Urban Infrastructure: Globalization / Slowbalization 3031237846, 9783031237843

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Urban Infrastructure

Remo Dalla Longa

Urban Infrastructure Globalization / Slowbalization

Remo Dalla Longa Bocconi University / SDA School of Management – PREM Lab Milan, Italy

ISBN 978-3-031-23784-3 ISBN 978-3-031-23785-0 (eBook) https://doi.org/10.1007/978-3-031-23785-0 © The Editor(s) (if applicable) and The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors, and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, expressed or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. This Springer imprint is published by the registered company Springer Nature Switzerland AG The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Preface

The book addresses the issue of urban infrastructures within globalization. Slowbalization is then introduced rather than deglobalization to indicate important variables that could stand in the way of a prevailing reading key in the book. Wiig et al (2022) argue that starting from a volume (Graham, Marvin, 2001 ) the study of infrastructures has been brought to the center of urban studies and has inspired the infrastructural turn within urban sciences. Infrastructures, and urban ones in particular, precisely because of their differentiation, specialisms, formulas and organizational models that underlie their assembly, governance and management have always appeared residual compared to other themes such as the city, urbanization, the form urban, competitive advantage, applied globalization; or on another more technical side, specialisms such as engineering or other technical disciplines called upon to assemble and update the various infrastructures in various ways. Moss (2020) on Berlin, which tells the story of that city (1920–2020) through infrastructures, removing them from invisibility, may be singular, but it is not. Putting them at the center offers new ideas and angles both from the point of view of economics, finance, assembly technique and above all the spatiality of the city within the different forms of globalization. Today, urban infrastructures are also a fundamental part of the economy and finance and follow their evolution and trajectory. They assume particular importance starting from the conjugation with the term globalization; we have seen a rapid transformation of the interconnected infrastructure precisely with the growth of globalization and the global city. The analysis focused more on what has been called the western global city and the context of the brownfield infrastructure. The slowbalization found body with the pandemic, present in the book, but also with a recent possible revision of the world order linked to the aggression of Russia against Ukraine and to the economic sanctions and commercial isolation towards Russia exercised by the West after on February 24, 2022. In general, the problem of China remains open, a fundamental engine of the new globalization and the impatience shown by the USA at various times in countering an eventual economic overtaking calculated in the next 10 years. China is also now experiencing a worrying slowdown in its growth. The 2022 Report of the International Monetary Fund (IMF) v

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indicates a slowdown in global growth (from 6% in 2021 to 3.2 in 2022 to 2.7 estimated in 2023) with data far below the 2000–2021 average (+ 3.6%), and from the period 1970–2021 when the peaks of globalization, global cities and urban infrastructure were highest. The data push, at least in the short term, to a slowbalization. Negative revisions are more pronounced for advanced economies than for emerging market and developing economies (IMF, 2022). On the other hand, Stiglitz (2022) appears much more optimistic over the next ten years. Added to this is the turbulence in Taiwan, on the sustained economic growth indices that China has had in recent decades and the intertwining that has taken place in recent years precisely on infrastructures as a ‘metaphor’ of globalization: One Belt One Road (OBOR), of the Build Back Better World (B3W) and to demonstrate that infrastructure is a central point of globalization the President of the United States launch again on June 26, 2022, the Partnership for Global Infrastructure and Investment (PGII—which adds to the B3W ) for 600 billion dollars to the G7 in Bavaria as opposed to the OBOR of China. Russia represents less than 2% of world GDP, less than the economic weight (GDP production) of each of the great European nations (Germany, UK, France and Italy), alone the partial exclusion of Russia, its substantial ‘deglobalization’ from the Western market it should not be able to block globalization, it can slow it down through slowbalization which would become something different if China decided to actively side with Russia and make a new block with it, in this case the ‘deglobalization’ at the geo-political level would widen and end up creating subglobal blocs. This is an unlikely element. We are facing a possible strengthening of slowbalization and not facing a disavowal, albeit temporary, of globalization as it is interpreted in the book, even if a new cold war were to arrive with a subdivision of blocks, precisely because it is in China’s interest. Not to achieve this and to block its markets which with the western market has the flow and the greatest advantage. Stiglitz (2022) seems to give a shareable reading of the pandemic even though it is dealt with in this book, namely: a) the pandemic is clearly a historical event and will have a lasting impact on our memories but it will not be able to stop globalization in the medium term. Stiglitz, limited to the pandemic but also extendable to the Ukrainian conflict, gives a conjunctural explanation to slowbalization regarding the production of goods by means of goods: “A requires B requires C requires A. If A’s production is stalled for lack of B, the problem is that B cannot increase its production without C and C cannot increase its production without A”. In our model, not without some simplifications, slowbalization is (A) the urban infrastructure blocked, or poorly adapted due to lack of (B) funds, investments, energy, usable materials and (B) it cannot grow adequately without a growth of the global city (C) the latter cannot grow in a dynamic and complete form without (A): the adapted urban infrastructures. This results then in slowbalization. From this point of view, slowbalization is a ‘partial’ blockage of globalization. Stiglitz has a horizon not in the short but in the medium term (next 10 years), it is not for a neoliberal globalization (which ‘has shaped economic thought and policy in the last forty years’ Stiglitz, 2022, page 6), but has a more critical view of this type of globalization (2002; 2006; 2017). It is for support with public

Preface

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financing of infrastructures, the Build Back Better World (page 9) is indicated as an example and of public infrastructures within the States rather than investments concentrated mainly in global cities as the neoliberal scheme, with financialization, would tend to propose. Infrastructures, whether we are talking about war or the development of globalisation, represent a central point of reference. They are so when they have to transport armies to more or less large cities, set up military logistics, be sabotaged or interrupted when it is thought to slow down the enemy’s advance. They are the first to be bombed and destroyed, such as airports and railway stations, energy plants, ports, roads and, in a highly criminal way, even hospitals and museums. They represent the connection, linking, switching and life of a city and the relationship between it and its territory. Infrastructures are a strategic and vital part of globalization and its form of development. They were even before the conflict through a challenge between China that made it a central point with its ‘Silk Road’: One Belt One Road (OBOR) or Belt and Road Initiative (BRI) and the response on the same issue from part of the USA with the Build Back Better World (B3W) and of the European community with the Global Gateway. Infrastructure can become the new challenge of globalization whether it operates within a single global market in which the center remains the urban infrastructure, or a subdivision into blocks in which trade branches off around the infrastructural platforms, difficult if not impossible to think outside the junctions of global cities and urban infrastructure. Eric Olander founder of the China Africa Project makes this example between two states involved in the ‘Silk Road’ program. In Kazakhstan, a company or consumer present in the capital Nur-Sultan of more than one million inhabitants asks for a product in Nairobi in Kenya: use (a) Alibaba e-commerce; (b) through a digital infrastructure; (c) which transmits on a satellite; (d) it is transmitted in Kenya where the producer receives it on a smartphone; (e) which works on a 4 or 5 G network built by Huawei; (f) the payment is made using a Chinese digital currency such as the yuan without using the SWIFT interbank system or the dollar; (g) the manufacturer in Nairobi prepares the packaging and ships it; (h) the package is tracked along the entire route by the Baidu satellite system and no longer by the American GPS; (i) then travels on a Chinese-built railway to the port city of Mombasa (in the Chinese Free Trade Zone); (j) there are Chinese computers and scanners that record it; (k) the package is embarked on a ship of Cosco (Chinese shipping company); (l) delivered to some Asian port operated by Chinese; (m) from there he travels on Chinese-built railways and roads to his destination in Nur-Sultan. Of the 16 passages from (a) to (o), 60% are infrastructures and all 16 products and transit filters (reference passages) and input–output are Chinese. These are in part and in part could be the platforms of the new globalization– slowbalzation that are being generated and could be identified within the commercial blocs. The Silk Road (OBOR eBRI) and the response of B3W of the USA or Global

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Gateway of the Europeans, or even the PGII 1 , respond to this logic or strengthening of trade and loyal globalization. The infrastructure, as seen, is at the center of this delicate passage, and within this, there is the urban greenfield infrastructure that largely described, but which is able to touch with as much impact, if not greater, the urban infrastructure brownfield . The funds that China has allocated to these programs with infrastructures at the center were, in the period from 2008 to 2019, 462 billion, an amount almost equal to what the World Bank did in its interventions. The investments of the EU’s Global Gateway in ‘climate, energy’, transport, health, education and research are expected to exceed 300 billion in favor of non-EU countries. They are a component with respect to general investments but enough to indicate infrastructures and necessarily urban ones at the center of the next development of globalization. Inside the book, there are references to the COVID-19 pandemic having a significant impact on slowbalization, globalization, global cities and urban infrastructures. The COVID-19 pandemic does not appear to be over yet, so its trajectory is not complete. There is in the book a description during the acute phase. Having faced and described, it has a precise meaning. Not just a contingency in which the trajectory can appear obscure if you find yourself inside a vortex that still lacks a clear direction. Assigning to this important exogenous factor, the pandemic, a weight in guiding the development of globalization, its slowing (slowbalization), the impact with urban infrastructures and global cities and the resulting transformations become important. Stiglitz himself (2022) in his economic analysis on today bypasses the obstacle and bases his analysis on 10 years, almost assuming that with such a long time in economics the problem of pathology will be solved or mitigated. The guiding concept is that in any case contagious diseases such as Covid-19, or others even more serious in their impact on global cities, will be increasingly frequent and could have an even greater impact than Covid-19 on urban infrastructures (Quammen, 2022). The issue is already known in relation to urban infrastructures (Ali, Keil 2006, 2010), as it is known as a risk called to manifest itself in ever shorter cycles (Plowright et al. 2015, Quammen, 2012) and with impacts that could be fifty times greater than COVID-19. A reference could be the H5N1 virus, described several times by (Quammen, 2012, 2022). The past has seen cities profoundly influenced by these events. Trajectories have often changed. Now, the hypothesized risk is that the phenomena are increasingly intense and sequential, also favored by open processes of extended urbanization, with infrastructures to act as a connector (Connolly et al. 2021). Just as there is a push to direct research on the fact that there is increasing importance to consider demographic change and infrastructure as a contributing cause of the spread of infectious diseases (Connolly et al. 2021). 1

The PGII foresees four intervention columns; one of these is the intervention on the ITC, for facilitate open digital societies: from working with trusted vendors to provide 5G and 6G digital connectivity, to supporting access to platforms and services.

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The discussion of the COVID-19 pandemic present in chapters 1, 2, 5 and 6 of this volume can be interpreted as the reading of a variable to be considered in a structural way with respect to the evolution of urban infrastructures. The new theme that has opened is that of urbanization and global cities in relation to the issue of health and disease. Connolly et al. (2021), Ali and Keil (2008) and others (Elsey et al. 2019, Wu et al. 2017) indicate that in addition to the theme of globalization and global cities with a purely economic and geographical interpretation (for example Ren and Keil, 2017) goes adds a reading of health-diseases-pandemics and infections. The discussion of COVID-19 in some chapters of the book also wants to address this theme and the implication with urban infrastructures and global cities, the central topic of the book. Milan, Italy

Remo Dalla Longa

References Ali, H., & Keil, R. (2006). Global cities and the spread of infectious disease: The case of severe acute respiratory syndrome (SARS) in Toronto, Canada. Urban Studies, 43, 491–509. Ali, S. H., & Keil, R. (2008). Networked Disease: Emerging Infections in the Global City. Oxford, Wiley-Blackwell. Ali, S. H., & Keil, R. (2010). Securitizing network flows: Infectious disease and airports. In S. Graham (Ed.), Disrupted cities. Routledge. Connolly, C., Keil, R., & Ali, S. H. (2021). Extended urbanisation and the spatialities of infectious disease: Demographic change, infrastructure and governance. Urban Studies, 58(2), 245–263. Elsey, H., Agyepong, I., Huque, R., et al. (2019). Rethinking health systems in the context of urbanisation: Challenges from four rapidly urbanising low-income and middle-income countries. BMJ Global Health, 4(3), e001501. IMF- International Monetary Fund. (2022, October). World Economic Outlook: Countering the Cost-of-Living Crisis. Moss, T. (2020). Remaking Berlin: A history of the city through infrastructure, 1920–2020. The MIT Press. Plowright, R. K., et al. (2015). Ecological dynamics of emerging bat virus spillover. The Royal Society Publishing, 282. Quammen, D. (2012). Spillover: Animal Infections and the Next Human Pandemic. Norton. Quammen, D. (2022). Breathless: The Scientific Race to Defeat a Deadly Virus. Simon & Schuster. Ren, X., & Keil, R. (Eds.) (2017). The Globalizing cities reader. 2nd edition. The Routledge Urban reader series. Routledge, Taylor & Francis Group. Stiglitz, J. E. (2002). Globalization and its ill -feelings. W. W. Norton & Company. Stiglitz, J. E. (2006). Making globalization work. W. W. Norton & Company. Stiglitz, J. E. (2017). Globalization and Its moods revisited: Anti-Globalization in the age of Trump. W. W. Norton & Company. Stiglitz, J. E. (2022, September 13). Is it a turning point in the US economy? Journal of Policy Modeling. Wiig, A. Karvonen, A. McFarlane C. & Rutherford J. (2022). Splintering Urbanism at 20: Mapping Trajectories of Research on Urban Infrastructures. Journal of Urban Technology, 29(1), 1–11. Wu, T., Perrings, C., Kinzig, A., et al. (2017). Economic growth, urbanization, globalization, and the risks of emerging infectious diseases in China: A review. Ambio, 46 (1), 18–29.

Contents

1

Urban Infrastructures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.1 The New Phenomenon of Urban Infrastructures . . . . . . . . . . . . . . . 1.2 Cities and Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.3 The Definition of Infrastructure According to Urban Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.4 How to Interpret and Classify Urban Infrastructures . . . . . . . . . . . 1.5 A Dynamic in Place . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.6 The Complexity of Infrastructure on Urban Failure . . . . . . . . . . . . 1.7 The New National Conflicts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.8 The Criticalities: From Hyper-Globalization to Slowbalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

1 1 13

Globalization and the City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.1 Urban Structure and Infrastructure: Greenfield and Brownfield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.2 Pandemic Impact . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.3 Concept of Greenfield and Brownfield Infrastructure . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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The New Complexity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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A Reference Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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Elements of Deglobalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93 5.1 Slowbalization and Contingency: Crisis and Pandemic . . . . . . . . . 98 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112

6

The Financialization of Urban Infrastructure . . . . . . . . . . . . . . . . . . . . 117 6.1 Financing of Infrastructure and PPP . . . . . . . . . . . . . . . . . . . . . . . . . 120 6.1.1 Financing of the PPP Alone . . . . . . . . . . . . . . . . . . . . . . . . . 121

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14 16 29 31 35 38 39

45 61 65 69

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6.2 6.3 6.4

Private Financing of Economic Infrastructures . . . . . . . . . . . . . . . . The Detailed Financing of Economic Infrastructure . . . . . . . . . . . Theoretical and Operational Elements of Financialization . . . . . . 6.4.1 Financing, Funds and Equity . . . . . . . . . . . . . . . . . . . . . . . . 6.4.2 Some Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.5 What Happens with the Covid-19 Phase? . . . . . . . . . . . . . . . . . . . . 6.6 Some Evidences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

121 125 146 165 167 171 172 182

7

Infrastructure Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 187 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 191

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Financialization in the Global City . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.1 Milan Global City and Financialization . . . . . . . . . . . . . . . . . . . . . . 8.2 Milan and Brownfield . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.1 Milan Bicocca . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8.2.2 Porta Nuova and City Life . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

Types of Urban Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 225 9.1 Slowbalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 236 References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 244

10 The Smart City: Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10.1 The Definition of the Smart City as an Infrastructure . . . . . . . . . . 10.2 Financing Smart Cities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

193 193 198 198 211 221

247 256 264 270

About the Author

Remo Dalla Longa is a professor at Bocconi University in Milan and at SDA Bocconi, Italy. His research focuses on infrastructures and publics works, on the Public-Private Partnership, and on urban evolution. He was a researcher at the CURDS of the University of Newcastle at UK publishing research on counterurbanization. He is currently, for several years, scientific director of the GePROPI (Management of Public Works Processes and Infrastructures) and of the PREM (Public Real Estate Management) Lab of the Bocconi University. In Italy, he was appointed in the past, along with others, for the writing of the Code of public contracts in transposition of EU directives. He was lead partner of an international project with the involvement of several European research centers and universities with the writing for Springer of some books ‘Globalization and Urban Implosion’ and ‘Urban Models and Public-Private Partnership’. He is the author of several international essays and books. The book wants to open a new field of research that sees urban infrastructure as a reference object. Other studies by other authors prior to this book have marked a direction on urban infrastructure. This contribution aims to give an impetus and originality to the concept.

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Chapter 1

Urban Infrastructures

Abstract The chapter deals with the concept of urban infrastructure. The attempt is that of a first systematization of the theme. The identity of the term and the meaning it assumes become central to understanding the concept and its importance. It is the urban term that is added to infrastructure that gives infrastructure a new meaning. It is the evolving phenomena that are combined with cities that make it a central theme. The use of the term urban infrastructure in an ever more extensive form does not concern an occasional passage, but it is a new treatment and a new line of research. We differ from a previous phase of territory, nation, city, public works. There is a technical rigor in defining the urban infrastructure, but also an interdisciplinarity in making it become a formidable key to interpreting the rapidly changing economic, technological and organizational, as well as social transformation. The big cities (global cities) and the infrastructures that innervate them are the centre of the discussion, the transformation of the state and of the private capital in relation to urban infrastructure also appears at the same time. There is also an attempt to rearrange and integrate the language of different authors and disciplines around the concept of urban infrastructure.

1.1 The New Phenomenon of Urban Infrastructures When over twenty years ago I wrote “Management of public works,” (Dalla Longa, 1997) infrastructure was considered separate from public buildings. Infrastructure was meant mainly as identified networks, in other words, a complex construction connecting things and people for public and collective use (in addition to the system of ports and airports, road and rail networks, electricity and telephone networks, etc.). Furthermore, the division between the specific assembly and uses of buildings and infrastructures also regarded disciplines; in engineering in particular (but in other areas as well), the various specialist components were followed that defined paths, careers, and acquaintances. In a broad sense, infrastructures were considered public works, that were carried out through tenders, strictly regulated by the state, which took care of them and

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_1

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1 Urban Infrastructures

‘fragmented’ the entire ‘assemblage,’ with a few consolidated and undifferentiated procedures. The approach was fairly indistinct between urban and less-populated areas, and adhocratic needs were followed. Infrastructure was assembled and for the most remained government controlled, considered precisely as public works. The ownership was exclusively (or predominantly) public. This was mainly a Western vision of an increasingly tighter and adapted role that enveloped infrastructure and public works, with many implications on the specialist front (that remains), but all of this is no longer enough to explain the importance and the new shape of urban and the new concept of infrastructure. Until a few decades ago, the key word was “public works,” a perimeter that encompassed almost everything; this was true even for the United States. However, more than twenty years ago, Herman and Ausubel (1988) asked themselves “what were ‘public works’ and what were ‘private works’?” Then they continued, adding: in the US we often identify infrastructure with public works, but it is equally true that in some states and regions there are private or public companies that operate in the construction and management of infrastructure, and ownership and governance could lead to identifying infrastructure in both the public and private sphere. All of this, however, creates a contrast with the urban complexity that has grown along with globalization that provides an imperfect classification for this clear separation between the two categories (public or private works). Complexity goes hand in hand with the transformation of infrastructure and cities. With a new layer of research, Graham (2010) also indicates that cities are the sum of infrastructures, or more accurately are a set of infrastructures, and therefore that the clear separation of public and private comes from a simplified view that can no longer be applied. Often, it is an invisible part of the city that is more or less identifiable, and not always well-perceived, which emerges as extremely important as soon as there is a failure of the infrastructure that calls into question the functions of the city. There are many authors—it is impossible to name them all (Amin & Thrift, 2017; Chattopadhyay, 2012; Graham & Marvin, 2001)—who dwell on the list of urban infrastructures. This reference is undoubtedly useful in shaping the concept of urban infrastructure. If you browse the list, the absolute importance of the infrastructure in giving shape and substance to the city emerges. An example of an only ‘instant’ and not ‘evolutionary’ list is the book “Cities and Their Vital Systems: Infrastructure Past, Present, and Future” (Herman & Ausubel, 1988), in which the full structure and complexity of urban infrastructures emerge. When we accept the term ‘complex interconnection of infrastructure,’ it becomes difficult to remain within separate categories of public or private works, and the spheres within the concept of urban infrastructure become confused. There is also another equally important and not fully-developed line of research that concerns the ‘life cycle’ of infrastructure. Graham and Thrift (2007) tackle the issue by searching for competitive advantages. Several authors, such as Marland and Weinberg (1988), point out that infrastructure sites are virtually eternal, they document our past and shape the present and the future. For Western urban infrastructure, a specific reference arises around a somewhat obscure term such as brownfield infrastructure, which must be better interpreted, which we will do later in this book.

1.1 The New Phenomenon of Urban Infrastructures

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A work of infrastructure has a phase of conception, design, and construction, especially in physical terms (D&C—Design & Construction); then there is another little-known phase, always left in the dark, on which Graham and Thrift (2007) intervened, which is O&M (Operation & Maintenance). In D&C phase, there is a political decision that overlaps with other administrative-technical and bureaucratic actions; for more complex infrastructures, the phase leading to the completion of D&C can sometimes last more than ten years. This is undoubtedly a critical issue, but times can be even longer in some cases; here we are faced with an obviously pathological condition. O&M is then a very long, almost infinite sum of many micropolicy choices, sustaining pushes for alterations that require particular interest because they are included in a brownfield phase, while D&C can be classified as greenfield. These are two different contexts when applied to urban infrastructure and globalization. Two different concepts arise, One is related to the broad specialization with which professionals look at infrastructure (Dalla Longa, 2004, 2014), the other that of addressing within this concept the theme of the difference of urban infrastructure in a greenfield and brownfield context, the first more suited to emerging countries, while brownfield is more compatible with high-income developed countries. Below is a model I used more than fifteen years ago (Dalla Longa, 2004). With the new urban infrastructure setup, this rational model must be modified both if used for multiple infrastructures (Graham, 2010), and if used for a single infrastructure. The model (Fig. 1.1) was focused on defining O&M as connected to D&C, and not separate as the engineering component connected to public works, the way it was intended and developed over time. The separation was due to different tenders. The main tender was for the design and construction of the work, followed by a myriad of other tenders for the maintenance and operation of the work. For public works, the misconception also prevailed that most products have production, stock, and sale phases, yet this is not the case for public works, since there is no sale, and thus the process is to be understood as a whole. In the traditional engineering model, particular attention was dedicated to D&C with times that were never too long times—otherwise a situation of criticality and pathology emerged—and then the infrastructure built entered the management of the public administration, and from that moment on, the individual O&M interventions were untraceable and often fragmented and random. Each culture and each country treated this part of O&M with its own particularities and customs. However, the D&C and O&M models can be integrated with the PPP formula (Public–Private Partnership), in which there is combined management in a DBOM (Design, Built, Operation, Maintenance) model. This aspect is also interesting and is dealt with later. The elements of the model I built (Fig. 1.1) were conceived in such a way that given a certain value on the construction, with AB the value of constant maintenance was maintained. At the same time, the line of physical obsolescence (AC) was recognized, which changes for each type of infrastructure. Along with this, the economic obsolescence must also be considered, that responds to the obsolescence of technology and which is different from physical obsolescence and concerns each infrastructure differently. On another side (a0-at), the abatement line is drawn, which in turn is profoundly different both for each infrastructure and for physical

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D2 constant maintenance line

A

B

D1

D&C greenfield

C 5

10

15

20

O&M brownfield

Fig. 1.1 The model of Design & Construction (greenfield) and Operation & Maintenance (brownfield) (Source R. Dalla Longa, 2004, p. 293)

or economic obsolescence, which have different representations. Economic obsolescence is measured by the depreciation years of the asset and the resulting pressures, in which technological obsolescence can be implicit. However, this is not a clear overlap. Amortization responds to different logics with respect to technological obsolescence, unless you try, with great difficulty, to make them coincide. An element that is neglected in the model is the renewal line, as it appears too theoretical in the specialized version, but this is not so at all if instead of being applied to the single infrastructure it is applied within the set of urban infrastructures or if urban infrastructures are considered together. The renewal line responds significantly to the competitive advantage linked to globalization and to the consequent pressures also of finance as well as political choices. The concept of infrastructure closely linked to politics, in a broad sense, is in fact a constant among some authors (Amin & Thrift, 2017; Chattopadhyay, 2012): “infrastructure not only has a politics but is a politics”. Each infrastructure has its own unscheduled requirements and depends on superior forces, which is mainly due to the evolution of globalization. O&M and brownfield represent another little-known, but in many ways just as, if not more relevant side of the moon than D&C (Fig. 1.1). The way to manage a brownfield infrastructure in global cities is a purely specific theme of high-income developed countries and is also the main theme of this book. Segments D1 and D2 represent the most important openings and in many ways more are indefinable and less programmable as the interacting variables are different. They affect the abatement point or ineffective use of the function containing the infrastructure (D1); or, due to the development dynamics of global cities, and of globalization in general, they can expand or not expand the segment represented from (D2).

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What is represented in Fig. 1.1 relates to programming, while the implementation of the model in the time phase represented by the lines is different. Here, the adaptation actions of the infrastructure due over time are measured. Actions over time are not rational, and depend on numerous variables (e.g. availability of resources, crisis, management models, vision of the decision-making and political sphere) including an ‘invisible’ and imperfect hand of competitive advantage driven by globalization. The most interesting part is not the model itself, but its implementation of and the consequent result. The model in Fig. 1.1 also highlights a dichotomous aspect of organization and management formulas, which on the one hand, with respect to D&C and O&M have a short time, while on the other hand the infrastructure—not all kinds, but mainly physical infrastructures that are a constituent part of the urban structure—is presented as a shell or a coral reef (Tarr, 1984) with the sedimentation that distinguishes it. The asymmetry between management formulas (think of traditional PPP contracts) and ‘eternal’ infrastructure creates many problems on the innovation side (see the renewal line in Fig. 1.1). This represents a typical ‘governance’ problem. There is also the more general point that without urban infrastructure, there would be no cities either. Furthermore, the specialist reference took the single infrastructure as an observation point; urban infrastructure, on the other hand, considers an intertwining or interactive set of infrastructures, often with ‘prostheses’ that are added to the traditional physical structures ones creating a third nature (Amin & Thrift, 2017). The question therefore applies: what are infrastructures made of? The traditional physical infrastructures that Amin and Thrift (2017) would call according to their nature are above all economic and social infrastructures. They are also the infrastructures that have characterized “public works” for a long time and have remained in different forms within the public perimeter for an extended period, and then have evolved (Weber & Alfen, 2010). Throughout the last century, they were understood as fragmented, where D&C was divided from O&M. This is a model that mainly affected high-income developed countries and specifically the European Community model. In the community context, within economic and social infrastructures, the gradual transformation of the relationship between the state and the market is implicit from the standpoint of institutional and organizational formulas and the changes that have taken place not only at the level of the single nation, but also, and above all, at the European and global community level. Unlike in the last century, many recent (urban) infrastructures were born directly within the private sector (e.g. the whole issue of digitization and media) with reference legislation that has changed significantly in recent decades (Guy et al., 2001a, 2011) and has shaped the relationship between public and private in different ways. As far as traditional infrastructures are concerned, an increasingly marked division between economic infrastructures and social infrastructures has emerged (Dalla Longa, 2017) from the standpoint of assembly and ’governance,’ even though both have undergone a migration, that has been more marked and structural for the economic infrastructures, that have gone from ’public works’ to infrastructure, and then to urban infrastructure. The transition has clearly regarded telecommunications, telephony, energy, and in various forms the

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disposal of waste and water. At the European level, the PPPI was born,1 involving the creation of public and private companies and the definition of the control of the companies and listing on the stock exchange. PPPI is other than design, financing, construction, operation and maintenance (DBFOM). Indirectly, this different configuration has a strong impact on the financing of networks, the controls and development of the same, the connections between different types of networks, and the fragility that complexity and different forms of management can produce on urban growth. It also impacts the systems of competitive advantage that can be generated, and the factors of inclusion and exclusion of social and economic components. A little explored point concerns the different infrastructure assembly systems. Ultimately, infrastructures, especially urban ones, have grown considerably over time, interwining with each other with an icrease in complexity (Fig. 1.2). In the engineering and specialist fields, at least until a few decades ago, the term ‘infrastructure’ was a well-defined physical entity. Yet the more we deal with the urban phenomenon (urban infrastructure)—and here too the discussion of recent decades is valid—and we enter social disciplines, the more infrastructure becomes an indefinite entity. Amin and Thrift (2017) integrate physical infrastructure with others of a third nature such as the detection and data collection capabilities that follow the physical arrangement of cables; infrastructure also concerns production and storage systems, and thus for large urban agglomerations an articulated vision of infrastructure has evolved. This, even though Amin himself (2014) treats it as a matter of evolution, and when he describes infrastructure for favelas as the ‘bare of complexity’: “the force of infrastructure is unmistakable, crystallised around the documents designating ‘ownership’ of a plot”, consisting of dwellings—shelters rather than homes; the infrastructure is therefore made of “poles, wires and tubes put into place to pirate water and electricity, the spaces cleared for play areas, churches, roads and toilet blocs, and the vehicles, mobile phones and televisions facilitating contact with the outside world”. The dwelling (not infrastructure), on the other hand, concerns the plot, “the bricks, corrugated metal and plastic tanks assembled” It remains questionable whether food distribution or commercial complexes are to be considered infrastructure” (Amin, 2014, p. 9). Graham (2010) also broadens the reference: in addition to the network infrastructures already indicated, food distribution systems, shopping centers, airports and logistics for goods to be distributed, electronic communication systems, and digital media are added. ‘Urban infrastructures’ are complex and ramified and indicate to Sassen (2012) that if all the infrastructure of a city, from sewers to electricity and broadband, were enclosed in transparent walls and floors or indicated at intersections, as well as bus stops, or in conventional spaces with public squares or cubes scattered around the urban fabric, this would make it possible not only to detect their central role in the urban metabolism, but also their unequal distribution. Furthermore, global cities are themeselves understood as infrastructure. As they have ‘became part of the living 1

European Commission: EC (C 2007/6661). Dalla Longa, R. (2017).

electricity renewable gas/pipelines district heating

Transport

Economic infrastructure

Power fixed network internet broadband wireless

Fig. 1.2 Systemic representation of urban infrastructures

5G

Communication information network ITC

platforms

Community services

police prison community centres cemeteries and crematoria

fire

historic legacy and monuments

of land

of air

of water

industrial domestic /differez . industrial disposal plants

airports

ports internal navigation

metro lines

roads and networks stations and railways surface transport

Waste/disposal

water cycle / purification

poles and city of health hospitals health centres individual health functions Health nests/nursey schoos different schools (primary, secondary, further education) Education and smart cities university, higher education and student houses schools buildings for education Universe of information digital media cultural centers by digitalization free time Culture /leisure Ubiquitous spaces for entertainment museums and theaters salons, fairs and markets infrastructure international technological sport facilities/sport centres Sport revolution and professional facilities shopping centers Social infrastructure smart cities social housing (and renewal) historic landscapes industrial complex and park green public realm Open space parks Green infrastructure Industry / trade rivers/coast/corridors/waterfront water Infrastructure (other) cycle paths footways Water supply drainage sewers/waster water Heritage space street furniture

sharing economy/app/platforms bases material for the dashboards cyberspace digital commons urban automotive

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infrastructure of a new type of global formations already in the 1980s and 1990s’ (Sassen, 2019b). Sassen is also one of the leading theorists of the globalized city (Sassen, 2016, 2019a, b). Furthermore, infrastructure has always been a silent glue, that is imperceptible and boring, but which shows how important it is when it causes a breakdown and non-use following a collapse or a rupture (Graham, 2010). This increases disruption when considering an ‘interactive set of infrastructures’ that is typical of urban contexts. The collapse of the Morandi bridge in Genoa in 2018, with 48 deaths, that led to the paralysis of the city for a long period, is emblematic in Italy. The bridge was constructed with D&C on the part of the State in 1960, and subsequently a concession was given with the formula of the Long Term Contract (LTC) to a private company (Atlantia) for management of the O&M phase. Over time, the nature of the duration of the concession also changed. In the absence of an O&M culture, including defined contractually, it was difficult to establish the interconnection point between the abatement line and the obsolescence line, passing through the constant maintenance line while also considering the change in traffic flows in the decades since construction. These components were managed by the contractor (economic operator) in the pursuit of profit, neglecting or downgrading some data and letting events take over. This was the sign of an unresolved management of the relationship within the formulas of O&M governance. There can be different interpretations of the accident, including the importance of an infrastructure for the city of Genoa, and the reification of the infrastructure when it ceases to function or exist. Equally significant was the reconstruction of the bridge, which will be discussed later. All of this represents a partial vision of infrastructure, while a differentiation between the different cultures, nations, or regions in the world remains. However, globalization brings the way of considering assets, and therefore also infrastructures on a global level, closer. The products placed on the market have now been standardized for several decades and have increasingly lost their origin with globalization (mobile phones, computers and complex products are assemblies in which the supply chain is extensive). Everything is global. For example, in analyzing not the use, but the production of mobile phones, Castells already claimed at the end of the last century that traces of national borders had been lost. What happens to infrastructures? What is happening globally? How to look at the object? How has globalization transformed this complex product? An answer comes from Chattopadhyay (2012), who analyzes infrastructure starting from India. The title of his book is significant (Unlearning the City: Infrastructure in a New Optical Field). What are infrastructures in Indian culture? According to Chattopadhyay (2012) they are: (a) the physical channels that connect one space with another, allowing the passage of people and goods: the technical systems of transport, telecommunications, urban planning, energy and water that create the skeleton of urban life. And again (b) in India and elsewhere this notion of institutionalized infrastructure, implemented by state and municipal authorities or corporate powers, has been understood as an undisputed asset; so much so that infrastructures are the

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core of urban thinking to the point that a city infrastructure is often confused with its structure. What happened with the wave of globalization in the 1990s in India was that we witnessed the radical principle of standardization of the ‘infrastructure’ product. Faster motorways were built (e.g. the connection between Calcutta and Mumbai, the cities analyzed below), there was digitization of the new suburbs, and common terms were coined such as ‘flows and bumpy road change’ or ‘plug-in and cut-andpaste’ with standardized D&C (Design & Construction) as a global product. However, there are discrepancies between terms such as elite/popular, cosmopolitan/provincial, prejudice and push for innovation. If infrastructure is a shell that records the past and shapes the present and the future, we have levels of standardization of D&C which often fall within the areas where the old infrastructures were located. In India, but also in China, roads within cities are widening to make room for automobiles by converting bike paths into automobile arteries. Three-wheel bicycles served as mobile kitchens, for transporting coal, as repair shops or warehouses, or for the removal of waste. One still sees them around town, but not in large numbers, and bicycles now carry the stigma of a passing era. In other places they become museum objects, as took place for industrial archaeology in Old Europe; but not in India, where albeit in a more limited form, they continue to exist and together with others continue to be counted among the traditional means of transport. While in China, until a few decades ago, they were still a status symbol, now in a short span of time they have become an embarrassment or an object for museums. For the most part, greenfield infrastructures are created, and where there are brownfields, the radical changes make them resemble greenfield infrastructures. Deep discrepancies are created between old and new infrastructures, and they also coexist in contiguous spaces. Significant examples are the treatment of a cricket field inside the green lawn and the surface of an airport (Chattopadhyay, 2012), or the use of roads (McFarlane, 2011) or public spaces (Simone, 2011), or in public transport (Chattopadhyay, 2009). The use of public space and the appropriation of infrastructure is confused between the new and old use of urban infrastructure (Simone, 2011). The major differences within globalization lie in the application of global infrastructure standards that upon being inserted into India, create a rift with the previous infrastructure culture. On another front, a big difference to be analyzed is that within the brownfield infrastructure between upper middle-income emerging countries and high-income developed countries. There is also a difference in the failure and breaking of infrastructure: when there is a failure in developed countries, those with high income (such as the Morandi bridge), there is a tragic awakening of awareness of the importance of infrastructure; while in developing countries this is the rule, with a different awareness and different perception of the importance of infrastructure. However, for infrastructure the least explored factor, and in some ways the most interesting one for the future, is the different treatment of O&M between the model of high-income developed countries and emerging medium–high income countries. In particular, this regards how the D1 and D2 segments of Fig. 1.1 will be treated and how the different lines will interact with each other. It is a central factor as it is closely linked to competitive advantage, the development of global cities, and the

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urban form and city that will emerge considering the concept of infrastructure as the central nucleus of modern urban thinking. Only by integrating O&M and D&C will it be possible to fully compare infrastructure and its production (assembly) with other global products. How long will this integration take? Today more than ever, infrastructures and public works are playing a central role in the interdisciplinary treatment of national development and global systems. There are several angles that can be identified. Amin (2014) highlights how we are witnessing the birth of a new kind of thinking that narrates the social life of a city through its material infrastructures; so much so that a new line of thinking among social scientists tends to see the material component, attributable to infrastructures, as closely intertwined with that of the new urbanism. In the past, engineering, architecture, urban planning, social and political science, and business administration had dealt with infrastructures in a sectorial way, but not with the central and integrated vision now present. This is a new current of thought that has led infrastructure and public works to attract strong interest and be at the center of different disciplines and narratives. In addition to Amin and Thrift (2017) there are authors such as Graham (2010); Graham and Marvin (2001) and Graham and McFarlane (2015), and more as well, who emphasize this shift. There is also another trend partly attributable to this, that for developing countries links the theme of infrastructure to citizenship (Lemanski, 2019) and how infrastructure is delivered can influence the concept of citizenship; which occupies a crucial space in the daily life of the contemporary city. The first reference regards what infrastructure is and how to combine it with the urban context: A rather reductive view is to consider trains, cars, trucks, ships, airplanes, water, sewage, waste, electricity, heat flows, radio signals, information, etc. as conductors of people from one place to another, or conductors/pipelines of matter (with infrastructure or wireless networks), or transformed from one carrier (gas) to another (thermal and/or electrical energy flow). Terminals such as stations, ports, airports, energy transformers, spillways, data processing centers, and switches are located and operate within cities. Networks often serve for transportation from one urban system to another, or have the place of transformation (energy) or landing place of flows within the same urban system. The data tells us that globalization has made it faster to update and concentrate these flows. Urban systems have increasingly skilled global cities that require rapid transformations of obsolete and no longer competitive functions, with others, on pain of losing the advantages. This requires flexible infrastructures able to anticipate or be synchronous with the change of urban functions. The problem regards not only of design and construction (Design & Construction—D&C), but also operation and maintenance (Operation & Maintenance—O&M) with the enormous flow of resources that this entails. All of this requires an organic intervention, an interdisciplinary approach, and a high level of knowledge, which is often combined with operational management. In addition to the aforementioned contributions, there is a new line that deals with urban infrastructures from the point of view of ‘financialization’. The reference is

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not so much to the global city but to the city in general, even if it regards principally large cities (Pike et al., 2019). It seems to be an interesting trend that supplements the discussion on infrastructure and makes it more dynamic, not conflicting but inclusive with respect to the particular attention paid to the discussion in this historical phase. Infrastructures are increasingly located within cities and urban areas so as to favor the birth of a new theory and interaction. Without infrastructures, cities would not exist, and each city’s conformation is structured around them, and based on the natural morphology that conditioned them originally. Urban transformations driven by exogenous factors, as well as by endogenous ones, require a strategic transformation of infrastructures which, depending on how they are configured, mark the success and form of the transformation. The principle is therefore valid that the set of urban infrastructures and their evolution produce the ethnography of a city. Inspired by infrastructures, Amin himself considers the city as a ‘machine’. In the post-‘Taylorist’ and post-Fordist phase (referring to the last century) the city had been compared to the ‘factory’ (Amin, 1994; Greenberg & Lewis, 2017) in which times, schedules, consumption, production, zoning, settlements, rhythms, and functioning recalled the shape and production of the factory; even if we no longer think of factory life as the economic engine of the city. Instead, the urban economy has now become a mixture of activities (Amin, 2000). Multi-temporality prevails, which is marked by infrastructures that do not mean a loss of control, but establishing order through the stratification of daily rhythms (Amin & Thrift, 2002). The contemporary city in the North is a machine of infrastructures of different kinds that overlap and behave as a whole (in interactions, overlaps, and conflicts). The infrastructures are what characterizes the flows (times and forms). In this sense, the force of the machine city (Amin & Thrift, 2017; Jonas & Wilson 1999) is internal and not external, even if it is a whirlwind of intentions, randomness, emergencies, and dysfunctions. Southern cities move away from or are something else from the reference to the machine, it is often human action that replaces the mechanisms of the ‘infrastructurecity’-machine’, too much would be the non-senses, the jams, the stumbling with respect to the concept evoked. Often the city is intended in other way (Chattopadhyay, 2009; Simone, 2011, 2014). Amin (2014) highlights how the creation of the new favelas, those that are more structured and have a future of greater inclusion, starts from the design of infrastructure with the assistance of professionals and then proceeds with the occupation of the land and the division of the lots on which beforehand, when taking possession, interventions are carried out with temporary settlements and then gradually with masonry works. The order, evolution and development of these settlements depends on how the places have been conceived and the activation of the infrastructures which can then, if necessary, evolve. Having foreseen, designed, and evolved infrastructures will mark the future of these new urban assets. The lack of these steps determines the ruin of these settlements. In other parts of the world, the crowding of population on the edges of cities occurs without the presence of supporting infrastructure, as is the case of the 12 million inhabitants around Lagos, the capital of Nigeria. The attraction is driven by the need for infrastructures, which are then denied by the impossibility of activating them, except in a very small number (Terreni, 2015).

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On another front, developed cities must address another issue, that of operating and maintaining (O&M) existing infrastructures (Graham & Thrift, 2007), with a growing need for spending and investments. Then, with globalization, there is the need to respond increasingly to competitive advantage with new urban infrastructures increasingly linked to technology (Turok, 2017). It is precisely this type of infrastructure that characterizes the new urban form and makes people say that it is infrastructure that is sometimes invisible and that contributes to forming the new social identity, as well as the economic identity, of the new urban structures. This trajectory contributes considerably to the growth and strategic importance of infrastructures and to the fusion of the term infrastructure with the social and economic component of urban centers. There is a perimeter that concerns the urban individual and its extension that coincides with the infrastructures; this perimeter can vary greatly depending on access to the infrastructures. The exponential importance of urban infrastructure and its rapid turnover requires increasing capital as well as the operation and maintenance of new and existing infrastructures (O&M). The enormous growth and importance of infrastructures requires that there be a new language of connection between the various infrastructures and the consumers/users, precisely because the reference begins to be the extension of the individual with infrastructure. The birth of the concept of smart city, of sharing, and of apps within cities, responds to this need to connect the individual to the infrastructure, and this ends up changing the identity, use, inclusion, exclusion, culture, and income of the individual with respect to the urban domain. We are increasingly witnessing the transfer of the space inhabited by private goods (e.g. cars) to one of collective goods (sharing) with the dematerialization of old industries and the birth of innovative productions, with the definition of interconnected spaces between the individual and infrastructure, and new public and private constellations. The innovative forms of inclusion/exclusion and smart cities seem to respond to this need. This exponential growth of infrastructure, on the other hand, increases the pressure on the operation and maintenance of the infrastructure itself (O&M). A new contest between cities is between the growth and functioning of infrastructure and the situation of other cities or urban centers that have interrupted or jammed this integration. There is a high perception of this interruption and there is also a fall in the competitive advantage of the city that suffers such an interruption; vicious (or virtuous) circles are created that are difficult to fix. Some cities appear wounded rather than bent. Attractions increase and new forms of inclusion and exclusion are born, by social and economic condition, by culture, and by opportunity. A gap is also created between infrastructures, with exponential growth of those at the urban level. Migratory flows towards cities with advanced infrastructure are a new element. There is a need to participate in the use of infrastructure. The new difference arises precisely between massing in the suburbs of Lagos that lack infrastructure or trying to access the most advanced urban infrastructures. This is done by following the routes of illegal immigration, at the risk of one’s life. This is also the characteristic of this historical-epochal phase. In the most advanced situations on the African continent, infrastructure can be understood as something more than the material means through

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which the urban environment is able to function, but also the intrinsically social way it is produced and used by the inhabitants of the city. In South Africa, universal citizenship is still relatively new and has emerged in a context where post-apartheid urban policy has been centered on providing infrastructure. The post-apartheid government has favored housing as one of the main anti-poverty strategies. Upon initial receipt of the dwelling, beneficiaries express citizenship as incorporated in their house, with physical receipt of a house which represents the beginning of a new identity as a South African citizen (Lemanski, 2019; Wafer, 2019). There is also an important change regarding the State with respect to infrastructure, in how it is regulated, financed, designed, built, maintained, and operated. The revolution regards not only the side of the new infrastructure relationship, that is urban, social, and economic, but also the aspects of their assembly. The organization of the implementation processes changes and the role of the state changes; we pass from a concession for implementation of the welfare state to a PPP model. The shift is also driven by growing needs and the massive necessary capital, that is unavailable from the public sector. In other words, the strong interconnection between the urban setting and infrastructure changes the nature of the State regarding the conception, D&C and O&M of infrastructure.

1.2 Cities and Infrastructure A thesis of some weight is that cities are held together by infrastructures, in which in addition to traditional and physical infrastructure we must add what Amin and Thrift (2017) call ‘machinic’ elements or ‘machinisms’, born from the technological revolution of ‘ubiquitous infrastructures’. The city, and the global city in particular, is the place where the new type of infrastructure was invented and has been applied more completely. This was also the case in other historical phases, but not so radically and in such a short time. Schwab (2016) links this phase to the fourth industrial revolution and the neurotechnology revolution that will contribute to radically changing the way we live, work, and relate. The idea of the machine city returns, along with the individual who is a part of it, but in a different form than in the past and in many ways combined with innovation. Higher, more inherently human operations have been replaced in a world of micro temporal computational media. It happened in communication whereby emotions are produced by distance communications, conveyed by ubiquitous infrastructures, by images and membership of groups and new social constellations. In services: banks are containers where human activity is replaced by the dematerialization of money, by remote working where the information-communication infrastructures have enlarged (or narrowed) the work layout by deconstructing the concentration of workplaces. Individuals are literally cogs in a larger individual machine. Infrastructural meshes emit and capture space-times. With the merger of the so-called ‘third nature’ ubiquitous, a new, more complex generation of infrastructure has been created for physical infrastructure

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of ‘second nature’. According to Amin and Thrift (2017), the importance that cities have acquired in this period is not fully understood; an importance that can only grow as infrastructures become increasingly pervasive. Dichotomies have arisen between cities with advanced infrastructures and those that still operate with an endowment of basic technology from poor infrastructures that live without prostheses, cities that have not yet seen a merger between second and third nature. In this, there can be a clear division between greenfield and brownfield infrastructures, between high-income developed countries and emerging countries. What holds each other together, within forms of standardization, is globalization. The thesis of Amin and Thrift (2017) is that cities, with the power they have assumed in making the world see the importance of the term infrastructure, are no longer an effect but a cause. In driving development, the future of cities and global cities will be ever greater, but fragility will also increase, as infrastructures are increasingly pervasive and machinery increases. The appearance of hitches, of a viral (Covid-19) or mechanical nature, can hinder or disturb this development. This is one of the aspects of fragility to keep in mind, which can divert or slow down the power of cities with infrastructure at the center as the cause of the development.

1.3 The Definition of Infrastructure According to Urban Infrastructure It becomes central to define what is meant by new ‘urban infrastructure,’ if the term has helped to give birth to a new kind of thinking. Initially Graham and Marvin (2001), understood telecommunications, highways, urban roads, electricity, water (considered as water recycling), airport cities, e-commerce spaces, and new media as infrastructures, logistics, shopping centers, an interesting and quite heterogeneous form of public and collective services and infrastructures with a change in management in some cases from public to private, while others were born directly as private functions. Amin (2014) refers to basic settlements, such as favelas (2014) and refers to the principles of new ‘urban infrastructure’; he considers basic and primary infrastructures such as water, sanitation and sewage services, electricity, accessible roads, churches, flat surfaces that look like squares, infrastructures basic but necessary to construct the settlement, with some possibility of permanence and evolution, and ultimately mark the subsequent legitimate expansion of the city. Amin and Thrift (2017), subsequently having to deal with the more general theme of ‘urban infrastructure,’ bring infrastructure back to the ‘network’: infrastructure consists of all those objects that allow humans, cars and trucks, boats, planes, water, sewers and other waste, oil, electricity, radio signals, information and the like to be used from one place to another, to become mobile, to circulate. Mostly they consist of continuous conduits of one shape or another, but increasingly, as wireless technology has become more common, these conductors have expanded into transmitted and received signals, although the principle remains the same. This infrastructure is

1.3 The Definition of Infrastructure According to Urban Infrastructure

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concentrated in cities because cities require flows of energy and matter to maintain their organization and resist entropy. Cities, of course, require stone, brick, wood, plastic, metal, and a variety of other materials to build and maintain infrastructure. However, cities also require energy flows. The infrastructure indicated here is visible and invisible metaphysics, and in any case suggestive with an almost philosophical implication, were it not for the fact that Amin and Thrift are geographers and toplevel theorists who also have a pragmatic vision of cities (Amin & Thrift, 2002). The very concept of ‘urban infrastructure,’ albeit within another context, is repeated by Amin (2016) even later. For his part, Graham (2010), who together with Marvin had contributed to the introduction of urban infrastructure (Graham & Marvin, 2001) subsequently perfected the references. Urban infrastructure means energy networks that connect the heating, cooling and energy of urban life, huge water systems, waste water, and sewage networks that remove organic waste that comes from the urban area; the maritime and commercial complexes, highways, airlines, the railway and road complexes that support the complex flows; the electronic communication systems that provide a universe of digital information, interaction, and entertainment that is always “on”; their pipes, including energy, water, sewage, transportation, electronic transmissions, and tunnels support the flows, connections, and metabolisms inherent in the city, and the urban infrastructure can only grow as the world becomes more urban (Graham, 2010). There is a convergence between different authors in considering networks of all types as the element of strengthening urban growth and polarization. Networks exist as there is an agglomeration, and this also becomes a driving force for increasing further urban growth, and consequently, to determining ‘competitive advantage.’ Infrastructure, networks, and economies of scale become an independent variable for urban growth, but this also produces the fragility of new urban growth. Infrastructure systems are in a state of transition and go from one passive infrastructure, to another proactive one. Guy et al. (2011) pose the problem of intelligently connecting something different and more than the smart city, the connection and transition of these different networks. Case studies have been developed on cities in the UK, Germany, and Denmark (Guy et al., 2001a) in order to highlight the transition and pressure for change and the management style of network services, pressure that results from a change of the state and the market through a vast development of liberalization, privatization, new forms of control, and intertwining between public functions and market action. To many it appears that in the post ‘network city,’ infrastructure is more than a simple forecast of basic urban services, but has proved to be a tool for urban expansion (Coutard & Rutherford, 2016). Cities are uniquely suited to infrastructure innovation (Shove, 2016) and (Harrison, 2013) demonstrate how urban scale and density are fundamental for infrastructure development, they are both cause and effect, and as Coutard and Rutherford (2016) underscore, in recent years infrastructure networks have taken on high importance in shaping the urban environment.

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1.4 How to Interpret and Classify Urban Infrastructures A book whose title is urban infrastructures has the obligation to provide an initial broad classification of terms and types. Urban infrastructure ranges from that with a direct influence of the state, to private infrastructure for collective use. However, there may be limitations on collective use. Cass et al. (2018) also argue that there are no boundaries, or a priori definitions for infrastructure. What is the difference between a kitchen (a gas and electricity terminal) and a port (a freight terminal)? For example, not all authors consider shopping malls to be infrastructure; although they are collective spaces, their main function is the ‘production’ of consumption. Private spaces such as housing and industry, offices, banks, factories, and stores are not infrastructure (if they are not connected to ports, airports and other infrastructure that modify their nature. An important role will be played by the reference to the ‘value chain’ which will be discussed later). But even these private spaces have important terminals that can be traced back to infrastructures such as: information and data connections, telecommunications, electricity, water and drains, and recycling in a private space. With Covid-19 and smart working, these spaces have become important information spaces. Moving inside the city, or in global cities, always projects the individual into urban infrastructures. The impact with urban infrastructures is less in rural or non-urban areas; there is a different progression, although these spaces are decreasing. The individual in motion, or one who induces others to move, e.g. the rider who delivers food or goods at home in cities, interacts with the infrastructures, activates a different use of the infrastructures (bicycles, apps, different use of roads and sidewalks), as do those who carry out short or long-haul transport of goods for Amazon. The principle indicated by Shove (2017), which can be shared in part, may be applied: infrastructures are material agreements that have infrastructural relationships with the practices they enable. Infrastructures are the approaches to the life cycle of the individual such as: neursey and preschoolar, primary and secondary school, further education, higher education, research and training centers, centers for the elderly or places for shelter, meetings or recreational and cultural activities (cinemas, theaters, sports centers, and parks). So are those places where Covid-19 was consumed by hospitals, intensive care units, the storage of corpses, and the military used trucks in Bergamo to bodies (corpses) to incinerators, which are also infrastructures. This is the nature of those integrated energy efficiency systems that replace the previous separate method of energy consumption such as single public lighting (Mwhe) and the heating and cooling of public buildings (Mwht) first powered by diesel fuel, then methane, and finally by alternative systems of energy production. The insertion of sensors into public lighting poles also allows for controlling the coloring of the walls of buildings with LEDs, the use of rubbish bins and their saturation, regulating traffic and parking, promoting the diffusion of interactive apps and sharing economy vehicles, and control and prevention, with this last component also being infrastructure. The development of 5G will robotize private spaces (including homes), expand spaces and health organizations—through

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the video services that use the network—as well as training, purchase and consultation of books and communication materials, video security control and interactive conferences. These are also new urban infrastructures. This is an enlargement of the perimeter of everything that connects, commutes, links, transports people, goods and biological flows, having the primary element of landing in the city. In the previous period it was the roads, railways, airplanes, ships, buses, and subways, the spillways, connection and transmission cables, and transport more in general; now everything is much more than that. However, not everything that is urban infrastructure has been indicated, as the discussion would be much more complex and the list much longer. Within cities and global cities we are witnessing an exponential increase in urban infrastructures, especially in their interaction and integration with technology that increases their importance, number and form. Or we are witnessing the multifunctionality of the same infrastructure in relation to the change in needs that is typical of urban infrastructure (Latham & Wood, 2015) and the integration and reduction of the fragmentation and separation of individual infrastructures. There is also a reduction in private spaces of any kind not attributable to urban infrastructures. The overall mass that forms global cities and cities is seeing an increase in urban infrastructures on the whole. Furthermore, the public perimeter within the management of infrastructures has been developed by mixing with the private perimeter. For all urban infrastructures, this has increased. For urban infrastructures, therefore, the principle of globalization is valid, which changes their nature with respect to the separate way of looking at them (Latham & Wood, 2015). From the strong interaction between infrastructural components, a new vision is born, one that abandons the purely technical manner of looking at infrastructure, and this is also one of the reasons why we move from public work to infrastructure; there is an overlap between different types and uses. It is also a symptom of the presence of brownfield infrastructures, for which the initial purpose for which they were built is then modified by the development of other needs, which is typical of urban infrastructures (Latham & Wood, 2015). Urban infrastructures tend to be standardized, even if some differences induced by the previous form remain: previous design and construction (Chattopadhyay, 2012; Tarr, 1984; Tuvikene et al., 2019). However, different ways of looking at urban infrastructures are possible. This is an attempt at an initial classification: through a matrix that combines the categories of treatment within which the book (b), (c) and (d) is placed. Vertically, on the other hand, there are some contributions by authors with respect to the categories (Table 1.1).

Box 1.1 Extended segment of urban infrastructure [1] Amin analyzes the formation of urbanization in an emerging middle income country (upper middle income in Table 2.1) even if the reference is to a particular component of urbanization such as favelas. The infrastructures are basic and included within the sphere of public action, even if at the beginning they are

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Table 1.1 The breakdown of the readings can be as follows a

b

c

d

e

Dalla Longa

x

x

x

x

*

Amin [1]

x x

x

Amin, Thrift [2]

g

i x

x

x

x x

Graham, Marvin Graham et al.

x

Chattopadhyay

x

Simone

x

Tuvikene et al.

h

x x

Sassen [3] Castells

f

x *

x x

Key—Urban infrastructure: (a) greenfield; (b) brownfield; (c) state-market change relationship; (d) integration of ICT (Information and Communication Technology); (e) private space, public space; (f) value chain; (g) infrastructure ‘shaped’ and revolutionized by globalization; (h) networked urban infrastructure as a whole; (i) infrastructure that fails for several reasons, including collapse

illegal and constitute piracy, the reference is to the constitution of the favelas in which the establishment of the public and private space is effectively legible (Amin, 2014). [2] Amin and Thrift, in reference to urban infrastructures, overturn the terms of a heterogeneous list of infrastructures, in which lies their originality. The reference is to the networks that allow for the movement of people and goods inside and outside the city, to which the impulse from wireless technology and incoming and outgoing signals has been added. From this, we deduce the importance of cities compared to the rest of the territory and of those that more than others are in connection with the globe (global cities) which require more and more commutation and continuous growth compared to the rest. The reference is not to subways or trains (but to the transport of people), not to roads, motorways, ports and airports (but to transport of trucks, cars, boats and airports), not to sewage disposal, and waste (but to unloading organic waste), and we could continue. The same principle also applies to wireless and to transmitted and received signals. In this the infrastructure, as a network, is a fundamental component of observation of the structurality of the city and its metaphysical complexity. The evolution of the state and the market are not distinguished (the transport of oil—pipelines—is not distinguished from the transport of a car in the city on municipal roads); in this context, oil and people see no difference (Amin & Thrift, 2017). [3] Sassen includes in the term urban infrastructure the presence of collaborators who supplement the functioning of the (high-income) family, and the restoration of offices, and make it possible for these persons to reproduce the

1.4 How to Interpret and Classify Urban Infrastructures

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production and consumption compatible with the times of global cities. Therefore, the low-cost work of immigrant and subordinate figures who enter the system to carry out activities not covered by the family, or its members, is partly to be classified as urban infrastructure. This activity, which has been found to expand over time, must work like clockwork, with no room for little crises. Pages, 97, 98, 102; see Sassen (2016).

(a) Greenfield—Traditional greenfield infrastructure also open to new types of infrastructure. This is mainly, but not only, a connection with urbanization that mainly characterizes emerging nations, or in some cases new infrastructure that takes over existing infrastructure in a completely new form (e.g. high-speed rail). However, the latter mainly concern high-income developed countries. Another example is the abandonment of an old hospital and the construction of a new one located in a different area. The term greenfield infrastructure is related to urbanization especially in emerging countries. It mainly refers to new physical infrastructure. It has accompanied other phases of globalization, above all the penultimate phase (Crouch, 2019), that of the post-war period. The discussion of greenfield infrastructure is used here to better deal with brownfield infrastructure in a differentiated format. There is a specific approach when dealing with emerging countries (Chap. 2). The greenfield infrastructures are not the central theme of the book. (b) Brownfield—Brownfield infrastructure mainly refers to global cities and not only to high-income developed countries. It refers to the more or less complex transformation of existing infrastructure or routes, in many cases changing their shape and consistency. The term brownfield infrastructure is a central theme of this book. These are infrastructures already present in cities, as they represent their backbone. Globalization reshapes them, and if it does not change their function, it connects and rearticulates them in a different way. It is around these infrastructures that in many ways the phenomena of greatest interest in the globalization phase occur. (c) State-market change relationship—Infrastructures that were previously totally publicly managed through public works now involve more nuanced public and private boundaries, that in many cases are intertwined through new management formulas, such as the public–private partnership. It is a state-market transformation; in this case the new management formulas prevail, including the Long-Term Contract.2 (d) Integration of ICT (Information and Comunication Tecnology)—Seeing the transformation of urban infrastructures from being single, separate, fragmented appendages and lagging behind the economic force of urban development, into the driving force of globalization is undoubtedly a new universal element. It is often technology that requires this type of integration. Aggregation can concern 2

See Chap. 6.

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several types of infrastructure. However, the scope remains within public functions or former public functions, or is broader if we also indicate communications (Castells, 2010). The guiding element is the development of technology and in particular of ICT. Castells (2010) summarizes how the world economy became truly global at the end of the twentieth century, thanks to the new infrastructure provided by information and communication technologies. This leads to multidimensional connectivity and multimodal infrastructure with the growth of some metropolitan regions worldwide. This is also one of the reasons that leads to the strong interest in urban infrastructure (Castells, 2001) which becomes a synthesis of multidimensionality, connectivity and multimedia. “Urban infrastructures are configured as integrated functional and social systems” (Castells, 2001). Castells, who has always been a scholar of global urban forms and dynamics with a ‘structuralist’ approach (“the urban question”), began to use the term infrastructure in connection with the development of information technology and networks and wireless technology that can be connected to globalization and global cities. With some simplifications (Castells, 2010): “the European and North American metropolitan areas (global cities) in the nineties were composed of a financial center, the economic engine of the city, networked with the global economy; the financial district consisted of an infrastructure made up of telecommunications, advanced services and office space and relied on technology generation centers and educational institutions. It was a node of the inter-metropolitan network and there was a connection with other equivalent places, organized by a network of infrastructures.” The infrastructure was the network and the technology but it also absorbed other broader functions, not only and not necessarily coinciding with the old physical infrastructures (point b). Again, Castells (2009): digital networks are global, they transcend traditional borders thanks to networks so infrastructures have the potential to be global. The contemporary process of globalization has its origin in economic, political and cultural factors, but the forces that drive globalization have been able to be put into action thanks to the infrastructures offered by technologies, communication including logistic networks. Hence the importance of the urban infrastructure which has been the cornerstone of the global city (Castells, 2001). It is the new technological paradigm (Castells, 2017) based on the information and communication revolution, and technology necessarily provided by infrastructure for this profound transformation leads to a new form of development. And all the crises that have occurred are also of direct or indirect infrastructure systems (Dalla Longa, 2010, 2011). Castells partially deals with traditional urban infrastructure (Castells, 1979), but never actually uses the term infrastructure, which is used for the first time (urban infrastructure), before technological and information networks, in 1985 (Castells, 1985). (e) Private space, public space—Infrastructure seen as the evolution of everything that does not belong to the private sphere but which causes a social or economic actor, once it leaves its perimeter, which is increasingly narrow, to enter urban infrastructures that can be a road, a communication (telephone or exchange of

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data and information), the use of a shared medium (sharing), or the switching of an energy or biological flow. This component is growing profoundly with the global city and a gap is increasingly created with the non-urban sphere. The reference is between public-collective spaces and private spaces, in which the former are constantly growing compared to the latter. This vision considers an urban infrastructure everything that is not a private dwelling or traditional production activity, distinct from everything that is interaction with infrastructure (including utility services: energy, water, sewage, telecommunications, and waste and disposal). However, production, consumption, and reproduction, if functional to the infrastructure, indirectly fall within urban infrastructure. Private spaces, including privacy, are undergoing a major structural reduction to the advantage of infrastructure. Chattopadhyay—referring to the cities of India and beyond, the author gives a description of a broad and all-encompassing infrastructure (in some passages difficult to place and classify –author’s note) that falls within the division of private and public space. Infrastructure is “in our daily life, it is everywhere, it is everything”. “Infrastructure is the systemic expression of the capital of deregulated currency, interest rates, commercial credit instruments, market forces and the institutions that apply them. These are water, fuel and electricity tanks. Supply routes and tariffs, satellite networks and lotteries. Logistics and supply coefficients. Traffic computers, airports and distribution centers. Cadastral techniques, legal procedures, telephone systems. Corporate district self-regulation mechanisms. Disaster evacuation and mobilization protocols. Prisons, subways, highways and their joints. Libraries and meteorological monitoring equipment. Waste removal and recycling networks, sports stadiums and management and delivery facilities for the data they generate. Parking lots, pipelines and gas meters. Hotels, public toilets, management of postal services and parks. School systems and ATMs. Advertising and identity engineering. Railway nodes and networks, television programming. Interstate systems, ports of entry and public goods and associated agencies. Sewers and alarms, multi-level military entertainment equipment. Wetlands and reservoirs. Maintenance programs of civil structures, epidemiological algorithms. Cable delivery systems, police matrices, licensing statutes. Greenmarket, medical pharmaceutical complexes. Scaffolding. Internet. Granaries and water towers, military deployment procedures. Street and motorway lighting schemes” (Chattopadhyay, 2012, pp. ix–xviii). (f) Value chain—Infrastructures are those components that in an increasingly significant way, also driven by globalization, have entered the ‘value chain’ and are no longer distinguished from the traditional categories of the last century: production, storage, transport, points of sale (all, or almost, private garrisons). The use of an app to order food for immediate consumption, including transport, the booking of goods and transport, and the order and delivery of expenses add more infrastructures (orders and payments via data and money flows, production modeling, stocking or just in time, use of bikes or other means of transport with the use of roads, or other, often in an unconventional way—Latham & Wood, 2015) reshapes the relationship between production and consumption

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and infrastructure, giving more and more importance to infrastructure in the creation of value. Part of the functions of banks have also turned into urban infrastructure, contributing to the rapid growth of global cities. This makes Sassen (2016) say that the global city generates extreme needs. These include state-of-the-art infrastructure that almost inevitably goes way beyond the standards for the broader city. For example, the financial centers of New York and London in the 1990s had to develop types of digital infrastructures of a completely different level and complexity than those used by most cities. As a space of production, the global city generates extreme needs. These include state of the art infrastructures that almost inevitably go well beyond the standards for the rest of the city (Sassen, 2016, p. 98). Just as for inner city for the delivery of takeaway food and small packages, bicycle couriers are common. The development of Ocado can also be considered an urban infrastructure. The production model is decomposed and recomposed, incorporating urban infrastructures and giving them more and more importance. Founded in 2000, Ocado started out as an online grocery store serving customers with VAT numbers primarily in the South of England. Subsequently, a series of agreements for automatic warehouses with foreign players (Swedish, French, North American, and Japanese) made Ocado a technological warehouse. The company’s market value is now over 9 billion pounds. Ocado has gone from an online grocery delivery service to a tech company that builds everything from consumer-facing websites to robot-operated warehouses for other grocery retailers. The “robots” operate on the “intelligent platform” at the Ocado logistics center in Andover, Hampshire. The management team focused on developing its technology. Over the years, work has been done to create the software and hardware needed to build the infrastructure behind online food retail. Eventually, software was created that could manage human pickers and regulate production, procurement, storage, and distribution services; adjustments were made for swings and the company operated under maximum capacity. The “beehive” automation model was created. “More than 1,000 robots use a 3D grid system to move groceries from storage to human pickers. Because the robots can pass each other, the potential for gridlock is avoided”. The tight integration of the warehouse software with the front-end consumer website and app allows you to offer customers real-time availability and automatically reorder inventory from suppliers. There is also a growing general merchandising business through brands with one-hour delivery of supplies in London (Fig. 1.3). The next frontier is robotic picking with over 50,000 products of various shapes, weights, and stiffnesses to manage the requests of retail clients and the centers themselves. Amazon, the US e-commerce giant, trades more than three times its turnover, while Tesco, the UK’s largest supermarket group, only 0.4 times. The future

1.4 How to Interpret and Classify Urban Infrastructures

23

Amazon Ocado COVID time

Tesco

Fig. 1.3 Trends in stock prices of Ocado, Tesco and Amazon: different years, (2012–2022) (Source Our processing of stock market data (last 10 years). Ocado Group has around 19,347 employees; 365,765 Tesco; 1,608,000 Amazon)

technological infrastructure activated

Customer on line sale retail

Webshop or mobile app Use of physical Infrastructures (e.g. road structuresimplification of routes)

Activation for handling (robot)

(former space traditional)

Management of the chain of the supply

Withdrawal across the softwere

Routing in the van through technology Delivery process also through the apps

Elongation of the chain of value

Fig. 1.4 Platform Ocado (Source Our processing on multiple documents. Note It is an example of a review of value chains having urban infrastructure as a reference)

lies in the development of these integrated infrastructures. James Lockyer, an analyst at broker Peel Hunt, believes the technology business has the potential to become the “Microsoft of retail.” In fact, a commercial distribution point has been transformed into an urban infrastructure (Fig. 1.4). (g) Infrastructures ‘shaped’ and revolutionized by globalization - These are infrastructure existing within large cities with different cultures and dynamics and overwhelmed or touched by globalization that superimposes new reference

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matrices on the original matrix. In analyzing the center of Johannesburg, one of the most urbanized cities in Africa, considered as a place of ruins, Simone (2004) indicates people as an infrastructure. If the principle indicated by Simone is that infrastructure is commonly understood in physical terms, as reticular systems of highways, pipes, wires and cables and these codifications are arranged to make the city productive and competitive and place the residents where the energies of the individuals can be distributed more efficiently, which is not the case for African cities. These cities are characterized by relentlessly flexible, mobile and temporary intersections of residents who operate without notions of how the city should be inhabited and used. Over the past two decades in particular, these intersections have depended on the residents’ ability to engage complex combinations of objects, spaces, people and practices. These conjunctions become an infrastructure, a platform that provides and reproduces life in the city. The ethnography of the center of Johannesburg means that urban spaces are simultaneously characterized by regularity and provisionality. This means, for the African cities, that an experience of regularity and prolonged collaboration between heterogeneous actors is precluded. This entails a substantial difference with the aspect on which part of this book concentrates, the global cities of high-income developed countries. That is to say: competing global cities create elements of physical-functional obsolescence within the city that require replacement (under penalty of loss of competitive advantage and destruction of value), giving a decisive role to brownfield infrastructures that must be rapidly reconverted to make the replacement possible and restrictive. In Simone, urbanization denotes a set of increasingly heterogeneous elements; the accelerated, extended, and intensified intersections of bodies, landscapes, objects and technologies differ from the calcification of the fixed territorial ensembles to which they belong and urban spaces are imagined as mobile functional destinations. There is some reversed similarity in this to Sassen’s assertion about people as infrastructure within the largest global cities of high-income developed countries (Simone, 2004). Subsequently, when Simone returns to analyze Johannesburg and Douala in Cameron, but above all Johannesburg, the reference is mostly extended to collective spaces and buildings, in a broad sense, which Simone includes within infrastructures (hotels, garage, large restaurant, ballroom, showroom, boutique), together with other physical infrastructures (Simone, 2006). This reference is provided to mark the difference between the large cities of different world regions which, although included in globalization, bring out parallels between infrastructures generated by globalization and the presence of existing brownfield infrastructures belonging to other cultures and phases. The same analysis is carried out, with different angles, in an analysis of a large Asian city such as Jakarta in the markets and public spaces of that city. In this case as well, it is found that people meet and form infrastructures in these locations that constantly change and are not necessarily efficient, where interruptions enable points of view, attention, memories, condensations, and dissipation of efforts (Simone, 2011).

