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La Marqueta Mile is an innovative economic development and public space revitalization project that is currently underway in East Harlem, New York City. The project site is located under a railroad viaduct in the middle of Park Avenue, between East 111th Street and the Harlem River. This mile-long space bisects a neighborhood where income, health and educational attainment are among the lowest in New York City; a situation that has been exacerbated by the current global economic crisis.
Click link or photo for description of project - a book chapter for “Feminist Practices: Interdisciplinary Approaches to Women in Architecture” 
Credits: Meta Brunzema Architect P.C.

La Marqueta Mile is an innovative economic development and public space revitalization project that is currently underway in East Harlem, New York City. The project site is located under a railroad viaduct in the middle of Park Avenue, between East 111th Street and the Harlem River. This mile-long space bisects a neighborhood where income, health and educational attainment are among the lowest in New York City; a situation that has been exacerbated by the current global economic crisis.

Click link or photo for description of project - a book chapter for “Feminist Practices: Interdisciplinary Approaches to Women in Architecture” 

Credits: Meta Brunzema Architect P.C.

Resilience in Humans and Ecosystems
 
Brian Walker, leading Australian ecologist explains resilience, self organization and feedback in this 7 minute long video. (Also see previous blog-post)
 
….” the way you maintain resilience of a system is to allow it to probe its boundaries”
 
….”the only way to keep a forest resilient to fire is to burn it”
 
For an in-depth lecture by Brian Walker entitled “Learning how to change in order not to change: Lessons from ecology for an uncertain world" click this link.
Nine Values for Resilience by Walker & Salt 2006
Brian Walker and David Salt’s book “Resilience Thinking” ends with a handy check list of 9 things a resilient world would value: 
1. Diversity: A resilient world would promote and sustain diversity in all forms (biological, landscape, social and economic)
2. Ecological Variability: A resilient world would embrace and work with ecological variability (rather than attempting to control & reduce it)
3. Modularity: A resilient world would consist of modular components
4. Acknowledging Slow Variables: A resilient world would have a policy focus on ‘slow’, controlling variable associated with thresholds
5. Tight Feedbacks: A resilient world would possess tight feedbacks (but not too tight)
6. Social Capital: A resilient world would promote trust, well-developed social networks, and leadership (adaptability)
7. Innovation: A resilient world would place an emphasis on learning, experimentation, locally developed rules and embracing change.
8. Overlap in Governance: A resilient world would have institutions that have ‘redundancy’ in their governance structures and a mix of common and private property with overlapping access rights
9. Ecosystem Services: A resilient world would include all the unpriced ecosystem services in developing proposals and assessments.
Another scientist, Simon Levin, has come up with his own list: “Eight Commandments of Environmental Management”. 

Nine Values for Resilience by Walker & Salt 2006

Brian Walker and David Salt’s book “Resilience Thinking” ends with a handy check list of 9 things a resilient world would value: 

1. Diversity: A resilient world would promote and sustain diversity in all forms (biological, landscape, social and economic)

2. Ecological Variability: A resilient world would embrace and work with ecological variability (rather than attempting to control & reduce it)

3. Modularity: A resilient world would consist of modular components

4. Acknowledging Slow Variables: A resilient world would have a policy focus on ‘slow’, controlling variable associated with thresholds

5. Tight Feedbacks: A resilient world would possess tight feedbacks (but not too tight)

6. Social Capital: A resilient world would promote trust, well-developed social networks, and leadership (adaptability)

7. Innovation: A resilient world would place an emphasis on learning, experimentation, locally developed rules and embracing change.

8. Overlap in Governance: A resilient world would have institutions that have ‘redundancy’ in their governance structures and a mix of common and private property with overlapping access rights

9. Ecosystem Services: A resilient world would include all the unpriced ecosystem services in developing proposals and assessments.

Another scientist, Simon Levin, has come up with his own list: “Eight Commandments of Environmental Management”. 

Case Study: Rotterdam 2042 - Connected Port City, a Transition Project by Doepels Strijkers Architects and the Dutch Research Institute for Transitions (DRIFT) developed for the City of Rotterdam. It is an example of purposely futuristic scenario planning - with a special focus on advancing a circular energy and material economy. Click link above for details.
Excerpts from a paper “Transition Scenarios in Transition Management” by S. Sondeijker, J. Geurts, J. Rotmans and A. Tukker:
"The intended benefit of scenarios is that they stretch as well as focus people’s thinking. The presumption is that scenarios on the one hand reduce overconfidence (Lichtenstein et al., 1982) by making available to the mind futures not yet considered (Koriat et al., 1980) as well as challenge those presumed likely (Mason and Mitroff, 1981)….These two characteristics of scenarios – stretching and focusing – are more or less contradictory. Therefore, scenarios need to strike a balance between on the one hand representing a window of opportunities and on the other hand functional clarity and simplicity (Berkhout et al., 2002).”
"The transition scenarios need to have a utopian character because when striving for a societal transition, we inherently strive for a structural change in a systems’ structure, its processes and its culture. Therefore, when transition scenarios would result in optimization strategies we would have failed in realizing this structural change that we believe is necessary for reaching future sustainability. This implies that the future images in transition scenarios need to be derogative from our prevailing perception of reality, impossible to reach by sufficing with optimization strategies. However, in order to bring about long-term commitment, the current perceived reality of actors needs to be captured. Therefore, the transition trajectories which lead to the images need to be based on informed imagination.”
 

Case Study: Rotterdam 2042 - Connected Port City, a Transition Project by Doepels Strijkers Architects and the Dutch Research Institute for Transitions (DRIFT) developed for the City of Rotterdam. It is an example of purposely futuristic scenario planning - with a special focus on advancing a circular energy and material economy. Click link above for details.

Excerpts from a paper “Transition Scenarios in Transition Management” by S. Sondeijker, J. Geurts, J. Rotmans and A. Tukker:

"The intended benefit of scenarios is that they stretch as well as focus people’s thinking. The presumption is that scenarios on the one hand reduce overconfidence (Lichtenstein et al., 1982) by making available to the mind futures not yet considered (Koriat et al., 1980) as well as challenge those presumed likely (Mason and Mitroff, 1981)….These two characteristics of scenarios – stretching and focusing – are more or less contradictory. Therefore, scenarios need to strike a balance between on the one hand representing a window of opportunities and on the other hand functional clarity and simplicity (Berkhout et al., 2002).”

"The transition scenarios need to have a utopian character because when striving for a societal transition, we inherently strive for a structural change in a systems’ structure, its processes and its culture. Therefore, when transition scenarios would result in optimization strategies we would have failed in realizing this structural change that we believe is necessary for reaching future sustainability. This implies that the future images in transition scenarios need to be derogative from our prevailing perception of reality, impossible to reach by sufficing with optimization strategies. However, in order to bring about long-term commitment, the current perceived reality of actors needs to be captured. Therefore, the transition trajectories which lead to the images need to be based on informed imagination.”

 

A few resources on Scenario Planning - a way to deal with uncertainty and risk:

“There is an urgency of finding ways to discuss urban futures and their social consequences beyond the classic “vision-approach” traditionally deployed by architects and planners since the 15th century. A systematic approach seems necessary. One possible method towards this end is forecasting scenarios for the future. This systematic method employs two fundamental and independent variables in order to find parallel, plausible future scenarios which in turn can be further developed. By use of storytelling methods and visualization, means of comparing and discussing these futures can lead to a more strategic and productive dialogue.” (kkh.se)
Presentation by Marina Alberti: Scenario Casting As a Tool for Dealing with Uncertainty
Steve Carpenter on Scenarios & Resilience 
Pros & Cons of Scenario Planning for Climate Adaptation (VCCCAR)

A few resources on Scenario Planning - a way to deal with uncertainty and risk:

There is an urgency of finding ways to discuss urban futures and their social consequences beyond the classic “vision-approach” traditionally deployed by architects and planners since the 15th century. A systematic approach seems necessary. One possible method towards this end is forecasting scenarios for the future. This systematic method employs two fundamental and independent variables in order to find parallel, plausible future scenarios which in turn can be further developed. By use of storytelling methods and visualization, means of comparing and discussing these futures can lead to a more strategic and productive dialogue.” (kkh.se)

Presentation by Marina Alberti: Scenario Casting As a Tool for Dealing with Uncertainty

Steve Carpenter on Scenarios & Resilience 

Pros & Cons of Scenario Planning for Climate Adaptation (VCCCAR)

On Superstorm Sandy & Planning:
Marina Alberti - ”Planning Under Uncertainty: Regime Shifts, Resilience, and Innovation in Urban Ecosystems" (2013)
Excerpt (see link above for full paper):
The future of Planning
Strategic decisions about urban infrastructure and growth management are based on our assessment of the past and our expectations for the future.  How we think about the future has significant implications for the choices we make and the decision-making process we apply.  Traditional approaches to planning and management typically rely on predictions of probable futures extrapolated from past trends.
However, long-term trends are increasingly unpredictable given the complexity and uncertainty of coupled human-natural systems.  Predictive models that are designed to provide accurate assessments of future conditions can only account for some of the interactions between highly uncertain drivers of change and the surprising, but plausible, futures over the long term.  Important progress has been made in complex modeling, and improved simulation and computer power have allowed us to process quite astonishing amounts of data; still, our models are constrained by our limited knowledge, unverified assumptions, and short-sighted mindsets.
I suggest five principles for planning under uncertainty towards enabling resilience and innovation in urban ecosystems:

1. Create and maintain diverse development patterns that support diverse human and ecosystem functions.


2. Focus on maintaining self-organization and increasing adaptation capacity instead of aiming to control change and to reduce uncertainty.


3. Expand the consideration of uncertainty and surprise by designing strategies that will be robust under the most divergent but plausible futures.


4. Create options for learning through experiments, and opportunities to adapt thorough flexible policies and strategies that mimic the diversity of environmental and human communities.


5. Expand the capacity for change through transformative learning by challenging assumptions and actively reconfiguring problem definition and policy action.

On Superstorm Sandy & Planning:

Marina Alberti - ”Planning Under Uncertainty: Regime Shifts, Resilience, and Innovation in Urban Ecosystems" (2013)

Excerpt (see link above for full paper):

The future of Planning

Strategic decisions about urban infrastructure and growth management are based on our assessment of the past and our expectations for the future.  How we think about the future has significant implications for the choices we make and the decision-making process we apply.  Traditional approaches to planning and management typically rely on predictions of probable futures extrapolated from past trends.

