OBLONG - "Smart Future Cities" Report

FUTURE CITIES BY TECNALIA

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SMART FUTURE 5 KEYS TO DESIGN SMART CITIES

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FUTURE CITIES BY TECNALIA

CITIES ARE THE FUTURE

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—In 2007, for the first time in the history of mankind, most of the world population lived in cities.

By 2050, the world population is expected to double and cities to concentrate 70% of this growth.

In this context, cities are a major threat to the planet ecosystem but, in turn, as the largest concentrators of talent, knowledge and innovation capacity, they provide an opportunity to contribute to our quality of life and social well-being as they become Smart Cities.

At TECNALIA we understand this idea as an instrument for setting a far-sighted approach. That is, a smart city project at the service of a transformation strategy that boosts social (cohesion-citizenshipinvolvement), economic (local development) and environmental (climate change, eco-efficiency) sustainability. A focused project leveraged on key strengths and differential assets to set driving strategic initiatives.

We identify, select and integrate urban solutions and suitable technologies to contribute to a smart city project ensuring sustainability and city regeneration, socio-economic development and boosting a greener, more sustainable economy.

A SMART CITY PROJECT GENERATES SUSTAINABLE BENEFITS CONNECTED WITH CITIES AND THE TERRITORY, GENERATING PROGRESS AND WELL-BEING FOR CITIZENS.

FUTURE CITIES BY TECNALIA

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OVER

THE CITY OF THE YEAR

20%

OVER

40 MM

ELECTRIC VEHICLES WILL BE SOLD WORLDWIDE

GREEN AND DIGITAL ECONOMY WILL CONCENTRATE OVER

50%

EMPLOYMENT

OF THE POPULATION WILL BE OVER

60

CO2

EMISSIONS SHOULD BE CUT IN HALF

CITIES AND MEGACITIES NETWORKS WITH OVER

10 MM

INHABITANTS WILL FORM SYSTEMS AT SUPRA-URBAN SCALE CITIES WILL CONCENTRATE

70%

OF THE WORLD POPULATION GROWTH

ENERGY RESOURCES WILL BE CONSUMED ALMOST AT

100%

IN CITIES

KEYS

TO DESIGN SMART CITIES

—BY TECNALIA—

FUTURE CITIES BY TECNALIA

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TECHNOLOGICAL INNOVATION

SOCIAL INNOVATION

SYNERGIES AMONG INSTITUTIONS COLLABORATIVE NETWORKS OPENED TO THE WORLD

INTEGRATED GOVERNANCE MODELS

PRIVATE SECTOR

CITIZEN PARTICIPATION

ECO-TECHNOLOGY

TALENT AND KNOWLEDGE CONCENTRATION

INNOVATION PLATFORMS AND CLUSTERS PUBLIC-PRIVATE COLLABORATION

NEW ECONOMIC ACTIVITY

INNOVATIVE PUBLIC PROCUREMENT

CO-FINANCING INTEGRAL URBAN REGENERATION

ECONOMIC SUSTAINABILITY FUTURE VISION

TERRITORIAL AND URBAN DESIGN AND DEVELOPMENT

KEYS TO DESIGN

SMART CITIES

BY TECNALIA —A territory committed to becoming an economic and social development driver in the future must develop these 5 keys, as cities and territories showing the best efficient, sustainability and responsible progress indicators evidence.

SMART INNOVATION & TECHNOLOGY

SMART STRUCTURE

SMART PROJECT

SMART FINANCING ARCHITECTURE

SMART ECONOMY

—Territory and city-based projects have huge potential as living labs where ecotechnological solutions can be developed as experimentation and demonstration spaces at the service of innovation.

—A smart city project requires a smart leadership, impulse and management structure.

These processes demand an inclusive, open to co-operation and transparent governance.

—The commitment to a smart territory must be understood as a tool at the service of a future vision and transformation strategy promoting social, economic and environmental sustainability.

—The transformation of a city into a Smart City requires a smart financing scheme combining multiple partnership and co-financing sources, tools and formulae.

—Cities are poles concentrating talent and knowledge to promote the creation of new business activities based on knowledge and innovation.

