Cities of Opportunity 2014

Contents
1. Highlights
2. Erik Brynjolfsson
3. Miguel Zugaza
4. Shanghai
5. Steven Koonin
6. Ulla Hamilton
Cities of Opportunity 6
Beijing
Berlin
Buenos Aires
Chicago
Dubai
Hong Kong
Istanbul
Jakarta
Johannesburg
Kuala Lumpur
London
Los Angeles
Madrid
Mexico City
Milan
Moscow
Mumbai
Nairobi
New York
Paris
Rio de Janeiro
San Francisco
So Paulo
Seoul
Shanghai
Singapore
Stockholm
Sydney
Tokyo
Toronto
6 | Cities of Opportunity 6 | PwC
Overview
Overview | 7
London
Cities of Opportunity 6 refects the wide range
of factors contributing to successful cities and
resilient urban communities
This year, weve organized our 10 indicators
into three families that refect the fundamen-
tals of a well-balanced city: forward-looking
tools such as education and technology;
quality of life making cities healthy, happy,
and sustainable; and the ability to pay the
bills for it all. However, reorganization does
not cut down on the observations to be
gleaned from the 59 overall data points on
our 30 cities. Here are some of the most inter-
esting fndings from Cities of Opportunity 6.
London claims #1 by a clear margin,
with New York and Singapore close
behind
Although London takes the top spot in our
rankings for the frst time, it was evident from
our last report that it was coming up quickly
on New York, fnishing a hairs breadth (less
than a tenth of 1 percent) behind New York
in our last edition in a virtual tie. This year,
London clearly takes the lead and is also the
only city to fnish frst in three indicators.
New York, on the other hand, while missing
out on the top rank in all indicators, shows
continuing superior consistency across most
of the indicator categories. The other strong
contender is Singapore. It scores an unexpect-
edly robust third place just behind New York
(four spots ahead of its previous ranking) and
fnishes frst in two indicators. Overall, nine
cities in the top 10 in our last report remain
in the top 10 in this one, albeit with some
natural movement up or down.
Sydney surprises, but Stockholm
remains a constant contender
The only city that was not in the top 10 in
our last report but climbs into that select
group in this one is Sydney, which also
ranks frst in two indicators measuring
quality of life, sustainability and the natural
environment, as well as demographics and
livability. Stockholm also fnishes frst in two
quality-of-life indicators (tying Sydney in
one of them) and seventh overall, just behind
Paris. Two other cities renowned for their
exceptional quality of life, Toronto and San
Francisco, rank fourth and ffth, respectively,
confrming their reputation.
Nobodys perfectbut the top cities are
very good at a lot of things
The most consistent fnding in our current
report, echoing previous results, is what we
called in Cities of Opportunity 5 a virtuous
circle of social and economic strengths.
When great quality-of-life factorsare
balanced with strong businesses and solid
infrastructure, the resulting formulaor,
better yet, network of reinforcing advantages
and assetscreates and sustains resilient
cities with high standards of living.
Of the cities ranked in the top 10 overall this
year, Sydney is the only one that doesnt fnish
in the top 10 in at least half of our indicators
(it makes the top 10 in four out of 10). Most
cities score in the top 10 in the majority of
indicators, which proves just how comprehen-
sively they attend to most of the factors that
enhance (or diminish) urban life and how
they actively sweat the details on virtually
every aspect of urban policy and organization.
It takes a city to make a citizen
and vice versa
Our other major fnding is that it really
doesnt matter what size a city is as long as
its a city. Every one of our indicators has both
small and large cities in the top 10, usually
in a good mix. Even our economic clout and
city gateway indicators, which are intuitively
associated with the larger (more promi-
nent) cities, have several smaller cities in the
top ranks. More to the point, all four quality-
of-life indicators have a majority of smaller
cities in the top 10.
How the cities rank
Intellectual capital
and innovation
Technology
readiness
Transportation
and
infrastructure
200
186
148
190
195
204
192
158
181
174
162
182
172
161
121
98
75
117
96
117
106
94
72
73
68
61
55
35
30
30
98
107
91
73
96
75
105
100
71
86
74
93
84
107
60
57
62
58
44
40
52
28
33
44
28
23
19
35
32
14
112
95
139
118
89
114
111
99
80
91
107
74
104
115
112
105
103
91
90
94
101
98
43
115
70
87
83
87
79
31
City gateway
172
137
153
98
109
143
96
151
119
93
113
105
151
125
148
141
131
93
156
137
97
88
94
68
111
76
51
57
58
34
16
13
11
8
6
London
New York
Singapore
Toronto
San Francisco
Paris
Stockholm
Hong Kong
Sydney
Chicago
Berlin
Los Angeles
Tokyo
Seoul
Madrid
Dubai
Kuala Lumpur
Milan
Beijing
Shanghai
Moscow
Mexico City
Johannesburg
Buenos Aires
Istanbul
So Paulo
Rio de Janeiro
Mumbai
Jakarta
Nairobi
21
20
19
18
17
15
14
12
10
9
7
5
4
3
2
1
22
23
24
25
26
27
28
29
30
This last fact is critical because it also illus-
trates the relationship between cities and
their people. After a certain level of economic
success, a citys residents demand more from
municipal administrations. In fact, economic
success normally is seen as (and historically
has been) the basis for those improvements in
urban life that lead to a citys infrastructural
development, from schools, hospitals, and
police to roads, buses, and metros to libraries,
parks, and environmental sustainability. While
it might be the simple demographic fact of
population density and expansion that turns
towns into cities, it is the self-consciousness of
citizensand their proud participation in the
growth of their respective citiesthat urges
cities to improve the quality of life of the men
and women who live in them.
Parlez-vous intellectual capital?
What is perhaps most impressive about Pariss
#1 ranking in intellectual capital and inno-
vation this year is not so much that it fnishes
frst; after all, it only beats out London by just
under 2 percent of the fnal top score. What
is most striking is the group that Paris rises
above. Look at the top 10 again: Seven of the
cities are English-speaking, and an eighth,
Stockholm, is a city in which English is almost
a second language (and often a frst one in
various felds of technology). The only other
city in which the natural language of intellec-
tual investigation and research is not English
is #10 Tokyo (see page 18).
This is a resonant achievement that plainly
refutes the notion that non-English-speakers
cant compete, intellectually or techno-
logically, within the context of todays
globalization of English. It also encourages
cities such as Berlin and Seoulwhich
just fall out of the top 10not to mention
Shanghai and Beijing or So Paulo and Rio
de Janeiro. Clearly, these results demon-
strate the value of education and innovation
in themselvesas opposed to the language
in which they are conductedprecisely
because, as this section says, they are the
most important tools of a changing world.
Think locally, connect globally
Technologys obvious capacity to level
the playing feld between developed and
developing cities (as well as East and West)
is confrmed by the technology readiness
indicator, in which Seoul ties London for
frst place. Much more than in our previous
indicator, we see a geographical and
cultural dispersion among the top 10 here
that confrms technologys innately disrup-
tive ability to upend traditional patterns of
economic sway and competitiveness.
but connect, in any case
The city gateway indicator exemplifes the
truth that, year after year, the most successful
cities are those tenacious, persistent ones
that persevere through good times and bad
regardless of whatever is thrown at them
economically, socially, politically, or environ-
mentally. And a critical reason they survive
so well is because theyve always been open
to the world. London, ranked frst in this
indicator, is, of course, an icon of global
trade and commerce. But if we look at the
other nine cities in the top 10, we immedi-
ately notice that six are portsand almost
all of them famous ones (see page 30). One
Overview | 9
Demographics
and livability
141
119
133
123
136
128
126
133
142
119
135
98
96
67
101
108
80
91
70
85
77
63
79
65
59
59
65
25
35
64
Cost
76
93
69
105
102
59
73
78
81
117
95
120
84
83
103
94
64
40
53
57
67
108
61
75
51
58
42
75
79
66
Ease of doing
business
173
194
219
182
167
142
158
197
146
167
134
172
151
160
124
100
156
98
97
72
77
126
108
51
79
79
71
66
70
62
Economic
clout
118
114
95
90
92
107
77
91
82
78
64
78
88
84
77
73
76
81
115
105
86
60
53
47
59
61
58
73
50
36
Sustainability
and the natural
environment
79
89
71
106
112
116
121
63
121
96
116
96
69
61
91
37
55
84
63
46
96
71
57
82
61
64
70
57
42
74
Health, safety,
and security
112
110
112
130
113
108
132
86
130
112
128
100
105
98
91
53
103
42
59
32
52
51
58
35
37
33
30
25
15
79
Score
1,290
1,235
1,230
1,215
1,211
1,196
1,191
1,156
1,153
1,133
1,128
1,118
1,086
1,043
1,015
913
885
880
813
808
781
747
698
664
645
598
547
523
496
439
High
Low
Medium
Highest rank in each indicator Each citys score (here 1,290 to 439) is the sum of its rankings across variables. The city order from
30 to 1 is based on these scores. See maps on pages 1415 for an overall indicator comparison.
(Paris) is located on a celebrated commercial
waterway, and only two, Beijing and Madrid,
are inland, although both have rivers running
through them (and, in Beijings case, several).
The city gateway indicator means a number
of things, but, before and beyond every-
thing else, it means exactly what it says:
city gateway. For a city to be looked upon by
the world as a model, a symbol, or even a
haven, it has itself to be continually looking
to the world and to be open to it for that
fundamental exchange of ideas, people, and
commerce that, in the past as well as in the
future, has always defned a transnational city.
Singapore moves peopleand houses
them as well
Singapore dominates among the cities of
opportunity in transportation and infra-
structure. It ranked frst by a small margin
in our previous report; it ranks frst by a
much larger margin in this one. Moreover,
the difference in score between Singapore
and #2 Toronto is great (even more than that
between the Canadian city and #15 Mexico
City). Singapore clearly understands the
fundamental role of infrastructure in a citys
development and in its contribution to the
well-being of its citizens. It is particularly
telling that Singapore ranks frst in the critical
variable that measures the availability, cost,
and quality of housing (which shows a strong,
positive correlation with the overall social
and economic health of a city).
The other noteworthy result in this indicator
is the exceptionally wide range of cities that
make up the top 10. Buenos Aires and Seoul
tie for third place, followed by Paris, London,
and Madrid (tied, again, for sixth place),
Stockholm, Berlin, and Dubai. This is, to say
the least, an unusual mix of cities, which
illustrates that good infrastructure is not
necessarily a product just of economic clout
or global prominence (as measured by our
city gateway indicator).
Whether or not small is beautiful, its
decidedly healthy and safe
Although we changed the variables slightly
in this edition, the results in health, safety,
and security have hardly changed from our
last report. Stockholm fnishes frst, with
a marginal difference, as it did previously.
Sydney and Toronto tie for second, currently
with a tiny difference between them, while
they fnished #2 (Toronto) and #3 (Sydney)
in our previous report. In the end, nine of the
cities in the top 10 in the last report remain in
the top 10 in this one.
What is perhaps more interesting than the
actual ranking of the cities is their size. The
top fve cities in this indicator have an average
population of just under 2.5 million. And
even if we add the populations of the top
10which includes London, Singapore, and
New Yorkwere still left with an average just
about 1.4 million larger. The result is no less
compelling for being so obvious: Larger cities,
with larger populations, must strive harder,
and expend more resources, to secure the
health and safety of their residents.
Where health and safety lead,
sustainability follows
Seven of the cities in the top 10 in the
previous indicator are also the frst seven
cities in the top 10 in sustainability and the
natural environment. And, again, if
we average out the populations of these
10 cities, it comes to roughly 3.61 million
peopleand thats only because of one
city, Moscow, whose population is almost
12 million. If we delete Moscow from the
average of the other nine cities, the fgure
drops almost by a million to 2.69 million.
Clearly, urban sustainability means just that:
sustainable urban magnitudes.
Sydney fnishes frst in livability, but
London beckons to would-be expats
Demographics and livability rounds out the
quality-of-life section of our study. It is also
the indicator that benefts from PwCs global
staff survey of 15,000 professionals that
supplements this years Cities of Opportunity.
Two variables are based on survey results, one
of which measures responses to the question,
Of the cities in Cities of Opportunity (other
than your own), which are the top three in
which youd most like to work? London
places frst in that answer. But Sydney fnishes
a whisker ahead of London in the overall
demographics and livability ranking and
places third as most desired city for relocation.
As for the other most desired cities for reloca-
tion, New York comes in a close second to
London (41 percent to 47 percent, respec-
tively)showing professionals are powerfully
attracted to the energy and opportunity of
the worlds most competitive cities. Sydney,
however, comes in third most desirable at
just under 28 percent with San Francisco
following close behind at 26 percent
suggesting that good quality of life has a
powerful pull, perhaps made even more
seductive by beautiful beaches and sophisti-
cated culture.
When it comes to economic success, be
strong but also be competitive
The fnal section of our report includes its
three economic indicators. Together, they
point to the synergies needed if economic
growth is to lead to permanent economic
strength. Its not surprising that the top fve
cities in our frst indicator, economic clout,
are London, Beijing, New York, Paris, and
Shanghai. They are all legendary cities
that mirror the economic history of the
urban world during the last couple of
hundred years.
Not one city in the top fve in our second
indicator, cost, is in the top fve in economic
clout, however. But the three cities in the top
10 in cost and economic clout are also in the
top 10 in our third indicator, ease of doing
business. In addition to their success in all
three indicators, these three mature cities
New York, San Francisco, and Torontoalso
rebut the notion that developed cities cant
compete on costs. Finally, given that six of the
cities in the top 10 in economic clout are also
in the top 10 in ease of doing business, our
fndings validate the obvious expectation that
a city in which it is easy to do business will
actually do so successfully.
