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Conceptualizing “Smart Cities”

Researchers Matthias Finger and Mohamad Razaghi published an article in Springer, regarding Smart Cities. The article provides an a-up to date review on this issue. Here there are some of the key issues.

The goal of the article is not to criticize smart cities, nor is it to promote them. The authors stress that they would like to make a contribution to develop a more realistic and ultimately more practical view of what smart cities can achieve… and what they cannot.

The researchers take large urban systems – which are agglomerations or metropolitan areas, rather than cities – as the relevant unit. In other words, large urban systems are, on the one hand, physical places where people live and work together; while on the other urban infrastructure systems (transportation, energy, water and wastewater, housing, telecommunications, and green infrastructures) create and determine the very conditions of such living together.

What is Digitalization?

The three main building blocks of digitalization, namely are data generation, data connection, and data analysis.

Data is generated from numerous sources such as (digital) cameras, sensors, RFIDs, satellites, and many other technical devices about ever more things. Not only is the number of data-collecting devices increasing exponentially, but moreover these devices are increasingly active both round the clock and the year.

The second building block of global digitalization is the “Internet,”: the World Wide Web and the Internet combined make all these data globally available and accessible.

The third building block of digitalization pertains to the capacity to deal with these huge amounts of data. But what is really new is the rapid development of the analytical skills, i. e., the available intelligence, to analyze these exponentially growing amounts of data, leading to new ways of analyzing and visualizing these data, a phenomenon called “big data”.  Typically, the analysis of such data will lead to (new) services that can either pertain directly to the usage of the urban infrastructure systems (e. g., mobility pricing) or indirectly as in the case of location-based offers to users. Sometimes, such services are also called “smart (city) services.”

Implications of Digitalization for Cities

The authors stress that the generation of all these data from the various urban infrastructures can lead to more than making them more efficient (smart city) or to generating new (cross-modal) urban services. Even though there are far fewer examples available, digitalization offers completely new and unprecedented opportunities for governing urban systems, notably in terms of citizens’ participation and more generally involvement of nongovernmental actors in collective decision-making and management.

However, the research points out that this potential for digitalization to be used in the governance of metropolitan areas has, unfortunately, so far been under-unexplored. Yet, potentially, this will lead to much more than making cities more efficient and will, in the end, also require a concept other than “smart city” to adequately account for this new phenomenon.

Perspectives on Smart Cities

The authors highlight that their conceptualization of smart cities as the application of digitalization (three building blocks) to urban infrastructure systems also offers a better understanding of the various interests in promoting “smart cities,” a promotion which has been mostly pushed, so far, by various types of vendors. This is not to say that the vendors’ perspectives are not legitimate; rather, the article will argue that their various perspectives are partial and ultimately do not exhaust the potential of digitalization for cities.

There is first the perspective of the different hardware vendors: such vendors sell sensors, cameras, and many other monitoring and data-generating devices.

There is secondly the perspective of the telecommunications operators: telecommunications operators are typically intermediaries that connect the data-generating devices either directly to the Internet or to some sort of digital platform. They are not vendors per se, as they predate the smart city phenomenon. However, as intermediaries they have access to huge amounts of data, which they hope to ultimately monetize by turning these data into smart city services for individuals.

There is thirdly the perspective of (digital) platform operators: these are typically companies that own and operate physical servers and ICT-platforms more generally (hardware), in most cases for firms, such as banks, retailers, logistics companies, and others. Their interest in promoting the concept of smart city lies in the fact that they would like to also sell such platforms to urban utilities and city government. They may also want to move into offering smart city services, given that they have access to all this data.

There is fourthly the perspective of data analytics companies: these companies, by virtue of their expertise in analyzing (and displaying) (big) data, are able to make such data value-added and therefore commercially interesting services for users, which can be individuals (e. g., e-hailing services), other firms (e. g., consumer behavior analysis), or cities (e. g., traffic analysis). This is probably the most lucrative segment of the entire “smart city value chain,” which is why all previously mentioned vendors ultimately also want to move into this segment of the value chain.

All four perspectives detailed above contrast, at least in principle, with the perspective of a city or more appropriately of a metropolitan area itself. The main difference pertains to the fact, that all above-mentioned operators will ultimately pursue a commercial interest, even though public operators such as public urban utilities may have slightly less financial pressure. This leads them to develop services that can either be directly monetized by selling them to individuals or firms or services that help cities (or firms) become more efficient, thus saving on costs.

This is precisely why the concept of smart cities as promoted by the different vendors is heavily associated with efficiency only. In other words, for all the above-noted operators, smart cities equal efficient cities. While this observation does not constitute, in itself, a criticism of the concept of smart city, the research nevertheless argues that there is more to the digitalization of urban systems than efficiency gains, and making money for that matter.

And this is precisely where the perspectives of the city, the metropolitan area and, most importantly, their inhabitants come in: while their perspectives certainly also pertain to efficiency – i. e., more efficient cities thanks to the digitalization of their urban infrastructure systems –, they may want to pursue (in addition to efficiency) also other (performance) objectives, such as more sustainable and more resilient urban systems, leading ultimately to a better quality of city life.

Unfortunately, these perspectives remain, so far, underdeveloped – as compared to the other four perspectives. In other words, the citizens, the non governmental rganizations, civil society more generally, as well as city administrators and especially city politicians have not yet fully appropriated what digitalization of urban infrastructure systems does and, potentially, could or could not mean for them.

Conclusion: What is at Stake in the Evolution Towards Smart Cities?

Is the opinion of the authors that three such issues can and should be identified: technology push or demand pull, consumers or citizens, and leadership: technology push or demand pull? Will smart cities continue, as is currently the case, being pushed into the rapid development of information and communication technologies or are cities and their inhabitants capable of formulating their “demands” in a way that technology will ultimately serve their needs?

The second issue at stake follows quite logically from the first: consumers or citizens? Quite clearly, the various operators promoting smart cities today pursue commercial interests. In the context of the financial constraints, if not financial crisis of the public sector, this however means that most of these operators ultimately aim at developing (smart city) services that they can sell to consumers, rather than services that are in the public interest. The latter may not be as lucrative, yet citizens, cities and metropolitan areas may need them (perhaps more urgently). However, in the absence of a financially solid public sector at the city and metropolitan area level, such services may never be developed.

And from here follows the last issue at stake, namely the question of leadership: the researchers emphasize that rather than being driven by technology and technology vendors, civil society actors and their political representatives should appropriate digitalization and place the concept of smart cities within the context of broader public policy objectives, whereas efficiency may well and actually should be one – but not the only (as is currently the case) – of these policy objectives. This, in turn, raises the issue of how to govern the smart city in the public interest (once in place), but, more importantly and more urgently, how to govern the transition from the current urban legacy systems to smart urban systems … as it may well be too late, once these systems are in place (smart city lock-in).

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