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These worlds seem irreconcilable with the Western and European community infrastructure setting in particular. Here, when he recalls the ‘shell,’ the term that Simone himself uses takes on a certain meaning, understood as the stratification of infrastructures over time (Simone, 2015). Simone suggests developing a great knowledge of the relationship of infrastructures over time. He is skeptical about the dynamic interpretation that is made of disused infrastructures as one of the main interpretative elements of the urban infrastructure. His more than traditional view, is the consideration today of physical infrastructures and urbanization in Africa. He concludes that what happens between cities, and between these and rural areas, and between Africa and the rest of the world, is just as important as what happens within the western city in the definition of urban infrastructure. There remain ultimately two interpretations of the urban infrastructure, both expressions of globalization (Simone, 2014). (h) Networked urban infrastructure as a whole—Another area that is not a classification but is the birth of a new vision of infrastructure is the integration between networks and infrastructure. More simply, the result is a new depth given to the concept of urban infrastructure. It is a question of looking at urban infrastructure in an interdisciplinary way, which already represents a significant evolution. It is a question of passing from a vision of the technical editing that remains and must remain of the work, to integration with other numerous disciplines. This vision was proposed twenty years ago (Graham & Marvin, 2001); here it is revived and expanded. The shared diagnosis was on why infrastructure appeared in important and structural studies as invisible and marginal, a difficult appendix to bring into the system. The terminology itself favored the term public work (Graham & Marvin, 2001 p. 20 and p. 96; Tarr, 1984). There was a lack of aggregative categories and often the term infrastructure or synonymous terms or ‘sociotechnical’ segment terms followed (e.g. transport, mobility, energy). For each component, there was a different assembly technique. The engineer had a different professional approach, coding and language for each infrastructure, and this differentiated the works within a specialized prevalent area. Looking at networked urban infrastructure forces a different vision. The city, urban agglomerates, global cities, urban forms and regional subways (Castells, 2011) are like structured shells centered on infrastructures. ‘Global cities’ are all the more so. Those who have tried to tackle this issue (Graham & Marvin, 2001) have found themselves faced with enormous problems of aggregation of this integration. One is represented by the legitimate specialist rigidity that characterizes the plurality of infrastructures. Graham and Marvin found themselves faced with a fragmented language, difficult to reunify and bring back to unity. The book that first sets the goal of addressing this integration (Graham & Marvin, 2001) is marked in both the title (splintering urbanism) and in the contents, which are an initial evocation accompanied by a segmentation (fragmentation and splintering) of the discussion. The difficulty is attributable to the delay with which this operation began. The need is to break down the languages and codifications of decades and centuries of specialization on the subject, driven by

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what Castells (2009) calls the entry into the field of technology and communication that modifies the paradigms of treatment and separation for (urban) infrastructure. If the concept of city exists, that of urban infrastructure must also find space and a new conceptual opening must be created. The theme is therefore the vision of interdisciplinarity in understanding urban infrastructure and considering networked urban infrastructure as a whole. A specific theme of interdisciplinarity concerns management which in some cases still represents a link (Guy et al., 2001). Fragmentation (or splintering), if aware, represents a value and not a limit. More than other tangible products, even more than other intangible products such as finance, infrastructure is affected by the difference with respect to the production and consumption chain within the supply chains of globalization. Products have in their code production, storage, sale and change of ownership with consumption. If something inside the supply chain breaks, there is a failure or change of product due to the interruption of purchasing and consumption. Globalization has made the whole process more uniform, we can talk about glolocal, the coexistence of local and global production chains. For infrastructures this principle fails as there is often consumption but not a change of ownership. The ‘glolocal’ aspect is inside every single infrastructure, or in most of them, and it also appears as a container that sediments the different phases present in the different geopolitics and regions of the globe; this is at the basis of fragmentation and splintering and the difficulty of recomposing ‘networked infrastructures as a whole.’ The choice to supplement the reading becomes a necessity in the presence of high risks. Following this study by Graham and Marvin, there were not many efforts to recompose the concept of urban infrastructure, which remains an identifying concept, but also one with significant division into elements. Several years later, Marvin himself, with others, reassembled urban infrastructure inside a ‘microclimate enclosure’ (or ecological island) in line with global sustainability (global life) and in advance of the green deal of the European Commission. (Marvin & Rutherford, 2018). A controlled environment, ecological islands regulated by infrastructures, buildings, transport, and energy, so much so that these ecological islands also become new urban infrastructures. You enter Urban Eco-Domes, Urban Security Domes, and Urban Biospheres (Marvin, 2016). Analyses and comments were added to novel forms of ‘smart’ or ‘computational’ urbanism that may govern urban life. Arguing that an analysis of the interface between the urban sphere and ICT requires a broader historical and theoretical perspective, rationalizing the use of infrastructures with algorithms and technocratic models (including business models); denies the concept of infrastructure as a ‘shell’ or coral reef sedimented in time (Luque-Ayala & Marvin, 2020). In addition, workshops of Urban Living Labs are developed and animated in different global areas of different continents focused on urban sustainability (Marvin et al., 2018) also addressing the theme of assembly of smart cities (Sengers et al., 2018) and comparison (Castan Broto, 2018). The first structured attempt to recompose the concept of urban infrastructure using urbanism as a containment base is due to Graham and Marvin (2001). The

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result is a very valuable work, but with very high indexes of descriptive fragmentation, almost 350 paragraphs out of 479 pages, of the volume. A significant amount of angles are addressed relating to the integration of ‘networked urban infrastructure as a whole.’ The authors wonder why infrastructure networks are always considered the ‘Cinderella’ of urban studies. The question and the answer lead to that deliberately and inevitably ‘messy’ way of dealing with the subject. Various suggestions follow, with a perimeter of analysis and systematization to be filled out, that the authors subsequently tried to fill out with other contributions, aware of the danger of splintering and with the fear, which then actually occurred, of falling back into further criticality. On the one hand, it is correct to claim merit for having explored the complex and dynamic interaction between networked infrastructures as a whole and providing a different change and horizon for contemporary urban studies, while on the other, there is the risk (danger) that a vicious circle will be created, in which splintering leads to further fragmentation in the wake of niche insights. This seems to have inevitably occurred with the authors’ subsequent insights and this contradiction can also be structural given the large level of splintering found in the discussion. The integration/fragmentation dichotomy remains an open and unresolved issue. It is right to (re) problematize the networked infrastructures pushed also by globalization which requires different orientations, but difficulties remain for an overall interpretation of infrastructure that this book highlights. (i) Infrastructure that fails for several reasons, including collapse—Another development in the discussion is that of Graham (2010), who starts from the assumption of underestimated urban infrastructure in the studies as networked infrastructures as a whole, which appears to be taken for granted and invisible, but which emerges with all its importance in the case of breakdown, failure, nonfunctioning, collapse, or destruction, precisely due to the direct channel with the functioning of the city and even more so for global cities. This also represents an autonomous point of study for the book. There are several authors who embody this approach (Chang et al., 2014; Harvey et al., 2017; Monstadt & Schmidt, 2019). Monstadt and Schmidt (2019) start from the observation that with globalization, infrastructures, especially urban ones, have become more connective and interdependent with each other and have become a whole (networked urban as a whole) and have become even more fragile. A more anthropological view comes from Harvey et al. (2017), according to whom infrastructure in the mid-1990s was less exciting than presently, in which infrastructure was an invisible backdrop. Then there is complexity, the network, and this means that infrastructure marks an inversion and in contexts where there are no smooth flows, where with the network the infrastructure becomes more fragile and the focus is on the collapse rather than routine operation. The attention to infrastructure, also due to its growing importance, is found in Chang et al. (2014) who activate simulation and prevention models with respect to failures and are subsequently perfected in other ways (Faramondi et al.,

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2020; Lo et al., 2020) with models on single types of infrastructures (Faramondi et al., 2020; London underground lines), or on networks and processes of interconnected, albeit independent, infrastructure networks referred to an urban or nationwide activity (Lo et al., 2020; applicable in perspective to Covid-19, even though the study was earlier). Compared to the more general theme, we can also add that of Clark and Hakim (2019), on PPP in advanced countries (e.g. the US) as a response to the decay of infrastructure built in a traditional way and lacking adaptation and functionality for an enormous amount of financial resources increasingly untethered from public sources due to the strong growth in borrowing requirements. However, an important dividing line remains also within globalization, between urban infrastructure in highincome developed countries and developing countries in the South of the world. It is precisely breakdown, failure, interruption, and improvisation that marks the difference and also demarcates the difference between infrastructure and competitive advantage. The central theme for infrastructure, more than other intangible components such as finance, lies in the developed/functional and developing/dysfunctional dichotomy and the failure (or fails) (McFarlane, 2010) of infrastructure that passes from an invisible state to a visible and important one, that concerns only, or in large part, developed countries within globalization, and much less the countries of the South of the world, unless they are exclusive investments to guarantee the production and trade of globalization (Graham & McFarnane, 2015; Lawhon et al., 2018; McFarlane, 2010). The approach of our book mainly concerns urban infrastructure in developed countries in globalization. In a broad sense, however, the principle may apply that the various cases of urban infrastructures “are connected by a common sense of infrastructure not only as a “thing,” a “system,” or an “output,” but as a complex social and technological process that enables or disables particular types of action in the city” (Graham & McFarnane, 2015). Other studies (Furlong, 2014) identify in infrastructure as a hybrid component a growing interconnection between the North and South of the world in the transition (for networks) from artisanal to industrial infrastructure that globalization accelerates. The structural difference of a failure in an urban infrastructure of high-income developed countries and low-income developing countries is that in the former the importance of the infrastructure and its networked infrastructure as a whole emerges as a strong disruption, while in the latter the failure represents the norm, with a structural separation in the single infrastructure between D&C and O&M, and it is also far from the concept of “networked” and “infrastructures as a whole.” The following quote is effective in placing the concept of infrastructure breakdown within developed countries in the dichotomy of developed/functional infrastructures (high-income countries) and developing/dysfunctional infrastructures (lower-income countries) “In the morning, Amaka wakes and goes to the community garden. Nearby there is open space where she relieves herself. She packs, and goes to town to work at her vegetable stall. She uses a nearby private pay toilet that costs 300 shillings (US$ 0.06). On her way home, it is

1.5 A Dynamic in Place

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dark. She goes a little out of her way to stop by her evangelical church, which has a VIP toilet. Her youngest child must be woken in the night and taken right outside, otherwise he wets the bed. There is a nearby municipal toilet: some weeks, it is dirty; some, it is locked. There is also a local private, pay toilet, used occasionally. Two weeks later: Amaka’s daughter became pregnant; while the church toilet is still available, social norms prevent its use. Her youngest child now has diarrhea, making the nightly wakings more frequent and their proximity to the house more problematic. It is the rainy season, and the municipal toilets are filled with mosquitos. There is not enough money for everyone to use the pay toilet all the time” (Lawhon et al., 2018, p. 721). Infrastructure failures (or fails) are problems crying out first for relief, and then for solutions (McFarlane, 2010, p. 131). Ultimately, we must consider that in the situations of the southern hemisphere, the destruction of infrastructure is the norm rather than the exception (Silver, 2016).

1.5 A Dynamic in Place Well over 50 percent of the world’s population lives in cities; 75% of the world’s population is projected to live there by 2050. Within just over four decades, there will be 7 billion people living in cities around the world, 4.75 billion more than in 2007. Overwhelming urban development will ensure that most of the population will be in cities and megacities in developed countries, and others in emerging countries (those with low and lower or upper middle income), especially in Asia, Africa, and Latin America. As this great demographic and geographic shift continues, mankind will become increasingly dependent on functioning urban infrastructure systems. Indeed, the very nature of urbanization means that every aspect of people’s lives will tend to become more dependent on the infrastructure circuits of the city. Globalization has contributed to accelerating urbanization phenomena, however urbanization does not have the same meaning on a global level. The strong urbanization of some Asian and African cities resembles the creation of slums, shantytowns and favelas, generating significant problems of deprivation that seem to find a precarious balance; infrastructure is lacking and will be lacking for a long time. In other cities, especially Chinese cities, infrastructure is a constituent part of the new forms of urbanization. In European and North American cities (developed countries), one of the formulas adopted is that of providing new models and new forms of integration with infrastructures. Even before that, these cities went through deindustrialization, and counter-urbanization phenomena (Coombes et al., 1989) due to the inadequacy of census and administrative boundaries (spillover), the reuse of abandoned industrial areas (brown area) and the rapid change of functions no longer responsive to rapid globalization. All of this required the conversion of existing infrastructures and the rapid creation of new infrastructures with the implicit definition of new financing and assembly models. Added to this is the contingent destabilization produced by Covid-19 infections, which culminated in large Western cities (Milan, London, Paris,

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Madrid, New York) and at least in the short term, can trigger elements that weaken growth (not counterurbanization but slowbalization—Dalla Longa, 2020). However, there is an important growth in infectious diseases (SARS, Covid-19 and more in the future) attributable, according to some (Elsey et al., 2019; Moore et al., 2003; Wolf, 2016; Wu et al., 2017) to ‘globalization’, global cities (Ali & Keil, 2006) and sub and post urbanization. Connolly et al. (2021) also indicate in the (urban) infrastructures of global cities a high responsibility for this cyclicality of contagions that is not episodic (there is also EBOLA). Epidemic that in the future, as a whole, is destined to grow, with an impact on the dynamics of globalization itself and on the use and aggregation of urban space (Alexandri & Janoschka, 2020) and connectivity (Ali & Keil, 2010). Currently there are several open fronts in the correct globalization/slowbalization balance (Olivié & Gracia, 2020; O’Sullivan, 2019, 2021). The new general references appear to be: . . . . .

Globalization which in part leads to strong urbanization; Differentiation of urban structures and cities; Revision of the infrastructure models and formulas of the individual countries; Growth and slowdowns of globalization due to contingent elements; New forms of globalization and variable impacts with urban systems and infrastructures.

If we consider developed countries—although this also concerns developing countries—one of the problems is the lack of public capital to meet infrastructure needs. In developed countries, problems do not arise from new infrastructures, but from their reconversion or abandonment, and enhancement and re-allocation of old to new functions and the recovery of quality in relation to the growth of new urban needs and incomes, including new types of infrastructures that were previously non-existent. The new phenomenon can also be summarized as the addition of prostheses to existing infrastructures, creating new integration between different types of infrastructures that was unthinkable only a few decades ago. Even if attenuated by the crisis, the need for a competitive advantage that arises from developed urban assets, and which requires a large amount of invested capital that sees real estate assets and infrastructure as a direct reference, remains alive. Demographic data tells us that in 2010 (starting from previous decades), there was an acceleration of the movement of population from less urbanized to more urbanized areas, and that from that period onwards, thus starting from the last decade, the global urban population outnumbers the agricultural population, and that the gap will grow exponentially in the coming periods. It is these stabilized trends that can be influenced but not reversed by slowbalization. The year 2010 represents the breakeven or deadline point of this shift. We must ask ourselves what is the city, what are its borders, what is the relationship between city and region? These themes have already been discussed (Coombes et al., 1989; Dalla Longa, 2010), and have always been on the agenda of disciplinary investigations. For now, we need to mark the phenomenon and the transition from public works to urban infrastructure.

1.6 The Complexity of Infrastructure on Urban Failure

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Our reference points will be centered mainly within Western global cities, with a broader reference to global urban assets (Figs. 1.5 and 1.6).

Box 1.2 Comments on trends In 2018, the population residing in urban areas was 55%, that residing in rural areas 45%. Of the total world population, nearly a quarter (23% growing) lived in cities with more than one million inhabitants. The last portion of the graph (1990, 2018, 2030) of Fig. 1.6 refers to the population residing in urban areas within which the demographic data for the cities are analyzed. For 1990 and 2018 this is real data, while 2030 refers to a projection. In 2018 the urban absorbed 55% of the world population, against 45% of the population living in areas defined as rural. It was in 2008 that there was for the first time, in modern history, a worldwide prevalence of the population that can be located in urban areas compared to rural ones. The insights on 2018 tell us that cities with more than 5 million inhabitants are constantly growing in absolute values and as a percentage of the size of other cities (population living in other cities). This is a constant growth that goes from 1990 to 2018 and is projected to 2030. Other data, also in connection with the previous data, tell us that the greatest growth, in terms of urbanization (greenfield), is in Asia and Africa. While North America and Europe are growing less or are stable. Within these trends it is readable, for urban infrastructure, the greenfield and the brownfield.

1.6 The Complexity of Infrastructure on Urban Failure A characteristic of the model will be ever greater growth of urban infrastructures, which will be characterized by their cost and by a problem linked to continuous growth and infrastructure overload. Will capital and funding be enough to build, interconnect, develop, operate, and maintain these infrastructures? Or will the investments prove insufficient? This may be one of the elements of urban failure (Amin, 2016) as in cities nothing can happen without these infrastructures. What can failure consist of? A lack of resources and capital to support the gigantism of infrastructure which is not only conception, construction, modernization, replacement, and innovation, but also making gigantism work within the functionality, sustainability, compatibility, constant maintenance, interconnection and linking of networks. It all seems obvious when infrastructure functions, but it is sufficient for something not to work for the importance of infrastructure to profoundly affect our daily or collective life (think of an electricity blackout, a computer breakdown with data cancellation, a waste emergency, a water interruption, the collapse of an urban bridge, a subway blockage, etc.).

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Rural areas 45%

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Urban areas 55%

Fig. 1.5 Urban population of the world by geographic region, 1950–2050 and by area of residence and size class of urban settlement, 2018 (Source Our processing on date and figures: United Nations, Department of Economic and Social Affairs, Population Division (2019). World Urbanization Prospects: The 2018 Revision (ST/ESA/SER.A/420). New York: United Nations. Notes In 2018 the population residing in urban areas was 55%, that residing in rural areas 45%. Of the total world population, nearly a quarter (23% growing) lived in cities with more than one million inhabitants)

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Fig. 1.6 Urban and rural populations of the world, 1950–2050 and number of cities of the world, by size class of urban settlement, 1990, 2018 and 2030 (vertical: population billions) (Source Our processing on date and figures: United Nations, Department of Economic and Social Affairs, Population Division [2019]. World Urbanization Prospects: The 2018 Revision (ST/ESA/SER.A/420). New York: United Nations)

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1.6 The Complexity of Infrastructure on Urban Failure 33

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The Morandi Bridge—At 11:36 am on August 14, 2018, under a thunderstorm, the Morandi bridge collapses in Genoa. Built in four years from 1963 to 1967, the bridge was 1.2 km long, and connected to the traffic system in Genoa when construction began in 1963. The collapse causes 43 deaths and 566 displaced persons, and a paralysis of the city of Genoa and its port, with harsh effects for the transit of people and goods. There is a fall in the city’s GDP and enormous inconvenience for residents. One year (ten months) later, what remained of the bridge was not yet been demolished, some peices still remained. The city undergoes a period of profound suffering. Two years after the collapse, the new San Giorgio bridge is opened. Local and regional political actors have staked their image on that strategic work. The information process has been airtight, and there have been simplifications of the assembly procedures, to accommodate an emergency, strategic work. Excess attention and transparency have been avoided regarding the assembly process. Those who have worked on the project (workers, companies, and professionals) consider it a war under the spotlight, that must be won with conviction. The President of the Region makes the bridge the political basis of his re-election campaign, with elections taking place a month after the inauguration of the bridge. In all this, there is the importance of urban infrastructure in a broad sense, as the infrastructure there had been neglected and downgraded (so much so that it collapsed and caused 43 deaths). When the bridge was missing, its importance emerged for the development of the city of Genoa, and an energy and reaction were triggered that marked the absolute importance of that infrastructure, that when it was present, was considered boring to deal with. A separate chapter (see the chapter on Slowbalization) will be dedicated to the discussion of Covid-19, a 80–160 nanomillimeter virus that by itself has jammed up the entire system of urban infrastructure and that of global cities in particular. This also indicates the fragility within which this system is situated. Even a virus of an imperceptible magnitude can end up destroying a mechanism as important as urban infrastructure in determining the engine of global development. For this reason as well, the analysis and discussion of urban infrastructure becomes central to redesigning of our development. In two months of covid-19, the main airlines enter into a deep crisis, so much so as to reduce their fleet, or even declare that they will not be able to resume the activity of the transport service in the immediate future. On the stock exchange, both Air France and Lufthansa reported a loss of 58% and 46% respectively. The period is from December 2019 to early May 2020, so it is a trend of a few months, the losses two years later (December 2021) pass respectively to 65% and 61%. Over the same period, some high-tech / distribution companies such as Ocado and Amazon experienced a significant 33% increase in their share prices. One year later, Ocado increased its share value by 110%, and then, as the pandemic subsided, fell again. Amazon, on the other hand, shows a more regular growth and two years later it exceeds 82% of previous prices. Specifically, Ocado (see point f: value chain) is a retail company that reduces social contact in food production and distribution (retail) thanks to the patented use of robotics and apps and therefore with its action leads to a variable reuse of traditional infrastructures and introducing new ones of another nature. There is therefore a profound crisis of infrastructures that

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photograph the new urban crisis and at the same time redesign and strengthen new ones. In this case it is not the infrastructure crisis that marks the urban crisis, but both of these components are undermined by the pandemic which has its greatest virulence in the urban system, so much so that it blocks the entire global economic system through it. The scenario seen starting from March 2020 is proposed again starting from October 2020, once again reaching the major European cities (London, Manchester, Paris, Madrid, Milan) from where it had bounced coming from Whuan. The pandemic does not even stop at the end of 2021 and 2022.

1.7 The New National Conflicts New urban infrastructures coincide with social phenomena and new forms of conflict. In the last century, conflictual movements were born in high-density urban structures (Castells, 1979); now, on the other hand, we see them in the United States, with the Trump presidential elections, in the UK with Brexit, in Italy for a short period with the government of the sovereignists, and in France with the ‘gilets jaunes.’ The conflict and the aggregation of consensus ‘against’ something takes place outside of complex urban systems. The protest and aggregation of consent takes place due to exclusion: from infrastructure, from higher incomes, from knowledge, from work and living conditions that are also intertwined thanks to urban infrastructure. In large urban centers, consensus goes to the opposition (US, Italy, and UK with Brexit), in France the President is accused of representing the ‘rich’, the principles of the last century are overturned, there are new forms of inclusion/exclusion. Large urban suburbs are deconstructed, and in many cases they detach from the more central parts and are added to the non-urban areas, while in others they become integrated with the central parts due to new urban infrastructure. A correlation can be seen between urban infrastructure, new complexity in management, dichotomy between complexity and neo-simplism, global vision v. nationalism, and global cities as important forms of competitive advantage almost detached from the nation-state, but also the connection between large urban dynamics, complexity, and new forms of exclusion of the non-urban, and pushing these areas towards the radicalism expressed by neo-simplism, distrust and criticism of the elite, and distrust of the need for knowledge of perceived complexities. Urban infrastructure seems to intertwine with all of this and correlate with the new identity. The complexity that characterizes the assembly of infrastructure is understood in the dynamic urban structures; yet it may appear extraneous and in some cases incomprehensible in the other parts of the territory, in part because we are not in the presence of large infrastructures and their governance. These two parts (complexity and simplicity) can come into conflict with each other. One is more oriented towards global openness, the other more enclosed within its own borders. It could also lead to a jamming of urban infrastructure and the search for competitive advantage vague to which they respond if held back by neo-simplism. It is no coincidence that the new forces of neo-simplism aim to occupy a place that replaces an elite in whom there is

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59.93

60.36 58.19

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50.7 UK ‘remain’ 48.1% England ‘remain’ 46.6%

Fig. 1.7 The Brexit -Referendum regarding whether to ‘remain’ in or ‘leave’ the European Union (vote regarding seven England’s metropolitan area—24 June 2016) (Source Our processing of the vote in the referendum (382 areas counted with a focus on England)

no longer any trust. This often brings non-knowledge into complexity, that requires other dynamics if the reference is urban infrastructure (Fig. 1.7). A partial analysis of the American presidential vote (Schier & Eberly, 2017), of Brexit (2016), and of the European and administrative elections in Italy, seems to confirm this dichotomy in which the role of urban infrastructure is not secondary. Even Jennings and Stoker (2018) point to areas with globalized knowledge—mainly cities—as opposed to peripheral sites (this is true for England, the United States, and other countries). If the issue is polarization—“Divergent Dynamics of Cities and Towns”—it becomes difficult to find a synthesis between complexity and neosimplism, between public works and urban infrastructures. In analyzing the Brexit’s votes Los et al. (2017) argue that it was above all those in London in favor of remain, while the rest of the territory was compactly for Brexit. With London there were also other large English cities such as Leeds, Manchester, Liverpool, Newcastle, Leicester, and more obviously the Scottish (Edinburgh, Glasgow) and Welsh (Bristol) cities. Two years later Billing et al. (2019) said that the same complex entities are highly unprepared for the choice of Brexit; here too there is a rift between neo-simplism and complexity. With respect to infrastructure, elections represent a possible response to accessibility and exclusion from the complexity of urban infrastructure. There is another line of research on accessibility and exclusion whose matrix is not recent at all. It derives from the school of Chicago and was then developed, in the last century, by various authors including Harvey (2002, 2009). The argument is that one of the strong elements of social exclusion is the cost of the functions that replace and exclude, through costs, the weaker functions that succumb. The abandonment

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of the city of the middle classes marks part of the urban crisis of the last century (Coombes et al., 1989). Urban infrastructure can help to trace an opposite path, with equally evident tensions. It is precisely the new forms of urban infrastructure that contribute, with cause and effect, to creating new forms of gentrification with new exclusions of the weaker middle classes, which then, in some cases, will help to feed the political expression of neo-simplism as opposed to elite knowledge and action. The new forms of exclusion are strengthened. It is useful to resume the debate starting with Richard Florida, who after having emphasized the importance of gentrification in globalization within global cities and evolved urban spaces (2002, 2005), notes how the urban crisis has been determined, following forms of gentrification, by the increase in costs in central areas and by subsequent forms of exclusion. The partial solution of the problem, according to Florida (2017), would lie in the exceptional redevelopment and enhancement of urban infrastructures, in particular of public transport, which would thus contribute to rebalancing, and lowering, the costs of central areas. In regard to the previous period, namely the urban crisis that peaked in the 80s, Sassen (2016, 2019a) notes: it was thought in the 80s that new technologies had dispersed the population through counterurbanization. But it was realized, with some surprise over time, that the very complex interconnection of infrastructure in mature cities and structured cities attracted elites and high-income professionals, with a significant gap in regard to a middle class that was partially excluded. In order to operate, the elite needed another type of ‘infrastructure’ (Sassen, 2016), made up of the enormous amount of people (often recent immigrants) that made regeneration and family consumption possible (cleaning, rearrangement and reorganization of spaces, and the logistics of daily life left unattended due to work-time, and intervene in the gaps of a regenerative phase: caregivers, restoration of clothes, arrangement of shopping, watching children at any time of day and evening, with extension to the care of pets, etc.). This new population settles in the interstices of the city and, unlike an excluded middle class, ends up using part of the urban infrastructure, or unconsciously being part of the urban infrastructure (e.g. riders). The issue of exclusion thus becomes more complex. In the 1980s, when counterurbanization was still hanging in the balance, the attraction of high-income classes into global cities was largely driven by the urban infrastructure that Amin and Thrift (2017) call of third nature, and which includes the high capacity and speed of processing, transmitting, interconnecting, and storing data that only large cities were able to guarantee. Hence, the subsequent evolution of urban infrastructure that blends the second and third natures. The momentary crisis generated by Covid-19 and the need to extend and strengthen networks, speed them up and make them smart, reduce time/space, and encourage remote working also through smart working villages, seem to upset these elements. However, global cities and cities contain a vital and regenerative secularization that can be mitigated (slowbalization) but cannot be eliminated by the logic of the system, and urban infrastructure contains a sedimented and attractive value that is too high not to find new scenarios and investments.

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1.8 The Criticalities: From Hyper-Globalization to Slowbalization Globalization is made up of multiple dimensions: (a) trade and circulation of goods; (b) the population, migration and movement of people; (c) investments and capital circulation; (d) from ideas, knowledge and technology across borders; (e) the evolution and global connection of infrastructures. Stiglitz (2017) indicates how, in a global reading, some of these dimensions have degraded, primarily in trade, and have negatively affected the others. An example of the present-near future is the non-resolution of the debt crisis in developing countries (Debt Crises in Developing Countries) also aggravated by the pandemic (Stiglitz & Rashid, 2020) which could result in an increase in unrest, fractures between countries. The turmoil will not spare developed economies, with a costly migratory crisis greater than that known today and with a perpetual cycle of crisis that could become the new reality. Stiglitz looked at globalization in an innovative/proactive form at the beginning it was necessary to make that system as fair and efficient as possible (Stiglitz, 2002, 2017); noted the strong initial euphoria of economists and operators. He highlighted the positive points of globalization by accompanying this to other critical points and open questions. His point of view was based on the fact that globalization appeared unsustainable (Stiglitz, 2017), but highly reformable (Stiglitz, 2006). He came, later, to the progressive observation of a growing opposition to globalization with the consequence of a difficult reformability of it (Stiglitz, 2021), even if still necessary. For four decades there has been a disruptive growth of globalization. The crisis that has arisen, evident in 2008, is above all due to an incorrect distribution of benefits and an impoverishment of the world middle class. This scenario has led to a growing aversion both towards globalization and towards the elite (Stiglitz, 2019) with a detachment, not too underground, between the global city and the rest of the territory of the States. This also happened through electoral results, nationalisms (eg Brexit) and protests (gilets jaunes) with dichotomies between city and territory. We witnessed a refuge within the state- nation border recalling that borders still matter and that the basic political unit remains the nation state, there has been a retreat from globalization, at least from that of hyper-globalization which prevailed before 2008 (Stiglitz, 2021). Stiglitz rightly recalls how economic globalization is faster than political globalization (Stiglitz, 2019) and that all nationalisms and neo-simplism are the result of a lack of (or asymmetrical) distribution of the benefits generated by globalization. The pandemic has aggravated this situation (Stiglitz, 2021). All this has turned into opposition to globalization and has gone from hyper-globalization to slowbalization. We have now entered an era in which differences in values, economic systems and points of view on how economic systems work are evident. Yet despite the growing critical view there is still a need for global cooperation (Stiglitz, 2021). Globalization itself has meant that in twenty-first century America, geography presents a different image from the past. There are more similarities between those who live in cities

References

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than the rest of the country with increasing gaps over time and often irreconcilable with each other (Stiglitz, 2019). Global cities are entities that are more globally connected to each other than often between them and the territory of individual states. This evolution of globalization has an enormous implication both for the concept of urban infrastructure and for understanding the political ‘aversions’ and oppositions between the cities and the rest of the territories and at the same time the aversion of an extended part of society to the elite. considered internal to cities (gilets jaunes, electoral trends, Trumpism, neo-simplism vs. complexity). Global cities respond on an electoral level in a homogeneous way with each other and in contrast with their national territories. This often creates a dichotomy between nation-state, as an electoral container, and a world network of global cities. Thus two conflicting visions emerge: it happened for Brexit, for the Trump-Biden elections, in the Italian elections of Milan, Turin and Rome. How does this dynamic fit together with the evolution of the urban infrastructure? However, there is still a huge need for global cooperation, made so evident by the climate and pandemic crises (Stiglitz, 2021).

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Chattopadhyay, S. (2009). The art of auto-mobility: Vehicular art and the space of resistence in Calcutta. Journal of Material Culture, 14(1), 107–139. Chattopadhyay, S. (2012). Unlearning the city: Infrastructure in a new optical field. University of Minnesota Press. Clark R. M., & Hakim, S. (2019). Public–private partnerships and their use in protecting critical infrastructure. In R. M. Clark, & S., Hakim (Eds.), Public-private partnerships: construction, protection, and rehabilitation of critical infrastructure. Springer. Connolly, C., Keil, R., & Ali, S. H. (2021). Extended urbanisation and the spatialities of infectious disease: Demographic change, infrastructure and governance. Urban Studies, 58(2), 245–263. Coombes, M., Dalla Longa, R., Raybould, S. (1989). Counterurbanisation in Britain and Italy: A comparative critiques of the concept, causation and evidence. Pergamon Press. Coutard, O., & Rutherford, J. (Eds.). (2016). Beyond the Networked City: Infrastructure reconfiguration and urban change in the North and South. Routledge. Crouch, C. (2019). The globalization backlash. Polity Press. Dalla Longa, R. (1997). Management of public work. Etas Libri. Dalla Longa, R. (2004). Management of the construction processes of public works and infrastructures. Carocci. Dalla Longa, R. (2010). Globalization and urban implosion. Springer. Dalla Longa, R. (Ed.). (2011). Urban models and public-private partnership. Springer. Dalla Longa, R. (2014). Il fondo immobiliare ad apporto pubblico: sviluppo e trasformazione. In R. Dalla Longa, & G. De Laurentis (Eds.), La gestione del patrimonio immobiliare pubblico. Bancaria Editrice. Dalla Longa, R. (2017). Il Public-Private Partnership: L’evoluzione Stato-mercato in opere pubbliche ed infrastrutture. Carocci. Dalla Longa, R. (2020). Reorganisation of the infrastructure sector and new forms of financing. In C. Secchi, & A. Belladonna (Eds.), Infrastructure in a changing world: Trends and challenges. Ledi Publishing. Elsey, H., Agyepong, I., Huque, R., et al. (2019). Rethinking health systems in the context of urbanisation: Challenges from four rapidly urbanising low-income and middle-income countries. BMJ Global Health, 4(3), e001501. Faramondi, L., Oliva, G., & Setola, R. (2020). Multi-criteria node criticality assessment framework for critical infrastructure networks. International Journal of Critical Infrastructure Protection, n. 28, 2020. Florida, R. (2002). The rise of the creative class. Basic Books. Florida, R. (2005). The flight of the creative class. Harper Collins Publishers. Florida, R. (2017). The new urban crisis. Oneworld Publications. Furlong, K. (2014). STS beyond the ‘modern infrastructure ideal’: Extending theory by engaging with infrastructure challenges in the South. Technology in Society, 38, 139–147. Graham, S. (Ed.). (2010). Disrupted cities: When infrastructure fails. Routledge. Graham, S., & Marvin, S. (2001). Splintering urbanism: Networked infrastructures, technological mobilities and the urban condition. Routledge. Graham, S., & McFarlane, C. (Eds.). (2015). Infrastructural lives: Urban infrastructure in context. Routledge. Graham, S., & Thrift, N. (2007). Out of order: Understanding repair and maintenance (pp. 1–25). Culture and Society. Greenberg, M., & Lewis, P. (2017). The city Is the factory: New solidarities and spatial strategies in an urban age. Cornell University Press. Guy, S., Marvin, S., Medd, W., & Moss, T. (2011). Shaping Urban Infrastructures: Intermediaries and the Governance of Social-Thehnical Networks. Routledge. Guy, S., Marvin S., Moss, T. (Eds.). (2001a). Urban infrastructure in transition: Networks, buildings and plans. Taylor & Francis. Guy, S., Marvin, S., & Moss, T. (2001b). Conclusion: Contesting networks. In S. Guy, S. Marvin, T. Moss. (2001). Urban Infrastructure in Transition. Taylor & Francis.

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Chapter 2

Globalization and the City

Abstract The chapter deals with the issue of globalization of cities and a distinction between them within a grid of emerging and developed countries and their subdivision into income levels. The thesis is that even within a globalization, urban infrastructure differs according to whether the concept of urbanization or urban consolidation is applied or as Brenner defined it at the beginning of this century for western cities: glocalization or interscalar of urban region. The urban infrastructure finds a different meaning or declination when referring to the greenfield phenomenon more consistent with rapid urbanization; or brownfield more connected with the urban consolidation of western cities. The term greenfield or brownfield infrastructure can also be coined, the latter more in keeping with western global cities. The content of the book focuses more on brownfields infrastructure.

The definition of “urban infrastructure” entails a comparison with the concept of the global city for different types of geographic areas. The question is the relationship of urban infrastructure with urbanization, and urban renewal within emerging and developed countries. The comparison is needed to better define a reference model. The thesis expressed here is that it is not possible to generalize the concept of infrastructure. This point introduces as the quantitative and qualitative and financing needs of urban infrastructure will be different in the coming years. Then there is a contingent question that will be addressed in another chapter, namely, can the urban infrastructure model be modified by unpredictable events that lead from globalization to slowbalization? Infrastructures are different in terms of: – Impact (on the economy and on different urban assets), hence the distinction between urban and non-urban infrastructure, but there may also be differences within urban infrastructure if combined with the different impacts; – Financing; – Assembly; – Greenfield and brownfield configuration; – Service delivery systems and types of users; – Risk management; © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_2

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Africa

Americas

Tanzania Egypt Ethiopia Low and lower middle income Emerging Countries Upper middle income

Developed Countries

High income

Ecuador Paraguay Argentina Brazil Colombia Mexico Peru Uruguay Chile Canada United States

Saudi Arabia Singapore South Korea Japan

Kenya Morocco Nigeria Senegal Angola South Africa

Asia Bangladesh Cambodia Myanmar Pakistan India Indonesia Philippines Vietnam Azerbaijan Jordan Kazakhstan Malaysia Thailand China Turkey

Europe

Oceania

Romania Russia

Croatia Poland France Germany Italy Spain United Kingdom

New Zeland Australia

Fig. 2.1 Countries included in the study by region and income group (Source Oxford Economics & GIH (2017), Global Infrastructure Outlook: Infrastructure investment needs 50 countries, 7 sectors to 2040, Global infrastructure Hub. p. 11)

Giving tangibility to this difference serves to reduce the levels of abstractness. The discussion on infrastructure in the literature has always been conducted with a high level of tangibility; going in the opposite direction can make comparisons irreconcilable. Two main elements will be considered below (Fig. 2.1). A set of countries from different continents with different income levels will be considered (low and lower middle income; upper middle income; high income), also dividing them into developed countries and emerging countries. The reference is 85% of world GDP and about 73% of the global population. Small but important European countries such as the Netherlands and Belgium, Austria, Scandinavian countries and Eastern Europe and other Asian and South American countries remain outside the direct comparison. Ultimately, countries with 15% of world GDP and about 30% of the world’s population remain outside of the comparison. The direct comparison will take place for the member countries of the G20, with the addition of 17 other countries invited by the Group of 20 due to their strategic and geopolitical positions. The 20 countries of the G20 alone account for 80% of the world’s GDP.

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Box 2.1 Reference on the considered nations The countries examined are 19 of the G20, another 17 countries invited by the G20 and 14 countries selected to guarantee coverage in all regions and income groups of the world. The latter countries were chosen on the basis of indications from the World Bank. (a) The G20 is made up of Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Mexico, Russia (after the war against Ukraine there are sanctions against Russia), Saudi Arabia, South Africa, the Republic of Korea, Turkey, the United Kingdom, the United States and the European Union. (b) The following countries were invited to participate in the G20: Spain, Poland, the Philippines, Vietnam, Malaysia, Thailand, Singapore, Colombia, Peru, Chile, New Zealand, Nigeria, Egypt, Ethiopia, Kenya, Morocco and Senegal. (c) The countries added in italics to complete the number of fifty are: Tanzania, Angola, Ecuador, Paraguay, Uruguay, Bangladesh, Cambodia, Myanmar, Pakistan, Azerbaijan, Jordan, Kazakhstan, Romania, Croatia. In total, the 50 countries included in the analysis represent over 85% of world GDP. A trend of five years will be considered (the time elapsed from 2011 to 2015) and, with some critical issues, a 20-year period will be projected in order to be able to make some forecasts on future trends. One of the theses to be investigated is represented by the difference between greenfield and brownfield approaches applicable to urban infrastructure. Greenfield concerns new urban infrastructures that are created in relation to ongoing urbanization and driven by the phenomenon of globalization. Brownfield, on the other hand, is the transformation and remodeling of existing infrastructures within the same phenomenon of globalization. Ultimately, it is about the explosion of new cities in developing countries (greenfield), or the remodeling of consolidated cities in already developed countries (brownfield). The nature and form of urban infrastructure differs in terms of impact with greenfield or brownfield processes. However, the consideration prevails that it is the brownfield that best represents the neo-definition of urban infrastructure.

2.1 Urban Structure and Infrastructure: Greenfield and Brownfield The nations considered have a different degree of urbanization. For developed countries, there is less demographic growth than the world population growth trend.

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The population grows more the more we move from developed to emerging countries, and above all from first-tier countries (upper middle income) to second-tier ones (low and lower middle income). There is a trend towards urban concentration which, however, is still one of urbanization for emerging countries. For developed countries, the phenomenon is one of urban consolidation and replacement of functions. These different types of processes have significant implications on greenfield infrastructure (urbanization) and brownfield infrastructure (urban consolidation and replacement of functions). Barring slowdowns from slowbalization, current urbanization is expected to remain fairly constant in Europe, America and Oceania, while urbanization is expected to grow more in Africa and Asia in the same period. Among global cities, the top fifty (in terms of population) are mainly distributed in the emerging countries, a sign of strong territorial polarization attributable to urbanization. Here, there is a difference in urban systems, one attributable to urbanization, the other mainly to the replacement of functions internal to urban systems. Different urban systems emerge even within homogeneous geopolitical areas. For example, Italy is very different from the United Kingdom (Figs. 2.2, 2.3, Table 2.1 shows, further on, the summary data treated in Figs. 2.2 to 2.6), but both systems respond to the organization and evolution of the market, and very often the organization of infrastructure can be traced back to the same logic. Both the British urban system and the Italian one respond better to a replacement and conversion of

Fig. 2.2 Italy and urban polarization (Source World Population Prospects (2019 Revision)—United Nations population estimates and projections. https://worldpopulationreview.com/countries/italypopulation)

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Fig. 2.3 United Kingdom and urban polarization (Source World Population Prospects (2019 Revision)—United Nations population estimates and projections. https://worldpopulationreview.com/ countries/united-kingdom-population)

existing functions, and thus a conversion of existing infrastructure. In addition to reconversion, there are also very important innovation factors. Then there are nations (or almost continents such as Australia) with a low population and high concentration in complex urban systems (Fig. 2.4). There is no doubt that economic infrastructure can have a different impact even if it is often the rules of the market and competition that create common rules, more than is demonstrated by the urban morphologies. The principle is even stronger and more similar for developed countries, where there are no strong urbanization pressures and there is a substantial amount of infrastructure already built (brownfield). Urban models are different: more polarized in some countries such as Australia where the top 20 cities absorb 65% of the population, or the United Kingdom (25%), and less in others such as France (11%). There is also a substantial part of African and Asian nations that respond to a strong urbanization logic (Sassen, 2019), and in this case we are facing a strong development of greenfield infrastructures. An example in Africa is Nigeria (Fig. 2.5), where in 1995 the population of the capital Lagos was 5.98 million, in 2019 it rose to 9 million (14 million considering a wider city border), and in 2025 the population is expected to be 20 million. There are growing cities in Nigeria such as Ibadan and Kano, currently with more than 3 million

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Fig. 2.4 Australia and urban polarization (Source World Population Prospects (2019 Revision)— United Nations population estimates and projections. https://worldpopulationreview.com/countries/ australia-population

inhabitants. Another nation with less population density, such as Kenya (Fig. 2.5), sees Nairobi projected to grow to 5.8 million inhabitants in 2025, adding more than one million inhabitants compared to today. Furthermore, in addition to polarization, there is also the concentration of GDP. For example, the city of Lagos in Nigeria concentrates 7.2% of the population but also 24.9% of the nation’s GDP; Kenya’s Nairobi represents 8.4% of its population and 12.4% of the nation’s GDP. Urban infrastructure can also be modulated based on the type of urban layout and a significant importance can also be attributed to other variables linked to the production of wealth (GDP) of the cities, including their location within each individual nation and the regional and geopolitical configuration covered. Europe, which absorbs 25% of world GDP, and which in the forecast will drop to 18% by 2040, has a stable population of seven hundred million inhabitants in the comparison between the two periods. A significant increase in cities over 500,000 inhabitants is not expected in Europe by 2030: in 2018 there were 146, in ten years (in 2030) another 9 will be added, of which 6 between 500,000 and one million inhabitants. The urban (and territorial) model is that of a geopolitical area without demographic growth and without urbanization, at least like that seen in the previous two centuries. With the first industrial revolution, for example, London went from 500,000 to 2,685,000 inhabitants, and Manchester was transformed from a small town of 20,000 inhabitants to a city of 303,000. These numbers are impressive, but they pale in comparison to the new urbanization carried out by China and African countries, but also those in South America. Although it is a partial figure, as every single administrative perimeter of the city must be calculated (Dalla Longa, 2010), before reaching a definitive synthesis, we

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Nigeria

Kenya

Fig. 2.5 Nigeria, Kenya and urban polarization (Source World Population Prospects (2019 Revision)—United Nations population estimates and projections. https://worldpopulationreview.com/ countries/nigeria-population, https://worldpopulationreview.com/countries/kenya-population)

must consider that while countries such as Great Britain, Germany and Italy have a fairly comparable density (inhabitants/Km2 ), their urban morphology is less similar (e.g. Italy and Great Britain) (Coombes et al., 1989). France and Spain have a lower density. If we consider the top 20 cities of each nation, they absorb from one-quarter (Great Britain) to one-sixth of the entire population of the nation; this gives the idea of how Great Britain has important urban assets within which to structure the concept of brownfield urban infrastructure. In part, Germany and Italy do too, while for France it’s a little less, but here the problem is the three or four big cities (Paris, Marseille,

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Fig. 2.6 China and Japan—New urban form (super corridors): system of connected metropolitan urban area (Source World Population Prospects (2019 Revision)—United Nations population estimates and projections. https://worldpopulationreview.com/countries/china-population, https://wor ldpopulationreview.com/countries/japan-population)

Lyon, Toulose) which alone create large urban agglomerations, leaving the others with a more limited role. Infrastructures within cities will mainly concern brownfield infrastructures (reconversion or contamination with multiple types of intervention). This will not mean a reduction in investments in dedicated infrastructures, but they could increase and be more complex and concern complex types of works or urban interventions of dismantling/reassembly and reconstitution of urban structures. Urban infrastructure acquires a clear peculiarity in this area and in particular within its identified sub-area. North America, which produces 34% of world GDP, like Europe will see a proportional decrease in 2040. It is expected to drop to 27% of global GDP by that year. The proportional net decline will be equal, but in absolute numbers it will remain much higher than in Europe. The population will tend to grow slightly compared to today (from 365 to 390 million), yet growth will not be comparable to that of Africa and Asia. In the forecast for 2030 there is a partial push towards urbanization that is not excessive, centered above all in cities with 1 to 5 million inhabitants (+9) and in a more reduced form for smaller cities (from 0.5 to 1 million, +6). This is an urbanization process comparable to the European one with a partial greater thrust, even though other parts of the hemisphere will see greater development, namely Asia and Africa. The difference with Europe is the lower population density, especially in Canada (US with 35 inhabitants/Km2 ; Canada 4 inhabitants/Km2 ), in which, however, 37% of the nation’s population is concentrated in the 20 largest cities, against 12% in the United States.

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The urban infrastructure model is quite similar to the European one though there is a greater mix between greenfield and brownfield. The way cities, and single settlements in North America, are structured, however, are not quite comparable at the urban European model. Yet there may be urban forms that are comparable in their impact with infrastructures, although historically there is a different political-managerial way of organizing and financing infrastructure (e.g. hospitals in the US and urban renewal). The elements of globalization, however, have tended to level out these differences. Asia is the area that has grown and: is intended to grow by more than GDP in the 2015–2040 period (from 36% to 48%), becoming a geopolitical region with the highest income in absolute terms and with even greater growth over time. It is also the continent with the largest number of inhabitants (4.4 billion, which in the trend rises to 5.1 billion in 2040). There is also an increase in the absolute level of the population, but it is not comparable, proportionately, to that of Africa. In the projection to 2030 there is a consolidation of the urbanization already started previously. The greatest growth is in large cities with over a million inhabitants, with significant growth for cities from 1 to 5 million, but also in those over 5 and 10 million. We are undoubtedly facing strong forms of urbanization and therefore infrastructures also respond to this principle. There is a substantial difference with the European model even though there may be some overlaps, precisely on the part most connected with globalization. The density models of the individual nations (South Korea, India, Japan)1 are double or nearly double compared to the European models, and not comparable to those in North American. However, there are different models: Japan (understood as an urban model of geopolitical development) is different and difficult to bring close to the Chinese or Indian model. The top 20 Korean cities concentrate 63% of the population, while just Seoul and its urban area concentrate 27% of the Korean population; this compares to 5% in Indian and 27% in Japan, higher but still comparable to the European and British models in particular. The Chinese urban conformation merits a separate discussion. The predominant infrastructure model is greenfield, with some minor presence of brownfield interventions where the replacement of obsolete functions prevails. The Asian model is more shapeless, chaotic in its growth, and has substantial differences between some models, such as those of China and Japan, that influence the urban infrastructure model. Africa. The continent is growing, although not in a form comparable to Asia in terms of GDP in the period 2015–2040 (from 3% to 5%), but it is above all in terms of the population that it is growing more, almost doubling the number of inhabitants (from 1.3 to 2 billion). There is a sharp surge in urban concentration. We are facing a marked form of urbanization, the most significant between the various regional areas. Cities with more than 10 million inhabitants are growing exponentially as are cities ranging from 5 to 10 million inhabitants, with a growth of 160% in the trend between 2018 and 2030. We are facing an infrastructure model that is not comparable to that of 1

South Korea 512 inhabitants/Km2 ; India 420 inhabitants/Km2 ; and Japan 335 inhabitants/Km2

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Europe, while the African model continues to support urbanization and development. Among other things, it represents the largest share of fixed investments and is the one that most drives the growth of GDP in this geo-political area. It is about how the infrastructures enter, with the multiplier, in the calculation of the fixed capital of the GDP. The reference is to roads, railways, ports, airports, telephones, electricity and other infrastructures (Fedderke et al., 2006; Perkins et al., 2005). A decisive factor in defining urban infrastructure is the city’s importance in the production of wealth in relation to the state. The 20 largest cities in the world produce a GDP comparable of the sum of many lower-income producing states: it is equivalent to the sum of the income of 162 nations out of 192 existing nations recognized by the United Nations. It is as if nations such as Nigeria, South Africa, Colombia, the Philippines and Pakistan, among the first to form the chain of 162 nations from top to bottom, were aggregated with the other 157 nations and formed neighborhoods or suburban areas of the 20 main large cities in the world in terms of production (GDP). These are impressive figures that help bring the concept of urban infrastructure into better focus. And we must also not forget that the major cities of these states (Lagos, Johannesburg, Bogotà, Manila, Karachi) are in turn, within their respective nations, those that produce the greatest quantity of GDP. A significant reason for this is that the largest 20 cities in terms of GDP, as Sassen (2019) and Khanna (2016) say, see three-quarters of the largest and most important multinational companies residing in these cities. These multinationals contribute to the creation of GDP and at the same time attract capital, brains and services which in turn invest in expansion in these cities. They are multinationals oriented not towards national cohesion but rather to respond to global connectivity. This creates a gap in the need for infrastructures in different parts of the world and in different parts of nations. Large cities operate at a deficit, have a continuous thirst to develop infrastructures, and cannot cover this need with public funds (contracts), but must find innovative forms of financing such as Public-Private Partnerships (PPP) with which to respond to their needs. PPPs require highly-innovative advanced management formulas and this ends up further differentiating the types of urban infrastructures and the competitive advantages that become fundamental in designing the compatibility between territories and states. Developed countries with high incomes have to deal with Nations that have high public deficits and infrastructures that need to be converted quickly to maintain a high competitive advantage. Emerging countries can tackle urbanization with public resources whose infrastructure assembly process is simpler. Often due to this importance, global cities are interconnected and experience a double relationship, the autonomous one of globalization and that of belonging to their own nation. The most dynamic cities are not the capitals often located at the center of a nation to better represent and summarize the territory of the state. These global cities are often located around important infrastructures or networks of infrastructures such as ports and airports or flows of traffic and international trade. When they are not capitals, these cities often ask the state for a discrepancy; they do not tolerate or seek a balance with capital cities. These are, for example, New York, Amsterdam,

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Milan, Barcelona, Shanghai and Mumbai. They respond to a double connection: the global one (which is mainly economic), and only partially the national one (which in many cases is political). This is how it was between London and England for Brexit, between New York and the rest of the federal states (the less global ones) with the election of Trump. Tensions exist between these cities and the state when the dichotomy is between globalization and deglobalization, between national openness and closure. The element that characterizes these cities is connectivity, but there is no gap between these 20 or more cities and the others; there is a different intensity with respect to connectivity. Such cities exert a growing power that often bypasses and displaces that exercised by the state (Khanna, 2011; Taylor, 2004a, b). In fact, a share of power is at stake, which in many cases leads to a conflict between the state and global cities. According to Taylor (2013), in the presence of increasing globalization, this will lead the state to change—sooner than we believe—in order to grasp the power that is constituted and expressed on nodes and networks. Connectivity is increasingly fueled by infrastructure, and this is often the element that makes the difference in determining the competitive advantage between cities. There are also those who argue (Khanna, 2016) that cities in the twentyfirst century are humanity’s deepest infrastructure. There are legible evolutionary phases of cities that have considerable implications regarding infrastructures and their present and future assembly accompanying urbanization (greenfield) or urban consolidation (brownfield). The first industrial revolution led Lewis Mumford (1961) to say, in regard to Manchester, Liverpool and other English cities, that they were similar and that they found themselves with different alibis in the same place and were created by the development of cotton, iron and steel. Organizations disappear, cities (infrastructures) remain and seek to reconvert their brownfields (the reference is to most European cities). Tarr (1984) describes the American infrastructure of the second industrial revolution as still exclusively connections within and between various states. The third or fourth revolution, if by third we mean the stage of the passage between the second and the fourth, began in the 80s (Crouch, 2019; Sassen, 2016a, b) and creates new conditions for global cities that in the twentyfirst century have seen new scenarios all linked or connected to infrastructure. Defining the periods of industrial revolutions (Schwab, 2017; Schwab & Davis, 2018) or, as Crouch (2019) calls them, waves of globalization, is not a minor question; connecting elements can be useful. Schwab (2017; Schawab & Davis 2018) speaks of the industrial revolution as it is linked to the evolution of (industrial) technology, although the fourth revolution that began in the twentyfirst century can no longer be explained using the evolutionary category. The third industrial revolution began in the 1960s with the digital and IT revolution, that of semiconductors and high-level devices and computers. However, it was in the 80s (PC) and 90s (internet) that the third revolution was consolidated. The other two revolutions had been the mechanical revolution (the first), and the electric revolution (the second). Sassen (2016a, b) has the new era coincide with consolidation of the third technological revolution in the 1980s, which marks a very specific economic transformation in major Western cities. Global companies would no longer need

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2 Globalization and the City

cities with the digital revolution. For Western cities we speak of counterurbanization (Coombes et al., 1989), while for other countries the principle may not apply (Schwab, 2017; Schawab & Davis 2018) as 17% of the world population had not yet benefited from the second industrial revolution and more than half (four billion people) from the third industrial revolution. The observation concerns today, as in the 80s the population unable to benefit from the third industrial revolution was the vast majority, and therefore counterurbanization concerned Western cities, if anything. This was not the case, according to Sassen (2016a), as time and ’fractions of a second’ matter in the new era and distances and time count even more. So the idea that cities were now only for people who wanted to go to the theater did not prove to be true. The difference is made by the brownfield infrastructure concentrated in large cities. The fourth industrial revolution identified by Schwab (2017; Schawab & Davis, 2018) that began in the twenty-first century and is consolidated today, is ubiquitous infrastructure that helps to change urban infrastructure, made up of mobile devices, that are increasingly powerful and cheaper, of apps capable of personalizing products and thus also strengthening the concept of differentiated urban infrastructure. Even Crouch (2019), starting from the waves of globalization, overlaps with this reading. We must also ask ourselves what Covid-19 is capable of producing and remodeling within this balance of infrastructures. What evolution can the city have as we know it in the face of an extension of the disease? And what will be the evolution of ubiquitous infrastructures in relation to the city and the interconnection with urban infrastructures? In the twenty-first century and close to it, new super corridors are created that connect cities hundreds of kilometers away (Fig. 2.6). An example is the connection in Japan between Taiheiyo and Belt that creates colossal and previously unthinkable urban archipelagos. It is difficult to call them new urban forms. Even Amin and Thrift (2002), in referring to the urbanized world, call it a system of connected metropolitan urban areas, Table 2.1. References and data connected to Figs. 2.2 to 2.6. (a)

(b)

population

Km2

(c) area

inhabitants

Km2

(d)

(e)

inhab. first 20 cities

population (d/a)

Italy

60,285,097

294,140

205

9,757,743

16%

UK

68,429,100

241,930

283

16,958,654

25%

Australia

26,004,384

7,682,300

3

17,492,810

67%

Nigeria

215,530,403

910,770

237

29,947,360

14%

Kenya

55,935,760

569,140

98

5,262,623

9%

China

1,433,783,686

9,706,961

148

163,167,991

11%

Japan

126,860,301

377,930

336

34,069,315

27%

Source see Figs. 2.2 to 2.6 (our processing)

2.1 Urban Structure and Infrastructure: Greenfield and Brownfield

55

creating new effects partly determined by the existing urban morphologies (e.g. in Europe the Randstad Region where Amsterdam, Utrecht, The Hague and Rotterdam are merged) in which the glue is the development of infrastructures that connect and ‘mend’ (fast underground lines, car parks, telematic portals, waterways, computer highways). Or in Japan there are always infrastructures such as the high speed trains inaugurated in the 70s and 80s, the ’railway link’ first and the ’bullet train’ later, that have fluidized cities 500 km away (Tokyo-Osaka), but in between which there are other cities almost always over two million inhabitants and at varying distances from Tokyo, such as Yokohama (28 Km), Nagoya (258 Km), and Kyoto (450 Km). As a result, rail transport from Tokyo to Osaka represents more than 80 billion passengerkilometers per year. In Germany (DB) there are 27 billion passengers-Km per year, in Italy (Trenitalia + Italo) there are 18 billion passengers-Km per year (Profillidis & Botzoris, 2013, 2018) The travel time is little more than that of a subway line with a (much) higher ticket cost (Tokyo-Osaka one way is more than 100 euros). Investments have continued to grow since 1970, with three generations of trains going from ‘bullet train’ to ‘chuo shinkansee”, with 75 billion dollars (euros) of investment starting in 2014 with magnetic levitation trains on new networks that reduce travel time—that had already previously been cut—by one-third (500 Km per hour). In 2009, when the first Milan-Rome high-speed connection was inaugurated (570 Km), which in a few years led to doubling the number of passengers transported per km, it was said that the Italian underground had been created. A round trip could be done in a few hours. In Italy there was a high perception of the changes in the city (related to an infrastructure) which ended up benefiting Milan more than Rome, also with the development of other infrastructures and the growth of Milan in the global city ranking. In the case of the Okaido (also labeled the Taiheiyo belt), all of this comes in exponential form. It represents a considerable accumulation of infrastructures, where in fact cities merge, creating an area of 100 km with 16 of the 20 largest Japanese cities and over 83 million inhabitants, 70% of the Japanese population. We are facing new phenomena. This is not urbanization, but the joining of an existing archipelago. The role of interconnected infrastructures is a new kind of stitching and repositioning. This opens a discussion on what cities and infrastructure are today, especially in developed countries with high income. Amin and Thrift (2002) wonder what the city boundary is. “A Londoner can certainly question whether some suburbs can be considered part of London, on the other hand he will strongly argue that the city does not extend to neighboring urban centres such as Reading and Slough” even if between London and these towns, with 220,000 and 150,000 inhabitants, the distance is 67 and 40 km, but there is an urban unicum that connects them. The same can be said for Monza (123,000 inhabitants) and Bergamo (122,000) which are respectively 19 and 46 km from Milan. The difference lies in the history, the administrative tradition and the codification of the city, and also in the sedimentation, quantity and reconversion of infrastructures. The difference of the perceived urban form is considerable when viewed by those who experience the places, and less so by those who see them from

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afar. The concept of applied urban infrastructure is also different. In the early 1990s— although the same is true now—Sudjic (1992) argued that Amsterdam, Rotterdam and The Hague were still distinct cities, although they were within half an hour of each other. But regarding Paris he maintained that it was a mistake to consider the five new cities of the Paris suburbs as autonomous entities: instead they are essential parts of the metropolis. They could not exist without the road network, airports and especially the metro lines, which are a constituent part of Paris. Then there are the ’archipelago’ cities. In some cases these are new cities of enormous dimensions, especially in the case of Chinese cities. In China, most of the twenty large cities are closely linked, forming an ‘urban system’ (Archipelago), even if the distance between them is around 100 km, and in some cases even more; it is the huge mass of population and productive activities that makes the urban mass unique (Fig. 2.6). This is the case for Beijing and Tianjin (11 and 12 million inhabitants, the second and third-largest Chinese cities); or Shanghai with Hangzhou and Suzhou (22, 6 and 5 million inhabitants); or again for Chongqing with three other cities of 7 million inhabitants, although here the distance between the three cities is greater than the two previous large agglomerations, but if connected, urban archipelagos of 36 million inhabitants are created (Khanna, 2016). A particular example is the Pearl River Delta, where cities such as Guangzhou, Shenzhen and Dongguan (11, 10 and 8 million inhabitants, the fourth, fifth and seventh-largest Chinese cities) are concentrated. In this case, the intent is to transform these cities into a megalopolis of 42 million inhabitants and almost 26,000 km2 , an area similar to the Lombardy Region, one of the richest regions in Europe, with Milan as a global city. The density of the new Chinese megalopolis is 3 times lower than that of Greater London but with an area 16 times greater; the area is comparable to the Lombardy Region, but has a population density four times greater. These are impressive archipelago cities. Fifty projects have been launched that will serve to merge the transport network, telecommunications, services, water and energy supplies for a cost of over 220 billion euros, also an impressive figure. Twenty-nine new high-speed railway lines will be built to reduce travel time between each of the nine cities to less than an hour, telephone and electricity rates will be unified, and investments will also be made in improving schools and hospitals. The impressive bridge started in 2009 and completed in 2017 on the Pearl River Delta was also built, with a 7 km tunnel with roads and railways linking nearby Hong Kong. The cost of the infrastructure is 20 billion, not much less than what is spent for infrastructure in Italy in a year. The goal is to integrate 68 million inhabitants, a little more than the whole Italian population, that represents 1/8 of Chinese GDP, and also to create a ’cluster’ that integrates finance (Hong Kong) with technology (Shenzhen) and industry (Dongguan). All of the 11 main Chinese cities are within the urban archipelago. The only city that remains outside is Wuhan (9 million), known for generating the ’coronavirus’. It is the new urban infrastructures that in part create these megalopolises, unlike what happened in other evolutionary phases of infrastructure. In the first of the archipelago megalopolises indicated, a high-speed railway ring is under construction that will connect Beijing and Tianjin in less than half an hour and will become the

2.1 Urban Structure and Infrastructure: Greenfield and Brownfield

57

axis along which satellite cities will connect, creating an urban area of 260 million inhabitants. It is the urban infrastructure that establishes the new forms of urbanization in China. The same happens between Mumbai and Pune in India with the ‘Yashwantrao Chavan Expressway’, although with different morphologies. There is also the new urban form of ‘aerotropolis’ (Kasarda & Lindsay, 2011). Cities where the airport was previously built as an appendix in a suburban area whose importance in the ranking was given by the importance of the city. Now in the new urban form the airport infrastructure creates new symmetries, it is placed at the center of the new conurbation, where workers and suppliers, managers, goods and headquarters are located, the airport is assigned the connective role of exit or entry with respect to global markets. The aerotropolis becomes the gateway to the global city. Seoul’s Incheon, Amsterdam’s Schiphol and Washington DC’s Dulles are new ‘aerotropolises’. In this case as well, at the center of the new urban form there is an infrastructure such as an airport and its interconnections. There is a substantial difference between, on the one hand, urban forms that respond to neo-urbanization, in which the main element is the greenfield, and on the other hand, already consolidated urban forms with functions already present. In the second case the intervention in the central parts is the replacement of obsolete functions with new ones, accelerated by globalization and by the interconnection with competitive advantage. Examples of neo-urbanization are represented by some forms of Chinese cities (e.g. archipelago cities), but also in many cases the aerotropolis where the axes of the cities move. Supercorridors can have a different character if they are strengthened in already structured cities, typical of high-income developed countries e.g. the Japanese ‘chuo shinkanseen’), or in emerging countries. Already-consolidated urban forms are typical of developed countries, especially in Europe, Japan and North America, including in part Australia. Even the multi-city cluster does not belong so much to neo-urbanization as to the redesign or replacement of existing infrastructures (Fig. 2.7): brownfield rather than greenfield. The multicity cluster is a strengthening and specialization between relatively close centers for the purpose of greater global competition (e.g. Boston, Washington and New York, which concentrates academic excellence, the political capital and the financial heart; the same could apply in another form to San Francisco, Los Angeles and San Diego). Overall, (Dobbs et al., 2011; Santoro, 2019) by 2007 the main 100 cities in the world had already produced 38% of world GDP, which if extended to 600 cities became 50%, a sign of a significant concentration of GDP production in the main global cities. A projection for 2025, again for the 600 main world cities, brings the production of GDP to 60% against a growth of the population concentrated in the same cities of from 22% to 25%. All of the numbers indicate how important the city, the global city and their dynamics are in the demographic and above all economic development of the planet. A fundamental role in this growth is attributed to urban infrastructures.