The texture of city life emerges beyond
the numbers
While quantitative results tell one sort of
story, the human experience of leaders
and thinkers at any moment in time adds a
different layer of insight. This year, those we
spoke with mention technology often but
quickly bridge to innovation, creativity, and
the need to be one with the spirit of a great
city. It seems, to borrow from Dylan Thomas,
the force that through the green fuse drives
the fower, drives our urban age.
Roll over Leif Eriksson and tell Valhalla
the news!
Accompanied to New York by a horde of
Nordic software developers, if not blood-
thirsty Vikings, Stockholms vice mayor
Overview | 11
for entrepreneurism, Ulla Hamilton, told
us her small, sustainable city with a powerful
broadband network has been lucky in the
area [of entrepreneurism] for several reasons.
We have a very interesting mix of life
science companies, information and commu-
nications technology companies, clean
tech companies, and the entertainment indus-
tries.That creates an innovative climate.
Also, Swedes are very interested in solving
problems, and it has become fashionable to
start your own company. One of Stockholms
most successful startups, DICE, even brought
us Battlefeld 1, 2, 3, and 4. It seems the old
Viking spirit is not dimmed by a pair of jeans
or a business suit.
Change those bad behaviors or else!
At New York Universitys Center for Urban
Science and Progress (CUSP), the hope of
urban informatics is being explored every-
where from traffc to health and safety and
energy management. But according to
CUSPs director Steven Koonin, big data
isnt so much a driving force to manage
cities but a tool to help people see and
improve urban patterns. Koonin explains
science with a social dimension holds the
promise of urban informatics to make city
life better, but its less a technological fx
than a way to understand our own collective
behavior and, with the help of behavioral
economics, build better, more logical
approaches to city dynamics.
In other words, individually, it may be hard
to start healthy eating looking straight at
a bowl of vanilla ice cream, but we may be
able to push collective behaviors in the right
direction guided by the power of information
and the need to serve the common good in
massive, densely populated cities where we
all share in success.
Shanghai surprise: A huge city
manages breathtaking growth with an
eye on its heritage
A city is a place for people to live, so you
need to adapt and make use of heritage,
explains Wang Lin, director of historic
conservation in Shanghai. Her citys explo-
sion to 14.3 million permanent residents
(nearly 24 million if migrants are included)
may not have begun with as big an eye on
Shanghais history, but, today, Lin says the
frst important thing is we need to be sustain-
able. We need to pay more attention to the
quality of the city. We need to keep a balance
between the environment and the economy.
And equality is very important. Careful
management of the great citys pastits
12 historic conservation areasweaves right
into the fabric of Shanghais future. Lins
focus on Shanghai is complemented by
Ron van Oers of the World Heritage Institute
of Training and Research for Asia and the
Pacifc and previously UNESCOs World
Heritage Cities Programme, who offers a
global perspective.
The Prado unveils an Enlightenment
approach to crisis management
Despite 60 percent government funding
cuts to Madrids splendid museum, Prado
director Miguel Zugaza tells us our reaction
was to actually invigorate our activities, do
more that would appeal to more visitors.
And his approach is working. Extended hours
and notable shows are attracting more visi-
tors from the city, the nation and the world.
In fact, Zugaza says one of the ways we will
exit the crisis in our country will come from
the cultural sector. Spain has a very important
asset in its cultural heritage.It generates
excellent employment. It generates appealing
activities for tourists. It enriches the economic
fabric around us. And its important that poli-
ticians and society know this....Every 1,000
visitors who come to the Prado generate one
job in Madrid.
A writer embraces the messy heteroge-
neity that defnes a great city
Suketu Mehta is author of Maximum City:
Bombay Lost and Found, a forthcoming book
on New York, as well as many articles on the
favelas of Brazil. Here he pauses amid travels
and teaching to explain the lure of urban
life from many angles. A young person in
an Indian village moves to Bombay not just
to make more money but because the city
signifes freedom. Its also a place where your
caste doesnt matter as much. As for rich
cities like London, he warns it doesnt matter
how welcoming the city is if you cant fnd
an apartment there for a reasonable price,
because you wont be part of the city at all.
Thats dangerous to the citys well-being. You
need the great middle classgood people
who will keep faith in the city during
a downturn.
Yikes! Robots advanceAre we inno-
vating ourselves out of a day job?
Erik Brynjolfsson, director of MITs
Center for Digital Business and author of
The Second Machine Age, keeps his fnger
on the pulse of economic and technological
change. Nowhere is creative destruction
more potentially dramatic than the rise of
smart machines and their ability to do our
jobs. How do cities and their citizens avoid
future unemployment and potential social
unrest? Brynjolfsson says a number of jobs
will be even more in demand: One is creative
work. The second is interpersonal interac-
tions. And those are areas where cities can
excel. They can stoke creativity by bringing
people togetherTheyre attracted partly
by the culture, partly by proximity to other
creative people. These people will be even
more in demand in the next 10 years, and the
successful cities will be the ones that cultivate
and attract them.
From Stockholm to Shanghai, Madrid and to the streets of
New York, the force that through the green fuse drives the
fower appears to drive our creative, urban age.
Robots are coming to a city near
you and they want your job!
Erik Brynjolfsson of MIT explains how to stay a step ahead of
technological unemployment
Erik Brynjolfsson is a professor at the MIT Sloan School of
Management and the Director of the MIT Center for Digital Business.
In 2003, Business Week declared: If e-business had an oracle, Erik
Brynjolfsson would be the anointed. Since then, he has sealed his
reputation as one of the worlds leading experts on the economic
effects of technological innovation. He is the co-author with Andrew
McAfee of a new book, The Second Machine Age: Work, Progress,
and Prosperity in a Time of Brilliant Technologies. Here, he shares his
vision of the future and discusses how cities can ride this wave of
technological change.
As the technological revolution
continues, how do you see it
affecting the economy and
employment, both for better
and worse?
When I look at the economic
statistics, I see that theres a
great paradox right now. On one
hand, we have record wealth. In
fact, it was just reported that the
United States hit a new record
for net wealth: over $77 trillion.
There are more millionaires
and more billionaires than ever
before. Productivity is at an all-
time high. GDP is at an all-time
high. Thats all good news. But,
at the same time, the reality
is that the median income is
lower now than it was in 1997;
the portion of the population
thats working is falling; jobs
are disappearing. So, on the one
hand, the economy is working
very well in terms of making
the pie bigger. But, on the other
hand, a lot of people are not
sharing in that. And the reality
is that theres no economic law
that says everyone has to beneft
from technological progress and
gains in productivity. Its quite
possible that some people will
be made better off and others
will be made worse off. When
the automobile was introduced,
people who made buggy whips
and horseshoes lost their
jobs. With every technology,
some people are made worse
off. Historically, thats been a
relatively small section of the
population. But recently its
gotten to be a bigger and bigger
section of the population. That
refects the fact that the new
technologies are so much more
powerful and are affecting so
many more tasks than earlier
generations of technologies.
Erik Brynjolfsson at MIT.
2 | Cities of Opportunity | PwC
Were really at a fundamental
infection point right now:
youre seeing cars that can drive
themselves; you can talk to your
machines, your phone, and
have it understand your natural
speech and carry out your
instructionsnot perfectly, but
pretty well. There are problem-
solving machines now that can
make medical diagnoses or that
can sift through legal documents
better than lawyers can to fnd
the most relevant information.
Watson, IBMs supercomputer,
won the game show Jeopardy,
which involves a very compli-
cated set of tasks. In each case,
technology is pushing back the
frontiers of things that, previ-
ously, only humans could do.
As a result, weve seen what
my co-author Andrew McAfee
and I call the great decoupling
of productivity from median
income and employment.
Historically, those trends rose
together: as the country became
more advanced and more tech-
nologically productive, median
income and employment also
went up. But, starting in the late
90s, they became decoupled.
Thats a real change. So, both
the theory and the data suggest
that we are in a different
era now.
This digital transformation is
occurring at a time when were
also seeing a trend of massive
urbanization. Is that
a coincidence?
I dont think its a coincidence.
One of the main things that
digital technologies are doing
is dramatically lowering search
costs and transaction costs. It
makes it easier for people to fnd
each other and share ideas. For
instance, with Googles search
engine, its remarkable how
easily you can locate a particular
document or piece of informa-
tion; and social networks do the
same thing for people. Mostly,
this is a good thing: people can
connect with each other in ways
they couldnt before. But it also
has some interesting effects in
terms of the way that people
group together. Ive written
about what we call cyber
Balkanization or what some
people call the flter bubble.
The idea is that you can use
technology to flter in the things
youre interested inbut,
when youre doing that, youre
also fltering out other things.
We only have a fnite number
of hours in a day and a fnite
amount of attention, so we cant
be friends with seven billion
people on the planet. We choose
who to be friends with. And we
cant pay attention to all the
information thats being gener-
ated. We choose what to focus
on. If people focus on particular
narrow interests and associate
with people who are like them-
selves, then theyre not getting as
much diversity of opinion; there
isnt the same kind of mix we
saw when people just randomly
bumped into each other without
having as much control over
that. And this can have some
negative effects in terms of our
social institutions, the variety
of ideas that are generated,
and political polarization. We
need to think more about this
about how to manage the effect
technology is having on the way
people interact and the way
ideas mix.
Technology is causing dramatic
economic dislocation and
creative destruction, yet you
still describe yourself as a digital
optimist. Why?
Technology is having an enor-
mous effect on our ability to
produce wealth, but its also a
substitute for lots of different
kinds of labor. Thats part of
the concernthat people wont
have jobs going forward, if
machines can do those jobs more
cheaply and effciently. But,
in the long run, Im optimistic
because I think theres no
inevitability to any particular
technology trajectory. I dont
think we should try to slow
down technology. However, I do
think we should speed up the
rate of re-skilling people and
improving the way they work
with machines, as opposed to
competing against them. That
way, we can create not just
a bigger pie, which is almost
inevitable with the improve-
ments in technology, but also
shared prosperity, with more
people participating in it. The
key, though, is that its not going
to happen automatically. Its
going to happen only if we make
conscious efforts to guide our
society in those directions. We
need to make choices that can
improve those outcomes.
Such as?
We can do a much better job
with education. Digitization has
affected almost every industry,
including media, manufacturing,
transportation, retailing and
fnance. But it has not affected
Were at a fundamental infection point right now: youre seeing
cars that can drive themselves; you can talk to your phone and have
it carry out your instructions. There are problem-solving machines
now that can make medical diagnoses. In each case, technology is
pushing back the frontiers of things that, previously, only humans
could do.
PwC | Cities of Opportunity | 3
education to nearly the same
extent. Were just at the cusp of
using digital technologies like
massive, online open course-
ware. Those technologies and
many others can allow us to
bring the very best educational
methods and the best teachers
to a much broader set of people,
raising the level of learning in a
lot of key areas. More important,
perhaps, these digital technolo-
gies will allow us to measure
and understand whats working
much better than before. Digital
processes are inherently more
measurable. Thats why many
of my students go into online
advertising, where you can see
who clicks and who doesnt.
You can take that same big-data
approach and apply it not just to
advertising or manufacturing or
fnance, but to education. That
means we would get not just a
higher level of teaching but also,
a higher improvement rate, as
we understand which practices
are working and which arent.
So, education is certainly one
category where we can improve.
There are also other areas like
boosting entrepreneurship and
fnding better ways of matching
people to jobs. If we work on
those areas, well be able to
get more people working than
would otherwise happen.
Do you see similar trends of tech-
nological change and disruption
outside the US?
Yes. This is a global phenom enon.
With globalizationwhich,
of course, is partly driven by
technologymany segmented
markets are now becoming one
global market. Therefore, the
same forces we see affecting
America also apply in China,
India, Europe, Latin America.
In fact, Id say that workers in
low-wage countries are even
more in the bulls-eye of
automation than those in
America. If you take a look at
manufacturing, for instance,
much of the routine work has
left the United States for lower-
wage locations. But looking to
the future, thats exactly the
kind of work that robots can do
best. So, if countries like China
or Vietnam are relying mainly on
low wages to protect themselves
from automation, thats going to
be a losing battle. In fact, what
well see is robots taking more
and more of those simple routine
tasks away from humans in every
country.
How important is immigration
as a means of driving innovation
and creativity?
The data Ive seen suggests
that a disproportionate share
of the startups in Silicon Valley
were founded by people born
outside the USas I was, for
that matter. One of the countrys
great strengths is the ability to
attract creative people from all
over the world to help not just
with startups but with scientifc
breakthroughs and contributions
to the arts and other felds. Its
been wonderful for the United
States to bring these people
together. You can make a case
that its also good for the world
because many of those people
are more productive in this
milieu where theyre near each
other. Urban environments tend
to facilitate that because creative
workers can be close to other
creative workers, and the speed
of idea transmission is just much
greater that way. Wonderful as
email and other digital technolo-
gies are for sharing ideas, there
are still a lot of things that can
really be done much better face-
to-face. So, by bringing people
together from all over the world
who have ideas in particular
areas, you can speed up idea
creation; then, ultimately, those
new products and scientifc
breakthroughs are available to
all of humanity, not just to the
local city or region where they
were developed. Id like to see us
do even more to increase the free
fow of people and ideas across
boundaries. Ideas are inside of
peoples heads, and its often
better to give people a chance to
work side by side in urban envi-
ronments than for them to have
to communicate digitally.
So the density of cities really
fuels innovation?
Absolutely. The reason I love
being at MIT is because of all
the amazing people I bump
into here not just at the MIT
Sloan School but the Media
Lab, the computer science and
A.I. lab, and also the students.
