Gain and responsibility: five business models for sustainable cities

(Photo by Mark Vauxhall of public Peugeot Ions on Rue des Ponchettes, Nice, France)

It’s strange how you can find inspiration in the most surprising places; and the first time I came across the philosophy of sustainability at the heart of big business was certainly unexpected.

Five years ago I was creating a business model in a UK city for a car-sharing scheme using social media (which at the time was a new technology); the scheme was being put together by a collaboration of technology entrepreneurs, University researchers and local employers who wanted to offer the scheme to their employees as a benefit in kind. What we lacked was a business partner with expertise in offering transport services to consumers.

A colleague suggested we speak to an international car rental company for whom they’d recently run an innovation workshop. Initially, we were sceptical: why would a car rental company encourage people to share cars – in other words, to need to hire less of them?

Nevertheless, we called the global Vice President of Sales of the company concerned. This person was responsible for the sales performance of a company in an extremely competitive, commoditised market, so we were expecting the social and environmental philosophy behind our proposal to be given little consideration compared to its revenue-earning potential.

Instead, I remember feeling as if I was being blown away down the telephone line by  his enthusiasm for sustainable business. The reason he had spent his career making a car rental company as successful as possible was his belief that it was the most viable business model for sustainable transport of its time: hire cars are much more effective than public transport for some journeys; and because they are heavily used throughout their lives, the environmental cost of manufacturing and decommissioning them is much less per mile travelled than for privately owned vehicles.

The proposition that technology offers to the sustainability debate – whether in Smarter Cities, intelligent transport or supply-chain optimisation – is to enable business models that create better social and environmental outcomes. In some cases, those outcomes are the objectives of a business; but more often they are the side effects of business operations whose objectives are to create financial returns. So in order to justify investments in technologies or practises that promote sustainability, we need to do just what the car rental company’s Vice President had done early in his career: think creatively about how to balance social and environmental outcomes with the financial imperatives of our existing economic systems.

We’ll need to find that balance in order to develop realistic business models for Smarter Cities. It will not always be an easy balance to find; and finding it will sometimes be a controversial process. But five approaches can already be seen that show how it can be achieved in different ways.

1. Cross-city Collaborations

Many initiatives that contribute to city-wide outcomes require either co-ordinated action across city systems; or an investment in one system to achieve an outcome that is not a simple financial return within that system. For example, the ultimate objective of many changes to transportation systems is to improve economic growth and productivity, or to reduce environmental impact.

Such initiatives are often shaped and carried out by a group of collaborating stakeholders in a city – perhaps including the City Council, nearby Universities, local businesses and community groups, and private sector partners.

To attract the various forms of investment that are required to support a programme of “Smart” initiatives, these partnerships need to be decision-making entities, not discussion groups. Investors will look for a history of collective action to achieve clear, shared objectives; and for a mature approach to the mutual management of risk in delivering projects.

Such partnerships take time to form, and it is notable that in last year’s Technology Strategy Board Future Cities Demonstrator competition, most of the shortlisted entries had been prepared by collaborations in cities such as Glasgow and Peterborough that had existed for some time before the competition began. Other examples include the Dublinked information-sharing partnership in Dublin, Ireland, and the Sustainable Dubuque partnership in Dubuque, Iowa. I wrote about these examples and discussed how they form and operate successfully, in “Smart ideas for everyday cities” last December.

2. Scaling-up Social Enterprise

Social enterprise is a broad category of private businesses which in some way commit themselves to social and/or environmental objectives against which they audit themselves alongside their financial performance – a practise known as triple bottom-line accounting.

Given the similarities between triple-bottom-line accounting and the objectives of “Smarter” initiatives, it’s not surprising that social enterprises are carrying out a great deal of “Smart City” activity. They often use innovative, technology-enabled business models that combine elements of sectors such as food, energy and transport. A good example is “Casserole Club“, which uses social media as the basis of a peer-to-peer model which connects people who are unable to cook for themselves with people who are willing to cook for, and visit, others.

(Photo by Mermaid of the People’s Supermarket in Lamb’s Conduit Street, London, a social enterprise that aims to promote social cohesion by supporting local, independent food producers)

Social enterprises have a powerful potential to contribute to Smarter City objectives. They tend to create employment opportunities where they are most needed, for example – 39% of all social enterprises are working in the most deprived communities in the UK, in comparison to 13% of SMEs. And they are a significant contribution to the overall economy – in the UK,  a recent government report found that the sector employs more than 2 million people, is estimated to have total annual incomes of £163 billion and to contribute £55 billion Gross Value Added – about 14% of the national total. Social enterprise is 13% of Sweden’s GDP and 21% of Finland’s GDP; and 4 in 10 residents of the USA– the world’s flagship private enterprise economy – are members of a co-operative of some sort. Worldwide, social enterprises employ over 100 million people with a turnover of £1.1 trillion. That’s big business.

Many social enterprises are entirely independent ventures. There is great potential for cities to recognise the alignment between their philosophy and Smarter City objectives; and to support their role in achieving them. When the resources and assets of large, formal organisations are made available to local, social innovation, the results can be tremendously powerful.

In Resilience, Andrew Zolli gives the example of the Kilimo Salama scheme in Kenya which provides affordable insurance for subsistence farmers by using remote weather monitoring to trigger payouts via mobile phones, rather than undertaking expensive site visits to assess claims. This is a good example of large-scale infrastructures operated by formal institutions – mobile payments systems and remote weather monitoring technology – that have been adapated to the needs of a community which previously didn’t benefit from them – the farmers – by a creative, socially-minded organisation.

Awareness is growing of the importance of this sector; the alignment of its values with the objectives of Smarter Cities (as described by Knight Foundation Vice President Carol Coletta recently); and of the great potential of information economy technologies, especially social media, to empower it (see this article by ex-IBM Vice President Irving Wladawsky-Berger). It will be a major part of the economy and society of the sustainable cities of the future.

3. Creativity in finance

We don’t consider banks, insurers and other financial institutions enough in the world of Smarter Cities. Public sector and research grants will not finance the wholescale transformation of our cities; we will have to look to the broader financial markets for that support.

New forms of financial service are emerging from the online, collaborative economy such as crowdfunding and peer-to-peer lending. In the UK, the Trillion Fund, for example, offer a range of investment schemes in renewable energy to the retail investment market; and a variety of local and electronic currencies are emerging.

(Photo of a smart parking meter in San Francisco by Jun Seita)

More traditional financial institutions are also exploring the new products that they can create to support this market; and we are sure to need the depth of resources they can make available. Smarter city services create assets and offer services which people and businesses pay to use. With the appropriate banking, insurance and investment skills, those assets and services and the incomes they generate can be packaged as investable financial products. Citibank, IBM and Streetline partnered last year to offer a financing scheme for “Smart Parking” solutions, for example.

Citigroup were also amongst those who supported the recent “Innovation and the City” report by the Centre for an Urban Future and the Robert F. Wagner Graduate School of Public Service which recommended 15 policies for consideration by the next Mayor of New York, many of which are financial innovations intended to support Smarter City outcomes.

In recent years, the banking industry has not always been associated with social outcomes. But some financial institutions are very clearly social organisations – such as the credit unions to which 87 million US citizens belong; and many banks have social elements in their original charters – as Hancock Bank demonstrated when responding to Hurricane Katrina in 2005. They have the means, method and opportunity to contribute enormously to the development of Smarter, sustainable cities and we should encourage them to do so.

4. Making traditional business sustainable

A very many of our lives depend for our basic needs – not to mention our entertainment and leisure – on global supply chains operated on astounding scales by private sector businesses. Staples such as food, cosmetics and cleaning products consume a vast proportion of the world’s fresh water and agricultural capacity; and a surprisingly small number of organisations are responsible for a surprisingly large proportion of that consumption as they produce the products and services that many of us use.

The social and environmental impact of those supply chains is immense, and, of course, highly controversial. A notable recent development, though, is the number of statements made by the leaders of companies involved in them asserting the importance of evolving their businesses to adopt more sustainable practises. The CEOs of  Unilever and Tesco have made statements of intent along these lines recently, and IBM and Hilton Hotels have described the progress they have already made.

Any analysis of the motivations for such statements and the outlook for their impact also enters areas of great controversy, of course. But need there be any fundamental contradiction between profitable enterprise and sustainability?

Richard Powers’ 1998 novel “Gain” tells the story of “incorporation”, the creation of companies as entities with a legal and financial existence separate from that of the people who start, manage and work for them. It contrasts the story of three Irish brothers arriving in 19th Century New York who make a living manufacturing soap, and the subsequent growth of their business into a vast 20th Century multinational corporation; with that of a woman dying from a cancer likely to have been caused by exposure to the waste products of the industrial operations of that corporation. Its complex, nuanced story explores both the facility of private enterprise to create wealth for anybody; and its potential for ambivalence towards the fair distribution of that wealth, and towards its impact.

(An example from Indonesia of the deforestation that can be the result of palm oil production. Photo by the Rainforest Action Network)

Gain’s narrative makes clear that the model of private enterprise does not lead inevitably to any specific outcome. The success, sustainability and equitability of any enterprise, social or private, are ultimately the result of the actions and decisions of those involved in it – whether they run it; work for it; supply it or buy from it.

All of us can assert influence on the sustainability of business, through our buying decisions as consumers and by campaigning. Jared Diamond explored in depth how we can do so effectively in his book “Collapse“. But the role of the investment markets is also crucial.

In one sense, the markets are already playing a role: in a recent report, 53% of fund managers collectively responsible for $14 trillion of assets indicated that they had divested stocks, or chosen not to invest in stocks, due to concerns over the impact of climate change on the businesses concerned.

However, that is a negative, not a positive action. It is driven by the impact of climate change on business, not by the impact of business on climate change. To grossly generalise, whilst the CEOs of Tesco and Unilever, for example, are following Jared Diamond’s argument that sustainability is simply good, long-term business sense; by and large investors are largely ambivalent to this argument. They choose which companies to invest in based first and foremost on the prospect of their short-term financial returns.

