INNOVATION: AN ESSENTIAL FACTOR FOR LONG-TERM ECONOMIC GROWTH IN CITIES
First introduced in 2015 by World Economic Forum founder and CEO Klaus Schwab, the term “Fourth Industrial Revolution” refers to extremely fast changes in technology, AI (Artificial Intelligence), robotics, IoT (Internet of Things) and the intertwining of physical, digital and biological world. It is a transformation which humankind has never experienced before.
The world is witnessing a technological revolution that completely changes everyone’s way of living and working. From watching movies, listening to music, buying products or ordering a taxi: all of this can be done remotely. Artificial intelligence is widely present: from drones, self-driving cars to all the possible software one can imagine.
According to Forbes magazine, innovation is vital for companies because it allows them to penetrate markets quicker, create original concepts, and grow more easily.
In the future, technology and communication costs will further drop, logistics and global supply chains will become more effective, and the cost of trade will diminish, all of which will then drive the economic growth even more.
All in all, innovation has become essential. But this does not relate exclusively for the business world, but also for cities.
The combination of innovation and talent in cities creates higher productivity and greater long-term economic growth. Consequently, cities that combine these two characteristics are also more resilient in the face of economic and financial crises. Although large cities are bigger drivers of creativity and innovation, the smaller ones can also provide excellent conditions for it, meaning that innovation is generally successful when both local conditions and resources are taken into account.
Overall, city innovations are associated with products, processes, marketing and organisational contexts, all of which are significant in urban areas.
According to European Commission, some concrete ways in which cities encourage innovation are:
- Entrepreneurial innovation oriented to support small businesses in the creation of new jobs
- Social innovation highly focused on meeting social needs by enhancing social interactions and integrating ideas, knowledge and vision of civil society with urban development
- Innovation in work systems: including teleworking, high mobility of entrepreneurs, co-working spaces, open office areas and other alternative ways to generate income
- Culture-led innovation, typically stemming from the creative knowledge of the arts and cultural domains and inspiring many city-relevant sectors and areas, including cultural tourism, consumer electronics and urban regeneration
With the aim of encouraging innovation developments in the cities throughout the European Union, European Commission annually rewards the city which is best able to demonstrate its ability to harness innovation with the goal of improving the lives of its citizens. The iCapital Award 2021 – European Capital of Innovation was won by the German city Dortmund.
For this occasion, mayor of Dortmund Thomas Westphal stated: “The award is a result of great teamwork in Dortmund as a City of Neighbours. Many committed partners from the fields of science, business, urban society and administration have built up a sustainable innovation ecosystem. A breeding ground for start-ups and companies, for research and development, for education and culture. But also for the implementation of good ideas, social projects, and creative solutions in our neighbourhoods. We are very pleased that these efforts have now been recognized at a European level. It is a success that will spur us on to continue on this path. We are very proud to be the first German city to have won this award!”
On the global level, Innovation Cities™ Index 2021 has named Tokyo as the world’s most innovative city in the last year. The extensive research is being conducted every year on more than 500 cities. 162 indicators have been taken into account: from technology application, digital capability all to the pandemics performance.
Tokyo is followed by Boston, New York, Sydney, Singapore, Dallas, Seoul, Houston and Chicago.
Paris took the 10th place. Other best European cities are London (11th place), Stockholm (16th place), Vienna (22nd place), Amsterdam (24nd place) and Oslo (25th place).
The top 50 also includes Berlin, Moscow, Munich, Madrid and Helsinki.
All in all, European cities make 22% of the most innovative cities in the world when talking about the TOP50 ranking.
To conclude with, an innovative economy is the centre of everyone’s vitality and quality of life. Innovation not only changes what we do, but also who we are. It affects our identity and all the other things associated with it. The list is endless because it is bound only by our imagination.
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DIGITALIZATION IN EU
ESTONIA: EUROPEAN LEADER IN DIGITAL TRANSFORMATION
Estonia ranks 1st in the European Union for Digital public services and continues to be the strongest European country in this area.
The share of e-government users has increased in recent years, accounting for 89% of total internet users in the country. This year, Estonia performed better than in 2020 in the number of users using pre-filled forms, scoring 97 out of 100, what is well above the EU average of 63.
E-Estonia is the most ambitious project in state technology today. This amazing project entered people’s everyday lives and includes all parts of the government.
For example, it includes all the normal services that the government is involved with, like legislation, voting, education, justice, health care, banking, taxes and policing. Those have all been digitally linked across one helpful platform, wiring up the whole nation.
Because of this futuristic concept, almost everything you can imagine, Estonians can do from home, with their phones or laptops.
All Estonians have a state-issued digital identity called eID, which is also a part of citizens’ daily transactions in the public and private sectors. Their eID’s are used when paying bills, shopping, signing deals, accessing their health information and much more. It has become a part of their everyday life.
