Disrupting cities: are tech firms to blame for rising inequalities?

By Steven McGinty

In cities across the world, there is growing unease at the impact of tech firms on local communities. In San Francisco’s Silicon Valley, “Google Buses” – the corporate commuter buses for Google staff – have been the subject of multiple protests by local activists, including the blockading of buses and displaying provocative banners.

The protesters’ main grievance? Housing. Researchers at the University of Berkley have found that rents close to bus stops used by Google employees are 20% higher than in other comparable areas.

It’s not just about Silicon Valley

In East London’s Tech City – home to both Google and Amazon – there have also been housing pressures, with property prices increasing by 13% in the two years to April 2017.

Further, The Economist has produced a map of London gentrification, showing that affluent young professionals are living in the inner-city, whilst poorer, often less educated ‘service workers’, are being pushed to the outskirts of the city. As Professor Richard Florida describes it “London is the archetypal example of a class-divided city”.

In Dublin, where Google and Facebook occupy 4% of all commercial office space, local activists have blamed tech firms for their housing crisis. Aisling Hedderman of the North Dublin Bay Housing Crisis Community, highlights that

“…we’re not going to see housing provided for families, but houses provided for single people and couples. And as long as people are willing to pay the high rents it’s going to keep driving up the rents

Tech firm Airbnb has also received a lot of attention for its impact on housing. Airbnb, who enable people to rent out their properties or spare rooms, has faced challenges in a number of cities. For instance, in November 2017, Vancouver introduced new regulations to stop businesses from offering short-term rentals through Airbnb and similar services. This means people can only rent out their principal property – which the city hopes will increase the availability of long-term rentals.

Technological change is nothing new

Edward Clarke, former analyst at the Centre for Cities, however, argues that the real problem for cities is not gentrification but poor city management.

In his view, urban neighbourhoods have always experienced periods of change, highlighting that Shoreditch’s status as a tech hub follows a long tradition of innovators moving to the area. And that research has shown that ‘new jobs’ (such as those in the digital and creative sectors) bring higher wages to an area, for the people working for these firms and in other sectors. Instead, Mr Clarke suggests there is a need to build more homes, and to consider developing on part of the Green Belt.

To alleviate these challenges, cities have started to recognise the need for closer collaboration. New York, Dublin, and London have all recruited tech leads to work with the tech sector. However, Joe Kilroy, policy officer at the Royal Town Planning Institute (RTPI), highlights that tech leads must have a remit that is wider than encouraging tech firms to move to the city. He explains:

Ideally the tech lead would liaise with city planners who can articulate the issues being faced by the city – such as housing affordability, infrastructure pressures, and skills shortages.”

Toronto and Kitchener, Ontario

In 2017, Toronto and its small town neighbour Kitchener announced plans to introduce a new transit line to ensure the city can cope with an expected influx of new tech workers.

It may be surprising to some that it’s not Toronto that’s the main tech player, but the region of Kitchener-Waterloo, home to the University of Waterloo and the birthplace of the Blackberry. It’s internationally recognised as a hub of innovation and prides itself on being different to Silicon Valley, viewing itself as more of a community than a series of business networks.

Local tech leaders acknowledge the importance of reaching out and working closely with local charities on issues such as affordable housing, as well as offering their skills to the community.

Final thoughts

Cities must ensure that the growth of the tech sector benefits everyone, and that sections of society aren’t left behind. However, big tech firms also have a role to play, and should become active participants in their communities, leading on areas such as education and skills and housing. Only then, will these tech firms truly prosper while having a lasting and positive impact on the surrounding communities.

The Knowledge Exchange provides information services to local authorities, public agencies, research consultancies and commercial organisations across the UK. Follow us on Twitter to see what developments in policy and practice are interesting our research team. 

Urban bike sharing: a tale of two cities

Bike sharing schemes are now a familiar feature of the urban landscape. From Montreal to Marrakesh, London to Lublin, more than 1000 cities around the world are learning that bike sharing can play a supporting role in reducing congestion, cutting air pollution, improving citizens’ health and boosting their reputations as great places to live, work and invest in.

But not all bike sharing schemes are progressing at an equal pace. While some, such as those in Paris and London are moving into the fast lane, others are struggling to stay upright. In today’s blog, we look at how two different cities – Seattle and Dublin – are tackling bumps in the road to better bike sharing.


