The core of human civilization is urban communities, be it towns, counties, municipalities, urban centers, urban sprawls, metropolis, or megacities, which lifecycle could much exceeds the lifetime of states or empires. Historically, of all possible types of human communities (Global Community, International Community, National Community, Urban Community or Local Community), the cities appear as most viable and long-lasting.
The future is largely to be shaped by the quality of its future communities and cities, and it’s logical that the infrastructure investment for these cities is forecast to be $30 trillion to $40 trillion, cumulatively, over the next 20 years.
However, according to UNCTAD (2012) World Investment Report, Towards a New Generation of Investment Policies: “only 2 per cent of the $5 trillion in sovereign wealth fund assets has so far been invested in sustainable development projects”.
Closing the gap and following the new investment policies, Japan – India are to build 7 smart cities in India, as the growth points of the Delhi-Mumbai Industrial Corridor (DMIC) project, estimated to cost around $100 billion overall, and expected to attract an investment of $90-100 billion over the next 30 years.
At the first phase, each city is to get the financial assistance ranging from US $ 500-600 million, added with the financial support of US $ 4.5 billion from the Japanese government.
The Japanese Government created a “FutureCity” with a goal to “construct sustainable cities with superior environmental technologies, core infrastructure and resilience all over the world…to advance the “Future City” model of urban planning with state-of-the-art environmental sustainability, strong disaster resilience and superb livability”.
Russia is planning to unlock its multi-billion treasury funds to initiate large-scale infrastructural projects: integrating the Trans-Siberian Railroad into Euroasian Rail Network with industrial and business hubs and innovation clusters along the way.
Russia’s expenses just for its first intelligent model community (Skolkovo Innovation Center) might exceed $15 billion, not mentioning it’s planned multibillion infrastructure projects.
China’s future “smart cities” are to become a main driver of its urbanization process, with 2 trillion yuan ($322 billion) allocated to more than 600 cities nationwide.
Long time being a global leader in advancing sustainable communities and smart intelligent cities, the EU might lose its leading position allocating Euro 200 million for the smart city program for next 2014-2015 under the 80 billion Euro Research Framework Program, Horizon 2020, making a tiny amount comparing with the disproportionally huge allocations to ERC.
To compete globally, the EU has to secure a comparable smart city funding with China or Russia or Japan and India, capitalizing on combined funding: sustainable funds from sovereign wealth funds and commercial lenders; national and city public funds; EU Funds (Horizon 2020 and EC Structural Funds, research and innovation funds from domain EC Directorates (energy; mobility, ICT), and DG Research); Investment banks, EIB loans, structural funding plus private funding, innovative finances, smart bonds, green bonds, etc.; Industry research / investment resources; as well as Crowd sourcing Funding.
Re/developing our cities requires innovative financing mechanisms and new business models as integrated solutions to ensure a balanced sustainable urban development, not just an energy efficient city development, as it is suggested in the Financing models for Smart Cities of the Finance Working Group.
Regardless of current inadequate funding and financing, Europe has the fundamental competitive global prospects: organizational, intellectual and financial.
First, the European Commission established a European Innovation Partnership on Smart Cities and Communities (EIP SCC) aiming for R&D&I&I Projects to test and prove standard universal models for cities and communities, which are technologically, socially, ecologically, and economically sustainable, that by itself is a revolutionary move. Now it is on the way to a Pan-European partnership platform organizing under one roof all types of key stakeholders:
Strategists (Smart City Policy Consultants, Smart City Planners and Architects, Think Tanks, etc.);
Promoters (national authorities, administrative bodies, government agencies, local authorities, large private investors, etc.);
Developers (industries and businesses, construction companies, technology vendors, etc.);
Financial institutions (banks, foundations, funds, capitals managing bodies, large private investors, etc.); Certification Authorities (scientific institutes, Consortium Companies, Financial Certification companies, etc.); Guarantors (Insurance agencies, National Banks, International Banks, Capitals management bodies, Foundations, managers of programmes and / or national and European investment funds, etc.).
Second, the EIP SCC is prioritizing the Policy and Regulation and Integrated Design and Smart Urban Development Planning with integrated smart urban technologies as the sustainable city fundamentals. Majority of the mentioned developments in Asia Pacific and Russia are badly lacking Integrated Smart City Strategies, relying on a traditional urban planning added with haphazard introduction of smart city technologies or eco-engineering solutions.
But to complete the organization process, European Innovation Partnership for Smart Cities and Communities should be entrusted with the management and coordination of all the EU smart city initiatives, financing schemes and funding tools and instruments. Specifically, the EIP’s Invitation for Commitments should be key part of the Calls under Horizon 2020; the H2020-SCC-2014-2015, application missing integrated smart city strategies should not be considered at all.
It’s expected that the EU, the largest world’s economy, will take a lead in the infrastructure investment of smart and sustainable cities and communities.
However, Europe first stands in need to commit itself, its citizens and cities, businesses and governments, academia and research institutions, to the sustainable future, with two polar choices, tactical or strategic.
From a short-term position, the city might pledge for the demonstration and deployment of some specific innovative solutions: low carbon technologies, energy and efficiency; being connected to the Internet of the future; mobility and sustainable transportation with ITSs; urban citizen behaviour, social welfare or well-being of citizens, etc.
From a long-term prospect, the city pledges for the overall strategy of sustainable city development, covering environmental, digital, social, and economic sustainability, as highlighted in the EIS Smart Cities Commitment, see as attached.
Smart commitments should to be backed up by smart financial engineering, fiscal stimulations, innovative funding models, new financing mechanisms, investment tools, banking instruments and facilities: Smart R&D Grants, Smart Bonds (general, revenue, industrial revenue, green, social impact, public benefit); Smart loans, Guarantees, Smart Equity, or Innovative Venture Capital, etc.
In all, avoiding huge resource wasting for Quasi-Smart Cities, as in Asia Pacific, the strict methodological rules should be followed:
No City is Smart without the Overall Smart City Policy and Regulation Frameworks, which determines a system of ISO standards for design and planning, construction and development of smart cities
No City is Smart without the Overall Smart City Strategy, which determines an Integrated Urban Development Planning System
No City is Smart without the Intelligent Urban Management Platform, which defines the city intelligence of sustainable urban ecosystems.
Meeting the above concerns, implementing One City Policy, the Smart Cities Global Initiative is aimed to create among European cities sustainable and intelligent urban communities guided with comprehensive, long-term smart city policies and development strategies.
To lead the Smart City Global Market, the EIP SCC is invited to scale up its activities to the Smart Cities Global Commitment, extended to the nation-wide scale of the Sustainable Nations Commitments.
Make Your Smart Choice and JOIN US for Future City Commitments