Hip Cities That Think About How They Work

The story of young people, full of ambition, energy, skill and talent, moving to enticing cities that call to them like a siren’s song is as old as modern civilization. And in a world where national borders are easier to traverse, where more countries are joining the prosperous global middle class and where the cost of a one-way plane ticket is more affordable, young professionals probably have more cities to choose from than ever before.

The Vilnius Cathedral and square in Lithuania.

This survey is not based solely on quality of life, number of trees or the cost of a month’s rent. Instead, we examine some cities that aim to be both smart and well managed, yet have an undeniably hip vibe. Our pick of cities that are, in a phrase, both great and good:
 
Auckland
With its beaches, inlets and lush coastal climate, the Kiwi metropolis has always had great natural beauty going for it (and, now, for the first time in 24 years, it is the home to the World Cup Rugby Champions). But we digress. Currently counting 1.5 million residents , the government is projecting the city to hit the two million-mark in just 30 years. The city has recently voted to create a new central core that mixes sustainable housing and mixed-use development.

The public transportation system, which includes subways, trams, busses and ferries, is constantly being expanded. Measures to increase the density of the urban landscape, meant to ultimately prevent encroachment on surrounding lands, as well as planting “green carpets” along urban roads demonstrate a keen eye toward creating a greener future. Plus, the city is expanding its free Wi-Fi coverage, according to a city official. Auckland is doing its best to “up their game with urban design,” said Angela Jones, a spokesperson for the city, turning a beautiful but provincial capital into a smart city.
 
Berlin
 
This culture capital combines low rents, a white-hot arts scene, good public transportation and myriad creative types — from media to design to technology — from all over the world. Known as Europe’s largest construction zone for at least 10 of the past 20 years, 4.4-million-strong Berlin has probably changed more in that time than any other large European city. And while the restaurants have become more expensive, the clothes are now more stylish and the D.J.’s have added more attitude, there is still plenty of real city left to be discovered by the thousands of artists and young professionals who move here every year to make this the pulsing center of Germany, the powerhouse of Europe.

Besides radical renovations to the government center, main train station and the old Potsdamer Platz, the city recently turned a historic airport in its heart into a vast urban park. A short-term bike-rental system is in place and the old subway system, reunited after the fall of the wall, like the city itself, is as efficient as ever. Besides artists and bohemians looking for the vibe, the city — home to several prestigious universities, research institutes and many a company headquarter — is brimming with smart scientists and savvy businessmen.
 
Barcelona 
 
Anyone who has walked down Las Ramblas on a summer evening or has stared at the Sagrada Familia for long enough understands why this city attracts planeloads of tourists. Music, good food, great weather and strong technology and service sectors compete to make this city of 1.6 million a home for all those who want to stay beyond summer break.

If all the traditional charms of Barcelona were not enough, an active city government is trying to keep this city smart, too. Under its auspices, photovoltaic solar cells have been installed on many public and private rooftops.

Charging stations for electrical cars and scooters have recently been set up around the city, in preparation for the day when residents will be tooling around in their electric vehicles. A biomass processing plant is being built that will use the detritus from city parks to generate heat and electricity, and free Wi-Fi is available at hotspots around the city.
 
Cape Town 
 
Wedged between sea and mountain, Cape Town’s natural setting is stunning. Nor does the city — with its colorful neighborhoods, historic sites, and easy charm — disappoint. And while its one of Africa’s top tourist destinations, it also attracts many new residents from around the globe. The local government is trying to lead the growing city of 3.5 million with a more inclusive government and development structure, to overcome the gross inequities of South Africa’s past.

Four major universities and many research institutes make Cape Town one of the continent’s bustling research centers. Named the 2014 World Design Capital last month, the city government is encouraging a cluster of design and creative firms in a neighborhood called the Fringe. The 2010 World Cup of soccer was a boon for infrastructure, especially public transportation. A new bus system, with dedicated lanes, has been rolled out in recent years to keep the many suburbs connected and alleviate crushing traffic.

Under a program called Smart Cape, libraries and civic centers have computer terminals with free Internet access. Poverty and crime are still issues in Cape Town, but overall quality of life indicators rank the city as one of the best in Africa.
 
Copenhagen 
 
Progressive, cozy and very beautiful, the young and the elegant flock to this northern light. Rents might not be as low as in other hip cities, but the social infrastructure in this metropolitan area of 1.9 million cannot be beat. Offering a prosperous blend of art, culture and scene, this highly tolerant city is attracting young professionals lucky enough to work in the center of Danish industry and commerce.

