As the world urbanizes, the rapid growth of cities is presenting a host of modern challenges unprecedented in their intensity and interconnectedness — from climate change and mass migration to congestion and unaffordable housing. In response, many cities are betting big on digital innovation.

Yet, the most innovative cities globally are also among the most unequal, and this is no coincidence. Innovation has been a significant driver of income inequality. Disruptive innovation creates new winners and new losers, which has made innovation a polarizing force for communities. This erodes our ability to form consensus around the pressing challenges we need to solve together for cities to flourish.

The question arises: How can cities be both digital and equitable? We need to shift from disruptive innovation to inclusive innovation – but it seems the disruptive model is still the baseline.

In Toronto, where Sidewalk Labs has just published its 1,524 page Master Innovation and Development Plan in hopes of creating the world's most digitally-enabled community, critics have complained that the Alphabet subsidiary is working from the top down, making the biggest decisions behind closed doors without enough input from citizens, city staff and Toronto's already thriving innovation ecosystem.

Here are five steps I'd like to see cities around the world take to make innovation work for everyone.

1. Put citizens at the center

Public legitimacy is the critical currency for city-building. Witness the recent withdrawal of Amazon's bid to build a second headquarters in New York amid protests, or the #BlockSidewalk movement, which was born out of frustration with the Sidewalk Labs public engagement process in Toronto.

Urban innovation needs to solve the problems that matter to city residents. Whereas both public- and private-sector actors have traditionally driven change through top-down policy and planning processes, inclusive innovation flips this orthodoxy and begins with the needs and aspirations of citizens.

A powerful engagement tool for cities to consider is the citizens' assembly. Ireland has established assemblies that have resulted in a marriage equality law and the end of constitutional bans on abortion and blasphemy. Citizens' assemblies aren't normally binding, but they do provide thoughtful, legitimate public guidance on complex and controversial issues.

In 2017, the City of Toronto established a citizen panel to provide citizen guidance on city planning issues, and it is the only standing residents' panel in Canada advising a municipal government.

2. Design for inclusive growth

While more urban innovation often equals more inequality, a few cities have flipped this relationship to achieve inclusive growth.

Austin, TX is one of just four top-100 U.S. cities to demonstrate sustained, simultaneous improvement in the three critical measures of economic growth, prosperity and inclusion, according to the Brookings Metro Monitor. Austin builds from a stable economic foundation as a college town and the state capital of Texas, and it has two locally based Fortune 500s (Dell and Whole Foods).

The city has attracted several large technology firms, with Apple's new $1 billion campus alongside expanding outposts for Amazon, Facebook, Google and Juul. Population growth has also helped to deliver balanced economic growth for middle-wage workers such as registered nurses and electricians.

Not all metropolitan areas have Austin's natural advantages — they have to work harder to drive inclusive growth. Take the East London borough of Barking and Dagenham, which scores 12th worst of 326 local districts in England's official Index of Multiple Deprivation.

To foster inclusive growth, Barking and Dagenham is taking a new approach called Every One Every Day, a network of thousands of people working together to make life better for the entire borough. The civic initiative starts with neighbors helping neighbors in simple everyday tasks, like batch cooking and bicycle repairs. It then ladders up neighborly participation to address complex and costly social problems like poverty, homelessness, unemployment and loneliness.

In its first year, Every One Every Day launched 38 resident-initiated neighborhood projects. The borough government is now redesigning policies because the new participatory culture is reducing community reliance on formal government supports.

3. Ensure trusted data sharing

Cities are becoming smarter and more responsive to the needs of residents and visitors. This creates potential for everyone to benefit from better services and improved quality of life.

What makes a smart city smart is the ability to collect, process and analyze data, then act on the insights. The Sidewalk Labs master plan envisions dozens of use cases where collecting and sharing data unlocks public benefits. But collecting and sharing data about people in cities also raises concerns about rights and freedoms.

Dr. Ann Kavoukian, who developed the Privacy by Design global standard for safeguarding privacy, says that in order to create a smart city of privacy rather than a smart city of surveillance, personal information needs to be de-identified at source. This would allow organizations to collect information about our behavior, but none of it could be associated with specific individuals.

In addition to privacy safeguards, the key questions on urban data governance are: Who owns the data? Who decides who can access the data for what uses? How is value created from digital assets distributed? Only an independent third-party organization can act in the true interests of residents, avoiding conflict of interest with both the profit motive of corporations and the public-surveillance motive of governments.

Sidewalk Labs, as well as supporters and critics of the project, have suggested that the independent data steward could take the form of a trust. In practice, a civic digital trust could serve as a fortified resource for public, private, academic and civil-society sectors. It would be transparently governed by an independent group of trustees mandated to make data-use decisions in the public interest. Its oversight would not be limited to data; it could consider the full range of digital assets, from the sensors that collect data to the algorithms that process it.

There are only a few examples of digital trusts in operation, with most still in the pilot stage. There are still open questions: how stakeholders should be consulted, what legal standards they should adhere to, what business model they should adopt, and how centralized their technical architecture should be. Cities need to test new models of data governance so they can advance citizen rights and take advantage of the tremendous value that trusted data sharing can unlock.

4. Experiment with regulations

Regulation nearly always lags behind innovation, sometimes by years. It takes time for a new technology's effects to be studied, for regulatory change to become a political priority, for new regulations to be passed and for enforcement agencies to police the new landscape.

This can be onerous, but tech can also open up exciting new possibilities for regulators. Inside and outside government, civic leaders are creating new spaces for regulatory experimentation.

In Barcelona, citizen scientists measured noise pollution and successfully changed multiple city policies to reduce it. In Taiwan, Cabinet Minister Audrey Tang's small team practiced radical transparency, crowdsourced deliberation and adopted open-source tools and practices to modernize regulations on ridesharing, online alcohol sales and closely held companies. In Australia and New Zealand, Pia Andrews has performed groundbreaking regulatory experiments on machine-readable legislation.

The implications of reimagining law as code are profound. A digital overhaul of governance has the potential to democratize access to the law. But to realize its full potential, we need to create greenhouses where technology, business models and regulations can co-evolve, rather than sandboxes that serve to provide exemptions and fast tracks.

5. Collaborate to innovate

Some innovation missions require a new model of collaboration that goes beyond a conventional public-private partnership. When developers, governments and nonprofits jointly invest in civic assets, the new value created can have wide benefits.

In New York, the development of the High Line park and the rezoning of the West Chelsea Special District created a "halo effect." A $260 million investment increased property values along the park, boosted city tax revenues by $900 million and brought four million tourists per year to what had been a neighborhood of low-rise warehouses.

A mission-oriented innovation ecosystem connects the dots between entrepreneurs and customers, academia and corporates, capital and talent, policymakers and activists, physical and digital infrastructure – and systems financing models can help predict and more equitably distribute the returns. For example, the recent launch of the Civic Capital Lab promises to convert one-off innovations on projects like the High Line into accessible playbooks for other cities around the world.

As sectors work to design digital layers and make cities smarter, they need to do connectivity in more ethical, democratic and inclusive ways. Innovation has to benefit everyone. It has to spread the wealth that digital innovation is bound to create.

The cities that accomplish this – that become both digital and equitable by embracing inclusivity, transparency and communication – will form the consensus they need to solve their challenges and propel the world in the right direction.