Dr Jaana Remes

Jaana is an economist and when we spoke to her for this podcast, she was leading the McKinsey Global Institute's work on cities. Since our interview, Jaana has retired and is volunteering as a search and rescue K9 handler.

Greg Clark / Caitlin Morrissey

In what sense do cities have a DNA? Is it literal? Is it a metaphor?


Jaana Remes

I think we would all agree that DNA of a city is a very useful metaphor because we know cities feel very different. I grew up with a father who is a civil engineer but also had a passion for urban design, and we travelled a lot by car across Europe. And I remember sitting in the back seat and asking my dad, what is the next city we are going to get to? And he always had a story why the city was there. Most of the time I remember, because I was young at the time, I just remember a lot of the time it had to do with the river that was a good conduit for boats to come in and out. It could have been a port; it could have been a marketplace. And I loved those stories. And it really shaped how I thought about the city where we were driving in next.


And I think it hasn't changed since I have grown up, and as I have lived in many different cities around the globe. It feels very different to be in Mexico City, where I have lived a number of years. It's just the life feels very different. My preferences are different. It's just I feel like I am emerged into the life of Mexico City, and it's very different from San Francisco or Helsinki, for example.


But when you ask the question about could it be something more, could it be more literal? Actually, the truth is that epigenetics, epigenetics do suggest that we are shaped by our environment as much as we are by our genes. And in a way, cities are the sum of all the people, all the plants and all the animals in that environment, and the same way those living creatures create the city, the city actually shapes them back. And I think you could make the argument that there is more to the DNA of cities than just a useful metaphor. I think it's quite clear on some of the interesting research of the speed of people walking. You know, some cities move faster than others. It's hard to imagine that there isn't something on the fact that your physical environment shapes on how your brain evolves, how your life evolves, how your choices evolve. So I do like thinking about the DNA of cities. I think it's insightful and I think it can be useful.


Greg Clark / Caitlin Morrissey

What might be the ingredients of their genetic code? What shapes a city?


I think obviously, I have studied the growth of cities, it's pretty clear that people are the core part. So it is how many people there, how many people are there in the city? How large is the city? How small it is, what demographics they are. Is it an aging city? Is it a city where a lot of people are leaving and the people who are left behind feel like they're being left behind? Is it a city that's attracting a lot of new people? Is it a city that is heavily weighted with one gender? So, for example, some of the boom energy or other resource cities, they feel very different than a city that is full of families and children and a more balanced demographic.


So clearly, people are at the very core of what shapes the city. The physical environment is the other one. Clearly, the physical environment is one that matters a great deal. A city where you have very compact living and people can walk everywhere is going to be a very different place to live than a broadly spread city where you can barely move around without a car. Climate obviously matters. Being in Phoenix or Houston in the summer can be very different. One of them is dry and sunny. The other one is humid and harder to be outside. And when you contrast that, for example, with Seattle, where things are rainier and cloudier many more days a year, that does influence people as well. As someone who comes from Finland, where part of the year is quite dark, it's very different then. Our lives are very different in the summer when there is sun all the time versus winter when it's dark and life is inside, and candles are where we get our light fix.


But of course, ultimately, I'm an economist, and economics do matter for the DNA as well. What is the economic lifeblood? How strong that is? Is it one that's growing, is it optimistic? Do we think there's a future for our jobs? Are we attracting new investments? New people? It's going to be a very different feel than a city that's clearly on the decline, where jobs are going away, where opportunities are fewer, it's going to feel very different, and even different industries will feel different.


As someone who has been travelling and choosing places where to live, choosing between New York and San Francisco, for example, for me had a lot to do with the kind of business environment of much more intense, work-focused financial industry in Manhattan versus San Francisco, where the tech industry is less. It's as hardworking, I would say. But the focus on the outdoors is larger. So, for example, even just the sector mix can be quite different and changes on how your life looks like. So I know this is a long answer, but I think just like the human genome, it's very hard to pinpoint what really matters for just about any outcome in the city. But it is a mix of very many different things that that make each city unique.


