problem with second tier cities in the UK is that they are too small; they lack the scale and critical mass to be competitive on the global stage. I think there is some merit in that argument, but I also think that the main problem is not that are cities are not too small, they are not well-connected enough. Leeds to Manchester is the same distance as London’s Central line, but less than 1% of the population of either city commute to the other one. As my colleague Dave Newton has said, better rail links between the cities of the north and the midlands through HS2 and Northern Powerhouse Rail will mean that when people need to move job, they do not need to move house. It will create more powerful, resilient and coherent non-London economic zones.

Technological change

Our cities are seeing huge technological change. Rashik Parmar of IBM, and a Board Member of Leeds City Region LEP, has written about these trends. They include:

  • Codified services – where what is done by people is replaced by software, and what is done from traditional bricks and mortar properties in cities (such as high street retail) is done online.
  • Digitised assets and pattern augmentation – enabled by the use of sensors which generate real-time data (the internet of things). This is what enable Rolls Royce to sell “power by the hour” and is creating new insights on and ways of managing urban services.
  • From data to value – the huge explosion in data (over 90% of the world’s data has been created in the last two years) which is creating new insights, better public services (for example more targeted healthcare – precision medicine – enabled by health informatics), new economic opportunities, but is also concentrating economic power in the hands of the firms with access to the most data.
  • Distributed ledgers, or blockchain which has the potential to be a powerful general purpose technology with positive benefits far beyond Bitcoin.
  • Automation & AI which will affect financial and professional services as well as manufacturing.
  • 5G, which will create new low-latency, high bandwidth telecoms infrastructure which could underpin systems for autonomous vehicles and digital healthcare.

Resilience

Extreme weather as a result of climate change is creating economic shocks, as we experienced in Leeds as a result of the flooding from Storm Eva at Christmas 2015. We need to design and build our cities to adapt to a changing climate, ensuring green and blue infrastructure is not seen as the poor relation to traditional physical infrastructure.

In the context of volatility in energy prices (something we are seeing currently as a result of extreme cold weather), local renewable and distributed energy systems have a role to play in providing dependable local supply and tackling fuel poverty.

Cities also need to ensure that their leadership and institutions can respond well to man-made shocks. Witness the exceptional civic leadership in Manchester following the Arena bombing.

Health and well-being

In an ageing society, health and well-being is a huge agenda for cities. People are living longer, but often increased longevity goes hand-in-hand with increases in serious long-term health conditions. As Leeds is demonstrating through the work of its Health and Well-being Board, and the Leeds Academic Health Partnership, it is at city and city region level where we can best integrate health and social care, and take action to tackle health inequalities.

 

Government and City Leadership

As the New Local Government Network have argued in their recent report, Culture Shock, city governments have been for some time moving away from traditional models of top-down control. In an era of austerity there is a danger of a “Market” culture taking route focused on aggressive competition, profitability, and a narrow focus on achieving goals. This runs the risk of Councils hitting their targets but missing the point of the wider economic and social outcomes they are seeking to achieve. Instead, NLGN argue for a more collaborative, clan-based approach whereby Council’s set out clear visions for change, and build coalitions and capacity across different institutions to deliver such change. This is very much in line with the concept of Civic Enterprise which Leeds helped develop through the Commission on the Future of Local Government.

NLGN

Models of City Government (from NLGN Cutlure Shock report)

The City of the Future

Whilst many of these trends create threats and uncertainties, they also provide exciting opportunities. I believe cities need focus on how they, their people, places, communities, firms and institutions, can adapt and become resilient to these changes, whilst grasping the opportunities. In particular they should seek to:

