INNOVATION DYNAMICS IN COMPLEX URBAN SYSTEMS REGGIO EMILIA AS CASE STUDY

EXECUTIVE SUMMARY

written by Silvia Pergetti

MAY 2010

“My friend Marco Polo intends to uncover the reasons underlying

the organization of societies within cities. A city is an ensemble of several elements:

memories, desires, symbols; cities are trading venues:

of goods, of words, of dreams; they are spider webs of tangled relationships

looking for a shape.”

Italo Calvino, Invisible cities

Abstract

Cities, a bit like people, have their own raison d’être, their own personality, their own history, made up by thousands of individual histories, thousands of individual personalities; at the same time cities, just like people, are part of a broader history, written by the actions of other cities, in a mutual relationship of interdependence.

In this essay I’m going to talk about history, interdependence, complexity, about interactions and interaction levels: cities are explored as networks of multilevel relationships occurring among different agents, on different interaction patterns and at different timescales. Emergent properties and circular cumulative causation can be observed, uncertainty arises and innovation unfolds through generative relationships.

A public debate on urban development policies must look at cities as complex, ever-evolving systems; implementing urban development policies implies analysing the way innovation arises in urban systems and the role innovation plays in shaping urban evolution. Therefore, the consideration of the structure and dynamics of urban systems as complex systems is pivotal to policy success.

The case study of Reggio Emilia well illustrates the theoretical framework outlined. Reggio Emilia, a medium-size city located on the ancient Via Emilia, squeezed between the more important cities of Modena and Parma, seizes the opportunity of the restructuring of the European High-Speed Rail system and initiates a transformation process that activates a cascade of innovations. A new ambition blossoms in Reggio Emilia: being included in the European urban network. Hence, the city designs and implements urban policies aimed at upgrading its position within the urban system it belongs, and beyond.

Complexity and emergence of innovation in urban systems

Urban networks as complex systems

Individuals, firms, associations, institutions and other agents1 act simultaneously within cities and across cities, driven by the most diverse reasons; their actions are neither prone to being coordinated nor convergent towards a predetermined outcome. While pursuing their own goals, they also interact, establishing a variety of economic, social, cultural networks. Within these networks, the interacting agents become interdependent; they become enveloped in action and interaction patterns in ways that could not be previously envisioned.

These actions and interactions within cities and across cities, among different agents at different levels, are the force behind the systemic nature both of the city itself and of the urban network the city becomes part of. On the one side, cities are permeable envelopes of locally dense and frequent interactions, and at the same time they (and a variety of agents for them) engage in a broad gamut of exchanges with other cities: communication flows, human migrations, traded goods, diplomatic relationships, capital flows, and so forth, give shape and structure to the system of cities2.

Actions and interactions undertaken at different decision levels and different awareness degrees eventually shape urban evolution. In other words, a city emerges as the unexpected product of both the micro-dynamics of actions undertaken within the city itself and the macro-dynamics of actions undertaken within the system of cities. This has crucial implications for policy-makers: the city doesn’t develop as an isolated entity, but evolves and co-evolves within the framework of a system of cities. Interdependence has to be taken into account in order to understand urban evolution patterns.

And why is it so? Because both the city as a system and the system of cities show an emergent behaviour that is determined by the nonlinearity of interactions among the agents: whatever action is undertaken by an agent, its effects are rebounded and enlarged by it generating a cascade of actions by other agents that does not follow a linear regression. Systems exhibiting such emergent properties can be defined as complex systems3. Emergence defines the very nature of the complex system, where “the whole becomes not only more than but also very different4 from the sum of its part” (Anderson, 1972, p. 395): structures that are moulded by the actions and interactions of the agents become properties of the system of agents, and transcend the agent’s control.

As a result of nonlinearity, emergence, and thus complexity, it is not possible to understand the urban system and predict its evolution path just by looking at the properties and the actions of single agents. As Lane and Maxfield theorize, agents inhabiting a world characterized by the casual, continuous and unpredictable emergence of new variables operate under “ontological uncertainty”, where they cannot frame foresight about the next future and the relevant consequences of their actions (Lane et

 1 The word ‘agent’ identifies any person or collection of people that engages in activities of any kind

(Lane et al., 1995). 2 Systems of cities can be defined as “evolutionary objects that may include subsets of cities

connected by long-distance networks or cities belonging to unified political territories” (Pumain, 2009, p. 200).