I do think every city is unique. Clearly, you can find characteristics that cities share, clearly you can find cities that look more alike than others because they are similar in certain dimensions. But just like people, every single city is its own being and it has its own history. It has its own people, both in terms of the mix of people, the diversity of the people, but also the individuals that may end up making a difference for the city. There are stories, there is shared imagination of what this city means for you. It's just very hard to make a case that we could bucket cities into different categories and we could treat them as the same. I think it's a useful exercise in many cases in social sciences, we don't have a lot more opportunities, a lot more capabilities of understanding the full complexity of cities. So we need to use it sometimes. But I think it would be far too simplistic to think that there is a certain clear set of archetypes of cities that explains everything what's going on in any one of the individual ones.


Those cities in general are some of the longest-lasting assets in the world, so whether you take Rome or Constantinople or Mexico City, you have seen nations rise and decline while the cities have been standing strong. So there is no doubt that there is something extremely durable and resilient in cities. And I think partly it comes from the fact that they are so complicated organisms that find a way to adjust. However, there are very clear changes in the physical environment, in the economic environment, in the demographics that that are very hard for cities to counter. And so when we think about, for example, aging, that's a big challenge whether it's in Japan or some of the Mediterranean European countries. It is going to be harder for cities to really look at rapidly expanding economic or demographic features in that environment. Climate change. I am sitting in California right now in the middle of the fires. It is a reality that we do need to do something about because it's just hard to imagine that we can just continue to sit and watch as our amazing forests are being burned and I think even though they are outside of the cities, the people who are displaced, the pain that we feel amongst people around us and of course, the smog and the smoke coming in here with us.


So I'm thinking of the different forces that happen for cities, those that are capable of seeing realistically what's going on and reacting to it rather than trying to believe something that is no longer true from something that you had seen in the past, those are the ones that are most likely to make the right choices. And it's unclear that there is one right choice for any city. It is it really does depend on what the forces are and what the goals of the people in the city are. Sometimes the right choice may be to say, "We actually are going to accept the fact that we'll have only a quarter less people in a few decades time. But we are going to make that smaller city thrive. We are going to find a way to not mourn too badly the losses of those economic activities that we are losing. We are going to focus on the ones that we can thrive with for the long term."


So I think the resilience of cities is not often easy because when none of us want to change, if we have the choice, but the cities that do understand what's going on with them and how they can make the most of whatever the situation is, in some cases it can be an opportunity, are most likely the ones that will be able to overcome even the tough challenges ahead.


Greg Clark / Caitlin Morrissey

What might cause cities to inherit, acquire, or accumulate a set of ‘genetic’ traits?


Yeah, I think we talked about some of those already, the history, what really was the starting point and legacy of the past. It's hard to imagine Chicago, for example, without the history of being the hub for the grain trade and on the other hand, the history of being the engine, a lot of the architectural innovations of the high rises, et cetera. It's just so much part of the city's DNA, if I may use it that way, that it really is a strength when you have the historical legacy.


But when we think about how that's going to change over time, I come back to the same factors we talked about earlier, demographics. Are you attracting new folks? So, for example, are you suddenly becoming the hub for new millennials moving in the tech industry, moving in, for example, or do you get a new economic investment from outside that's going to dramatically expand the job opportunities? Or perhaps you are doing a big investment or expanding housing that actually brings in a new cohort of people. Could it be that there is a flood in your neighbourhood state and you are seeing a lot of people who are displaced and coming and having to find a place to live and to earn their living in your city?


So I think people ultimately are the ones that will make a big difference. The economic swings up and down can also – both in the positive side of creating opportunities, but they can also hit some kids harder than others. The current pandemic, for example, there are cities that have been quite hard hit and it is likely that we'll see some legacy impact in terms of people's lives, economic activities, the closures of many of the small or medium-sized businesses. In many ways, some of the changes that might have taken a lot longer are happening faster than we probably would have seen otherwise.


