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SENSEABLE CITY LAB

23

2Government’s Role in Growing a Smart CityMatthew Claudel, Alice Birolo, and Carlo Ratti

Growing the smart city

Our planet is urbanizing at a staggering rate: more than half the human population live in cities today, and the number is growing.1 Today’s urban space is changing rapidly, as digital technologies and pervasive networks integrate with physical space. “Ubiquitous computing names the third wave in computing, just now beginning,” once noted Mark Weiser, Xerox Parc pioneer. “First were mainframes, each shared by lots of people. Now we are in the personal computing era, person and machine staring uneas-ily at each other across the desktop. Next comes ubiquitous computing, or the age of calm technology, when technology recedes into the back-ground of our lives.”2 Ubiquitous computing, with its so-called Internet of Things3 corollary, is creating a new urban condition: the smart city.

It is widely thought that smart cities have the capacity to respond better to their inhabitants and their environment, becoming efficient, sustain-able and livable ecosystems. A number of books,4 articles5 and studies6 have supported this claim. With the goal of smart urban optimization, a broad spectrum of implementation models are emerging in different parts of the world. But what is the role of government in the process of imple-menting smart city developments? How can smart city funding be used most effectively, specifically to promote innovation? And are huge sums of public money ultimately the right stimulant of smart cities after all?

Models for smart city government

Diametric approaches are appearing between the United States and, broadly speaking, of the rest of the world. In South America, Asia, and Europe, all levels of government are quickly identifying the potential

D. Araya (ed.), Smart Cities as Democratic Ecologies© The Editor 2015

24 Smart Cities as Democratic Ecologies

latent smart cities, and are working to channel significant investment in that direction. Rio de Janeiro is building capacity at its “Smart Opera-tions” center7; Singapore is about to embark in an ambitious “Smart Nation” effort8; and Amsterdam recently channeled €60 million ($81 mil-lion) into a new urban innovation center called Amsterdam Metropolitan Solutions9. The European Union’s Horizon 2020 program has earmarked

Smart UtilitiesSmart TransportSmart BuildingSmart Government

Annual Smart -City Investment by Industry World Market, 2010-2020

0 K

1 K

2 K

3 K

4 K

5 K

2010 2011 2012 2013 2014 2015 2016 2017 2018

Source: Gigaom Research (2012), “Key technologies for the future of smart city”

Figure 2.1 Annual Smart-City Investment by Industry World Market, 2010–2020.

Figure 2.2 Top 30 cities by GDP in 2025.

‘Big six’ city

$ bn

0

500

1000

1500

2000

2500

Toky

oN

ew Y

ork

Sha

ngha

iLo

s A

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ong

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delp

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an F

ranc

isco

Syd

ney

Toro

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Seo

ul

Top 30 cities by GDP in 2025

Source: McKinsey Global Institute (2012), “Urban world: Cities and the rise of the consuming class”

Government’s Role in Growing a Smart City 25

€15 billion in 2014–201610 – an investment that represents a significant commitment of European resources to research and development in the field of smart cities, particularly during a time of severe fiscal constraints.

In the United States, on the other hand, there is little public sector funding, yet the general idea of smart urban space has been central to the current generation of successful start-ups. One recent example is Uber: a smartphone app that lets anyone call a cab or be a driver. The compa-ny’s operations are polarizing: Uber has been the subject of protests and

Figure 2.3 What defines a Smart City.

Figure 2.4 Smart City Market by Segments Global, 2012–2020.

