Why human nature is playing into the game of smart cities

My colleague Niklas and I had the pleasure to interview Andreas on the hot topic of Smart Cities. Andreas is Director for Customer Insights at the University of St. Gallen (HSG) and visiting professor at The London School of Economics and Political Science (LSE). The interview took place on November 12, 2020 via Microsoft Teams.

Daniel: What makes the globally top ranked smart cities like Singapore, Helsinki and Zurich really a smart city?

Andreas: All these cities are home to companies, which focus on future-oriented industries such as technology and software. The European headquarter of Google is based in Zurich, Helsinki is a hotspot for software development companies and Singapore is a hub for smart mobility. By focusing on these future oriented industries, you attract a certain kind of population. Most of the people living in theses three cities are primarily young, highly educated, liberal and green. This is naturally changing the appearance of a city. In a next step that also has an impact on the political landscape of a city. To stay attractive to businesses, these cities cannot become to ideological, as they would not be attractive enough anymore. So we see that Singapore, Helsinki and Zurich are obviously able to bring in businesses, which are future oriented and therefore people who earn good money. In return the cities get high tax payments from both, businesses and individuals. Other aspects of smart cities are that they all have a very progressive major and a very modern administration.

Niklas: What is the advantage for the inhabitants to live in a smart city?

The biggest advantage comes from the mobility side. Thanks to smart mobility solutions, cities give back space to people. Therefore, you have a much higher quality of living, as you have less traffic jams. As consequence you also need less roads and less space to park all the cars. Furthermore, the administrative structure in a smart city is very entrepreneurial, non-bureaucratic and consumer oriented. Inhabitants are treated as customers and not just as taxpayers. As an outcome there is a completely different relation between the population and the city government. Another advantage for people living in smart cities is the fact that every aspect of administration can be handled online, which is just super convenient. As smart cities generate a higher tax income for themselves and are richer, it is much easier for them to transform themselves towards customer centricity and service orientation. In the end, it probably is the sum of 20 to 30 factors, which make life easier and less complicated. Finally, it just feels good to live in a smart city as you contribute to a smarter and more sustainable environment and therefore to a better future for all of us.

Niklas: As always in life there are two sides of a coin. What are the other aspects of a smart city and their implications?

Andreas: One question could be, if it is worth investing these enormous amounts of money into a city to become smart. Do people really appreciate it? At the end of the day all the inhabitants of a city benefit from it. But it could be the case, that some people benefit more than others. If you are unemployed living in your two-room apartment and do not contribute much to the cultural life of the city. What do you really want with all these nice and smart gadgets? In the long run it could happen, that society will be divided even more. With that development the divergence between rural areas and smart cities could become even bigger. Do not forget that some people need a bit more time to become part of a new system. When we talk about urbanisation and about smart mobility systems, we always have a city in mind and normally ignore rural areas. If we consider Singapore, I see two advantages. On one hand it is a city as such without many rural areas. On the other hand, it has a very strict political system, whereas you do not have to find compromises. Therefore, it is much easier to transform Singapore into a smart city, compared to all European cities for example. Another interesting thought regard is the question, why the top ranked smart cities are in Singapore, Finland and Switzerland? In my opinion it has something to do with the cultural background. People in these three countries comply with rules, accept governmental authorities and therefore are very compliant.

Source: Curtin Singapore

Daniel: What can other cities learn from these three smart cities?

Andreas: I am not sure, if the “copy and paste” approach would work in that regard. If you take for example Kuala Lumpur, Jakarta or Sao Paolo it does not make sense to take the smart city concept from Helsinki or Zurich and transfer it as a “one size fits all” approach. But you can pick some individual measures or technologies and implement them. But in the end, you need to gain the commitment of the population of the city. A very important prerequisite is that people have some affinity for smartness in an urban environment. Let’s take a big city in South America, like Sao Paolo or Mexico City as an example. The people living there have other concerns. How can I feed my children? How can I move up the social ladder? How can I escape the crime in the streets? At some point you need to fix these basic needs, before you move one step further and talk about smartness and environmental protection. That is why I am sure that the role model approach from top ranked smart cities does not fit to many other cities. First you need to provide safety, a proper education system and job opportunities to your people. Otherwise the inhabitants of these cities do not estimate investments in smartness and other beneficial services. I see a huge opportunity for medium sized cities in the western world to do things jointly and collaborate on certain factors of becoming a smart city. Especially when it comes to mobility you often think in regions rather than cities. It might be more intelligent, if three or four medium sized cities come together and create an ecosystem around mobility in their respective area, which benefits all involved cities. The city government of St. Gallen for example is doing excursions, to other European cities like Copenhagen or Stockholm to learn from. As far as I know there is a lot of exchange on various levels going on between several European cities around that topic. Finally, I would mention that the concept of a smart city is probably a European invention.

