Part III: Triple bottom line benefits for city business
ContentsThe Networked Society City Index aims to develop a comprehensive evaluation of cities’ ICTmaturity and their socia...
ExecutiveSummaryThis report is the third and final installment in the Networked Society City Index seriesanalyzing ICT-dri...
Ericsson Networked Society City Index – Part III  5
City LifeToday, more people live in cities than in rural areas, and by 2050, about 70 percent of the world’spopulation is ...
Our EconomytransformedThe internet is transforming many aspects of the global marketplace – from consumer behaviorto new b...
The BusinessperspectiveThe relationship between ICT and economic development is a widely researched area and thereare nume...
These findings, along with a body of previous              facilitates the discovery of new opportunitiesresearch, both em...
Environmentalbenefitsfor businessFor decades we have understood the potential of ICT to drive change and stimulate environ...
Ericsson Networked Society City Index – Part III  11
NetworkedSocietyCity IndexThe Networked Society City Index is a framework designed to provide city mayors, localauthoritie...
The business index                                           The current city index is least developed in theThe business ...
Key ResultsIn the previous City Index reports, Ericsson looked at ICT-generated benefits from the cities’and citizens’ per...
New York is the top overall ranking city followed by            In fast growing cities, a combination of issues canStockho...
Key Results(continued)ICT strategy drives entrepreneurship                           measures business regulations and the...
Global reputation is importantOne effect of globalization is an even higher trans-national mobility of the creative elite ...
ConclusionThe Networked Society City Index – including the City, Citizen and Business perspectives – is acomprehensive ana...
Figure 3: Linkages and interdependencies between ICT development and triple bottom line development in a city environment....
Ericsson is shaping the future of mobile and broadband internet communications throughits continuous technology leadership...
Networked Society City Index Report
Upcoming SlideShare
Loading in...5
×

Networked Society City Index Report

1,424

Published on

http://www.ericsson.com/thinkingahead/networked_society/city-life
The Networked Society City Index report continues to explore the correlation between cities’ ICT maturity and their triple bottom line development.

As with the previous studies, this index continues to show a strong correlation between ICT maturity of the city and their social, economic and environmental progress. In this report, New York City tops the overall ranking followed by Stockholm, London and Singapore.

The Networked Society City Index aims to develop a comprehensive evaluation of cities’ ICT maturity and their triple bottom line development. Through a series of reports we have analyzed 25 urban areas around the world from a city, citizen, and now, business perspective.

Patrik Regårdh from Ericsson’s Networked Society Lab says: "We see the individual – rather than city institutions or businesses – as the drivers of development resulting from ICT maturity. Governments follow by adapting to citizens’ changing behavior, while businesses primarily adopt ICT innovations to increase internal efficiency. More importantly, government decisions help steer the business sector’s ICT development. Therefore, changes in policy, regulation and planning, paired with research and support for taking risks and funding, are some of the key factors for driving progress. These factors are crucial in helping organizations of all sizes to connect, collaborate and compete more effectively."

Transcript of "Networked Society City Index Report "

  1. 1. Part III: Triple bottom line benefits for city business
  2. 2. ContentsThe Networked Society City Index aims to develop a comprehensive evaluation of cities’ ICTmaturity and their social, economic and environmental development. In a series of reports we haveanalyzed 25 urban areas around the world from a city, citizen, and now, a business perspective.1 Executive summary 32 City life 63 Our economy transformed 74 The business perspective 85 Environmental benefits for business 106 Networked Society City Index 127 Key results 148 Conclusions 18 Ericsson Networked Society City Index – Part III  3
  3. 3. ExecutiveSummaryThis report is the third and final installment in the Networked Society City Index seriesanalyzing ICT-driven benefit creation in the world’s largest cities. The first two studies,conducted in collaboration with the consultancy firm, Arthur D. Little, focused on benefitsprovided to cities and citizens, while the focus of this final report is on business.As with the previous studies, this index continues to business reveals an interesting pattern of benefit creation.show a strong correlation between ICT maturity of the Our data indicates that development as a result of ICTcity and the triple bottom line of economic, social and maturity is initially driven by individuals rather than byenvironmental development. Few cities are found outside city institutions or businesses. Individuals and socialthe trend line of ICT-generated triple bottom line benefits, networks appear to embrace opportunities associatedand there is no evidence that triple bottom line benefits with ICT and innovation more quickly. City institutionsdecrease even as ICT maturity increases. This implies adapt – as the behavior of their citizens changes – and arethat even the most ICT-mature cities can still benefit positioned to drive socioeconomic and environmentalfrom continued