However, long-term trends are increasingly unpredictable given the complexity and uncertainty of coupled human-natural systems.  Predictive models that are designed to provide accurate assessments of future conditions can only account for some of the interactions between highly uncertain drivers of change and the surprising, but plausible, futures over the long term.  Important progress has been made in complex modeling, and improved simulation and computer power have allowed us to process quite astonishing amounts of data; still, our models are constrained by our limited knowledge, unverified assumptions, and short-sighted mindsets.

I suggest five principles for planning under uncertainty towards enabling resilience and innovation in urban ecosystems:

1. Create and maintain diverse development patterns that support diverse human and ecosystem functions.
2. Focus on maintaining self-organization and increasing adaptation capacity instead of aiming to control change and to reduce uncertainty.
3. Expand the consideration of uncertainty and surprise by designing strategies that will be robust under the most divergent but plausible futures.
4. Create options for learning through experiments, and opportunities to adapt thorough flexible policies and strategies that mimic the diversity of environmental and human communities.
5. Expand the capacity for change through transformative learning by challenging assumptions and actively reconfiguring problem definition and policy action.
On Superstorm Sandy: Wicked Problems, Social-ecological Systems, and the Utility of Systems Thinking by Timon McPhearson
Excerpt on Systems Thinking (click link above for full article):
“Interconnectedness is a fundamental trait of systems and cities as examples cannot then be understood or effectively managed by focusing only on a subset of system components.  All social-ecological systems are marked by interconnectedness.  Importantly, connectivity is within and between the ecological and social components.  Indeed, the hallmark of system thinking is that it focuses on the connections and relationships, more than the components themselves.
Systems thinking is crucial to problem solving including for urban planning and policy, because no problem exists in isolation, all are part of a larger system of interacting networks; social networks, biogeophysical networks, political networks, and economic networks.  Interestingly, it turns out that you can’t understand the behavior of system by studying its parts; you need to study the whole thing.  Which poses perhaps a series of wicked problems for urban planners.”

On Superstorm Sandy: Wicked Problems, Social-ecological Systems, and the Utility of Systems Thinking by Timon McPhearson

Excerpt on Systems Thinking (click link above for full article):

Interconnectedness is a fundamental trait of systems and cities as examples cannot then be understood or effectively managed by focusing only on a subset of system components.  All social-ecological systems are marked by interconnectedness.  Importantly, connectivity is within and between the ecological and social components.  Indeed, the hallmark of system thinking is that it focuses on the connections and relationships, more than the components themselves.

Systems thinking is crucial to problem solving including for urban planning and policy, because no problem exists in isolation, all are part of a larger system of interacting networks; social networks, biogeophysical networks, political networks, and economic networks.  Interestingly, it turns out that you can’t understand the behavior of system by studying its parts; you need to study the whole thing.  Which poses perhaps a series of wicked problems for urban planners.”

Case studies: Royal Institute of British Architects (RIBA) - Building Futures Group with the Institution of Civil Engineers:
Facing up to Rising Sea-Levels: Retreat? Defend? Attack? (2010) 
More information on the ongoing project here.

Case studies: Royal Institute of British Architects (RIBA) - Building Futures Group with the Institution of Civil Engineers:

Facing up to Rising Sea-Levels: Retreat? Defend? Attack? (2010) 

More information on the ongoing project here.

THE SECOND ECONOMY by W. Brian Arthur 
W. Brian Arthur is a visiting researcher with the Intelligent System Lab at the Palo Alto Research Center (PARC) and an external professor at the Santa Fe Institute. He is an economist and technology thinker and a pioneer in the science of complexity. This is an article from McKinsey Quarterly, October 2011. 

"Digitization is creating a second economy that’s vast, automatic, and invisible—thereby bringing the biggest change since the Industrial Revolution." W. Brian Arthur

In 1850, a decade before the Civil War, the United States’ economy was small—it wasn’t much bigger than Italy’s. Forty years later, it was the largest economy in the world. What happened in-between was the railroads. They linked the east of the country to the west, and the interior to both. They gave access to the east’s industrial goods; they made possible economies of scale; they stimulated steel and manufacturing—and the economy was never the same.
Deep changes like this are not unusual. Every so often—every 60 years or so—a body of technology comes along and over several decades, quietly, almost unnoticeably, transforms the economy: it brings new social classes to the fore and creates a different world for business. Can such a transformation—deep and slow and silent—be happening today?
We could look for one in the genetic technologies, or in nanotech, but their time hasn’t fully come. But I want to argue that something deep is going on with information technology, something that goes well beyond the use of computers, social media, and commerce on the Internet. Business processes that once took place among human beings are now being executed electronically. They are taking place in an unseen domain that is strictly digital. On the surface, this shift doesn’t seem particularly consequential—it’s almost something we take for granted. But I believe it is causing a revolution no less important and dramatic than that of the railroads. It is quietly creating a second economy, a digital one.
Let me begin with two examples. Twenty years ago, if you went into an airport you would walk up to a counter and present paper tickets to a human being. That person would register you on a computer, notify the flight you’d arrived, and check your luggage in. All this was done by humans. Today, you walk into an airport and look for a machine. You put in a frequent-flier card or credit card, and it takes just three or four seconds to get back a boarding pass, receipt, and luggage tag. What interests me is what happens in those three or four seconds. The moment the card goes in, you are starting a huge conversation conducted entirely among machines. Once your name is recognized, computers are checking your flight status with the airlines, your past travel history, your name with the TSA (and possibly also with the National Security Agency). They are checking your seat choice, your frequent-flier status, and your access to lounges. This unseen, underground conversation is happening among multiple servers talking to other servers, talking to satellites that are talking to computers (possibly in London, where you’re going), and checking with passport control, with foreign immigration, with ongoing connecting flights. And to make sure the aircraft’s weight distribution is fine, the machines are also starting to adjust the passenger count and seating according to whether the fuselage is loaded more heavily at the front or back.
These large and fairly complicated conversations that you’ve triggered occur entirely among things remotely talking to other things: servers, switches, routers, and other Internet and telecommunications devices, updating and shuttling information back and forth. All of this occurs in the few seconds it takes to get your boarding pass back. And even after that happens, if you could see these conversations as flashing lights, they’d still be flashing all over the country for some time, perhaps talking to the flight controllers—starting to say that the flight’s getting ready for departure and to prepare for that.
Now consider a second example, from supply chain management. Twenty years ago, if you were shipping freight through Rotterdam into the center of Europe, people with clipboards would be registering arrival, checking manifests, filling out paperwork, and telephoning forward destinations to let other people know. Now such shipments go through an RFID (Radio Frequency ID) portal where they are scanned, digitally captured, and automatically dispatched. The RFID portal is in conversation digitally with the originating shipper, other depots, other suppliers, and destinations along the route, all keeping track, keeping control, and reconfiguring routing if necessary to optimize things along the way. What used to be done by humans is now executed as a series of conversations among remotely located servers.
In both these examples, and all across economies in the developed world, processes in the physical economy are being entered into the digital economy, where they are “speaking to” other processes in the digital economy, in a constant conversation among multiple servers and multiple semi-intelligent nodes that are updating things, querying things, checking things off, readjusting things, and eventually connecting back with processes and humans in the physical economy.
So we can say that another economy—a second economy—of all of these digitized business processes conversing, executing, and triggering further actions is silently forming alongside the physical economy.
ASPEN ROOT SYSTEMS
If I were to look for adjectives to describe this second economy, I’d say it is vast, silent, connected, unseen, and autonomous (meaning that human beings may design it but are not directly involved in running it). It is remotely executing and global, always on, and endlessly configurable. It is concurrent—a great computer expression—which means that everything happens in parallel. It is self-configuring, meaning it constantly reconfigures itself on the fly, and increasingly it is also self-organizing, self-architecting, and self-healing.
These last descriptors sound biological—and they are. In fact, I’m beginning to think of this second economy, which is under the surface of the physical economy, as a huge interconnected root system, very much like the root system for aspen trees. For every acre of aspen trees above the ground, there’s about ten miles of roots underneath, all interconnected with one another, “communicating” with each other.

HOW FAST IS THE SECOND ECONOMY GROWING?
The metaphor isn’t perfect: this emerging second-economy root system is more complicated than any aspen system, since it’s also making new connections and new configurations on the fly. But the aspen metaphor is useful for capturing the reality that the observable physical world of aspen trees hides an unseen underground root system just as large or even larger. How large is the unseen second economy? By a rough back-of-the-envelope calculation (see sidebar, “How fast is the second economy growing?”), in about two decades the digital economy will reach the same size as the physical economy. It’s as if there will be another American economy anchored off San Francisco (or, more in keeping with my metaphor, slipped in underneath the original economy) and growing all the while.

