SMART CITIES
Further praise for Smart Cities:
Smart cities require suitable technologies, sustainable business
models, and proper administration processes. This book conveys
concrete ways of how cities can become smart cities.
� Oliver Deuschle, SMIGHT at EnBW, Germany
This book succinctly expresses why only one smart city can persist
in face of location competition.
� Yvonne Beutler, Vice President of City Council, Switzerland
Digitalization opens up myriad development possibilities in cities.
This book expertly delineates various “best practices” as well as
core elements of a systematic and strategic approach.
� Prof. Thomas Schildhauer, Humboldt Institute for
Internet and Society, Germany
Municipal utilities not only construct and operate essential digital
infrastructure, but also new services for a smart city � from waste
disposal “on demand” to electromobility. This book can especially
assist small public utility companies in their efforts to develop and
realize a strategy for their smart city.
� Katherina Reiche, Verband kommunaler
Unternehmen e.V., Germany
The realization of smart city projects presupposes a uniform
understanding of their relevant dimensions. This book and its smart
city management model offer the ideal foundation for this crucial
unification.
� Orlando Gehrig, Swisspower Innovation, Switzerland
SMART CITIES
Introducing DigitalInnovation to Cit ies
BY
OLIVER GASSMANNJONAS BÖHM
MAXIMILIAN PALMIÉUniversity of St. Gallen, Switzerland
United Kingdom � North America � Japan � India � Malaysia � China
Emerald Publishing LimitedHoward House, Wagon Lane, Bingley BD16 1WA, UK
First edition 2019
Copyright r 2019 Emerald Publishing Limited
Reprints and permissions serviceContact: [email protected]
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British Library Cataloguing in Publication DataA catalogue record for this book is available from the British Library
ISBN: 978-1-78769-614-3 (Print)ISBN: 978-1-78769-613-6 (Online)ISBN: 978-1-78769-615-0 (Epub)
Certificate Number 1985ISO 14001
ISOQAR certified Management System,awarded to Emerald for adherence to Environmental standard ISO 14001:2004.
CONTENTS
List of Figures xi
List of Tables xv
Preface xvii
How to Use This Book 1
The Future of Cities and the Concept of Smart Cities 3
1. The Future of Cities 5Cities as a Megatrend 6Current Challenges for Cities 8
Challenge 1: Urbanization and Opposing Trends 9Challenge 2: Modernization Requires Time 13Challenge 3: Development of Diverse Lifestyles 13Challenge 4: Demographic Developments 13Challenge 5: Overloading of Infrastructure 13Challenge 6: Air Quality and Smog 17Challenge 7: Noise 19Challenge 8: Limited Resources of Cities 19Challenge 9: Mobility and Tourism 20Challenge 10: Tragedy of the Commons 20Challenge 11: Immigration 22Challenge 12: Flexibility 22
2. Smart Cities 25A New Role for City Administration 26The Digital Shadow of a City 27Service Areas of a Digital Shadow 31
Smart Environment 32Smart Living 34
Smart Economy 38Smart Mobility 40Smart Government 42Smart People 45
Obstacles for a Smart City 46Volatility 47Uncertainty 48Complexity 50Ambiguity 51The Most Common Obstacles 51
Business Models for a Smart City 57What Is a Business Model? 57
The Smart City Management Model 61Service Areas 61The Transformation Process 63Basic Elements 65
3. Smart City Lighthouse Projects 67Case Study: Vienna 67
Initiate Transformation 69Determine Location 71Develop Concepts and Synchronize Partners 74Activate Resources 79Realize Projects 81Operation and Institutionalization 87Conclusion 88
Case Study: Munich 89Initiate Transformation 91Determine Location 95Develop Concepts and Synchronize Partners 99Activate Resources 103Realize Projects 104Operation and Institutionalization 106Conclusion 107
Case Study: Lyon 109Initiate Transformation 110Determine Location 112
vi Contents
Develop Concept and Synchronize Partners 114Activate Resources 116Realize Projects 117Operation and Institutionalization 120Conclusion 120
