Go to previous page Smart Citiesvideo transcript

Smart Cities Research Institute launch

Text transcript from the launch video

Video transcript: Smart Cities Research Institute: Research Associates

[MUSIC PLAYING]

MARK BURRY: Welcome, everybody, to our inaugural Thought Leaders Series event. And I will be welcoming Mr. Gruen shortly. But I thought you might like a little bit of context for those of you who don't know everything that there is to know about the Smart Cities Research Institute.

I'm Mark Burry. I'm the director of the Institute. And we have been going for almost two years. We were inaugurated on June the 7th in 2017.

And smart cities is quite an interesting topic today. We had a session before this where we had all the leaders together just talking about where we're going as an Institute. And I was saying how when I came, smart cities was pretty close to being a buzzword. And I thought it might be problematic if you're saying you're the director of the Smart Cities Research Institute.

And it is in a way, because people they're-- they've heard it. Could be a cliche. Could be buzzword. Could be so vague as to not be particularly definable. And that actually works quite well for a certain audience.

And for the rest of the people who are tired of the buzzword aspect, it's quite easy. You say, well, actually, it's about urban futures and the future of our cities, as we know that it's presenting a number of challenges. And we also know that one way or another, we're going to be using technology for the best, we hope. And that's what we're researching. And that, of course, means that the cities will be smart.

So the Smart Cities Research Institute thus is a big space to be in. And this is my diagram to explain why would a university host an Institute of Smart Cities rather than why wouldn't you just leave it with the consultants outside the university, the private entities? And the reason is that the university is the last bastion for a liberal take on anything here. I can hear our guests sniggering already, I think. [LAUGHTER]

That might be cynical, but I'm going to say this. It is the last bastion for a very wide conversation. And I used the word "conversation" advisedly because I hope that will come up later in the talk. I suspect it might.

It's a conversation that is fueled by people who don't have too much self-interest other than their intellectual pursuits. They're not being paid to say something for any reason. They're not being forced to follow any particular trajectory. They're there because they are fundamentally interested in that particular thing that they're interested in. So this diagram here shows that if you take, say-- a typical institution might have five faculty, what's shown here.

Each one of those layers is the pecking order in terms of your experience rather than, say, seniority. So the people at the bottom of these cones, your undergraduates, and they go all the way up through to the top, which is your professoriate and your distinguished researchers. And each one of those faculties is composed of a number of disciplines.

And on paper, they talk to each other. That's the whole point of being in a university. You can talk to each other. But we all know that the silos are there.

But that's not to say that it's not hopeless. It's actually just waiting to be unpacked. And that's why research institutes like ours are a wonderful opportunity for a university to unlock its intellectual goods in a lateral rather than a linear way. And so that's what we're doing.

We're looking at four areas, the future urban decision-makers. That's, can we harness real-time information? Can we process it in real-time and inform decisions in real-time rather than saying all the time, I'll get back to you?

The future urban mobility is a no-brainer. There's so many changes. We heard from Professor Hussein Dia, who leads the future urban mobility program, that some say that we'll have aerial taxis in Melbourne in five years' time. And who's doing the thinking about that?

The smart cities for living, that's really thinking about where we live and how we work in the future. We know this is changing already. Those of us-- my generation have got kids who are now in their 20s finding their way through the work scene. They're already in a different world, at least that's our experience, than the one we went through.

And then there's the future urban infrastructure. Again, a no-brainer. We have to really think about what we're doing about water and waste and all the rest.

So in a nutshell, our Institute is this. It's tiny. But it's tiny not in terms of soul or heart or income or anything. It's just tiny in terms of the big picture because it's a nucleus to get stuff to happen.

So we've got these four programs. I've just given you a brief summary of all four. But if you take future urban mobility, for instance, that program is one of four. It hosts three streams, each with a leader. And each of those streams hosts a number of themes, each with a leader.

So when you look at one of the programs, you get this. Each one of those dots represents a major thought leader in the discipline. And these disciplines aren't refined down to someone who's interested in a particular peptide. These are subject areas like building information modeling, city information modeling, circular economy. These are all themes within our Institute.

And when you actually put them all together, you get this. So if you've got a take-home image from my part of the talk, which is introducing you to the Institute and its thought leadership, it will be this. It will be, this is what the Institute is.

It's a collection of people, each of whom are thought leaders, who are people that anybody who's interested in the city from outside the university can come to and say, I need someone who really knows about recycling waste. What are we going to do about plastics? In that group, there'll be somebody who is an expert with international standing.