Now this second, digital economy isn’t producing anything tangible. It’s not making my bed in a hotel, or bringing me orange juice in the morning. But it is running an awful lot of the economy. It’s helping architects design buildings, it’s tracking sales and inventory, getting goods from here to there, executing trades and banking operations, controlling manufacturing equipment, making design calculations, billing clients, navigating aircraft, helping diagnose patients, and guiding laparoscopic surgeries. Such operations grow slowly and take time to form. In any deep transformation, industries do not so much adopt the new body of technology as encounter it, and as they do so they create new ways to profit from its possibilities.
The deep transformation I am describing is happening not just in the United States but in all advanced economies, especially in Europe and Japan. And its revolutionary scale can only be grasped if we go beyond my aspen metaphor to another analogy.
A NEURAL SYSTEM FOR THE ECONOMY
Recall that in the digital conversations I was describing, something that occurs in the physical economy is sensed by the second economy—which then gives back an appropriate response. A truck passes its load through an RFID sensor or you check in at the airport, a lot of recomputation takes place, and appropriate physical actions are triggered.
There’s a parallel in this with how biologists think of intelligence. I’m not talking about human intelligence or anything that would qualify as conscious intelligence. Biologists tell us that an organism is intelligent if it senses something, changes its internal state, and reacts appropriately. If you put an E. coli bacterium into an uneven concentration of glucose, it does the appropriate thing by swimming toward where the glucose is more concentrated. Biologists would call this intelligent behavior. The bacterium senses something, “computes” something (although we may not know exactly how), and returns an appropriate response.
No brain need be involved. A primitive jellyfish doesn’t have a central nervous system or brain. What it has is a kind of neural layer or nerve net that lets it sense and react appropriately. I’m arguing that all these aspen roots—this vast global digital network that is sensing, “computing,” and reacting appropriately—is starting to constitute a neural layer for the economy. The second economy constitutes a neural layer for the physical economy. Just what sort of change is this qualitatively?
Think of it this way. With the coming of the Industrial Revolution—roughly from the 1760s, when Watt’s steam engine appeared, through around 1850 and beyond—the economy developed a muscular system in the form of machine power. Now it is developing a neural system. This may sound grandiose, but actually I think the metaphor is valid. Around 1990, computers started seriously to talk to each other, and all these connections started to happen. The individual machines—servers—are like neurons, and the axons and synapses are the communication pathways and linkages that enable them to be in conversation with each other and to take appropriate action.
Is this the biggest change since the Industrial Revolution? Well, without sticking my neck out too much, I believe so. In fact, I think it may well be the biggest change ever in the economy. It is a deep qualitative change that is bringing intelligent, automatic response to the economy. There’s no upper limit to this, no place where it has to end. Now, I’m not interested in science fiction, or predicting the singularity, or talking about cyborgs. None of that interests me. What I am saying is that it would be easy to underestimate the degree to which this is going to make a difference.
I think that for the rest of this century, barring wars and pestilence, a lot of the story will be the building out of this second economy, an unseen underground economy that basically is giving us intelligent reactions to what we do above the ground. For example, if I’m driving in Los Angeles in 15 years’ time, likely it’ll be a driverless car in a flow of traffic where my car’s in a conversation with the cars around it that are in conversation with general traffic and with my car. The second economy is creating for us—slowly, quietly, and steadily—a different world.
A DOWNSIDE
Of course, as with most changes, there is a downside. I am concerned that there is an adverse impact on jobs. Productivity increasing, say, at 2.4 percent in a given year means either that the same number of people can produce 2.4 percent more output or that we can get the same output with 2.4 percent fewer people. Both of these are happening. We are getting more output for each person in the economy, but overall output, nationally, requires fewer people to produce it. Nowadays, fewer people are required behind the desk of an airline. Much of the work is still physical—someone still has to take your luggage and put it on the belt—but much has vanished into the digital world of sensing, digital communication, and intelligent response.
Physical jobs are disappearing into the second economy, and I believe this effect is dwarfing the much more publicized effect of jobs disappearing to places like India and China.
There are parallels with what has happened before. In the early 20th century, farm jobs became mechanized and there was less need for farm labor, and some decades later manufacturing jobs became mechanized and there was less need for factory labor. Now business processes—many in the service sector—are becoming “mechanized” and fewer people are needed, and this is exerting systematic downward pressure on jobs. We don’t have paralegals in the numbers we used to. Or draftsmen, telephone operators, typists, or bookkeeping people. A lot of that work is now done digitally. We do have police and teachers and doctors; where there’s a need for human judgment and human interaction, we still have that. But the primary cause of all of the downsizing we’ve had since the mid-1990s is that a lot of human jobs are disappearing into the second economy. Not to reappear.
Seeing things this way, it’s not surprising we are still working our way out of the bad 2008–09 recession with a great deal of joblessness.
There’s a larger lesson to be drawn from this. The second economy will certainly be the engine of growth and the provider of prosperity for the rest of this century and beyond, but it may not provide jobs, so there may be prosperity without full access for many. This suggests to me that the main challenge of the economy is shifting from producing prosperity to distributingprosperity. The second economy will produce wealth no matter what we do; distributing that wealth has become the main problem. For centuries, wealth has traditionally been apportioned in the West through jobs, and jobs have always been forthcoming. When farm jobs disappeared, we still had manufacturing jobs, and when these disappeared we migrated to service jobs. With this digital transformation, this last repository of jobs is shrinking—fewer of us in the future may have white-collar business process jobs—and we face a problem.
The system will adjust of course, though I can’t yet say exactly how. Perhaps some new part of the economy will come forward and generate a whole new set of jobs. Perhaps we will have short workweeks and long vacations so there will be more jobs to go around. Perhaps we will have to subsidize job creation. Perhaps the very idea of a job and of being productive will change over the next two or three decades. The problem is by no means insoluble. The good news is that if we do solve it we may at last have the freedom to invest our energies in creative acts.
ECONOMIC POSSIBILITIES FOR OUR GRANDCHILDREN
In 1930, Keynes wrote a famous essay, “Economic possibilities for our grandchildren.” Reading it now, in the era of those grandchildren, I am surprised just how accurate it is. Keynes predicts that “the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day.” He rightly warns of “technological unemployment,” but dares to surmise that “the economic problem [of producing enough goods] may be solved.” If we had asked him and his contemporaries how all this might come about, they might have imagined lots of factories with lots of machines, possibly even with robots, with the workers in these factories gradually being replaced by machines and by individual robots.
That is not quite how things have developed. We do have sophisticated machines, but in the place of personal automation (robots) we have a collective automation. Underneath the physical economy, with its physical people and physical tasks, lies a second economy that is automatic and neurally intelligent, with no upper limit to its buildout. The prosperity we enjoy and the difficulties with jobs would not have surprised Keynes, but the means of achieving that prosperity would have.
This second economy that is silently forming—vast, interconnected, and extraordinarily productive—is creating for us a new economic world. How we will fare in this world, how we will adapt to it, how we will profit from it and share its benefits, is very much up to us.

THE SECOND ECONOMY by W. Brian Arthur 

W. Brian Arthur is a visiting researcher with the Intelligent System Lab at the Palo Alto Research Center (PARC) and an external professor at the Santa Fe Institute. He is an economist and technology thinker and a pioneer in the science of complexity. This is an article from McKinsey Quarterly, October 2011. 

"Digitization is creating a second economy that’s vast, automatic, and invisible—thereby bringing the biggest change since the Industrial Revolution." W. Brian Arthur

In 1850, a decade before the Civil War, the United States’ economy was small—it wasn’t much bigger than Italy’s. Forty years later, it was the largest economy in the world. What happened in-between was the railroads. They linked the east of the country to the west, and the interior to both. They gave access to the east’s industrial goods; they made possible economies of scale; they stimulated steel and manufacturing—and the economy was never the same.

Deep changes like this are not unusual. Every so often—every 60 years or so—a body of technology comes along and over several decades, quietly, almost unnoticeably, transforms the economy: it brings new social classes to the fore and creates a different world for business. Can such a transformation—deep and slow and silent—be happening today?

We could look for one in the genetic technologies, or in nanotech, but their time hasn’t fully come. But I want to argue that something deep is going on with information technology, something that goes well beyond the use of computers, social media, and commerce on the Internet. Business processes that once took place among human beings are now being executed electronically. They are taking place in an unseen domain that is strictly digital. On the surface, this shift doesn’t seem particularly consequential—it’s almost something we take for granted. But I believe it is causing a revolution no less important and dramatic than that of the railroads. It is quietly creating a second economy, a digital one.

Let me begin with two examples. Twenty years ago, if you went into an airport you would walk up to a counter and present paper tickets to a human being. That person would register you on a computer, notify the flight you’d arrived, and check your luggage in. All this was done by humans. Today, you walk into an airport and look for a machine. You put in a frequent-flier card or credit card, and it takes just three or four seconds to get back a boarding pass, receipt, and luggage tag. What interests me is what happens in those three or four seconds. The moment the card goes in, you are starting a huge conversation conducted entirely among machines. Once your name is recognized, computers are checking your flight status with the airlines, your past travel history, your name with the TSA (and possibly also with the National Security Agency). They are checking your seat choice, your frequent-flier status, and your access to lounges. This unseen, underground conversation is happening among multiple servers talking to other servers, talking to satellites that are talking to computers (possibly in London, where you’re going), and checking with passport control, with foreign immigration, with ongoing connecting flights. And to make sure the aircraft’s weight distribution is fine, the machines are also starting to adjust the passenger count and seating according to whether the fuselage is loaded more heavily at the front or back.

These large and fairly complicated conversations that you’ve triggered occur entirely among things remotely talking to other things: servers, switches, routers, and other Internet and telecommunications devices, updating and shuttling information back and forth. All of this occurs in the few seconds it takes to get your boarding pass back. And even after that happens, if you could see these conversations as flashing lights, they’d still be flashing all over the country for some time, perhaps talking to the flight controllers—starting to say that the flight’s getting ready for departure and to prepare for that.

Now consider a second example, from supply chain management. Twenty years ago, if you were shipping freight through Rotterdam into the center of Europe, people with clipboards would be registering arrival, checking manifests, filling out paperwork, and telephoning forward destinations to let other people know. Now such shipments go through an RFID (Radio Frequency ID) portal where they are scanned, digitally captured, and automatically dispatched. The RFID portal is in conversation digitally with the originating shipper, other depots, other suppliers, and destinations along the route, all keeping track, keeping control, and reconfiguring routing if necessary to optimize things along the way. What used to be done by humans is now executed as a series of conversations among remotely located servers.

In both these examples, and all across economies in the developed world, processes in the physical economy are being entered into the digital economy, where they are “speaking to” other processes in the digital economy, in a constant conversation among multiple servers and multiple semi-intelligent nodes that are updating things, querying things, checking things off, readjusting things, and eventually connecting back with processes and humans in the physical economy.

So we can say that another economy—a second economy—of all of these digitized business processes conversing, executing, and triggering further actions is silently forming alongside the physical economy.

ASPEN ROOT SYSTEMS

If I were to look for adjectives to describe this second economy, I’d say it is vast, silent, connected, unseen, and autonomous (meaning that human beings may design it but are not directly involved in running it). It is remotely executing and global, always on, and endlessly configurable. It is concurrent—a great computer expression—which means that everything happens in parallel. It is self-configuring, meaning it constantly reconfigures itself on the fly, and increasingly it is also self-organizing, self-architecting, and self-healing.

These last descriptors sound biological—and they are. In fact, I’m beginning to think of this second economy, which is under the surface of the physical economy, as a huge interconnected root system, very much like the root system for aspen trees. For every acre of aspen trees above the ground, there’s about ten miles of roots underneath, all interconnected with one another, “communicating” with each other.