3 The word ‘complex’ comes from the lat. COMPLÈXUS p.p. of COMPLÈCTOR comprehend, embrace, constituted by the particles COM = CUM together and PLÈCTO - gr. PLÈKO - interweave. A ‘complex system’ consists of many, heterogeneous parts that become interdependent through nonlinear interactions.

4 ‘Different’ in terms of quality.

al., 2005). In such an uncertain environment, strategic public policies become intertwined with individual decision-making processes: the city is a “social product”, outcome of a wide range of actions performed by a variety of agents. Local development policies operate within this framework.

Structure and dynamics of urban systems

“Innovation is clearly the emergent property of a dynamic [complex] system

that takes place when qualified interactions become effective generative relationships

structured by appropriate scaffolding social organizations that take place in cities and across cities

within national and global urban system.”

Cristiano Antonelli (2010)

Intelligence, as the ability to process information and creating order out of random arrays of events and phenomena, is not specific to humans but is exhibited by any complex system as a result of the nonlinear interactions among its constituting elements: the single neuron doesn’t think, yet the individual does; ant colonies behave in an extremely intelligent way compared to the intellectual abilities of the single insects; a single molecule of H2O doesn’t show the same properties exhibited by water (such as freezing at 0°C); and so on.

Urban systems show a similar intelligence: casual, uncoordinated actions by single agents eventually generate a structure that, despite being out of the agent’s control and foresight framework, is highly organized. Such organization within the urban structure is what we call “system of cities”: the system of cities is the emergent product of nonlinear interactions among the agents (Pumain et al., 2009). In particular, this organization becomes explicit in a dimensional and functional differentiation of cities within the system of cities: put differently, the system of cities displays a hierarchical organizational structure; cities within the system occupy very different hierarchical positions and have access, to a greater or lesser extent, to development opportunities.

The mechanism underlying the formation of such a hierarchy is innovation. As we all know, interaction and innovation are two phenomena that go hand in hand: innovation is rarely the discovery of an isolated genius; far more often it’s the product of multiple interactions occurring in different places, at different timescales, among heterogeneous agents. Having said that, looking at cities as network of interacting agents allow us to understand innovation as a property of the system of cities, and in particular as the result of agents organizing themselves in coalitions of interests5 so as to engender generative relationships6.

As the mechanism shaping the evolution of the system of cities into a hierarchical structure, innovation generates a dynamic process that is characterized by path dependence, distributed growth and reinforced hierarchy. Let’s assume an innovation arises in city A. Eventually, the innovation percolates in each single node of the network, i.e. in each single city within the system, generating distributed growth. However, this distribution doesn’t happen randomly, on the contrary innovation reaches

 5 Antonelli (2010) claims that “the single act of ingenuity of a creative individual can become actual

innovation only if and when the complexity of the complementary interactions and transactions is organized in coalitions of interests so as to engender generative relations that enable the participation […] and the convergence of the incentives of a variety of actors […] towards the realization of a common, innovative goal”.

6 Innovation arises within the framework of generative relationships (Lane et al., 1995).

first (and likely stems from) the nodes that are better connected7. In other words, innovation flows are path dependent: the innovative capacity of a city is both the product and the determinant of the extension of its network; the cities with better and more frequent connections have better chances of being touched by innovation flows at an earlier stage. Following a circular cumulative causation8 process, innovation feeds urban growth, improves the connectivity of the city and eventually determines its position within the hierarchy, which is reinforced.

Innovation as emergent property of complex systems

“What we mean by the term innovation is the set of processes through which

[…] cascades of changes in the structure of agent-artefact space

are realized.”

David Lane and Robert Maxfield (2005)

The city could be considered as an agent-artefact9 space that undergoes cascades of rapid changes. In a complex system, the attributions10 of meaning to agents and artefacts populating that space are extremely unstable. The theory of innovation casts light on the fact that shifts in attributions represent the fuel that powers innovation: innovation is nothing else but the discovery and the assignment of new functions or identities to artefacts or agents populating the agent-artefact space.

Most of the time, those attributional shifts originate from generative relationships, i.e. “relationships that can induce changes in the way the participants see their world and act in it” (Lane et al. 1995). In order to engage in a generative relationship, agents should exhibit heterogeneity, aligned and mutual directedness, appropriate permissions structures and joint-action opportunities: they should show different features and attitudes towards the world and assign different attributions to the agent-artefact space, and nonetheless they should share common objectives and the willingness to realize mutual benefits and overcome the semantic uncertainty11 arising from the assignment of different attributions.