A mix of stately old European buildings and modern, green-oriented architecture speaks of a city that treasures the old but loves experimenting with the new.
Despite its cool Scandinavian climate, the Danish capital might just be the most bicycle-friendly city in the world. Bike superhighways crisscross the city, and statistics show that more than a third of the city’s inhabitants commute to work or school on their trusty two-wheelers.
A metro system was inaugurated in the last decade for those who choose to go without. With sunlight-flooded underground stations and clean, driverless subway cars, the system looks more like a people-mover at an international airport than an urban transport system.

Having committed itself to reducing carbon levels by 20 percent before 2015, some of the city’s power is generated by wind. The city has been so successful in cleaning up its once-industrial harbor that it has been able to open three public baths in a harbor waterway.
 
Curitiba, Brazil 
 
One of the smartest cities in Latin America, Brazil’s wealthy regional capital attracts many new inhabitants with jobs in service and production sectors, and with the promise a functioning city. The 1.7 million residents have access to a bus-based rapid transport system so good that more than 700,000 commuters use it daily. Buses run on designated lanes that, because of a unique and modern urban design, have right-of-way and preferred access to the city center.

A beautiful botanical garden and other city parks, along with other strong environmental measures, keep the air largely clear of pollution, despite Curitiba’s land-locked location.

The city strives to be sustainable in other ways, too. According to reports, it recently invested $106 million, or 5 percent, of its budget into its department of environment. The city government makes itself integral in the lives of Curitibans, not just seeking comment and feedback on policies, but also organizing a host of events. “Bike Night” is the latest craze in the active city. Each Tuesday, residents take to their bikes and peddle through the night, accompanied by municipal staff members.
 
Montreal
With its hearty French and North American mix, this city of 3.6 million has a real soul thanks to low living costs and long winter evenings. And it is no slouch when it comes to good food, hip culture, well-appointed museums and efficient transportation.

With four major universities and plenty of bars, the nightlife in this bilingual city has a well-deserved reputation. Because the winters tend to be long and cold, the city possesses an extensive underground network connecting several downtown malls and a subterranean arts quarter.

When spring finally does arrive, and snow is cleared from the many bike paths, the city puts out its 3,000 short-term-rental bicycles, known as Bixi. City-sponsored community gardens are sprouting around town, giving urbanites a chance to flex their green thumb. Montreal is an incredibly active town where festivals celebrating everything from jazz to Formula One dominate the city’s calendar during the summer.

Thanks to Mount Royal, a large central park and cemetery that serves as cross-country, snowshoe and ice-skating terrain in the winter and becomes a verdant picnic ground and gathering spot in the summer, Montrealers never have to leave city limits.
 
Santiago
A vibrant mix of Latin American culture and European sensibility, this Chilean city is modern, safe and smart. The rapidly growing city of 6.7 million — , which, perhaps surprisingly, was first subject to urban planning mandates in the mid-20th century — is still ahead of others in South America when it comes to urban governance. A law curtailing urban sprawl and protecting the few natural spaces close to the city is exemplary.

Beautiful old cultural jewels like the library and fine art museum are dwarfed by serious commercial skyscrapers. The smell of local food, good and inexpensive, brings life even to the streets of its financial district.

One of the most extensive public transport systems on the continent whisks more than 2.3 million commuters to and from work or school every day. Because of its high altitude, pollution is a problem — one that the national government is trying to curb with various green initiatives. Short-term bike rentals exist in one of the more active parts of town, and significant city funds have been used to construct bicycle lanes.

For a city this modern, however, Santiago has few parks. But the ocean is just a short drive to west and the mountains to the east.
 
Shanghai
China’s commercial heart has grown tremendously in the past couple of decades. Attracting young professionals with its jobs and opportunities rather than with museums and hip nightlife, this megacity of 23 million is surprisingly smart. Its top-down urban planning approach is efficient in a city made up of separate 16 districts and one county. City coffers are put to use building enormously ambitious infrastructure, like a deepwater port, tunnels, bridges and roadways.

A good indicator for the rapid and deliberate growth of the city is the metro system. First opened in 1995, it is now the world’s longest subway network, according to city officials. Adding a futuristic aspect to the utilitarian system is a Maglev (magnetic levitation) line that connects the airport to the city, and on which the train travels at speeds of up to 431 kilometers, or 268 miles, per hour.

But Shanghai’s urban development is also green. The city claims that it put the equivalent of $8 billion into environmental improvement and cleanup, which include sewage treatment systems but also an impressive number of city parks.
In addition, Shanghai has made its city government more accessible by running a Web site were residents can find municipal information, and read a blog entitled “mayor’s window.”
 