Case Study: Songdo City 121Initiate Transformation 122Determine Location 123Develop Concepts and Synchronize Partners 125Activate Resources and Realize Projects 127Operation and Institutionalization 129Conclusion 130
Case Study: Toronto 130About Toronto 131Overview of Smart City Toronto 132Initiate Transformation 132Determine Location 134Develop Concepts and Synchronize Partners 136Activate Resources 137Waterfront Toronto: Initiate Transformation 138Waterfront Toronto: Determine Location 140Waterfront Toronto: Develop Concepts and Synchronize Partners 141What’s Interesting about Toronto? 143
What Can We Learn from the Lighthouse Projects? 147
4. Guidelines for Smart City Transformation 153St Gallen’s Pilot Projects 158Initiate Transformation 162
Preparations and Initial Considerations 162Assembling a Project Team 165Developing a Vision 166Setting Priorities 170Kickoff and Clarifying Responsibilities 172
Determine Location 178Internal Perspective 178External Perspective 180The Point-of-view Method 184
viiContents
Stakeholder Map 186Environmental Analysis 189Identifying Strategic Options 191Determining the Direction of Impact 194
Developing Concepts and Synchronizing Partners 197Ensuring Partner and Citizen Participation 198Designing and Implementing Data Governance 201Preparing Funding 203Developing Project Concepts 207Selecting the Right Technology Platform 209Developing Business Models 216Finding Partners for Implementation 222Dealing with Risks 224Define Criteria for Project Selection 231Performing Project Selection 233Developing Roadmaps 234Learning to Synchronize 237
Activate Resources 238Finding Partners 238Mobilizing Citizens 240Building a Project Coalition 242Clarify the Project Organization 245Defining Funding 248Removing Barriers 253
Realizing Projects 256Operation and Institutionalization 259
Designing an Operating Model with Scaling 262Initiating a Continuous Improvement Process 265Exploiting Synergies between Initiatives 267
5. Outlook 269Software Is Eating the World 269The Ubiquity of Data and Computing 269Computational Materials 270Decreasing Transaction Costs 271A Trend Toward Ecosystems 272The Rise of Artificial Intelligence 273
viii Contents
Unprecedented Forms of Mobility 275New Work or No Work 276The Merging of Humans and Machines 277The Dark Side of the Moon 277Twenty-one Critical Questions for Smart Cities in theTwenty-first Century 278
6. Tools for the Transformation into a Smart City 283The Smart City Maturity Model 283
How to Use the Model 283Stakeholder Map 292Worksheet: Smart City Initiative 293Risk Assessment 296
How to Complete a Risk Assessment 296Cause and Effect Tree 300
How to Use This Tool 301Question for Business Model Scaling 302
How to Use This Tool 303Patterns of Synergy 304
Contacts 309
Acknowledgements 311
Bibliography 315
Index 333
ixContents
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L IST OF FIGURES
Chapter 1
Figure 1.1. The Worldwide Urban and Rural Population from 1950 to2050. . . . . . . . . . . . . . . . . . . . . . . . . . 5
Figure 1.2 Typical Development of Urbanization in a Western and aNon-Western Nation. . . . . . . . . . . . . . . . . . . 8
Figure 1.3. The Most Urgent Challenges for Cities with Respect to SmartCity Topics. . . . . . . . . . . . . . . . . . . . . . . . 10
Figure 1.4. Challenges Addressed by Smart City Projects. . . . . . . . 11
Figure 1.5. Urbanization Worldwide. . . . . . . . . . . . . . . . . 12
Figure 1.6. Regions of Population Decline. . . . . . . . . . . . . . . 14
Figure 1.7. Citizens Fear the City’s Impact on Their Health. . . . . . . 17
Figure 1.8. Smog Values in London. . . . . . . . . . . . . . . . . . 18
Figure 1.9. Percentage of Individuals Exposed to Exceedingly LoudNight Noise, According to the Threshold Values Set by theWorld Health Organization. . . . . . . . . . . . . . . . 19
Figure 1.10. Worldwide Tourism Growth, 1996�2017. . . . . . . . . 20
Figure 1.11. The Frequently Double-digit Growth Rate of Tourism PlacesStress on Infrastructure. . . . . . . . . . . . . . . . . . . 21
Figure 1.12. Over-tourism in European Cities. . . . . . . . . . . . . . 21
Chapter 2