Greg Clark / Caitlin Morrissey

Can cities understand their DNA? And who might be interested in understanding the DNA of a city?


Yeah, I think that's actually a great question, because there are some cities where there is a very strong sense of self of the city. There's a city where there's a really an imagined community. We are the city. And I think, as Greg and I, we have talked about that in the past, that cities where you really have a unified vision, not only of who we are, but also where we are going, everyone can pull in the same direction. And that makes a big difference for the likelihood of a success. And I think we have seen that those cities everywhere, whether you think about it, for example, in my home country, Oulu, northern part of Finland, you wouldn't necessarily think of being so far on the periphery of Europe would give you a natural advantage. So certainly the climate is so much tougher than it would be somewhere in the Mediterranean. Yet the city has always had a capability of bringing the university, the city itself, the businesses together and making it a place for innovation, for investment, for attracting young people. And I think that is, for me, a great example of a city that is unified and has a sense of self and sense of pride. There are many cities like that around the world, Medellin in Colombia being another one on a region that that that has seen some real challenges yet has been able to collectively address many of them.


One of my favourite quotes about cities is from Dolly Parton, who has said, "Find out who you are and do it on purpose." And that's definitely something that cities can learn from as well. And if you have a clear purpose, if you have a clear mission that everybody shares, it's hard to imagine a city with many, many people doing the same thing not being able to overcome whatever challenge is coming their way. So I think for me, the answer to your question on who needs to know the city's DNA and who knows who needs to know the mandate, I think it really is everyone. Solutions that only apply to some, smart cities that only are accessible to certain groups of people or businesses or business initiatives that only favour certain segments of the society are much less likely to be long-term sustainable, because I think ultimately cities need everyone to thrive in order to be there for the long term.


Yeah, I think I understand your challenge is only a part of the solution, so I think if you think there may be DNA that in a way could be a cancerous, troublesome part of you – I think I'm not getting my biology necessarily right here, but – there may be features of the city that we all agree on. Inequality, for example, in San Francisco, which is a very clear challenge for that everybody's aware of. Do we have a shared view on where to go? I think that is less clear than the diagnostic of the problem, and I think that's a very good thought. So how – you're right that knowing your DNA is a necessary condition for being able to go to the right direction, but it is not sufficient for finding the path out of your current troubles, for example. So you need much more than that. Being able to have a realistic picture of what you are is a step that allows you to think through what the options are. But if you have a good sense of self and if you have a strong shared view of wanting the city to thrive, that does help of being able to overcome some of the challenges and trade-offs that need to be made to make everybody aligned behind a shared future and perhaps thinking further on.


In addition to the DNA, what else matters for a real successful way of building on the strength and dealing with the challenges of each city is that you do feel a shared sense of community, that you feel like your city. Your city's success depends on everybody thriving, and I think that shared sense of social responsibility of everyone, the fact that you want your city to thrive and you want everyone there to be able to share of that. And that success is a key part for actually getting the strategy of how to move forward. Right?


I think I mentioned two examples of the shared responsibility, Oulu in northern Finland and Medellin in Colombia. I'm sure there are many other examples, and I think there are many cities where you have seen periods where that has been really the case. Unfortunately, there also are many cities on the other category. But I think I'll choose not to name them.


Greg Clark / Caitlin Morrissey

Can you tell us anything about types of cities these are?


That's a good question, I think both of them are noncapital capital cities out in the region that had a strong historical sense of space. They all cared about their region thriving. And I think that is a big factor. They had a shared sense of they wanted  –perhaps – I think that may be one of the things that they shared in that they really wanted to make sure that their cities weren't sucked out to the metropolitan areas that were more central in their city. So they really knew they had to do many things right in order to continue to thrive and be competitive in attracting investments and attracting people to their cities.