Vilnius, Lithuania
One of the greenest of the former Eastern bloc capitals, Vilnius has a forward-thinking city government. In a recent Internet video that spread virally, the mayor, Arturas Zuokas, is seen crushing a Mercedes parked on a bike path with a tank. Beyond the obvious political theater of the stunt, the city, whose metropolitan area population is 850,000 takes providing good public transportation seriously. A recent study suggested that some 70 percent of the capital’s citizens either walk, bike or take the bus.

Vilnius, a verdant city that despite some communist architectural clunkers is charmingly medieval and surprisingly well maintained, boasts an old town that is a Unesco world heritage site. After the fall of the old regime, the city took great pains to retool its waste disposal systems, building a modern landfill in 2005. The capital attracts young professionals, and not just from Eastern Europe, who see in Vilnius a rising star in business and appreciate all that the extensive cultural scene in the little capital has to offer.

by CHRISTOPHER F. SCHUETZE. A version of this special report appeared in The New York Times  on November 18, 2011

Sorry, Strivers: Talent Matters

HOW do people acquire high levels of skill in science, business, music, the arts and sports? This has long been a topic of intense debate in psychology.

Research in recent decades has shown that a big part of the answer is simply practice — and a lot of it. In a pioneering study, the Florida State University psychologist K. Anders Ericsson and his colleagues asked violin students at a music academy to estimate the amount of time they had devoted to practice since they started playing. By age 20, the students whom the faculty nominated as the “best” players had accumulated an average of over 10,000 hours, compared with just under 8,000 hours for the “good” players and not even 5,000 hours for the least skilled. 

Those findings have been enthusiastically championed, perhaps because of their meritocratic appeal: what seems to separate the great from the merely good is hard work, not intellectual ability. Summing up Mr. Ericsson’s research in his book “Outliers,” Malcolm Gladwell observes that practice isn’t “the thing you do once you’re good” but “the thing you do that makes you good.” He adds that intellectual ability — the trait that an I.Q. score reflects — turns out not to be that important. “Once someone has reached an I.Q. of somewhere around 120,” he writes, “having additional I.Q. points doesn’t seem to translate into any measureable real-world advantage.” 

David Brooks, the New York Times columnist, restates this idea in his book “The Social Animal,” while Geoff Colvin, in his book “Talent Is Overrated,” adds that “I.Q. is a decent predictor of performance on an unfamiliar task, but once a person has been at a job for a few years, I.Q. predicts little or nothing about performance.”

But this isn’t quite the story that science tells. Research has shown that intellectual ability matters for success in many fields — and not just up to a point. 

Exhibit A is a landmark study of intellectually precocious youths directed by the Vanderbilt University researchers David Lubinski and Camilla Benbow. They and their colleagues tracked the educational and occupational accomplishments of more than 2,000 people who as part of a youth talent search scored in the top 1 percent on the SAT by the age of 13. (Scores on the SAT correlate so highly with I.Q. that the psychologist Howard Gardner described it as a “thinly disguised” intelligence test.) The remarkable finding of their study is that, compared with the participants who were “only” in the 99.1 percentile for intellectual ability at age 12, those who were in the 99.9 percentile — the profoundly gifted — were between three and five times more likely to go on to earn a doctorate, secure a patent, publish an article in a scientific journal or publish a literary work. A high level of intellectual ability gives you an enormous real-world advantage. 

In our own recent research, we have discovered that “working memory capacity,” a core component of intellectual ability, predicts success in a wide variety of complex activities. In one study, we assessed the practice habits of pianists and then gauged their working memory capacity, which is measured by having a person try to remember information (like a list of random digits) while performing another task. We then had the pianists sight read pieces of music without preparation. 

Not surprisingly, there was a strong positive correlation between practice habits and sight-reading performance. In fact, the total amount of practice the pianists had accumulated in their piano careers accounted for nearly half of the performance differences across participants. But working memory capacity made a statistically significant contribution as well (about 7 percent, a medium-size effect). In other words, if you took two pianists with the same amount of practice, but different levels of working memory capacity, it’s likely that the one higher in working memory capacity would have performed considerably better on the sight-reading task.

It would be nice if intellectual ability and the capacities that underlie it were important for success only up to a point. In fact, it would be nice if they weren’t important at all, because research shows that those factors are highly stable across an individual’s life span. But wishing doesn’t make it so. 

None of this is to deny the power of practice. Nor is it to say that it’s impossible for a person with an average I.Q. to, say, earn a Ph.D. in physics. It’s just unlikely, relatively speaking. Sometimes the story that science tells us isn’t the story we want to hear.

