Earlier this week Sidewalk Labs released a long-awaited master plan for Sidewalk Toronto, a controversial project that has galvanized a broad range of opposition throughout Toronto, Ontario, and across Canada. At 1300-plus pages, this massive document is from a playbook of an earlier age, and a repeat of the then-unsuccessful approach Sidewalk CEO Dan Doctoroff took to New York City’s Olympic bid in the 1990s. In four bound volumes it lays out a plan for an urban innovation district built “from the internet up” with tall-timber construction, using a pile of dead trees to do it.
No doubt, the plan — once it is digested by a populace already confused by earlier data dumps — will reveal its merits and missteps. There’s been an ample debate about the company’s proposals to date. There’s hope this round will be more substantive and productive. But one question that is on the minds of many around the world, who may step into this fray for the first time now that all the cards are on the table, is this: What’s everyone so worked up about? Why are so many in Toronto looking this gift horse in the mouth so closely? What’s the deal?
Well, there are a lot of issues.
Data governance has been a lightning rod because its new and scary. Early on, Sidewalk put more energy into figuring out how the robot trash chutes would work than how to control data it and others would collect in the proposed district. As part of Alphabet, you’d think this would have been a source of unique added value versus say, a conventional development. Not so — the company’s initial proposal in 2017, also hundreds of pages, tacked on a 2-page memo to CYA on the topic. It didn’t work, and belated efforts to fill the gap only led to more missteps along the way, doing little to calm critics.
More important questions and criticisms have been raised about Waterfront Toronto’s handling of the Quayside bidding process and its transparency. Existential questions for Canadian cities about the shifting line between public and private delivery of government services are also on the table. None of these have been satisfactorily addressed by Sidewalk, and the number of elected officials speaking out against the project has grown as a result.
Finally, however, its time to cut to the chase. The release of Sidewalk’s plan this week came pre-packaged with a familiar kind of promise — 44,000 direct jobs and $14.2 billion in annual economic impact by 2040, according to the company’s claims.
Here’s the problem though. I don’t think anyone in their right mind believes this kind of nonsense anymore. We simply no longer trust that having one big company, especially a tech company, can produce this kind of effect.
That’s my hunch at least.
Economic development in cities today is a lot like hunting whales. Mayors try to land big deals that promise lots of jobs. They wield extensive tools, explicitly designed to operate outside of local legislative control, to make the needed concessions to outbid other cities. It’s in many ways a race to the bottom. They all hate it, but they do it.
There is some theory behind it. Landing a big anchor company, especially one in a knowledge-intensive industry, is seen as a catalytic event for broader growth. Through their hiring and spending, these anchor companies, it is believed create a pump that could prime a local ecosystem of suppliers, spin-offs, and so on. This “economic multiplier” effect is widely understood to exist, to be good, and to be more intense the higher up the value chain a company is. A steel plant doesn’t do much more than employ manual laborers and import raw materials. It doesn’t pump profitable ideas into an economy. A software company, on the other hand, will buy lots of things in a surrounding neighborhood or region, support firms that can grow and also export their offerings to others outside the region. And great ideas will walk out the door with employees when they leave to start their own firms — nearby, it is presumed.
Some bits of this narrative have started to get picked off. In Berlin, the impact on housing prices became a flash point — not only because it the unfairness it represented, but because it could undermine the city’s ability to attract creative young people… the whole reason Google wanted to be there in the first place. In Queens, hard questions were asked about the company’s commitment to workforce development in the local community.
But the narrative has not yet completely collapsed. These are conventional concerns arising naturally at the end of an economic expansion that’s already used up most of the available urban land. Things are getting expensive. People are getting forced out, and Google and Amazon make good boogeymen.
I have a hunch, however, that the old narrative is on life support. Because if you look beneath the surface, its clear that the cracks are starting to show. What if people simply stop believing in this version of How It Works? That having a big company at the center of their community is a path to prosperity?
Here’s what I think has changed, and we haven’t quite put our finger on. The kinds of companies that want to set up shop in cities, today, the flagships of “surveillance capitalism” as Shoshanna Zuboff calls it, no longer operate like the industrial engines of the past. They source talent and services from all over the world, wherever its cheapest. Being near a big population is more useful because it supports a big airport, than because it provides a big pool of workers.
More to the point, though, they are ruthless and efficient at preventing knowledge spillovers, through vigorous and aggressive patent hoarding and non-compete agreements with former employees. Intel, the poster child of Silicon Valley’s high-tech ecosystem, which functioned as a finishing school and investor for many of the region’s engineers and their startups, was itself a knowledge spillover from Bell Labs, via Fairchild Semiconductor. Google, Amazon, and their ilk are more like knowledge blackholes. Ideas and talent go in and they don’t come up, at least in a form usable to others. Seen another way — it is precisely their ability to contain knowledge spillovers that has powered their success.
Here’s the way I think it should work instead in cities like Berlin, Toronto, and New York that are doing great and running out of land. Companies, especially those that thrive on big data about spending, mobility, and communications, should have to prove their multiplier potential. We need to go beyond big promises.
But even bigger spreadsheets, which Sidewalk no doubt has, aren’t the answer either. Amazon and Google should come to cities hand in hand with detailed, real-time maps of their spending footprint, and the viral legacy of its employee alumnae in creating high-growth spinoffs in the surrounding area. If, as Zuboff convincingly argues, they are in the business of selling high-precision predictions of future human behavior, put that know-how and technology to work helping cities forecast the impacts of proposed development in far greater detail and accuracy than they do now. I can imagine simulations of social graphs showing the seeding and acquisition of local talent and services over time, showing the “stickiness” of such innovation ecosystems over time, filling the skies over Queens, Kreuzberg, and the Portlands when RFPs are evaluated.
This is so different from how we do this today, its like night and day. But it would sure start the ensuing discussion rolling in a very different direction than the tail-chasing dialogue we’ve seen to date.