So that's what a research institute is. That's how it succeeds. It gets across the whole university. And we want this thought leadership opportunity to be our mark, not that we're going to be doing consultancy and trying to compete with the big four or the engineering companies, all those people who have really got skin in the game. We want to be a place where those people can come and say, I wonder if you've got some additional expertise that we can take advantage of.

So that's why we're having a Thought Leaders Series because we need to be seen as thought leaders and we want people like our guest, Nicholas Gruen, to come and show us how it's done. So I'm going to cut off now, because I've got more slides I could have shown. You'll see them very quickly as I scan through them. But these will be on our website so you can bone up later. And I'll introduce Nicholas, who's going to talk to us about "The Public Goods of the 21st Century."

[APPLAUSE]

 

Video transcript: The Public Goods of the 21st Century: Nicholas Gruen

[MUSIC PLAYING]
And so that's what I'm going to talk to you about. Anyone over 40 will know what that means, which is you should interrupt me at any time. People used to roll Jaffas down the aisle of cinemas with wooden floors. And if you see that in any of the slides, just ignore it, OK?

So those are the topics I'm going to talk about. And I'm going to start with public and private goods. And I'm going to talk to you about how economists see public and private goods, and then try and look at that whole question much more broadly.

So that's a private good. And you will be familiar with-- many of you will be familiar with-- a fellow called Adam Smith, who said that it is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard to their own interest. So private goods are things which are typically sold in markets, and they are therefore the kinds of things that are unproblematic to sell in markets.

And then there are lots of other goods – has typically been regarded as a subset, a kind of smallish subset of the economy, but consider a lighthouse. Now, once you build the lighthouse, anyone can take advantage of it, so it's hard to provide and it's hard to put your hand out, and say you can't have the benefit of the lighthouse without you paying me the fee, also known as price. And same with street lighting or a simple sign on a suburban road. So those are classic public goods from an economist's textbook.

And an informal definition of a public good is that that I've just provided you there. Let's see if I can point. Yes. Public goods are supplied by government because markets won't supply them. And after a period of intellectual and ideological skirmishing from 1954 till the '70s, there was a guy called Paul Samuelson produced an article with three pages of mathematics, and said therefore governments should fund these things. And a bunch of other people said, well, we're going to redefine a few things so that the government doesn't have to provide them.

And a public good was defined by the Ostrom couple, Vincent and Elinor. Some of you may be pleased to hear that Elinor went on to win the Nobel Prize. And I'm not too sure where Vincent was on the night, but he didn't. And there are two characteristics of a public good. The first is that it's non-excludable, which explains why it's so hard to charge for it in the marketplace. And the second is that it is non-rivalrous.

Now, the non-excludability is the public good problem. That's the reason why markets don't make public goods. And you've heard the expression free rider problem. Everyone's heard that expression. Well, guess what? The fact that they are non-rivalrous, and a non-rivalrous good is something like the words I'm using, which can be used again and again and again, and if you use them, I can still use them, compared to this thing, which is a rivalrous good.

And non-rivalrousness, if non-excludability creates a free rider problem, non-rivalrousness creates a free rider opportunity. Of course, we've all heard that expression, free rider opportunity not. But it's bigger than the free rider problem. It's not that the free rider problem doesn't exist, but it's a mark of the ideological grain of our culture, if you like, that the expression free rider problem is something that almost everyone uses and understands and the expression free rider opportunity is either-- mostly just kind of nobody knows what it means, or they react to it with visceral hostility, as somebody did to me on email many years ago. It was a very traumatic experience that I will spare you from.

So there's a free rider problem or a free rider opportunity. And sometimes, you need to conquer the free rider problem to take advantage of the free rider opportunity. And the example of that is a patent, which, by internalizing property rights, by stopping people copying a particular idea, enables people to fund the development of that idea. And then when the patent ends, we have a free rider opportunity.

So however, there is a statesman of the free rider opportunity, but he was going about his schtick more than 200 years ago. Fresh from the logging excitement of the 18th century, when they called it pamphlets, Thomas Jefferson really thought this was a big deal. Now, it's not that people haven't noticed this today. They have. But people do not give it sufficient attention, in my opinion.

If I asked you to guess what century we were in, you would say we must be in the 19th century based on that. And that's where we are. And I want to very quickly suggest to you that, unlike these diagrams that I've shown you with these particular goods, and all we do is we have a bunch of goods that are public goods and a bunch of goods are private goods, and typically the government provides the public goods and the market provides the private goods and we're all happy, I want to suggest to you a richer story. And the richer story I will introduce by talking about a century where people wore top hats more than in any other century, I'm reliably informed.

