How the digital world is shaping our cities

+ Digital lifestyles and the smartphone economy are driving city growth in the 21st century; successful cities need to embrace and support this trend.

In the digital era, in order to thrive cities must offer innovative digital services that support the rapidly changing lifestyles and behaviours of their populations. I believe that this digital-driven ability to continuously improve efficiency is now central to a city’s long-term success. 

In developed nations, internet-powered smartphone apps have already started to transform many daily tasks, changing the way we think about the provision of goods and services, from travel to food shopping. 

Cities with a powerful supporting network of these services become more attractive for people who want to be able to get things done, whether it’s running a business or just managing their family life more easily. This in turn creates a virtuous circle by attracting more potential users or customers for these online services, helping them to grow and profit. 

In dense and diverse cities, developing new mobile businesses is easier with a larger addressable market for new services and established interest in innovation. Digital and location-based services are helping entrepreneurs, individuals and even governments to rethink services in new ways. 

Cities in developed nations should not assume they are leading in this area, and some developing cities are pushing forward at greater speeds with superior levels of adoption and innovation. In China over 550 million people use WeChat daily – able to quickly set up and run a business and communicate with social media followers and customers. Users can also make and receive payments, pay utility bills, access government offices, book hospital appointments, make transport reservations, read the news and much more, all from a single app. It doesn’t have a direct equivalent in either the USA or Europe. 

In a highly digital city, people’s access to services and goods is also less restricted by location than they once were. Affordable delivery-based businesses are helping both busy workers and older, less mobile people to take advantage of vital services.

Instead of replacing traditional bricks and mortar businesses, these new online-to-offline (o2o) businesses are providing additional employment opportunities on top of existing ones. For example, over 250 million Chinese people use Dianping which offers portal-like access to group-buying, online restaurant reservation, take-out delivery, e-coupon promotions, and many other services, making it a valuable online partner to traditional local businesses.

In this way, these platform businesses are helping small local suppliers to find bigger audiences for their product or service, while expanding employment in fields like warehousing, delivery, IT infrastructure and marketing, helping to build these cities’ long-term economic resilience. 

And digital innovation drives city popularity. A LinkedIn China survey has revealed how digitally innovative cities like Hangzhou or Wuhan are becoming the new ‘Tier-1’ cities, leapfrogging over traditional centres like Beijing and Shanghai. Hangzhou is where China’s huge trade website Alibaba is headquartered and its cluster of surrounding tech start-ups is encouraging growing numbers of people to relocate there. 

The digital world’s ability to reshape the fortunes of the physical city is now clear. City stakeholders including governments, academic institutions, investors and property developers need to cultivate an innovative environment through policy making, governance and administrative support. And by offering attractive working environments for tech incubators, cities can foster collaboration and skills sharing.

If you’ve encountered interesting examples of cities’ embrace of digital potential, do share them in the comments below.