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SENSEABLE CITY LAB 2 Government’s Role in Growing a Smart City Matthew Claudel, Alice Birolo, and Carlo Ratti
Growing the smart city
Our planet is urbanizing at a staggering rate: more than half the human population live in cities today, and the number is growing.1 Today’s urban space is changing rapidly, as digital technologies and pervasive networks integrate with physical space. “Ubiquitous computing names the third wave in computing, just now beginning,” once noted Mark Weiser, Xerox Parc pioneer. “First were mainframes, each shared by lots of people. Now we are in the personal computing era, person and machine staring uneas- ily at each other across the desktop. Next comes ubiquitous computing, or the age of calm technology, when technology recedes into the back- ground of our lives.”2 Ubiquitous computing, with its so-called Internet of Things3 corollary, is creating a new urban condition: the smart city. It is widely thought that smart cities have the capacity to respond better to their inhabitants and their environment, becoming effcient, sustain- able and livable ecosystems. A number of books,4 articles5 and studies6 have supported this claim. With the goal of smart urban optimization, a broad spectrum of implementation models are emerging in different parts of the world. But what is the role of government in the process of imple- menting smart city developments? How can smart city funding be used most effectively, specifcally to promote innovation? And are huge sums of public money ultimately the right stimulant of smart cities after all?
Models for smart city government
Diametric approaches are appearing between the United States and, broadly speaking, of the rest of the world. In South America, Asia, and Europe, all levels of government are quickly identifying the potential
23
D. Araya (ed.), Smart Cities as Democratic Ecologies © The Editor 2015 24 Smart Cities as Democratic Ecologies
Annual Smart -City Investment by Industry World Market, 2010-2020
5 K
4 K
3 K
2 K
1 K
0 K 2010 2011 2012 2013 2014 2015 2016 2017 2018
Source: Gigaom Research (2012), Smart Utilities Smart Transport “Key technologies for the future of smart city” Smart Building Smart Government Figure 2.1 Annual Smart-City Investment by Industry World Market, 2010–2020.
Top 30 cities by GDP in 2025
$ bn
2500
2000
1500
1000
500
0 rk s o ya ri Yo ky dney ancisco Wuhan ronto Pa Seoul Dallas To Osaka Tianjin Fr Beijing Sy Nago London To Chicago Moscow Houston Randstad New New Shanghai Sao Paulo Sao Shenzhen Singapore Rhein/Ruhr Chongqing Hong Kong Guangzhou Mexico City Mexico Los Angeles Los Washington Philadelphia San San Source: McKinsey Global Institute (2012), “Urban world: Cities and the ‘Big six’ city rise of the consuming class” Figure 2.2 Top 30 cities by GDP in 2025. latent smart cities, and are working to channel signifcant investment in that direction. Rio de Janeiro is building capacity at its “Smart Opera- tions” center7; Singapore is about to embark in an ambitious “Smart Nation” effort8; and Amsterdam recently channeled €60 million ($81 mil- lion) into a new urban innovation center called Amsterdam Metropolitan Solutions9. The European Union’s Horizon 2020 program has earmarked Government’s Role in Growing a Smart City 25
What defines a Smart City
Smart City framework Investments in Human and Social Capital Investments in Transport Smart City
Governance Smart City Investments Initiatives in ICT
Investments in Environment Smart City Investments Projects in Natural Resources
source: European Parlament, Policy source: Dar Al-Handasah (2013), Department, Economic and Scientific “Toward Smart Cities. Eco Living, Policy (2014) “Mapping Smart Cities Networking, Communications” in EU. Industry, Research and Energy”
Figure 2.3 What defnes a Smart City.
Smart City Market by Segments Global, 2012-2020
Smart Building Smart Governance and Smart Education 9.7 % 24.6 % Smart Healthcare 14.6 % Smart City Market 8.7 % Smart Security Smart Mobility 13.5 %
13.1 % 15.8 % Smart Infrastructure Smart Energy
Source: Frost & Sullivan (2014), “Strategic Opportunity Analysis of the Global Smart City Market” Figure 2.4 Smart City Market by Segments Global, 2012–2020.