  • Building diverse, resilient economies, focusing on long-term productivity growth (not short-term job creation),  innovation and interconnected industries, and creating places and new city districts that are attractive to innovators and entrepeneurs (creating the science parks of the 21st century);
  • Generating more inclusive growth, seeking to tackle poverty (including low pay) and improve social mobility through a new model of economic growth;
  • Connectivity to better link people to jobs, firms to markets, and employers to their workforce, supporting higher densities of jobs and homes, and by shaping the new future of urban mobility;
  • Growing human capital by improving education, attracting and retaining a skilled workforce, putting children at the heart of city growth strategies, and making the workforce of today and the future more resilient to technological change;
  • Embracing technological change, using data and digital infrastructure and services to innovate in public service delivery, and developing the concept of the city as a platform for technological innovation, based on common standards, open systems and open data (in contrast to technology provider-led models of the past);
  • Tackling health inequalities, integrating health and social care, using data to join up and provide new insights to healthcare (for example, the Leeds Care Record) and using social innovation (such as the Neighbourhood Networks in Leeds) to tackle isolation and loneliness.
  • Increasing resilience, by tackling climate change, improving energy security by embracing renewable and distributed energy, protecting our cities from the effects of extreme weather, and by ensuring city institutions and leadership can respond effectively to natural and man-made shocks.
  • Developing new models of city governance, which are collaborative and creative and enterprising, where elected city leaders, Councils and Combined Authorities are empowered through devolution and have a positive impact disproportionate to their size through their ability to work with and through others, mobilising the organisations across the public, private and community sectors which collectively have the power to make a real difference.

 

 

Conclusion

If we are going to grasp these opportunities, and withstand the threats we need to move to a new definition of smart cities, where we are at the forefront of economic change, where we back innovators and entrepreneurs, we tackle inequality, we create the spaces for innovation and productive growth, not just those for consumption. Where we invest in human capital, particularly in our children, and in making our workforce resilient. Where digital and data is mainstreamed in everything we do – we need to be digital by default. Where we are better connected and have a transport system which supports density and places for people not just for cars. Where we shake off the legacy of the Motorway City of the 70s and become the railway and mass transit city, and the city for walking and cycling for 2020s and 2030s. Where we can help solve the challenge of health, social care, well-being and the crises of loneliness and air quality. Where our city is resilient to the impacts of climate change, and plays it part in tackling it. And we need new forms of governance that are agile, collaborative and creative.

The Leeds economy has in the past reinvented itself successfully. No other UK city has made such a large shift from a production based economy at the start of the 20th century to a knowledge economy at the start of the 21st century.

economicchange

Leeds: A century of Economic Change (diagram by Leeds City Region, adapted from analysis by Centre for Cities)

The wheel of economic change is now turning again. The foundations of our recent economic success, financial and professional services, are being disrupted by digital change. Automation will replace what people do currently. But new opportunities and new industries are developing.

table

Leeds: a city of innovation (diagram by Tom Bridges)

Leeds has many attributes and a great capacity for innovation. But the competition is not standing still, and the pace of change is not slowing. I believe that it is only by replicating the boldness and foresight of our city leaders, reformers and entrepreneurs in the 19th century that we will succeed in the middle and later parts of the 21st century.

Advertisements
Posted in Uncategorized | Leave a comment

Connected and Autonomous Vehicles – the Implications for Cities and Transport Systems

Earlier this week we convened a group of transport and cities experts and decision makers to discuss advances being made with Connected Autonomous Vehicles (CAVs) and their implications for our cities. The group, which met at Arup in Leeds, was represented by number of sectors including transport technology, planning of major infrastructure projects, regeneration, commercial property, legal, civic advocacy, academic research, and transport planning. Thanks to all who participated.

The UK Autodrive Trials

UK Autodrive is an ambitious three-year project that is trialling the use of connected and self-driving Vehicles on the streets of Milton Keynes and Coventry. It is involving trials of road-based cars, as well as 40 pavement-based low speed ‘pod’ vehicles. Arup are part of the UK Autodrive consortium along with other sector leading organisations.

Ralph Wilson and John Miles, Arup and UK Autodrive, described the trials that are being undertaken in Coventry and Milton Keynes.