All these ingredients could be easily detected in cities, and in particular urban agents are generally very heterogeneous: cities are patchworks of different ethnic, religious, social groups, blends of diversified activities and competences. Interactions occurring within cities have thus a real generative potential. Emphasizing the importance of heterogeneity provides new perspectives on the debate on multiculturalism and integration policies: the idea implicitly suggested is that of a urban identity that is permeable, able to embrace change and contaminations by different cultures.

 7 If we are to use Barabasi’s words, the system of city is a scale-free network where growth and

preferential attachment can be observed (Barabasi et al., 1999). 8 The concept of ‘circular cumulative causation’, first identified by the economists Gunnar Myrdal

and Nicholas Kaldor, refers to the cumulating of positive feedbacks occurring between variables linked by a relationship of circular causation. Over time, the summing up of positive feedbacks magnifies the effects of initial small shifts and leads the system to a qualitatively different state. Because of the cumulative causation, the evolution process of a complex system is open-ended, nonlinear and out-of-equilibrium.

9 ‘Artefact’ is defined as any object or service around which socio-economic activities are organized (Lane et al., 1995).

10 ‘Attribution’ is defined as an interpretation of meaning by an agent to itself, to another agent or to an artefact (Lane et al., 1995).

11 When heterogeneous agents confront, the difference in their world perspectives generate uncertainty about meanings.

New insights for local development policies

The theoretical framework outlined enables us to gain a brand new perspective on how to design and implement strategic urban development policies. The very concept of strategy12 alters: in the face of complexity, ambiguity and uncertainty, ‘strategy’ becomes an on-going set of practices meant to interpret and build interactions within the agent-artefact space.

Any policy maker should acknowledge innovation as the driver of urban evolution: the structure and the dynamics of the system of cities are shaped by the spreading of innovation within the system, a process that we have illustrated as being hierarchical and selective. The policy maker should then act in order to promote the conditions that lead to the flourishing of innovation within and across urban boundaries; in short, he or she should take into account complexity and foster the emerging of relationships with generative potential.

First of all an understanding should be gained on the structural and dynamic properties of the city within the system of cities: it should be investigated how, in a context dominated by emergence, individual decision-making processes intertwine with strategic public policies, shaping the unique evolution path of the city under consideration. Possibly, expectations and goals of different interacting agents should be aligned towards a common scenario, where actions converge. Local governance should attempt at enhancing the ability of urban agents to think, plan and act collectively towards a shared scenario of local development.

Secondly, the urban planner should invest in the consolidation and the expansion of that “spider-web” of tangled relationships that constitutes and envelops a city. An effective policy fosters urban interactions and innovation flows within and across cities: in other words, it reinforces or rebuilds physical, virtual, normative infrastructure networks and reshape the city in order to make it an attractive place for human capital to live and work and a suitable platform for social capital to emerge.

Moreover, the urban strategist should increase semantic uncertainty: policies aimed at promoting the encounter and the coexistence of heterogeneous actors indirectly encourage the formation of generative relationships. That implies, among other things, the promotion of an intercultural approach, one that recognizes and exploits the potential of diversity: this is to be achieved through adequate education policies and social policies aiming at giving everybody the same opportunities.

Among policies aimed at fostering generative relationships, the construction of scaffolding structures13 is recommended. Be it a physical or a virtual structure (e.g. a fair, a web platform, a urban area), a project (e.g. an international cooperation project, a cultural festival), an institution (e.g. an educational institution, an innovation lab), the scaffolding structure provides support to the agents engaging in innovation processes: it enables them to meet in a structured environment where they can align their attributions and collectively face their ontological uncertainty.

 12 Traditionally conceived as a mean to achieve control on future events. 13 The concept of scaffolding structure, introduced by Professor Andy Clark in 1997, refers to a

complex of social and mental structures supporting human analytical activities. Lane and Maxfield (2005) used the same concept to describe structures in support of human interactions.

Reggio Emilia as case study

Reggio Emilia within the system of cities

“Looking at Reggio Emilia as a complex system points out that […] its understanding

can’t be derived from a mere analysis of its constituting elements.”

