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Smart city as urban innovation: Focusing on management, policy, and context

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Smart City as Urban Innovation: Focusing on Management,
Policy, and Context
Taewoo Nam and Theresa A. Pardo
Center for Technology in Government
University at Albany, State University of New York, U.S.
{tnam,tpardo}@ctg.albany.edu

ABSTRACT quarters of the world’s natural resources and are primarily

This paper sees a smart city not as a status of how smart a city is responsible for green-house gas emissions [70]. Problems arising
but as a city’s effort to make itself smart. The connotation of a from rapid urbanization indicate a loss of basic functionalities to
smart city represents city innovation in management and policy as be a livable place: for example, difficulty in waste management,
well as technology. Since the unique context of each city shapes scarcity of resources, air pollution, human health concerns, traffic
the technological, organizational and policy aspects of that city, a congestion, and inadequate, deteriorating and aging
smart city can be considered a contextualized interplay among infrastructures [12,96,101]. Another set of problems is social and
technological innovation, managerial and organizational organizational rather than technical, physical or material.
innovation, and policy innovation. However, only little research Concerns are substantially associated with multiple diverse
discusses innovation in management and policy while the stakeholders, high levels of interdependence, competing values,
literature of technology innovation is abundant. This paper aims and social and political complexity. In this sense, problems
to fill the research gap by building a comprehensive framework to become wicked and tangled [28,88,102].
view the smart city movement as innovation comprised of To prevent the rapid urbanization from being a crisis is to operate
technology, management and policy. We also discuss inevitable cities in an innovative way. To that end, making a city smart is a
risks from innovation, strategies to innovate while avoiding risks, new approach to urban development. The popular saying that
and contexts underlying innovation and risks. crisis is the mother of innovation applies for smart cities as well.
The smart city approach is emerging as a way to solve tangled and
Categories and Subject Descriptors wicked problems inherited in the rapid urbanization. Since the
H.4.2 [Information Systems Applications]: Type of systems— wicked and tangled problems of urbanization are social, political
e-government applications and organizational, smart city strategies for innovation must
reflect consideration of management and policy as well as
technology. While commentators tend to spotlight the
General Terms technological sides of a smart city, its organization and policy
Management, Performance, Human Factors, Theory issues have not gained much attention. The meaning of smartness
in the urban or metropolitan context not only indicates utilizing
Keywords cutting-edge of information and communication technologies
Smart city, Public sector innovation, Urban innovation, (ICTs), but also importantly management and policy concerns.
Sociotechnical perspective Furthermore, the adoption of technology is not an end, but a more
vital thing is the smart use of technology adopted and, in turn,
smart use also necessitates smart management and policy.
1. SMART CITY: A RISING WAVE
Some quick numbers about cities over the globe merit attention. We identify a smart city as one with a comprehensive commitment
Ten percent of the world population lives in the top 30 to innovation in technology, management and policy. Innovation
metropolises, and 600 cities accommodate its quarter [36]. for a smart city entails opportunities and risks at the same time.
Currently half of the total population lives in cities. The world is There is a gap in existing literature of a smart city. Most writers
at an unprecedented level of urbanization [33-35]. The trajectory address only technological aspects. So far the literature has
of the rapid urban population growth is not just an interesting fact viewed a smart city as a manifestation of innovative ideas, mostly
but requires a demanding imperative for sustainable development neglecting considerations of the policy and managerial side of
and better livability. The expansion of cities face a variety of innovation. However, reviewing a wide array of literature on e-
challenges [101]. Although cities occupy less than two percent of government projects, information technology innovation and
the landmass of the earth, urban residents consume over three urban innovation provides a lens to view a smart city as an
innovation in management and policy and consider contexts
where a smart city initiative is developed. Drawing from the broad
Permission to make digital or hard copies of all or part of this work for literature, we discuss non-technological side of a smart city as
personal or classroom use is granted without fee provided that copies are
innovation but substantially related to technology.
not made or distributed for profit or commercial advantage and that
copies bear this notice and the full citation on the first page. To copy This paper is presented in six sections, including the foregoing
otherwise, or republish, to post on servers or to redistribute to lists, introduction. Section 2 explores the concepts of smart city
requires prior specific permission and/or a fee.
innovation and then constructs a framework of a smart city as
ICEGOV2011, September 26–28, 2011, Tallinn, Estonia.
