How the Nordics can punch above their weight and become a driving force in smart city development world-wide

9 min read

My name is Gard Jenssen, I’m the co-founder of Smart Cities Norway. We’re an advisory and technology firm in Oslo focussing on accelerating smart city development in Norway. We’re also running a the largest national smart city network in the country, with 70 members from local government, small and large businesses, academia and NGOs.

I’ve been jumping back and forth between business and government throughout my career. I was literally there when the web was born. I was heading up the work on several major websites in the mid-90s  – among them the Norwegian government and European Commission’s first web sites. I also had the pleasure of being part of the one of the great European start-up success stories of the digital boom, when we sold Kelkoo to Yahoo back in 2004. I think I know an opportunity when I see one.

Smart cities feels just like the advent of the Internet – it represents tremendous opportunities.

I believe the Nordic countries have a gigantic opportunity in front of them – and I think I have an idea about how they can take that opportunity.

Or – to be more precise: There are TWO gigantic opportunities – and they are tied to each other like Yin and Yang.

There is a market opportunity for businesses, and there is a productivity opportunity for local government.

So – what is the smart city market opportunity for businesses globally? I have seen fantasy figures predicted. One of the most cited in Norway is from analysts at Frost and Sullivan, who a couple of years back estimated that the world-wide market for smart cities from 2016 to 2021 would be worth some 1.5 Trillion dollars. McKinsey’s estimates are somewhere 1 and 2 Trillion dollars per year in 2025, although this applies only to the IoT part of smart cities. To be honest, I have no clue what they based their calculations on, it could have been the net value of all services and infrastructure in all the world’s cities for all I know. But there is clearly money to be made.

Then – what is the opportunity for local government? In sum, I think the opportunity is to increase the productivity of cities and municipalities.

Most smart city officials I meet will say no – it’s about improving people’s lives. But hey – that’s not an opportunity – that’s common GOAL for all democratic government. Smart city is the opportunity cities need to be able to afford good public services and welfare.

Once the opportunities are clear, business and local government seek each other out, realising they have common interests. That’s why you are all meeting up in crowds on events like this all over the world. Local governments realise they cannot get smart without new technologies and systems from the tech industry. But on the other hand they are not experts on technology like sensors or big data analysis, and they’re wary of being locked-in or making bad investments on behalf of their taxpayers.

Forward-looking national governments have taken notice of the opportunities. They have seen the light and understand that there are opportunities for national growth in helping their cities to become smart. Many of them are working on national strategies and implementing incentive schemes.

The hard part is getting cities to co-operate. Even harder is getting cities to understand WHY they should cooperate. In most western democracies, cities are not operated by national government. Any co-operation needs to come from cities feeling the need to co-operate.

Cities and municipalities do co-operate in some areas, and the trend for co-operation is increasing, at least here in Norway, where it has become normal to co-operate on complicated technological services such as waste management, water plants, electricity and ICT.

With smart cities – the need for co-operation becomes more important and more urgent than ever before. Some reasons for co-operation are simple:

Competency: Few municipalities have the needed competency to become smart on their own. Both the technologies and the innovative methodologies needed to become smart are normally not core to the average municipality’s operations. You can add to this, that there is no area of public service that cannot be made smarter: Parks, roads, lighting, parking, health care, schools, culture, water and waste, budgeting, and so on.

Costs: It’s obvious that once the wheel was invented, no one needed to invent it again. Most municipalities share the same needs. It makes little sense that each of the heads of municipal parking in 400 Norwegian municipalities individually spend time researching parking sensor technology. At the same time, innovation will suffer if just one head of parking should decide on which sensors to use for all 400 municipalities. The key to is to find a good balance.

The most important reason for municipalities to co-operate on smart cities is also the most complicated one, the most boring one, the most costly one, and the most painful one. In order to understand this reason, local government officials need to to understand how developers develop and what makes entrepreneurs take risks.

99% of all smart city solutions will require data, no matter what smart city area you can think of – water, waste, mobility, energy, and so on. Not only will they require data – they will require carefully crafted, well presented data that are always available.

It’s possible to imagine a situation where a municipality will get their data right on by themselves and then go on to create all of their own smart city solutions – but is it really smart? And will it generate new businesses in your town? Not very likely.