And what did we do in the 19th century? We largely invented public education, public sanitation. There was this amazing idea that we should have a public service built on merit, an idea that we pinched from the Chinese, who'd been doing it for 1,000 years. Before then, before 1857, the Northcote–Trevelyan report, which you can see before you, people used to buy commissions in the public service. It took seven years to just start to implement that. There are public bank-- there are central bank notes. I could talk to you for at least an hour on them, but I won't. Ignore the cat. Just remember that.

And we know what century we're in now. We're going backwards. We are in the 18th century, even though I'm sure that was made in the 20th century. And the picture I'm trying to give you is that public and private goods exist not in some mechanical relation, but in some ecological relation, and that economic development is about the co-evolution of public and private goods. And here's central banking coming into its own in the 18th century, just starting the end of the 17th century.

Here's two pieces of public knowledge that were absolutely necessary if the Navy was ever going to go anywhere, because it kept bumping into continents late at night, and merchant and military and the sailors kept dying. And Harrison's clock solved the first problem, and vitamin C solved the second problem. The Joint Stock Company came into its own. That is, today that's a proprietary limited company where any small people can get shares in large enterprises.

So we're in the 21st century. Naturally, I need a hat for that. But this isn't really all that good. This was the best I could do. And I want to ask you-- I want to tell you that the 21st century has seen an explosion of new public goods. And then I want to ask you what they are. People who have not seen me talk about this before. Yes?

[INAUDIBLE]

Yeah, that's good. I like it. So all of those things are public goods. And before people get excited and say that they're private and they're destroying the world, which Facebook may well be, cigarettes are private goods. So I'm not talking about good or bad, I'm talking about the kind of economic commodity they are.

So how does this happen? Because none of those goods were built by government, so how the hell does it happen? Some are built for profit, some are built not for profit. Some are kind of just sort of kind of build themselves, like open source software. So I'm going to put you in a small company. And the small company has got this incredible algorithm called BackRub.

And BackRub is, whenever we are-- I think it'd be around about 1997, 1998, and all the search engines that have been introduced to the internet feed you up junk. Nobody's been able to work out how to get the sort of links that you want. And BackRub, on which there was a patent, Larry and Sergey from a company that came to be called Google had worked out that, if they looked at how many links linked to a page, that was a good proxy for how worthwhile this page was.

And so here's the thing. I've just told you it's a public good, but there is a bit of a difference, because all of the examples of public goods that I gave you were non-excludable. Nothing non-excludable about Google. Google could have been built behind a paywall. So Google had a choice. And if they'd been behind a paywall, what would have happened? They might have charged $200, a lot of people wouldn't have used them, some people might have tried to copy them in various ways, and they would have made a nice amount of money for you or me, $200 million, $300 million. They might even have made a billion dollars.

And the thing is they would have captured almost, say, 70% of the value they created. But they decided that the costs of providing the service are so low that they could make more money giving it away than they could make selling it, which is what they did. So that's the sort of value that Google creates.

And it gets by on the smell of an oily rag a measly $60 billion a year of advertising revenue, while it creates about $1 trillion worth of value. Chief economist at Google, Hal Varian, estimates it as about half that, but he's being conservative. And you know, but anyway, it's an awful lot of value. And the costs of supplying the product are maybe half the $60 billion. So that's looking like a nice arrangement.

So we are in a new world. And I like to say that we're looking at public goods along a plane. And on the one hand, we've got these textbook economist public goods, and then we've got all these new public goods. I will leave what that stands for to one side for a minute. We'll get to it. But open source software, an extraordinary public good. These public goods that get built on platforms and so on.

And so a question arises, and the question is this. These things could be built, because the costs of building them were so low compared to the value they created, that they can fund themselves on 6% of revenue going to the people who set them up, and there's a huge profit involved. So there must exist a class of products, a class of goods here which might generate as much or more value than Google or Facebook, but which would cost more than you can recover from advertising.

We know that you could fund roads from putting posters on the side of them and selling the space, but you could only fund about 3% of their cost or 2% of their cost. So that doesn't build you the road. And so we have a whole lot of missing digital public goods that look a bit like this.

So this was my great breakthrough, great insight, all that sort of stuff. That's why I'm a thought leader, you see? And I knew that I needed a kind of killer example to kind of make it live for people, and I couldn't get one. And then I attended-- this is the story, OK? The low-hanging fruit's been picked, what else can we turn up?