Copyright 2011 ACM 978-1-4503-0746-8…$10.00.
innovation. Section 3 highlights organizational and managerial

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innovation for a smart city. Section 4 drills down into the policy with urban problems associated with urban agglomerations [18].
innovation aspects of smart city. Section 5 discovers contexts of A smart city is ICT-enabled public sector innovation made in
smart city innovation. The concluding section suggests urban settings. It supports long-standing practices for improving
implications for both practitioners and researchers. The the operational and managerial efficiency and the quality of life by
implications represent propositions derived from rich discussion building on advances in ICTs and infrastructures [53]. Innovation
of smart city innovation. links between the definitional components of a smart city
discussed above. Smart city innovation occurs at infrastructures
and processes to realize visions.
2. SMART CITY IS INNOVATION
2.1 Conceptual Elements of Smart City Previous literature of public sector innovation and urban
Before exploring details of a smart city as an innovation, we need innovation provides categories or dimensions of innovation.
to understand its core conceptual elements. The smart city concept Damanpour’s [26] typology distinguishes between technical and
itself is still emerging, and the work of defining and administrative/organizational innovations. Smith and Taebel [93]
conceptualizing it is in progress [13,57]. suggested the three dimensions of innovation in municipal
government bureaucracies: management, technology, and
Table 1. Working Definitions of Smart City administration. According to Hartley [54], innovation could be
Definition made in product, service, process (new ways in which
organizational processes are designed, and administrative
[45] “A city well-performing in a forward-looking way in various
reorganization into front-office and back-office processes),
characteristics, built on the smart combination of endowments and
activities of self-decisive, independent and aware citizens”
position (new contexts), strategy (new goals or purposes),
governance (new forms of citizen engagement and democratic
[52] “A city that monitors and integrates conditions of all of its critical
institutions), and rhetoric (new language and new concepts).
infrastructures”
[54] A city “connecting the physical infrastructure, the IT infrastructure, 2.3 Smart City Risk
the social infrastructure, and the business infrastructure to leverage
All innovations have opportunities and risks. A smart city
the collective intelligence of the city.”
characterized as innovation becomes a living laboratory for
[96] A city “combining ICT and Web 2.0 technology with other experiment [17], which necessarily entails unavoidable risks
organizational, design and planning efforts to de-materialize and (generated by new, untested trials). A smart city initiative is not
speed up bureaucratic processes and help to identify new,
only an innovation driver but also an effort to manage risks of
innovative solutions to city management complexity, in order to
innovation. Risks of smart city innovation are of interest in this
improve sustainability and livability”
paper, because previous research has underestimated the possible
[101] “The use of Smart Computing technologies to make the critical
negative effects by the development of new technological and
infrastructure components and services of a city—which include city
networked infrastructures needed for a city to be smart [18,57]. A
administration, education, healthcare, public safety, real estate,
smart city initiative as innovation may introduce a new level of
transportation, and utilities—more intelligent, interconnected, and
complexity. The initiative extends beyond technology, integrating
efficient.”
technology, people, capability, and global reach into systems that
are sufficiently complex for unexpected emergent properties to
Table 1 describes several working definitions currently used. We develop [62].
recognize three key themes in those definitions. First, The failure in managing high risks leads to total failure in
infrastructures are central to the smart city concept. Technology is technology-driven public sector projects. 85 percent of IT projects
an enabler of a smart city, but it is not necessarily the most critical fail because of the challenges by non-technical aspects of
factor [79]. Combination, connection and integration of systems innovation in large part—policy, organization, and management-
and infrastructures are fundamental to a city being smart [2-4]. related risks [41,104]. Common reasons include poor planning,
Core systems are not discrete, and become a complex multi- weak business case, lack of top management support, lack of
dimensional network of diverse systems interconnected in a leadership, lack of professional skills, misalignment between
synergistic fashion that promotes optimum performance [34,96]. organizational goals and project objectives, vulnerability to policy
Second, processes—how to make a city smart—are important in swings, too much technology-driven enthusiasm, and political
the working definitions. A major element of a smart city is a hyper-activism [15,19,25,29,48,55].