So whatever motivations influence the CEOs of companies that manage the vast supply chains that play such a major role on our planet to adopt sustainability as a business objective, it is not to win short-term investment. It may be to appeal to consumer opinion; or it may be to attract investors who take a longer-view.

One thing is certain, though. Our world as a whole, and the cities in which life is concentrated, will not become socially and environmentally equitable and sustainable unless private businesses adopt sustainable strategies. So it is in all of our interests to encourage them to do so, whilst putting in place the governance to ensure that those strategies are carried out effectively.

5. Encouraging entrepreneurs everywhere

Smarter city services are innovations that change the relationships between the creation of social and financial value and the consumption of resources: they involve new ways of doing things; and they often depend on consumers choosing to buy different products or use different services than those that they are accustomed to.

Investing in a new product or service on the basis that consumers will change their behaviour in order to buy or use it is a risky business. Too risky, in many cases, for traditional institutions.

In the developed world, public sector finances are under extreme pressure. Economic growth is slow, so tax returns are stagnant. Populations are, on the whole, growing older, and requiring increased levels of healthcare. So public sector has little ability to make risky investments.

But the private sector is also under pressure. The same slow economic growth, coupled with competition from rapidly growing countries in emerging markets, means that money is short and the future is uncertain. Risky investments are unlikely here, too.

(The QR code that enabled Will Grant of Droplet to buy me a coffee at Innovation Birmingham using Droplet’s local smartphone payment solution, an example of a Smarter City service created by an entrepreneurial company.)

But some investors are seeking new investment opportunities, even risky ones – especially as the rate of return offered by many traditional forms of investment is so poor. One consequence is that many Smarter Cities services are delivered by entrepreneurial companies backed by venture capital. Examples include “Droplet“, a smartphone payment system operating in Birmingham and London; and Shutl, who provide a marketplace for home delivery services through a community of independent couriers in London.

However, many cities face a challenge in exploiting the ability of entrepreneurial businesses to deliver Smarter services.

Such businesses may be inherently risky; but those that succeed still do so by minimising risk wherever possible. One way to minimise the risk involved in any new business is to operate that business as closely as possible to its largest possible market. So entrepreneurial businesses that offer services to city ecosystems (as opposed to national or international customers) tend to start in and provide services to capital cities.

If cities that are not capitals wish to encourage this sort of entrepreneurial business, they will need to make themselves attractive in some other way: by offering tailored programmes of support (as IBM and Sunderland Software City are doing); by making available unique assets created by geography, culture or existing business clusters (such as the cluster of wireless technology companies in Cambridge); or by exploiting the strength of local teaching and research (as Birmingham are doing through institutions such as Birmingham Ormiston Academy and the Aston Engineering Academy; or as “Science Vale” has long done in Oxfordshire).

Entrepreneurial businesses can and will make a huge contribution to Smarter Cities; and those that succeed will eventually scale their businesses to cities across the world. But in order to benefit from their creativity early, cities that are not capitals will need to take action to attract and support them.

Evolution and revolution

As I remarked in my last article on this blog, “business as usual” will not deliver Smarter, sustainable cities. We would not be so collectively concerned with this subject otherwise. But while we will need new approaches, sometimes revolutionary ones; we are not entering wholly uncharted territory.

We will need new cross-city collaborations; but the idea of such collaborations is not new. The collaboration that submitted Peterborough’s short-listed proposal for the Technology Strategy Board’s Future Cities Demonstrator has its origins in the Greater Peterborough Partnership which was formed in 1994, for example.

Social enterprises and sustainable business models are hardly new, either – co-operative businesses have existing for centuries, and IBM, Sony and Cadbury are just three examples of private businesses started 50 to 100 years ago by Quakers with a strong sense of civic and community duty.

So whilst change is required, we are not entering the unknown. Our challenge is rather to realise that there is no single approach that can be adopted in all circumstances. All of the approaches I’ve described in this article – and doubtless others too – will be needed. But not all of them will be popular all of the time.

An address to the United Nations: science, technology and innovation for sustainable cities and peri-urban communities

I was honoured this week to be asked to address the 16th session of the United Nations’ Commission on Science and Technology for Development in Geneva on the topic of Smarter Cities. I was invited to speak following the Commission’s interest in my article “Open urbanism: why the information economy will lead to sustainable cities“, which was referenced in their report “Science, technology and innovation for sustainable cities and peri-urban communities“. I’ll write an article soon to describe what I learned from the other speakers and discussions at the Commission; but in the meantime, this is a reasonable representation of my spoken remarks.

(Photo of a street market in Dhaka, Bangladesh by Joisey Showa)

In the Industrial Revolution European cities were built upwards around lifts powered by the steam engine invented by James Watt and commercialised by Matthew Boulton in Birmingham. Over the last century we have expanded them outwards around private automobiles and roads.

We believed we could afford to base our cities and their economies on that model because its social and environmental costs were not included in its price. As our cities have become polluted and congested; as the world’s urban population grows dramatically; and as energy costs rise; that illusion is failing.

Professors Geoffrey West and Louis Bettencourt of Los Alamos Laboratory and the Sante Fe Institute said in their 2010 paper in the peer-reviewed scientific journal Nature that “At the start of the twenty-first century, cities emerged as the source of the greatest challenges that the planet has faced since humans became social.”

Technology offers powerful opportunities to address those challenges, and to support the lives of populations inside and around cities in new and more efficient ways, in both developed and developing markets. But technology will only deliver those benefits if we adapt governance and financial models to achieve broader social, economic and environmental outcomes; and if we use technology in a way that serves the genuine needs of local people, communities and businesses. A city that succeeds in transforming itself in this way is one that we call a Smarter City.

Those technologies are developing at an incredible rate. Two years ago, IBM’s “Watson”computer competed successfully against human beings in the television quiz show “Jeopardy”. Scientists at the University of California at Berkley have used a Magnetic Resonance Imaging facility to capture images from the thoughts of a person watching a film. And anything from prosthetic limbs to artificial food can be “printed” from digital designs.

The boundary between information systems, the physical world, and human minds, bodies and understanding is disappearing, and the world will be utterly transformed as a result.

But for who?

As digital and related technologies develop ever more rapidly, they will continue to change the way that value is created in local and global economies. Existing challenges in the acquisition of skills, digital exclusion and social mobility mean that life expectancy varies by 20 years or more even between areas within single cities in developed economies, let alone between the developed and developing world.

The challenge of digital exclusion is well known, of course; but the rapidity of these developments and the profound nature of their potential impact on city systems and economies imply a new sense of urgency in addressing it.

When my son was two years old I showed him a cartoon on an internet video site using the touchscreen tablet I’d just bought. When it finished, he instinctively reached out to touch the thumbnail image of the cartoon he wanted to watch next. The children of my son’s generation who grow up with that innate expectation that information across the world is literally at their fingertips will have an enormous advantage.

One of the things that we are exploring through Smarter City initiatives is how to make some of the power of these technologies more widely available to cities and communities.

(The multi-agency control centre in Rio de Janeiro built by Mayor Eduardo Paes to enable the city's agencies to manage the city effectively during the 2014 World Cup and 2016 Olympic Games)

(The multi-agency control centre in Rio de Janeiro built by Mayor Eduardo Paes to enable the city’s agencies to manage the city effectively during the 2014 World Cup and 2016 Olympic Games)

The city of Rio de Janeiro offers one example of what is possible when we successfully apply technology in cities. Under the leadership of Mayor Eduardo Paes a single operations centre for the city now coordinates the actions of 30 City services to manage the city safely and efficiently. Information feeds from the city’s road systems, CCTV cameras, public safety services and from an advanced weather forecasting solution that can predict the likelihood of life-threatening landslides are delivered to the centre in realtime, and used to trigger multi-agency responses, as well as alerts to the civilian population through channels such as social media .

But Rio is a large city in a rapidly growing Country; and it is preparing for a Football World Cup and Olympic Games within 2 years of each other. How can cities who are not in this position emulate Rio’s approach? And how can the power of this technology be made more broadly available to city communities as well as the agencies and institutions that serve them?

In Dublin, Ireland, the “Dublinked” information sharing partnership between the City and surrounding County Councils, the National University of Ireland, businesses and entrepreneurs is now sharing three thousand city datasets; using increasingly sophisticated, realtime tools to draw value from them; identifying new ways for the city’s transport, energy and water systems to work; and enabling the formation of new,  information-based businesses. It is putting the power of technology and of city information not only at the disposal of the city authority and its agencies, but also into the hands of communities and innovators.

But Dublin is the capital city of a developed country, with an internationally-recognised university, and which hosts large development and research facilities for multi-national technology companies such as IBM. How can cities without those advantages emulate Dublin’s successes?

One way is to re-use the results of research and “first-of-a-kind” projects whose cost has been borne in the developed world or in rapidly growing economies to pilot solutions in the developing world.

For example, my colleagues recently used knowledge gained through research in Dublin to suggest improvements to public transport in Abidjan, Cote d’Ivoire.

The project analysed anonymised movement data from the GPS sensors in the mobile telephones of bus passengers in order to identify clusters of start, end and intermediate points in their end-to-end journeys. By comparing existing bus routes to those points, the project identified four new bus routes and led to changes in many others.

As a result, 22 routes now show increased ridership. And by providing bus routes that better match the journeys that people really want to undertake, the need for them to travel to and from bus stops – often using unregulated and relatively unsafe “informal” travel services – is reduced to the extent that citywide travel time has decreased by 10%.

But we are not just seeking to replicate what works in a handful of high-profile cities as if the same solutions apply everywhere. It’s not always the case that they do, especially without local adaptation. And it’s vital to also enable new initiatives that arise from specific local contexts in cities everywhere, whatever their resources.

Consequently, in Sunderland, we were asked by the City Council: how do you make Hendon Smarter?

Sunderland is typical of the many post-industrial cities in Europe that are rebuilding economies following the decline of industries such as coalmining, bulk manufacturing and shipbuilding in the late 20th Century. Hendon in Sunderland’s East End is one of the areas that suffered most from that decline, and it still has low levels of employment, skills and social mobility.