And then, in 2012, I watched Anne Wojcicki present-- now, she was and is the CEO of 23 and Me. And 23 and Me is a consumer genomics company. So you pay them some money, and they send your kit. You spit into the kit. Apparently you spit an awful lot into the kit, but you do. And then you send it back, and they do a partial genomic analysis. And then they give you your own web page, and they'll tell you what they've found in the genomic analysis, and also what relatives they've found of yours if you ask them. And I'm sure they won't do it if you tell them absolutely don't do that.

And then I thought that's my killer example, because it hadn't occurred to her-- she's an American, she doesn't know that other countries have public health systems. And I looked at this, and I thought this is an obvious public/private digital partnership. And the basic way it would work is we've got our killer amount of value generated, we're going to generate $1 trillion out of this-- trust me, I'm a thought leader-- and the costs mean that Anne Wojcicki and the shareholders of 23 and Me won't build the good.

But there's a huge benefit-- but imagine all the things that a public health system could do. Sorry, it's up there as NHS. You can see this lecture has traveled. But if we were in Medicare, then Medicare can fund it. We can nudge people into the system at the same time as giving them the right to opt out. And then we can connect it up to diagnosis, pharmacovigilance, research. The asset would be huge, I think. And ultimately, this would become a platform, and 23 and Me would be some small app with lots of other people running lots of different things on the platform. In case anyone's alarmed about privacy and so on, obviously these things would be dealt with very well, but not perfectly. That is because we're not yet in heaven.

OK, so one can generalize from this. So any SaaS hub-- that is, software as a service, for the people who know the term-- so think of Xero. Well, think of Facebook, actually. So everything happens at the other end of your browser, and there is a vast cache of data that accumulates in the hub. And we have barely thought about how-- I mean, private companies have thought about how to use this, but it's a bit sad, I think, that we're not thinking about the potential social benefits of this, and how we might be able to build out from those things.

This is a Melbourne-- I won't call it a startup anymore, it's doing very nicely for itself. Culture Amp is the company. It's based in Richmond. This is a product called Murmur. And it's an employee satisfaction survey, if you like, employee engagement survey. Now, they make a good living, a very good living, providing that service to companies, and companies subscribe to it. And it's all browser-- it's just delivered on a browser.

But imagine if the state government or the federal government said to them, what would it take for you to make that available for free to all businesses in Australia, or Tasmania, or all small businesses? And could we, at the same time, build into it a partial standard that people could opt into or not opt into if they don't want to, and then it would start to generate data which would enable us to benchmark firms against each other in all these different dimensions.

And then we could-- someone could get an email saying we know firms that do the things that you don't do very well well and the things that you do well not very well, would you like us to do all the things you need to do these days because of privacy regulation to bring about an introduction. So we have a double blind acceptance, and then we introduce those people. It's something that could be used to benchmark-- basically to generate public visibility about something which could be very important to productivity.

Xero, one could do the same thing with online accounting. And I won't talk about that. That was an idea I took to the 2020 summit, and it doesn't come with software. The basic idea is to collaboratively define a partial standard against which these surveys are set. And then one has generated a whole lot of data, and then one can-- and then the competition would lead firms to publish that data if they were performing well. So you start to develop a market for employees in well-run companies.

And why doesn't that exist at the moment? I think the answer, I'm pretty confident the answer is there is no standard against which to report. So if a firm is doing very well, another firm can grab a bunch of other statistics built from a different survey, and no one is any the wiser as to whether they're better or not.

There are public/private digital partnerships in urban planning and urban management. This is Alibaba Cloud in Hangzhou, the Hangzhou City Brain program. And it's much easier to do that in-- I mean, there are all kinds of things going on there that might make some of our hair stand on end, like facial recognition all over the place. But again I'm pointing out the potential here, what we are doing something similar just via Google Maps and so on. But it would be nice to think that those representing the public interest were hungry for the good that some of this data can do, at the same time as respecting some of the concerns that we would obviously have.

This was White Night. And White Night was done with a public/private digital partnership with ANZ. And here's a bunch of pictures to prove it. I don't know what the pictures really mean, but I knew I had to show you pictures. But here's some facts that come out of that data.

So what they are doing, what ANZ is doing is ANZ is, in an anonymized way, looking at the expenditure patents for all those who have got ANZ credit cards and merchants who are putting through ANZ credit card payments, and then they're looking for the footprint of White Night. And they can tell us a great deal about what the demographic is, who goes to White Night, something about where they come from, why they like it. Let me ask you, what do you think the main demographic for White Night is?

[INAUDIBLE]

Oh, I don't know about age. I was thinking of where they come from.