fundamental change to the way that services are delivered, and
delivering the smart city is not primarily about technology but Furthermore, public sector innovation itself could be an
about service transformation and improvement [21]. Finally, oxymoron [11], since public sector innovation projects have
visions for the better future are also important. A smart city conditions less friendly for innovation. Government agencies are
should envision smart economy, smart governance, smart monopolies without competitive pressure to innovate as well as
mobility, smart environment, smart people, and smart living bureaucracies structured to perform core tasks with stability and
[44,45,72,96]. consistency, and resist change or disruption of those tasks. The
public sector cannot easily burden varying costs of learning,
2.2 Smart City Innovation experimentation and improvisation. The avoidance of failure is an
Innovation simply denotes “novelty in action” [5] and “new ideas organizational priority in the public sector and is highly valued
that work” [77]. These short definitions commonly emphasize not because of accountability [29,85]. Risk taking through
just a new idea but a new practice. When we treat a smart city not experimentation is likely to be institutionally blocked in
as a status of how smart a city is but as a city’s effort to make government. Public sector e-services has a legacy of a risk-averse
itself smart, the connotation of a smart city represents city environment where the focus is on the politically charged short-
innovation. The label smart city points to innovation for dealing

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term delivery of goals and results, lacking a long-term strategy of exercises in deploying and using technology [39]. Organizational
service innovation [24]. and policy innovation enables technological potentials, and thus
technological innovation requires organizational and policy
2.4 Framework innovation [68]. Innovation is thus a shift in both policy and
A comprehensive view of smart city innovation is comprised of management practices to better meet a city’s technology needs
technology, management, and policy innovations. The two non- [15]. Advanced technologies increase complexity and uncertainty.
technical sides (management and policy) of a smart city merit The greater the risk, the more necessary to look beyond
further consideration. Table 2 presents the multidimensional technology for effective managerial and policy tools necessary to
framework of smart city innovation, placing value on an equal deal with the risk [62]. Alongside advances in technology,
importance of technology, organization, policy and context advances in city management and policy are necessary for
dimensions. innovation.
Table 2. The Framework of Smart City Innovation We simply define smart city innovation in terms of technology,
organization, and policy as follows:
Dimension Innovation Risk Way to Success
How can we change What are risks from How can we deal
Technology innovation: a mechanism to change and upgrade
the way government innovation? with risks while technological tools to improve services and create conditions
delivers service? innovating? where the tools can be better used.
Technology ▪ Leveraging ▪ Lack of ▪ System
Organization innovation: a mechanism to create managerial
(to serve as a transformational knowledge interoperability and organizational capabilities for effective use of
tool for potentials of ▪ Incompatibility ▪ Integration of technological tools and conditions.
innovation) advanced ICTs ▪ Too much hope systems and
Policy innovation: a mechanism to address institutional and
▪ Security infrastructures non-technical urban problems and create conditions enabling
Organization ▪ Enhancing ▪ Organizational ▪ Enterprise for a smart city.
(to manage efficient, effective conflict interoperability and
innovation) management (front- ▪ Resistance to business modeling In addition, context of innovation needs to be considered.
office and back- change ▪ Cross- Contextual components vary with characteristics of cities. The
office) ▪ Misalignment organizational unique context of each city shapes the technological,
▪ Improving between goals and management and organizational and policy aspects of that city. A smart city can be
interoperability projects managerial considered a contextualized interplay among technological
within or across interoperability innovation, managerial and organizational innovation, and policy
organizational ▪ Leadership innovation.
boundaries
This paper does not emphasize the role of technology again in
Policy ▪ Redesigning ▪ Inconsideration of ▪ Policy integration parallel to the prior literature that already sufficiently has
(to create an relationships multiple ▪ Marketing discussed technological innovation for a smart city. Instead we
enabling between stakeholders ▪ Governance
will contribute to a balanced view through filling a research gap
environment) government and ▪ Political pressure ▪ Collaboration
between much-addressed issues and less-addressed ones by
actors ▪ Conflict with other ▪ Partnership
considering management, policy and context. Table 2 presents a
▪ Policy experiment policies
framework that helps understand smart city efforts from the
Context ▪ Physical dimension ▪ Consideration of
perspective of the four dimensions. The next sections outline the
▪ Environment context
organizational-managerial, policy, and contextual dimensions of a
▪ Level of interactions
smart city.