HOW FAST IS THE SECOND ECONOMY GROWING?

The metaphor isn’t perfect: this emerging second-economy root system is more complicated than any aspen system, since it’s also making new connections and new configurations on the fly. But the aspen metaphor is useful for capturing the reality that the observable physical world of aspen trees hides an unseen underground root system just as large or even larger. How large is the unseen second economy? By a rough back-of-the-envelope calculation (see sidebar, “How fast is the second economy growing?”), in about two decades the digital economy will reach the same size as the physical economy. It’s as if there will be another American economy anchored off San Francisco (or, more in keeping with my metaphor, slipped in underneath the original economy) and growing all the while.

Now this second, digital economy isn’t producing anything tangible. It’s not making my bed in a hotel, or bringing me orange juice in the morning. But it is running an awful lot of the economy. It’s helping architects design buildings, it’s tracking sales and inventory, getting goods from here to there, executing trades and banking operations, controlling manufacturing equipment, making design calculations, billing clients, navigating aircraft, helping diagnose patients, and guiding laparoscopic surgeries. Such operations grow slowly and take time to form. In any deep transformation, industries do not so much adopt the new body of technology as encounter it, and as they do so they create new ways to profit from its possibilities.

The deep transformation I am describing is happening not just in the United States but in all advanced economies, especially in Europe and Japan. And its revolutionary scale can only be grasped if we go beyond my aspen metaphor to another analogy.

A NEURAL SYSTEM FOR THE ECONOMY

Recall that in the digital conversations I was describing, something that occurs in the physical economy is sensed by the second economy—which then gives back an appropriate response. A truck passes its load through an RFID sensor or you check in at the airport, a lot of recomputation takes place, and appropriate physical actions are triggered.

There’s a parallel in this with how biologists think of intelligence. I’m not talking about human intelligence or anything that would qualify as conscious intelligence. Biologists tell us that an organism is intelligent if it senses something, changes its internal state, and reacts appropriately. If you put an E. coli bacterium into an uneven concentration of glucose, it does the appropriate thing by swimming toward where the glucose is more concentrated. Biologists would call this intelligent behavior. The bacterium senses something, “computes” something (although we may not know exactly how), and returns an appropriate response.

No brain need be involved. A primitive jellyfish doesn’t have a central nervous system or brain. What it has is a kind of neural layer or nerve net that lets it sense and react appropriately. I’m arguing that all these aspen roots—this vast global digital network that is sensing, “computing,” and reacting appropriately—is starting to constitute a neural layer for the economy. The second economy constitutes a neural layer for the physical economy. Just what sort of change is this qualitatively?

Think of it this way. With the coming of the Industrial Revolution—roughly from the 1760s, when Watt’s steam engine appeared, through around 1850 and beyond—the economy developed a muscular system in the form of machine power. Now it is developing a neural system. This may sound grandiose, but actually I think the metaphor is valid. Around 1990, computers started seriously to talk to each other, and all these connections started to happen. The individual machines—servers—are like neurons, and the axons and synapses are the communication pathways and linkages that enable them to be in conversation with each other and to take appropriate action.

Is this the biggest change since the Industrial Revolution? Well, without sticking my neck out too much, I believe so. In fact, I think it may well be the biggest change ever in the economy. It is a deep qualitative change that is bringing intelligent, automatic response to the economy. There’s no upper limit to this, no place where it has to end. Now, I’m not interested in science fiction, or predicting the singularity, or talking about cyborgs. None of that interests me. What I am saying is that it would be easy to underestimate the degree to which this is going to make a difference.

I think that for the rest of this century, barring wars and pestilence, a lot of the story will be the building out of this second economy, an unseen underground economy that basically is giving us intelligent reactions to what we do above the ground. For example, if I’m driving in Los Angeles in 15 years’ time, likely it’ll be a driverless car in a flow of traffic where my car’s in a conversation with the cars around it that are in conversation with general traffic and with my car. The second economy is creating for us—slowly, quietly, and steadily—a different world.

A DOWNSIDE

Of course, as with most changes, there is a downside. I am concerned that there is an adverse impact on jobs. Productivity increasing, say, at 2.4 percent in a given year means either that the same number of people can produce 2.4 percent more output or that we can get the same output with 2.4 percent fewer people. Both of these are happening. We are getting more output for each person in the economy, but overall output, nationally, requires fewer people to produce it. Nowadays, fewer people are required behind the desk of an airline. Much of the work is still physical—someone still has to take your luggage and put it on the belt—but much has vanished into the digital world of sensing, digital communication, and intelligent response.

Physical jobs are disappearing into the second economy, and I believe this effect is dwarfing the much more publicized effect of jobs disappearing to places like India and China.

There are parallels with what has happened before. In the early 20th century, farm jobs became mechanized and there was less need for farm labor, and some decades later manufacturing jobs became mechanized and there was less need for factory labor. Now business processes—many in the service sector—are becoming “mechanized” and fewer people are needed, and this is exerting systematic downward pressure on jobs. We don’t have paralegals in the numbers we used to. Or draftsmen, telephone operators, typists, or bookkeeping people. A lot of that work is now done digitally. We do have police and teachers and doctors; where there’s a need for human judgment and human interaction, we still have that. But the primary cause of all of the downsizing we’ve had since the mid-1990s is that a lot of human jobs are disappearing into the second economy. Not to reappear.

Seeing things this way, it’s not surprising we are still working our way out of the bad 2008–09 recession with a great deal of joblessness.

There’s a larger lesson to be drawn from this. The second economy will certainly be the engine of growth and the provider of prosperity for the rest of this century and beyond, but it may not provide jobs, so there may be prosperity without full access for many. This suggests to me that the main challenge of the economy is shifting from producing prosperity to distributingprosperity. The second economy will produce wealth no matter what we do; distributing that wealth has become the main problem. For centuries, wealth has traditionally been apportioned in the West through jobs, and jobs have always been forthcoming. When farm jobs disappeared, we still had manufacturing jobs, and when these disappeared we migrated to service jobs. With this digital transformation, this last repository of jobs is shrinking—fewer of us in the future may have white-collar business process jobs—and we face a problem.

The system will adjust of course, though I can’t yet say exactly how. Perhaps some new part of the economy will come forward and generate a whole new set of jobs. Perhaps we will have short workweeks and long vacations so there will be more jobs to go around. Perhaps we will have to subsidize job creation. Perhaps the very idea of a job and of being productive will change over the next two or three decades. The problem is by no means insoluble. The good news is that if we do solve it we may at last have the freedom to invest our energies in creative acts.

ECONOMIC POSSIBILITIES FOR OUR GRANDCHILDREN

In 1930, Keynes wrote a famous essay, “Economic possibilities for our grandchildren.” Reading it now, in the era of those grandchildren, I am surprised just how accurate it is. Keynes predicts that “the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day.” He rightly warns of “technological unemployment,” but dares to surmise that “the economic problem [of producing enough goods] may be solved.” If we had asked him and his contemporaries how all this might come about, they might have imagined lots of factories with lots of machines, possibly even with robots, with the workers in these factories gradually being replaced by machines and by individual robots.

That is not quite how things have developed. We do have sophisticated machines, but in the place of personal automation (robots) we have a collective automation. Underneath the physical economy, with its physical people and physical tasks, lies a second economy that is automatic and neurally intelligent, with no upper limit to its buildout. The prosperity we enjoy and the difficulties with jobs would not have surprised Keynes, but the means of achieving that prosperity would have.

This second economy that is silently forming—vast, interconnected, and extraordinarily productive—is creating for us a new economic world. How we will fare in this world, how we will adapt to it, how we will profit from it and share its benefits, is very much up to us.

"The Modules" is a five-story building with 72 student apartments serving Temple University in Philadelphia. Designed by Interface Studio Architects, the 70,000 SF building received the Architectural Excellence Award in Innovation from AIA Pennsylvania in 2011. The building also received a “LEED for Homes” certification. Click the photo for more information.
Built of 80 prefabricated boxes, the project is an example of off-site wood construction typically used for single-family houses being realized on a much larger scale.  It includes a green roof to meet Philadelphia’s stringent storm water requirements.
Viktoria Diskina, the project architect of the Modules, recently spoke to my graduate architecture class at Pratt - and explained that modular construction requires a great deal of design coordination. While the overall architecture, engineering and construction process was 10 months long - the prefabricated boxes were built within one month at a factory - including cabinetry, interior finishes and paint. The exterior skin was installed on site.
Templetown Realty acted as both developer and general contractor for the project. The total cost of the modular building came in at $119 per square foot.

"The Modules" is a five-story building with 72 student apartments serving Temple University in PhiladelphiaDesigned by Interface Studio Architects, the 70,000 SF building received the Architectural Excellence Award in Innovation from AIA Pennsylvania in 2011. The building also received a “LEED for Homes” certification. Click the photo for more information.

Built of 80 prefabricated boxes, the project is an example of off-site wood construction typically used for single-family houses being realized on a much larger scale.  It includes a green roof to meet Philadelphia’s stringent storm water requirements.

Viktoria Diskina, the project architect of the Modules, recently spoke to my graduate architecture class at Pratt - and explained that modular construction requires a great deal of design coordination. While the overall architecture, engineering and construction process was 10 months long - the prefabricated boxes were built within one month at a factory - including cabinetry, interior finishes and paint. The exterior skin was installed on site.

Templetown Realty acted as both developer and general contractor for the project. The total cost of the modular building came in at $119 per square foot.


La Marqueta Mile is an innovative economic development and public space revitalization project that is currently underway in East Harlem, New York City. The project site is located under a railroad viaduct in the middle of Park Avenue, between East 111th Street and the Harlem River. This mile-long space bisects a neighborhood where income, health and educational attainment are among the lowest in New York City; a situation that has been exacerbated by the current global economic crisis.
Click link or photo for description of project - a book chapter for “Feminist Practices: Interdisciplinary Approaches to Women in Architecture” 
Credits: Meta Brunzema Architect P.C.

La Marqueta Mile is an innovative economic development and public space revitalization project that is currently underway in East Harlem, New York City. The project site is located under a railroad viaduct in the middle of Park Avenue, between East 111th Street and the Harlem River. This mile-long space bisects a neighborhood where income, health and educational attainment are among the lowest in New York City; a situation that has been exacerbated by the current global economic crisis.