Its a wonderful experience,
and theres so much serendipity
that you cant plan. If you had
to schedule a meeting with
somebody, it wouldnt be nearly
as likely that youd come up with
these unexpected insights as
when you just run into people in
the elevator or at lunch, or else-
where. I have to admit that
I made a big mistake ten years
ago when I was on the MIT
Parking Committee. As a good
economist, I was looking at the
fact that theres a lot of free
parking at MIT, and I thought,
Well, we should charge people
the marginal cost of that
parking, which is quite expen-
sive here in Cambridge, because
then theyd make a rational
decision about whether to come
in and clutter up the parking lots
or work at home. So, we raised
the cost of parking. But it was
one of the worst mistakes Ive
made because a lot of people
now work at home. They save
the cost of parking and trans-
portation, but we all lose when
they arent here as part of the
milieu. When I work at home, I
can be very effcient in tackling
certain kinds of tasks, but I
lose that unexpected beneft of
bumping into other people. If I
were asked to be back on that
Parking Committee, I would
undo that and provide subsidies
that would encourage people to
be more physically close to each
other. Just as at MIT, the same
thing is true for cities: by getting
people to be near each other,
you get what economists call
externalities from these idea-
sharing events. Thats one of the
great virtues of a university and
of a city. Unfortunately, its not
something that technology can
easily replaceat least, not in
our generation.
What happens if cities stick with
their old ways, hoping that these
technological and economic
changes will pass, instead of
adapting to this new era?
There are certainly some tempo-
rary phenomena going on right
nowlike the Great Recession
and the business cycle. But the
roots of this disruption were
seeing in the labor markets and
elsewhere are much deeper,
and they have to do with
some fundamental technology
changes that are only going to
accelerate. Those technological
improvementswhether its
self-driving cars or being able to
speak to our machinesare just
the tip of an even bigger tidal
wave of changes that well see in
the next ten years. Technological
change is not going to slow
down; nor should we want it to
slow down. Its going to accel-
erate. But whats happening
is that our organizations and
institutions arent keeping up.
And if they dont keep up, more
people will be out of work, more
people will fall into poverty, and
were going to have even more
social and economic disruption.
So, ignoring those technology
changes is not an option. The
best option we have is to try to
speed up our adaptation to the
technology and to get ahead of
it, and thats going to require
much more effort in thinking
about urban planning, organi-
zational studies and economics,
both at the national and indi-
vidual levels. All of those things
are going to require much more
attention than weve given them
so far.
In The Second Machine Age,
you argue that everyone from
lawyers to truck drivers will
be upended by technological
change. What should
individualsand cities
do to prosper in this new
environment?
What were seeing is that a lot of
routine information-processing
work is being automated, and
this is increasingly happening
with routine physical work as
well. But a number of areas will
be in more demand. One of them
is creative work, inventive work.
The second is interpersonal
interactions and relationships.
And those are areas where cities
can excel. In particular, they
can stoke creativity by bringing
people together. As Richard
Florida [an urban studies theo-
rist at the University of Toronto]
and others have described, you
need to attract a creative class of
professionals who work together.
Theyre attracted in part by the
culture, in part by proximity to
other creative people. Those
kinds of skills and those kinds
of people will be even more in
demand in the next ten years
than they were in the past, and
the successful cities will be the
ones that cultivate and attract
them.
But a lot of people are not that
well-equipped for this brave new
world of creativity.
Right. I think were entering a
world in which more and more
peoplebut not everyone
are going to be part of this
creative class. Some of their
creations will be incredibly
valuable and will help billions
of people; others wont be so
valuable. You go to YouTube
and you see a whole panoply of
people doing creative things.
And thats great. The crowd
sourcing of ideas and creativity
is a wonderful thing. It doesnt
mean that every single one is
going to be a blockbuster or
even interesting. But some of
those apps and videos and other
types of creative contributions
will catch on. Its very hard to
predict in advance that this
person or this idea is the one
thats destined for big success.
Really, the best way is to let a
thousand fowersor a billion
fowersbloom. Try lots of
different ideas and see which
ones end up being successful. To
be frank, if someone had come
to me with the idea of Wikipedia
ten or 15 years ago, I would
We should speed up the rate of re-skilling people and improving
the way they work with machines, as opposed to competing
against them. The key, though, is that its not going to happen
automatically. Its going to happen only if we make conscious
efforts to guide our society in those directions.
defnitely have said: Dont even
bother. Theres no way that
could work. Theres no economic
model. But, of course, its been
enormously successful. Luckily
for the world, MIT professors
or presidents or Congress are
not the ones that decide which
ideas are tried and which arent.
Instead, we have an increas-
ingly open innovation system.
And, as the routine work gets
automated, theres going to be
more opportunity for people to
contribute that kind of creativity.
John Maynard Keynes predicted
in 1930 that, around now,
humans would solve the
economic problem of subsistence
and move on to the greater chal-
lenge of living a more fulflling
life. With the coming of the
second machine age, are there
signs of that shift?
I think so. But Keynes was
accurate in some predic-
tions and off on others. He
wrote a great article called
Economic Possibilities for our
Grandchildren. Interestingly,
he was almost spot on in terms
of what GDP per person would
be. He extrapolated the expo-
nential trend, and were actually
a little bit richer even than he
predicted. He was terribly wrong
in terms of how many hours he
thought people would work. He
assumed that when people were,
by his standards, so wealthy
as we are compared to people
in 1930we would not want to
work more than 10 to 15 hours
a week, that wed go fox hunting
or whatever wealthy people did
back then. But the reality is that
many of us continue to work
quite a large number of hours.
There are lots of new things we
can buy that the lords and ladies
of the 1930s couldnt buy. But
also, weve had a bifurcation
where there are many people
looking for work today who cant
fnd work. Many of their skills
simply arent in demand the
way that they wouldve been 20
or 30 years ago. And thats the
big challenge we need to face
now: although were creating a
lot of wealth, we dont have an
economic system that leads to
shared prosperity to the extent
that most of us would like to see.
Has the world ever had a
system like that?
Yes. There used to be more
economic mobility in the United
States. But its gotten harder for
people who are, say, born into
the bottom quintile to rise up
to being middle class or above
that, as they could before. Some
of the things we can do about
this include better education
and more entrepreneurship
not because everyone is going
to become an entrepreneur but
because entrepreneurs are the
ones that create jobs. We need
to create new industries, new
products, new services, just
as Henry Ford, Steve Jobs and
Bill Gates did. This happened
when people on farms saw their
jobs disappear in earlier eras of
automation. We can speed up
the creation of new industries
and jobs. Sadly, its happening
more slowly now than it used to
happen, and thats a challenge
for us as a society and for us as
individuals. This is something
the government can do more
to foster.
If countries like China or Vietnam are relying mainly on low wages
to protect themselves from automation, thats going to be a losing
battle. In fact, what well see is robots taking more and more of
those simple routine tasks away from humans in every country.
Do we need to readjust our atti-
tude to fundamental questions
like how much time we should
spend working and how many
consumer goods we should buy?
Different people will have
different ways of answering
these questions about values.
But I think we could realistically
set the goal of essentially
eliminating severe poverty in
the next 20 years. Jeffrey Sachs
[a Columbia University professor
and author of The End of Poverty]
makes a very convincing
case. Its an achievable goal.
Its what Keynes described in
Economic Possibilities for our
Grandchildren. As the wealth of
the globe continues to increase,
the share of people in crushing
poverty has been dropping quite
rapidly. And if you extend and
extrapolate that, you can get
it down pretty close to zero in
terms of the number of people
who are actually, literally,
starving. That would be a huge
achievement for humanity,
for the frst time ever to elimi-
nate starvation and crushing
poverty. But its not just about
crushing poverty: its also about
the opportunity for people to
contribute more broadly. These
are the challenges that well
need to face going forward.
It seems like we have the
riches and the knowledge to
achieve that, but do we have
the incentives?
Thats a great point. I do think
we have the wealth and the
technology to achieve that. One
interesting feature of a capitalist
system, for all its wonders, is
that it gives everybody a vote
based on how much income
they have. If somebody has zero
income, then an entrepreneur
has essentially zero incentive to
provide any goods and services
or to develop new inventions
that are useful to that person
because they cant pay anything.
Some might say that this is a
bug in the capitalist system.
So, if we want to put a positive
weight on those people who are
very poor, we have to do that
through other mechanisms; we
cant just expect a free market
system to automatically take
care of it. One of the reasons
Bill Gates devotes so much
philanthropy to things like
mosquito nets is he recognizes
that this is a gap in the way the
current free enterprise system
works. But we can work toward
solving this better through
philanthropy and government
action. And I guess the frst step is
recognizing that this is something
that wont automatically fx itself.
Boston, which is just across the
river from you at MIT, is a rich
and developed city. But is there
anything about it that youd want
to improve?
Its great that Boston has a
vibrant cultural and academic
community. Its one of our
real competitive advantages,
and we need to work hard to
preserve and boost that further,
and also to encourage more
entrepreneurship. The physical
infrastructure could also use a
lot of improving. In part, its a
matter of making investments in
Technological change is not going to slow down; nor should we
want it to slow down. But our organizations and institutions arent
keeping up. And if they dont keep up, more people will be out of
work, more people will fall into poverty, and were going to have
even more social and economic disruption.
transportation. In part, its that
we also now have the technology
to make the traffc fow much
more smoothly. A few weeks
ago, I had a meeting in down-
town Boston and it took me 30
minutes to go two miles to get
there. Oddly, the other person
thought we were meeting at
MIT, so then it took me another
30 minutes to come back. It
would have been much quicker
if it hadnt been for that traffc
congestion. Having congestion
pricing could do a lot to help the
traffc fow more smoothly. Of
course, new technologies could
help with that as well. So, I think
there are things we can do on
the infrastructure sideand
also on the education side
that would continue to make
Boston a magnet for creative
and intellectual leaders.
What would you do in terms
of education?
Weve been very successful
with universities like MIT and
Harvard, and thats something
we obviously need to try to
preserve and extend. But for a
lot of the rest of the population
the people who arent going
to the elite schoolseducation
hasnt been as robust. The data
Ive seen suggests that, if we
invested more in education at
the K-12 level, that would have
huge payoffs. Eric Hanushek
[an economist at Stanford
University] has found that
taking a schoolteacher from the
bottom of the distribution even
just up to the middle perhaps
by fring that person or perhaps
by retraining themcan add
$300,000 to $400,000 of lifetime
value for each class they teach.
Thats a huge return on invest-
ment. Also, right now, many of
our best and brightest are going
into investment banking or law
and elsewhere. I think it would
be a wise societal choice to boost
the pay of teachers so we start
attracting more of the best and
brightest into that area, and also
to put the time and effort into
improving educational methods.
When we underinvest in educa-
tion, both in terms of technology
and in terms of direct resources,
we are shortchanging our future.
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A number of areas will be in more demand. One of them is creative
work, inventive work. The second is interpersonal interactions
and relationships. And those are areas where cities can excel. In
particular, they can stoke creativity by bringing people together.
The Prados relationship
with Madrid
blends a full palette of artistic, cultural and economic benefts,
according to Miguel Zugaza
Since 2002, Prado director Miguel Zugaza has overseen the rein-
vigoration of one of the worlds greatest museums with collections
spanning Velzquez, Goya, El Greco, Bosch, Bruegel and Drer.
Attendance has risen by a million annually during Zugazas tenure
despite the economic crisis including many more visitors from
the Madrid area. Here, Zugaza discusses a museums responsibility
to the public and its multi-faceted contribution to the city. He
also tells how, in the face of drastic funding cutbacks, the Prado
is continuing research and conservation and still expanding
services and public access.
You have said that the Prado
has grown without forgetting its
reason for being. What would
you defne as the Prados reason
for being?
Museums came about toward
the end of the 18th century with
the ideas of the Enlightenment.
Museums were invented at that
particular moment, and havent
changed that much up until
our days. What has changed is
society and the way society uses
museums. I think its important
that museums adapt to the needs
that society makes of them,
but without changing their
original mission. However, some
museums fall into the tempta-
tion of following the demands of
society and become something
theyre not.
Fortunately, the Prado, which
is a relatively small museum in
comparison with the Louvre,
the Metropolitan or the
Hermitage, has been able to build
an expansion that lets it have
a better relationship with the
public and that allows it to better
develop its research, conserva-
tion, and restoration needs. But
we do this not by going against
the frst basic mission of the
museum. Im going to give you
an example. Im not against new
technologies, but I resist having
new technologies come into that
frst relationship of the visitor in
the museum.
A lot of advisors propose that
we offer our visitors a tablet
to walk through the museum
and compare images with the
Miguel Zugaza in front of Goyas The Pottery
Vendor at the Portraits of Spain exhibition at
Queensland Art Gallery, Australia.
Photo: Lyndon Mechielsen/newspix
painting they have in front of
them. I resist that. We believe
that its an unnecessary competi-
tion. In a way, museums are a
natural reserve of humanity. We
have to temper the experience
even if its understood as almost
an antiquated ideal. But, its a
unique experience with art.
What is it about Spains history
that most inspires you when you
come to work in the morning at
the Prado?
The process of moderniza-
tion in Spain that began at the
end of the 18th century with
the reign of Charles III was
completely shut off by the War of
Independence at the beginning
of the 19th century. Instead of
helping society progress toward
modernity, as it did in the United
States and in France, in Spain
the war slowed it down. What
remained in some institutions,
one of which was the Prado,
was the memory, the idea of the
Enlightenment or the search for
modernization. As a matter of
fact, the Enlightenment was the
historical reference point behind
the Spanish transition toward
democracy at the end of the 70s,
beginning of the 80s.
Jonathan Brown, the professor
at NYU, recently said, I cant
think of any other major museum
that has reinvented itself the
way that Prado has. What have
you done?
Jonathan Brown, the great
Hispanist that he is, has lived
since the 80s the very diffcult
progress toward moderniza-
tion of this museum. He has
witnessed the past 15 years
with great enthusiasm. For the
frst time ever, the Prado had
the full support of the Spanish
administration and had a plan
to expand. There was also the
desire to professionalize the
museum, moving it away from
political maneuvering and
bringing in teams of profes-
sionals. I think thats what
Jonathan refers to.
What are your goals for the
people who come here?
