In prior discussions about smart cities, including the global rankings I published on Co.Exist a few weeks ago, I believe many of us have under-emphasized the importance of cities in creating an enabling environment for emerging technology companies.
This was a key issue addressed at the first-ever Cities Summit held in Vancouver earlier this month. Mayors of 35 cities around the world joined with executives and consultants in an intense day and a half of panels discussing open cities, digital cities, urban laboratories, smart-city financing, and startup cities.
One of the most interesting conversations was about "Startup Cities." Nanci Klein of San Jose spoke about the five different industrial areas that the city is promoting, as well as the role of the city in supporting the local startup community. One of San Jose’s early insights was addressing the bureaucratic hurdles in their procurement process by creating a demonstration program that bypasses some of the traditional constraints that usually prevent the government from innovating.
In 2008, San Jose created a "Framework for Establishing Demonstration Partnerships" which allows the city to work towards a more sustainable future—including the creation of 25,000 new green jobs—by enabling local companies to use municipal facilities as urban laboratories to test out new clean tech, sustainability, and mobility technologies. Rather than having to jump through the typical arduous and bureaucratic hoops, the demonstration allows the fast-tracking of pilot projects from local companies.
San Jose’s website explains: "The City may consider partnerships that temporarily utilize City owned land, facilities, equipment, rights-of-way and data, provide financial assistance and/or absorb some costs for project implementation, require agreement to non-disclosure statements and request City Council to exempt the project from certain City Policies."
Throughout the two-day summit, I reflected on how smart cities not only use technology in ways that improve the quality of life and reduce the ecological and carbon footprint of their citizens, but also how they can leverage their procurement dollars to serve as urban laboratories and incubation engines.
Smart cities of the future will find ways to incentivize and enable private sector innovation and local economic growth. The question is, how can cities accomplish this?
I think it is largely about innovative use of demand-side tools, as opposed to supply-side solutions like tech parks and tax breaks. As Klein noted, when San Jose conducted stakeholder discussions with the private sector, city leaders learned that the tech sector did not seek further supply-side support. But the feedback was that the emerging companies wanted to find a way to get their pre-commercial technologies tested by the city. This allows startups to get the kinks out as well as increase their ability to sell technology to other markets. This is why San Jose focused on creating a program to support demonstration projects. Aside from procurement, cities can also use things like new standards or regulations (e.g. green building standards) to stimulate demand for new clean solutions.
So if a smart city has created clean, enabling infrastructure like broadband and public transit, and implemented innovative demand-side policies, what else is missing? Attracting and retaining young, educated people to study, live, and work in smart cities is a critical piece of the puzzle.
Good city branding attracts and retains new talent, startups, services, and the arts. City branding also enhances the ability of local companies to market their products and services internationally. For example, Vancouver has built a strong international brand for smart development. For this reason, six Vancouver sustainable development experts were recently invited to Guayaquil, Ecuador, to discuss how lessons from Vancouver could be adapted to their city (I was one of those "experts").
One caveat: Before competing for talent, cities need to increase livability and grow their enabling infrastructure to support emerging companies before embarking on a smart-city branding initiative.
The Vancouver Cities Summit was an engaging journey into the future of city building, and highlighted for me the importance of not just infrastructure but the critical role city leaders play in incubating local smart and clean technologies. The cities that pull this off—and create a unique brand—will be best positioned to succeed in the increasingly competitive market for talent.