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Report of the Digital Government Review


Progress creating Future Cities in the UK

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The Government has recently stated the importance to the UK of investing in smart city technologies, to ensure that UK cities remain competitive in a global economy and to gain a share of the new business opportunities. Government has set a target of 10% of the 2020 Smart Cities market ($4 Billion) [202]. The UK Government’s strategy is set out in a series of papers from BIS in late 2013 [203] which brand the UK’s approach as Future Cities.

Key elements of this strategy are:

  • The creation of a Future Cities group under the guidance of BIS
  • The establishment of a Future Cities Catapult, to provide funding, spread best practice and support cities in their efforts to implement Future City projects
  • Funding for a number of Future City pilot projects. The bulk of this funding (£33m) was awarded to Glasgow to develop a Future City demonstrator, where concepts can be trialed at scale. Further projects are underway in Bristol, Milton Keynes and Peterborough [204].
  • Continuing research into Future City related areas, using established Research Centres of Excellence like Imperial College and Birmingham University.
  • A commitment to work with UK, European and International Standards bodies, to ensure interoperability of emerging solutions, for example the recent £1.6m funding of work with IT suppliers to develop standards for the Internet of Things (IoT) [205]
  • A commitment to engage with European and other International Smart City programmes and to keep abreast with emerging best practices

There are also a large number of other programmes in related areas. DCMS has committed to equip 22 Super Connected Cities and provide super fast broadband to all Enterprise zones by 2015. Other government departments are encouraging research into digital innovation of related services; for example the Department of Transport is working on establishing open standards for Intelligent Transport Systems and the Energy Technology Institute is a public /private partnership researching Smart Energy solutions for the UK [206].

Some UK Cities are working with established IT suppliers to develop Future City visions and specific initiatives. Manchester is working with Microsoft, Glasgow with IBM and Norwich with HP. These cities hope to benefit from the global scale and experience of these companies, who are also offering their services at much lower rates, as they are keen themselves to pilot approaches and develop high quality reference sites. Care will be needed however to ensure that the solutions being developed do not lead to vendor lock in or prevent an open and competitive market for both current and future service needs.

Despite the Government’s ambitions on Future Cities progress has not been as fast as hoped.

The UK is not generally regarded internationally as a leader in Smart Cities. For example, a recent league table of Top Smart Cities [207], had London at number 2, but no other UK cities in the Top 10. Other European countries are probably further ahead, with Spain (e.g. Barcelona), France (e.g. Paris, Lyon), Germany (e.g. Berlin) and Italy (e.g. Milan) all making steady progress with public backing. Looking further afield, the US, Japan, Singapore, Australia and South Korea are all promoting and investing in Smarter Cities with encouraging results.

There are a number of reasons why progress in the UK has been slow. Above all the period from 2010 has been one of “austerity” in Town Halls, where there have been very limited funds for new initiatives and an unproven concept. Future City solutions are not yet mature enough to have the sort of compelling business case with quick pay back that could encourage investment. We lack a common architecture based on standards that would mean that a solution built in one city can be reused in another. There has also been little enthusiasm or push from city populations, most of the active promotion of the concept appears to come from the large suppliers who have most to benefit financially or central government departments that are looking to build new businesses, rather than looking to improve services.

To drive through a Future City vision and programme requires a particular type of digitally aware leadership that is in extremely short supply. This leadership needs to come from both the political sphere and from within the delivery teams in the organisation. Usually council leaders have to work together and with a complex ecosystem of competing public, private and third sector suppliers.

There have been successes in terms of driving innovation in some of our cities. Tech City is establishing London as a global force in the growing tech sector in particular Financial Technology, far behind San Francisco and New York [208], but well ahead of all European competitors in terms of new business creation. Other UK cities are also growing promising tech clusters, for example Cambridge, Bristol, Brighton, Manchester, Newcastle and Liverpool.

Long term, creating vibrant digital businesses will depend on more than creating fertile conditions for startups. Most startups fail to make it long term and we risk most of the startup activity benefitting a small technocratic elite. Longer term it is essential to engage the broader population, to increase the pool of talent that will be needed to drive forward startups into viable businesses and to transform existing businesses with new digital capabilities.

Overall our progress is behind other countries and the progress is uneven across the country. There are many towns, cities and regions that fear being left behind, with industries under threat and facing a damaging cycle of decline with persistent unemployment, a declining working age population and increasing demand for services for an ageing population.

The future city revolution risks leaving some cities behind and excluding the people and communities that live and work in them.