FUTURE CITIES BY TECNALIA

SMART PROJECT

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Since ancient times until now, mankind has gradually been settling around cities, organised and planned with a view to improving well-being, prosperity and safety of their inhabitants. The world has progressively stopped being rural to become urban to the point where at the start of this millennium most of the world population had already moved to the city and 70% of the planet population is expected to do so by 2050.

This urbanisation movement poses a first-degree challenge for mankind and is one of the main factors of economic, demographic, social and environmental change in the forthcoming decades.

How this process takes shape will critically impact on ways of life around the world, the environment, not to mention local and global economy. Therefore, understanding and assessing with rigour and imagination what we want and what we need for future cities is critical.

Human paradox draws us to the fact that the extent of urban growth is also the biggest threat to the planet global ecosystem or ecosphere, and one of the conditions required for its preservation.

The need to create, renew and maintain infrastructures and services which will be generated by this growth may end up turning into a huge destructive force for the planet, unless they are addressed from a smart city design combined with the reasonable application of clean technologies.

At present, cities already lead economic growth in the global scenario while at the same time consuming a disproportionate amount of the global natural resources and generating 80% of CO2 emissions. This pace is unsustainable; however we are still in time to make cities part of the solution by combining new lifestyles and consumption habits with smart city design and implementing clean technologies for a new generation of infrastructures and services.

Today, these challenges are leading us to the main challenge of sustainable development, understood as a permanent process of creation, maintenance and enhancement of life conditions and basic structures to facilitate human well-being within the limits of ecosystems (Word Summit on Sustainable Development, Madrid 2006).

Sustainability is the means of delivery to orient our responses to this global city challenge of creating, renovating and maintaining city infrastructures, while reducing the ecological footprint of built environment.

Nevertheless, the final aim is to achieve the “sustainable city”, a city where economic, social and ecological components are harmoniously connected - the Smart City - considered the first stage in a necessary transition towards higher concepts. In response to the complexity and diversity of issues such as climate change, quality of life, inclusive economic growth, social cohesion, etc. impacting on all aspects related to life in the city (city planning and order, means of transport, safety, health, services, housing, etc.), the Smart City proposes a wide, integrated focus where technology improves the efficiency of the city operations, the quality of life of its citizens and the local economy growth.

The smart city project will be turned into an opportunity for: • Citizens, providing access to new services and solutions to facilitate and make our life in the city more comfortable, to move faster, to communicate and give us more safety.

•

Companies, providing a platform to unfold a wide variety of products and services in fields such as: electric mobility, waste recovery, energy efficiency and smart energy management, data collection and treatment, mobile interactivity, etc. We mean business opportunities in the fields of: transport, industry, energy, new technologies, construction, new materials, etc.

•

Public administration can render services more efficiently and at a lower cost, offering citizens new services together with communication options and social participation.

The current economic scenario reinforces the importance of the challenge but to be obligatorily conducted with good judgement. Commitment to the smart city makes sense as much as it serves a future project. Today, the competitive challenges of the global economy are addressed at city and city policy levels. Facilitating and promoting the local economic development is a priority to which the smart city must contribute.

In sum, the city level is ideal to promote a sector of eco-technological city solutions as a transverse cluster to enable: converging private and public initiative, promoting territory development and urban rehabilitation pilot projects, combining a smart city design with the sensible application of clean technologies.

- COMMITMENT TO THE SMART CITY ONLY MAKES SENSE AS MUCH AS IT SERVES THE PURPOSE OF A FUTURE PROJECT. Today, the competitive challenges of the global economy are addressed at city and city policy levels. Facilitating and promoting local economic development is a priority to which the smart city must contribute.

The Smart City proposes a wide, integrated focus where technology improves the efficiency of city operations, the quality of life of its citizens and the growth of the local economy.

•

FUTURE CITIES BY TECNALIA

SMART STRUCTURE

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Smart City is a complex, dynamic, multidimensional, diffuse concept with many players and levels, subject to different interpretations referring to a city transformation process whose targets are not clearly defined and may even change throughout the process. The Smart City concept does not suggest an exclusive standard idea of a smart city, but rather how it may be achieved.