What we have learned in Sunderland and elsewhere is that it is often private sector entrepreneurs and community innovators who have the widest set of ideas about how technology can be used cleverly to achieve the outcomes that are important to their cities, particularly in an environment with limited access to finance, skills and technology resources.

The large institutions of a city can assist those innovators by acting as an aggregator for their common needs for such resources, making them easier to acquire and use. They can also introduce external partners with research and development capability to those aggregate needs, which for them can represent a new market opportunity worthy of investment.

It’s rare that these connections work directly: government bodies and their large-scale suppliers have very different business models and cultures to small-scale innovators; and often there is little history of interaction, cooperation and trust. The role of “bridging organisations” and networks between individuals is extremely important.

(The SES "Container City" incubation facility for social enterprise in Sunderland)

(The “Container City” incubation facility for social enterprises operated by Sustainable Enterprise Strategies in Sunderland)

In Sunderland, Sustainable Enterprise Strategies, who provide business support to small businesses and social enterprises in Hendon, provided the bridge between the City Council and IBM; and community innovators, such as Lydia’s House who train vulnerable adults in skills such as furniture-making, and Play Fitness, who engage children from deprived backgrounds in physical exercise and education by using digital technology to connect exercise equipment to computer games. Sunderland Software City, the city’s technology business incubator, plays a similar role within the local community of entrepreneurial technology businesses.

This approach is not specific to Sunderland, the UK or the developed world. Our work in Sunderland was inspired by a previous project in Wuxi, China; and in turn it has informed our approaches in cities as far afield as the United States, the Middle East, Africa and Asia.

In many countries in many geographies, new organisational models are emerging from these co-operative ecosystems. For example:

  • Community Interest Companies for managing shared assets such as land, natural resources, or locally-produced food or energy, such as the Eco-Island initiative on the Isle of Wight; or similar models internationally such as Waste Concern in Bangladesh.
  • Social Enterprises such as Lydia’s House and Play Fitness, which develop financially sustainable business models, but which are optimised to deliver social, environmental or long-term economic benefits, rather than the maximum short-term financial return.
  • New partnerships between public sector agencies; educational institutions; service and technology providers; communities; and individuals – such as the Dubuque 2.0 sustainability partnership in where the city authority, residents and utility providers have agreed to share in the cost of fixing leaks in water supply identified by smart meters.

Often such organisations create innovative business models in the form of marketplaces in industries in which money-flows already exist. The changes to those money-flows created by smarter systems form the basis of the potential for returns upon which a business case for investment can be made.

(The SMS for Life project uses the cheap and widely used SMS infrastructure to create a dynamic, collaborative supply chain for medicines between pharmacies in Africa. Photo by Novartis AG)

Arguably, the widespread use of mobile phone technology in the developing world, and in particular the ubiquity of mobile payments systems in Africa, is more advanced in its ability to create such marketplaces using very low cost infrastructure than in communities in the developed world . Both financial services institutions and technology entrepreneurs in the West are watching these innovations closely and learning from them.

Examples include SMS for Life, which uses a text messaging system to implement a dynamic, distributed supply chain for medicines between collaborating pharmacies in several African countries. And Kilimo Salama provides affordable insurance for small-scale farmers by using remote weather monitoring to trigger payouts via mobile phones, rather than undertaking expensive site visits to assess claims. This is a good example of a private-sector aggregator – in this case an insurer – investing in a technology – remote weather monitoring – to serve a large number of end-users – the farmers – who can’t afford it directly.

In cities, we are starting to see these ideas applied to the creation of food distribution schemes; sustainable transport systems that share the use of resources such as cars and vans and perform dynamic matching between networks of independent consumers and providers of transport services; and many other systems that reinforce local trading opportunities and create social and economic growth.

(A smartphone alert sent to a commuter in a San Francisco pilot project by IBM Research and Caltrans that provides personalised daily predictions of commuting journey times – and suggestions for alternative routes.)

But the role of technology in these markets is not just to introduce consumers and providers of services to each other; but to do so in a way that informs consumers about the impact of the choices they are about to make.

In Singapore, algorithms are used by the city’s traffic managers to predict traffic flow and congestion in the city up to one hour ahead with 85% accuracy. This allows them to take measures to prevent the predicted congestion occurring.

In a later project in California, those predictions made by those algorithms were provided to individual commuters in San Francisco’s Bay Area. Each commuter was told, in advance, the likely duration of their journey to the city each day, including the impact of any congestion that would develop whilst their journey was underway. This allowed them to make new choices: to travel at a different time; by a different route or mode of transport; or not to travel at all.

And we can appeal not only to individual motivations, but to our sense of community and place. In a smart water meter project in Dubuque, households were given information that told them whether their domestic appliances were being used efficiently, and alerted to any leaks in their supply of water. To a certain extent, households acted on this information to improve the efficiency of their water usage.

However a control group were also given a “green points” score telling them how their water conservation compared to that of their near neighbours. The households given that information were twice as likely to take action to improve their efficiency.

Maslow’s hierarchy of needs tells us that once the immediate physical needs and safety of ourselves and our family are secured, that our motivations are next dictated by our relationships with the people around us – our families, communities and peers. Our ability to relate information to community contexts allows information-based services to appeal to those values.

(The Dubuque water and energy portal, showing an individual household insight into it's conservation performance; but also a ranking comparing their performance to their near neighbours)

(The Dubuque water and energy portal, showing an individual household insight into it’s conservation performance; but also a ranking comparing their performance to their near neighbours)

A new style of personal leadership can be found in many of the situations in which these ideas are successfully applied: people from a variety of backgrounds who have the ability to build new bridges; to bring together the resources of local communities and national and international institutions; to harness technology at appropriate cost for collective benefit; to step in and out of institutional and community behaviour and adapt to different cultures, conversations and approaches to business; and to create business models that balance financial health and sustainability with social and environmental outcomes.

The more that national and local governments can collaborate with the private sector, bridging organisations and communities to encourage this style of leadership and support and reward these new models of business, the more successfully we’ll put the power of technology into the hands of the people, businesses and communities most able to design, use and operate the new services that will make their cities better.

Large organisations have resources; small organisations have the ability to create valuable innovations in true sympathy with the detail of their local context. Private sector has the expertise to invest in assets that create future value; public sector has the responsibility to govern for the good of all. It is only by working together across all of these boundaries at once that we will really succeed in making cities Smarter in a way that is sustainable and equitably distributed. And that must be the only definition of “Smarter” that makes sense.

A design pattern for a Smarter City: City-Centre Enterprise Incubation

(The Custard Factory in Birmingham, at the heart of the city’s creative media sector in the central district of Digbeth)

(In “Do we need a Pattern Language for Smarter Cities” I suggested that “design patterns“, a tool for capturing re-usable experience invented by the town-planner Christopher Alexander, might offer a useful way to organise our knowledge of successful approaches to “Smarter Cities”. I’m now writing a set of design patterns to describe ideas that I’ve seen work more than once. The collection is described and indexed in “Design Patterns for Smarter Cities” which can be found from the link in the navigation bar of this blog).  

Design Pattern: City-Centre Enterprise Incubation

Summary of the pattern:

This pattern describes the provision of mixed facilities to incubate technology, creative and social enterprises in an urban environment.

The intention is to foster growth across the high-value sectors of a city economy in a way that maximises the potential for cross-sectoral interaction and innovation. Locating incubation facilities in a city centre rather than on an out-of-town campus encourages such cross-fertilisation between existing and new businesses. The city environment – its transport systems, retailers, businesses, residents and visitors – can also serve as a “living lab” in which to test new products and services.

Such incubation facilities are often operated through hybrid public/private models so that they are financially sustainable, but act so as to promote the success of enterprises which contribute to the host city’s strategic objectives – for example, promoting growth in key sectors of the economy or creating jobs or skills in specific areas or communities.

City systems, communities and infrastructures affected:

(This description is based on the elements of Smarter City ecosystems presented in ”The new Architecture of Smart Cities“).

  • Goals: Any.
  • People: Primarily innovators. Citizens, employees and visitors play a secondary role as the potential consumers of new services created through innovation.
  • Ecosystem: All.
  • Soft infrastructures: Innovation forums; networks and community organisations.
  • City systems: Any.
  • Hard infrastructures: Information and communications technology, spaces and buildings.

Commercial operating model:

City-centre incubation facilities are often operated by “Special Purpose Vehicles” (SPVs) jointly owned by city institutions such as local authorities; universities; and organisations providing incubation services to businesses and social enterprises. Alternatively, some are established through collaborative business models such as Co-Operatives, Social Enterprises or Community Interest Companies. This enables them to offer the revenue-generating services that enable financial self-sufficiency; but also to focus on incubating those enterprises that contribute most significantly to the city’s overall strategic objectives, rather than simply generated the highest revenue income.

Some investment is often made in shared technology or services for use by tenant enterprises: for example, access to Cloud computing resources; collaboration tools; video conferencing services; 3D-printing or 3D-cutting facilities. Such services may be procured through the creation of partnerships with technology vendors or service providers who are seeking to build their own ecosystem of entrepreneurial business partners.

Long-term financial sustainability is dependent on the generation of commercial revenues from services offered to successfully operating businesses and social enterprises.

Soft infrastructures, hard infrastructures and assets required:

(The collaborative working space of Hub Westminster which is constantly refactored to support new uses, exploiting furniture and spatial technology laser-cut from digital designs)

(The collaborative working space of Hub Westminster which is constantly refactored to support new uses, exploiting furniture and spatial technology laser-cut from digital designs)

An active incubation programme depends on a complex ecosystem of relationships and capabilities, including: the generation of new entrepreneurial talent through the education system; the attraction of external entrepreneurs and businesses to re-locate; access to market insight and development capability, mentoring and finance; the provision of business support and growth services such as office space, computing capability, legal and financial advice; and access to business partners and market opportunities.

Unless they are of significant size and diversity, cities and regions will be most successful if they focus their business development capacity on the stimulation of growth in specific sectors that maximise the value of their existing regional economic, social, geographic and infrastructural capability.