[INAUDIBLE]

[INAUDIBLE]

No. What is the part of-- apart from Victorians, and I'll tell you about that in a sec, interstate visitors to White Night, where do you think they come from, predominantly?

[INAUDIBLE]

Sydney. What part of Sydney? The western suburbs. So the average income of those attending is $25,000 a year. They're not really fully employed, obviously. This is a good night out for them. They tend to turn up the whole time. Melton and Sunshine are big suburbs in Melbourne for White Night. The average spend is $50, and they're there for an average of five hours. Very different to visits from the eastern suburbs. An interstate visitors hotspot is Western Sydney. So all this stuff that we can know, you know, not a lot of cost involved here, nobody's privacy is being breached, and so on.

Other data partnerships, how hungry are we to say to Uber that part of its operating license would be collaboration on the data that they've got. Google Maps likewise. I mean, I'm not as up-to-date as I was three or four years ago, but certainly three or four years ago I was let's just say a little shocked at how unhungry ABS was for real-time data. And there's a lot of it about, and a lot of it is better than the data that you get by doing the same old, same old. There's a lot that could happen.

So that's the old technology stack. It's called the Tower of Babel, and it didn't work very well. And now we have a new technology stack, which works a lot better. And once you've spent all the money to build this, everything happens bang, like that. And the other thing that happens is that, if you build a platform that everybody wants to be part of, it sucks everything in and everybody has to play by your rules, which isn't very nice for some of them, but a standard is created. And so the social benefit of the standard is created where the alternative might be none of the benefits of that process.

And thinking about that when I was involved in an arts group, I thought of this idea of Platform A. And that is a data platform for the arts. So these are tricky things to do. And so arts marketing, this is what arts marketing looks like. And most of it, we know how misleading it is, we know that they put that quote up there because it was the best quote they could find, and there might be other quotes that say don't bother going to this damn show. And so we ignore it. So something like 10% to 15% of all money spent on the arts is spent on trying to bamboozle us, and we don't care anymore.

So I sort of spent the time thinking, well, can we build a TripAdvisor for the arts? And if we could, then the sort of things we-- consumers would post reviews, and we would try to build the platform so it would answer questions, not just what's a good play, but what's the sort of thing I would like to go and see.

It would be a platform on which you control who gets hold of your data, and you would then say this data broker, I'll trust them to protect my data and to give my data to arts organizations that I might therefore be able to influence them to produce something more like I want, or to use the sign that was used by the schoolchildren campaigning against climate change, just to make things a little bit less shit.

Arts venues should be sharing customer data with each other. Again, anonymized. Why? Because there's so much public subsidy going into that. So it's obvious, and governments should lean on them to ensure that the most value is extracted from the public money that goes in. And millions would be saved on marketing, as it is with restaurants, because nobody-- you know, I suppose in some upmarket magazines it's still there, but you go to TripAdvisor, and there is a lot more horizontal trust in our community than vertical trust.

We know we're getting the best bit of bullshit we can get from people in marketing positions in pretty much every area you can think of. And we trust each other to try and suss out some of what's going on. You could use it to connect with favorite performers. You could use it to influence their next show. And again, anyone could build apps on this platform.

Now, these ideas were kind of accepted by the Victorian government about three years ago, and they've put a small amount of funding into trying to build this thing. And it's kind of disappeared, disappears for long periods of time, and I'm not too sure how it's going. But this is much harder than a Google, which you just build it and then people use it. This has got-- you can see all the sort of institutional layers to this. And that's one of the really big problems.

And Swinburne is trying to do something similar with planning with a digital platform for urban planning and urban life, if you like. And it will, too, experience lots of institutional richness, which is a nice word for obstacles, if you're trying to do something big and important and there are lots of people involved. So that's all the digital stuff that I wanted to talk about. I'm making reasonably good progress, but I do want to talk about the rest of life, which has some significance, you might say.

So I want to take you to the very first economist, because believe it or not, Adam Smith had a much richer view of what human life was like than your average economist. He's famous for writing The Wealth of Nations, which is about private goods, but he tells the story of the spontaneous evolution of a market. And guess what? The market itself is a public good. Non-rival, non-excludable. Or at least non-excluded, if it's a good market.

And the amazing thing about Smith is that he was fascinated with this idea of spontaneous evolution, spontaneous order. And his first book, 17 years before The Wealth of Nations, was called The Theory of Moral Sentiments, and is a theory of human culture evolving. And it evolves in a similar way, according to him, to the way markets evolve, which-- and I won't go into the whole story because I don't have time, but it's an interesting story, and I can point you to some stuff I've written if you don't want to read the whole of The Theory of Moral Sentiments, which does tend to run on a little.

