GETTING SMARTER ABOUT SMART CITIES

2 GETTING SMARTER ABOUT SMART CITIES | APRIL2014

GETTING SMARTER ABOUT SMART CITIESDECEMBER 9–10, 2013

SummaryandKeyTakeaways

verthelastfiveyears,theconceptofthetechnology-driven“smartcity”hascapturedtheimaginationofpublic,private,andnonprofitleadersalike.Yetfortherapidriseininterest,smartcitydeploymentshavefailedtomeetbothprivatesectorfirms’adoptionambitionsandthepublicsector’sexpectationsforimpact.Againstthisbackdrop,theBrookingsInstitution’sMetropolitanPolicyProgramandBarcelona’sESADEBusinessSchoolbroughttogetherofficialsfromcitiesthrough-outEurope,Canada,andtheUnitedStatestobetterunderstandthepromiseand

practiceforsmartcitiesaroundtheworldtoday.

Thediscussionistimelyascitiesarerespondingtomyriadpressures(e.g.populationgrowth,climatechange,fiscalstress)byseekingnewmoreefficientwaysofoperatingthroughtheuseofinformationandcommunicationstechnologies.Theseinvestmentsindigitalinfrastructurearedesignedtoimprovethewaywemanagethebuiltenvironmentandconfrontthechallengesofurbanization.Frommandat-ingtheconstructionofenergyefficientbuildingstocreatingintelligenttransportnetworks,citiesareseekingtobecome“smarter.”

Thetantalizingprospect:Citiesacrosstheglobeusetechnologytomanageurbancongestion,maxi-mizeenergyefficiency,enhancepublicsecurity,allocatescarceresourcesbasedonrealtimeevidence,andeveneducatetheircitizenrythroughremotelearning.Atstakearenotjustgreaterlivabilityandsustainabilitybutthejobsandinvestmentthataccruetocommunitiesatthecuttingedge.Citiesandregionsmustconsiderwhethertheywillbeabletoeconomicallycompeteandsustainablygrowwith-outfullyintegratingdigitaltechnologyintotheirbuiltenvironments.

However,thereisstillmuchworktobedonetomakesmartcitydevelopmentthenormratherthantheexception,andtomatchthedeploymentstothehype.

TheBrookings/ESADEdiscussionconsistedofatwo-dayworkshoptoinvestigatehowpublicsectorinnovationscancontributetothiseffort.Thefirstdayincludeda public eventfeaturingciviclead-ersfromNorthAmericaandEuropethatareusingemergingtechnologiestomakethemostoftheirlimitedbudgets,acceleratetheimplementationofnewdigitalsolutions,andgrowtheirmetropolitaneconomies.Onthesecondday,participantsrepresentingeightcitiesacrosstwocontinentscontrib-utedtoaprivateworkingsessionfurtherinvestigatingtheseissues.Thesessionsincludedshortpresentationsbycityleaders,smallbrainstorminggroupexercises,andlarge-scaleconversations.

Whatfollowsisadistillationofthekeythemesandtakeawaysfromtheworkshop.

APRIL2014| BROOKINGS INSTITUTION / ESADE 3

I.SmartCitiesBeginwithanEconomically-Driven, Technologically-Focused Vision

Participantsagreedthatacity’sabilitytoachieve“smart”statusmustbeginattheplanningstage.Smartcitiesknowwhattheywanttobe;theyhaveanoverarchingeconomicvisionbasedonatrueassessmentoftheirstrengths,challenges,andopportunities.Smartcitieswillthenharnessthepoweroftechnologytobringtheireconomicvisiontofruition.Edmontonisaclearleaderinthisarea,usingtechnologyprogramsthroughoutthesixstrategicplanscontainedinitsCityVision2040efforttodesignandachievethecity’slong-termeconomicstrategy.

Citiesingeneralshouldpreparetheireconomicvisionswithouttheexpectationofnationalgovernmentassistance.Washington’sfiscalpull-back,plusthelackofrelatedfederalgrantprograms,putstheonusonlocalauthoritiestolocateandsecurecapitalfunding.InEurope,thecombinationofausteritymeasuresandslow-growingnationaleconomiesoftenleavecitiesasthemostcapableinvestor.Yetthiscallforlocalresponsibilityshouldbeseenasanopportunity.Thelackofnationalguidelinesandcapitalprogramsprovidelatitudetocraftacityeconomicvisionuniquetotheirgoalsandneeds.