In recent years, bike-sharing schemes have been springing up in cities all over the United States. Among the success stories is Washington, DC’s Capital Bikeshare programme, which is rapidly becoming an integral part of the city’s transportation system.

On the other side of the country, however, Seattle’s Pronto bike share scheme had a difficult birth. In its first year, people took 142,832 rides on Pronto bikes (the comparable figure for Capital Bikeshare was one million rides). A year after its 2014 launch, Pronto became insolvent, and Seattle’s city council bailed out the scheme at a cost of $1.4 million. Last year, the council announced that Pronto would cease operations in March 2017.

Pronto’s disappointing performance has perplexed cycling enthusiasts in the city. One Seattle bike blogger observed:

“Washington, D.C. is freezing in the winter and horribly hot in the summer, but they’ve blown past us, definitely on bike share and also on their rates of bike commuting.”

The factors behind the failure of Pronto have been the subject of considerable debate. Some have blamed it on compulsory helmet laws in the city, pointing out that similar rules in Melbourne also resulted in poor take-up of its bike share scheme. Others have put forward a range of theories, from poor cycling infrastructure and inadequate marketing to Seattle’s rainy climate and hilly topography. The city’s bicycle club also weighed in, arguing that the scheme’s small size, insufficient density of bike stations and prohibitive pricing structure put the brakes on what should have been a success story.

Bike sharing in Seattle may be down, but it’s not out. The city council is preparing to launch a successor to Pronto that will provide electric bikes and double the number of stations. There are still concerns that the mandatory cycle helmet rule may discourage take-up, although helmets will also be available for hire.

The council hopes the new scheme will be launched in summer 2017. It remains to be seen whether motorized cycles can kick start Seattle’s bike sharing journey.


In contrast to Seattle, Dublin’s experience of bike sharing started off with positive results. Within seven years of its 2008 launch, the Dublinbikes scheme had 55,000 long-term subscribers and had recorded over 10 million trips. An expansion in 2013 took bike sharing stations beyond the core of the city and delivered an extra 950 bikes.

The popularity of Dublinbikes has continued to grow, but would-be users have often been frustrated by the lack of available bikes and delays in further expansions. Funding difficulties lie at the heart of the problem.

Dublin City Council contracted the outdoor advertising company JCDecaux to operate the Dublinbikes scheme. In exchange, the company was given the right to advertising space at a number of locations around the city. Dublinbikes also secured sponsorship from Coca-Cola, and managed to stay in the black for its first six years. However, the scheme has been running a deficit since 2015.

The stark figures tell their own story:

  • the Dublin Bikes scheme costs €1.9m to run
  • subscriptions and usage charges generate €1.2m
  • sponsorship by Coca-Cola is €312,000

Under its contract with JCDecaux, Dublin City Council must fill the €388,000 shortfall, but the council is itself under financial pressure.  Expansion of the scheme would cost €1.2m, with a further €500,000 a year of running costs for the additional bike stations.

To fulfil its side of the Dublinbikes deal with JCDecaux, Dublin City Council proposed the placement of advertising screens in the southeast of the city. However, these plans were thrown into question in August 2016 when Ireland’s national heritage organization lodged objections. One heritage officer described the proposed screens as “nasty” “contemptible”, “tacky” and “grossly offensive”. City councillors subsequently voted against installation of the screens, leading to concerns that the costs would have to be shouldered by bike users.

In November 2016, the annual Dublinbikes fee rose by €5 to €25. That’s still lower than annual membership of London’s more extensive Santander bike share scheme (£90), but there are now concerns that the price increase will exclude people on low incomes or unemployed people, who may have found the bike share scheme more affordable than getting around by car or public transport.

Overcoming spokes in the wheel

Seattle and Dublin have experienced different problems in establishing their urban bike sharing schemes. But it’s worth remembering that Washington, DC’s early bike share scheme suffered very low use rates, while Montreal’s first attempt at bike sharing went bankrupt. Today, DC’s Capital Bikeshare is among the most admired in the world, and is contributing to cuts in congestion. Meanwhile, Bixi, which now operates Montreal’s bike share scheme, is exporting its expertise to other parts of North America.