RDM Group's autonomous vehicle, the Pod Zero, photographed in front of the London Eye, 13 July 2017.

One of the connected and autonomous low speed pedestrian based pods being trialed by UK Autodrive

The Big Questions

As well as testing the technology and how Autonomous Vehicle (AV) systems are operated, the trials are exploring questions such as:

  • How will AVs affect congestion?
  • Can they improve city centre spaces?
  • What do the public think?

The group discussed these issues and then considered wider questions such as:

  • What are the implications for public transport?
  • Will we still need large car parks in city centres and at major railway stations?
  • Will it become easier for people to access jobs, boosting social inclusion?
  • What are the legal issues?
  • What are the economic questions?
  • What might be the human factors and public perceptions?
  • What is the role for city digital infrastructure?

Congestion and road space

Proponents of AVs make the case that they will reduce congestion because they use road space more efficiently. However, others argue that this will be offset by privately owned AVs returning empty to their owner’s home once they have dropped them off at work.

Much will depend on whether people will use shared ‘car club’ systems, the extent to which they will share journeys, and the provision of parking near to, but not necessarily in, city centres and employment hubs.

More efficient use of road space could lead to increases in, or more intensive use of, capacity. AVs use road space more efficiently meaning additional lanes, or wider pavements could be created. Experience tells us that increased road capacity, in time, fills up with increased traffic. However, there will be potential to incorporate dynamic pricing, which already exists in Singapore for example, to help spread peaks in demand.

The use of low speed autonomous pods on pavements and in public spaces could enable cities to expand their pedestrianised precincts. There is also potential for them to play a role in “last mile delivery” as part of more sustainable urban logistics systems. 

Implications for city and infrastructure planning

Because AVs will be able to drop people off at their destination and then drive away to park somewhere else or to pick up another passenger, the need for city centre parking could be reduced. This would allow existing car parks to be redeveloped for more productive uses, enabling the densification of city centres and supporting economic clustering. However, existing property investors, including local authorities, in car parks will need to revise their business models. It should also be noted that better rail, bus and mass transit links also support densification of cities.

We need to future-proof the planning major rail stations. For the masterplan for Leeds Station (already the busiest transport hub in the north of England) incorporating HS2, decisions need to be taken soon about the scheme. However, HS2 to Leeds will not be operational until 2033, and is an infrastructure project for the long term, and we don’t yet know what the long term implications of AVs will be. The plans will need to be flexible. A large car park at the station which is planned today and may be used in the early years of the scheme, may not be required over the longer term, then offering an opportunity for redevelopment.

There is a need for cities to think about how the next generation of digital infrastructure, such as 5G, can support AV systems. AVs will need to verify their position relative to other vehicles and street infrastructure in real-time, and 5G low latency, high bandwidth, small cell digital communication systems may be needed. Systems will need to be open enough to allow different vehicles to communicate as part of them, but need to be secure enough to not be hacked.

Public Transport Systems

There was interest in the potential of AVs, including low speed pods, to widen access to public transport hubs such as stations and park and ride sites. This could feed more people into the system and allow more efficient public transport networks focused on core routes. Uber is already making transport more demand responsive, and AVs could be a further step.

There could also be benefits for social inclusion. AVs could help people without private cars to access jobs and services more easily. They may also increase mobility for people with disabilities (Guide Dogs for the Blind are participants in the Milton Keynes trial). Much will depend on the operating models for AV systems, price points, and the role of comercial providers and potentially the public sector in providing AVs.

Human Factors

Professor Natasha Merat of the Institute of Transport Studies, University of Leeds provided an overview of her research, including using their Virtuosity simulator, into potential behaviours of AV users, and public attitudes. Whilst fully autonomous vehicles could have significant safety benefits, the research indicates that semi-autonomous vehicles pose risks due to drivers over-relying on the autonomous controls.

