Emily Badger has written an excellent piece for the NY Times. Perhaps due to space constraints, she does not discuss one key issue. Most of the challenges of building "high tech" cities emerge because of durable capital. My proof goes as follows. Suppose that urban infrastructure only lasts for 1 month and then turns to dust. In this economy, you always have the option to rebuild the city using "modern infrastructure --- including sensors and subways" at the end of the month. Yes, there would be fixed costs to rebuilding but the city would always be at the technological frontier.
When a city builds a very impressive subway system that is meant to last for 70 years, it is locking into a given technology that will soon be out of date. Less durable capital embodies an option to cheaply rebuild later at low cost. This was one of the key points in Bunten and Kahn (2017).
Another example can be seen by riding the subway in Shanghai versus NYC. One is a modern subway the other isn't. Go to an Asian airport such as Singapore's vs JFK. Again and Again we see, new capital = good, old capital = dated. We need strategies that allow us to easily dissemble older capital (think of Lego pieces) and ways to take older capital and reconfigure them for the modern world. Our urban planners need to build new infrastructure with such option value ideas in mind.
My own USC is running into this issue. USC Economics is housed in this 1960s building that is not exactly "cutting edge". If building capital had a shorter life, we would rebuild a modern economics department building with better architecture, design and ventilation. It is a tribute to the vitality of San Francisco that a great tech hub emerges despite the persistence of the capital stock in place.
In this blog post I haven't tackled the urban politics question of whether a "modern San Francisco" featuring road sensors and other cutting edge technology would be more willing to adopt dynamic pricing and follow Singapore to price roads, electricity and water to reflect true scarcity. The real green , "smart city" combines both cutting edge technology with dynamic pricing. Would the urban median voter allow such dynamic pricing to be adopted or would concerns about price gouging the poor lead to a veto?