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Broadband Deployment: Hastening the Decline of First-World Cities?

  • August 2014
  • 11 pages
  • Frost & Sullivan
Report ID: 2312102

Summary

This report explores some reasons why in a 21st Century first-world economy cities may be losing their relevance. Quite possibly, the metropolitan disaster stories, such as Detroit, may actually be a harbinger of things to come; and may not be quite the disaster that many people assume. This discussion will be of interest to telecommunication service providers, policy makers and urban planners.

Introduction
Frost & Sullivan has identified the growth of cities as a primary Mega Trend, in keeping with many public policy projections. In fact, predictions by the World Health Organization disclose that by the year 2050, roughly % of the global population will be living in cities. This figure, though, is misleading. Although one might conclude that most people are destined to live within urban metropolises, there is good reason to suppose that this forecast is simply a consequence of existing economics rather than an innate desire by humans to live in such centers.

The fact is that there are actually two dynamics at work in the evolution of cities. In the first, cities are major points of commerce and production: in simple terms they are where jobs and food are located. In developing countries these basic realities are the reason that people are migrating to the new mega-cities. Cities such as Cairo and Rio de Janeiro reflect this dynamic. Poor people stream in from the countryside in order to survive (See Exhibit 1).

A reverse dynamic may be taking place, though, in first-world countries. Especially in the United States, cities are facing a rough time as technology—in particular, broadband communications technology—largely obviates the reason for cities in the first place. Previous municipal powerhouses, like Detroit, Chicago and New York City, are finding that there is an increasing migration away from urban centers by the affluent and middle class; one which, at a critical level, leads to a precipitous decline, and eventual stagnation.

Major urban centers have traditionally been a way to concentrate workers and resources. As people congregated in ever larger collectives, services to provide housing, food and entertainment also developed. In fact, one of the principal justifications for a city in the 21st Century is that it provides, not only employment, but access to entertainment and social interaction that can’t be accessed in other locations: in other words, people who value the arts, entertainment and society tend to migrate to cities to experience these amenities.

Now, however, communication technology is enabling remote interaction. Armed with the new notions of distributed manufacturing and mass customization, people who used to accept the disadvantages of city life—pollution, crowding and crime—in order to find and keep employment are now finding that they no longer have to compromise their lifestyle merely to keep a job. They can even use broadband to virtually enjoy many of the added benefits that a city provides, without actually having to live in one.
Pervasive broadband communications, in fact, is a game changer; and likely to be the death of the traditional city. In a first world economy, the dynamic is precisely the opposite of a developing economy: people will move away from a city to improve their lifestyles, especially if food and employment can be obtained outside the confines of a metropolis.

This report does not suggest that cities are universally doomed, but it does explore some reasons why in a 21st Century first-world economy cities may be losing their relevance. Quite possibly, the metropolitan disaster stories, such as Detroit, may actually be a harbinger of things to come; and may not be quite the disaster that many people assume. This discussion will be of interest to telecommunication service providers, policy makers and urban planners.

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