Eurocities: Europe’s cities ‘frustrated’ by innovation policy

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Europe's biggest cities believe the European Commission's definition of innovation is too narrowly focused on the commercial and research sectors. In an interview with EURACTIV, Paul Bevan, secretary-general of Eurocities, said Europe's urban centres are teeming with examples of social, organisational and market-driven innovation.

Paul Bevan is secretary-general of Eurocities. He was speaking to Gary Finnegan.

To read a shortened version of this interview, please click here.

Innovation has become the leitmotif of the new European Commission, which is now working on a research and innovation plan. Do you think the EU has the right priorities in this area?

Well, we get a little frustrated that the focus is on R&D and market innovation. Those things are hugely important to Europe's global competitiveness and we wouldn't want to diminish that. However, we are concerned that the role of city governments as innovators and facilitators of market innovation is not part of the discussion.

Big cities are doing a lot on this in areas like education, planning and providing public services – they can connect innovation in lots of areas. Cities are creating opportunities for entrepreneurs but also for big businesses. For example, Siemens is working with cities on energy efficiency in buildings. So we shouldn't overlook the potential of cities.

We have a new Commission, a new commissioner and new thinking but what we are saying – and we'll meet Maire Geoghegan-Quinn shortly – is that European innovation policy does not always have to be done through grand projects. It's also about innovation incubators and developing entrepreneurs – something cities and universities are working on together.

How are cities themselves innovating?

People who work in cities have to innovate all the time. With the pressure on our budgets we have to find new ways to do things. Look at e-government, online services and one-stop-shops for local authorities. What is now commonplace seemed like a major challenge ten years ago. Innovation has taken place but it's not really celebrated in the same way.

What about social innovation. Is that something cities can foster?

Social innovation is about how we live and cities have a role to play, although there are plenty of initiatives that come from citizens. The Big Issue magazine, for example, is a well-established way that homeless people are encouraged to help themselves. Credit unions are another example of social innovation, where citizens find a new way to organise something.

What are the drivers of social innovation?

The green agenda will spark changes in the way we live our lives. In fact it has already prompted changes. We see people looking at ways to grow their own food, ways to recycle and sharing. Some of these things can be supported by local government. The web has been a huge boon to these kinds of initiative. And local governments have their own carbon targets they have to meet, so this is pushing people to think about ways to do things differently.

Public procurement is likely to feature in the European Commission's innovation plan. How can cities' spending priorities be used to drive innovation?

The buying power of cities is a real lever for change. The challenge is to come together to increase that leverage. Take green buses, for example. Cities have tried to work together across borders to come up a single specification for green vehicles. This is not very easy because of procurement legislation, but it should be possible to develop standards used by several cities. Manufacturers are also keen to work with local government to develop green buses and waste collection vehicles.

Green transport seems to be something cities are taking very seriously. What are European cities doing in this area?

Transport is one of the areas where cities will play a crucial role. 85% of GDP is created in cities, 75% of people live in urban centres and 80% of our carbon footprint comes from cities. So, mobility and carbon emissions targets have pushed transport to the top of the agenda.

There is a huge renaissance in trams across Europe. It started in Nantes and Strasbourg but now other cities are doing it too. Even electric cars and hybrids won't be the only solutions, because you've still got to solve the problem of congestion. You can innovate as much as you like, but if you can't get around it hurts competitiveness.

There are other things happening like collaboration between Paris and London on electric vehicles. Or the city bike schemes, which don't cost much at all. In fact the first one, in Lyon, cost nothing. It was funded entirely by advertising.

One thing I'd say about transport is that information is crucial. If you give better information on travel options, you're more likely to change people's behaviour. You can now use your mobile phone to get information on train or bus times and can even pay for your ticket online using your phone. In Tallinn, they have a system where you can use your phone to buy a one hour journey on public transport. This isn't new technology – they've been doing it in Estonia for five years.

Mobile phones have huge potential for public service information. I think smart cards will be superseded by mobile phones.

Public private partnerships have grown in popularity with cities in recent times, but this trend has not been immune from criticism. Do you think PPPs will be used increasingly now that public budgets are stretched?

Yes, I think the use of PPPs will continue to grow but there are so many different types of contracts that it's hard to generalise. To return to the example of what Siemens and local government are doing on energy-efficient buildings, the private partner is investing a great deal of capital in return for a commitment that they will deliver outcomes.

The ones that have been questioned are long-term projects – like hospitals and schools – which have long-term leaseback clauses at high costs. In some cases, those turn out not to be cheaper.

The private sector brings a certain expertise but people are concerned if a PPP is the only option presented to them.

Is there a perception that cities can no longer deliver some services themselves?

Many cities feel very strongly that they should retain the right to do things themselves. The Commission has given an undertaking to look – again – at services of general interest. There is pressure from the EPP-dominated parliament and Commission to open up markets to the private sector. Cities don't want to be forced to do that.

In Vienna – a huge entity employing around 55,000 people – there is a commitment to doing everything themselves. Stockholm on the other hand does a lot of outsourcing and creates a lot of partnerships with the private sector. It's a matter for each city and depends on culture.

One area where cities directly support businesses is in funding clusters. Is this still an important part of policy?

Lyon leads our work on clusters through the Clusnet partnership. A lot of our cities are collaborating in areas of common interest. Toulouse, Bristol and Hamburg, for example, all have aerospace clusters working on Airbus. Through clusters, cities act as development agencies for their region and create networks that help spin-off ideas by bringing people together.

With public debt soaring since the economic crisis, what will be the medium-term impact on cities' budgets?

There will be a lot of pressure on public budgets and it's going to require more innovation to do more with less. For those reliant on government grants the pain hasn't come yet. Those reliant on taxes are feeling it already. Some cities have brought forward investment to counter the crisis, but that obviously means there are two or three years where there will be less money to invest.

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