Life in the Uber City

Financial Mirror (Cyprus) - - FRONT PAGE -

As ev­ery French fifth-grade stu­dent knows, the In­ter­net was in­vented in Paris. It was called Mini­tel, short for

a net­work of al­most nine mil­lion ter­mi­nals that al­lowed people and or­ga­ni­za­tions to con­nect to each other and ex­change in­for­ma­tion in real time. Mini­tel boomed dur­ing the 1980s and 1990s, as it nur­tured a va­ri­ety of on­line apps that an­tic­i­pated the global dot-com frenzy. It then fell into slow de­cline and was fi­nally de­com­mis­sioned af­ter the “real” In­ter­net rose to global dom­i­nance.

Both Mini­tel and the In­ter­net were pred­i­cated on the cre­ation of dig­i­tal in­for­ma­tion net­works. Their im­ple­men­ta­tion strate­gies, how­ever, dif­fered enor­mously. Mini­tel was a top­down sys­tem; a ma­jor de­ploy­ment ef­fort launched by the French postal ser­vice and the na­tional telecommunication op­er­a­tor. It func­tioned well, but its po­ten­tial growth and in­no­va­tion was nec­es­sar­ily limited by its rigid ar­chi­tec­ture and pro­pri­etary pro­to­cols.

The In­ter­net, by con­trast, evolved in a bot­tom-up way, man­ag­ing to es­cape the telecommunication gi­ants’ ini­tial ap­peals for reg­u­la­tion. Ul­ti­mately, it be­came the chaotic but rev­o­lu­tion­ary world-changer that we know to­day (“a gift from God,” as Pope Fran­cis re­cently put it).

To­day, an­other tech­no­log­i­cal revo­lu­tion is loom­ing. Per­va­sive dig­i­tal net­works are en­ter­ing phys­i­cal space, giv­ing rise to the “In­ter­net of Ev­ery­thing” – the net­worked lifeblood of the “smart city.” And, once again, a broad spec­trum of im­ple­men­ta­tion mod­els is emerg­ing in dif­fer­ent parts of the world. In the United States, the gen­eral idea of smart ur­ban space has been cen­tral to the cur­rent gen­er­a­tion of suc­cess­ful start-ups. One of the lat­est ex­am­ples is Uber, a smart­phone app that lets any­one call a cab or be a driver. The com­pany’s op­er­a­tions are po­lar­iz­ing – Uber has been the sub­ject of protests and strikes around the world (mainly in Europe) – yet it was re­cently val­ued at a strato­spheric $18 bln.

Be­yond Uber, the learn­ing ther­mo­stat Nest, the apart­ment-shar­ing web­site Airbnb, and the jus­tan­nounced “home op­er­at­ing sys­tem” by Ap­ple, to name just a few in­no­va­tions, at­test to the new fron­tiers of dig­i­tal in­for­ma­tion when it in­hab­its phys­i­cal space. Sim­i­lar ap­proaches now prom­ise to rev­o­lu­tion­ize most as­pects of ur­ban life – from com­mut­ing to en­ergy con­sump­tion to per­sonal health – and are re­ceiv­ing ea­ger sup­port from ven­ture cap­i­tal funds.

In South Amer­ica, Asia, and Europe, all lev­els of govern­ment are quickly iden­ti­fy­ing the po­ten­tial ben­e­fits of build­ing “smart” cities, and are work­ing to un­lock sig­nif­i­cant in­vest­ment in that area. Rio de Janeiro is build­ing ca­pac­ity at its “Smart Op­er­a­tions” cen­ter; Sin­ga­pore is about to em­bark in an am­bi­tious “Smart Na­tion” ef­fort; and Am­s­ter­dam re­cently chan­neled EUR 60 mln ($81 mln) into a new ur­ban in­no­va­tion cen­ter called Am­s­ter­dam Met­ro­pol­i­tan So­lu­tions. The Euro­pean Union’s Hori­zon 2020 pro­gramme has ear­marked EUR 15 bln in 2014-2016 – a sig­nif­i­cant com­mit­ment of re­sources to the idea of smart cities, es­pe­cially at a time of se­vere fis­cal con­straints. But how can such fund­ing be used most ef­fec­tively? In­deed, is al­lo­cat­ing huge sums of pub­lic money even the right way to stim­u­late the emer­gence of smart cities?

Govern­ment cer­tainly has an im­por­tant role to play in sup­port­ing aca­demic re­search and pro­mot­ing ap­pli­ca­tions in fields that might be less ap­peal­ing to ven­ture cap­i­tal – unglam­orous but cru­cial do­mains, such as mu­nic­i­pal waste or wa­ter ser­vices. The pub­lic sec­tor can also pro­mote the use of open plat­forms and stan­dards in such projects, which would speed up adop­tion in cities world­wide (Barcelona’s “city pro­to­col” ini­tia­tive is a step in this di­rec­tion).

But, most im­por­tant, gov­ern­ments should use their funds to de­velop a bot­tom-up in­no­va­tion ecosys­tem geared to­ward smart cities, sim­i­lar to the one that is grow­ing in the US. Pol­i­cy­mak­ers must go be­yond sup­port­ing tra­di­tional in­cu­ba­tors by pro­duc­ing and nur­tur­ing the reg­u­la­tory frame­works that al­low in­no­va­tions to thrive. Con­sid­er­ing the le­gal hur­dles that con­tin­u­ously plague ap­pli­ca­tions like Uber or Airbnb, this level of sup­port is sorely needed. At the same time, gov­ern­ments should steer away from the temp­ta­tion to play a more de­ter­min­is­tic and top-down role. It is not their pre­rog­a­tive to de­cide what the next smart-city so­lu­tion should be – or, worse, to use their cit­i­zens’ money to bol­ster the po­si­tion of the tech­nol­ogy multi­na­tion­als that are now mar­ket­ing them­selves in this field. These com­pa­nies’ ready­made, pro­pri­etary, and typ­i­cally dull of­fer­ings rep­re­sent a route that should be avoided at all costs – lest we wake up to find our­selves in Mini­tel City.

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