Tag Archives: Milano

Innovation needs the frontier: notes from a conversation with Fabrizio Barca

Fabrizio Barca is one of the most interesting policy makers in Europe. He receives a lot of media attention since 2011, when Mario Monti appointed him Minister of territorial cohesion. People interested in public policy, though, have been following him for much longer. He has a track record of delivering well-thought through, ambitious, elegant policy packages. I have been following his work for almost twenty years. Initially I read his writings and discussed them with friends and colleagues, some of whom worked with him. Later, we started meeting up in person. When I am in Rome I like to look him up and check what he is up to.

In 2013 the experience of the Monti government ended. Fabrizio went back to his job as director general of Treasury and turned his attention to inner areas (“aree interne”). Aree interne are territories that happen to be far from certain key public services: high schools, hospitals, railway stations. They include four thousands villages an small towns, accounting for 60% of Italy’s surface and 25% of its population. They are hamlets in the hills and mountains, meadows, fields, grazing areas. They are often places of beauty, rich in local culture and history. Just as often, they experience trouble. People leave; employment decreases; services get harder to find. Marginal land is abandoned, paving the way for environmental problems like landslides or flash floods.  Innovation stagnates.

Inner areas are clearly important. It is understandable that the Italian state wants to improve their conditions. What I don’t understand is why Fabrizio feels the need to work on them himself. In the last fifteen years, development economists have looked in the opposite direction. Cities, they say, are of strategic importance. In 2014, they were home to 53% of humans, and produced 80% of the workd’s GDP (World Bank). For developed countries, these percentages are much higher still. For example, in the Euro area 76% of the population lived in cities in 2014.

Italy is a little less urban than most developed countries (“only” 69% of Italians lived in cities in 2014). But there, too, cities are strategic. Consider Milan. Its metro area is home to a little over five million inhabitants, one Italian in twelve. In 2004, this area had a GDP of 241 billion Euro: that’s more than the whole of Austria, and 13% of Italy’s.

It’s not just GDP. Milan and the other urban areas produce almost all of Italy’s exports, that is, at the end of the day, our contribution to the world’s economy. Chemicals. Textiles and clothing. Rubber and ceramics. Vehicles. Industrial automation. Italy is a manufacturing economy, one of the most important in the world. The agri-food industry, too, likes to represent itself with images of green fields, but it sells transformed products. In 2014 Italy exported transformed food products, beverages and tobacco for about 28 billion Euro; it imported some for about the same value. The Italian trade balance for food products, so, is about zero. The industrial automation industry exported 74 billion worth of production, and recorded an active balance of over 50 billion Euro (ICE). Most companies in these industries are in urban areas, not in remote areas.

Italy is no exception. Cities produce more per capita wealth then the countryside; and large cities produce more than small ones. Two physicists, Luis Bettencourt and Geoffrey West, have found an exact mathematical relationship between the size of cities and their production (PMAS). The average citizen of a metropolis produces and earns more than that of a smaller city. A city with n inhabitants pays wages proportional to n to the 1.12-th power. This means that, as city sizes grows, per capita income grows too. All other things being equal, the average wage in a 10-million inhabitant city is about 30% higher than in a 1-million inhabitants one; and about 75% higher than in a 100,000 inhabitants one.

This sort of growth is called superlinear. It surfaces in many aspects of urban life, from banking deposits to electricity consumption. In particular, it is typical of variables tied to innovation, like number of patents per year or R&D employment levels.

Why are cities so successful? According to Bettencourt, cities are “social reactors”. They behave more like stars (that are nuclear reactors) than like living creatures (Science). Their ability to produce innovation and wealth depends on the number of connections  that they can bring about. Commerce, science, manufacturing are all network phenomena, because they depend by the exchanges across people and organisations. Just think about it: as more peoplem get involved, the number of possible exchanges across them grows fast. One individual can have no exchanges. Two people, Alice and Ben, can give rise to at most one exchange. If we add a third person, Charlie, we get three possible connections: Alice-Ben, Ben-Charlie and Charlie-Alice. If we add a fourth one, we get six connection, if we add a fifth one, we get ten. As we get one million people, we’ll have close to five hundred billion connections (check for yourselves!).

