Public Private Partnerships are one of the tools which contribute to a country’s development by removing the barriers imposed by the lack of public financial capacities and the risks associated with private financing. Dividing the risks between authorities and private investors allows Smart City projects to be implemented quicker, bringing countries closer to solving problems of waste management, air pollution, deteriorating infrastructure, traffic congestion and human health.
Even if PPPs represent a stable form of financing for Smart City projects by being regulated by authorities, they tend to lose ground as more focused instruments of financing emerge on the market. Mini-bonds, venture philanthropy and crowdfunding have emerged from the need to lower the risk of typical local public finance and the need for flexibility of private finance, at the same time bringing citizens into the investment process and giving them the chance to be actively involved in decision-making.
Societies change as do people’s behaviour along with it. It becomes crucial to adapt all aspects of civic life to these changes in behaviour and attitude. But the question remains, how can it be done? One thing is clear, technology and connectivity are slowly, but surely changing authorities top-down decision-making approach by allowing them to state their opinion, give feedback and bring forth solutions to their day-to-day problems. Online platforms, forums and interactive maps are good solutions for citizen engagement and now the Internet of Things along with smartphones provide an even greater opportunity for authority-citizen interaction.
Having a mixture of funding solutions and a well-planned citizen engagement strategy can lead to the much desired Smart City of the future.
Ahead of Nordic Smart Cities – The City 2.0 we conducted an exclusive speaker interview with Renato de Castro, Senior VP Smart Cities, Commercial Real Estate Financing, Inc. about smart city strategy and citizen engagement.
With more than twenty years of cumulated experience, Renato is a world-renowned speaker/lecturer on international strategies and investment attraction for smart cities and he is mentoring and advising start-ups with ‘going global’ strategies.
How can citizens actively participate in Smart City plans?
First of all, we really must define and understand better the concept of an organised society and by developing this concept we must understand that different countries have different perceptions of the society. We must also keep in mind the goal of the citizen within the society, so when talking about citizens participation in Smart Cities depends deeply in what market we are talking about. I have been following projects in India, China, Europe, South America and each market is different from the other and depending on how deep is this concept of organised society within the local society it can be easier or more difficult to engage people. For example, in Europe or in the US we can ensure and promote much more citizen participation much easier because these societies are used to being part of city planning and of the decision making process. When you go to China or South America it’s much more difficult because they come from a communist background, in India – the largest democratic country – they have social issues about class, so the definitions we give to an organised society must be 100% customised by the market. The biggest challenge we have today when talking about Smart City projects is in India because discussing these projects with 1.2 billion people is a really big challenge. So, if you think about these not so developed societies, I think the best way to engage its citizens would be through applications, like apps, so they can engage and be a part of the decision-making process.
How do we engage people into the decision making process? Moreover, how do we engage young people in future city planning?
We must understand that the new definition of Smart City must be based on the concepts of the new economies, we are talking about the creative economy, the sharing economy and of course young people have totally merged with these kind of new contrast. Using co-creation, the concept of crowdfunding can be a very good way to engage young people in the process of decision making. Also making citizens active stakeholders for Smart City projects is equally important, not only asking for their needs, the way they think that we should be doing the future planning, but also inviting them to be part of this as investors. We know that crowdfunding campaigns are very successful for companies now, but as a citizen I would really like to be part of or invest in a company that is developing something for my city. It’s not asking for money or charity, it’s really putting citizens as investors for these projects or companies that will be creating the future Smart Cities.
Can you tell me five or more steps to a successful Smart City Public-Private-People Partnership?
Basically, to reach the PPPP level we need to go through at least four four steps before.
As a first step, we need to re-think this Smart City pitch. We cannot build a Smart City only by copying other projects that were successful. People don’t need or don’t want a new city, they just want a better city. When thinking about the concept of Smart Cities, the first step is to keep in mind that you have the DNA of your city and this DNA is history, it’s really important that it stays part of the whole process.
The second one is trying to keep it as simple as possible. I’ve seen many projects that start from very complex and expensive masterplanning to transform cities and municipalities and when it comes to execution they don’t have the money to build the whole project. You must consider that you need money, you are going to need private investors and they will also probably require you to adapt somehow or they will want to influence somehow. It’s important to be ready and not spend much time in planning, but plan well to get the right partners and then you can start the project.