Smart City projects for city development and transformation are complex processes responding to a unique strategy to generate sustainable advantages linked to the territory, generating progress and well-being for citizens.

These processes are deliberative in nature requiring the co-operation and interaction of different players as well as creating and maintaining areas of debate to share information, experiences, perspectives and generating shared visions. These innovation processes include high doses of experimentation and open and collaborative construction of city proposals.

Managing this transformation requires a governance scheme to replace the oneway policy-making - from top to bottom - by methods of governance which are inclusive and open to the co-operation of different players. The involvement of citizens and interested parties (companies, universities, R&D centres, institutions and public bodies‌) is critical for the success of the Smart City and, in this context, governance could be interpreted as a responsibility shared by public administration, the private sector and citizens in dealing with city problems.

On the other hand, the challenge of cities planning to apply Smart focuses is to achieve a transition from the current functional systems towards more sustainable smart systems. Projects and activities promoted to achieve the vision proposed benefit from technological breakthroughs, in particular ICTs. However, breakthroughs mean a growing expansion of city structures and services which in turn require the development and optimisation of the corresponding financial architecture.

To pursue a city project with the scope and approach proposed in this document requires a smart structure of leadership, promotion and management. Leadership at local level is increasingly relevant for the growth of open, collaborative territorial innovation ecosystems which facilitate, promote and boost physical and knowledge infrastructure which make the territory smart, effective and attractive and differentiate the city as the best scenario for investment and performance of innovative economic activities.

Compartmental structures which are commonplace in traditional local administrations encounter serious difficulties to address strategies involving integral, participative intervention in different management scopes (city planning, transport, the environment, economic promotion, etc.) and/or implying the synchronisation of activities among administrations at different levels such as alignment between urban development and regional specialisation plans promoted by Europe. A smart focus develops integrated governance models facilitating co-ordination at interdepartmental and inter-institutional level (multi-governance).

A society aware of sustainability and efficiency criteria also needs to build an extraordinary driving component for local development of an eco-efficient economy.

Policies promoting dynamic, innovative and eco-sensitive communities play a crucial role here, ranging from initiatives encouraging public procurement according to eco-design criteria to others aimed at fostering responsible consumption patterns or boosting new entrepreneurial activities in the field of green economy.

The cities of reference have selected multiple options to promote and manage this type of strategic projects.

Sometimes this role has been delegated to development agencies which are separate from the municipal structure, with more or less capacity to act and provide resources. In any event, a smooth relationship and co-ordinated action with municipal departments is crucial for good performance.

Singapore is using its development agency Sinbridge as an instrument to promote city development projects in Asia and Latin-America, going hand-in-hand with a powerful ecosystem of businesses and sovereign fund backing enabling it to enter financing structures in partnership with local agents.

In other cases, local public leadership has created clusters and innovation platforms to boost the local project, while promoting the development of new solutions and products by companies.

In Copenhagen, a major Cleantech Copenhagen Cluster was created as well as a series of innovation platforms in the field of smart grids and energy efficiency with the participation of local industry, international trailblazing companies, universities and technology centres. A tool increasingly acquiring growing importance is incubators and accelerators.

Entrepreneurial activity is closely linked to local events. Entrepreneurs increasingly value connections and physical encounters, access to face-toface networks to be used as support to obtain and compare ideas. The challenge is how to capitalise the trend towards "entrepreneurship urbanisation" to revitalise parts of the city and do it within a context of scarce resources.

- A CITY PROJECT REQUIRES A SMART STRUCTURE OF LEADERSHIP, DRIVE AND MANAGEMENT. The cities of reference have selected multiple options to promote and manage this type of strategic project.

In some cases this role is delegated to development agencies which are separate from municipal structure while in other cases clusters and innovation platforms were created to pursue the local project and promote new solutions and products. A tool acquiring growing importance are incubators and accelerators. •

FUTURE CITIES BY TECNALIA

SMART INNOVATION & TECHNOLOGY

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A Smart City integrates very different aspects related to the environment, resources, infrastructures, services, social and policy behaviour, etc. to progress in social, economic and environmental sustainability using technology (ICTs) resources to improve efficiency of city

operations, the quality of life of citizens and local economy growth.

