Disruption has become a cliché. But we should not underestimate the scale and speed of change that London must face.
John Kraus, Director of External Affairs, RICS
19 February 2018
Consider this: 52% of Fortune 500 companies active in 2000 had been either liquidated or acquired by competitors by 2014.
As entire industries are reshaped in the fourth industrial age, successful cities must adapt. For the last two centuries, proximity to natural resources and availability of mass labour were the primary ingredients for success. Today’s business use decentralised production and service delivery models. Their needs are more likely to centre on buzzwords such as “on-demand”, “peer-to-peer”, “shared” and “circular” economic models.
As a result, significant new competition can emerge from unexpected quarters. Take Chattanooga: best known for stream trains, it has re-invented itself as Gig City, with internet speeds 50 times faster than the US average. Not only does this mean a 25-minute HD film download has been reduced to 30 seconds, it has led to the rapid growth of high-tech start-ups.
If London succeeds in becoming “smart” and “open-source”, businesses will benefit from the opportunities for new collaboration and real-time insight into customer needs. Citizens will also gain through greater participation in shaping their urban environment and new ways to access public services.
On the down-side, greater connectivity also brings systemic cyber vulnerabilities, and the risk of social divide between the digital haves and have-nots.
Political risk is ever-present. The Government’s own analysis suggests that UK’s regional economies are at greatest risk from the potential negative impacts of Brexit. London’s size and sheer economic weight offer the capital some protection. This suggests a question: how can major cities act – alone or collectively – to hedge against the risks of central government policies that are driven by wider considerations than one city’s best interests?
If national governments choose to turn their backs on international co-operation in order to “regain sovereignty”, shouldn’t cities “take back control” from central government? This approach would enable London to decide its own best interests not merely within the UK, but on a global stage. Absent trade agreements between the UK and third countries, London could help retain its attractiveness to foreign investors through the adoption of international standards for the built environment.
These standards encompass valuation, ethical business practice, project cost management and property measurement. They increase business transparency and reduce investment risk. And they are created by industry for industry, meaning they can be adopted and implemented without national legislation or international treaties. Moreover, such standards are designed to be applied by accredited professionals, and independently enforced at no cost to the tax-payer.
So, when Sadiq Khan talks of London as the world’s leading smart city he should think beyond technology and look too at the smart standards that aid competitiveness. This is why RICS is leading the global conversation on future cities, new technology and smart standards. First stop is the London Summit of the World Built Environment Forum in April.
The World Built Environment Forum facilitates industry leading discussions harnessing the enormous potential of the 21st century's people and places.