Figure 2.1. The Digital Shadow of a City. . . . . . . . . . . . . . . 30
Figure 2.2. The Warka Water Tower. . . . . . . . . . . . . . . . . 33
Figure 2.3. Development of the Tasks of Buildings in the Future EnergySystem of Switzerland; the Tasks Are in Parentheses. . . . . 35
Figure 2.4. The Holistic Concept of a Decentralized Energy System ofthe Urban Area of Suurstoffi, Zug Estates AG, 2018. . . . . 36
Figure 2.5. Overview of the Solution Space of Decentralized EnergySystems, Based on the Core Development Drivers:Technological Innovation, Business Model Innovation,Integration, and Digitalization. . . . . . . . . . . . . . . 37
Figure 2.6. Energy Hub in NEST at the Swiss Federal Laboratories forMaterials Science and Technology. . . . . . . . . . . . . 38
Figure 2.7. Smart Crosswalk. . . . . . . . . . . . . . . . . . . . . 42
Figure 2.8. Challenges of Smart City Transformations, According to aStudy Conducted by BI Intelligence. . . . . . . . . . . . . 52
Figure 2.9. The Main Smart City Challenges Faced by Mayors of USCities.. . . . . . . . . . . . . . . . . . . . . . . . . . 53
Figure 2.10. The Smart City Management Model. . . . . . . . . . . . 62
Chapter 3
Figure 3.1. Objectives of the Smart City Framework Strategy at aGlance. . . . . . . . . . . . . . . . . . . . . . . . . . 70
Figure 3.2. Smarter Together Project Area in Simmering, Vienna. . . . . 82
Figure 3.3. The SIMmobil Mobile Information Stand. . . . . . . . . . 83
Figure 3.4. Seestadt Aspern.. . . . . . . . . . . . . . . . . . . . . 86
Figure 3.5. Logo of Perspektive München, Munich’s Strategic UrbanDevelopment Concept. . . . . . . . . . . . . . . . . . . 91
Figure 3.6. Interaction of the Eight Central Objectives of City Planning inMunich. . . . . . . . . . . . . . . . . . . . . . . . . . 93
Figure 3.7. Overview of the Smart City Projects of Munich. . . . . . . 94
Figure 3.8. Organizational Structure of Munich’s Smart City Initiatives. . 94
Figure 3.9. Munich’s Smarter Together Project in the Freiham andNeuaubing Districts. . . . . . . . . . . . . . . . . . . . 107
Figure 3.10. Smarter Together Project Area in Lyon.. . . . . . . . . . . 115
Figure 3.11. The Navly Electric and Autonomous Shuttle Service. . . . . 119
Figure 3.12. Master Plan of Songdo City. . . . . . . . . . . . . . . . 127
Figure 3.13. Five-step Action Plan as Proposed by the SCWG. . . . . . 135
Figure 3.14. Quayside and Toronto’s Eastern Waterfront. . . . . . . . . 139
xii List of Figures
Figure 3.15. Sidewalk Toronto’s Sustainability Vision. . . . . . . . . . . 141
Figure 3.16. Flexible and Mixed Uses.. . . . . . . . . . . . . . . . . 142
Chapter 4
Figure 4.1. Communication by the Public Communications Departmentof St Gallen Regarding Smart City Projects in St Gallen(2017). . . . . . . . . . . . . . . . . . . . . . . . . . 157
Figure 4.2. Visual Representation of the Remishueb Project.. . . . . . . 160
Figure 4.3. First Step of the Transformation to a Smart City According tothe Smart City Management Model: Initiate Transformation.. 163
Figure 4.4. Public Value Scorecard for Project Selection. . . . . . . . . 171
Figure 4.5. Sample RACI Matrix.. . . . . . . . . . . . . . . . . . . 175
Figure 4.6. Responsibility Matrix for the St Gallen Smart City Initiative. . 176
Figure 4.7. Organizational Model for the St Gallen Smart City. . . . . 176
Figure 4.8. Step 2 of the Smart City Transformation According to theSmart City Management Model: Determine Location.. . . . 179
Figure 4.9. Smart City Maturity Model. . . . . . . . . . . . . . . . . 181
Figure 4.10. Stakeholders in the Development of a Smart City. . . . . . 184
Figure 4.11. Point-of-view Analysis for St Gallen. . . . . . . . . . . . . 186
Figure 4.12. A Map of the Stakeholder Network in St Gallen. . . . . . . 188
Figure 4.13. Visualization of a Benchmarking Exercise. . . . . . . . . . 191
Figure 4.14. Definition of the Desired State. . . . . . . . . . . . . . . 196
Figure 4.15. Step 3 of the Smart City Transformation According to theSmart City Management Model: Develop Concepts andSynchronize Partners. . . . . . . . . . . . . . . . . . . 197
