Smart Cities and the Energy Transition

Smart Cities and the Energy Transition: Within the framework of the Collective Report of the Energy Transition Stakes course delivered by Prof. Laurence de Carlo, ESSEC Business School, students Joaquim Martin, Thomas Nivet and Quentin Riblier look into the track record of smart cities to define a set of factors for a city to be truly smart.
Photo by Scott Webb from Pexels

Within the framework of the Collective Report of the Energy Transition Stakes course delivered by Prof. Laurence de Carlo, ESSEC Business School, students Joaquim Martin, Thomas Nivet and Quentin Riblier look into the track record of smart cities to define a set of factors for a city to be truly smart.

Smart Cities and the Energy Transition, translated from French by Tom Gamble and edited by Laurence de Carlo and Tom Gamble.

Before going deeper into the concept of a smart city and its link with energy transition, it is essential to understand what a city is. As such, a city is a local area and territorial system based on the interdependency if its players, more precisely on three main types of relationships between them : functional relationships (physical exchanges of information, goods and people), hierarchical relations (ensuring the functioning of the area through frameworks and management) and competitive or synergistic relations.[1] In this light, a city can be characterized by relations between all its players, including its inhabitants – both being interdependent. From this definition, we will attempt to see how to render the city more intelligent or “smart”– the objective being to establish if, and at which conditions, smart cities could indeed be the future model for our urban areas.

Smart city – the what and the how  

Within an increasingly urban society, the intelligent or smart city is considered as one of the solutions to improve the sustainability as well as the functionality of urban clusters. The main objective is to improve the management of the city via optimising flow and networks. But there are several definitions of what smart city actually means.

To quote a couple of examples, let’s look at those provided by the European Parliament and the Paris Climate Agency. According to the European Parliament, a smart city is “a city that seeks to tackle public issues through solutions based on information and communication technologies that include a multitude of stakeholders whose partnership is centred around municipal authority”[2] , whereas the Paris Climate Agency believes that the notion of a smart city is based on the “use of information and communication technologies by a City to improve the management of its natural resources, its sustainable economic development, its inhabitants quality of life or even their democratic participation”.[3] We can notice that these definitions rely on one essential prerequisite: the massive use of New Information and Communication Technologies (NICT).

The concept of the smart city has become extremely popular over the last few years. Public authorities have tended to apply the concept to many types of urban project with mixed results – as we will see.

The several definitions of a smart city show that there is no ideal model of smart city. On the contrary, the abusive use of NICT may even harm the urbanisation of a city.[4] Technological innovations must be steadily and moderately implemented in order to obtain a coherent set of solutions rather than an indiscriminant mass of innovative choices. As we will see, in the end the objective seems to be one of giving priority to simple and practical NICT for use by inhabitants, according to their needs and priorities. Indeed, it is which and how NICTs are used that will ultimately render the city smart and not their sole presence.

The failure of smart cities ex-nihilo: The lessons

Prof. Laurence de Carlo, ESSEC Business School, students Joaquim Martin, Thomas Nivet and Quentin Riblier look into the track record of smart cities to define a set of factors for a city to be truly smart.

We can distinguish two, distinct types of smart city: those created out of nothing – ex-nihilo – and those stemming from a partial or more substantial transformation of an existing city. The first type of smart city might seem much easier to achieve – mainly from the fact that external constraints are absent, leaving space for total freedom in the architecture of the city, in the choice of technologies to implement, or even the materials and tools used. However, the various experiences of these cities created “from nothing” have so far not been shining examples of success. 

One of the most striking examples is that of Masdar City, the construction of which should have been completed in 2016, and which will finally be achieved, in the best scenario, in 2030.[5] The ambition of the project launched by Abu Dhabi was to build the first ever zero carbon, zero waste city in the world. But for the time being, only a few students and researchers inhabit this “city” which still lacks a social and economic fabric to fully deserve the name. More specifically, its objectives lack coherence with the style of life around it.