Onthebusinessside,thereisamajorflawinthecurrentmarket.Thetypicalbusinessagendaisforprivatefirmstoapproachcitieswithavailablesolutions.However,bothcitiesandfirmshavefoundthisapproachtoyieldunsatisfyingresults,eventhoughbothpublicofficialsandfirmrepresentativesagreethesolutionscouldimprovecityoperations.Onlybyfirstestablishingacomprehensiveeconomicvisioncancitiesknowwhatproductstodemandandwhatpoliciestoadopt—leadingtoagrowingmar-ketplaceforallparties.

“�Only�by�first�establishing�a�comprehensive�economic�vision�can�cities�know�what�products�to�demand�and�what�policies�to�adopt—leading�to�a�growing�marketplace�for�all�parties.”

123

4 GETTING SMARTER ABOUT SMART CITIES | APRIL2014

II.ASuccessfulCityVisionMustAddressThree Key Economic Drivers

Simplydraftingatechnology-focusedeconomicvisionisnotenough,however.Asuccessfulvisionwillalsoexplicitlyusetechnologytopursuethreekeydriversforanyhealthyeconomy.

THE FIRST IS PRODUCTIVITY:Acity’seconomicvisionmustsupportaggregateeconomicgrowthandpromoteefficienciesthroughoutthepublicandprivatesectors.MultiplepanelistsreferencedtheconcertedeffortbyNew York Citytogrowitstechandinformationindustriesinsupportofthecity’slong-termeconomichealth.Thesepoliciesrangefromlarge-scalepublicinvestments,likethemultipleApplied Sciencescampuses,tofacilitatingventure capital fundraising.Aproductiveeconomicvisionalsowilltargetthepublicsector’stechnologybase—mostnotablydepartmentalwebsitesandtheirservices—tocreategovernmentefficiencies,whichreducecostsfortheentiremarketplace.

THE SECOND IS INCLUSIVITY: Avisionmustsupportopportunityforallfirmsandcitizens.Toextendthepreviousexample,broadbandisequallyimportanttothefutureeconomicsuccessofhouseholdsaswellasitsbusinesses.SoasLos Angelesandothermarketsexploreprovidingtheirpublicschoolstudentswithtabletcomputers,forexample,everychildshouldhavetheopportunitytousebroadbandintheirhomeandtakefulladvantageofmoderncomputingcapabilities.Educationextendstoadults,too,asimplementingsmartcityinvestmentscanprovideaplatformtotrainworkersfor21stcenturyemploymentopportunities.Likewise,opendatapoliciescaninspirenewcitysolutionsandgrowlocalcompanies,allwithoutthefailingsofprivilegedaccess.

THE THIRD IS RESILIENCY: Avisionmustsupportamoresustainablebuiltenvironment.Whilecitycoresareoftenenergyefficientbydesign,citiesandtheirsuburbsstillgeneratemoreaggregatecarbonthanotherpartsoftheworld.Atthesametime,theirdensecollectionsofpeoplemakethemespeciallysusceptibletothenaturaldisastersandotherlong-termenvironmentalconcernsrelatedtoclimatechange.Asmartcitywillunderstanditsglobalresponsibilitytoadoptsustainablepoliciesandmakeenvironmentally-friendlyinvestments.Fortunately,technologyisagreatenablerinthisspace.FromcuttingedgecoastalfloodmanagementintheNetherlandstoEdmonton’sThe Way We Green environmentalplan,asmartcityvisionistheperfectwaytomakeaneconomymoreresilientthroughtheuseoftechnology.

APRIL2014| BROOKINGS INSTITUTION / ESADE 5

III.CitiesMustReformGovernmenttoSuccessfullyImplement Their Economic Vision

Developingafocused,forward-lookingeconomicvisionthattargetslong-termproductivity,inclusivity,andresiliencyisthefirststepinmakingcitiessmarter.Yetthosesamecitiesalsoneedtomakesuretheirinternalstructurescansupportthatvision,meaningpurposefulintegrationbetweentechnologyandsustainabilitydepartmentsandtheirpeersinotheragencies.Participantsfeltthatwidespreadchangesneededtooccurintheprevailinggovernancestructuresofmostcities.

Bybreakingdownsilosandformalizingcollaborationamongdifferentcityagencies,inparticular,participantsthoughtleaderswouldbebetterequippedtohandlesmartcityactivitiesandaddresstheirongoingtechnologicalneeds.Philadelphia,forinstance,founditespeciallyusefultoholdformalmeetingsandcoordinateeffortsacrossadistinctsetoflocalactors,includingenhanced neighborhood-level communica-tions.Mayors,economicdevelopmentofficials,andsmartcitystaffmembersarealsoamongthemanyindividualsacrosscitiesthatneedtoworktogetherinpursuitoftheircollectiveeconomicgoals.

