How to Achieve Smart City Outcomes

In my last blog, I wrote about the importance of focussing smart city initiatives on outcomes, not technology. The challenge, of course, is that that’s often easier to say than to do.

Firstly, what are the outcomes we want from a smart city initiative?

The most extensive co-operative exercise I’m aware of to discover the outcomes we collectively want for our places and communities was the establishment of the United Nations’ Sustainable Development Goals. Over the years, I’ve found them to be pretty representative of the actual goals of specific places and developments I’ve worked with, albeit each is obviously individual and locally rooted. They include objectives such as equality, wellbeing, growth and sustainability that it’s hard to argue with.

However: smart city initiatives are intended to create change, and doing so requires the commitment of individual, institutional or community resources, and usually the investment of money. Are the types of goal represented by the UN SDG’s likely to make those commitments happen?

Sometimes, yes, usually when government or charitable investments are made. However, those funds do not exist at sufficient scale to transform cities. For that, we need private sector investment too. And that means we need to generate profits.

Finding mechanisms that align profitability with the delivery of social, economic and environmental outcomes is the central challenge of the smart city idea. It’s only when we recognise and address this challenge that significant programmes to create change will take place.

Jane Jacobs’ words in 1961  about delivering her vision for mixed-use, human-scale environments developed from a citizen-centric perspective rings equally true about delivering smart cities: “Private investment shapes cities, but social ideas (and laws) shape private investment. First comes the image of what we want, then the machine is adapted to turn out that image.”

The good news is that there are a variety of ways to do that.

Firstly, this is a challenge that is often addressed in large-scale property developments and regeneration schemes. These are always a negotiation between planning authorities, developers, investors and communities. Commercial developers and investors are required to make a return, whereas planning authorities are the custodians of healthy places, communities and economies. The result is that rather than simply maximising profitability, such schemes usually generate reasonable profitability whilst investing in public space, infrastructure and community assets alongside commercial property.

In the digital masterplanning process we’ve developed over the past few years, we apply that principle to investment in digital infrastructure and services. As well as  basic fixed and mobile connectivity, that might include smart energy, water and transport infrastructure that operates efficiently and monitors environmental quality, apps to support active mobility and communities, skills initiatives and support for business digitalisation.

Increasingly, developers and investors realise that these investments are more than a sacrifice they make in short-term profitability – they are an investment in long-term success. In the long term, communities that are better connected, with better skills and facilities are more successful economically, and so the value of assets rises. The developer of Kings Cross commented at a conference a couple of years ago that it was important to have included high quality public space in the development in order to attract the companies and institutions that have transformed the area – “the open spaces at Kings Cross are delightful and make it a place people want to be, but they were expensive”.

In some cases, negotiation through the planning process isn’t sufficient to achieve this, however, and special purpose vehicles are needed, such as Slough Urban Renewal, a joint venture between Slough Borough Council and Muse, or the Birmingham Innovation Quarter, a joint venture between Birmingham City Council, Aston University and Bruntwood SciTech.

Another approach is the packaging of multiple asset classes and use of blended financing. We used this approach recently to secure pension-fund development backing for a new special purpose vehicle to provide fibre-to-the-premise connectivity to social housing in a major UK city. The vehicle was made investible by a combination of a long return-on-investment period with over-the-top services including preventative maintenance of domestic heating equipment and remote delivery of health and social care, the latter complementing commercial revenues from connectivity infrastructure with operational cost savings.

We have been helping the Cities Commission on Climate Investment apply similar approaches to unlocking financing for sustainable infrastructure, combining both public and private financing for schemes that combine obviously investible opportunities such as electric vehicle charging infrastructure with more challenging schemes such as the retrofit of buildings.

In all these cases, it takes patient development and investment and collaboration between the right partners to see that short-term compromises can lead to long-term optimisation.

The public and private institutions and communities in a place, particularly those who take a long-term view, share their prospects for success with each other through the prospects for success of the place they’re based in. Where their leaders are so minded or can be persuaded to be, that leads to collaboration to improve social, economic and environmental outcomes. For example, the structure of the social housing fibre initiative was not created in isolation as a single idea. It was developed in iterative discussions with local stakeholders discovering how challenges and opportunities in the area could be brought together with different financing streams to create synergies and a practical model for investment and delivery.

Which brings us finally back to the starting point: people and communities. Cities only change when people are given the opportunity to change, and when that change achieves something they want, and is important to them.

This will be a huge aspect of the changes we will need to make to mitigate and adapt to climate change. The way we insulate, heat and cool our homes will need to change. The way we shop and travel will need to change. The way we meet for work will change. This transformation will be most effective if we deploy co-creative, user-centric design techniques, that put people at the heart of change from the start, and that put their interests first.

That’s where another long-established tool should be our starting point: Maslowe’s Hierarchy of Needs. The Hierarchy essentially says people will only prioritise long term objectives such as climate change when their short-term needs are taken care of. In the cost of living crisis, people struggling to feed their families and heat their homes are prioritising those challenges. It is only if we help them to address those at the same time as creating improvements in sustainability and economic growth that smart cities will succeed.