Research Summary

Innovative Business Models for Sustainable Urbanization

by Robert G. Eccles

Description

The world is experiencing two inexorable trends that are in conflict with each other: urbanization and sustainability.  As the world's economy evolves, rural areas are less and less able to support the populations that live in them and so a massive wave of urbanization is happening that will continue for at least the next 50 years.  At the same time, public consciousness about the need for sustainability--defined in economic, social, environmental and governance terms--is growing rapidly.  If current cities grow and need cities are created in the same way that urbanization has happened in the past, the result will not be sustainable.  Thus new models must be found for achieving urbanization in a sustainable way and cities will need to provided integrated reports of their economic, environmental, social and governance performance (http://www.integratedreporting.org).  Here a number of different "natural experiments" are taking place, such as new cities being built in Masdar, Abu Dhabi and Dongtan, China.  Large companies such as Accenture, Cisco, IBM and Siemens are also developing products and services to help built "Smart" cities.  One especially interesting experiment is taking place in the Municipality of Paredes, about 20 minutes outside Porto, Portugal.  Here a start-up company called Living PlanIT, S.A. is building a green field research city called PlanIT Valley on 1,700 hectares of land in Paredes.  This ambitious and innovative business model combines elements of innovation clusters, real estate development and professional services utilizing a "partner" model that involves a large number of major companies addressing the sustainable urbanization market.  This includes both new cities and the "retrofit" of existing ones.  If this model is successful, Living PlanIT and its partners plan to replicate this model all over the world.  In collaboration with Professor Amy Edmondson, Dr. Eccles is studying this initiative on a real time basis with the full support of company and partner company executives, as well as all levels of the Portuguese government.  Eccles and Edmondson will supplement this in depth research case study with studies of other "smart" and "eco" cities and major real estate developments, as well as other initiatives to create research and innovation clusters.  This research project includes a large number of MBA and doctoral students and includes collaborations with faculty and students in other schools at Harvard University, including the Graduate School of Design and the Harvard Kennedy School.  Their ultimate objective is to write a book on business models for sustainable urbanization.