First and foremost a museums
major mission is to take care of
its collection. What the visitor
ultimately looks for is the
authenticity of the collection
as it is presented; works of art
that are unique. That is the frst
responsibility. Furthermore, we
have to put this collection at the
disposal of a very heterogeneous
public. We have to think of a
public that perhaps is highly
educated and specialized, and
present the works in a way that
appeals to them, in the same
way that we have to think about
the visitor who has much less
information, is much less versed
in the collection whether he or
she comes from a small village
close to Madrid or Seoul. I think
thats what we have to do.
How is Madrid different or
distinguished from other cities?
And, what is the relationship
of the Prado with Madrid?
Madrid is, frst of all, an interior
city neither close to the ocean or
a large river. Its identity comes
from the fact that it is a capital
city chosen by Phillip II to be the
center of a huge empire. But one
of the problems that we detected
early on was that the Prado had
largely ignored the city. It was
a museum for the tourists. And
what we worked on diligently
from the beginning was to actu-
ally nourish a relationship with
the visitor who is closest to us,
from Madrid itself.
One of the great recent successes
is precisely the addition of
almost a million new visitors
annually from our own commu-
nity. We have structured our
program of exhibitions as a key
to that relationship with visitors
in close proximity, at the same
time as we pursue research.
Do you think that the political
changes in Spain in the past
30 years have helped the Prado
to become more vibrant and
popular?
There are two moments that are
very important in the transition
for the Prado and Spanish
culture. And they both have to
do with the relationship between
Madrid and New York. The frst
was the arrival of the Guernica,
because when it frst arrived
from the Museum of Modern Art
it came to the Prado. And then,
the second was an exhibition
of Velzquez that the Prado
organized in collaboration with
the Metropolitan in 89 and
90. It was a big success in New
York, but here, it almost brought
traffc disorders because of the
amount of success. It was a
social gesture of great relevance.
It was Spanish society acknowl-
edging, recognizing the Prado
for the frst time.
Two moments that are important in the transition for the Prado have
to do with Madrid and New York. First was the arrival of the Guernica
from the Museum of Modern Art. Second was an exhibition of
Velzquez that the Prado organized with the Metropolitan. It was
society acknowledging the Prado for the frst time.
The Third of May 1808 by Francisco de Goya commemorates Madrids resistance to Napoleans army. Understanding of [Spains] history,
not just the history of its art, but also its history in full context is among the Prados many rewards, explains Miguel Zugaza. Courtesy of Museo
Nacional del Prado.
Because of Velzquez, because
of the Prado, because of the
moment in time?
Its a mixture of the three
elements. A lot of people at the
time of Spanish society thought
of the Prado as a museum of
the Franco era. The Velzquez
exhibition gave society a
recognition that changed the
relationship with the Prado.
Thats the moment when Spain
began to discuss the need for the
Prado to expand because of the
relationship to the needs of this
new society.
What contribution does a great
museum like the Prado make to
a city?
No doubt the Prado has a very
important cultural impact in
Madrid, but also a socioeco-
nomic one. Every 1,000 visitors
that come to the Prado generate
one job in Madrid, symbolizing
the economic fabric that
surrounds the Prado. Theres
also an element of pride in
the city of Madrid toward the
Prado. Its almost a patriotic
feeling the city of Madrid and
the country itself have toward
the Prado because weve been
able to maintain the collection of
the Spanish monarchy with full
integrity.
Yes, yes.
President Manuel Azaa, who
was President of the Republic
in the 30s, said that the Prado
was more important than the
Republic and the Monarchy
together.
I felt that pride when I was
handed an interview with you
in La Razn at the hotel.
When the Spanish transition to
democracy was initiated, only
the Prado existed. Shortly there-
after, the Guernica arrives in this
building close to us. Then there
was a planned decision to enrich
the Prado with a series of institu-
tions around it: the Reina Sofa,
and the Thyssen Museum.
Are you happy with the Guernica
at the Reina Sofa or should it
hang in the Prado?
My personal opinion is that it
was Picassos wish that it be at
the Prado. But right now its
invigorating a very good collec-
tion of contemporary art at the
Reina Sofa.
You have said we must
encourage the public to have
a conscientious, more mature
relationship with the museum.
Describe that relationship and
how you accomplish it?
Im always impressed that any
person who appears at the door
of the Prado, right before coming
into the museum, has taken a
very important, a very relevant
decisionwhich is to come into
a museum and have a personal
experience with works of art.
Many years ago when we began
here, people used to criticize
the groups that came from the
far corners of the world and the
way they experience museums.
But I reminded them that these
tourists had taken a fight thou-
sands of kilometers, taken a part
of the little vacation they have
every year to come to the Prado,
to come and see these works, and
that we should acknowledge and
recognize that.
I remember telling people
of Madrid and Spaniards in
general, You criticize these
tourists, but you have the
museum right next to you across
the street. You understand its
prestige as an institution, but
you dont come in to see whats
inside. Youre not valuing it in
the same way. And the museum
can offer many things: under-
standing of your countrys
history, not just the history of
its art, but also its history in
its full context. Its a cosmo-
politan museum also. That is,
the culture is actually European
rather than purely Spanish.
And thats why I think we should
attempt to bring the Prado to
the public, at different levels.
Theres one limitation that I
think the Prado has, and Madrid
museums have with respect to,
for example, British museums.
And its the payment of the entry
ticket. I think its a bit cynical on
our part that we want to open
the Prado to everyone, but then,
the visitor has to pay for a ticket
to enter. If it is a public museum
and we would like to invigorate
that relationship with the public,
one shouldnt have to pay to
come in. Thats why we looked
for a mixed format so a lot of
groups can actually enter free.
This includes young people up
until the age of 25, people who
are above 60, and also every day
the two last hours are free.
the Spanish administration by
our own meansby having
a stronger relationship with
society, and asking the visitor
to pay a slightly greater share.
Were a very simple enterprise.
At a time of economic diffculty,
what do you say to the public
sector, to private philanthropists
to convince them the Prado is a
priority?
I actually think that one of the
ways we will exit the crisis in
our country will come from the
cultural sector, in the manage-
ment of our patrimony. Spain
has a very important asset in its
cultural heritage. And we know
how to manage this Spanish
heritage very well. It gener-
ates excellent employment. It
generates appealing activities
the four percent it does now. That
should be the objective.
If you knew in 2004 or 05 the
economic crisis was coming,
would you have said to architect
Rafael Moneo, No, lets not
build the new wing?
No, I wouldnt. The Prado needed
this extension to better present
its collections for the needs of
visitors. As a matter of fact, the
Prados extension has not been
capricious in any way. It was very
much needed. What we could
have done, had we known, is
perhaps stop building unneces-
sary projects such as airports in
Spain that have no airplanes or
museums that have been built in
a very artifcial manner and that
have no contents.
A few years ago, the MoMA
presented a project regarding
development of buildings for the
great talents of architecture in
Spainspectacles of buildings
that were to be built throughout
Spain. But it was almost like a
sickness, a feverish moment.
Like the Spanish Flu that scared
everybody.
Like the Bilbao effect, every
city building a museum to put
itself on the map?
Bilbao is actually the only
exception.
Because it was the frst one?
It was the frst one, but it was
also an example of a project well
done, very well done, that cannot
be duplicated anywhere else.
Right.
Bilbao symbolizes the success and
the failure of the globalization of
museums. As a matter of fact, the
Guggenheim itself has tried to
replicate this idea in other places
in the world, and it hasnt been
able to. But Im from Bilbao,
I dont know if you know.
Museums are a natural reserve of humanity. We have to temper
the experience even if its understood as almost an antiquated ideal.
Its a unique experience with art.
How have you adapted to the
economic crisis?
In the past three years, the Prado
has lost 60 percent of the funds
that were allocated from the
administration. At this point,
what the Spanish administration
gives to the Prado allows us to
pay half of the staffs salaries.
But our reaction was to actually
invigorate our activities, do more
that would appeal to more visi-
tors, and in that way, generate
greater revenues. Weve
readjusted the program of the
museum with the idea of being
fully able to work within the
$42 million year-round budget
by 2016. By that I mean we will
generate what we have lost from
for tourists who can enjoy it. It
enriches the economic fabric
around us. And its important
that politicians and society know
this, and value it as well.
The crisis undresses a country.
The crisis leaves you naked.
When you take away all the
accessories, all the jewels,
what it will leave Spain with is
the nucleus for the future, the
strength of what it has. And no
doubt, one of the great things
this country has is its cultural
heritage. I think that once we
come out of this crisis, that every-
thing that has to do with culture
in Spain could generate almost
six percent of GDP rather than
You said in La Razn, A muse-
ums proftability is not measured
by the number of visitors. How
should one measure a museums
true proftability?
Im not sure what to measure. I
think there are certain indicators
that are important to understand
the reality of an institution. And
one of these is the number of
visitors. Within the number of
visitors one can also see different
elements. For example, maybe
one year there are less visitors
coming into the museum, but
theres a higher number of visi-
tors that were gained from the
community close to you, and
thats a success. And an impor-
tant indicator of the benefts of
your museum is the number of
works that have been restored
that year, and the publications
that are edited or published by
the professionals, the curators
in the museum. Indeed, I dont
think you can measure the
benefts or the success of a
museum by its visitors.
The media likes that indicator.
But it shouldnt upset us. Nobody
dares do this with a hospital.
Nobody talks about, Oh, the
Gregorio Maran Hospital in
Madrid has had 100,000 more
visitors, more sick people than
a year ago.
You said despite the budget cuts,
the last thing to suffer as long as
you are director of the Prado will
be research and conservation.
Why is that?
The frst responsibility the
museum has is to preserve in
the best conditions possible a
collection for the future. And
the museum has to continue
the research on its collection at
all times. A museum can then
literally just open its doors to
allow people to come and see its
collection. The Prado has been
doing that since it was opened
for the frst time in 1819, but
apart from that, what you can
do is showcase the collection,
and preserve the intellectual
and material wellbeing of that
collection by enriching it the
best way possible.
And weve actually looked with
great interest at the [Philippe
de] Montebello years at, at the
Metropolitan [Museum of Art
in New York]. In his very long
tenure [1977-2008] as director of
the Metropolitan, everything was
negotiable except relinquishing
intellectual academic excellence
vis--vis the collection. And thats
where we cant fail.
Were living in a funny time.
You can go into certain
neighborhoods in Brooklyn,
New York or Berlin, and it seems
90 percent of the people will
tell you theyre artists. Do you
think painting and drawing and
sculpture will die away as new
forms of expression take over
geared to the mass experience?
Thinking about the develop-
ment of art in the 20th century
and simplifying it greatly, there
are two artists who had really
shaken the foundations and
turned it around. The frst is
Marcel Duchamp, who said that
anything could be art starting
with this installation that you
have placed between us here.*
And then, the German artist,
[Joseph] Beuys, who said not
only that everything is art, but
within us, everyone is an artist
and has a soul to create art. I
dont think its a bad idea, a bad
The Prado had largely ignored the city. It was a museum for the
tourists. And what we worked on diligently from the beginning was
to actually nourish a relationship with the visitor that is closest to
us, from Madrid itself.
* Mr. Zugaza refers to a microphone placed in a glass to record the conversation.
notion to think that we can all
as individuals think of ourselves
passing through life, our exis-
tence, in a way that could be
creative in itself. Not only to look
at beauty and to amass beauty
if one has a means to do so, but
also to acknowledge our own
existence as creators.
But I think of Albrecht Drer
sitting there for thousands of
hours, or Henri Cartier-Bresson
pre-visualizing a photograph and
patiently waiting for the decisive
moment. The idea of investing
time and labor to perfect craft
into art seems not modern.
Thats almost like an occasional
defect of the way artists are
trained nowadays. Baudelaire
used to say of Manet, that he was
a genius amongst the decrepi-
tude of painting. He spoke of
Manet as if saying he was the
last one. And the craftsmanship
of painting and drawing is dying.
Its dying every day as we speak.
And its interesting that at the
same time that were seeing the
death of this craftsmanship, its
when society is demonstrating
its greatest need to see great art.
What does quality of life mean to
you in a city?
For me, quality of life has a lot to
do with effcient, good manage-
ment of the public services,
where you have good alterna-
tives for education, for health,
good opportunities to relate with
art and culture, within a secure
environment. And if, on top of
that, its an ideal city if you have
a good climate, and the society
is fun and not lazy, and people
want to reinvent themselves and
be dynamic. Small Spanish cities
have actually developed rather
well, this idea of quality of life.
The AVE [high-speed train] is
here also. You can go anywhere
easily and pleasantly.
Yes. The communications,
connecting with the world. And
another factor thats important
is that its economically viable as
a citizen to live in that city. And
I dont know if Madrid, in that
sense, is competitive enough. I
think its a rather expensive city.
Its cheap compared to New
York, but its probably expensive
compared to Berlin.
Yes, Berlin is very cheap.
Looking back 20 or 30 years from
now, what would you want to
have accomplished at the Prado?
I think any director will tell you
that one of the things that gives
great pride in what he or she
did during their tenure is the
acquisitions that were made;
the value youve added to the
collection. I see myself with my
grandchildren some day walking
through the Prado and looking at
Pieter Bruegels The Feast of St.
Martin, or different works that
have been acquired in the past
few years, and looking at them
with certain pride. Interestingly
enough, when Philippe de
Montebello left as director of the
Metropolitan, an exhibition was
set up by all his curators of the
acquisitions that had been made
during his tenure.
In the past three years, the Prado has lost 60 percent of the funds that
were allocated from the administration. But we will generate what
we have lost by our own meansby having a stronger relationship
with society.
One more question that comes
from one of your former curators,
who said, Miguel is like a great
orchestra director. He knows
how to talk to everyone, the poli-
ticians, the administrators, the
curators, the educators. Miguel
Zugaza gets the best out of all of
them, and he gets what he wants,
too. What is the secret?