A version of this op-ed appeared the New York Times.
by David Z. Hambrick and Elizabeth J. Meinz

House of Horrors, part 2

The bursting of the global housing bubble is only halfway through 

Nov 26th 2011 | The Economist.com

MANY of the world’s financial and economic woes since 2008 began with the bursting of the biggest bubble in history. Never before had house prices risen so fast, for so long, in so many countries. Yet the bust has been much less widespread than the boom. Home prices tumbled by 34% in America from 2006 to their low point earlier this year; in Ireland they plunged by an even more painful 45% from their peak in 2007; and prices have fallen by around 15% in Spain and Denmark. But in most other countries they have dipped by less than 10%, as in Britain and Italy. In some countries, such as Australia, Canada and Sweden, prices wobbled but then surged to new highs. As a result, many property markets are still looking uncomfortably overvalued.

The latest update of The Economist’s global house-price indicators shows that prices are now falling in eight of the 16 countries in the table, compared with five in late 2010. (For house prices from more countries see our website). 

To assess the risks of a further slump, we track two measures of valuation. The first is the price-to-income ratio, a gauge of affordability. The second is the price-to-rent ratio, which is a bit like the price-to-earnings ratio used to value companies. Just as the value of a share should reflect future profits that a company is expected to earn, house prices should reflect the expected benefits from home ownership: namely the rents earned by property investors (or those saved by owner-occupiers). 

If both of these measures are well above their long-term average, which we have calculated since 1975 for most countries, this could signal that property is overvalued.

Based on the average of the two measures, home prices are overvalued by about 25% or more in Australia, Belgium, Canada, France, New Zealand, Britain, the Netherlands, Spain and Sweden (see table). Indeed, in the first four of those countries housing looks more overvalued than it was in America at the peak of its bubble. Despite their collapse, Irish home prices are still slightly above “fair” value—partly because they were incredibly overvalued at their peak, and partly because incomes and rents have fallen sharply. In contrast, homes in America, Japan and Germany are all significantly undervalued. In the late 1990s the average house price in Germany was twice that in France; now it is 20% cheaper.

This raises two questions. First, since American homes now look cheap, are prices set to rebound? Average house prices are 8% undervalued relative to rents, and 22% undervalued relative to income (see chart). Prices may have reached a floor, but this is no guarantee of an imminent bounce. In Britain and Sweden in the mid-1990s, prices undershot fair value by around 35%. Prices in Britain did not really start to rise for almost four years after they bottomed. Some 4m foreclosed homes could come onto America’s market, which may hold down prices.

The second question is whether home prices in markets that are still overvalued are likely to fall. Some economists reject our measures of overvaluation, arguing that lower interest rates justify higher prices because buyers can take out bigger mortgages. There is some truth in this, but interest rates will not always be so low. The recent jump in bond yields in some euro-area countries has raised mortgage rates for new borrowers.

And low rates need to be balanced against the fact that tighter credit conditions make it harder for homebuyers to get mortgages. The average deposit needed by a British first-time buyer is now equivalent to 90% of average annual earnings, according to Capital Economics, a consultancy. It was less than 20% in the late 1990s. 

Another popular argument used to justify sky-high prices in countries such as Australia and Canada is that a rising population pushes up demand. But this should raise both prices and rents, leaving their ratios unchanged.

Prices do not necessarily need to drop sharply to return to fair value. Adjustment could come through higher rents and wages. With low inflation, however, it could take a decade or more before price ratios return to their long-run average in some countries.

Jingle mail

American prices fell sharply, even though homes were less overvalued than they were in many other countries, because high-risk mortgages and a surge in unemployment caused distressed sales. In most other countries, lenders avoided the worst excesses of subprime lending, and unemployment rose by less, so there were fewer forced sales dragging prices down. America is also unusual in having non-recourse mortgages that let borrowers walk away with no liability.

An optimist could therefore argue that our gauges overstate the extent to which house prices are overvalued, and that if markets are only a bit too expensive they can adjust gradually without a sharp fall. It is important to remember, however, that lower interest rates and rising populations were used to justify higher prices in America and Ireland before their bubbles burst so spectacularly.

Another concern is that Australia, Britain, Canada, the Netherlands, New Zealand, Spain and Sweden all have even higher household-debt burdens in relation to income than America did at the peak of its bubble. Overvalued prices and large debts leave households vulnerable to a rise in unemployment or higher mortgage rates. A credit crunch or recession could cause house prices to tumble in many more countries.