The interactions between AVs and pedestrians and cyclists pose interesting issues. How do we overcome the lack of eye contact or helpful hand gestures that exist currently between users of streets? There may be a need to delineate parts of public spaces where low speed pods have priority, and accepted norms and protocols will need to evolve.

The initial research on public attitudes to AVs is that many people do not have firm views for or against, but are open-minded. The opportunity for the industry and policy makers is to shape how attitudes develop in hopefully a well-informed way.

Conclusion

CAVs have the potential to transform our cities and our transport network. The technology is advancing rapidly. AVs are already on our roads and streets as part of the trials by the UK Autodrive consortium. Now is the time for city leaders, policy makers and planners to consider the possibilities created by CAVs, and also the risks and limitations, and to set the agenda for how we can mobilise this new technology to reshape our cities for the better.

 

Posted in Uncategorized | Leave a comment

The UK Cities Agenda in 2018 – Infrastructure and Technology

2000x1125 Queensferry landscape complete

Following on from my post last week with my thoughts on the big city policy issues for the year ahead. Here are my predictions of the big Infrastructure and Technology issues for UK cities for the rest of 2018.

Technological change is impacting on the role and shape of cities. Policy makers are increasingly interested in the impact of automation on city economies and their labour markets. The impact of robotics, 3D printing and the fourth industrial revolution are already impacting manufacturing. There will be profound implications for skills and training policy as an excellent recent article by Sarah O’Conner explains. Transformational technologies suh as AI, big data and distributed ledger technologies will disrupt sectors such as financial and professional services, legal, health and social care, and engineering. As Centre for Cities have set out, there will be winners and losers amongst firms, workers and cities. Those that can adapt to and be at the leading edge of this change will prosper, those that do not will be left behind.

I also think and hope we will see the emergence of a smarter approach to smart cities focusing less on technology-led solutions, and more on creating common platforms and standards for innovation and invetsment in open data, big data, and IoT. the focus needs to be less on the clever technology, and more on finding clever things to do with it. This applies to 5G, where I helped set out Leeds’s ambitions. Far sighted Chief Digital Officers such as Theo Blackell in London, or Dylan Roberts in Leeds are leading the way here.

Cities and city regions are developing strategies for maximising the benefits of large infrastructure projects. This is being done through the HS2 Growth Strategies, for example in Leeds City Region which is a plan for HS2 as part of a coherent vision for the trnsport nework as a whole, for maximising regneration opportunities at stations, connecting people and firms to the new job and business opportunities that will be created, and capturing economic uplift to create new funding streams. Expect to see more of these strategies, and for major projects beyond HS2.

We will also see cities develop strategies for imporoving air quality, although it is debatable whether any UK cities are being bold enough given the scale of the public health crisis caused by vehicle emisisons. Electric vehicles have an important role to play. Cities need coherent strategies for how they get their electricity networks, car parks, charging infrastructure, and planning policies ready for a big uptake in EVs.

As Connected Autonomous Vehicles move from being a futuristic vision to a realistic prospect, expect more analysis and debate about the implications for cities. This needs to start with consideration of what digital infrastructure will be required. High bandwidth small cell communications technology such as 5G will have a role to play here. Trust tech systems will be needed that are open enough to enable the vehicles to communicate in real-time with each other and the roads, but secure enough not to be hacked. Autonomous Vehicles may enable densification of city centres, as they do not necessarily need to be parked at the origin or destination.

The debate about regional disparities in transport and infrastructure spending will rumble on. The huge differences in regional transport spending per head have been highlighted by the recent analysis by IPPR North. Yorkshire and Humber is bottom of the spending league table, with the North East and South West faring little better, and all with spending per head less than half the national average. There is a palpable sense of anger in these places. I hope the debate becomes a wider one, which is not just about cities and regions making their case for central government spending, but also making a case for greater freedoms and flexibilities about how they can raise their own finance.

