Today's political states seem too big to solve the problems that directly affect their citizens. Hence, in cities around the world public administrators are demanding greater self-governance from their respective national governments. Another challenge facing cities is how to effectively implement Smart City initiatives. At the Smart City World Congress, participants in the plenary session dedicated to governance and funding debated over which governance model is best suited to the greater autonomy that cities are demanding.

"To determine the success of Smart City initiatives, you have to consider long-term indicators," remarked Greg Clark, CEO of The Business of Cities Ltd. His comment may serve as a wake-up call for city governments that risk prioritizing politically motivated policies that encompass electoral periods and that are typically limited to 4 or 5 years. This type of city governance is totally inconsistent with Clark's concept of a Smart City: one that in 50 years will be able to absorb huge numbers of new residents from around the world that will have been forced to move because of global climate change.

Leadership: a key element

Without delving into an exhaustive study on governance, the participants debated over the best political systems for cities to make decisions today that will affect them over the next few decades. Greg Clark affirmed the importance of leadership in this context, underscoring the consequences of administrative barriers that can block genuine attempts at generating truly Smart Cities: the aforementioned short-term thinking, as well as insufficient power, governmental fragmentation, inadequate financial instruments, and even cynicism among the public or in the media.

The importance of leadership was echoed by Paul Tilsley, Deputy Leader of Birmingham City Council. According to Tilsley, leadership has been critical to the success of Smart City initiatives taken in Birmingham. He also highlighted the role of the private sector in this success. "City governments must push an agenda of change, but they can't do it by themselves," he declared. The administrator explained that Birmingham City Council has a pragmatic attitude when it comes to working with private companies. "We don't rely on a single model; we work on a case-by-case basis, stimulating collaborations that can include long-term contracts or even joint ventures," he said. Tilsley also recognized that without the knowhow and experience of private-sector companies, which are hard to find in the public sector, his city would not have witnessed so many improvements and so quickly.

Anti-democratic privatization

Although she did not renounce the type of private-sector participation described above, Mildred Warner, from the Department of Urban and Regional Planning at Cornell University, warned of the dangers of sub-contracting city services, a trend that has grown over the past few years. "Markets do not do a good job of coordinating public needs," she stated. Furthermore, Warner affirmed that the large majority of studies on this issue indicate that the private sector not only does not offer any savings for administering public services, it also leads to greater dissatisfaction among the residents that receive them. She pointed out that this trend is especially pronounced in developing economies, where price-hikes from privatization of basic services like water and electricity have made these services inaccessible to many of the people that need them most. "Private-sector companies have a role," she explained, "but they have to fulfill it without breaking down the fundamental democratic relationship between city residents and their city governments that exists when public services are provided."

Eliminating 19th century governance

Manuel Ausaberri, Director of Smart Cities at Indra and the participant who represented the strongest link to the private sector, emphasized pragmatism when dealing with urban problems. "City residents have hundreds of demands; unfortunately, the financial resources are limited, especially in the past few years." For Ausaberri, the answer may lie in technology, which can end up paying for itself. However, he believes that this would first require a revolution in how public administrations operate: to terminate with a 19th century system of governance in which each department or agency only deals with its own problems.

Echoing Manuel Ausaberri's call for an integrated approach to governance was Abha Joshi-Ghani, who manages the Urban Development Unit at the World Bank. Joshi-Ghani considers Smart Cities to be those that can do more with less and that know how to manage the interdependence between different actors and areas. Nevertheless, she reiterated that "citizens are more than just customers."