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 IESE’s Center for Globalization and Strategy annually measures the progress of the world’s cities in terms of “Urban Intelligence”, i.e. “Smartcities”, which, through the Cities in Motion Index, defines the key variables for the top cities that make up the global ranking.

What are IESE’s criteria for measuring and classifying Smart Cities?

By: Gabriel E. Levy B.

Directed by Pascual Berrone and Joan Enric Ricart, IESE’s Center for Globalization and Strategy at the University of Navarra in Spain, is the largest think tank on smart cities around the world, reflecting on the challenges and opportunities of digital transformation in cities and recognizing progress through an annual indicator, called Cities in Motion[1].

The IESE has defined, among others, 10 criteria, as key elements to evaluate the progress of cities around the Digital Transformation and therefore its evolution in Smart Cities[2], a mechanism that is frequently taken up by universities, analysts and public entities around the world, to standardize these criteria[3].

The criteria for assessing the progress of Smart Cities proposed by IESE:

1.     Human Capital

Many experts agree that it is not possible to achieve Digital Transformation experiences if there is not enough trained human capital in the cities with the knowledge to manage the transformation projects. For this reason, IESE incorporates in its measurements the efforts made by local governments to train public employees, staff involved in the projects and citizens in general, in all issues related to digital transformation, not only from the practical and technical, but with special emphasis on the conceptual.

Similarly, the indicator measures the amount of research and studies that are conducted on the topics of “Smartcities” and “Digital Transformation”, because thanks to these initiatives, the frontier of knowledge is expanded and models can be adapted to local realities, a mechanism known as “Tropicalization”[4].

2.    Social Cohesion

The concept of “Social Cohesion” refers to the degree of integration of citizens in their own community, i.e. how united, supportive and integrated a community is, through variables such as coexistence, participation, respect for civil rights, among many other factors.

Modern democracy recognizes social cohesion as a relevant concept to guarantee social integration, economic growth and political stability, in such a way that it becomes a direct indicator of the degree of integration of citizens in their community.

“To speak of social cohesion implies society, defined as a group of people who relate to each other, according to certain legal and customary rules of organization, where its members share the same culture or civilization in a given space or time”,

Democratic Lighthouse of the National Autonomous University of Mexico[5].

One of the conclusions reached by Pascual Berrone and Joan Enric Ricart’s team at IESE, is that a digital transformation project of a city aimed at becoming a smart city, lasts over time if the society is cohesive, being this cohesion the best guarantee not only of success but also of rootedness within the same community.

3.    Circular Economy

Circular economy refers to a production and consumption model that involves sharing, renting, reusing, repairing, renewing and recycling existing materials and products as many times as possible to create added value. In this way, the life cycle of products is extended and an environmentally friendly and sustainable value generation model is achieved over time [6] .

In practice, the circular economy involves reducing waste to a minimum. When a product reaches the end of its life, its materials are kept within the economy wherever possible. These can be productively used again and again, thus creating additional value.

The Circular economy is an antagonistic model to the traditional linear economic model, based mainly on the concept of “use and throw away”, which requires large quantities of cheap and easily accessible materials and energy, i.e. programmed obsolescence.

For IESE, a city can only be smart if its economy works based on a circular model, where each product is used to the maximum and there is a strong awareness on the part of citizens about the importance of sharing, renting, reusing, repairing, renewing and recycling.

4.    Efficient Public Management

Efficiency in public management is a fundamental pillar of any smart city and is a concept that applies in two ways, on the one hand that governments properly implement digital transformation models, but in turn, that the digital transformation impacts on the efficiency of public management models, so that the administration of cities work by processes, and set clear indicators, long-term and survive multiple administrations, becoming real development plans sustained over time and not the whim of the rulers of the day.

It is for this reason that a Smart City, in all cases, must guarantee a type of “public management” measurable by results, guaranteeing a transparent action and permanently accountable to civil society.

For IESE, the continuous improvement of public administration will be based on the strengthening of management tools consolidated in an integrated system that allows the good use of resources and the capacity of the State to produce results in favor of citizens’ interests. These should be developed within a framework of modernization, reform and inter-institutional coordination.

5.    Environmental Sustainability

The criterion of Environmental Sustainability is complementary to the criterion of the Circular Economy and refers to the rational use and exploitation of one or several present resources, without compromising the availability of the same resource for future generations, the above from an ecosystemic view of the environment, i.e. it must ensure the preservation of the good along with the other resources that make up the entire ecosystem that surrounds it.

Herman Daly is an economist and ecologist of North American origin, professor of the “School of Public Policy” at the University of Maryland in the United States [1] and is one of the most referenced authors regarding the concept of “sustainable economy”, so it is considered within the scientific community, responsible for laying the foundations of multiple theories of the so-called “Ecological Economics” [7].

