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World's Business Leaders Converge on L.A., Give a Few Nods to Cities

BEVERLY HILLS -This week's Milken Institute Global Conference brought together more CEO's, heads of state, hedge fund managers, and industrialists than, I reckon, any other annual gathering in the United States. It's a strange event at which to be an urbanist - and not just because it takes place in one of our most unusual cities, Beverly Hills. 

Planners, developers, and sundry folk love and believe in our cities. Many of us love our cities, and we are inspired daily by their dynamism and, in some case, their enormity. Los Angeles has 4 million people. And it functions (sort of). Amazing, right?! I think so.

But then you pass the Splenda to a CEO in the coffee line and realize that the annual revenue of his or her company might exceed that of a city's budget, or even its gross metropolitan product. That's humbling. It's more humbling when you consider that some of these companies, from Twitter to Google to all the finance companies, hardly exist in physical space. They might employ a handful of people and deliver all of their products online. 

As global capital becomes more powerful, more autonomous, and more placeless, it's crucial to consider how the capitalists feel about cities.

One version holds that global capital has colonized a few cities, or parts thereof, that serve the business and lifestyle demands of the ultra-wealthy. They offer hotels where meetings can take place, airports where they can land private jets, free-trade office parks where they can avoid taxes, and overpriced real estate that they can collect when they need some shut-eye. The capitalists don't care about these cities' fortunes as such, and they are happy to displace and exploit local populations. These are the "boutique" or "luxury" cities of Manhattan, Moscow, Dubai, London, Paris, Hong Kong, and Beverly Hills.

That's the dark, Mike Davis version. 

The more sanguine version holds that the world's financial leaders appreciate cities for many of the same reasons that planners do. They bring people together and embrace diversity. They foster innovation and development of new knowledge. When designed well and not crushed by debt, they are great places for everyone to "live, work, and play" (to cite my least-favorite reduction). They hold the key to environmental sustainability. They drive national economies and create wealth for countless people. Sentiment aside, the economic data backs up all of these claims: a full 60 percent of the $77 trillion of the gross planetary product is produced in the top 600 cities. Funny that many of the same American politicians and parties that are pro-business are also vehemently anti-urban.

A handful of panels focused explicitly on urban and urban-related issues. Here are a few highlights from the sessions I attended, from the local to the global:

"Why L.A. is Working": This may be news to San Francisco, but the rivalry between Los Angeles and the Bay Area lives on. By most accounts, Los Angeles is doing all right. The cluster of tech startups known as "Silicon Beach," located in Santa Monica and Venice, solidifies by the day and a diverse, diffuse array of tech firms makes Los Angeles County the leading manufacturing county in the country. Of course, all of that activity pushes up office rents and cost of living for the employees of Silicon Beach. It makes you wonder where those companies were when the Santa Monica City Council voted to down-zone the city last week. I guess they were too busy Snapchatting each other to go to the city council meeting. 

Detroit: A Case Study in Rebuilding a City's Fortunes: Some of the leaders of Detroit's bankruptcy settlement and recovery shared some lessons for how to deal with a crisis - and how not to. The consensus was that the only thing worse than declaring bankruptcy today is declaring bankruptcy tomorrow. They said that, despite the depths to which Detroit had sunk, the past two years have brought back a semblance of stability, and the private sector is responding. (I covered this session at length here.)

Conversation with U.S. Governors: Democratic Governors Hickenlooper (CO) and McAuliffe (VA) have their differences with Republican Governors McCrory (NC), and Ricketts (NE) have their political differences. But they expressed clear consensuses on the need to improve education - including vocational training and two-year colleges - and to invest in infrastructure. McCrory and Ricketts did not explain how they intended to convince their fellow GOP'ers in Washington to adopt their sense of urgency.

"The Urban 6 Billion:" There's a strange comfort in hearing facts and concepts that you already know - and a surreal feeling to realize that other people in the audience don't know the same. For the record, half the people in the world live in cities, and the urban population is indeed hurtling towards six billion.

Of all the panels I saw, this one touted most strongly the benefits of urban agglomeration and made me believe that capital and cities can get along. There was consensus that stolid "anchor institutions," such as universities and medical centers, are important, but possibly not as important as the helter-skelter of today's startups in the innovation economy (see my Q&A with innovation sage Enrico Moretti). The lesson for developers: reject the dogma of asset classes. It's not about investing in "office space" or "residential." Connections matter more than typologies, and diversity matters more than comparative advantage does. Planners have known this for a long time. The future is about mixed-uses, placemaking, design, and neighborhoods. It's time developers and funders figured it out too.   

Finally, former Greater London Authority Chief Economic Advisor Bridget Rosewell heaped on Los Angeles the highest praise I've ever heard: "Los Angeles is the only successful polycentric city I know." I'm not sure I agree, but cheers to that.

Innovative Cities: It's funny to think that a half-century ago, the Modernists felt that they had the keys to the future. Many of today's visions of the future are now trying to un-do that vision of the future, now that the future has come and gone. We hear a lot about urban innovations these days: buildings are greener, transportation networks are smarter, cities are wired within an inch of their lives. The 128-story Shanghai Tower, designed by L.A.-based Gensler, will have turbines on top and "sky gardens" at 14-story intervals. Urban accelerators like London's Level 39 are simultaneously fueling and employing these innovations. Nonprofits like Atlanta-based Purpose Built Communities are addressing place-based poverty. Some technologies are baubles, and some will be crucial for cities' future health, especially amid climate change and sustainability goals. One thing is for sure about Future 2.0: cars will drive themselves. Or maybe they won't.

Gov. Jerry Brown: The conference concluded with one of Gov. Jerry Brown's two announcements about his ambitious new targets for reduction of greenhouse gas emissions: 40 percent below 1990 levels by 2030. The business community often has a fraught relationship with environmentalism, to say the least. But, if Detroit can rise from bankruptcy, Shanghai can turn into a megacity, a sexting app can be worth $19 billion, and developers can embraced mixed-use, then anything is possible. Especially in the state that, with the world's eighth largest economy, is a giant among nations. 

The conference presented many reasons why urban stakeholders and global businesspeople alike should be optimistic about the state of the world's cities. Everyone has to recognize the symbiosis between healthy cities and general prosperity. While powerful people discussed all this and more at the Beverly Hilton Hotel, parts of Baltimore burned.