As the European Society for Innovation in Cities and Smart Communities expresses in its strategic implementation plan:

MOBILITY URBAN SUSTAINABILITY

DECISIONS

SUSTAINABLE AND CONSTRUCTED ENVIRONMENT DISTRICTS

INTEGRATED INFRASTRUCTURES AND PROCESSES

CITIZEN CARE

HOW TO INCLUDE CITIZENS IN THE PROCESS AS INTEGRAL PLAYER FOR TRANSFORMATION.

POLITICS AND REGULATION

CREATION OF A SUITABLE ENVIRONMENT TO ACCELERATE IMPROVEMENTS.

INTEGRATED PLANNING

HOW WE WORK, ADMINISTRATIVE LIMITS AND HOW WE MANAGE DEADLINES.

KNOWLEDGE TRANSFER

HOW TO ACCELERATE TRANSFER OF EXPERIENCES TO ACHIEVE DEVELOPING INNOVATION CAPACITY AND SHARING KNOWLEDGE.

METRICS AND INDICATORS

TO ENABLE CITIES TO DEMONSTRATE PERFORMANCE IMPROVEMENTS EMPIRICALLY.

OPEN DATA

UNDERSTANDING HOW TO MAKE THE MOST OF THE INCREASINGLY MORE COMMON DATABASES, MAKING THEM ACCESSIBLE YET ALWAYS OBSERVING PRIVACY.

PERSPECTIVES

STANDARDS

FUNDS

BUSINESS MODELS, PROVISIONING AND LOCAL FINANCIAL SOLUTIONS

PROVIDING A FRAMEWORK TO GIVE CONSISTENCY, FAMILIARITY AND HABITUALITY, NOT HINDERING INNOVATION.

BOTH WITHIN THE EU AND IN MORE GLOBAL MARKETS.

Alternative energy, public transport, efficient logistics, planning

Improving energy efficiency in buildings and districts, increasing the ratio of renewable energy sources used and habitability of our communities

— Priority areas (European Innovation Partnership on Smart cities and Communities) Strategic Implementation Plan; http://ec.europa.eu/eip/smartcities/files/sip_final_en.pdf)

Energy, ICTs, Transport - connecting infrastructure assets to improve efficiency and sustainability of cities.

The implementation of this vision implies identifying, choosing and integrating the best solutions and technologies with sound and independent criteria, putting them at the service of a smart city project.

This also requires a second relevance factor associated with the technology factor: the economic and business model.

We are about to unfold a wide variety of products and services with a strong technological base. The speed and success of this unfolding will depend to a great extent on suitability and social acceptance of economic and business models for launching to market.

The three-fold technology-marketbusiness model is the base activity core to unfold technology-based innovations.

Technology is not only a problem solving tool, but also plays a leading role as a lever to create new businesses, facilitating the generation of a renovated industry based on knowledge and innovation.

However, this business creation role requires hybridism of technology with other knowledge and innovation classes, making collaboration among multiple players, essential.

Currently we are witnessing the emergence of a new innovation nature according to the open innovation paradigm described by Henry Chesbrough over a decade ago, where open collaboration in business creation adopting ideas, knowledge and external assets is increasingly gaining relevance and partnerships, networking and relationships in different spheres and regional and global levels play a role of unprecedented relevance.

As Amar Bhidé, a leading expert in technology-based economic creation dynamics (and a member of the Scientific Advisory Committee of TECNALIA), suggests, fluent dialogue with suppliers, clients and users is an essential mechanism to co-ordinate a decentralised economy based on innovation. Dialogue only flows when a context of sustained and trust-based relationships is in place, thus the relevance of having a stable relational framework such as the one offered by “living labs”, with a variety of business and institutional agents as final users to build business opportunities in this new co-operation economy.

In fact, urban “living labs” are local ecosystems where co-operation between industry, government organisations and citizens to achieve specific local targets generates relational density and the necessary interaction to develop a new creative economy and become spaces where technology innovation is also social innovation.