Such focus may lead to some supporting capabilities, including technology, being common to many businesses in a locality. For example, 3D printing is an increasingly useful tool for prototyping manufactured objects; but the cost of highly capable 3D printers may be beyond the capability of individual small businesses to afford. Similarly a Cloud Computing platform dedicated to supporting small, entrepreneurial businesses may enable the cost of some technology capabilities to be shared by a regional cluster.

Driving forces:

An economy of sustainable, profitable businesses is at the heart of the long term vitality of cities and the regions surrounding them. As economic growth in emerging markets combines with increasingly rapid advances in science and technology, maintaining such an economy requires constant innovation by businesses; and it is in the interests of cities to stimulate and support such innovation.

Michael Porter’s analysis of economic clusters shows that this innovation is created when businesses adopt new technology; or when they adopt existing technologies from outside their current market sector. Whereas many science parks have been based on or near to University campuses to enable access to new technology, an increasing number of more broadly focussed incubation facilities are based in city centres in order to facilitate cross-sectorial interaction and innovation. Some of these can additionally exploit their proximity to city-centre Universities.

City centre locations also provide the opportunity to create businesses with unique capabilities or value. New technologies that emerge from University-based science are often the result of a global research agenda; but innovations that are created through cross-sectorial interaction in a city economy are shaped by the specific characteristics of that economy, and of the city’s geography and demographics. They may thereby create unique products and services that it is harder to replicate elsewhere, providing a competitive advantage in the global economy.

Benefits:

  • Enable local organic economic growth and job creation through small and entrepreneurial businesses.
  • Enable local businesses to exchange ideas across sectors to maintain the value of existing products and services; and to create new ones.
  • Provide access to leading edge technology and market insight to local economic clusters through the attraction of technology and service providers seeking partnerships with clusters of entrepreneurial businesses.
  • Coordinate regional investment and incubation capacity in support of business growth in areas of strategic local importance.
  • Create an offer that is attractive to talented people and businesses to locate in a place.

(Technology entrepreneurs in Birmingham Science Park Aston exploring how their skills can contribute to innovative services in the city, photographed by Sebastian Lenton)

Implications and risks:

  • There are very many factors that affect the success of initiatives intended to provide business incubation and stimulate economic growth, including the availability of affordable housing, the attractiveness of the urban environment and the availability of skills. Some of those factors are difficult to influence, and some take considerable time and investment to affect.
  • It is difficult to “pre-let” incubation capacity, so initial investments are usually speculative.
  • Rental revenues for incubation space provide relatively short term financial returns, but job creation, economic growth and other intended outcomes are long-term.
  • Genuinely constructive partnerships rely on effective engagement between city institutions, businesses and communities that can take time to achieve.

Alternatives and variations:

Collaborative working spaces exist in many cities to offer small businesses, entrepreneurs and mobile workers convenient, attractive, flexible and vibrant places to work. Whilst they are not always explicitly intended to incubate new businesses, or businesses in specific sectors, they clearly represent an incubation capacity; and most also invest in shared resources such as office space and digital connectivity.

Cutting edge examples also use technologies such as 3D-cutting to constantly re-fashion furniture and interior structures to adapt the shared space to changing requirements to support presentations, workshops, prototyping, conferences and events. Many collaborative working spaces attractive creative and media rather than technology businesses; but these sectors now overlap to such a significant extent that the distinction between them is increasingly slight.

Examples and stories:

Examples of collaborative working spaces include:

Sources of information:

Some of the articles on this blog refer to this topic and provide further links to information sources:

A design pattern for a Smarter City: the City Information Partnership

(Delay times at traffic junctions visualised by the Dublinked city information partnership.)

(Delay times at traffic junctions visualised by the Dublinked city information partnership.)

(In “Do we need a Pattern Language for Smarter Cities” I suggested that “design patterns“, a tool for capturing re-usable experience invented by the town-planner Christopher Alexander, might offer a useful way to organise our knowledge of successful approaches to “Smarter Cities”. I’m now writing a set of design patterns to describe ideas that I’ve seen work more than once. The collection is described and indexed in “Design Patterns for Smarter Cities” which can be found from the link in the navigation bar of this blog).  

Design Pattern: City Information Partnership

Summary of the pattern: A collaboration between city institutions, communities, service providers and research institutions to share and exploit city data in a socially and financially sustainable system.

City systems, communities and infrastructures affected:

(This description is based on the elements of Smarter City ecosystems presented in “The new Architecture of Smart Cities“).

  • Goals: Any.
  • People: Citizens; innovators.
  • Ecosystem: All.
  • Soft infrastructures: Innovation forums; networks and community organisations.
  • City systems: Any.
  • Hard infrastructures: Information and communications technology.

Commercial operating model:

City information partnerships are often incorporated as “Special Purpose Vehicles” (SPVs) jointly owned by city institutions such as local authorities; universities; other public sector organisations such as schools, healthcare providers and emergency services; services providers such as transportation authorities and utilities; asset owners and operators such as property developers and facility managers; local employers; and private sector providers such as technology companies.

A shared initial investment in technology infrastructure is often required; and in order to address legal issues such as intellectual property rights and liability agreements.

Long-term financial sustainability is dependent on the generation of commercial revenues by licensing the use of data by commercial operations. In cases where such initiatives have been supported only by public sector or research funding, that funding has eventually been reduced or terminated leading to the stagnation or cessation of the initiative.

Soft infrastructures, hard infrastructures and assets required:

Information partnerships only succeed where they are a component of a co-creative dialogue between individuals and organisations in city institutions such as entrepreneurs, community associations, local authorities and social enterprises.

Institutional support is required to provide the models of legal liability and intellectual property ownership that create a trusted and transparent context for collaborative innovation.

Technologies such as Cloud Computing platforms; information management; security; analytics, reporting; visualisation; and data catalogues are required to manage city information and make it available and useful to end users.

Information partnerships require the participation of organisations which between them own and are prepared to make available a sufficiently broad and rich collection of datasets.

Driving forces:

Information is transforming the world’s economy; it provides new insight to support business model creation and operation; makes new products and services possible; and creates new markets.

At the same time global and local demographic trends mean that the cost-base and resource usage of city systems must change.

Information partnerships expose city information to public, private, social and academic research and innovation to discover, create and operate new models for city services; with the potential for resale elsewhere; leading in turn to economic and social growth.

Benefits:

Community hacktivism can usually be engaged by information partnerships to create useful community “apps” such as local transport information and accessibility advice.

The creation of new information-based businesses creates local employment opportunities, and economic export potential.

Information partnerships can provide information resources for technology education in schools, colleges and universities.

New city services developed as a result of the information partnership may provide lower-carbon alternatives to existing city systems such as transportation.

Implications and risks:

If participating organisations such as local authorities include the requirement to contribute data to the information partnership in procurement criteria, then tendering organisations will include any associated costs in their proposals.

For information partnerships to be sustainable, the operating entity needs to be able to accrue and reinvest profits from licenses to exploit data commercially.

The financial returns and economic growth created by information partnerships can take time to develop.

Genuinely constructive partnerships rely on effective engagement between city institutions, businesses and communities.

Existing contracts between local authorities and service providers are unlikely to require that data is contributed to the partnership; and the costs associated with making the data associated with those services available will need to be negotiated.

Alternatives and variations:

Some organisations have provided single-party open data platforms. These can be effective – for example, the APIs offered by e-Bay and Amazon; but individual organisations within cities will rarely have a critical mass of valuable data; or the resources required to operate effective and sustained programmes of engagement with the local community.

Many advocates of open data argue that such data should be freely available. However, the majority of platforms that have made data available freely have struggled to make data available in a form that is usable; to expand the data available; to offer data at a reliable level of service; or to sustain their operations over time. Making good quality data available reliably requires effort, and that effort needs to be paid for.

Examples and stories:

Sources of information:

The UK Open Data Institute is championing open data in the UK – http://www.theodi.org/

O’Reilly Media have published many informative articles on their “Radar” website – http://search.oreilly.com/?q=open+data&x=0&y=0&tmpl=radar

The report “Information Marketplaces: The new economics of cities” published by Arup, The Climate Group, Accenture and Horizon, University of Nottingham – http://www.arup.com/Publications/Information_Marketplaces_the_new_economics_of_cities.aspx

Finally, I have written a series of articles on this blog that explore the benefits and challenges associated with the collaborative exploitation of city information:

The six steps to a Smarter City; and the philosophical imperative for taking them (updated 9th January 2013)

Eastside City Park

(Birmingham’s new Eastside City Park, opened late last year as a public space and walking route, adjacent to Millennium Point and the new Birmingham City University campus)

(This article originally appeared in September 2012 as “Five steps to a Smarter City: and the philosophical imperative for taking them“. Because it contains an overall framework for approaching Smart City transformations, I’ll keep it updated to reflect the latest content on this blog, and ongoing developments in the industry. It can also be accessed through the page link “Six steps to a Smarter City” in the navigation bar above). 

In recent weeks I have valued open and frank discussions between city leaders, financiers and developers, policy makers, academics, architects, planners – and even some technologists. They have revealed simple ideas that are common to those cities that are successfully implementing transformations across city systems to achieve city-wide outcomes.

I have also explored, in more philosophical articles that are largely categorised in the “Urbanism” section of this blog, the need for cities to encourage “messy”, “informal”, “organic” and “bottom-up” forms of innovation in hyperlocal contexts within cities. To do so requires a new openness and willingness to engage between city institutions and communities.

I’ve updated this article to accommodate those topics; I believe they are vital to creating and sustaining the meaningful changes that we increasingly recognise our cities need.

  1. Define what a “Smarter City” means to you
  2. Convene a stakeholder group to create a specific Smarter City vision; and establish governance and a credible decision-making process (Updated)
  3. Structure your approach to a Smart City by drawing on the available resources of expertise (Updated)
  4. Populate a roadmap that can deliver the vision (Updated)
  5. Put the financing in place (Updated)
  6. Think beyond the future and engage with informality: how to make “Smarter” a self-sustaining process (Updated) … and a philosophical imperative for doing so

1. Define what a “Smarter City” means to you

Many urbanists and cities have grappled with how to define what a “Smart City”, a “Smarter City” or a “Future City” might be. It’s important for cities to agree to use an appropriate definition because it sets the scope and focus for what will be a complex collective journey of transformation.