I have the diffculty of not
being able to speak in several
languages. But I am given the
credit for being able to speak
to different people. I think
a director has to be a good
connector. He connects a good
sponsor with a good project
that a curator is developing, for
example; or the museum itself
with different sensibilities, for
instance, amongst politicians. I
feel comfortable doing this. But
then somebody once told me
having the product I have makes
it all that much easier.
If you were not at the Prado,
is there another museum that
would be a challenge to you?
After the Prado for somebody
who works in art, there really
isnt anything else. You have to
think about doing something
completely different.
Its a beautiful museum. Its
very intimate compared to the
museums in New York.
There is this human scale to it,
yes. Thats one of the most fat-
tering comments weve had.
Museums in New York have
gotten very crowded and often
very consumerist. Perhaps the
Brooklyn Museum retains the
most human scale.
I love this museum.
Its wonderful.
It is one of the best to me. But
others require almost a fstfght
to get near the art.
The Metropolitan, once you
leave aside the Egyptian
Galleries and the Impressionists,
there are certain spaces within
the Metropolitan that are almost
always empty.
Yes, and pleasant.
The Met is actually one of
the museums that gives me
the greatest pleasure to walk
through. It embodies this idea of
a museum that is interested in
absolutely everything that has
to do with human creativity. You
actually are very lucky to live in
a city that has the Metropolitan.
www.pwc.com/cities
www.pwc.com
Every 1,000 visitors that come to the Prado generate one job in
Madrid. Theres also pride in the city toward the Prado. Its almost a
patriotic feeling.
Urban conservation takes hold as
skyscrapers rise across a powerful,
new Shanghai
Wang Lin and Ron van Oers explain a young citys coming of age
as they take afternoon tea on the historic Bund
Wang Lin, director of the historic conservation department in
Shanghais Planning and Land Resources Administration Bureau and
a Loeb Fellow at Harvard, has been one of the driving forces in the
citys master planning and redevelopment for 15 years. Ron van Oers
served for 10 years coordinating UNESCOs World Heritage Cities
Programme in Paris before assuming his current role as vice director
of the World Heritage Institute of Training and Research for Asia
and the Pacifc based in Shanghai. Together, they combine insight
into Shanghais evolution with a wide perspective on the worlds
great cities.
To set the context, how would
you defne urban preservation?
Shanghai is an amazing city,
amazing in energy and in history.
But its growth seems to defy
the notion of keeping anything
as it was.
RvO: Preservation is a word
typically used by Americans,
but conservation in this regard
is a better one. Conservation
is actually more a collective of
processes to retain and reveal
cultural signifcance. Urban
preservation, from my point of
view, is a contradiction in terms
because the urban condition
by defnition is changing all
the timeits dynamic, its in
fuxand preservation is strictly
keeping something as it is. Urban
conservation would be more
the process of trying to retain
cultural signifcance, which
doesnt mean that you have to
freeze things. You can reveal
cultural signifcance while
you are actually adapting to
the current context. I think that
is what we are experiencing
in Shanghai.
WL: I agree. When I got my
doctorate degree in preserva-
tion of Chinese historic cities,
we talked about the difference
between preservation and
conservation. Conservation
includes preservation, but is
more than that. It means we can
reuse a building or improve it,
add new life or new facilities.
Yes, and revitalize it. Thats more
than preservation, especially
when you use the word with
urban because a city is a place
for people to live.
Urban conservation is not to
put a building into a museum,
or put a city or streets or
Ron van Oers and Wang Lin sit across from the
sprawling Pudong district and atop Three on Bund,
the citys rst steel-frame structure, built in 1916.
neighborhoods into a museum
just to show the original. Maybe
one or two buildings or one or
two streets can remind people
of the cultural tradition. But
the most important thing is
culture. Culture means youre
not only engaging to remember
it, but you need to make use of
it, to create a new history of the
future. Thats very important,
especially in the city.
Why should a city thats
growing as fast as Shanghai
say conservation is a priority?
What are the benefts?
RvO: For big cities, and certainly
if youre a really big city like
Shanghai with 23 million people,
I think a keyword is diversity
diversity of work places, resi-
dential areas, choices where
you can spend your money.
And Shanghai is the top city in
China where the best salaries
are meted out. So, how are you
going then to pump that money
back into the local economy?
One of the problems Hong Kong
is experiencing is that people
are making a lot of money
but there is very little oppor-
tunity for the people there
to spend it. So Hong Kong is
investing heavily in trying to
get big cultural institutions and
museums into the city, because
people in their leisure time have
very few options to spend that
money, aside from shopping.
It is partly for tourism purposes,
but partly also for the people
that are living and working in
the city so they can actually have
a pleasant time out of offce.
I think conservation is part of
offering diverse choices in work,
leisure and where you want to
live. For me, as a foreigner who
came to Shanghai a year and a
half ago, I have a multitude of
different neighborhoods where I
can choose the type of living that
would most engage me. I dont
necessarily have to go into a resi-
dential tower, although Shanghai
is full of residential towers. I can
actually, if I want to, live in a
mansion-style apartment from
the nineteenth century.
Shanghai practically has got
the whole range of residential
styles on offer and that makes
Shanghai stand out against
many other cities, like Hong
Kong or Shenzhen. They just
have residential towers, there is
actually no choice. That is the
way that you live and that is the
way you earn your money, and
you go over the border, to Macao
or to another place, to spend and
to see something different.
People living and working in
Pudong, they just take the ferry
ride to Puxi, and I think for them
it is wonderful to be working
there in one of the top offces
and earning a big salary and a
fve-minute ride later theyre in
a totally different neighborhood
where its almost like being in a
different country.
Of course, coming from
Europe, its so normal to spend
one or two hours traveling
to be in completely different
surroundings and a different
environment, whether its
language, culture, or cuisine.
I think Shanghai to a certain
extent is emulating that. Within
a large urban area of 23 million
people, you can actually travel
around and have different
experiences within a day. And
the practice of urban conserva-
tion contributes to that diversity
of experiences.
WL: I totally agree with Ron that
diversity is one of the very big
issues for a Green City. Three
aspects I would say will be very
important for a Green City.
For instance, frst I think culture.
Culture will be very important,
because when you respect
culture you will retain the
character of your city
especially when we talk about
historic preservation, because
buildings are very important,
or the streets are also important,
like name cards that show the
history of the city.
Tea and conversation.
Yes, I feel that.
WL: The third aspect is that
Shanghai is a city thats open-
minded, with open-minded
people. The Shanghainese are
very curious. And they respect
other peoples business. They
will talk, discuss, but they would
not quickly condemnbecause
Shanghai is not a traditional city.
Theyre open, not closed.
Thats what makes this city so
diverse compared with other
cities, because, for example,
in the central part of Shanghai
we have defned 12 historic
conservation areas. Each area
has its own character. When
you go inside Hengshan-Fuxing
Historic Area, its a different
character than when you go into
the Bund Historic Area and its
waterfront, for instance. So I
think its culturelinked to the
quality of life and the openness
of the people.
Shanghai reminds me of New
York and Parisgreat cities that
are parts of their nation but just
as much open cities that are
parts of the world.
WL: Yes. I think Shanghai is that
kind of city.
Who are the various stakeholders
you consider in terms of
conservation and how do you
balance interests among govern-
ment planners, developers
and communities?
WL: Thats a big question. I
should say that generally
speaking, maybe 20 years ago,
not so many people paid much
attention to historic preservation
in Shanghai. I think its almost
the same in the US.
Very muchcertainly in New
York. San Francisco was paying
attention to preservation decades
ago. New York only recently.
WL: Actually we have destroyed
some very good buildings during
the past phase of rapid develop-
ment of Shanghai. We have to
say that. But very fortunately we
have some experts, professors
and historians and also the right
persons who work for the city
including some directors in the
Urban Planning Department and
mayors of Shanghai. Now, more
and more people have begun
to pay attention to historic
preservation.
Compared with most Chinese
cities Shanghai is a very young
city. Because when we talk about
historic cities, there are some
more than 3,000 years old. But
Shanghai is just 170 years old,
when it was declared a city. Even
so, Shanghai was among the
frst cities in China where the
city government began to pay
attention to historic preservation.
In 1986 we applied for inclusion
in the list of National Historic
Cities of China. We were the frst
modern city to be included as
a historic preservation city. We
have the frst legally listed preser-
vation buildings, especially those
of the Bund and several other
buildings. [The Bund is a river-
side area of Shanghai popular
with residents and tourists for its
architectural mix.] I think we had
more than 61 buildings listed to
be preserved at that time.
So, I should say that culture is a
very important issue for people
and that you can see the differ-
encethe way people walk, the
way people think, and the way
people live. So, thats the sense
of place offered by the city.
Thats the reason why you will
like Shanghai immediatelyits
a special city combining West
and East together very well. It
has its own history, our history.
Its a city that has its beginnings
from the time of the concessions,
from the British Concession and
French Concession, then public
concession, and this is combined
with western and eastern people
living here. Its a commercial city
with a culture that totally mixes
West and East. Its culture is very
important to Shanghai.
The second aspect I think is
quality. Shanghainese have
a deep desire for the delicate
quality of life, and quality
of life does not only mean
money. Its more than that
much more. So, thats another
character of Shanghai.
The frst important thing is we need to be sustainable, not just
having the most rapid speed of construction. We need to pay more
attention to the quality of the city. We need to keep a balance
between the environment and the economy. Also equality is very
important. We will pay more attention to low-income persons.
Wang Lin
So the city of Shanghai itself said
this is valuable to us?
WL: Yes. The city government,
the Urban Planning Authority,
we work together with profes-
sors and some experts on what
and how to list, and then we
show this to the public and
then just send it to the national
government and get it approved.
At the very beginning, because
not so many people paid atten-
tion to historic preservation, we
just listed it and got it approved
by the government. At the time
this was not so complicated. But
now we have more than 3,000
buildings as listed heritage
buildings. This year we have
begun to collect even more
historic building to be listed.
So, now we have a very serious
process, because the stake-
holders, the government, the
owners, or any people who live
in the city can give their opinion
about it if they do or dont want
to preserve. But, of course,
the Historic Conservation
Committee makes the fnal
decision. Consultation is part
of the legal process now.
But generally speaking, in China
we do not need to get permission
from the owner, so if we think
this building or this district is
valuable from the general point
of view, we have a process that
we can just defne and list it as
a historic building or historic
district. Thats the privilege of
the government.
Do you involve the people in
the community in whats going
to happen?
WL: Certainly. We will show
people before we defne it and
collect their opinion or ideas.
Its a legal process, we need to
do that now and we will put it
on the website or put it in the
paper and collect opinions of the
people. Its a process we need to
do now.
RvO: What I fnd fascinating in
this story is, like you said Lin,
Shanghai is relatively a very
young city, I mean, barely 200
years old as a city. But it is really
at the forefront of conservation
thinking, urban conservation
thinking. So that is of course a
very fascinating duality
a young city, but very advanced
in its urban conservation
thinking, whereas other cities
that have a legacy of 2,000 years
have not been able to articulate
as well as Shanghai does the
importance of urban conserva-
tion for the further development
of the city. And one may be
inclined to think that that is prob-
ably because of an early, much
open infuence, when the city
was open to many outside ideas
and infuences.
The fact that the government
can actually list buildings and
neighborhoods without the
consent of owners is a very
European thing. In France and in
Holland its the sameowners
are not asked, just informed.
However, the government is
obliged once they list buildings
to provide some sort of incentive
for the owner to maintain and
conserve the building.
In my mind this advanced
thinking in urban conservation
is very likely coming from an
intense exchange with European
partners on this subject, and
the French are very active in
Shanghai. Tongji University has
a longstanding working rela-
tionship with some of the fnest
conservation institutes in Paris
and in France. So I think that
much of the thinking of how
to deal with urban conserva-
tion in the city has probably
been exchanged and discussed
with European partners. That
is bringing another fascinating
aspect to the table, which I think
counts for the whole of China,
because that is how the national
leadership looks towards the
development of China. China has
made a great effort in studying
many different systems and
many different contexts and situ-
ations in order to see what is the
most useful to adapt and further
develop in the context of Chinas
history and culture.
I read somewhere that the
postal services are taken from
the Dutch model because the
Chinese had studied various
postal services around the
world and considered that the
Dutch was the most effcient.
Similarly, for railroads and other
types of services, as well as the
various aspects of managing
societies and managing the city.
China is adopting very much
the American model in that a
city must not be impeded too
much to stymie growth. That
is a typical American idea, but
theyve taken urban conserva-
tion models and approaches
from Europe, not from America.
To me thats the fascinating
thing of Chinathey combine
things to create a whole new
context. So its not that every-
thing is American, or everything
is European, or everything is
Asian. Only some things remain
distinctly Asian.
What I feel is that, for instance,
relating to your question
about who is involved in urban
conservation, the West is always
talking about stakeholder
participation and participatory
planning. If Im going abroad
and Im telling what type of work
Im involved in, in Shanghai and
in China, there is a huge skepti-
cism about public participation.
In the West there is an almost
universal belief that public
because they think it is another
political slogan. But with the
growing middle class, can you
expect anything else? People
have become far more vocal
about what they want.
WL: I would like to give an
example about what you said.
Actually, lilong is a very typical
Shanghai-style residential
building . There are a lot of
lilong in very bad conditions.
In lilong each unit was origi-
nally designed for one family,
but when you go inside a gate,
actually at least four to fve,
sometimes seven families, live in
one unit. So, the living standard
there is very low. Because of
the history of China, people do
not own them. The government
owns the house, they just lease
it to the family for very, very low
pricesalmost nothing. But if
you want to upgrade all these
buildings, its very diffcult fnan-
cially, so the people are writing
letters each year to the govern-
ment, because theres no facility,
theres no toilet in their own
building, they only have a public
toilet in the whole neighbor-
hood. So, its a bad situation for
the 21st century. People who live
there want to move out.
