Recently Google pulled the plug on the Toronto Sidewalk project, a high-tech, digital urban area development launched in 2017. I think it’s applaudable that Google had the guts to start the Toronto Sidewalk Project, and it’s applaudable that they stopped it.
We need projects that unite physical and digital worlds. Only by bringing these worlds together, we will be able to create sustainable, healthy and inclusive cities. I appreciate the ambition and effort behind this project – not just of Google, but also of local governments. The project has been a great driver for debate and learning on challenges and opportunities of smart cities, and it accelerated developments throughout the world.
However, the project seems to have run into crucial issues related to the core business models of Google and its much-needed partners, and it would have been very difficult to overcome these.
First, Google’s public image and behaviour outside the project undermined its credibility as a partner trusted with the interests of people living and working in the area. After all, Google’s business model revolves around vast amounts of personal data. The vision for Toronto didn’t change this, so, next to the ‘official’ positive vision for an inclusive, sustainable area, a negative vision emerged – a vision in which Google could eventually become the master puppeteer in the area.
Second, area development, property development, energy management and online services are completely different ball games. Each of these industries are networks of connected business models, based on the value that each party adds to the system. A smart, digital area development creates value in new ways and thus overthrows many of these business models. For any organisation, exchanging an old business model for a new model is risky and costly, so a transition requires organizations to run two parallel business models, or in fact, two companies.
Therefore, incumbent businesses try to stick to their old models as long as they can. I assume that this is also the case in Toronto. Even though property developers and investors may see the value of smart buildings and smart areas, many daren’t rely on this for their investment cases. As a result, smart solutions will always remain just an add-on to what they’re doing, and not cause true paradigm-shifts in design, construction, use and operation of buildings and the area.
It seems that Google has not been able to create a breakthrough in this, and the current economic outlook has destroyed their expectations that they will in the near future.
It all starts with bits and pieces
The Toronto Sidewalk project proves that the development of smart areas requires acknowledgement of the short-term interests and concerns of all participants on the long-term road to a sustainable and inclusive vision. This is challenging. It’s like putting together the pieces of a puzzle, with the extra requirement that connected pieces create an attractive picture at each intermediate step, not only when the puzzle is completed.
How to join the bits and pieces of digital and physical environments and industries is a learning process that can be induced. The Toronto Sidewalk project provides good lessons, but I’m personally still looking for the visionaries that provide the setting for ground-breaking cooperation between all – industries, governments and the people.