In his article “The Top 10 Smart Cities On The Planet“, Boyd Cohen of Fast Company defined a Smart City as follows:

“Smart cities use information and communication technologies (ICT) to be more intelligent and efficient in the use of resources, resulting in cost and energy savings, improved service delivery and quality of life, and reduced environmental footprint–all supporting innovation and the low-carbon economy.”

This definition shares a useful distinction that was made to me by the Technology Strategy Board‘s Head of Sustainability, Richard Miller: a “Smart City” is one that transforms itself into a “Future City” by using technology. In IBM we use the phrase “Smarter City” to describe a city that is making progress on that path.

As is frequently quoted, more than half of the world’s population now lives in urban areas; and in the UK where I live, that’s true of more than 90% of us. So its not surprising that so many people have strong views on what Smart, Smarter and Future Cities should be.

Personally I think that a useful and holistic definition of a “Future City” needs to include the following concepts:

  • A Future City is in a position to make a success of the present: for example, it is economically active in high-value industry sectors and able to provide the workforce and infrastructure that companies in those sectors need.
  • A Future City is on course for a successful future: with an education system that provides the skills that will be needed by future industries as technology evolves.
  • A Future City creates sustainable, equitably distributed growth: where education and employment opportunities are widely available to all citizens and communities, and with a focus on delivering social and environmental outcomes as well as economic growth.
  • A Future City operates as efficiently & intelligently as possible: so that resources such as energy, transportation systems and water are used optimally, providing a low-cost, low-carbon basis for economic and social growth, and an attractive, healthy environment in which to live and work.
  • A Future City enables citizens, communities, entrepreneurs & businesses to do their best; because making infrastructures Smarter is an engineering challenge; but making cities Smarter is a societal challenge; and those best placed to understand how societies can change are those who can innovate within them.

If those objectives provide – an admittedly very generic – view of what a “Future City” is, then a “Smarter City” is one that uses technology to accomplish them.

Creating a more specific vision is a task for each city to undertake for itself, taking into account its unique character, strengths and challenges. This process usually entails a collaborative act of creativity by city stakeholders.

2. Convene a stakeholder group to create a specific Smarter City vision

For a city to agree a shared “Smarter City” vision involves bringing an unusual set of stakeholders together in a single forum: political leaders, community leaders, major employers, transport and utility providers, entrepreneurs and SMEs, universities and faith groups, for example. The task for these stakeholders is to agree a vision that is compelling, inclusive; and specific enough to drive the creation of a roadmap of individual projects and initiatives to move the city forward.

This is a process that I’m proud to be taking part in in Birmingham through the City’s Smart City Commission, whose vision for the city was published in December. I discussed how such processes can work, and some of the challenges and activities involved, in July 2012 in an article entitled “How Smarter Cities Get Started“.

To attract the various forms of investment that are required to support a programme of “Smart” initiatives, these stakeholder groups need to be decision-making entities, such as Manchester’s “New Economy” Commission, not discussion forums.  They need to take investment decisions together in the interest of shared objectives; and they need a mature understanding and agreement of how risk is shared and managed across those investments.

Whatever specific form a local partnership takes, it needs to demonstrate transparency and consistency in its decision-making and risk management, in order that its initiatives and proposals are attractive to investors. These characteristics are straightforward in themselves; but take time to establish amongst a new group of stakeholders taking a new, collaborative approach to the management of a programme of transformation.

The article “Smart ideas for everyday cities” from December 2012 discusses these challenges, and examples of groups that have addressed them, in more detail.

3. Structure your approach to a Smart City by drawing on the available resources of expertise

Any holistic approach to a Smarter City needs to recognise the immensely complex context that a city represents: a rich “system of systems” comprising the physical environment, economy, transport and utility systems, communities, education and many other services, systems and human activities.

In “The new architecture of Smart Cities” in September 2012 I laid out a framework  for thinking about that context; in particular highlighting the need to focus on the “soft infrastructure” of conversations, trust, relationships and engagement between people, communities, enterprises and institutions that is fundamental to establishing a consensual view of the future of a city.

In that article  I also asserted that whilst in Smarter Cities we are often concerned with the application of technology to city systems, the context in which we do so – i.e. our understanding of the city as a whole – is the same context as that in which other urban professionals operate: architects, town planners and policy-makers, for example. An implication is that when looking for expertise to inform an approach to “Smarter Cities”, we should look broadly across the field of urbanism, and not restrict ourselves to that material which pertains specifically to the application of technology to cities.

So whilst  “City Protocol” seems to be the strongest emerging initiative to determine frameworks and standards for approaching Smarter Cities – and certainly should be considered by any city starting on that path – there are other resources that can be drawn on. The UK is establishing one of three local charters to the society.

UN-HABITAT, the United Nations agency for human settlements, recently published its “State of the World’s Cities 2012/2013” report. UNHABITAT promote socially and environmentally sustainable towns and cities, and their reports and statistics on urbanisation are frequently cited as authoritative. Their 2012/2013 report includes extensive consultation with cities around the world, and proposes a number of new mechanisms intended to assist decision-makers. It focuses extensively on South America, Africa, Asia and the Middle East; but also considers a number of European and North American examples.

(The components of a Smart City architecture I described in “The new architecture of Smart Cities“)

The World Bank’s Urban Development page contains a number of reports covering many aspects of urbanisation relevant to Smarter Cities, such as “Transforming Cities with Transit”, “Urban Risk Assessments: Towards a Common Approach” and a forthcoming report in December to promote “sustainable urban development through cross-sector integration by focusing on the careful coordination of transit and land development”. At the Bank’s “Rethinking Cities” symposium in Barcelona in October, they also announced that they would be publishing a book of the same title containing a set of viewpoints on similar themes.

The Academy of Urbanism, a UK-based not-for-profit association of several hundred urbanists including policy-makers, architects, planners and academics, publishes the “Friebrug Charter for Sustainable Urbanism” in collaboration with the city of Frieburg, Germany. Frieburg won the Academy’s European City of the Year award in 2010 but its history of recognition as a sustainable city goes back further. The charter contains a number of useful principles and ideas for achieving consensual sustainability that can be applied to Smarter Cities.

A number of current research programmes are seeking to define more technical standards for achieving the interoperability between city systems that underpins many Smarter City ideas. Imperial College in the UK have established the Digital City Exchange initiative; Imperial have a depth of expertise across urban systems such as transport and energy, and are working with a number of academic and industry partners.

The European Union Platform for Intelligent Cities (EPIC) project is similarly researching  architectures and standards for Smart Cities technology infrastructure – my colleagues in IBM and at Birmingham City University are amongst the participants. And the “FI-WARE” project, also funded by the European Union, is researching architectures and standards for a “future internet platform”: one of its focusses is the integration of city systems, and particularly how cities can provide technology infrastructures on which SMEs and entrepreneurs can base innovative new city services.

With the UK Technology Strategy Board continuing to invest through it’s “Future Cities” programme (link requires registration) and the EU announcing new investments in Smart Cities recently, research activity in this area will surely grow.

Consultancies, technology and service providers also offer useful views. IBM’s own perspectives and case studies can be found at http://www.ibm.com/smartercities/Arup have published a number of viewpoints, including “Information Marketplaces: the new economics of cities“; and McKinsey’s recent report “Government designed for new times: a global conversation” contains a number of sections dedicated to technology and Smarter Cities.

The large number of “Smart Cities” and “Future Cities” communities on the web can also be good sources of emerging new knowledge, such as UBM’s “Future Cities” site; the Sustainable Cities Collective; and Linked-In discussion Groups such as “Smart Cities and City 2.0“, “Smarter Cities” and “Smart Urbanism“.

Finally, I published an extensive article on this blog in December 2012 which provided a framework for identifying the technology components required to support Smart City initiatives of different kinds – “Pens, paper and conversations. And the other technologies that will make cities smarter“; and I specifically discussed the challenges and technologies associated with the city information and “open data” platforms that underlie many of those initiatives in “Why open city data is the brownfield regeneration challenge of the information age” in October 2012.

(The discussion group at #SmartHack in Birmingham, described in “Tea, trust and hacking – how Birmingham is getting Smarter“, photographed by Sebastian Lenton)

4. Populate a roadmap that can deliver the vision

In order to fulfill a vision for a Smarter City, a roadmap of specific projects and initiatives is needed, including both early “quick wins” and longer term strategic programmes.

Those projects and initiatives take many forms; and it can be worthwhile to concentrate initial effort on those that are simplest to execute because they are within the remit of a single organisation; or because they build on cross-organisational initiatives within cities that are already underway.

In my August 2012 article “Five roads to a Smarter City” I gave some ideas of what those initiatives might be, and the factors affecting their viability and timing, including:

  1. Top-down, strategic transformations across city systems;
  2. Optimisation of individual infrastructures such as energy, water and transportation;
  3. Applying “Smarter” approaches to “micro-city” environments such as industrial parks, transport hubs, university campuses or leisure complexes;
  4. Exploiting the technology platforms emerging from the cost-driven transformation to shared services in public sector;
  5. Supporting the “Open Data” movement.

In “Pens, paper and conversations. And the other technologies that will make cities smarter” in December 2012, I described a framework for identifying the technology components required to support Smart City initiatives of different kinds, such as:

  1. Re-engineering the physical components of city systems (to improve their efficiency)
  2. Using information  to optimise the operation of city systems
  3. Co-ordinating the behaviour of multiple systems to contribute to city-wide outcomes
  4. Creating new marketplaces to encourage sustainable choices, and attract investment

It is also worthwhile to engage with service and technology providers in the Smart City space; they have knowledge of projects and initiatives with which they have been involved elsewhere. Many are also seeking suitable locations in which to invest in pilot schemes to develop or prove new offerings which, if successful, can generate follow-on sales elsewhere. The “First of a Kind” programme in IBM’s Research division is one example or a formal programme that is operated for this purpose.

A roadmap consisting of several such individual activities within the context of a set of cross-city goals, and co-ordinated by a forum of cross-city stakeholders, can form a powerful programme for making cities Smarter.