What municipalities should do is to make it possible for start-ups and businesses to create solutions for them. Ideally these should be solutions with working business models, in some cases this will even make some public services unnecessary. The ideal scenario for all innovation is to have several businesses competing to create the best solutions.

The only way to make this happen is if cities and municipalities co-operate on harmonising their data, standardising their data models, and the way data are made available.

Let me give you an example. Let’s say you are an entrepreneur wanting to make an app that will make it easier to find a parking space in a city. The first thing you will need is data: Data about parking spaces. Where they are, when can they be used, what is the cost, and so on. As the developer starts Googling “parking data” and various cities, she will soon realise that finding the data she needs will be a nightmare. 90% of this data is simply not available. She’ll need to phone municipalities, find out who has the data, get it sent to her in all kinds of formats. The little data she will find, she will need to dig out with all kinds of tools. Once she has the data, she’ll need to spend an eternity harmonising it in order to make it all work in ONE app for ALL cities.

This is what is really new with smart cities: The need for standardised, harmonised and easily available data. Data you can play with. Data you can test. Data that it’s possible to use. This is also what is new for cities and municipalities world-wide: Cities will not be smart unless they co-operate from day one on data. No amount of research projects, sensors, big data analytics, or cloud solutions will make make a city smart without detailed collaboration on, and availability of, smart city data.

And believe me: This work is tedious (unless you are an open data geek), difficult to sell to voters and employees (why should taxpayers’ money be used for standardising data instead of nursing old people?), costly (because it takes skilled people away from other tasks), risky (it will cause endless discussions) and generally complex. This task is so challenging that once you understand it, you instantly want to become a monk in the Himalayas. Try to get cities to cooperate just across municipal borders – on anything nitty gritty. Or regional border. Or national ones. But again: If we don’t do it, we will not have smart cities. Alternatively, smart solutions will be extremely more expensive to develop..

 

The Nordics have some unique characteristics that could make the region a smart city leader – if we co-operate  – if we do it right  – and if we do it quickly:

 

Openness and trust – the Nordics are known for transparency and trust in authorities

High level of tech adoption – guess which was the first country to connect to the Arpanet, and which companies were spearheading the launch of GSM standards and infrastructure that started the mobile revolution?

Similarities in Culture and language – worldwide the Nordic way of life is envied. Nordic languages have a good mix of being very similar and very different, which is needed for finding out how to co-operate on data across borders.

A varied set of small to medium size cities – optimal conditions for testing and failing without too high costs – which is essential for innovation

A varied business landscape – from global tech giants to lean and mean tech SMEs

An avid culture of national collaboration – longstanding Nordic co-operation in the Nordic council of ministers – combine this with the collaboration efforts needed by most people trying to survive close to the north pole.

 

What needs to happen in order for the Nordics to punch above their weight in the global smart city market would be something like the following:

 

  1. The Nordic council of ministers need to form a task group on Nordic smart city data, involving people who have been instrumental in the countries’ various national smart city activities, open data enthusiasts, and CIOs from cities who understand what needs to be done. The goal of the task force would be to create an aggressive plan for standardising and making available smart city data in Nordic city networks.
  2. A parallel task force on IoT infrastructure, involving representatives from the R&I community, the telecom and energy industry, national governments and front-running cities. The goal of the task force would be to create an open IoT infrastructure that allows experimentation.
  3. National governments would have to apply incentives and actions to ensure that the business community can partner with the R&I community and municipalities to ensure that the Nordics will reach the highest rate of smart city experimentation in the world

It’s much cheaper to experiment in small cities and countries than in big ones. It’s also easier to co-operate in smaller scales than bigger. Innovation and collaboration, that’s how the Nordic countries could become leaders in the smart city market. To finish, let me give those of you who don’t know it, the mantra of OASC: One city is not a market. The only way to create a market is to collaborate.

About Gard Jenssen

Gard har lang erfaring fra bl.a. EU-kommisjonen, Yahoo!, Kelkoo, og nå sist Kommunal- og moderniseringsdepartementet, der han han arbeidet med smarte byer, EUs programmer for forskning og innovasjon (Horisont 2020) og digital europeisk infrastruktur (Connecting Europe Facility). Han har også bakgrunn som gründer og investor, samt digital strategirådgiver i selskapet Ignitas.