Will smart city projects deliver efficient infrastructures, better governance, sustainability, and inclusion; or will they turn into techno-totalitarian dystopias, featuring ubiquitous surveillance and despotic algorithms, with no space for democratic decision-making? These are important questions that legitimately dominate debates around the digitalization of cities, inside and outside academia. Other questions, while equally crucial, are raised less often. Where is the money? Or, how is value extracted from smart cities, and who benefits from it? When these questions do get asked, the answers tend to point, somewhat lazily and vaguely, to the usual suspects: Big Tech selling proprietary solutions to municipalities and taking advantage of the pool of data generated in urban environments. While there is more than some truth in this, the dynamics through which value is extracted from smart cities can be more complex and stratified. The story of New Town, a township in the outskirts of Kolkata which is being turned into a ‘smart’ city under the 100 Smart Cities program, shows a fil rouge linking land grabbing and real estate speculation to platform economy and data extractivism.
Land and Property: The Smart City Effect
In August 2018, Mamata Banerjee, Chief Minister of West Bengal, laid the foundational stone for the ‘Bengal Silicon Valley’ – 200 acres of land in the township of New Town Kolkata – which is poised to become the next IT hub in South Asia. Bengal Silicon Valley is only the latest chapter in the parable of New Town Kolkata. During the 1990s, the left front government of West Bengal decided to build a special economic zone (SEZ) for the IT industry in the agricultural area of Rajarhat, on the northeastern fringes of Kolkata: New Town. Plots of land owned by small farmers were acquired by a state-owned enterprise, the West Bengal Housing and Development Corporation (HIDCO). To force those who refused to sell, the government resorted to a colonial law dating back to the 19th century. Those who protested faced intimidation and jail, and the process left behind thousands of displaced households. In their thoroughly researched book, Kolkatan researchers Ishita Dey, Ranabir Samaddar, and Suhit K. Sen describe the making of New Town as an example of the repetition of the primitive accumulation that marked postcolonial capitalism, where the violent grabbing of land and resources resulted in the expulsion and destitution of entire communities.
The SEZ project never took off. Although some IT companies opened branches in New Town, along with a few colleges, hospitals, and residential and commercial developments, the township became neither a global business hub nor an upscale residential area. Instead, it grew into a paradoxical space where unfinished flyovers stand beside luxury hotels, unsold condos remain abandoned to decay, and corporate enclaves are surrounded by bastees (slums) and wastelands.It was perhaps in the hope of giving another chance to the township that in 2015, the New Town Kolkata Development Authority applied for and obtained funding from the Smart Cities Mission (SCM), an INR 7,20,000 crore (approximately USD 90 billion) worth program launched by the Government of India. The project to turn New Town into a smart city revolves around the Pan City Solution, an extensive system of Internet of Things (IoT) infrastructures managed via a single control room. Although the SCM requires funded projects to be operational by 2023, Pan City is still far from completion. Rather than the holistic, integrated network of technologies envisioned in smart city projects, the digitalization of New Town has so far proceeded in bits and pieces. Trails and pilot projects for the IoT are being conducted in selected zones of the township, while corporate enclaves have featured state-of-the-art digital technologies for quite some time now. At the same time, large portions of the township are not only disconnected from Wi-Fi coverage and IoT, but also lack basic utilities such as water and sewerage.
New Town’s smart city might be still far from fulfilling its promises, but it is succeeding in one aspect: triggering a new wave of investment into real estate operations in the area. Smart infrastructures, even if only exist on paper, have been leveraged to promote government-sponsored developments, such as the Fintech Hub, which aims to create an ecosystem for financial institutions and digital companies. Investors – real estate investment trusts, equity funds, and the like – who had fled New Town in the wake of the 2008 financial crisis, have come back. The price of land and properties is on the rise again, and the remaining plots are in high demand and selling quickly. In this context, the Bengal Silicon Valley Hub stands out as the ultimate state-sponsored venture. Hoping to attract leading tech companies, the West Bengal government offers a 99-year lease at discounted prices, as well as remarkable fiscal incentives such as 50% exemption of property tax for 12 years.
New Town’s smart city might be still far from fulfilling its promises, but it is succeeding in one aspect: triggering a new wave of investment into real estate operations in the area.
Among the first projects to land in the area are several data centers that companies intend to build to cater for the growing demand of cloud providers in the regional market. Although construction has barely even started, Bengal Silicon Valley seems to have already boosted the value of residential properties in New Town. Realtors are competing to sell mortgages and attract investment funds to complete new gated communities. Thanks to the ‘smart city effect’, land taken from farmers for minimum (if any) compensation and then left vacant for two decades has now multiplied its market value to the advantage of investors.
Platforms and Data Extractivism
In the meantime, platforms are after another type of resource that abounds in the smart city: data. Platforms catering to different kind of services – mobility, accommodation, dating, food, logistics – have increasingly targeted New Town over the past few years, attracted in particular by the customer pool of young IT professionals that work and/or live there.