So I think that was one potential component in these two cities. I think the other one is that they did have people in the leadership positions who really made the effort to build those bridges. They went out of their way to communicate with different parts of the society, and they made sure that they had everyone play their part for the success. So, for example, in the case of Oulu, it had to do with working with policymakers in Helsinki and in Brussels for those areas where they needed help. The university making sometimes tough choices to create the talent pool needed. And all of the leadership making the commitment of meeting up to discuss what the next steps would be and what everyone would do to make sure things worked out so I think it is both the shared sense of responsibility for the city, perhaps the sense of the urgency of not being the natural hub, and then the real commitment of the leaders and delivering on that commitment to keep everyone united and pulling on the same direction.


Greg Clark / Caitlin Morrissey

So, what are the limitations of The DNA of Cities? What does it not explain about the way cities evolve?


Just like all good models or ideas, it is a simplification, because that's the way in which we can deal and process and analyse many things. However, just like I think we have found with the Human Genome Project, things are much more complicated and it's much harder to identify exactly what is driving what in a city. So if you are thinking about the DNA of cities as a way that, OK, we understand that and here are the three things we need to change things, it's probably not going to work that way, just like it doesn't work in the Human Genome Project. We haven't really found the gene for cancer that we can just click turn off. The same thing is true for cities. There is a lot of things that we can do to help make the outcomes we want happen. On the other hand, serendipity is going to play a role. You can have the wind blow you to the right direction or you can run into unexpected potholes and obstacles. And there is only so much you can do.


And so overall, I think I like the DNA of cities because I find it insightful, it's inspiring, it makes me curious, it gives me energy to go and explore a city. However, just like all models, it is as simple as it can be, but not any simpler. But it also means that there is a lot that goes beyond the DNA of cities. And I think we shouldn't forget that. And we should stay humble as we think of the DNA of cities and make sure that we acknowledge the complexities and the serendipity that goes beyond what we can actually easily simplify into a city's personality or sense of self.


Greg Clark / Caitlin Morrissey

Can you tell us more about what you think this means for the resilience of cities? We're having this conversation during the Covid-19 pandemic, how will this shape the DNA of Cities?


I was thinking about resilience of cities mostly in terms of diversity. If you are a monocrop, for example, on a field, it's quite clear that it is easier for a single calamity to really wipe out your crop. I think a city that's well diversified has multiple sources of energy, built as diversified demographically, for example, as well, so that you have different kinds of people with different kinds of ideas, with different kinds of opportunities and different kinds of situations, that makes it easier for the city to be resilient. So I think that is one of the strengths of larger cities, they tend to be more diverse.


And when even when we think of the DNA of cities, one of the fascinating things about large metropolitan centres is that you have so many different dimensions to the DNA. You have groups of folks that live in a completely different universe. They read different things. They collaborate in different species. They spend their time differently. And it's just seeing that layering, for example, in those points where the different populations meet, whether it's on the public transit, for example, it's absolutely fascinating. And I think it is that diversity that in many cases makes it easier for large cities to be more resilient.


I think that definitely applies to economic resilience as well. Cities that have many industries that are not overly concentrated on one are able to overcome any downturns faster because seldom industries boom and bust at the same time. So those are a few of the factors that I can think of when I think of the resilience of cities.


It's quite clear that the Covid pandemic is not going to be able to reverse urbanisation if there are some trends that have been consistent across ages, across regions, across countries, is that after people move to cities, a very small minority of them wants to return. And it would be stunning to see that happen. And I don't think we are seeing the evidence.


That said, it is a pretty big shock for most cities in the world. It has been the biggest downturn in anybody's lifetime today, and it is also one that has stopped activity in a different way than the economic downturn we are used to. And we have been just studying about the potential impact on households and consumers of this period. And there are some changes that I think will leave a mark on cities.


