Are "Smart Cities" the New Paradigm for Development?

Daily mentions on Twitter and
linear trends (data from Topsy's Otter)
The concept of smart cities has become more and more popular in the general public.

As the graph on the left testifies, during the last year it has been more mentioned on Twitter than other fashionable and development-related concepts (such as "digital economy" or "creative class"), and its trend is growing quicker.

The main reason, at least from a European perspective, is due to the choice of using this concept as a key policy instrument in reaching EU 2020 targets on climate change mitigation.

However its spread is worldwide and it is not bounded to politics and popular media. In fact this concept is equally gaining attention in the scientific community working on the complex nexus between innovation, geography and growth.

Take for instance the recent book published by the World Bank "Geography of Growth: Spatial Economics and Competitiveness". The entire 5th chapter is dedicated to the smart cities approach, and by taking a look at the table of contents it seems that the development debate has strongly shifted its focus towards cities rather than regions and clusters. It almost seems that, from the viewpoint of the academic and policy debate, we have moved from "regional innovation systems" to "urban innovation strategies".

Probably the reasons are very well-known: economic activities are largely concentrated in metropolitan areas, and the chinese growth is going to face, in the very near future, the same dilemma on total-factor-prodcutivity growth that western economies nowadays address only by means of innovation and entrepreneurship at the urban level. However, from the opposite perspective, an everyday growing literature inspired by the New Economic Geography approach is diffusing a renewed attention to regional competitiveness and should counterbalance the effect in favor of regions, clusters, districts and the like.

Finally, the same concepts of regional innovation system, cluster, etc.. are undergoing a long process of scientific specification, with the help of empirical analyses that allow to prune some false misconceptions (too many times enrooted in the development rhetoric). It is for instance the case of Fallah et al. 2012 who show interesting results about cluster effects and knowledge spillovers. Thus, if within-industry cluster effects are often negative and growth mainly derives from a very extended concept of supply chain and if universities, in the end, are crucial because of human capital cumulation rather than because of relationships with the surrounding entrepreneurial environment, aren't we talking about smart cities and smart citizens?



References:

Geography of Growth: Spatial Economics and Competitiveness
Nallari, N., Griffith, B. & Yusuf S.
Published May 10, 2012 by World Bank
TOC:
  1. Frameworks for Spatial Analysis
  2. Urbanization as a Typology of Space
  3. Urban Transition and Growth
  4. Spatial Concentration and Specialization
  5. The Attributes and Role of “Smart Cities”
  6. Globalization, Urban Regions, and Cluster Development
  7. Urban Development and Growth
  8. Elements for Future Success of Metropolitan Regions

Geography and high-tech employment growth in U.S. counties
Fallah, B., Partridge, M.D. & Rickman D.S.
MPRA Paper No. 38294, posted 22. April 2012 / 23:06
Abstract
This paper investigates the role of geography in high-tech employment growth across U.S. counties. The geographic dimensions examined include industry cluster effects, urbanization effects, proximity to a research university, and proximity in the urban hierarchy. Growth is assessed for overall high-tech employment and for employment in various high-tech sub-sectors. Econometric analyses are conducted separately for samples of metropolitan and nonmetropolitan counties. Among our primary findings, we do not find evidence of positive localization or within-industry cluster growth effects, generally finding negative growth effects. We instead find evidence of positive urbanization effects and growth penalties for greater distances from larger urban areas. Universities also appear to play their primary role in creating human capital rather than knowledge spillovers for nearby firms. Quantile regression analysis confirms the absence of within-industry cluster effects and importance of human capital for counties with fast growth in high-tech industries.


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