The future viability, resilience and success of cities and communities at large will increasingly depend on a given city’s ability to engage in new ways of organising, providing citizen services, security and governance, and establishing the conditions for modern job creation and successful enterprise. 

As we depart the industrial age with its centralised approaches to production and government and advance deeper into the information era, a new network-based organising principle is being introduced into our organisations and our daily lives. This structure can best be compared to a grid with no centre or periphery that consists of thousands of loosely interconnected nodes, mostly enabled by technology. It affects our culture and how we behave, increasingly influencing, if not governing, human enterprise at large and cities in particular—from healthcare and education to energy distribution and urban planning.

What do network-based cities look like? 

The shift towards “smart” network-based cities is largely enabled by the application of digital and network technology. A visible example of this would be outdoor lights. Instead of static lamps, connected light poles would dim and lighten up depending on street movements, while at the same time combining a large number of functionalities, such as electric-vehicle charging, parking sensors, video cameras, digital signage and multiple sensor-based solutions such as snow detection and mobility monitoring. Such light poles are becoming “the smartphones of the street”. Similarly, waste collection trucks would no longer have to make their fixed rounds to find half of the bins empty: sensors would indicate which bins are full, making the pick-up round more effective and dynamic.

What does it change for us? 

The network paradigm is ultimately changing how city dwellers behave and think about their role in the urban environment. A nice illustration of this cultural shift is the move away from traffic lights as the principal tool to organise traffic (which is based on centralised control, with the authorities determining who should stop or move and who gets fined) to the roundabout, introduced in ever larger numbers in cities. Here, no central authority governs the flow of traffic, but the nodes in the network (ie you, the driver) individually and collectively decide whether you are good to go.

Why go "smart"?

Networked operations are often smart, dynamic and a lot more energy-efficient. For example, dynamic new networked LED light in the streets of our cities can save as much as 80% of the electricity bill compared with the costs of the old-fashioned static lights of the past. Smart energy is another example. Unlike old energy grids that relied on centrally produced energy transported over long distances, smart grids generate energy wherever possible—on roofs or in parks, homes and offices—and route that energy to the closest point of demand.  As much as 30-40% of traffic in inner cities is traffic looking for a parking spot. Smart mobility and parking solutions guiding drivers to a reserved parking spot with optimised routes will sharply reduce inner-city congestion—and the annoyances that come with it. As the benefits become clearer, smart, network-based solutions will increasingly be adopted in areas such as education and healthcare.

Challenges

However, cities face challenges to adopt some of these solutions. For instance, how can cities initiate and manage their strategies in an integrated manner? Cities typically operate in silos, with traffic departments, for example, being responsible for mobility-related solutions. However, in network-based strategies, policies and procurements—everything from infrastructure to solutions and data—interrelate. Hence, new models of management and governance are required.

Examples of other cities 

Many cities are well under way on this networked journey. Copenhagen is implementing an “Internet of Everything” strategy, becoming a leader in dynamic outdoor light innovations and networked solutions that help to cement the city’s reputation as one of the world’s greenest communities. Reykjavik and Amsterdam are considering similar approaches, while São Paulo is making preparations for its 550,000 outdoor light-end points to become networked and energy-efficient. Meanwhile, Hamburg is a world leader in the digitisation of port affairs. Hundreds of cities are at some level of preparation, wanting and needing to “smarten up” in their own right.

What businesses and government in the UK need to do 

The successful, resilient and sustainable UK cities of tomorrow will have embraced the network paradigm early and comprehensively. Leaders will need to think of the following. First, cities need to articulate a vision of what their community should become in the future and identify the key challenges, aims and requirements. Second, comprehensive digitisation strategies need to take advantage of the existing digital assets and explain what investment is needed and why. And third, a new type of leadership needs to step in, providing executive sponsorship and governance and connecting various stakeholders, both internal and external, with the municipal apparatus.

Cities that lead the world are open-minded about the extent and roles of their stakeholders, including not only governmental partners but also big enterprise, academia and local companies, incubators and start-ups. Even more importantly, these cities promote, support and integrate their home-grown companies and start-ups in their digitisation strategies. Cities should address the various stakeholders and the big objectives beyond the traditional silos such as education, energy or finance at a time when a company like Google may become a bank, a service provider may become a distributor of educational content and utilities may become providers of smart parking services. And finally, (local) government should rethink what the tools and dynamics of civic participation in public-sector decision-making should look like. Whether they do it by means of offline townhall meetings where citizens engage or online platforms, in the age of the network paradigm citizens and city administrators can collaboratively share, arriving jointly at a decision as to what should happen in a given square or school building.

Conclusion

Rarely has humanity faced an organisational evolution that is larger, faster and more fundamental than the shift we are currently witnessing and experiencing. Cities take centre stage in this evolution, given their density, the needs of their growing populations and their available resources. While humanity has benefitted massively from the first wave of digital communication over the past 20 years, creative destruction and disruptive innovation have only just begun. In the long run, the network paradigm presents the critical ingredient in the creation of the sustainable and successful cities and communities of tomorrow.

The views and opinions expressed in this article are those of the authors and do not necessarily reflect the views of The Economist Intelligence Unit Limited (EIU) or any other member of The Economist Group. The Economist Group (including the EIU) cannot accept any responsibility or liability for reliance by any person on this article or any of the information, opinions or conclusions set out in the article.