Figure 4.16. New Services Made Possible by the New 5G Standard. . . 212
Figure 4.17. The Magic Triangle of a Business Model. . . . . . . . . . 217
Figure 4.18. Sample of a Smart City Probability-of-impact Matrix. . . . . 227
Figure 4.19. A Portion of St Gallen’s Impact Tree. . . . . . . . . . . . 229
Figure 4.20. Step 4 of the Smart City Transformation According to theSmart City Management Model: Mobilizing Resources. . . 239
xiiiList of Figures
Figure 4.21. Conflicting Objectives in the Project Organization. . . . . . 246
Figure 4.22. Examples of Goals that Typically Call for Private VersusPublic Financing. . . . . . . . . . . . . . . . . . . . . 249
Figure 4.23. Financial Cycles in a Smart City Transformation. . . . . . . 251
Figure 4.24. The “Valley of Death” in Smart City Transformation Projects. . 252
Figure 4.25. Step 5 of the Smart City Transformation According to theSmart City Management Model: Realizing Projects. . . . . 256
Figure 4.26. Step 6 of the Smart City Transformation According to theSmart City Management Model: Operation andInstitutionalization. . . . . . . . . . . . . . . . . . . . . 260
Figure 4.27. Existing Smart Cities and How They Use Synergies. . . . . 268
Chapter 6
Figure 6.1. Stakeholder Map. . . . . . . . . . . . . . . . . . . . . 292
Figure 6.2. Worksheet for the Conception of a Smart City Initiative. . . 293
Figure 6.3. Example of a Completed Worksheet. . . . . . . . . . . . 294
Figure 6.4. Risk Probability and Impact Matrix. . . . . . . . . . . . . 295
Figure 6.5. Effect Tree. . . . . . . . . . . . . . . . . . . . . . . . 300
Figure 6.6. Scaling Questionnaire, Part 1. . . . . . . . . . . . . . . 301
Figure 6.7. Scaling Questionnaire, Part 2. . . . . . . . . . . . . . . 302
Figure 6.8. Scaling Questionnaire, Part 3. . . . . . . . . . . . . . . 303
xiv List of Figures
L IST OF TABLES
Chapter 1
Table 1.1. TomTom Traffic Index for Smaller and Mega Cities (2018). . 15
Chapter 2
Table 2.1. Comparing Traditional City Management and ParameciumPolitics. . . . . . . . . . . . . . . . . . . . . . . . . . 45
Chapter 3
Table 3.1. Qualitative Smart City Objectives in Munich. . . . . . . . 100
Chapter 4
Table 4.1. Checklist for the Project Team. . . . . . . . . . . . . . . 165
Table 4.2. Checklist for a Visioning Workshop.. . . . . . . . . . . . 167
Table 4.3. Examples of “Smartness” in European Cities’ Smart CityVisions. . . . . . . . . . . . . . . . . . . . . . . . . . 170
Table 4.4. St Gallen’s Initial Self-assessment. . . . . . . . . . . . . . 182
Table 4.5. Examples of Smart City Implementation Initiatives in EachService Area. . . . . . . . . . . . . . . . . . . . . . . 192
Table 4.6. Ideas for Smart City Development in St Gallen. . . . . . . 193
Table 4.7. Typical Life Cycles of Smart City Infrastructure. . . . . . . . 204
Table 4.8. Possible Sources of Financing for Smart City Projects. . . . . 205
Table 4.9. Overview of Risk Categories in Smart City TransformationProjects.. . . . . . . . . . . . . . . . . . . . . . . . . 225
Table 4.10. Checklist for an Initial Risk Assessment. . . . . . . . . . . 227
Table 4.11. Examples of Project Objectives and Possible Performance-based Indicators. . . . . . . . . . . . . . . . . . . . . 230
Table 4.12. Example of a Benefit Value Analysis Using a Likert Scale andWeighting. . . . . . . . . . . . . . . . . . . . . . . . 233
Table 4.13. Synchronization Mechanisms for Smart City Initiatives. . . . 237
Table 4.14. Comparison between Technology-oriented and Citizen-oriented Smart City Planning. . . . . . . . . . . . . . . . 241
Table 4.15. A Comparison between Traditional and Smart CityProcurement Management. . . . . . . . . . . . . . . . . 255
Table 4.16. Reasons for the Failure of Smart City Projects. . . . . . . . 257
Table 4.17. Differences between Innovation Mode and ReplicationMode. . . . . . . . . . . . . . . . . . . . . . . . . . 261
Table 4.18. Key Decisions in the Scaling Up Process. . . . . . . . . . 262
Chapter 6
Table 6.1. Questionnaire to Assess Your City Using the Smart CityMaturity Model. . . . . . . . . . . . . . . . . . . . . . 284