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2 Globalization and the City (Countries) Low and lower middle income Upper middle income

Growing urban structure

GDP - Income growth Greenfield infrastructure

Urbanization

Renewal (Recover – Redevelopment)

Global cities Urban infrastructure (A)

Urban Infrastructure (B)

Consolidated urban structure

PPP –complex financialization Brownfield infrastructure

(Countries) High income

GDP - Moderate income growth (and proportionate)

Fig. 2.7 Urban infrastructure (A and B) and composition of global urban phenomena (Source PPP: Public-Private Partnership; Renewal-Recover-Redevelopment see: Dalla Longa R. [2011])

The urban infrastructure model can be broken down into (A) and (B); this book is focused on (B). Infrastructure regarding assembly, financing and the presence of PPP often leads to a differentiation between models (A) and (B). Global cities respond to the rules of global competition in search of competitive advantages that mark their growth and the driving force of the national economy. Even if several elements merge, traditions, peculiarities and strengths remain, corrected and oriented towards a global matrix. So the differences between Shanghai, Nanjing, Wuhan and Beijing, or London and New York and between the latter and Chicago remain, but they are also shaped by a great global trend (Sassen, 2019). Infrastructure plays a strategic role in connecting different competing functions with each other. Finance could not have become so complex and innovative if it did not have a network of global cities (Sassen, 2007, 2019). Urbanization, as we have mainly known it in the last century, is not in contrast with global cities, even though it is the result of a different historical dynamic. There are also different classifications of global cities and over time these categories also change depending on the variables that are used (Sassen, 2019). In the 25 major cities where there is greater business connectivity, with reference to 2000, five (Hong Kong, Amsterdam, Brussels, Zurich, and Taipei) were not included in the nations considered in Fig. 2.1. In 2016, nine exited the list of the 25 cities with the most connectivity globally. In 2016, other cities entered the ranking of the 25 cities, including four Asian ones: Beijing (6th), Shanghai (8th), Seoul (23rd), and Kuala Lumpur (24th). Milan was in 8th place in the ranking in 2000, and ranked 12th in 2016, but business connectivity grew significantly from 2000 to 2016 due to the expansion of the Asian market which accentuated globalization and the growth of the importance of global cities. In the comparison of the rankings between 2000 and 2016, almost all cities have changed position in the ranking, with only London (1st) and New York (2nd) remaining stable. At the geopolitical level, the change was as follows:

2.1 Urban Structure and Infrastructure: Greenfield and Brownfield

59

Box 2.2 Connectivity matrix: reading The comparison (ranking—Fig. 2.8) between 2000 and 2016 refers to GNC (Global Network Connectivity). In the connectivity matrix, the black box with a white number represents a lower position (rank) of the cities in the global ranking from 2000 to 2016. The other numbers represent: (a) light gray and white number a presence in the 2000 ranking of the top 30 cities and a left that ranks in 2016; (b) single number in black a non-presence of the global city in the ranking of the top 30 cities in 2000 and a presence in 2016. The GNC

Europe

North America

Asi Oceania Af. South Amer.

Buenos Aires

Mexico City

Johannesburg

Sao Paulo

Sydney

Melbourne

Kuala Lumpur

Mumbai

Jakarta

Beijing

Shanghai

Taipei

9 17 25 10 5

Singapore

S. Francisco

Los Angeles

8

5 12 17 20 26 27 35 16 2 13 28 39 43 21 7

Seoul

Tokyo

Toronto

Chicago

Miami

New York

Moscow

Milan

4

Rank 2016 1

Amsterdam

Paris

Rank 2000 1

Madrid

London

Zurich

Brussels

7

Frankfurt

14 11 12 15 19 34 2

Asia

6 41 20 31 36 26 22 21 13 24 43 16 18 23 3 23 36 8

6 24 25 15 10 30 19 11 14 37

United Kindom 0 -6.6

Spain -0.5

Italy

-1.2

Germany France

0.6

Poland Holland Belgium Developed Countries

Swiss high income

-8.1 -6.1 -2.4 -2.2 -3.7 -11 -6.8 -3.5

USA

-7

Canada Chile

-0.3

Japan

15.3

South Korea 10.7

Singapore

-1.8

Taiwan(1) Saudi Arabia

3.4 1.5

Australia New Zeland 25 27.2

China

7.1

Malaysia Thailand Turkey uper middle income

Russia

14.6 -2.1

Argentina 5.9

Brazil

9

Mexico Colombia Peru

Emerging Countries

11.8

South Africa 11.8

India Indonesia

3.6

Phhilippines Vietnam low and lower middle income

Egypt Ethiopia Kenya Morocco Nigeria Senegal

Fig. 2.8 Matrix between global cities (GNC) and countries. The level of global connectivity is between 2000 and 2016 (Source Our processing on: Global Infrastructure Hub (2017). Global infrastructure outlook: infrastructure investment needs 50 countries, 7 sectors to 2040. https://out look.gihub.org/methodology. (see Fig. 2.1); S. Sassen, (2019), Pag.77 Exhibit 3.8 and see: Taylor, P.J., Derudder, B., (2016), World City Network: A Global Urban Analysis, London, Routledge. See also: https://www.lboro.ac.uk/microsites/geography/gawc/datasets/da28.html)

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assigns 100 points to the first GNC city (London), the other global cities are linked to this indicator. The intersection between cities and countries sees the loss or growth of CNG in the period 2000 and 2016 (the sign [−] represents a decrease in connectivity; the sign [+] represents an increase in connectivity compared to 100 points in London). All the nations present in Fig. 2.1 have been considered. (excluding countries in italics). Of Fig. 2.1 the division between low and high income was also included. Regarding the GNC rank, no two cities (Hong Kong, Dubai) were considered. Compared to the classification of Fig. 2.1, Taiwan was introduced to cross it with the city of Taipei present in the 2000 ranking and then released from the first 30 cities of the 2016 ranking. All the cities represented in 2016 refer to the top 30 cities in the ranking, the presence majority of black boxes with white numbers, within the matrix, means the sliding of the western cities (European and North American) that were in the rankings in 2000 and 2016 are significantly moving away from the top 30 positions, while overwhelmingly conquering the GNC ranking of Chinese and Asian cities. Beijing goes from 36th position in the 2000 ranking to 6th position; Shanghai from 31st position to 8th position. Los Angeles, on the other hand, from 9 to 28; San Francisco from 17 to 39; Miami from 25 to 43. In addition to the last 2 American cities mentioned, Zurich, Buenos Aires and Taipei are also out of the GNC ranking of the top 30 cities. In addition to the two Chinese cities, Seoul and Moscow also enter, as well as a particular city such as Dubai and Johannesburg on another front. In the matrix proposed in Fig. 2.8. there is a strong dichotomy between urbanization and urban consolidation; between greenfield and brownfield infrastructures; between the decline, or loss of centrality, of the West as opposed to the rise of the Asian area. If the GNC (Global Network Connectivity) ranking is calculated from 2000 to 2026 for the global cities indicated above, it emerges that there was a loss of positions for European cities (−7.7%; 16.6%) and North American cities (−33.7%). At the same time, there was a strong increase of GNC for Asian cities (90%; 37.6%) and a somewhat more limited one for other cities in South America, South Africa, and much less for Australia. On the basis of overall considerations, Sassen (2012) argues that “the geopolitical future will largely be determined by 20, or a little more, strategic world-class urban networks”. It is also questionable how much this has affected the ’deglobalization policy’ carried out primarily by the United States (by Trump with tariffs and an antidelocalization policy), but also, to varying degrees, by European countries (Brexit). It is Western citizens who with their intentions or with their vote favored politicians who promised to bring jobs and wealth to their homelands. It is still very early to assess the globalization/deglobalization dichotomy and the trend. The hypothesis,

2.2 Pandemic Impact

61

already put forward in the text, is that there may be a slowdown but not a reversal of the structural trend. The current situation seems fluid. In the US, Joe Biden became president, and for now, the European Union has stabilized after Brexit. From 2000 to 2016, the major cities that grew in the GNC ranking were emerging countries, at the expense of developed countries with high income.

2.2 Pandemic Impact We must also ask ourselves what Covid-19 is capable of producing and remodeling within the urbanization/urban consolidation dichotomy. What evolution can the city have as we know it in the face of an extension of the disease? And what will be the evolution of infrastructure in relation to the city and the interconnection with urban infrastructures? Covid-19 was not the first global pandemic; other highly lethal viruses and diseases have affected the evolution of cities. In the fourteenth century, the plague (black plague) killed one-third of Europe’s population (Alchon, 2003). It came through the ports from the Middle East and Asia and involved port cities first and then the other cities. We were facing early stages of rudimentary globalization (Nye & Donahue, 2000) driven by trade. The epidemic involved the major port cities of the time (Venice, Genoa, Marseille, Barcelona, Bordeaux, Bristol and London, the latter with river ports with access to the sea) and other cities involved as commercial or transit hubs (Paris, Toulouse, Avignon, Basel, Bremen, Moscow). These were all future large cities, but still with a limited population, and for almost all the pandemic decimated the population. In Venice, 60% of the population of 120,000-150,000 inhabitants died. In London there were 25,000–50,000 deaths out of 125,000 inhabitants (Naphy & Spicer, 2000). Deaths were similar in Bremen (70%), Lübeck (25%) and Magdeburg (50%). One of the suggestions for containing the pandemic was to abandon the city. This was the case of Milan, where part of the population found refuge in the vast adjacent territories (Naphy & Spicer, 2000). As for the plague, in addition to the fourteenth century, which remains that with the greatest impact, there have been other periods of pandemic in other centuries. There was a second wave (Dean et al., 2018) and a third wave (Bramanti et al., 2019) as well, with the involvement of other large cities. In the nineteenth century, cholera decimated the populations of London, Paris, Hamburg, New York and Chicago (Florida et al., 2020). Davenport et al. (2019) highlight the development of cholera in British cities in 1848 and 1849. The great flu of 1918–1920 killed 40 million people around the world, 2.1% of the population (Barro et al., 2020). In the United States, 0.52% of the population died of the great flu, equal to 550,000 people (Markel et al., 2007). In Europe, the deaths from the great flu were on average higher. For example, in Italy the death rate was 1.23% of the population at the time. In the US, there has been a heated debate (Correia et al., 2020a, 2020b; Lilley et al., 2020) on the impact

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of the great flu and the dynamics of that country’s big cities. There is a convergence among researchers about the fact that the great flu slowed the economy for a few years, but when you consider the population growth in the period from 1900 to 1930, some of the cities considered, after a downturn, continued to follow the growth trend of the pre-pandemic trajectory (Correia et al., 2020b). This was the case in New York, Detroit, Boston, Washington, Seattle and Baltimore. Often the impact was the greatest in the cities, and the deepest scars were left in terms of escape from the cities and the creation of lazarettes, places of segregation and shelters. Scars were created but the cities continued their trajectory as before. However, as Herlihy (1997) shows, after the black plague of the mid-fourteenth century, it took decades for the European population to slowly increase again. The debate on the temporal decline of American cities after the great flu remains open, and in any case it had a less disruptive impact for cities than the black plague (Correia et al., 2020a; 2020b; Lilley et al., 2020). In part on the basis of evolutionary considerations, Florida et al. (2020), indicate that despite the high levels of devastation it has caused, Covid-19 is unlikely to be able to derail the long process of urbanization and urban adaptation of the city as described. The city is the place of knowledge workers, the grouping of talents, creativity, abstract work, and the presence of a highly educated population that sees the city as the nodal point of growth. For American cities, the 2010–2020 US census data seem to confirm this. Even some indicators for the first half of 2000, in the middle of the first wave of the pandemic, seem to be within this trend (Cortright, 2020). But the city is also a place of high connectivity. Hence, the consideration that at the macro-geographic level it is unlikely that the pandemic will be significant in altering urban dynamics. Where the pandemic can have the greatest impact is on urban micro-geography. It can result in a series of longer-lasting changes. There is an unknown factor compared to other pandemics of past centuries: in this case, there is the ubiquitous infrastructure already used during the pandemic that can dilute one of the essential elements of the city, namely high connectivity. This is also the first pandemic to occur when there is a widely available alternative to face-to-face interaction (Florida et al., 2020). Cities, and especially high-income cities, are able to arrange a different organization of work especially through technology; the reference is to the cities located in developed countries. Several studies (OECD, 2020; Dingel & Neiman, 2020) address the possibility of breaking the organization of work centered on ’face-to-face’ interaction through remote work. These studies indicate this possible ’rupture’ for global cities and for more technological ones with much greater intrinsic possibilities than other cities (OECD, 2020). These studies start from a comparison of cities within the same country or between cities in different countries. Or the reference is to the professions that lend themselves to remote work (working at home, or working at a distance) indicating for the US 37% of the jobs analyzed and 46% of all US salaries (Dingel & Neiman, 2020). In this case as well, in a deductive form, starting from professions, remote jobs are largely concentrated in large cities and global cities. Various studies converge on this point (Dingel & Neiman, 2020; Magrini & Sells, 2021; OECD, 2020).

2.2 Pandemic Impact

63

Ultimately, the use of remote work and therefore the elimination of ‘face-to-face’ is more feasible: (i) in large cities, preferably global cities; (ii) in rich cities where professional profiles were already inclined to embrace this (e.g. managers, finance, training/information providers); and (iii) in the cities of developed countries and therefore in the face of urban consolidation rather than urbanization. This has a direct impact on brownfield urban infrastructure. Among English cities (Magrini & Sells, 2021), starting indirectly from the professions and the different impact with ’face–to-face’ interaction, there are cities that come out victorious (those of Southern England, the most global ones) and others that are losers (those of Northern England). The intersection is between professions, social income and housing and this partly falls within the area of micro-geography and the accentuation or new creation of social evils that the pandemic can cause. Work is remote, organizations change, there is the support of technology, the unknown is how stable the attractiveness of large cities remains: houses (that are small and non-functional due to the high costs and functions for which they were born) transformed into workplaces do not lend themselves to a stable role in a mixed housing/work function. When these small lodgings, even if used little and for primary functions, become a place of constant presence, they often free up other needs opposite to those of the other collective concentration. Much will undoubtedly depend on the intensity and duration of the pandemic. It is from urban infrastructures inside brownfield areas that major changes can take place. Today, it is ultimately in the use of mobility (travel and commuting) and interconnective communication, moving or use of ubiquitous technology, that there can be major changes. This also applies to the modification of urban forms and real estate. Service locations such as restaurants, entertainment and meeting places are already confronted with a different configuration of spaces inside buildings, and outside buildings with a different use of sidewalks, streets and squares, and their conversion. There is also a different relationship with shopping and work, that are increasingly mediated by ubiquitous technology and the interconnection of public, collective and private infrastructures. The scars that are created on the urban microgeographic form lead to a greater differentiation between the greenfield and brownfield models, between urbanization and urban consolidation. Florida himself (2002, 2005, 2017) was pushed to change his analysis: from an emphasis on the creative class, with the rise (2002) the flight (2005), to the urban crisis (2017). In the first part (2002, 2005) it was precisely the exaltation of connectivity and physical encounters within the city that was highly successful. It was the reuse of brownfield spaces in the city abandoned by industry in the transition from the third to the fourth industrial revolution (Leamer & Storper, 2001). In this context, the role of the city as a production base for creative value was exalted. From this scenario we moved on to the recent analysis of the new urban crisis (2017), before Covid-19, in which Florida identified the expulsion of the creative class from the city (post-gentrification). This process of exclusion was due to the high costs of real estate to replace spaces of the first gentrification with the value of finance and the transformation of real estate into assets. As a consequence, there is a progressive destruction and scattering of an important part of the creative class, the more dynamic

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one, which had contributed to the revitalization of the city but eventually became its victim. Covid-19 leads to a further change with the revision of employment, shopping, workplaces, and the choice of residence. Through this phenomenon, new and unexpected uses of the city and brownfields can be determined, new spaces can be decomposed and recomposed with an abandonment of buildings as an asset and with the recomposition in another form of the creative class related to the city. The younger and more dynamic class can take the city back with greater vigor (Florida et al., 2020). Much will depend on the persistence of Covid-19 and the effectiveness of vaccines. However, there is no doubt that a scar will remain and the city itself as a center of attraction for large numbers of people may be affected. Enochlophobia, or fear of the crowd, could be a further and evident critical issue. This pathological ’form’ is likely to affect people as long as the risk of infection remains, and for some, for a period even after the gradual resolution of the pandemic. Most of the population is likely to recover quickly, especially in cities, as has happened in previous pandemics. However, cities and global cities provide an elevated space for interaction between human beings including the elements of training and direct transmission of knowledge and learning that often represent the virtuous circles of transmission and what Florida (2002, 2005) calls the creative class. This class is formed by knowledge professionals, teachers, researchers, students and those who provide all direct and indirect subsistence and entertainment services, along with activities for the regeneration of this component and the respective supply chain. The term ‘transmission’ here takes on two meanings, one virtuous, before the pandemic, the other vicious, after the outbreak of Covid19. However, recent research indicates that there is a trend in the US for young, highly-educated people to concentrate in the central areas of cities (Baum et al., 2020; Moos, 2016). Young people represent an age group that is less impacted by the most serious viral forms of Covid-19 and are therefore less likely to be affected by phobias, allowing them to take advantage of the situation and give new forms to the components of virtuous transmission. It is also the most challenging and in some ways most unscrupulous component. While much will depend on the persistence of the disease, and on the enochlophobia generated. It could be one of the most difficult and complex scars to heal, attributable more to the urban microgeography than macrogeography. Due to accumulated experience, knowledge workers are not always young, which is an important component of the attractiveness of cities. In the long run, there could also be a rift to be interpreted between generations of those involved in virtuous transmission. More generally, the development of technology is a theme that cancels the distance that at different times, in which urban attraction is questioned (counterurbanization vs. urbanization), has been addressed (Coombes et al., 1989), and which has seen the global reuse of urban spaces prevail (Sassen, 1994) but which now faces greater uncertainties, especially if protracted. The technology of this period is much more advanced, tested and evolved than its application in the analysis of the 1980s. The fear of closed subways, trains and buses can exert an even more centripetal or centrifugal pressure, that is to say, to seek increasingly narrow living spaces in downtown areas, or to lean towards the remote use of ubiquitous technology as an

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alternative to commuting from a external area to a central one. Much will depend on fighting the virus, and once again, on the security of access to urban infrastructures.

2.3 Concept of Greenfield and Brownfield Infrastructure The terms greenfield and brownfield were not born with direct application to infrastructure. Greenfield primarily refers to land that has not been previously used, deriving from the UK planning term (Alker et al., 2000; POST, 1998). Brownfield emerged as an opposite to greenfield, that is to say, a site that was previously subject to development2 and that under certain conditions can be used. In the initial phase, the comparison was with contamination (a dispute arose in 1996 between the English model of POST3 and the American one of USEPA 4 ). Regarding the term contamination, almost immediately the most direct reference was to existing and contaminated derelict sites, and only later did it evolve into a term that contemplated the reuse of urban areas (De Sousa, 2000, 2002a, 2002b),5 or a more advanced reference which indicated the replacement of functions (Newton, 2010),6 up to a systemic reading of the replacement of functions linked to globalization and competitive advantage (Dalla Longa, 2010, 2011). The reference to greenfield indicates a new intervention on something that did not previously exist, providing the contrast with the term brownfield. It is also the contrast between neo-urbanization and the global city, often understood as a consolidated urban structure inside of which there is a replacement of functions linked to the dynamics of competitive advantage. Urban infrastructures are highly differentiated depending on whether they are greenfield or brownfield. However, references that have a direct application to infrastructures have grown over time (Ahmad et al., 2018; Weber & Alfen, 2010), and one also wonders how to correctly interpret the two terms as applied to infrastructures. Greenfield is simpler, as for infrastructure it concerns an intervention carried out from scratch, that was previously non-existent, which includes all the phases from conception to construction to then move on to operation (Arezki et al., 2016). Therefore, it is easy to compare with neo-urbanization. The definition of brownfield is more complex, as it first provides a clear definition and then, due to the peculiarity of the term, a different declension (obsolete parts—or functions—of cities, industrial buildings, polluted brownfield areas, vacant or abandoned properties that are usually found in the older, often central or declining parts of cities). The application of specific 2

Development is defined in the Town and Country Planning Act 1990 as follows: “The carrying out of building, engineering, mining or other operations, in, on, over or under land, or the making of any material change in the use of any buildings or other land”. 3 POST (Parliamentary Office of Science and Technology). 4 USEPA (United States Environmental Protection Agency). 5 “Abandoned, idle or underused commercial or industrial sites where previous activities have caused environmental contamination, but where there is an active potential for redevelopment.” 6 “A brownfield site is one which has been urbanized or used industrially, subsequently vacated and available for re-urbanization.”

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cases leads Loures and Vaz (2018) to say that the peculiarity of the cases ends up giving the term brownfield various different expressions. A dynamic global city, driven by growth, is more likely to deal with the replacement of functions and having a greater quantitative and qualitative load on brownfield infrastructures. With respect to urban evolution, cities in developed countries operate within already structured urban infrastructures, often face changes and replacements of functions within brownfield areas, and must be redesigned by bringing together several aspects. It starts with traditional physical infrastructures which then merge with other types of infrastructures. There is a difference in the application of the brownfield approach within the development of global urban arrangements; it is less present and significant in emerging countries and more present and structured in developed counties. So with urbanization, greenfield infrastructure prevails, while with urban consolidation, brownfield is prevalent. Globalization has resulted in a faster life cycle of replacement in brownfield contexts: on average, brownfields or those that require replacement due to non-compliance, are called upon to operate quickly, otherwise they lose a significant competitive advantage and destroy value. A more precise definition of greenfield and brownfield applied to infrastructure is given by Weber and Alfen (2010). Greenfield infrastructures are those that are built for the first time in a specific site, while brownfield infrastructures are those that are already operational, or have a predecessor of some description (asset or function) at the same location, or that are adapted in the same location and in the same section. The reference to brownfield is the reconstruction, renovation or expansion of existing assets. This definition of urban infrastructure goes well with brownfields in an urban area to be redesigned and reconverted. There is also a more static application of greenfield and brownfield regarding single infrastructures, that is adopted by finance and funds in directing their financing. The Fig. 2.9 highlights how at a macro level, in global cities and especially in the developed countries model, there is a strong interaction between brownfield infrastructures and consolidated urban areas. It is the change of functions that requires a revision of the existing infrastructures. It is this type of intervention that characterizes most of the urban infrastructures in developed countries. The brownfield model leads to a particular readjustment of the infrastructures built in a previous phase of enhancement, that is now concluded. It is the rapid and complex transformation of brownfields that requires rapid readjustment of urban infrastructure. Faster times and synchronization between economic operators are required, and due also to the huge amounts of capital mobilized and the complexity of the interests involved, this type of intervention requires a particular development of PPPs. The remodeled urban infrastructure in the brownfield becomes the glue necessary to make possible and create value with new processes of urban renewal. Operating within a browfield expands non-traditional types of financing more than what can be done in a greenfield. It may also include components relating to the land (lend) and the ownership of the real estate assets by the economic operator and the public entity involved. Many different combinations remain possible (Dalla Longa, 2011).

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Existing derelict urban sites Contaminated sites Abandoned sites Constructed derelict areas Previously developed but now vacant areas Underutilized sites due to obsolescence Existing urban sites Free buildings Sites with active functions but tending to obsolescence Sites with stagnant return

brownfield

Existing urban sites with possible or strong development Areas or buildings correctly used and allocated in local plan Areas and buildings currently used with potential knowledge for redevelopment Areas correctly used with strong demand for transformation pushed by global dynamics Existing infrastructures Physical traditional Non-physical traditional Renovated Innovative (with growing elements of innovation)

Fig. 2.9 Types and different forms of brownfields

It is useful to combine the concept of brownfield and greenfield with what is indicated in the development of cities in developed or emerging countries. The terms have different applications, just as there are different forms of assembly and financing. The greenfield approach to a single infrastructure concerns: conception, programming, design, and construction. The brownfield method concerns the operation of the infrastructure. To simplify, the first part is divided into D&C (Design & Construction), the second part into O&M (Operation & Maintenance). However, in the phases of reconstruction and renewal of a brownfield, O&M absorbs less significant phases of D&C than occurs with greenfield infrastructures. In the application of PPPs and especially in relation to financing by economic operators, and more specifically by funds (see Chapter 6), there is a broad discussion on greenfield and brownfield methods applied to infrastructure (e.g. Arezki et al., 2016; Della Croce & Gatti, 2016; Nowacki et al., 2016). Currently, funds are more concentred on financing brownfield infrastructures, considered to have lower risk (Della Croce & Gatti, 2016). The funding is structured in various forms, defining brownfield in different ways. Pension funds are the most active in financing brownfield infrastructures, responding to a prudential constraint on the use of funds. Inderst (2020), taking up a study by Alonso et al. (2016), shows how these investments in a differentiated way have affected a large part of the developed high-income countries not uniformly. The principle prevails (Panayiotou & Medda, 2014) that precisely because the brownfield infrastructures are already in operation, the lowest risk / return ratio applies (Russ et al., 2010), where low risk prevails in the formula. There is also the possibility, for the major funds, to diversify the flow of capital within a period that appears long and constant.

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risks

Many defined benefit pension plans face a maturing membership, underfunding, stricter supervision and accounting rules. Therefore, also for this reason, they have a preference for lower-risk, brownfield assets and PPP investments with state availability payments (Inderst, 2020). While greenfield infrastructure is considered as responding to a higher risk / return (Inderst, 2009, Inderst & Stewart, 2014). The most recent operations entail moving, especially in low and middle income countries (Taguchi & Sunouchi, 2019), involve the transfer of part of the loans granted by private funds and institutions to greenfield operations (Nowacki et al., 2016). This happens, even if not only, in consideration of a different infrastructural maturity. Ultimately, reference is made to how the direct investment needs of large funds are mainly intended for the enhancement of brownfield infrastructure projects in Europe and the United States. In a different way, greenfield investments are destined for emerging countries (Arezki et al., 2016), this more and more in recent years and clearly from 2016 onwards (Taguchi & Sunouchi, 2019). Recent data from the World Bank certify it (World Bank, 2021). However, it is with the development of the PPP that the terms brownfield and greenfield take on a high importance, because with the Long Term Contract it is articulated and, in specific cases, merges D&C with O&M (Fig. 2.10). Therefore, in the traditional view of infrastructure, greenfield merges with brownfield. However, according to Inderst (2020), especially in developed countries with high income, many investors have avoided greenfield infrastructures as the funds themselves have no experience with the construction risks inherent in D&C, although more funds have indicated that they want to move towards greater attention to D&C (Inderst, 2021). For global cities, on the other hand, the principle of high maturity of the infrastructures applies, which requires a readjustment-reconversion more than a mere construction or reconstruction (Dalla Longa, 2020).

time Bidding and development

Construction period

Greenfield

Ramp-up period

Operation period

Brownfield

Fig. 2.10 Risk profile development of an infrastructure asset (Source our processing on Arezki et al. [2016])

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Chapter 3

The New Complexity

Abstract The application of the evolution that underlies the urban infrastructure has to do with the growth of complexity. The theme of the chapter is therefore the new complexity that integrates and characterizes the concept of urban infrastructure. In the decomposition of the term there is an incidence of increasing complexity of the State, of the global city of national and international accountability and of the Public–Private Partnership, all these forms contribute to making the assembly and the shape of the brownfield urban infrastructure much more complex than it was intended only a decade or two ago. The term urban infrastructure cannot be tackled without assuming the neo-complexity and all that this means in interdisciplinarity and in the synthesis of knowledge. This is to better interpret the urban infrastructure or even design, assemble and replace the parts that more than others require innovation.

In the past three decades, in high income developed countries, there has been a growth in complexity factors of public real estate assets and infrastructures (Jordana, 2017). (A) The State model has changed; (B) The intensity of concentration of urban infrastructures within global cities has changed (see Chap. 2); (C) Vertical and horizontal accountability has changed considerably, especially at the European Community level, and new formulas have been created, and there has been a significant evolution of legislation (European directives and national transposition) and institutional and market constraints. International institutional control has become structural in regard to the public budget, its formulas, debt and the compatibility of accounts. However, with Covid-19 there has been a loosening of some constraints, especially on budgets and those relating to procurement. They have been temporarily simplified and relaxed. (D) There is a very urgent need at the European level and in some countries (e.g. Italy and France) to review the organization of contracting authorities, that is now inadequate to address the issue of urban infrastructure. These are the same contracting authorities born within the welfare state and designed for public works, which treated procurement categories differently (public works, supplies, services) (Edquist et al., 2012). The reductive and unsolvable debate © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_3

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(E) (F) (G)

(H) (I) (J)

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began between framework agreements of the central purchasing bodies and the transposition of those agreements within structure of the contracting authorities. The problem is more complex than it may appear in a framework agreement, as the greatest criticality lies in the assembly, not the purchase of an urban infrastructure, especially in a Long-Term Contract, and also concerns the introduction of rapid forms of innovation in public procurement, while there is a backwardness of the European bureaucracy on the subject that is difficult to correct, as it is often structural in the relationship with the private sector and this leads to an increase in the complexity of procurement and assembly. (Edler & Georghiou, 2007). Mixed infrastructure incubators have been created within entities, and the relationship between entities has changed; new management formulas have been created (e.g. SPV and ESCo). The real problem is the permanent asymmetry between economics and politics. Stiglitz (2019) would say the former (global economy) is much faster than the latter. The law of profit and the market is asymmetrical, and in many circumstances difficult to combine, with the rules of fairness expressed by the public sector. The first is a tangible rule, even if often irrational, equity instead is often an abstract rule that is difficult to control and innovate within parameters that tend to remain constant even within a dynamic of innovation (Benington & Moore, 2011; Pollitt & Bouckaert, 2011). Who is called to apply and exercise equity, the executive and public official (Benington & Moore, 2011; Moore, 1995) or the legislator (Pollitt & Bouckaert, 2011), cannot have the tangibility of the economic operator (Porter, 2008) which operates having profit as a reference. Profit and equity can be traced back to the same concept of effectiveness, but then end up having different meanings. This concept contains the growth of complexity within globalization and with a specific reference to urban infrastructure. The market has changed and globalization requires more intense assemblies and infrastructures; Compared to pre-existing contracts, concessions have strengthened and PPPs have appeared differently and have begun to take direct and potential form; Furthermore, it is no longer possible to treat urban infrastructures through a single specialized discipline, but there has been a proliferation of disciplines and an interconnection and contamination of knowledge. We have gone from disciplinary to interdisciplinary; The evolution of cities and their diversification has also changed the nature of infrastructure; In some cases of urban development, the rapidity of transformation has clashed with the complexity of assembly of state-market formulas. Covid-19 breaks or downsizes the concept of complexity—simplicity

It is legitimate to ask questions: – Is there a significant step towards complexity or is this a distorted reading of reality? Derrible (2017) argues how network science looks at the structure of networks as indicators of complexity, and it has been heavily applied to study cities and their infrastructure systems (Barabási, 2016; Derrible, 2012).

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Can complexity be simplified? Is it the evolution of systems (e.g. Globalization) that produces complexity? Is simplifying individual parts solving the problem? Can the response to complexity be an increase in knowledge and training? Is this the way to go?

The push for simplification and the return to the previous phases is contradictory: – It is pushed in an irrational, often contradictory way by some, not all stakeholders (specialist associations, construction associations, some political and government members); – The comparison is not national, it is global and concerns different nations; – Simplification is a necessity, but it is probably a matter of replacing what is no longer sufficient and is made obsolete by complexity and replaced with new formulas and institutions (e.g. contracting authorities); Complexity—The complexity model shows how infrastructure, together with other products, incorporates the evolution of complexity. It represents past and present globalization in which infrastructure, on a planetary level, is the innervation and bone structure of globalization. It represents better than other ‘artefacts’ the aspects of decline/development of old and new forms of markets and of economics and finance. Around infrastructure, new businesses and knowledge are coagulating and ‘geopolitics’ is being reorganized. It is the very concept of brownfield infrastructure that incorporates complexity; it is not a question of producing something at the same time as you decide to construct it (greenfield), but with brownfield it is a question of resuming the interferences and connections with something which already exists and which was created for other needs and purposes, that often have already been dead for some time, or in significant necrosis. When you intend to intervene, you have to resume and revive the parts and reconvert them to the new: identify them, break them down, or readjust the interferences. This is like sanding and transforming a shell with complexity and increasing compatibility. The Silk Road, with its OBOR (One Belt One Road) or BRI (Belt and Road Initiative, as others call it)—both are officially named within the various Chinese institutional passages (Huang, 2016)—before the pandemic and the stiffening of geopolitical blocks, had its center of gravity in ports, airports, railways, highways and logistics. The investment in these infrastructures (1.8 trillion dollars in 10 years) had the objective of opening new markets or strengthening existing ones, with a new exchange of goods within globalization (Zou et al., 2021). The debates on high-speed rail (TAV) in Italy and France are another chapter. These are still simple infrastructures even though they absorb quite high quantities of resources and financial engineering and new modes of state-market integration. However, this does not represent the intrinsic complexity of infrastructure; OBOR and TAV summarize its impact and the quantitative amount. The key element is the change in the assembly formulas of many infrastructures, which also shifts the emphasis on the terms that describe them.

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We are facing exponential growth of complexity that is configured as interdisciplinarity; the disparate attempts to introduce the logic of BIM (Building Information Modeling) partly represent this trend. New goods and markets, competitive advantages, the replacement of old urban functions, and renewal pass through the new infrastructure system. This is also one of the new elements of interest that coalesces around infrastructure. Experimental enterprises are born and modeled around them in which the new form of ‘state’ and market (public and private value) is founded; a new form of collective value is also born. However, the growing complexity is accompanied by opposite tendencies, which are represented by the return to simplicity (or simplification), or to the rhetoric that represents its language. The latter is often to be interpreted as a form of reaction to complexity and globalization. It is found in political formulas, in national sovereignty, and in nostalgism. It can certainly be an understandable reaction, and in some cases have some partial success in the short term. The negative hypothesis produced by (neo-)simplism is that jams and an accumulation of delays can occur in the medium and long term. Blocking structural complexity can lead to mediumand long-term trauma in the form of turbulence. It could be useful to look at the new phenomenon with an adequate investment of new knowledge and the activation of new application tools. The dichotomy that presents itself in the form of conflict is: either neo-simplism, or a new investment in knowledge at multiple levels. The new complexity that affects the assembly of infrastructure is very complex because it requires the continuous replacement of obsolete non-correspondences with new forms of knowledge that the dynamics impose. The double tendency can be to operate within criteria of simplicity, recognizing as structural the complexity that will have to find an adequate ‘governance’ rather than a negation. The objection that could be made is: will we be able to chase complexity, or is it destined to create ruptures and rejections by shifting the axis towards neo-simplism? Sassen has often put complexity at the center of his works (Khan, 2016). It is also a key to understanding globalization and for this reason it is placed at the center of the discussion (Sassen, 2008). The assembly of elements that lead from the national to the global means that “the knowledge of the dynamics that shape it can help to increase the level of complexity through which the correct transformation is examined and understood” (Sassen, 2008, p. 6). In the historicization of assembly that leads to globalization, Sassen focuses on territory, authority, and rights. He also gives particular importance to urban infrastructures (Sassen, 2016a, 2016b, 2016c). He argues: “I love the term infrastructure and the idea that it is expanding its domain” (Khan, 2016). Infrastructure encompasses complexity and explains a non-secondary part of the evolution from nation to global. However, in this book the focus can be summarized as: (1) territory (globalization); (2) authorities, institutions, organizations, and management formulas; (3) infrastructure that replaces the concept of ‘rights’ used by Sassen (2008). There are, however, more nuances that differ in conceiving infrastructures compared to Sassen (2011, 2016a, 2016b, 2016c; Khan, 2016). Sassen emphasizes the contents and enters fully into the organization of work, and for her these are the new infrastructures, which she divides into conventional

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(highways, trains, airports) and new infrastructures concerning digital technologies and the ensuing flows applied to the organization of work. The containers (buildings) can be the same in Chicago, New York, Paris, and London (there is no discussion of whether they are adapted or built from scratch), but what happens inside these containers is highly different, compared to what happened previously. While in the 1960s office work was standardized (administrative acts, accounting, and control), now with finance and digitalization everything in those offices is broken down and globalization is created without barriers, each office adopting different criteria and perhaps experimenting with new logarithms. This is what unconventional infrastructures are: they break down barriers, create new exclusions/inclusions, and require not territorial dispersion, as intangible flows would suggest, but the urban concentration typical of global cities due to the need for high contiguity and non-standardized specialism. Obviously, this new dynamic has a strong impact with the evolution of conventional urban infrastructure, even if Sassen does not deal with this directly. All of this passes through new forms of molecular complexity if we consider dematerialization, and this is replaced with the flow of digitalization that has no boundaries. Examples are banks, credit, and finance. However, in the assembled passage from nation to global it is not a given, it may not appear irreversible, but it remains linked to various factors in evolution within a complexity, which contributes to continuous evolution and not irreversibility. Cities are complex systems, but also incomplete systems. These characteristics vary enormously over time and place. In this mix of complexity, incompleteness, and fluidity there is the ability of cities to survive much more than powerful but formal and closed systems (organizations, leaders and forms of thought, governments, management formulas and pandemics). (Sassen, 2017). There is a passage that appears significant, in which the nuances are attenuated: “it is an element often forgotten also by digitalization and finance: the key infrastructure for mobility and flows is not Wi-Fi but fiber cables, that are very material and very physical, typical of a conventional (urban) infrastructure. Without fiber there could not even be 5G. But if we limit ourselves to considering only the physicality, and therefore the conventionality, we lose sight of the concept of additional (urban) infrastructure, whose importance is what happens inside the optical fibers. There may be a dematerialization of conventional infrastructures themselves. This dematerialization passes precisely through the optical fibers, or through the financial instruments that dematerialize conventional real estate, including public properties (Dalla Longa, 2014), they transmit investments in the real estate sector and in innovative, transformed, and conventional urban infrastructures; including their circulation as assets in global markets. In another sense, there is a liquefaction of brick and other materials, that are transformed into financial instruments. The building and the infrastructure, the latter also transformed in the redesign of the brownfield, stands still, but it is an entity that is no longer comparable to what it used to be. Urban infrastructure must therefore be seen within multiple dimensions, hence the complexity. On the one hand, there is its physical transformation within the brownfield; on the other, the dimension of its projection into the emergent globality of all kinds (Sassen, 2016b). So much so

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State Global city Accountability PPP (public-private partnership)

1990 55 41 42 38

2019 45 59 58 62

diff. -10 18 16 24

somma 100 100 100 100

Fig. 3.1 Evolution in the period 1990–2019 of four references that interact with the new complexity of urban infrastructures (State, global cities, accountability, PPP)

that Sassen (2019, p. 76) broadens and turns the theme of infrastructure complexity upside down. Notably, the ways in which cities became part of the live infrastructure of new types of globals formationas. This since the 80s and 90s. Figures 3.1, 3.2 and box 3.1 show how complexity can change (proportionally over time). In a long time (1990–2019), global cities and the PPP have grown, while the State has withdrawn. More recently (2019–2022), proportionally to the years considered, the State has recovered weight, global cities have retreated slightly, as have accountability and PPP.

Box 3.1 The new complexity: a reading The reference is a t0 in which the overlapping of the perimeters coincides. If the reference is 100, t0 will be 50 for all the ‘State’ items; PPP; Responsibility; Global city. The comparison between 1990 and 2019 indicates that the state changes in 30 years (−10); this also applies to the global city (+18); responsibility (+16) and PPP (+24). The sign (−) for the State means that the weight of the action of the State in the intervention on infrastructures has decreased (Dalla Longa, 2017: it has decreased above all in terms of dedicated resources on the amount of direct financing of infrastructures and on direct assembly). The signs

3 The New Complexity

State Global city Accountability PPP (public-private partnership)

79

2019 47 54 52 57

2022 53 46 48 43

diff. 6 -8 -4 -14

somma 100 100 100 100

Fig. 3.2 Evolution in the period 2019–2022 of four references that interact with the new complexity of urban infrastructures (State, global cities, accountability, PPP)

(+) of the global city, responsibility, PPP indicates that these three components have grown in importance, shape and weight over the past 30 years within the global system. If we compare the three-year period 2019 and 2022 (years of the Covid-19 pandemic and Russia’s war against Ukraine and the strong repercussions on globalization and energy) we have, compared to the previous period 1990–2019 (t0), a sign ( +) on the State that has recovered a greater intervention on the regulation of phenomena (think of the fight against the pandemic); the signs (−) on global cities, accountability and PPP are due respectively to the fact that the importance and growth of global cities has slowed down due to Covid and the lockdowns exercised above all within global cities and in more concentrated areas; as well as the sanctions against Russia have led to a partial ‘deglobalization’ of Russia and a different trend in the use and consumption of energy distribution, in which global cities are energy-intensive). Some accountability rules have been suspended (for example the European stability pacts) or lightened compared to a previously structured application. The PPP has seen the growth of direct state intervention through the New Generation EU fund, or direct state intervention in the United States, Japan and other G7 and G20 states at the expense of rising public debt. All of this has slowed down the need

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to expand PPP for brownfield infrastructure. However, this is a temporary and not a trend transition (Stiglitz, 2022). Accountability can be defined as horizontal or vertical and refers, for example, to the EU accounting legislation that regulates the PPP, the on / off balance, but also refers to the credit crunch and other rules such as the ecological transition now loosened in the face of the emergency encountered. There are some authors who make the new complexity applied to infrastructures an in-depth element (Chester et al., 2019, 2021; Matinheikki et al., 2019, 2021). However, the new complexity applied to infrastructures proposed by the various authors seems to range over several focuses. Chester et al. (2021) anchor the new complexity of infrastructures within the Anthropocene found especially in this early century. The reference is not so much to urban infrastructure and global cities. They are not the direct treatment of these contributions, but the physical infrastructure and its technological evolution and adaptation to evolving needs are. Matinheikki et al. (2021) referring to PPPs in relation to the neo-complexity of the infrastructures that this determines, they define this neo-complexity as making friends with aliens, so evident is the deviation of this phase of the infrastructures with the final phase of the last century. Oughton et al. (2018) point out that national infrastructure systems spanning energy, transport, digital, waste and water are widely recognized as complex. Chester et al. (2019) add that there is no stopping-to-transformation rule for infrastructures, they are an evolving process that needs to be constantly re-examined (Chester et al., 2019); they apply the term ‘ wicked and complex process. Often the way of designing infrastructures is long and static, while context evolutions are rapid. This risks leading to a continuous separation between the infrastructure object and their use. Infrastructure complexity has always existed in some form, making infrastructure agile and flexible will now require recognizing and working with the fact that change appears to be an increasingly complex process (Chester et al., 2019). The speed and extent of change affecting infrastructures occur with a great acceleration (Chester et al., 2021), so much so as to change paradigms and professions such as engineering, which has always been dedicated to the assembly of infrastructures and is now no longer sufficient to consider the complexity in which the infrastructure is immersed. The suggestion is that study paradigms need to be changed (Chester et al., 2021). The principle is that infrastructure transformation is necessary to ensure that core systems keep pace with an evolving world. In this book the main references are urban infrastructures and global cities. For Chester et al. are: uncertainty and technological evolution and the growing complexity of the systems and environments in which we operate (Chester et al., 2021).

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References Barabási, A. L. (2016). Network science. Cambridge University Press. Benington, J., & Moore, M. H. (2011). Public value in complex and changing times, in In J. Benington & M. H. Moore, (Eds.). Public value: Theory & practice. Palgrave Macmillan. Chester, M., & Allenby, B. (2019). Infrastructure as a wicked complex process. Elementa, 7(1). 21. Chester, M., Underwood, B. S., Allenby, B., Garcia, M., Samaras, C., Markolf, S., Sanders, K., Preston, B., & Miller, T. R. (2021). Infrastructure resilience to navigate increasingly uncertain and complex conditions in the Anthropocene. Npj Urban Sustain., 1, 1–6. Dalla Longa, R. (2014). Il fondo immobiliare ad apporto pubblico: sviluppo e trasformazione, in R. Dalla Longa, G. De Laurentis, eds. La gestione del patrimonio immobiliare pubblico. Bancaria Editrice. Dalla Longa, R. (2017), Il public-private partnership: L’evoluzione Stato-mercato in opere pubbliche ed infrastrutture. Carocci. Derrible, S. (2012). Network centrality of metro systems. PLoS ONE, 7(7). Derrible, S. (2017). Complexity in future cities: The rise of networked infrastructure. International Journal of Urban Sciences, 21, 68–86. Edler J., & Georghiou L. (2007, September). Public procurement and innovation: Resurrecting the demand side. Research Policy, 36(7), 949–963. Edquist, C., & Zabala-Iturriagagoitia J. M. (2012). Public Procurement for Innovation as missionoriented innovation policy, Research Policy. Huang, Y. (2016). Understanding China’s belt & road initiative: Motivation, framework and assessment. China Economic Review, 40, 314–321 Jordana, J. (2017). Accountability challenges in the governance of infrastructure, in Wegrig, K., Kosta, G., Hammerschmid G.(Eds.). The governance of infrastructure. Oxford University Press. Khan, S. (2016). Saskia Sassen: Interviewed by Shamus Khan, Public Culture, 28(3), 541–561. Matinheikki, J., Aaltonen, K., & Walker, D. (2019). Politics, public servants, and profits: Institutional complexity and temporary hybridization in a public infrastructure alliance project. International Journal of Project Management, 37(2), 298–317. Matinheikki, J., Naderpajouh, N., Aranda-Mena, G., Jayasuriya, S., & Teo, P. (2021). Befriending aliens: Institutional complexity and organizational responses in infrastructure public–private partnerships. Project Management Journal, 52(5), 453–470. Moore, M. H. (1995). Creating Pblic Value. Harvard University Press. Oughton, E. J., Usher, W., Tyler, P., & Hall, J. W. (2018), Infrastructure as a Complex Adaptive System. Complexity Hindawi, 1–11. Pollitt, C., & Bouckaert, G. (2011). Public management reform. Oxford University Press. Porter, M. E. (2008). On competition. Harvard Business Press. Sassen, S. (2008). Territory, authority, rights: From medieval to global assemblages. Princeton. Sassen, S. (2011). The impact of the new technologies and globalization on cities, in R.T. LeGates, F. Stout, (Eds.). Cities in transition. Taylor & Francis. Sassen, S. (2016a). Global networks, linked cities. Routledge. Sassen, S. (2016b, June). The global city: Enabling economic intermediation and bearing its costs. City & Community, 15, 2. Sassen, S. (2016c). Digital cultures of use and their infrastructures: Digital, organizational, and social temporalities, in J. Wajcman, N. Dodd, (Ed.). The sociology of speed: Digital, organizational, and social temporalities. Oxford University Press. Sassen, S. (2017). The global city: Strategic site, new frontier, in L. Ferro et al., (Eds.). Moving cities—contested views on urban life. Springer. Sassen, S. (2019). Researching the localizations of the global. In M. Juergensmeyer, S. Sassen, M. B. Steger, & V. Faessel (Eds.), The Oxford handbook of global studies (pp. 73–92). Oxford University Press. Stiglitz, J. E. (2019). People, power, and profits: Progressive capitalism for an age of discontent. Penguin.

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Stiglitz, J. E. (2022 Sepetember, 13). Is it a turning point in the US economy? Journal of Policy Modeling. Zou, L., Shen, J. H., Zhang, J., & Lee, C. C. (2021). What is the rationale behind China’s infrastructure investment under the Belt and Road Initiative. Journal of Economic Surveys, 42, 1–29.

Chapter 4

A Reference Model

Abstract This chapter refers to a central part of the book. It is the clarification of the reference model, that is to say the transition from public work to urban infrastructure. This transformation brings with it other important transformations, such as: the impetuous growth of globalization and global cities; the transformation of the State that intervened until a few decades ago exclusively on public works; the complex birth of new forms of assembly of infrastructures with new formulas management including public and private partnerships and long term contracts (LTC); the transformation of larger cities into consolidated global cities that need to be renewed through the evolution of the urban infrastructure; global cities that enormously feed the needs of urban infrastructures. There are also enormous delays and clashes between the old model and the new one. In the macro system nothing is sequential and automatic, two models coexist, often creating asymmetries in the assembly and management of urban infrastructures. Private (investment) capital massively enters the replacement with public (investment) capital. There is also a convergence with the development of technology (ICT) which transforms the very idea of infrastructure.

The model of urban infrastructure, that of developed countries, is driven by an evolution of multiple phenomena: (a) (b) (c) (d) (e) (f)

the technological revolution, that affects several variables; the transformation of cities within globalization; the transformation of public works into urban infrastructure; the birth and development of PPPs; the evolution of the state and the new relationship with the market; some accidental variables that stand in the way.

The points indicated above are elements interacting with each other. A systemic approach of decomposition/recomposition of variables is used here, trying to give greater weight to those considered most relevant. The systemic method of decomposition/recomposition has different approaches: from those of the first systematization of organizations (Ackoff, 1971; Etzioni, 1975; Galbraith, 1973; Lawrence & Lorsch, 1967), to the more recent ones on Porter’s theory of value (1985, 2008) or urban sociology, which later became Castells communication and power (1979, © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_4

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(A) Other areas Global cities

Urbanized area

Network infrastructures

(B)

Public works ICT wireless Sharing economy

New complex urban infrastructures

Public-Private Partnership (PPP) Concession contracts Public procurement

Special purpose company/entity Project company

State

(D)

Holding companies Private (market)

Long Term Contracts

Concessions to institutionalised PPP (IPPP)

(C) Fig. 4.1 Our reference model

2009). There are also other systemic analyses such as Kerzner’s on project management (2001, 2015), Klijn and Koppenjan’s on governance networks (2016), that with different approaches on infrastructure, Graham and Marvin (2001) or, based on some nuances, on infrastructure and technology (Grubler, 1990, 2003). It becomes difficult to deal with the issue of infrastructure and its evolution partly attributable to urban infrastructure, if we do not want to enter into technicalities or specialist aspects, but consider only a few variables. By definition, infrastructure is comparable to a shell that incorporates the sedimentation of different phases, angles, and evolutions that contribute to transforming its meaning, and the angle of observation along with it. With a systemic analysis, we are faced with variables which transform the object, like modified tensors; thus the systemic analysis becomes a method of the adopted model (Fig. 4.1).

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Fig. 4.2 Our reference model: evolution of urbanized area

Other areas Global cities

Urbanized area

(A) An unquestioned impulse is to be ascribed to world cities and globalization, that has accelerated the role of infrastructure with its needs and new dynamics. The discussion remains open, with the technological revolution as invariable, as to whether the driving factor is attributable to the acceleration of globalization or whether it was the growing competition between the world’s major cities that played a significant role in encouraging the rapid growth of globalization. (Brenner, 1998; Olds & Yeung, 2004; Parnreiter, 2019). The phenomenon can be traced back to the beginning of the 1970s as an unprecedented factor in which cities and interurban networks replace states as basic territorial infrastructures for the development of globalization (Friedmann, 1995). World cities have accelerated the obsolescence of function within urban structures and increased the need for replacements to maintain a high level of competitiveness. Furthermore, this has occurred with the explicit request by the ‘system’ for the participation of private capital (economic operators) in the assembly of the interventions. World cities require rapid, flexible, remodeled, and supportive interventions for real estate which, if supported by finance, as always happens, require an integrated symmetry between the two types of interventions (real estate and urban infrastructure) in order not to have conflicting languages of assembly and profitability, that would open up the possibility of vicious circles dangerous for the ‘blocking’ of the city. Urban infrastructures are strategic in determining the intervention, more than the replacement interventions of functions are, and it is the infrastructures that determine the attraction and success of the operation (Fig. 4.2). In developed countries, the flow of a growing share of private capital to meet a growing need collides with public rules and procedures, which are more complex than the rules for seeking a profit. New dichotomous scenarios of simplicity/complexity are created, along with a drive for the transformation of the state.

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Other new infrastructures

Fig. 4.3 Our reference model: evolution of public works

Network infrastructures Public works ICT wireless Sharing economy

(B) The definition of urban infrastructure also changes in relation to urban transformation, if wireless (or ubiquitous infrastructure) is added to an idea of traditional network infrastructure; this contributes to changing the original nature of the infrastructure. The question is very complex, but the digital age finds a different integration of (and in) the cities of the world, that is much greater than the mere presence of traditional infrastructures. In the digital age, both infrastructures and cities are changing their nature. The phenomenon appears much more pronounced in world cities and in global cities than in the rest of the territory. In a more recent phase of the literature, trade is also added to traditional infrastructure, which partly with e-commerce, but not only, becomes integrated with traditional infrastructure, helping to form the more general concept of urban infrastructure (Fig. 4.3). (C) Another element of which will be developed significantly in the book is the growth in importance of PPPs in supporting and partially replacing public procurement in the assembly of infrastructures, in which significant new components such as finance and different forms of management and assembly complexity come into play. The new forms of PPPs in particular will require specific contextualization and deeper examination (Fig. 4.4). (D) The transformation of the state and the creation of new mixed corporate forms that change the nature and DNA of the state-market relationship and introduce the IPPP

4 A Reference Model Fig. 4.4 Our reference model: evolution of public procurement

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Public-Private Partnership (PPP) Concession contracts Public procurement Long Term Contracts

Concessions to institutionalised PPP (IPPP)

in a structured way in the European framework (where “I” stands for institutionalized1 ) is a new element that characterizes the new forms of urban infrastructure. There is no doubt that in the last twenty or thirty years, the state has been facing rapid changes that have been seen abundantly also at the disciplinary level. The discipline of government was born and has expanded considerably, encompassing various disciplines such as the public scientist, public management, and components that have dealt with the state in different forms. One wonders what is the right hierarchy and interconnection between state, globalization, and global city; evolution from public works to infrastructures. It is not just one variable that changes, but it is all these variables within a systemic context that change. When the reference is to the state, however, there are two strands. One is the general evolution of the state indicated above, while the other is the ‘crumbling’ of the state at the urban level with the creation of mixed companies, due in Europe to the strong liberalization and privatization of utilities starting in the second half of the last century (Moss, 2011). In addition to the privatization or different management formulas of utilities in Europe, there is also the implosion of functions of the state given in concession to other actors, such as telecommunications, wireless, and the gig-economy, which precisely at an urban level and in the interconnection of functions changes the meaning of urban infrastructure. In addition to the unique presence of the state at the urban level, there is a plurality of corporate management formulas in which the state—sometimes, but

1

In practice, an IPPP is usually set up: – either by founding a new company, the capital of which is held jointly by the contracting entity and the private partner; – or, in certain cases, by several contracting entities and/or several private partners; – or by the participation of a private partner in an existing publicly owned company which has obtained public contracts or concessions ‘in-house’ in the past. EU, (2008/C 91/02)–Commission interpretative communication on the application of Community law on Public Procurement and Concessions to institutionalised PPP (IPPP).

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Fig. 4.5 Our reference model: evolution of the State

Special purpose company/entity State

Holding companies Private (market)

not always—is present with public shares. However, a huge governance problem arises (Fig. 4.5). In the model, passages take place between different levels that can coexist; they are not automatic, and they are often contradictory, as the case studies especially tell us. The assembly of an infrastructure is a long process and includes its entire life cycle. The transition between public work and infrastructure can be slow: it can take place in a phase of the process that changes its trajectory, or it can already come with this characteristic. Case studies are used to give consistency and traceability to these steps. There may be some urban realities in which these passages are more intense, and others where they are less so. A systemic breakdown of the model is able to highlight the growth in the complexity of urban infrastructures fueled by each of the variables indicated. Urban infrastructures themselves are able to feed the dynamics of world cities, to define their ranking and possible virtuous and vicious circles. The presence of world cities is able to expand the network and the synergy of infrastructures between those that are innovative and more traditional ones, and give full meaning to the term ‘new.’ The development of the infrastructure network itself contributes to increasing the complexity of urban infrastructures. The element that deserves particular discussion is the PPP and Long-Term Contract (LTC), as it represents an important junction of the evolution of the State and of the public–private sector in relation to the assembly of infrastructures. Crouch (2000) had already posed the problem of the evolution of the state through the new forms of PPP. Greve and Hodge (2022) build the genesis and dynamics of the PPP regarding the evolution and ‘governance’ of infrastructures. Without this step, there is no full development of new urban infrastructures. Then there is the development of the state in the different dimensions addressed. It is not easy to define a hierarchy between these different variables, all of which contribute to the degree of development in new urban infrastructures and to their degree of complexity. Is it the transformation of the state that determines the new dynamics of

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89

cities and of world cities in particular, or vice versa? What is the impact between the development of the PPP and the articulation of the urban infrastructure network? The element that dominates and influences all the variables the most is the concept of globalization, which drives and feeds the term of complexity. Globalization in turn determines the reaction of the new forms of neo-simplism and nationalism. The current situation appears to be that of a jammed or blocked globalization. The question is what all of this will entail and produce for new urban infrastructures and for the interactions that will occur. There is no model on urban infrastructures, much less an organic reference with globalization and the adaptation of the variables that this determines. An important contribution from the second half of the last century is that of Tarr (1984). With a historical approach regarding the United States, he reconstructs the birth and evolution of urban infrastructures, underscoring that previously there was no systematic reading of the subject. There were indistinct references to public works, which in some cases were interchanged with urban infrastructures, without a precise meaning or evolution. Various terms were used: urban public works and capital infrastructure (Aldrich, 1980; Armstrong et al., 1976; Hoy & Robinson, 1982; Moehring, 1982). In Tarr’s contribution (1984), there is no precise reference model, but urban infrastructures are influenced by indistinct variables such as finance, politics, technology, space, public health, and social and demographic aspects. There is also a problem of the provider (public, public–private, private) of supply and demand. It is the evolution of these variables that leads urban infrastructures to take shape over time. However, there is no organic way of giving hierarchy and interconnection to the variables and, above all, in recent decades there have been radical changes that have significantly influenced the conformation of the variables that shape urban infrastructures. Other authors have addressed the theme of urban infrastructures from different angles bringing contributions that are original, but in many cases partial. The current phase of history and evolution requires that we develop an attempt to establish a model for the concept of urban infrastructure and its evolution, focusing on the distinguishing and unique aspects of the variables that make up the model. An equally important contribution comes from Graham and Marvin (2001), who address the issue of infrastructure in a vast way on a global level. The reference is global, not referring only to the United States as Tarr (1984) does, although later in Jacobson and Tarr (1996) some references and comparisons are made with infrastructures in Great Britain and France. In Graham and Marvin (2001), the historical evolution of infrastructures is resumed; even though the theme is ‘splintering urbanism,’ the destination remains the development of the urban layout and of urban infrastructure in particular. Some elements of the ‘proposed model’ are touched upon, but with different angles. The evolution of infrastructure from traditional to the LTC ‘revolution’ is presented, however this is one of several ‘revolutions’ that have involved urban infrastructure. Part of the discussion also concerns the evolution of water networks, sewage systems, transport in general, gas networks, electricity, cars, and telecommunications (telephones and televisions); even more at the center of evolution are wireless,

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gigabyte-P2P-5G, and in general, also ICT Service Management in its continuous evolution. However, the interactive dynamics of the variables appear blurred.

References Ackoff, R. L. (1971, July). Toward a System of Systems Concepts, Management Science, vol. 17, No. 11. Aldrich, M. (1980). A history of public works in the United States, 1790–1970. In Consad (Ed.), A study of public works investment in the United States, Available from the U.S, Government Printing Office. Department of Commerce. Armstrong, E. L., Robinson, M. C., & Hoy, S. M. (Eds.). (1976). History of Public Works in the United States 1776–1976. American Public Works Association. Brenner, N. (1998), Global cities, glocal states: global city formation and state territorial restructuring in contemporary Europe. Review of International Political Economy, Spring n. 1–37. Castells, M. (1979). The urban question. MIT Press. Castells, M. (2009). Communication power. Oxford University Press. Crouch, C. (2000). Coping with post-democracy. The Fabian Society. Etzioni, A. (1975). Comparative analysis of complex organizations. The Free Press. Friedmann, J. (1995), Where we stand: A decade of world city research, pages. 21–47. In World cities, In P. L. Knox, & P. J. Taylor (Eds.), World-system. Cambridge University Press. Galbraith, J. R. (1973). Designing complex organizations. Addison-Wesley. Graham, S., & Marvin, S. (2001). Splintering urbanism: Networked infrastructures, technological mobilities and the urban condition. Routledge. Greve, C., & Hodge, G. A. (2022), The PPP research terrain in a contested era. In A research agenda for public–private partnerships and the governance of infrastructure. Edward Elgar Publishing. Grubler, A. (1990). The Rise and fall of infrastructures: Dynamics of evolution and technological change in transport. Springer. Grubler, A. (2003). Technology and global change. Cambridge University Press. Hoy, S. M., & Robinson, M. C. (1982). Public works history in the United States: A guide to the literature. American Association for State and Local History. Jacobson C. D., & Tarr J. (1996). No single path: Ownership and financing of infrastructure in the 19th and 20th centuries. In A. Mody (Ed.), Infrastructure delivery: Private initiative and the public good. World Bank Publications. Kerzner, H. (2001). Project management: A systems approach to planning scheduling and controlling. Wiley & Sons. Kerzner, H. (2015). Project Management 2.0. Wiley & Sons. Klijn, H., & Koppenjan, J. (2016). Governance networks in the public sector. Routledge. Lawrence, P. R., & Lorsch, J. W. (1967). Organization and environment managing differentiation organizations. Harvard University. Moehring, E. P. (1982). Public works and urban history: Recent trends and new directions. Essays in Public History, n. 13. Chicago, Public Works Historical Society. Moss, T. (2011). Intermediaries and the Governance of Urban infrastructures in transition. In S. Guy, M. Marvin, W. Medd, & T. Moss (Eds.), Shaping urban infrastructures: Intermediaries and the governance of socio-technical networks. Earthscan-Routledge. Olds, K., & Yeung, H. (2004). Pathways to global city formation: A view from the developmental city-state of Singapore. Review of International Political Economy, 11(3), 489–521. Parnreiter, C. (2019). Global cities and the geographical transfer of value. Urban Studies, 56(1), 81–96.

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Porter, M. E. (1985). Competitive advantage: Creating and sustaining superior performance. The Free Press. Porter, M. E. (2008). On competition. Harvard Business Press. Tarr, J. (1984). The evolution of the urban infrastructure in the nineteenth and twentieth centuries. In R. Hanson (Ed.), Perspectives on Urban Infrastructure (pp. 4–66). Washington, DC: National Academy Press.

Chapter 5

Elements of Deglobalization

Abstract The model of the previous chapter represents a consolidated even if not obvious dynamic. The main reference is made up of globalization which has largely dragged the other components. More than thirty years ago, with other researchers, I tackled the issue of counterurbanization in a phase of crisis (deindustrialization) involving the West, replaced by the growth of finance and financialization. At that time, the deviations from the traditional model of urbanization were evident. We were witnessing the decline of old production within the city and its replacement by financialization. Now a critical factor that has intervened in the disruptive growth of globalization has been a crisis that has introduced the concept of slowbalization. Then followed the pandemic which had its epicenter in global cities and urban infrastructures. Hence the dichotomy between globalization and slowbalization, with strong repercussions on the evolution of the urban infrastructure.

