Are Cities Still Relevant in the Metaverse Era?
As described by Glaeser, in his book Triumph of the City, “Cities are the absence of physical space between people and companies. They are proximity, density, closeness. They enable us to work and play together, and their success depends on the demand for physical connection. During the middle years of the twentieth century, many cities, like New York, declined as improvements in transportation reduced the advantages of locating factories in dense urban areas. And during the last thirty years, some of these cities have come back, while other, newer cities have grown because technological change has increased the returns to the knowledge that is best produced by people in close proximity to other people.” This is why we needed cities: people could work together, produce great machines, reconfigure our everyday with new inventions, and produce art.
Like most phenomena, cities are also subject to ups and downs. Some cities grew, ebbed, and grew again while others didn’t manage to stay relevant. For instance, Seattle is not the same city it was. Old buildings have been rebuilt to host start-ups and company headquarters. Seattle, known as Microsoft’s headquarters, was barely the obvious choice for a software company in the late 1970s. At that time, it was heavily dependent on manufacturing, lumber, and transportation. Seattle was named the city of despair. It was when Microsoft shifted offices that it began its evolution into a successful innovation hub. As Moretti notes, “More than any other sector, innovation has the power to reshape the economic fates of entire urban forms.” New York was a port city with a heavy focus on garment manufacturing, it has since transformed into the financial and fashion capital. Both industries requiring immense amount of human capital to flourish. However, Detroit which was an automobile manufacturing hub has been in decline as it did not reform itself. Thus, for a city to persist it must stay with the times.
As the pandemic continues to rage on, and our backgrounds transport us to a penthouse in the Tribeca area, or a beach house, or to a small quaint cottage on the countryside, and our outings continue to remain at historic lows, what is the importance of cities? The new idea of metaverse as a way to experience the city through virtual reality, are cities even relevant? Cities were required as hubs of employment, however, the pandemic saw more than two thirds of jobs in the US economy become work-from-home in 2020. The pandemic has accelerated digital adoption. One of the biggest benefits of digital is being able to work remote. The cloud has made access to data simpler, made it possible to seamlessly carry on the work you started late afternoon in the office once you get home and have had dinner. The pandemic forced many people to stay at home and work. A trend noticed during the pandemic was reverse migration. As employers shifted to a WFH model, employees began migrating back to their hometowns to be closer to family—all amenities a city could provide were inaccessible in a lockdown!
But cities are more than places of employment. Beyond housing and employment, cities offer amenities that are not available in rural areas. London, Paris, or New York are great places to live in because of parks, museums, restaurants, and their bustling arts scene. Cities lend themselves to be places to play and be entertained in a way rural-areas cannot. As WFH becomes a permanent feature, people will persist in cities because of the quality of life they offer. Another thing to note is, it is high-skilled jobs that have become WFH. Therefore, essential workers will always remain a feature of the city-life. When we say jobs have become WFH, we have to be careful in making the distinction: whose jobs have become WFH? Most times, it is those that have privilege to have a college education and valued skills. Most low-paying or essential jobs, continue as they were before the pandemic.
However, as the function of cities becomes amenities for those working out of office spaces, will the landscape of offices change forever? Will they become places of socialising rather than productivity? Will we see a reverse migration to the suburbs and rural areas, with cities becoming occasional hangout spots? We believe that cities will be seen as places of socialising. Cities will be associated with a feeling rather than a geographic location. Most jobs will return to the offline because of the benefits of agglomeration and the positive externalities that contains. We are a long time away from a completely WFH economy.
To conclude, a city has its own idiosyncratic way of showing you the world from within its boundaries. You encounter different cultures, sights, peoples, food, and experiences every single day. Cities help fuel change, they are hubs of innovation, they will persist as long as the city keeps pace with the changing tide. On a personal note, I don’t think cities will go anywhere. Once you live in a city, the pace cannot be matched by the suburbs or rural areas. I can’t imagine myself in anywhere but a city, even as I write this sitting in an apartment and not having stepped outside of my house in a week!