Table 6.2. Risk Assessment Checklist. . . . . . . . . . . . . . . . . 296
Table 6.3. Possible Synergy Patterns for different Types of Cities,Based on Centralization of Asset Management andAccess to Funding.. . . . . . . . . . . . . . . . . . . . 304
xvi List of Tables
PREFACE
The concept of the “smart city” promises to solve many of the urgent
issues that accompany progressive urbanization � overwhelming traffic
congestion, strains on energy and water systems, delinquency, inadequate
housing, and the lack of social inclusion � through digitalization. Smart
cities are therefore highly relevant for political decision makers in munici-
palities, administrative agencies, and nonprofit and civic organizations.
Moreover, smart or “ecosystem” cities offer great potential for countless
corporations in the fields of information technology, real estate, telecom-
munications, energy supply, auto-mobility, sensor systems, and data ana-
lytics. Accordingly, it is not surprising that numerous highly innovative
companies, including IBM, Cisco, Telekom, Siemens, Toshiba, and
Google, along with public utilities around the world, are actively investing
in smart city development. Additionally, many startups are concurrently
entering the Internet of Things (IoT) and energy fields, placing competitive
pressure on established firms.
The social and political demands of the energy revolution, combined with
the auspicious possibilities of an interconnected yet decentralized world
within the framework of IoT, are accelerating the transformation of urban
centers toward becoming smart cities. Despite the exploitation of existing
potentials by “lighthouse” (i.e., pilot) cities, such as Barcelona, Munich,
Lyon, and Vienna, most municipalities have pursued smart city opportunities
only to a limited extent thus far. As a result, the discrepancies between lead-
ing smart cities and less ambitious cities are widening. The need for action is
frequently discerned, yet the most appropriate path of action often remains
unclear.
Various important questions about smart city development are still unan-
swered. What are the core elements of smart cities? What steps should be fol-
lowed in building them? Where does the greatest potential lie? What is the
ideal starting point? What procedures have other cities applied? What can be
learned from pioneers in the field? Are the successes of the greenfield
approaches applied by Asian smart cities transferable to other parts of the
world? What methods and tools can be usefully implemented? What busi-
ness models have participating firms used? How can diverse stakeholders be
effectively integrated?
This book answers these questions in the form of solution paths, accom-
panied by design concepts and success factors. It covers the following main
topics:
• the future of cities;
• an overview of smart cities;
• smart city management model;
• smart city lighthouses;
• guidelines for smart city transformation; and
• tools for making your city a smart city.
Cities today face tremendous challenges concerning livability, mobility,
energy, and communication. These challenges are forcing them to reconsider
their former self-conception, their functionality, and their service offerings.
However, cities that focus actively on their objectives and on the requisite
digital transformation can imagine and realize entirely new living spaces. To
help them achieve this goal, they should learn from the experiences of pio-
neers in the field, which we call lighthouse cities. Urban centers can orient
their strategies around the solutions and experiences of these role model cit-
ies, so as to design and execute their own situation-specific, customized
transformation. These smart city management models serve as reference
frames that provide basic fundamentals, offer recommendations for action,
and contribute to the synchronization of the transformation process. The
models are especially valuable as orientation tools introducing all stake-
holders in a city or region to the smart city concept.