The model presented has as its starting point the push towards globalization in which global cities represent an advanced part of the evolutionary push factor. In this, it would seem that global cities are driving the transition from public works to urban infrastructure. In reality, the term urban infrastructure is a consolidation of terms that combine to form it. There is no doubt that the growth of connectivity and global cities favors a consolidation of the concept of urban infrastructure as opposed to public works; just as there can be a link between procurement on the one hand, and new forms of contracts represented by Long-Term Contracts or by the breakdown of the state as a single entity typical of the welfare state, in favor of the creation of mixed public and private societies. The aspects of Long-Term Contracts and mixed public and private companies represent a new organizational and management role of urban infrastructures that has evolved over time. The term urban infrastructure cannot be diminished, as it has its own structurality, however changes or slowdowns in the evolutionary dynamics could emerge if a slowdown in globalization were to occur. The same would apply to the forms of organization (long contracts and mixed companies) that have developed in recent years around the concept of infrastructure. There have been several waves of globalization (Crouch, 2019), as well as ensuring crises. The term deglobalization may be excessive. There is the risk of evoking it with © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_5

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each attenuation of globalization, only to have to deny it at the time of recovery. There are several critical visions on the concept of globalization; some more radical (Bello, 2008), others more attenuated (Crouch, 2019; van Bergeijk, 2019), and still others attentive to the dysfunctions that globalization produces (Stiglitz, 2002). However, almost everyone believes that it is possible to intervene within globalization to make corrections (Stiglitz, 2017) and that we can no longer go back on the more general concept of globalization as known today, as we have gone too far in the evolutionary path (Crouch, 2019). It is a principle that starts from Polanyi (1957) when he indicates that correct ‘globalization’ is based on the “reintegration” of the economy into society, rather than on society driven by the economy. The term globalization is implicit in Polanyi’s thinking. The term deglobalization has been adopted by Bello’s more radical view, which includes the affirmation of the reformer Polanyi within deglobalization. Bello, however, proposes a correction of globalization divided into some points which, due to their highly radical nature, are de facto part of deglobalization, even if it is argued that this concept is not to be considered a withdrawal from the international economy but a reorientation of the economy in which exports are production grown for and by the local market (Bello, 2008) and must remain so. Other authoritative authors such as Stiglitz (2017) believe that the failure of globalization is not inevitable, even though Stiglitz takes a highly critical view of how globalization is developing. The double negation, ‘not’ and ‘inevitable’ accompanied by ‘both,’ means that if a systematic corrective to the current form of ‘globalization ‘ is not activated, it can turn into anti-globalization, as is partly happening now, given the many stop-and-go situations, with the activation of tariffs, protectionism, and a possible new Cold War, although not comparable to that of the postwar period of the last century. There is a systematic criticism of economists and their simplified models, when they stop analyzing and become advocates of globalization tout court and emphasize the benefits while underestimating the costs. This trend has currently found representation in the treatment of deglobalization (e.g. van Bergeijk, 2019) where intensity of globalization coincides with an increase in costs over benefits. Stiglitz’s position is that of a systematic reform of the negative effects produced by globalization with a revision of the free trade model typical of the conception of extreme liberalism, reforming taxation and addressing the non-traceability of finance (offshore). There is a criticism of international institutions and a recognition of the now critical state of the economies of high income developed countries due to: (a) low economic growth, or, where growth is present, it is all biased in favor of high incomes; (b) the inability to be inclusive (growing social inequality); (c) the gradual disappearance of the middle class; and (d) a new form of industrial decline and loss of jobs, and consequent electoral rebellion of places that “don’t matter” (Rodríguez-Pose, 2018). In the same vein as Stiglitz is also Hillebrand (2010), for whom interrupting globalization would lead to extremely negative results for most countries and most income groups. While the enacting of protectionist policies could improve income parity between poor and rich, the percentage number of people in poverty, in the medium and long term, will only increase. It is striking, however, that the thirty richest people

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in the world have a personal fortune of 1.742 trillion dollars, hypothetically in tenth place in the production of income (GDP), ahead of Canada and behind Brazil. The difference in the comparison, however, is asymmetrical, as it is between the assets accumulated by the thirty richest people in the world the first and annual GDP. Again in the asymmetric comparison, the ten richest people—with 856 billion dollars—have wealth equal to the income produced annually by the 94 nations in the lower part of the rankings of the 197 nations in the world (equal in number to almost 50% of all nations on the globe); or assets equal to one-third of the income produced annually by a continent like Africa. This is also one of the reasons why the residence of CEOs and their companies and businesses in global cities greatly contributes to raising the income produced annually by these cities (see Chap. 2). In addition, of the ten equity holdings, five of the largest come from Amazon (J. Bezos), Microsoft (B. Gates), Facebook (M. Zuckerberg), Oracle (L. Ellison), and Google (L. Page and others). It would be all too easy to say that without these ‘networks’ there would be no globalization as we know it today. It should also be noted that most of the theories on deglobalization have been accentuated after the global economic and financial crises (Hillebrand, 2010; van Bergeijk, 2010) in which the most dramatic expression is that by Bello (2009): the subprime crisis ‘has placed the final nail in the coffin of globalization.‘ Reference were made to subprime and the property market crisis of 2007–2013. Referring to that period, it was said to be one the worst crisis since the Great Depression of 80 years ago. There are also models in favor of deglobalization that Stiglitz would call too simplified, as he did for those in favor of globalization (Martin et al., 2018), or on the contrary all-encompassing and indefinite (Hillebrand, 2010 on the model of Hugles and Hillebrand [2006] and Herrero [2019]) that from the data deduce a decay or slowdown of globalization and therefore push towards its opposite. Those authors who analyze data on the balance of payments of some states and on total global GDP growth fall under the simplified model. On the other hand, the all-encompassing models include those that analyze a significant number of types of data in which it becomes difficult to give them a precise weight and hierarchy. However, in many ways we are undoubtedly facing a highly critical situation for globalization as we know it today. Faced with a process of deglobalization, the model indicated in the previous chapter would certainly experience a slowdown; the most critical aspect would concern brownfield infrastructures. In other words, urban infrastructures already created and settled with specific contractual and organizational formulas. The term brownfield is significant in that the infrastructures would risk deviating from the new configuration of cities, especially global ones; a new phase of cyclical crisis would arise if the parts of the cities deviated and were no longer responsive. Dynamism, or dynamic growth, makes it possible to create virtuous interactions; the opposite occurs when brownfields, whether they are infrastructures, areas, or functions, are found to be split, the result of needs that are no longer satisfying or obsolete. Compared to the model indicated, pending a revision and reformulation, the organizational, managerial and contractual formulas that have been consolidated in recent years are also entering into crisis. Cities and reference models are destined for

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cyclical crises which very often produce urban and city crises and just as often mark the discrepancy between the different components of brownfield areas, infrastructures and functions. In the absence of alternative formulas, globalization is destined to recover, as are the dynamics of global cities, at the expense of what appears to be definitively compromised. This happens in the absence of structured alternatives. Brownfield infrastructures remind us that they are the result of sedimentation of requirements that have been implemented over time, even with the delays and applications that need to be renewed in accordance with their economic physical, or functional cycle. The renewal of function can be rapid in a phase of dynamic growth, or remain suspended for some time and abandoned or mostly recovered, even with different functions, if it remains embedded within global cities. This, provided that global cities still prove to be consistent with the growth of globalization and do not turn into counterurbanization. In other words, cities, brownfield infrastructures and urban infrastructures, in particular, are the combination of different factors made up of organizations, visions, embedded economic interests, investments, short and long contracts (think of the Long-Term Contracts of a PPP), and the birth of new figures and professions. A rapid change of direction can be disastrous for some components: asymmetries, economic disjunctions, and divisions can be created between city functions (Porter, 1995) and between those functions and infrastructures. Ongoing investments or programs can turn from virtuous to vicious circles. On the contrary, in the medium and long term, a coherent dynamic leads to a convergence of variables. The example is the replacement of obsolete urban functions with other more responsive ones (Dalla Longa, 2011) which—not without contradictions—drive brownfield infrastructures to remodel themselves. Around this dynamic there are organizations, funds, and cultures that mobilize in a structured way, producing not only enormous interests but also dynamics of which, as described, globalization can be a synthesis. The corrective aspects to the model can also be the accidental aspects that stand in the way. The reference is to the crises or disruption of urban systems: they can be partial, conjunctural, and momentary, or they can be the beginning of a phenomenon that can lead to different solutions. We bring these aspects back into the context of a crisis. What is the model made of? An evolution of infrastructures in all the phases of the model, that have been driven by the push towards globalization and by the city as an agglomeration of ‘complex systems of works and infrastructures’ which has changed forms, procedures, contracts, management formulas, and ultimately the relationship between state and market. However, if we look at the model from the sole and exclusive point of view of infrastructure, there is an evolution starting almost exclusively from the cities. They are organisms and concentrations of extremely complex and evolving resources and technologies whose jamming quickly leads to necrosis and a domino effect of value destruction. Cities and global cities are entry hubs, complex production and assembly, and exit hubs, and all this is guaranteed by infrastructures. Often the focus is on

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the hubs and the sub-categories of which they are composed, and almost never on the infrastructures that allow for the existence of the hubs. It can be considered acquired, accessory, or boring, also because the components are very different from each other, sedimented in time, overlapping in the process of increasingly complex processing and with different functions. The question is: what happens when these infrastructures, due to endogenous or exogenous events, stop or stop working? What do they produce in the model? Graham (2010) takes this passage into consideration to say that the importance and evident role of infrastructures comes precisely when they stop working. Then we understand how important they are and what ‘domino’ effect they are capable of producing. Strong statements can be made, such as: the city exists only as a function of circulation and circuits and these are however guaranteed by infrastructures. So the infrastructures are: energy, water, sewage, systems, tools and means to move people and goods rapidly, systems that allow for promoting people’s metabolisms in terms of consumption of what is produced by the agricultural supply chain and related packages, consumer goods, disposal, overheating and pollution, and their regulation; transportation, people (including commuters, visitors/tourists) who enter and leave the cities, commercial, financial and communication infrastructures, positive and negative multipliers that allow the interest of modern urban life; their pipes, ducts, servers, wires, electronic transmissions, and tunnels that support the passages, connections and metabolisms intrinsic to contemporary cities. There are buildings and public structures that shape the urban morphology and that guarantee different degrees of acquisition of culture and knowledge, up to the training of excellence that in global cities has its best and most attractive university cathedrals and centers for research, cultural creativity and of transformation of knowledge, storage of knowledge, sports and entertainment facilities, historical and monumental sites, and real and imaginative collective spaces. All of this is urban infrastructure. A layered and interconnected whole, that in high income developed countries can often be classified as brownfield, understood as constructed and resting on continuous elaboration and transformation. Pike et al. (2019) broaden the field in which to place infrastructures even further and underline how “infrastructure systems provide the services we all rely upon for our everyday lives”. And also: “Infrastructure underpins and connects sites for fundamental human and social activities in the home, and places to live, learn, work and play and all this is above all geographically concentrated in urban areas. It is this concentration, almost aggregate of elements that allows cities and global cities to exist and function. The question is what happens when endogenous factors (collapse of a connection bridge) obstruct the functioning of this complex system. It is in this case that the dynamics of the model and the risk it produces are better understood, up to the point of hypothesizing the transition from globalization to slowbalization. The difference between brownfield and greenfield has already been reiterated. To this we must add a structural difference between urban infrastructures within globalization between the North and the South of the world, also in relation to the modification of the proposed model.

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The term heterogeneous infrastructure configurations (HICs) is also formed to mark this difference (Lawhon et al., 2018). It happens, for example, that the characteristic of the infrastructure is not the continuity, in which an interruption due to collapse, the epidemic, or more generally to disaster, can correct the geometries of the model negatively. In the HICs, applied to the south of globalization, continuity does not exist; it coexists with prolonged interruption or fits and starts and therefore a model should incorporate and not ignore this. There is a further structural differentiation, with the exponential growth of ubiquitous technological and digital infrastructures, which increasingly interact and become integrated with other types of infrastructures. So it happens that digitalization and intrinsic technologies are added to the first supply of basic essential services, such as water and energy supply (Coutard & Rutherford, 2016), widening the range of urban infrastructure models between: (a) developed countries with high income; with brownfield infrastructure; (b) emerging countries with greenfield infrastructure; (c) low and lower countries with urbanization without or with a structural lack of infrastructure.

5.1 Slowbalization and Contingency: Crisis and Pandemic Figure 5.1 brings out elements of slowbalization coinciding with two crises: the subprime crisis of 2008, whose effects occurred after 2010 for some nations, especially European ones (Italy, France, and Spain), but also Japan and the crisis linked to the Covid-19 pandemic which touches all the nations of the world. There are also those like James and Steger (2021), with a ‘sour’ criticism of globalization, define them as two complex ‘disjunctions’, calling them GFC (Global, Finance, Crisis) and GCC (Global, Covid-19, Crisis), which, under certain conditions, can contribute to redesign the known trajectory. From these data, the slowbalization phenomenon can be better interpreted. There is still uncertainty about the duration and impacts of the crisis (Cebr, 2020; Gorynia, 2021; Olivié & Gracia, 2020; Siddiqui, 2020; Staples, 2020, 2021) and different scenarios are described. In Fig. 5.1 GDP is represented, but this is not all to explain the transition from globalization to deglobalization. In addition to a correct representation of GDP (Stiglitz et al., 2010) and trade, other indicators should also be considered such as the movement of capital and people, knowledge and technology (Stiglitz, 2017) and the wellbeing of citizens (Stiglitz, 2019). In the Fig. 5.1 the data refer to the Cebr 2020 report, the subsequent reports (Cebr 2021, 2022) reveal less penalizing future projections for the USA, compared to the data on China. The scenario also shows some criticality of the growth of China’s driving globalization. Not so much for higher GDP growth in the USA, although present with respect to Fig. 5.1, as for lower growth in China. Even if the trend of China, in terms of growth, is led, in the next decade, to exceed the GDP of the USA in absolute values. ‘China is forecast to move from second place to first place in the WELT (World Economic League Table) of Cebr,

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Fig. 5.1 Thirty-year GDP trend (constant prices). Source Our processing on data from the Cebr— Center for Economics and Business Research (2020), World Economic League Table (WELT), 2021, December 26, 2020, 12th edition.; https://cebr.com/wp-content/uploads/2020/12/WELT-2021final-23.12.pdf)

during the 2030s, though this is now expected to occur in 2036, rather than in 2030 as we expected a year ago’ (Cebr 2022, p. 70). Forecast for 2021 which in any case, for China, had already been slightly worse than the growth trend shown in Fig. 5.1 (Cebr 2020, 2021). In Fig. 5.2 the global export value is represented. It is clear an exponential growth of globalization from 1985 until before the subprime crisis and then a slowdown with falls in the last decade that lead to the use of the term slowbalization. In 1970 the export value represented one tenth of the world GDP, in 2008 before the crisis it became one fifth. However, it is at the beginning of the 2000–2008 century that the growth of export value drags the world GDP by intensifying the exponential growth of globalization. With the subprime crisis and later with the pandemic, export value stabilizes as well as the GPD. We pass, even in numbers, from a pushed globalization to a de facto slowbalization. In reality, the term slowdown was used significantly by more authors such as eg. Altman (2009) immediately after the subprime crisis. While China’s push with the OBOR (One Bealt One Road) or BRI, launched in 2013, is an attempt to respond to the slowdown in globalization by building connective infrastructures between nations and continents. This happens, for China, after the first signs of deglobalization (Huang, 2016; Wang et al., 2020; Zhang et al., 2018), when its public debt is increasing and economic growth begins to manifest itself. decline. China’s home construction needs cooling due to rising local debt. For this reason, teams of Chinese construction companies engaged abroad, under the BRI regime, can favor the process of debt reduction and the reduction of excess internal production capacity (Swaine, 2015).

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20,000

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Fig. 5.2 World Merchandise exports—years 1950–2022 (millions of US dollars). Source Our processing on date WTO. World Trade Organization, WTO-Stats-indicators: Mercandise exports (Reporting Economy), https://stats.wto.org/ different years

After the subprime crisis of 2008, and the growing trade war, the original idea of the BRI has become, for China, an important push to balance the decrease in production and the slowdown in trade. The BIS seeks to expand the markets outside the now commercially misaligned ones of the United States and the major developed economies (Zou et al., 2021). It is also calculated that a 1% increase in investment in transport infrastructure can reduce trade costs by 0.03–0.58% of the volume traded between developing countries, especially Asians with more efficient shipping and faster delivery times (Zhai, 2018).Through the BRI, Chinese exports can therefore explore more potential markets as their competitiveness increases due to better logistical conditions. For China, connection infrastructures outside its borders become a first response to deglobalization. Most of the agreements like BIS officially involve 130 countries, 200 cooperation documents are produced and 30 international organizations are involved. Of these with 51 nations, 374 projects (Coenen et al., 2021) have been developed for an amount of 500 billion dollars to be used in a few years, in which the majority of contracts and investments concern transport (70%): railways and roads (53% of investments) and ports and intermodal infrastructures (17%). Then there are the energy plants (25%), including coal plants (13%). The remaining 5% refers to transmission lines and pipelines. The types of infrastructures and the passage in very sensitive territories reveal a particular criticality regarding the environmental sustainability of the interventions (Teo et al., 2019; Tracy et al., 2017). It follows that the connective infrastructure is a high deterrent to deglobalization. China indicates how its financial institutions and banking sector could provide up to 8 trillion dollars to cover the cost of the infrastructure needed in transport, highways and port facilities crossing over sixty countries (Ajami et al., 2021). This is more than 50% of the annual Chinese GDP and 10% of the world and 45% of the entire annual

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world trade. Within this reading, the data and sources are however weak: the BIS is still expanding; there is no official register of all projects; the same data change even if referring to long periods (Ajami et al., 2021) and are, moreover, hardly comparable with annual data such as GDP and world trade; finally, primary sources come from Chinese political banks and state-owned commercial activities and therefore with limited accessibility (Coenen et al., 2021). Previously, when globalization proceeded unstoppably, it was also easy to grasp what may now appear to be simplifications: Blair (2005) ‘stop debating globalization yes or not’, because ‘you might as well argue whether autumn should follow summer’ (Bishop & Payne, 2021). In reality, the evidence appears to be more complex today. In January 2019, The Economist 1 adapted a term coined by a Dutch writer, and came out with the following headline: “Slowbalization—Steam has come out of globalization—A new model of world trade is becoming clearer, as are its costs.“ There are various terms used to explain the ‘momentary’ slowdown of globalization (Dalla Longa, 2020; OECD-WTO, 2019). In the same issue of The Economist one year before the Covid-19 pandemic, it was also stressed that “the golden age of globalization, in 1990–2010, was something to behold,” and in the same article added slowbalization: “the Today’s commercial tensions are, on the other hand, aggravating a change underway since the financial crisis of 2008–2009”. In short, the questions about ‘globalization’ as a locomotive were present well before the pandemic (the occurrence of Brexit and Trump in the UK and US were a derivative of it). However, the data taken from Cebr (2020) indicate that after the post-2010 and post Covid-19 slowdown, a new development is expected, especially for China and India, and in part for the United States; while Europe is struggling to reach the pre-2010 values even 15–25 years after the two crises appeared. These are the elements that hold open the reflection on slowbalization versus (vs.) globalization.

Box 5.1 Trend commentary The conflict (war) between Russia and Ukraine which began in February 2022 is estimated to make GDP fall by 1% at the level of OECD countries compared to the estimated trend: euro area 1.4%; USA 0.8%; world 1.1%. Source: OECD, Economic Outlook, Interim Report March 2022. To the data shown in Fig. 5.1 the decline in GDP due to the ongoing war must be added—the decline in GDP was not considered in the counts. The conflict is only at the beginning and in any case it will block the dynamics of ‘globalization’ as we know it. From the data on world exports it emerges that globalization peaks in the period 1990–2008 (before the 2007 subprime crisis in the USA), with globalization growths not comparable to previous ones (with reference to the postwar period onwards). From 2008 to 2011 there was an initial absorption of the subprime crisis. From 2011 to 2020, the data indicate a slowbalization with

1

The Economist. (2019, January 24). Slowbalization: The Future of Global commerce.

USA 16,062 16,801 20,564 3,763 18% 19,685 -879 -4%

China 2,822 6,762 13,817 7,055 51% 14,059 242 2%

EU 9,931 10,771 9,569 -1,202 -13% 8,920 -649 -7%

Japan 5,859 6,388 4,874 -1,514 -31% 4,646 -228 -5%

Germany 3,510 3,813 3,705 -108 -3% 3,577 -128 -4%

UK 3,131 2,777 2,716 -61 -2% 2,496 -220 -9%

France 2,708 2,967 2,606 -361 -14% 2,414 -192 -8%

Italy Canada 2,291 1,446 2,396 1,813 1,920 1,666 -476 -147 -25% -9% 1,749 1,514 -171 -152 -10% -10%

India 1,028 1,915 2,753 838 30% 2,453 -300 -12%

Russia 1,008 1,830 1,633 -197 -12% 1,385 -248 -18%

Australia 904 1,403 1,331 -72 -5% 1,263 -68% -5%

Spain 1,422 1,595 1,338 -257 -19% 1,180 -158% -13%

Total 52,122 61,231 68,492 7,261 11% 65,341 -3,151 -5%

Fig. 5.3 Gross Domestic Product (GDP) at constant price of the main nations (G 7) plus India, Spain, Russia, Australia (different years). Source Our processing on Cebr date. Center for Economics and Business Research (2020), World Economic League Table, 2021, December 26, 2020, 12th edition; https://cebr.com/ wp-content/uploads/2020/12/WELT-2021-final-23.12.pdf

2020 pand. diff. diff. %

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peaks of greater falls in 2016 and 2020. In 2021 there seems to be a rebound in global trade, however, significantly slowed in 2022 by the war waged by Russia against Ukraine. Compared to 2005 with GDP at constant prices, only China grows: it grows significantly from 2005 to 2019, dragging globalization. However, there is significantly slowed growth with the Covid-19 pandemic. The United States and India grow until 2019; while both see GDP decrease in the Covid-19 year, compared to the previous year. All the other nations in Fig. 5.3 (at constant prices) have decreased in the last decade, contributing to slowbalization, with a further significant decrease in the year of Covid-19. The elements of possible slowbalization have affected nations in different ways. It is striking for European nations, which had been the ones that reacted the worst to the previous subprime crisis, with the unfortunate application of the internal stability pact in the search for a symmetrical balance between nations with low public debt (Germany) and others, on the contrary, with high public debt (Italy). However, globalization/slowbalization is not measured only with increasing/decreasing GDP. In some countries, the increase in GDP is linked to population growth (urbanization). There is also another element, which is the inequality (exclusion) of possible growth within the same nation, which leads excluded places (or non-places) to oppose globalization and favor political pressures towards slowbalization (in France with the ‘gilets jaunes,’ in the UK with Brexit, and in the US with ‘Trumpism’). This, although the sharp fall in world GDP due to the pandemic, due to the way the pandemic itself has developed, is undoubtedly an element of strong interest in the globalization/slowbalization dichotomy. In addition to GDP, there is also another important figure, which is that of private as well as public investments, and the resilience of banks, which in the first crisis of 2008 actually conditioned growth, and indirectly globalization as well. Alongside slowbalization there is the thesis of Contractor (2022) which indicates not a weakening, but a strengthening, of globalization precisely through the Covid19 crisis, and the various nationalisms (seen as a paradox); strengthening, in the next ten years, led by multinational technological enterprises (MNEs). With some more doubts there is Miroudot (2020) who argues how past experiences show how. Supply chains quickly recover from disruptions and Covid-19 could be an accelerator of this change even though it is now too early to predict a solution to the globalization /slowbalization trend. The opposite thesis to that indicated by Baldwin and Tomiura (2020) projected on a deglobalization from Covid-19, or Verbeke (2020) in which sudden shocks produce stock-outs and prolonged shortages, or Fontaine (2020) in which the pandemic produces a greater aversion to risk of globalization. It is not worthwhile in this close and contingent phase to enter into the microcomponents that determine slowbalization, as it would tend to be too abstract an exercise. It is more convenient to stay on the macro-phenomena, given that our

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reference is the model of urban infrastructure and the global city. The crisis largely affects this aspect. Covid-19 touches the crucial elements of urban infrastructure and its projection into the development of the globalized city as we currently know it. The deviation could be a slight corrective aspect, or, if it persists, have a greater impact and cause a change in the trajectory of the reference model. Already in other recent historical periods, globalization has put cities in a critical situation. The crisis of the large automotive industry, or the related crisis of big cities (Detroit, Turin, Manchester, Birmingham, and Milan) and the creation of vast abandoned brownfield areas had seriously questioned the centrality of these cities and the reutilization of the infrastructure and areas created around them. There is also a parallel literature that in different periods was born from the crisis of city infrastructures (Coombes et al., 1989; Gorham & Glazer, 1976; Graham, 2010; Musgrave, 1969; O’Connor, 1973). Today, with Covid-19, a possible additional scenario has arisen (Figs. 5.4 and 5.5). There are new elements of crisis and development that are forcefully produced, and it is not certain that these two opposing forces cancel each other out with respect to the model of globalization. Under certain conditions, they could both push in a direction opposite to globalization, or create a different globalization (Puaschunder, 2020a, 2020b), and this hypothesis is ingrained in a current of thought that has already been present for some years (Bello, 2008; Hammes, 2018; van Bergeijk, 2019). Some structural aspects of the urban growth model enter into crisis. This crisis can be momentary as in various historical periods, or be prolonged and cause gaps and slowdowns (slowbalization), or again, in a theoretical form for now, turn into deglobalization. (in crisis) (growing) green infr . bike

distribution

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counterurbanization or deglobalization t2

Fig. 5.5 Possible dynamics between globalization and slowbalization

Urban crises and the trends that follow are a feature of urbanization and consolidation and of urban infrastructure. The term brownfield applied to infrastructure means just that. The infrastructure is built in a given period, is the result of that period, and then constrains the urban structure. This structure changes rapidly within a context of competitive advantage, and can help to quickly shift from a greenfield to a brownfield infrastructure. The construction of an infrastructure is the result of an idea that began in a period long before its construction, and once the work has been completed, it does not always respond to a need present at that moment. This is also why correct planning is important, even though it is not decisive. Crises are often an acceleration of this shift, although Covid-19 is a dramatic and quite special event. The life cycle of an infrastructure, like that of a building, is on average long, around which various organizational forms and needs intervene that have variable life cycles, often much more limited in time than those of an infrastructure. With long-term contracts and PPPs, an attempt has been made to stabilize the organizations and management formulas around infrastructures. This could be a problem capable of producing new forms of default not previously known. An infrastructure linked to urbanization can lag behind urban development, or try to accompany it (Chinese model). A brownfield infrastructure often requires a readjustment to the evolutions that occur, and underutilization can occur with the presence of various gaps. A greenfield infrastructure, on the other hand, can suffer an interruption in relation to a crisis. Covid-19 creates various gaps that could remain such, or gradually disappear, bringing slowbalization back to globalization; or produce a push towards deglobalization (although it is difficult to consider it structural). Complex models have been adapted to simulate the transition from globalization to deglobalization (Ahlfeldt et al., 2020; Ahlfeldt & Pietrostefani, 2022), for which the theme of deglobalization, but most of all slowbalization, cannot be neglected in the discussion. Only in a few years, once the trends have stabilized, will it be possible to give more certain answers (Nathan & Overman, 2020). Here are some gaps that are emerging:

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Airline crisis—The major airlines are in crisis: Lufthansa loses one million euros a day, and without the support of the German government it risked bankruptcy; there is still an open dispute with the EU on state aid. The same is true for Air France and KLM, which are requesting substantial aid from the respective governments of France and The Netherlands. Air Canada, on the other hand, has been forced to halve its staff. Alitalia represents a separate story, as it has always been in crisis and then it was closed and replaced by Ita airways. Ryanair says it will suspend flights. Airlines such as Thai Airways and the British regional airline Flaybe go bankrupt. With the partial or total closure of borders air traffic has fallen to the levels of 2006, but with double the number of employees. There has also been a massive drop in trade in goods and the bankruptcy of related services—such as Hertz—that connect air and road infrastructure. It is these central infrastructures for trade and the global exchange of people and goods that photograph the greatest backlash induced by slowbalization. Crisis of subway lines and trains—In the period from March 9 to May 3, 2020, 65 million fewer passengers traveled on Italian regional trains compared to the previous year. In the same period, 1.5 billion euros were lost for local public transport, while for high-speed rail in Italy in the two months of the lockdown the loss was estimated at 500 million. On the other hand, bikes in New York increased by 600% in two months compared to the previous year, as did the prices of bikes (scarcity of supply compared to demand). Subway transport is considered to be high risk. The bike has therefore replaced the subway in New York and other large global cities. In April, New York announced that it would temporarily open 100 miles of roads for pedestrians and cyclists, a move that officials say could lead to permanent closures of roads open to traffic as we know them now. This regards a country, the United States, which was built around cars. Oakland plans to close 10% of its roads to cars during the pandemic, while Seattle said it would permanently close 20 miles of roads (Goldbaum, 2020). The same phenomenon was found in London, Paris, and Milan. Training and excellence centers—The crisis of excellence training centers is (or could be) only momentary, but it can have different outcomes. Excellence training centers represent a strong point for some global cities. This is the case for New York, Boston, Milan, Madrid, and Barcelona, and obviously London and Paris and all the other major European cities. With one million students (Florida & Selingo, 2020), New York is the largest university city in the United States, while others like Los Angeles and Chicago have 950,000 and 520,000 students, respectively. Urban universities have played a huge role in attracting what Richard Florida (2005) calls the ‘creative class.‘ The public universities (classic urban infrastructures) of New York (NY University), Southern California, and Boston, that were not particularly popular in the early 90 s, have contributed to revitalizing a significant part of the city, including through attraction of interest globally; through virtuous circles, they have thus increased their academic reputation. The presence of students and teachers in those residential areas has increased the ‘creativity’ and value that has developed around this presence. The renewal areas where those universities had been situated had become important places of attraction in the 2000s, with a very high ancillary and creative economy. Previously, those areas were the result of public interventions in the 50s, 60s and 70s, that were later considered unfortunate, as they had contributed

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to creating high levels of crime and other forms of degradation; they were then made virtuous by the presence of the universities. The same is true for Milan with its universities such as Bocconi and its Business School, on the one hand, and the Politecnico and all the other universities, that are mostly public, such as Bicocca (Dalla Longa & Vecchi, 2010). These universities have grown a lot, not only in numbers of students and teachers but also in prestige and quality and ranking of teaching/research and services offered. They have given a lot to the city of Milan in the context of GNC (Global Network Connectivity). Since the end of the 90s, an enormous amount of creative economic activities, retail, and entertainment services have sprung up around these universities; the costs of the areas and accommodations have also risen and their international attraction has grown considerably thanks also to Business Schools. Urban universities have often been supported by infrastructures, as happened directly for the Bicocca University of Milan, partly for the Polytechnic, and only to a lesser extent for Bocconi with the new headquarters of its Business school, opened at the beginning of 2020. Other programs attributable to this expansion are underway with the recovery of the railway stations inside the city belt. John Sexton himself, former president of New York University, pointed out that his university has been ‘blessed’ by a spectacular local endowment, also made up of infrastructure, that compensates for its more limited financial endowment. But with Covid-19 at this stage in Milan, as in other major cities in the US and Europe, urban universities can appear even more fragile than they might seem, especially in relation to more traditionally non-urban campuses. The crisis of these centers, only foreshadowed for now, could contribute negatively to the reduction of the GNC of the respective global cities and lead to a crisis of the enormous economic, creative, cultural, and urban development activities that have sprung up around them. The criticalities are variable and depend on the trend of Covid-19. There are three scenarios: (a) optimistic; (b) prudential; and (c) pessimistic. In the last two years (2020–2021) there has been, depending on the seasons, a pendulum that has swung from (a) to (c) and then returned to (a), with further oscillations on the other points. Optimistic—If the Covid-19 emergency were to cease today, the challenge for urban universities, after an initial period of disorientation, would be to recreate what was lost in the first two years of the pandemic and deal with the trauma and psychological aspects that Covid-19 has produced on the attractive side of the city. Prudential—This refers to a definitive pharmacological solution for Covid-19, that to date appears the most likely and transforms the pandemic into congenital. Columbia University, Harvard, and all universities and research centers have begun to develop new forms of distance learning and conferences, that had already been partially tested in the past, but which have now become a priority. There must be a strong interconnection with technology and with new formats referring to a medium-long period with the possibility of making these formats structural even in the post-vaccine period. However, there is also the psychological fact that these rapid retreats to technology are perceived as an effect of a pathological cause and therefore will suffer from a psychological effect that is not positive. A new relationship and phenomenon of acceleration is established with the all-encompassing infrastructure

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referable to urban infrastructure. There is a readjustment of the internal structures of the University linked to distancing as occurs in other productive nodes of the urban economy. The prudential model has consequences for the urban economic fabric and the fact that virus pandemics can recur in another form. In large cities, in these first two years book shops and university libraries, places that encourage strong cultural aggregation, and also food and entertainment venues, appear to have collapsed. In an analysis of the 57 largest American and Canadian cities, Moos (2016) identifies the significant and growing presence of young people in inner cities and coins the term ‘youthification’ of cities. This also refers to Washington, New York, Chicago, Montreal, and Toronto. Subsequently, Moos et al. (2019) find a link between ‘youthification,’ student housing, and gentrification, and we find ourselves inside the transforming perimeter of the creative class indicated by Florida (2005). The reference is more complex than it may seem: it is linked to high population density, subleases, the high number of beds in a room, apartments not otherwise usable, the morphological change of apartments over time, and the students’ residences (Moos et al., 2019; Revington, 2021; Revington et al., 2020). This important part of youthification which chooses the city based on biking, transit, walkability, cultural amenities, parks, nightlife, jobs, high-tech, sharing, public services, and infrastructures with Covid-19, and a pandemic that continues, is penalized. Student accommodations are often an urban infrastructure and can be part of financialization as discussed in Chap. 6 (Revington & August, 2019). Net of Brexit, among the factors of crisis in London and in large English cities, there is the lack of attraction of international students due to Covid19 (Anderson et al., 2020). This is greater the stronger the international (and national) attraction of the training and research centers was. The recovery must have a direct relationship with the respective cities and administrations and each must work with each other on common agendas also focusing on the recovery and evolution of infrastructures. The possibility should not be excluded that the major universities, in their attraction policy, can open small decentralized facilities to attract teachers, talented young people, and exchange students, in line with the recovery of landscape centers. Pessimistic—The situation could prove unsolvable (only a theoretical situation). In this case, we would enter a scenario of deglobalization and/or counterurbanization. The development assets of global cities would need to be reassessed. As in other historical phases, there will be a structural crisis of the cities that will require appropriate analyses that cannot be addressed here. Urbanization, however, is a more powerful force than infectious diseases, while for urban universities, the guarantees remain slightly less certain. Abandonment of the city by professionals—The abandonment of the city by professionals is a phenomenon that has been seen in several cities affected by Covid-19. It has been documented with data and commented on for New York and other cities (Cevendish, 2020). This is the constriction of undergoing a lockdown inside of “shoebox” housing, often used with a purely ancillary function. Being used for sleeping or little more, it allowed for the activation of a very extensive and attractive entertainment economy (restaurants, permanent meeting places); what Florida in its first phase of research (2002) defines as the basis for intellectual attractiveness. In the central parts of cities, housing real estate, except in special cases,

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is made up of small accommodation. When these, in addition to housing, become an office or a place of connection, they ‘burst.’ Needs and desire return to being larger and a new relationship is created with the vast urban settlement, and with its center (Manhattan,2 Milan, Paris, and London) the attraction for which is looser and more problematic. The greatest victims of Covid-19 in Paris were found in the 93rd Department, that of Seine-San-Denis in the north and on the outskirts of the central core of Paris, the poorest banlieue sites inside the city (Aulnay-sous-Bois) or neighboring it (Gennevilliers). Among other things, these areas have poorer public services and half the hospital beds than other parts of the city, such as comparable to Seine-San-Denis (e.g. Hauts-de-Seine). In the first wave of the pandemic, mortality rose due to Covid-19 by 63% in this district compared to 32% in the more central part of Paris. The residents are workers, cashiers, cleaners, garbage collectors, housekeepers and nursing assistants, with difficulty to properly confine themselves and without the possibility to migrate to more suitable or comfortable places, as happens, or happened, for the professionals located in the most central part of the city. The victims of Covid-19 are among the kinds of people who perform the services provided in city centers. The same is true for New York: in New Rochelle, which is located north of the Bronx, the infections and deaths have been the greatest, while significantly decreasing in the center of Manhattan. The phenomenon can also be recognized for London. The city of London has had a rather low number of cases, which were mostly present in the southern districts of the city (Lambeth and Southwark), which mostly have low incomes, and in the northwest (Brent and Harrow), even though the phenomenon is not entirely clear, as the northern districts of the city, that on average are poorer than Great London, have had lower rates of contagion on average (Islington, Hackiney, Haringey). London itself, after an initial high contagion, has seen the greatest weight shift to North West (Liverpool and Manchester) and West Midlands (Birmingham) and the New Castle metropolitan area. The center of the big empty cities versus the teeming suburbs is also the image of this reality. The micro-accommodations in the center near an office or workplace guarantee a permanent connection; there are no timetables, like in globalization, which does not have them. It is always active; this is the ‘GNC’ formula. Once this dimension is closed, both the slightly larger apartments—but still small with the presence of families with children—or the shoeboxes themselves, become unusable, and all this favors ‘escape’ and the desertification of services. Downtown areas that are deserted due to the closing of offices often provide a photograph of this situation of desertification. The suburbs, on the other hand, remain in profound distress (Doucet et al., 2021). There remains a strong push towards digitization, remote video links, and the strengthening of networks. Work from home has grown considerably, in some cases going from margin percentages to over 50% (Nathan & Overman, 2020). The question remains whether this organizational formula is more or less productive than the pre Covid-19 situation. In Britain, opinions are almost equally divided (Felstead & Reuschke, 2020). The hypothesis is 2

Bozikovic, A. (2020, May 19). The Global and Mail.

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that inter-connectivity and high density are what increase productivity and particular products. Namely: specialized clusters emerge in low-density areas, whereas highdensity cities diversify and produce unconventional ideas (Berkes & Gaetani, 2019), as do innovation, creativity and training exchange through information and practices (Catalini, 2018; Sandvik et al., 2020). Ahlfeldt et al. (2020) and Ahlfeldt and Pietrostefani (2022), updating their model, indicate that productivity does not have such an important impact on agglomeration, but the quality of life in large cities and global cities is more significant, and was removed by Covid-19 in 2020 (and 2021), which could be a real threat to agglomeration. It could also happen, if the pandemic were to persist over time, that productivity will decrease in global cities, but increase overall throughout the whole territory. The fact that higher-paid jobs are more susceptible to remote work (Felstead & Reuschke, 2020) can exacerbate these effects. And it may also happen that in a return to normality, organizations and companies will draw different ideas from the different forms of remote technology development and encourage it, including destructuring it outside of the nation. Perhaps a new type of slowbalization would be created, as opposed to the dynamics of the global city with a different relationship between brownfield/greenfield infrastructures. New urban crisis—There is also a deeper reading of the current urban crisis. linked to globalization and less compatible with Covid-19. The principle is that if the dynamics of globalization applied to the global city lead to rapid replacement of obsolete functions with others that are more responsive to competitive advantage, we must also consider what all this produces in terms of social and economic dynamics. If the contributions on counterurbanization (Coombes et al., 1989) were in part the ‘hole-in-the-donut’ effect of the urban crisis of the 1960s and 1970s, which became evident in the 1980s, subsequent studies by Sassen (1994, 2019) demonstrated how the re-appropriation of cities was a merger between the technological and digital revolutions that began in the 1980s and 1990s. Not urban dispersion, but a neo-concentration around the principle that ‘the fraction of a second counts,’ and the city knew how to guarantee and safeguard this principle more than anything else. Richard Florida gradually identifies cities and globalization as the engine of value production through the creativity that the global city knows how to attract and reproduce, especially those cities that have passed through the scars of brownfields, those that appeared to be most in crisis due to the abandonment of old industry generating disused areas and infrastructures. Florida (2005) stressed that “the older cities were the ideal places to further extend the creative economy, full as they are of industrial architecture, factories and warehouses, that is to say, the most suitable spaces for economic innovation.” The infrastructures already existed; it was enough to just reconvert them, readjust them to the transformation. It was the brownfield areas and infrastructures that were the new decayed assets to be transformed. Up to now, in the first decade of this century we were in line with the proposed model. It was Richard Florida (2017) himself who recently—before Covid-19—introduced the concept of new urban crisis, reserving a primary role for revitalized urban infrastructure. Just as a primary role is given to the new brand that creative value had produced within the city.

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What happens according to the new urban crisis? There is a new postgentrification turnover through gradual income replacement through a replacement of ‘classes’ and functions and growing inequality, and housing price growth becomes the key to unlocking replacement. We therefore pass through a change in the puzzle from creative cities to cities that actually favor segregation and the denial of inclusion, the primary element of ‘creative value.’ Cities are the true center of many great changes and therefore the neo-dyscrasia between the injection of new strong classes to the detriment of the reduction of the widespread phenomenon of gentrification, leads to the new urban crisis. Land rent, as in other phases, albeit in a different form, recreates the new urban crisis and through this affects ‘globalization.‘ The crisis of cities in the form of neo-segregation, and of global cities in particular, cannot fail to affect global urbanization and therefore jointly involve brownfield and greenfield infrastructure and the globalization model more in general. Five dimensions of the new urban crisis are to be considered: (a) The major global cities, those with a higher GNC index, namely New York, London, Paris, Los Angeles, Boston, Amsterdam and Berlin, but also Milan, become the winners-take-all of urbanism; that is to say, they become richer and more attractive and create a new kind of inequality within the nation. This is the case of London and the UK, that for high income developed countries have high GDP growth, but that growth is absorbed mainly by global cities. And between those global cities, there remains a hierarchy at the expense of other territories which have gradually, and in many cases rapidly, lost their economic base. This is the case for the cities of Northern England, the New Castle area and Sunderland, or for New York in relation to other states, but the same could be said for Milan and the rest of Italy. This partly explains Brexit or the Trump phenomenon, and the dichotomous and conflictual criticality between neo-populism and ‘elites,’ and ultimately the political expressions of neo-nationalism against forms of globalization. (b) In global cities, real estate has grown enormously, as has the price of housing, as already indicated. New substitute settlements were born with the support of funds and finance which helped greatly in terms of the economic and GDP growth of the respective cities (Milan owes a part of its growth to this phenomenon with Porta Nuova and City Life. (c) Richard Florida points out how the super rich have parked their money in housing investments and choose these areas as the place to live. All this, according to Florida, has brought musicians, artists, and creatives out of those areas of gentrification that had created the start-ups of change, as well as teachers, nurses, hospital workers, and attendant, while students see their money devoured by high housing prices. (d) The presence of the middle class in global cities and urban systems has been diminished; in American society, it has gone from 2/3 in 1980 to 1/2 today; while in the United Kingdom it went from 27 to 17% in just a few years. (e) A question that remains open from the redesigning of the city with intervention of planners, funds, and “starchitects”, is where they have positioned

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those classes who had to make way for the upper class or increases in housing costs? In other words, how did the dichotomy of inclusion/exclusion reshuffle the cards? Before Covid-19, especially in Anglo-Saxon countries, the relationship of suburban areas and the center of the city, partly determined by the ‘hole-inthe-donut’ effect of the 60s and 70s, had been overturned. It follows that in 2000 more people in poverty were in inner London, while in 2013 a clear majority of poor people lived outside of London (60% versus 40% in inner London). The reference is to 2.14 million people classifiable as poor. Of the new settlements, some of them outside London were exported directly or in another form from the city, while others were considered to be middle class who lost their jobs or moved due to the rise in housing costs. Over the last thirty years or more, there has been a transfer of the wealthiest people from the suburbs to the city center, and vice versa for the poorest classes, moving away from the central or subcentral areas near or bordering the global city. With Covid-19, this principle is dramatically challenged. (f) The principle is not only limited to developed countries, and thus globalization is fully present in the discussion. There is thus a universal reference that comes from the cites where there is an urban consolidation (developed countries) and also involves the urbanization of emerging countries and developing countries; urbanization and rising living standards seem to have broken. Rapid and chaotic urbanization has seen little or no improvement in individual living standards. A number of people exceeding the population of Europe (800 million) live in global neo-urbanization in poverty in slums, barrios, and favelas close to cities, forming urbanization. This phenomenon, according to some researchers, will grow faster than the rate of urbanization.

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Stiglitz, J. E. (2017). Globalization and its discontents revisited: Anti-globalization in the era of trump. W. W. Norton. Stiglitz, J. E. (2019). People, power, and profits: Progressive capitalism for an age of discontent. Penguin. Stiglitz, J. E., Fitoussi, J. P., & Sen, A. (2010). Mismeasuring our lives. Why GDP doesn’t add up. The New Press. Swaine, M. D. (2015). Chinese views and commentary on the “One Belt, One Road” Initiative. China Leadership Monitor, 47, 1–24. Teo, H. C., Lechner, A. M., Walton, G. W., Chan, F. K. S., Cheshmehzangi, A., Tan-Mullins, M., Chan, H. K., Sternberg, T., & Campos-Arceiz, A. (2019). Environmental impacts of infrastructure development under the Belt and Road Initiative. Environments, 6(6), 72. Tracy, E. F., Shvarts, E., Simonov, E., & Babenko, M. (2017). China’s new Eurasian ambitions: The environmental risks of the Silk Road economic. Eurasian Geography and Economics, 58(1), 56–88. van Bergeijk, P. (2010). On the brink of deglobalization: An alternative perspective on the causes of the world trade collapse. Edward Elgar Publishing. van Bergeijk, P. (2019). Deglobalization 2.0: Trade and openness during the great depression and the great recession. Edward Elgar Publishing. Verbeke, A. (2020). Will the Covid-19 pandemic really change the governance of global value chains? British Journal of Management, 31(3), 444–446. Wang, C., Lim, M. K., Zhang, X., Zhao, L., & Lee, T. W. (2020). Railway and road infrastructure in the Belt and Road Initiative countries: Estimating the impact of transport infrastructure on economic growth. Transportation Research Part A: Policy and Practice, 134, 288–307. Zhai, F. (2018). China’s Belt and Road Initiative: A preliminary quantitative assessment. Journal of Asian Economics, 55, 84–92. Zhang, L., Luo, M., Yang, D., & Li, K. (2018). Impacts of trade liberalization on Chinese economy with Belt and Road Initiative. Maritime Policy & Management, 45(3), 301–318. Zou, L., Shen, J. H., Zhang, J., & Lee, C. C. (2021). What is the rationale behind China’s infrastructure investment under the Belt and Road Initiative. Journal of Economic Surveys, 42, 1–29.

Chapter 6

The Financialization of Urban Infrastructure

Abstract The chapter is one of the most important passages of the book. Without financialization, even the full concept of urban infrastructure as it is treated in the volume would not be possible. Financialization is a central point in understanding the specificity of urban infrastructure and the potential for growth and transformation that the concept of urban infrastructure assumes. Financialization also represents a formidable symmetry between the growth of the global city and the urban infrastructure in an evolution that cannot be broken down. This explains, especially within global cities, the progressive replacement of the state by finance in the assembly and management of urban infrastructures. This replacement is not comparable with what happens in other parts of the national territory. The transformation of the Real Estate and urban infrastructures is therefore a phenomenon that mostly involves global cities. The question is: at what stage of the process we are and what are the margins for development. The data tell us that we are only at the beginning with enormous contradictions and complexities that must find a solution to evolve. Some application examples (micro cases) highlight some difficulties which is also the difficult transition between the before and the after, between the old and the new driven by competitive advantage. Other difficulties mentioned in Chap. 1 concern the gap between large cities and the rest of the national territory and the difficulties of territorial integration that arise.

How is it possible to define new management formulas if at the same time we do not operate with a perimeter on categories of urban infrastructures? The question is even more pertinent if, as indicated by Pike et al. (2019), general categories are inserted within these infrastructures that concern the individual from the standpoint of connection, communication, in-depth analysis of consumer goods, movement, recreation, and more. Below is an analysis of economic infrastructures (one of the components of urban infrastructure) to define their perimeter, characteristics, and evolution. Economic infrastructures represent the ‘core’ of urban infrastructure and are also those that, traditionally, allow us to return to the original term of urban infrastructure.

© The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_6

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In addition to economic infrastructures and the perimeter that constitutes them, there are others, which are further analyzed in the following chapters: social infrastructures, infrastructures deriving from real estate, ubiquitous infrastructures, green and technological infrastructures, and other infrastructures. Economic infrastructures include: roads and bridges, electricity, railways, telecommunications, water, ports and airports. These types of works have an estimated weight of about 3% of GDP of the various nations considered to be developed countries and emerging countries, with a growth requirement of 3.5% (GIH, 2020; Oxford Economics, 2017). If all types of infrastructures were to be considered, the weight on GDP would be much greater. In the relationship with GDP, it is also necessary to consider the supply chains, and ancillary activities, that pertain to infrastructures and the economic benefits they produce. The reference would be close to 20–25% of GDP, moving it more to developed countries. The same is true if we were to consider the entire supply chain (quarries, foundries, materials factories, stocking, marketing and transport of materials to construction sites, machinery, ingenuity, etc.). Economic infrastructures also represent the more traditional hard infrastructures which, as already indicated, constitute the primary ‘backbone’ of urban infrastructures. Economic infrastructures, and others even more so, have both a different impact on global GDP and a different impact also within the different nations considered (Global Infrastructure Hub, 2020; Oxford Economics, 2017).1 If we consider two opposite models (the US and China), this type of infrastructure in the USA varies from about 1.6% of GDP (2009) to a minimum of 1.35% (2015). In China, it goes from a maximum of about 8.7% of GDP (2009) to a minimum of 7% (2015). This can be interpreted as different levels of investment in greenfield and brownfield infrastructures and different impacts on infrastructure in the globalization processes of the world’s two main nations. The reference is to economic infrastructures in the 2007–2015 period, such as ports (in China 1–2% of GDP per year; in the US 0.03% of GDP per year) and railways (in China 2–2.5% of GDP per year; in the US 0.07% of GDP per year). So if we consider the GDP of each country to be 100, China invested 40 times more than the US in just ports and railways, a sign of a great expansion of globalization driven by (economic) infrastructures. China therefore invested annually from 50 times more (ports) to 30 times more (railways) than the US compared to respective GDP in the period 2007–2015. This data contains all the information on globalization, greenfield and brownfield infrastructure, global cities, the growth of new types of cities, and urban infrastructures, starting with the two largest players. There are also differences between China and the US on energy—3% of GDP in China and 0.6% in the US—and on roads—2% of GDP in China and 0.6% of GDP in the US (Oxford Economics, OECD, Belladonna & Gili, 2020).

1

Economic infrastructures: % of GDP (Asia, 4%; Americas, 1.7%; Europe, 2.3%; Africa, 4.3%; Oceania, 3.5%). Source Oxford Economics (2017, p. 6).

6 The Financialization of Urban Infrastructure

119

2.0 1.5

1.0

0.5

0.0 05

06

07

Government

08

09

10

11

Corporate

12

13 PPP

14

15

16

17

18

19

20

non-PPP

Fig. 6.1 Infrastructure investment (% GDP; different years). Source EIB Infrastructure Database (IJ Global EPEC, Eurostat)

The thesis already proposed is that these types of works also have a strong impact with complex urban systems as they connect and facilitate exchange among major urban systems (roads and railways, ports and airports). Electricity consumption and investments occupy a position where the consumption and intertwining with other infrastructures take place. The water cycle, when there is no direct relationship with agriculture, is the circulation and treatment of water within urban systems. The financing of urban infrastructure comes from: – – – –

Government Corporate PPP (Public-Private Partnership) non-PPP (e.g. non-profit)

Funding comes mainly from the state and public administrations (as seen significantly in China), from private or publicly-controlled banks (e.g. CDP—Cassa Depositi e Prestiti, in Italy; CDC—Caisse de Dépôts and Consignations in France; KfW—Kreditanstalt für Wiederaufbau in Germany), international institutions (e.g. World Bank and other regional institutions), private or public funds, and from corporate or risk capital (equity). Over time there has been an evolution and division of these financing components and institutions. As a summary for Europe (EU) what is indicated in Fig. 6.1. Therefore, there is no single model of infrastructure financing. The birth of the PPP represents an innovative formula that is underestimated by the data, as it often consists of public (government) and private funding. The PPP model, although not very recent, was born for various reasons, including the fiscal crisis of the state that has made it impossible to finance infrastructure growth needs. Depending on the country, the PPP model takes on a different conformation and a different evolutionary form to consider in order to better classify different types of infrastructures. It is precisely the widespread presence of the ‘corporate’ financing, PPP and non-PPP that is contributing to changing the DNA of infrastructure and transforming it from

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public works into urban infrastructures. This is not the only cause, but certainly one of the most important. GIH (2020) estimates that the significant future infrastructure needs, especially economic ones, will end up being paid for and managed mainly, or almost exclusively, by the economic operator. Figure 6.1 seems to penalize the PPP, other data indicate a more central role in the PPP (Dalla Longa, 2017). The presence, albeit decreasing, of the Government is due not only to the presence of economic infrastructures (utilities, transport, communication), but also from health and education which alone absorb 0.6 of the GDP.

6.1 Financing of Infrastructure and PPP Financing of infrastructure can be divided into: Traditional public: managed by and under the responsibility of the state, using debt to finance public works. The lender is a bank or other lender. The state is required to pay principal installments and financial charges for a set period, especially over the medium to long term. The risk involved is mainly procurement risk. Private financing: managed with a significant presence of the private sector and with a economic calculus centered primarily on the user/consumer. There may be funding of various kinds, including from public sources, but the levels of responsibility change. The management areas concern, in a non-prevalent form (or in a different form from the traditional one) government, corporate, PPP, and non-PPP. The lender provides debt capital (Kd, cost of debt). The lender is a bank or another institution. To this we added risk capital (Ke, Equity) in which various lenders participate, including investment and pension funds. The former is extinguished with repayment of principal installments and financial charges in the traditional way, and the latter repayment of principal installments and returns. This mode is characterized principally by operational risk. For urban infrastructures, the data tell us (GIH, 2020) that debt financing is mainly extended in high-income countries (75%), while equity is lower. This figure is diametrically opposite for low-income countries (73% equity and 27% debt). The traditional infrastructure financing model is in decline. The second, more complex model (private financing) is driven by growing needs and is linked to the development of urban infrastructure, and has been an important push factor. There is no urban infrastructure without private financing. This financing consists mainly of debt, but often, or almost always, equity is also present (greater or lesser risk of being solvent on debt). The formula proves to be modular according to the degree of development and guarantees offered by the nation. For nations with fewer guarantees (low-income), there is a greater share of risk capital in the relationship with the investment, with a consequent greater increase in the cost of the investment.

6.2 Private Financing of Economic Infrastructures

121

6.1.1 Financing of the PPP Alone Globally, PPP is worth nearly 60 billion dollars in 2010 to 30 billion in 2019, or 36% to 28% as a share of total investment in private infrastructure (GIH, 2020). Actually in Fig. 6.1 it is estimated with a lower share than the data indicated, albeit low, by GIH even if the reference in Fig. 6.1 mainly concerns economic infrastructures (utilities, transport, communications and to a lesser extent healthcare and education). Other data from IJ Global (differents years) indicate that PPP is around 310 billion dollars worldwide and around 70 billion dollars in Europe (Dalla Longa, 2017), but the reference does not distinguish the different types of infrastructures. Kappeler (2012) indicates in Europe a PPP funding of 25 billion dollars, even if the sectors involved are: general public services, defense, public order and security, environment, health, research and education, not really economic infrastructure. To these is added the economic infrastructure such as transport with a weight that is anything but secondary. Other data (Dalla Longa, 2017) estimate the private capital of social infrastructure alone in Europe at around 20 billion dollars. The result, beyond the different angles, is a non-uniformity of the data on which the PPP is based and above all its weight within the private financing of urban infrastructures.

6.2 Private Financing of Economic Infrastructures Let us leave out the important public funding source (government) that characterized the infrastructure of the last century. The shift from the terms of public works to assets, or from public procurement to urban infrastructure, is due also to the increasing importance of private financing of infrastructure, primarily economic infrastructure. The growth of private financing for economic infrastructure and its evolution, in accordance with the logic of the market, is an important step in understanding the evolution of urban infrastructure, globalization, and global cities. It is not only the financing, but also the public choice of the state (e.g. EU) to gradually consider these infrastructures as special sectors or “excluded sectors” or semi-excluded, from the direct intervention of the state. In Europe, economic infrastructures are included in the excluded sectors in the European Directive of 1993 (Dir. 93/38) where there is a step towards liberalization compared to the 1970s (Dir. 71/305 and Dir. 77/62) after the White Paper of 1985 on the “completion of the internal market,” and at the same time as the multilateral negotiations of the Uruguay Round which saw a further correction of Dir. 93/38 in 1996. With the new century, in the EU directives of 2004 (04/17) and 2014 (14/25) water, energy and major transport infrastructures (ports, airports, rail) are treated separately from public procurement in a ‘hybrid’ private-public field, while starting from 2004 a significant part of telecommunications were brought into the private sphere, whereas in 1996 (correction of Dir. 93/38) outsourcing had already begun for voice telephony services, telex, and mobile radiotelephony. Thus, in the last twenty-five years, in a gradual form, there

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has been a process of outsourcing of economic infrastructures towards the privatepublic perimeter in which competition and market rules are accepted, with innovative access to private financing. The new EU directive of 2014 on concession contracts (Dir. 14/23) can be included in this context, introducing one of the best known and most used PPP formulas into EU law for the first time, accompanying it with the also important concept of operational risk. A closer relationship is established between the user, competition, and the business economy in the provision of the service. However, this transition did not take place in a linear form, and complex constellations still remain in the private-public financing relationship that affect the management formulas of economic infrastructures and the type of financing used for them. Private financing of economic infrastructures therefore has deep and constantly evolving roots and is also a basis for transformation and in part a peculiarity of this type of (urban) infrastructure. Some macro data allows us to better define types of financing of economic infrastructures in the evolution between public and private; even though the data presented is partial and some gaps remain due to the complex private-public constellations (Fig. 6.2). Private financing for economic infrastructures prevails, representing approximately 91% of financing against 9% coming from public contributions or participation. The type of financing that has grown considerably is that from secondary markets, i.e. the exchange of shares, in many cases also with the participation of retail. On the other hand, private investment in the primary, institutional market, has remained fairly stable. The largest share of public participation concerns primary private financing. A strong relationship is established between users and investors, in several cases leading to shares being widely-held. Within this logic, the concept 600

billion dollars

500 400 300 200 100 0 2010

2011

2012

Private primary markets

2013

2014

2015

Private secondary markets

2016

2017

2018

2019

Public (prim. + second)

Fig. 6.2 Financing of economic infrastructures. Source Global Infrastructure Hub, October, 2020

6.2 Private Financing of Economic Infrastructures

12%

100%

0%

123 11%

24% 39%

80%

47%

60% 20%

40%

89%

76% 61%

68%

20%

53%

0 High-Income High-Income Countries 68% Low Middle-Income Countries 12%

Upper Middle-Income Countries 20% Low-Income Countries 0.4%

Upper MiddleIncome private

Low Middle-Income

Low-Income

public

Fig. 6.3 Economic infrastructures: share of private infrastructure investment (average 2010– 2019)—by country income. Note World Bank Income Group classifications 2010. Source IJ Global and Global Infrastructure Hub, October, 2020

of ‘operational risk’ applied to economic infrastructures becomes clear, such as the activation of concessions, which, for example, becomes much more problematic for social infrastructure. Another element of economic infrastructures is that the contribution, or public participation, is much more limited for economic infrastructures located in higherincome countries (high-income: 11%), while it rises to almost 50% in low-income countries. This appears in line with the concept of greenfield and brownfield infrastructure (new construction or management and adaptation of the infrastructure) and with the concept of urban infrastructure connected to the model indicated in the book (see chapter 3) (Fig. 6.3). A breakdown of private financing by geographic area shows that it is largely concentrated in high-income countries with a greater impact on brownfield urban infrastructure and the ability to interconnect with globalization, global cities, and other types of infrastructures. There is some asymmetry in the data on public contributions, corporate, and PPP with regard to urban infrastructure. This also comes from the plurality of management formulas, already present in the phase of the Uruguay Round (1986–1994), that led to the next period of liberalization in which there were companies that managed economic infrastructure services and were fully publicly-owned, and have remained so even today. In this area, the analysis of the financing by private capital has never been significantly posed and therefore does not belong to the calculation of the data considered; therefore there is no such type of calculation on public funding. This is the case, for example, of Rheinenergie of Cologne in Germany (Leitheiser & Follmann, 2020), but the same could be reconstructed for several other realities. The city of Cologne (Germany) with its own public capital (Fig. 6.4), controls 100% of a holding (the Stadwerke GmbH) company which manages various economic infrastructures through various utilities. One of these is GEW AG, which controls 90%, while the other subsidiaries of Stadwerke GmbH are KVB AG (urban transport) HGK AG (port operations and industrial railways) AWB GmbH (waste collection) and others, thus representing a large part of the city’s economic infrastructure. GEW Cologne AG controls Rheinenergie AG with a capital stake of 80%, which in turn deals with energy and water and is not listed on the stock exchange.

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6 The Financialization of Urban Infrastructure

City of Cologne

funds

100%

RWE AG

Stadtwerke Cologne GmbH (Holding, municipal utilities)

Stadtwerke Cologne GmbH (Holding, municipal utilities)

investment

90% Innogy SE 20%

KVB

GEW Cologne AG (Holding)

economic infrastructures

80% Rheinenergie AG

funds

Public funding

funds

light railway system and buses and maintenance

AWB

Four ports and rail linked container terminals

HGK

waste collection and street cleaning company

shares

funds

Fig. 6.4 City of Cologne (D) and urban infrastructures (utilities: transport, waste collection, energy and water) and relationship between public and private market and investments. Source Our processing on: Leitheiser and Follmann (2020, p. 902)

A share of 20% of Rheinenergie AG is owned by Innogy SE, which in turn was created in 2016 by the second-largest, publicly-traded German multinational energy producer (RWE AG) while Innogy was subsequently acquired at the end of 2019 by the top German multinational energy producer (E.ON) that is also listed on the stock exchange. In turn, RWE AG often created several special purpose companies with German local authorities for the production and supply of energy. Within this configuration we have capital and public investment, which is the majority with respect to primary financing and private secondary financing relating to 20% of E.ON. In Germany and also in Cologne, positive energy balances have in the recent past helped to balance the decline in the city’s tax revenues, or to use its own budget to finance the (public or private) of KVB AG (urban transport) (Leitheiser & Follmann, 2020). It is also necessary to note that this type of action has been increasingly opposed in Europe by the European directives that have been issued since the second half of the 90s (starting with Dir. 93/38) with the restructuring of government and public administrations, through liberalization and direct organizational comparison with the market2 and with the transformation of economic infrastructures from public administrations into autonomous companies (Bulkeley & Kern, 2006). Local authorities that relied on the profit of their companies to divert financing/investments have over time, and with corporatization, dented the natural competitive advantage for these companies. That means, expansion, possible market shares, revenue and profits (Richter, 2013). The other element is whether this financing is classified or falls within the private, public, or corporate sectors; then there are PPP projects, which are separate. There has been a very heated debate in Europe over the years on the concept of in house providing, which indicated a clear separation between the public control body and the

2

p. 3 of the European Commission Green Paper—COM(2004)327 final; p. 4 of COM(2005)569 final.

6.3 The Detailed Financing of Economic Infrastructure

125

autonomy of the companies operating within the economic infrastructures. The European Court of Justice has often intervened with sanctions, still identifying too much mixing between the public budget and that of economic infrastructure companies. Different formulas of infrastructure assemblies are added together: most of them refer to different PPPs, with different management formulas, referring to different types of urban infrastructures, with a different inflow of private capital, and they are also different types of infrastructures (social, and especially economic). This demonstrates the strong evolution of infrastructures and the new relationship formulas between public and private and the strong cultural deficit of the public sector in governing complex processes linked to new forms of private financing. If we consider the various Italian cases analyzed, what emerges is: – – – –

a stratification of times a stratification of culture a stratification and differentiation of financialization and ‘assetization’ an impact of different cultures, that in many cases tend to canceling each other out – the feeling is that there are multiple incremental strategies and stratifications that are difficult to trace back to a single strategy. New themes are activated regarding infrastructure that were unthinkable only a decade or two ago. Then there can be a traditional PPP with the creation of an SPV and the presence of a public contribution; in this case the public contribution is counted. And there can be public financing that pertains to the primary market (public share capital) or public holding of own shares in the secondary market of economic infrastructures. Since the beginning of the twenty-first century, there has been particular attention paid to the evolution of management and the structure of investments in economic infrastructures (Guy et al., 2001; Moss, 2011; Pike et al., 2019). However, the tables and figures above clearly represent the type of private (and public) funding for economic infrastructure that especially after 1986–1994 (Uruguay round) have been required to deal more closely with the market, to varying degrees.

6.3 The Detailed Financing of Economic Infrastructure We have already mentioned the difference between the USA and China in the two different development models, that can also be reconstructed in brownfield and greenfield infrastructures. There is also a substantial difference in investment in infrastructure between developed countries and emerging countries (Fig. 6.5); in Europe investment is 2% of GDP, in Japan 2.6%, and in low and lower income emerging countries in African investment in economic infrastructure reaches peaks of over 6% (Kenya and Senegal), 9% (Morocco), and 11% Ethiopia. Once again, this is a sign

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6 The Financialization of Urban Infrastructure

that urbanization and globalization push for greenfield infrastructures. High-income developed countries, on the other hand, invest more in the consolidation of existing infrastructures (brownfield).

Box 6.1 Sequential number of nations: decoding The countries included within Fig. 6.5 are: EUROPE: (1) France, (2) Germany, (3) Italy, (4) Spain, (5) United Kingdom, (6) Poland, (7) (1 + 2 + 3 + 4 + 5 + 6) Europe. RUSSIA: (8) Russia, (9) Russia + Europe; NORTH AMERICA: (10) US, (11) Canada. (12) (10 + 11) North America: OTHER AMERICA: (13) Argentina, (14) Brazil, (15) Colombia, (16) Mexico, (17) Peru, (18) Chile, (19) (13 + 14 + 15 + 16 + 17 + 18) other America; ASIA: (20) China, (21) Japan, (22) South Korea, (23) India, (24) (20 + 21 + 22 + 23) Asia. OTHER ASIA: (25) Indonesia, (26) Philippines, (27) Vietnam, (28) Malaysia, (29) Thailand, (30) Turkey, (31) Saudi Arabia, (32) Singapore, (33) (25 + 26 + 27 + 28 + 29 + 30 + 31 + 32) other Asia: OCEANIA: (34) Australia, (35) New Zealand, (36) (34 + 35) Oceania. AFRICA: (37) South Africa, (38), Nigeria, (39) Egypt, (40) Ethiopia, (41) Kenya, (42) Morocco, (43) Senegal, (44) (38 + 39 + 40 + 41 + 42 + 43 +

12% Europe

North America Russia

Other America

Other Asia

Asia

Oceania

Africa (40)Ethiopia

10% (42)Morocco

8% (43)Senegal (20)China

6%

average Africa 4%

(6)Poland

average all countries Developed countries high income

(22)S.Korea (21)Japan

2%

average Europe

(3)Italy (10)USA

(16)Mexico

0% Europe Russia North Other America America

Asia

Other Asia

Oceania

Africa

Fig. 6.5 Investments in economic infrastructure, percentage on GDP. Note Investments mainly refer to economic infrastructures such as: telecommunications, energy, water, roads, railways, ports and airports. This type of investment also concerns PPP. Source Our processing on date of GIU-Global Infrastructure Hub; GIU Outlook, 2017 and other different years

6.3 The Detailed Financing of Economic Infrastructure

127

44) Africa without South Africa, (45) (44 + 37) Africa with South Africa, (46) Total all the countries (excluding the continental aggregations: 7, 9, 12, 19, 24, 33, 36, 44, 45). (a)

(b)

Investments GDP

(a)/(b) (c)

(c)/(a)

%

%

PPP

Popul. 2019

% of growth by 2030

Developed 719,777 countries (hight income)

38,514,421 1.9%

China

652,729

10,982,800 5.9%

Emerging countries (upper middle income)

253,425

8,237,251 3.1%

32,592 12.9%

Emerging countries (low and lower middle income)

178,197

4,493,688 4.0%

23,210 13.0% 2,349,620,049 14.4%

96,248 13.4%

2,007

934,876,190

2.5%

0.3% 1,431,906,615

2.3%

912,202,704

6.7%

Note “Developed countries (hight income)” = (7), (12), (21), (22), (36); China = (20); Emerging country (upper middle income) = (19), (28), (29), (30), (31), (32), (37); Emerging country (hight income) = (23), (25), (26), (27), (44)

The table shows how the developed countries have stabilized investment in economic infrastructure, which instead appear as the driving force for urbanization and globalization for China and for emerging countries. In China, investments in economic infrastructure are three times greater than those of developed countries. If the reference includes the projected population growth as of 2030, the growth of infrastructure investment is accompanied by strong urbanization precisely in emerging countries, and in particular in those with low and lower middle income. There are some elements of differentiation within this data, which are useful to note. The African nations considered show economic development mainly driven by urban infrastructure, which contributes to accelerating population and urbanization growth. Among all nations China is the one that invests most in both its globalizationinfrastructure and internal urbanization and is massively present with its models in the economic infrastructure of Africa. This also allows us to explain the nexus between infrastructure-development-population growth-urbanization and the new urban configuration.