Click link or photo for description of project - a book chapter for “Feminist Practices: Interdisciplinary Approaches to Women in Architecture” 

Credits: Meta Brunzema Architect P.C.

Resilience in Humans and Ecosystems
 
Brian Walker, leading Australian ecologist explains resilience, self organization and feedback in this 7 minute long video. (Also see previous blog-post)
 
….” the way you maintain resilience of a system is to allow it to probe its boundaries”
 
….”the only way to keep a forest resilient to fire is to burn it”
 
For an in-depth lecture by Brian Walker entitled “Learning how to change in order not to change: Lessons from ecology for an uncertain world" click this link.
Nine Values for Resilience by Walker & Salt 2006
Brian Walker and David Salt’s book “Resilience Thinking” ends with a handy check list of 9 things a resilient world would value: 
1. Diversity: A resilient world would promote and sustain diversity in all forms (biological, landscape, social and economic)
2. Ecological Variability: A resilient world would embrace and work with ecological variability (rather than attempting to control & reduce it)
3. Modularity: A resilient world would consist of modular components
4. Acknowledging Slow Variables: A resilient world would have a policy focus on ‘slow’, controlling variable associated with thresholds
5. Tight Feedbacks: A resilient world would possess tight feedbacks (but not too tight)
6. Social Capital: A resilient world would promote trust, well-developed social networks, and leadership (adaptability)
7. Innovation: A resilient world would place an emphasis on learning, experimentation, locally developed rules and embracing change.
8. Overlap in Governance: A resilient world would have institutions that have ‘redundancy’ in their governance structures and a mix of common and private property with overlapping access rights
9. Ecosystem Services: A resilient world would include all the unpriced ecosystem services in developing proposals and assessments.
Another scientist, Simon Levin, has come up with his own list: “Eight Commandments of Environmental Management”. 

Nine Values for Resilience by Walker & Salt 2006

Brian Walker and David Salt’s book “Resilience Thinking” ends with a handy check list of 9 things a resilient world would value: 

1. Diversity: A resilient world would promote and sustain diversity in all forms (biological, landscape, social and economic)

2. Ecological Variability: A resilient world would embrace and work with ecological variability (rather than attempting to control & reduce it)

3. Modularity: A resilient world would consist of modular components

4. Acknowledging Slow Variables: A resilient world would have a policy focus on ‘slow’, controlling variable associated with thresholds

5. Tight Feedbacks: A resilient world would possess tight feedbacks (but not too tight)

6. Social Capital: A resilient world would promote trust, well-developed social networks, and leadership (adaptability)

7. Innovation: A resilient world would place an emphasis on learning, experimentation, locally developed rules and embracing change.

8. Overlap in Governance: A resilient world would have institutions that have ‘redundancy’ in their governance structures and a mix of common and private property with overlapping access rights

9. Ecosystem Services: A resilient world would include all the unpriced ecosystem services in developing proposals and assessments.

Another scientist, Simon Levin, has come up with his own list: “Eight Commandments of Environmental Management”. 

Case Study: Rotterdam 2042 - Connected Port City, a Transition Project by Doepels Strijkers Architects and the Dutch Research Institute for Transitions (DRIFT) developed for the City of Rotterdam. It is an example of purposely futuristic scenario planning - with a special focus on advancing a circular energy and material economy. Click link above for details.
Excerpts from a paper “Transition Scenarios in Transition Management” by S. Sondeijker, J. Geurts, J. Rotmans and A. Tukker:
"The intended benefit of scenarios is that they stretch as well as focus people’s thinking. The presumption is that scenarios on the one hand reduce overconfidence (Lichtenstein et al., 1982) by making available to the mind futures not yet considered (Koriat et al., 1980) as well as challenge those presumed likely (Mason and Mitroff, 1981)….These two characteristics of scenarios – stretching and focusing – are more or less contradictory. Therefore, scenarios need to strike a balance between on the one hand representing a window of opportunities and on the other hand functional clarity and simplicity (Berkhout et al., 2002).”
"The transition scenarios need to have a utopian character because when striving for a societal transition, we inherently strive for a structural change in a systems’ structure, its processes and its culture. Therefore, when transition scenarios would result in optimization strategies we would have failed in realizing this structural change that we believe is necessary for reaching future sustainability. This implies that the future images in transition scenarios need to be derogative from our prevailing perception of reality, impossible to reach by sufficing with optimization strategies. However, in order to bring about long-term commitment, the current perceived reality of actors needs to be captured. Therefore, the transition trajectories which lead to the images need to be based on informed imagination.”
 

Case Study: Rotterdam 2042 - Connected Port City, a Transition Project by Doepels Strijkers Architects and the Dutch Research Institute for Transitions (DRIFT) developed for the City of Rotterdam. It is an example of purposely futuristic scenario planning - with a special focus on advancing a circular energy and material economy. Click link above for details.

Excerpts from a paper “Transition Scenarios in Transition Management” by S. Sondeijker, J. Geurts, J. Rotmans and A. Tukker:

"The intended benefit of scenarios is that they stretch as well as focus people’s thinking. The presumption is that scenarios on the one hand reduce overconfidence (Lichtenstein et al., 1982) by making available to the mind futures not yet considered (Koriat et al., 1980) as well as challenge those presumed likely (Mason and Mitroff, 1981)….These two characteristics of scenarios – stretching and focusing – are more or less contradictory. Therefore, scenarios need to strike a balance between on the one hand representing a window of opportunities and on the other hand functional clarity and simplicity (Berkhout et al., 2002).”

"The transition scenarios need to have a utopian character because when striving for a societal transition, we inherently strive for a structural change in a systems’ structure, its processes and its culture. Therefore, when transition scenarios would result in optimization strategies we would have failed in realizing this structural change that we believe is necessary for reaching future sustainability. This implies that the future images in transition scenarios need to be derogative from our prevailing perception of reality, impossible to reach by sufficing with optimization strategies. However, in order to bring about long-term commitment, the current perceived reality of actors needs to be captured. Therefore, the transition trajectories which lead to the images need to be based on informed imagination.”

 

How to achieve innovation in Sustainability Transitions?
What is protective space? Reconsidering niches in transitions to sustainability - a paper by Adrian Smith and Rob Raven

How to achieve innovation in Sustainability Transitions?

What is protective space? Reconsidering niches in transitions to sustainability - a paper by Adrian Smith and Rob Raven

A few resources on Scenario Planning - a way to deal with uncertainty and risk:

“There is an urgency of finding ways to discuss urban futures and their social consequences beyond the classic “vision-approach” traditionally deployed by architects and planners since the 15th century. A systematic approach seems necessary. One possible method towards this end is forecasting scenarios for the future. This systematic method employs two fundamental and independent variables in order to find parallel, plausible future scenarios which in turn can be further developed. By use of storytelling methods and visualization, means of comparing and discussing these futures can lead to a more strategic and productive dialogue.” (kkh.se)
Presentation by Marina Alberti: Scenario Casting As a Tool for Dealing with Uncertainty
Steve Carpenter on Scenarios & Resilience 
Pros & Cons of Scenario Planning for Climate Adaptation (VCCCAR)

A few resources on Scenario Planning - a way to deal with uncertainty and risk:

There is an urgency of finding ways to discuss urban futures and their social consequences beyond the classic “vision-approach” traditionally deployed by architects and planners since the 15th century. A systematic approach seems necessary. One possible method towards this end is forecasting scenarios for the future. This systematic method employs two fundamental and independent variables in order to find parallel, plausible future scenarios which in turn can be further developed. By use of storytelling methods and visualization, means of comparing and discussing these futures can lead to a more strategic and productive dialogue.” (kkh.se)

Presentation by Marina Alberti: Scenario Casting As a Tool for Dealing with Uncertainty

Steve Carpenter on Scenarios & Resilience 

Pros & Cons of Scenario Planning for Climate Adaptation (VCCCAR)

On Superstorm Sandy & Planning:
Marina Alberti - ”Planning Under Uncertainty: Regime Shifts, Resilience, and Innovation in Urban Ecosystems" (2013)
Excerpt (see link above for full paper):
The future of Planning
Strategic decisions about urban infrastructure and growth management are based on our assessment of the past and our expectations for the future.  How we think about the future has significant implications for the choices we make and the decision-making process we apply.  Traditional approaches to planning and management typically rely on predictions of probable futures extrapolated from past trends.
However, long-term trends are increasingly unpredictable given the complexity and uncertainty of coupled human-natural systems.  Predictive models that are designed to provide accurate assessments of future conditions can only account for some of the interactions between highly uncertain drivers of change and the surprising, but plausible, futures over the long term.  Important progress has been made in complex modeling, and improved simulation and computer power have allowed us to process quite astonishing amounts of data; still, our models are constrained by our limited knowledge, unverified assumptions, and short-sighted mindsets.
I suggest five principles for planning under uncertainty towards enabling resilience and innovation in urban ecosystems:

1. Create and maintain diverse development patterns that support diverse human and ecosystem functions.


2. Focus on maintaining self-organization and increasing adaptation capacity instead of aiming to control change and to reduce uncertainty.


3. Expand the consideration of uncertainty and surprise by designing strategies that will be robust under the most divergent but plausible futures.


4. Create options for learning through experiments, and opportunities to adapt thorough flexible policies and strategies that mimic the diversity of environmental and human communities.


5. Expand the capacity for change through transformative learning by challenging assumptions and actively reconfiguring problem definition and policy action.

On Superstorm Sandy & Planning:

Marina Alberti - ”Planning Under Uncertainty: Regime Shifts, Resilience, and Innovation in Urban Ecosystems" (2013)

Excerpt (see link above for full paper):

The future of Planning

Strategic decisions about urban infrastructure and growth management are based on our assessment of the past and our expectations for the future.  How we think about the future has significant implications for the choices we make and the decision-making process we apply.  Traditional approaches to planning and management typically rely on predictions of probable futures extrapolated from past trends.

However, long-term trends are increasingly unpredictable given the complexity and uncertainty of coupled human-natural systems.  Predictive models that are designed to provide accurate assessments of future conditions can only account for some of the interactions between highly uncertain drivers of change and the surprising, but plausible, futures over the long term.  Important progress has been made in complex modeling, and improved simulation and computer power have allowed us to process quite astonishing amounts of data; still, our models are constrained by our limited knowledge, unverified assumptions, and short-sighted mindsets.