Yetastechnologydepartmentsbecomemoreintegratedintolong-termdecision-making,participantsagreedthatprocurementreformiscritical.Anexamplefoundinmultiplecitieswastheinabilitytoallowfirmsselectedtobuildtechnologypilotstoalsobidonlargerrollouts.Thiscounterintuitivepolicyactuallystallsinnovation,ratherthansupportingit.Procurementgatekeepersmustunderstandthatgrowingasmartcityreliesoncutting-edgetechnologies,andtypicalrulesmayneedtweaking.ThistrueinChicagoandPhiladelphia,wheregenuineprocurementreformstargetedatgovernmentandtechproducersareunderway.

Participantsalsochampionedtheideaofintegratingtechnologyintolong-rangeeconomicdevelopmentplans,specificallyasmeanstosecurefundingforsmartcityprojects.Toronto’swaterfrontprojectwillrevitalizeamassiveareabypursuingincreasedeconomiccompetitiveness,amoresustainableenvironment,andamorelivablemega-neighborhood.Critically,itincludesaninnovationagendathatprioritizestechnology-driveninfrastructureupgrades.Byincludingtheseinnovationelementswithintheoriginalvision,themassivewaterfrontprojectunlocksfundingstreamsforspecifictechprojectsandhelpsforgeintegrationbetweentechnologyagenciesandothercitydepartments—alltenetsofasmartcity.Integratingsmartcitytechnolo-gieswithlong-rangeplansisespeciallyhelpfulinmaintainingfundingaroundadhocprojects.

Toreformgovernmentandintegratemoretechnologyprojectsintodevelopmentefforts,partici-pantsagreedthatbroadbandcanspringboardtheseefforts.Muchlikeelectricityandphonelinesofthe20thcentury,everyindustryandhouseholdwillrequireaccesstobroadbandtoreachtheirfullpotentialinthe21stcentury.Thatmakescitytechnologyleaders,andtheirpartnersinsustainabilityoffices,criticalactorsmovingforward.It’swhyeffortsincitieslikeLos Angelestoexpandbroadbandaccessandfiberdeploymentcitywidewillbothincreasecitycompetivenessinthecomingdecadesandstrengthentheroleoftechnologywithinlocalgovernmentdecision-making.Italsomeansdepartmen-talheadsresponsibleforbroadbandshouldbeincludedinnearlyalleconomicdevelopmentplans.

“�Procurement�gatekeepers�must�understand�that�growing�a�smart�city�relies�on�cutting-edge�technologies,�and�typical�rules�may�need�tweaking.”

6 GETTING SMARTER ABOUT SMART CITIES | APRIL2014

IV.CitiesMustBalancetheRelationshipBetweenProject Scale and Risk Tolerance

Alongsideestablishinganeconomicvisionandreforminggovernment,asmartcityalsorecognizestheappropriatescaletodeploytechnologyinvestmentsandhowtomeasurethatscaleagainstpublicexecutives’risktolerances.Scaleandriskmanagementarekeyelementstoaddresspolitical,logisti-cal,andfinancialbarriers.

Whilelocalgovernmentsarethecrucialpublicsectoractorinthesmartcityspace,notallprojectsandplansshouldencompasstheentirecity.Particularmedical,innovation,oradvancedindustryhubsmaydemandspecificsmartcitytoolsthatdonotyetneedtobescaledtotheentirecitytomakeamean-ingfuldifference.Forexample,providingaccesstolaborincubatorspaceinaspecificdistrict,suchas22@BarcelonaortheBoston region’sKendallSquare,canfulfilleconomicdevelopmentneedsbasedondistinctivemarketadvantagesthatleveragetheirneighborhood-levelscale.Afterdemonstratingprovendemandinsmaller,oftenbusiness-focuseddistricts,technologieslikesmartmetersorelectricvehiclechargingstationscanbeexpandedtoanentirecity.

Scaleiscriticaltoprojectfinancing,too.PlaceslikeAmsterdamareutilizingpublic-privatepart-nershipstospreadtherisksandrewardsofsmartcitytechnologiesbetweenthegovernmentandbusinesscommunities.Othercitiesareworkingactivelytobreakdownthetraditionalbarriersbetweenbureaucraticsilos.San Francisco’sapproach,seenthroughtheirclimate plan,istobringtogetherstakeholdersacrossmultipleagenciestodefineprioritiesandaligngoals.Torontoispursu-ingbothcoursesbypartneringwithboththestateandnationalgovernmenttounlock$500millionincapital,whichwillfurtherstimulate$700millioninprivateinvestment.