Investments in Natural Resources

Investments in ICT

Investments in Transport

Investments in Human and Social

Capital

Investments in Environment

Governance

What defines a Smart City

Smart City framework

Smart City

Smart CityInitiatives

Smart CityProjects

source: European Parlament, PolicyDepartment, Economic and ScientificPolicy (2014) “Mapping Smart Citiesin EU. Industry, Research and Energy”

source: Dar Al-Handasah (2013),“Toward Smart Cities. Eco Living,Networking, Communications”

Smart CityMarket8.7 %

14.6 %

9.7 %24.6 %

13.5 %

15.8 %13.1 %

Smart Building

Smart Healthcare

Smart Mobility

Smart Infrastructure Smart Energy

Smart Security

Smart Governanceand Smart Education

Smart City Market by SegmentsGlobal, 2012-2020

Source: Frost & Sullivan (2014), “Strategic Opportunity Analysis of the Global Smart City Market”


strikes around the world (mainly in Europe), yet it was recently valued at a stratospheric $18 billion.11 Beyond Uber, the learning thermostat Nest, the apartment-sharing website Airbnb, and the “home operating system” by Apple, to name a few, attest to the new frontiers of digital

Smart City MarketMost Adopted Funding Mechanism for Smart City Projects

Source: Frost & Sullivan (2014), “Strategic Opportunity Analysis of the Global Smart City Market”

22 %

37 %1%

40 %

Special Development Fund

Public-Private Partnerships

Self-financing

Private Investment

Figure 2.5 Smart City Market Most Adopted Funding Mechanism for Smart City Projects.

Figure 2.6 Prominent cities in the smart city field.

source: Jones Lang LaSalle (2013), “The Business of Cities 2013.What do 150 city indexes and benchmarking studies tell us aboutthe urban world in 2013?”

3°

1°

2°

apore 1st, Networked

y y Index

1st, European Smart

y 3st, Networked

y y Index

Aarhus 2st, European Smart

y

Smart Attr utesapore

es, traffmanagement

Energy Roadmap 2020

ICT rtransport system

Aarhuslue ICT

economy and talent

Pr y f d


information when it inhabits physical space. Similar approaches now promise to revolutionize most aspects of urban life – from commuting to energy consumption to personal health – and as such, they are receiving eager support from venture capital funds.12

That isn’t to say that government should take a hands-off approach to urban development – it certainly has an important role to play. This includes supporting academic research and promoting applications in fields that might be less appealing to venture capital – unglamorous but nonetheless crucial domains such as municipal waste or water services. The public sector can also promote the use of open platforms and stand-ards in such projects, which would speed up adoption in cities worldwide. Barcelona has made a step in this direction by creating the City Protocol13

Figure 2.7 Investments in smart city field in American Cities; Investments in smart city field in European Cities; Investments in smart city field in Asian Cities.

Investments in smart city field in American Cities

Buildings

Economy and People

Energy

EnviromentGovernment

Living

Mobility and Transport

AmericaWorld

Investments in smart city field in European Cities

Buildings

Economy and People

Energy


Living


EuropeWorld

source: Cassa Depositi e Prestiti (2013),“Smart City. Progetti di sviluppo e strumenti di finanziamento”

Investments in smart city field in Asian Cities

Buildings

Economy and People

Energy


Living


AsiaWorld

0 %

20 %

40 %

60 %

0 %

20 %

40 %

60 %

0 %

40 %

60 %

20 %


Top 10 Smart Cities all over the world

1 Vienna

32

4

65

ParisTorontoNew YorkLondonTokyo

78

109

BerlinCopenhagenHong KongBarcelona

Rank City


Best Quality of Life

1

32

3

65

78

88

Global Rank 2012

City


1111

1111

1515

1717

2017

SingaporeSydney

AdelaideBrisbane

KobePerth

CanberraDublin

MelburneCopenhagen

BernHong KongVancouverAucklandAntwerp

Wellington

TokyoSan Francisco

YokohamaAmsterdan

Global Rank 20111

41

3

64

912

1010

1714

1214

1714

620

226

Figure 2.8 Top 10 Smart Cities all over the world; Best quality of life.

that brings together cities, commercial and nonprofit organizations, uni-versities and research institutions to develop a shared and interoperable set of guidelines and solutions for city transformation. Most important, these protocols will be multicity, multiculture, and multipartner.

