Living in Corporate Cities

The news regarding Sidewalk Labs pulling the plug on the Quayside project in Toronto have generated debates in the smart city eco-system.

As the project is planned to be re-deployed in the company’s HQ in NYC and SF, and in light of Google’s new SF neighborhood, Toyota’s “Woven City” of the future, and Facebook’s Willow Village Campus in Menlo Park, it was interesting to hear a comment by Dr. Michelle Oren, Head of the Urban Futures Lab at the Bar Ilan Center for Smart Cities, stating that corporates that really wish to promote significant and visionary technology projects, will probably be better off doing so on privately owned land, rather than depending on local governments.

According to Dr. Oren, the Googles, Facebooks and Toyotas of this world will build residential areas for their employees and their families. People who would like to live in technologically advanced cities, with all the associated benefits, perks, and innovative services, will move to such corporate towns, whereas others will live in “traditional” cities, lagging behind the corporates, and slower to adopt innovation.

It is quite an interesting approach, that is already becoming a reality in privately owned projects, either originally designed with an R&D objective in mind, such as in the cases of Toyota, Sidewalk and Larry Ellison’s Lanai Island, or projects mainly built for regular housing, but could also serve as a platform to build and test innovation.

Setting aside the debates around privacy and the meaning of multinational corporates getting a deeper control over our day to day, it is not hard to assume that these initiatives will eventually be limited by regulators.

As long as such projects are relatively small in both territory as well as population, governments will allow the corporates to play. Will they still be so open minded towards such “corporate cities” as they keep growing, challenging the source of power of local governments? Who governs – Zuckerberg and Ellison, or the mayor and governor? Who provides security services? Who charges local taxes and decides what to do with them?

An interesting equivalent to learn from is Bitcoin. As long as it was something only a handful of geeks knew about, there was no real problem. However, as its popularity grew, it also challenged central banks’ ability to execute monetary policy, thus the likelihood of Bitcoin becoming legal tender is pretty low, even though it does enjoy the trust of the people. Governments will not just yield such a significant source of power and control.

When governments feel threatened by tech giants, they tend to respond in different ways, from anti-trust rulings in court, all the way up to the total banning of the technology in the country.

Residents reaction is another issue to consider. For those who have chosen to live in “corporate cities” – what happens when they are no longer satisfied, unhappy with the performance of their corporate “mayors”? Will they be able to replace them, just like in the liberal democracy model? Or are such mayors appointed directly by the corporate’s board of directors or executive body, more like in a dictatorship?

With this new tension between governments and corporates, it will sure be interesting to see how things unfold.