Smart Cities and the Importance of Public Trust

A critical review of the Waterfront Toronto Smart Cities Project

Source: https://www.linkedin.com/company/waterfront-toronto/

UPDATE: On May 7, 2020 Sidewalk Labs pulled out of Waterfront Toronto

https://medium.com/sidewalk-talk/why-were-no-longer-pursuing-the-quayside-project-and-what-s-next-for-sidewalk-labs-9a61de3fee3a

There are places I’ll remember

All my life, though some have changed

Some forever, not for better

Some have gone, and some remain

            The Beatles, “In My Life”

Over the last few weeks in class we have discussed the regional innovation phenomena, studying recent examples such as Silicon Valley (Northern California, USA), Silicon Alley (New York, USA), Shenzen (in China) and practices in India. In this paper I review a recent project with objectives of stimulating regional innovation, on the shores of the Toronto lakefront, and consider how partners Sidewalk Labs and Waterfront Toronto are handling the project. Specifically, I address what mistakes they might be making and make recommendations for more sustainable long-term regional development.

Waterfront Toronto is according to their website:

“…the public advocates and stewards of Toronto’s waterfront revitalization. Created by the Governments of Canada and Ontario and the City of Toronto, our mandate is to transform our city’s waterfront by creating extraordinary new places to live, work, learn and play.” (Waterfront Home)

One key element of their 5-year strategic plan was to work with a private company as their innovation and funding partner. Sidewalk Labs, a subsidiary of Alphabet and sister company to Google, was awarded this contract in October 2017. Sidewalk Labs submitted a $50M bid to develop a Master Innovation and Innovation Plan jointly with Waterfront Toronto. Their bid included an impressive 200-page detailed outline of a smart city “built from the internet up”,  beginning with Quayside (12 acres), and then expanding across the River District to become the Innovative Design and Economic Acceleration (IDEA) District (190 acres) as shown in Fig.1.

Fig. 1 Sidewalk Labs IDEA District (Sidewalk Labs, “IDEA District”)

The website for the project Sidewalk Toronto is Sidewalk Labs tool for public engagement. The site outlines 5 objectives: job creation, affordable housing, mobility, sustainable and climate positive development, and urban innovation.

We were assigned two critical articles to read, one by Sauter written for the Atlantic in early 2018 shortly after the project was launched, and another by Bliss written towards the end of 2018 for CityLab.com  (Sauter; Bliss).  These articles raised serious questions about who gets to decide what a city is used for, how companies should use your data and how much power should be given to private companies by government when developing cities. Bianca Wylie, a “civic tech reformer” whose interview was the subject of Bliss’ article, held grave concerns that government would allow Sidewalk Labs to direct the development of the entire 800-acre Waterfront site. Both Bliss and Sauter’s articles, although early in the planning process for Quayside, highlighted the concerns of the public and activist groups at the time. These concerns included a lack of genuine consultation with the public, lack of due process and transparency when Waterfront Toronto had awarded Sidewalk Labs the contract, lack of consideration for data privacy of the potential residents and that the entire process was un-democratic. Waterfront Toronto did not even release the contract to be reviewed by the City of Toronto Council until public pressure forced them. The pressure must have been intense, because by Fall 2018, the CEO of Waterfront Toronto had resigned, three board members of Waterfront Toronto were fired including the acting CEO and Chairperson following an audit by Ontario Province, and Bliss reports that three project advisors quit due to concerns about data privacy and apathy and lack of leadership regarding shaky public trust (Bliss; McLeod).

Indeed, since these articles were written, Sidewalk Toronto has made efforts to address the public’s concerns. The planning process was originally meant to be a co-creation of the plan (Sauter), however it appears as though public pressure resulted in Waterfront Toronto distancing themselves from sidewalk Labs to be more arms-length: Sidewalk Labs would work on the plan and Waterfront Toronto would work on the framework to assess it.

By late November 2018, the draft site plan was released and Waterfront Toronto’s objectives have changed: they have dropped Urban Innovation and replaced it with Data Privacy and Digital Governance reflecting the public’s concerns (Sidewalk Labs, Quayside Draft Site Plan). However, Sidewalk Toronto’s website accessed in March 2020 still headlines Urban Innovation as a key objective and made no mention of the other two.