€15 billion in 2014–201610 – an investment that represents a signifcant commitment of European resources to research and development in the feld of smart cities, particularly during a time of severe fscal constraints. In the United States, on the other hand, there is little public sector funding, yet the general idea of smart urban space has been central to the current generation of successful start-ups. One recent example is Uber: a smartphone app that lets anyone call a cab or be a driver. The compa- ny’s operations are polarizing: Uber has been the subject of protests and 26 Smart Cities as Democratic Ecologies
Smart City Market Most Adopted Funding Mechanism for Smart City Projects
22 %
37 % 1%
Special Development Fund
40 % Public-Private Partnerships Self-financing Private Investment
Source: Frost & Sullivan (2014), “Strategic Opportunity Analysis of the Global Smart City Market” Figure 2.5 Smart City Market Most Adopted Funding Mechanism for Smart City Projects.
Smart Attr"utes Pr'%"& &+ "+" *"&+! *%)+ "+y f" $d 1"& apore &$"& ! $+!"&"+"+"-es, 1° traff" '& *+"'& 1"& apore management 1st, 1" && Networked ' " +y 2° Energy "*"'& "+y Index 1Aarhus Roadmap 2020 st 1 ',$ 1" && 2 , 1st, ICT r" !(,$" 3°European European 1 ',$ Smart Smart transport system 3st, "+y 1Aarhus Networked "+y ' " +y " !-lue ICT "+y Index economy and talent
source: Jones Lang LaSalle (2013), “The Business of Cities 2013. What do 150 city indexes and benchmarking studies tell us about the urban world in 2013?” Figure 2.6 Prominent cities in the smart city feld. strikes around the world (mainly in Europe), yet it was recently valued at a stratospheric $18 billion.11 Beyond Uber, the learning thermostat Nest, the apartment-sharing website Airbnb, and the “home operating system” by Apple, to name a few, attest to the new frontiers of digital Government’s Role in Growing a Smart City 27
Investments in smart city field Investments in smart city field in American Cities in European Cities
Buildings Buildings 60 % 60 % Mobility and 40 % Economy and Mobility and 40 % Economy and Transport 20 % People Transport 20 % People
0 % 0 % Living Energy Living Energy
Government Enviroment Government Enviroment
America Europe World World
Investments in smart city field in Asian Cities
Buildings 60 %
Mobility and 40 % Economy and Transport 20 % People
0 % Living Energy Asia Government Enviroment World source: Cassa Depositi e Prestiti (2013), “Smart City. Progetti di sviluppo e strumenti di finanziamento” Figure 2.7 Investments in smart city feld in American Cities; Investments in smart city feld in European Cities; Investments in smart city feld in Asian Cities. information when it inhabits physical space. Similar approaches now promise to revolutionize most aspects of urban life – from commuting to energy consumption to personal health – and as such, they are receiving eager support from venture capital funds.12 That isn’t to say that government should take a hands-off approach to urban development – it certainly has an important role to play. This includes supporting academic research and promoting applications in felds that might be less appealing to venture capital – unglamorous but nonetheless crucial domains such as municipal waste or water services. The public sector can also promote the use of open platforms and stand- ards in such projects, which would speed up adoption in cities worldwide. Barcelona has made a step in this direction by creating the City Protocol13 28 Smart Cities as Democratic Ecologies
Top 10 Smart Cities all over the world Best Quality of Life
Rank City Global Rank City Global Rank 1 Vienna 2012 2011 2 Paris 1 Singapore 1 3 Toronto 2 Sydney 1 4 New Yo rk 3 Adelaide 4 5 London 3 Brisbane 3 6 Tokyo 5 Kobe 4 7 Berlin 6 Perth 6 8 Copenhagen 7 Canberra 9 Dublin 9 Hong Kong 8 12 Melburne 10 Barcelona 8 10 8 Copenhagen 10 11 Bern 17 source: Jones Lang LaSalle (2013), 11 Hong Kong 14 “The Business of Cities 2013. 11 Vancouver 14 What do 150 city indexes and benchmarking 11 Auckland 12 studies tell us about 15 Antwerp 17 the urban world in 2013?” 