At the same time, the displaced communities of New Town have provided platforms with a pool of cheap labor, especially young men willing to take up ‘gigs’ as delivery riders or Uber drivers. The relationship between platforms and the smart city goes both ways. On the one hand, platform operations – anything at the touch of your fingertips, literally – contribute to make the city ‘smarter’ by enriching the narrative of an urban space where things work smoothly, quickly, and digitally. Commercial platforms are recognized as forces of urban ‘smartening’ to such an extent that the strongest among them, such as Uber, are able to openly negotiate investments and incentives with local authorities in exchange for them starting their businesses in the city. For example, in 2015 the head of public policy of Uber India proposed an agreement between the company and the government of West Bengal. Under the agreement, Uber would “contribute to making New Town a smart city” by creating up to 40,000 jobs, especially for unemployed youth, women, and marginalized groups, providing the local government with predictive analytics, and by cooperating with local authorities to provide last-mile connectivity and integrating the existing routes of transport. In return, Uber expected “favorable treatment” with respect to taxes, real estate, and local policies.
Thanks to the ‘smart city effect’, land taken from farmers for minimum (if any) compensation and then left vacant for two decades has now multiplied its market value to the advantage of investors.
On the other hand, platforms leverage the existing urban infrastructures – which include non-human and human components alike, such as Wi-Fi networks, sensors, data, and digital users – to test, deploy, and continuously upgrade their proprietary computing technologies. Smart cities generate and concentrate huge volumes of data, and in the age of what has been variously defined as digital/algorithmic/platform/surveillance capitalism, data is an immense source of value. Platforms operations are driven by a logic of data extractivism, where users – and, I suggest, urban environments as well – are “valuable stocks of data” that companies seek to drain. Food orders, car rides, reviews, purchases, are only some of the activities through which platforms identify and collect data from bodies, objects, social interactions, and, more broadly, cities. But before becoming actionable, data need to be processed through specific algorithmic operations – sorting, scraping, cleaning up, clustering, modeling, etc. These operations turn supposedly ‘raw’ data into value – something that can be traded and monetized in various ways. Most importantly, platforms use so-called ‘predictive’ algorithms to build profiles of their users and models of future business scenarios.
Profiles and models enable platforms to maximize their margins in several ways. For example, the profiling of users based on location, contacts, patterns of transactions and searches, and many more features, enables the production of ever-updating targeted advertising. Models of traffic congestion, weather conditions, and faster routes are used to optimize the logistics of platforms operations, such as food delivery or car rides, saving time and money. Yet, logistic optimization too often turns into surveillance and disciplining of workers. For instance, the performances of Uber drivers and delivery riders are monitored and rated all the time, as algorithms enforce key performance indicators such as on-time delivery rates, customer satisfactions, daily targets, and so on.
Smart cities are sites of intensive data extraction, but they are also part of a network of expansive extractive processes. If we were to draw an anatomical map of smart cities and of the millions of devices and infrastructure of which those are composed, like Kate Crawford and Vladan Joler did for Amazon’s artificial intelligence (AI) device, Alexa, we would come up with a multi-layered figure made of code as well as human labor, minerals, toxic waste, and money. In contrast to the Silicon Valley imagery of friendly cooperation and sleek design, digital infrastructures are built upon the predation of natural resources and humans alike. Consider the legions of invisible workers performing content moderation or assembling smartphone components, often in unsafe and exploitative conditions. Also, consider the devastated lands of mining regions, where rare earth minerals are extracted at the expense of scarce natural resources and exploited workforce. Think of the urban fringes of Dhaka or Delhi, where piles of toxic e-waste are dumped, with children scrapping pieces that can be recycled or sold. And then think, of course, of the boardrooms of investment banks and tech companies, where financial speculations are designed that will hit the ground with more land grabbing, more displacement, more work exploitation, more mining, and more waste. These heterogeneous and seemingly unrelated dynamics all conflate in smart city projects like New Town, as they provide the material and financial foundations of hardware and software for computing infrastructures.
A New Form of Urban Life
The story of New Town Kolkata is, like any urban story, unique, and shaped by specific conditions of postcolonial capitalism and urbanization. But at the same time, it sheds light on broader processes of digital urbanism. New Town shows how the making of smart cities reconfigures the urban environment in ways that enable the valorization of land and property, as well as the production and appropriation of data. In other words, smart city projects produce a form of extractive urbanism that makes it possible to extract value from the city and its inhabitants in several ways, from real estate to algorithmic modeling. Smart cities are test beds not only for new technological products but for a new form of life – datafied, profiled, and predictable – that is itself the product.
If we were to draw an anatomical map of smart cities and of the millions of devices and infrastructure of which those are composed, we would come up with a multi-layered figure made of code as well as human labor, minerals, toxic waste, and money.
In recent years, ‘smart’ cities seem to have lost at least some of their charm. Academics, journalists, and activists have raised critical voices on the perils of entrusting matters as complex as urban governance to (often proprietary) sensors and algorithms. Policymakers at any level are attempting to pass legislation that seeks to limit the immense power of tech corporations, protect users’ data, and establish an ethical framework for the development of AI.* Yet, despite criticism, computing technologies continue to proliferate in cities, and well beyond state control. ‘Smart’ or not, our cities will only become more digital. And we should keep asking questions about how money runs through them. Who is profiting from the making of ‘smart’ cities, and how? The fight for urban justice in the age of data and algorithms is not only a matter of ethics protocols or industry regulations. Reclaiming more inclusive and equitable cities is essential, but it is only possible if we keep our pulse on the radar where economic power lies and how it works.
*For example, the technological sovereignty framework produced by the City of Barcelona, or the AI Act proposed by the European Commission