I suggest five principles for planning under uncertainty towards enabling resilience and innovation in urban ecosystems:

1. Create and maintain diverse development patterns that support diverse human and ecosystem functions.
2. Focus on maintaining self-organization and increasing adaptation capacity instead of aiming to control change and to reduce uncertainty.
3. Expand the consideration of uncertainty and surprise by designing strategies that will be robust under the most divergent but plausible futures.
4. Create options for learning through experiments, and opportunities to adapt thorough flexible policies and strategies that mimic the diversity of environmental and human communities.
5. Expand the capacity for change through transformative learning by challenging assumptions and actively reconfiguring problem definition and policy action.
On Superstorm Sandy: Wicked Problems, Social-ecological Systems, and the Utility of Systems Thinking by Timon McPhearson
Excerpt on Systems Thinking (click link above for full article):
“Interconnectedness is a fundamental trait of systems and cities as examples cannot then be understood or effectively managed by focusing only on a subset of system components.  All social-ecological systems are marked by interconnectedness.  Importantly, connectivity is within and between the ecological and social components.  Indeed, the hallmark of system thinking is that it focuses on the connections and relationships, more than the components themselves.
Systems thinking is crucial to problem solving including for urban planning and policy, because no problem exists in isolation, all are part of a larger system of interacting networks; social networks, biogeophysical networks, political networks, and economic networks.  Interestingly, it turns out that you can’t understand the behavior of system by studying its parts; you need to study the whole thing.  Which poses perhaps a series of wicked problems for urban planners.”

On Superstorm Sandy: Wicked Problems, Social-ecological Systems, and the Utility of Systems Thinking by Timon McPhearson

Excerpt on Systems Thinking (click link above for full article):

Interconnectedness is a fundamental trait of systems and cities as examples cannot then be understood or effectively managed by focusing only on a subset of system components.  All social-ecological systems are marked by interconnectedness.  Importantly, connectivity is within and between the ecological and social components.  Indeed, the hallmark of system thinking is that it focuses on the connections and relationships, more than the components themselves.

Systems thinking is crucial to problem solving including for urban planning and policy, because no problem exists in isolation, all are part of a larger system of interacting networks; social networks, biogeophysical networks, political networks, and economic networks.  Interestingly, it turns out that you can’t understand the behavior of system by studying its parts; you need to study the whole thing.  Which poses perhaps a series of wicked problems for urban planners.”

Case studies: Royal Institute of British Architects (RIBA) - Building Futures Group with the Institution of Civil Engineers:
Facing up to Rising Sea-Levels: Retreat? Defend? Attack? (2010) 
More information on the ongoing project here.

Case studies: Royal Institute of British Architects (RIBA) - Building Futures Group with the Institution of Civil Engineers:

Facing up to Rising Sea-Levels: Retreat? Defend? Attack? (2010) 

More information on the ongoing project here.

THE SECOND ECONOMY by W. Brian Arthur 
W. Brian Arthur is a visiting researcher with the Intelligent System Lab at the Palo Alto Research Center (PARC) and an external professor at the Santa Fe Institute. He is an economist and technology thinker and a pioneer in the science of complexity. This is an article from McKinsey Quarterly, October 2011. 

"Digitization is creating a second economy that’s vast, automatic, and invisible—thereby bringing the biggest change since the Industrial Revolution." W. Brian Arthur

In 1850, a decade before the Civil War, the United States’ economy was small—it wasn’t much bigger than Italy’s. Forty years later, it was the largest economy in the world. What happened in-between was the railroads. They linked the east of the country to the west, and the interior to both. They gave access to the east’s industrial goods; they made possible economies of scale; they stimulated steel and manufacturing—and the economy was never the same.
Deep changes like this are not unusual. Every so often—every 60 years or so—a body of technology comes along and over several decades, quietly, almost unnoticeably, transforms the economy: it brings new social classes to the fore and creates a different world for business. Can such a transformation—deep and slow and silent—be happening today?
We could look for one in the genetic technologies, or in nanotech, but their time hasn’t fully come. But I want to argue that something deep is going on with information technology, something that goes well beyond the use of computers, social media, and commerce on the Internet. Business processes that once took place among human beings are now being executed electronically. They are taking place in an unseen domain that is strictly digital. On the surface, this shift doesn’t seem particularly consequential—it’s almost something we take for granted. But I believe it is causing a revolution no less important and dramatic than that of the railroads. It is quietly creating a second economy, a digital one.
Let me begin with two examples. Twenty years ago, if you went into an airport you would walk up to a counter and present paper tickets to a human being. That person would register you on a computer, notify the flight you’d arrived, and check your luggage in. All this was done by humans. Today, you walk into an airport and look for a machine. You put in a frequent-flier card or credit card, and it takes just three or four seconds to get back a boarding pass, receipt, and luggage tag. What interests me is what happens in those three or four seconds. The moment the card goes in, you are starting a huge conversation conducted entirely among machines. Once your name is recognized, computers are checking your flight status with the airlines, your past travel history, your name with the TSA (and possibly also with the National Security Agency). They are checking your seat choice, your frequent-flier status, and your access to lounges. This unseen, underground conversation is happening among multiple servers talking to other servers, talking to satellites that are talking to computers (possibly in London, where you’re going), and checking with passport control, with foreign immigration, with ongoing connecting flights. And to make sure the aircraft’s weight distribution is fine, the machines are also starting to adjust the passenger count and seating according to whether the fuselage is loaded more heavily at the front or back.
These large and fairly complicated conversations that you’ve triggered occur entirely among things remotely talking to other things: servers, switches, routers, and other Internet and telecommunications devices, updating and shuttling information back and forth. All of this occurs in the few seconds it takes to get your boarding pass back. And even after that happens, if you could see these conversations as flashing lights, they’d still be flashing all over the country for some time, perhaps talking to the flight controllers—starting to say that the flight’s getting ready for departure and to prepare for that.
Now consider a second example, from supply chain management. Twenty years ago, if you were shipping freight through Rotterdam into the center of Europe, people with clipboards would be registering arrival, checking manifests, filling out paperwork, and telephoning forward destinations to let other people know. Now such shipments go through an RFID (Radio Frequency ID) portal where they are scanned, digitally captured, and automatically dispatched. The RFID portal is in conversation digitally with the originating shipper, other depots, other suppliers, and destinations along the route, all keeping track, keeping control, and reconfiguring routing if necessary to optimize things along the way. What used to be done by humans is now executed as a series of conversations among remotely located servers.
In both these examples, and all across economies in the developed world, processes in the physical economy are being entered into the digital economy, where they are “speaking to” other processes in the digital economy, in a constant conversation among multiple servers and multiple semi-intelligent nodes that are updating things, querying things, checking things off, readjusting things, and eventually connecting back with processes and humans in the physical economy.
So we can say that another economy—a second economy—of all of these digitized business processes conversing, executing, and triggering further actions is silently forming alongside the physical economy.
ASPEN ROOT SYSTEMS
If I were to look for adjectives to describe this second economy, I’d say it is vast, silent, connected, unseen, and autonomous (meaning that human beings may design it but are not directly involved in running it). It is remotely executing and global, always on, and endlessly configurable. It is concurrent—a great computer expression—which means that everything happens in parallel. It is self-configuring, meaning it constantly reconfigures itself on the fly, and increasingly it is also self-organizing, self-architecting, and self-healing.
These last descriptors sound biological—and they are. In fact, I’m beginning to think of this second economy, which is under the surface of the physical economy, as a huge interconnected root system, very much like the root system for aspen trees. For every acre of aspen trees above the ground, there’s about ten miles of roots underneath, all interconnected with one another, “communicating” with each other.

HOW FAST IS THE SECOND ECONOMY GROWING?
The metaphor isn’t perfect: this emerging second-economy root system is more complicated than any aspen system, since it’s also making new connections and new configurations on the fly. But the aspen metaphor is useful for capturing the reality that the observable physical world of aspen trees hides an unseen underground root system just as large or even larger. How large is the unseen second economy? By a rough back-of-the-envelope calculation (see sidebar, “How fast is the second economy growing?”), in about two decades the digital economy will reach the same size as the physical economy. It’s as if there will be another American economy anchored off San Francisco (or, more in keeping with my metaphor, slipped in underneath the original economy) and growing all the while.

