Mikael Edelstam, CEO Miljostrategi
Many cities experience a need to deliver more and better services and develop initiatives for the citizens and businesses, but with restricted resources. This makes innovation necessary. Part of the challenge can be handled by working within the city’s own organization, but most of it will require collaboration with external stakeholders like universities, companies, and citizens.
When trying to set up external collaborations, a key asset is the local innovation ecosystem with its diversity of stakeholders including public sector, business sector, universities, citizens and civil society organizations. It also includes the competencies and capabilities among those stakeholders, the existing institutions, policies, and practices, as well as physical assets like incubators, labs, test sites, and demonstration sites. To harvest the full potential of that system, you need to understand it and govern it.
Complexity and Wicked Problems
Smart City challenges are wicked problems, with a multitude of stakeholders, and diversity in the values and competencies among those stakeholders. The challenges also include strong aspects of uncertainty, unpredictability, complexity and interdependencies. These aspects make Smart City problems hard to handle.
Handling technical complexity is quite well-known as a challenge in development processes. But as Smart City development involves so many dimensions and stakeholders, the social complexity often is the bottleneck to efficient collaboration. The social dimension also tends to be a bit overlooked when building long-term collaboration.
Trust and openness make it possible to learn and to explore new ways of handling both daily routines and unknown challenges, as is the case when working with Smart Cities. Often, the context for collaboration will, at least at the start, be quite the opposite. The individuals and organizations have different backgrounds and values, meaning they have limited common ground to start with. They will be viewing challenges from different perspectives, and have a need to deliver value with different logic and different expectations from their own organization. Therefore, governance of the system is required.
Governance
Governance could be described as the means used to stimulate, support, influence or in other ways “manage” the interactions between different stakeholders. There are three basic models of governance:
- Hierarchic governance based on jurisdiction and control.
- Market governance based on prices, transactions, and efficiency.
- Network governance based on cooperation between different stakeholders.
When it comes to Smart Cities, the challenges are complex and unstructured, with a multitude of factors and actors, with the need for balancing different governance models. This meta-governance means using the right governance model for the right group of stakeholders, in the right situation, for the right action.
Action Space and Relational Space
You also need to understand two other aspects of collaboration — action space and relational space.
Action space is the aspect of collaboration that creates tangible value creation (new market opportunities, increased performance in existing operations, a better quality of life for citizens or something else). This is the obvious basis for setting up consortia and allocating resources for collaboration. Focus is on concrete results and execution.
Relational space is the aspect of collaboration that creates understanding and trust between the partners, in order for the roles and motivation that guide their participation to be clear and accepted.
In the case of working with the wicked problems of Smart City innovation, the relational space is more important than in ordinary projects. There are many reasons for this.
- The work is about exploring new ground, which requires searching and new thinking from all participants.
- You need a more common, but also more flexible and understanding vision of what you are trying to achieve together.
- Collaborative searching and sense-making, using the collective competencies and resources in the local innovation ecosystem, has a strong component of trust.
- You are aiming for long-term collaboration, not only three-year projects.
This often requires slow processes and systemic innovation that are not fit to work within project form. Instead, they need more open-end processes, where deeper understanding and new ideas among partners can emerge. This means building structural capital in the system.
In the past, I have put these process to work to help the Skåne region and a couple of cities in Sweden to develop a three-level governance model for Smart City innovation collaboration: the Form, Know, Do model.
The top level is the operational projects, called DO. This is about “normal projects and daily operational activities.”
The second level is about building knowledge and capabilities that are necessary to run projects on the DO level. This level is called KNOW.
On the deeper level of change, system analysis and design thinking are important, opening for transformational strategies and solutions. This level is called FORM.
Recommendations from the work include:
- Your local innovation ecosystem should be seen and governed as the strategic asset it is - establish a governance model for this.
- Understand and respect the differences in values and objectives among stakeholders.
- Project logic needs to be complemented by continuous processes for innovation ecosystem development.
- Work with Smart City wicked problems as exploratory, open-end processes, and involve all concerned stakeholders in defining issues and solutions.
- Learn from international best practices, and link up your local innovation ecosystem to international markets.