I predict we will see a greater focus on the future role and development potential of railway stations and their environs. Network Rail, following its reclassification, needs to look at new innovative ways of raising finance for improving major stations as gateways and interchanges. This could include looking at retail and leisure development within stations, and adjacent site high density commercial and residential development. I think there are some useful lessons from the work to produce an integrated masterplan for Leeds Station, which is the busiest transport hub in the north. This includes getting the relevant interested parties around the table, working together in a genuine spirit of partnership, and shaping and committing to a shared vision and plan.

 

 

 

 

Posted in Uncategorized | Leave a comment

The UK Cities Policy Agenda in 2018

These are my predictions of what will be big policy issues for UK cities agenda in 2018. Future posts will look at the likely big issues for infrastructure and technology, and regeneration and housing.

I am a bit late with this post, as we are already three weeks into 2018. In my defence I started a new job at the beginning of the month. I have left Leeds City Council where I had a fantastic five and a half years as Chief Officer Economy and Regeneration. During that time the city experienced one of the fastest rates of private secctor jobs growth of any UK city, led the agenda on inclusive growth, and set out ambitious plans for reshaping its city centre to drive productive growth through the plans for Leeds Station and HS2, Leeds Innovation District, and South Bank Leeds.

I am now back at Arup, in an exciting role leading the firm’s UK Cities Advisory business. I am already getting involved in great projects advising cities, city regions and Government on place based strategies for economic growth and inclusive growth, on how to maximise the benefits of major infrastructure projects, and advising private sector clients on how best to position their projects within the changing cities and city region agenda. This is already giving me a perspective of issues beyond Leeds.

Brexit will continue to dominate Whitehall and Westminster, meaning increasingly cities will need to forge their own agendas for growth, and to understand the potential impacts on their economies, in areas such as trade, investment, skills, and the reduced value of the pound, and to identify the actions they will take to mitigate the risks and exploit new opportunities. Some cities set out action plans for Brexit, such as the Leeds five point plan. I believe all cities / city regions need Brexit strategies.

The national Industrial Strategy has been criticised for not being sufficiently place based. Local Industrial Strategies will be important in setting out how national and local policies and interventions will come together to drive productivity growth in places.

The concept of inclusive growth continues to take hold, but many of the frameworks and toolkits produced lack a focus on practical actions cities can take, and underplay the role of leadership in creating a framework for business, education providers, the health sector and local government to do things differently. I led the production of the Leeds Inclusive Growth Strategy, which I believe sets out a strong framework for change, and other cities such as Bristol are producing inclusive growth strategies.

Education and skills are critical to increasing productivity and social mobility. Expect to see cities and Mayors continuing to make the case for greater influence over or develoution of the education and skills system. In particular I predict a greater focus on supporting the progression and resilience of existing workforce and tackling low pay, to help people move to better jobs, and to help them adapt to economi and technological change.  It is also clear that there will be a stronger focus on schools, and in particular on raising school performance and educational attainment in places, although as Eleni Magrini has argued more needs to be done here.

I predict we will see an increasing focus on what can be done support growth of mid-sized cities and towns. These are significant in scale, but are not “core cities” or not part of a “city region”. Some of these are highly successful, some are seeking new roles in the context of economic restucturing. What is clear is that an agenda that is solely focused on clustering in large cities an their centres is not compatible with the concept of inclusive growth, and is not likely to be polically acceptable.  

It is likely that the UK’s cities agenda will continue to be seen by many through the lens of devolution, particularly as the directly elected metro mayors continue to get into their stride. The relationship between the Mayors and indivudual local authority leaders is evolving. There are already calls for greater devolution of power to these Mayors, as well as for devolution settlements to be agreed elsewhere, not least in Yorkshire. I also predict a wider debate around the case for greater devolution, including stronger fiscal powers, to councils, particularly in large cities.

More to follow on these topics in the weeks and months ahead.