Chamber of Commerce of Reggio Emilia, 2009

Back in the ‘90ies, the city of Reggio Emilia underwent cascades of rapid changes with ambiguous and unpredictable consequences: the foresight horizon of the municipality of Reggio Emilia became complex and its operational framework uncertain. In 1986 the Italian government agreed on the implementation of the High-Speed Rail system, pregnant of consequences in terms of perception of distances and redistribution of power and opportunities across Italian cities. Rising immigration trends deeply altered the social and urban structure of Reggio Emilia and an unrestricted construction bubble undermined the integrity of its historical and cultural heritage. Finally, globalization and the economic crisis represented real threats to the local economic system, intensifying competition and affecting competitiveness. Over the years, the municipality of Reggio Emilia has gained awareness about being (and being part of) a complex system. Policy makers in Reggio Emilia have started to design and implement local development policies accordingly.

The High-Speed Rail: a new perspective arise for Reggio Emilia

At the beginning of the ‘90ies Reggio Emilia began envisaging the potential benefits of playing host to the station along the High-Speed Rail line between Milan and Bologna. The configuration of transport and communication networks has always affected urban morphology and evolution: on the one hand, a city fosters the construction of facilities in order to enhance its connectivity and accessibility; on the other, cities arise, grow and expand where transport facilities are available. The city builds the transport infrastructure and the transport infrastructure shapes the city; infrastructure fosters or constrains urban development14.

In 1998 Reggio Emilia was selected as the site where the Mediopadana15 HSR station was to be constructed; this station would have been the only stop on the HSR line between Milan and Bologna. Reggio Emilia was to become the node of a high-speed network running across Italy to Europe; shrinking distances were separating the city from an exclusive club of cities watered by the High-Speed Rail, i.e. from a broader network embedding multiple occasions for innovation. In 2002 Reggio Emilia asked for the contribution of the Architect Santiago Calatrava, who transformed the infrastructural project into a territorial branding operation, aimed at upgrading the image of the city. Due to its enhanced accessibility, the area surrounding the station was meant to become a new attraction pole able to stimulate production, tourism, commerce, entertainment.

 14 Pumain et al. (2009), pp. 198-199, 216-218, well illustrate how the hierarchical and selective

process of innovation (e.g. transportation technology) generate size and functional differences among cities, while shaping the system of cities.

15 So called because located in the middle of the Po valley.

Fig.1: The three viaducts that rise above the motorway and the HSR line gently impose a distinctive landmark for the territory.

Fig.2: The core of the project consists of the Mediopadana HSR station, which conveys the intention of Reggio Emilia municipality to embrace new development opportunities.

The City Structure Plan: an example of local governance

In 2009 the City Structure Plan16 came into force as the new, innovative normative framework sustaining Reggio Emilia development policies; it suggested a new vision for the city and a new understanding of urban development. Carefully designed by the Architects Giuseppe Campos Venuti17 and Rudi Fallaci, the Plan introduced a governance approach that aimed at realizing a convergence between individual decision-making processes and territorial planning: it demonstrates an increasing awareness about the fact that neither the individual agent nor the municipality are able, alone, to exert control over the evolution path of the city, which emerges unpredictably as a product of their interaction.

“Reggio Emilia – European city” and “Reggio Emilia – people’s city” were the leitmotiv of this innovative planning tool. The ambition of Reggio Emilia to become a European city as outlined in the 2007 Leipzig Charter on Sustainable European Cities was articulated into a five-point agenda: sustainability; quality of life; requalification of public spaces; valorisation of human and social capital; interactions within and beyond Reggio Emilia. The Plan looked at these ingredients as the key for becoming a city of embedded knowledge and the cradle of innovation processes.

The motto “people’s city” revealed another ambition and strategic objective: the city intended to provide access to high-quality education, as well as to attract, motivate and retain human resources. “Reggio Emilia – people’s city” commits to offer high quality of life and the same possibilities to all; believes in the diversity of cultural backgrounds as being a resource enabling cross-fertilization of ideas, intellectual growth, and social  

16 Translated from the Italian Piano Strutturale Comunale (PSC). 17 Giuseppe Campos Venuti, born in 1926, is one of the most prominent European architect and

urban planner of the last century: he designed several municipal and provincial plans for urban development and has been awarded with numerous international prizes and acknowledgements.

cohesion; invests in people and valorises competences in order to generate development opportunities for all.

Reggio Emilia engaged in achieving the goals set in the Plan through a variety of actions: from the renovation of parks and squares, designed as safe, clean and beautiful places of encounter, to the provision of scaffolding structures such as libraries, tech and innovation labs, social networks and digital infrastructure, to forward-looking immigration policies and social services. In this essay I am going to present just two specific areas of intervention.