A smart city as an innovation harnesses the transformational 3. ORGANIZATIONAL INNOVATION

potential of smart technologies (for example, instrumentation with This section introduces organizational and managerial strategies
intelligent sensors), mobile technologies, virtual technologies, for smart city innovation. According to Moon and Norris [76],
cloud computing, and digital networks such as Mobile wireless managerial innovativeness is the most compelling reason why
and Metropolitan Area Networks (MANs) [106]. These municipal governments adopt new ICTs in their core functions.
technological innovations induce technology-related risks such as Managerial innovation affects the degree of technological
incompatibility between old and new systems, the lack of innovation and administrative innovation [100]. Successful
technological knowledge, and too much hope over technological organizational change in the public sector should be managed
feasibility [29]. Interoperability is fundamental to technological [42]. A smart city is the application of intelligence to city
innovation in a smart city context. A smart city provides management [12]. Various strategic approaches are applicable to
interoperable services that enable ubiquitous connectivity to smart city innovation.
transform government processes, both internally across agencies
and externally to citizens and businesses [2-4]. To make a city 3.1 Enterprise Architecture
smart, technologies should be readily integrated across systems Smart city innovation can be characterized as an enterprise
and organizations [15]. interoperability initiative. Ross, Weill, and Robertson [90]
defined enterprise architecture as “the organizing logic for core
Technological performance is not to be taken for granted as a
business processes and IT infrastructure reflecting the
logical progression from technological advancement, but rather
standardization and integration of a company’s operating model
performance depends on effective management of technological
(p. viii).” In their view, enterprise architecture boils down to two
systems and infrastructure. Smart communities are not just
concepts: business process integration and business process

187
standardization. Thus enterprise architecture is not an IT issue— collaboration through which multiple organizations join their
it’s a business issue. Enterprise architecture is not only applied for efforts across boundaries of jurisdictions and sectors [65].
companies but also to governments. Enterprise architecture and
business process modeling are a way to organizational and
managerial innovation to change traditional bureaucracy. The
4. POLICY INNOVATION
While technology is a tool, innovation in policy can lead to using
term enterprise refers to the scope of architecture, denoting a
the tool in a smart way. Innovative government stresses changes
distinct, interdependent group as a whole consisting of multiple
in policy, because government cannot innovate without a
agencies working jointly and a defined network of those
normative drive [40]. Whereas innovation in technology can be
organizations sharing a policy area to provide services that no
observed and broadly agreed, innovation in policy is more
single agency provides alone [81]. It is considered a requisite for
ambiguous [54]. We suggest three key policy directions for smart
whole-of-government collaboration [20,31,61]. According to
city innovation.
Ebrahim and Irani [38], the e-government architecture defines
“the standards, infrastructure components, applications,
technologies, business model and guidelines for electronic 4.1 Policy Integration
commerce among and between organizations that facilitates the Urban policy plays an important role in shaping and changing the
interaction of the government and promotes group productivity (p. regional, national and even global linkages of cities [9].
591).” Enterprise architecture is crucial for designing and Coordination of policies—across a variety of spatial scales, across
developing systems that are aligned with business process organizational practices, and across all levels of governance—is
management, identified within the enterprise architecture not as of vital importance to innovation in a city [70,84]. In particular,
project-specific but rather as whole of government metropolitan areas are receivers of a plethora of policies from a
[38,60,89,91,92]. The readiness for business model and enterprise number of bodies, but policies from different levels of
architecture [23] is thus an important capability for innovation governments may be often poorly coordinated, fragmented,
toward a smart city. overlapping, or even conflicting, and thus producing perverse
outcomes. Integration is not merely for technologies, systems,
infrastructure, services or information but for policies. “Packages
3.2 Cross-organizational Management of policies,” not single-focused interventions, are essential to
Smart city innovation necessitates advanced levels of sharing and
successful innovation [63,73,99].
integration of information and knowledge. To that end,
managerial interoperability across organizations and applications Van Winden [99] suggested a distinction between three types of
is a key enabler of cross-organizational information and policy integration: sectoral, horizontal, and vertical. Sectoral
knowledge integration necessary for ICTs to deliver on the integration relates to the coordination of policy fields and sectors:
promise of government transformation [80]. Governments are e.g., economic policy, transportation policy, and housing policy.
increasingly turning to cross-organizational interoperability as a Horizontal integration denotes the alignment of policies between
strategy for maximizing the value of information. The growing actors in an urban area [82,83]. Most metropolitan areas are
support for interoperability transcends political partisanship and governed by many municipalities that interact with each other and
crosses policy areas and institutions. Achieving interoperability share resources. Vertical integration concerns the coordination
across boundaries of agencies and levels of government requires between different layers of government—typically federal (central
leadership appropriate for cross-boundary settings, network, and or national), state (provincial or regional), local (or municipal),
governance. and international context.