Posted in Uncategorized | Leave a comment

Let’s regain our confidence as a profession

A version of this article appeared in The Planner magazine (the RTPI’s business monthly magazine for planning professionals), February 2017.

The Planning Under Pressure (The Planner, December 2016) article reflected how downtrodden many in the planning profession feel. The finger of blame is pointed at Government for perpetual changes to the system, at politicians who see planning as a barrier to growth, at an increasingly adversarial culture, and at funding cuts.

The Royal Town Planning Institute (RTPI) has its “Proud of Planning” campaign, but we need to avoid an “us-against-the-world” mentality, which blames others. It is now time for the planning profession to look at itself honestly and take action on what it can do positively and proactively to change.

First, we should halt the “woe-is-me” narrative. Yes, resources are tight, and the political narrative can be unhelpful, but these issues are not unique to planning. Looking back through to a supposed past golden era is unhelpful. Now is the time for innovation and a positive forward-looking mind-set.

Second, we should stop using impenetrable jargon, and start communicating in a way people understand. We should embrace social media. Look at Jen Keesmaat, the Chief Planner of Toronto with over 34,000 Twitter followers and a blog exploring issues in more detail. Too many local plans are long, boring documents that could apply to anywhere. Instead they should set out a clear, compelling and distinctive vision for how a place will develop and change.

Third, we should take seriously and respond constructively to criticisms about commercial awareness and attitudes to growth. We must challenge the negative and jaundiced views of developers that some planners still hold. Sufficient weight must be given to the economic benefits of development as well as negative environmental impacts. We all should increase our commercial understanding.

Fourth, we need to be more politically aware. Local planning authorities are politically led organisations. Planners need to listen better to what Councillors or Ministers want to achieve and to seek a way to do so. Developers and consultants could do more to understand political priorities. All of us have a responsibility to build a less adversarial culture in planning.

Fifth, we must reduce the costs and complexities that businesses and people face in navigating the planning system. Whilst these often result from statutory requirements, we should look locally at what can be simplified.

Finally, we need to be more pragmatic and confident. I once asked a Council Chief Planner how they had put a local plan in place quickly when so many others have failed to produce up-to-date plans. His response was, “well, we just got on with it”.

Let’s regain our confidence as a profession, be more can-do, politically and commercially aware, and communicate and engage with people in new ways. Most of all we need to get on with it, and show the will and imagination to make a difference.

theplanner

 

 

Posted in Uncategorized | Leave a comment

Brexit has always been a Marmite issue, now Marmite is a Brexit issue

The phenomenal post referendum plunge in the value of Sterling led to the short lived stand-off between Unilever and Tesco. The dispute was over the extent to which increased import costs should be passed on to customers for products such as Marmite and pot noodles.

bloomberg-1-year

GBP-USD Exchange Rate 2016. Source: Bloomberg

This has led to much speculation on the implications for the UK economy of the reduced value of the pound. It is clear there will be significant impacts on UK cities.

First the positives. We are likely to see a big increase in inbound tourism and stay-cations, as overseas visitors take advantage of cheap holidays in the UK, and UK residents recoil from a big increase in accommodation and food and drink costs abroad. For Leeds this could accelerate further our already fast growing tourism sector.

Exporters have also received a boost, particulary manufacturers, proving a very welcome economic stimulus following the referendum. This, along with the likely negative impact of Brexit on UK financial services, has led some to think that Brexit could result in a helpful rebalancing of the UK economy. They argue that a shift from over reliance on financial services concentrated in over-heating London to manufacturing based in the Midlands and the North would be a good thing.

But most economic commentators believe the cons will far outweigh the pros. I think there will be five negative impacts on cities.

First the impact on financial and business services will not just hit London; it will impact on other major cities too where, as Andrew Sentance has highlighted, financial and business services are the most significant and fastest growing sectors.