The wealth of possible connections enable specialization; the presence of specialised people and organisations enable a higher productivity. The mathematics of connectivity points to cities as humanity’s future.  The world’s poor seem to agree, as they are moving there en masse. According to ecologist and digital pioneer Stewart Brand, they are motivated by access to better services (especially education); and the sharp increase in personal freedom that city dwellers enjoy with respect to villagers. This is especially true for women. Brand claims these benefits accrue to all city dwellers from arrival day, even if they move to slums. His data are clear: upon arrival, urban migrants tend to stay afloat by being active in the gray economy. In a couple of decades, though, they tend to become legitimate. Their children almost always attend high school, and aspire to enter the middle class.

This brings me back to my conversations with Fabrizio Barca. Why is the most interesting policy maker in Italy not working on cities? Why this fascination for hamlets, mountains, and valleys?

A few weeks ago I asked him a direct question. He answered that he thinks inner area are the future – not the world’s, but Italy’s. For three reasons.

  • They make up most of the country’s surface, and they are similar to one another. Val Basento in Sicily and Val di Vara in Liguria face similar problems. Their local leaders understand each other, and can collaborate, exchanging notes and know-how. A policy for inner areas is well placed to scale to the national level.
  • Italian cities are not like that. They are different from each other, and from cities elsewhere in Europe. Naples is the only true metro area in the country. Milan has some of the functions of first-tier European cities (design, finance, creativity), but not their size. Rome is a touristic-bureaucratic-religious conglomerate. No generalization is possible. Each city needs its own set of recipes.
  • Above all, Italian inner areas show signs of being vital. They are generating top-notch initiatives in culture, tourism, agri-food. School is holding  out, and often even makes progress, adding new technology to the mix.  Even the territory’s partial abandonment becomes an opportunity, because it means that inner areas have space. The local communities pay attention to what you do there. They hunger for innovation. There are low-cost physical spaces, often beautiful or interesting, to host new ideas and new people. For example. you could get  1,700 decommissioned railway stations for free. Honest.

In these terms, Barca’s story seems convincing. He does have tons of data to support it. So, humanity’s future is in inner areas. But then, the story that emerges from the works of the World Bank, Bettencourt and West, and Brans is also convincing – and it, too, has data to support it. So, the future is in cities, their universities, their labs, and their slums. Can these two stories be true at the same time?

I think they can. I propose that territorial innovation needs freedom. And that means places where you can try new stuff out without too many constraints. Where social norms approve, or at least do not condemn, who tries to walk the road less travelled. Where not every single inch of terrain is already claimed by powerful, well-organized stakeholders. If I look around, I see that the innovative spaces tend to be more free than average. You’ll find freedom in the slums described by Brand, because the state gives up on maintaining a tight control on every aspect on their economic life. You’ll find it in Silicon Valley’s web farms and data centers, because their activity is too fast and too global for traditional regulation. You’ll find it in outer space, where Elon Musk and the other space billionaires build their own piece of the future. And yes, you’ll find it in inner areas, disclosed by the availability of cheap, beautiful places and by low population density. These places are the frontier of contemporary society, our West, our Lebensraum.

If  I’m right, then the unifying narrative of  2015 goes something like this. Smart, ambitious, restless people are on the run from closed spaces, where powerful organizations (political actors, the state, corporates) limit their effectiveness. Where do they go? Where they always have: they go to homestead the frontier. Frontiers are weird places, full of contradictions and merciless at times. But they do offer chances of social mobility to individuals, and R&D labs to society as a whole. Italy has an extra frontier: inner areas. We can use it to innovate on the environment, tourism, leisure, culture. It’s a nice card to have up your sleeve. I hope we’ll play it well.

Photo: Mauro Mazzacurati su flickr.com

An Italian version of this article was published on the online magazine CheFuturo

What we mean by “smart” in “smart cities”

There’s lots of talk about smart cities. There are two reasons for such attention.

The first one is structural: cities are our future as a species. Already, for the first time in history, over half of the world population lives in cities. Every week, 1.3 million people relocate from rural areaas to the cities of planet Earth. It’s plain common sense that we apply our best smarts to our dominant habitat. The second one is contingent: there’s money up for grabs if you hack smart cities. In Italy, the government is throwing over 600 million euro at research-and-deploy projects to “solve problems at the urban and metropolitan scale” in spaces like safety, aging, technologies for welfare, domotics, smart grids etc.