Creating a comprehensive vision for a metropolitan region can be
3.3 Extensive Roles of Leadership an important step in achieving greater policy integration. Different
Top-management support and commitment to organizational visions for a smart city may conflict with each other, but
change play an especially crucial role in success of innovation successful modern cities combine multiple visions [73]. For
[1,16,30,42,64,107]. An important role of both executive and example, increasing accessibility to transportation could be
managerial leaders is also to champion the cause of innovation, detrimental to the urban environment, while the improvement of
establish unambiguous reasoning for change, identify and air quality might result in restricting the accessibility. A challenge
encourage champions, and develop a single set of goals which for that city is to maintain economic growth, stay accessible and
people can commit to [21,42]. Especially, Chief Information improve quality of life at the same time. Possible is a situation
Officers (CIOs) in metropolises are identified as enablers of a where one stone catches two birds. A policy approach for that is
smart city [101]. “decoupling” [10], which originally arises from a set of policies
that contribute to reducing the transport intensity of activities
Leadership in cross-organizational settings represents various
while at the same time maintaining economic growth. In this case,
capabilities of leaders and managers. Leadership is not only
decoupling economic growth from negative externalities of
exercised for a single agency, department or team, but extending
transport must be recognized as a priority issue for policy. For this
to a network and enterprise of organizations. This does not
approach, policies need integration. Linking health to transport
suggest that central leadership is unimportant, but notably ICT-
policies, by including references to healthy lifestyles and related
driven organizational, structural changes such as network
concerns, is a useful way of persuading citizens to change
encourage coordination among diverse actors rather than
transport choices. In this way, transport policies integrate other
hierarchical command and control [56]. Thus leaders should
policy areas: health care, public safety, and economic
develop their network leadership skills. Successful
development.
implementation of a smart city initiative needs strong leadership
[21]. City leaders can develop a social infrastructure for

188
4.2 Branding for Marketing Demand-side policies also promote and facilitate active
Policy rhetoric is necessary for city marketing [7]. Innovation in citizenship and citizen-centered network governance. A smart city
the policy dimension requires a branding strategy [69]. A brand is initiative needs to create a community where all citizens can
also a public promise that a city government makes to urban engage more easily and effectively [21,83]. Citizen engagement
residents and external people or organizations. Image making is has the potential to develop citizens’ sense of ownership of their
not a minor issue but pivotal to the transition to a smart city city, enhance the local authority’s awareness of their needs, and
because a popular brand makes a city well-known to the outside ultimately reshape the citizen-government relationship [67,97].
world [58]. Cities, not nations, now compete for people, ideas and Web 2.0 gives government more opportunities to engage the
capital, and a city’s smartness is increasingly becoming a major public in a transparent and learning environment that provides
selling point. City marketing is necessary for cities that act as a feedback into governance [24]. Donovan et al. [37] highlighted a
magnet to attract new talent, resources and investments. large-scale municipal e-government project in Ireland, Innovative
Cities for the Next Generation (ICING). Its major principle, “the
A city brand should tell its differentiating strengths [33-35]. thin skinned city,” connotes a city becoming more sensitive and
Labeling a city as a smart one or an alternative equivalent responsive to the requirements of residents living in a city.
nickname has the risk that the ambiguous naming is no better than
hype, illusion, fad or empty rhetoric [22]. In contrast, there are
some telling examples where hard-charging rhetoric underpins
5. CONTEXT OF SMART CITY
Any normative claim about the future of cities is necessarily
constructive policy developments. Hospers [58] offered three
contextual [13]. Context characterizes and matters for innovation
examples as a result-targeted and broadly-supported branding
to a substantial degree [54]. Each city has unique contexts
strategy to promote a city’s sustainable growth and differentiate
regarding innovation for a smart city, and the way any city designs
itself from others: “Austin: USA’s Live-Music Capital,” “The
its strategy can be unique [96]. Both innovation and risk should
Øresund: The Human Capital,” and “Manchester: Original and
be identified in context. A thorough characterization of a set of
Modern.” Austin, the capital of Texas, is the hang-out for the
likely risks given the context of a particular initiative should
domestic pop and rock industry. The Øresund, the Danish-
complement the presentation of strategies [47].