Second, the benefits to exporters could be overstated. The benefits of a low pound need to be weighed up against the implications of the UK leaving the Single Market, which 74% of manufacturers believe will be a negative move. As Frances Coppola has argued, UK manufacturing is now specialised, highly skilled with complex and globalised supply chains. Many “exporters” now actually import a lot of their raw materials and components, all of which will now be more expensive. The cost of rising energy and labour costs are yet to bite. Whilst manufacturing remains an important part of our economy (for example there are still around 30,000 manufacturing jobs in Leeds), it is fanciful to think that there will be a sudden expansion in the sector to become as significant as it is in nations such as Germany.

Third, we will become a less attractive destination for inward investment. Our position as one of Europe’s most attractive destinations for inward invetsment (around 42,000 UK jobs were created from inward investment projects in 2015) will undoubtebly be hit as a result of Brexit even without the fall in Sterling. For cities such as Leeds, with numerous foreign-owned firms and as the second most attractive Core City inward invetsment destination in 2015, the impacts could be significant.

Fourth, as David Smith argues in today’s Sunday Times, the Sterling crash will exacerbate the wider sense of economic uncertainty and instability, all of which will deter business investment and hit our already sluggish productivity. This is far from a managed devaluation. There have been wild fluctuations in the value of the pound, such as the flash-crash on October 7th. We will see inflationary pressures, which may prompt a fiscal response. The cost of UK Government gilts have risen in recent days, increasing the cost of public sector borrowing (although it remains at very low levels by historic standards).

Finally, perhaps most significantly, living standards will be hit, as the prices of everyday essentials such as transport, energy, and food (Marmite included) rise. This will hit people on low incomes hardest, including many in cities. For example in Leeds there are around 80,000 jobs (many of them part time – indeed some people are juggling two or three part-time jobs) that pay less than the “Real Living Wage” of £8:25 an hour. For those who do not feel they have benefitted from economic growth and globalisation, the majority of whom voted leave (see this excellent analysis from JRF), the negative impacts of the falling value of Sterling will far out-weigh the benefits of the current short-term economic stimulus.

Many cities have set out the actions they will take in response to Brexit, for example our five point plan in Leeds. It is clear that our cities face significant challenges ahead. In the context of further austerity, respondingto an increase in prices and the subsequent decline in living standards which will hit the poorest hardest may be the biggest challenge of them all.

Posted in Uncategorized | Leave a comment

Disruption and Distributed Ledgers

There is increasing interest in the huge potential for distributed ledger technologies to disrupt business, drive innovation and create new economic opportunities for places. A recent report by the Government’s Chief Scientific Advisor highlights the significant implications and opportunities of these new technologies.

Beyond “digitised paper”

Ledgers have supported commerce and government for thousands of years. They record financial transactions, property, taxes, and personal information. And, as the Government report says, for thousands of years whilst the material on which ledgers have recorded has changed – from clay tablets to papyrus, to vellum, to paper, and to digital, until recently the basic process of updating and maintaining these records has stayed the same; the clue is in the term “bookkeeping”.

This lack of innovation is startling. In a recent interview, Chad Cascarilla, CEO of distributed ledger start-up itBit said:

“Depending on the asset, people are still using excel spreadsheets, emails, PDFs to basically reconcile what’s going on in the back office. It’s still very much a bodies business. I would describe it as they’ve just digitised a paper process. They didn’t reimagine it.”

At a recent event at The Mansion House, the Lord Mayor of London, compared this lack of innovation to the huge disruptive change in the taxi market created by Uber, posing the challenge that “the taxi cabs industry has become more innovative than financial services”.

The building blocks of blockchain

But this is all changing as a result of the technology, called a “blockchain”, behind the online currency bitcoin. I won’t try to explain the technology here. The best explanation of I have read is in this excellent article in The Economist. Unlike traditional payment systems where a trusted third party, such as banks, stand behind transactions, there is a database (the “blockchain”) which records payment history and ownership of every bitcoin, but is owned by no-one. But despite this database being open and “distributed”, it is also trustworthy and secure, thanks to the innovative algorithm technology.