So, for example, most folks have been contained into their houses for extended periods of time – in the case of many of the US cities right now, six months. And that means that space in your house has become valuable, much more valuable than it was before, because you can't get out and socialise. You can't get out and go and eat elsewhere. So you want to have more space to move around in your house. A lot of people have invested on home offices because they are able to work from home, home gyms. They want more space for their children to be able to work for school. The challenge of being in a contained space when you need to have four people in a room at the same time, like in my household, I had two college kids and two parents who all had to Zoom at the same time.


Those are the kinds of things that have made people make asset investment on their houses and have made them want to have more space. So it's quite likely that we will see a shift from very dense small-footprint housing to more space simply because of the fact that people have experienced the constraints of a small space overall. So I think some of those differences we will see. It's definitely accelerating somewhat the move of people to mid-sized cities. So, for example, from Los Angeles and San Francisco, we have seen people move to places, whether it's Denver, Portland, Austin. That has continued to happen, people are looking for places where they can have a backyard for their dog now that they have a harder time taking them out into the woods.


So I think there will be changes like that. We also have seen a pretty big transformation on retail. Online shopping has moved far beyond where we traditionally did. A lot of new people have tried it for the first time. Grocery has accelerated very rapidly. It has forced the industry to respond in a different way. So we will probably continue to see that kind of acceleration of some of the past trends. So while I don't think COVID is going to make a difference for the long-term trends for cities, it is a jolt, and a pretty substantial one, in shifting how exactly people are choosing to live in cities.


One of the striking things about this crisis is that it has been very different in different parts. The bounce back in China has been impressively fast. In the US, it has for multiple reasons been much slower. And the income equality or income inequality impact of the crisis in the US has been very steep. So the kinds of changes that we talked about, opportunities available to the wealthy, for the lower-income households, their income hit has been extremely hard because of the fact that the wealthy stay at home. They didn't go to restaurants. They didn't use services, which led to huge job losses amongst the lower income segments. And the income constraints are much sharper for the lower income segment.


So I think part of that is also reflecting the income inequality differences in the impact of Covid And clearly, Europe is a place where the where the Social Security system and social policies in general have attenuated many of those widening forces that we saw in the US. So while in China, I don't exactly know the situation, exactly what the income impact is, it's clearly the level of inequality is wider in Chinese cities given their level of income inequality. But I don't know how much Covid changed that. It may not have changed as much, or it could have. I don't really know.


So I can exactly see, as you say, that the impact is going to be different. It's going to be different because of both the demographic factors, the kind of the response and the policy factors, as well as the economic consequences of the lockdown policies and the behavioural changes, I'm sure there is something on the kind of priorities as well. One thing you didn't mention, and I don't think I want to be cited for this one, but it's quite clear that a lot of people who can afford it have actually basically rented, or if they have their own house, lived in their country house, or they have rented on Airbnb, whether it's in the Caribbean or in the mountains, to be away from the health risks and working from home. It's quite clear that – I am not sure if in China they are at work every day. I think what I'm hearing, what but I'm kind of interpreting from across the board is that people will go back to four plus one, so one day at home, three plus two, two days from home, depending a little bit on what business you are. Very few are going to go going to stay fully on or offline full time. But some kind of a mixture is probably likely, mostly because people really like it. The time they save on commute, etc. is going to be valuable. So I think that will have an impact on cities. It will have an impact on cities. Like I think there's been a lot written around London is that a lot of the coffee shops are coming back in the suburbs rather than in the city. And I think-that's going to lead into changes in where the small and medium size service businesses are going to be and where the jobs are going to grow. So I think all of that is kind of the dynamics of the post-Covid evolution.


Greg Clark / Caitlin Morrissey

Is there anything else you’d like to add that you haven’t had a chance to say already?


Yeah. I don't think so, I think you asked quite a few questions, so I think I exhausted anything that I could come up with on DNA. I do like the question, though.