This book is based on ongoing research undertaken by the Institute of
Technology Management (ITEM) and the Center for Energy Innovation,
Governance, and Investment at the University of St. Gallen. Worthy of par-
ticular mention are the European Union project “Smarter Together,” the
national energy research program comprising eight Swiss Competence
Centers for Energy Research (SCCERs), and numerous projects of the ITEM
with partners from the spheres of politics, administration, and the economy.
xviii Preface
The target audience for this book includes all stakeholders involved in a
smart city transformation:
• Mayors, council members, administrators, and managers who must
understand the impact of a smart city transformation and wish to be
informed about promising paths of action.
• Decision makers in corporate settings (e.g., executives, innovation and
R&D leaders, project directors, product managers, and startup
entrepreneurs) who are involved in the realization of smart cities.
• Citizens who want to have a better understanding of future conceptions of
their living environment.
A book is always a collaborative learning process.1 We thank our partners
in Smarter Together, which we were able to assist in the development of busi-
ness models for the lighthouse projects and that in return gave us great
insights in the process of developing a smart city. The concrete implementation
example in the city of St. Gallen was developed in close collaboration with the
municipal utility of St. Gallen (sgsw). We are particularly grateful to Marco
Huwiler and Céline Hähni as well as the mayor of St. Gallen, Thomas
Scheitlin who gave great insights and wrote the case study on St. Gallen. Very
special thanks further go to Karin Klöti, Adrian Joas, and Laura Caviezel for
their detailed research on the case studies, Simon Kuster for the elaboration of
smart city business models, and Matthias Sulzer, Andrea Perl, and Kilian
Schmück for their assistance with the sections on smart energy, smart mobil-
ity, and smart government. Lastly, we especially thank Pete Baker, Katy
Mathers, and the entire Emerald team for making this book possible.
The urban challenges of the future require more intelligent concepts at all
levels. The tools, processes, checklists, tips, and general experiences that
have arisen from our research and practice-related work and are presented
in this book can facilitate the development of such key concepts by decision
makers. They provide a solid foundation for a diverse range of smart city
transformation projects.
We hope that these concepts will spread, and we wish all individuals
responsible for the realization of smart city elements much success in the
development of sustainable environmental, social, and economic solutions.
xixPreface
NOTE
1. For a full and detailed description of all the contributions, see the
acknowledgements.
xx Preface
HOW TO USE THIS BOOK
This book is designed as a standard, practical reference for executing smart
city transformations. It should give everybody involved the necessary back-
ground understanding and tools to get their hands dirty. Here is how we
suggest that you use it.
First: Get an overall understanding of what a smart city can be, what the
challenges are, and where the topic is heading. Focus on the big picture;
don’t get buried in specifics, which will change rapidly with new develop-
ments and technology improvements.
Second: Pay very close attention to the Smart City Management Model. This
comprehensive model is not an academic exercise; it needs to be applied. It
can become the most central management tool in your own smart city pro-
jects. You may wish to adjust it slightly, but be sure to involve your stake-
holders in any revisions.
Third: Find inspiration from how other cities have pursued transformation
by reading about the model cities’ lighthouse projects and reviewing the sec-
tion on tools.
Finally: Engage! The full potential of this book, and especially of the Smart
City Management Model, emerges when it is shared with others. To build
consensus among all stakeholders, focus on execution rather than on differ-
ences in definitions. For example, hold a kickoff meeting with your
stakeholders and discuss who will be responsible for each part of the model.
Shortcuts: The book addresses many different stakeholders in smart city
transformations and tries to be as comprehensive as possible. In view of that
structure, particular stakeholders might appreciate knowing a few shortcuts
to the content most relevant to them:
1
• The decision maker: Chapters 1 and 2 explain what a smart city is and
how to manage it. These are the most important chapters for you. If you
want further detail on large cities, read the case studies. For smaller cities
(around 100,000 people), the example of the Swiss city St. Gallen in
Chapter 5 shows that every city has the potential to take meaningful
action!
• The implementer: If you are in charge of managing implementation and
need the right tools, tips, and tricks to guide you, first familiarize yourself
with the Smart City Management Model. Then jump right into the tools
section and do the analysis of your city’s maturity level.