So now, citizens can vote from their laptops and pay parking tickets from home. Applications have their data pulled from the system, like incomes, debts or savings, so people don’t have to spend any time searching for that information.
There is also the “once only” policy, which dictates that no single piece of information should be entered twice, which is helpful for older citizens or anyone that forgot whether they already typed something down.
But the thing that is the most impressive is how Estonia’s digitalization influences its health system. When you go to the doctor as an Estonian citizen you would never wait in those boring waiting rooms and you wouldn’t have to fill out your information because doctors have access to patients’ files with just a couple of clicks. This makes their health system truly incredible but also accessible and simple for anyone that is in need of medical care.
Estonia’s digital systems also influenced the educational system, making the country one of the role models in digital education attracting the attention of many world leaders.
When the Covid crisis started, almost all schools around the world switched to different digital platforms for education. That was a big switch for many nations, but for Estonia, it wasn’t a problem at all. 99% of schools had already been using some type of e-solutions, so this wasn’t a new thing for the Estonians.
Today, the Estonian schools are mostly in the cloud: 95% of schools use e-school solutions. These are innovative tools that provide an easy way for parents, teachers, and children to collaborate and organize all the information necessary for teaching and learning.
There are also many more benefits that came with digitalization in Estonia and there are no signs of slowing down this amazing process.
The country has become known for many liberal regulations around tech research and now has the lowest business tax rates in the European Union.
In 2014, the Estonian government even launched a digital residency program, which allowed logged-in foreigners to partake of some Estonian services, such as banking as if they were living in the country. This way, anyone could get familiar with the Estonian digitized system.
Estonia represents a country that is already living in the future and is definitely ahead of its time with regards to other European countries. Their elaborated and digitized system is the goal that everyone is leaning to.
Estonia is the role model which gives us no benefit of a doubt about the future and what digital transformation is bringing. (Photo credit: Pixabay)
DIGITALIZATION IN EU
TOP DIGITAL PERFORMER: THE NETHERLANDS
The Netherlands is commonly regarded as one of the continent’s leaders in the field of digitalization.
Eventhough a lot has already been achieved on this front, changing times bring new challenges but also provide a chance to go even further. At the same time, local leaders are bound to embrace the transformation when responding to the issues that today’s urban development brings. It is therefore possible that digital transformation will soon become one of the central topics for Dutch cities.
“The current digital revolution offers great opportunities for our society and economy. Those chances we will leverage with excellent digital skills, a strong European digital market, state-of-the-art digital infrastructure and ambitious collaboration in technological innovation.
At the same time, digitization is creating a digital divide and growing inequality in our society. Our security, rule of law, democracy, human and fundamental rights and competitiveness is under pressure. This requires solid rules of the game, supervision and strategic autonomy,” the four parties agreed in their coalition agreement.
In recent years, the Netherlands has consistently been among the top performers in the European Digital Economy and Society Index (DESI). In the 2021 edition, the Netherlands was ranked fourth, behind Denmark, Finland and Sweden. The most recent analysis relies primarily on data from 2020, and portrays the condition of the digital economy and society in the first year of the pandemic across European Union member states. Due to its strong foundation in terms of digitalization, the Benelux state was ready to respond to the crisis fairly better than many other member states.
The Netherlands, however, does not plan to stop there and will continue its digitalization journey equally strong, with a fresh focus on newly emerging needs and challenges. Primarily, The Netherlands is looking to become the digital hub of Europe with robust, fast and secure Internet access in all parts of the country. Furthemore, science, business sector, knowledge coalitions and government are said to join forces to capitalize on the opportunities that digital technology offers.
The Netherlands is also looking to take the leading position in the European context and strengthen cooperation between member states in the areas of digitisation, including the people-oriented use of artificial intelligence, digital ethics, digital identity and cybersecurity. The new coalition agreement also focuses on digital equality, making sure everyone can develop digital knowledge and skills through education and retraining.
Furthemore, the new Dutch government will also recognize fundamental civil rights online and strengthen secure digital communications at the same time. Investing in a strong position of the Personal Data Authority and boosting cooperation and coherence between the various digital regulators has also been named one of the cabinet’s upcoming tasks. Additionally, collecting only the necessary data and developing rules for data ethics in the public sector remains essential. As a result, all Dutch citizens are to be given their ‘online’ identity and take full control over it.
The digital transformation is moving at a lightning speed and the ongoing coronavirus pandemic has highlighted the necessity for countries to accelerate the processes and harness the full economic and social potential of digital technology. Digitalisation entails a real change of a wide range of activities in our societies and there are very few areas that have not been completely reinvented by this process.
The digital transition is happening in front of our eyes. The example of the Netherlands only proves that digitalization is a journey rather than a destination. Despite being one of the pioneers in this field, many opportunities remain untapped. As the Netherlands continues its digitalization journey, final limits of this process are not yet in sight. (photo credit:Vecteezy)
Mayor of Amsterdam Femke Halsema