investment in ICT. progress. Businesses too are willing to adopt ICT innovation for internal efficiency purposes but are stillIn this analysis, New York is the top overall ranking city hesitant to make profound transformational changes.followed by Stockholm, London and Singapore. New Yorkhas the advantageous combination of favorable business The aim of all three City Index reports has been to developconditions, ease of doing business, clear legal frameworks, a comprehensive city index capturing triple bottom linecollaboration between business and academia, as well as a benefits of ICT from three different perspectives: city,fast growing digital economy. It has the highest overall citizens and business. The focus of this study is on thescoring in social and economic dimensions, and is among third perspective – benefits of ICT for business in the city.the top three cities in the environmental dimension. In preparation of this report, we collaborated with TheComparing the three perspectives of city, citizens and Swedish Trade Council and Urbanity Labs AB. Figure 1: City Index map The Networked Society City Index aims to develop a comprehensive index comparing cities ICT maturity and their social, economic and environmental development (the triple bottom line).4  Ericsson Networked Society City Index – Part III
  4. 4. Ericsson Networked Society City Index – Part III  5
  5. 5. City LifeToday, more people live in cities than in rural areas, and by 2050, about 70 percent of the world’spopulation is expected to reside in urban areas. Virtually all global population growth is occurringin cities, while urban areas in the developing world are absorbing the majority of this growth. Thispresents enormous challenges but also tremendous opportunities.Cities consume the majority of our planet’s resources butare also centers of innovation, exploring new ways tomore effectively use those resources. These advances, About the studymany led by businesses in the private sector, are resulting Ericsson aims to contribute to and inspire thein major economic, environmental and social benefits. development of networked cities around the world. The Networked Society is at the forefrontThe United Nations has presented the global community of this development, successfully using ICT aswith a bold challenge – create more sustainable cities a tool to drive triple bottom line development.that will also continue to be engines of prosperity.Here, ICT is playing a central role. The sharp uptake For this series we selected 25 large cities forof mobile broadband and new digital services has in-depth study. The selection was made basedstarted to fundamentally change the way cities and on the United Nations list of the world’s largesttheir business sectors operate, evolve, and eventually, cities, with the addition of two capitals from thewill transform. Technologies such as mobility and the World Economic Forum’s Networked Readinesscloud are rapidly being integrated into the core Index. This addition was made to ensure thatprocesses of many industries, while sharing of data cities with strong ICT development are capturedacross enterprises and in city infrastructure has in the study.become increasingly more common. We recognize the importance of an effectiveCity businesses – including utilities, transportation, policy framework in the sustainability arenaeducation, health care, retail, government, finance, but this is not the intention of this report. Thisculture and entertainment – are all facing a fundamental is not a scientific study either. Rather, this isshift in the way consumers demand and purchase their an invitation to explore the link between ICTproducts and services. and triple bottom line development in city environments. It is the hope and intention thatNew media services and business concepts such as this series of reports will inspire city mayors,smart grids, intelligent traffic and e-health, are examples decision-makers and enterprises to createof recent responses to this new landscape. Governments stimulating city environments and set positiveand leaders in society recognize that connectivity along change in motion with the help of ICT.with ICT policy, literacy, and sustainable business modelsare all crucial in order to create a positive climate forinnovation and business.6  Ericsson Networked Society City Index – Part III
  6. 6. Our EconomytransformedThe internet is transforming many aspects of the global marketplace – from consumer behaviorto new business models and processes. Mobility, cloud computing services, broadband, big dataand social media are at the center of the transformation that is occurring in both developed andemerging economies.ICT has become an integral part of our working and The general public’s increased ability to use informationliving environments and will continue to be an important services and apply ICT is accelerating this change.resource for business, government and society at large.By combining information, knowledge, processes, and Today we are living in a society shaped by differenttechnology, ICT is driving efficiencies and fuelling networks – information networks, social networks, andinnovation – and will play a crucial role in helping networks of things. Their existence is not new, but theorganizations of all sizes to connect, collaborate and role that they are playing is more significant now thancompete more effectively. ever before. We depend on networks to enable the applications and technology we use on a daily basis. Because of this development, new markets have opened up with radically different business propositions and anA 1 percentage point increase in increasing demand for connected products