Now this second, digital economy isn’t producing anything tangible. It’s not making my bed in a hotel, or bringing me orange juice in the morning. But it is running an awful lot of the economy. It’s helping architects design buildings, it’s tracking sales and inventory, getting goods from here to there, executing trades and banking operations, controlling manufacturing equipment, making design calculations, billing clients, navigating aircraft, helping diagnose patients, and guiding laparoscopic surgeries. Such operations grow slowly and take time to form. In any deep transformation, industries do not so much adopt the new body of technology as encounter it, and as they do so they create new ways to profit from its possibilities.
The deep transformation I am describing is happening not just in the United States but in all advanced economies, especially in Europe and Japan. And its revolutionary scale can only be grasped if we go beyond my aspen metaphor to another analogy.
A NEURAL SYSTEM FOR THE ECONOMY
Recall that in the digital conversations I was describing, something that occurs in the physical economy is sensed by the second economy—which then gives back an appropriate response. A truck passes its load through an RFID sensor or you check in at the airport, a lot of recomputation takes place, and appropriate physical actions are triggered.
There’s a parallel in this with how biologists think of intelligence. I’m not talking about human intelligence or anything that would qualify as conscious intelligence. Biologists tell us that an organism is intelligent if it senses something, changes its internal state, and reacts appropriately. If you put an E. coli bacterium into an uneven concentration of glucose, it does the appropriate thing by swimming toward where the glucose is more concentrated. Biologists would call this intelligent behavior. The bacterium senses something, “computes” something (although we may not know exactly how), and returns an appropriate response.
No brain need be involved. A primitive jellyfish doesn’t have a central nervous system or brain. What it has is a kind of neural layer or nerve net that lets it sense and react appropriately. I’m arguing that all these aspen roots—this vast global digital network that is sensing, “computing,” and reacting appropriately—is starting to constitute a neural layer for the economy. The second economy constitutes a neural layer for the physical economy. Just what sort of change is this qualitatively?
Think of it this way. With the coming of the Industrial Revolution—roughly from the 1760s, when Watt’s steam engine appeared, through around 1850 and beyond—the economy developed a muscular system in the form of machine power. Now it is developing a neural system. This may sound grandiose, but actually I think the metaphor is valid. Around 1990, computers started seriously to talk to each other, and all these connections started to happen. The individual machines—servers—are like neurons, and the axons and synapses are the communication pathways and linkages that enable them to be in conversation with each other and to take appropriate action.
Is this the biggest change since the Industrial Revolution? Well, without sticking my neck out too much, I believe so. In fact, I think it may well be the biggest change ever in the economy. It is a deep qualitative change that is bringing intelligent, automatic response to the economy. There’s no upper limit to this, no place where it has to end. Now, I’m not interested in science fiction, or predicting the singularity, or talking about cyborgs. None of that interests me. What I am saying is that it would be easy to underestimate the degree to which this is going to make a difference.
I think that for the rest of this century, barring wars and pestilence, a lot of the story will be the building out of this second economy, an unseen underground economy that basically is giving us intelligent reactions to what we do above the ground. For example, if I’m driving in Los Angeles in 15 years’ time, likely it’ll be a driverless car in a flow of traffic where my car’s in a conversation with the cars around it that are in conversation with general traffic and with my car. The second economy is creating for us—slowly, quietly, and steadily—a different world.
A DOWNSIDE
Of course, as with most changes, there is a downside. I am concerned that there is an adverse impact on jobs. Productivity increasing, say, at 2.4 percent in a given year means either that the same number of people can produce 2.4 percent more output or that we can get the same output with 2.4 percent fewer people. Both of these are happening. We are getting more output for each person in the economy, but overall output, nationally, requires fewer people to produce it. Nowadays, fewer people are required behind the desk of an airline. Much of the work is still physical—someone still has to take your luggage and put it on the belt—but much has vanished into the digital world of sensing, digital communication, and intelligent response.
Physical jobs are disappearing into the second economy, and I believe this effect is dwarfing the much more publicized effect of jobs disappearing to places like India and China.
There are parallels with what has happened before. In the early 20th century, farm jobs became mechanized and there was less need for farm labor, and some decades later manufacturing jobs became mechanized and there was less need for factory labor. Now business processes—many in the service sector—are becoming “mechanized” and fewer people are needed, and this is exerting systematic downward pressure on jobs. We don’t have paralegals in the numbers we used to. Or draftsmen, telephone operators, typists, or bookkeeping people. A lot of that work is now done digitally. We do have police and teachers and doctors; where there’s a need for human judgment and human interaction, we still have that. But the primary cause of all of the downsizing we’ve had since the mid-1990s is that a lot of human jobs are disappearing into the second economy. Not to reappear.
Seeing things this way, it’s not surprising we are still working our way out of the bad 2008–09 recession with a great deal of joblessness.
There’s a larger lesson to be drawn from this. The second economy will certainly be the engine of growth and the provider of prosperity for the rest of this century and beyond, but it may not provide jobs, so there may be prosperity without full access for many. This suggests to me that the main challenge of the economy is shifting from producing prosperity to distributingprosperity. The second economy will produce wealth no matter what we do; distributing that wealth has become the main problem. For centuries, wealth has traditionally been apportioned in the West through jobs, and jobs have always been forthcoming. When farm jobs disappeared, we still had manufacturing jobs, and when these disappeared we migrated to service jobs. With this digital transformation, this last repository of jobs is shrinking—fewer of us in the future may have white-collar business process jobs—and we face a problem.
The system will adjust of course, though I can’t yet say exactly how. Perhaps some new part of the economy will come forward and generate a whole new set of jobs. Perhaps we will have short workweeks and long vacations so there will be more jobs to go around. Perhaps we will have to subsidize job creation. Perhaps the very idea of a job and of being productive will change over the next two or three decades. The problem is by no means insoluble. The good news is that if we do solve it we may at last have the freedom to invest our energies in creative acts.
ECONOMIC POSSIBILITIES FOR OUR GRANDCHILDREN
In 1930, Keynes wrote a famous essay, “Economic possibilities for our grandchildren.” Reading it now, in the era of those grandchildren, I am surprised just how accurate it is. Keynes predicts that “the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day.” He rightly warns of “technological unemployment,” but dares to surmise that “the economic problem [of producing enough goods] may be solved.” If we had asked him and his contemporaries how all this might come about, they might have imagined lots of factories with lots of machines, possibly even with robots, with the workers in these factories gradually being replaced by machines and by individual robots.
That is not quite how things have developed. We do have sophisticated machines, but in the place of personal automation (robots) we have a collective automation. Underneath the physical economy, with its physical people and physical tasks, lies a second economy that is automatic and neurally intelligent, with no upper limit to its buildout. The prosperity we enjoy and the difficulties with jobs would not have surprised Keynes, but the means of achieving that prosperity would have.
This second economy that is silently forming—vast, interconnected, and extraordinarily productive—is creating for us a new economic world. How we will fare in this world, how we will adapt to it, how we will profit from it and share its benefits, is very much up to us.

THE SECOND ECONOMY by W. Brian Arthur 

W. Brian Arthur is a visiting researcher with the Intelligent System Lab at the Palo Alto Research Center (PARC) and an external professor at the Santa Fe Institute. He is an economist and technology thinker and a pioneer in the science of complexity. This is an article from McKinsey Quarterly, October 2011. 

"Digitization is creating a second economy that’s vast, automatic, and invisible—thereby bringing the biggest change since the Industrial Revolution." W. Brian Arthur

In 1850, a decade before the Civil War, the United States’ economy was small—it wasn’t much bigger than Italy’s. Forty years later, it was the largest economy in the world. What happened in-between was the railroads. They linked the east of the country to the west, and the interior to both. They gave access to the east’s industrial goods; they made possible economies of scale; they stimulated steel and manufacturing—and the economy was never the same.

Deep changes like this are not unusual. Every so often—every 60 years or so—a body of technology comes along and over several decades, quietly, almost unnoticeably, transforms the economy: it brings new social classes to the fore and creates a different world for business. Can such a transformation—deep and slow and silent—be happening today?

We could look for one in the genetic technologies, or in nanotech, but their time hasn’t fully come. But I want to argue that something deep is going on with information technology, something that goes well beyond the use of computers, social media, and commerce on the Internet. Business processes that once took place among human beings are now being executed electronically. They are taking place in an unseen domain that is strictly digital. On the surface, this shift doesn’t seem particularly consequential—it’s almost something we take for granted. But I believe it is causing a revolution no less important and dramatic than that of the railroads. It is quietly creating a second economy, a digital one.

Let me begin with two examples. Twenty years ago, if you went into an airport you would walk up to a counter and present paper tickets to a human being. That person would register you on a computer, notify the flight you’d arrived, and check your luggage in. All this was done by humans. Today, you walk into an airport and look for a machine. You put in a frequent-flier card or credit card, and it takes just three or four seconds to get back a boarding pass, receipt, and luggage tag. What interests me is what happens in those three or four seconds. The moment the card goes in, you are starting a huge conversation conducted entirely among machines. Once your name is recognized, computers are checking your flight status with the airlines, your past travel history, your name with the TSA (and possibly also with the National Security Agency). They are checking your seat choice, your frequent-flier status, and your access to lounges. This unseen, underground conversation is happening among multiple servers talking to other servers, talking to satellites that are talking to computers (possibly in London, where you’re going), and checking with passport control, with foreign immigration, with ongoing connecting flights. And to make sure the aircraft’s weight distribution is fine, the machines are also starting to adjust the passenger count and seating according to whether the fuselage is loaded more heavily at the front or back.

These large and fairly complicated conversations that you’ve triggered occur entirely among things remotely talking to other things: servers, switches, routers, and other Internet and telecommunications devices, updating and shuttling information back and forth. All of this occurs in the few seconds it takes to get your boarding pass back. And even after that happens, if you could see these conversations as flashing lights, they’d still be flashing all over the country for some time, perhaps talking to the flight controllers—starting to say that the flight’s getting ready for departure and to prepare for that.

Now consider a second example, from supply chain management. Twenty years ago, if you were shipping freight through Rotterdam into the center of Europe, people with clipboards would be registering arrival, checking manifests, filling out paperwork, and telephoning forward destinations to let other people know. Now such shipments go through an RFID (Radio Frequency ID) portal where they are scanned, digitally captured, and automatically dispatched. The RFID portal is in conversation digitally with the originating shipper, other depots, other suppliers, and destinations along the route, all keeping track, keeping control, and reconfiguring routing if necessary to optimize things along the way. What used to be done by humans is now executed as a series of conversations among remotely located servers.

In both these examples, and all across economies in the developed world, processes in the physical economy are being entered into the digital economy, where they are “speaking to” other processes in the digital economy, in a constant conversation among multiple servers and multiple semi-intelligent nodes that are updating things, querying things, checking things off, readjusting things, and eventually connecting back with processes and humans in the physical economy.

So we can say that another economy—a second economy—of all of these digitized business processes conversing, executing, and triggering further actions is silently forming alongside the physical economy.

ASPEN ROOT SYSTEMS

If I were to look for adjectives to describe this second economy, I’d say it is vast, silent, connected, unseen, and autonomous (meaning that human beings may design it but are not directly involved in running it). It is remotely executing and global, always on, and endlessly configurable. It is concurrent—a great computer expression—which means that everything happens in parallel. It is self-configuring, meaning it constantly reconfigures itself on the fly, and increasingly it is also self-organizing, self-architecting, and self-healing.

These last descriptors sound biological—and they are. In fact, I’m beginning to think of this second economy, which is under the surface of the physical economy, as a huge interconnected root system, very much like the root system for aspen trees. For every acre of aspen trees above the ground, there’s about ten miles of roots underneath, all interconnected with one another, “communicating” with each other.

HOW FAST IS THE SECOND ECONOMY GROWING?

The metaphor isn’t perfect: this emerging second-economy root system is more complicated than any aspen system, since it’s also making new connections and new configurations on the fly. But the aspen metaphor is useful for capturing the reality that the observable physical world of aspen trees hides an unseen underground root system just as large or even larger. How large is the unseen second economy? By a rough back-of-the-envelope calculation (see sidebar, “How fast is the second economy growing?”), in about two decades the digital economy will reach the same size as the physical economy. It’s as if there will be another American economy anchored off San Francisco (or, more in keeping with my metaphor, slipped in underneath the original economy) and growing all the while.