Actually, when they really move
out, they will be given at least
two to three times the amount of
space of their current living area.
This means their living situation
will be much better, but some-
times theres a big argument
prior to that. When the govern-
ment really tries to move them,
some of them said no, sometimes
to extract more compensation
money, sometimes to settle old
disputes and sometimes they
did not want to move from the
central part of the city. So now
we have a democratic process
that means we will ask people to
vote if they really want to move
out or not. The process will be
going in two stages. First, there
is a general stage to inquire if
they want to move out. If more
than 90 percent of the families
agree to move out and rede-
velop, then, they will go into the
second stage. They will be given
very detailed information
where they will be moved and
what the conditions will be like,
the amount of space of the new
neighborhood, or the compensa-
tion money they will be paid if
they move out. All the detailed
information will be shown to
the neighbors and to the public.
And the people will vote again.
This time, if more than 85
percent of the families agree,
the government will redevelop
the area. If less than 85 percent
agree, the area will not be rede-
veloped. If not, the government
will stop it. Its a real process in
which people decide for them-
selves if they want to move out
or not. Its really progressing.
RvO: And if you allow me, I
would like to add to this very
signifcant fact that to me as a
technician, Im not an adminis-
trator in terms of government
function, but as a technician
thinking about these issues and
visiting the old city and the old
town, the parts that still exist
here in Shanghai, Im being
confronted with a key question
that is so diffcult to solve, which
is what Lin is explaining. If you
go to these old neighborhoods
my thinking and my training is
lets try to renovate and reha-
bilitate these areas, because
these are wonderful areas. I
mean, very typical of an Asian
context in terms of organization,
very densely packed and rich
in social fabric. However, each
unit, which should house one
family, has seven families, so
how are you going to deal with
the renovation of an area where
six-sevenths of the population
cannot be brought back? And
how do you pay for such an
intervention?
Shanghai is probably the most advanced of any city in China in
asking local people their opinion and trying to fnd solutions that are
the optimum for many stakeholders, meaning some neighborhoods
can stay, but some have to go.
Ron van Oers
participation doesnt exist in
Chinaeverything is a top down
approach, and a heavy-handed
top down approach. Thats why
it is so important to talk to Lin
and to other colleagues. Public
participation has a different
form than in the West, but it is
of course there. Chinese people
are very vocal and they are very
much aware of their rights, and
they express that at various
occasions and in various ways.
But of course China is still very
much under development, so
the sophistication of how these
processes actually work out in
the feld needs a little bit more
time, a little bit more matu-
rity, but it is certainly there.
And I think the more you go
to the south in China the more
expressed it is. There is a real
dividing line going from north
to south. Guangdong province
and Guangzhou city are very
much expressing their own
opinions and the newspapers
there are the most progressive
in the country.
WL: Generally speaking, we
are going to democracy. We are
making progress.
RvO: The people in the West will
not easily accept and believe that
Of course, there are also regular
capitalist forces at work in the
city. At the moment that a neigh-
borhood is slated for renovation,
there are obviously some people
who say, listen, we can also
make some money out of this if
we completely redevelop it. So
there is a type of building which
makes money for developers,
which solves the problem for the
city government to upgrade
the local standard of living,
and they can also bring back
the same amount of people, or
even more, because the city has
to accommodate an increasing
number of people coming in
from the countryside.
Those are the forces that we
should be looking at when we
are talking about urban conser-
vation, in trying to understand
the type of transformations that
we are witnessing in the city
of Shanghai. There are many
forces at work and obviously
an optimum needs to be found
between upgrading of neighbor-
hoods, providing everybody with
a decent standard of living, and
accommodating an ever growing
number of people who move into
the city.
This is how we have to under-
stand the transformations that
we see going on. And still I
think that Shanghai is probably
the most advanced of any city
in China in dealing with these
matters, in asking local people
their opinion and trying to fnd
solutions that are somehow the
optimum for many stakeholders,
meaning some neighborhoods
can stay, but some have to go.
But its not easy.
I was thinking that conservation
might be easier in a developed
city with more money and less
growth. But you seem to be
saying its a priority here also.
WL: I should not say its easy
because historic preservation
always means money. It means
that you need to have a lot of
money because you need to
make this building more useful
for modern life, for todays life.
So you need money to reno-
vate the historic building, to
revitalize it. From our point of
view the Europeans and the
Americans have already done a
lot of good things and they have
set a really good example in
historic preservation. What we
do is try and learn from them.
But listed buildings create a
burden. How can we really
preserve them? We cannot
just move surplus people out,
or make these buildings into
museums. But even if a museum,
you would still need money to
maintain it. So thats a reason
to opt for redevelopment, they
want to just destroy the building
and make a high-rise building.
Its much easier and you spend
less money if you destroy it and
build a new one. Its cheaper
than when you renovate or
revitalize an old building. But
that creates a lot of conficts
between the experts, the govern-
ment and the developers.
I think for Shanghai city we
need to get more policy for
historic preservation. We need
to provide fnancial incentives
for historic preservationgener-
ally speaking, we do not have
that. Maybe we can just embed
that into a policy regulation. For
example, now we begin to try to
explore the incentive of TDR.
RvO: That is Transfer of
Development Rights. So, if
you have a one-story historic
building where the owner actu-
ally would like to demolish it
to build a tower, then he can be
compensated for the fact that he
cannot develop this particular
lot with the historic building on
it, but through another lot he
owns somewhere else, where
he can develop more foors. Its
called Transfer of Development
Rights, or TDR.
WL: Exactly. We try to fgure out
a special policy for historic pres-
ervation to encourage people,
not only from the cultural
perspective but also from the
economic perspective.
I think most important is that the
government itself cannot have
all the burden. This kind of thing
is to be done by collaboration
among all the stakeholderslike
owners, developers, and NGOs
and organizations like that. We
try to encourage that.
And youre working with
colleagues from around
the world.
WL: Yes. We work together
with Tongji University here in
Shanghai, and we also work
together with some experts
from Paris and the School of
Architecture of Paris. We work
together. When I was in charge
of the detailed planning of the
inner city area, we tried to learn
a lot of things from other cities
how to control development.
We defned regulations for each
building block in the historic
area, so when people renovate
Because urban life keeps changing, we not only control the historic
buildings, we also control what happens in the area. You need to
retain the traditional fabric, the scale and the street pattern. So, its
very important to control new construction.
Wang Lin
they know how they should
preserve, and which buildings
could be demolished. Thats very
important for the historic areas.
Also, we make regulations that
control the scale of the building
and the fabric of the street in
each area. We not only control
the historic buildings, but also
the new construction: it means
new construction will meet the
fabric, meet the sense of place
of the surrounding area.
In other words, aesthetically and
practically the new buildings
will
RvO: Fit into the historic
context.
WL: Yes. My department is
called the Historic Conservation
Department. Actually we also
control new construction.
Why and how does that work?
WL: Thats what we talked about
earlier, urban conservation is
not preservation per se. Because
urban life keeps changing, we
not only control the historic
buildings, we also control what
happens in the area. Some build-
ings are historical, which you
can preserve, but some buildings
you need to destroy because they
need to be renovated and they
are of no historical or cultural
value. But you need to retain
the traditional fabric, the scale
and the street pattern. So, its
very important to control new
construction. Although the area
keeps changing, it still feels that
you are in a historic area.
It seems like youre thinking
40 or 50 years out in the future.
WL: We learn from the West.
RvO: But I think that there is
an important addition to that,
which is that the political system
there favors long-term thinking.
Our political system doesnt
favor long-term thinking.
WL: Really?
RvO: With elections going on
every four years the effectiveness
of a person is reduced, whether its
the president of the United States
or a mayor is elected for four
years, because the frst year you
need to adapt to being in offce.
Then, the second and the third
year you can probably be effective
in whatever you decide to do. And
the fourth year you need to focus
on your re-election. So, effectively
people can only do two years of
real, meaningful work in terms of
setting up policies and infuencing
certain trends, whereas Chinas
president can reasonably assume
that he has 10 years to effectively
do something.
WL: Actually I should say that
its very fortunate for Shanghai
that we have very good mayors.
They have paid a lot of attention
to historic conservation. For the
whole of Shanghai the adminis-
trative boundaries combine
a total of 44 districts. Each
district has its own character
and planning.
But our department that belongs
to the city government oversees
all planning. And especially, we
control all the building activity
in these historic districtsnot
only their historic preservation,
but also the new construction in
all these areas. So we are much
more powerful, a right that the
mayor has issued to us. So thats
the reason that all these areas
have been very well preserved,
generally speaking.
RvO: So, youre controlling the
44 districts?
WL: Yes.
RvO: The important point that
we have to take into account is
the current process of further
decentralization. What Im
saying is that with decentraliza-
tion the cities are changing very
rapidly, because many of the
city government offcials engage
actively in the city development
process. These people are in
their seat usually for four years
only and then they get promoted
to another place and this promo-
tion often happens based on
how much development has
been brought to the area that
they were responsible for. That
is one of the critical things that
I run into regarding the imple-
mentation of the Historic Urban
Landscape approach in China.
Instead of slowing down, the
pace of development is going
too fast, with the decentralized
system favoring promotion
based on how much change has
been brought about. This is auto-
matically in confict with urban
conservation. How can we create
the conditions by which govern-
ment offcials in power will take
local culture and heritage into
account when making deci-
sions about development, while
avoiding being penalized when
promotions are meted out? That
is the critical issue that we are
facing here in China.
Whats fascinating is that Shanghai is a relatively young city,
barely 200 years old, but it is really at the forefront of conservation
thinking. That is a fascinating duality: young city, but very
advanced in urban conservation practice.
Ron van Oers
WL: I think centralization is very
good for urban conservation. Its
benefting from it. I totally agree
with that.
As a planner and conservationist,
do you think about building
Shanghais soft power including
heritage and cultural richness to
attract and keep the people who
will build the citys future?
WL: In 1999 I got my PhD and
went to the Shanghai Urban
Planning Administration Bureau,
which is called the Planning
Authority. There I participated in
the development of the Master
Plan of Shanghai for the next
20 years, meaning from 1999
to 2020. We set a goal for the
city for the next 20 years, which
included the function of the city,
the layout of the city and the
transportation, the infrastruc-
ture and also including historic
preservation and residential and
industrial development.
So, we had a blueprint for the
city, which we presented to
the public. Then according to
the Master Plan we developed
detailed plans. Thats the tradi-
tion for any Chinese citythey
need to have a Master Plan and
then work through it. In 2005,
when I was the director of the
Master Plan Department, our
Planning Authority began to
review what we had already
done according to the approved
Master Plan.
Its a sort of a review, mid-term
review.
WL: Indeed. But actually we
have reached most of the goals
set for 20 years already. We
have done more than that. So
we began to prepare for the new
Master Plan for Shanghai, to
see what is most important for
the next 20 or 30 years. We have
to do a lot regarding the physical
construction for the city to meet
the needs of urbanization of
the country.
People come here?
WL: Yes, they come here. I
think the city sometimes is not
ready. We cannot catch up with
the speed of the immigration.
Each year we have 500,000 to
600,000 more people added to
the city
RvO: So, six million over the last
10 years?
WL: Yes. How can you build for
that?
Where are they coming from?
From China?
WL: All over China most of them,
but also some foreigners.
RvO: But foreigners are a minor
trickle in the six million. Just
to clarify, Lin, am I correct in
understanding that what was
planned for 20 years was actu-
ally achieved in 10 years?
WL: Yes, generally speaking.
RvO: Shanghai development is
going so fast: it went twice as fast
as planned! All the benchmarks
were already met, you say?
WL: Well, we already met most.
We have to revise the Master
Plan, which means that over 60
percent of the set targets have
been reached, some overreached.
Two-thirds of the aims for 2020
we have reached already. We
aimed to reduce the population
in the inner city of Shanghai, but
we failed. We failed.
Looking forward what are
the challenges you still want
to address?
WL: Thats exactly a question
that we posedwhat we need to
do for the next 20 years. I think
the frst important thing is we
need to be sustainable, not just
having the most rapid speed of
construction, because we do
not pay much attention to the
quality of the construction. We
need to pay more attention to
Looking down from Three on Bund at waterfront redevelopment planned by Wang Lin and others. An underground highway allows Shanghainese to cross the road and stroll along the bustling Huang Pu River.
are lots of things going on that
should give the city an eco label,
but beyond just having more
technicalities related to green.
Of course, Singapore has also
been quite signifcant in terms of
how it actually pushes forward
particular policies, as they would
like to attract highly-skilled,
highly-trained labor, so they are
investing heavily in science parks,
biotechnology. But those types of
high-tech, highly-skilled workers
that they would like to draw into
the city would like to have also a
high culture environment.
So, Singapore is moving into the
next phase and providing this
super green environment, which
I hope goes beyond just a brand
and a label. What Im reading
is that they are really trying to
push urban farming to a limit
where most Singaporeans can
eat organic food that is grown in
the city itself. That is of course at
the core of sustainability.
You read about urban farming a
lot now. Is there a possibility that
it really could be scalable for the
size of modern cities?
RvO: What I hope and what I
think is happening in Singapore
is that all the policies are being
aligned to achieve this goal,
and I think that is the impor-
tant lesson from Lin. Historic
preservation, or urban conser-
vation, needs to be integrated
into the planning of the city,
meaning that various policies
how you deal with housing,
how you provide for a working
environment, you know, your
labor policyall those poli-
cies need to be linked to this
goal of historic preservation.
Historic preservation is not so
big in Singapore, but I think that
making the city more sustainable
means realigning all the policies,
including everything you do in
terms of business, and how you
invest your money in the city.
Singapore is a new city.
There wasnt much of a city
50 years ago?
RvO: It is also a very young city,
of course, and in many aspects
one can only admire whats been
built up over there. Its one of
the safest, one of the cleanest,
one of the most prosperous cities
in Asia. In the Asian context
Singapore has always been an
outstanding example. However,
one small thing needs to be said.