5. Put the financing in place

A crucial factor in assessing the viability of those activities, and then executing them, is putting in place the required financing. In many cases, that will involve cities approaching investors or funding agencies. In “Smart ideas for everyday cities” in December 2012 I described some of the organisations from whom funds could be secured; and some of the characteristics they are looking for when considering which cities and initiatives to invest in.

There are very many individual ways in which funds can be secured for Smart City initiatives, of course; I described some more in “No-one is going to pay cities to become Smarter” in November 2012, and several others in two articles in September 2012:

In “Ten ways to pay for a Smarter City (part one)“:

And in “Ten ways to pay for a Smarter City (part two):

I’m a technologist, not a financier or economist; so those articles are not intended to be exhaustive or definitive. But they do suggest a number of practical options that can be explored.

(Meeting with social entrepreneurs in Sunderland who create local innovations in the city)

6. Think beyond the future and engage with informality: how to make “Smarter” a self-sustaining process

Once a city has become “Smart”, is that the end of the story?

I don’t think so. The really Smart city is one that has put in place soft and hard infrastructures that can be used in a continuous process of reinvention and creativity.

In the same way that a well designed urban highway should connect rather than divide the city communities it passes through, the new technology platforms put in place to support Smarter City initiatives should be made open to communities and entrepreneurs to constantly innovate in their own local context.

I described that process along with some examples of it in “The amazing heart of a Smarter City: the innovation boundary” in August 2012. In October 2012, I described some of the ways in which Birmingham’s communities are exploring that boundary in “Tea, trust and hacking: how Birmingham is getting smarter“; and in November I emphasised in “Zen and the art of messy urbanism” the importance of recognising the organic, informal nature of some of the innovation and activity within cities that creates value.

When it works well, the result is the ongoing creation of new products, services or even marketplaces that enable city residents and visitors to make choices every day that reinforce local values and synergies. I described some of the ways in which technology could enable those markets to be designed to encourage transactions that support local outcomes in “Open urbanism: why the information economy will lead to sustainable cities” in October 2012 and “From Christmas lights to bio-energy: how technology will change our sense of place” in August 2012. The money-flows within those markets can be used as the basis of financing their infrastructure, as I discussed in “Digital Platforms for Smarter City Market-Making” in June 2o12 and in several other articles described in “5. Put the financing in place” above.

(Artist’s impression of a vertical urban farm shared by Curbed SF)

A philosophical imperative

It’s worth at this point reminding ourselves why we’re compelled to make cities Smarter. I’ve often referred to the pressing economic and environmental pressures we’re all aware of as the reasons to act; but they are really only the acute symptoms of an underlying demographic trend and its effect on the behaviour of complex systems within cities.

The world’s population is expected to grow towards 10 billion in 2070; and most of that growth will be within cities. The physicist and biologist Geoffrey West’s work on cities as complex systems showed that larger, denser cities are more successful in creating wealth. That creation of wealth attracts more residents, causing further growth – and further consumption of resources. At some point it’s inevitable that this self-reinforcing growth triggers a crisis.

If this sounds alarmist, consider the level of civic unrest associated with the Eurozone crisis in Greece and Spain; or that in the 2000 strike by the drivers who deliver fuel to petrol stations in the UK, some city supermarkets came within hours of running out of food completely. Or simply look to the frightening global effects of recent grain shortages caused by drought in the US.

Concern over this combination of the cost of resources and uncertainty in their supply has lead to sustainability becoming a critical economic and social issue, not just a long-term environmental one. The concept of “resilience” has emerged to unify these concepts; and it demands changes in the way that cities behave.

As an example of just how far-reaching this thinking has become, consider the supply of food to urban areas. Whilst definitions vary, urban areas are usually defined as continuously built-up areas with a population of at least a few thousand people, living at a density of at least a few hundred people per square kilometer. Actual population densities in large cities are much higher than this, typically a few tens of thousands per square kilometer in developed economies, and sometimes over one hundred thousand per square kilometer in the largest megacities in emerging economies.

In contrast, one square kilometer of intensively farmed land with fertile soil in a good climate can feed approximately 1000 people according to Kate Cooper of the New Optimists forum, which is considering scenarios for Birmingham’s food future in 2050. Those numbers tell us that, then unless some radical new method of growing food appears, cities will never feed themselves, and will continue to rely on importing food from ever larger areas of farmland to support their rising populations.

(Photo by TEDxBrainport of Dr Mark Post explaining how meat can be grown artificially)

As I’ve noted before, such radical new methods are already appearing: artificial meat has been grown in laboratories; and the idea of creating “vertical farms” in skyscrapers is being seriously explored.

But these are surely scientific and engineering challenges; so why do I refer to a philosophical imperative?

I’ve previously referred to artificial meat and vertical farming as examples of “extreme urbanism“. They certainly push the boundaries of our ability to manipulate the natural world. And that’s where the philosophical challenge lies.

Do we regard ourselves as creatures of nature, or as creatures who manipulate nature? To what extent do we want to change the character of the world from which we emerged? As the population of our planet and our cities continues to rise, we will have to confront these questions, and decide how to answer them.

Geoffrey West’s work clearly predicts what will happen if we continue our current course; and I think it is likely that scientists and engineers will rise to the challenge of supporting even larger, denser cities than those we currently have. But personally I don’t think the result will be a world that I will find attractive to live in.

Organisations such as Population Matters campaign carefully and reasonably for an alternative path; an agenda of education, access to opportunity and individual restraint in the size of our families as a means to slow the growth of global population, so that more orthodox solutions can be affective – such as increasing the efficiency of food distribution, reducing food wastage (including our personal food wastage) and changing dietary habits – for instance, to eat less meat.

I don’t claim to know the answer to these challenges, but I’m thankful that they are the subject of urgent research by serious thinkers. The challenge for cities is to understand and incorporate this thinking into their own strategies in ways that are realistic and practical, in order that their Smarter City programmes represent the first steps on the path to a sustainable future.

Smart ideas for everyday cities

(Artist’s impression of the new Birmingham City University campus, currently under construction alongside Millennium Point and the new Eastside City Park. Image by Birmingham City University.)

The outcomes that matter to cities and to the people who live and work in them, such as wellbeing, job creation, economic growth, and social mobility, are complex, compound results of the behaviour of a combination of city systems such as education, public safety, transport and the economy.

Because those systems are operated by separate organisations – if they are even “operated” as systems at all – many “Smarter City” discussions are concerned with “breaking down silos” in order to integrate them.

As Fast Company’s 2010 survey of the “Top 20 Smartest Cities on the Planet“, illustrates, many of the earliest and highest profile examples of cities pursuing “Smart” agendas were governed by hierarchical, integrated systems of authority which helped them to address this challenge – often because they were new or expanding cities in rapidly growing economies.

Elsewhere, governance is more complex. Particularly in the UK, services such as utilities and transport are operated by private sector providers contracted to deliver performance and financial measures that cannot easily be changed. It is hard enough to agree common objectives across a city; it can be even harder to agree how to make investments to achieve them by transforming city systems that are subcontracted in this way.

But that is what cities must somehow do. And in recent weeks I have valued some open and frank discussions between city leaders, financiers and developers, policy makers, academics, architects, planners – and even some technologists – that have revealed some simple ideas that are common to those cities that have demonstrated how it can be done.

Start new partnerships

Most initiatives that contribute to city-wide outcomes require either co-ordinated action across city systems; or an investment in one system to achieve an outcome that is not a simple financial return within that system. For example, the ultimate objective of many changes to transportation systems is to improve economic growth and productivity, or to reduce environmental impact.

(The members of Birmingham’s Smart City Commission)

A programme of initiatives with these characteristics therefore involves the resources and interests of great many organisations within a city; and may lead to the creation of entirely new organisations. Special purpose vehicles such as  the “Eco-Island” Community Interest Company on the Isle of Wight and the Birmingham District Energy Company are two such examples.

New partnerships between these organisations are needed to agree city-wide objectives, and to co-ordinate their activities and investments to achieve them. Depending on local challenges,  opportunities, and relationships those partnerships might include:

  • Local Authorities and other public sector agencies co-operating to operate shared services;
  • Central government bodies involved in negotiations of policy, responsibility and financing such as “City Deals“;
  • Leaders from cities’ business, entrepreneurial and SME communities;
  • Local Universities who may have domain expertise in city systems; and who provide skills into the local economy;
  • Neighbourhood, faith and community associations;
  • Representatives of the third sector – charities, voluntary associations, social enterprises and co-operatives;
  • Industry sector and cultural organisations;
  • Service and technology providers who form partnerships with cities; for example, Amey have a 25-year PFI partnership with Birmingham; IBM operate joint research programmes with cities such as Dublin and Moscow; and Cisco have partnerships with cities such as Songdo in South Korea;
  • Financiers, for example local venture capitalists such as MidVen in the West Midlands, or banks and financial services companies with a strong local presence;
  • … and there are many other possibilities.

To attract the various forms of investment that are required to support a programme of “Smart” initiatives, these partnerships need to be decision-making entities, such as Manchester’s “New Economy” Commission, not discussion groups. They need to take investment decisions together in the interest of their shared objectives; and they need a mature understanding and agreement of how risk is shared and managed across those investments.

Such partnerships do not start by adopting the approach of any single member; they start with a genuine discussion to build understanding and consensus.

For example, public and private sector organisations both tend to assume that the other is better placed to accept risk. Private sector organisations make profits and invest them in new products and markets, so surely they can take on risk? Public sector organisations are funded to predictable levels through taxation, so surely they can take on risk?

In reality, the private sector has lost jobs, faced falling profits, and seen many businesses fail in recent years. Meanwhile, public sector is burdened with unprecedented budget cuts and in many cases significant deficits that are threatening their ability to deliver frontline services. Both are therefore risk averse.

A working partnership will only form if such issues are discussed openly so that an equitable consensus is achieved.

(A video describing the partnership between IBM and Dubuque, Iowa, which aims to develop a model for sustainable communities of less than 200,000 people)

Size matters; but not absolutely

Manchester’s New Economy Commission have taken a particular approach that is commensurate to the size of the Greater Manchester area and economy, coordinated by the Association of Greater Manchester Authorities (AGMA). But their approach is not the only one.