And there's another absolutely-- well, I would say textbook public good, paradigm public good, but it never appears in textbooks, to my frustration, language. And the government didn't build language, we built language. And it got built in the same way. We don't know exactly how, but people are going about their business trying to get stuff done, and out of it, over a long period of time, comes language. I call those things emergent public goods.

I'm going to skip that because I don't have time. Yeah, look at this. Isaac Newton turns up. What was that all about, you're going to be asking yourself. It was big. It was big.

The way in which-- I will tell you very quickly that one of the things that Smith was doing was he was aping Isaac Newton. Isaac Newton's theory of celestial mechanics took a single idea, which was gravity, of which we have daily experience, and spun this extraordinary story about the whole heavens out of this single idea. Smith tried to do that for markets, and he tried to do it for human society. And for markets, it was the innate human tendency to truck, barter, and exchange, and for society it was what he called sympathy.

Now remember, the Germans hadn't coined the expression empathy by then. And by sympathy, he means something not just a feeling, but something about how you know things. You don't know what someone else is thinking except by putting yourself into their position. That's the only way we understand each other. And that was his theory of how society-- that we care about what each other thinks, that's roughly a very quick description of how he builds his story about how human society gets built.

So a friend of mine has a great expression for this. And he calls it a generative commons. So a generative commons is something which we generate ourselves, and we produce it as we consume it. And it's very different to an economist's idea of a good, because a good has a producer and has a consumer that could be the same thing. A farmer can produce food and can eat the food, but they're conceptually different. But you can't live in a culture without contributing to it in some way. If you use the language or the culture, that is contributing to it. And you use it at the same time.

And that is the description of culture, of language, of standards-- standards emerge by people adhering to them-- markets, money, communities of practice. Each of these generate- and this is an important point-- each of these generates its own ethical world. Economists have outsourced ethics, and you can't think about society by doing that, I don't think.

So the world is what I call a nested ecology of public and private goods. Private goods, there is competition between private goods. There doesn't have to be. People don't have to compete if they don't want to. But competition is fine between private goods. It's true of individuals compete with each other, as well as cooperate with each other. Firms compete in markets. Organizations are for themselves. Sporting teams pretty obviously are for themselves. If they are not, who are they for?

And then public goods, shared goods are what holds social formations together. And the theme there is cooperation and group interest. So rather than a sort of markets and governments and stick them together and you've got an economic model of some kind, I'm suggesting that it's a much richer story. And I want to say a little bit more about that.

I don't like the term altruism. I think we should think in three terms. So altruism, shared intentionality, that is shared intentionality. No animal that we know of does that. No animal that we know of has one person, one being holding down something for the other one to pick. That's what kind of builds our society.

So where do you think I got those numbers from? Tax. So we give about 1% of our income away. That's altruism. Paying tax isn't altruism. We get something for giving something. And it's collective. And collective and shared intentionality, that's what you want to go into battle with, not altruism.
Economists like sort of, you know, two things. Good, bad, private, public, and so on. So some people will recognize where this is from. It's from the steps of the state library. And I looked at this, and I thought most people would want to go to lunch or they would have more innocent thoughts on looking at this scene, but I thought to myself here is a nested ecology of public and private goods. Wherever you look, there is publicness, there is privateness.

The people playing the chess, the people playing the game of chess, there's no point in playing the game of chess if you don't compete in some sense. I'm not telling you how hard, how much it should mean to you, but don't bother playing if you're not trying to compete with the other side. That is the point of the game, and the game itself is a public good. And if we look around, there are people on the lawns, and they're having conversations. And conversations are themselves about public and shared goods.

So a few words on the social health of cities. This is a guy you might recognize. A great expression from Warren Buffett, the institutional imperative. He's talking about a bunch of imperatives in business that I'm not talking about, but institutional imperatives are imperatives. And when institutions have them, they just go after them.

And so one of the things about this is that professional knowledge is more prestigious than informal knowledge, knowledge in the life world. Professional knowledge is more systematic, so easier for bureaucracies to implement. Hard infrastructure is often more popular than softer options electorally. But it is true that, since Jane Jacobs wrote her book in I suppose the 1960s-- early 1960s, wasn't it? The Life and Death of Cities, The Life and Rebirth of Cities?