2 Smart Cities: Introducing Digital Innovation to Cities
THE FUTURE OF CITIES AND THECONCEPT OF SMART CITIES
The 19th century was a century of empires, the 20th century,
a century of nation states. The 21st century will
be a century of cities
� Wellington Webb,
Former Mayor of Denver,
Colorado, United States1
Cities are both a curse and a blessing. On the one hand, they contribute to
sustainability in important ways. Their inhabitants are more eco-friendly,
produce less CO2, and earn a higher average income (GDP per capita) than
rural residents. On the other hand, cities are often associated with crime, air
pollution, health problems, high population density, increased soil sealing,
social conflicts, and traffic issues. The smart city concept attempts to con-
front these negative aspects of cities with innovative, technology-based
approaches. Smart cities are introducing and disseminating competitive
advantages on an international scale.
China has incorporated smart cities as an integral component of its urban
planning, followed by India with its “100 Smart Cities” plan. The number
of smart city projects is growing daily. The Japanese firm Panasonic is con-
structing a new residential district, “Future Living Berlin,” in the city’s
Adlershof section, including 69 housing units with electricity and heat flow
automatically regulated. Microsoft founder Bill Gates has recently purchased
a tract of land in Arizona where he hopes to create a high-tech city with a
high-speed cyber-network, data centers, and autonomous vehicles.
Furthermore, a futuristic $500 billion megacity showcasing, among other
3
things, passenger drones has been planned for the desert sands of Saudi
Arabia, under the leadership of former Siemens CEO Klaus Kleinfeld.
These developments are making the very nature of the city a center of
attention with regard to the sustainability of regions or nations. In the first
part of this book, we consider why this is the case, what the smart city con-
cept truly offers cities beyond the facade of glossy brochures created by tech-
nology firms, and where typical implementation obstacles can be expected.
Despite the often-cited examples of smart megacity projects, across the
globe small and medium-sized cities are increasingly struggling with rapid
changes as well. Although the proportion of the world population living in
megacities (i.e., cities with more than 10 million inhabitants) has grown to
5.3% in 2010 (compared to 1.4% in the 1960s) and will reach 7.9% in
2025 according to projections, small and medium-sized cities (with between
300,000 and 5 million inhabitants) have experienced equally rapid develop-
ment: The proportion of the global population living in such cities increased
from 11.2% in 1960 to 15.4% in 1990 and then to 19% in 2010, and it is
projected to reach 22.4% by 2025. In other words, far more people live in
modest-sized cities than in megacities. This frequently ignored fact leads
inevitably to the conclusion that medium-sized cities and their municipalities
should assume a predominant role with respect to smart city initiatives in
Europe. These cities will be responsible for spreading smart city ideas. Thus,
this book examines the very specific challenges of such cities.
NOTE
1. Huffington Post, 2017.
4 Smart Cities: Introducing Digital Innovation to Cities
CHAPTER 1
THE FUTURE OF CITIES
The projections convey a clear message: cities represent the living environ-
ment of the future. The “century of the city” has been a crucial theme pre-
occupying politicians, business developers, city planners, public authorities,
and citizens in recent years (Figure 1.1).
Figure 1.1. The Worldwide Urban and Rural Population from 1950 to2050.
Source: United Nations (2015).
5
CITIES AS A MEGATREND
The importance of cities for the future of civilization becomes evident when
one considers the following facts:
• Worldwide, more individuals are living in cities than in rural areas. In
2014, 54% of the human population resided in cities, whereas in 1950,
city dwellers constituted only 30% of the global population.
• In 2040, 65% of the global population will be living in cities.
• Every second two persons move into a city worldwide.
• In 2050, 70% of the global population will be living in cities. Urban
societies will consume 80% of total energy, produce 75% of total CO2
emissions, and expend 75% of resources.
• Urban centers possess massive appeal. The three most popular city
hashtags on Instagram in 2016 (#NYC, #London, #Paris) were mentioned
in more than 180 million tweets.