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6 The Financialization of Urban Infrastructure

This strong dichotomy at a global level between a greenfield infrastructure model (urbanization) in emerging countries and the brownfield model in developed countries (consolidation of existing infrastructures) will be the subject of in-depth analysis in the subsequent discussion, especially with regard to brownfield infrastructures. One aspect that emerges in investments in economic infrastructure is that developed countries operating within brownfield infrastructure have a different model of infrastructure assembly. It is useful to segment urban infrastructure in a different way. There is also a different way to finance infrastructure. Particular weight is assigned to the PPP (Fig. 6.6), which assumes different characteristics depending on the type of country in which it is applied. The models are the same, while the way to apply them to the object change. The PPP model, due to its complexity and the new implications for the state and the market, and the consequent transformation of the state’s role from welfare to an intertwining of public and private interests, will be an important point in this book. The PPP model represents a structurally new form of financing that changes the way of understanding urban infrastructure. The formula can be extended to all PPPs, but these have different characteristics. Several models can be identified, including a European one. The main aspect remains the transfer of risk from the public to the economic operator. The PPP is a recent component of the financing of economic infrastructure (and other projects) and also involves a share of public contributions and fees. It can also be expressed in different forms through the PPPI model, which in addition to investment, also consists of the creation of mixed public-private companies particularly suitable for economic infrastructure. In general, private capital will be particularly important 60%

Europe

North America Russia

Other America

Asia

50%

Other Asia

Oceania

Africa

(32)Singapore

40% (34)Australia

30%

Developed countries high income

(43)Senegal

(26)Philippines (18)Chile

(5)UK

20%

(37)South Africa

(11)Canada (1)France

10%

average (without China)

(3)Italy

average (with China)

(10)USA

(35)New Zealand

(6)Poland

0%

(20)China

Europe

Russia North Other America America

Asia

Other Asia

Oceania

Africa

Fig. 6.6 Percentage of investment in PPP over traditional investment (public works). Source See Fig. 6.5 and Box 6.1

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in the next decade given the fiscal challenges and the high indebtedness of states after Covid-19. The data in the figure and table indicate, for economic infrastructures, an apparent percentage balance with respect to investments. However, if we look at the data more carefully, some peculiarities emerge which become important to note. Not all nations have a balanced relationship that regards ‘development’ in regard to the PPP model. In developed countries, PPP is almost not present in Japan (1.7% of investments) and in South Korea (2.9%); while in Europe, for different reasons, it is not very present in Poland (3.9%) and in Germany (9.5%). The latter has a strong budget surplus, and generating public debt through government investment is not a problem. At the EU level, other countries hope that Germany makes strong investment in infrastructure (government investment) to favor the development of the European economy more than paying attention to the budget deficit. On the other side, there are nations such as Italy, France, and Spain (the South of Europe)—and Italy in particular—with significant public debt, that with the PPP model, could have this debt signed up in private accounts, since private debt is in Italy much lower than it is singularly for Spain, France, and even Germany. Thus there are different interests, sensitivities, and opportunities in regard to using PPPs in the European and euro area context. This is one of the reasons we are facing a consolidation and possible revival of the PPP model in Europe. PPPs were born in the UK (27% of investments in economic infrastructure) and spread to France, Spain, Italy, and other smaller nations, exceeding 15–20% of the amount of investments in infrastructure. The model also has a strong presence in relation to infrastructure investments in other Anglo-Saxon countries (Australia 37%, and Canada 18%). The PPP model is not present in Russia (3.5%) and even less in China (0.3%). Due to its characteristics, China shows a significant peculiarity, that of having high investments in economic infrastructure compared to GDP, but all made with public funds (Government) in line with its political ‘regime’ and development planning and the relationship with production, the market, and globalization. There are also some South American countries where the PPP model is poorly developed (e.g. Argentina and Brazil) and others like Turkey where PPPs represent half of the investments in economic infrastructure made in that country (more than 48% of all investments in economic infrastructure carried out there). These differences do not prevent the PPP model from representing 13% of the total investments concerning economic infrastructure. This data is underestimated in general statistics, because together with private capital there is often a public contribution of about one-half compared to the private capital, and then an Operation and Maintenance (O&M) fee follows (or it is created autonomously) that is rarely counted correctly. Modification of financing and creation of the PPP at a general level—A few decades ago, in developed countries we were faced with the issue of the unsustainability of state intervention in financing infrastructure. Today the state has significantly reduced its role as a lender. Furthermore, new forms of infrastructure have appeared, as have new actors and financiers, and new

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procedures, in which the state is no longer the main actor. The Public-Private Partnership was born and developed. Therefore, for infrastructure, from procurement to concession and to PPP more in general, direct intervention by the private sector is also growing. Furthermore, the term urban infrastructure is a new term that has changed its meaning compared to its use a few decades ago. The PPP model currently assumes a broad perimeter and concerns not only economic infrastructures, those that gave rise to the PPP, but also social infrastructures and complex urban interventions (Dalla Longa, 2011), as well as other types of interventions (Dalla Longa, 2017). Between stop and go, it is constantly changing in terms of assembly and types of infrastructures. It is not possible to deal with urban infrastructure without fully considering the essence and importance of the PPP within different global contexts. The criticalities and potential of PPPs compared to traditional interventions— The problems and potential of PPPs are almost never absolute, but they must be contextualized and in several cases they can be mitigated or developed. The following problem can be present: – An undeniable higher cost of PPP infrastructure compared to traditional procurement interventions; – A possible cultural asymmetry between the procuring authority and the project company; – Risk management within a Long Term Contract (LTC). It is already complicated to manage risk in a contract; it grows exponentially in an LTC; – The control and verification systems of the public operator within an LTC appear to be inadequate to date. There are no automatic market mechanisms, and an LTC often has a longer life cycle than an individual’s working life. – The growth of new forms of social exclusion, that can, however, be mitigated with other interventions that are currently little known. PPP is potentially positive, instead, when: – It can enhance operations and integrate the different parts of an infrastructure project; – It creates collective benefits by allowing for the circulation of citizens’ savings in a virtuous circle. But this does not always occur within the same nation; to ensure that this happens, several virtuous circles must be activated simultaneously (e.g. attractiveness of investment, large amounts of savings in the nation); – There may be greater efficiency of the private sector in managing infrastructure considering the fragmentation of public action; – It can favor a greater spread of culture and standard forms of rates, fees, output, quality, and satisfaction; – It can be an epochal form of modernization and innovation of services and infrastructures. Regardless of its problems or potentialities, the PPP absolutely requires interdisciplinarity and new organizational forms that are not simple for either the state or

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the market. The boundary between criticality and potential remains weak and not completely resolved. The PPP model at the global level—After the advent of the modern PPP and its recent evolution, there are now different components that distinguish it and it may seem simplistic to provide a single view. If we focus on the more traditional and consolidated part of PPPs, that of economic infrastructure,3 more representations emerge globally. Both developed countries (13.4%) and emerging countries (12.8%) indicate on average 15% of infrastructure in PPPs. China, as already indicated, has its own trajectory. More traces can be identified: (a) English-speaking nations have a figure clearly higher than 15% as concerns PPPs with respect to the rest of investments in infrastructure: below the average are the USA (13.3%), while Australia is at 37.4%, Soud Africa at 27.6%, the United Kingdom at 26.6% and Canada at 17.7%; (b) they are followed by the historical European Community countries: below the average we find Germany (9.5%), while above the average there are France at 15.4%, Spain at 14.5%, and Italy at 11.7%; and (c) the countries of South America and Africa are below the average. There are also some important variables that must be taken into account: – The uncertainty of data on infrastructure, and even more on PPPs: this is a serious problem that will remain such for some time4 (Dalla Longa, 2017). There is also the belief, when crossing more data, that there is a general underestimation of PPPs. – The economic and geopolitical differences among different nations and geographical areas, that implement PPPs in different ways. For all PPP formulas, the basic element is represented by the relationship between the procuring and project companies through a contract. However, this formula was valid until a decade ago, but is not anymore. For some countries (e.g. European Community) we are within a new generation of PPPs, in which (B) is clearly added to (A) (see Fig. 6.7). – The difference in infrastructures, if they can be classified as greenfield or brownfield, which is very marked in relation to the economic and geopolitical positions of the various nations. Initial macro differentiation of PPPs globally—Emerging countries5 show the following profile: – They are countries with strong infrastructure needs (and recent investments represent a substantial part of fixed investments); – These are mainly investments better defined as economic and greenfield infrastructures; 3

The economic infrastructures referred to here and in the next two paragraphs are: energy, telecommunications, airport, ports, rail, road, water the source is mainly GIH/Oxford Economics (several years). 4 The reference is to data from GIH, OCDE, Eurostat, EIB/Epec, IJ Global (several years). 5 See Box 6.1.

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(B)

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Fig. 6.7 Evolution of PPP models (A) (B). Source Dalla Longa (2020), our elaboration on GIH (2018)

– They are countries with forecasts of growth (GDP) and this type of infrastructure can be the push factor for growth; – The important thing for these nations remains a correct balance between the procuring authority and the project company sanctioned by a PPP contract. – The partial and imperfect transmission of risks from the public sector to the economic operator can be covered by the growth of GDP, which overshadows the management asymmetries and incomplete knowledge of consistency and assembly management within the LTC (Fig. 6.7, point A). – Furthermore, both emerging African countries, Asian countries, and in part American countries, are those for which the projections indicate significant urban growth and therefore the need for urban infrastructure more compatible with new forms of PPPs. European developed countries (and some others)6 show the following profile: – They have a developed infrastructure system; – In the future, investments will impact brownfield infrastructures, that already exist; it will be a question of modernizing them or contaminating them with other types (new technologies, green, etc.); – They are countries with the lowest GDP growth. The weight of investments in infrastructure is more limited compared to fixed investments in the various countries; 6

Ibidem.

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– They are countries with significant public debt. It is useful to remember that at the EU level, before the Covid-19 pandemic, the Stability Pacts (Maastricht) and the Fiscal Compact were in force; they were suspended during the fight against the pandemic, but will return to normal again; – For these countries, the correct balance between the procuring authority and the project company is no longer relevant. It becomes important to immediately define a correct balance between hard consistence (object), PPP contract, and management in the PPP assembly throughout the LTC (Fig. 6.7, point B). – The correct and permanent transmission of risk from the public sector to the economic operator becomes the central point of the PPP, around which the feasibility and legitimacy of the formula revolves; – Developed European countries are those with greater urbanization (more than 70% of the population living in urban areas against 40–50% of countries such as Asia and Africa). The expected increase in urbanization in the future is the most limited compared to all other parts of the world. This is confirmation that for these countries PPPs will concern the infrastructural reconversion of large numbers of brownfield urban infrastructures. Growth in infrastructure investment needs and PPP prospects—An analysis carried out for the 52 most developed countries worldwide indicated 2.3 trillion dollars of investments in economic infrastructure in 2015, with a natural trend that will reach 3.8 trillion in twenty years (2040). To meet the growing needs, however, an additional level of 1.2 trillion dollars (+1/3) is foreseen compared to the growth trend considered to be natural. Only with the growth of private capital, through PPPs, is it possible to cover the growing need for infrastructures, considering that public spending on contracts in developed countries, and in particular in the EU, has been declining for several years (Dalla Longa, 2017). The greatest need for growth in the natural trend of investment in infrastructure concerns the countries in the Americas (47%) and Africa (39%) countries, followed by Europe (16%) while the world requirement is estimated at 19%. Within EU countries, the greatest need is in Italy, which in recent years has had to restrict investments due to the Stability Pact, due to its enormous public debt. The reference to the need for the off balance sheet investments thus becomes a central additional element for some countries, and the correct use of PPPs would respond to this need. The data indicates that PPPs will grow and tend to be differentiated a lot over the years. The perimeters of PPPs will increase and PPP models will also change for different types of infrastructures, while the management component, interdisciplinary knowledge, organizational culture, and risk management will be fundamental in the diversification of the models themselves and in the symmetrical development of PPPs. The European PPP model—There are multiple versions of PPPs in Europe, which is one of the reasons it cannot be enclosed within the economic infrastructure. The birth of the PPP for economic infrastructure is the oldest and it is also the one that is easiest to compare worldwide. In addition to this, there is the discussion of social

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infrastructure, and energy efficiency (EPC and creation of the ESCo: Energy Service Company), and there are others, some of which are related to real estate. The most structured are the first two (economic and social infrastructure) which have also been reflected in the relevant European legislation. The PPP for economic infrastructure is the oldest and most consolidated model. Its matrix is that of project finance, and it represents the backbone of the EU directive of 2014, which for the first time introduced the granting of project financing into EU law, with the corollary of operational risk and market risk in a direct relationship between the user and the economic operator. The beginning of application of the PPP model to economic infrastructure dates back structurally to the end of the nineteenth century, with the first railways in England, France, Germany, Belgium, and Italy, in which more than 20,000 km of railways were built with project finance techniques (Dalla Longa, 2020) and then consolidated over time. The PPP model applied to social infrastructure, on the other hand, is more recent and can be traced back to the United Kingdom at the end of the last century (Fig. 6.8).

Box 6.2 Contents that feed the chart The PPP project data covers: (a) transactions that have reached financial close in EU-27 countries; (b) transactions structured as design-build-finance-operate (DBFO); (c) transactions, design-build-finance-maintain (DBFM); (d) transactions or concession arrangements that feature a construction element, the

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14

billion euros

12 10 8 6 4 2 0

Fig. 6.9 United Kingdom—Breakdown of PPP (social infrastructure) interventions by type. Note 715 projects (entered and canceled depending on the termination of the LTC); period: 1995–2017. The reference here is social infrastructure projects, those with a public fee. Tariff infrastructures (economic infrastructures: concessions) are not considered in PFI and PF2. Source Our elaboration based on: “HM Treasury & Infrastructure and Project Authority” (2018) Private Finance Initiative and Private Finance 2 Projects: 2017 summary data 5

billion euros

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Fig. 6.10 Italy—Breakdown of PPP (social infrastructure) interventions by type. Note 135 projects, period: 2001–2013. The reference is to social infrastructures, those with a public fee. Tariff infrastructures (economic infrastructures: concessions) are not considered. Source Our processing on PREM Lab (SDA Bocconi) data

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provision of a public service and genuine risk sharing between the public and the private sector; (e) transactions financed through project financing; (f) transactions of a project value (defined as the external financing requirements for projects at the time of financial close—i.e. the sum of debt and equity, excluding public capital contributions) of at least 10 million of euro. The data coming from EPEC and elaborated by us indicate that in the last 25 years the funds used, by the private sector alone, for PPP investments have been 403.2 billion euros, this against almost 2,000 projects. Public contributions to PPPs are excluded from the calculation, while the infrastructures concerned are mainly social and civil ones. From the EPEC data it emerges that, from the comparison with the European Community (EU), the Union Kingdom (UK) in the same period affects with 55% of the funds (more than 1,000 billion euros) and 41% of the projects (165) for PPPs. In Fig. 6.8, the inclusion of the UK in the direct comparison with the total EU data is due to the fact that the Private Finance Initiative (PFI) was born in the UK and only subsequently expanded to other European countries. In the last decade (see Fig. 6.8) the decline in the amount of PPP and projects coincides in part with the decline in the trend in the UK. This with the transition from PFI to PFI2, as the British themselves called it, criticizing the previous PFI system, considering it not very controllable and imperfect. The countries of the EU considered are: in addition to the UK, exit with Brexit from the EU in 2020, France, Spain, Netherlands, Germany, Czech Republic, Hungary, Portugal, Cyprus, Sweden, Greece, Italy, Finland, Romania, Slovenia, Poland, Ireland. Figure 6.8 mainly deals with data relating to the PFI (i.e. social infrastructures in which it is the State that pays all or a large part of the fee and not the user called to pay the rate as is the case with economic infrastructures). Social infrastructures are to be considered: Healthcare, Education, Housing and Community Services, Recreation and Culture. Also included as fee-based infrastructures: General Public Services, Environment, Defense, Public Order and Safety. All these items in the EPEC data represent, for the EU, 77% of the PPPs indicated in Fig. 6.8 and for the UK alone 93%. Economic infrastructures such as transport appear only marginally. The reference of the data mentioned above is that of the last thirty years (see Fig. 6.8; 1990–2020). In the last decade, there has been a marked decline in PPPs in the UK offset in part by an increase in France which shows an opposite trend in PPP growth over the last decade. Partly more limited growth also occurs for Germany. This is a little less true for Spain and Portugal. From the EPEC data we have elaborated it emerges that PPP projects with more than 10 million euros are taken into consideration, and from these are excluded public contributions that can reach up to 50%, but up to a few years ago (less than ten years ago) there was no specific limit on the public contribution within a PPP. In Fig. 6.8 there are also the tariff economic infrastructures such as Transports, Telcos RDI which in the EPEC data of Fig. 6.8 do not exceed 23% of the projects reported and in the UK do not exceed

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7% of the total UK PPPs. In these data (see Fig. 6.8) the genesis of the PFI and its evolution prevails, unlike the previous figures of this chapter in which economic infrastructures prevailed. In the data shown in Fig. 6.8 medium-small interventions are excluded, very present for example in the municipalities in Italy (sports and swimming facilities, school buildings, many urban renovations). Energy efficiency PPPs such as public lighting and many others are also excluded as shown in Figs. 6.9 and 6.10. Furthermore, with the establishment of ad hoc monitoring systems (e.g. NAO—National Audit Office), the UK has much more structured and efficient data collection and transmission systems than other EU nations, this partly explains the possible disproportion between EU and UK present in Fig. 6.8. The data on Europe shows that the PPP model (understood as social infrastructure) has a precise origin, and the reference is to England under Tony Blair (1997–2007). The term used is Project Finance Initiative (PFI) which differs from economic infrastructure better known as Project Finance (PF). The initial orientation began with the government of John Major, but there is no doubt that the development of the PPP (PFI) took place at the beginning of the 2000s (Kappeler & Nemoz, 2010). The Fig. 6.8 highlights the entire phase of introduction and development of the PPP (social infrastructure) in which the English model always had a significant presence in driving and determining the structure of the instrument. Only in recent years has growth of this PPP (social infrastructures) affected other European nations, including Italy. The PFI model grew over time and changed after having encountered errors in the assembly phase, present in widespread form also in the Italian model that was ‘contaminated’ by the Anglo-Saxon one, in which the assembly formula is implemented but little is done on its supervision, as a split remains between the conceptual capacity to connect the D&C typical of public works (design & construction) with the O&M integration required with PPP (operation & maintenance). In December 2012, England passed from the model of PFI (Private Finance Initiative) to that of PF2 (Private Finance 2). The changes concern several aspects: (a) the British PA acts as a minority co-investor; (b) contract times are reduced and some ‘operation’ services that cannot be amalgamated with others are removed (e.g. cleaning and safety) (c) greater transparency is introduced on the EFP assembly data (Economic and Financial Plan). The transition from PFI to PF2 took place after a rigorous analysis and diagnosis of all PFI projects arranged up to that moment. As of March 31, 2017, there were 715 PFI and PF2 projects based on LTC contracts (Fig. 6.9), 16 of which were under construction, for a value of 67 billion euros with an average of 83 million each. Every six months, the projects that exit the LTC due to the end of the term of the Long Term Contract (20–25–30 years) are removed from the total, and return to being “government” infrastructures. Of the 16 under construction, there is an investment program for education in Yorkshire and a hospital pavilion in Birmingham, of 138 and 48 million euros, respectively. The UK has an effective PPP monitoring system which a country such as Italy does not have.

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In Italy, the first generation of PPPs (social infrastructures, the equivalent of PFIs) saw the active intervention of three Regions: Lombardy—through Infrastrutture lombarde—Veneto and Tuscany. In the first of the three regions there were seven hospitals to be built prior to the enactment of Legislative Decree 50/2016 (national Italian law which implements the European Directives and introduces PPPs in a structural manner—social infrastructures and more); two actually remain to be completed (including the “Health City7 ”). The value of the investment is 1.2 billion euros, with construction beginning between 2004 and 2010. For all seven hospitals the tender was conducted with the system prior to Legislative Decree 50/2016 following more or less the same procedural model. The Veneto Region, still the pre-LD 50/2016 phase, completed four hospitals for 0.6 billion euros, and Tuscany four hospitals within a single structure of 0.4 billion euros. In Italy as a whole, if we take overall PPP interventions exceeding 20 million euros as a reference, the construction of hospitals represents 50% of PPPs. In the United Kingdom, the hospitals in PFI and PF2 projects represent 22%, with 130 interventions compared to 40 in Italy, with an average investment which is the same for the two countries, equivalent to 120 million euros per intervention. The lower number of PPPs in Italy—which has tried to resume all the interventions carried out—should not be interpreted as indicating partial data (regarding Italian) but as an absolute lower intervention of PPPs compared to the situation in the United Kingdom (Fig. 6.10). If anything, for Italy we must recognize the lack of systematic collection of data on PPPs, which instead takes place in the United Kingdom, with the addition also that for Italy, the data collected reveals a conceptual lack of culture with respect to the instrument of PPPs. Different types of data are combined: economic infrastructures with fees and social infrastructures with fees; concession of services not distinct from those of works; or the term concession is improperly used (Dalla Longa, 2017). In Figs. 6.9 and 6.10 an attempt was made—to the extent possible—to carry out a coherent count of the data with the verification of each individual project and its trend. Small PPP interventions are missing from the count. The current situation reflects Brexit, and thus with Great Britain, that more than others had pushed PPP (PFI) conceptually and operationally, now located outside of the EU perimeter. A series of actions and guidelines (EU, 2004) were adopted by the EU Commission to integrate the UK model developed by the Tony Blair government within the EU system. In the next few years, this issue could produce unpredictable developments for Europe itself. Economic and social infrastructure in the European model—Economic infrastructure, as discussed here, is only one of the components of the PPP model and the matching of urban infrastructure to the brownfield, but perhaps in the specific case the term to be used is ‘browngreefield’. Often the PPP, especially in social infrastructures (e.g. decommissioning of old hospitals and construction of new ones), is the construction of the new in often different places with an indirect link with the old.

7

See further on—Sect. 6.6, Case (1b): Infracapital.

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In Europe (EU) economic and social infrastructure have differed since 2014 and it is useful to consider them separate. In 2014 in Europe (EU) the state formally assumed a secondary role for the first time as regards economic infrastructures. This happens with the introduction of the ‘operational risk’ introduced with the EU directive of 2014/23. The primary relationship is that between economic operator and user. That means, it is the economic operator who must evaluate the demand for use of the service over time and organize the offer around this. The principle is very similar to what happens with activation and investment for any other economic asset. The main relationship remains between the lender (credit institution or fund) who is asked to provide the loan, and the economic operator who requests it, to organize the offer based on the analysis of demand. The two economic subjects, each from their own point of view, will evaluate the advisability and sustainability of the proposal. The state and the public administration will evaluate the service in terms of benefits for the community, utility, sustainability, and environmental and economic impact. They can also make an initial contribution not exceeding 50% of the value of the work, but they cannot substitute market risk, that is to say, the relationship between the user and the consumer required to pay the rate and the resulting revenues. This means that revenue and costs are regulated by supply and demand between the user and the economic operator. In the absence of profitability, the state (and the public administration) cannot intervene in support of the economic operator, on pain of generating a form of illegitimacy, that is reprimanded and sanctioned by the EU due to conflict with the EU directive. This principle of operational risk and market risk represents an epochal transition in the relationship between the state and economic infrastructure and between the state and the market. Operational risk must remain constant throughout the Long Term Contract and does not belong only to the first phase of the contract between the state and the economic operator. Social infrastructure (Hospitals, Healthcare, Assistance, Education and Universities, Social in general, Civil buildings, Prisons, etc.) when it is part of a PPP, instead responds to other principles. It is the state and the public administration that organize the demand: the economic operator organizes the offer. In organizing the demand, the public operator must replace the user and must be able to evaluate the evolution of the demand over time. It is not so much the operational risk that is transferred, as the construction risk (D&C) and the availability risk (O&M). Once the construction is finished, it will be a question of supplying the offer on the basis of the demand established in the planning and contract phase. An offer that is not able to respond over time to its initial assumptions leads to a reduction of the fee, that represents nothing more than the synthesis of the demand of the user, represented by the state that deviates from the offer. Therefore, indirectly, that market imbalance (‘vagaries of the market’) inherent in the economic infrastructure would arise. With the difference that while the market automatically activates the invisible hand, the state must instead be able to determine the non-payment of the fee with tangible and effective actions. In this case as well, there are strict rules to keep the construction risk and the availability risk within the economic operator’s perimeter.

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In this case, the state maintains a central role in the choice of a PPP and in the initial planning, which must verify the choice of procedure (traditional procurement, or PPP). At the heart of the choice and the rigor that must be implemented throughout the LTC there is the possibility of recording the investment off-balance sheet, that is to say, that the private debt for the construction of the infrastructure—never less than 50%—remains in the ‘belly’ of the project company (SPV) and is not entered in the public budget as a tender contract (public work) is. This is a fundamental step for states with high public debt that are required to respect the Maastricht parameters: in the European model, organizing the assembly of a social infrastructure through a PPP, if combined with off-balance sheet accounting, requires a strong increase in public management. The complexity and failure of the traditional PPP in Italy and in Europe—Urban infrastructure evolution needs PPP development (Boardman & Hellowell, 2017) and for this tools are put in place to demonstrate ex ante, regardless and questionably (Winch & Onishi, 2012) the convenience of PPPs. There is no doubt that we are living in an era of PPP (Hodge & Greve, 2019; Wegrich et al., 2017) however, in Europe there is a partial failure, or slowdown, of its first phase of the cycle (Winch, 2012) also for the delayed evidence of rising costs compared to those planned (Boardman et al., 2016). This does not mean that the PPP is dead, but that it is evolving and behind it, despite the revision of the contracts, it leaves failures or findings that no longer correspond (Posner et al., 2009). It is not the PPP that is in question, but its balance. We are in a complexity that continuously shapes the PPP in which financialization is an accelerator and a new dimension. There is a dynamic, complex and not obvious intertwining with the urban infrastructure. This is a different view from those who look at the PPP as an entirely neo-liberal evolution of the city (Hackworth, 2006). The greatest criticality lies in the complexity and difficult connection between the state and the market in the assembly of a PPP. It is the connection between profit and equity that is weak within a Long Term Contract. It is this evolutionary phase and within this the element of criticality must be found. The transition from public work to LTC of PPP draws a highly critical path in many segments of the assembly. Technicality, specialism and conjunction of specificity of the State and the market are confused. In many cases, a symmetry that is difficult to synthesize is created. The paradigms of an economic operator are different from those of a public operator who is the political decision-maker called to govern public affairs for an extremely limited period compared to the assembly of an LTC or public officials or managers who are measured on efficiency criteria effectiveness not comparable to that of the economic operator. In the first case, the individual, even if replaced, responds to precise rules, as does the organization that promotes him. For the public operator, the criteria pass through knowledge and individual value criteria not linked to strong general rules and the organization itself that supports its action often experiences randomness and non-structurality. The comparison between the assembly of the public work and the PPP, shown in the Fig. 6.11, is significant. In the public works (Fig. 6.11-1) the essential steps of the assembly are: (a) programming, in some countries such as Italy, which is not widely practiced (Wegrich

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Fig. 6.11 Difference between a traditional public works assembly process and another of PPP (DBFOM)

et al., 2017, p. 7); (b) the design carried out often, and increasingly, by external designers recruited through a public tender; (c) carrying out the works with an engagement of the executing economic operator through a tender managed by the public operator, in some cases the economic operator completes the design at this stage; (d) the delivery of the work created to the public body and use of this; (e) subsequent maintenance interventions through other economic operators always found through a public tender. All the economic operators intervening in the assembly are strictly, almost always, not connected to each other. The choice of actors is random, the connection hinge are represented by the competitions often performed by different people or organizations. The PPP, on the other hand, presents an integration of interests, budgets, actors, long and intertwined processes, professions and organizations that are structured for a long time in the assembly of an infrastructure. For the resulting assembly, the infrastructure resembles a company, albeit quite particular. The integration of this plurality of subjects, tools, interests and organization is almost never accidental. The passage in Fig. 6.12 from (a) to (b) requires that all phases and sub-phases are in sync and controllable, during the project phase, under penalty of slowdowns and sub-phases of the assembly with serious results on the dynamics of completion of the infrastructure urban. The assembly—The term “assembly” (assembling) is the one that perhaps lends itself best to the phase that goes from the conception to the end of the cycle of a PPP. This also implies the transition from design to project for assembling. We must first define the term montage; it is used in different ways: McKeenEdwards and Porter (2013) use it in reference to the montage of value and power within the governance of “global finance”. In an archaic sense and with a specific dimension with art, editing is defined by Seitz (1961) as bringing out disparate elements without relationships with others; DeLanda (2006) and Wise (2011) define montage as a set of elements that enter into a new relationship with an agreement or with a distinctive meaning or purpose. The terms “relationship”, “agreement” and

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territorial site remediation (brownfield land)

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Identification, composition (B) Kd; Ke Risks and Guarantees Business plan

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Feasibility study (master plan) (functional building model) (technical report)

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Fig. 6.12 Different criticalities in the assembly phase of different PPPs referred to complex EPC (a), (b), or more traditional formulas of DBFM (c), or DBFOM (d). Notes Phases in which PREM Lab is involved (dark gray) to remove the criticalities of a complex assembly, such as that of a PPP. In all four cases (a), (b), (c), (d) the assembly is not yet concluded

Risk matrix

project variant

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create new company (newco)

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“purpose” give the montage a structurality. From a social point of view, Deleuze and Guattari (1988) indicate montage as the putting together of often conflicting elements; for this reason it can amalgamate hybrid elements concerning knowledge, feelings, emotions. It is in the production that we find the main indications on the concept of assembly starting from the physical place (the factory) in which all this takes place. Warnecke and Hueser (1994) define the industrial product as the assembly of finished products into several individual parts, which have been produced at different times and separate places. The editing evolved according to the two authors and the sum of different sessions, of problems within a whole of production and engineering. The reference is to the automobile, in which robotics is the assembly of everything that can be separated into simple step-by-step operations and that include everything. Pham et al. (2016) indicate assembly as a product that circulates and is assembled not in one place but in several countries; the reference is to high technology and the different nations are linked together by a network. And this is the evolution of the assembly of the “factory”. Even in design, or in the construction of machines, there is an idea of assembly that well highlights the evolution of this concept over time. Boothroyd et al. (2011) explain the transition from manufacturing without design (or with a low presence) to one of DFM (design for manufacture) and DFA (design for assembling) growth and an integration of these into the DFMA (design for manufacture and assembly), as well as using the DFA as DFX knowledge The final ‘X’ indicates the specific property of technical products or more often their related professionalism (Dynybyl et al., 2016; Hosnedl et al., 2016). If we reduce the field to construction, assembly is interpreted in a different way. Winch (2010) considers the editing as the reference perimeter and the place of production (as in part, and in another form, took place in Warnecke, Hueser 1994, and in Pham et al., 2016), that is to say as “standardization” or “pre-assembly”, with the use of standard or mobile components, i.e. prefabricated, pre-assembled, assembled on the construction site: structured inside the “factory”, near the factory or on the construction site. This whole issue is destined to grow with BIM (building information modeling) (Ciribini, Dalla Longa, 2014). The temporal change of the montage is implicit in the reference to production. We must ask ourselves whether the subject “montage” or the object “as happens in the specific case of montage” is more important. The answer is that both are important: in the short the object of the montage, in the medium-long the subject. Pratt (2011) instead considers assembly as the component that consists in starting the construction project and for this reason it is a part of the work that can be considered separate from the others; at the metaphor level and the “concrete in the wall”. It is also compared to the identification of “work packages”: the sequential bricks that make up the building. In both cases (Pratt, 2011; Winch, 2010) we are inside the construction process: in the first case the problem arises with the assembly of the production perimeter (Winch, 2010), in the second case (Pratt, 2011) the assembly represents the homogeneous sequence of the project. The concept of assembly (assembly) expressed is that of “applied management”. Lotter (1989) states that the assembly is based on a large number of single parts,

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produced at different times and by various production processes; the objective of the assembly is, on average, to compose a highly complex part with specific functions in a specific period of time starting from individual parts. Nicholas and Steyn (2012) indicate that the assembly is an assembly system of parts where the parts are influenced by being in the system and for this reason the reference remains project management. The assembly proposed here requires that the concept of process be clear; with the long-term contract (LTC) the assembly does not coincide with a short time but with a continuous assembly, where disciplines change and integrate and, at the same time, the individual parts risk being asymmetrical if not thought of as integrated. The culture of integration must be all the more consistent the longer the life cycle of an assembly is extended. Both the need for integration and the life cycle change over time, as does the type of assembly. What has been described concerns the assembly of a complex output that belongs to a production process. The assembly of a PPP is something different, it concerns at all stages different interests and paradigms that can create continuous asymmetries beyond the technicalities. There is a different language that must tend, amidst disparate difficulties, to be unified. In the assembly of a PPP of the DBFOM model, 60 variables are indicated here to describe its complexity, all the parts must be broken down even if within a single wp (work package), others must also be removed based on the kit to be given to the “assembly” of the PPP. Assembling an intervention as a sum of non-communicating disciplines could make sense in a prototype phase of the PPP (t1); it can no longer be so in a phase of risk maturity, nor does the evolution and globalization of the urban infrastructure require it. What has been indicated can no longer be the sum of different cultures, skills and specialisms. Without this sharing, the PPP is destined to run aground and not come to a conclusion, or to turn into a pathology. Knowing how to converge around risks becomes fundamental in a phase of risk maturity. Lack of awareness and lack of measurement is now no longer possible. However, for a PPP the greatest difficulty does not concern the integration of different disciplines and skills (Fig. 6.13), but rather the connection of interests, times, organizations, sensitivity, actions responding to different needs in which the contract alone, unlike a public work, no longer represents the relationship between public entity and economic operator. The main criticalities that can be found concern: (a) The setting and programming phase, which is strategic to correctly set up the assembly process. There is a substantial asymmetry between political decision maker and editing (Wegrich et al., 2017). (b) The reunification of planning, in which it is clear what the PA wants and how it wants it. A total delegation to the private on this aspect is intended to reify the problems in the phase of the process that follows.

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coordinated/integrated (Projet Manager/management)

1

2 3 4 (assembly) life cycle 5

6 7 Programming

D&C

O&M

Fig. 6.13 (Assembly) life cycle: specialism and Interdisciplinary relationship within a PPP. Note The numbering corresponds to: (1) european and national law; (2) administrative procedure; (3) accounting; (4) finance; (5) risk; (6) other specialisms; (7) facility management, all these specialisms coordinated/integrated by the project manager. Source Dalla Longa (2017)

(c) The correct activation of the competitive dialogue in all its phases and the possibility of interrupting it if deemed not convenient for the participating subjects, including the PA. (d) The phase of selecting the contractor and the contract. The underestimation of this phase, which is very frequent, is due to the lack of importance given to planning and to considering the tender as a separate component from the process with a settling culture, specialized and not very communicating with the other components of the process. (e) The financing phase. This is by far one of the most critical components of PPP development (and concessions). Hall (2015) and others (Chan & Worth, 2016) input to this phase and its problematic nature the reduction of the number of PPP projects in the implementation or investment reformulation phase; or an extension of the time between the end of the tender and the financial close, with an increase in costs (Voordijk et al., 2016). Others (Dalla Longa, 2017) attribute the reduction of the PPP in the most critical period of the crisis to the internal stability pact (inability of local authorities to provide public contributions to private capital). (f) The phase of constitution of the SPV: it must take place in a phase in which all the part of the loan has been resolved and the PA is aware of the “real” implications on cash flow. (g) The construction phase, in which a rift is not created between those who are called to build quickly and those who will then be called to use the asset. It has been found in some researches carried out (Dalla Longa, 2017) as many errors projects are downloaded ex post with variants in the O&M phase, or fees are paid that correspond to plants built but not used.

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(h) The O&M phase, in which the major problems, unsolved questions and pathologies not dealt with correctly in the previous phases are poured out with some main actors who have now exited the process leaving to others the management of pathologies that in a phase of maturity risk are no longer manageable. Each of these macro phases contain different outputs that must find a synenrgic integration between them. Looking for a new PPP—The Future of PPPs and initial conclusions. The future of PPPs and the use of private capital will be mandatory and necessarily continue to grow. In 2020, the International Monetary Fund estimated that in July 2020, states, through new debt, or near-term direct fiscal commitments, had used 11 trillion dollars in response to Covid-19, and that the amount would double or triple by the end of 2021. Given this situation, others (Oxford Economics, 2017) have foreseen investment in infrastructure of 94 trillion from 2017 to 2040 (23 years). Furthermore, to cover needs, following the trend, there would have to be an additional 15 trillion dollars, with an increase from 3% to 3.5% of investment as a percentage of GDP. The reference is to trend forecasts made three years before the Covid-19 pandemic. With the new scenario, the trend can be guaranteed only through a revision of the composition of infrastructure financing and PPPs, perhaps reformulated. This will inevitably lead to a strong genetic mutation of urban infrastructures. The PPP model cannot be unique on a global level; while techniques (e.g. project finance, leasing) formulas (e.g. DBFOM, EPC, but there are many others— Dalla Longa, 2014) and management and organizational purpose companies (e.g. SPV: Special PurposeVehicle, ESCo: Energy Service Companies; and AMC: Asset Management Company) are. The difference consists of types of infrastructure and the organization of the public administration, and for developed countries the ability to create a new integrated culture. Often there are barriers that prevent the rapid development of the PPP model. PPPs represent an important line of global development which can however be combined with the segmentation and different nature of states. An acceleration on the old PPP model can still be seen in some states (emerging countries) but there is a blockage or slowdown in others (developed countries). In summary: A PPP is presented as a possible area (perimeter) from which to draw broad and in many ways unexplored development, an instrument able to channel the enormous mass of unused financial resources to produce collective benefits in the ‘saver-userconsumer’ chain. However, there are also very critical issues to be addressed and reconciled.

6.4 Theoretical and Operational Elements of Financialization The use of the term financialization (or financialization)—there is a prevalence in the academic field for the use of the first term over the second, due to the prevalence

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of the US rather than UK spelling of the concept (Aalbers, 2019)—began to have a strong impact in the last decade (Mader et al., 2020). Its use began earlier, but it is in the last decade that the term took on substance and different meanings. One of these is the financial services revolution and the rise of non-bank financial institutions (Aalbers, 2019) which have always represented the traditional financing of public works. Another, related to the first, is financialization as assetization, that is the transformation not only of real estate (Aalbers, 2017), but also of infrastructures as assets and of another range of commodities and goods transformed into marketable financial assets (Aalbers, 2019) which, however, for infrastructures ends up taking on a completely new character given the traditional relationship of the latter with users and the state. One of the effects of financialization is the reduction of bank financing to production companies (real economy) to the advantage of the assets that best attract financing. The relationship between banks and enterprises has changed in favor of financial assets (Lapavitsas & Powell, 2013). According to Krippner (2005) it follows “an accumulation model in which profits accrue mainly through financial channels rather than through trade and the production of raw materials.” It is ultimately in this century that clarity was reached on the financing mechanism through financial assets (including real estate first and then infrastructure) and then assetization and financialization. Assetization saw pension funds enter the field (Clark, 2000) as well as other financial institutions whose criterion for funding takes on new, not always rational characteristics (Chohan, 2018) and new risk categories and a different way of dealing with risk arise (Birch, 2017; Clark et al., 2006). Pension and insurance funds and those involved in real estate as developers therefore establish a strong attraction of financial funds with large cities and global cities. In the last 10 years, starting from 2011, there has been an exponential opening and growth of academic and literature contributions on financialization with content that is interdisciplinary, regards economics and geography, and is more separated in terms of the amount of business and finance and political science involved (Mader et al., 2020). This is also a sign of a phenomenon that is beginning to present itself with a strong structural trend, even if this growth leads to gaps (Christophers, 2015a, 2015b) and to passages not fully demonstrated by scientific evidence that would require more rigor (Krippner, 2011). For example Lapavitsas (2011) identifies several more or less radical approaches to financialization, while Davis and Walsh (2017) intervene in the differentiation between financialization and neoliberalism. Ultimately, three types of risk are identified regarding the term financialization used in an extended form. That is to say, the term was diluted following the spread of the financialization narrative, and therefore by the extensive movement outside of its disciplinary boundaries (Christophers, 2015a); or, that there is a conceptual extension (Engelen, 2008) to the point of becoming a meaningless ‘meme’ (Mader et al., 2020). Contrary to these two considerations, the term financialization could be considered within a closed concept and system in which the causes are linear and an artifice and detachment is created with the change of the object (finance) especially if there has been a simplification of the cause and effect (Aalbers, 2019) of financialization. In any event, the change in the present and the post-Covid-19 phase will be disruptive. On the one hand, there

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is a strong attraction towards the new term financialization and assetization, with all this entails for the impact it has on global cities, real estate, and brownfield infrastructures; on the other, though, caution is needed for the use of the term as a whole. As regards real estate, Wijburg et al. (2018) indicate the passage from 1.0 to 2.0, from a phase where the financialization carried out by funds was mainly speculation, to another, more advanced phase. The shift is from the method of buying at a low cost to then sell at a higher price, defined in a fairly short timeframe, which produced gentrification (Brown-Saracino, 2013; Smith, 2017), to a phase 2.0 of financialization in which times lengthen and become a central feature of the urban structure where asset management has a longer life cycle. Another role is taken on by private equity funds (Beswick et al., 2016) such as Blackstone (the second-largest real estate fund in the world in terms of turnover and in the top twenty-five as an infrastructure investment fund) and Colony Capital (one of the top thirty-five worldwide in real estate and among the top thirteen in infrastructure investment). these funds act as ‘Global Corporate Landlords’ (GCL) in London and in large global cities, helping to coin phase 2.0 of real estate financialization (Beswick et al., 2016); the same has been documented for large global cities including New York and Berlin (Fields, 2015; Fields & Uffer, 2016). It is in the last decade that financialization has been combined with infrastructure (O’Neill, 2013, 2019; O’Brien & Pike, 2017; Pike et al., 2019). There is no consideration that leads directly to global cities, or to large urban centers; but it is a particular attention to the evolution of the state (O’Brien & Prike, 2017; O’Neill, 2019) and to the specific fiscal crisis of the state that creates the conditions for financialization (O’Neill, 2019). With financialization applied to infrastructure, we are witnessing an assetization of infrastructure without a clear distinction between economic and social infrastructure. In many cases, the infrastructure considered is brownfield, especially by pension funds, such as the Australian Macquarie, and therefore, from the more general analyses of O’Brien et al. (2019), financialization is indirectly part of urban infrastructure. In the works cited above there is a reference to financialization and urban infrastructure, but not to global infrastructure, which is found in Torrance (2009) and which can ideally summarize the beginning of some correlations with assetization, infrastructure financialization, and global infrastructure market. In the summer of 2006, Britain’s largest water management company (Thames Water), serving 13 million users in London and much of Southeast England through 31,000 km of aqueducts and 67,000 km of sewer systems, was the source of a bidding war among various investment banks, infrastructure managers, investment funds, and private equity firms. The Macquarie fund won the tender with an offer of 8 billion pounds (16 billion dollars), moving the water utility into institutional investors. Sixteen institutional investors from around the world, including pension funds from Canada, the Netherlands, and Australia supported the offer made by of Macquarie. They are now co-owners of the London water network and these same institutional investors look to the water network for recovery of interest and return on invested capital, just like any investment in any other asset.

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In terms of academic publications and literature before 2009, the number of articles with the title infrastructure had grown, but not exponentially, as happened subsequently (Pike et al., 2019) just as, in the same period, articles having the word financialization as a reference ‘topic’ increased five-fold (Mader et al., 2020). In his analysis, Torrance (2009) does not combine global infrastructure with global cities as the action is ‘defocused’. In the 25 cases reported globally, pension funds, in the decade prior to 2009 (especially in the years 2004–2006), often acquired corporate control of economic infrastructures that are not localized necessarily in the context of the global city. Or better, such infrastructures are indirectly located within global cities, or large cities, but cities are not the point. The issue is the assetization of infrastructure on a global level by pension funds that are starting to enter the finance scene, in which the Australian Macquarie fund alone has purchased and acquired control, a stronger position, and a presence in nine economic infrastructure companies (water, electricity, gas, airports, and rail transport) in seen different countries among Northern Europe, North America, and Australia. These are purchases of brownfield infrastructure located in high income developed countries for a few hundred billion dollars. The same happens with the Canadian pension fund, or to a lesser extent Morgan Stanley (e.g. parking lots) or Goldman Sachs (ports). The major contributions on financialization before the last decade had a reference to the city (Pike et al., 2019), but not to the global city. Or there was a reference to globalization and infrastructure as an asset, but no reference to financialization (Torrance, 2009), partly because the literature on financialization came later. It is these elements that must be composed. O’Brien and Prike (2017) analyze the UK, US, and Australia and indicate how financialization is a negotiated and disorderly process and takes place in different geographical contexts. To activate financialization it is necessary for there to be some preconditions: the transformation of the state and a change of regulations. The main object of analysis is not the city, although it is present (Pike et al., 2019) but the different relationship between the state and the market (economic operator). O’Neill (2019) indicates a three-component relationship that characterizes the relationship between infrastructure and financialization: organization, capital structure, and regulations. In the first of the three (organization) there is the emergence of several infrastructure financing entities with different economic interests such as direct investors, closed funds, open funds, platforms vertically integrated corporations, merchant banks, sovereign wealth funds, pension funds, and insurance funds. Lenders, their organizations and funding lines, have a different way of considering assets: (a) (direct investors) in terms of autonomous and sufficient equity management able to control the operation of the infrastructure; (b) (closed funds) holding a portfolio of selected assets with fixed return expectations before repayment of capital; (c) (open funds) with a dynamic portfolio and more inclined to speculation, without a specific closing date, in evolution and with different investment times; (d) (pension and insurance funds) in a more prudent way linking it to a safe inflation recovery and reduction risk. Among those listed there are also lenders and more complex credit lines.

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In the discussion of financialization and assetization, we arrive at the global city or urban infrastructure because they dovetail, not necessarily due to a strategy on the part of the players, but by functional induction linked to the sum of several filters or matrices. According to O’Neill (2019) capital structure means a mix of finance assembled to satisfy credit by creating new needs for the asset within its Long Term Contract. There may be a sum and often divergence of interests; on the one hand the interest of the traditional component of users, and on the other, that of the return for the saver, retiree, speculator, investor, or other various interests incorporated in the asset class. With ‘assetization’, in the transition from public work to urban infrastructure, some important aspects change: the state-user-voter relationship and the financial mix that enters the infrastructure. Furthermore, the nature of the infrastructure itself changes with the Long-Term Contract. It is worth remembering that this is a nonnegligible evolution induced by financialization. Tensions are growing in the amalgamation of finance within the process of assembling an infrastructure, and the additions to the contract increase, effectively shifting the axis of the relationship of the infrastructure with users and the state. There is nevertheless a further structural aspect, to involve those who invest to ‘park’ financial capital in infrastructure. Global cities are those that, due above all to their shape and characteristics, attract investments and those who invest. Attracting and being attracted also requires high planning skills on several fronts. For this reason as well, investments are placed within defined areas in which the language of globalization is often a formidable landing point. Due to its high density of infrastructures and its high capital intensity, the city is able to sustain investments in infrastructures in the long term, better and more than other areas. Although according to Halbert and Attuyer (2016) these investments, as with many infrastructures, remain invisible to most. Except, such as infrastructures, when they collapse (e.g. the Morandi bridge in Genoa, see page) and in cases of more on less comparable inconvenience (e.g. the subprime crisis which revealed the interconnection between household mortgages and the capital market), they become highly visibles. This may be one of the reasons for a disconnect between assetization, financialization, urban infrastructure, and global cities. The proposal made by Halbert and Attuyer (2016), without touching these different categories, is to consider financialization as a new form of urban production. Other authors such as Langley (2018, 2020) place financialization in relation to assetization with a reference to urban infrastructure, but with a weak reference to globalization, especially with reference to global investors (Langley, 2018) and to the global financial crisis (Langley, 2020). However, there is no specific reference to globalization as such and to global cities; just as the reference to cities is weak, the only link is with urban infrastructure. This also concerns other contributions where there is a high reference to infrastructure (and not to urban infrastructure) and to assetization and marketization, but none to globalization, financialization, or global cities (Birch & Siemiatycki, 2016). The term financialization, however, overlaps with

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assetization. It is the term financialization added to assets, the market, and urban infrastructure using Bryson et al. (2018) without ever referring to globalization and the city or urban infrastructure. Cities, urban infrastructure and financialization are the references made by Kirkpatrick and Smith (2011) yet in this case as well, almost without referring to globalization. The setting of this book has as its center of gravity financialization, urban infrastructure, globalization, and more specifically the global city and assetization, aggregations which are not very present, all together, in the previously mentioned contributions. Here the question is to verify financialization with respect to the center of gravity indicated (Fig. 6.14). There are not many studies that place the center of reflection within the center of gravity. There is a trace of this in the evolution of the works of O’Brien and Pike (2015), O’Brien, Pike, et al. (2019), partly in O’Neill (2009, 2019) and to a lesser extent in Jonas et al. (2019) who, without using the term financialization, introduce the global infrastructure PPP, or Farmer and Poulos (2019) who having as a reference the now known case of Chicago in which many funds are involved in an experimental form (Farmer, 2014), without going through the term financialization (which instead he used in 2014), but using that of financializing, indicate in addition to the global city also global infrastructure, finance, and investment. In 2015 and 2018, O’Brien and Pike (2015) and O’Brien, Pike, et al. (2019) addressed London not as a global city as such, but as a global city-region; there is also an attempt to mark a difference between (global) city region (Scott, 2002, 2008) and global city (Sassen, 1991, 2010). However, precisely the analysis of London and indirectly of some major world cities, make it clear how the needs of urban infrastructure are differentiated, and evolve, in global cities or city regions. It is not to be forgotten that in the ranking of global-cities, according to the Comparative

globalization global city urban infrastructure financialization

infrastructure

city assetization marketization

Fig. 6.14 Breakdown of the technical-operational elements of financialization

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Business Connectivity (GNC Global Network Connectivity), London is in first place (Sassen, 2019; Taylor & Derudder, 2016). In terms of demand for urban infrastructure, several peculiarities emerge in regard to Greater London: – It grew by 5% from 1996 to 2012 in terms of GDP, considering the entire United Kingdom as 100%. All other UK Regions cede percentages in favor of Greater London (Travers, 2015). Greater London alone accounts for 1/5 of the entire UK GDP. – 2014 data elaborated and compared by Berry et al. (2015) showed that for London investments in infrastructure were at a per capita level (equal to 5,305 pounds per person) 12.8 times higher than those of the North East (the New Castle upon Tyne area); 8.6 more than the East Region; 8.7 more than the West Midland Region (the Birmingham area) and 2.7 more than the North West Region of Liverpool and Greater Manchester. The concept of urban infrastructure and global city is clearly explained by the relationship of these data. There is also a correspondence with annual GDP production present in these regions (Travers, 2015). – The London Infrastructure Plan 50 (LIP, 2015) indicated infrastructure investment requirements for London of 1.324 trillion pounds from 2016 to 2050. However, the amount reported as available was significantly less than 1/5 of the possible public resources. The calculation mainly considers traditional infrastructures, albeit largely brownfield ones (public buildings, transport, energy, schools, water, waste, etc.). An example is public transport, with a requirement of 466 billion pounds and public resources available in the same period of 89 billion pounds (19%). The evolution of urban infrastructure was not considered in the calculation. In the last decade, London has launched a detailed policy of financialization of urban infrastructures (e.g. public water with Macquarie; Allen & Pryke, 2013; Pryke & Allen, 2019), but it is above all with the subways that there has been a massive policy of creating an interconnection between PPPs and real estate (pension funds and sovereign funds, e.g. the Malaysian Sovereign Wealth Fund for the Northern Line Extension), experimenting with different formulas, including innovative ones for those years, so much so that the mayor at the time, Ken Livingstone, claimed that the proposed PPP was too complex (O’Brien & Pike, 2015) to be managed. The same view was expressed by TfL (Transport for London) which stressed that PPP contracts were “by far the most complex contractual arrangements that had ever been attempted to apply to an urban mass transit system” (TfL, 2002, p. 2). Some financialization policies failed (Metronet in 2007; or in 2010, Tube Lines, a private entity, which had won a 30-year contract for the Jubilee, Northern, and Piccadilly lines; O’Brien, Pike, et al., 2019). In the late 1990s, the London Underground was in dire need of new investment, and repairs and maintenance were at risk. These are the elements that for global cities, led urban infrastructure, financialization and assetization to take shape within brownfield infrastructures. Recently (2016) new joint ventures (the Property Partnership Framework) were born for London, led by TfL, with urban developers (13 of the major London and global developers) with the aim of connecting real estate (including a share of social housing) and transport

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infrastructures (TfL, 2016). These are new forms of evolution and financialization of urban infrastructure in a global city. The relationship of financialization with infrastructure can take various forms. From the purchase and management of the infrastructures then changing the nature of the infrastructures themselves, to interventions through joint inventions, the creation of special purpose companies (SPV, ESCo, etc.), to direct intervention through the management of debt or equity (different lines of financing), determining part of the trajectories or strategies of the infrastructures. The change of nature with financialization does not only concern urban infrastructures, but also largely concerns real estate (Botzem & Dobusch, 2017). In financialization, there is also the interconnection between the urban infrastructure (brownfield) and real estate. One of the theses that leads to financialization is the increasingly important and growing weight of finance within the assembly of infrastructures. There is a change of interests, logic, and stakeholders that have an increasingly massive impact on the assembly processes of an infrastructure and this is greater where the infrastructures are located, in large urban centers. Financialization is combined with globalization and this is an element that is added to other considerations, in part because the financial actors are often the same and operate on a global level. There are also significant implications with modifying the assembly. The complexity of the assembly is growing, along with the complexity of governance, there are new forms of accountability, the nature of the state and the shape of cities are changing, and the concept of financialization is merging with globalization. There are also new forms of inclusion/exclusion and there is a need to think quickly about new interdisciplinary skills. One of the expressions of financialization is the rapid growth and the presence of new financial actors that enter the financing of infrastructure and that join forces with real estate in global cities and large urban centers. In recent decades, finance has acquired an ever-increasing weight compared to traditional production tools. It is both the cause and effect of other transformations. One of these is the transformation of the state, which in turn is the result of other transformations. Even if the term cause-effect is poorly demonstrated, there are contributing causes of transformations including the relationship between the state and the market, and the globalization that follows is one of the pre-eminent transformations that drive the transition from public works to urban infrastructure. This weight is combined with globalization and large urban centers and global cities. What is part of financialization effectively sanctions the change of nature of urban infrastructure towards the growth of greater complexity and the change of actors, scale (prevalently from national to global) languages, professions, and accountability. All of this takes place in an inorganic form and with differentiated and heterogeneous logics, more concentrated in large cities. The use of the term financialization indicates a change underway rather than driving it. It is significant that there are different categories and specializations that use the term financialization to explain the changes, even going so far as to define the risk of making the term financialization useless due to the excessive number of meanings.

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Financialization enters the obsolescence and replacement of significant parts of the city on a large scale. Financialization enters first into real estate and then into urban infrastructures. An growing role is played by dedicated funds or loans in the form of debt, equity, joint ventures, or corporate financing for urban infrastructures. The ordinary financing from the Italian State for public works in infrastructure (tenders) amounted to 27 billion dollars in the year 2020. In the same year, the fund managed by the top fifty funds was equal to 257 billion dollars, almost ten times more than the traditional intervention of the Italian state. However, the territorial references are different, even though most of the investment from funds is located in Europe and the US. The top three funds related to infrastructure (Macquarie infrastructure, Brookfield, and M&G) invested in infrastructure 123 billion dollars in 2020 compared to 2019. The allocation of funds’ resources to real estate began earlier and is much greater than that allocated by the same funds to infrastructure, although in recent years the percentage of resources has tended to be inverted, with the passage of non-marginal shares from real estate to infrastructures (Fig. 6.15a, b). An analysis of the nature of the top 100 funds shows that for infrastructure, the top funds with the most resources to be assigned and managed are those of a global nature with a global profile; they are also those that manage most of the resources to be transferred in different forms to urban infrastructure. In an equal comparison with the funds relating to real estate, a greater concentration in the management of funds by the relative few players emerges for infrastructure. The top three funds investing in infrastructure financing account for 42% with respect to the other 95 main funds, compared to less than 20% for rea estate; this if the same metric were to be applied. It follows that those who intervene through funds in infrastructure financing are more concentrated in the tip of the pyramid (a few large funds), for real estate, on the other hand, a greater distribution from top to down prevails (Fig. 6.16). Figure 6.15a, b show how the allocation of funds and institutional financing (f & ii) have grown in recent years for both Real Estate and infrastructures. We are witnessing a rapid and progressive growth of the ‘assetization’ and in particular a greater growth in infrastructure financing compared to Real Estate. The phenomenon did not stop even in the face of the 2020 pandemic. Where there has been a slowdown in Real Estate this has been replaced by infrastructure financing. It is a long and structured trend that is difficult to break. The different weight of a few (f & ii) on the total considered as regards the financing of infrastructures represents today a characterizing datum. A sign (as shown in Fig. 6.16) that the (f & ii) at the tip of the pyramid on Real Estate are more traditional and conservative and mainly have other financing within the portfolio with a substantial share of Real Estate. On the other hand, the large funds involved in the financing of the infrastructure are more focused on the highest part of the pyramid, both in absolute values compared to other investments and in relation to the remaining forty-five out of fifty (f & ii). Although in the last year (Fig. 6.16) there is a slight rebalancing of the funds paid by the remaining forty-five funds out

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155

a 6000 5000 1429

4000 1055 798

3000

611

2000 2463

1000

3576

3143

2890

0

Real Estate

Infrastructure

2021

35%

2020 Infrastructure

9%

14%

17%

31%

b

2019 Real Estate

32%

2018

> % 2018

> % 2019

> % 2020

Fig. 6.15 a Infrastructure and Real Estate: funds and private institutional investors (f & ii—the world’s 50 largest infrastructure and real estate investors; billions of dollars invested by (f & ii); different years; absolute values); b Infrastructure and Real Estate: funds and private institutional investors (f & ii—the world’s 50 largest infrastructure and real estate investors; % increase in each year from 2019 to 2021 in dollars invested by (f & ii). Source Our processing on IPE Real Assets (Magazine—International Publishers): Research and data, The top 100 global investors, different years (2017–2022)

of the fifty as regards the financing of infrastructures, a sign of a progressive level of maturity and more widespread sharing of financing of (f & ii) on infrastructures. The Real Estate financing of the major funds extends over several continents and in particular within global cities. It is evident that different funds are intervening globally in all regions of the world. Table 6.1 also shows how there is a strong growing intertwining between the financing of Real Estate and that of infrastructures.

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6 The Financialization of Urban Infrastructure

100% 80% 60% 40% 20% 0 2020

2021

2020

real estate da 1 a 5

2021 infrastructure

da 6 a 10

da 11 a 50

da 51 a 100

Fig. 6.16 Infrastructure and Real Estate: funds and private institutional investors (f & ii—ranking of the 100 largest infrastructure and real estate investors in the world). The reference is the % distribution of—f & ii (top 5, from sixth to tenth and so on) and the results of the funding by ranking, 2020, 2021. Source Our processing on IPE Real Assets (Magazine—International Publishers): Research and data, The top 100 global investors, different years (2021–2022). Infrastructure = 100. How much do the top 5 largest funds contribute (2020, significant data: 19% for Real Estate and 42% for infrastructure); how much the second 5 funds contribute (from 6 to 10th place in the ranking), how much contribute the 40 intermediate funds ranging from 11 to 50th, finally how much the remaining 50 funds that covering the positions ranging from 51 to 100th

Table 6.1 Infrastructure and Real Estate: private funds and institutional investors (f & ii—ranking of the 50 largest infrastructure and real estate investors in the world). For each (f & ii) it was considered whether the financing referred only to Real Estate (a2) or only to Infrastructures (b2) and if it referred to both, how much of (f & ii) was recorded in Real Estate (a1) and how much instead in infrastructure (b1); 2020 Real estate (a) a1

Infrastructure (b)

1,551

b1

Total

References (a)

(c) 656

(a1+b1)

2,207

References (b)

%(a1; a2/tot)

%(b1; b2/tot)

49%

62%

a2

1,593

b2

399

(a2+b2)

1,992

51%

38%

tot

3,143

tot

1,055

tot

4,198

100%

100%

Billions dollars; a1 (f & ii) presente sul Real Estate ma anche sulle Infrastrutture; a2 (f & ii) presente solo su Real Estate; b1 (f & ii) presente sulle Infrastrutture ma anche sul Real Estate; b2 (f & ii) presente solo su Infrastrutture Source Our processing on IPE Real Assets (Magazine—International Publishers): Research and data, The top 100 global investors; see Fig. 6.15, year 2020

In part this is due to a particular phenomenon, that of infrastructure financing, which is more recent after all, and in which the first players quickly took the position in the ranking and began to shape infrastructure financing. Among the five funds are those analyzed in Table 6.2. These are actors, which compared to the first five

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157

involved in the financing of Real Estate, have almost the same weight despite different proportions in the financing of the two sectors (Real Estate and Infrastructure). It almost does not mean the same weight today, but a tendency towards a possible alignment. Many (f & ii) that invest in infrastructure are also involved in the real estate sector, so there is an intertwined strategy between investing in infrastructure and real estate.

Box 6.3 Data comment The comparison should be made with Fig. 6.15a, year 2020 in which the financing of (f & ii) for Real Estate was equal to 3,143 billion dollars, while the financing for infrastructures was equal to 1,055 billion dollars for a total total of 3,143 + 1,055 = 4,198 billion dollars. Of the 4,198 billion dollars, the component of each (f & ii) that added a share of financing on Real Estate (a1) to the Infrastructure (b1) was 1,551 (a1) + 656 (b1) = 2,207 billions dollars; while the component that concerned only Real Estate (a2) or only Infrastructure (b2) was 1,593 (a2) + 399 (b2) = 1,992 billions dollars. They are considered only the top 50 (f & ii) if we had extended them to the top 100 (f & ii) it could happen that some (f & ii) with a ranking among the top 50 (f & ii) would had either a financing share in the top 50 (Real Estate) and a share among the remaining 50 (from 51 to 100) for Infrastructure and vice versa for Real Estate. However, this count that takes us away from Fig. 6.15a is marginal and does not exceed the 87 billion dollars so it is omitted from the calculation of Table 6.1. Table 6.1 shows how for the top 50 institutional (f & ii) funds and lenders, those with a prevalence of real estate, historically more structured, in 2020 divided their interest between a prevalence of real estate, but with an investment also in infrastructure, a sign of a new contiguity and expansion of its business with infrastructures. It is an expansion of the concept of ‘assetization’. This is also present with predominantly infrastructure funds (62%), a sign of a double intertwining between Real Estate and infrastructures, but there is a share of institutional funds and lenders (f & ii) that intervene exclusively on infrastructure (38%). This is further proof of the phenomenon of global cities and urban infrastructures seen as one and the same integration. Figure 6.17a, b further highlight how the (f & ii) that finance infrastructures and real estate are globally branched and at least the major funds intervene in all geographical areas with some peculiarities: (a) The financing of (f & ii) on infrastructures appears with much more intertwining, ramifications and globalization than in Real Estate. For infrastructures, the relationship between Europe and North America and in general between all regional areas appears to be more structured and interdependent, a sign of uniformity of financing on infrastructures compared to Real Estate. For infrastructures, a nodal point is constituted by the Europe area where the brownfield on which the (f & ii) seems to concentrate more the interest and financing of the (f &

Infrastructure

Real Estate

Fig. 6.17 a Top 10 financing in Infrastructure and Real Estate taken from the ranking (f & ii) splited in European investments; North American investments; Asia-Pacific investments; other investments (Infrastructures: Latin American; Real Estate: Rest of world). Global presence (link) of the same (f & ii) within this subdivision, 2021; b Top 10 financing (f & ii) in Infrastructure in European investments and the relationship (link) of (f & ii) with the Real Estate financing spliting; North American investments; Asia-Pacific investments; Latin American investments. Source Our processing on IPE Real Assets (Magazine—International Publishers): Research and data; November/December 2021 IPE Real Asset, July/August 2022, IPE Real Asset

a

158 6 The Financialization of Urban Infrastructure

159

Fig. 6.17 (continued)

6.4 Theoretical and Operational Elements of Financialization

160

(b)

(c) (d)

(e)

6 The Financialization of Urban Infrastructure

ii) in favor of infrastructures so as to exceed the financing in favor of Real Estate, which has always been bigger but which from now on redesign a new phenomenon driven by (f & ii). All the main ones (f & ii) that finance the infrastructures, including the first ten those taken into consideration (see Figs. 6.17a), intervene in several geographical areas with three (f & ii) that intervene in all the world regions. Most of the main ones (f & ii) intervene both on the financing of infrastructures and on that of Real Estate (see Fig. 6.17b). The major (f & ii) financer of infrastructure are North Americans and Austalians compared to (f & ii) Europeans, but they mobilize funds without considering their initial national membership, a sign of a logic that mainly responds to globalization. There remains a strong interconnection between financing of (f & ii) to infrastructures and Real Estate, so much so that it appears to be the result of a single growth strategy that can be inscribed within a crescendo of ‘assetization’ and rapid transformation of the global cities within which these investments tend to settle. There is no doubt that a growth in the financing of (f & ii) in favor of infrastructures is destined to change the nature of the infrastructures themselves towards a consolidation of the concept of urban infrastructure and the strong integration between financing of (f & ii) in favor of infrastructures and Real Estate within a single design for the production of value. All this leads to an acceleration of global cities and globalization in general.

Below is an incidence. Brookfield Asset Management is the second largest fund that intervenes in infrastructure financing (see Table 6.2) with 158 billion dollars tied up in infrastructure, versus much less than double that of real estate (264 billion dollars). In infrastructure, since 2012, acting through its subsidiary (Enwave) through its investments the fund has increased its presence throughout North America, acquiring networks in 11 cities in the United States and Canada. Each asset is located in a central business district that provides essential services with high entry barriers for other competitors. Enwave has the great advantage of being able to use the enormous financial resources provided by Brookfield for its innovative strategies. Additionally, a key feature of the Enwave Toronto acquisition was the opportunity to leverage Brookfield’s real estate presence, knowledge base, and operational experience. In Real Estate in 2014 the fund began a huge redevelopment of an area called ‘Manhattan West.’ This is an area of 2.5 hectares in the heart of Manhattan, an area glued to one of the most important subway stations in Manhattan (Penn station) and Madison Square Garden. Several buildings were built in that area under the direction of the fund, effectively tripling the marketable land area (65,000 square meters) through the verticality of the build, in terms of square meters, with buildings of 67 floors and a skyline (height) of 303 m. The entire installation has led to the construction of state of the art offices for a ‘global company,’ luxury apartments, boutique hotels, shops, and restaurants, while of the initial two and a half hectares, less than one is destined to open space. The area had been purchased in 1985 by

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161

Table 6.2 Matrix of relationship and breakdown between (f & ii) and financing of Infrastructure and real Estate Macquarie infrastructure (*)

Brookfield asset

M&G investments

Year of intervention The year 2000 on infrastructures coincides with the creation of pension funds in Australia to which all Australians had to contribute and also coincides with the privatization of Australian public assets, in 2004 the Macquarie Infrastructure Company was founded

In 2005 the current Brookfield was born, there is a transition from Brascan Corporation to Brookfield Asset Management, and from 2005 to 2021 the assets managed by Brookfield increased by more than 14 times

In 1999 M&G became part of the Prudential Plc Group, one of the largest global providers of financial services. Since 2001 M&G has opened offices in continental Europe and has talked on a global dimension. In 2001 M&C founded Infracapital one of the leading European infrastructure investor

Country

Canada

UK

Total

(a) Managed capital 251.3 (*)

459.5

371.3

1,082.1

(a1) (a) − (a2) other 19.2 financing

37.7

288.3

345.2

(a2) = (b) + (c )

232.1

421.8

83

736.9

(b) Financing Infrastructures

230.2

157.9

43.3

431.4

(European investments)

(124)

(31)

(North American investment)

(28)

(79)

(Asia Pacific investment)

(76)

(20)

Australia

(Total)

(Others)

(2)

(28)

(c) Financing Real Estate

1.9

263.9

39.7

305.5

(European investments)

(0.9)

(50)

(30)

80.9

(North American investment)

(1)

(181)

(3)

185.0

(0.9)

(7)

7.9

(Asia Pacific investment)

(continued)

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6 The Financialization of Urban Infrastructure

Table 6.2 (continued) Macquarie infrastructure (*)

Brookfield asset

13,800 employees and 25 representations around the world

18,700

2,250 employees and 28 representations around the world

Yes

Yes

Equity (99%)

Equity ( 8%); debt (92%)

(Others) Employees around the world

(32)

Integration between Yes Infrastructure and Real Estate Is Debt or Equity privileged on infrastructures?