Third, find partners. This is totally based on this new creative and sharing economies that we have now. The companies that are emerging from this new economic reality are really willing to be a part of the new solutions and they are good partners because they were already born in this ‘win-win cooperation’ concept, so don’t ask how much budget you have to make your Smart City project a reality, but ask what your city can give back to these companies in order for them to become a corporation.
After that, in the fourth step we are really ready to go to PPPP’s because finding partners also means giving and receiving feedback and this is when we can go from the traditional Public-Private Partnership to 4P’s by bringing people to the whole process. This can be done by promoting the possibility for people to be part of the projects as investors or as co-creators or even by enabling them to become partners in companies that will be part of the the local projects.
Last, independently of how you plan your Smart City project, when it comes to the stage when the pilot project is already a success and you need to scale it up, here is when problems arise, so thinking about how you’re going to scale your project in the future is really important to be part of the initial plan. One key point when scaling up Smart City projects is connectivity, so think about the internet, about the shadows you have in the city and how you’re going to connect the whole city. This involves IoT, citizen participation through apps. Everything must be online and information must be reliable all the time. It is probably one of the main key points when developing Smart City projects, it doesn’t matter if it’s a pilot project because it will become the core of the project when you’re going to bring it to a city scale.
Can you give an example where Private-Public Partnership meet citizens needs better because they were actively involved in the Smart City plans?
Whatever kind of project we’re talking about, when you bring it to the level that people are actively involved it can be implemented faster and easier and the result would be better. You can take any case and analyse it from this perspective.
A very good example which relied on people and that’s the main reason it was a success is Singapore’s public transportation system. Even if it’s a small country it has a high density of people so mobility is a big issue there, so after developing the whole public transportation system which is a very modern and efficient one, they got to the conclusion that whatever they were doing in the traditional way regarding the peak times would not solve the problem so supplementing the number of trains or buses during these times wouldn’t solve the problem in the long term because then the system would not be fully used between peak times. What they did is a project called ‘Travel smart’. They brought together the 200 largest corporations in Singapore and proposed to these companies to change the working hours of their workers. Also the nature of Singapore’s economy, based on services and working mostly for clients from abroad, for whom the working time is not an issue as it is in a country that lives off of the local economy also helped a lot. The idea was the following: the government was giving them a budget to hire a specialized consultant company to do an individual mobility plan for each individual worker based on where the worker lived and how they traveled to work. Together they would decide what would be the best time and the best way to commute in the city. After that the workers whom accepted to travel during the hours planned for them would also get some kind of reward. This was very easy to monitor when the person was using the transportation system through their Smart Pass city card. And as a last measure for this project, they also offered some kind of reimbursement for the companies as a compensation for changing the working time. This is now a scale project, but it was a very successful pilot project and they spent much less money by investing in re-planning the working time that by buying more buses.
So it’s not only the way you do it, it’s also re-thinking how you’re going to do it and in this case, the project was for citizens and they were a part of the project.
What makes a Smart City project attractive to investors?
Big events combined with Smart City projects can be attractive projects for investors. When we talk about big events we talk about managing mobility, managing all the resources of a city, which it might not have and must amend. Applying Smart City concepts to big events management can be a very good combination to attract investors.
What can we expect of 2017 from these partnerships?
I don’t see these partnerships as a global movement that everybody starts realising about, yet, but more cases are emerging though. PPPP is a concept that Smart City projects are only now starting to be aware of. We have done a PPP, because PPPP is just a concept, in Rio de Janeiro for the Olympic Games and it seems it was a great success and the legacy of the Olympic Games for this Smart City project is really valuable. What I see is that implementing Smart City projects within big events will be a trend that we’ll start seeing. Big events like Expo, Olympic Games, World Cups will be connected with Smart City projects and that will be a way to attract investments to the projects. We associate all the development we had in Barcelona after the Olympics with the event, but at that time we didn’t do the Barcelona Olympic Games based on a Smart City project, so what I see now as a trend is that these big events are beginning to be associated with Smart City projects.