One of the major contributions of Daly’s work, which is taken into account by IESE in its evaluation of smart cities, are the principles of environmental sustainability:

“Renewable resources shall not be used at a rate greater than their generation.

Polluting substances may not be produced at a rate greater than can be recycled, neutralized or absorbed by the environment.

No non-renewable resource should be harvested faster than is necessary to replace it with a renewable resource used in a sustainable manner” [8] .

In addition, IESE measures the contribution of cities to the reduction of global warming, whether through green bond projects, tree planting or the promotion of innovative initiatives such as vertical gardens or CO2 capture systems.

6.    Intelligent Mobility

For IESE, the main indicator of intelligent mobility is based on the strengthening of public transport systems and the digitization of all the services linked to the provision of this service, guaranteeing on the one hand the optimization of available resources and on the other hand ensuring that users move quickly, economically and as comfortably as possible.

Additionally, the Smart Mobility criterion necessarily includes automation schemes of the vehicle fleet in Smartcities, which is achieved through an integral digital system, based on communication technologies between the vehicles themselves, and the centralized urban infrastructure, through a robust network connectivity system, which demands an adequate deployment of fiber optic networks and wireless communication systems, such as 5G networks, as well as the incorporation of high-precision sensors in traffic lights, crossings, delineation of tracks, smart screens, platforms, etc.

7.    Urban Planning

Defined as the set of technical and normative instruments that are drafted to order the use of land and regulate the conditions for its transformation or, where appropriate, conservation, Urban Planning necessarily includes a set of projective practices with which a management model is established for a spatial area, which generally refers to a municipality, a sectoral urban area.

In the case of Smart Cities, Urban planning is a necessary condition for the implementation of a real digital transformation, since it defines the critical work path, avoiding improvisation and ensuring the harmonious integration of all the factors that make up the delicate balance of turning a city into a Smartcity.

Annually, IESE reviews the coherence of the Urban Planning of the cities, with the achievements and advances of the digital transformation.

8.    Technological Implementation

Selecting the best technologies is a huge challenge, but it is much more challenging to implement them properly and according to the local reality of each environment and this is precisely what measures this variable proposed by IESE, which seeks to assess the relevance of the technologies used in cities, its scope, but above all, the benefit they yield in terms of meeting objectives in line with the planning and goals set, understanding technology as the instrument that materializes the proposed objectives.

It is important to note that for IESE, this indicator does not measure the amount of technology used, but rather the relevance and impact it has on the goals defined in urban planning,

9.    Compliance with ISO 37120

ISO 37120, a standard that defines services and quality of life in communities and cities, is the first set of standardized international indicators that provide a uniform approach to what is measured and how it is measured, allowing cities to communicate with each other using globally standardized comparable data.

By means of the ISO 37120 Standard, it is possible to objectively compare the performance of one city with respect to another, obtaining reliable and comparable information.

ISO 37120 is considered the ISO standard for the implementation of Smart Cities and is taken into account annually by the IESE, as a criterion for assessing the progress of Smartcities.

10. Internationalization

In a globalized world no city is isolated, in any case, like it or not, it is interconnected with the rest of the world, whether with the permanent migration resulting from human transit, the cultural impact of books, television and the Internet, or the constant flow of cross-border information.

It is for this reason that IESE incorporates a criterion dedicated to evaluating the level of internationalization of Smart Cities, as the mechanism to measure their interrelationship with the rest of the world’s cities and their contribution to the sustainable growth of this great global village.

In Conclusion, IESE’s Center for Globalization and Strategy at the University of Navarra in Spain, is the largest think tank on smart cities around the world, which reflects on the challenges and opportunities of digital transformation in cities and recognizes progress through an annual indicator called Cities in Motion, which measures among others, 10 key aspects composed of: Human Capital, Social Cohesion, Circular Economy, Efficient Public Management, Environmental Sustainability, Smart Mobility, Urban Planning, Technological Implementation, ISO 37120 compliance and Internationalization.

[1] Official IESE publication on Smart Cities of the University of Navarra in Spain.
[2] IESE publication on the smartest cities in the world
[3] Official IESE publication on Smart Cities of the University of Navarra in Spain.
[4] IESE Cities in Motion Annual Indicator and Selection Criteria
[5] Publication of the Democratic Lighthouse of the National Autonomous University of Mexico.
[6] European Union document on its Circular Economy model
[7] Book: Ecological Economics: Principles And Applications. Herman E. Daly, Joshua Farley. Island Press, 2004.
[8] Book: Ecological Economics and Sustainable Development Advances in Ecological Economics Series. Herman E. Daly. Edward Elgar Publishing, 2007.  ISBN 1847206948, 9781847206947. 288 pp.