In June 2019, Sidewalk Labs draft Master Innovation and Development Plan (MIDP) was released by Waterfront Toronto, along with an open letter from Waterfront Toronto’s CEO. Both documents were made available online, and the open letter immediately advises the public of the issues it has with Sidewalk’s plan: that it is premature to expand from Quayside to the entire IDEA District, that presuming the lead developer contract would be given to Sidewalk is wrong, as there needs to be a tender process, that the conditions for the success of the plan require investments that are beyond the ability of Waterfront Toronto to make and that they need to ascertain compliance of the data collection proposal. The open letter closes in a way that echoes the concerns raised in our two readings and tries to convince the public that this project is still in negotiation (Diamond).

“Whether the Quayside project proceeds or not, the conversation we are having is important for all of Toronto” Stephen Diamond, Chairman and CEO of Waterfront Toronto (Diamond).

In July 2019 the parties signed an amendment to the Plan Development Agreement which this time was made available online for the Toronto Council and general public to see  (Waterfront Toronto and Sidewalk Labs).

Then in October 2019, after some public consultation, another open letter was released explaining that agreement has been reached with Sidewalk Labs on all of the issues, and Waterfront Toronto would then begin to formally review the revised MIDP. The issues were resolved as such: scope revised back to Quayside site only, the plan makes no demands of other government investment, it includes a data management plan and clarifies Sidewalk Labs role as a partner to lead developers, who will be determined through competitive tender. It also reaffirms Sidewalk Labs commitment to an urban innovation fund whilst making a commitment that 50% of investors will be Canadian. Still, the CEO remarks of Quayside, “this is not a done deal”.

Despite all these efforts to assure the public that Waterfront Toronto and Sidewalk Labs are listening to the people of Toronto and have their best interests in mind, in January 2020, Waterfront Toronto announced that they have pushed back the decision to move forward on the Quayside project from March to May 2020 to give more time for public feedback (Waterfront Home). This means the project is at least 7 months late, as planning was only meant to take 12 months. At this stage, it isn’t overreaching to say that Sidewalk Labs and Waterfront Toronto appear to have lost the public’s trust, and the entire “smart city” project could be in jeopardy. So where did they go wrong?

In a nutshell, my take on this is that Sidewalk Labs fundamental mistake was presuming that the people of Toronto are techno-optimists as they themselves are. We have learned that techno-optimists believe that if governments would just get out of technology companies’ way, they would solve all the worlds problems. Lindtner describes how techno-optimists from Silicon Valley and the West are attempting to bring this ideology to China, and Lilly Irani talks about the same phenomena  in India. Influencers like MIT and Silicon Valley companies set up shop there looking for governments, corporations and investors who are also believers to help them colonize these countries with their ideas and be able to profit from these more undeveloped economies and legal and regulatory frameworks. However, Toronto is a far different technological place, that has similar social and legal systems to the US, and in addition a healthy skepticism of big US companies and their promises of economic development. According to the readings, Canadians have had a long history of such US companies either poaching successful startups to move to the bigger market of the States, or setting up in Canada only to pull out when economic times got rough (Sauter).

IMO, Sidewalk Labs first misstep was revealing too much in their 200-page submission in order to win the bid. Their intentions and their assumptions were immediately made clear, and the savvy people of Toronto were very uncomfortable at the size of their ambitions. They perceived that Sidewalk Labs needed the scale of the entire Waterfront site to bring their vision to life, not to mention unfettered access to all residents’ data. Lindtner and Gu and Shea explained how the Chinese government might allow companies to do this in China, in order to make efficient and innovative cities with free maker and hacker spaces and new products and services for the Chinese people, but this was not going to be an acceptable trade off for Canadians.

Possibly blinded by techno-optimism, and perhaps assuming that of course a smart city is what every Torontonian wants, it’s the natural solution for economic growth?  Waterfront Toronto seem to have jumped straight to this conclusion too, that of course a smart, data driven city is the best idea and they should partner with a technology company like Sidewalk Labs. This assumption was quickly proved wrong, because like Americans, Canadians value their privacy and believe in democracy, and need to be included in the decision-making. Lindtner explained Orientalism, where the West treats the people of China as “others” that they can distance themselves from and take advantage of without guilt on the basis of these perceived differences. But Canada are by no means “others”,  Canada’s culture and values are so similar to the US, so there is no excuse of “cultural differences”. I am astounded that Sidewalk Labs and Waterfront Toronto could have made such a fundamental error to assume people  would be willing to give so much up for the sake of technology. There are of course many other options for development, such as expanding other industries like the independent film industry in Toronto, and improvements, repairs and maintenance of existing services and infrastructure, so the people of this city want to be part of any process that decides what their city is for, who they partner with and who benefits from living and working and investing there.