15 Wellington 14 17 San Francisco 20 17 Tokyo 6 17 Yo kohama 6 20 Amsterdan 22 source: Jones Lang LaSalle (2013), “The Business of Cities 2013. What do 150 city indexes and benchmarking studies tell us about the urban world in 2013?” Figure 2.8 Top 10 Smart Cities all over the world; Best quality of life. that brings together cities, commercial and nonproft organizations, uni- versities and research institutions to develop a shared and interoperable set of guidelines and solutions for city transformation. Most important, these protocols will be multicity, multiculture, and multipartner. But all of this is working toward less top-down determinism; govern- ments should use their funds to develop an organic innovation eco- system geared toward smart cities, similar to the one that is growing in the United States. It is more about bottom-up innovation than top- down projects. This must go beyond supporting traditional incubators, and aim to produce and nurture the regulatory frameworks that allow innovations to thrive. Considering the legal hurdles that continuously plague applications like Uber or Airbnb (paradoxically, Barcelona has been one of the most aggressive Airbnb opponents, fning the company €30,000 for tourism law infraction),14 this level of support is sorely needed. Regulation is still vitally important, but in a more responsive way – government can still take the pulse of innovation and its impact on society, without creating unnecessary legislative constraints. Govern- ments will have to be nimble on their feet, responding to technologies Government’s Role in Growing a Smart City 29
2013 European Smart City Rankings Final Smart Smart Smart Smart Smart Smart City Rank Economy Enviroment Governance Living Mobility People 1 Copenhagen 7 1 7 2 4 1 2 Amsterdam 6 4 9 4 1 2 3 Vienna 4 6 3 1 6 7 4 Barcelona 5 5 5 6 3 5 5 Paris 3 7 8 9 2 4 6 Stockholm 8 2 4 7 7 6 7 London 1 10 7 10 10 3 8 Hamburg 8 3 10 3 5 8 9 Berlin 2 8 6 5 8 10 10 Helsinki 10 9 1 8 9 9 source: Co.Exist - World changing ideas and innovation (2013), “The 10 Smartest European Cities” 2013 Asian Smart City Rankings Final Smart Smart Smart Smart Smart Smart City Rank Economy Enviroment Governance Living Mobility People 1 Seuol 2 6 1 6 3 1 2 Singapore 4 1 2 5 2 7 3 Tokyo 4 2 5 4 4 3 4 Hong Kong 1 5 3 9 1 4 5 Auckland 8 8 4 1 10 2 6 Sydney 3 10 6 3 7 5 7 Melbourne 7 7 7 2 8 6 8 Osaka 9 3 8 10 5 9 9 Kobe 9 4 8 8 6 10 10 Perth 6 9 8 7 9 8 source: Co.Exist - World changing ideas and innovation (2013), “The 10 Smartest Asia/Pacific Cities”
Figure 2.9.1 2013 European Smart City Rankings; 2013 Asian Smart City Rankings. as they emerge. In this manner, new developments will have room to grow, but their rise will be within the bounds of equitable operations.
The case of Singapore Smart Nation
Singapore is an apt case study, with the announcement of its Smart Nation Project (SNP), part of the government’s Infocomm Media Master- plan. “Our goal is to establish Singapore as a smart nation that taps the potential of Infocomm and Media (ICM), and that nurtures innovative talent and enterprises,” said Dr. Yaacob Ibrahim, Minister for Communi- cations and Information. “In this way, the ICM sectors can bring about economic growth and social cohesion, and better living for our people.”15 But how? The city-state fnds itself at a fork in the road toward smart city development, as the island becomes networked and intelligent. 30 Smart Cities as Democratic Ecologies
2013 North American Smart City Rankings
Final Smart Smart Smart Smart Smart Smart City Rank Economy Enviroment Governance Living Mobility People
1 Seattle 1 6 1 5 8 2 2 Boston 2 3 6 7 4 4 3 San Francisco 5 1 7 3 7 3 4 Washington, DC 10 4 2 10 2 1 5 New Yo rk 4 5 3 8 1 10 6 Toronto 2 9 3 3 6 9 7 Vancouver 7 2 9 1 9 6 8 Portland 6 7 5 2 10 5 9 Chicago 9 7 7 8 5 7 10 Montreal 8 10 10 6 2 7 source: Co.Exist - World changing ideas and innovation (2013), “The 10 Smartest Cities In North America” 2013 Latin American Smart City Rankings
Final Smart Smart Smart Smart Smart Smart City Rank Economy Enviroment Governance Living Mobility People
1 Santiago 1 5 5 2 3 4 2 Mexico City 2 6 1 10 1 1 3 Bogota 4 2 3 9 4 2 4 Buenos Aires 8 7 2 4 7 3 5 Rio De Janeiro 3 3 6 7 8 5 6 Curitiba 7 1 10 3 6 8 7 Medellin 6 8 9 6 2 7 8 Montevideo 9 4 7 1 10 9 9 Lima 5 10 4 8 9 6 10 Quito 10 9 8 5 5 10 source: Co.Exist - World changing ideas and innovation (2013), “The 10 Smartest Cities In Latin America”
Figure 2.9.2 2013 North American Smart City Rankings; 2013 Latin American Smart City Rankings.
