Mega-Cities and Urbanization
- Many of the technologies to create sustainable mega-cities exist, but there is a long way to go until these are implemented.
- Cities have a wide range of sustainability issues, which offers the opportunity for companies to collaborate on and innovate for sustainability solutions, new products, and stronger relationships with customers.
- Companies such as Siemens and AECOM are shaping their strategies for cities around mega-trends including climate, demographics, and globalization.
“There are a lot of challenges, but it is not technology holding us back. Often we are being held back by public will.” —Raj Sapru, BSR
“I don’t think cities exist to aggregate interesting architecture and infrastructure. Cities exist because there is some sort of compact between citizen and community that their life has a better chance of getting better by choosing to live in an urban place.” —Gary Lawrence, AECOM
“When we look at a city as an enterprise, it really forces us to get out of our company silos and to figure out how different technologies inter-relate to solve problems. The focus on cities has really forced us to look at how we develop products and solutions.” —Alison Taylor, Siemens
Sapru opened the session by noting that as of 2010, more people live in cities than outside of them; by 2050, an estimated 70 percent of the global population will be urban—and none of the world’s 25 fastest-growing cities are in developed economies.
Sapru elaborated that cities are a physical manifestation of all sustainability issues in one place. As populations urbanize, they can either build thriving cities or fall victim to disparity and poverty. Underlining the importance of discussing how to avoid the latter situation, Sapru asked what challenges each panelist sees ahead.
Taylor explained that Siemens looks at long-term mega-trends such as climate, demographics, and globalization; each of these is a challenge for cities, but together they could create the perfect storm. As more people move into cities and live longer, the strain on transportation, energy, healthcare, and other infrastructure will create a huge challenge. Siemens sees cities as an opportunity to be a hub of innovation in each of these areas. Lawrence stated that by 2050, the world will need a 40 percent increase in the food supply to feed the population, and with people moving toward cities and water becoming scarcer, it is essential to solve these problems to avoid social unrest.
Taylor said Siemens’ city strategy embraces an obvious need for a rapidly expanding market. She highlighted that cities provides companies with the opportunity to be innovative and more solution-oriented: Companies often operate as silos, but working on the various problems of a city uncovers new ways to develop products and build relationships with customers. Lawrence said that for AECOM, cities are critically important and that understanding how their systems inter-relate allows AECOM to leverage the intersection of systems and save costs.
When asked if the world is on track to meet the future needs of cities, Lawrence acknowledged that it greatly depends on where one looks. Every city has tackled its issues differently—for example, the different ways in which China and Australia have dealt with water issues. Sapru asked Lawrence to expand on what can enable the scale needed to solve issues such as water. Lawrence said scaling is often a matter of awareness, but financing is one of the biggest barriers: Few cities are flush with cash, and many are not willing to be forward-thinking and invest in technology. As a result, many cities only react when faced with a crisis.
The conversation turned to how companies work with both government and the private sector on issues facing cities, when each often has a short-term view. For example, Lawrence noted that that issues such as water are discussed in terms of availability and quality, not as critical assets. Thankfully, many local governments are looking 20 to 50 years out, forcing companies to be more enterprising about problems and to look further ahead.
A question from the audience raised broader issues, such as how to make a city self-sustaining, given the amount of food needed and waste generated. Lawrence said that much of the technology exists to make cities self-sustaining, but economically it doesn’t make sense, largely because resource pricing is low and does not include the cost of externalities. He added that there is no political will to enforce charging for externalities, which in turn impedes behavior change.
Sapru changed the subject to the green city index developed by Siemens. Taylor discussed how the index has created competition between cities and is driving those cities in the middle to take action. She said it also serves to call out best and worst practices among cities, as well as highlighting the disparity in available data between cities.
Turning to emerging markets, Sapru asked the panelists to describe how their companies approach emerging markets. For AECOM, there is no formula for success, and solutions vary by city. The opportunities evolve at different paces depending on the political situation and state of the problems. However, one important issue for both companies is to have local offices with local workers, and it is imperative to understand the technology and how to make it work in each city.
To close the session, Sapru put forward whether we are currently asking the right questions. Both panelists responded that often individual companies go into a market with ideas of what to sell and that these ideas may not be aligned. Instead, it is important to understand what the public agrees is needed and to define what the city wants to become. The panelists stressed that it is critical to listen—and that often the answers are surprising.
Date and Time
Wednesday, October 24, 2012, 2:30 pm-3:30 pm