that have richer benefits and greater flexibility.broadband penetration increases newbusiness registration by 3.8 percent. Over the next five years, many sectors – including technology, telecommunications, entertainment, media,Source: Broadband and Entrepreneurship, Carlsén and Zhou, Stockholm School of Economics banking, retail and health care – will continue to be reshaped by the application of ICT into their business. The constantly changing global marketplace, fuelled byICT-driven transformation high-growth economies and new technology, hasThe changes that our society is going through – particularly accelerated the speed of business activity from productthose in business – are being driven in large part by ICT. development to customer response. Real-time businessThe initial benefits are improved development and intelligence and predictive analysis is required not onlyproduction efficiencies but as we move forward, these for faster decision-making but to cope with unexpectedtechnologies will have more transformative implications. market risks and opportunities. Ericsson Networked Society City Index – Part III  7
  7. 7. The BusinessperspectiveThe relationship between ICT and economic development is a widely researched area and thereare numerous academic reports and case studies that support the positive correlation betweenICT and economic development.A series of reports from Ericsson and Arthur D. Little Digital natives – In the next decade a newconcluded that for every 1,000 new connections, 80 new workforce will enter the labor market. Their lifestyle isjobs are created, and for every 10 percent increase in characterized by greater individual freedom, opennessmobile and broadband penetration, GDP increases by to mixing work and private life and a tendency to1 percentage point. One of these reports studied the challenge established ideas and authority. This meanssocioeconomic effects of broadband by examining that organizations that want to attract talent must foster33 OECD countries between 2008 and 2010. It was a culture of openness, creativity and innovation. Atfound that doubling connection speeds yields a the same time, they must also take advantage of the0.3 percentage points increase in GDP . experience and knowledge of their current workforce.Similarly, the Broadband and Entrepreneurship report Greater flexibility – The modern workforce sees theirby the Stockholm School of Economics looked into the work as more than just a paycheck. Workers todaycorrelation between broadband and entrepreneurship demand more flexible working environments. Here,in 23 OECD countries between 2004 and 2009. It ICT can help employers adapt to these new demands.concluded that a 1 percentage point increase inbroadband penetration increases new business Adapted behavior – Changing behaviors andregistration by 3.8 percent. The benefits of ICT in fostering innovation and entrepreneurship arethis case are an increased number of entrepreneurial some of the hallmarks of ICT.opportunities, improved market access for entrepreneursand reduced transactional costs, as well as reduced Entrepreneurship is a powerful force in urbancosts for starting a new business. development, and there is a strong connection between entrepreneurial activity and urban success.The increasing demands of a global and digital The environment for entrepreneurship and innovationmarketplace is pushing firms to move away from is enhanced by ICT. By providing people with tools andtraditional hierarchical forms of decision-making infrastructure to make it easy for them to start a business,and toward a more organic, networked-based ICT nurtures innovation and helps people to realizestructure. Several new factors are driving a clear their ideas for new companies, products and services.shift in how we now define the concept of work in Finally, it provides access to a market far greater thanthis new marketplace: what was previously possible for start-ups.8  Ericsson Networked Society City Index – Part III
  8. 8. These findings, along with a body of previous facilitates the discovery of new opportunitiesresearch, both empirical and scenario-based, by shortening the distance between potentialhighlight the positive link between ICT and entrepreneurs and their network.socioeconomic development. Some of the specificconclusions include: Improved market access: enables entrepreneurs to reach a largerIncreased number of entrepreneurial opportunities: geographical market enables new product innovations such as music and enables specialized niche firms to reach critical video streaming, e-commerce and cloud services mass markets. enables new business models such as advertising- funded services Reduced transaction costs between firms: helps reduce the costs for obtaining products and services externally reduces the need to be located geographically close to suppliers, partners and customersFor every 10 percent increase in increases access to information aboutpenetration rate, GDP increases potential counterparts increases transparency of market prices, which inby 1 percentage point. turn leads to increased market efficiencySource: Ericsson and Arthur D. Little, 2010-2011 directly impacts entrepreneurs by making it cheaper and easier to obtain critical resources externally increases outsourcing activity in established firms. For every 1,000 new connections, 80 new jobs are created. Source: Ericsson and Arthur D. Little, 2010-2011 Ericsson Networked Society City Index – Part III  9