Interference between the two causes the expression “smart cities” to be interpreted in different ways. Simplifying a bit, there are two main interpretations. The dominant one (also the first one to be proposed) is associated with some large tech corporates: IBM and Cisco were the prime movers, but Google is in there too with projects like Latitude. The idea is to use networked sensors to increase the density of the flow of information that cities generate; and then move on to use this information to adapt our behavior and redesign the places we live in. “Redesign”, in this case, is an ambitious project; it aims to deploy new infrastructure (example: curbside recharging stations for electric cars), in their turns connected to more sensors. The most important sensors would live on our smartphones, that feed a non-stop stream of information about our surroundings onto large datasets. Technology and interdependence are the lynchpin of this vision. Its symbol is MIT’s Copenhagen Wheel.

The second interpretation is associated to hacker culture and the social innovation world. The idea here is to redesign cities to make them more comfortable, simple, sustainable – financially sustainable too. Sometimes this will imply introducing advanced technology (examples: microsolar and LED street lighting); others it will drive low tech solutions (examples: bicycles and urban farming). Social relationships, community building and awareness of the natural environment’s fragility are the lynchpin of this vision. Its symbol is the hackerspace. I will call cities evolving according to these two different interpretations “type 1 and -2 smart cities” respectively.

Type 1 smart cities have advanced technologies, cool design, researchers of proven excellence. Each component, taken individually, is definitely smart. And then a funny thing happens: once you piece them together you get a whole that does not look smart to me. Not at all. Take, for example, electric cars. They are silent, and don’t spew out greenhouse gases. But:

  • the electricity that powers them has to be produced somehow. In a world in which hydro is at capacity, nuclear is politically dead and solar not developed (yet?), installing additional capacity means burning fossil fuels. Cars’ emission, then, are not eliminated, just moved where you can’t see them. A shift to electric cars would increase or decrease total emissions depending on the existing power stations and the grid: fossil fuels power stations typically convert to electricity only about 50% of the energy harvested from combustion (the rest becomes heat); another 5% are lost along transport. So, of 100 KW embedded in fuel, only 45 are actually available to recharge that new, shiny electric car.
  • they require a costly infrastructure of recharging stations
  • electric cars are still cars. They embody the idea of associating to each human being a tin box of four meters by one and a half by one, that gets driven on average one hour a day and spends the remaining twenty-three squatting precious urban space. As such, they don’t solve mobility problems. They might even make them worse, since they are allowed into restricted entry areas.
  • they are a nonpermissive technology. You are not allowed to hack them, you are not allowed to charge them any way other than connecting them to the power grid. You are allowed to choose what color you want them, and how to pay for them. They relegate us to a passive role – the same we have with respect to internal combustion cars.

Now let’s look at another approach to mobility, not as innovative on first sight: congestion charges – schemes whereby drivers are charged some money to enter a city center. I had the privilege of witnessing the launch of a congestion charge scheme in Milan, Area C. Its results are impressive: 34% reduction in vehicles accessing the area (49% of high emission vehicles); 5% increase in commercial speed of public transport; 23% reduction of driving accidents (24% on injuries); 15 to 23% reductions acroo the spectrum of the main pollutants (source – Italian).

But the real advantage of Area C is that it creates space rather than occupying it. In perspective, it makes the central streets in Milan available to be a platform for social interaction, play, trade, food consumption, lifestyle innovation. Since fast and heavy (hence dangerous) vehicles are not reclaiming most of their surfaces anymore, people can attempt to do new, interesting things with city streets. They can and do explore other ways to move about – bicycles, rollerskates, running. Talented hobbyists and crafty mechanics can create new ecosystems of urban light mobility: in countries that have already undergone this transition you can see this in the sheer variety of bicycles – bicycles with trailers, or bicycles with loading surfaces for small freight. You can see children walking to school in safety, a big taboo in Italy (roads are perceived to be so dangerous that only nonconformist parents let their children walk to school: many schools go as far as to forbid it).

