The success of a city today is based on its ability to support the new economy of the 21st century — an economy that requires a very different kind of built environment from previous models. Jobs in the new economy are concentrated in areas where young entrepreneurs, future leaders and experts want to live. Unfortunately, cities based on 20th-century models and built by conventional urban planning do not appeal to them. The planning of suburbs and highways does not reflect the new economic reality, either locally or at a global level. We need to adapt.

In the 20th-century vision of the city, outside of downtown areas the defining parameter was traffic infrastructure. Employment was concentrated in a small number of large companies, so planners focused on regional connectivity measured by travel time. But this kind of connectivity is not as relevant to the new economy or to the social interactions on which it is based. The internet has set people free from location. In the 21st century, urbanism is based on ad-hoc interactions between people and services, enhanced by mobile technology and intelligent location-based services.

The most attractive and profitable places are no longer those that are the most accessible to cars. What’s far more important is the structure and balance of the city at a neighbourhood level. Dispersed urban structures need to be sewn together. In our work, we define neighbourhood as the area within 700m of a given location — in other words, the easily walkable area. The entrepreneurs leading the new economy want to access a mix of uses and experiences within their immediate vicinity, and so do the workers they need to attract. So to be successful, cities need to create varied, vibrant neighbourhoods that combine places to live, work, socialize and relax.

We call this ”urban capacity”, and we developed the CITYROI methodology to measure it. We calculate urban capacity by combining all the properties in an area, the activities that take place within them and the connecting street etwork. We can measure all of this using geospatial data and geographical information systems (GIS).

Urban capacity is highest in areas that are densely built up, where there is a lot of activity within a highly connected street network. In other words, the more possibilities there are for people to interact, the higher the urban capacity. Features that diminish urban capacity include highways and massive shopping centres, because they limit interactions and accessibility.

This analysis allows us to detect development potential in existing cities and future plans, just as conventional planning would measure traffic connectivity. We can identify the areas with the most “buzz”, or with the most versatile services, jobs and dwellings. We can see where the most interesting places to spend time are, and we can decide which planning solutions will create the greatest value.

The method is scalable, depending on the available data, and how accurate it is. For example, we can include parks in the calculation to identify their effect on urban environments, or bring in external data such as house prices.

When we applied CITYROI to the redesign of Helsinki’s ring-road II xtension, we found that there will be more small and medium-sized businesses, so the economic benefits of creating new SME workplaces would be much greater than for a traditional ring-road plan.

Urban capacity has a great impact on traffic too. The number of trips per person does not change, but the modes that people choose do. Within neighbourhoods with good urban capacity, a lot of services are close by, and walking and cycling are the most convenient ways of getting around. Land-use models based on highways, on the other hand, lead to more car journeys — the resulting sparse land-use, combined with long distances between services, makes it hard to organize efficient public transport systems.

The economic impact of urban planning should not be underestimated. Even though planners are working to far longer timescales than economists, their decisions will have a profound and potentially immediate influence — the quality of the urban environment is, after all, the value base for both business and the housing market. From this point of view, it is remarkable that the paradigms of global economics and local urban planning are so out of alignment.

Ironically, an example of ignoring the importance of urban capacity concerns the mega-companies of this new economy. Organizations such as Apple, Facebook and Google are building their own campuses outside of city centres. Their goal is to provide more space more affordably, and to protect their intellectual property by cutting out inter-company connections. But this approach to development does not create resilient or appealing city economies. That’s why many Silicon Valley employees prefer to live in San Francisco, and the giants of the new economy are left running old-style transit networks to get their workers where they need them to be. 

Teemu Jama is head of urban architecture and Tuija Pakkanen is a city analyst at WSP in Finland


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