  9. 9. Environmentalbenefitsfor businessFor decades we have understood the potential of ICT to drive change and stimulate environmentalprogress in society. For example, the Smart 2020 report from the Global e-Sustainability Initiativelooks at ICT’s potential impact on climate change.The report concludes that ICT can reduce CO2 For economies that are growing, it is important to noteemissions by up to 15 percent in 2020. Progress has the risk of “rebound effects. For example, the gains in ”been made already in the areas of policy and with productivity that result from incorporating ICT intoconcepts that generate positive environmental results, production and logistics may lead to decreased retailbut so far, adoption and large-scale changes in prices. This in turn could increase consumption andbehavior have been limited. thereby increase consumption-related emissions. To counteract this “rebound effect,” cities must employ aOne major challenge is that increased economic comprehensive ICT strategy that creates the requiredoutput (GDP) and increased consumption are incentives and initiatives that encourage citizens totypically associated with adverse environmental change their consumption patterns and reduce theirimpacts. Comprehensive measurements that include total impact on the environment.indirect environmental impacts also reveal thatincreased local consumption results in increased A supporting policy framework is needed for benefits toenvironmental strain elsewhere in the world. be realized. That is why, together with the World Wildlife Federation, Ericsson has produced a five-step plan toHowever, in contrast to many traditional infrastructure help policy-makers make the necessary shift towards ainvestments, ICT, and specifically broadband, can low-carbon economy.actually help reduce the environmental impact of socialand economic activity. In its report, The Broadband In addition to this plan, there is a large and well-groundedBridge – linking ICT with climate action for a low-carbon global base of research – including studies and caseseconomy, The Broadband Commission identifies three – that explores the effects of ICT on society. Ericssonareas where ICT can positively impact climate change: regularly investigates and analyzes this research. Transformation: helping other sectors of society to reduce greenhouse gases through dematerialization of physical products and systems. The ICT potential to reduce emissions The Smart 2020 report concludes that ICT Climate mitigation: reducing the ICT sector’s own could deliver approximately 7.8 GtCO2e of emissions, for example by developing energy-lean emissions savings in 2020. This represents products and solutions, and setting and delivering about 15 percent of emissions reductions on tough reduction targets. in 2020 based on a “business as usual” estimation. The Smart 2020 report also Climate adaptation: changes in processes, practices shows that ICT-enabled energy efficiency and structures to reduce the vulnerability of natural translates into approximately EUR 600 billion and human systems to the effects of climate change. in energy savings. Broadband can provide viable solutions, for example, weather information and disaster alerts.10  Ericsson Networked Society City Index – Part III
  10. 10. Ericsson Networked Society City Index – Part III  11
  11. 11. NetworkedSocietyCity IndexThe Networked Society City Index is a framework designed to provide city mayors, localauthorities and decision-makers with information and benchmark material regarding theircity’s ICT maturity, as well as the city-wide triple bottom line return on ICT investments.City stakeholders will gain valuable inspiration from Cities’ ICT maturitysuccessful ICT initiatives around the world. By sharing The ICT maturity dimension is determined bythis knowledge, Ericsson aims to contribute to the availability and performance of ICT infrastructure;understanding of ICT as an important enabler for growth, or the cost at which services are provided and theirinfrastructure and triple bottom line development for actual usage levels. The logic and design is similarmetropolitan areas. to the Network Readiness Index published annually by the World Economic Forum, but with a moreThe Networked Society City Index provides a map of direct focus on measurable ICT maturity and lessworld cities and their progress. The index is designed on prerequisite components. A total of 14 indicatorsto describe the development status of cities worldwide capture the ICT maturity dimension.in terms of their ICT maturity and triple bottom lineeffects derived from ICT. Triple bottom line benefits from ICT investments A city’s triple bottom line benefits from ICT areThe environmental benefits of ICT are particularly evaluated on three different levels: social, economicchallenging. This is in part due a lack of established and and environmental. For each of these dimensions,globally agreed methodologies for assessing the ICT important indicators related to business activitiescontribution. In addition, many new solutions – such as within the city context have been chosen andsmart grids and intelligent transportation – are in the weighted together to reflect a total measure ofearly stages of implementation, so their achieved triple bottom line benefits derived from ICTlarge-scale impacts have been hard to assess. investments in a particular city. Each indicator has a logical connection to ICT investments and theA total of 28 indicators have been used to measure the usage of ICT, and is chosen to capture the maintotal benefits in the index. These indicators can be conclusions from previous analysis and Ericssoncategorized into two dimensions: research on benefits related to ICT. ICT maturity clusters Cities located in Northern Europe, North America and parts of East Asia have a longer track record of investing in ICT and consequently score higher in the maturity dimension. Singapore, Stockholm and London lead among highly mature cities, while Sydney, Buenos Aires and Istanbul lead among moderately mature cities. Jakarta, Dhaka and Karachi top the list of less mature cities.12  Ericsson Networked Society City Index – Part III
