Friday, 3 April 2015

* Smart cities Dodoland-style: yet another bounty for land oligarchs

Baljinder Sharma

Can thirteen smart cities – six, reportedly under construction, reasonably provide the foundation for a promised second economic miracle?

Feetz, a technology startup incubated in the Silicon Valley, that uses 3D printing to manufacture customized shoes, moved earlier this year to Chattanooga, 120 kilometers northwest of Atlanta, Georgia. ‘Chattanooga is a product of startup wave enabled by years of cutting-edge urban design’ wrote The Pulse – city’s local news weekly.  As the startup wave accelerates, the young tech/creative talent those companies need is both attracted to places like Chattanooga and helps sustain and grow those places by demanding more housing, shops, restaurants, bars, music venues and more walkable and bikeable streets. Urban design works to grow for the whole community’.

In presenting the 2015-16 budget, Finance Minister Vishnu Lutchmeenaraidoo has hinged his hopes on the elusive idea of smart cities to deliver a new economic paradigm that is both sustainable and dramatically superior. Will he succeed?

Of course there are other boring weaknesses that he has tried to fix - for instance, creating the SME Bank in order to improve the supply of credit to the employment-generating small and micro businesses, reducing the cost of doing business, promising a one-stop-delivery-shop, abolishing unnecessary permits and eliminating red tape wherever possible. In private, the opposition has found little fault with the budget; in public they have expectedly described it as unrealizable, impractical, deceptive and a bluff.

Yet, building smart cities and techno-poles is perhaps the only option, which the country can rely upon – one in which possession of knowledge, intellect, acumen and innovation matter more than the availability of land and labor. At this historic juncture, if Minister Lutchmeenaraidoo were ever accused of getting his budget wrong - it would only be for the right reason.

Unsurprisingly, most people, including the opposition, view the rolling out of smart cities as another real estate initiative designed for the further enrichment of the existing landholders who are also the country’s industrialists and its dominant economic operators. That would be an ill-informed view of the smart cities ecosystem. Elsewhere in the world similar development frameworks have been used to rejuvenate social and economic communities, create new industrial activities, improve public service deliveries, enhance learning experiences, leveraging innovative technologies for job creation and enterprise development and for deepening citizen engagement and empowerment.

It must, however, be underlined that smart cities are a means to an end and not an end by themselves.

It is the nature of innovation and path-breaking activity within its surroundings that characterize them as thriving magnets for economic and social capital and not the buildings that they contain. Intelligent design, energy efficiency, smart managed utilities and intellectually stimulating work culture – education, art and entertainment – the software - often contribute more than 70% to the economic value that smart cities generate.

It is elaborating the nature of such activity and supporting measures that the budget fails to address. There is also a legitimate concern – echoed in certain quarters that leaving everything to the private sector might not provide the larger social and economic benefits that government expects to derive for the population in general.

First, the skills recycling scheme is inadequate to convert chronic job seekers into new-generation technopreneurs inhabiting the proposed smart cities. It requires a kind of exposure and training that regular universities and struggling training institutions simply cannot provide.

Second, governments are terribly misplaced at recognizing and nurturing entrepreneurial ecosystems – yet they cannot disregard their crucial role in constantly vitalizing smart cities. It is imperative that they keep engaged with the startup community and provide incentives to private incubators for doing so.

Third, it is hard to balance the need for regulation and oversight while allowing innovation to emerge. Yet it is this very delicate balancing that will decide if the country succeeds … or falls behind.

 Fourth, there are entirely new means of livelihood – new professions, new roles and new employer-employee engagement models that life in such smart cities requires. Labor laws lose relevance and are replaced by new forms of contractual arrangements. Dealing purposefully with labor unions can be cumbersome but necessary in these situations.

Fifth, investment and enterprise promotion agencies are required to respond to the demands of new generation of global entrepreneurs who bring ideas and intellectual capital more than foreign direct investment into the country.

Sixth, making it easier not just for entrepreneurs and investors but also artists, professionals, dreamers and innovators to immigrate and settle down.

 Seventh, improving virtual and physical connectivity with the external world – lightening speed access to the Internet as well airline linkages to the thriving Eastern and Southern African economies.

‘Gig City’ as Chattanooga is now called, installed the first high-speed gigabit Internet services in the United States. That is 50 times the average speed for homes in the rest of the country about which the New York Times recently wrote ‘Since the fiber-optic network switched on four years ago, the signs of growth in Chattanooga are unmistakable. Former factory buildings on Main Street and Warehouse Row on Market Street have been converted to loft apartments, open-space offices, restaurants and shops. The city has welcomed a new population of computer programmers; entrepreneurs and investors’ underlining its transformation from an industrial town to an entrepreneurial smart city in a relatively short period of time.

But why is Chattanooga – an obscure city in the American state of Tennessee relevant to my commentary on the Mauritian budget?

Firstly, Chattanooga – not only arrested its economic decline at the turn of the last century but also actually brought out a complete transformation on the back of a futuristic Gigabit Internet service and a smart grid. It is now rated as one of the world’s top 7 smart cities.

Secondly, the case of Chattanooga demonstrates that quick and dramatic change is possible with a pioneering vision and allocation of resources and effort in the right direction.

When asked if Chattanooga aspires to be the next Silicon Valley, Mayor Andy Berke is reported to have said “That’s not who we’re going to be, and we shouldn’t try to be that. We are making our own place in the innovation economy.”

Minister Lutchmeenaraidoo, with his 2015-16 budget may have set a vision for the country but destination Mauritius will be determined not by the investment that goes in building these smart cities but by the effort that goes in sustaining them as nerve centers of innovative economic activity and fulfilling social life. Perhaps he will have time to organize this software as the hardware builds-out.

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