[INAUDIBLE]

1962. Her and Rachel Carson. Rachel Carson wrote in '62? Anyway. So since then, it's been a long time coming, but since then cities have understood-- city planners have understood this much more. And certainly Melbourne has done some terrific things. I listened to an interesting program on-- I'm just trying to remember where it was-- anyway, it's a podcast, radio national podcast on this sort of urban art. And at the time that they had just released a new bit of legislation to clean up graffiti, the marketing arm of Vic Tourism was out marketing this stuff. And so that has been a useful little bit of dynamic tension, and has produced some pretty nice results, of which Melbourners are now proud.

This is a map of the social footprint of that extraordinary building in Singapore, which is a gigantic boat on three buildings, and of which much ado has been made, and Chinatown. And as you can see, the social connectedness brought about by Chinatown vastly outstrips the icon.

When our human ecology is-- when social capital is damaged, we're pretty bad at dealing with that. Here's a quote from Mystique. She was in care from the age of three, I think. And then when she turned 18, of course she went off the books. Off you go. And I spent some time involved with the Australian Center for Social Innovation, and we were looking for ways to improve the situation. Anyone know what that is? What is this man's profession?

He's a designer. And what is he designing? A hospital. He's trying to get inside the experience. What do you think came back on the camera, on the camera feed? You just look up, you'll see. Nothing. That's what patients see. That's a useful insight. Nobody'd had it. They'd just had to look up to get the insight. But there you go.

At the Center for Social Innovation, we built a program to try to address troubled troubled families, to help troubled families. But we didn't have social workers from another class, another age come and knock on their door with a clipboard and sit down with them for an hour, we arranged it as a mentoring arrangement between two families, which was coached by a social worker, or at least somebody who was trained to do that. And I won't play you the video I was going to, I'm running out of time, but that's the video. Look at that video. It's a nice-looking video. Let's move on. I'm going to move on.

So we're back at our generative commons. And I want to say a little more about the fact that in here is generated an ethical life. Yes, ladies and gentlemen, even in a market. A market is a form of ethical life. The ethics are about exchange. All of these things carry with them ethical content. And I've recently become fascinated with what I think of as the most simple generative commons. You can see it there. And I will play you a one-minute video to show you how deep the idea of conversation is inside us.
Can we get? That's a ball, he's saying. He's teaching the cat English.

[INAUDIBLE]

[INAUDIBLE]

[INAUDIBLE]

OK, so that's the drive for human connection, the drive for conversation. Don't try it on a cat, but that's not really why I was showing you the video. That's how strong this thing is in us. And just to go back to the original picture, so this thing, the conversation which I've discovered, you know, this is not like a good which is a thing and it's unitary, it's just on its own. This is a relational thing, but it's clearly a unit of something. It's clearly a unit that builds society.

And so imagine we're having a conversation. Let's say it's a debate about whether the Earth goes around the sun or the sun goes around the moon. Sorry, that was a strange thing to say, wasn't it? The Earth goes around the sun or the sun goes around the Earth. The two parties to that conversation might compete with each other. That's actually OK, because they're different people, and they're bringing different perspectives. But they need to compete with each other in a way that respects that they're both engaged in a joint project, because if they don't do that, they haven't turned up. They shouldn't bother. Go and get a sex robot or something, if you like.

And that, to me, is one compelling way to describe what has happened to political conversation, which has been completely professionalized, as professionalized as McDonald's professionalizes the creation and marketing of food to get people to eat it, even though it's perfectly nice food to have occasionally, but it's kind of poison if you eat it all the time.

And so I would argue that a lot of what's wrong with politics is that this very fundamental human thing, this thing that human society is built out of, politics is built out of, everything human is built out of has been colonized by people with their own ends. And that's fine that people have their own ends, but the whole thing has become professionalized in a way that people viscerally react against for good reason. That's my little summary of politics as culture war.

And it's the politics of competition. The one thing that doesn't turn up is the idea of trading things off and coming to a joint conclusion among people who disagree, although, in some sense, obviously, the counting of numbers in parliament ends up producing a result with greater or lesser legitimacy. I've just written a piece in [INAUDIBLE] on this subject, and how the use of citizen juries can cut through a lot of this, because when you see what happens in citizen juries, little Ari, who's the name of the little kid talking to the cat, little Ari finds himself not talking to a cat, but talking to another little Ari, and the conversation is had. And it's so much better than most political conversation.

And anyway, I won't spend much time on that because I'm not able to. One very quick point. For cities, it's important that scale matters. This is exactly the same game played by people. And the way the game worked was that people had to take their own money and contribute it to the part. And if they all cooperated, they'd all end up with more money, but if you didn't cooperate and everybody else cooperated, you hit the jackpot.