  12. 12. The business index The current city index is least developed in theThe business index has been calculated using the environmental dimension of the triple bottom line. Thesame methodology as in the previous Networked data looks at a few proxies that capture ICT’s potentialSociety City indexes. It uses proxies to measure a for creating economic growth with nominal environmentalselection of indicators. This means that it does not impact, as well as environmental indicators at the citycapture all the complexities of each society nor does level. For the social and economic dimensions, theit claim to be scientific proof. The aim of these reports, variety of the proxies used is well balanced and therather, is to provide a common sense perspective on data is both recent and of good quality.how successful each city has been in using ICT toenable businesses to thrive. The proxies for the different dimensions of the triple bottom line can be grouped in the following way: 11 proxies are related to the social dimension, 10 proxies are for the economic dimension, and seven are proxies for the environmental dimension.Triple bottom line is a standard for The index is based on data that varies in scale. Forurban and community accounting. example the Foreign Direct Investment indicator can beIt provides a comprehensive as high as hundreds of billions of US dollars, while the Private Sector Growth Rate is at most a couple ofmeasurement of a city’s success percent. For this reason, the data for every proxy isby examining its progress on three normalized before the index is calculated to make each proxy of equal weight. This ensures that no proxy gets adifferent levels: social, economic preference in the index. In the total Y-axis score, social,and environmental. economic and environmental proxies are weighted as one-third each. The overall index is calculated equally on the X and Y axis. Ericsson Networked Society City Index – Part III  13
  13. 13. Key ResultsIn the previous City Index reports, Ericsson looked at ICT-generated benefits from the cities’and citizens’ perspectives. This study now explores the benefits from the business perspective.This study covers 28 indicators that analyze business The cities studied in this report represent a broadlife in 25 cities around the world. The selection of geographical selection but are also spread across thecities remains unchanged from the preceding reports ICT development curve. Cities located in Northernand covers some of the world’s largest cities with an Europe, North America and parts of East Asia have aemphasis on geographical and economic diversity, as longer tradition of producing and using ICT equipment,well as on ICT leadership. and have therefore been able to benefit from their investments over longer periods of time. This can be seen in the Networked Society City Index, where citiesFigure 2: The Business IndexAll 25 cities have been plotted according to their ICT maturity (X axis) and the corresponding with a combination of high-ICT maturity and ICTtriple bottom line benefits from ICT to city business (Y axis). The data has been normalized toaccount for the large variation in values. The best performing city in each proxy may receive a leverage (return on investments) generally fall withinmaximum of 100, while the lowest performing city can receive a minimum of 1. these geographical areas.14  Ericsson Networked Society City Index – Part III
  14. 14. New York is the top overall ranking city followed by In fast growing cities, a combination of issues canStockholm, London and Singapore. New York has the actually hinder cities from taking advantage of ICT-advantageous combination of favorable business driven triple bottom line benefits. These includeconditions, ease of doing business, clear legal frameworks, lower education levels and infrastructure issues likecollaboration between business and academia, as well as planning of roads, water and power supplies. Somea fast-growing digital economy. It has the highest overall of these issues may help explain why certain citiesscoring in social and economic dimensions, and is among score lower in this study. However, examples such asthe top three cities in the environmental dimension. the mobile-money implementation in Kenya prove that once basic infrastructure is improved, majorTogether, New York, Sydney and Johannesburg exhibit benefits can progress quickly.significantly improved ratings compared with previousNetwork Society City Index reports. One reason may be Based on the quantitative data and qualitative analysis,their leading role in business, both regionally and globally. the following conclusions can be made:A combination of eight cities – Singapore, Seoul, New Businesses benefit from ICT investmentYork, Stockholm, London, Tokyo, Paris and Los Angeles The City Business Index clearly shows a continued– lead across all three indexes. They represent mature strong connection between ICT maturity and tripleeconomies that are focused on services and that are bottom line development. Few cities are found outsideprogressing towards digital economies. All eight cities the typical trend line of ICT-generated triple bottom linehave in common reliable network infrastructure, initiatives benefits. The trend line clearly represents the developmentthat take advantage of ICT, and a clear regulatory path towards the networked city. Additionally, this