M&G investments

Equity (59%); debt (41%)

(Total) 32.0

Note On how the individual fund and institutional investors (f & ii) intervene on infrastructures there is a first reference literature for ex. on Macquarie Infrastructure: Allen and Pryke (2013), Ashton et al. (2012), de Lemosa et al. (2004), and Deruytter and Derudder (2019) Source Our processing on different date incluse IPE Real Assets (Magazine—International Publishers): Research and data; novembre/december 2021 IPE Real Asset, yuly/august 2022, IPE Real Asset

Olympia & York when Brookfield was not yet there; in 2006, Brookfield bought a second lot, which in 2011 was then integrated with another portion of adjacent assets purchased. The full ‘Manhattan West Project (MWP)’ began to take shape when the Bloomberg administration added incentives for the development and reorganization of the area. Michael Bloomberg was mayor of New York from 2001 to 2013 and is also founder in 1981 of the financial information giant Bloomberg LP. Amazon and Fintech companies were interlocutors for the concurrent sales and rentals of the MWP buildings Fintech. The original area was home to old warehouses under the influence of the river port (Pier 76) and above all a number of railways and terminals due to the underground crossing of the Hudson River (Penn station). Brookfield made an investment of nearly 5 billion dollars for the entire purchase, followed by construction and development for a final commercial value of 8.6 billion at the end of 2019. The investment was also characterized by an innovative construction intervention above the railway and subway junctions, with a strong interconnection and conversion of infrastructures, given Penn station’s role as a landing place for those who cross the Hudson River tunnel. The fact that Brookfield Asset Management is a real estate and infrastructure investment fund was fundamental in managing the entire operation, that began in 2014 and ended in 2019. With integrated elements between real estate and infrastructure and through this operation, there was a replacement of obsolete functions (brownfield) with a merger between real estate and infrastructure. Real estate/infrastructure. A PPP proposed by the Brookfield Asset Management fund was accepted by the State of New York with the involvement of public bodies (Empire State Development and the Port Authority, with the same designers as the ‘Manhattan West Project’) for a readaptation and connection of Moynihan Station

6.4 Theoretical and Operational Elements of Financialization

163

(an expansion of Penn station) with the port (Pier 76) and through this a wider connection with the rest of the existing High Line, with the aim of connecting and strengthening transport hubs, sports and cultural facilities with an initial cost of the PPP operation of 60 million dollars, that can be increased. It involves remodeling and expanding brownfield infrastructure in relation to the Brookfield fund’s recently completed ‘Manhattan West Project.’ The PPP intervention also brings undoubted value to ‘MWP’ which is crossed by the extension of the infrastructure and allows it to be connected to Penn station and the port (Pier 76) as well as to take advantage of the innovative High Lines, considered one of the most innovative reconversions of brownfield infrastructure in Manhattan in the last 10 years (Fig. 6.18). In addition to the adaptation/extension of the High Line, there is another PPP of a different nature concerning the Moynihan Train Hall. It is a major part of Penn Station, which alone is used by over 700,000 passengers per day, more than LaGuardia, John F. Kennedy, and Newark international airports combined. It is one of the busiest passenger stations in America. The total investment is 1.6 billion dollars, of which 967 million from public sources (NY State, Amtrak, MTA, federal grants) and being a PPP/joint venture, 630 million dollars come from the private operator. The private team is made up of a Swedish construction company, one of the largest in the world (Shanska); a real estate developer, not a fund but a field operator with a small to medium turnover (Vornado Realty Trust); and a company that provides management services (WSP USA). Each financialization of the three projects and assemblies in a ‘synchronous’ way has a different governance. In the ‘Manhattan West Project (MWP)’ the Brookfield fund largely remains the owner of the assets created, that through the project contributed to the change of functions and the inclusion/exclusion of economic operators and social groups. The Moynihan Train Hall PPP/joint venture is instead a readjustment of a brownfield urban infrastructure in which the economic operator partly uses the revolver account which serves to cover the range of costs between construction and sale and rent, while the ownership of the infrastructure remains almost exclusively with the public operator. The PPP on the High Line Extension in which Brookfield Asset Management is directly involved has another, different PPP formula. Major parts of cities city blend real estate and brownfield urban infrastructure. This combination involves funds, developers, and builders, while the PPP that is developed is also different depending on whether it concerns the Moynihan Train Hall or the High Line. The assembly, private financing, role of governance, and interests at stake are different. At the operational level, the maps are colored by interventions and infrastructures constructed, showing a rapidity of intervention from 2014 to 2020. The two main operations have been concluded (‘Manhattan West Project’ and Moynihan Train Hall). In the narrative there is the clear vision of urban infrastructure, brownfield infrastructure, the birth and strengthening of new subjects, the representation of global cities, and partly what is meant by financing applied to infrastructure. Among the funds, the use of equity prevails over the debt, which by far modifies the ‘governance’ models of an infrastructure assembly and often directs the conversion

164 disused pier on thenavigation Pier 76 of Hudson river

6 The Financialization of Urban Infrastructure

2b 1 2a

3a

Moynihan train Hall

3b

Fig. 6.18 Example of the intervention of a fund (Brookfield Asset) which integrates Real Estate financing and urban infrastructures into a global city. Manhattan—(1) ‘Manhattan West Project (MWP)’ built and owned by ‘Brookfield Asset Management’; (2) PPP: High Line, 2a (phase 1) High Line East Connection, 2b (phase 2) High Line North Connection; (3) Existing High Line, 3a readjustment, 3b existing and usable. Yellow: PPP Moynihan train Hall

of brownfields in which it is necessary to have a greater vision than for investment in greenfield infrastructure, and risk management also grows. Given the greater vision, there are also higher levels of return on investment. Another element of interest is the strong interconnection between of the fund managers of real estate and infrastructure financing. This interconnection is one of the elements that create a strong synergy between real estate, which is a fundamental

6.4 Theoretical and Operational Elements of Financialization

165

component of global cities (its business is decidedly inside these situations) and interventions on urban infrastructures and in particular on brownfields or smart cities. The growing weight of these lenders (Table 6.2) has rapidly contributed to changing the logic of assembling infrastructures, to better position them within the areas of greatest transformation, to favor brownfields over greenfields, and to create new languages and interests that until recently were unpredictable. Public works, the previous stage of urban infrastructure, involved all national actors. The debate and discussion was mostly national. With urban infrastructure and financing, urban infrastructure, in addition to being interconnected with real estate which has its business in large urban cities, ends up being no longer a national but a global landing place, as the bearers of assembly and financing rules are global entities that often make global cities their landing point for concentrating investments and the new rules of assembly and growth of the complexity of governance. With urban infrastructure, we move from big cities to global cities, in which there is a strong interconnection and interests of global stakeholders who make globalization their business. Most of their gyms remain global cities, and within these brownfield areas and infrastructures, and this makes global cities even more strategic within globalization. Strategic visions also come together around this form. Thus there is an increasing interaction between the development of finance, globalization, spatial displacement, and urban hierarchy within individual states.

6.4.1 Financing, Funds and Equity The financialization of urban infrastructure is an important element that should not be overlooked, comparable to real estate within global cities, and impossible to diminish; indeed there will be further evolution of this process. It is however reductive to trace the centrality assumed by the concept of urban infrastructure to this variable alone. O’Neill (2019) summarizes how the optimization and innovation of services, no longer achievable by the public administration, requires a new vision. The result is, more than an absolute and unique pre-eminence of finance, a framework capable of managing all this hybridity. All without being trapped by the political intransigence that comes when the debate is framed in the dualism of the public/private sector as a binary factor. In fact, there is an intertwining of variables with the need to increase governance so as to prevent interventions from running aground, a sign of an interaction of variables that interact and gradually transform urban infrastructure. It is certainly difficult to think of a single variable capable of pushing change in a single direction. These are contributing and interacting causes within a complexity that puts urban infrastructures at the center, and among these, financialization has a significant weight. Financialization lies above all in the numbers. Infrastructure is not, as in the past, financed only by the public sector through public works, but there is a mix between debt financed through bank flows (Kd), but to a limited, but growing extent, also

166

6 The Financialization of Urban Infrastructure

through funds, and risk capital (Ke) which comes mainly, although not exclusively, from funds in the form of risk capital. Kd is returned in the form of capital and financial charges that must comply with the Basel II and III criteria in order not to generate problems (pre-default and a consequent increase in the cost of money requested by the banks to cover the flows), while risk capital, coming partly from the funds, is expressed in terms of yield and apportionment of profits among the lenders. Consequently, new innovative elements emerge with respect to the phase in which there was a quasi-monopoly of public works. Funds themselves undergo an evolution of their own; often they have shifted from investment in bonds to investment in equity, to the point of establishing complex infrastructure financing platforms. – Multi-year Long Term Contracts are used to allow the lender to recover the invested capital. Funds themselves mostly declare that they favor interventions in infrastructure assets by keeping them in their portfolio for more than ten years (81% state this preference) – Special purpose companies (e.g. SPV) are created to manage D&C (Design & Construction) and O&M (Operation & Maintenance) in which funds are present, although there is no guarantee this will happen immediately in the D&C phase; they may enter later, in the O&M phase. This extends the time of the investment and the possible profitability of the return. – Often the difference with the real estate sector is that the latter, compared to infrastructure, has a much shorter cycle referring only to D&C. – In many funds, more and more teams are created which, in addition to dealing with brownfields (financing in the context of something that has already been built; O&M), also deal with greenfields (financing that organizes the D&C and O&M assembly of the infrastructure from the start). – Once the fund enters to provide financing for a long period, there is a tendency to control the management of the infrastructure. In some cases “we try to lead the special purpose company. We like to direct where our money goes, and so we push to try to be in control” of the SPV. This quote is from Ron Boots (Head of Infrastructure Europe at APG) who then adds: “this required an increase in internal staff.” Ron Boots was the first on the infrastructure team in 2005; now APG has 35 people in this segment looking at the asset class spread across its offices in Amsterdam, Hong Kong, and New York. As your investment grows, “you need skills, experience, team, and ability,” says Boots. – With financialization, there is a higher cost of money for the financing of the infrastructure, deriving from financial charges and above all higher yields than those of public works. However, this requires a recovery of efficiency/efficacy within the assembly of the D&C and O&M of the infrastructure. – The Public Administration must increase the capacity of management and control and verification with objective systems and tools, under penalty of the creation of enormous vicious circles for the state coffers, that are already in deep crisis (fiscal crisis of the state);

6.4 Theoretical and Operational Elements of Financialization

167

– This also represents one of the major critical points summarized in the question: is the state, with its internal mechanisms and bureaucracy, able to evolve in equilibrium with the economic operator to prevent the private value created with the PPP from being fed by destroying public value, generating a sum of the model whose result is not the creation but the destruction of value? – The complexity and the different levels of integration of infrastructures are growing; in other words the need for governance is growing; – Knowledge requires time, cost, and quality control. – The new term assembly is born, and the infrastructures de facto become large and medium-sized hybrid companies with a remarkable ability to adapt over time. The differentiated interests of the public and private sectors often do not allow this. – Global cities cannot be fully understood if one does not understand the merger that has taken place between the evolution of the infrastructures, capital and finance that have taken the place of the state. The statement by Brice Flatt (CEO of Brookfield Asset) may appear significant when he says: ‘We’re in a 50-year transformation of the infrastructure world. We’re 10 years in; we have 40 left to go. By the end of that 50 years most infrastructure in the world will be transferred to private hands’ (Evans & Smith, 2018; Garrett et al., 2020). Likewise, the new concept of urban infrastructure cannot be understood if it is not combined with other interconnected transformations. Evolution has inevitably contributed to globalizing its assembly, interconnections, fluidity, language, interests, and the new partial knowledge still in the development and consolidation phase. This helped create the new business and the emergence of new and deep-rooted global interests around this transformation. Nothing is therefore the same with respect to the models known until a decade ago or at the end of the last century (Fig. 6.19).

6.4.2 Some Data In recent years (decade), infrastructure financing funds have grown a lot, often replacing other products to be financed. There has been a growth in the financing of real estate considered more risky. Over the last ten years (2010–2019), financing of unlisted infrastructures has proved to be more profitable and less risky than investing in global equities. This is an important element in explaining the orientation of funds (Fig. 6.20). However, it should be added that the period of the pandemic caused the performance of unlisted infrastructures to slow down in favor of global equities.

Box 6.4 Funds and infrastructure investment The data explain the expansion of investments in infrastructure of funds and institutional investors (f & ii) in the last ten years, also driven by the lower

168

6 The Financialization of Urban Infrastructure

(A) Other areas Global cities

Urbanized area

Network infrastructures

(B)

Public works ICT wireless Sharing economy

New complex urban infrastructures

Public-Private Partnership (PPP) Concession contracts Public procurement

Special purpose company/entity Project company

State

(D)

Holding companies Private (market)

Long Term Contracts

Concessions to institutionalised PPP (IPPP)

financialization

(C) Fig. 6.19 Area of the model in which financialization has the greatest impact in the transformation of urban infrastructure, the components on which the infrastructure tradition rested are modified

risk and higher return performance of infrastructures compared to the more general global equities. The same comparison is also true with US Treasury bonds (long term). “Historically unlisted infrastructure provide higher returns and less risk than global equities. Over the past decade, yields on listed and unlisted infrastructure have risen sharply. High dividend yields, lower trading prices and lower volatility are one of the key factors driving the attractiveness of unlisted infrastructure”. A traditional barrier State centered entirely on the bureaucratic model would not have allowed the entrance of private funds into infrastructure. The growing need for urban infrastructure to foster competitive advantage, the rising cost of D&C and O&M, and the fiscal crisis of the state have acted as accelerators towards this integration. However, it cannot be taken for granted that the risk capital of funds earmarked for infrastructure will be directed to urban infrastructure.

4

6

8

10

12

14

0

5

10

Annualised return (%)

US Treasury bonds (long term)

15

Unlisted infrastructure

Global equities

b

4

6

8

10

12

14

16

0

50 2011

100

150

200

250

300

350

10

Annualised return (%)

5

2014

Global equities

2013

US Treasury bonds (long term)

2012 2016

15

infrastructure Unlisted

2015

2017

2018

2019

2020

Global equities

+31.4%

Unlisted infrastructure

Fig. 6.20 a Global equities and unlisted infrastructures (and US Treasury bonds): relationship between risk and return (different years in the return: 2011– 2020 years performance; dollars); b 2021 changes in returns and risks: the Covid-19 pandemic has temporarily halted the trend. Source Our processing MSCI Gross Return. EDHECinfra. Damodaran NYU (US T bonds), GIH-Global Infrastructure Hub: Infrastructure Monitor 2020 and December 2021

Annualised risk (%)

a

Annualised risk (%)

16

6.4 Theoretical and Operational Elements of Financialization 169

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A survey of 100 funds that invest in infrastructure (Lowe, 2020) did indicate in 2019 that in the next 18 months there would be a willingness to invest in infrastructure in Europe and North America relating to renewable energy, telecommunications, the water cycle, airports, ports and urban waste but also social housing and hospitals. These are all areas with a strong impact on the city. The survey was conducted before the Covid-19. There were 19 other questions asked of the world’s 100 largest funds in the survey. Here are only the aspects that are of greatest interest for our analysis. – Most of the funds (63%) claimed to invest in infrastructure; – The majority (51%) claimed that such investments would grow over the next 18 months; – The return on investment oscillates between 5–15%, making the Ke yield higher than the traditional return on public works, which have always been found to operate within the Kd debt investments from traditional infrastructures. This aspect implies a new factor in the infrastructure assembly scenario. Pike et al. (2019) indicate an oscillation between 9 and 15% of return for three-year equity (referring to the IRR), while on the expected cash return (in addition to the Ke there is also Kd) the figure fluctuates from 4 to 12%. The interview with 100 funds indicated that two-thirds expected a return that varied between 5 and 10%, while the remaining one-third expected 10–15%. These are high returns for social infrastructures (e.g. hospitals and schools, etc.) compared to traditional assembly interventions. This means that if it is a question of social infrastructures in which a public fee is paid, the infrastructure is more expensive in terms of D&C (Design & Construction) and O&M (Operation & Maintenance). Sustainability would only be achieved if the cost were off balance sheet (outside of the public deficit) and new forms of management and effectiveness were added to this, in other words, a new ‘form’ of urban infrastructure. However, it becomes necessary to further change the actors and cultures of infrastructure assembly. To these data we must be add that the phenomenon of funds emerged significantly in the beginning of the 2000s and is constantly growing. Interest in infrastructure is a more recent focus, which is also the result of the global ‘subprime’ crisis of 2007–2013, with going beyond interest in real estate being one of the most critical elements. In 2019, the investment by funds in infrastructure was more attractive than real estate for 46%, against the 8% who said the opposite, while 35% said that the attraction was similar, and the remaining percentage (11%) had no opinion. The figures are not very different from those for 2018, which in any event is a sign of a segment trending towards growth. Recent data suggests that funds’ investment in infrastructure is outstripping that of Real Estate. These are investments that unlike real estate attract interest because they are oriented to the medium-long term and are presented in a stable form. There is not only equity (Ke is 70% of fund investments), but also debt investment (Kd 30%). Real Estate is itself differentiated and not all segments have the same weight on returns. There is diversity between offices, retail, logistics, residential, hotels, student housing, healtcare. Attached (this chapter) are the general financing data for some funds, those that are transparent in the provision of data.

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6.5 What Happens with the Covid-19 Phase? The same survey on the 100 funds investing in infrastructure was also carried out in 2020 in the midst of the Covid-19 (Lowe, 2020) and has been deliberately compared with the same questions asked the year before (Lowe, 2020). The answers given by the funds show the propensity to look to Europe and partly to the Asia-Pacific as regions where to seek the best investment opportunities, while references to South and North America have plummeted. The response from investors adversely affected by Covid-19 was predictable: transport as a whole (91%) while there is also a minority that considers the situation an opportunity (31%). Sectors seen as pure opportunities are telecoms and digital and renewable energy, while opportunity also prevails slightly for social infrastructures (health, education). The impact on the global city remains uncertain, especially with regard to transport. Compared to the 19 (updated) questions that were asked of the 100 largest world funds, 3 specific questions on Covid-19 were added, one of which found that 71% expected there will be no effects on funds’ investments due to the pandemic, with 11% for both seeking to increase the exposure of investments and for taking a break from investments. Only a residual component (2–3%) declared that they wanted to change strategy compared to the previous year. The limited impact of Covid-19 on fund investments, which in some cases tend to increase the attraction to infrastructure, is due to a higher return compared to the global market and above all to a lower perceived risk. The decisive element is constituted by the fact that: it is the totality of the assets (100% declared by the interviewees) to be considered and above all that the investments have an indicated duration of more than 15 years (28%) and between 10 and 15 years (47%) and only a limited share (22%) between 5 and 10 years; investments that remain restricted for 1 to 5 years are completely residual (3%). Therefore, Covid-19 is perceived as a contingent situation, such that once the pandemic passes, it will be possible to restore the previous order with some changes. One difference with 2018 and 2019 regards a shift of investment from the long term (more than 15 years) to the medium term (5–10 years). In the long term, the figure went from 35% in 2019 to 28% in 2020; in the medium term, from 16% in 2019 to 22% in 2020. A percentage of 58% of the 100 funds also argue that liquidity is not important in the activation of strategies, an increase compared to the pre Covid-19 period (54%). Furthermore: – Compared to 2019, the willingness to invest in infrastructure has increased from 63 to 70%, reducing the portion not willing to invest to 30%. – In 2020, the opinion of the top 100 funds rose from 51% (2019) to 62%, believing that investment in infrastructures by funds will grow in the next 18 months. Proof of this is that investment already increased in the year between the two interviews, from 415 to 467 billion dollars from 2019 to 2020, with the Covid-19 underway.

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(a) An asymmetry is confirmed between national investment, consisting mainly of resources for public works, and funds that are located and move within a global space; (b) Financing of public works infrastructure tends to be more uniform across an entire state. The funds that finance urban infrastructure such as real estate are much more selective and focus on urban infrastructure and global cities, accentuating the territorial divergences within the national territory in favor of the interconnection of global (cities). (c) Both the dynamics of the assembly of infrastructure (urban infrastructure) and the way of understanding the brownfield infrastructure change. Pension funds prefer brownfield to greenfield infrastructure, due to the lower risk that investors face (Whiteside, 2017). Brownfield infrastructure is also preferred due to its greater agility and management of investment entry and exit times. (d) Funds are attracted to urban infrastructure (the same goes for real estate) in which rules are shown to be compatible with the assembly expressed by the funds, producing a clash between national rules and the new global rules expressed by the new lenders. There is also a clash of specializations and languages (which is mainly technical in public works). (e) In the background there is the competitive advantage within competing global systems and a growing need to find alternative resources to those provided through public works. This is followed by an increase in the need for infrastructure development, and urban infrastructure in particular. (f) The competition also takes place through a review of accountability, and at the same time the development of new interdisciplinary knowledge of a global nature in the assembly of urban infrastructures. (g) The most competitive urban infrastructures and global cities are the ones that best adapt to new attractive scenarios. Knowing how to attract funding from a fund may not always prove successful if conflicts and vicious circles are created. (h) A dichotomy can be surmised between the push towards simplification and the increase in the complexity of urban infrastructure assembly. (i) Urban infrastructures will be more and more inclined towards innovation (e.g. the smart city) and integration with real estate, having as its drop point the selected and selective global city with respect to the proposed funds. (j) We leave the traditional concept and form of infrastructure and enter a plural concept of infrastructure that is well-summarized by urban.

6.6 Some Evidences The description of cases regarding funds implies ‘photographing’ the phenomenon when it occurs to mark its structurality, impact, innovation, and dynamics. Funds are by definition fluid, as are the investments they control. It may happen that after some time all of the references have changed, with the removal and different placement of

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the investments and interests. There is much more flexibility and discretion in this area compared to commercial banks. Case (1a): M&G M&G in the international ranking, as of June 30, 2020, represented the fifth global fund with investments in infrastructure with 43 billion dollars. However, compared to six months earlier, it showed a reduction in investment in infrastructure. This is a factor in contrast to the other funds considered, especially when viewed in the short and medium term: in the period 2017–2020, M&G is the only fund among the top 50 that invest in infrastructure to have reduced the amount of investment in this segment. M & G’s investment in infrastructure represented 17.3% in 2018 compared to the amount of its other investments; in 2020 it drops to 11.7%. M&G is a British fund based in London regulated by the Financial Conduct Authority of the United Kingdom, this could also be a consequence of the referendum of June 2026 on Brexit, where the space of globalization is reduced, albeit very marginally. In reality, the amount of funds that M&G allocates to infrastructures must add two different brands that it directly controls (M&G investments and Infracapital) to which the 43 billion dollars allocated to infrastructures must be added to the 8 billion managed directly by Infracapital. There are three other brands controlled by the M&G holding including one on Real Estate, the other two carry out traditional prudential and bond activities. The funding invested by M&G Real Estrate is 37.7 billion euros, overall an amount lower than that invested in infrastructure. The strong opening to globalization of M & G takes place in 2001 where representations are opened in Germany, France, Italy, Spain, Holland and other European countries and in 2012 in Asia Pacific. M&G has a traditional fund profile, manages assets of 371 billion euros divided into bonds, equities, and other (which includes infrastructure assets). A bond is a loan to the public administration or to companies. If it is directed to the public administration, it can be recorded in the public debt if the bond is issued to finance infrastructures. The bond component, which is the most prudent in the composition of the various compound funds, is the pre-eminent part (it never falls below 50%). Equities are intermediate in terms of specific weight (varying from 20 to 40%) and it is the purchase of a security that gives the holder a share of ownership in a company or a mutual fund and therefore refers to a share of control and returns. Within equities there is a specific fund (Infrastructure) created in 2017, which has as its ‘core’ objective the investment of 80% of shares issued by infrastructure companies, referable to real estate or infrastructures of any dimension. The fund owns shares in fewer than 50 companies around the world and effectively controls them. For infrastructure companies, the reference is to utilities, energy, transport, health, education, security (e.g. prisons), communications. The fund manages 50.4 billion euros, a part of which is invested in infrastructure understood in a strict sense. Below are the types of infrastructure in which the fund invests, and six cases in which it used its specific infrastructure fund to purchase shares and control of companies.

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6 The Financialization of Urban Infrastructure oil pipelines

power

wind power electricity natural gas renewable

utility

ports aeroporti streets railways optical networks communications

2 Gas Natural Barcelona, Spain - Global LNG (liquefied natural gas) and electricity distribution business. LNG demand is growing worldwide natural gas vs. oil and coal.

waste water

transport

1 Ørsted Fredericia, Denmark - World leader in offshore wind. It operates nine wind farms and is currently building four more in the UK.

3 Infrastructure Cheung Kong Hong Kong, China - Invest in a diverse range of infrastructure assets related to electricity and gas distribution, water supply, wind power, waste management and toll roads. A twenty-year track record of using free cash flows to make infrastructure investments around the world

4 Transurban Melbourne, Australia - Owns and operates urban toll road networks in Australia and the United States. Backed by traffic growth in the cities where it operates.

transmission communications towers satellites

health care

hospitals

instruction

schools

safety

prisons

5 Equinix Redwood City, California, USA - A global business supporting the company's growing use of data, and its growing reliance on it. It owns and operates 190 data centers that support nearly 10,000 businesses globally, including Amazon, Microsoft, and Salesforce

6

American Tower Boston, USA - Owns, operates and develops wireless communications and transmission towers around the world. It supports the increase in wireless penetration and use of mobile data brought about by the digital economy. It operates approximately 40,000 wireless towers in the United States, 57,000 in India and 43,000 in the rest of the world.

Case (1b): Infracapital Infracapital of M&G Group plc, constituting its European savings and investments business. It operates in equities (shares). It is therefore an operational arm of M&G in terms of infrastructure investments in Europe. Infracapital was created at the beginning of the century by two founders who come from the initial PPP (PFI) experiences in the UK. The fund’s beginning can be identified about 20 years ago (2001). It is also the result of the English PFI experience that began a few years earlier and anticipated PPPs in Europe. The Fund manages billion euro invested in twenty-two infrastructures located mostly in medium-large cities and global cities:

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– three in Italy (Milan and Florence); – thirtysix in the UK (much London, Birmingham, Manchester, and Glasgow); – fourteen in other European states

– There are 56 employees divided among transactions, greenfield, asset management, and finance; – The infrastructures on which they intervene with the funding are judicial and penitentiary structures, education, health, waste and water, energy and energy efficiency; – In Italy the fund intervened in 2016 with an agreement with Pipelines (among the top ten construction companies in Italy) spending 700 million to buy 80% of the shares of C2i, the company that controls the SPV of Vimercate-Milan Hospital PPP (which was present in the construction of the hospital and now in the management of seven services), the Empoli Hospital located near Florence, and in the management of the trigeneration plant of the Careggi-Florence Hospital. These were three brownfield interventions; namely, the part of construction had already been carried out (D&C), so the interventions involve managing the O & M. The initial package also includes the construction of a new hospital in Milan (Health City) with an integration of D&C and O&M. The philosophy behind the ‘Infracapital’ interventions can be summarized in the following points. – Value can also be extracted by targeting complex agreements that require considerable experience in execution. This could include transactions regarding assets that require separation from a parent company, more complete consolidation under a new management structure, or the establishment of a new executive group. Typically, these operations require a hands-on approach led by a dedicated wealth management team that can support the transition to a solid independent business.

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– However, by identifying macro trends and leveraging wealth management experience, experienced managers can develop broader platforms. Nevertheless, we also attach great importance to developing high quality executive management teams within portfolio companies with the appropriate level of clearance to achieve our strategic goals. – In many cases, it may be possible to optimize performance without taking unjustified risks. Indeed, in some regulated companies it is not possible to make substantial changes to the strategy. However, this does not limit the ability to make material enhancements. By working closely with management, asset managers can provide the support and incentives needed to guide the business towards improvement. – Infracapital’s top management says that they believe it is important for wealth managers to spend a lot of time engaging with all stakeholders, in order to understand the role of assets in the communities in which they operate, which ultimately produces value for investors. – There is a quantitative aspect; it is a question of understanding how much the intervention of the funds, in addition to bringing increasing resources, is able to modify the assembly of infrastructures and the change in their shape and interconnection. Stakeholders expand and enter a global scenario in which direction no longer comes only from a nation, as new forms of direction and management are also created. Profitability and risk take on a new characteristic, as does the concept of infrastructure. – It is useful to frame the context in which Infracapital intervenes in the investment also to understand the interconnection of different global cultures in infrastructures that in the past were by definition understood within national cultures and contexts. – To get a general picture of the change in the infrastructure, its assembly and the environment in which it took place, the following reference is useful. The relationship was often between an organizational unit of a public body, of professions, of national companies linked by rather limited time contracts and almost never of Long Term Contract (LTC). An enormous contractual fragmentation prevailed and interventions on ‘segments’ (specialists, outputs, products), which were then difficult to integrate. The advent of funds, and more, revolutionizes the concept of infrastructure and helps to give birth to that of urban infrastructure. Below is an analysis of two of the different interventions in which Infracapital carried out, or tried to carry out, infrastructure financialization in Italy: – Health City of Milan; – Trigeneration plant at the Careggi Hospital. Health City of Milan This is a major investment for the city of Milan as it will absorb two centers of excellence in Milanese healthcare, Besta and the Cancer Institute. The investment is 300 million in the construction of the new hospital and another 2 billion in the management of seven services for twenty years.

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Invitation letter and Tender Documents Land reclamation

j

2013 f m a m j j a s o n d j

Call for tenders published

Published Official Bulletin. Program agreement between entities Offers

2014 f m a m j j a s o n d j

The procedure was blocked by Finance police

j

2016 f m a m j j a s o n d j

Agreement between Condotte (builder) and Infracapital for the control and financing of the SPV

Salini-Impregilo (builders) 2nd appeal to the Regional Administrative Court

Judgment of the Regional Administrative Court

2017 f m a m j j a s o n d j

The company wins the tender

Provisional award Pre-award

The tender commission is not yet operational

1st Council of State ruling

2015 f m a m j j a s o n d

Post tender and content update (pre contract signature)

2018 f m a m j j a s o n d j

Disputes between companies in the tender assignment

2019 f m a m j j a s o n d

State Council definitely confirm the contractor

Contractor he goes into administration Extraordinary, three commissioners

Acceptance and sharing of the information system of ‘governance' (control and audit)

– The investment by the fund is partially to be considered greenfield as there has already been a tender and therefore all the contents of an offer, but a contract has not yet been signed, and thus the assembly risks have not yet begun to be implemented; – The investment by Infracapital was forecast for three years after the tender and two years after the submission of bids by the economic operators. In the process leading to the signing of the contract, some elements attributable to accountability and increased complexity arose, that are not unusual in Italy. It is also the result of the troubled transition from an old public work to an urban infrastructure. It remains an issue that is not obvious and not easy to solve. The pathologies—What is indicated in the new complexity and in the management of this is an important step of urban infrastructure, financialization and urban development and global cities. In this case and in what will follow (Careggi Hospital), the case represents a pathological exception, but not so rare (Reeves, 2013, 2015): (a) there was a slowdown of the procedure for awarding the contract due to the intervention of a state body regarding alleged corruption; (b) one year later there is provisional assignment (sub-judge) of the intervention to the winning economic operator (Condotte—Inso); (c) six months later, there was an appeal to the TAR (a judicial body—Regional Administrative Court) by the runner-up in the tender (Salini Impregilo—the largest Italian construction company); (d) seven months later, there was a Condotte Infracapital pre-agreement for the sale of control in the SPV in the case the contract was signed; (e) nine months later there is the first judgment of the Council of State which follows the provisional awarding of the tender to Condotte and therefore there are the necessary conditions for finalizing a pre-agreement with

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Infracapital; (g) eight months later, Condotte entered into receivership (three commissioners were appointed). The pre-bankruptcy was not due to ‘City of Health’ tender, but to more complex factors; (h) one month later, the Council of State definitively confirmed the contractor (the legitimacy of the tender won by Condotte); (i) finally eight months later the documents are reconsidered and updated in order to close the contract and the start the works—it had been over six years since publication of the call for tenders; (l) in mid-2019, a new information system platform was updated and prepared to guide the D&C and O&M phases; and (m) in January 2020, with the establishment of the SPV, the contract was signed and the work began. – From the publication of the call for tenders to the signing of the contract, as indicated, seven years passed (six and a half years if the reference is to the letter of invitation); an amount of time not compatible with a PPP. All of the actors who can generate absolutely critical situations in the assembly of a PPP intervened in the process. This is not the norm in Italy, but it can represent an extreme case, not to be overlooked, to better understand the difficulties of assembling and financing infrastructures within an evolving situation of complexity. – This is a serious pathology that is not uncommon in the assembly of complex interventions in Italy, that also indicates the inadequacy of public management to move from the standardization of public works to the complexity of urban infrastructure. It is not just an Italian phenomenon, which in this specific case is the sum of several critical elements that feed a huge vicious circle. In France, the following case occurred: – Eight months late, on Monday, January 23, 2012, the Sud-Ile hospital, on the border between Evry and Corbeil-Essonne, welcomed its first patients. With 1,017 beds and twenty operating rooms, it became the largest hospital in France, replacing Georges-Pompidou in Paris. The opening of the hospital had been postponed several times due to 8,000 reservations for equipment not meeting standards, and the additional work required by the hospital. – The delay fueled the controversy over the choice of the public-private partnership (PPP) contract with the Eiffage company (the third-largest construction company in France and among the top twenty in the world). The PPP grants Eiffage the right to finance and build the hospital and facilities, and then to intervene on maintenance for the next thirty years, in exchange for a fee of 40 million euros per year. Many consider the sum to be exorbitant, so much so that the president of the hospital, the PS mayor of Evry, Manuel Valls (a future French prime minister) declared that he was in favor of termination of the contract8 8

‘Le Monde’, 23 January 2012.

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– The Health City PPP is a Long Term Contract for construction (D&C) and (O& M) that incorporates, in addition to maintenance, the energy component, catering, cleaning, hospital waste management; sanitization and linen rental and laundry. The PPP cannot be entered within the (public off balance sheet) as the public contribution by far exceeds 50% of investments, and the off balance sheet is not applicable to the energy component, as the operation was not carried out within the EPC rules that have allowed the application off balance sheet. This could be considered a part of the public administration setting mistake that he thought the intervention. However, it must be considered that the rules, accountability and assembly management itself are constantly changing and the error must be contextualized and this is also a criticality of the PPP. – There is inflow of private capital through a bank loan and an equity line; to this is added the fund that purchases the shares of the SPV and controls its operation. However, as it did not respect the proper method from transfer of risk from the public to the private operator, the debt is recorded in the public budget of the Lombardy Region. Trigeneration plant inside the Careggi hospital The trigeneration plant is one of the first PPP investments in Italy in the field of trigeneration plants for energy production. The investment is located inside an important national university hospital, and it produces 10 MWh of thermal energy and electricity. The hospital is located in the central part of the city of Florence, and city transportation has been has been reshaped around it. The amount of the investment is 33.7 million euros and there is payment of an annual public fee of 8 million euros per year for twenty years (2013–2033). – The stipulation of the PPP contract (construction and management concession) took place in February 2007; from that date on, the D&C (Design & Contruction) and testing phase began. – The investment was sustained entirely by the economic operator, with no public contribution for construction. – It is therefore recorded as private debt (within the SPV), and there is no accuracy on EPC front also because the national and EU rules on the subject change. – In mid-2013, the trigeneration plant began to operate with the payment of the fee for a duration of twenty years.

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2004

….

2007

….

2013

j

2014 f m a m j j a s o n d j

D&C phase Study on the energy consumption of the hospital

Contract signature

2015 f m a m j j a s o n d

Strong conflict between public administration (hospital) and SPV economic operator

Entry into operation of trigenic station Penalty letter or possible termination of the contract O&M phase

2016 2017 2018 2019 g f ma mg l a s o n d g f ma mg l a s o n d g f ma mg l a s o n d g f ma mg l a s o n d

Strong conflict between public administration (hospital) and SPV economic operator

2020

….

2033

Report accepted, dynamic verification in the future Guided negotiation

Clarification of the Tuscan Court of Auditors

Guided negotiation start Infracapital’s investment in C2i (Italian fund)

Scheduled end of concession

Contract review and new risk matrix O&M phase

– Information and operational management systems for control and verification of contractual forms are lacking, and complexity and in part the lack of valid management tools take over (e.g. there is a discrepancy in the construction cost accounts of a few million euros, there is no bill of quantities, the relationship between Kd - debt and Ke - risk capital—which end up affecting the fee, is used in a not completely transparent way). – The fee includes a share of financial charges, equity, and repayment of the invested capital. – On June 17, 2014, the General Directorate of Careggi Hospital indicated the application of a harsh penalty or termination of the contract, since the payments for thermal and electrical Kwh were higher, and considered to be excessive, compared to what could be purchased on the market, contrary to what was indicated in the contract. – The question is: what is the advantage for the public administration (hospital) to pay for energy at a higher cost than that sold by the market (sold by other carriers)? The answer is: actually owning the production plant that will be fully returned after 2033. The observation is: the life cycle of the plant is less than 20 years and there is a risk of inheriting a cost rather than a benefit. – From 2014 to the beginning of 2017, there was a strong conflict between the public administration (hospital) and the economic operator (SPV). – In the context of this conflict, in 2016, Infracapital purchased 80% of C2i from Condotte, and de facto found itself controlling the SPV downstream. – At the beginning of 2017, opens a ‘window’ of guided negotiations was opened between the public administration and the economic operator (SPV). – At the beginning of 2018, the parties revised the original contract with the application of a manual and a new risk matrix.

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– At the beginning of 2019, a regional accounting body (the Court of Auditors) asked the hospital for a report for the proper classification of the trigeneration plant. The question was dramatic: was the 33.7 million euro trigeneration plant to be recorded ‘on’ or ‘off ’ public balance sheet? It would be ‘off’ public balance sheet only if the European EPC rules were respected (no deviations or assembly errors). This would require very careful management of the parts built over time, which was absolutely not present at the beginning. An ‘on public balance sheet’ classification would have led to disastrous choices on the part of the Hospital (blocking the hospital budget) including the repayment of an ordinary loan obtained thanks to the effect on the budget of recording the plant off public balance sheet. A large penalty would have to be paid for early repayment of the loan. And damage to the state revenue would be declared, with the public managers having to pay for the damage caused to the hospital coffers from their own pockets. The case shows how an asymmetry is created between the investment of the fund Infracapital’s equity and the needs of the public administration. The high expected return underlying an expansion/restriction of private infrastructure financing is found to be in contrast with the needs of the public operator, which needs the off balance sheet not to turn into an off balance guided by ‘additional acts’ which would increase the annual fee paid by the hospital and cancel the risk transferred. The increase in the investment return would probably lead to on balance sheet, while a freeze on the fee would create an opposite situation with a reduction in the return on the investment made by Infracapital and a flight of capital. The problem is not unsolved, but it requires operating from the time the PPP is conceived with tools and an evolved culture that allow for a coherent ‘governance’ of D&C and O&M assembly and not operating with disruptions when one is aware that the lack of tools and culture has driven the financial parameters out of control. It is also this type of financing that ends up transforming the nature of infrastructure and makes it possible to better classify the concept of urban infrastructure. These two cases in which funds and financialization are inserted provide reflections on how to interpret complexity (Chap. 3) and avoid underestimation in combining it with the evolution of urban infrastructure. It is also part of the travails of a change in models with contradictions, the presence of asymmetrical components, generated conflicts, and stop and go situations that are determined, and the attraction and flight of capital/funds from initiatives that run aground. Other examples, in addition to the one described above, are the south-Ile Paris hospital already mentioned, the London underground (O’Brien & Pike, 2015; O’Brien, Pike, et al., 2019), with the Metronet bankruptcy in London in 2007 (Jupe, 2011) with the Lusoponte concession in Lisbon (de Lemosa et al., 2004) the interventions of funds in Chicago (Ashton et al., 2016) and other investments of different types and with different angles (Reeves, 2013, 2015; Reeves et al., 2017). Financialization is constantly changing, forcing past formulas (Domingues & Zlatkovich, 2015; Hodge & Greve, 2021) to be revised within a situation of complexity that is also evolving.

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Chapter 7

Infrastructure Changes

Abstract This chapter summarizes some points of the evolution of urban infrastructures over a period of time in which it is possible to verify this change. These are different elements that come to convergence and help to mark the deviation from the past, even recent, and a map of the evolution of the urban infrastructure. This chapter also represents a way to give a precise profile to the concept of urban infrastructure in a phase of change. The mapping can find some ‘slowbalization’ delays but its identity entity finds in the synthesis a well-defined profile that gives a precise entity to the term of urban infrastructure.

With the treatment of the two cases in the previous chapter we entered the internal workings (assembly) of the system of infrastructure and we tried to describe the changes underway, Some criticisms have been highlighted starting from two examples. – At the end of the last century, many high-income developed countries faced a fiscal crisis that affected the possibility to update their infrastructure. There has been no repair and replacement of obsolete infrastructures with the addition of investments in public infrastructures in decline compared to GDP growth (Dalla Longa, 2017; Wagenvoort et al., 2010; Whiteside, 2017). – There is a transition from public works to PPPs, from a single D&C (Design & Construction), contract typical of a welfare state model, to a Long Term Contract model that connects the D&C to the O&M (Operation & Maintenance) typical of a state that integrates with the market. – The globalization of infrastructure encompasses finance with its logic and its profitability timeframe. – We exit the national boundaries to which public works had been confined for decades and centuries, and which the national legislation of the welfare state had defined, and we enter a global dimension driven precisely by the modification of public works in urban infrastructure. – Globalization and the language of finance end up differentiating between the nation and global levels and standardizing the assembly processes of infrastructures within the national territory. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_7

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– Breaking the segmentation and specialized differentiation of infrastructures and considering them as urban infrastructures implies making them uniform within new languages for assembly. – The new era of infrastructure requires studying new symmetries and knowledge and professions not yet present. As a result, assembly pathologies increase and create visible breakdowns. – The public administration and the instruments used for decades need to be removed and rebuilt, and this is one of the problems of the breakdowns. It manifests itself in a contradictory form, also through a fight against the elites and knowledge that then requires being reformulated and not eliminated. – There is a need to activate new forms of management, with a much greater management culture than that present until now within the assembly of infrastructures, with new tools and teams compared to those used up to this point. – In the absence of a revolution regarding the new constituent aspects of the DNA, the labor of the passage from public works to urban infrastructure will be marked by strong inconsistencies and the difficulty to “digest” the passage for the various components and aspects of knowledge required to be constituted around the assembly. – The change of DNA will also involve moving in a contradictory way between infrastructure as a push factor/mitigation of globalization and global cities (push element and restraint). Integration of infrastructures within urban infrastructure or presence of interstitial fragmentation. Push and slowdown of globalization. – The change of DNA is mainly affecting high-income developed countries precisely because a significant amount of knowledge, rules, specializations, regulations, procedures, and new forms of financing and assembly to be transformed (accountability) has been accumulated. Hence, the reference concerns brownfield infrastructures, while it regards the change in greenfield infrastructures in emerging countries is less. The latter have less complexity to reconvert. – The new forms of assembly of infrastructures have a further critical element which is the speed around which they confront each other, which is however the opposite of the time that the DNA change requires. – The cases treated, in addition to the pathologies that best highlight the labor of the DNA modification, bring out other passages (Fig. 7.1). – Funds enter with the interests that they bring along to enter the dynamics of the assembly of infrastructures alongside new management logics that differ in form and substance from the logic of public management. – Through the funds, the direction of the new assembly management is no longer just national, but through the international organizations that operate within the same application logics they can push towards new forms of global homogenization that are linked together. The transformation of infrastructure into assets is an acceleration from this standpoint. – Infrastructure as an asset is more disruptive than real estate assets. – Multinational coding and languages are used which grow in scale around the transition from public works to urban infrastructure.

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– There are new forms of global control: indirect (market), or supranational (e.g. EU control through directives and new forms of accountability exercised with stability pacts). – The assembly system, together with the infrastructure itself, ends up constituting the competitive advantage of a global city, and more generally of a country. – For infrastructure, risk management plays a significant role, as it is now structural in the market and in banks and the use of credit. – An acceleration is enacted on the concept of urban infrastructure. – Within this context, in the medium and long term, PPP represents the most innovative form of assembly. – Urban infrastructure absorbs new languages, that typical of the asset, which makes it similar to other assets. In governance, the technical figures typical of the public work phase (D&C) are reduced and figures with the global vision to manage assets appear. – Different knowledge leads to a different classification of infrastructure; a dichotomy is established between urban infrastructure and the rest of the infrastructure. That which responds to the logic of assets and globalization is redesigned from another point of view; what Brenner (2003) calls differentiation between territories or unequal development within the space of the state. – Urban infrastructure and real estate, both understood as global assets, merge, linked by the same interests. The arena where the merger takes place is only that of global cities capable of attracting large capital and funds. This is also combined PA/State

Public administration / State

National economic operators + global multinationals

National economic operators

International Finance (Funds) D&C

D&C + O&M

Public work State Accounting / Public Debt

Mainly national legislation

Infrastructure

International controllers (EU / stability pacts) Accounting State Public debt + global ex. EU Spreads and Markets

Multinational legislation (e.g. EU on assembly) Integration

Differentiation

Risk management

PPP

Global evolution / threats (pandemic with critical points in urban systems)

Evolving urban infrastructure

Gear with globalization

Innovative infrastructure that merges with technology and transformed its traditional application fields

Merger with urban systems and other assets Integration with real estate and strengthening of the global city

Fig. 7.1 Evolutionary sequence from public work to urban infrastructure

Growth of the global competitive advantage

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with the most innovative technology, which is also elevated to the rank of an asset, that of interconnections, communication, apps, big data, data detection and rapid data transfer. The urban and global system remains a formidable meeting and melting point between these assets. – A serious ‘threat’ appears on a global level, the pandemic, which has significant points of impact precisely in the most interconnected and extended urban systems, and can create new unforeseen trajectories. There is also another possible interpretation that can be made with the massive entry of funds into the financing of urban infrastructure: – The change of the capital lender takes on significant importance in urban infrastructure assembly. Among the innovative elements is the fact that the single urban infrastructure is seen as an integrated entity and not, as for public works, a structural separation of often non-communicating segments (partly dictated by specialization). For example, between D&C and O&M; – The fund cannot be enclosed within a nation. The attempt to restrain it within a national context has often failed (Whiteside, 2017); although with different models, depending on the countries they belong to (Inderst, 2014). This certainly applies to the major funds investing in infrastructure. These funds, which mostly cover the urban infrastructure interventions, have offices in the main global cities. They are attracted to profitability and risk reduction. The main funds refer to brownfield urban infrastructures. Their time of entry and exit from the investment is rather short compared to the life cycle of the infrastructure. Their action is often to integrate the assets which they enter and leave (urban infrastructure and real estate), or to recognize difficulties or breakdowns for which they offer themselves as interested rescuers, often when there are non-performing loans that are added to other critical issues. – Funds are able to mobilize a significant amount of financial resources that other more traditional institutions (e.g. banks) are unable to or no longer can mobilize (Basel III—Basel Committee, 2017); they intervene in structurally weak points, such as that produced by a fiscal crisis or financial conditions. Within this area of weakness they provide funds by deferring the interest to be collected, which can translate into (and often does produce) conflicts with the stakeholders of the traditional parts of public works; less with the political sphere, which has a shorter life cycle, and more with the component of infrastructure management or with the users (inclusion/exclusion or increase of costs and deferred and additional payments). – They effectively shift infrastructure governance “by borrowing it from the back door with less transparency,” if there is no symmetry of vision, as Krugman (2016) suggests in “Infrastructure Build or Privatization Scam?” – There is an overlooked aspect that may be useful to point out: with public works, virtuous circles (multipliers) typical of Keynesian policies could be created. Funds often have offices in tax havens. The multiplier effect becomes jammed, there is less tax revenue to recover, and many of the nation’s resources escape the virtuous

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circle of Keynesian public works. Many funds are powered by a nation’s pension funds, which can fuel induced vicious circles when reinvested (Whiteside, 2017).

References Brenner, N. (2003). Metropolitan institutional reform and the rescaling of state space in contemporary Western Europe. European Urban and Regional Studies, 10(4), 297–324. Dalla Longa, R. (2017). Il Public-Private Partnership: L’evoluzione Stato-mercato in opere pubbliche ed infrastrutture. Carocci. Inderst, G. (2014). Pension fund investment in infrastructure: Lessons from Australia and Canada. Rotman International Journal of Pension Management, 7(1). Krugman, P. (2016). Infrastructure build or privatization scam? Krugman Blog. The New York. Wagenvoort, R., de Nicola, C., & Kappler, A. (2010). Infrastructure finance in Europe: Composition, evaluation and crisis impact. European Investment Bank Papers, 15(1), 16–39. Whiteside, H. (2017). The Canada Infrastructure Bank: Private finance as poor alternative. Studies in Political Economy, 98(2), 223–237.

Chapter 8

Financialization in the Global City

Abstract The affirmation that financialization progressively replaces the state in the assembly of significant parts of the city also characterizes the way of understanding urban infrastructure. The claim, therefore, needs to be proved. The choice falls on a case study, able to focus on financialization and set-up applied to the Real Estate and to the urban infrastructure of the global cities. In order to see the effects it is therefore necessary to verify its evolution. Milan is chosen, the most global city of the last thirty years in Italy. The evolution of the last 20 years is analyzed and an attempt is made to verify the intertwining between new forms of Real Estate and the new evolution of urban infrastructures.

8.1 Milan Global City and Financialization At the end of the last century, and in the first years of the new century, large urban centers saw globalization create polarization with the growth of competitive advantage no longer between nations, but between global cities. The theme was dealt with, in an articulated way, at the end of the last century and the beginning of the new (Alderson & Beckfield, 2004; Friedmann, 1995; Godfrey & Zhou, 1999) with a classification reference for the major global cities (Friedmann, 1995; Godfrey & Zhou, 1999). At the level of globalization, Milan has been included in different forms of classification: “global core secondary city” (Friedmann, 1986), “subnational articulation” (Friedmann, 1995), “alpha world cities” (Beaverstock et al., 1999), “Europoles” (Meijer, 1993). The polarization of globalization on western cities intended as a push factor of globalization itself can however find reservations if it becomes a single global reading (Robinson, 2002), that is to say it is necessary to reconcile these dynamics with Cairo (Stewart, 1999), Philippines (Kelly, 1999), Malaysia or Jakarta (McGee, 1995). In Western global cities the The pre-financial crisis period (prior to the bursting of the housing bubble) was characterized by a rapid replacement of obsolete urban functions with other functions (Dalla Longa, 2011). The replacement took place relatively quickly. The intervention, in the global context, especially for western cities where a brownfield existed or was created, involved replacing the old one with new collective © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_8

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private and public functions, as well as with other functions. This took place within the more complex urban areas where there was the presence of old industry spaces, productions or services that are no longer responsive and functional. There was a crescendo of large clients: institutions, funds, and the state in its central and local dimensions. These functions ended up adding to or feeding urban infrastructure. The acceleration was often favored by finance, which has entered the direction and ‘governance’ structure of urban centers in a new form. In large cities, interventions have multiplied; it is no coincidence that cities like London, but also Milan, have benefited from favorable trends. These interventions have helped to position Milan well within international rankings, and helped to place the city at the top of smart cities with a combination of these interventions and urban infrastructure. In GNC (Global Network Connectivity), Milan has a high impact in terms of ranking: its global ranking was 8th in 2000 out of 315 global cities. Before Milan there were London, New York, Paris, Tokyo, Hong Kong, Singapore, Chicago (for data and methodology: Taylor & Derudder, 2016; see also Sassen, 2019 p. 77). Milan is 12th in 2016, with scores of 60.4 and 60 in the two years, with London set at 100. Milan was overtaken in 2016 only by the two main Chinese cities (Beijing 6th, Shanghai 8th), by Dubai (9th) and Sydney (10th), while it overtook Chicago (13th) (Sassen, 2019). The GNC is not the only classification element that emerges from the studies, it is the one of greatest synthesis. There are others (such as: OLA/Office Location Approaches, with all the evolutions and criticalities—Derudder, 2021; APS/Advances Producer Services and others; WCN/World city Network—Derudder & Taylor, 2020) which, precisely because they are the basis of application and sector choices fuel a dialectic and open criticism. In some cases the criticism is radical (Smith, 2014; Smith & Doel, 2010) in others it is more sectorial (Derudder, 2021; Neal, 2021; Pažitka et al., 2021). Even considering the most radical criticisms, the concept of a global city remains. Other scholars of British and American economic geography in the classification of world cities and global creative centers (global cities) place Milan among the firsttier cities along with Chicago, Los Angeles, Frankfurt, Hong Kong, and Singapore, with only four top-level cities that precede it: New York, London, Tokyo, and Paris (Florida, 2005). There is also a further positioning of Milan compared to the Alpha Ranking cities (Florida et al., 2020). At the end of the 90s, contributions on cities, globalization, multinationals, headquarters were one of the main search engines (Sigler et al., 2021). We have gone from the research mentioned at the beginning, and carried out in that period, to apparently more advanced formulas (Rozenblat et al., 2017). Milan has always been represented within this evolution, both at the end of the last century, resulting among the most analyzed global cities (Beaverstock et al., 1999; Nordlund, 2004), and now, in the most recent studies on globalization (Pažitka et al., 2021; Rozenblat et al., 2017; Sassen, 2019; Sigler et al., 2021). So ultimately, as a global city, Milan should be considered as an interesting case study for the purpose of dealing with urban infrastructure within brownfield infrastructure. There are other lists and rankings that over time have monitored Milan as a global city, placing it among the top positions of global cities (Brenner & Kell, 2006; Derudder et al., 2012), See also “Globalization and Word Cities Research” since

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2000, every two or four years until today. In terms of nations with a presence among the infrastructure indicators, refer to “The Global Competitiveness Report”, 2016– 2017 (several years), “World Economic Forum”. The use of widespread and heterogeneous indicators may however appear questionable if used as the only parameter to classify a global city such as Milan. Particular interest pertains to the assembly of urban renewal and expressly to the more architectural and engineering component, and at the same time, to the commissioning bodes that guide the process of urban renewal. The orientation concerns: – the possibility, if we refer to Milan, of identifying the phase of evolution from deindustrialization, at the end of the last century, to the more recent phase of ‘financialization’ applied to a global city; – the number of these types of interventions within a few identifiable urban structures. In Italy, the explosion of real estate involved very few cities, in line with global financialization. Milan benefited mainly from the rebuilding of its skyline. Also addresses the issue of financialization applied to the city of Milan. Another example applied to a city that through financialization has seen the joint application of urban infrastructure and real estate is Chicago (Weber, 2010, 2015); – the procedure for involving the major architects (‘starchitects’) and their role in the assembly of the asset; – the role of finance and funds; – the incompatibility, often, between big names and public procedures in the assembly of the asset; – the evolution of urban infrastructure. As regards the assembly of assets, traditional public clients, in the case of design and construction contracts (D&C), did not favor the hiring of ‘starchitects’. This was due to the intrinsic formula of the public tender. With the PPP model (public– private partnership) there are much greater possibilities for the private/public client to involve major architects in the assembly (D&C plus O&M: operation and maintenance). When completed, new projects often contribute to creating high inclusion/exclusion factors. There is a reshuffling of the use of the city. Dead or underutilized parts become the new beating ‘heart’ of the city due to the enormous investment of financial resources made. For Milan, by putting together several elements, it is possible to look at financialization since the beginning of the 2000s and the evolution that has occurred: – compared to previous interventions (pre-financialization); – the rise of finance also in relation to the different way of configuring the previous intervention; – a different way of integrating real estate and urban infrastructure. Harvey (2014), along with others, notes a new phase of financialization starting from the 70s–80s with globalization, deindustrialization, and the growth in importance

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of brownfield areas and infrastructure. A contradiction is created between the physicality of a capital and its mobility. Physicality is made up of all those materials and products invested in previous periods, which enters into a deep contradiction with mobile capital (financialization), that resembles a wave that submerges the physicality of the previously invested capital. It can overwhelm that capital and constitute a non-use (destruction of value) or pull it or readjust it to new uses and functions. The major urban systems, and developed, high-income systems in particular, represent points of this transformation that Harvey (2014) also defines in the form of an acute contradiction. A distinction is therefore made between financialization and the processes used previously, and we are witnessing the rise of a global real estate market and the merger with urban infrastructure, with significant differences between mature urban systems and those resulting from new urbanization. The interventions in Milan well represent this past and present evolution and also the evolution within financialization in recent phases. It becomes useful to discuss two ‘case studies,’ that focus on ‘assembly’ and the proportion between private and public space, and the centrality, importance, and growth of infrastructure. They involve funds, finance, leading economic operators, and top international players. It is the concept of ‘assetization’ that allows this merger to take place, that prior to the strong integration of globalization, finance, and urban infrastructure, was almost unthinkable. The sequence makes it possible to highlight the birth and emergence of financialization in real estate and urban infrastructure in a global city like Milan. At the end of the last century, the capital of Lombardy decided to intervene with important changes to its urban structure; it is necessary to replace functions that were no longer responsive. The process began with a phase of crisis in the orientation of the city, in which the crisis of industry (deindustrialization) was mixed with the birth of financialization in the evolutionary phase. The comments reported by Gonzalez (2009) can be summarized: “Milan is struggling to reinvent itself and resume the international leadership it once held as an industrial city”; or what OECD (2006) said about Milan: “a glorious industrial city challenged to transform itself into an international service hub.” There have been some papers on the transformation of Milan in the phase in which it was possible to see the transition from post-industrial to ‘financialization’ (Anselmi & Vicari, 2020; Gonzalez, 2009; Kaika & Ruggiero, 2016; Mosciaro, 2021; Savini & Aalbers, 2016). The intent here, in this context, is to highlight the intertwining between new real estate and urban infrastructure as it tends to shape and evolve. Kaika and Ruggiero (2016) deal with the treatment of Bicocca by indicating the transition from “transformative role in the transition from industrial to financial capitalism,” but the contribution remains within the importance of the land rent left free by deindustrialization in the implementation of financialization, led by the industrial elite and other institutions. However, even if linked to globalization, this remains a partial and incomplete analysis, as underscored by the case of Porta Nuova and City Life dealt with below. The main reference cannot be the land: land financialization, or industrial land into a financial asset.

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Anselmi and Vicari (2020) analyze Porta Nuova with a sociological slant in which the debate on the intervention within that semi-central area of the city emerges through an analysis that begins in the 1980s, paradoxically blocked by fragmentation of decision-making and conflicting interests, to the recent phase when the deadlock was broken. In the article, perhaps too much weight is given to the role of a developer of Hines (Catella); this derives from the evolution in the method of analysis of the ‘City as a Growth Machine’ (Cox, 2017; Molotch, 1976). In reality it is globalization, it is the global city that drives investment. In this we can in part see the temporal difference with the Bicocca case: financialization was in the embryonic, development phase in that case, while it was overt at Porta Nuova. The analysis indirectly demonstrates the role of financialization in overcoming local divisions and mutual vetoes, so much so that the term ‘back seat’ is used for other alternatives, given the quantity of global capital that can flow from funds to place the local government at a disadvantage compared to the holders of global mobile capital. It is no longer the Bicocca ‘lot’ (Apportionment Plan) and the negotiation around it, even for urban infrastructures (university and theater), that determine the assembly of the intervention, including the sale of the ‘lot.’ It is the leverage of financial capital available at all scales that limits the local level. It is the full effect of the global city, of financialization, and of the new urban infrastructure that prefigure the choices. Anselmi and Vicari (2020) trace back to Porta Nuova the intervention by which “Milan made it to the big leagues”; in reality, that intervention was the effect of the fact that Milan, like other global cities, is within the network of global cities. The resulting urban infrastructure responds to those logics of development with dynamics and influences superior to those that can be exercised for Milan by the power of the state. This theme of being shaped by financial markets is not new (Gotham, 2006; Rutland, 2010; Savini & Aalbers, 2016; Weber, 2010). Due to the dynamics of globalization and the resulting network, in that phase Milan moved with more power than the Italian state to which it belongs. Mosciaro (2021) analyzes CityLife. In the comparison between Bicocca and CityLife, which also emerges from this chapter, there is a predominant role of insurance companies over other subjects in CityLife (Generali and Allianz Italia in part). Pirelli RE also participated in the tender for the purchase of the area, but its bid ranked behind Generali and its partners, and therefore was excluded. This is a clear sign of a change of the players in the arena. With the entrance of the large insurance companies (Generali), financialization is brought to maturity. There was an offer of 523 million euros for the purchase of the area owned by Fondazione Fiera Milano (FFM) with a base price of 310 million euros and with a bid 15% higher than what was offered by Pirelli RE. The purchase cost of the area proves to be higher than that of the market (the area was 250,000–280,000 square meters [sqm], of which 50% was allocated for parks). In the various steps of assembly of the interventions, Generali, and Allianz initially, proved to be the directors and the proactive subjects more than others, and became developers themselves; a new function, despite their role as property managers, being insurance companies.

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8.2 Milan and Brownfield 8.2.1 Milan Bicocca The Bicocca project was an important urban transformation project carried out in the city of Milan following the deindustrialization of the city. It was an intervention that anticipated financialization, even though some (Kaika & Ruggiero, 2016) already define it as a financialization operation. Its importance is due to: 1. the number of actors involved, although the role of the multinational company Pirelli, the owner of the area, was predominant. It went from an industrial area (brownfield) to an infrastructure, residential, and service area. There was already the transition from industrialization to pure financialization for Milan; 2. the value and extension of the investment, that were much higher than other interventions previously carried out in Milan; 3. the relationship between the events affecting the owner of the area (the multinational industry Pirelli), and the dynamics of the project. Bicocca can be considered an example of urban transformation undertaken by the owner to cope with a crisis it was experiencing. In fact, the large area was not part of the Urban Transformation Plan (Director Document) approved by the Municipality. Despite the guidelines in this document, the planned projects remained just ideas, and the unexpected Bicocca project was carried out following Pirelli’s lead, based on the company’s desires and choices. The redevelopment of the Bicocca area must be contextualized within the framework of the changes occurring in Pirelli (one of the largest companies in Milan and Italy) as a result of the globalization of the market, and only secondarily based on its business strategy (industrial and financial strategies). In the 1980s, Pirelli’s risky activities on international markets increased, until the failed attempts to buy Goodyear and Continental. As a result, Pirelli accelerated its major reorganization and planning.

8.2.1.1

The Phases of the Intervention

Phase I—The first phase of the project began when the idea for the renewal was conceived around the theme of high-tech during one of Pirelli’s most serious crises. This phase was characterized by the first macro agreement with the main public institutions to carry out the intervention. The Municipality and the other institutions fully supported the private company and its development idea through the strengthening of internal research and the development of administrative activities to the detriment of industrial activities, to be decentralized elsewhere. This

8.2 Milan and Brownfield

199 Productive

Green - car parks

9%

Residential

24%

17% Commercial

4%

Research and Education

15%

Tertiary

31%

Fig. 8.1 Distribution percentages of the different functions on the basis of the gross floor area

was the time when many private players were attracted by the opportunity for development of a high-tech hub in Northern Italy. Phase II—The second phase began at the end of the 90s and was characterized by the definitive abandonment of the Technocity idea and its replacement with two new urban infrastructures that can be defined as social: the new Bicocca University and Public Theater Arcimboldi. The project changed rapidly with respect to the production scenario; the configuration became characterized by functions aimed at consumption (commercial and housing) and public and collective infrastructures. Figure 8.1 shows the distribution percentages of the various functions on the basis of gross square footage: Productive 9%; Residential 17%; Tertiary 31%; Research and education 15%; Commercial 4%; Green-parking 24% Phase III—The third phase of the project started in 2004, from a different perspective. While at the beginning the project was governed by the goal of maximizing the return on the investments (development was driven by demand in the housing market), in this stage the client decided to redesign an area that would include a significant presence of a type of urban infrastructure. The main innovative feature of this project was the birth, within the project’s structure, of a new economic actor in urban transformations: the real estate developer, that in this specific case, emerged from the ashes of deindustrialization, and in which the industry itself (Pirelli) sought to enter the new markets that would later clearly be subject to ‘financialization.’ This was one step, whereas the actors in the subsequent phase of ‘financialization’ would be others. Pirelli Real Estate, a few years after the

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conclusion of the Bicocca intervention and after other attempts to remain on the national and international market, went out of business. On many occasions, the declarations of the top manager of Pirelli Real Estate (RE) indicated that “complex urban interventions such as Bicocca are strongly linked to PPPs.” These were statements; the truth about the Bicocca project may be different. Before the 1990s and in the early part of this century, the real estate players on the market were builders and lenders whose focus was on the construction phase. There was also some sort of separation between supply and demand for new real estate developments. With complex urban interventions, the new scenarios begin to change. In the 1990s in Italy, with its new line of business in real estate, Pirelli became the first real estate developer able to build an entire complex urban investment. The second important innovation, although connected to the previous one, is the role that the marketing and promotion function took on, stimulating various targets of demand. The transition from deindustrialization to recent financialization is current and from the pre-pandemic phase, and has seen the disappearance of subjects such as Pirelli RE and the birth of promoters and funds. With the other interventions that would follow, Porta Nuova and CityLife, in Milan we are fully within the sphere of financialization. The Bicocca case (Fig. 8.2) saw the intervention of various public entities with multiple roles, including those relating to the creation through partnerships of the university urban infrastructure, the theater, and other interventions. They were mostly configured as new greenfield urban infrastructures (built from scratch) inside a brownfield area, rather than a conversion of existing infrastructures. Of course, there were the network infrastructures that previously served the industry and the

Fig. 8.2 The Bicocca area after the renewal

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existing suburban area (transport, energy, sewage and water systems), but the major intervention was greenfield (new infrastructures) inside a brownfield (industrial area undergoing decommissioning). Important roles were played by the Municipality and the company, that decided the three phases in which various public administrations entered the process: the phase linked to work and employment, the phase linked to Technocity and hightech production, and the phase of the Bicocca area intended as a container for the placement of different creations not related to the first two phases. In the relationship with the Municipality, the traditional instruments of regulation and assembly were abandoned. We were also faced with a proactive private entity ingrained in the city’s history that did not stop at closing its production activities, but rather proposed new profits and business from the use of the local territory. It is interesting to note how Pirelli used an integrated communication strategy in the thrust phase to obtain a modification of the urban plan, while, once the modification was obtained and assembly phase began through the ‘Apportionment Plan’ (“PdL”), all of this passed through single operational tactics with the involvement of the public agencies in determining the composition of the lot. This was especially valid for the area of the University (more than 20 hectares), thus creating new alliances between the public sector and Pirelli. The same goes for the Teatro alla Scala (La Scala Theater).

8.2.1.2

The Funds and Financial Instruments Used

The amount of funds attracted by the initiative was almost three billion euros, with reference to 100 hectares of land. Economic and financial plans were developed (as were due diligence, leasing scenarios related to some real estate funds, risk management tools, etc.); however, some of these studies were not considered important due to the continuous change of times and strategies. More important was the more empirical data on individual types of interventions and cash flows related to costs and profitability expected per square meter. Negotiations with the public entity took place on the basis of empirical tools with elements of flexibility. The operating elements were thus determined by expected costs and revenues, verified marketability, time assessments, availability of resources, and cash flows. In a nutshell, the negotiations with the Municipality were centered on accepting requests for public use of some parts of the area in exchange for higher building indexes or types of use favorable to Pirelli. The public funds that flowed directly into the area due to various negotiations concerned: a. the new university building (250 million euros); and b. the new buildings for some public entities (INPDAP, CNR).1 1

The INPDAP is a social security institution for public administration personnel; The CNR is the National Research Center.

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To these we must add the indirect public funds deriving from the payment of the urbanization fees by Pirelli, which are certainly to be considered public funds: c. d. e. f.

the sale of sports facilities (5 ha); the industrial archeology hangar used as a modern art museum (1.5 ha); public green spaces (a park); transportation.

A different approach was used in the construction of the Arcimboldi Theater (14 million euros from the City and 17 million euros from Pirelli).2 In a different form, this also regards a kindergarten and a school.

8.2.1.3

Managerial Models Adopted

The direction of the Bicocca case was mainly led by Pirelli. Yet this didn’t mean that the public administration did not have a role in negotiating the actions, presenting counterproposals, and in some cases, balancing private action with specific public interests. For the public administration, as for Pirelli, it was a new scenario with respect to the past and the rules on accountability known up to that time. At times there were unfavorable judgments from national legal bodies (failure to implement certain operating procedures, tools, norms, and selection criteria, etc.) as there were adverse judgments by European bodies as well, such as the judgment of the Court of Justice of the EU (C-399/98, 12 July 2001). It is interesting to underscore how this confirms that the Pirelli case was the genesis of something new: on the one hand, the crisis of the traditional tools and rules that had to be applied, which appeared inadequate, and at the same time it seemed that something was lacking that could replace these tools and rules. In the transition from deindustrialization to financialization, and from the welfare state model to PPP that followed, the contradiction between the new needs and actions and the rules and tools present up to that point was made clear. They represented exactly the metaphor of the passage from pre- to postfinancialization and the asymmetric impact with existing accountability; a strong, irrepressible dynamic of rigid finance and rules and legislation belonging to the culture of welfare and its regulation. The management adopted was an interconnection between a plurality of public and private actors in the different phases of the process. Particularly interesting was the interconnection between the public and private designers. This was partly due to the rapid change in strategy from the private actor.

2

This PPP intervention was dealt with in a judgment of the European Court of Justice (C-399/98, July 12, 2001).

8.2 Milan and Brownfield

8.2.1.4

203

Private Actors Involved in the Renewal

The history of Bicocca is linked to its owner, that transformed itself in order to take advantage of all the economic opportunities deriving from the development of the project. The realization of the project gradually followed the corporate transformation within the Pirelli group. In the design and urban planning approval phase, the owner of the area was Società Progetto Bicocca (a company of the Pirelli group). Subsequently, with the PdL obtained, small and medium-sized special purpose vehicles or entities (SPV srl) were created within each PdL with the sole purpose of implementing the project. There was no precise strategy, but rather the center of operations remained the PdL and SPV srl, always different in terms of composition; while the area of the business strategy remained in the hands of Milan Central Realty, the real estate holding company of Pirelli, responsible for overall project coordination. Milano Centrale Immobiliare (MCI) was formally born in the early 1990s and then transformed into Pirelli Real Estate (PRE) after the acquisition of UNIM in 1999– 2000. PRE becomes a major Italian real estate company listed on the Italian Stock Exchange. Milano Centrale was instead 100% controlled by Pirelli & Co. In the 1990s, Milano Centrale Immobiliare was not comparable to other international real estate companies (e.g. British or American). In 1992, Milano Centrale Immobiliare signed an agreement with Knight Frank, a leading company in the global real estate market, and in 1997 with Morgan Stanley Real Estate Funds, in order to learn how to enhance its real estate assets, especially in the tertiary market. The choice of having a flexible project, which mainly influenced the selection of the projects, was an important condition for Pirelli, while after the abandonment of the Technocity idea, it was defined modularly to meet the demand of private investors.

8.2.1.5

The Single Types of Actors

a. The owners of the area The whole area has a single owner: Pirelli. In a further move (1997–1998), the company acquired another part from Ansaldo (24 hectares, an industrial area abandoned by a nearby steel industry), increasing the entire Bicocca area from 75 hectares (80, if we also consider the green spaces) to almost 100 hectares. This led to the name of ‘Grande Bicocca’ (‘Big Bicocca’). The ownership of the territory and the implementation of the strategies were important for the specificity of all the interventions in the Bicocca area. The presence of an active company, one of the largest in Italy and therefore able to raise considerable capital, and the desire to quickly reconvert the area, were fundamental elements.