The other concern raised by Bianca Wylie and other community members was that Sidewalk Labs and Waterfront Toronto were not government bodies and should not have the power to facilitate or make these decisions (Bliss).  Sidewalk Labs are a tech company, not city planners, or elected representatives, and people complained their “consultation” was more publicity and marketing. Their lack of engagement hints that they did not have the desire or perhaps experience to navigate this kind of wicked community problem?

According to critics, not only did they lack the credentials, mandate or experience themselves, they were keeping the City of Toronto and its constituents in the dark about the terms of the initial agreement and the process to award the contract. This really damaged the relationship with the government, and damaged the reputation of the City in the eyes of their constituents that they were to deliver a good outcome for Toronto. This kind of behavior also resulted in removal of some board members of Waterfront Toronto. Western companies in China and India take a very different approach with those countries’ governments, helping them and other influential parties solve their problems. Taking a hostile approach was a big mistake in my opinion.

Unlike the entrepreneurial citizenship discussed by Irani that was welcomed and encouraged in India by the government, Canadians were aghast that such nation-building powers were being ceded to a US corporation, and that the process was undemocratic and opaque.

Sidewalk Labs wanted to make the IDEA District a huge, government subsidized low cost makerspace like those described by Wen, Gu and Shea and Lindtner in Shenzen. However, they wanted to bring all their Silicon Valley investors and transient employees in to use these great facilities. They did not make plans for a community to take root. Bliss and Sauter explain that the commercial space was all modular and configurable and suitable for pop ups. The residential spaces and the services to support them weren’t suitable for families, or workers who might need to commute from other parts of Toronto to provide services, but more focused on single professionals who would live two steps from their office and never need to use a car. The physical configuration reflected their notion of what a tech community looks like. This MDIP would not resolve Toronto’s accommodation shortage or high cost of living. Irani, Lindtner and others explained that makerspaces were often only accessed the upper middle class, and the luxury of being an innovator was only afforded to the well-educated and those with agency to be a maker. This seems part of the Sidewalk Toronto plans also, and that lack of understanding the demographics of Toronto seems another mistake.

Sidewalk Labs perhaps thought they could transplant their network from Silicon Valley and New York into Toronto, and apply their influence on the governments of Canada, Ontario and Toronto. Sidewalk Labs revealed in their initial proposal, their draft site plan and their draft MIDP they wanted Waterfront Toronto to give them significantly more scope than they originally planned, clear legislative “roadblocks”, develop special economic zones with low taxes and low interference for Sidewalk Labs, and divert public infrastructure investment to support the development of the smart city. In Shenzen and India, the US companies understood the importance of giving a local look and feel to their projects in order to convince locals that the project was in their best interest (even if it wasn’t). But critics believe Sidewalk Labs failed to do this. If anything, this came across as a hostile takeover of the Toronto Waterfront project. As O’Mara states, Silicon Valley is a symbol of the American Dream, but the response from Toronto appears that this Silicon Valley dream is not a Canadian one.

  Irani talks about the importance of empathy as a form of hegemonic communication when the dominant party wants to convince the subordinate one that what is good for them is good for all. However, Waterfront Toronto and Sidewalk Labs did a terrible job of displaying any empathy. Wiley describes the project’s communications as not even PR, but essentially crisis communications, where they were trying to see how little they could reveal, how much they could get away with, and only provide information when they were pressured by activists like her. If so, this is atrocious communications and community consultation, and it is no wonder the public lost trust and faith in the project.

I have a number of recommendations for future smart city projects to address these mistakes and make the project more long-term and sustainable.

 As explained above, Waterfront Toronto made changes after the two articles we read from 2018 were written. They became more transparent, they included the City in their processes, they gave more than enough time for community consultation and they separated themselves from Sidewalk Labs. These changes make a lot of sense, but they came far too late, the trust was already evaporated. For future projects, I recommend that they are completely transparent with their agreements, and ensure their governance is best practice, and they should hire locals for highly visible decision- making roles.