The frst phase of the SNP will focus on the deployment of hard infra- structure, related specifcally to connectivity and sensors, followed by initiatives that address various dimensions of the island’s life and opera- tions. These technologies constitute a “city operating system” similar to the software systems that run most of today’s smart technologies, from laptops and iPads to increasingly networked domestic appliances. While the masterplan spans the whole island nation, the Jurong Lake District development will become the heart of research and application, serving as a controlled trial area where smart city technologies can be deployed, tested, and subsequently transplanted elsewhere in the city (or across the planet). It will become an applied research site commonly known as an “urban living lab” in smart city jargon. The goals of the SNP are ambitious. First and foremost is a con- certed push for urban effciency. Second, the plan seeks to promote an Government’s Role in Growing a Smart City 31
Smart City Investments in different fields % 70 60 50 40 30 20 10 0 r. l l ro ty stems re pita nt fe ency Sy usion Grid Ca Co Sa r Mng ff rt e Energies te ste Mng ste mobility bl Appliances and E-dem blic blic fo rt Education ocurement and Hospitality anspar lfare Services lfare blic Lighting blic Healthca Sma Wa ov wa Wa tion and Entrep ICT di In llution City Logistics Pu blic Assets Mng blic Tr Pr re Human Pu ne va We Mobility Services Po E-g Sma Pu Home Energy Mng Home Energy Re Building Mng Leisu Inno
Mobility and Transport Energy Economy and People source: Cassa Depositi e Prestiti (2013), Government “Smart City. Progetti di sviluppo e strumenti di finanziamento” Environment Living Building
Figure 2.10 Smart City investments in different felds. ecosystem of entrepreneurial innovation. Are these two objectives – effciency and innovation – attainable? But most important, are they desirable? The frst goal of effciency is quantifable, and strategies for optimizing the city’s function have the potential to make a substantial impact on daily life. Who would not want to live in a city that consumes less energy, or where traffc jams are reduced to a minimum? Singapore is probably one of the world’s best test cases for cutting-edge urban developments. The nation is small, dense, tech- savvy, and most important, can now draw on an overt commitment from the government. This attitude is not new – it has transformed Singapore repeatedly since it became independent. Transportation has been a recurring focus: Singapore pioneered one of the world’s frst Electronic Road Pricing schemes, later implemented by cities elsewhere. The system dramatically reduced vehicle traffc on roads, alleviating congestion, primarily in the central business district during peak hours. The public transit system is no less a model of eff- cient operation: since its inauguration, it has been rated the best Asia- Pacifc metro system and most technologically innovative metro.16 It is also among the most resource-effcient transit networks in the world, as evaluated by the international Metro Rail Awards. 32 Smart Cities as Democratic Ecologies
A framework for stategic planning
What activities do cities currently do that What are a city’s core activities that
ve they should shed? should be retained? ha ly 2+*)&+(ce to reduce costs and free 2&+(ce of competitive advantage up resources; Divest non on-strategic 2&* y need to be optimized, reorganized, consolidated?
Current interest
In which activities should cities continue What new activities should a city be ve to partner for external experience? expanding into? ha ’t 2 ))(y alliance to meet critical 2 w source of sustained advantage needs 2) & !%*ernal assets, relationships and 2ontinue to partner and develop new capabilities alliances Currently don Currently
&%&(e competency Core competency (External specializaton) (Internal specializaton)
Source: IBM Center of Economic Development Analysis (2009), “A vision of smarter cities. How cities can lead the way into a prosperous and sustainable future”
Figure 2.11 A framework for strategic planning.