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The ownership of the area become an important field to experience the unique creation of the largest Italian real estate company of that time: Pirelli Real Estate (RE), later also abandoned with the arrival of other new generation competitors. In this we can see the very genesis of financialization, new real estate, and a new form of urban infrastructure, one very different from that of recent years with the Porta Nuova and CityLife interventions. Before Bicocca there was nothing significant in this field, at the end of the 1980s there were two small real estate companies in Pirelli, born from a previous merger (Pirelli-Caboto) and Pirelli also controlled, before becoming MCI, the then a small joint stock company Milano Centrale, then MCI. In 6 years, ‘ Milano Centrale RE Pirelli’ increased its value by 16 times (from 15 million euros in 1994 to 250 million euros in 2000; and its employees went from 120 in 1994 to 520 in 2000). In 2001, the joint-stock company Pirelli RE was established, unifying all of the real estate functions of Pirelli including Milano Centrale and stimulating the new company of real estate to make international acquisitions (in Germany and Poland). Namely the Baubecon Immobilien GmbH and Deutschland GmbH in Germany, and Pekao in Poland. b. The builders The builders were not influential, as large corporations were not involved; rather, there was a strong connection with small and medium-sized enterprises. Since 1993, there have been nearly 400 construction companies involved in Bicocca. This is partly due to the particular organization of the operation in this intervention, where the center of attention is not the builder, but the real estate developer. Before Bicocca, in some minor interventions, the relationship was between owner and builder; in some cases, the two figures combined. The subjects with more powers (Pirelli, the developer, and others) realized that the construction or assembly could be carried out by themselves, or that the manufacturer could have replaced them at will, all without reference to qualifications, subcontracts, the size of the manufacturer, ranking in a tender. In other words, trust and discretion, and flexibility and functionality were the elements characterizing the intervention, making it the opposite of a public tender, even though the object was a public infrastructure (e.g. a university). A crucial point of the matter was the financing (credit) and the cash flow also linked to the progress of the work and the interconnections with the buyer and the forms of payment linked to the state of the work. The builder (company) lost its central role and became a subject in decline in the new process. With Bicocca, a new module is born for realization, where the owner and the developer of the intervention were the same subject from the beginning. c. The sponsor and the financer Pirelli adopted two basic models of intervention and financing (Figs. 8.3a,b): one refers to homes, and the other to the service sector. In these two models, forms of financing and assembly can be seen which anticipated the more recent forms of financialization seen in Porta Nuova and City Life in Milan.

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(First model)—Pirelli negotiated and obtained from the Municipality, for a portion of the area, the approval of a detailed building plan (Apportionment Plan). It sold the part of the area included in the PdL to an ad hoc company (CSESpecial Purpose Entity) in which Pirelli holds the minority of the shares (e.g. 26% of the project called “Project Bicocca La Piazza—Ltd)” They have an area of 5 ha: about 3 for private residential units, 1 for commercial units, and 1 for student residences; the majority (74%) held by another real estate company outside the Pirelli group (a property developer controlled by an insurance group). Pirelli gave capital to this company, which also drew resources from the sale of part of the land owned by another shareholder, who in turn had to finance the company in order to reach the majority. A significant part of the investment was financed through subsidized loans. For Pirelli, there was a mix of financing to the company originating from the sale of the land and the injection of capital through direct financing. Pirelli, as a partner of the SPV (Special Purpose Vehicle), showed interest in the relationship with the Public Administration, in the design of the buildings and their ultimate marketability. Once the construction of the lot envisaged by the PdL was completed, it was first made marketable, then the profitability of the intervention was verified on the basis of the stock of each partner, and finally, the choice was made of whether or not to dissolve the Special Purpose Entity. (Second model)—The second model relates to the construction of buildings intended for the service sector. Pirelli again negotiated and obtained approval of a PdL, and a new SPV was created in which Pirelli held all the shares (“Project Bicocca il centro – Ltd”). The SPV sought a company willing to settle in the area (for example, Siemens and Deutsche Bank) and a real estate fund to sell the buildings (e.g. Siemens Kapitalangla gesellschaft GmbH and Oppenheim Immobilien GmbH) and also to obtain financing for the intervention through the sale. Real estate funds would lease the buildings to the companies (Siemens and Deutsche Bank). The SPV, generally the contractor, was in charge of the design and construction of the buildings, and Pirelli RE of the O&M (operation and maintenance). Pirelli itself built its headquarters in the Bicocca area using this model: Lambda— Ltd (Pirelli Special Purpose Entity) executed the agreement with the real estate fund (Unicredito Immobiliare Uno) in 2000 in the form of a “sale of future assets,” and thus with direct financing (leasing). The project was executed by Gregotti and associates architecture firm, and the SPV acted as the general contractor for construction. After testing, the building was leased by the real estate fund to Pirelli with a 9 + 9 year contract. Pirelli RE was responsible for the facility management of the construction (O&M). The three blocks of buildings mentioned above (Siemens, Pirelli, Deutsche Bank) are multilevel buildings (towers) with respective surface areas of 24,000 m2 , 19,000 m2 , and 8,000 m2 Deutsche Bank, covering a total of 5.1 hectares. The intervention in the Bicocca area took place one piece at a time, creating a formula and varying it according to the type of product (housing, services, or urban infrastructure); each intervention made it possible to activate a portion of financing and move on to the next one.

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a 74% Immobiliare Lombarda (*§) PdL Pirelli (§)

Sale of the land

Creation of a Special Purpose Entity (Ltd)

marketing profitability

Winding-up (or preservation) of the company

Pirelli (§) 26%

(payments/financing)

b Pirelli (§) 100% PdL Pirelli (§)

Creation of a Special Purpose Entity (Ltd)

Sale of land and buildings interested

Leasing

Agreements with purchasers and tenants Project design Construction Facility management (buildings) Fig. 8.3 (a) The model adopted by Pirelli for the residential sector (*stock company) (b) The model adopted by Pirelli for the tertiary sector

d. The designers For various reasons, the designer played a very important role in the making of Bicocca. The international tender launched by Pirelli in 1985 and then refined in 1988 also served to attract foreign capital. The guarantee of a famous architect was perceived as synonymous with the quality and value of the investment and therefore with the attraction of capital. The designer was asked to work with great flexibility and a strong relationship with the City. The term urban renaissance is also linked to the instrumental use of the designer (big international architects had never been involved in Milan in urban redevelopment interventions of this type, even if the involvement is not comparable to that of the subsequent cases of Porta Nuova and CityLife). This involvement began to be tied instrumentally to marketing,

8.2 Milan and Brownfield

207 Pirelli RE (*§*) (Bicocca brownfield)

Residential

Tertiary

(Special interventions)

Asset management

Project management Organizational Units

Facility management

Special Purpose Entity (projects)

Credit servicing

(Bicocca area)

Fig. 8.4 Organizational units of Pirelli RE

attraction of capital, and marketability. This aspect would be enhanced in subsequent experiences and case studies. e. The Project Manager (PM) The Bicocca area was divided into projects/PdLs. Each of them had a Special Purpose Entity (there were more than 10 SPV3 ) with the aim of intervening on the peculiarities of each single intervention. Each SPV was governed by ‘shareholders’ agreements (minimum 5 years) which regulated governance within the Pirelli group, especially when Pirelli had a minority stake in the SPV (e.g. Project Bicocca La piazza—Ltd). Each SPV managed more or less 50,000 m2 of constructed buildings. After the completion of the project, the SPV could be dissolved. Some organizational units intervened in matrix form (Fig. 8.4). Particularly relevant was the Project Management Organizational Unit, which had the task of standardizing the interventions of the individual SPVs, in particular concerning: . . . .

administrative procedures, time planning and cost assessments; relations with the public administration; coordination of design and architectural and engineering assignments; construction of buildings, namely the selection and awarding of builders, coordination of assembly and of suppliers; . works direction and supervision of construction sites. In addition to internal staff, 36 outside experts (Project Management experts) were also involved. 3

The name of some of these SPVs were Projects: Esplanade; the Piazza; the Alpha; the Lambda (responsible for the Siemens and Pirelli offices); the Centro (in charge of Deutsche Bank building); the Grande Bicocca multivendita, etc.

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The other organizational unit in matrix form was Facility Management, which intervened in the operation and recovery of the buildings after testing, even when Pirelli was not the owner, as is the case for the university. The Credit Service Organizational Unit was responsible, among other functions, for the preparation of due diligence, credit, and cash flow. Within Pirelli RE, there were staff units that also dealt with contracts, staff mobility, marketing, etc. The “special interventions” also included urban infrastructures such as the university, the improvement of transportation, and the Arcimboldi Theater, where as mentioned, Pirelli acted as a sponsor. f. Urban infrastructure Even in the construction of important urban infrastructures, Pirelli adopted processes that were not so different than those used in the assembly of other private interventions. The University represents an important establishment in the Bicocca area. It has been calculated that over 35% of the area is occupied by university-related functions with 25,000 students (Fig. 8.5). Pirelli created an SPV (Bicocca University Project—Ltd), while design, construction, and facility management were handled by Pirelli itself. The buildings (six) were assigned to three social security institutions (Enasarco, Inail, Inpdap) which in their turn rent the buildings to the university, with all the facilities and classrooms. After two years (2001), the University became operational and a program was prepared by the Ministry of University and Research for the gradual purchase of the university buildings from the public and private social security institutions and pension funds. In 2001, the financial burden for leases was 20 million euros, paid by the Ministry of Universities to social security institutions. That year the Bicocca University was authorized to carry out an initial requesting a loan of 250 million euros, Ministery of University (agreements) (payments/financing) PdL Ministery Public Works Pirelli (§)

University tenant

Pirelli (§) 100%

Creation of a Special Purpose Entity (Ltd)

Sale of land and + block of buildings

Project design Construction (Facility management - buildings)

Fig. 8.5 Project Bicocca University—Ltd

Social security institutions • • •

Enasarco Inail Inpdap

Leasing

8.2 Milan and Brownfield

209

for the gradal purchase of buildings by social security institutions, entirely borne by the Ministry. The two pension funds are one that is private (ENASARCO). We see a particular form of leasing here, not entirely permitted by Italian law and by the European rules in that period. The correct procedure should have been as follows: a. identify the area in which to establish the university; b. buy the area at a low market price (with an amicable agreement or expropriation); c. design tender managed by the public administration for the seven university buildings; d. totally public financing of execution. It was a classic ‘public work’. In that process, Pirelli would certainly have been rejected on the grounds that it did not have either the design features or the characteristics of the builder, and there would have been a huge conflict of interest. Despite the anomaly, the operation appeared quite transparent, as did the public– private partnership, even though this does not mean it was legitimat. For the Arcimboldi Theater (2,500 seats; Fig. 8.6), Pirelli intervened with considerable financing (15.5 million euros). The City also intervened with slightly less funding (13 million euros). In this case as well, we see a partnership with some procedural abnormalities. In the agreements between Pirelli and the City, in addition to the construction of the theater as a reduction of urbanization fees, a intervention was planned for unpaid maintenance on the Teatro alla Scala (Scala Theater), that is organizationally linked to the Arcimboldi. Pirelli coordinated the design and construction without the SPV. The Arcimboldi theater is an urban infrastructure, that once completed, came under the management of the City of Milan. It was managed by the Project Management Organizational Unit of Pirelli RE, and was economically and financially accounted for by Pirelli RE in the form of a deficit, reducing the Compound Annual

PdL

Municipality

Pirelli (§)

Financing

Arcimboldi Theatre

Property of the Municipality

Financing

Project design

Sentence State Council

Construction

(Facility management - buildings)

Fig. 8.6 The Arcimboldi theatre project

Contestation Inpugnation

Sentence Court of Justice

Contestation Inpugnation

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Growth Rate (CAGR). Without a direct intervention by Pirelli RE, the construction of the theater would have been entrusted entirely to the City, transferring the resources for its construction, or public tender procedures would have been used for its construction. The correct procedure according to be followed according to the national rules would have been as follows: a. preparation of the area and financing—total or partial—by Pirelli, according to the PdL; b. call for proposals for the design of the theater prepared by the City; c. call for tenders for the construction of the theater within the time limits defined by the Municipality. The procedure was challenged by the Architects’ Association of Milan for failing to comply with the public tender procedure for the selection of designers. Pirelli defended itself by stating that design was totally free. The Regional Administrative Court (TAR)4 stated that Pirelli was in the wrong, while the Council of State (a higher body) found the opposite (2003).5 Another appeal against Pirelli concerned the construction of the theater: in this case the public tender was not carried out and having been carried out directly by Pirelli, the company was claimed to lacked requirements of a builder. The Court of Justice of the EU, in a judgment (Case 2001 C-399/98), found that Pirelli had erred. Other primary urbanization fees were managed by Pirelli RE in the same way: construction of roads, sidewalks, green spaces, an 18 million euro tramway with a connection to two subway stations. In this case also, Pirelli played an important role in choosing the urban infrastructure to be built. Once completed (2003), the transportation infrastructure line was transferred to the municipal transportation company, that became the owner. In the Bicocca case study, the nature of the urban infrastructure changes with respect to previous infrastructure interventions. The forms of assembly partially change; the rules deriving from the previous state model (industrial decline, welfare state and pre-financialization) are in contrast with the new passage of ‘financialization’. These are important parts that are interrupted, creating a clear difference between public works and urban infrastructures. In addition to construction (D&C) a new formula is created for urban infrastructure management: the application of O&M (through Pirelli RE facility management), in the management of public property, find little difference in the management of commercial and service assets respect to the public assets. In the case of Bicocca, there is no highly shared form of PPP. Pirelli always played an active role in choosing which urban infrastructure to propose and include within its area (for example, the university, the theater, and the modern art hangar) and which public infrastructures to sponsor (the theater and tramways). Only later (2007–2008) through agreements with the city, was the need considered to 4 5

Lombardy Regional Administrative Court, section III, 7 August 1998, n. 1953 Council of State, section V, 14 January 2003, n. 86

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211

subtract units from the free market (4.7 hectares -ha) by activating facilitated housing (4.5 ha), social housing (0.5 ha), housing for university students and others small social and recreational services (0.7 ha). It should also be noted that the Bicocca building index is now high (1.2 m2 ; amount of surface per square meter of land), a symptom of very intense use of the land (and profitability for the company).

8.2.2 Porta Nuova and City Life Porta Nuova and CityLife are interventions located in more central areas of the city than Bicocca; this is the semi-central area of Milan, where the buildings redesign its skyline. The interventions exceeded four billion euros, of which more than two billion for the Porta Nuova project alone. The City of Milan owns considerable amounts of the areas (75% of the existing areas for Porta Nuova). The old functions that were replaced were underutilized or abandoned areas, or in the case of CityLife it was a reutilization, after demolition of the old headquarters of the Milan trade fair, that moved to another part of the city. The number of square meters does not differ much for the two areas: 320,000 for Porta Nuova and 280,000 for CityLife. The urban infrastructures are tangible and ‘molecularly’ remodel the surroundings and create new hubs and poles of attraction in the city through public spaces and/or collective transport and public and functional roads. The direct resources that the economic operator constructs for the public, on the basis of the two interventions, can be estimated at around half a billion euros, which can be used largely in new urban infrastructure linked to the intervention area; another share of private investment is added to public investment for infrastructures and collective spaces within an urban planning agreement. The interventions partially use the existing infrastructures, which in part would remain unused or underused, as the previous functions (production and administration) are no longer there. The sewers and the aqueduct have been significantly upgraded. The electricity and gas networks were rebuilt and the underground cables and pipelines were repositioned, while interference between systems was studied. The road system was revised with the creation of connecting tunnels. Public transport, parking lots, and subway lines were redesigned with dedicated stops for both Porta Nuova and CityLife with a stop inside the main district (the three towers) and others nearby (Fig. 8.7). For CityLife, the contributions made by private operators to the City of Milan for the new districts amounted to 192 million euros, divided into urbanization costs (40%); an extraordinary contribution (19%) largely allocated to underground structural works linked to the metro station line (M5); “monetization of the standard” (20%), intended to monetize the new museum of contemporary art; the additional contribution (10%) partly linked to the provision of the M5 metro line and partly intended for the re-functionalization of an important sports facility (the Vigorelli: the historic, internationally famous velodrome) and neighborhood and attraction works; and finally works for public use (11%), such as squares, pedestrian spaces

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8 Financialization in the Global City Bicocca

CityLife

Porta Nuova

(B)

(A)

Rogoredo Santa Giulia

(a) Evolution of the road system

Evolution of the subways and underground transport lines

public lighting network water network and aqueduct electrical network electricalpower power network sewer network electrical power network gas networkpower network electrical telecommunication network electrical power network

(b) Fig. 8.7 Map of Milan where the investments were made (Real Estate: a: Porta Nuova; b: City Life); (a – Porta Nuova): new urban infrastructure in the brownfield area

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213

and public parking lots. In addition to the infrastructures indicated, there were highquality renovations and the reutilization of historic buildings for public-collective use, the construction of schools and nurseries, pre-schools, bicycle and pedestrian paths, Carabinieri barracks and police stations, a congress center and in both cases urban parks considered to raise the quality of the city (one of the largest is that of City Life in the central part of the city, 160,000 square meters; the other, in Porta Nuova, is 90,000 square meters and called the library of trees). The new urban renewal are divided into components that ultimately are simple to break down: 39% residential (44% in CityLife, against 32% in Porta Nuova); 39% offices (the percentages are reversed between CityLife, 35%, and Porta Nuova, 45%). The percentages are net of the urban park, that is 100 square meters, about 70% is covered by private functions (residences and offices) and infrastructures and public and collective spaces; while the remaining 30% is a public park. It follows that if we consider all the space, the private areas are less than the public-collective spaces. The same percentage could apply to the overall cost of the project. This all concerns the implementation (D&C) of design and construction; however, it is not known how much the cost of O&M is; much will depend on the buyers of the various functions, their income and needs, and on the institutions and companies that use the office and commercial spaces. The role of the public in urban infrastructures can grow or shrink over time, different mixed management formulas may arise, and much will also depend on the competitive advantage that these investments will be able to develop. Virtuous or vicious circles may arise with the growth and/or urban crisis generated. The investment can be estimated as a few billion (D&C), higher than five; but the O&M in the next decades—according to some estimates (Dalla Longa, 2014)—will be multiplied by seven. Will this be an element of development or crisis? The investment project (D&C) is composed of several buildings that mark the Milan skyline. International architectural firms were hired, with the implicit intention of transforming the signature of D (Design) into value added to the asset. The client and ownership of the buildings themselves are represented by the largest banks and insurance companies in the country which, in many cases, use the new complexes as their headquarters. For Porta Nuova, these are: – Unicredit (built in three years, 2009–2011); the design was entrusted to the North American architecture firm Cèsar Pelli; the height of the building is equal to 231 m, with a floor area of 50,500 square meters for offices and 6,370 square meters for commercial functions; – Torre Solaria (built in four years, 2010–2014); the design was entrusted to the American architecture firm Fort-Brescia of Miami; the height of the building is 142 m, with 37 floors, – BNP Paribas—Diamont Tower (built in three years, 2010–2012); the design was entrusted to the North American architecture firm Kohn Pedersen; the height of the tower is 140 m, with 61,000 square meters of surface area, including 45,200 square meters of residential and 6,300 square meters to be used for offices.

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8 Financialization in the Global City

– The Vertical Forest—(built in 6 years 2009–2014); the project was by the architect Stefano Boeri; the height of the two buildings is 110 m and 26 floors, and 76 m and 18 floors; – Unipol-Sai Tower (the foundations are under construction); based on the design by the Mario Cucinella architecture firm… the commercial surface area will be 35,000 square meters; At the edge of the Porta Nuova area, but within the renovated area, there is also the construction of the new headquarters of the Lombardy region which was assigned to the contractor through a public contract. – New building of the Lombardy Region—(built in four years, 2007–2010); the design was by the architecture firm Pei Cobb-Freed & Partners of New York and Caputo Sistema duemila; the height of the building is 161 m, with various architectural modules not all developed vertically and with a significant extension of area equal to 33,700 square meters; the cost was 400 million euros, that at the end could be entered in public accounts, referring only to D&C). CityLife includes three principal buildings: – Generali Tower—(built in four years, 2014–2017); the design was entrusted to the architectural firm Zaha Hadid; the height of the building is 177 m with 44 floors for offices. The tower is able to accommodate 3,200 people with a commercial gallery at the base. – Allianz Tower—(built in four years, 2012–2015); the design was entrusted to the Japanese architecture firm Arata Isozaki; the height of the building is 249 m and includes 50 floors with 53,000 square meters capable of accommodating 3,800 people. It is used for offices, while the complex includes schools and pre-schools. – Curved tower—(the year of start of the works was 2016); the design was entrusted to the Daniel Libeskind architectural firm; the tower height is 175 m and 28 floors. The works were completed in 2020 (built in five years, 2016–2000), while the building was opened for use in 2021 (Fig. 8.8). The starchitect phenomenon is itself a phenomenon within a phenomenon associated with strong globalization and global cities, Sklair calls it a new form of ‘iconic’ architecture (Sklair, 2006, 2017). The term starchitects has its genesis in the second half of the 90‘ (Klimek, 2013). There is some correlation between starchitects and works done within the global cities; both Knox (2012) and Jeong-Patterson (2021) define the correlations with some empirical verification, Jeong-Patterson for North American cities. Knox (2012) indicates just over twenty archistars, on the other hand with a different and unrelated criterion Jeong-Patterson (2021) indicates some global cities within which significant and connected projects of archistars appear. For Porta Nuova and CityLife Cèsar Pelli, Zaha Hadid, Arata Isozaki, Daniel Libeskind are considered by Knox in the list of starchitects, in line in form, skyline and the content with other global cities projects. Sklair (2012) indicates four components in the globalization of starchitects.

8.2 Milan and Brownfield Towers / Plexuses

215 years - construction (C) Towers / Plexuses

(D) Design - starchitects

2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Unicredit Tower Solaria BNP Paribas Woods verticale Tower Unipol-Sai New Palace Lombardia Tower Generali Tower Allianz Tower Curva

USA USA USA IT IT USA UK J USA

1 2 3 4 5 6 7 8 9 10

Cèsar Pelli Fort-Brescia Kohn Pedersen Stefano Boeri Mario Cucinella Pei Cobb-Freed Zaha Hadid Arata Isozaki Daniel Libeskind

Unicredit Tower Solaria BNP Paribas Woods verticale Tower Unipol-Sai New Palace Lombardia Tower Generali Tower Allianz Tower Curva (residential CityLife)

Fig. 8.8 Assembly (D&C) of the urban renewal of Milan (Porta Nuova and CityLife)

a. Those who own and/or control major transnational corporations and their local affiliates (corporate fraction). In architecture these are the leading architecture, architecture—engineering and architecture—developers—real estate companies. Compared to the world’s main consumer goods, energy and financial companies, the revenues of the largest companies, that of the architecture sector, are rather modest. However, their importance to the built environment and their cultural significance, especially in cities, far outweighs their relative lack of financial and business strength. b. Politicians and globalized bureaucrats (political fraction) who help decide what is being built, where and how changes in the built environment are regulated. c. Globalization professionals (technical fraction). d. Marketing and media. The latter are the figures responsible for the marketing of architecture in all its manifestations. In reality, to these four possible components is added a fifth, not mentioned, the most important. The client who is often a fund (see Chap. 6) accompanied by a developer. The theme is that of the organization and financialization and morphological change

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of global cities driven by the significant financial availability of funds and institutional investors. All the actors mentioned end up being the evolution of the same phenomenon. In the case of architects there is an intertwining between their work carried out in the major cities (Knox, 2020) and the presence of the work carried out that strengthens the global cities themselves just as starchitects drive some of their standing from le visible presence of their built work in major cities, so the potency of the symbolic of global cities is derived in part from their association with starchitects and starchitecture. Without the fifth point it becomes questionable what Gospodini (2002) affirms and confirmed by Sklair (2005), namely: “in the era of globalization, the relationship between urban economy and urban design, as established throughout the history of urban forms, appears to be reversed. If for centuries the quality of the urban environment has been a result of the economic growth of cities, today the quality of urban space has become a prerequisite for the economic development of cities; and urban design has taken on a new strengthened role as a means of economic development (2002: 60)”. Urban design is not the independent variable as Gospodini (2002) and Sklair (2005) seem to affirm, but it is the client (fund and finance in primis) who, through the setting (highly globalized urban economy), establishes the relationship between urban economy and urban design, albeit in a different form from the past. These projects are almost always financed by the private sector, while in the past the monumental, institutional and imaginative architecture and configuration of iconic spaces often had a strong public component, but today these are emblems and channels of globalization. The architectural industry, but it would be better to say, for the fifth missing point, the client and financialization organizes social production and marketing, also shows how these interventions increasingly dominate the built environment and promote the trend towards globalization of cities. It directs new urban consumption and new forms of inclusion/exclusion. In order to complete its function, the new iconic architecture (Real Estate) must merge with urban infrastructures right from its conception phase. The interventions to replace functions in Milan are not yet finished in the two areas of Porta Nuova and CityLife. They represent about 1/5 of the areas for possible interventions in Milan, even though, in addition to the disused railway yards, these are the most central areas of the city. The developers were mainly funds (Hines, Coima, and Qatar) for Porta Nuova, and insurance companies (Generali) for CityLife. The influence of the American Hines fund seems to have influenced the hiring of North American architectural firms. The three components of the intervention were: (a) the high-income residential part (11,000–15,000 euros per square meter); (b) the headquarters of large banks and insurance companies; (c) infrastructures, public works, and public and collective spaces. The first two components seem to have been the driving force behind the assembly. In the assembly there was a combination of finance and the sale of part of the properties. Failure to sell raises the subsequent costs of disposing of stock (assets) due to increased financial charges, risking aggravating the unsold portions, or generating a situation of distress for the investments. There may be implications for the work and assembly, that are slowed

8.2 Milan and Brownfield

217

down, or either the need to increase sales costs per square meter or extend forms of rent/sale through rent to buy. Only if Milan continues to be a pole of growth will the urban infrastructure not go into crisis and the O&M will not become unmanageable for the public administration. The growth must take into account the attraction to Milan of high-income buyers mostly from abroad and it must also be considered that in moving to the new locations, banks and insurance companies, and other economic operators as well, must abandon other buildings located in the center of the city. This entails the risk of increasing the stock of unused urban assets if there is an absence of dynamism. The reference always remains either the destruction of value (unused or obsolete functions), or the growth in competitive advantage (Dalla Longa, 2010). Funds and cities always expose themselves to high risk in their growth or fall, and this helps to keep alive the concept of a possible urban infrastructure crisis (the term is real estate bubble: growth or explosion). Past investments have also seen in Milan the rapid rise of economic and real estate agents (Zunino and more in general Ligresti) who have linked their rise, or failure, to particular initiatives (Santa Giulia in the south of Milan for Zunino). The roles of the actors has alternated. In 2015, the Qatar fund took over the assets of Porta Nuova for two billion dollars, that were previously controlled through a close alliance of Hines and then Coima (Cantella). The control and the purchase of assets by the Qatar fund first concerned 40%, and subsequently 100%. The problem for funds always remains that of refinancing in the absence of sales dynamism. In CityLife, Generali Insurance took over the share of Alleanz. The overall data show that Milan has increased its GDP by 3.1% from the 2007–2009 crisis to today, while other national territories still have a negative balance of 4.5%. The number of residents in Milan has grown by one hundred thousand (over 1.4 million inhabitants), which had not happened since 1990, as the trend was constantly decreasing. Growth contrasts with the birth rate, a sign of a different kind of attraction. Other international real estate indicators (Urban Land Institute, 2017) say that Milan is growing both in terms of willingness to buy and invest, noting some ‘excitement’ among international economic operators in acquiring assets in Milan. In 2016, 49% of real estate investments in Italy took place in Milan; the purchase of the Porta Nuova assets by the Qatar fund played a significant role here. However, the critical element is the replacement of productive ‘dematerialization’ (formerly abandoned areas) with residences, and thus production replaced by consumption. The design of global cities and urban infrastructure (crisis or development) remains linked to the vision of the future city. Milan is growing significantly in the international rankings for attraction of investments, while London, which has always been the leader of real estate, is decreasing dramatically due to Brexit, risking a serious crisis in its urban infrastructure. The case study highlights the importance of urban infrastructures in the assembly; they are at the center of the assembly, and generate a convergence of global capital and an attraction and intertwining of major world and national players. New knowledge is created, along with the principles of a global competitive advantage, that involve the city and pull part of the nation along with it. Without the value of existing infrastructures and those that are rapidly added by ‘re- assembly,’ even the convergence of these phenomena would not be possible. The foundations for further development, or

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for a profound crisis, are created if urban infrastructures are not able to drive the interdisciplinary ‘montage’. The biggest problem may not be D&C (the design and construction), but O&M, the functioning and maintenance which concerns not the present but the future, and the huge amount of resources and knowledge and innovation that the O&M challenge will require. In this case as well there is a parallel with the montage of the favelas of Amin (2014) where success or failure depends on the infrastructure, that is embryonic and prefigured for the favelas, but structured and projected with high future ‘governance’ for the mature and global urban structure of this case study. In either case, the underestimation of infrastructure will spell the failure or future disaster of the investment. What has been described is also a different way of representing a part of the concept of urban infrastructure, where the real estate asset merges with the old public work— now a brownfield—and is revitalized by changing its function and turning it into a part of urban infrastructure. The description of new urban infrastructures in the case study contains more indications: a. in Milan that was expanding (peripheral districts) in the previous decades (welfare state model), first there was construction and only much later did public works and infrastructures follow, with almost exclusively public funds; they were never sufficient and the work was of poor quality, badly placed, and had incomplete life cycles and disjointed broken management. The model was that of public works. b. Now it is urban infrastructure that drives the success of private real estate investment, shapes it, and marks its destiny; the capital driving urban infrastructure is significantly ‘private,’ with a public presence. It appears to be integrated in some respects. The unknown factor is that in future years the operation and maintenance (O&M) of the entire infrastructure will, for the most part, be left to the public, creating possible significant unknowns for the city’s budget. To maintain urban infrastructures, Milan must be able to keep alive the virtuous circles activated by proposing continuous investments guided by urban infrastructures. Interrupting the process can create collapses and falls with difficulty to recover afterwards. The model indicated is that of urban infrastructure incorporated into real estate within the development of the global city. There is also clear evidence of a merger between Real Estate and urban infrastructure driven by financialization (primarily funds) in which the change over the previous model of public works is evident. The regeneration process changes compared to the past. However, there are new forms of inclusion and exclusion to be composed and considered in the transition from public works to urban infrastructure (Florida, 2017). The new urban infrastructures are strategic for the success of an investment; a symmetrical non-connection can destroy value, or lead it to default. This is the rule of financial real estate within global cities. A new form of driver management must be created that can move quickly within increased complexity. If successful, a transaction contributes to increasing the competitive advantage of the global city.

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219

The same intervention can have a contraindication represented by new forms of segregation, and can upset the balance between urban integration and inclusion. The sale of the new assets at 15,000 euros per square meter can generate an earthquake for the contiguous settlements that belonged to obsolete areas with low sale or lease costs. This phenomenon belongs to a new and rapid form of ‘gentrification’ that led Richard Florida (2002, 2005, 2014, 2017) to modify his enthusiasm and orientation regarding some types of transformation taking place, in the space of twelve to fifteen years. The sale of assets and their relationship with finance is highly linked to the effectiveness of construction and the reconversion of new urban infrastructures within a framework of enormous growing complexity. The reference here is to the construction (D&C) of infrastructures, but what is much more important and partly unknown is the operation and maintenance (O&M) of urban infrastructures. For O&M, this requires public resources to necessarily be added to private funds, under penalty of gumming up the growth mechanism and provoking a collapse of the competitiveness of the global city. Milan therefore must remain dynamic in order not to fall. Overcoming the concept of public works, in addition to remodulating financing through a change of stakeholders, also derives from the need to shorten execution times: it is the rapid economic and financial change that requires it. There are also much fewer public resources to devote to this specific need and a considerable presence of the funds’ own financial resources; and the separate way of looking at the assembly of the artifacts has also disappeared. In fact, design and construction (D&C) are increasingly a component, often not the most important, but certainly the most visible in many circumstances. However, the most important element is continuity and functioning, and this requires additional resources from states struggling with public debt. These principles revise the role of the specialisms that operated within public works. New hierarchies are created and new disciplines are introduced, in addition to the separation and sub-division of architecture and engineering, finance and management (passing from design to project), risk management, management, and the connection between assets, which is more complex than real estate, entailing knowledge of public and European accounting and budget, not only and no longer national law. All this generates the transition from public works to economic and social infrastructure; not that public works no longer exist, but they are limited, in a reduced role they coexist with the broader concept of infrastructure. Public works are more present in areas not exposed to strong globalization, where there are no high economies of scale that combine large interventions, speed of execution, high levels of integration between construction, management-operation, and remodeling and modification. With this meaning, the traditional division between network infrastructure and public buildings, or “primary and secondary infrastructure” as defined in urban planning, is also missing. It is better to define everything as “new urban infrastructure” There can be little difference, from several points of view, between a Milan metro line (line four) and the Health City, the new headquarters of the National Cancer Institute (INT) and the Carlo Besta Neurological Institute (INB). Both are urban infrastructures, one (subway line) classifiable as economic, the other (healt

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city) as social, which have impacts, albeit in different ways, through the replacement of obsolete functions and on rankings and competitive advantage in globalization. Unlike in the past, neither can be classified as a tender contract, but as Long Term Contracts—LTC, not managed by the state, or at least not exclusively, but by mixed-purpose companies (PPP-DBFOM); representing a challenge, and a strong contradiction, with the complexity of recording the assets outside of the public debt (off balance sheet).

8.2.2.1

Coda

A separate chapter, not addressed here, but very present in the literature (Smith et al., 2021; Tammaru et al., 2016), also for Milan (Petsimeris & Rimoldi, 2016), concerns the forms of exclusion determined by financialization. The theme is ‘settling’ and weak social groups, often on the edge of the crater of a browfield area, but the phenomenon creates new consistent shock waves for the entire surrounding urban assets. There is a problem of new destinations of use of the global city and the new urban infrastructures as well as favoring new forms of renewal also favor new destinations and future consumption (Bryson et al., 2018). The highly critical ‘assetisationfinancialization’ theme with respect to the new forms of exclusion and selection social. To these main forms of inclusion/exclusion are added new interpretative and reflexive matrices applicable to the case of Milan in the pandemic and post-pandemic period that mark new additional maps on the theme (Pasqui, 2022). In the phenomenon described, Milan highlights urban infrastructures that are located inside the brownfield, taking up existing routes and infrastructures and renewing them, remodeling them, adapting them, updating them, reorienting them within the new consumption to do this also creates new segments, albeit minor, of infrastructures greenfield. The focus on the different subjects of the renewal change and urban infrastructures is also due to underlining the epochal transition from different cities, with We focused on the subjects because the map changes from national to global

(A1) There was the State that presented itself with different rules

(A) Previously cities differed

(B) A homologation of global cities is readable

(B1) Globalization (B2) Global subjects

(A2) Subjects who operated were national

(B3) National rules first (public works) and then integrated with Community ones

(B3) Global procedures led by finance

There may be asymmetries and delays

Fig. 8.9 Global city—transition from one model (A) to one (B): from differentiation to homologation driven by financialization

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public works—in which it was the State that presented rules and procedures and the actors and economic operators were mostly national—to a relatively recent phase of financialization-assetization in which an increasingly more homologation of global cities is readable and the subjects (capitals, funds and assembly drivers) are always global. Often bypassing national rules and bringing finance-led global procedures Fig. 8.9). This is what makes Aalbers say as the “urban policies are increasingly moving away from urban planning and housing departments toward finance departments” (Aalbers, 2022). Asymmetries and delays can also arise, deriving from (A) and (B) of the Fig. 8.9 as they are practices that coexist within a transformation. It is that of urban infrastructures and real estate as an asset that ends up involving different cities: European (Milan), North American (Chicago: Ashton et al., 2016) and Chinese cities such as Shanghai, with the construction of the Nanpu bridge and the line one of the subway (Feng et al., 2021) and the creation of the Chengtons, then spread to all major Chinese cities in the construction of urban infrastructures and real estate. Also in that case we speak of financialization (Chen & Wu, 2022) but they are different phenomena compared to western global cities (Aalbers, 2022), the Chengtons are mainly regulated by the State and its branches (Feng et al., 2021; Wu, 2022) the interventions of Milan (and Chicago) from finance. In both cases there is an articulated intertwining between real estate and urban infrastructures understood as a new phenomenon.

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Chapter 9

Types of Urban Infrastructure

Abstract The central theme is a definition of urban infrastructure. It is a question of identifying the different types and completing the shape through the different types. It is precisely the different typology of infrastructures that provides the thickness and complexity of urban infrastructures and the conceptual perimeter where to insert them. It is the growing presence of the ITC and the innovation of the ubiquitous infrastructure capable of contaminating the other types that end up giving a sense of depth and greater three-dimensionality to the concept of urban infrastructure. Technology is an important component of the evolution of urban infrastructure, which technology represents a variable of other evolutions. Within the chapter there is also a part on the slowdown of globalization and the effect that this can have on the development of the concept of urban infrastructure. At the same time, it is the infrastructure that appears in all national programs for the recovery of economic development and which is used as a guide for getting out of the pandemic crisis.

The treatment of urban infrastructures is not always the same; plurality enriches the discussion and serves to better size the proposed model. There is a different way of declining urban infrastructure. We can start with a too general statement like that of Star (1999) in the “Ethnography of Infrastructure,” seen as part of human organization, to then define more tangible categories. More dynamic categories are proposed below that are consistent with the proposed model (Fig. 9.1). The discussion in this book has it is mainly concerned the passage from (A) to (B), with some secondary references also to (C) and (D). There have never been enough questions asked about how many organizations have been stratified, and changed, on top of infrastructure, while infrastructure remained or underwent changes as brownfields. There is a structural difference in the life cycle between the two entities. It is too simple to think of the pyramids in Egypt. It is less obvious to refer to the inauguration of the San Giorgio bridge in Genoa on August 3, 2020, rebuilt in two years after the previous Morandi bridge collapsed on August 14, 2018 causing 48 deaths. During the inauguration, the architect/designer Renzo Piano—also the creator of the “Shard” in London—expressed the hope that the new bridge will last 1000, even though in a few years it will become a brownfield infrastructure. © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_9

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today

control A

control

private

B public

private

impermanent

impermanent C

public

D evolutionary permanent

evolutionary

permanen

Fig. 9.1 Evolutionary scenario among components relating to urban infrastructures

The organization that accompanied the collapse and the reconstruction of the bridge remains complex and the matter is unsolved. There is a public-private partnership (PPP) concession listed on the stock exchange accused of not having correctly managed the O&M and life cycle of the Morandi Bridge. It is still in a dispute over the exclusion of the private controlling shareholders of the company that manages the bridge and the Italian highways. The guiding idea is the return of the public sector (CDP group) as manager of the highways. Italian Cassa Depositi e Prestiti (hereinafter CDP), as so German Kreditanstalt fuer Wiederaufbau (KfW), and French Caisse des Dépots et Consignations (CDC), is a typical example of financial institution, owned by the Italian Government, with a mixed public-private investments. After two years of conflicts the question has not yet resolved, and has created turbulence in the Italian government and on the stock exchange, as the bridge is part of management of highway infrastructures worth billions and trillions. Permanent Urban Infrastructures—These are traditional urban infrastructures with materials made of concrete, iron, plastic, wood, glass, and other materials and metals. They absorb significant amounts of investment, involve important companies in the construction process, and the construction time is—except when pathological situations arise—ultimately limited. In recent years, the implementation formulas have changed. In addition to design and construction (D&C), operation and maintenance (O&M) have also been integrated into one process. The relationship with the private sector has changed and the references for control have changed. For urban infrastructures there has also been greater contamination with other types of urban

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infrastructures, and in relation to the replacements of urban functions there has been a rapid transformation of permanent infrastructures. These are traditional infrastructures whose maximum concentration is within evolved urban systems and brownfields. In addition to what is indicated in Fig. 1.2, there are different ways of representing infrastructures even if it is almost impossible or extremely complex to arrive at a complete representation of all permanent infrastructures and their evolution, even partial, over time. There was, in some ways, an attempt by Tarr (1984) and to a much more partial extent by Morphet (2016). However, even if the different versions are compared with other versions, several angles remain unexplored or too simplified. For example, with respect to Fig. 1.2, cemeteries, prisons, police and fire brigade offices, cycle paths and car parks, river and lake embankments, canals, district heating and biomass, parks and street furniture, walkable roads, are excluded. Libraries and community centers, public buildings with offices and public functions. These are just a few examples that could be multiplied if we enter the particularities and subcategories, or if more general categories such as redevelopment, regeneration or urban renewal are applied. Permanent urban infrastructures are also those that form and shape the city; they were built in a historical period and then rebuilt over time respecting the morphology of the city itself. This is the case of roads, railways, collective spaces, and the distances around them that existed with the buildings. The production models, organizations, cultures, and development of the State and market that created them, and the technologies, have changed over time, even rapidly, while the permanent urban infrastructures have remained. If anything, in some cases the different organization of an assembly or the different technologies that have taken over have impacted the process of remaking the city. In this, brownfield infrastructures are different from greenfields, as the former carry a historical and evolutionary character of the urban system that the latter often do not yet have. Architects-urban planners, sometimes on a secondary level, have through the design of avenues and streets and other services ended up defining the urban conformation of cities like Amsterdam and Hamburg, and others as well (Dalla Longa, 1998; Frank, 1998; van Bergeijk, 1998); but in any case this represents an overvaluation of their work. In fact, it is the intrinsic weight of the individual permanent infrastructures that has ended up forever shaping the morphology of the city, more than a single designer could have done. This is a characteristic of brownfield infrastructures, and permanent infrastructures in particular. They have conveyed in the past, present, and future a different value than greenfield infrastructures. Sustainable (evolutionary) urban infrastructure—The term sustainable urban infrastructure is a strong reference that can be traced back to the United Nations in 1982 (Du et al., 2019), or the Brundtland report—again under the United Nations— from 1987 (Malekpour et al., 2015). Both studies (2019 and 2015) show how thinking about sustainable urban infrastructure has changed over time. Initially, it mainly concerned developing cities, and subsequently involved all the cities of the world. Malekpour et al. (2015) monitored how the term has been used and what its evolution has been over time for more than a century, from 1900 to 2013. Du

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b

number of annual publications

a

Senility

Maturity

Growth Emerging Year

(Publications from) countrty tot. n. publications

USA 2.322

water management water resouce water supply water reuse wastewater tot. water and wastewater (%) energy efficiency renewable energy smart grid tot. electricity (%) internet wireless sensor network peer-to-peer tot. telecommunications (%) greenhouse gas environmental impact tot. environmental protection (%) stormwater floods eartiquakes tot. disaster prevention (%) sostenible transport eletric vehicles tot. transport (%) bridges housing sanitation tot. construction (%) education turism tot. culture et al. (%) green infrastructure land use governance tot. urban planning (%)

7 6 5 3 5 26 3 3 3 9 3 2 2 7 4 2 6 6 2 2 10 3 2 5 3 1 4 8 8 3 11 8 5 4 17 100

the number of publications UK Australia China 736 503 467 % 5 14 9 7 4 6 7 3 1 4 2 6 24 23 21 2 3 3 3 3 2 4 5 5 10 4 3 3 4 1 1 4 4 8 2 4 4 3 3 5 4 7 5 1 9 4 4 2 2 1 11 11 6 1 2 1 1 2 4 2 4 5 5 3 3 3 4 1 2 3 3 10 10 7 8 9 6 11 6 14 20 6 7 5 6 3 3 14 16 12 9 26 20 29 100 100 100

average 4.028 9 6 4 1 4 24 2 3 2 7 3 2 1 6 4 2 6 3 5 2 10 2 2 4 4 2,25 3 9 6 7 13 7 6 10 23 100

Fig. 9.2 (a) The growth (Gompertz model) of literature on sustainable urban infrastructure from 1991 to 2085: Gray area represent 20% urcentaintly range of the Gompertz curve; (b) Urban infrastructures: selection of 6,706 publications (records) for 20 countries, of which 4,028 from the first four countries. Source our processing on Du et al. (2019)

et al. (2019), with a more quantitative but also quite complete approach, carry out an examination of the academic contributions of four periods ranging from 1991 to 2017, to verify the changes in and extension of the themes addressed regarding sustainable urban infrastructures. The periods examined are 1991–1999, 2000–2008, and 2009–2017, with a consideration of the evolution that studies on sustainable urban infrastructure will have over time. Exponential growth is anticipated of the contributions of scholarship on the topic (Fig. 9.2).

Box 9.1 Evidence on the treatment of (sustainable) urban infrastructures In addition to the exponential growth of publications, in the analysis of contributions, more and more publications emerged in international collaboration with various authors from different countries. A sophisticated selection system was also used, however some shortcomings appear in the selection of categories (WA, EL, TC, EP, DP, TR, CO, CU, UP) when compared with Fig. 1.2 of this book and with what added above in the text commenting on Fig. 1.2. This is a sign of the complexity and high articulation of the concept of both traditional and evolving urban infrastructure. However, the way of dealing with the issue of infrastructure appears heterogeneous, often not without specialisms. Among the nearly ten thousand (9,588) academic publications considered from 1991 to 2017, there is no substantial difference between countries (US, UK, Australia, and China) in the type of studies.

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The elements of infrastructure taken into consideration are different from Permanent Urban Infrastructures; for example, there are no ports, airports, railways and airports, roads and more. It is the term “sustainable” that does not appear suitable, as it changes meaning over time. It can be applied to peripheries, mobility (UN-Habitat, 2013), development (Wheeler & Beatley, 2014), and design. Several authors (Du et al., 2019) show how over time the sustainability of urban infrastructure has changed the object of application. At the end of the last century, we moved on to investments and the cost of urban infrastructure, to the prevention of pollution; at the turn of the century, due to technological innovation, to the critical role of funding and evaluation indicators, while in the last decade the themes have been the dramatically changing climate and intelligent infrastructure systems (Du et al., 2019). However, there is no doubt that the term sustainability applied to urban infrastructure can partly change the shape and interconnections of urban infrastructure. If the reference is congestion (sustainability of transport, as under the theme of traffic congestion), the way of organizing parking lots, intermodal systems, the replacement of parking spaces alongside roads with bike paths, the different use of sidewalks and of technology, and thus with design, ecology, the suburbs, the term sustainability becomes a structural element to understand urban infrastructure. Sustainable (evolutionary) urban infrastructure creates a difference between a street in a small town and a street in a global city. They are made of the same material, but the shape, use, and design change over time, as does their interconnection, including the resources absorbed; sharing (of cars, motorcycles, and bikes) can pass over them with the support of ubiquitous infrastructures (APP, ICT, etc.). In the subsoil of the infrastructure are other flows, of waste and water, electrical wires and pipes, energy, telecommunications and interconnection of data and information, vehicle shelters and parking lots and transportation as well. There is a significant amount, that is growing and under review, of interferences that can be re-adapted to the evolution of sustainability. For his part, Braun (2005) claims that ‘urban sustainability’ must be understood as a series of urban processes, basically a policy more than more than a technical or design problem. Sustainability applied to cities and infrastructure indicates that cities are autonomous entities, and undergo improvement processes due to and driven by physical infrastructure (permanent physical infrastructure), in turn driven by globalization factors that support individual cities. Therefore, the term sustainability in the sense used here is not so much able to replacing physical infrastructure, but to remodel it. Starting in part from these considerations, Rutherford (2019) argues that urban sustainability is the result of urban practices and in some cases of past and future ‘ideologies,’ and urban infrastructure is a key interpretation for urban sustainability/future, hence “redeploying urban infrastructure.” Ubiquitous infrastructure—This term refers to the technological development of ICT (Information and Communication Technologies), that has changed the idea of infrastructure within urban areas; producing an integrated and in many ways different use of traditional (permanent) infrastructure (Fig. 9.3). It has also allowed for new forms of infrastructure integration. Despite being ubiquitous, the application of infrastructure at the urban level is what creates the greatest synergy and different and

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9 Types of Urban Infrastructure Multi-media conference personal information management, etc.

u-Businnes smart office u-Life smart culture

Satellite network

u-Life smart home Remote checking meter, edutainment, Home banking, etc.

Broadcasting network

u-Life smart transport Real time traffic information collection and distribution, telematics, auto navigation, etc.

Ubiquitous Network

High-speed network

Cabled network

Mobile network

Mobile/home shopping, wearable computer, convergence between broadcasting and communication, etc.

u-Government

u-Life smart edu/ health Remote education and medical examination, virtual theme park, interactive cinema, online multi platform game, etc

Cyber government, disaster forecasting and prevention, etc.

Fig. 9.3 Ubiquitous infrastructures framework. Source Lee, Han, Leem et al. (2008, p. 156) and Lee, Yigitcanlar, Han et al. (2008)

innovative uses of urban space. Infrastructures are largely born in private channels, and public control appears weak. All the capital belongs to economic operators; they are not necessarily large investments, and if they are, they refer to revenues deriving from the market. They represent one of the elements that have most revolutionized the concept of urban infrastructure. They are highly contiguous with traditional (permanent) infrastructures, to the point of revolutionizing their use. The same happens with ‘urban structures’ so as to change the accessibility and use of the city. The assembly and management of this type of infrastructure appear highly different from permanent infrastructure. Yigitcanlar and Lee (2014) well summarize the importance of ubiquitous infrastructures: “the convergence of technology revolutionizes the way in which urban infrastructures and services are designed, developed, provided and accessible and contributes to the formation of next generation urban infrastructures” (Fig. 9.4). Below is an example in which the macro and micro aspects are valid. a. Ubiquitous (U) infrastructure transforms everyday life and the city. (U) transport allows citizens access to places where and when they want. The information generated over time by the (U) infrastructure allows for minimizing the waiting period at transport stops or stations, and also allows for improved production efficiency by public transport. Even those who choose their own vehicle or forms of sharing have an indication as to which route or road to choose, including the where and how of immediately available parking spaces, with mobile wireless networks or systems installed in the car. With constantly updated traffic information, or indications of changes that occur within the (U)-city through the assistance of (U)-infrastructure, part of the smart city programs deal with this with specific, dedicated platforms (Matheus et al., 2018).

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(a)

Common

E-Governance

Digital Common

eGov Maturity Assessment

Human Smart Cities

Citizen Participation

(c) Smart city U-health

U-policy

U-water network

U-security

U-power network

(b)

U-transportation

Public Governance

U-citizens

U-economy

Conventional City U-environment U-education

Physical Elements *Building *Street *Facility *District *Intelligent building *Bus info system *Smart guide

U-home

u-eco-city in a broad sense

*Eco building *Geothermal energy *Greening and solar energy

*U-eco city *U-eco street *U-eco building

ICTs: BcN, WIFI *Smart work *Video conferencing *U-bike *Qr code

u-city

*U-eco mileage *Air pollution monitoring *Eco monitoring

EcoTs: Recycling, Regeneration *Reduction of CO2 Emission *Provision of greening space *Use of renewable energy *Green transportation, bike

eco-city u-eco-city in a narrow sense

Fig. 9.4 (a) Research problem and conceptual constructs; (b) Relation between u-city and ecocity in the context of u-eco-city; (c) Interrelations between ubiquitous components. Source (a) Yigitcanlar (2019), (b) Yigitcanlar and Lee (2014), and Rad et al. (2018)

b. U-business makes use of (U) infrastructure with components that support the business and consumption of citizens. (U) transport helps businesses within the city. U-transport not only provides efficient transport services in U-life but also helps to develop the essential logistics of services (e.g. delivery of goods and services); fast, safe and convenient transport services. (U) technologies can increase productivity and quality in both supply and demand. (U) transport services and infrastructures can be created that merge with physical infrastructures. For many new businesses with high-quality service, opportunity is linked to growing and new interactive demand of an exponential nature regarding the types of connections between the public and businesses. However, this merger between infrastructures can come at the expense of intermediation activities between production and consumption; points and centers of commerce. (U) infrastructure merged with other infrastructures is able to bypass those points reducing that type of cost for the product and thus dump them on the social sector (fewer persons employed in the sales sector that is bypassed by the interconnection of infrastructures). c. U-government, much like E-government, makes all vital government services available to the public with possible reduction of congestion and reshaping of life-time (Lee, Han, Leem et al., 2008, p. 153).

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As Picon (2018) says digital technology is in transition towards the smart city. ‘The smart city appears both as an ideal that is rooted in the imagination and as an entirely concrete mixture of experiments and innovations, connected infrastructure,’ smart ‘and collaborative platforms that set out to improve certain services. With the rise of digital technology, the matter that constitutes cities seems to be changing ‘. Figures 9.4 partially summarizes this evolution. Rad et al. (2018; see Fig. 9.4) identify 99 embryos or sub-categories of infrastructures belonging to 11 macro “U” references. Yigitcanlar and Lee (2014) ask themselves, starting from Ubiquitous infrastructure, whether for Korean cities the ubiquitous-eco-city is a smart-sustainable urban form or a branding hoax? The answer is the following: The results show that ubiquitous computing is already more than a mere technology vision, especially when considered the technology being currently reached to a high degree ofmaturity. Together with urban infrastructures such ubiquitous technology approach enables a great number of new infrastructures and services. The ubiquitous urban infrastructure has a considerable economic potential to increase efficiency and thus competitiveness of our cities. On the contrary to the countless opportunities they provide the ubuquitous technology, there are also many challenges and barriers associated with ubiquitous technologies, infrastructures and services unresolved.

Finally, on the evolution of Ubiquitous, the contribution of Li et al. (2022) is of some interest. Ultimately, for the last two decades, through a systematic scientometric analysis, they take into consideration the evolution of Ubiquitos and a part of it (first smart home research, then in the evolution contaminated with other forms of smart: governance, healcare, grid, etc.). Subsequently they arrive at the landing with the smart city. Rad et al. (2018) instead support a different thesis that the development of the Ubiquitous represents a subsequent and more advanced stage of the smart city. Green urban infrastructure—The concept of green infrastructure is widely used, even if there is no standard definition (Garmendia et al., 2016) and even when we try to classify it (Dover, 2015) we move away from the type of infrastructure indicated here. The reference is the OECD (Kaminker et al., 2013; Merk et al., 2012) in which types of urban infrastructures and experiences and case studies are indicated. Green infrastructures partly overlap with permanent physical and urban infrastructures and with the concept of sustainable infrastructure, although there are significant differences. The reference is to an articulation of infrastructures. Below is an indicative example with specific references: Transport—bicycle sharing there are structured and widespread cases in Paris, London, Barcelona, Oslo, Lyon, Stockholm, Brussels, Seville, Dublin, Copenhagen and in other cities not only in Europe. All carried out through public-private partnerships (PPPs), but there are cases of in-house (Bogota) or procurement (Stockholm). In the latter two cases it is not a question of sharing but of bicycles paths and congestion charging in the Swedish capital. Energy—renewable energy supply there are also cases of Barcelona, Austin, Melbourne and many other European global cities and beyond. The best known formulas are the EPC which is a particular PPP formula, or the in-house, or there are still public intervention formulas. Energy savings which involves infrastructures and buildings in various global cities such as Chicago Copenhagen, Tokyo, Berlin,

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London. Stuttgard, Paris through PPP conjugated with EPC, or PFI or in-house (Merk et al., 2012). A different approach is the street lighting that arises as energy saving and rationalization through LED lighting, a different form of piling and brightness, but also becomes a gateway to the smart city. Street lighting is the ideal basis for the diffusion of different types of sensors throughout the territory and the creation of reference dashboards for a smart city. Also in this case the intervention is that of the PPP and EPC. The cases that fall within the scope of street lighting are different: Toronto (Building -b-; energy -ene-; waste -was-; environmental -env; water -wat) with Google as high-tech company partner—h.t.c.p; Hamburg Port (b, ene, wat, mobility -m) with Cisco as h.t.c.p; Adelaide (m, env) with Cisco as h.t.c.p; Singapore (m, env, ene) with Google as h.t.c.p; Dublin (m, env, b, wat, ene) with IBM as h.t.c.p; Dallas (m) with Ericsson as h.t.c.p; Valencia (m, was, env, ene) with Telefonica as h.t.c.p and the list could go on for several other cities (D’Amico et al., 2020). Green urban infrastructures cannot but start from renovable uses: solar, wind, hydro power, geothermal, biomass power. For transport, these also translate into distribution systems in urban centers (liquid biofuels/biogas, hydrogen, etc.) which in many cases integrate with infrastructures (Gielen et al., 2019). In reality, green urban infrastructures are combined with the circular city which modifies some elements of the city and infrastructure by introducing sustainable input (the use of inputs from renewable sources—both material and energy—or from reuse and recycling); the product as a service (a business model in which the customer purchases a product in the form of a service, like car sharing, from the company); sharing (platforms where private individuals can share assets between them). Green urban infrastructures also have an implication on the assembly of micro and macro urban components, including the merger with existing infrastructures and the way of conceiving them. An example comes from Lobaccaro et al. (2019) on a segment of renewables. The theme takes on a high synergistic element for global cities and urban infrastructures when we set ourselves the goal of a strong ecological transition having a point and date of arrival in the reduction of CO2 and on this the global cities begin to be measured (Shmelev & Shmeleva, 2018). These attempt to respond to and remedy the ecological degradation that the growing urban areas and their interconnective complexity produce. Such infrastructures pose a different way of using large urban agglomerations, different types of consumption and production, and add significant changes to the behavior and use of infrastructures and the competitive advantages that follow. New interconnections are also established with other types of infrastructures, including new organizational and governance formulas. Climate change and environmental movements push for rapid development of this type of infrastructure. In some cases, when hydrogen replaces fossil fuels it drives a transformation of mobility within the city, just as the self-driving car together with the electric car will reduce automobile ownership, to be replaced by the sharing economy with a revision and inclusion in one of different types of infrastructures (physical, sustainable, ubiquitous, or green). There are currently new financing programs in Europe (e.g. Elena of the EIB) which for ten years have financed programs related to green infrastructure. The European Commission itself, for ten years starting from 2020, has indicated financing of one trillion euros for this

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area. The will be prevalently European resources, with the addition of investments mobilized by the private sector, almost always within PPP models. This is about 15–20% of investments for new infrastructure for a country like Italy. The same percentage may vary for other European countries. Access to these investments is based on the projects that must be presented (the set of projects), that can be mainly private if they concern agricultural or industrial companies (production or recycling), or public if the investments concern infrastructure. They should not differ much from those already known, for example those already financed by the EIB. That European bank should change its name from EIB to EUCB precisely because of the size of the “green deal”, will become the EU climate bank. It announced that it will gradually increase the percentage of its funding devoted to climate action and environmental sustainability, bringing it to 50% of operations by 2025. Cooperation with other financial institutions will also play a key role. Elena-EIB—Over the period of ten years there have been 85 projects, some of which have already been completed (30), while others are still in progress. Community funding was 150 million euros and generated private and public investment of 5.6 billion euros, with a value 37 times higher than the community investment. In addition to the loan, the interest rate (Kd) issued by the EIB, which is very low and provides incentives for investments, must also be considered, while the possible off balance for the public must also be added. The infrastructures financed refer to the energy efficiency of buildings (45%), transport (20%), public lighting (13%), district heating (12%), energy renewal (7%), and smart grids (2%). Public projects will mainly concern infrastructures within a PPP model, which will not replace the types of urban infrastructures already indicated but will contaminate them. It will depend on the projects, but as far as infrastructures are concerned, most of the projects should be located within the major urban assets, with an increase in assembly models due to the presence of PPPs. The public administration is called on to evolve and grow its managerial skills and knowledge in assembly in terms of D&C and O&M, a process that is not a given, and is by far among the most complex. The green urban infrastructure (GUI) theme is turns out quite recent. It is in the last decade that we are witnessing, even at an academic level, a growth in the discussion (Matsler et al., 2021), even if the term dealt with is that of green infrastructure (GI). One of the first discussions on green urban infrastructure (GUI) is that of Ahern (2007) who defines GUIs as those infrastructures that apply “the key principles of landscape ecology to urban environments, specifically: a multi-scale approach with explicit attention to pattern process relationships, and an emphasis on connectivity”. Another contribution is in Kambites and Owen (2006) even if here the reference is to green infrastructure (GI) and therefore the concept of infrastructure is extended to the whole national territory. Wright (2011) in trying to summarize the various contributions that would soon grow exponentially states that the variation of the concept of GI makes it difficult to reach consensus on a global level, also in this case the discussion is extended to GI and not exclusively to the GUI. These general contributions have been followed by other recent attempts at systematization (Matsler et al., 2021) using the broader concept of (GI) and partly of urban green space. In addition to

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Matsler et al. (2021) and Grabowski et al. (2022) must also be considered even if, in this case, the topic remains mainly within green infrastructure (GI). The latter refer to a system of interconnected ecosystems, ecological–technological hybrids, and built infrastructures providing contextual social, environmental, and technological functions and benefits. As a planning concept, GI brings attention to how diverse types of urban ecosystems and built infrastructures function in relation to one another to meet socially negotiated goals. Since 2013, the EU itself has promoted increasingly stringent programs on green infrastructure (EC-COM, 249) the same has happened through the guidelines and pronouncements of the major investment funds such as Blackrock (among the top 7 world investment funds in infrastructure) with its cofounder and president Larry Fink (2022)1 who, faced with accusations of being a radical ‘ecologist’, replies: we focus on this issue not because we are environmentalists but because we are capitalists and we are attentive to the impact on your portfolios. “The question is no longer whether the net zero transition will happen, but how and what that means for investment portfolios. As a fiduciary, we are committed to helping our clients navigate, drive, and invent this economic and financial transformation”. The in-depth studies on green infrastructure then concerned individual cities by applying models that are in some ways innovative. The reference is in London (Ince & Marvin, 2019), New York through the GISP2 method (Meerow, 2020) and Lipzing through the MSPA3 method (Wang et al., 2019), Barcelona (Anguelovski, Connolly, Brand et al., 2018; Anguelovski, Connolly, Masip et al., 2018) and other cities such as Frankfurt (Peterek et al., 2019). In addition to applications on single cities, there have been studies referring to a comparison of US and European cities, a sign of an expansion of the theme and concept of green urban infrastructure (GUI) even if in the various studies the terms remain imperfect in Lipzing (Wang et al., 2019) the term Urban green infrastructure is used, or for New York (Meerow, 2020) the term is urban green space. In the cases of European cities (Gr˘adinaru & Hersperger, 2019) and North American cities (Hoover et al., 2021) in both cases the term used remains green infrastructure (GI). There are also studies that trigger a critique of GUIs as they are infrastructures that end up determining a selection of consumption, social exclusion and new forms of gentrification (Anguelovski, Connolly, Brand et al., 2018; Anguelovski, Connolly, Masip et al., 2018). Examples of green urban infrastructure may concern ‘blue’ (relating to water in all forms), ‘green spaces’ (their concentration, thinning out and furnishings) and ‘gray’ (other infrastructures and buildings), passing through waste management. Within this there are ‘multiscale’, interactive and connective urban approaches, in which, taking up Ahern (2007) there is a “hybrid hydrological / drainage network, complementing and linking the relict green areas with built infrastructure that provides ecological functions”, Energy, no carbon emission and net zero transition are connected to 1

Larry Fink’s 2022 Letter to Ceos: The Power of Capitalism; https://www.blackrock.com/uk/ind ividual/2022-larry-fink-ceo-letter. 2 Green Infrastructure Spatial Planning (GISP). 3 Morphological Spatial Pattern Analysis (MSPA).

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Global cities

urban social

physical sustainable

cities

ubiquitous

economic

green

rest of the territory

State

State

Private

Fig. 9.5 Systemic breakdown of urban infrastructures in relation to global cities

this (Eames et al., 2013; Tozer, 2019). In such a broad view there may also be some overlap with sustainable infrastructure. This concept greatly expands that set in 2013 at the community level of the EC which indicated how green infrastructure (GI) represented an alternative or a complementary component to traditional gray “solutions - infrastructures -” (EC-COM, 249). The development of different types of infrastructures must now deal with the post-pandemic crisis and with ‘slowbalization.’ There is undoubtedly an acceleration, or loosening, of some mergers between infrastructures, as new forms are being created (Fig. 9.5).

9.1 Slowbalization The post-pandemic phase gives greater weight to states and above all to EU bodies in Europe. While in the pre-pandemic phase a major role was the prerogative of globalization and global cities, now the role of the state prevails, with the need to save the economy and employment, that cannot be left to the dynamics of the market, some of whose important mechanisms seem to be in a crisis. State intervention means uniform action within the national territory. At the European level, the drive for territorial homogenization is also implicit, as is the application of some additional matrices such as the ecological transition and attention to the recovery of homogeneity of the territory. The Next Generation EU program identifies a significant amount of resources for the states for the next few years (2021–2026), especially for Italy, Spain, and France. Obtaining the funds requires meeting several indicators, including territorial cohesion and ecological transition. Funding includes a significant amount of infrastructures,

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but the projects must comply with some indicators which in fact lead to a weakening of the criteria with which the dynamics of globalization had developed. This principle ends up having two different results: (a) to considerably increase the resources available to the state and reverse a trend that saw a decline in public investments for infrastructure; previously investments were private as related or conditioned by globalization; (b) the guided modification of physical infrastructure could, in a short time, lead to an ecological transition, with the result that the same physical infrastructures could lose part of their current configuration, and, due to this transformation, they may afterwards need to absorb an additional amount of resources. Furthermore, greenfield infrastructures could already have a set of characteristics that allows for their transformation. Different could be for brownfield infrastructures: old and in many cases obsolete, not responding and with a direction that no longer appears obvious. The EU in its manuals that guide the investment in the ecological transition considers the intervention of the brownfield infrastructure as a priority over the interventions on the greenfield infrastructure (EC—C2021, 1054 and annexes). Last but not least, as it is the guiding element, the US and Europe use infrastructure to counter the decline in the economy and employment, making it a tool for recovery and revitalization. The US program is simply called the “American jobs plan” (now BIL) and is constructed around infrastructures, in part traditional projects. Better understanding the nature of US and European investment serves to better define the current evolution of infrastructure and the dynamics between forms of globalization (centripetal with respect to the development and evolution of infrastructures) and slowbalization (centrifugal with significant effects on infrastructure dynamics). It may be that this is the issue around which the transformation of infrastructure and global cities and globalization will play out in the next five to ten years, perhaps producing forms of development different from what has been described up to now. The United States and the American Jobs Plan (AJP)—The AJP, approved in November 2021 and referred to, after approval, as BIL (Bipartisan Infrastructure Law). The BIL has a very simple structure and allocates a significant amount of resources to revive employment. Unlike what happens with the European plan, there are initially five functions to be financed, with a flow of 2,200 trillion dollars over ten years. However, there is a difference between the initial indications and what is instead approved by the Senate and the US Congress. The ‘Build Back Better Act’ (BBBA) starts from a large container and is then broken down into parts. The BIL is one of the three most important pillars of the (BBBA). Of this, in the original proposal if broadband is excluded, 56% (equal to 1.26 trillion dollars) referred to traditional infrastructure, even if partially remodeled as green infrastructure (Jaeger et al., 2021). The prevailing idea is to modernize existing infrastructures, neglected for too many years without adequate modernization, in line with the fiscal crisis of the state, so much so that ‘it was evident that American infrastructures were collapsing (crumbling)’. The ‘public investments in American infrastructures, as a share of gross domestic product (GDP), has declined by more than 40% since the 1960s

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(Anderson & Davis, 2022). “As a percentage of the GDP of all levels of the US government: 6–7% in the 1950s and 1960s, 5% in the 1970s and 1980s, 4% in the 1990s and 2000s, and around 3.5% since 2010” (FRB, 20214 ). These are highways, bridges, railways, roads, schools, and public hospitals, issues on which O’Connor (1973) had already focused almost five decades ago, noting their critical role in the fiscal crisis of the state. The resources to finance infrastructure should be obtained, in the form of taxation, from the profits deriving from globalization and from the profits of American companies that have been most aggressive on this front (500 billion dollars from the minimum global tax for US multinationals, and 300 billion dollars from preventing tax havens and offshoring for the same companies). The goal is to increase employment and recover competitiveness throughout the entire country (federal), allocating investment in the infrastructure neglected in recent decades; this could partly affect urban infrastructure, result of globalization, even if there is a previous last globalization infrastructure plant scattered in the various federal states. The BIL is added to the American Rescue Plan, approved before the BIL and itself another pillar of the BBBA, which with 1.75–1.9 trillion dollars also intervenes to a limited extent on infrastructures such as airports. However, the American Rescue Plan, unlike the BIL, is a social assistance program. The initial setting of the AJP desired by Joe Biden, in the approval steps, is revised in the various parts and then partially approved in November 2021 as BIL. The amount of the infrastructures drops from 1.26 to 1 trillion dollars approximately also due to a weak agreement between Democrats and Republicans. Agreement which also helps to introduce the term of BIL. Four proposals are integrated in the six months of March-November, partially deconstructing the initial plan. However, the high amount of public (federal) resources allocated to infrastructure remains. If we compare the 1 trillion dollars of the BIL for the next 10 years intended exclusively for infrastructure with the investment requirement calculated by the Oxford Institute (3.314 trillion dollars), again for same years, we see that just about onefourth (originally era a third) of the requirement destined for infrastructure is covered. However, this calculation must be added to the trend or the intervention of private and non-public institutional operators, that supplement these funds. They are not substitutes but largely additions to the trend indicated. There is also a lack of all other public funds, for infrastructures, from individual states and other public administrations. At least initially the contents and the trajectories of the funds, and the logic underlying, have an impact in prefiguring the type of infrastructure that follows. The approach present in the BIL appears to be that of a centrifugal effect on the territory, rather than a centripetal effect on urban cities and urban infrastructure. Upon approval of the American Jobs Plan (AJP) by the Senate (August 10, 2021; it is then in November 2021 that the House definitively approves it as BIL), the Secretary of the Treasury Janet Yellen (former chairman of the Federal Reserve) called it “the largest modernization of American infrastructure since Eisenhower built the 4

FRB—Federal Reserve Bank of St. Louis, Government Investment on the Decline, Rsch. (October 18, 2021), https://fredblog.stlouisfed.org/2021/10/government-investment-on-the-decline/ .