As such, this semi-ghost town is still only a mirage and the contradictions between the much-lauded low energy consumption and the actual results are far from satisfactory, as emphasised by Radia Lahlou, a Moroccan student: “Masdar City is a pioneering ecological initiative, but when you leave the campus you discover a way of life that is geared towards over-consumption. In the city it’s aircon all year round and where big cars reign” [6] even though a clean transport network and electric cars are there to get you around town.[7]

Smart Cities and the Energy Transition. Prof. Laurence de Carlo, ESSEC Business School, students Joaquim Martin, Thomas Nivet and Quentin Riblier look into the track record of smart cities to define a set of factors for a city to be truly smart.
Photo by Kostiantyn Stupak from Pexels

New Songdo, in South Korea, is another pertinent example that can be cited. This ultra-modern city in the suburbs of Seoul, was built in less than ten years. An archetype of the sustainable city, as such Songdo is often mentioned as a model of the ultra-connected smart city: everything had been planned to optimise mobility, waste management, the wellbeing of its inhabitants and the city’s electricity management.[8]  Despite its economic success and reputation, the city still has trouble in attracting dwellers: a few, well-off families settled there, seduced by the quality of services, but Songdo counts only approximately 258,500 inhabitants, 4,600 are expatriates, whereas Seoul is populated by nearly 18 million inhabitants.[9] It seems that the strong planning of the city missed important factors: not easily reachable from Seoul, lack of soul coming from poor social diversity, lack of privacy due to a large system of surveillance, and an electricity management developed with NICT but the production of which is still a source of great carbon dioxide emissions[10]

Thus, it appears difficult to make an ex-nihilo city appealing. Citizens have to make it their own – because that is one of the founding principles of the city. The ex-nihilo cities mentioned above were built with the goal of maximum efficiency but did not show enough social or economic fabric upon their creation. In such cities, inhabitants appear as spectators of is construction and development: contrarily to a traditional city, the setting up of various hospitals and clinics, shops, schools and other places have not been designed progressively according to people’s needs but are created and organised primarily to make the city the most effective and efficient as possible. As such, it is the inhabitants that must adapt to their environment. When choosing one’s city in which to live, people will, moreover, give priority to the social aspects and customs rather than settling in a technological centre without a soul. A smart city must subsequently take into account the importance of the things that bring people together and must try to satisfy their true needs, rather than searching for an abstract optimisation which will, in fact, make the city more of a technological shop window. 

As such, the advantage in transforming an existing city into a smart city in comparison to building an ex-nihilo city is the prior existence of this urban, economic and social fabric. This does not prevent the improvement of the city’s features which most need to be made smart.

Smart city development initiatives – what works

What role do smart cities have in the energy transition?

Today, there are many smart cities development initiatives in already-existing cities such as Stockholm, Amsterdam or Malmö in Sweden. Northern Europe is not the only region where they are being developed, but some of its countries include several cities which are shining successes on the subject.  

Studying the case of Malmö’s reconversion enables us to highlight many important characteristics in the creation of a smart city. Indeed, we may consider that the ecological success of this city, which at the end of the 1980s went into decline through the closure of its shipyard, began at the end of the 1990s with the construction of an 8-kilometre long bridge linking the city to its neighbour, Copenhagen. This bridge enabled a central issue regarding smart cities to be tackled: the connection between areas and mobility. Thus, a low-tech solution like a bridge can contribute to make a city smart.

This will, moreover, attract a variety of new players, already including pharmaceutical companies and Microsoft, who will add to the region’s dynamics. At the end of the 1990s, the city was also selected to host an exhibition devoted to the city of the future. As such, the local municipality decided to re-energize the run-down districts of the 1980s-1990s by hedging their bets on ecology. In this way, the Vastra Hamnen port district, then the Augustenborg district began to develop rapidly: 1,500 eco-designed homes, with 60,000 homes supplied with 100% wind-generated electrical supply, waste water capture for Vastra Hamnen, waste sorting to produce biogas, the use of rain water for toilets, rooftop gardens, etc.[11]. if all these initiatives work, it is also thanks to a strong citizen engagement in everyday ecological practices. To accelerate the energy transition, the municipality involved local and regional stakeholders and sought to develop appropriate ways in which the inhabitants could take part. The experience of Malmö has nevertheless a limit the local authorities work on: rents are higher in the growing smart part of the city.

