Revisiting ‘Connected Cities’ (2010) urgent questions about meaningful innovation in 20/20

10 years ago we published a handbook on technology-enabled service innovation in cities and a frustration shared across the field that meaningful things just weren’t taking off. Here is what happened to some of our key ideas.

Why, have highly valued services like mobile parking, tourism, or solutions for the visually impaired not taken off despite the astronomical investments in digital infrastructures over the past decade?

The Handbook

In 2010, we found ourselves at the cusp of a frustrating digital transition. 61% of the world population had a mobile phone, yet we could not see the impact of the mobile internet our urban lives. Data (and roaming) costs were prohibitive, operators picked winning startups. Nokia held 35% of the market, Apple 2.9%. But this was also a time during which we witnessed the actual potential in what must now seem as quite visionary pilots: ParkNow! mobile parking in Tallinn (2000), e-Adept navigation for the blind in Stockholm (2005), iCarYou peer-to-peer ride-sharing in Germany (2009).

We wrote that the market for digital urban services was broken, with hundreds of billions of dollars in revenue opportunity piling up — unrealized. The main culprits were twofold: 1/ the gatekeepers at the handset makers and over-bearing operators, robbing entrepreneurs and users blind and keeping the market in their pocket. And 2/ the inability of entrepreneurs and public leaders to align the stakeholder interests to get solutions off the ground and scale them. In short, the market wasn’t delivering best value for users and citizens.

We covered case after case after case to tell the stories of solutions, entrepreneurs, inspired leaders and ask:

Why is this not scaling? Why are we not succeeding?

Our conviction was that we needed to smarten up in three ways.

Firstly, we needed to develop smarter business models that were not pricing data usage, but actual business value and create much more comprehensive economic impact models.

Secondly, we provided an agile playbook to ideate, prototype, pilot and scale urban innovations taking into account some of the smart hacks and work-arounds by entrepreneurs and city leaders.

Thirdly, we emphasized the importance of understanding both user and institutional demand for these innovations and provided a rubric to detect the right cities with solid commitment to action.

Looking back from 20/20, how did this play out?

Was it only 10 years since we published the book? Incredible. Data and roaming costs? Gone. Operators shelving entrepreneurs and dabbling in AppStores? Gone. Success is only possible if you bring stakeholders on board? Airbnb, Uber and Lyft certainly tried to disappear that part.

But I find that our fundamental argument held: The market for solving meaningful urban problems remains broken. In 2019, we found that U.S. cities adopt experimental, venture backed technologies at a rate of 20:1 to proven social innovations. It is just one of the many indicators that show us that the ‘public’ is not in control of the market for service innovation. And it appears that the availability of meaningful innovations is proportionate to our ability to collaborate with a variety of stakeholders to deliver shared value.

10 years later, we remain far from having an eco-system that truly incentivizes innovation toward meaningful community outcomes.

Revisiting ‘Connected Cities’ also reminds me how much Europe has ceded its unique historic lead in mobile technology to US tech giants. Operating systems and AppStores are dominated by US startups backed by seemingly unlimited (venture) capital, adhering more often than not to a playbook that avoids engaging stakeholders and asks forgiveness later. This dynamic was probably our largest omission, we simply could not fathom an Uber or Airbnb gatecrashing our cities in the ways they have.

Regrettably, they (Uber, Lyft, Airbnb) also set the benchmark of what investors expect success to look like, rather than enabling a more nuanced (and maybe slower) ecosystem that gives some value to meaning, equity and sustainability.

I, for one, am of the opinion that we are not simply experiencing a system or a market at work, but that these systems are made by none other than us. We should look hard at how the market for service innovation in cities played out over the past decade to ask ourselves: what is the future we want to create? Who should be part of that future and how can we create the kind of ecosystem that will deliver meaningful improvements.