Now this second, digital economy isn’t producing anything tangible. It’s not making my bed in a hotel, or bringing me orange juice in the morning. But it is running an awful lot of the economy. It’s helping architects design buildings, it’s tracking sales and inventory, getting goods from here to there, executing trades and banking operations, controlling manufacturing equipment, making design calculations, billing clients, navigating aircraft, helping diagnose patients, and guiding laparoscopic surgeries. Such operations grow slowly and take time to form. In any deep transformation, industries do not so much adopt the new body of technology as encounter it, and as they do so they create new ways to profit from its possibilities.

The deep transformation I am describing is happening not just in the United States but in all advanced economies, especially in Europe and Japan. And its revolutionary scale can only be grasped if we go beyond my aspen metaphor to another analogy.

A NEURAL SYSTEM FOR THE ECONOMY

Recall that in the digital conversations I was describing, something that occurs in the physical economy is sensed by the second economy—which then gives back an appropriate response. A truck passes its load through an RFID sensor or you check in at the airport, a lot of recomputation takes place, and appropriate physical actions are triggered.

There’s a parallel in this with how biologists think of intelligence. I’m not talking about human intelligence or anything that would qualify as conscious intelligence. Biologists tell us that an organism is intelligent if it senses something, changes its internal state, and reacts appropriately. If you put an E. coli bacterium into an uneven concentration of glucose, it does the appropriate thing by swimming toward where the glucose is more concentrated. Biologists would call this intelligent behavior. The bacterium senses something, “computes” something (although we may not know exactly how), and returns an appropriate response.

No brain need be involved. A primitive jellyfish doesn’t have a central nervous system or brain. What it has is a kind of neural layer or nerve net that lets it sense and react appropriately. I’m arguing that all these aspen roots—this vast global digital network that is sensing, “computing,” and reacting appropriately—is starting to constitute a neural layer for the economy. The second economy constitutes a neural layer for the physical economy. Just what sort of change is this qualitatively?

Think of it this way. With the coming of the Industrial Revolution—roughly from the 1760s, when Watt’s steam engine appeared, through around 1850 and beyond—the economy developed a muscular system in the form of machine power. Now it is developing a neural system. This may sound grandiose, but actually I think the metaphor is valid. Around 1990, computers started seriously to talk to each other, and all these connections started to happen. The individual machines—servers—are like neurons, and the axons and synapses are the communication pathways and linkages that enable them to be in conversation with each other and to take appropriate action.

Is this the biggest change since the Industrial Revolution? Well, without sticking my neck out too much, I believe so. In fact, I think it may well be the biggest change ever in the economy. It is a deep qualitative change that is bringing intelligent, automatic response to the economy. There’s no upper limit to this, no place where it has to end. Now, I’m not interested in science fiction, or predicting the singularity, or talking about cyborgs. None of that interests me. What I am saying is that it would be easy to underestimate the degree to which this is going to make a difference.

I think that for the rest of this century, barring wars and pestilence, a lot of the story will be the building out of this second economy, an unseen underground economy that basically is giving us intelligent reactions to what we do above the ground. For example, if I’m driving in Los Angeles in 15 years’ time, likely it’ll be a driverless car in a flow of traffic where my car’s in a conversation with the cars around it that are in conversation with general traffic and with my car. The second economy is creating for us—slowly, quietly, and steadily—a different world.

A DOWNSIDE

Of course, as with most changes, there is a downside. I am concerned that there is an adverse impact on jobs. Productivity increasing, say, at 2.4 percent in a given year means either that the same number of people can produce 2.4 percent more output or that we can get the same output with 2.4 percent fewer people. Both of these are happening. We are getting more output for each person in the economy, but overall output, nationally, requires fewer people to produce it. Nowadays, fewer people are required behind the desk of an airline. Much of the work is still physical—someone still has to take your luggage and put it on the belt—but much has vanished into the digital world of sensing, digital communication, and intelligent response.

Physical jobs are disappearing into the second economy, and I believe this effect is dwarfing the much more publicized effect of jobs disappearing to places like India and China.

There are parallels with what has happened before. In the early 20th century, farm jobs became mechanized and there was less need for farm labor, and some decades later manufacturing jobs became mechanized and there was less need for factory labor. Now business processes—many in the service sector—are becoming “mechanized” and fewer people are needed, and this is exerting systematic downward pressure on jobs. We don’t have paralegals in the numbers we used to. Or draftsmen, telephone operators, typists, or bookkeeping people. A lot of that work is now done digitally. We do have police and teachers and doctors; where there’s a need for human judgment and human interaction, we still have that. But the primary cause of all of the downsizing we’ve had since the mid-1990s is that a lot of human jobs are disappearing into the second economy. Not to reappear.

Seeing things this way, it’s not surprising we are still working our way out of the bad 2008–09 recession with a great deal of joblessness.

There’s a larger lesson to be drawn from this. The second economy will certainly be the engine of growth and the provider of prosperity for the rest of this century and beyond, but it may not provide jobs, so there may be prosperity without full access for many. This suggests to me that the main challenge of the economy is shifting from producing prosperity to distributingprosperity. The second economy will produce wealth no matter what we do; distributing that wealth has become the main problem. For centuries, wealth has traditionally been apportioned in the West through jobs, and jobs have always been forthcoming. When farm jobs disappeared, we still had manufacturing jobs, and when these disappeared we migrated to service jobs. With this digital transformation, this last repository of jobs is shrinking—fewer of us in the future may have white-collar business process jobs—and we face a problem.

The system will adjust of course, though I can’t yet say exactly how. Perhaps some new part of the economy will come forward and generate a whole new set of jobs. Perhaps we will have short workweeks and long vacations so there will be more jobs to go around. Perhaps we will have to subsidize job creation. Perhaps the very idea of a job and of being productive will change over the next two or three decades. The problem is by no means insoluble. The good news is that if we do solve it we may at last have the freedom to invest our energies in creative acts.

ECONOMIC POSSIBILITIES FOR OUR GRANDCHILDREN

In 1930, Keynes wrote a famous essay, “Economic possibilities for our grandchildren.” Reading it now, in the era of those grandchildren, I am surprised just how accurate it is. Keynes predicts that “the standard of life in progressive countries one hundred years hence will be between four and eight times as high as it is to-day.” He rightly warns of “technological unemployment,” but dares to surmise that “the economic problem [of producing enough goods] may be solved.” If we had asked him and his contemporaries how all this might come about, they might have imagined lots of factories with lots of machines, possibly even with robots, with the workers in these factories gradually being replaced by machines and by individual robots.

That is not quite how things have developed. We do have sophisticated machines, but in the place of personal automation (robots) we have a collective automation. Underneath the physical economy, with its physical people and physical tasks, lies a second economy that is automatic and neurally intelligent, with no upper limit to its buildout. The prosperity we enjoy and the difficulties with jobs would not have surprised Keynes, but the means of achieving that prosperity would have.

This second economy that is silently forming—vast, interconnected, and extraordinarily productive—is creating for us a new economic world. How we will fare in this world, how we will adapt to it, how we will profit from it and share its benefits, is very much up to us.

"The Modules" is a five-story building with 72 student apartments serving Temple University in Philadelphia. Designed by Interface Studio Architects, the 70,000 SF building received the Architectural Excellence Award in Innovation from AIA Pennsylvania in 2011. The building also received a “LEED for Homes” certification. Click the photo for more information.
Built of 80 prefabricated boxes, the project is an example of off-site wood construction typically used for single-family houses being realized on a much larger scale.  It includes a green roof to meet Philadelphia’s stringent storm water requirements.
Viktoria Diskina, the project architect of the Modules, recently spoke to my graduate architecture class at Pratt - and explained that modular construction requires a great deal of design coordination. While the overall architecture, engineering and construction process was 10 months long - the prefabricated boxes were built within one month at a factory - including cabinetry, interior finishes and paint. The exterior skin was installed on site.
Templetown Realty acted as both developer and general contractor for the project. The total cost of the modular building came in at $119 per square foot.

"The Modules" is a five-story building with 72 student apartments serving Temple University in PhiladelphiaDesigned by Interface Studio Architects, the 70,000 SF building received the Architectural Excellence Award in Innovation from AIA Pennsylvania in 2011. The building also received a “LEED for Homes” certification. Click the photo for more information.

Built of 80 prefabricated boxes, the project is an example of off-site wood construction typically used for single-family houses being realized on a much larger scale.  It includes a green roof to meet Philadelphia’s stringent storm water requirements.

Viktoria Diskina, the project architect of the Modules, recently spoke to my graduate architecture class at Pratt - and explained that modular construction requires a great deal of design coordination. While the overall architecture, engineering and construction process was 10 months long - the prefabricated boxes were built within one month at a factory - including cabinetry, interior finishes and paint. The exterior skin was installed on site.

Templetown Realty acted as both developer and general contractor for the project. The total cost of the modular building came in at $119 per square foot.


About:

This is a site for Meta Brunzema's growing collection of useful and inspiring green economy resources and projects.

ABOUT META BRUNZEMA:

Meta Brunzema is the principal of Meta Brunzema Architect P.C. (MBAPC). Established in 1998, MBAPC is a design practice that produces innovative architecture and urban design. Clients include the NASA Goddard Institute for Space Studies, the Rockefeller University, the Metropolitan Waterfront Alliance, the Lower East Side Ecology Center, the Durst Organization and numerous private clients. The firm’s work has been published in Metropolis, Architecture Magazine and the New York Times.

MBAPC’s projects are often investigations, instigations, experiments - collaborative efforts to shape a more sustainable and equitable society. Brunzema writes about this approach in a book chapter for "Feminist Practices: Interdisciplinary Approaches to Women in Architecture" (Ashgate Publishing).

Since 2000, Brunzema has been on the faculty at Pratt Institute in Brooklyn where she teaches graduate-level design studio, integrated building systems and history/ theory.

Brunzema holds a Master of Architecture degree from Columbia University and a Bachelor of Environmental Design Science from Dalhousie University in Canada. She is a fellow of the Institute for Urban Design and a LEED accredited professional.

Click on images for more information.

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