indexframework that supports triple bottom line benefits. confirms that increased ICT maturity enhances triple bottom line leverage at the same pace all along theBuenos Aires and Seoul are performing relatively less development path. There is no sign of decline in triplefavorably in the business ranking compared with the bottom line benefits for cities with greater ICT maturity,previous City Index reports. To change this, these implying that even the most ICT-mature cities wouldtwo cities may consider an increased focus on benefit from continued investment in ICT.entrepreneurship, industry and university collaboration,as well as efforts to attract foreign investment. Individuals are the first to embrace innovation Benefit creation starts and is initially driven byThe cities of Istanbul, Mexico City, São Paulo and individuals rather than institutions or corporations.Manila all score in the mid-range. All of these cities Individuals and groups appear to be able to transformface tough, quality-of-life challenges with congested more quickly as a result of innovation and efficiencycity centers, long commuting times and a need for initiatives. For business, this strengthens the need toimproved efficiency. Here, initiatives that prioritize attract highly-skilled people who can handle andnecessary development in combination with improved understand new technologies and apply technologyICT infrastructure performance are crucial. toward new business practices. Ericsson Networked Society City Index – Part III  15
  15. 15. Key Results(continued)ICT strategy drives entrepreneurship measures business regulations and their enforcementHigh-performing cities typically have several things in across 185 economies. The report analyzes indicatorscommon, such as well-developed strategies and such as how easy it is to start a business, set upimplementation programs that drive efficiency, innovation electricity, deal with construction permits, pay taxes orand entrepreneurship. Collaboration between business acquire cross-border trading contracts. For example,and academia and extended support for start-up business in Johannesburg, digital initiatives aimed at simplifyingare also common factors. These developments typically the process of setting up a new business online standfollow an initial focus on rationalized city operation and in contrast in the report to the city’s unreliable broadbandimproved services for citizens. connectivity and frequent power outages.Cities encourage entrepreneurship by reducing red tapeand ensuring access to capital and affordable incubatorspace, as well as fostering public-private partnerships that The city of São Paulo in Brazildiversify the local economy and develop the workforce. introduced electronic tax forms to decrease paper use, stem corruption and simplify the process for The New York City Economic Development Corporation (NYCEDC) opened 16 business registering business transactions. incubators across the city in an effort to support entrepreneurship and to encourage start-ups to locate and thrive in the city. This report finds that fiscal incentives and encouragement for small-firm networking and clustering are more useful than direct support. In general, evidence shows that cities with a high concentration of colleges and universities areBusinesses benefit from clear legal and more likely to have increased entrepreneurial activityfiscal frameworks (Maddock and Viton, 2008). Other initiatives – such asBusinesses benefit from ICT when there are clear legal creating centers of excellence within research andand fiscal frameworks, simple and fast procedures and development – are also important. More critical howeverpredictable conditions – especially in cities with lower is the need to invest a larger share of public funds inICT maturity. Connecting a city’s knowledge-based applied research. By doing this, businesses in cities caninstitutions with universities and other industries will benefit from university and public research efforts.also increase innovation and new-idea generation. Progress in all of these areas will create a moreIn its annual Doing Business report, The World Bank attractive environment for innovation and creativity.16  Ericsson Networked Society City Index – Part III
  16. 16. Global reputation is importantOne effect of globalization is an even higher trans-national mobility of the creative elite and talents of London’s Business Boot Camptomorrow. In this new era, the top performing cities arecompeting with each other to attract the best brains gives entrepreneurs the chanceand entrepreneurs. In his book, The Rise of the Creative to develop the skills needed forClass, author Richard Florida describes a new group ofcitizens who are moving from traditional worker societies building successful businesses inor financial centers to creative centers. This new creative sectors that range from digital toclass is impacting how cities market themselves andtheir core strengths. fashion, hospitality, entertainment, creative and biotech.Top performing cities such as New York, Tokyo,London, Singapore and Los Angeles all share onething in common – a well-established position inglobal business. It is therefore possible to conclude Societal transformation still lies aheadthat successful city development is not just about Despite the long-term use of ICT in business,creating a good environment for local or regional efficiency gains and increased economic outputbusinesses – but for global ones too. It’s about have largely been constrained to current industrysetting a direction for industrial development, boundaries. However, ICT initiatives in cities suchincorporating the effects of digital transformation, as