So, what do we mean by smart in smart city? The two approaches I tried to cover here are not clearly outlined in the current debate. And yet, it seems to me they are not only different, but mutually incompatible. Type 1 smart cities are centralized: all smarts are concentrated in the technologists in corporate and university labs, and the role of citizens is to consume their various gadgets. Type 2 ones are full of networks to purchase locally produced food, urban farming, sewing cafés, hackerspaces, fablabs. Type 1s invest huge amount of money on ultrafast mobile networks. Type 2s conjure, as from thin air, wifi city networks that ride on the back of routers already installed in cafés, public libraries and our own homes (this happened in a matter of hours during the earthquake in spring 2012). Students in Type 1 smart cities go to school with tablets. Those of Type 2s use creative commons syllabi – and probably can mix and match the lecturing of their local teachers with that of the Khan Academy or similar experiences. Smart cities of Type 1 concentrates production (agriculture, manufacturing, finance) to large companies, organized to take advantage of increasing returns to scale. Those of Type 2 distributes it, at least in part, across many small entities: permaculturists, makers, community lending agencies.

By now you will have figured out that I find decentralization much smarter an more modern. But there is a problem: almost anything that is smarter in that sense reduces GDP. If public transport works better, more people use them: traffic decreases, but so does the consumption of fuel and vehicles. If people engage more in sports and outdoor activities GDP goes down via the reduction in health care costs (health care is a gigantic business). Area C in Milan, by reducing driving accidents, is a scourge on GDP (fewer medical treatments, less rehab, less car repairs). Type 1 smart cities have no such problem: the Copenhagen Wheel costs 600 dollars and needs an onboard iPhone to work. In fact, the Guardian ended up wondering how smart it is to put over a thousand euro worth of sophisticated circuitry on a bicycle – an eminently stealable contraption.

Corporates love centralization. And so they should, because it gives them a pivotal role and lots of headroom to monetize what they do (when everything is centralized, people in the periphery have to buy everything from the center). I have no doubt that they will be the protagonists of the government’s smart cities call for projects. And still, I have a hunch that in the last few months the voices of the supporters of decentralized solutions started to be heard somewhat. Such voices come, as usual, from that most decentralized of places: the Internet.

What fascinates me in the discussion on smart cities is that it twists our arm into asking really relevant questions. What does GDP really measure? What is really this thing called growth that we are trying to drive? How do we want live with each other in our cities? Whatever the outcome (or the lack of one), I do hope we will take the time and effort to go deep into the debate. It’s not every day that we get to make collective decisions of such broad scope, forcing us to ask ourselves what we really want, how we really expect to live together. To fully rise to this challenge, I hope that the prime sensors of the new smart cities are deployed to listen to citizens (and by that I mean individuals, not just stakeholders); and that their prime enabling technologies are safe, detoxyfied, rational argument-oriented environments – located both online and offline – in which we can talk stuff through, and make, together, the relevant decisions. Even those of us who like centralized systems will surely agree that making collective decisions on our common future should stay decentralized. You see, we even have a name for decentralized public decision making: we call it democracy.

Area C in Milan: the converging conversation

Area C is the name of a City of Milan initiative, not unlike London’s congestion charge: you pay to enter the city center in a car. The back story is this: a previous city administration had introduced an experimental congestion charge. When the experimentation period was over, municipal elections were coming up, and the mayor of the time put off the decision of whether to scrap it or keep it. The 2011 elections ousted the incumbent mayor; the new one had already promised it would keep the congestion charge, with redesign.

The city administration opened an official Area C group on Facebook. While unusual, the move made a lot of sense: when almost everybody is a driver, any limitation to car circulation is going to stir controversy. The idea was probably to do damage control, channeling discontent in a controlled space where moderation could be exerted and the city authorities could make their voice heard. About a thousand people joined the group.

And then something unexpected happened.