The Governments’ approach to Future Cities has been to provide financial support to a small selection of authorities, where they will carry out demonstrator projects, which can then be deployed elsewhere. The danger of this approach is that the country will be divided into a very few digital leaders with a large number of digital followers, with a few stragglers making hardly any progress at the back.

There is also a tendency among some to see the development of future cities as a race for investment and talent. Some cities will thrive as companies invest and a talented, young workforce moves to take advantage of the job opportunities and vibrant atmosphere, sucking resources away from traditional cities reliant on old and dying industries.

Rather than cities competing for limited resources, we want to see future cities collaborating and the overall pool of resources growing in response to demand. Investment funding will grow as new, profitable opportunities emerge. New investments in turn, will drive increasing demand and the supply of a digitally skilled workforce.

All cities should have an equal opportunity to become future cities and should be encouraged to do so. Cities and regions will have different needs and will develop at different paces but we fully expect all to make progress in the period to 2020. The leading, innovative cities will encourage demand through the supply chain to neighbouring cities, providing new business opportunities. However we will need to ensure no city or region is left languishing without the opportunity and support needed to modernise.

In practice that will mean communicating the benefits of future cities more widely and effectively throughout the UK, it will mean co-ordination between the BIS responsibilities for Future Cities and the DCLG responsibilities for local authorities. It will also mean having a more comprehensive network in place to provide the commercial and technical support that may be needed, to deliver the business case and then provide the guidance so that cities can build on best practices elsewhere in an efficient way, avoiding costly reinvention and duplication.

Although the UK has not got off to the fastest start, we have the capabilities to be among the leading innovators of digital services to cities. This is a target worth striving for. Partly for the chance to take a share of the large and growing market for high value added and high skilled products and services. More importantly though it is because cities with properly designed and implemented digital services offer substantial benefits to its citizens – cheaper and better public services but also safer, cleaner and healthier places to live, work and spend their leisure time in.

We shouldn’t be seeing smart cities as something unique and special, smart city technologies are simply another tool in the digital workbox that can be used to build public services.

Looking forward to 2020, city digital services will evolve and the support that government needs to provide will need to change accordingly. Although it may not develop as rapidly as predicted a few years ago, we still expect the quality of digital city solutions to mature significantly, particularly as networks of sensors become more intelligent and integrated (the IoT) and as costs drop as volumes grow. In the UK and in particular internationally the evidence of successful digital services and the associated benefits to cities and regions will rapidly increase. Here in the UK the case for cities and regions to invest in digital services will be increasingly compelling. So the focus from 2015 should gradually shift from running small scale pilots, to supporting more widespread implementation.

However as our cities design how they will deploy digital technology to make their cities more attractive, this is our one chance to ensure that it is done the correct way. Our cities must be inclusive and designed to meet the needs of all their population, rather than a technological concept to optimise business performance.

At the extreme we can imagine two fictional future cities:

  • City One uses proprietary technology designed by an alliance of a major supplier and public officials. The major supplier has built several models of this city in different countries around the world. The city authority collects information on its citizens through smart meters, pervasive CCTV, number plate recognition and in-car systems. Digital enclaves provide superior Internet access and digital services to those people and businesses that can pay for it; while other areas are poorly served and become no go areas for the privileged. The city makes choices for the citizen, encouraging them to act the way it wants. It is in control.
  • City Two develops digital services through co-production with its people, communities, charities, universities and private sector to create greater opportunities for all. The services are right for its people. It has not simply copied what exists elsewhere, it has understood and adapted them. The city has pervasive broadband access, effective integrated transport systems and pleasant public spaces where people can meet to work, shop, socialize, educate or entertain themselves. Everyone can choose to participate.

We need to ensure that our cities look more like the latter.

[202] BIS, ibid
[203] See also: Global Innovators: International Case studies on Smart Cities” – BIS, research paper 135, October 2013 and “the Smart City Market: Opportunities for the UK”: BIS research paper 136, October 2013.
[204] “Smart Cities: Background Paper”: Department of Business Innovation and Skills, October 2013 https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/246019/bis-13-1209-smart-cities-background-paper-digital.pdf
[205] See: http://www.theregister.co.uk/2014/08/20/uk_gov_hypercat_funding/
[206] BIS, ibid
[207] IESE Cities in Motion Index 2014 at: http://ieseinsight.com/doc.aspx?id=1582&ar=15&_ga=1.145551858.779718704.1405696049
[208] See Reuters report 16 June 2014 at: http://uk.reuters.com/article/2014/06/16/uk-britain-tech-growth-idUKKBN0ER00520140616

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