Smart cities and Rocket steam engine: on parallel tracks?

By Sheridan Nye

Back in the early 19th century, the public debut of George Stephenson’s Rocket steam engine was a harbinger of the Age of Steam, which applied the technologies of the industrial revolution to transport with great success. Funded by eager speculators, railway infrastructure soon expanded across the world and eventually usurped canals as the main form of transportation.

Such technology-driven revolutions have occurred at surprisingly regular intervals in the last 250 years, according to economic historians. Steam, steel, electricity, mass production – all had dramatic impacts on world economies. Could smart cities be the next inflection point?

Smart city technology is live and effective in numerous flagship projects and in new-build showcases, such as Songdo in South Korea and Masdar in the United Arab Emirates. Yet history shows that mainstream technology adoption is always hostage to external factors, not least the availability of finance and readiness of institutions and people to adopt new ways of doing things.

So how did technologies of the past win political and public support, given that they, like smart cities, required a comprehensive overhaul of established institutions and processes?

More than a decade ago, Venezuelan economist Carlotta Perez drew attention to a simple but vivid pattern in the complex co-evolution of technological change and economic development ( Technological revolutions and financial capital, Perez, C (2002), Edward Elgar Publishing). Every 50 years or so, since about 1770, a new technological revolution has taken hold.

Perez associates a ‘big bang’ with each revolutionary epoch. This is the crucial point when emerging clusters of innovation come together to produce a highly visible new product or event – for instance, the Rocket’s victory in the Rainhill speed trials in 1829. This immediately captures the attention of pioneers in finance and technology, attracted by the growth opportunity in cheaper, more efficient products.

A frenzied period of boom and bust results, accompanied by repeated challenges to existing institutions and ways of working. Eventually – and not without job losses and financial bloodshed – the new technology displaces the previously dominant technology, which by now is recognized as inefficient and costly.

This process of socio-institutional change lags technological breakthroughs by as much as 20-30 years. Hence, the overall 50-year cycle. Perez identifies Intel’s microprocessor as the most recent ‘big bang’ event. If the model proves to be predictive as well as historical, the next is due around 2020.

The next big bang

Will the next revolution come from smart cities, or bio-tech, or some other collection of technological enablers waiting in the wings?

Informa’s view is that truly revolutionary impact will come from closed loop control, when human oversight and intervention is minimal and machine communications really is ‘machine to machine’. Systems can then respond in real time and continually learn and optimize. In contrast today, even so-called intelligent transport systems are rarely out of direct control of human operators.

The challenge will be to make the benefits of closed-loop control visible in some way to investors and the public. Like the Rocket belching smoke and noise on its maiden voyage at 24mph, smart cities need to inspire the popular imagination.