First, quite a lot of people started to voice in no uncertain term in favour of Area C. There is even a hardliner group that is clamoring to extend the policy to the rest of the inner city: why should just the rich people in the center enjoy the good life with far fewer cars? We want it too. Makes sense: traditional (offline) participatory processes are expensive and exhausting: you have to cross the city, during business hours, to sit in boring meetings. You are not going to do it unless your financial interests are at stake – and even then, you are likely to hire lobbyists to do it for you. So, of course, every time it tried to pedestrianize a city center, an administration would in principle involve its citizens, but in fact it would end up talking to the shopkeepers lobbies. But this, man, is the Internet: an entirely new ballgame. It’s always on, you can participate from your home at midnight if you want to. The threshold of participation for Area C is so much lower than it was for its forerunner initiative that suddenly you are hearing the voice of pedestrians, cyclists, mothers of small children, the minority of shopkeepers who are actually in favor of it. The city administration (represented in the Area C group by a clearly identifiable user called “Moderatore Area C”) redressed its role accordingly: it is not in the business of selling the policy to its citizens anymore, because the citizens themselves are doing that. No, the city is now playing arbiter: asking questions (“has anybody used such and such service payment? How did you find the first car-free Sunday?”), enforcing netiquette, providing links with factual knowledge (“here you can see the data: the average speed of public transport has gone up 22% in the first month”).

Second, the quality of the debate soared. Mutual aggressions between fanboys and haters rarefied; factual contributions seemed to be rewarded by far more Likes and comments, and that nudged the emerging Area C community towards a square meter-by-square meter monitoring of the policy. Traffic has thinned out in street X; it has become impossible to park in square Y, just at the border of Area C; and on it goes. People take pictures with phones and upload them to prove their point. The conversation is still tense: a popular activity is to upload pictures of cars damaged after a crash, with accompanying status updates like “see, this is what car culture does to you and your children”. But it hardly ever crosses the border to insult (moderators had to kick out a few trolls in the early days to get it across that they were serious about enforcing netiquette). People who make meaningful points and share factual information are popular: one of the stars of Area C is Davide Davs, who likes to download air pollution data from the Milano environmental agency’s website and use them to plot charts comparing how Area C is doing with respect to its predecessor initiative for various pollutants. Davide is a twentysomething from the South of the country who works in Milano. He is the typical citizen expert that emerges from a well run online community around a public policy – and that would never get invited to an offline stakeholders meeting, simply because there is no way to know he exists before creating a self-selecting community on the matter.

In weeks, the group had gone from confrontation between citizens and the city to confrontation between citizens and citizens to informed assessment of the policy. The next step was obvious: proposals. And proposals came. So many came that the administration decided to organize an event, Traffic Camp, where citizens could present their ideas without asking for permission (to get on the list of speakers, you just write your name and the title of your presentation on the event’s wiki). A whopping 47 talks were given at Traffic Camp, parading online journey planners for cyclists, car sharing schemes, bicycle-only delivery services and much more. The first speaker was Pierfrancesco Maran, the young alderman responsible for Area C, who gave fellow citizens a progress report. From the accounts I read, Traffic Camp was hugely popular: lots of ideas, good vibrations, packed rooms.

Third, it became clear that the question about the merits of the Area C congestion charge had been the wrong one all along. At this point the conversation is not even so much about Area C anymore: it has moved on. Everybody is talking about mobility. Everybody agrees that any viable solution for Milan’s mobility problems is going to need to deploy a variety of instruments, and both induce and rest on significant behavioral change. Everybody agrees that bicycles are going to be a big part of any such solutions. Area C is likely to be short-lived: as that solution emerges, my guess is that it will need be redesigned, probably beyond recognition, to fit and support that solution. The question was wrong, but the only way to get at the right question was to ask the wrong one, structure an open, knowledge-oriented, institutionally backed interaction environment and let citizens work it out.

In my book Wikicrazia I have argued that online conversations converge: given the right values and the right rules of engagement, a shared conclusion will be reached. Decision makers considering using the Internet as a channel for citizen participation are worried that their participation initiatives will be maimed by trolling and flame wars, that the constructive citizens will flee and they will be stuck with the haters. I have tried to convince them that the mechanism of a well-structured online conversation rewards good contributors like Davide Davs with attention and reputation effects. It is always nice to see somebody proving you right.

Also, consider the costs and the time scale of the process: all of this involved no more than three months and a lot of attention by skillful community manager Pietro Pannone and strategists Alessio Baù and Paola Bonini, all with Hagakure. Another couple of projects like this one and traditional offline participation processes will become an unviable proposition. As far as I am concerned, good riddance: participation will be much easier for those who can’t afford to hire professional lobbyists. That is, at the end of the day, for all of us.