So it was a question of who would defect or who wouldn't cooperate. And all that's happening there is that it's exactly the same game played between exactly the same number of people. One's played online, and the other is face-to-face. And the other thing about democracy as we have it is that it is the democracy of road rage, not of trying to work stuff out.

And finally, then, how could I be introduced by the former executive architect of Sagrada Familia in Barcelona and not talk about beauty? The one pinnacle of ethical life in every civilization that we know of, other than our own, has carried within it some notion of ineffable beauty. And that's more or less gone. I brought this up at a seminar of various policy wonks who were talking about livability, and they kind of looked at me as if my sexuality was in question. And they said, well, you can't objectively measure it.

Anyway, that, if you don't know, is the legislative council, inside the legislative council. It's sublime. It's a workaday piece of late 19th century architecture. Absolutely sublime to look at and to be in. That's it. Thank you very much.

[APPLAUSE]

 

Video transcript: AR Room Scanner - EMD Studio, Appear-ition Creating Realities

Two people hold up phones.

Text: Single Marker Tracking A R Starting Point.

Man sticks square maze to wall.

Text: Scan your work area, full 3d tracking.

Man walks holding phone, phone scans room.

Text: mark your anchor point, save the scan.

Man holds phone up to maze on wall, taps phone.

Man works at laptop.

Text: build augmented rooms, edit from a web browser.

Man types, works on diagram of scanned room, adding a contraption to the middle of the room.

Text: edit and save your scan. Import custom content

He saves his work. Message, save complete

Man walks slowly in room while looking at phone.

Man sees contraption on room floor through his phone.

Text: high fidelity 3D, fully interactive.

Four people look at their phones while standing in the same room.

Contraption appears in room between them.

Text: multi user connectivity, full A R Collaboration.

They all crouch down and aim their phones at the contraption.

Embodied movement design, E M D studio, Supported by the Swinburne University of Technology's Smart Cities Institute and Appearition. Created by EMD Studio, Stephen Jeal, Casey Richardson, Casey Dalbo, Joshua Reason, John McCromick. Supported by Appearition. Cinematography Jordan Kaye, Editing Stephen Jeal, music by purple planet.com

 

Video transcript: Smart Cities Research Institute Launch

[MUSIC PLAYING over images of a VIBRANT MODERN CITY]

MARK BURRY: The reason that the Institute is so crucial at this time is that we face unprecedented challenges. Melbourne, for instance, is a city that's going to double in size by 2050. We've got an increasing awareness of the negative effects of climate change; we've got mass migration; we're worrying about security for food and water and energy; we have to think about the mobility challenges; and we've also got health challenges of aging populations.
We have four key programs that the Institute will be focusing on. They are new urban government structures, sustainable urban mobility, smart spaces for home and work, and smart sustainable infrastructure and delivery systems.

ALEKSANDAR SUBIC: As a university of technology, clearly we have our eye on developing technologies that have the potential to disrupt and transform our cities, and create an agenda that's very much supportive of our citizens. So the Smart Cities Research Institute at Swinburne will be unique because it places our citizens at the heart of the strategy. And this is the agenda of all of our five institutes whereby they are, really, the five pillars of one institute, which is Swinburne.

DAVID SINGLETON: There are reasons why I think the Swinburne Research Institute has the potential to get ahead of the game, and that is principally because of the fact that we're launching it alongside the other four research institutes. And so there's a great opportunity to integrate research across related areas.

MICHELLE FITZGERALD: It's really important for smart cities research to be led out of Melbourne today because we have this incredible asset of students, researchers, academics in our city who are citizens themselves and can connect to the challenges we need to solve for Melbourne-- whether it be related to safety or congestion or environmental challenges-- and to apply the knowledge, the skills, the capabilities we have to create the solutions of the future, and to inform IP patents and to inform new businesses that might be starting up from the back of this work.

MICHEL MASSON: So smart cities are those which understand the importance of the overall change as a key lever to a different outcome, and that's because at the end of the day, cities are all about people. They're all about the experience that you feel in the city.

MARK BURRY: Our institute will focus on defining the smart citizen to help create and run the smart city. In short, we will be playing our part in assuring that Australia, home to some of the world's most liveable cities, will be recognized for being home to the world's smartest smart cities.

[MUSIC PLAYING]

Contact the Smart Cities Research Institute

There are many ways to engage with us. If your organisation is dealing with a complex problem, then get in touch to discuss how we can work together to provide solutions.

Call +61 (03) 9214 5177