Singapore doesnt have to deal
with 23 million people.
From Shenzhen to Dubai, many
cities today are entirely new.
How does conservation apply
to them?
RvO: I would reframe that
question. We need to integrate
contemporary culture in the city
because we need to create the
heritage of the future, although I
think that would be going beyond
the real meaning of what heritage
should be all about. Its all about
meaning and once something has
meaning and signifcance and
value you start to care for it. You
should not be starting creating
buildings that should be heri-
tage. I mean, you should create
something that has meaning.
And is there something that is
meaningful in terms of the devel-
opment of Shenzhen, or Dubai,
that is worthy of preservation? I
think that is a good question.
Also in the city of Shanghai
development is a priority, but
the shift is going towards,
recognizing what has meaning
and what has value and to give
that a strong voice in decision
making in how the city should go
forward. That to me is critical for
any city anywhere in the world
because of the global competi-
tion. So cities should be looking
towards a very smart strategy
and that includes sustainability,
which has four components,
not only the environmental, the
economic and the social, but also
the cultural. The cultural compo-
nent has to do with meaning and
value and traditions. Tradition is
very powerful for inspiration.
Shanghai is capable of deriving
some inspiration for its future
from the historic neighborhoods
that it still has, in search of a
better quality of life. Shenzhen is
Shanghainese have a deep desire for a precious quality of life.
And quality of life does not only mean money. Its more than that
much more.
Wang Lin
the quality of the city. We need
to keep a balance between the
environment, ecology and the
economy. Its important. Also
equality is very important. We
will pay more attention to low
income persons. So we began to
look at quality, equality, ecology
and environmentwe pay more
attention to that now.
Looking at the cities we cover
beyond Shanghai, are there
any projects you view as
real successes or models for
other cities?
RvO: Ive been looking recently
into a series of cities because
of the program that Im trying
to implement in China, that
is, UNESCOs Historic Urban
Landscape approach. For
example, Singapore is rein-
venting itself now as not only
a green city, but as a city in a
park. You know, not with parks
in the city, but the city in a green
ecological area.
So, there is an enormous
amount of investment going
on in terms of creating green
roofs, creating extra parks, but
also linking all the undeveloped
areas surrounding Singapore
and to draw them into the city
and to undertake urban farming,
for instance, a key project in the
city. Singaporeans should buy
Singapore-grown food, which
should be organic. So there
not able to draw inspiration from
that because it doesnt have any
historic neighborhoods, so the
inspiration comes from Dubai.
But Dubai is a totally different
city with a totally different
context, where the longevity of
its quality of life still needs to
be proven. So youre importing
something that you may only
hope will take root, whereas
Shanghai can draw inspira-
tion from its past that you can
actually touch. I think that is
an important element that is
fortunately being valued much
more now in the development of
the city.
WL: I would like to focus on
your question about other
cities and what we could learn.
I would like to give you some
examples. Like Boston. Boston
has a major projectthe Big
Dig. The purpose of the Big Dig
is to put transport circulation
underground and to create more
public space above ground. We
really learned from it.
If you walk along the Bund, you
can see that people can now just
walk through the streets and go
to the Bund, to the waterfront.
But four to fve years ago, people
could not go. They needed to go
underground from the terminal
and walk and then up again,
because there were 10 lanes of
traffc on the Bund. What we did
is that we put six lanes under-
ground and left four lanes above
the ground, and we created a
100 meters wide space for the
public. Actually I was involved
in and in charge of one part of
this project in 2007. We had an
urban design for the landscape
of the Bund, but that created
big arguments with different
departments.
But it was 2007, only three years
before the Shanghai Expo, so
if we did not make a decision
then, the construction would be
impossible to achieve in time for
the Expo. So I explained to the
mayor that we had three reasons
to do this renovation project of
the Bund. First, we could give
more than 100 meters of public
space to the people. People
could walk across the street and
then go to the Bund and they
could see the historic areas and
the waterfront.
Second, we could do more for
historic preservation for the
Bund, because the Bund is the
image of Shanghai. You could
have more space for people to
walk along the Bund very close
for the historic buildings and
they could have a good look at
the historic buildings. So that
was the second reason. The third
was that we all know that there
were some of the facilities
underground for more than 100
years, so it was a very tough
work to renovate this area. So
the Shanghai Expo was a key
point, a unique point for deci-
sion making, because we needed
to get support from the people
as we had to stop the traffc for
more than half a year.
To do the excavation?
WL: Yes. We showed this
renovation plan to the public
and asked the people if they
agreed or not: 99 percent of the
people agreed with the plan,
so the mayor made the fnal
decision: lets do it!
RvO: Its a big success.
Weve learned historic preservation from New York, such as the very
popular High Line on how to make new public space and to make
urban redevelopment happen around it. We also learned from SoHo
in New York, because when we renovated the waterfront at Suzhou
Creek, where we have lots of abandoned warehouses and factories,
we looked at how these projects were done in New York.
Wang Lin
WL: We just used three years
to fnish our Big Dig. I think
thats a great success. What
weve tried to learn from New
York is historic preservation, for
example, the very popular High
Line of New York.
I think thats not only historic
preservation in itself, but also
its how to make such a kind of
public spaceto be useful and
to make urban redevelopment
happen around it. I think thats
the interesting thingso thats
what we need to do. That means
that Shanghai needs to pay
more attention to its public
space. It means more space not
only for traffc but for people
to walk down the street and
to enjoy the urban life and the
space around them.
RvO: Its actually taken from a
Parisian example, Promenade
plante. It was a high-elevated
rail line that they converted into
a public space, into an elevated
garden. Im convinced that the
Conservation is part of offering a diversity of choices in work,
leisure and living. Shanghai practically has got the whole range
of residential styles on offer, and that makes Shanghai stand out
against many other cities.
Ron van Oers
people from the High Line looked
at the Parisian example and said,
hey, this is what we want.
WL: We also learned from SoHo
in New York, because when we
renovated the waterfront at
Suzhou Creek where we have
lots of warehouses, abandoned
warehouses and factories, they
said you can learn from New
York. We did preserve a lot
of warehouses and factories,
which were renovated and used
for creative industries. We also
learned from London about the
creative industry.
If you could come back in 50
years, how would you like to see
Shanghai looking?
RvO: What I would like to see
very much is that Shanghai
somehow has managed to
retain this diversity that it has
right now. Im living in Xuhui
District and I had an interesting
discussion with Lin about it,
because what she was explaining
earlier in retaining a certain
urban fabric, its actually
happening in that part of the
former French Concession where
I live. You see a lot of conver-
sions going on,
and it doesnt mean that all the
buildings are being preserved
but the character is being
preserved. That is something
that many people dont asso-
ciate with the dynamic image of
Shanghai. But it is of course an
integral part of it. Then we have
the Bund. Then we have other
historic areas as well.
WL: Exactly.
RvO: I hope that the sheer
diversity in different historic
neighborhoods with their
different characters has been
retained and that a lot more
neighborhoods have been added
to this careful planninglets
not necessarily call it preserva-
tion, but careful planning and
retaining character and signif-
cance. I also hope that some
areas that have grown under
sheer pressure, in the second
half of the 90s and the early part
of the 21st century, like Pudong,
have been improved, because I
think in terms of public space,
for instance, Pudong is a poor
area. If you walk over Century
Avenue and you keep walking
youre suddenly in an American
city really. Nowhere are any
coffee shops or bars, or anything
like that to be seen. You need to
have a car, because otherwise
you walk among these rows and
rows and rows of high rises.
Thus, what is so characteristic of
Xuhui, the small, human scale,
has actually been lost in the rapid
development of Pudong and Im
very pleased to hear that Lin is
working towards a requalifca-
tion of that area and to see how
more urban life can be brought
into Pudong. I hope that in 50
years time the citys diversity will
have been maintained and even
increased, and that the rapidly
developed areas will have gained
more urban quality.
Lin, in 50 years, what would you
be most proud of? What would
you want to see?
WL: Its my point of view that
Shanghai does not need much
more new construction. We
cannot stop that, but we do not
need much more. I think when
I come back in 50 years, its
important that the Bund will still
be the Bund, that it will have kept
its original image. Maybe we
will have less traffc than today.
I would like to see more quality.
The level of economic growth
may be lowerwe should lower
the speed of developmentbut
we will have much more leisure
time in the city. Yes, I hope gener-
ally speaking that the overall
speed of life in Shanghai will be
lower than before.
Thats a great challenge.
WL: Yes, but I dont think its
a bad thing. Its a good thing.
To be a little bit lower, but have
more quality of life, which
means more sustainability.
The weather I think should be
90 percent blue skies.
When you look at the future,
would manufacturing still be
part of your vision for Shanghai,
or would you only see fnance,
engineering, accounting and
other services?
WL: We need manufacturing,
but its the same thingit means
that we need to change the
quality. We can have a different
kind of manufacturing, but
it is a very important part of
Shanghai. We could change its
style and add more value to it.
And we should have more good
quality public space, and more
museums, more theater, more
culture and artmore cultural
and life satisfaction in the city.
In the 50 years do you think
Shanghai will be the commercial
and cultural center of Asia?
RvO: Im pretty confdent in
saying yes.
WL: Thats our ambition. We set
a goal to be like that. I think in
50 years we will be.
RvO: And very important in
that strategy is to make the
Chinese renminbi fully convert-
ible on the capital markets and
that is a stepped process that
the Chinese leadership is doing
very cautiously and in a very
controlled fashion. But you
can imagine in 10 years time
when the Chinese renminbi is
fully convertible, Shanghai will
rival New York in terms of sheer
output of fnancial services,
because much of the trading,
the direct bilateral trading
between China and its partners,
is already being agreed upon
that it should be directly in RMB,
instead of dollars.
WL: I think we will be going
forward to democracy, but the
style of the democracy will be
different, because the culture
is different. Thats the point.
We cannot do exactly what the
foreign democracies do. Its
different because of the culture.
www.pwc.com/cities
www.pwc.com
Community heritage lives in Fuxing and many other parks throughout the city where
Shanghainese gather daily for ballroom dancing, tai chi in the morning, mah-jongg and chitchat
all day long.
Photo: Qilai Shen/The New York Times/Redux
As cities hone in
on the promise of big data
theyre often lost in the sauce of big government,
explains Steven Koonin
Steven Koonin, founding director of NYUs Center for Urban Science
and Progress (CUSP), served as under secretary for science at the US
Department of Energy from May 2009 through November 2011, over-
seeing technical activities across the departments science, energy,
and security activities. Before joining the government, Koonin spent
fve years as chief scientist for BP p.l.c. and was professor of theoret-
ical physics at California Institute of Technology from 19752006. He
is a member of the US National Academy of Sciences and the JASON
advisory group.
Lets talk about privacy and secu-
rity of data. What is it that people
tend to misunderstand the most
about what research facilities are
trying to do with big data?
First, privacy and security have
emerged as a key research topic
for CUSP, because its so essen-
tial in letting us do the urban
research that we want to do.
And thats central: CUSP is a
research institution. Were not
a company, although we work
closely with companies. Were
not part of the government.
Second, as a research institution,
we are subject to independent
oversight by NYUs institutional
review board under the federal
Policy for the Protection of
Human Subjects.
Third, we are, of course, not
interested in individuals. Were
interested in aggregate behavior.
And weve got a set of policies
that make that very explicit.
Finally, were beginning a larger
dialogue about privacy and
security in a broader academic
context, sponsoring a conference
in June [2014] and publishing,
Privacy, Big Data, and the Public
Good: Frameworks for
Engagement, this coming June
[2014].
If, as your taxi study shows,
urban informatics can make
plain certain ineffciencies of
human behavior, then changing
those behaviors would seem to
require a revolution in regulation,
compliance, and enforcement.
Are we moving into an era of
greater regulation of individual
behaviors?
I would say its a greater
awareness of individual
behaviors. It doesnt have to
happen through regulation.
Theres a whole discussion of
nudges or, to use a fancier term,
choice architectures, that
can infuence human behavior
but are not actually regulation.
We see choice architecture at
work with organ donorship and
drivers licenses, for example. If
you ask people if they want to
be an organ donor, perhaps 20
percent choose to do so when
they sign up for their license.
But when you make your
targeted behavior the default
optionand oblige people to
opt out of the donor program,
then donorship increases.
Its a simple, non-regulatory
mechanism that targets optimal
behavior.
If everyone will soon be living in
cities, wont federal or national
governments have an increasing
interest in helping to provide
solutions that will help cities
run betterfnancing and/
or incentivizing big data or
urban informatics solutions,
for instance, or subsidizing the
retrofts of infrastructure and
traffc management systems or
electric grid support and water
systems that will become the
smart city of the future?
Cities qua cities dont have
great visibility in the [US]
federal government. Yes,
theres Housing and Urban
Development, but it is concerned
with one small slice of cities.
There is certainly Health and
Human Services, concerned
with the public health aspects
of cities and medical care. And
then youve got transportation,
and so on, but there is no place
in the federal government that
thinks about cities as systems of
systemsno federal entity that
funds, regulates, and encourages
cities as systems of systems.
And do you see this changing?
I would like it to change. I and
others have been talking in
Washington to see if we can get
city-focused initiatives cross-
cut across the various agencies.
Not to look with envy, but the
Department of Agriculture,
for example, is very much
concerned with rural affairs,
as one might well imagine, but
there is nothing comparable
in an integrated way for the
interests of cities. Again, not
to complain but just to state a
factcities are legal entities of
state governments, so this is a
result of how the Constitution
apportions power to the states.
As youve said elsewhere, the
shape of the future is urban-
ized, but the current paradigm,
in which the federal govern-
ment has long had an interest in
encouraging economic growth,
is, in fact, based on an agrarian
world.
Absolutely. And Im no expert on
politics or political theory, but
one can imagine that the idea of
changing this paradigm would
cause a lot oflet me just say
discussion, in Washington.