Elsewhere, Southampton City Council are creating a “Virtual Local Authority”, together with other authorities around the country, as a vehicle to approach the bond market for a £100 million investment. They believe such a vehicle can create an investment opportunity of similar size to Birmingham’s “Energy Savers” scheme.

“Size” in these terms can mean geographic area; population; economic value or market potential. It is interpreted differently by international investment funds; or by local interests such as property and business owners. And it is balanced against complexity: one reason that some more modestly sized cities such as Sunderland and Peterborough have made so much early progress is their relative political and economic simplicity.

Vision, Transparency and Consistency

Whatever specific form a local partnership takes, it needs to demonstrate certain behaviours and characteristics in order that its initiatives and proposals are attractive to investors. They are straightforward in themselves;  but take time to establish amongst a new group of stakeholders:

  • A clear, agreed and consistent set of goals;
  • A mutual understanding of risk; how it is shared; and how it is managed;
  • An ability to express investment opportunities, including the risks associated with them, to potential investors;
  • A track record of taking transparent, consistent decisions to coordinate projects and investments against their objectives.

This is the model that in many cases will deliver Smarter City projects and programmes in everyday cities: a model of several organisations coordinating multiple investments, rather than individual organisations managing their own budgets.

(Philippe Petit’s remarkable tightrope walk between the towers of the World Trade Centre in 1974 at a height of 417 metres. Image from Carolina Pastrana)

Match risks to the right investors

There are many sources of funding for Smart City initiatives; each has different requirements and capabilities, and is attracted by specific risks and rewards. And with traditional markets such as property stagnant in developed economies, new opportunities for investment are being sought.

However, with a high degree of uncertainty in the prospects for future economic growth, it is harder than ever to assess the likely returns from investment opportunities. And when those opportunities are presented as new forms of partnership, special purpose vehicles or social enterprises, or by public sector authorities adopting revenue-generating models to compensate for dramatic cuts in their traditional funding, that assessment becomes even harder.

There is no simple answer to this challenge; but once again progress to resolving it will begin with conversations that build understanding. Ultimately, investors will be attracted to proposals with well defined and managed risks from organisations exhibiting good governance; and that can demonstrate a track record of making clear decisions to achieve their goals.

Of course, some Smart City projects are highly innovative, and may be too risky for investors accustomed to supporting infrastructure projects such as transportation and property development.  This is particularly the case for schemes that require a change in consumer behaviour – for example, switching from private car ownership to the use of “car clubs” or car-sharing schemes.

These sorts of project may be more suited to technology or service providers who might invest in pilot schemes in order to develop or prove new offerings which, if successful, can generate follow-on sales elsewhere. The “First of a Kind” programme in IBM’s Research division is one example or a formal programme that is operated for this purpose.

Similarly, Venture Capital will make investments in new businesses with higher risk profiles – demanding, of course, a commensurately higher level of return. And government backed innovation funds such as the European Union FP7 programme or the UK’s Technology Strategy Board are also available.

All of these organisations, of course, are looking to invest in projects which are initially small scale; but that will eventual develop into a widespread market opportunity. They will therefore be drawn to projects that take place in a stable, supported context from which that opportunity can be developed – in other words, the same level of partnership working, governance, transparency and consistency.

(A successful urban intervention: the “Container City” incubation hub for social enterprises operated by Sustainable Enterprise Strategies (SES) in Sunderland. SES support hundreds of new businesses and social enterprises in Sunderland every year, with a combined turnover of around £25m, and employing thousands of people from the city’s most challenged communities. 82% of the people they help to start a business or a social enterprise were previously unemployed, and after 2 years nearly three quarters are still in business.)

Exploit success to build momentum

Most cities need to stimulate economic growth, and to revitalise economically and socially deprived neighbourhoods.

It may be more effective to achieve those goals through a series of related steps, than through a single initiative, however:

1. Invest to reinforce growth that is already taking place – it may be more straightforward in the first place to use mechanisms such as tax increment financing or private investment to accelerate growth that is already taking place; such as last week’s announcement by David Cameron of additional government and corporate investment in London’s “Tech City” cluster.

2. Retain the financial benefits resulting from growth – Manchester’s New Economy Commission is able to retain the benefits of the growth the stimulate in the form of increased tax returns, in order to reinvest in subsequent initiatives. Their early successes built confidence amongst investors in the viability of their ongoing programme.

3. Recycle funds to stimulate new growth – having built an initial level of confidence, returns from early projects can be reinvested in areas with more significant challenges; where new infrastructures such as broadband connectivity or support services are required to attract new business activity.

Everywhere is different

Whilst the ideas I’ve described in this article do seem to be emerging as common characteristics of successful Smarter City programmes; we are still at a relatively early stage.

In particular, not enough examples exist for us to reliably separate generally viable elements of these approaches from those aspects that are strongly tied to specific local contexts.

Every city of course is different; and in this context has different access to transport systems, and to national and international supply chains and markets; has different demographics and social character; and different economic capacity. Even within a country, the governance of cities and regions varies – in the UK, for example, the relationships between Central, County, District, City and Borough Councils are subtly different everywhere. So each city still needs to find its own path.

But the first step is simple. There is nothing stopping cities from having the conversations that will get them started. And those that have done so are proving that it works.

I’d like to thank the delegates and attendees at many workshops and meetings I’ve attended in recent weeks; the discussions I’ve been lucky enough to participate in as a result have contributed significantly to the views expressed in this article. They include:

The six steps to a Smarter City; and the philosophical imperative for taking them (updated)

(Photo of digital lights in “The Place” in Beijing by Trey Ratcliff)

(This article originally appeared in September 2012 as “Five steps to a Smarter City: and the philosophical imperative for taking them“. Because it contains an overall framework for approaching Smart City transformations, I’ll keep it updated to reflect the latest content on this blog, and ongoing developments in the industry. It can also be accessed through the page link “Six steps to a Smarter City” in the navigation bar above). 

As I remarked last week, in the past months some interesting announcements have been made concerning emerging frameworks and protocols for Smarter Cities – such as the “City Protocol” collaboration which will be formally launched at the Smart City Expo this week in Barcelona.

There are now a wide variety of established and emerging repositories of experience and practise relevant to Smart Cities in such domains as sustainability, technology, community engagement and economic development. Some are open collaborations; some are research programmes; and some are published position papers from consultancies and service providers. It therefore seems an opportune time to update the article “Five steps to a Smarter City” I wrote in September, to include a sixth step: “Structure your approach to a Smart City by drawing on the available resources of expertise“:

  1. Define what a “Smarter City” means to you
  2. Convene a stakeholder group to create a specific Smarter City vision
  3. Structure your approach to a Smart City by drawing on the available resources of expertise
  4. Populate a roadmap that can deliver the vision
  5. Put the financing in place
  6. Thinking beyond the future: how to make “Smarter” a self-sustaining process … and a philosophical imperative for doing so

1. Define what a “Smarter City” means to you

Many urbanists and cities have grappled with how to define what a “Smart City”, a “Smarter City” or a “Future City” might be. It’s important for cities to agree to use an appropriate definition because it sets the scope and focus for what will be a complex collective journey of transformation.

In his article “The Top 10 Smart Cities On The Planet“, Boyd Cohen of Fast Company defined a Smart City as follows:

“Smart cities use information and communication technologies (ICT) to be more intelligent and efficient in the use of resources, resulting in cost and energy savings, improved service delivery and quality of life, and reduced environmental footprint–all supporting innovation and the low-carbon economy.”

This definition shares a useful distinction that was made to me by the Technology Strategy Board‘s Head of Sustainability, Richard Miller: a “Smart City” is one that transforms itself into a “Future City” by using technology. In IBM we use the phrase “Smarter City” to describe a city that is making progress on that path.

As is frequently quoted, more than half of the world’s population now lives in urban areas; and in the UK where I live, that’s true of more than 90% of us. So its not surprising that so many people have strong views on what Smart, Smarter and Future Cities should be.

Personally I think that a useful and holistic definition of a “Future City” needs to include the following concepts:

  • A Future City is in a position to make a success of the present: for example, it is economically active in high-value industry sectors and able to provide the workforce and infrastructure that companies in those sectors need.
  • A Future City is on course for a successful future: with an education system that provides the skills that will be needed by future industries as technology evolves.
  • A Future City creates sustainable, equitably distributed growth: where education and employment opportunities are widely available to all citizens and communities, and with a focus on delivering social and environmental outcomes as well as economic growth.
  • A Future City operates as efficiently & intelligently as possible: so that resources such as energy, transportation systems and water are used optimally, providing a low-cost, low-carbon basis for economic and social growth, and an attractive, healthy environment in which to live and work.
  • A Future City enables citizens, communities, entrepreneurs & businesses to do their best; because making infrastructures Smarter is an engineering challenge; but making cities Smarter is a societal challenge; and those best placed to understand how societies can change are those who can innovate within them.

If those objectives provide – an admittedly very generic – view of what a “Future City” is, then a “Smarter City” is one that uses technology to accomplish them.

Creating a more specific vision is a task for each city to undertake for itself, taking into account its unique character, strengths and challenges. This process usually entails a collaborative act of creativity by city stakeholders.

(The members of Birmingham’s Smart City Commission)

2. Convene a stakeholder group to create a specific Smarter City vision

For a city to agree a shared “Smarter City” vision involves bringing an unusual set of stakeholders together in a single forum: political leaders, community leaders, major employers, transport and utility providers, entrepreneurs and SMEs, universities and faith groups, for example. The task for these stakeholders is to agree a vision that is compelling, inclusive; and specific enough to drive the creation of a roadmap of individual projects and initiatives to move the city forward.

This is a process that I’m proud to be taking part in in Birmingham through the City’s Smart City Commission. I discussed how such processes can work, and some of the challenges and activities involved, back in July in an article entitled “How Smarter Cities Get Started“.