The underlying recommendation is about building trust, empathy and knowledge about the community and government you are working with.

It is vital for urban developers to gain the trust of the government in the first instance, and then secondly the citizens. To do that, you need to understand the culture that you are working in. I recommend in future companies work with the community and government to first define who are the stakeholders, then define the problem, and the city’s objectives, and only then see how they could help solve these problems.

There are winners and losers in every big change like this, so it is important that the government consult with the community to fully understand all the possible impacts, and try to find a way to minimize and alleviate some of the externalities this project might create.

The development council should conduct vigorous community consultation process before they begin any project planning. If the local council has not done this already, include cost and time for this process in your development proposal. This needs to be true empathy, not an exercise in justifying pre-determined outcomes, unlike the examples given by Irani in India.  

I recommend that developers explain to the community how the benefit will be shared with the community members as well as the government and the corporations. They also need to protect the fundamental individual rights of the community, in accordance with the community’s values, such as data protection and individual privacy, and family values in this case. I can really see the importance of ethnographic and critical studies to understand the culture and the community, because developers would be a lot more successful if they understood this.

Of course, this information may not actually change the level of community exploitation the developers pursue. It may actually have the sinister effect of helping the developers improve their hegemonic communication and other practices in order to gain community acceptance of the changes they are proposing, and therefore that would make any change more long-term and sustainable in that way. If successful, their communications could make the majority feel like winners, and disenfranchise and dehumanize the losers, so that most people feel  happy that the project is in their best interests, even if that is all smoke and mirrors.

To echo Sauter’s closing remarks, deciding who a city is for and who decides how they grow is indeed a wickedly complex problem. For innovation and development to be sustainable and long-term, the decision makers need to truly understand the community and the culture they are working with in order to be able to communicate the project and sell it to the people.

Whether the innovation is truly in a community’s best interest, only time and the history writers will tell.

Works Cited

Bliss, Laura. Toronto Privacy Advocate Bianca Wylie v. Sidewalk Labs – CityLab. 21 Dec. 2018, https://www.citylab.com/life/2018/12/bianca-wylie-interview-toronto-quayside-protest-criticism/574477/.

Diamond, Stephen. “Open Letter from Waterfront Toronto Board Chair June 2019.” Waterfront Toronto, 24 June 2019, https://waterfrontoronto.ca/nbe/wcm/connect/waterfront/waterfront_content_library/waterfront+home/news+room/news+archive/news/2019/june/open+letter+from+waterfront+toronto+board+chair%2C+stephen+diamond+regarding+quayside.

Irani, Lilly. Chasing Innovation Making Entrepreneurial Citizens in Modern India. eScholarship, 2019.

McLeod, James. Ontario Sacks Three Waterfront Toronto Board Members amid Sidewalk Labs Controversy | Financial Post. https://business.financialpost.com/technology/ontario-sacks-three-waterfront-toronto-board-members-including-acting-ceo-amid-sidewalk-labs-controversy. Accessed 16 Mar. 2020.

Sauter, Molly. Sidewalk Labs: Google’s Guinea-Pig City in Toronto – The Atlantic. 13 Feb. 2018, https://www.theatlantic.com/technology/archive/2018/02/googles-guinea-pig-city/552932/.

Sidewalk Labs. “IDEA District.” Sidewalk Toronto, Mar. 2020, https://www.sidewalktoronto.ca/plans/introduction-to-the-idea-district/.

—. Quayside Draft Site Plan. 18 Nov. 2018, https://storage.googleapis.com/sidewalk-toronto-ca/wp-content/uploads/2019/06/13210448/18.11.29_Quayside_Draft_Site-Plan.pdf.

Waterfront Home. https://www.waterfrontoronto.ca/nbe/portal/waterfront/Home. Accessed 17 Mar. 2020.

Waterfront Toronto, and Sidewalk Labs. Plan Development Agreement (July 2018) and Amendment (July 2019). July 2019, https://quaysideto.ca/wp-content/uploads/2019/04/Plan-Development-Agreement-July-31-2018-and-Amendment-July-31-2019.pdf.

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