Can you speak to the question
of how the smart city solutions
that youre creating at CUSP
will be deployed in developing
cities? What solutions seem to
be the most likely candidates for
developing cities?
One of the advantages of the
developing countries is that the
infrastructure is largely yet to be
built. So you could try to build
some of this in from the begin-
ning. And synoptic observation
techniques that were developing
for cities, where you can watch
the broad swath of a city from
an urban vantage point, may
have some real advantages in
the developing world, because
you can cover large areas
without having to put in a sensor
infrastructure.
Theres a whole discussion of nudges, or, to use a fancier term,
choice architectures, that can infuence human behavior but
are not actually regulation.
www.pwc.com/cities
www.pwc.com
What advantages will New
Yorkers gain from CUSP in
10 to 20 years?
First, one goal for CUSP is to just
make the city more effcient. New
York City has already made the
enforcement of illegal building
conversions fve times more
effcient. Second, by putting data
about the city in peoples hands,
you can improve the quality of
life. Noise levels are something
that were quite interested in. If
people understand, in a more
detailed and quantitative way,
the noisier parts of the city, you
can modulate your living and
travel. Real estate prices will no
doubt change as a result of what
the noise scores look like.
Innovation, entrepreneurism and
sustainability spur Stockholm
according to deputy mayor Ulla Hamilton
Deputy mayor for entrepreneurism, labor and traffc and previously
the environment, Ulla Hamilton has played a leading role in some of
the citys greatest successes, including development of Stockholms
broadband network, auto congestion pricing plan and sustainable
housing. Here she discusses those and other efforts to keep the city
growing and healthy.
Stockholm is admired around
the world for style, sustain-
ability, and openness. What
are Stockholms greatest
achievements?
Its a fantastic time because
Stockholm is one of the fastest
growing cities in Europe. On
population, it is bigger than ever
and growing. New businesses
game companies like DICE
and Spotify. Its a fber network
open to whoever needs to
rent capacity.
How did Stockholm put in the
information and communica-
tions spine without it costing
Stockholmers anything?
I was vice chairman of the
company when we discussed
how to develop the business
idea. It was part of an existing
network, a cable network that
was developed into a fber
network. We thought that it was
important that small companies
that couldnt afford to develop
a system on their own could
hire the capacity they needed to
develop their business ideas.
So in the late 1990s Stockholm
was very enthusiastic about
IT development. And because
are springing up and its a very
creative city. Its a big change
from 10 or 15 years ago.
Is that growth because
Stockholmers are having more
children or because more people
are moving in?
Both. More people are coming,
and Stockholmers with children
used to move away, but now are
staying. People are coming
from other parts of Sweden,
and other countries.
What is Stockholm doing right
to attract and keep people?
We have a lot of interesting
companies and interesting
jobs. Combine that with the
city overallwe have good
restaurants with great chefs,
entertainment, closeness to
nature, both in terms of greenery
and water. It is a combination
of things.
What government programs
make Stockholm so attractive?
Its very important to develop
the city in a sustainable way.
Also, we developed a broadband
network in the mid 1990s, and
that has led to a booming ICT
industry, the development of
New Yorks bike sharing program
wins a Nordic nod of approval.
of that, we attracted a lot of
companies, both from Sweden
and from other countries. Now
the network covers more than 90
percent of all real estate in the
Stockholm area. All the schools
are connected and most of the
businesses as well. And the
capacity is high1,000 megabit
per second.
So this is a case where public
investment in infrastructure
drove the health of the economy?
Yes. And we didnt use any
taxpayers money because we
kept it affordable. We let compa-
nies rent the capacity, and we
didnt develop the system until
we had customers.
It also became a revenue
engine for the city?
Yes.
Do you think investment
in infrastructure generally
drives growth, or does growth
occur and then you invest in
infrastructure?
I think that investment in infra-
structure is very important in
order to get growth.
What would you do to improve
Stockholm further?
We should use the tools
that we have today to better
develop education. We have
the game industry. You can
use, for example, Battlefeld
or Minecraft, as a tool to push
innovation in education. Young
people are used to having smart
phones and ICT all around them.
You have to have something in
education that connects to that,
and that might be one way of
attracting more people to learn
mathematics or physics and
so on.
Stockholm has done well in
Cities of Opportunity for the
past three years in areas like
sustainability, health and safety,
intellectual capital and innova-
tion. What explains Stockholms
excellent standing?
On sustainability that goes way
back. Stockholm was named
the frst European green capital
in 2010. And that was because
weve been dealing with
sustainability for a long time.
In the 1920s, people began to
be interested in how to create
green areas in a growing city.
That interest has continued,
and the city has been developed
in a green way.
The city has been so depen-
dent on clean water, and Lake
Mlaren, which surrounds
Stockholm, is our drinking water
reservoir. So it has always been
very important to take care of the
environment in Stockholm, and
in order to do that, you have to
have smart engineering solutions.
Beginning in the 1940s we
built a very big water treatment
plant, so the water infrastruc-
ture is very well developed.
We started early to develop the
subway, and a big percentage of
people use public transport. We
developed the district heating
system in the early 1950s. These
are engineering solutions., but
also environmentally friendly
solutions. For example a district
heating system based on renew-
able fuels means you have low
CO2 emissions. And if many
people use public transport,
running on renewable fuels,
that also lowers CO2 emissions.
You mentioned earlier Fortum
Heat, the large biomass facility
to turn garbage into energy.
How does it work? How do
you get Stockholmers to sort
their garbage?
The system to burn waste
and produce electricity and
district heating is connected
to 80 percent of all the houses
and apartment buildings in
Stockholm. And in order to
do that in an environmentally
friendly way so you have clean
waste to burn, you have to sort
the household waste, and thats
done by families.
The incineration is environ-
mentally friendly with tough
environmental rules. Its a very
smart way of taking care of
the waste. We also have tough
legislation regarding plastic
packaging. We just recently
decided upon a new biogas
strategy, where we are collecting
food waste to produce biogas.
The biogas is used by many
buses and taxis. We decided to
collect 50 percent of household
food waste to produce fuel, and
the program will grow over time.
Stockholm is one of the fastest growing cities in Europe.
New businesses are springing up and its a very creative city.
Its a big change from 10 or 15 years ago.
Stockholm entrepreneurs from Spotify to Mutewatch, Vamos, Mozoomi and more join Ulla Hamilton on a trip to Manhattan.
You were saying that by making
Stockholm environmentally
friendly, you attract younger,
more environmentally
conscious people.
We know that people are more
and more concerned about
environmental issues. We notice
since Stockholm was named the
European green capital in 2010,
people like to boast that they
live in a very environmentally
friendly city. It is important to
tell people what we are doing
to be more sustainable in the
future. We inaugurated plans for
new districts with high environ-
mental goals, and people are
proud to be part of a city thats
working in a sustainable way.
In Sweden, what is the balance
of power between the city
and regional and national
governments?
There is always a confict
between the city and the
national government, and that
goes for every country. But its
important that we as a growing
city, thanks to the tax structure,
keep much of our tax money.
Its a good situation.

How will you continue to spur
innovation and entrepreneurism
in the future?
We are lucky in this area, and its
because of several reasons. We
have a very interesting mixture
of life science companies, ICT
companies, clean tech compa-
nies, and the entertainment
industries. And Stockholm is
a fairly small city, so its easy
for executives and innovators
to meet one another. And that
creates a creative, innovative
climate. Also Swedes are very
interested in solving problems,
and it has become fashionable
to start their own companies.
In the past fve or six years,
universities and high schools
have become interested in
helping students begin their
own companies. Before that
the universities were more
focused on producing
academics. Now we have
very close cooperation among
businesses, the universities,
and the city. The atmosphere
is totally different today.
Considering not just Stockholm,
but Malm, Uppsala,Gothenberg
and other cities, what does
government do to foster
innovation?
A politician should try to fnd
arenas where people can meet to
exchange ideas. But a politician
must know when not to interfere
and disturb development. Its
very important to understand
the governments role.
In other words, stand back
a little, allow more room to
innovate?
Yes. Also in Stockholm we
have open data resources so
companiesand Stockholmers
as wellcan develop websites,
or apps, or other business ideas.
Small businesses created
800,000 jobs in Sweden from
1990 to 2012, over twice what
Sweden had in 1990. What
explains that and what part is
government playing?
There has been a big change
in Sweden since the present
government took over in 2006.
The past decade, a voucher
system was created for elderly
care, healthcare, schools and
so on. That led more people
to consider starting their own
companies rather than just being
employees. So it was a combina-
tion of things.
Its been a tremendous change
in the atmosphere and attitudes
in Sweden and Stockholm since
the 1970s, where we had a big
state, and the attitude was the
welfare state should take care of
you. Todays voucher system has
provided the opportunity for big
and small companies to provide
services, rather than the govern-
ment doing so. The competition
in the service area brings devel-
opment and productivity.
Rather than building a cradle-
to-grave government structure,
youre letting people play a
greater role in it?
Yes, and the voucher system is
still fnanced by taxpayers, but
its using the taxpayers money
in a more effcient way.
Speaking of public-private
partnerships, do you think
injecting the proft motive into
things like building a hospital
is a good thing?
The county council in Stockholm
is right now building a new
hospital. And its a public-private
partnership with the construc-
tion company Skanska. Thats
one example where the public
sector and the private sector
can work together to fnd smart,
cost-effective solutions.
quite a lot of different services
that we cant even imagine
today. Just look at the growth of
the smart phone, for example.
You mentioned that Stockholm
has 201 different nationalities
living there.
Thats a very big challenge.
Historically, it has taken a long
time for immigrants to Sweden
to be part of the workforce. But
we are trying hard to see that
immigrants can start working
as soon as possible. We have
programs where people with
academic qualifcations can
learn Swedish and work at
the same time. We also have
programs where, for example,
engineering companies connect
with trained engineers who
recently moved to Stockholm.
people as possible leaving their
cars at home when they go to
work. To do that, you have
to give more space for buses,
for example, and give more space
for bicycles and pedestrians.
And thats what were working
with right now. You have to
take away some parking spots
for cars. And, hopefully, more
people will choose the public
transport systems, and also ride
bicycles more.
Their own bicycles as in
Amsterdam or rental bicycles?
Both. Its very popular, and the
number of people using the
bicycle has at least doubled
during the last 10 years.
Can bike lanes and rental bikes
work in an aggressive, non-bike
environment like New York?
It can work, but it has to be
made quite clear for car drivers
and buses that bicycles are a
part of the infrastructure. Its
very important that different
travelers accept each other, or
there will be a lot of confict.
This is hard and it will take
time. Different travelers have to
behave in a polite way. Eighty-
fve percent of Stockholmers live
close to where they work, so its
easier to use bicycles.
A few years ago I was told
Hammarby Sjstad and the
Royal Seaport were models of
sustainable housing that were
exportable beyond Stockholm.
How are those projects going?
The Royal Seaport area is
developing quite well and the
area is one of 18 programs in
the Clinton Climate Initiative.
We have very good cooperation
between business and the city to
fulfll the tough environmental
goals. The retroftting program
for the city-owned apartment
buildings is also going quite well,
and the energy use in apart-
ments has been halved. Thats
a very interesting program
Sustainable development is very important in Stockholms
attractiveness. We also developed a broadband network in the
mid-1990s, and that has led to a booming ICT industry.
That makes it easier for
immigrants to become part of
Swedish society, but it is still
a big challenge.
What is Stockholm doing to
ease traffc congestion?
The challenge is that the city is
built on islands. Whether your
city is big or small, there are
ways to make traffc easier, but
you have to regulate to avoid
chaos. In Stockholm, we are
promoting bicycling and walking
as the best ways to move around
the city, and having as many
Stockholm is growing.
Immigrants are coming and
Swedes are doing their duty
making more Swedes. Is there
a threat of unemployment
as technology makes many
jobs obsolete?
No. Technical development also
leads to development of services.
So I dont see that as a threat.
Actually the risk is that the city
doesnt grow. In a growing
city you will always have devel-
opment of new businesses. Im
absolutely sure of that. Five
years from now we will have
because most of the buildings
involved are older, and the
energy use is high.
Three quarters of all the apart-
ment buildings built in Europe
after the Second World War
are similar to the buildings
that weve been retroftting in
Stockholm. So we learn from
the experience.
Is the retroftting paying for
itself in terms of energy and
other savings?
Yes, during some years. But
from the city point of view this
is an investment in the future
What is your thinking on the
future of Stockholm in terms
of growth? Is it good? Is it bad?
And, what would you like to
see happening?
Its good because the alternative
is very bad. To be competitive, to
be creative and innovative, its
crucial that the city grow. But
we have to grow in a sustainable
way. We have to have green
areas, and people like the
closeness to nature. This helps
to attract people to Stockholm.
Its a tough challenge for the
city and the larger Stockholm
area, because we will have
constructed 140,000 apartments
by 2030. But the alternative to
growth is much worse.
It seems that there are more
leading women in business and
government in Scandinavia than
in other places.
It has to be so and it has to come
in other countries, too. In an
open society, in a transparent
world, women should be part of
leading positions as well.
If you were to leave Stockholm,
among the 30 cities next year
in Cities of Opportunity, where
would you go, and why?
There are a lot of nice cities,
so its a tough choice. Buenos
Aires has a lot of challenges,
but the climate is nice and they
have a lot of opportunities. San
Francisco is also a very nice city.
I would pick Buenos Aires. Its
a city with a lot of potential.
But the traffc situation is quite
interesting, and they also have
quite a lot to do to develop a
waste management system.
Overall, the, environmental
issues are very important, but
there are great opportunities
to develop the city by learning
from Stockholm.
We have a very interesting mixture of life science companies,
ICT companies, clean tech, and entertainment companies.
And Stockholm is a fairly small city, so its easy for executives
and innovators to meet one another.
www.pwc.com/cities
www.pwc.com

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