Territorial and urban-based projects have a huge potential as living labs where eco-technological solutions can be developed as experimentation and demonstration spaces at the service of innovation. Cities such as Copenhagen or Boston are paradigmatic examples of how living lab projects have become a space to experiment and demonstrate technological innovation, new products, advanced services and business models.

Once the minimum knowledge and technological infrastructure is in place, the territory should also be able to use its own domestic market as experimental laboratory to test different business models, supporting the development of new advanced solutions, products and services by industry. The existence of a domestic market with an innovative nature regarding procurement habits is a key factor to developing a local innovative industry, starting from the administration itself as public purchaser. Thus the

importance of promoting and articulating innovative public procurement processes in strategic territorial and urban development projects.

For markets to implement innovation, new business models reconciling the interests of the municipality, companies and citizens are also required. On the one hand, budget limitations and the extent of investment required push cities to find new financing models and develop sustainable and market-oriented strategies for public-private co-operation.

On the other hand, for companies providing not only technological competence but also financial capacity to become involved, new partnership models must be tested. Such models should be less costly and better adapted to the challenges addressed sharing risks and benefits.

Innovation is the only strategy ensuring long-term sustainability, responding to the challenges of socio-economic development at territory level and promoting a greener and more sustainable economy. This smart scenario is characterised by the need for innovation and technology. There is an opportunity space open to new ways of understanding the city and the territory and to influence them promoting real-scale pilot projects, demonstrating technologies oriented to achieve low carbon urban environments.

The convergence of these concepts -Smart City and Eco-Technologyis essential for the future of cities; generating integrated proposals in the field of Urban Solutions, to respond to the challenges of the 21st century city. These challenges will demand new models, structures and tools, such as collaboration networks, innovation platforms, living labs and partnerships, which are increasingly playing a more central role as a lever for the development of economic opportunities based on innovation and technology.

—URBAN LIVING LABS ARE CATALYSTS FOR NEW SOLUTIONS IN SPACES WHERE TECHNOLOGY INNOVATION IS ALSO SOCIAL INNOVATION. Urban living labs are local ecosystems where co-operation between industry, government agencies and citizens to achieve specific local objectives, generates the necessary relational density and interaction to create a new creative economy and are turned into spaces where technology innovation is also social innovation.

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FUTURE CITIES BY TECNALIA

SMART FINANCING ARCHITECTURE

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Nowadays, many cities are looking for a way to become smart cities promoting the so-called Smart City projects. However, the transformation of a city into a Smart City requires significant financing.

Although part of the project can be financed through traditional procurement mechanisms, budget restrictions and the level of investment required force cities to look for new supplementary means of financing.

Europe is a positive context.

In 2012, the European Commission (EC) launched a new initiative, the European Innovation Partnerships on Smart City and Communities. Its main purpose is to share European resources for the development of Smart Cities with the aim of supporting urban demo projects related to energy, transport and ICTs. Europe will promote large-scale lighthouse demo projects with integrated urban solutions (energy, transport, ICTs,...) as a lever to progress towards the 20/20/20 sustainability targets. Nevertheless, cities will be required to find partnerships and co-financing structures adapted to the complexity of projects.

Obviously there are different funding models, from fully publicly funded to private financing.

However, in particular, procurement through the Private-Public Collaboration (PPC) formula is particularly interesting for Smart City projects as it enables risk and benefit sharing.

PPC is a concept covering different types of co-operation between the Public and the Private Sectors in relation to infrastructure and service hiring to maintain activity and promote innovation in technology companies, while improving and developing public services to guarantee budget sustainability.

The application scope of PPC agreements is very wide as they are a tool for ensuring performance and exploitation of projects and ensures a competitive economic return for the private sector involved.

However, the advantages of a PPC procurement formula go beyond the budget scope, as they favour innovation and enable accelerating the development of new higher quality services, generating greater social impact.

In most cases, PPC contracts require very high resources implying in turn the need for outsourced financing sources, other than funding from the project promoters.

Among the different sources of public financing, the European Union (EU) -as main booster of Smart City projectsis the highest source of financing potential.

