Survey: How cities respond to, and harness, disruptive technologies

Mayors Innovation Studio, held October 22 in Paris.

In advance of the Mayors Innovation Studio in Paris — a day-long event exclusively for mayors from around the world — surveyed participants about their city’s experience with disruptive technology. The results provide evidence of high levels of impact in several areas and demonstrate the extent to which disruptive-technology companies are greeted with both optimism and concern. While mayors are hopeful that disruptive tech can be harnessed to improve the lives of their residents, they recognize that challenges persist in striking mutually beneficial partnerships with these companies.

State of disruption in these cities

Nearly all of these mayors have some experience with disruptive tech, with 85 percent saying that new, disruptive-technology models have impacted their city. While ride-sharing services, such as Uber and Lyft, and home-sharing platforms, such as Airbnb, are the most prevalent, mayors also reported seeing emerging impacts in advanced manufacturing, elderly care, healthcare, the environment, and ticket sales.

Uber and Lyft are the most prevalent of the mobility services, with 89 percent of mayors saying these companies operate in their city. But regional and local ride-sharing services exist in many cities as well. Airbnb dominates disruptive-tech in housing (88 percent), but international and local companies are also prevalent in many areas, some of which have multiple home-sharing services. Finally, 88 percent of mayors reported that tech incubators or accelerators were already operating in their city.

Early effects of disruptive tech on cities

More than half of mayors (52 percent) reported that their cities have made regulatory changes in response to disruptive-technology companies operating in their cities. In some cases, this was an amendment to existing law to cover new players in an existing market. For example, a few cities had to alter existing laws in response to ride-sharing companies. In other cases, new laws were required to protect residents from unintended consequences, such as in housing. Some mayors are working to ensure their municipal framework encourages innovative tech or taking a lighter regulatory approach. Still, many have not needed to make any immediate changes.

In 38 percent of these cities, mayors reported that state or national laws have been adopted or introduced to supersede local authority. There have been several high-profile cases in the U.S., particularly in situations where state governments dominated by Republican Party control have superseded local regulations — primarily to end or prevent new regulations in Democratic cities. But this phenomenon is not restricted to the U.S., raising the possibility that municipal-based, global, collective action could emerge if restrictions on local autonomy increase.

For their part, companies are seemingly attempting to be proactive. Eight in ten mayors reported that they have been contacted by disruptive-tech companies. In some cases, this is simply to lobby the city. But in others, there are hints of genuine attempts to co-create solutions for local challenges.

Mayoral assessment of disruptive tech in their community

On balance, mayors expressed optimism about disruptive tech. Nearly six in ten (59 percent) said they have had a positive experience with disruptive-technology companies, with 11 percent saying their experience was negative and 30 percent that it was neutral. Most (68 percent) see disruptive tech as something that can be leveraged for the public good. Only 4 percent felt that disruptive tech posed an unregulated challenge to municipal authority. But 28 percent replied both that it could be harnessed for general welfare and undermines local control.

Many mayors are eager to have their city work positively with disruptive-tech companies, seeking to send a message that they are willing partners. But they also worry that these businesses might not share the same goals as public-sector actors, and do not always appreciate the unique constraints on municipalities. They also want to see how disruptive tech fits into existing long-terms plans. Mayors weren’t shy about their own challenges, noting that internal factors reduce their own ability to work with disruptive-technology companies, such as bureaucratic structures (silos) and legacy systems, lack of staff capacity and resources, or politicization of disruptive tech.

On balance, though, mayors are overwhelmingly hopeful (92 percent) about disruptive tech. And they laid out a number of areas ripe for disruption, including healthcare, traffic congestion, tourism, affordable housing, pollution, and income inequality.

Celebrating public sector progress and innovation in cities around the world. Run by @BloombergDotOrg’s Government Innovation program.

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