Cities leverage density, scale, association and extension to realize efficiencies and generate wealth. So why aren't we planning our cities to take better advantage of this?
By Ryan McGreal
Published July 28, 2009
I've just started reading Jeb Brugman's recent book Welcome To The Urban Revolution: How Cities Are Changing The World (Viking Canada, 2009), and it's already shaping up itself to be a revolutionary transformation in how we view and understand cities - and how we can leverage that understanding to make our cities work better.
Specifically, he argues that it makes sense to think of the world's many cities in toto as a human-made ecosystem - a more or less continuous complex pattern of land use that organizes, directs and amplifies global economic, social, political and organizational trends we normally imagine taking place at the national level.
I'm planning a proper review once I've finished it, but in the meantime I wanted to share Brugman's description of what he calls "the four basic elements of urban advantage, which make cities everywhere magnets for every kind of ambition: what I call their economies of density, scale, association, and extension." [all emphases in original]
Brugman defines economies of density this way:
The first economy, economy of density, will be familiar to most RTH readers. In previous article, I've noted research (compiled by Richard Florida in his recent book Who's Your City?) finding that density increases the efficiency and productivity of city infrastructure.
The first thing that anyone notices on entering a city is the concentration of people and their activities. Simple as it is, this density has been little understood, adn its benefits are too often squandered through the low-density development of cities today.
The density of cities is their most basic advantage over any other kind of settlement. Without density of settlement, most of what we learn, produce, construct, organize, consume, and provide as a service in the world would simply be too expensive. Density increases the sheer efficiency by which we can pursue an economic opportunity.
Unfortunately, as Brugman notes later, "in my city [Toronto], a person living in a low-density neighourhood pays the same rate for water as the people in my [urban] neighbourhood." The result is that urban residents end up subsidizing suburban residents, artificially inflating demand for more low-density development.
Here in Hamilton, studies have demonstrated that new, low-density suburban developments ultimately increase the city's net liabilities.
This is a more commonly-cited economy, but it's interesting how Brugman ties it into the overall advantage of cities:
The scale of cities is the second building block of urban advantage. It increases the sheer volume of any particular opportunity, producing what we call economies of scale. Scale permits the splitting of fixed costs and known risks over a large enough group of users to make an activity attractive or service profitable in a big way. In this way, the scale of cities increases the range of opportunities and level of ambition that can be viable pursued in them and thereby the scale of the impacts that urban pursuits can have on the world.
In effect, the size of cities increases the potential market for a good, service or idea to the point that the risk of capital investment falls to acceptable levels.
Combine density and scale, and together they produce a third economy:
The scale and density of interactions among people with different interests, expertise, and objectives then combine to create the third basic economy of cities. Together they exponentially increase the variety of ways, and the efficiency with which people can organize, work together, invent solutions, and launch joint strategies for urban advantage.
I call this collaborative efficiency economies of association. Like-minded people have only so much time and opportunity to happen upon the people and organizations with whom they can invent, plan, and launch their strategies for advantage in the world.
Again, this parallels Florida's argument that cities increase the rate of innovation even at the same time as they increase the productivity of infrastructure. By attracting large numbers of creative, skilled people and bringing them into close proximity, cities act as de facto idea machines.
The suite of advantages that a city provides to innovators serves also as a launch pad:
Finally, economies of density, scale and association together provide the cost efficiencies and user communities to extend their organized strategies to other cities through infrastructure investments and technology applications. Shipping ports, airports, telephone, cable, television, and fibre-optic networks depend on the combined economies of density, scale and association in cities.
We accurately call these systems urban infrastructure because their economic viability is uncertain without the supply efficiencies created by density and scale and the demand efficiencies created by association. The net result is a new kind of advantage: economies of extension. Extension is the ability to link the unique economic advantage of one city with those of other cities to create whole new strategies for advantage in the world.
This echoes Jane Jacobs' book Cities and the Wealth of Nations in its insistence that it is principally cities, not countries, that are engines of economic growth and development.
How astonishing, then, that we generally relegate city governments to the margins in setting policy and managing investment flows. In Canada, cities aren't even real governments - they're merely "creatures" of the provinces, existing under provincial legislation.
Our city councils are at best a stepping-stone for ambitious politicians looking to move "up" to levels of government with "real" powers. Yet if actual economic growth happens in cities, could the decision to separate city governments from real power be crippling our national ability to realize efficiencies, generate wealth and solve our problems?
More specifically, how much potential innovation and wealth have we forgone over our half-century exercise in redirecting urban capital to artificially subsidize low-density living?