The potential applications go far beyond bitcoin. This is potentially a powerful General Purpose Technology which can be used in any field where there is a need to keep reliable, secure and up-to-date records of transactions, information, and contracts.

The implications for financial services back office functions are huge. Current post-trade reconciliation systems could become far more efficient. In developing nations, property rights could become far more secure. In fields such as legal documentation there is potential for different parties to suggest updates and amendments to a single document, vastly reducing the complexity and challenges of version control of exchanging multiple drafts. And digital signatures enabled by the technology can also bring substantial benefits.

The potential applications extend to Government, in the way in which it manages and shares personal data mindful of sensitivities around data security and confidentiality. It can also enable governments to pay benefits, collect taxes, issue personal identification such as passports and drivers licences, record property transactions and titles. And this can be done in a way in which individual citizens can control access to their records and can see who has accessed them.

The potential for innovation is being increased through the availability of open source software, collaborations such as the Hyperledger project to create common standards and governance structures, and with the likes of IBM contributing code.

So why is this relevant to cities?

Why are we interested in all this here in Leeds?

First it creates opportunities and threats to places, such as Leeds, with strong financial services sectors. Threats because, like all disruptive technologies, it could automate existing labour intensive back office functions. But it also provides opportunities for innovation, investment and start-ups. In Leeds, we have a strong track record in innovation in financial services, from the building societies to the creation of the world’s first ever telephone bank, firstdirect. Combine this with a strong digital sector, with particular expertise in data analytics, cybersecurity, online gaming, and the UK’s only internet exchange independent of London, we believe we have the ingredients to exploit the opportunities from distributed ledger technologies. And with Innovate UK looking to support commercialisation of this technology, we are looking at what we can do to support blockchain innovation and investment in Leeds.

Transforming public services

Second, the potential applications for Government could transform the way in which local bodies deliver services, share and analyse information, and engage with citizens. Leeds has particular expertise in health data science (we have more health informaticians than any city in the world). We have led the way in creating the Leeds Care Record, a single patient record across the NHS health and local authority funded social care systems. This enables more integrated care and interventions for people. But applications such as this are fraught with concerns about confidentiality. In short, people want to know who can update and who can look at their records. And this is where the technology has real strengths in terms of its security; a user needs a unique key to access their records, and knows who has accessed their information. And because the databases are distributed and secure, they can be less vulnerable to cyber attacks than traditional systems.

Baltics and tailless cats

Third, we are looking to new trade partners to make the most of this technology. Links to London, which is indisputably the world’s leading fintech centre, are hugely important for places such as Leeds. But we are also looking elsewhere. Some of the most innovative firms in this area were not created in London, New York or Silicon Valley, but in the Nordics and Baltics. And closer to home, whilst perhaps better known for the TT races and the Manx cats without tails than as a fintech hub,  the Isle of Man is aiming to grow a leading blockchain hub. It is doing this through Government leadership, intelligent regulation (and no doubt its low tax regime). And with already over 25 Manx blockchain startups, they are doing so with some success. For firms with expertise in distributed ledger technologies looking to enter the UK market, of course London will be a huge magnet, but places like Leeds which are easier to navigate, with a lower cost base, excellent talent, and the right ecosystem could also be attractive.

Watch this space!

“It’s just a database…..nobody’s running it because everyone’s running it”

The final word goes to Chad Cascarilla who cuts through the complexity and sums up what this technology is and why it could be so disruptive:

“It’s just a database — that’s all it is. It’s easy to lose track of it amongst the buzzwords. But it was a big innovation in databasing because it’s fully distributed. A normal database, someone’s actually running it. On the blockchain, nobody’s running it because everybody’s running it. From that perspective, that’s a real big shift. That’s actually hard to underestimate”

 

Posted in Uncategorized | Leave a comment