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Is Covid the end of cities’ dominance?

This post is by Martin Crookston, a strategic planning consultant.

Yesterday saw the publication of our book Why face-to-face still matters. It draws on research into what makes cities so vital to the modern economy, including interviews with players – old and young, senior and junior – from a wide range of central London activities.

Now that we have the prospect of the pandemic’s grip eventually loosening, it seems worth asking what might its impact on urban life in the long term actually turn out to be? There has been a mass of prognostication over the past twelve months, a lot of it with a ‘things will never be the same again’ slant: covering working from home, the role of IT, the impact on commuting, the future of central city offices, and so on.

A strong underlying theme has been that the suburbs, the countryside, the ‘not cities’, will be the destination of choice for both residents and businesses: that a new and stronger centrifugal pull away from urban cores means the end of ‘urban renaissance’ and all that. And, of course, the real estate trade are on it as fast as anyone.

This would not be good news for the environment. It would be a trend towards thinly spread activity, linked by car dominated movement patterns, and land hungry development. Green organisations spent much of the 20th century battling sprawl, and this would be a recipe for its return. In the context of the 21st century’s climate challenge, it would be a disastrous backward step.  

Why cities still matter
We argue, however, that this ‘death of the city’ idea is overdone.  Cities were the future at the start of 2020. And they’re still the future at the start of 2021. Why? Our work shows that modern, high added value businesses will still need high intensity central places: busy, well connected and hyper-convenient. These organisations are engaged in what are called ‘opaque’ markets, uncertain settings with a heavy reliance on judgement rather than calculation. They need to reduce risk, to understand clients and be understood by them, and to make their business decisions on a basis of confidence, not certainty. Face-to-face contact is a core component of those judgements and this is what cities specialise in.

Our interviews with central London businesses and workers showed that there’s a constant whirl of quick contacts and, despite the availability of many digital channels, there seem to be more, not less, such interactions, particularly early evening contacts (lunch is dead in many sectors). In this matrix, face-to-face is more important, not less. It provides extra ‘bandwidth’ that other channels cannot. It’s critical to building relationships, key in an economy where competition is as much about affinity as about competence (if everyone is competent, how do you pick your collaborators?). In the complex and uncertain markets where many big city firms operate, there is a powerful set of links from business risk, to confidence, to meeting in person, to the need for proximity: and so to the strength of big, central places. 

The pandemic has accelerated existing trends
Now we are not saying it’ll all be back to as before. But it’s important to think about what changes, and what doesn’t. The pandemic ran a full strength test of what an ‘e-only’ working life could be like for very many people (though not everybody, of course). Our argument is that the experience will cement and accelerate certain tendencies that already existed; but it will not create fundamentally new ones.  We don’t mean that Covid-19 will have no effect on how businesses organise themselves and their employees. But it won’t do away with the need for face-to-face or for cities either.

So change has been accelerated by the pandemic and lockdowns. But they don’t cause it. They are doing what new tech has been doing for 200 years, since coal and steam and capital launched the first Industrial Revolution.

Businesses will carry on asking “why are we here?” with obvious implications for central business districts and office values there. Who’s going and who’s staying? Firms in uncertain markets with complex outputs, short product cycles, and constantly changing transaction patterns (high finance, consultancies, creative and cultural organisations) are the likely stayers. At the other, going, end of the scale are sectors such as traditional R&D, logistics and many of the back office functions of banks and other large employers. It is the type of input or output – and their associated search and experience costs – that determines whether it’s actually worth investing in a city location.

There’s a lot of promise for regional cities
But a lot won’t change, or not in such striking ways. We argue that cities and towns will fall back into recognisable and long established patterns. World city dominance will continue. For many of the major regional cities, there is a lot of promise: they share many of the economic strengths of the biggest conurbations, whilst offering a different mix of convenience and liveability. Well managed, they can be a key component of regional growth policies that work against the anti-urban and environmentally damaging pressures which are still a threat.

As for the smaller places, there is both potential, because of their convenience and lower cost base, but also menace, because sometimes those apparent advantages will be undercut by the fact that ever more businesses can locate anywhere. Economic activity is not going to fall in their laps, despite the more excitable prognoses of a flood of businesses relocating to pleasant market towns.

We have tried to understand the dynamics of urban change and the way in which markets work and businesses choose. For both economic and environmental reasons, it’s clear that the pandemic, grim and earth shaking though it has been, has not fundamentally changed the core requirements: to get the most out of our centuries long investment in urban life, and to use it as the basis for a liveable, climate friendly future.  Cities and governments must have the confidence to sustain that investment, and to resist calls for a new wave of decentralisation, driven by a perceived working from home revolution.

As we say in our final paragraph: “‘Being there’ is still at the core of the urban experience. Even in a world of instant digital access and unparalleled connectivity, central places matter, and face-to-face contact is what they do for a living. That is their story, and it will be their future.”

Why face-to-face still matters: the persistent power of cities in the post-pandemic era, by Jonathan Reades and Martin Crookston, is published by Bristol University Press, March 2021

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Green Alliance is a charity and independent think tank focused on ambitious leadership and increased political support for environmental solutions in the UK. This blog provides space for commentary and analysis around environmental politics and policy issues as they affect the UK. The views of external contributors do not necessarily represent those of Green Alliance.