"Emerging technologies and the rise of the experience economy are ushering in a new area in business. Every individual can now genuinely make a difference to the world and make an impact that was traditionally a luxury only afforded to governments and large organizations." - Salim Ismail, a lead author of Exponential Organizations
Salim Ismail the Founding Executive Director of Singularity University co-fonded the OpenExO community to help businesses adopt the exponential technologies of our time and achieve an exponential economic growth. His peers and he have created a global movement since 2014 when Exponential Organizations Book was published. Advocating for the must in transforming your business model to exponential one, the OpenExO community impacts our global economic landscape changing our reality.
Today, a global perception for an Exponential Reality is widely accepted as a definition for a highly uncertain and changing environment. New competitors, opportunities and challenges apear and grow fast as never before. The fast pass in technological development and adoption changes the consumer habits, the social relationships and urban culture in months where it was needed a generation, 20 years before.
To visualize what is an exponential growth, the best example is the Domino Chain Reaction. In this case, a small 1 mm high piece can make fall down more than a meter tall one after 13 pieces. This fast growth in power is based on an exponential function where the quantity grows at a rate proportional to its current value.
The traditional economic model relates the creation of the economic value to the productivity where there is a generation of some appreciation higher than the cost of the production. Then, the standard business model focus on maximization of the perceived value while minimizing operational costs.
OpenExO methodology suggests that enterprises can obtain exponential creation of economic value with a wise exploitation of the digital technologies and the virtual space created by them. The successful demonstration of this model was announced as Exponential Organizations (ExOs): Google, AirBnB, Github, and more.
Exponential Trends and Cities
PEOPLE: Globally, there are 1.3 million people moving to cities each week.
SIZE: Megacities with over 10M people from 3 (New York, Tokyo and Mexico City) in 1975 became 21 in 2010. It is expected that their number will reach 29 by 2025.
ECONOMY: The top 600 cities generated 60% of global GDP in 2010. And, it is projected that 80% of the global economic growth will occur in cities by 2030.
ENVIRONMENT IMPACT: The world’s cities occupy just 3 per cent of the Earth’s land, but account for 60-80 per cent of energy consumption and 75 per cent of carbon emissions.
HEALTH: 6 global pandemic have occurred in a period of 70 years during 20th century. In the new 21st century, the same number of pandemics happened in a period of 20 years. Two of the pandemics in 21st century have impacted more than 210 countries.
Can we apply the ExO methodology to city planning?
As we currently are living in an exponential reality, cities need to fit to it. It is wise to think they should prepare for making the best of the exponential opportunities while managing better their intrinsic risk and uncertainty. This is another way to see the smart cities development and the digital transformation on a city level.
In our methodology, Cities Building Futures, we adopt a piece from the ExO methodology called Massive Transformative Purpose (MTP). We developed further MTP concept to the Smart City Brand in our methodology which integrates the purpose with the history of the city into a renew city identity.
The Smart City Brand is the starting point and the macro framework which we propose for a correct city planning. The concept can embody future visions and trends as well as historical city identity. In this line, a municipality can choose to become an Exponential City.
In the case of aiming to build an Exponential City, we suggest a few important points to be carefully understand and treated. First, it should be done a careful selection of which components in the city will have an exponential behaviour. Second, it should be done an exhausted and detailed analysis about the long term impact of these behaviours. Third, a specific contingency framework should be developed which should help the city to protect itself from self-destruction.
Why is this important?
It is specifically important when an exponential behaviour is intended because of the acceleration of the exponential function. Lack of information and time for understanding are the main challenges in an exponential environment. This is of a higher importance to cities as they are systems which should persist for generations and centuries to come. The city can easily perish if there are no mechanisms to limit the negative impact of the decision and choices about technology, processes, organizational structures, etc.
Also, deep understanding of the functions behind the exponential behaviour is needed as there is a large variety of them. Also, they are not obvious in more of the cases and they can express complex interrelation in a multi-parametric space. Consequently, the obtained result can strongly differ from the expectations.
As exponential function is a way to shape a process: development, transformation, growth, etc. It needs to operate over something specific. In CREA IDEA LAB, we are advising that a specific list of components should be developed with exponential functions to convert a municipality into an Exponential City. For example, it can be built on accelerating personal realization of its citizens where every citizen and newcomer can find fast its own purpose in life and grow up to wellbeing and happiness.
Maybe Exponential City sounds modern for many but it can hide an important challenges if the concept is taken lightly.