METRO /Capital gains

Men came to cities to live,'' said Aristotle, "and stayed to live a better life."

In the second half of the century we no longer view cities as the engines of civilisation but rather as some nightmare consequence, which threatens to engulf our planet in an environmental catastrophe. At the beginning of the century, about 5 per cent ofthe world's population lived in cities - and the greatest of them all was London. By the end of this century, more than 50 per cent of the world's population will be living in cities and, in terms of size, London will be just one of the also-rans - dwarfed by giant sprawls of 20 and 25 million people scattered mostly across the poorest nations of the earth.

The simple truth is that if we don't get it right for cities, we can forget the rest of the planet - there won't be one worth living on. Cities represent much more than just problems. Despite all the nightmares of urban dwellers - pollution, congestion, crime, high rents and the rest of it - we love our cities. Aristotle was right. The millions packed into the slums of the developing world have moved there to "live (or, at least, to seek) a better life''.

From the earliest urban communities of 5,000 years ago, cities have been the driving force of human affairs - economically, culturally and politically. And they remain, as Tom Wolfe so graphically put it in Bonfire of the Vanities, the "irresistible destination of all those who insist on being where things are happening''. Humans are social animals. Communication is the skill which we have developed above all others, and upon which we increasingly depend.

Cities are about communication, and as soon as communication begins to break down - whether it's the basic transport system or those less visible but more vital systems of communication between communities and generations - the city begins to come apart.

To consider how we might make London a better city, let's take a fresh look at some of its strengths. Slightly to its own surprise, London remains the greatest financial centre in the world. It accounts for something approaching 50 per cent of the world's foreign exchange market. And even after the huge "shake-out'' of the recession, it's been estimated that the number of people working in financial services in London is greater than the total population of Frankfurt - the city that is often held to be its rival for the title of "financial capital of Europe''.

Another vital component of London's economic strength is the tourist industry. The British Tourist Authority estimates that London absorbs more than 50 per cent of the £10bn a year foreign tourists spend in this country. They account for about 20 per cent of Oxford Street's turnover, 25 per cent of all taxi fares and 40 per cent of all theatre tickets.

Without tourists and visitors much of London's diverse arts provision would cease to be viable. The fate of these two, the arts and tourism, is inextricably bound together, and the more fully we recognise and acknowledge this fact, the more likely we areto secure the long-term future of both, and, with them, an economic and cultural future for our city.

The arts in London are the flagship of a major national industry, a field of activity in which Britain excels. That makes the Government's policies all the more puzzling. It makes no economic sense to spend just enough money on the arts to allow them to keep their head above water; just enough to keep our orchestras going, but under constant threat; just enough to keep the RSC alive, with the occasional closure of one of its theatres whenever the overdraft gets too big; just enough to see the actors andfilm-makers we have trained go to Ireland or the United States to make their movies.

In many respects, London is the arts capital of Europe - certainly as far as young people are concerned. Every night there are some 60,000 seats available in theatres, cinemas and concert halls.

If someone told you that London could become the world centre of the electronics industry, or the hub of the European Union, you wouldn't believe them. But if someone told you that London could be the world's focus for creative and artistic talent, that's not quite so hard to imagine, is it?

Let me tell you why I believe that to be the case. The success of our city has always been about communication. Each new form of communication has made its own impact. The railway, the car, the telephone, television - each has brought radical changes to the way we interact.

Now we're on the edge of another major development in communications - multi-media, the convergence of computing, television and telephony. It represents, through the process of digitisation, a technological convergence of communications media, but, moreimportantly, it points the way towards a convergence of activities which we have carelessly allowed to become divorced. It is already beginning to dissolve the distinctions between office and home, work and play, education and entertainment.

Success in multi-media depends on skilled software programmers: we have some of the best in the world - for example, in animation techniques and computer graphics. The British animation industry dominates the world in terms of quality and innovation, winning the majority of competitive awards at world level. Our success also depends on technological skills - 40 per cent of the UK's information technology companies are located in London, as are some of the world's most experienced and highly regarded ele ctronic publishers.

But most of all, these new media will depend on a constant supply of creative and artistic talent. We have the necessary skills and resources - in theatre, graphic art, music, design, television and film in London.

In other words, we have any number of compelling reasons to engineer a multi-media convergence in the London economy, bringing together a wide variety of skills, and putting the arts to work at the heart of an industry with almost unlimited export potential.

And if to that mix we add the resources of the giant telecom companies, already operating in London at the very cutting edge of innovation, and the cable companies which have already invested in London, then we begin to get some sense of the very real prospect of a city able to build an unparalleled network of resources for its schools, colleges, libraries - and homes. To develop and exploit these possibilities systematically would radically transform the educational experience of our children. It would, at the same time, begin to create a workforce ready for the challenges of the 21st century in a city literally wired up to exploit the next flush of opportunities.

It's often said that this is not so much a city as a network of villages and towns. The foremost quality of multi-media is precisely that it is built on networks - it isn't a matter of having one headquarter and a string of satellites. Here is an opportunity to reinvigorate one of London's most enduring and delightful characteristics. It would allow us to do - at least in one dimension - what public policy has so dismally failed to achieve in another - to equalise access to communications.

With the best will in the world, our transport system is going to take decades and tens of billions of pounds to put right. Here is an opportunity to get at least one vital element in the capital's communications infrastructure right - and to do it quickly.

These resources - human and financial - are all there. But there is, of course, one utterly essential element that's still missing. Among all its qualities, characteristics and strengths there is nothing that marks London out more starkly from the other great cities of the world than the fact that it has no elected government of its own. In Los Angeles, hardly a hotbed of socialist planning by anybody's standards, the mayor has announced a major resource centre to explore the ways in which new multi-media applications can benefit the city's economy and its people.

We have no equivalent elected Mayor, we have no city budget, we have no responsible authority to play the vital role in bringing together the resources to the benefit of us all.

What we need are not solutions thought up by concerned groups of well-intentioned citizens, but long-term strategies argued, implemented and resourced within the framework of an elected and democratically answerable city government.

David Puttnam CBE delivers the LWT Lecture, `Capital Lost or Capital Gain', at 12.15am, Sunday 18 December on LWT