But all of this is working toward less top-down determinism; govern-ments should use their funds to develop an organic innovation eco-system geared toward smart cities, similar to the one that is growing in the United States. It is more about bottom-up innovation than top-down projects. This must go beyond supporting traditional incubators, and aim to produce and nurture the regulatory frameworks that allow innovations to thrive. Considering the legal hurdles that continuously plague applications like Uber or Airbnb (paradoxically, Barcelona has been one of the most aggressive Airbnb opponents, fining the company €30,000 for tourism law infraction),14 this level of support is sorely needed. Regulation is still vitally important, but in a more responsive way – government can still take the pulse of innovation and its impact on society, without creating unnecessary legislative constraints. Govern-ments will have to be nimble on their feet, responding to technologies


as they emerge. In this manner, new developments will have room to grow, but their rise will be within the bounds of equitable operations.

The case of Singapore Smart Nation

Singapore is an apt case study, with the announcement of its Smart Nation Project (SNP), part of the government’s Infocomm Media Master-plan. “Our goal is to establish Singapore as a smart nation that taps the potential of Infocomm and Media (ICM), and that nurtures innovative talent and enterprises,” said Dr. Yaacob Ibrahim, Minister for Communi-cations and Information. “In this way, the ICM sectors can bring about economic growth and social cohesion, and better living for our people.”15 But how? The city-state finds itself at a fork in the road toward smart city development, as the island becomes networked and intelligent.

Figure 2.9.1 2013 European Smart City Rankings; 2013 Asian Smart City Rankings.

2013 European Smart City Rankings

1 Copenhagen

32

4

65

Stockholm

AmsterdamVienna

Paris

London78

109 Berlin

Hamburg

Helsinki

Barcelona

FinalRank City Smart

EconomySmart

EnviromentSmart Living

Smart Mobility

Smart People

7

46

5

83

18

102

1

64

5

27

103

98

7

39

5

48

710

16

2

14

6

79

103

85

4

61

3

72

105

98

Smart Governance

1

72

5

64

38

910

2013 Asian Smart City Rankings

1 Seuol

32

4

65

SingaporeTokyo

Hong KongAuckland

Melbourne78

109

Sydney

PerthKobe

Osaka

FinalRank

CitySmart

EconomySmart

EnviromentSmart Living

Smart Mobility

Smart People

Smart Governance

2441837996

61258107349

1253467888

65491321087

32411078569

17342569108

source: Co.Exist - World changing ideas and innovation (2013),“The 10 Smartest Asia/Pacific Cities”

source: Co.Exist - World changing ideas and innovation (2013),“The 10 Smartest European Cities”


The first phase of the SNP will focus on the deployment of hard infra-structure, related specifically to connectivity and sensors, followed by initiatives that address various dimensions of the island’s life and opera-tions. These technologies constitute a “city operating system” similar to the software systems that run most of today’s smart technologies, from laptops and iPads to increasingly networked domestic appliances.

While the masterplan spans the whole island nation, the Jurong Lake District development will become the heart of research and application, serving as a controlled trial area where smart city technologies can be deployed, tested, and subsequently transplanted elsewhere in the city (or across the planet). It will become an applied research site commonly known as an “urban living lab” in smart city jargon.

The goals of the SNP are ambitious. First and foremost is a con-certed push for urban efficiency. Second, the plan seeks to promote an

2013 North American Smart City Rankings

1

3

2

4

6

5

7

8

10

9

FinalRank City

Smart Economy

Smart Enviroment

Smart Living

Smart Mobility

Smart People

Smart Governance

2013 Latin American Smart City Rankings

1 Santiago

3

2

4

6

5

Mexico City

Bogota

Buenos Aires

Rio De Janeiro

Medellin7

8

10

9

Curitiba

Quito

Lima

Montevideo

FinalRank City

Smart Economy

Smart Enviroment

Smart Living

Smart Mobility

Smart People

Smart Governance

1

2

4

8

3

7

6

9

5

10

5

6

2

7

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1

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10

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5

4

1

2

3

58

7

9

6

10

source: Co.Exist - World changing ideas and innovation (2013),“The 10 Smartest Cities In North America”

source: Co.Exist - World changing ideas and innovation (2013),“The 10 Smartest Cities In Latin America”

1

2

5

10

4

2

7

6

9

8

6

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Boston

San Francisco

Seattle

Vancouver

New YorkToronto

Washington, DC

Montreal

Portland

Chicago

5

7

3

10

8

3

1

2

8

6

Figure 2.9.2 2013 North American Smart City Rankings; 2013 Latin American Smart City Rankings.


ecosystem of entrepreneurial innovation. Are these two objectives – efficiency and innovation – attainable? But most important, are they desirable?

