by Bas Boorsma*
Regional governance such as advocated in the e-SMART partnership for the Alpine region is one of the most strategic components required for success in smart territory initiatives. In a single city this can already be a magnificent task: Innovation and digitalization focused governance must reach beyond municipal silos, it must be horizontal, it cannot be owned by one department. It needs to reach beyond the walls of municipal organizations to encompass market, citizens and academia. This represents a significant effort for cities. Yet regional collaboration and aspiring smart territories are in for an even more challenging task: to enable collaboration across jurisdictions, different regulatory environments, different cultures and potentially languages.
Community digitalization and innovation initiatives can and should primarily be conducted by means of a broad, well-thought through governance structure. The degree to which leaders can be effective depends, more than anything else, on the governance structures established. When examining governance structures as part of a community innovation agenda, what I mean is the governance structure within a municipality, a state or provincial government, or the government of a national state, with the required extensions into an ecosystem of partners to include companies, academia, citizens, and collaborating municipalities.
Where does effective governance of community innovation and digitalization start? What are the key variables upon which effectiveness depends? At least five cornerstones of effective governance can be defined:
- Mandated people, organizations with authority: Effective governance of digitalization starts out with people well mandated and an organization that carries authority, with such a mandate coming from elected and unelected community leadership – a mayor, a prime minister, a governor or a city council. An organization tasked to manage a smart city initiative but operating at the bottom of the hierarchy at city hall typically proves unproductive. Digitalization ‘tsars’ and their organizations ideally report straight into community leadership, such as a prime minister’s department or a mayor’s office. Teams tasked with digitalization agendas need to be able to experiment out of the box yet also need to be listened to, and have the authority to loop lessons learned back into regular government channels. They should have the mandate to provide government with advice on change management, or make budget proposals. They should have the authority to talk to all stakeholders in government, and they should have the authority to talk to any partner outside government. They should also have the authority to veto decisions, policies and procurement schemes that run counter to the community’s digitalization strategy. These same people and teams mandated on the digitalization agenda should have the channels and means to work across departments, disciplines and, if applicable, across jurisdictions, with a clear understanding as to who their peers in those different organizations are. Many examples of cities getting this right exist. The City of Rome has transformed the role of the traditional CIO into a Chief Digital Transformation Officer, reporting directly to the mayor of the city. As a result, this CDO and team have a systematic mandate and oversight on digitalization across functions; Singapore forged its Smart Nation group that reports directly to the prime minister of the city state. Smart nation does not outrank traditional agency directors, but it has the power to veto procurements and decisions that run counter to Singapore’s innovation agenda; City of Reykjavik has made the bold organizational move to have the city move away from a divisional organizational structure primarily dependent on vertical flows of authority. Instead, a matrix structure dependent on both vertical and horizontal flows has been created. This has resulted amongst other in the establishment of the Department of Services and Innovation, with its director reporting directly to the mayor, and with the department having a final say on every expenditure on digital in the city; And the City of Amsterdam created an urban innovation dedicated Chief Technology Officer with a team of a hundred people tying in to all relevant city departments.
- A degree of autonomy: The program offices, teams, or perhaps even departments tasked with overseeing community digitalization or innovation thrive best if provided with a certain degree of autonomy, meaning the freedom to operate outside standard procedures and protocols. Many of the initiatives, policies and pilots called for may run counter to existing practices and may prove counter-intuitive to plenty government leaders. Having to report on every detail on an action undertaken dooms the effectiveness of teams on a mission to innovate. Innovations do not thrive well within rigid hierarchies and organizations known for strict protocols. In some successful cases, urban innovation program offices set up a close-to-proverbial circus tent outside city hall in order to manage a culture of their own.
- Resources & funds: for a broader governance to be effective, resources and funds needs to be on the table. While community digitalization cannot and should not be a public sector affair only, government funds can prove essential. Government can help to bring innovations to society for which the market is embryonic. It can help where markets do not already exist or fail. Government can trigger private sector investment by matching it with an investment of its own. Such investments can be in the shape of money, people, existing assets and orchestration. For government to be effective in its extremely vital roles – again, from facilitation, to being a launching customer, regulator and more – it needs to match those roles with the required funds and resources where possible, and to prepare in a timely fashion. Amsterdam, again, serves as an example: the city’s CTO office and the city’s renowned entrepreneur-in-residence program allow for a structured way of the city operating as a launching customer.
- A Framing of Values: Good governance involves the framing of the values that are understood to be at the heart of decision-making and implementation processes. This certainly applies to community digitalization, and it set to apply even more across a territory involving multiple municipalities, (sub)cultures, local care abouts and priorities. ‘Framing’ implies the action of capturing the values a community and its leaders hold dearest. Many cities produce digitalization charters that outline ethical approaches on digitalization.
- No one is going to do this alone: as with the community’s innovation agenda at large, the governance structure that is to support that agenda need to reach well beyond government organizations. As already stated, it should involve private sector enterprise, academia, citizens and NGOs.
Towards Smart Territories & Regions
To achieve success across a region, across jurisdictions, enabling a smart territory, requires a governance strategy that reaches even further. First, it is important that the municipalities that are to be part of the smart territory plan have a shared clarity on purpose. Next, they need to recognize the benefits associated with smart territory collaboration. Issues, challenges and opportunities typically do not end at the physical borders of a given municipality. Smart grids, complex choices on mobility or the investment in a particular choice of, say, physical security or dynamic outdoor lighting are typically helped by a collaboration across a cluster of communities or by a smart region approach. A smart region approach can also enable smaller communities as they get to benefit from the knowledge and resources afforded by their larger neighbours. Numerous examples exist: Grand Paris, greater Seoul, the Greater Phoenix region in Arizona, or Greater Copenhagen to include several municipalities in both Denmark and – across the national border – Sweden. Smart Flanders is one of the first regions to have an agreed reference framework that allow for individual municipal technology procurements within a documented framework that guarantees interoperability and that provides reference architectures. Second, a regional approach will need to dive deeper and longer into differing, possibly competing solutions, platforms, services and architectures that may already exist in the larger array of cities that collaborate within the territory – and try to use such existing assets to the best of the smart territory leadership’s abilities. Third, many different expectations may exist as to what to achieve, how to achieve it, what levels of digitalization will be required or how much investments can & should be put to the job. Effective regional governance must support the process of streamlining such views. Fourth, any partnership across jurisdictions cannot dictate what to procure. Governance in a single city can lead up to procurement, but smart territory initiatives will be hard pressed to do so: in the end it always remains up to every single municipality to decide what to procure. What smart territory governance therefore must lead up to is a smart territory framework that defines the conditions, terms and care-abouts, that will govern seamlessness, security, interoperability of what gets procured. In doing so, a smart territory can achieve a unified approach on, for example, e-mobility or smart energy grids. This is exactly what e-SMART is aiming for.
*Bas Boorsma is a member of the board of The Smart City Association Italy, Professor of Practice at Thunderbird School of Global Management and author of ‘A New Digital Deal’.