Swedish border city, is now famous for good to live, work and
play. The nickname of Manchester, UK, sounds like repeating its
glorious past as a historical cradle of the Industrial Revolution, 5.1 Physical Dimension: Distance Not Dead
and thereby making the city a modern as well as classic industrial Today’s technologies are called “space-shrinking technologies”
metropolis. [32], which have enabled a knowledge society and a global
community. One may say that place is no longer of importance
4.3 Demand-focused Initiative and then all we need is a good cable connection to put the entire
world within easy reach. Yet, the hyperbolic claim that distance is
Policies in successful smart cities are demand-driven rather than
dead belies an important paradox [108]. Geographical concepts
supply-driven, or well-balanced between the two approaches. The
such as distance, location, place and space still matter for
difference between demand and supply does not only account for
innovation of a city [14,63,68,84]. Face-to-face contacts between
economic activities but a contrast between governmental push for
people remain of crucial importance. The proximity of people is
a smart city initiative and non-governmental parties’ engagement
still a necessary condition for intensive communication and
in the initiative. At the most fundamental level, smarter
exchange of knowledge.
government means making operations and services truly citizen-
centric [59]. Supply-side (government-driven) policies alone are There are a variety of reasons why the physical dimension matters
insufficient and need complementing with demand-side in this digital age. A progressive reason is the feasibility of a
initiatives. Smart city policies need to be balanced with more on hybrid (material plus virtual) city, which is an experiential
the demand side and encourage diversity, social networks and blurring between cyberspace and material space [108]. The
cross-sector innovation. Successful innovation is oftentimes made ambivalent relationship between the supposed placelessness of
by involvement of key stakeholders [49-51,54]. cyberspaces and the continued importance of place signals a core
concern for smart cities [13]. As well, the context of urban
Demand-focused policies may lead to better governance.
proximity still matters due to many compelling reasons. The
Governance is a form of concerted action by a number of actors
economic and technological attractiveness of cities is attributable
and the capacity to get things done in the face of complexity,
to the presence of agglomeration economies [8]. Innovative
conflict and social change [99]. In particular, ICT-enabled
organizations and people will continue to come together and
governance is the interplay between ICTs and governance
cluster in specific sites such as financial districts, industrial
processes [74,75,103]. Governance empowered by digital
districts, and cultural zones [6]. Urban agglomeration of talent
networks reflects a shift from existing and increasingly ineffective
and creativity induces innovation; the more concentrated the
hierarchical structures toward frameworks better understood in
talent, the more innovative the output [105].
terms of the negotiated involvement of multiple public and private
stakeholders operating at different scales [43,56,84,86,97,98]. In turn, spatial concentration generates wicked urban problems.
Poverty researchers report negative neighborhood effects such as
Policies for a smart city initiative should support collaboration
growing income polarization and decaying community
and partnership as a strategy to overcome fragmentation by
infrastructure [14]. Neighborhoods in the same city are not often
including key stakeholders. A smart city becomes a laboratory for
equal in the accessibility and usability of traffic systems, digital
collaboration among different functional sectors, and among
infrastructures and other services. For example, the digital divide
different jurisdictions [39].
in some urban areas becomes a neighborhood-specific spatial

189
issue. Location context advantages some areas while and incomplete, so we offer a more comprehensive view of the
disadvantaging others. smart city phenomena. This review on the extensive literature of
e-government project, public sector innovation and urban
innovation suggests counterclaims against usual (sometimes
5.2 Larger Environmental Context misleading) beliefs of a smart city. Conclusively, the following
Urban policies are closely linked to and influenced by the larger
propositions are our message to government practitioners and
environmental (social, political, economic, cultural, and
researchers of a smart city.
demographic) context [47]. Odendaal [78] compared smart city
initiatives in Brisbane and Durban in terms of the larger Proposition 1. A smart city is not only a technological concept
environmental context. Success of the two cities relies upon but a socioeconomic development one.
contextual differences in the relationships among key actors and
the environment of politics and economy. Seeing the changing Technology is obviously a necessary condition for a smart city,
geopolitical context, Eger [39] claimed there is no one-size-fits-all but citizens’ understanding of the concept is about the
approach for city innovation. City government’s imperative is development of urban society for the better quality of life. The
thus to establish a set of clearly articulated strategies that are well- adoption of up-to-date technologies per se does not guarantee the
situated in the environmental context. success of smart city initiatives. Rather, innovation in
management style and policy direction makes a city more livable.