The growth of urban economic centers is already causing the importance of
countries to diminish. Silicon Valley, the epitome of innovation in the digital
age, is competing with cities such as Shanghai, Boston, and Bangalore, rather
than with nations such as India or China. This trend toward the increasing
importance of cities, which may even surpass the significance of nations, not
only entails bright prospects for urban areas but also great challenges: noise,
smog, mobility bottlenecks, tightly constrained living spaces, overloaded energy
and communication infrastructure, the redefinition of the urban role, modifica-
tions of existing structures, and social challenges related to living and working.
The challenges confronting cities vary significantly depending on the region
and the city’s size. Massive urban regions such as Tokyo�Yokohama, Jakarta,
Delhi, Manila, Shanghai, and Mexico City have all exceeded 20 million inhabi-
tants and have experienced enormous population growth in the last few
decades. These cities have very different challenges and opportunities from cities
such as Stuttgart, Porto, Halifax, Richmond, or Boise.
Urbanization Across the World (United Nations, 2017)
Africa: Africa has the lowest level of urbanization, with an annual urban
growth rate of 4%. The number of cities in Africa with more than one
6 Smart Cities: Introducing Digital Innovation to Cities
million inhabitants has grown rapidly from 28 in 1995 to 43 in 2005 and
59 in 2015. It is expected that the number of individuals experiencing
urbanization will rise from 413 million (2010) to 569 million (2020).
Asia-Pacific region: About half of all people living today are in Asia, which
is experiencing rapid urbanization, largely due to the industrialization of
China and India. The impact of Asian cities on the world stage is increas-
ingly apparent. In global city rankings, based on its gross domestic prod-
uct, Shanghai is expected to rise from 25th place in 2008 to 9th place in
2025. The number of city dwellers in this region will increase from 1.675
billion (40% of all residents) in 2010 to 2.086 billion (47%) in 2020.
Latin America: Demographic changes during the past century have
prompted the development of a highly urbanized structure in Latin
America. About 540 million Latin Americans (78% of the total popula-
tion) are living in cities. However, regional differences exist. In some South
American countries, the proportion of city residents has approached 90%,
whereas in Central America this demographic group represents only 50%
of the population. As a whole, the urbanization level for the entire region
is expected to increase to about 83% by 2020.
North America: In contrast to Africa, Asia, and Latin America, North
America is experiencing relatively moderate population growth (0.9%
annually between 2000 and 2010), 75% of which is occurring in metropol-
itan areas. However, this growth is not uniform. In fact, the suburban
growth rate was three times as high as that of inner cities. Migration from
northern to southern regions has occurred, leading to especially high popu-
lation growth in suburbs of southern US cities. Nonetheless, large cities are
still growing due to the high proportion of immigrants, which balances out
the flight of other Americans away from cities. It is projected that the degree
of urbanization is continuing to increase from 82% (2010) to 85% (2020).
Europe: Urbanization patterns in Europe are similar to those in the United
States, with both differing sharply from demographic developments in the
rest of the world (see Figure 1.2). Various trends in Europe have caused
conceptions of the city to evolve constantly and have posed significant
challenges. In Europe, growing populations are not a major factor in
urban development; in fact, during the last century, one-third of European
7The Future of Cities
cities experienced a population decrease while another third had no signifi-
cant change. Projections indicate that the degree of urbanization is increas-
ing only slightly from 73% (2010) to 75% (2020).
Figure 1.2. Typical Development of Urbanization in a Western anda Non-Western Nation.
CURRENT CHALLENGES FOR CITIES
City planners are confronted by new and constantly changing sources of ten-
sion and strain. Consider the following surprising facts:
• In San Francisco, 4% of municipal waste is produced by domestic
animals, and that percentage continues to grow.
• In Germany, 320,000 coffee-to-go paper cups per day are consumed,
leading to 40,000 tons of waste every year.
• The Swiss city of Basel has 31,000 public parking spaces and 69,000
more on private property, whereas the city’s residents have registered only
57,000 automobiles. This is not efficient.
• The average speed of tramways is 15.4 km/h. Subways meanwhile drive at
an average speed of 31.3 km/h.
• 80% of buildings in Europe will still exist in 2050.
• Drivers in Frankfurt am Main spend on average 65 hours each year searching
for a parking space, resulting in costs amounting to 1,419 euros (Statista, 2017).
8 Smart Cities: Introducing Digital Innovation to Cities