The first goal of efficiency is quantifiable, and strategies for optimizing the city’s function have the potential to make a substantial impact on daily life. Who would not want to live in a city that consumes less energy, or where traffic jams are reduced to a minimum? Singapore is probably one of the world’s best test cases for cutting-edge urban developments. The nation is small, dense, tech- savvy, and most important, can now draw on an overt commitment from the government. This attitude is not new – it has transformed Singapore repeatedly since it became independent.

Transportation has been a recurring focus: Singapore pioneered one of the world’s first Electronic Road Pricing schemes, later implemented by cities elsewhere. The system dramatically reduced vehicle traffic on roads, alleviating congestion, primarily in the central business district during peak hours. The public transit system is no less a model of effi-cient operation: since its inauguration, it has been rated the best Asia-Pacific metro system and most technologically innovative metro.16 It is also among the most resource-efficient transit networks in the world, as evaluated by the international Metro Rail Awards.

Figure 2.10 Smart City investments in different fields.

source: Cassa Depositi e Prestiti (2013), “Smart City. Progetti di sviluppo e strumenti di finanziamento”

Mob

ility

Ser

vice

s

Ren

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le E

nerg

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Hom

e E

nerg

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ng

Sm

art G

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ICT

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ng

Hum

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City

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istic

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Ser

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and

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Sm

art A

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Pro

cure

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t


Economy and PeopleEnergy

Government

LivingEnvironment

010203040506070

Building

%Smart City Investments in different fields


Today, car autonomy – as in driverless vehicles – is on the brink of entering the consumer marketplace, bringing significant benefits to society, drivers, and pedestrians. Singapore, once again, could become a world leader in testing future mobility. This is particularly promising in small controlled sites such as the Jurong Lake District or Sentosa, where autonomous driving projects have already been proposed.

But how will all of this spark innovation? Unlike efficiency, innovation cannot be institutionally purchased or mandated from the top down. It demands a complex and delicate ecosystem based on the bottom-up, concerted effort of many individuals. Here, Singapore’s forward path will be more challenging. Mr. Lee Kuan Yew famously urged Singapore-ans to take more risks, a vital component of the three attributes of global competitiveness underpinning his development platform: entrepreneur-ship, innovation, and management. “The American economy has taken off because of the enterprise culture and willingness to try,” said Mr. Lee. “I think it’s going to be a very arduous business changing the mindsets [of Singaporeans].”17

In the course of our work on the island, we have personally noticed this same pattern – government and business eagerly seek novel and

A framework for stategic planning

Source: IBM Center of Economic Development Analysis (2009), “A vision of smarter cities. How cities can lead the way into a prosperous and sustainable future”

What activities do cities currently do that they should shed?

ce to reduce costs and free up resources; Divest non on-strategic interest

What are a city’s core activities that should be retained?

ce of competitive advantagey need to be optimized,

reorganized, consolidated?

In which activities should cities continue to partner for external experience?

y alliance to meet critical needs

ontinue to partner and develop new alliances

What new activities should a city be expanding into?

w source of sustained advantageernal assets, relationships and

capabilities

Cur

rent

ly h

ave

Cur

rent

ly d

on’t

hav

e

e competency(External specializaton)

Core competency(Internal specializaton)

Figure 2.11 A framework for strategic planning.


innovative ideas at first, but soon furtively ask: “How many times has this been implemented before?” (By definition, if a technology has been implemented before, it is no longer novel!)

This is in sharp contrast to the prevailing attitude in California’s Silicon Valley – one of the world’s most productive innovation ecologies – where risk-taking is rewarded, while failure is tolerated.