Challenges in the larger environmental context reflect the Success of smart city projects is not determined by technology or
increasing exclusion of particular segments of the population, on technical capital. Success is dependent on leadership and
the basis of socioeconomic gaps [72]. A demographic gap is also interorganizational coordination. Technology itself does not make
obvious in access to online tools. Many cities are concerned with any contribution to innovation [66].
the impact of aging society on technology diffusion. In contrast,
the proportion of Digital Natives, Digital Immigrants [87], or Net Proposition 2. A smart city is not system-driven but service-
Generation [94]—those who have been born into and are familiar oriented.
with new technologies—forms an important urban context that The ultimate goal of a smart city is to enhance the overall quality
merits our attention, because the technology-savvy generation is of city services. Establishing an integrative system is not an end in
likely to benefit from smart city innovation. itself, but a mechanism through which service is delivered and
Another environmental context is that of urban competitiveness information is shared. Organizational and policy innovation for a
on international pressure. The intensity of competition among smart city is to effectively manage service and consider service
global cities may shape a suite of policies for a smart city. There demands identified through governance.
are several evaluation metrics for ranking and rating smart cities Proposition 3. A smart city is not only a municipal phenomenon
and their innovation initiatives. A representative evaluation is but also a national or global movement.
European Smart Cities Ranking, which could be an effective
instrument for positioning, benchmarking and branding cities. The World-renowned metropolises now reside in the context of global
metrics, however, generates some risks—i.e., neglecting complex competitiveness. Smart city innovation initiatives in those cities
interrelations, ignoring a long-term perspective, and touting are building strategies for marketing a city brand. The impact of a
current initiatives as stereotypes [45,46]. smart city is national and global, beyond the urban boundary.
Proposition 4. A smart city is not a mono-sectoral concept but a
5.3 The Level of Interactions multi-sectoral one.
The complexity of innovation and the uncertainty of the
The scope of a smart city initiative goes beyond a single sector or
environment substantially influence innovation [95]. Levels of
organization. A smart city is a new concept of partnership and
complexity vary with the nature of interactions. Smart city
governance developed through electronic linkage of multi-level,
initiatives can be intergovernmental, interorganizational or
multi-jurisdictional governments and all non-governmental
intraorganizational, and they can be program-specific or
stakeholders such as firms, nonprofits and citizens.
enterprise-wide [80]. The scope of smart city initiatives can
extend beyond city boundaries to multi-jurisdictional context. Proposition 5. A smart city is not revolution but evolution.
Objects of interaction include data, information, and knowledge.
Activities for interaction can be sharing, communication or Some commentators derive an image of revolutionary change
integration. Various possible combinations create the varying from a casual glance at current smart city cases. Paying attention
extent of complexity. Smart city initiatives in which more actors to only technological aspects of a smart city renders its image
and higher levels are involved would be more complex. Success revolutionary. However, that’s only partly true. One may have
in smart city innovation requires the ability to understand the level confusion between low hanging fruits (seemingly revolutionary)
and nature of the complexity. and long-term strategies (actually evolutionary) [71,82,83,96].
Innovation is a long-term strategy, not a quick solution. One
should track the long-run evolutionary trajectories of innovation.
6. CHALLENGING CONVENTIONAL BELIEFS While technology changes rapidly, management changes slowly
The discussion up to this point has explicitly focused on smart and even policy evolves more slowly [27]. Considering that, we
city initiatives as managerial and policy innovation to create a claim a city can keep evolving to a smarter one through
balanced perspective between already much-discussed innovation.
technological issues and relatively little-discussed managerial and
policy issues. We see that a majority of smart city studies are Proposition 6. A smart city is not a replacement of physical
technology-oriented and optimistic for the future of smart city structures but a harmony between material and virtual world.
initiatives. Their findings are not wrong in themselves but limited

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