Clearly, successful bike sharing schemes require careful planning, public participation, adequate funding and – perhaps most important of all – time to grow.

Understanding science and innovation: key ingredients

Female scientist in a lab.

Image from Flickr user Robert Couse-Baker, licensed for reuse under a Creative Commons License.

By Steven McGinty

“Innovation distinguishes between a leader and a follower” Steve Jobs

From penicillin to Dolly the sheep, the UK has always been at the forefront of scientific innovation. Last month, the Chancellor, George Osborne, gave a boost to the scientific community when he welcomed the idea of a National Institute for Materials Research and Innovation in the North of England. The Chancellor said that this would create new jobs and attract further investment, emphasising that the government are committed to the creation of a ‘Northern Powerhouse’.

This is just one example of how scientific innovation can be used to support economic development. Below I’ve identified some of the key ingredients to developing innovation, as well as providing several examples of good practice across the UK and Ireland.

Innovation infrastructure

The North West Business Leadership Team (NWBLT) report highlights the importance of having the infrastructure in place to support innovation. Crucially, it suggests that the ability to create partnerships between organisations and across business, government agencies, and academia, helps firms to gain a competitive advantage. For example, the Virtual Engineering Centre, a partnership between the Hartree Centre and the University of Liverpool, supports companies such as Jaguar Land Rover to improve their business performance through the adoption of the latest techniques and tools.

Business clusters, particularly digital clusters, have also proven to be important for driving innovation and increasing productivity. These clusters involve bringing together the right innovative people and providing them with access to the right resources in a small geographical area.

Some notable examples include Tech City in East London, which is a cluster of technology and creative firms, and Dublin’s Digital Hub, a project based in the Republic of Ireland, which contains a range of firms, focused around digital media and entrepreneurship. The clusters blend technology companies with organisations from other sectors, including retail, leisure and advertising.

They also play a key role in helping start-ups to develop. For instance, it’s been shown that the development of the nanotechnology industry has been related to a small number of scientific clusters across the world.

Start-ups and agile SMEs

Start-ups and SMEs are important for bringing new products, technologies and services onto the market.  Universities can play an important role in providing a wide variety of support to SMEs. Several programs already exist in universities across the UK, including the University of Leicester’s “SME Support to Growth” project, which offers advice on exporting internationally, and the University of Birmingham’s Accelerating Business-Knowledge Base Innovation Activity (ABIA) project, which provides varied and tailored support to SMEs working in science and technology in the West Midlands, including access to support from doctoral researchers.

Additionally, the University of Manchester has also been very successful in launching SMEs.  This includes Nanoco, a firm that develops and manufactures quantum dots and semiconductor nanoparticles that are used in a number of areas, such as bio-imaging and solar energy.

The Organisation for Economic Co-Operation and Development (OECD) also highlights that SMEs can find it difficult to access early stage financing, particularly since the economic downturn. Therefore, it’s important that the government introduces and supports policies that provide access to finance. Two examples that already exist include the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS), which provide tax relief to investors who buy shares in high risk SMEs.

The Campaign for Science and Engineering (CaSE) has also raised the issue of investment in SMEs. They have voiced their concern over the UK government’s cuts to research spending, highlighting that the UK is below the EU average on research spending and is 21st in the league tables of research spending, behind countries such as Belgium and the Czech Republic. The report suggests that increased funding should be given to Innovate UK, a body that supports innovation in business.

Highly skilled workforce

The Department for Business, Innovation, and Skills emphasises the importance of having people with the necessary science, technology, engineering and maths (STEM) skills to generate new knowledge. In addition to technical skills, the report makes it clear that the UK must produce people who have an understanding of business management and the entrepreneurial skills to develop their innovation commercially.

Further Reading:

The Idox Information Service has a wealth of research reports, articles and case studies on a range of economic development issues. Abstracts and access to journal articles are only available to members.

Green for go: the rebirth of light rail

tramby James Carson

When Edinburgh’s new tram system opens this week it will be three years overdue and millions of pounds over budget. But, in spite of the delays, spiralling costs and contractual difficulties, the Edinburgh system is joining a wider urban light rail renaissance.

Since the 1990s, municipalities around the world have been investing more in light rail transit systems: Continue reading