The EU 2014 - 2020 budget offers major opportunities to cities. The European Regional Development Fund, ERDF, requires at least 5% of the funds are allocated to integrated activities related to sustainable city development (16,000 million Euro), to be potentially allocated through the ITI tool.

Integrated Territorial Investment (ITI) is a tool which enables Member States to implement operative Programmes transversally and seek financing from several priority axes of one or more operational Programmes, to guarantee the implementation of an integrated strategy in a territory. ITI is a tool encouraging integrated use of funds (including ERDF, ESF, CF) to achieve better results with the same amount of public investment while ensuring the involvement of local players and offering greater safety in relation to financing for promoters.

As well as receiving funding for the abovementioned city developments, Smart City projects may also benefit from other funds from the EU such as the Framework Programme for Research and Innovation H2020, the Business Competitiveness Programme COSME, Rural Development funds EAFRD or the LIFE programme for the environment and climate change.

On the other hand, there are financial instruments acting as catalysts for public and private resources to achieve a multiplying effect of investment in high socio-economic value projects, which are sustainable from a financial point of view, but not attractive to private funds given their risk profile or maturity term.

It is worth highlighting the importance of the European Commission initiative, jointly developed with the European Investment Bank and the Council of Europe Development Bank (CEB), JESSICA (Joint European Support for Sustainable Investment in City Areas) which finances integrated and sustainable projects for urban development. Other relevant instruments are: RSFF (Risk Sharing Finance Facility) or ELENA (European Local ENergy Assistance).

Finally, we would not like to finish without mentioning innovative public procurement (IPP) which although not a financing instrument as such, is an effective mechanism to promote business innovation which in return finances the R&D required by a company to take part in a public tender. It involves the acquisition of innovative assets and services introduced for the first time in the market by public bodies.

Both the EU and Spain have IPP funding mechanisms. The EU through Horizon 2020 supports the creation of networks to promote IPP and exchange of good practices such as joint cross-border procurement to be carried out by public purchasers of at least three Associated Member States. In Spain, as well as co-financing projects with European funding, there are two other funding methods: One is the INNODEMANDA, programme managed by the Centre for the Development of Industrial Technology (CDTI), through which companies entering IPP tender processes may receive financing for R&D activities through an accelerated award process. With INNOCOMPRA IPP activities are supported by ERDF technology funds in Autonomous Communities. This is a support system from the Ministry of Economy and Competitiveness for public organisms and bodies of autonomous communities to support R&D&I projects eligible for State grants, as long as a significant part of these programmes leads to contracts called Innovative Public Procurement.

—PRIVATE-PUBLIC COLLABORATION (PPC) FORMULAE ARE OF PARTICULAR INTEREST FOR SMART CITY PROJECTS AS THEY ALLOW RISK AND BENEFIT SHARING. PPC agreements are a tool to guarantee implementation and exploitation of projects while ensuring a competitive economic return for the private sector involved.

Moreover, they promote innovation and enable accelerating the development of new services of better quality and higher social impact. •

FUTURE CITIES BY TECNALIA

SMART ECONOMY

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According to the UN projections, the demographic boom of the 21st century is characterised by the concentration of population in the cities, which will be modest in developed countries but spectacular in the rest of the world.

What we are seeing today is an increasingly urban world where cities are being built more than ever.

China alone is building more city space than ever before.

The world is not flat but multi-centred, where centres are the cities and citiesregions are increasingly promoted as emerging realities over the last years.

These dynamics have an economic reading: 30 major cities will concentrate 30% of the global economic growth between 2010 and 2020 (The Global Cleantech Report 2012).

The dynamics of wealth creation cannot be separated from innovation and talent concentration and takes place first and foremost in the metropolis which plays a crucial role in the transition towards knowledge economy as they host an increasingly larger part of the better qualified, more creative and entrepreneurial population. Cities (and region-cities) are poles of talent and knowledge concentration where the future of economic growth will take place. City development reconfigures economies concentrating economic and political power of increasingly importance until they reach and even exceed the level of the Member States.

Nevertheless, it is worth considering that (J. Haëntjens, Futuribles, No. 398, 2014) in 1991 Saskia Sassen described a global economy led by fifteen global cities, and now McKinsey consultants state that two thirds of growth in the next decade will be led by 600 big cities.