Reggio Emilia intercultural city

Reggio Emilia has shown great interest in achieving social cohesion: it carried out studies to understand the social structure and practices of foreign communities; it launched cooperation projects with the immigrants’ countries of origin; it attempted at establishing a culture of solidarity and tolerance by offering to young citizens the possibility to participate in school exchanges and similar activities. In many occasions Reggio Emilia has been invited by the European Union to share good practices for the promotion of social integration.

Reggio Emilia smart city

In order to boost competitiveness and foster innovation, the municipality of Reggio Emilia has designed policies aimed at establishing an “intelligent territorial system”: it elaborated a plan for the repositioning of the local economic system on strategic sectors and arranged poles of excellence and innovation labs; it prepared two master plans, one envisioning the creation of a tech lab for the mechatronics and green housing sectors, and the other establishing a special economic zone in the northern area of the city.

Case study review and policy recommendations

“There was a very similar [fountain] in East Berlin: it was built at the time of Nazi military parades. They then dismantled it because it was consuming a lot. We surely can afford it, at least as a shower facility for the immigrants who, at night, sleep on the 700 euro benches in front of the theatre”: the comment of a citizen of Reggio Emilia complaining about the opening of a new fountain provides food for thought.

Urban development policies undertaken by the municipality of Reggio Emilia certainly have not been able to fully grasp and manage complexity. The evolution path of Reggio Emilia is still hard to predict, as many uncertainties lie ahead. The Mediopadana HSR station has still to be constructed; many of the projects outlined in the City Structure Plan have not been implemented, while others are currently under implementation. Citizens are not yet fully aware of the need of systemic thought and action, nor are sometimes policy makers. The idea of an ever-evolving urban identity, embracing change as part of its essence, is in many ways hard to accept.

Several questions feed an on-going debate: to what extent can a municipality foster the interactions within and across cities? Doesn’t the idea of preserving the architectural and cultural heritage of they city, which is included in the City Structure Plan, clash with the idea of an ever-changing identity? What is the role played by scaffolding structures in promoting interactions and generative relationships? Can innovation unfold in predetermined structures or rather do relationships exhaust their potential when channelled into a given platform?

Whatever the answer is, however, Reggio Emilia can be considered pioneer of an innovative model for local governance, one that takes complexity into consideration and attempts at channelling it into the fostering of relationships generative of innovation. It therefore represents an important lesson learned on local development policies.

Bibliography

Anderson, Philip Warren (1972) ‘More is different. Broken symmetry and the nature of the hierarchical structure of science’, Science, vol.177, n.4047

Antonelli, Cristiano (2010), ‘From population thinking to organization thinking: coalitions for innovation’, Economic Department of the University of Turin and Bureau of Research in Complexity, Knowledge and Innovation (BRICK), review article of: Lane, David and Sander van der Leeuw, Denise Pumain, Geoffrey West (eds.) (2009) Complexity perspectives in innovation and social change, Berlin, Springer, Methodos Series, vol.7

Bretagnolle, Anne and Denise Pumain, Céline Vacchiani-Marcuzzo (2009), ‘The organisation of urban systems’, chap.6, pp. 197-220, in: Lane, David and Sander van der Leeuw, Denise Pumain, Geoffrey West (eds.) (2009) Complexity perspectives in innovation and social change, Berlin, Springer, Methodos Series, vol.7

Chamber of Commerce of Reggio Emilia (2009), ‘Reggio Emilia 2.0. Il futuro non si prevede. Si fa’

Municipality of Reggio Emilia (April, 20th 2009), ‘La nostra città. Cinque anni di amministrazione’

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ACKNOWLEDGEMENTS

The theoretical framework outlined in this essay has been inspired by the work of David Lane, Sander van der Leeuw, Denise Pumain, Geoffrey West and all researchers who contributed to the volume Complexity perspectives in innovation and social change (2009); by the papers Foresight complexity and strategy (1995) and Ontological uncertainty and innovation (2005) by David Lane and Robert Maxfield; and by Philip Warren Anderson, who introduced me to complexity with More is different. Broken symmetry and the nature of the hierarchical structure of science (1972). I would like to thank all these brilliant scholars, and in particular to Professor Margherita Russo.

While carrying out empirical research I was able to get in contact with actors who played a significant role in the strategic planning process of Reggio Emilia: I have highly benefitted from the exchanges of ideas and experiences with Municipality Manager Mauro Bonaretti, Public Administrator Antonella Spaggiari, Director of SME-Association Azio Sezzi, and with the Architects Carla Ferrari and Rudi Fallaci.