Sustainable Cities Need Sustainable Business Models and Social Fabrics Too

With research and writing assistance from Estephani Garcia

The new report from Harvard Business School* (January 22, 2011) entitled “Sustainable Cities: Oxymoron or the Shape of the Future?” As interest turns to responses to urbanization, especially in rapid growth developing countries, a number of analytical frameworks have been developed that look at the new ecocities as one way of addressing the degradation of the natural environment that comes with urban growth and the need for smarter density in these cities.

This HBS framework discusses examples across China and several developed country cities – China (Dongtan, Nanjing, Tianjin, Meixi Lake District), Abu Dhabi (Masdar), South Korea (New Songdo City), Finland (Sitra Low2No), Portugal ( PlanIT Valley). For each of these, the paper looks at the (1) ecocity’s goals and vision, (2) governance and financing, and (3) the partnership network.

Where this framework is useful:

  • It highlights the complex and multi-disciplinary collaborations across professions over long-term time trajectories: government agencies, developers, urban planners, designers, builders, technologists, financiers, etc. Projects that have mapped out the complicated interplay of physical development and soft partnerships appear to be better poised for success.
  • Financing: Where is the money coming from? Single government, dual government, private sectors? Each of the projects have had varying composition of private and public sector financing across the spectrum.
  • Partnerships: Integrating private and public partnerships presents communication and collaboration challenges across disciplines and over long time trajectories.
  • Challenges for Replicability:The authors do well in pointing out that replicating ecocities may not necessarily be easily implemented for the following reasons: 1) Securing and assembling land in the right location at the right price, 2) Development under different political systems, 3) Communication of new ecocity lessons to older sites 4) Design of the ecocity economic model
  • Real Estate Emphasis: “If we build they will come” model fails to recognize the need for jobs and economic development within an ecocity’s business model. (e.g. PlanIT Valley depends on software industry for revenue)
  • Technology Emphasis: Citizens may benefit from access to technological innovations but likewise may fear the invasion of privacy from advanced surveillance of ecocities.

Additional themes would be useful for further exploration:

  • What’s the impact of the mix of financing and partners on the plan and outcome for the ecocity, its economic development trajectory and its governance? Does more private sector involvement translate to better business models but less social inclusion?
  • How can learning from older ecocities be leveraged for the development of those in the future? And how can these learnings be customized within varied social, political, economic and environmental conditions?
  • Given the massive capital investment involved in both building new cities and making them smart and sustainable, can any of these ecocity business models also accommodate the idea of inclusive cities for all? Or are these going to be green clubs of privilege at city scale?
  • Are these ecocities going to be accessible and appealing enough to attract a socially sustainable range of inhabitants? Will potential inhabitants shy away from living in such technologically intensive – and potentially costly – places?

Overall, the ecocities theme should be interesting fodder for the triple bottom line and responsible real estate investment world but to be truly socially, environmentally and financially sustainable, far more work needs to be done to flesh out business models and partnerships for social sustainability. These two areas are the key gap between sterile white elephant projects and diverse and dynamic 21st century cities for all.

* Authors: Annissa Alusi (research assistant), Robert E. Eccles (Professor of Management Practice), Amy C. Edmondson (Novartis Professor of Leadership and Management), Tiona Zuzul (Doctoral Candidate)

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