Stockholm (Royal Seaport), Moscow (Skolkovo)and creating a clear agenda and a positive business and Seoul (Songdo and Sejong) have proven thatenvironment. Changes in policy, regulation and fundamental change and transformation acrossplanning, access to financing, research, and industries is possible. These projects share aencouragement for risk-taking are some of the key common ambition to apply ICT in transformativelevers that will drive progress. ways and to develop radically new solutions to current city challenges. They hold great potential for boosting business output through ICT even further. In 2009, the Singapore Energy Market Authority It is also important for governments and the launched the Intelligent Energy System, private sector to work together. By offering public which aims to modernize transmission and services online, governments can stimulate demand electricity distribution through new information, for and demonstrate the benefits of ICT. And by communication and sensor technologies. choosing suppliers that use ICT to deliver improved services, they can also promote and reward innovative behavior. Ericsson Networked Society City Index – Part III  17
  17. 17. ConclusionThe Networked Society City Index – including the City, Citizen and Business perspectives – is acomprehensive analysis of the contribution of ICT toward city progress. Through these studiesand our interactions with city stakeholders, academia and business leaders, we have gained aclearer understanding of the underlying drivers of city progress.Today, we stand on the brink of the Networked Society. extent to which individual consumers, groups andThe contributions of ICT to society have meant significant society at large are willing to adopt these productseconomic, social and environmental progress for hundreds and services. Evidence shows that consumersof millions of people around the world. So how has this embrace or reject new products and serviceschange been enabled and what are the mechanisms based on both objective and subjective factors.behind it? Understanding change mechanisms andallowing these to work will help future generations Investor perspective – technology, government,create positive triple bottom line benefits for society. society and funding-related enablers that lay the foundation for change mechanisms. Change mechanisms – these include underlying ›› Technological enablers are developing rapidly enablers, enabling offerings and behavior and and are improving the foundation for ICT-related structural changes. These components are products and services. These developments, in interlinked and can influence one another both turn, bring about more positive change and triple sequentially, in parallel and in reverse order. bottom line benefits for society. Underlying enablers – provide the foundation for Underlying enablers lay the foundation for mechanisms change and are influenced by stakeholders in society. of change. The creation of enabling services is followed These can either be catalysts for ICT innovation or by behavioral and structural changes, which result in obstructions that limit the full, positive impact of real triple bottom line benefits. These changes create ICT on society. momentum in society, including increased demand and development of underlying enablers and enabling services. Technology clusters – concentrations of interconnected businesses that provide fertile As these enablers turn into real change, a new connected ground for technological innovation. They include world opens up with unlimited opportunities to share our the following underlying enablers: challenges, hopes, aspirations and dreams. This may ›› Connectivity infrastructure – the backbone be the key to solving some of the greatest challenges enabling people and machines to connect of our time. ›› Devices – servers, computers, handhelds and mobile phones that connect to the infrastructure network We can’t predict exactly what progress will look like in the ›› Interoperability – allows devices and infrastructure future – but we can reach further than any other generation with different standards to operate with one another. by supporting underlying enablers that allow people all around the world to explore their creativity. This is the Human perspective – the impact of human behavior, vision of the Networked Society, where everything that skills and knowledge can benefit from a connection will be connected. It is ›› ICT literacy and readiness – indicate to what Ericsson’s hope and intention to engage with the most extent knowledge exists about new ICT products forward-looking individuals, organizations and decision- and services makers around the world to step-by-step realize the ›› Acceptance and embracement – explains the vision of a truly networked, collaborative society.18  Ericsson Networked Society City Index – Part III
  18. 18. Figure 3: Linkages and interdependencies between ICT development and triple bottom line development in a city environment.Ericsson Networked Society City Index – Part III  19
  19. 19. Ericsson is shaping the future of mobile and broadband internet communications throughits continuous technology leadership.Providing innovative solutions in more than 180 countries, Ericsson is helping to createthe most powerful communication companies in the world.The content of this document is subject to revision withoutnotice due to continued progress in methodology, design andmanufacturing. Ericsson shall have no liability for any error ordamage of any kind resulting from the use of this documentEricsson ABSE-126 25 Stockholm, SwedenTelephone +46 10 719 00 00Fax +46 8 18 40 85www.ericsson.com © Ericsson AB 2012

×