3. Structure your approach to a Smart City by drawing on the available resources of expertise

Any holistic approach to a Smarter City needs to recognise the immensely complex context that a city represents: a rich “system of systems” comprising the physical environment, economy, transport and utility systems, communities, education and many other services, systems and human activities.

In “The new architecture of Smart Cities” I laid out a framework  for thinking about that context; in particular highlighting the need to focus on the “soft infrastructure” of conversations, trust, relationships and engagement between people, communities, enterprises and institutions that is fundamental to establishing a consensual view of the future of a city.

In that article  I also asserted that whilst in Smarter Cities we are often concerned with the application of technology to city systems, the context in which we do so – i.e. our understanding of the city as a whole – is the same context as that in which other urban professionals operate: architects, town planners and policy-makers, for example. An implication is that when looking for expertise to inform an approach to “Smarter Cities”, we should look broadly across the field of urbanism, and not restrict ourselves to that material which pertains specifically to the application of technology to cities.

So whilst  “City Protocol” seems to be the strongest emerging initiative to determine frameworks and standards for approaching Smarter Cities – and certainly should be considered by any city starting on that path – there are other resources that can be drawn on.

UN-HABITAT, the United Nations agency for human settlements, recently published its “State of the World’s Cities 2012/2013” report. UNHABITAT promote socially and environmentally sustainable towns and cities, and their reports and statistics on urbanisation are frequently cited as authoritative. Their 2012/2013 report includes extensive consultation with cities around the world, and proposes a number of new mechanisms intended to assist decision-makers. It focuses extensively on South America, Africa, Asia and the Middle East; but also considers a number of European and North American examples.

(The components of a Smart City architecture I described in “The new architecture of Smart Cities“)

The World Bank’s Urban Development page contains a number of reports covering many aspects of urbanisation relevant to Smarter Cities, such as “Transforming Cities with Transit”, “Urban Risk Assessments: Towards a Common Approach” and a forthcoming report in December to promote “sustainable urban development through cross-sector integration by focusing on the careful coordination of transit and land development”. At the Bank’s “Rethinking Cities” symposium in Barcelona in October, they also announced that they would be publishing a book of the same title containing a set of viewpoints on similar themes.

The Academy of Urbanism, a UK-based not-for-profit association of several hundred urbanists including policy-makers, architects, planners and academics, publishes the “Friebrug Charter for Sustainable Urbanism” in collaboration with the city of Frieburg, Germany. Frieburg won the Academy’s European City of the Year award in 2010 but its history of recognition as a sustainable city goes back further. The charter contains a number of useful principles and ideas for achieving consensual sustainability that can be applied to Smarter Cities.

A number of current research programmes are seeking to define more technical standards for achieving the interoperability between city systems that underpins many Smarter City ideas. Imperial College in the UK have established the Digital City Exchange initiative; Imperial have a depth of expertise across urban systems such as transport and energy, and are working with a number of academic and industry partners.

The European Union Platform for Intelligent Cities (EPIC) project is similarly researching  architectures and standards for Smart Cities technology infrastructure – my colleagues in IBM and at Birmingham City Universityare amongst the participants. Finally, the “FI-WARE” project, also funded by the European Union, is researching architectures and standards for a “future internet platform”: one of its focusses is the integration of city systems, and particularly how cities can provide technology infrastructures on which SMEs and entrepreneurs can base innovative new city services.

With the UK Technology Strategy Board continuing to invest through it’s “Future Cities” programme (link requires registration) and the EU announcing new investments in Smart Cities recently, research activity in this area will surely grow.

Consultancies, technology and service providers also offer useful views. IBM’s own perspectives and case studies can be found at http://www.ibm.com/smartercities/; Arup have published a number of viewpoints, including “Information Marketplaces: the new economics of cities“; and McKinsey’s recent report “Government designed for new times: a global conversation” contains a number of sections dedicated to technology and Smarter Cities.

Finally, the large number of “Smart Cities” and “Future Cities” communities on the web are good sources of emerging new knowledge, such as UBM’s “Future Cities” site; the Sustainable Cities Collective; and Linked-In discussion Groups such as “Smart Cities and City 2.0“, “Smarter Cities” and “Smart Urbanism“.

4. Populate a roadmap that can deliver the vision

In order to fulfill a vision for a Smarter City, a roadmap of specific projects and initiatives is needed, including both early “quick wins” and longer term strategic programmes.

Those projects and initiatives take many forms; and it can be worthwhile to concentrate initial effort on those that are simplest to execute because they are within the remit of a single organisation; or because they build on cross-organisational initiatives within cities that are already underway.

In my August article “Five roads to a Smarter City” I gave some ideas of what those initiatives might be, and the factors affecting their viability and timing, including:

  1. Top-down, strategic transformations across city systems;
  2. Optimisation of individual infrastructures such as energy, water and transportation;
  3. Applying “Smarter” approaches to “micro-city” environments such as industrial parks, transport hubs, university campuses or leisure complexes;
  4. Exploiting the technology platforms emerging from the cost-driven transformation to shared services in public sector;
  5. Supporting the “Open Data” movement.

A roadmap consisting of several such individual activities within the context of a set of cross-city goals, and co-ordinated by a forum of cross-city stakeholders, can form a powerful programme for making cities Smarter.

5. Put the financing in place

A crucial factor in assessing the viability of those activities, and then executing them, is putting in place the required financing. There are many ways in which that can be done, and I described several of them in two articles in September:

In “Ten ways to pay for a Smarter City (part one)“:

And in “Ten ways to pay for a Smarter City (part two):

I’m a technologist, not a financier or economist; so those articles are not intended to be exhaustive or definitive. But they do suggest a number of practical options that can be explored.

(Meeting with social entrepreneurs in Sunderland who create local innovations in the city)

6. Thinking beyond the future: how to make “Smarter” a self-sustaining process

Once a city has become “Smart”, is that the end of the story?

I don’t think so. The really Smart city is one that has put in place soft and hard infrastructures that can be used in a continuous process of reinvention and creativity.

In the same way that a well designed urban highway should connect rather than divide the city communities it passes through, the new technology platforms put in place to support Smarter City initiatives should be made open to communities and entrepreneurs to constantly innovate in their own local context. I described that process along with some examples of it in “The amazing heart of a Smarter City: the innovation boundary“.

When it works well, the result is the ongoing creation of new products, services or even marketplaces that enable city residents and visitors to make choices every day that reinforce local values and synergies. I described some of the ways in which technology could enable those markets to be designed to encourage transactions that support local outcomes in “From Christmas lights to bio-energy: how technology will change our sense of place“. And the money-flows within those markets can be used as the basis of financing their infrastructure, as I discussed in “Digital Platforms for Smarter City Market-Making“.

(Artist’s impression of a vertical urban farm shared by Curbed SF)

A philosophical imperative

It’s worth at this point reminding ourselves why we’re compelled to make cities Smarter. I’ve often referred to the pressing economic and environmental pressures we’re all aware of as the reasons to act; but they are really only the acute symptoms of an underlying demographic trend and its effect on the behaviour of complex systems within cities.

The world’s population is expected to grow towards 10 billion in 2070; and most of that growth will be within cities. The physicist and biologist Geoffrey West’s work on cities as complex systems showed that larger, denser cities are more successful in creating wealth. That creation of wealth attracts more residents, causing further growth – and further consumption of resources. At some point it’s inevitable that this self-reinforcing growth triggers a crisis.

If this sounds alarmist, consider the level of civic unrest associated with the Eurozone crisis in Greece and Spain; or that in the 2000 strike by the drivers who deliver fuel to petrol stations in the UK, some city supermarkets came within hours of running out of food completely. Or simply look to the frightening global effects of recent grain shortages caused by drought in the US.

Concern over this combination of the cost of resources and uncertainty in their supply has lead to sustainability becoming a critical economic and social issue, not just a long-term environmental one. And it demands changes in the way that cities behave.

As an example of just how far-reaching this thinking has become, consider the supply of food to urban areas. Whilst definitions vary, urban areas are usually defined as continuously built-up areas with a population of at least a few thousand people, living at a density of at least a few hundred people per square kilometer. Actual population densities in large cities are much higher than this, typically a few tens of thousands per square kilometer in developed economies, and sometimes over one hundred thousand per square kilometer in the largest megacities in emerging economies.

In contrast, one square kilometer of intensively farmed land with fertile soil in a good climate can feed approximately 1000 people according to Kate Cooper of the New Optimists forum, which is considering scenarios for Birmingham’s food future in 2050. Those numbers tell us that, then unless some radical new method of growing food appears, cities will never feed themselves, and will continue to rely on importing food from ever larger areas of farmland to support their rising populations.

(Photo by TEDxBrainport of Dr Mark Post explaining how meat can be grown artificially)

As I’ve noted before, such radical new methods are already appearing: artificial meat has been grown in laboratories; and the idea of creating “vertical farms” in skyscrapers is being seriously explored.

But these are surely scientific and engineering challenges; so why do I refer to a philosophical imperative?

I’ve previously referred to artificial meat and vertical farming as examples of “extreme urbanism“. They certainly push the boundaries of our ability to manipulate the natural world. And that’s where the philosophical challenge lies.

Do we regard ourselves as creatures of nature, or as creatures who manipulate nature? To what extent do we want to change the character of the world from which we emerged? As the population of our planet and our cities continues to rise, we will have to confront these questions, and decide how to answer them.

Geoffrey West’s work clearly predicts what will happen if we continue our current course; and I think it is likely that scientists and engineers will rise to the challenge of supporting even larger, denser cities than those we currently have. But personally I don’t think the result will be a world that I will find attractive to live in.

Organisations such as Population Matters campaign carefully and reasonably for an alternative path; an agenda of education, access to opportunity and individual restraint in the size of our families as a means to slow the growth of global population, so that more orthodox solutions can be affective – such as increasing the efficiency of food distribution, reducing food wastage (including our personal food wastage) and changing dietary habits – for instance, to eat less meat.

I don’t claim to know the answer to these challenges, but I’m thankful that they are the subject of urgent research by serious thinkers. The challenge for cities is to understand and incorporate this thinking into their own strategies in ways that are realistic and practical, in order that their Smarter City programmes represent the first steps on the path to a sustainable future.

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