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Interstate System” (USDT, 2021) one of the brightest inspirations of the 1950s, with a centrifugal distribution of infrastructure funds that involved each of the 50 States with proportionate funding (Greiman & Sclar, 2019). The federal government disbursed the funds, named disbursement controllers, and each individual state used them in its own programs, contributing to the concept of a diffuse city that is different from, or the antithesis to, the concept of the global city (Altshuler & Luberoff, 2003). The reference is that of public works different from urban infrastructure. For the interstate system, the Federal-Aid Highway Act of 1956 was important, which led to the birth of the interstate highway network, to which Briggs (1983) traces the decentralization and growth of population and employment in the non-metropolitan US, related to the opening of individual highway exits. Ultimately, it is the massive resources of the federal government on public works, of a centrifugal and uniform nature, that determined an effect opposite to the structuring of urban infrastructure as indicated in the model in Chap. 4. Then there is another problem, that of the enormous dysfunctions that in terms of time, cost overruns, and incomplete works such massive operations produce (Flyvbjerg, 2017; Hall, 1982). This occurs when the purpose of the investment is a sum of different needs (fighting unemployment, indirect aid for the growth of the automotive industry, support among agricultural and non-urban areas) as it was for the Interstate System and will be—in part—also for the BIL, so much so that Flyvbjerg et al. (2003) propose to separate the value of the investment from its assembly in order to definitively know whether or not the effort was worth the cost. While the center of the Interstate System was the highway networks, with an estimated investment value in 1956 (adjusted to today) of 273 billion dollars over ten years, which after a few years became 411 billion dollars (USDT, 2017), the BIL, like the Interstate System, has a centrifugal investment system that produces slowbalization. This in the absence of the opposite centripetal thrusts typical of urban infrastructures. The measures of the BIL appear more fragmented and with a more uncertain outcome than the Interstate System of 1956. In the BIL a stated goal, even if the numbers say different things, remains the green infrastructure (GI), even in comparison with other international programs (Boyle et al., 2021). In August 2022, President Biden approved and signed the Inflation Reduction Act (IRA) which allocates 369 billion to Energy Security and Climate Change with some infrastructures and investments in renewable energy that are added to the BIL. The comparison with 65 years ago is on the highways, but now the theme, even though it is not entirely clear, it is not the car but another connective flow: energy and interconnection through broadband. The BIL allocates to electrical infrastructure, high-speed broadband, and electric vehicles 374 billion dollars. These are for highspeed broadcast and for Broadband Equity, Access, and Deployment (BEAD), which for convenience we call broadband, fast internet on the territory, of billions of dollars comparable, in part, to those of the highways of 1956. The question arises is whether it is the highways of that time, or the broadband of today that responds more to a centrifugal logic? At that time there was a convergence between public federal and

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state funds that converged in the infrastructure (highways), today the partnership is with the private sector in PPP models (broadband). A study by Princeton University (Larson et al., 2020) pegs the need for clean and climate-friendly spending at 1.43 trillion dollars for the US, which rises to 2.0128 trillion dollars if the goal is a net-zero pathway. Saha et al. (2021) say that the level of federal funding under the BIL is not at all sufficient to build the network infrastructure needed to achieve the ambitious goals, although it can serve as a stepping stone, but additional policies are needed. The highway networks of the Interstate System constructed as public works were and remain public and managed by the individual states. On the other hand, the energy and ecological component (clean and climatefriendly spending), part of the BIL funds (Jaeger et al., 2021; Larson et al., 2020), also requires strong integration with the private sector in a new structured form of PPP (Public-Private Partnership). The approval of the Inflation Reduction Act—IRA (August 2022) with respect to the BIL’s trend can lead to a further decrease of 1/3 on the trend in greenhouse gas emissions with loans, contributions and infrastructures (Jenkins et al., 2022). Europe and the Next Generation EU (NGEU)—Through the NGEU plan, the European Union is allocating 750 billion euros raised through the issuance of bonds, leveraging the increase of the EU’s own resource ceiling. This is 41% of EU funds destined for individual states (44% if cleansed of some items), and therefore an important chunk if we want to measure the EU trend with respect to the pandemic and the orientation of the European institutions regarding development and infrastructure in the globalization/slowbalization dichotomy. The apportionment of the 750 billion euros has a greater impact for Italy and Spain, and less for Germany and France (Fig. 9.6). It is interesting if the comparison is made between the expected trend of infrastructure investment over six years (Oxford Institute for G20) and the ‘life cycle’ of the NGEU funding; a significant impact emerges for orienting the types of infrastructure for Italy and Spain, and less for France and Germany. Actually, Spain’s contribution is divided into two parts (2021–2023 and 2023–2026), it immediately makes the subsidy plan operational, while for now it has declined the portion of the loan, considered less advantageous, postponing the decision to integrate the two parts in a second phase within the phase defined as slowbalization and to verify whether we can identify an impact with alternative formulas to urban infrastructure. It may seem interesting that not all EU nations are interested in such an influence on development. European nations have been called upon to prepare plans for the use of the European funds, using the grids already prepared by the European Commission (annexed to the NGEU Regulation) and related formats, albeit partially revised by the ERDF (European Regional Development Fund); in fact, they appear hardly compatible with the concept of urban infrastructure. The Italian plan includes about 60% of the infrastructures, which, however, respond to a logic of territorial cohesion within matrices that cannot be superimposed on urban infrastructures as indicated by the dynamics deriving from globalization. Small significant anecdotes run after each other. The mayors of Milan, Rome, Turin and Naples write jointly and confidentially to prime minister Mario Draghi

9.1 Slowbalization Germany

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France

8%

9%

92%

91%

Spain

Italy

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72%

Subdivision of the Next Generation EU

28% 43%

36%

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19% 1% 4% 5%

58% 64%

Italy

Spain

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Holland

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Fig. 9.6 Representation of the new infrastructure investment plans, with reference to the New Generation European Union (NGEU) and the Bipartisan Infrastructure Law (BIL) USA. Representation in relation to the investment needs identified by Oxford Economics 2017 and GIH, 2020; 2021 in the same period of years in which the investment is exercised. Source Our processing on—USA, Federal Ministry of Finance (2021); German, Recovery and Resilience Plan (2021); France. Relance Plan National de Relance et de Resilience (2021); Governo de Espana, Plan de Recuperacion Transformacion y Resiliencia (2021); Governo Italiano, Piano Nazionale di Ripresa e Resilienza; Next Generation Italia (2021)

and the Minister of Economy and Finance on the inadequacy of the distribution of funds to say: in energy redevelopment it is planned to finance only one school per municipality without distinguish Milan with much more than a million inhabitants from another town in a sparse area of 15,000 inhabitants. The demographic dimension disappears. The same goes for the 20 million for urban regeneration, is it nothing for a large urban center, it is a lot for other smaller centers not located in urban fabrics. In an off-air television the mayor of Milan speaking of the National Recovery and Resilience Plan (NRRP) says: “NRRP: south-south-south”, the response of the Minister who sees 40% of the NRRP destined for the south say: “the NRRP in the south-south-south is also an opportunity for the north” and so on. It is a representation between: (a) public work vs. urban infrastructure; (b) centrifuge vs. centriped vision; (c) slowbalization vs. globalization. One has to ask: is the theme of Next Generation EU significant in explaining the post-pandemic period with regard to infrastructure, including the new role of the state? It probably is for Italy and Spain, but less for other nations, if only for a smaller amount of resources allocated. The logical steps of the NGEU are:

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a. Through some indicators the amount of the NGEU distributed to the different nations is defined; those indicators explain the different amount of funds by country (see different amounts of funds for Italy, Spain, France, and Germany); b. In order for the different nations to obtain the funds established by (a) they must respect a ‘classification’ grid in which the concept of ‘green deal/ecological transition’ is prevalent (37% + 3%), along with digitalization (20%); c. The other constraints indicated by the Regulation are: (c1) compliance with the European accountability budget constraint, (c2) whether the investments will have a lasting impact; (c3) whether they will have an impact on employment, and (c4) whether they respect the European time frame (calendar) of 2021–2026. d. An analysis of the single items within the constraints of point (c) shows that investments are attracted toward infrastructures, but not necessarily those that can be defined as urban. This is not true for all nations, though. The elements that place the investment within infrastructure are point (c2) if connected to the point (c1). Elements to view with some criticality are point (c3)—as investment in infrastructure only guarantees lasting employment under given conditions; the issue is nevertheless complex—and point (c4), as for complex infrastructures five years could a short time and therefore subject the assembly of a complex infrastructure to a lack of final funds. There could be an inability to implement the investment planned and received. However, there the individual nations have different profiles with respect to the points indicated. The characteristics of Germany regarding points (c1) and (c2) are different, due to the fact that the amount of public debt is different, as is the total amount of investments allocated due to point (a). However, there are those, like Fuest (2021), who argue that in reality the constraints are not as rigid as they might appear, even if this is not necessarily negative. e. With the NRRP for infrastructures we pass from a traditional concept of ‘design assembly’ to one of ‘project assembly’. f. Therefore, within the distribution only a part of the fund is attributable to infrastructure, which must be identified within the individual plans prepared by the individual nations. The reference to infrastructure is in the Regulation, but also supported by models (Ba´nkowski, Ferdinandusse et al. 2021-EIB) which indicate that public productive investment, compared to transfers to other subjects (consumers or even businesses), has a greater impact on GDP growth. There is, however, a need to reconcile the correct balance between grants (360 billion for the period 2021–2023) and debt (390 billion for 2024–2026), the use of which will be recorded in the debt of the single states starting from 2027. The four National Recovery and Resilience Plans (NRRP) of the four nations are different from each other. In its NRRP, Germany presents segments with summary categories. Italy tends to specify the items in more detail. There is the indication of traditional physical infrastructure such as railway lines, as well as other adaptations such as energy efficiency of public infrastructure (schools and social and health buildings), while other projects are traditional networks (e.g. water), but mostly IT, broadband and 5G, to then indicate different types of ubiquitous infrastructure and

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digitization. Most of the infrastructure projects are presented as green, i.e. with an environmental impact. The result is not urban infrastructure, but infrastructure which mainly concerns the national space, which can also partially overlap urban concentrations. However there is no significant trace of urban concentration of investments in the NRRP, and where present it is merely derived from other elements. These are the general plans for 2021–2026, which have been approved, but then there is the implementation of the plans, which involves the concrete construction of the projects and the activation of the declared reforms. An incorrect procedure would be unable to transform what is planned into reality; downstream there is an implementation process that passes through forms of control and verification. For Italy the trend for infrastructure indicated by the Oxford Institute is 284 billion euros, while for infrastructure the NRRP, again for the six years in question, indicates 115 million euros, to which more may be added. Even more than for the US, we see centrifugal policies for the entire territory of the state, responding to European cohesion and strong national sub-cohesion in which there is not a large space for global cities, which must look elsewhere to continue the dynamics of urban infrastructure and globalization. Below is a key to understanding the Italian Next Generation EU plan, through: (a) the categories of Project management; and (b) the identification of public works and infrastructures within the different financing mechanisms. The application of PM categories to the NRRP brings particular attention to the breakdown of the projects using the PBS (Project Breakdown Structure); not that the NRRP formalizes this type of language, but it makes it implicit. The NRRP is composed of 6 missions, 16 components, 39 projects, 131 investments, and a package of reforms required by the EU (49 are indicated), of which the most important are that of the PA, justice, taxation, and simplification, also in the implementation of infrastructures. It would have been better to call them first, second, third, and fourth level work packages (WPn; wpn1), using a language more suited to a PBS. The work package, from the macro to the most limited component within a hierarchy, would have been much more useful for a representation and a comparison with the OBS (Organization Breakdown Structure). Most of the work of the central government bodies has been done on the ‘modeling’ of what looks like a PBS, however the comparison of the PBS with the OBS appears to be deficient and worrying; that is to say, a WP able to merge (cross) the PBS-OBS with breakdown of “P” (lines of financing) and “O” (lines of organization). “O” are public organizations (local authorities, institutions, companies) and their functions and other organizations that are to intervene on the same WP at the same time. The deficiency is particularly evident for public works and infrastructure. Intervening with a centrifugal, rather than centripetal logic means that the teams and skills that have now vanished must be recreated in areas where infrastructures have receded. Taking back the glocal at the expense of the global must also consider this aspect carefully. The theme of public works and infrastructures is one of the most important of the NRRP; it is the one that would best be able to represent the future of Italy

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and Europe. Long-lasting investments are created that can mark a direction of movement. A reconstruction tells us that of the 92 investments, 70% (65 inv.) refer to infrastructure, thus equal to 55% (115.2 billion euros) of the 209 billion that make up the NRRP. These are heterogeneous investments in assembling resources and in fully representing the concept of infrastructure. A first question is: in a routine phase, until 2019, Italy managed 27 billion euros per year for jobs related to infrastructure. To these funds another 115 billion is now added from the NRRP, thus doubling the ordinary amount (23 billion a year in five years). How will Italy be able to cope with this doubling of resources available for infrastructure if Italy is also the country that, more than others, does not know how to fully use EU funds at an even a much lower level?

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Chapter 10

The Smart City: Integration

Abstract The treatment of the smart city and its development has many similarities with the treatment of urban infrastructure. Many interpretations can be given to the concept of smart city in some cases it is a subject in the process of consolidation. However, a key to understanding is that the concept of smart city begins to take shape coinciding with the take shape of the concept of urban infrastructure. It is precisely the discussion of the different types of urban infrastructures that serve to better understand the form and substance of smart cities. Probably without a connection of the variables that make up the urban infrastructure it would have become difficult to define the concept of smart city. A strong link is represented by ubiquitous infrastructure in characterizing the concept of urban infrastructure and at the same time of smart city. In an extreme form, and in an equally extreme and selective reading, it can be said that the smart city is the planned and ideal conjunction typical of several types of urban infrastructure and therefore is itself an urban infrastructure.

The smart city, understood as an infrastructure, is a mix of elements that can make it rise to this play this role. Many global cities emphasize the term smart city. However, around the term there is enormous publicity and the publication of many contributions from research centers, scholars, international institutions (e.g. the EU commission), multinational and global players and stakeholders. There were 138 publications relating to smart cities in 1996, which grew to 16,500 in 2015, with an exponential growth on the subject (Komninos & Mora, 2018). Often, however, the authors of these contributions, faced with a complex, contradictory, and rapidly growing terrain, end up producing chaotic material and languages. Mumbai and one hundred other Indian cities, among various problems (Datta, 2018), have applied the term smart city and publicized it since 2014 when the Indian government indicated a program for the country to leapfrog towards a digital urban future, through an integration of transport, the definition of commercial areas and green areas as an integration of existing structures and new spaces, and the strengthening of buildings and mobility. These are platforms that are customized according to the city; they take the measurements and integrate the infrastructures by creating a single infrastructure from the process. In the case of Rio de Janeiro (Matheus et al., © The Author(s), under exclusive license to Springer Nature Switzerland AG 2023 R. Dalla Longa, Urban Infrastructure, https://doi.org/10.1007/978-3-031-23785-0_10

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2018), this has produced a building with four floors of technology and personnel that operate there to manage the smart city platform and the integration of urban infrastructures (these are the data center or dashboards). This is how the ‘smart city’ infrastructure company materializes with a global footprint that fits well with city. Rather than listing the large global cities that have not launched smart city systems or that have not posed the problem of developing infrastructure integration programs (in high or low-income developed countries), it is easier to indicate which of these cities has not organized itself in this sense. The cities that in developed countries indicate that they have launched smart city programs far exceed 50%. After all, this is a rapid growth: in 2010, Frost & Sullivan (James & Sullivan, 2013) indicated 41 cities as promoting the development of smart cities; two years later, in 2012, Yonsei University identified 143 cities (Lee & Hancock, 2012). In 2014, there were 240 such cities in Europe over 100,000 inhabitants (50% of the cities above that population threshold—Manville et al., 2014). In 2018 and 2020 Deloitte (2020), also taken up by Wang et al. (2019) and by Horwitz (2019) on Cisco, have indicated more than 1,000 smart city pilot projects that were in progress or under construction around the world, but the data is still growing if we look at the various sites of global companies interested in smart cities. Here are some cities where abundant literature and case studies on smart cities have developed; it remains only to choose them: Stockholm (Shahrokni et al., 2015), Barcelona (March & Ribera-Fumaz, 2016, 2018), London and Manchester (Cowley et al., 2018), Hamburg (Bärb et al., 2020), Cologne (Leitheiser & Follmann, 2019), Milan (Trivellato, 2017), Vienna (Fernandez-Aneza et al., 2018), Amsterdam (Lee & Hancock, 2012; Mora & Bolici, 2017; van Winden et al., 2016), and Helsinki (Mora et al., 2019). The list of those who have experimented with the smart city could go on and on (Ahvenniemi et al., 2017; Deakin, 2018; Joss et al., 2019). We add Dubai (in which advertising classifies it as a city in which the ‘smart city,’ as the only large infrastructure, anticipated the population, and not vice versa). The city-state of Singapore has through specific acts formalized its desire to make present and future choices as a smart country and global city, innervating resources, filtering them around these principles and declaring this as a competitive advantage of the nation and its global city. Other studies—some complex and some questionable— must be added as regards Australian cities (Dowling et al., 2018; Yigitcanlar et al., 2020), Japanese cities (Chatfield & Reddick, 2015; Trencher & Karvonen, 2018), and other Asian cities such as Seoul (Lee et al., 2014), Honk Kong (Lam & Yang, 2020), Singapore (Hoe, 2016), and North American cities (Lee et al., 2014). Moreover, in the last decade the literature on smart cities has grown considerably in Europe, Asia, America, and Australia (Mora et al., 2017). Except in particular cases, it becomes difficult to develop an overall view starting from the different case studies, as we must operate within a cultural and evolutionary stratification of contributions and experiences. At the academic and scholarship level, we are faced with a babel of languages that in some cases, have ended up ridiculing the language of the ‘smart city’ and creating a linguistic ‘bubble’ around it that ends up making the term ineffective. There may be container terms (Ismagilova et al., 2019) within which there are various contributions. Container terms can be in addition to the term ‘smart’: mobility (refers to

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use of sustainable and innovative ICT in modern transport technologies; internet of vehicles—Zhu et al., 2017; traffic surveillance; micromobility; network integration and interoperability—Fong et al. (2017); mobility as a service, sharing mobility— Exposito-Izquierdo et al. (2017); automated driving systems, Tsugawa (2017), living (smart-living—Han & Kim, 2021; health infrastructures—Pramanik et al., 2017; Chalmers, 2017), education—Uskov et al. (2020), environment, citizens, government, architecture and technologies. Other terms more related to hard infrastructure are more widely indicated by stakeholders and multinational companies: ICT, energy and infrastructure, automation and building, security, telecom, transportation, and healthcare. These are not the only containers (aggregations of functions/categories) of the terms of the global city, important to better define the perimeter of the border between the smart city and urban infrastructure. Among the countless contributions, others can be identified that integrate, or in part differ from, each other (Anthopoulos, 2015). Then there is a coherent way of presenting a division proposed by the research on European cities from the beginning (Giffinger et al., 2007) to then arrive with the same division at the section on 20 European cities (Manville et al., 2014). A different division is present in Staffans and Horelli (2014) and in Mora et al. (2019). While this is the division found in the literature, a different division can be found in the contents of economic operators and global players such as James (2013), Jacobson (2018), and ABB (2023) can be argued without being denied. However, these are just some of the terms used, it can be argued without denying that the problem of the classification of interventions within smart cities is one of the major problems currently encountered. This is true to the point that it is said, even here without being denied, that “there is no commonly agreed definition of smart cities” (Angelidou, 2014) and the scientific literature appears too little systematized (Caragliu et al., 2011), even if in this chapter we have tried to do so with some timid attempts in the initial phase. We have tried to keep a key to reading and then address the analyzes and considerations (Ahvenniemi et al., 2017; Deakin, 2018; Song et. al. 2017), even with critical visions (Desdemoustiera et al., 2019). The current literature (Karvonen et al., 2018) appears too oriented toward cases which on the one hand serve to contextualize the interventions, and on the other hand contribute to creating a babel of languages, often legitimized by the action and complexity of the interventions (Mora et al., 2019). Working on cases is due to the rapid growth of the theme, that is situated within the smart city, and those places that resort to the use of the term. When the 100 Indian cities apply the concept of smart city with extreme determination, they demonstrate on the one hand a strong determination in pursuing the underlying strategic objective (Lam & Yang, 2020; SCC, 2018), on the other various problems in application (Datta, 2015, 2018), with respect to the cities of developed countries, and European cities in particular (Manville et al., 2014). In summary, the intervention attributable to smart cities is global and affects all the major cities of the world without distinction; some structures change. Often the glue is globalization and competitive advantage, but not only that, as otherwise it would be too easy to find a single interpretative key; other maps can be read inside of it, often emphasized by rhetoric and which often do not produce clear outlets.

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The term “leapfrog” used for the 100 Indian cities is significant. For example, in Mumbai it can be used to try to bring order to chaotic growth. In Dubai, to try to harmonize growth that is still without functions and population, both see the presence of platforms, big data, and stakeholders that are global players in globalization where urban infrastructure is central, even if the model of the city appears to be the opposite, invalidating the urban infrastructure itself. Both places use private capital. For India in particular, the model indicated for the country is activated with the PPP (Lam & Yang, 2020; SCC, 2018). Manville et al. (2014) start from an analysis of European Union (EU) cities with 100,000 inhabitants or more. They identify 469 such cities and, of these, 240 (51%) fall under the smart city target. In other words, an operational (ex ante) definition of Smart City is established and the cities that match this definition are mapped (ex post) in the Member States. The 240 cities selected respond to an initial and characteristic definition of smart city. In the research, the first division used to formalize the smart city was composed of six characteristics (smart: economy, environment, government, people, mobility and living) and three components that revolve around all the characteristics (technology, human and institutional factors). One wonders where the infrastructures are; the physical infrastructures are within the technological feature. This approach, despite having depth in the classification work, is in fact not consistent with our approach. In a simplified way, it could be said that all classifications, or most of them, are characterized as part of urban infrastructure, so much so that the smart city is considered an infrastructure where becomes tangible with actual interventions. Angelidou (2014), but also other authors before that (Caragliu et al., 2011), after pointing out that strategic planning for the development of smart cities worldwide is still a largely unknown field, indicates as one of the possible strategies that of a dichotomy between hard infrastructure (e.g. transport, water, waste, energy) and soft infrastructure (e.g. social and human capital; knowledge, inclusion, participation, social innovation, social equity, etc.). This classification is also partial and does not fall within the classification used in the book. The EC (2023) indicates others. In the identification of 27 world cities with more than 2.5 million inhabitants in which to apply their analysis, Joss et al. (2019) provide a further classification in which infrastructure covers 9.5%, but it is capable of absorbing other items classified by the study in other forms under the item of urban infrastructure. We could continue (Caragliu et al., 2011): this different division is also the recognition of the lack of a single interpretative key regarding smart cities and a not clear vision of urban infrastructure as discussed here. On EC official website (2023), as priorities of the partnership for a smart city, the following categories are indicated: (a) sustainable urban mobility; (b) sustainable districts and built environment; (c) integrated infrastructures and processes in energy, information and communication technologies and transport; (d) citizen focus; (e) policy and regulation; (f) integrated planning and management; (g) knowledge sharing; (h) baselines, performance indicators and metrics; (i) open data governance; (l) standards; and (m) business models, procurement and funding.

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Joss et al. (2019) instead indicate the following categories for smart cities: Governance (10.1%), infrastructure (9.5%), international (8.9%), digital technology (8.3%), society (7.3%), economy (7.1%), spatial planning/development (4.6%), experiment/innovation (3.8%), environment (1.9%), sustainability (0.9%), unclassified (37.7%). These indicated are just two examples. Another weak element in the treatment of ‘smart cities,’ both in the academic literature and in the operational and applicative literature, concerns the specific weight that the interventions have. In addition to a representative ‘confusion’ relating to the interventions, and what the possible key to understanding is that remains even with an attempt at rationalization, there is an aspect, especially in non-academic contributions, of rhetoric and ‘euphoric vision.‘ Ultimately, there is often a lack of impact with the results and with the financial viability of the interventions. Smart city interventions are widespread in all large cities, and in global cities in particular, driven by several factors such as globalization, the growth of PPPs (Lam & Yang, 2020), and the evolution of the state. In Europe, it has often been EU that has mainly taken charge of this process. In other countries, there have been not insignificant interventions by tech multinationals. The interventions have provided their own contribution to widespread technological innovations and to a dedicated economy precisely in the cities that have invested the most in smart cities (Caragliu et al., 2011) and to the rapid integration of infrastructures able to bring better focus to the concept of urban infrastructure. A central element remains the functioning and criticality of the interventions and the incidence they have on the amount of investments and those in urban infrastructures in particular. For our purposes of smart city as infrastructure, there can be five containers (Fig. 10.1): – a macro container that goes beyond the space of the single infrastructure but can also contain it. The usable term can be smart urbanism (Luque-Ayala & Marvin, 2015; Marvin et al., 2016); – then there are the interactions, connections, and switching; the first (interaction) regards most of the network infrastructures that allow the mobility of people and things understood as goods; the second regards the connection referring mostly to the network and signals of the internet, radio, and frequencies, in which all of the ICT, app, content, and communication data is located; the third (switching) regards the networks for the transport of energetic materials (fluids and gases) and inorganic materials (water, solid and organic waste, water flows); – savings, the environment, and sustainability, which represent a very important basis for rationalizing existing elements and financing the smart city itself. These are the investments of the previous decades, each in an incremental and partial form and never seen as a whole, for which waste and inadequacies have accumulated multiplying costs, dispersions, pollution, and consumption. Think of integrated systems and economies of scale, in tune with technological development, is one of the elements that feeds this type of infrastructure;

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Spaces rationalization (smart urbanisme) Healthcare Education

Infrastructure assembly

Sustainable savings

. . .

power water pollution

Interactions Connections Commiutations (switching)

Technology - Big data PPP State evolution Governance (criticality)

Fig. 10.1 The five containers to place contributions and dynamics and compare the entities of the smart city as an urban infrastructure

– the assembly of infrastructures understood as D&C and O&M; in this, all the space inside the single infrastructure including also operation (O), is oriented towards integration. This container differs from the macro container since it is part of smart urbanism, interacting (and integrating) significantly with it. On this front, there have been significant interventions from the BIM and the comparisons that have developed around this issue (Ciribini & Dalla Longa, 2014; Desdemoustiera et al., 2019) – to the assembly of individual infrastructures, a fifth one is added, which concerns in particular health and education understood as infrastructures separated from individual containers (hospitals, universities, schools, or other teaching centers) already indicated in the assembly of infrastructures but which refer to particular hospital technologies, or technological-health infrastructure of the territory or elearning, often connecting or diversifying traditional infrastructure. This component is also part of urban infrastructure. Then there is the issue of e-government, understood as access through ICT to documentation, deeds, public and institutional certifications, or the interaction with heritage or public museums as long as the latter do not belong to smart urbanism or rationalization of spaces. This classification is the one that places the smart city within urban infrastructure and leads to a greater rationalization of the language used for the smart city. However, this division represents only a first important classification matrix of the smart city in order to consider it as a ‘synthesis infrastructure.‘ In reality, the language of the smart city is different, more dispersive, as it is the dynamic combination between these components, accentuating the differences and particularities and the numerous criticalities that arise. The sustainable savings of the different forms of energy are integrated with the interactions, connections, and switchings thus with the other three panels finding in technology and Big data, PPPs, evolution of the state, and governance, the basis for a strong comparison. This affects the types of infrastructures seen previously (physical, sustainable, omnipresent, green—see Chap. 9). All the staff, and the technologies and knowledge put in place to connect these different panels

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belong to urban infrastructure. The result obtained is a different idea of infrastructure as understood in the past with public work and the state which intervened with incremental procurement models deriving from the welfare state that rigorously separated the action of the state from that of the private sector (economic operators); now the flow is more complex and in many ways more problematic and chaotic. In addition, the fear that the city, in a logic of globalization interconnected with strong competitive advantages, can become a fetish of the representation of an integrated global enterprise led by urban infrastructure, is not to be neglected (Marvin & Luque-Ayala, 2017; Kummitha & Crutzen, 2017). In this historical phase, the global city and the city become a terrain in which multiple ‘games’ are played. The interests at play are very extensive, as are the forms they take. In this sense, the documentation analyzed and cataloged by Mora et al. (2019) over 10 years in four of the most important smart cities in Europe is significant, being a sign of the atomization of actions, of a quantity of organizations that operate there, from different directions. There are necessarily three key characteristics of the ‘smart city’: (a) the strong interconnection between these components which allows the term ‘smart’ to be adopted; (b) the structural and organic development of the PPP (Public–Private Partnership), the development of which allows us to speak in a complete form of a smart city and more generally of another vision of urban infrastructure, whereas otherwise we remain largely within a terrain of rhetorical representation; and (c) the ‘molecular’ reform of the state. Without the PPP in its various forms it would not even be possible to apply the concept of smart city, just as it would not be possible to use the term without observing a ‘molecular’ transformation of the state starting from the big cities. The intertwining of these two components (PPP and transformation of the state) is an aspect of smart cities that has not been completely resolved; we are witnessing rapid transformations taking place, with many contradictions (cf. p. 4). The discussion of PPPs began late and with some ambiguity (Lam & Yang, 2020). It may happen that through this intertwining the very future idea of the city will be determined. The debate remains very heated and open (Calzada, 2018). For example, the development of the smart city of Copenhagen (framework to 2025), over several years, is to see an investment of 1% (362 million euros) from the public spending of the city (municipal investments), against 99% (33.5 billion euros) from individuals (private investments) (James & Sullivan, 2013). Or the public sector could be the natural owner of the applications referring to smart cities (70% public against 30% private), compared to an almost opposite level of investment (40% public and 60% private), and the level of overall investment could have a positive financial return (55%) against a smaller share (45%) with no direct financial return; the reference is to energy, water cycle, waste cycle, transport, and hospitals. Autonomous vehicles excluded: technology has not been deployed at scale and the required investments by 2025 are not yet clear(McKinsey, 2018). It is a question of verifying the correct combinations and also prefiguring the idea of the city that follows. The push factors of this scenario are the development of technology and big data, which are in part also a consequence. There is also a strong push from the economic

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Commerce

Industry

DWELL

Turism Leisure

retailers

hotels residences

LEARN Research Universities

buildings

financial institution factories

Smart city managment infrastructure

Recycling facilities Public facilities

Schools

TRANSPORTATION Logistics

Energy stations Railway srtations

Hospitals

Data center

water cycle Industrial wastewater

Agriculture fisheries

WORK

internet

Dashboard (big data) videoconf.

water

communications

Ubiquitous ITC App (traditional)

telephony Sewage tratment Water treatment

New energy

energy central power plant

ports gas Renewables Hydrogen Batteries

airports

transportation

roads

Sharing Urban transport

railways

Fig. 10.2 Ideal–typical model of smart city (systemic breakdown) with a highly corporate interpretation. Notes The three different shades of gray indicate a frontal or decreasing impact with urban infrastructure (the greatest impact sees a darker shade of gray). Source Our processing Marvin, Luque-Ayala (2017) and ABB (2023).

operators, that are cause and effect of this evolution, in which they put much of their competitive advantage on the line. Below is a meta-smart city model proposed by those who are involved in this business (Marvin & Luque-Ayala, 2017 (Fig. 10.2). This is a systemic breakdown of urban structures (urban systems) born in the 1960s at MIT in Boston, which has also had some success in Italy by creating academic

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disciplines around it (Urban Systems Analysis). To propose it again today means having global players who can support and sponsor it; there are technologies that can support them with the development of big data. The relationship between state and market can be better reformulated through the PPP. Previously the state was ossified around the welfare state with clear separations from the market. The term ‘smart’ integration is now in the logic. This scheme has a highly communicative effect towards the driver and the public decision-maker that should not be overlooked. It also has it from the point of view of scholarship. However, there are some criticalities that cannot be overlooked, and the stakes involved are very high for the concept of the city itself. A maximum criticality is due to the relatively long times of an LTC (Long Term Contract) and the turbulence that takes place in the short and medium term in the vision of globalization and global cities and urban systems. Peck et al. (2013) and Peck and Theodore (2019) themselves detect this in discussing a concept that should be solid such as neoliberalism or thrusts towards the post-neoliberalism (Peck & Theodore, 2019). There are important stakeholders who push for an integration of infrastructures within the framework of the ‘smart city’ Arup (Buck & While, 2017) and also others such as Cisco (Brazil), Siemens, IBM (McNeill, 2016; Wiig, 2015), Intel, BT, Telefonica (UK), or Hitachi and other major software companies (Marvin et al., 2016; McNeill, 2016). There may also be other entities such as local corporations operating on the market and controlled by local governments, such as in Cologne in Germany (e.g. Stadtwerke GmbH) (Leitheiser & Follmann, 2019). Even Engie (a French multinational energy company), has used aggressive advertising to be very visible for the general public in Italy, with an important dedicated advertising budget. The company claims, through captivating images, that there was an important smart city experience in Italy as well. This experience was based on European models of low-consumption districts, integrated infrastructures, and sustainable mobility in a PPP (Public–Private Partnership) between Engie and a Municipality (local government). The operational structure had been created through Livin ‘Platform Engie, a circular process between data monitoring, aggregation and analysis, development of smart interventions, intelligent parking lots, electric mobility, smart benches, and innovative management of public lighting. In reality, cases of smart cities in Italy are present in various areas and prior to those mentioned by the French energy multinational (e.g. Dameri, 2017; Grossi & Pianezzi, 2017; Trivellato, 2017). One of the arguments made (McNeill, 2015) is that tech multinationals, joined by local companies (Caragliu & Del Bo, 2019), link their competitive advantage, and in some cases their existence, to globalization (global cities) and within this to the growth of urban infrastructure in smart cities. The explicit interest of some tech multinationals (Cisco, IBM, Fujitsu) is indicated with precise references also by Hollands (2015). This remains an important point in the discussion of smart cities.

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10.1 The Definition of the Smart City as an Infrastructure Especially in the cities of high-income developed countries with widespread presence of brownfields, the smart city can be understood as an important application to existing infrastructures which in a more or less diffused manner modifies their organization, use, and fruition, creating a new infrastructure as a whole; hence in part the concept of smart city as an infrastructure tout court. It is a question of understanding how widespread the application is, what type of change is caused, and how broad it is. A precise answer serves to remove the rhetoric or the emphasis that has affected the term smart city for just over a decade. There is no doubt that we are facing a possible ‘revolution’; what remains to be established is how close this revolution is, what its direction is, and if there is a dichotomy between what is declared at the level of a scenario and what is actually pursued, and how great this difference is. For this reason, the smart city can only be a component that is added to other types of infrastructure (Fig. 10.3), or in a situation of strong development and pervasiveness it can absorb them, summarizing the situation with the term ‘smart city.‘ Some dichotomies, for example between sustainable city and smart city, have already been detected by Ahvenniemi et al. (2017). The gap between the evolution of a scenario (or the development of rhetoric) and the real weight of this revolution is enormous, as are the interests at play and the correct connections and transitions of models—that will not be painless—to be made. The major global companies closely linked to globalization are involved in smart cities. All the major global technology players are present. Five of the world’s top 10 technology companies are directly involved, along with a significant portion of those in telecom, energy, security, and many other sectors. Some big players put forward some suggestive hypotheses. James (2013) indicate the market value of smart cities as 1.5 trillion US dollars, and even if it is not comparable, in terms of content and time, the BIL (Bipartisan

Physical infrastructure Sustainable infrastructure Ubiquitous infrastructure Green urban infrastructure Smart city Fig. 10.3 Urban infrastructure evolution from public work (physical infrastructure) to smart city

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Infrastructure Laws) are 1 trillion US dollars. The figure estimated by James (2013) referred to 2020, while the one trillion of the BIL (see Chap. 9) refers to 10 years. The 1.5 trillion dollars smart city market is a seven-sided ‘diamond’: a. smart infrastructure—13.75% (this does not include all infrastructures, as some are also present on other sides of the diamond); an increase compared to the past eight years (2012–2020) in the absorption of market value; b. smart energy—16.65%; declining; c. smart transportation—9.09%; declining; d. smart healthcare—15.26%; seeing strong growth; e. smart security—14.11%; stable; f. smart building—10.21%; stable; g. smart governance and education—20.93%; seeing strong growth. Likewise, the UK government (Kummitha & Crutzen, 2017; UKTI, 2015) believed that the market for Smart City products and services in 2020 would equal the twelfthlargest nation in terms of GDP, behind Canada and ahead of Australia, again with 1.5 trillion US dollars. There is a convergence between what is indicated by the two subjects (the first business, the second government). This is a clear indication for top global players to quickly organize the market. The UK government adds that “it is estimated that the top 750 smart cities will generate two-thirds of the world’s GDP by 2030.” Most tech multinationals are involved in the development of smart cities, while existing infrastructures, within high-income developed countries, are considered as strategic assets. For a long time, urban infrastructures have been used little or not at all as systems for the direct production of value; they have been used as indirect producers of value since the welfare state was something other than the direct production of value in hard form. Thus infrastructures are assets, with a high underutilized value incorporated that can grow exponentially. The problem is which push factor must be activated (we can use the term helixes, given the widespread use of the term in explaining the phenomenology of smart cities) in order to get the infrastructural revolution (urban infrastructure) off the ground. With some simplifications, it can be said that if the helixes were only those of the big players (McNeill, 2015), the cities would be organized as new businesses with a non-negligible addition of a widespread network, joint ventures and partnerships of the top global players with turnover higher than those of many states. An issue that is not new is that of cities represented as companies, which has already been tackled over time, but now there are new, non-negligible elements, including the technological revolution. Smart cities as a representation of business, touching different angles, is a theme that has been addressed by several authors, and in particular by Hollands (2008, 2015). The new theme is, if anything, the convergence in new forms of networks and joint ventures and partnerships of large players with greater financial power than that of individual states. The role of the state would only be as an accessory or a facilitator, and the millenary theme of what the city is would be eliminated or simplified. Hence the multi-debate on the different helixes (Mora et al., 2019), that is often only theoretical, though, as a fundamental element to be addressed remains the financialization

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of the intervention, one of the central themes of this book (Chap. 6). That is to say: (i) the complex culture regarding application; (ii) the idea of the state; (iii) the organizational models that follow; (iv) the PPP; (v) feasibility and sustainability; and (vi) the post-pandemic phase with the NGEU and BIL and the role of cities. Without addressing this issue, we would be faced with conceptual disputes with ‘blocked’ situations; or the debate can have the function of slowing down some processes but having difficulty reversing them, unless there are radical (and unlikely) changes. However, it becomes important to address the issue of confrontation in the field to better define the smart city as an infrastructure. Some contributions can be taken as a reference (Calzada & Cobo, 2015; Deakin, 2018; Desdemoustiera et al., 2019; Hollands, 2015; Kummitha & Crutzen, 2017) and return to the use of the metaphorical term of helix. It would be difficult, if not impossible, to cite all the authors who use the term; here we indicate only a few, who address the theme from the general to the particular (Dameri, 2017; Monteiro & Carayannis, 2017; Selada, 2017). The two helixes are made up of businesses and the state, with the weaknesses found in this dichotomy faced with such radical interests (development, profit, and globalization for businesses), regulation by the state in the face of a fiscal and public debt crisis and an unresolved employment problem, and some attraction to progress and technology. The third helix is constituted by university and research centers with service tertiary roles, also to recall elements such as exclusion, segregation, discrimination, loss of citizenship rights, resilience, and the millenary culture of cities (polis). Therefore the concept of “unplugging the smart city” has also been born (Calzada & Cobo, 2015) that arises as a dynamic opposed to the ‘corporate’ integration of the city as a single infrastructure. If the smart city tends to be configured as the only infrastructure, the purpose of unplugging ‘is to shift the axis to people; from private and financial to communitarian and socio-economical; from controlled to open; from top-down and master planning to bottom-up and emergent plan; from individualism to neo-communitarianism; from high to low (Calzada & Cobo, 2015; Chourabi et al., 2012). The fourth helix consists of the social and collective dimension, which, however, may appear weak. It may be important to define a more stringent interconnection model between the smart city and urban infrastructure, and develop a synthesis of the treatment of urban infrastructure and the smart city. Six different models of the city can be identified under the influence of the smart city (Fig. 10.4). Some of these assume an ideal–typical or abstract characteristic (e.g. the locations of -e- and -f-) but serve to better define the intersection between urban infrastructure and the smart city. The two main variables considered are the technological variable and the human variable. Model (a)—This model mainly focused on technology (ICT) as a connecting element between the various existing infrastructures. The global cities that serve as a reference here are, for example, Dubai and Masdar in the United Arab Emirates, and Songdo in South Korea (Hollands, 2015; Sennett, 2012). The last two are cities built from nothing in just a few years as smart cities, with high indices of infrastructure integrability. They are greenfields, but above all they also apply to brownfields, with a greater impact in regions of Asia (e.g. Singapore), but less to brownfield cities in

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high

a

e

technology

c

medium

d

f

b low low

medium

high

human Fig. 10.4 Six different city models and intersection between smart city and urban infrastructure

Europe, especially due to a different relationship between technology and the human aspect in the application of top-down models. However, albeit with some abstraction, model (a) is applicable globally. It is in the Western regions (high-income developed countries) that the most interesting developments can be found. They refer to the two helixes of business and public administration, the latter having a prevailing role of legitimation and procurement. Among all of these, model (a) is the one most able to superimpose the smart city on urban infrastructure. The main features are the following: – maximum exponential development of urban infrastructure; – brownfield infrastructure as a strategic asset to be enhanced with strong integration of its parts and strong expansion; – a central part of the ‘assembly’ is entrusted to the finance and financeability of the interventions; – the structural references on which it is based are: efficiency/effectiveness (this is a reference to the business logic used by some, e.g. Hollands, 2008, 2015); technology-driven infrastructure integration; technical universities and technological intelligence; data expansion with ‘big data’ and algorithms and derivative control systems; the reference is the individual and the organization rather than the social environment with its contaminations; growth of social constellations selected and driven by technology; low democracy and technocracy; division of territories through technological filters; new dichotomy between historic and technological; – social exclusion is affected by technology, income differentiation is linked to the use of technology;

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– radical models of social inequality can develop; – Then there are other induced aspects such as: the emphasis on technology risks leading the ICT to be an end in itself; robotics is facilitated and the burden (mobility) of reaching people is reduced. There is also an idea of utopian city, that cannot be escaped; – The containers of Fig. 10.5 interact strongly with each other, helping to increase the effect of the smart city superimposed on urban infrastructure. The interactions, connections and switching are linked and rationalized with each other, restricting private space in favor of collective space, and the private space is also powered by infrastructures which expand: ‘smart’ work takes place within infrastructures (smart working); individual procurement takes place within and with the help of infrastructures (Amazon, Platform Ocado see Appendix). Mobility and transport are influenced by the reduction of private spaces; furthermore, sharing is developing in large cities, replacing the ownership of private vehicles. There can be joint activation of extensive investment in savings and sustainability (energy, water, and pollution). Work is done to rationalize urban spaces through technology. Healthcare and education are regulated by technological investments (new generation electromedical devices and e-learning). There is a new form of industrialization of the production and assembly process of individual infrastructures and buildings through BIM. In 2014, our reference (Ciribini & Dalla Longa, 2014) with respect to BIM was the following:

Spaces rationalization (smart urbanisme)

Healthcare Education

Infrastructure assembly

Technology - Big data PPP State evolution Governance (criticality)

Sustainable savings

. . .

power water pollution

Fig. 10.5 Interaction between the five containers of Fig. 10.1

Interactions Connections Commiutations (switching)

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Building Information Modeling (BIM) is a modeling system focused on the public building as well. We are facing a new exponential interest in the unit of measurement of the building. We will call this interest the “new Renascence”; Two references to frame the theme. a. One by Francis Maude (2012) Minister for the Cabinet Office—on the website of Department of Cabinet Office Business Innovation & Skills (BIS)—“This Government’s four-year strategy for BIM implementation will change the dynamics and behaviors of the construction supply chain, unlocking new, more efficient and collaborative ways of working. This whole sector adoption of BIM will put us at the vanguard of a new digital construction era and position the UK to become the world leaders in BIM.“ b. The other by Hardin and McCool (2015)—“The construction industry is in the midst of a technology renaissance. BIM served as the initial catalyst for the period of innovation, but has now grown beyond ‘just BIM’ to include innovations in many other areas such as mobility, laser scanning, and Big Data analytics among others: Supporting process are changing as well. The construction industry is realizing that there new technologies don’t fit into previous processes The interest recalls the principles of new industrialization of the construction sector (one of the most backward). Industrialization passes through a dematerialization of old methods and forms and from the development of BIM (information technology— first of all). University research centers, present worldwide and in companies that operate in the process of the life cycle of public works and infrastructures, are acting with great determination within BIM. At stake is the patent and the future competitive advantage. The supply chain in the world of ‘construction’ is one of the major producers of value in the world; in this context, that of public works and infrastructures is, for various reasons, an advanced point; BIM is subject to different approaches: the tool is not the decisive aspect, but what use is made of the tool. It can become the extension of some specialisms (for example, design), or, if combined with a far-sighted vision of management, it can become a formidable tool for integrating the life cycle process that considers D&C and O&M coherently within new forms of production, new management formulas. This is not a technical problem but a question of culture. The application of the new Renascence implies a profound revision of the professions, specialisms, and knowledge now known, as well as of the way of producing the usable elements. Model (b)—It is specular, with the opposite sign of model (a), and is based on a critique of the concept of smart city and what it implies. This model summarizes several legitimate positions ranging from antagonists who consider the smart city a fundamentalism of capital and finance in search of new markets, with new and more violent forms of segregation. Watson (2014) analyzes them for the cities of Kigali, Nairobi, Lagos, and others and considers them as nightmares, which will surely find some who will rebel among the young people and in the suburbs of these cities: “these

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plans could be sufficient to mobilize the inhabitants of the shanties, the unemployed young people, informal and formal local businesses, and the NGO sector on an urban scale, to effectively counter these interventions.” Another observation attributable to this model is the criticism of applied technologies. Inable, according to some, of resolving the complexity of urban problems (Hollands, 2015) in which the problems identified in the last century (urban poverty, discrimination, inequality, social polarization, conflict, decline, crime and neglect, and even environmental problems such as traffic congestion and recycling) cannot be improved by simple technological solutions or more sophisticated data collection. This position of complexity of problems and conflicts has deep roots and solid references (Brenner, 2013, 2014; Gorham & Glazer, 1976; Harvey, 2012). Then there is the critical consideration on the privatization of urban spaces. In this case as well the theme comes from afar, having already been mentioned previously by Harvey (1989) and now in a different form it is indicated as ‘privatization’ of urban space in the construction of new Asian cities (Hogan, et al., 2012), or the withdrawal of the State from local territories in favor of urban development based on the market (Gibbs et al., 2013) which (Peck, 2004) has defined as “market fundamentalism authorized by the state.“ Another term widely used within this model, in defining much of the treatment of the smart city, is neoliberal urban policies (Grossi & Pianezzi, 2017). What has been indicated is only an iceberg of criticality or opposition to the concept of smart city and therefore to an integration of infrastructures. The guiding idea of this model remains that of Calzada and Cobo (2015) of “unplugging the smart city” and therefore of operating in a form opposite to the full concept of superimposition of smart city with urban infrastructure, and therefore of infrastructure integration. The presence of this model allows for enhancing what is indicated in Fig. 10.3 with the consequent modularity of the types of infrastructures; thus not integration of the different types of infrastructures within the smart city, but a clear breakdown of them, albeit within an urban infrastructure design that does not necessarily pass through the smart city. Model (c)—Generally these refer to the three helixes in which the company and the public administration are added to university and humanistic and city-oriented research centers. Is searched a balance between the interest of the economic operator and the social interest, in many cases also the public interest. The complexity of Western and European urban systems and their enormous cultural, historical, and social science sedimentation have triggered a clear rejection of the technological simplification of model (a). It is as if globalization and the technological revolution shatter a millenary vision and research on the ‘polis,’ In model (c) ICT is not in opposition to the social and human component, an integration and lasting alliances are sought; for this reason as well technology continues to remain high and we think about what is collective and public. Often, in model (a) the public interest is often not present. We often talk about neoliberal models (Grossi & Pianezzi, 2017). In the literature, the low presence of the human component does not allow for the use of the term ‘smart.’ In model (c) there may be some lack of integration between the logic of finance and social demands. The political and public sphere can often act as

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a synthesis between different needs. In addition to top-down models, there are also some bottom-up models regarding decision making. The presence of technology is mediated by the presence of social stakeholders and elements such as segregation and exclusions are considered. It is also possible to witness the shift of some researchers’ sensitivities (e.g. Florida, 2002, 2005, 2017) with a passage from a blinded vision on prevalently model (a) to that of model (c), until encroaching on model (d). Kummitha and Crutzen (2017) call this phase ‘reflexive’. The actor able to assemble the intervention is always the economic operator and the big player. However, it is often the strong and reformed public administration that tries to create direction (Cocchia, 2014; Fernandez-Aneza et al., 2018; Selada, 2017). The ‘reflexive’ part, waiting for the right combinations, could lengthen the time. Model (c) can lead to a slowdown and not necessarily to a weakening of the relationship between the smart city and urban infrastructure, which tend to overlap significantly. Model (d) —This represents the latest smart city model, that is, this model is the frontier between high absorption of smart city within the more general concept of urban infrastructure, or distinct contiguity of infrastructures. The meaningful concept of infrastructure integration could be clearly lost. However, significant links remain. The concept of top-down is overturned and replaced with a bottomup approach. It is the social component and the citizen—better if organized—who become central to technology. The principle of entrepreneurship is undermined; the axis is shifted to the citizen and is not necessarily connected to business. However, the role of finance in incorporating investments is thus lost or significantly weakened. To the three helixes, a fourth is added, made up of the citizen who is called on to ‘create’ through ‘bottom-up’ entrepreneurship or ‘creative-proactive’ participation. This is a community-driven idea of a smart city. Some types of urban infrastructures are created, that are well summarized by the ‘Urban Living Labs’ (Marvin et al., 2018). Some characterizing elements of this model are focused. Urban imaginary—urban as a contingent factor and as a historically produced context and urban understood in a particular way by local communities, which concerns bottom-up. There is also the possibility of using urban as a testing ground that can be replicated or generalized. Organization form—The organization form is mainly based on the evolutionary partnership formed by local actors with multiple micro/single forms of community organization. The selection of the site for experimentation can also be considered in competitive-urban. Funding type—The funding assumes a low profile and does not provide for a structured presence of finance, and concerns co-financing and partnersip, being left to improvisation (Marvin et al., 2018; Schuurman et al., 2016). Model (e) —Represents a typical and utopian ideal reference, at least in the location that sees high parameters of technology and the human element. It is evoked by several contributions, including Selada (2017), but also by Mora et al. (2019) following another empirical path. The theme of diversification and integration of the models is heavily discussed, one of the reasons we do not dwell on it. Here we just want to underscore how the bottom-up model, as indicated by several contributions, is found to be in antithesis to the top-down. The latter is referred to

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as ‘corporate’ and in line with the strategies developed by global players, which however are in antithesis with the principles enunciated by model (b) and above all with ‘living.‘ The top-down model is considered incapable of serving people and their needs (Gooch et al., 2015; Townsend, 2013) as according to Shin (2009) they represent the demands of major corporate suppliers and the private manufacturing sector. On the other hand, the bottom-up model has organizational forms focused on the micro and single, or on multiple forms of community organization. Financing is also different: large amounts of funds in top-down models with finance intervening in an organized way; while bottom-up models are improvised and co-financed. Globalization is expressed more with top-down models. The evocation of model (e) is to connect the top-down models (a) and (c) with the bottom-up model (d) for this ideal type. Mora et al. (2019), Desdemoustiera et al. (2019) and Fernandez-Aneza et al. (2018) identify, through empirical research, in major cities and global cities with high investment in the culture of infrastructure integration and in smart cities, a critical presence of model (e). It is as if different matrices coexist which contribute not to slowing down but to developing the concept of urban infrastructure. There may be overlapping matrices (Fernandez-Aneza et al., 2018); an important issue will be the governance of these overlaps. Model (f)—This represents an apathetic city, inserted only to a limit extent in the context of globalization, that is backward, not necessarily from the previous century, with low forms of democracy, indicated here as figurative with no impact on the treatment of the evolution of urban infrastructure and therefore not included in the configuration of the smart city. The four models in Fig. 10.6 have a different impact with the development of the smart city and with its overlap with the infrastructure. The overlap remains low (or non-existent) in model (b), while it grows gradually with models (d), (c), and (a). Investments also gradually grow and the nature of the applicable PPP changes, passing from the social impact bond of model (d) to important PPPs and concessions of models (c) and (a). Precisely in the amalgamation of models and an unclear reading of the applicative evidence then present in reality, we can borrow a statement from a senior IT executive in a US smart city: “many internal projects in a smart city are launched as pilot projects and funded through PPPs, but can then fail before being integrated into city operations”.

10.2 Financing Smart Cities The financing of smart cities is the critical element and is also a verification of the weight of smart cities as an infrastructure. The model that is generated can be the one indicated in Fig. 10.7. Public funds, PPPs, and private funds. Often an unclear definition of this part is the result of slowdowns or blocking of projects.

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Significant weight of finance (Innovative and traditional PPPs)

Increasing integration of smart city with infrastructure

Limited funding (social impact bonds; Impact investment fund)

Progressive breakdown of smart city from infrastructure

a

Rationalized corporateization of the city

c

Rationalized corporateization of the city

d

b

Contraposition

Fig. 10.6 Positioning of the four models in relation to urban infrastructures contribution State EU other instit.

business PPP

rate user

competitive advantage globalization

citizen (conflict)

no profit critical aspect

efficiency savings

social action smart / citizen

Fig. 10.7 Macro process of financing of a smart city and critical issues

– Glasgow—after the use of the 28 million pounds assigned to it by the British government, to develop smart city interventions, Glasgow, which was indicated as the smartest city, marked a halt on interventions. The stop occurred after the funds used in 2014 for a smart Operations Center which monitors real-time transport and public safety. The British cities involved in public funding (DBIS) in 2012 for the smart city were besides Glasgow: London, Bristol, Peterbourough. Glasgow then came in first and got about half of the funding to develop smart city programs. (Cowley et al., 2018). – Cologne—due to lack of funds, the Cologne smart city project was entrusted to the local energy company, controlled by the municipality. The local company operated with the funds it had available; when the interventions did not fit within the company’s financial possibilities, there was a slowdown in the interventions. The municipal administration declared that it did not have enough funds to take on the smart city interventions (Leitheiser & Follmann, 2019). These are just two examples of how it is possible to work within smart cities where private funds or PPPs are lacking or limited.

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A McKinsey study (2018) identifies the possible availability of public bodies to finance the urban infrastructures that are located within the smart city as being 16%. The rest must be produced by energy savings accompanied by technology, private capital activated through PPPs, or simply by private capital. It may be possible that the development produced by globalization is able to repay part of the PPP; and the rationalization of waste driven by technology is able to cover an additional share. The remainder is payable by the citizen user. Everything is workable within this formula. An additional part can be paid for through volunteer work and the use of the smart individual/population. It can also create a conflict between the different thrusts, mainly between the push for globalization and competitive advantage and the ‘vision’ oriented to sustainability. It is difficult to find a balance between these two terms; a decisive match takes place for the smart city within this dialectic. The cornerstones of the financing model of a smart city are as follows: – Savings, especially energy savings, are able to activate PPPs and cover, at equal costs, some technological investments capable of rationalizing, modernizing and making energy production more efficient, leading to lower energy consumption and repaying the investments with lower consumption. There are now specific cases that can be traced to this shift. The activation of PPPs in turn produces costs (finance and risk capital, but also the creation of new purpose-built companies that must be maintained and managed; a share of the lower consumption is therefore absorbed by this managerial and organizational evolution). However, the principle is to intervene in an incremental model where old frameworks, structures and systems (electrical, mechanical, water) were following the design of (public) buildings in different times, even decades, bringing with them the problems of backwardness and the technological deficits accumulated on energy savings. Looking at the object as a whole allows us to work on the accumulated deficit and convert it into new technological investments, leaving the cost for the public administration unchanged (public spending—expenditure). However, these new investments require a new management and control and verification culture that cannot be delegated solely to mechanical and electronic devices or other types of detectors. There must be a significant and epochal evolution of management (control and verification) primarily on the part of the public administration to define balanced management with the economic operator who makes this type of intervention and system knowledge his business. This is to prevent a significant share of efficiency (savings) from being transformed tout court into business profit. – If we exclude the fee paid, stabilized, and converted, the public contribution and the European institutions can cover only a very limited part of the investment. In many high-income developed countries we are faced with a restriction of public spending. If you exclude the direct public contribution, or the contribution through a stabilized fee and operate within savings, the user’s direct rate remains. This, however, is an element that can generate exclusion factors from cities and global cities due

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to an increase in the cost of using the city. This remains one of the burning aspects of the discussion focused on exclusion (Florida, 2017). – Net of the public contribution, all that is urban infrastructure, if it is not exclusively a private intervention to be verified at a specific level, passes through the constitution of PPP models, that are often theorized, but little or partially applied in their extension and articulation within the smart city. This has happened above all due to the complexity of the theme and the creation of a new integrated interdisciplinary culture. There are still too few contributions on this theme (Lam & Yang, 2020) that know how to approach PPPs in a balanced way, not from the standpoint of the formula, but of the substance. – There is another element of interest to verify: the change in production and consumption in urban markets. This implies, on the one hand, a strong competition between mature production sectors (old production) and emerging sectors (technology) for hegemony in new markets. Even within technological production sectors the game is open; this explains the strong competition and ferment around the theme of global cities and within the production and competitive advantages that are generated. This must be followed by a different orientation on the part of those who consume within the global city and the smart city in general. This can be done, for example, dismissing private ownership of assets (e.g. automobiles, and in perspective, parts of real estate) and reconverting these individual investments along their life cycle into sharing or other collective and shared assets; converting some travel costs and times into landing services, dematerializing some organizations and technostructures (e.g. banks) into connections, dematerializing money and using interconnection for purchases and supplies, and rethinking the places and concentration of work. These are different aspects, which are interconnected but also require profound revolutions for individuals and in conceiving the ownership, the savings linked to real estate assets, differentiations between global cities and glolocal territories (Brenner, 2003) and between cities and non-urbanized areas, even more bloody than that indicated at the end of the last century, to beginning of this, by Harvey (1989), by Hall and Hubbard (1998) and by Brenner (2003). They are more evident and radical than those of a revolution in the production sphere between segments and production sectors. The strong transformation of the individual with respect to ICT and interconnection technology and its use make this transition seem possible (not utopian), with all the enormous risks involved. This change is partially underway and is demonstrated by the strong interest and in some cases the strong push of some production sectors towards the smart city. Strong imbalances, tensions, and conflicts can also arise (employment, increase in user costs with expansion of exclusions, a rapid crisis of some local and national productive sectors in favor of large global players, strong territorial imbalances, disagreements of electoral consensus and blocking of processes with the destruction of value, and assemblies left incomplete). Within this point there is also the recovery of efficiency and effectiveness and the reduction of general costs (this is an issue on which global players insist a lot), which as already indicated, however, are absorbed by the birth of new organizations, skills and technostructures. Complexity is increasing as are the costs of managing it.

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– Another fundamental point is the verification of the adequacy of the state and the rapid need to reconstitute it at the molecular level. There are changes in management, knowledge, the role of control and verification, the ability to find balance with respect to imbalances, the ability to have stability within instability, and to know how to manage political turbulence and not leave processes unfinished with destruction of value. Knowing how to manage the important challenge of rising costs, keeping the easy profitability of global players under control, knowing how to control the possible change in consumption from private to collective and public, without imbalances: as regards urban infrastructure, all of this, like the modification of production and consumption, requires a pervasive modification of the state. Putting together of all these points represents a contradiction and slowdown in the implementation of global cities. There is undoubtedly a gap between the documentation, the rhetoric, and the enormous emphasis around the smart city, and the implementation phase of the same. One of the in-depth questions to be better investigated concerns the question of financing smart cities. There is, however, a conceptual aspect that accompanies this change that began a few decades before the twenty-first century. That is to say, we move from a Keynesian policy of spreading infrastructures within the territory of the state to one more concentrated on cities and urban structures. This shift is also defined by Brenner (2003) as ‘managerialism,’ which anticipates that of ‘entrepreneurialism’ typical of the end of the last century and the beginning of the twenty-first (Brenner, 2003; Hall & Hubbard, 1998; Harvey, 1989). The entrepreneurial city is the convergence of the more mature part of globalization and the beginning of the PPP model in which the state withdraws (also due to the fiscal crisis and growing public debt) and opens up to private capital which technically, according to the neoliberal thesis, makes users pay for infrastructure and services with the activation of exclusions, segregations, and expulsions (Florida, 2017); or to extend the public debt over time (Harvey, 1989). Brenner (2003) calls this phase not only entrepreneurialism but also ‘glocalization,’ that is to say that entrepreneurial cities represent the main arenas of regulation within which the new glocalized geographies of the power of the nation-state are considered. Referring to the space to be considered with ‘glocalization’ is a little different than that of the global city (Sassen, 1994, 2019), closer to the Regions and Competitiveness (Huggins & Thompson, 2017) even though between regions and global cities there are some overlaps. The reference of glocalization is the region more than the global city; in the region, through ‘rescaling’ (Brenner, 2003) there is a return of Keynesian policies in the context of regional rebalancing. There has already been a discussion in this book that dialectized the relationship between the global city and the region. The whole post-Keynesian phase is defined as neoliberal (Brenner, 2003, Brenner & Schmid, 2015; Harvey, 1989; Hall & Hubbard, 1998; Peck et al., 2013; Springer et al., 2016), with growing forms plus the PPP and globalization are growing to become post-neoliberal, in the recent definition by Harvey (2016a), or turbulently post-liberal (Peck & Theodore, 2019). Within the attraction of private capital, urban assets and global cities represent an extraordinary epochal opportunity

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for the creation of value and global growth for big and global players, hence the push factors, but cities are also the result of an extremely complex composition, not only made up of economic aspects, but also social aspects and those related to selection, inclusion/exclusion, multiplication/deprivation of income, creation/destruction of value, differentiated knowledge, and accessibility to extremely different infrastructures. These are the issues indicated by Harvey and Brenner and others (Amin, Castels), but also those who are very critical with smart cities (Greenfield, 2013) and critical and reflective towards the new technologies and integrations (Greenfield, 2017) that they recall. A model that goes beyond ‘entrepreneurship’ or glocalization as an evolutionary form of Keynesianism first, and then managerialism, would create a new scenario if it were the model (a) of Figs. 10.4 and 10.6. There could be, in the most extreme forms, a high private financialization of global cities (smart cities). The state and the public sector, in its various ramifications, have no financial resources to intervene or have only a minimal amount, and if they did exist the state could not concentrate them in some areas of global cities, even if strategic, on penalty of an even greater breakdown of territories than not happened with glocalization. In the global cities of high-income developed countries, there could be a push towards dematerialization of private property in favor of sharing, the possession/loss of personal data through big data, or differentiated exclusionary collectivism and an at least initial break of global cities from glolocal with an inability to mend the ‘cracks’ of differentiation that would open up. The sharing economy applied to cities is seen by McLaren and Agyeman (2015) as an opportunity, that is, a race to the bottom “of competition, closure and division. In our extended understanding of the financialization of sharing, this would not necessarily be the case. With globalization, PPP, and neoliberalism the factors of segregation and spatial selection increase. Florida (2014) himself, the theorist of the creative class, is struck some years later by how these components of globalization have produced forms of exclusion (Florida, 2017). His proposal in terms of infrastructure is quite reductive: to excessively increase metropolitan transport (frequency and speed) to include as much as possible what the market has dispersed in a wider area. The smart city is considered by Harvey (2016a, 2016b) as an artifice not able to solve the stratified and secular problems of the city, and therefore appears as a marketing effect and at the same time hard effect of neoliberalism. Brenner and Schmid (2015), instead, considers the smart city as a separation between the use of big data and the counting of phenomena and behavior (passive citizen) and the subsequent plan to solve the accumulation of procedural problems of a city. The city is a process that does not cancel but brings along its secularization and its endemic problems, and therefore also ‘technoscientific’ aspects can only operate on the surface and even aggravate the underlying problems. However, there is a problem of financing the smart city if it is to be understood as an integrator of urban infrastructures. The PPP is a mandatory step; it can be accelerated as the global players intend it or slowed down through alternative forms of smart city. It is difficult to be ambiguous on this point. Even our idea of urban infrastructure passes through a development of the PPP; it is a question of understanding whether or not the PPP is, by definition, controllable or classifiable entirely as a destructive tool of the culture of the second half of the last

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century, and more generally of Keynesianism; or whether it is an instrument which, if used carefully, can reform Keynesianism. Calzada (2018) proposes an additional model compared to those previously analyzed. The PPP is replaced and the ‘smart city’ is overcome. These are experimental cities that go beyond the smart city, with the addition to the four helixes treated in the previous models, of a fifth helix made up of entrepreneurs and activists and local actors deeply rooted anchored around the urban commons (Bollier, 2016) with the presence of proactive citizenship driven by emerging bottom-up complexes. The new stakeholders are: social entrepreneurs, activists, bricoleurs, brokers, and assemblers; above all with the aim of canceling (overcoming) the PPP and the evolving state-market relationship. This is the right theme, that of a dialectic, if we think of big data, the control and possession of data (owners), how control logarithms are carried out, how passive users must conform to the new urban ‘shapes,’ or the many shared criticalities regarding technology applied to smart cities (Greenfield, 2013, 2017). However, the fact remains that without the PPP there is no infrastructure integration. There is more than anything else a different use of infrastructures and of the city, in some ways utopian compared to the current situation. It is no coincidence that in the reference of experimental cities there is the addition of a fifth helix to the four previously identified and discussed, that had already weakened the PPP—if applied—as an engine for transformation. The question remains as to which financial resources must be found to finance smart cities. In this sense, the term experimental cities leaves many critical issues open. It is correct, however, that low or high participation of citizens can lead to a particular use of the data referring to the smart city: expropriation and lack of control and absence of reappropriation of the same in the case of lack of participation of the citizen; or the opposite in terms of ownership of the data and its controlled use in the case of high citizen participation through experimental cities.

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