Intheprocessofdesigningprojects’geographicandfinancialscope,smartcityleadersmustalsoconsiderrisktolerancewithintheircommunities.Amajorconsiderationispoliticaltimelines.Manymarketscouldbefirstmovers—bothonprojectsandpolicies—andelectedofficialsmayberesistanttoproductionpipelinesthatmayexceedtheirtimeinoffice.Similarly,someexecutiveleadersmayberesistanttolargeprojectswithbroadgeographicreachandpricetagstomatch.

APRIL2014| BROOKINGS INSTITUTION / ESADE 7

V.CitiesRequireStronger NetworksandImproved Communication Tools

Inlightofthegovernance,scale,andotherimplementationhurdles,participantsvoicedtheneedforstrongnetworksofleaderstodrivesmartcitypoliciesandinvestments.Representativesfromthepublicandprivatesectorshouldplayaleadroleformingthesenetworks,tobesure,buttheymustalsoextendtoincludecivicactorsandotherinfrastructureusers.Technology,assuch,canserveasaneffectiveconvener,broker,enabler,andigniterforahostofinterests.

Participantsalsoarticulatedtheneedformorecity-to-citycollaborationinstrengtheningthesenet-worksandcompletingprojectswithintheirownjurisdictions.Throughexpandedpartnerships—bothformalandinformal—citiescanspreadbestpractices,embracenewtechnologies,andreplicateothercreativesolutionsadoptedelsewhere.Forexample,San Franciscorecognizeshownetworkscanfacilitatetheefficientadoptionoftechnologiesandconsistentlyidentify“painpoints”inexistingurbancenters.TheUrban Sustainability Directors Networkwashighlightedasanorganizationalmodel.ParticipantsalsorecognizedEuropean citieshaveaclearadvantageinthisrealm,asEuropeanCommissionprogramslikeSmart Cities and Communitieshelpbuildnetworksthroughformalcommunicationandgrant-makingauthority.

Atthesametime,generatingpublicsupportremainsakeycomponentintheseengagementstrategies.Ascitiespursuenewkindsofsmartcityprojectsovertime,leaderswillneedtodefinetheseeffortsclearlythrougha“commonlanguage”andexplorenovelwaystogalvanizepublicinterest.Effectivemarketingmeansmostcitizenshaveheardofsmartcitiesorsomethingsimilar,butfewunderstandwhatitmeans.Greatertransparencyintechnologydeploymentnotonlyeducatescitizensonthetangiblecostsandbenefitsofsmartcityimprovements,butalsomakesiteasiertoadvancesimilarupgradesinyearstocome.

VI.Conclusion

Twenty-firstcenturytechnologiesoffernewfoundpromiseforthefutureofcities:moreefficientresourceusage,greaterconnectivitybetweenpeopleandplaces,andbroaderopportunityforall.Theyalsopromiseacompetitiveandsustainableedgerelativetoothercitiesslowtoadapt.Butachievingthoseimpressivegoalswillrequiremorethanmajorcapitalinvestmentsandbottom-upinnovations.Citiesneedaclearvisionfortheireconomicfuture,onethatisgroundedinrealityandleveragesuniquelocalassets.Onlywithsuchavision,andtheaccompanyingpolicyframework,cancit-iestrulydeploytechnologyinthesmartestwayspossible.n

“�Greater�transparency�in�technology�deployment�not�only�educates�citizens�on��the�tangible�costs�and�benefits�of�smart�city�improvements,�but�also�makes�it�easier�to�advance�similar�upgrades�in�years�to�come.”

1775MassachusettsAvenue,NWWashingtonD.C.20036-2188telephone202.797.6000fax202.797.6004websitewww.brookings.edu

telephone202.797.6139fax202.797.2965websitewww.brookings.edu/metro

BROOKINGS

FOR MORE INFORMATION:

AdieTomerSeniorResearchAssociateandAssociateFellowBrookingsMetropolitanPolicyProgramatomer@brookings.edu

RobertPuentesDirectoroftheMetropolitanInfrastructureInitiativeandSeniorFellowBrookingsMetropolitanPolicyProgramrpuentes@brookings.edu

The Metropolitan Policy Program at Brookings would like to thank the Metropolitan Leadership Council, a network of individual, corporate, and philanthropic investors that provide us financial support but, more importantly, are true intellectual and strategic partners.

The Smart Cities series explores the role urban technologies play in making cities more productive, inclusive, and resilient. The

application of digital infrastructure investments—specifically through information, communications, and sensor technologies–promises to integrate public services, better connect cities with its citizens, and enhance overall productivity. The Smart Cities series aims to improve technology policy and project deployment by providing ground-breaking research projects and cataloging best and worst practices from cities across the world.