Often, political pundits and policy wonks spend so much time focusing on the here-and-now, they donï¿½t focus enough on what we need to do to get where we want to go. This trap is easy to fall into. The issues served up on our public policy platesï¿½growth, revitalization, job creationï¿½pose difficult questions, and finding the answers requires a substantial investment in time and other resources.
But, sitting back and examining the big picture can have important implications for how we design and implement public policy today. This is increasingly true in the area of urban policy where the success of cities depends increasingly on their ability to capture the benefits of technology and meet the challenges of unprecedented demographic mobility. The mantra for the city of the 21st century may well be: "technology, technology, technology!"
Obviously, this is overly simplistic, and elected officials and policymakers should resist the temptation to subscribe to slogans and avoid hard truths. Silicon Valley's dramatic "readjustment" at the end of the 20th century should be sobering enough to caution anyone from wedding himself too closely to a hi-tech economy.
Nevertheless, technology's influence in shaping regions can't be ignored. It is fundamentally changing the environment in which cities operate. Cities and regions exist in an intensely competitive, globally interconnected world. Technology—how regions use it, nurture it, and keep it—is the one influence that continues to dominate the regional urban landscape and should continue to shape how we frame public policy on the local and regional level as well.
Technology is up-ending traditional ideas about urban geography because it is increasingly freeing the average "Joe" (or "Harriet") from the traditional constraints of location. The Internet, teleconferencing, video communications, cell phones, and a host of newer telecommunications devices, let people (and companies) choose among a myriad of options for how they want to be organized, where they want to be located, and who they want to be physically close to. Technology, then, is ushering in an unprecedented new age of mobility for personal and professional reasons.
Thus, technology is fundamentally changing the "logic" of location. Location choices are shifting from the commercial realm to the personal realm. The bottom line is more often the most efficient location for the key players within a company, and physical proximity to a large pool of labor is becoming less and less important.
This new environment allows personal choice and preference to play a much larger role in deciding where we live, work, and play. We can even choose to live, work, and play in the same location by working out of our home. Thus, "place"—the character of where we live and work—is more important in urban geography now than in the past.
Firms may still have a need to concentrate some workers, but the thresholds of concentration are much lower because products (and services) are becoming increasingly compartmentalized and specialized. More functions can be handled in remote offices as long as mechanisms for accountability and quality control keep pace. This trend allows individuals to exercise more choice and discretion over where they live and where they want to grow their businesses.
More fundamentally, this urban environment is more dynamic, fluid, and difficult to track. Seeing into the future is more hazardous than ever because the growth, maturation, and decline of individual businesses and industries are less predictable. Cities need to be adaptive and flexible, allowing for innovation to occur spontaneously and avoiding the tendency to be locked into commitments that attempt to preserve the past at the expense of the future.
In practical ways, how can cities position themselves to take advantage of this fluid environment? How can this "technology-migration" paradigm help design public policies that sustain them in an era of what analyst Joel Kotkin calls the New Geography?
First, they cannot lose sight of the basics. Cities, particularly local governments, provide certain services that are crucial to keeping the city and its region competitive. Maintaining a skilled, adaptable, and creative labor force is an obvious requirement. Cities must establish a system in which schools operate that allow them to function at very high levels and meet individualized learning needs at all stages of education, from pre-school to higher education. Mass production teaching techniques are "out" in this environment, and small, specialized learning environments are "in."
Second, the technology-migration paradigm means that the city has to provide a top-flight living environment—crime must be low, public safety must have a high priority, infrastructure must be well-maintained, and the housing stock must be well maintained and fluid. Moreover, these living and business environments need to be cheap. In an environment of easy, international capital flow and migration, people will not put up with high levels of regulations and taxes. Only a few places—Silicon Valley, New York City, London, Paris, and perhaps Chicago—will be able to break away from this constraint.
An attractive, sustainable urban environment, however, doesn't necessarily mean the lowest tax environment. Over and over again, people have demonstrated a willingness to pay taxes for high-quality services that they want. In the case of Silicon Valley, people and businesses put up with significant burdens—high taxes, high housing prices, extraordinary traffic congestionï¿½because they can take advantage of a moderate climate and globally unique pool of hi-tech talent. Silicon Valley is the exception, and even this advantage appears to be eroding in the wake of the tech recession. Irrespective of Silicon Valley's future, most urban places will be subject to the harsh constraints of freely flowing people, jobs, capital markets, and investment. Local and regional governments must be very efficient in this environment.
The technology-migration paradigm also means that cities and regions have to be well connected to the outside world, primarily through telecommunications and air travel. Airports are the water ports of the 21st century. Access also has to be relatively cheap, both in terms of dollars as well as time. Indeed, as incomes rise, more and more people will be squeezing their work hours to provide more time for leisure and family.
The technology-migration paradigm establishes an agenda for urban reform that should be generally applicable:
- Schools must be effective. Life-long learning is an integral part of the new economy, and school systems need to be able to recognize and nurture individual learning needs. The needs vary by the experience and personality of the child as well as the evolution of the community and economic system in which she lives. Curricula will necessarily become more personalized as a result.
- Local infrastructure must be high quality and well maintained. The bricks and mortar of traditional cities are still crucial to their functioning. These services must be provided in a cost-effective way, so that citizens and businesses pay the least for the highest quality possible. Technology has improved the efficiency of, and reduced the cost of providing, key traditional public services such as water, wastewater, drainage, and roads. Privatization and user fees are likely to thrive in this new environment because they help tie services directly to consumer needs and desires while also significantly improving efficiency. Regardless of how these services are delivered, cities (and regions) will continue to be responsible for ensuring they are available and accessible. Without this core infrastructure—making sure the potholes are filled—cities will languish in the new economy.
- The region must be accessible to the world. Airports, broadband communications, DSL services, and other top-flight telecommunications technology must be available and accessible to businesses and residents. Businesses of the 21st century will be using telecommunications and travel innovations to increasingly marginalize physical space as a constraint on human activity.
- Economic development policies must foster entrepreneurship, innovation, and dynamism. Economic opportunity abounds in the new economy, both for new, high-tech businesses as well as a growing array of services that improve the quality of life. Nail salons, catering businesses, taxi service, local restaurants, and retail businesses are as much part of the infrastructure of a neighborhood as a manufacturing plant or software company, although the scale and scope of the impact are different. Cities must ensure that local regulations and public policies do not interfere with the business formation process, and maximize the opportunity for the private sector to transform old uses (e.g., warehouses) into new ones (e.g., loft apartments) that enhance the quality of life for the neighborhood and city. While difficult, the open-ended nature of the market process will need to be embraced and accommodated. Tying public policies to shoring up the economic past are likely to compromise a city's economic future.
The technology-migration paradigm is creating an environment much more uncertain and unpredictable than in previous eras, and public policy needs to recognize this. In the end, how well cities adapt to the technology-migration paradigm will determine their sustainability. Innovation, adaptability, flexibility, and fluidity will be the benchmarks on which a city's progress and a region's development will hinge.
Samuel Staley is director of urban and land use policy at Reason Foundation and co-editor of the book "Smarter Growth: Market-Based Strategies for Land-Use Planning in the 21st Century."
The ideas in this article were developed as part of a dialogue and correspondence with Brian Lee Crawley, President of the Atlantic Institute for Market Studies, for a speech in Halifax, Nova Scotia delivered on April 24, 2002. Mr. Crawley's speech can be downloaded from www.aims.ca.