Singapore needs this bold entrepreneurial spirit to exploit the cut-ting-edge tools that will be deployed in the course of the media mas-ter plan. Fostering an innovation culture will not be easy in a country where the educational system has historically been shaped by the stigma of failure [17]. Innovation demands an environment where ideas are tested and challenged, so that new and better ones can advance.

Innovation ecology

There seems to be a fine line for governments to walk as they implement smart city strategies: they should, at all costs, steer away from the temptation to play a deterministic and top-down role. It is not their prerogative to decide

Figure 2.12 Cities systems and their interrelationships within the larger frame-work of the city’s strategy and governance.

City Services

Citizens

Energy

WaterCommunication

Transport

Business

CITY STRATEGY

CITY GOVERNANCE

Source: IBM Center of Economic Development Analysis (2009), “A vision of smarter cities. How cities can lead the way into a prosperous and sustainable future”

Cities systems and their interrelationships within the larger framework of the city’s strategy and governance

City Operations Systems

City Users Systems

City Infrastructure Systems


what the next smart city solution should be – or, worse, to use their citizens’ money to bolster the foothold that technology multinationals are gaining in this field. Conversely, governments should create all the conditions – eco-nomical or normative – to grow innovation ecosystems.

And here might lie another delicate balance: between smart city effi-ciency and innovation. In some cases the latter will also need a good dose of chaos – the opposite of optimization – as the Singapore case study suggests. The most creative solutions often emerge and thrive in environ-ments with less regulation and more mess. In other words, at times we might want less “smart” if “smart” is to be more than an empty label.

Notes

1 World Bank, Urban Development topic. 2 Weiser, M.. “Ubiquitous computing,” http://www.ubiq.com/hypertext/weiser/

UbiHome.html. 3 The term “Internet of Things” was coined by Kevin Ashton in 1999 for a

presentation to Procter & Gamble (P&G) executives. However, the concept was detailed in a 1991 paper by Mark Weiser for Scientific American. “The computer for the 21st century.” Scientific American, 265(3), pp. 94–104.

4 Glaeser, E. (2011). Triumph of the city: How our greatest invention makes us richer, smarter, greener, healthier, and happier. New York: Penguin Group, 2011.

5 O’Grady, Michael, and O’Hare, Gregory (2012). “How smart is your city?” Science, 335(6076) (March 30), pp. 1581–1582.

6 McKinsey & Company (2013). “How to make a city great.” September. 7 Rio de Janeiro, IBM® Intelligent Operations Center, and IBM Smarter Cities

Software. Inaugurated by Mayor Eduardo Paes in 2010. 8 Infocomm Development Authority (IDA) and the Singapore Smart Nation

Programme, housed within the office of Singapore prime minister Lee Hsien Loong.

9 Amsterdam Metropolitan Solutions launched by former Amsterdam Vice-Mayor Carolien Gehrels.

10 Digital Agenda for Europe, a Europe 2020 Initiative. European Innovation Partnership (EIP) on Smart Cities and Communities.

11 Rusli, E. M., and MacMillan, D. (2014). “Uber gets an uber-valuation.” The Wall Street Journal, June 6.

12 Herrmann, B. L., and Marmer, M. (2015). Startup ecosystem report. January.13 City Protocol refers to both a program of activity and to the society that is

responsible to develop this system’s approach to rationalize, under a shared basis, city transformation.

14 Kassam, Ashifa (2014). “Airbnb fined €30,000 for illegal tourist lets in Barce-lona.” The Guardian, July.

15 Ibrahim, Yaacob (2014). “Speech by Dr Yaacob Ibrahim, Minister for Com-munications and Information, at the Opening Ceremony of imbX 2014.” Infocomm Development Authority, Singapore, June.

16 Terrapinn (2010). Asia Pacific Rail Awards.17 Ignatius, D., and Richardson, M. (2001). “Q & A/Lee Kuan Yew: Singapore’s

‘slow and painful’ shift to Internet Age.” The New York Times, January.

http://www.ubiq.com/hypertext/weiser/

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