Today, car autonomy – as in driverless vehicles – is on the brink of entering the consumer marketplace, bringing signifcant benefts to society, drivers, and pedestrians. Singapore, once again, could become a world leader in testing future mobility. This is particularly promising in small controlled sites such as the Jurong Lake District or Sentosa, where autonomous driving projects have already been proposed. But how will all of this spark innovation? Unlike effciency, innovation cannot be institutionally purchased or mandated from the top down. It demands a complex and delicate ecosystem based on the bottom-up, concerted effort of many individuals. Here, Singapore’s forward path will be more challenging. Mr. Lee Kuan Yew famously urged Singapore- ans to take more risks, a vital component of the three attributes of global competitiveness underpinning his development platform: entrepreneur- ship, innovation, and management. “The American economy has taken off because of the enterprise culture and willingness to try,” said Mr. Lee. “I think it’s going to be a very arduous business changing the mindsets [of Singaporeans].”17 In the course of our work on the island, we have personally noticed this same pattern – government and business eagerly seek novel and Government’s Role in Growing a Smart City 33
Cities systems and their interrelationships within the larger framework of the city’s strategy and governance
City Services
Citizens Business
CITY STRATEGY CITY GOVERNANCE
Energy
Transport
City Operations Systems City Users Systems Water Communication City Infrastructure Systems
Source: IBM Center of Economic Development Analysis (2009), “A vision of smarter cities. How cities can lead the way into a prosperous and sustainable future”
Figure 2.12 Cities systems and their interrelationships within the larger frame- work of the city’s strategy and governance. innovative ideas at frst, but soon furtively ask: “How many times has this been implemented before?” (By defnition, if a technology has been implemented before, it is no longer novel!) This is in sharp contrast to the prevailing attitude in California’s Silicon Valley – one of the world’s most productive innovation ecologies – where risk-taking is rewarded, while failure is tolerated. Singapore needs this bold entrepreneurial spirit to exploit the cut- ting-edge tools that will be deployed in the course of the media mas- ter plan. Fostering an innovation culture will not be easy in a country where the educational system has historically been shaped by the stigma of failure [17]. Innovation demands an environment where ideas are tested and challenged, so that new and better ones can advance.
Innovation ecology
There seems to be a fne line for governments to walk as they implement smart city strategies: they should, at all costs, steer away from the temptation to play a deterministic and top-down role. It is not their prerogative to decide 34 Smart Cities as Democratic Ecologies what the next smart city solution should be – or, worse, to use their citizens’ money to bolster the foothold that technology multinationals are gaining in this feld. Conversely, governments should create all the conditions – eco- nomical or normative – to grow innovation ecosystems. And here might lie another delicate balance: between smart city eff- ciency and innovation. In some cases the latter will also need a good dose of chaos – the opposite of optimization – as the Singapore case study suggests. The most creative solutions often emerge and thrive in environ- ments with less regulation and more mess. In other words, at times we might want less “smart” if “smart” is to be more than an empty label.
Notes
1 World Bank, Urban Development topic. 2 Weiser, M.. “Ubiquitous computing,” http://www.ubiq.com/hypertext/weiser/ UbiHome.html. 3 The term “Internet of Things” was coined by Kevin Ashton in 1999 for a presentation to Procter & Gamble (P&G) executives. However, the concept was detailed in a 1991 paper by Mark Weiser for Scientifc American. “The computer for the 21st century.” Scientifc American, 265(3), pp. 94–104. 4 Glaeser, E. (2011). Triumph of the city: How our greatest invention makes us richer, smarter, greener, healthier, and happier. New York: Penguin Group, 2011. 5 O’Grady, Michael, and O’Hare, Gregory (2012). “How smart is your city?” Science, 335(6076) (March 30), pp. 1581–1582. 6 McKinsey & Company (2013). “How to make a city great.” September. 7 Rio de Janeiro, IBM® Intelligent Operations Center, and IBM Smarter Cities Software. Inaugurated by Mayor Eduardo Paes in 2010. 8 Infocomm Development Authority (IDA) and the Singapore Smart Nation Programme, housed within the offce of Singapore prime minister Lee Hsien Loong. 9 Amsterdam Metropolitan Solutions launched by former Amsterdam Vice- Mayor Carolien Gehrels. 10 Digital Agenda for Europe, a Europe 2020 Initiative. European Innovation Partnership (EIP) on Smart Cities and Communities. 11 Rusli, E. M., and MacMillan, D. (2014). “Uber gets an uber-valuation.” The Wall Street Journal, June 6. 12 Herrmann, B. L., and Marmer, M. (2015). Startup ecosystem report. January. 13 City Protocol refers to both a program of activity and to the society that is responsible to develop this system’s approach to rationalize, under a shared basis, city transformation. 14 Kassam, Ashifa (2014). “Airbnb fned €30,000 for illegal tourist lets in Barce- lona.” The Guardian, July. 15 Ibrahim, Yaacob (2014). “Speech by Dr Yaacob Ibrahim, Minister for Com- munications and Information, at the Opening Ceremony of imbX 2014.” Infocomm Development Authority, Singapore, June. 16 Terrapinn (2010). Asia Pacifc Rail Awards. 17 Ignatius, D., and Richardson, M. (2001). “Q & A/Lee Kuan Yew: Singapore’s ‘slow and painful’ shift to Internet Age.” The New York Times, January.