Niklas: What is the biggest challenge if a city has been named a smart city?

Andreas: In today’s world you immediately think: How can I stay in that position? Or what do I need to do, in order to come up as number one next time? These rankings create an enormous pressure on the administrations of the cities. You may compare it to the rankings of universities, where we as the University of St. Gallen are exposed too. In our internal meetings we spend a lot of time thinking about these rankings and how to act and what to do to stay a top ranked university. But in the end, I think these rankings are beneficial, as they create competition, which is positive. These smart city rankings force majors to think entrepreneurial and make up their mind about how to invest their money best, to be top ranked and, as a consequence, be attractive for their people. In general, I think to have these rankings is stimulating the governments as well as releasing creativity and is therefore positive in the end. Singapore, Helsinki and Zurich need to think about the next steps to take. Without that pressure they might not think along these lines. Rankings help, as so far there was no competition among cities and most cities thought only locally. Due to these rankings, they now start to think globally.

Daniel: What are the main differences of a smart city compared to a not smart city?

Andreas: The cities of Singapore, Helsinki and Zurich are privileged cities, because they do not suffer from all the burdens as the so-called “arrival cities” do. If you take for example Delhi, Mexico City and many other cities worldwide, you have thousands of people per day coming to these cities to live there. There is no chance to do something smart, as the main question is how to feed these people, create enough jobs and make sure that children are educated to a basic extend. So, the concept of a smart city seems to be a kind of luxury problem, as you have solved all the fundamental problems for the inhabitants. In my career, I have worked a lot with these arrival cities. The vast amount of money there is needed to fulfil the basic needs of all these incoming people. You just need to build new houses and roads very quickly. Otherwise the city will end up in chaos, just because of all these many new people coming in every day. Transforming into smartness requires that these fundamental problems are solved. Imagine you talk to the major of Delhi about sensors and smart technology. He will for sure tell you, that he has other issues to solve at the moment.

Niklas: How does a smart city look like in your future vision?

Andreas: In my vision we will see pure battery-electric and autonomous vehicles on the streets of smart cities in future. There will be no ownership of any mobility device and the streets will be much smaller. We will have more space, more pedestrian areas, more parks, more trees and more recreation areas. There will be pure online communication with the city administration and pure online voting, which is especially important for us in Switzerland, as we vote all the time. I also think that there will be a much better connection between these cities. Maybe in future we talk more about smart regions and not only about smart cites, but to reach that point politicians need to think and act in broader terms and not only considering their own city. Today a major is responsible for his or her city. In the worst case, the cities around a smart city will suffer from the self-optimization of the smart city itself. I am sure that we find evidence that the traffic situation around Zurich is worse than within the city, as Zurich is optimizing the traffic situation by only focussing on the city of Zurich.

Daniel: Do you have any final thoughts or comments on the topic of smart cities?

Andreas: I am sure, if you would do a correlation of the smart city ranking and the ranking of formality and compliant behaviour of people in these cities, there will be a high correlation.

That may also apply, when you compare the rankings of so called high-trust and low-trust societies. In many regions and countries outside Europe and the US, we have so-called low-trust societies, which just means that you do not trust other people and that causes a lot of trouble within these countries.

Bottom line, I would argue that a lot of cultural topics and human nature are playing into the game of smart cities. Maybe much more than we are aware of.

Thank you so much for your time and the very useful insight, Andreas. Niklas and I learned a lot about smart cities and had much fun, too.

Source: Daniel Müller