Moreover, the highest growth is estimated to occur in medium size cities (between one and three million inhabitants) rather than large locomotives like New York, London, Paris or Tokyo.

The higher volatility of companies and co-operators and the shift of the planet economic gravity focus towards the East and South-centre, prevent ensuring a dominant position for older global cities.

One of the main economic challenges of this growth will be infrastructure financing and in particular, transport networks for people and goods, fluids, energy, information, waste, etc. with construction and maintenance costs shooting as the city cluster expands.

These basic infrastructures are, however, an essential condition for good operation of Future Cities.

In turn, metropolitan expansion questions the traditional city concept removing its limits and absorbing areas around the city to expand into large city areas, crosslinking multiple functional areas (housing, activities, commerce, leisure, etc.) and with activities branching out in huge territories.

An ever growing number of economists propose the time has come to rethink economy through territories.

In 2008, the economy Nobel Prize was awarded to Paul Krugman, one of the founders of the new territorial economy, reinforcing its credibility. This territorial economy is based on the idea of wealth and competences tending to polarise at certain points in the planet; not just any points but around metropolis offering especially competitive mediating costs and facilities. Large cities are generally located at the heart of smaller cities which provide them with big competitive advantages.

Cities are a powerful creator of wealth.

This is a privileged place concentrating talent, capital, businesses and raw materials to create wealth in the city and beyond. This capacity of transforming resources into wealth is measured via the concept of attractiveness. Economic attractiveness becomes the determining factor of activity, comparative advantages, excellence, market development and finally, employment. But this is not enough. Moreover, financial resources and overall, intellectual and human resources required for the creation of new high-value economic activity based on innovation and technology, need to be attracted.

Daniel Innerarity has argued that creative economy tends to become territorial, to select suitable spaces for networking and exchange. In particular, the relational density that characterises the urban environment makes it an ideal place for the development of this new creativity and knowledge economy.

Hybrid urban spaces that favour diversity and interaction can be real innovation poles for the creation of wealth.

Richard Florida, renowned for the development of the “creative class” concept around the three Ts: “Talent, Technology and Tolerance”, has also highlighted the differential advantages of the city to start new entrepreneurial activities with an innovative character. Technology-based products and innovative services are increasingly multidisciplinary and require a wide range of knowledge. They benefit from cross-cutting collaboration with users and early adopters.

In this context, today it is widely accepted that the creation of the new economic activity based on innovation and technology responds to an open model; it requires a diversity of players, disciplines and approaches; it is transverse, in crosssections between scopes or established sectors; and it is emerging, not easy to forecast in advance.

We are witnessing major movements of cities like Singapore which presents the best sustainability indicators in Asia.

This is a completely urban territory, a small-size city-state which is intensively industrialised and very advanced economically.

Urban solutions are proposed as the economic priority for the coming years, using the city as real-scale experimental project scenario. This is a good example of how to use the experience and excellence accumulated in strategic projects to promote the local business sector which nowadays is behind most projects for new cities in Asia.

—CITIES ARE POLES CONCENTRATING TALENT AND KNOWLEDGE WHERE THE FUTURE ECONOMIC GROWTH WILL BE GENERATED. The dynamics of wealth creation cannot be separated from innovation and talent concentration and takes place first and foremost in the metropolis which plays a crucial role in the transition towards knowledge economy as they host an increasingly larger part of the better qualified, more creative and entrepreneurial population.

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FUTURE CITIES BY TECNALIA

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WE BELIEVE IN CITIES, IN THEIR PROGRESS POTENTIAL, CATALYST ROLE FOR INNOVATION AND CAPACITY TO BECOME DRIVERS OF ECONOMIC DEVELOPMENT.

This is one of the major challenges embraced by TECNALIA in forthcoming years, providing innovative and technological solutions able to create smart and sustainable cities generating business opportunities.

AUTHORS: Fernando Espiga Director Emerging Businesses Division TECNALIA Dr. Gotzon Azkarate Garai-Olaun Innovation Strategies Division TECNALIA

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SMART FUTURE 5 KEYS TO DESIGN SMART CITIES

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