This shows the relevance of setting up public consultation schemes – like in Reykjavik – where citizens are at the heart of the change and can propose debating themes and vote for ideas within the framework of improving the city on a website baptised ‘Your Priorities’. The Reykjavik municipality has also set up educational programmes in schools and colleges. A smart city must in effect also include its citizens, considered as smart, i.e. able to contribute to strategic local decisions when well informed and trained,[12] to develop better.   

Smart cities and green transportw.

Luc Bélot, a politician expert in digital matters was entrusted by the French Prime Minister to draft a report on the future of smart cities (Rapport sur l’avenir des smart cities)[13]. He proposed to ‘place the citizen experience at the heart of developing public policy’. This means not thinking of citizens solely as users but as players in their own right. This supports the theory of the importance of appropriating the region – enabling strong citizen engagement to develop. 

Reykjavik has thus empowered its citizens to contribute to the improvement of their cities by mobilizing their knowledge and experience. In this dimension of exchange and dialogue, some cities use the sharing economy to help develop their smart city. The Sharing Seoul Initiative, set up by the city’s public authorities, enables citizens to share public and private resources. Begun in 2012, by 2019 the initiative grouped 63 sharing services (car sharing with SoCar, sharing of goods between neighbours with Biliji, etc.) via the Sharehub platform.

While digital technology can be one of the keys in developing smart cities, it doesn’t mean that new technologies should always be developed. First, it is necessary to collectively think and discuss about the multiple and concerned players’ priorities, including citizens, knowing the potentialities of digital technologies. Then the use of some of them, and of low-tech solutions, can be considered. For example, in Jakarta, through the Twitter account ‘Nebenger’, more than a thousand requests for car-sharing are recorded every day. And Twitter is not a NICT anymore.

Within the framework of the Collective Report of the Energy Transition Stakes course delivered by Prof. Laurence de Carlo, ESSEC Business School, students Joaquim Martin, Thomas Nivet and Quentin Riblier look into the track record of smart cities to define a set of factors for a city to be truly smart.

Strong citizen involvement and an integrated ecology conscience also enable citizens to develop ‘plogging’ – a practice coming from Scandinavia that consists in jogging while picking up litter and waste. Indeed, Facebook groups have been formed in Paris to organise groups to do exactly that.

As such, we can observe that the success of smart cities and of smart city initiatives are strongly linked to their population and its involvement regarding its local area. Smart cities thus develop around their specificity and in a steady way over time – an opportunity that an ex nihilo created city cannot allow.


Through this report we have seen that the use of NTIC is insufficient to create a smart city but that it is indeed a vector of success. These new strategies can be deployed within the framework of a wider strategy based on the needs of inhabitants and regional actors. Indeed, smart cities can only come into being if they are thought out and planned with its citizens. It is a matter of putting citizens at the heart of the urban development process in order to render the governance of the city intelligent. It is also for that reason that a smart city relying on a pre-existing social and economic fabric has more chances of meeting with success than an ex nihilo-created smart city.

Finally, the main stakes in leading a smart city project to successful achievement are indeed to reply to today’s major debates/issues: the ecological transition and the creation of collaborative initiatives between citizens and their environment.

Sources: [1] GéoConfluences (2015), Systèmes de ville : système urbain, ENS Lyon ; [2]  European Parliament Européen (2014), Mapping Smart Cities; [3] Agence parisienne du climat (2017), Report by Mathilde VAN-EECKHOUT; [4] Sennet R. (2012), No one likes a city that’s too smart; [5] Roger S. (2016), Le Monde, Au milieu du désert, le mirage de Masdar ; [6] Roger S. (2016), Le Monde, Au milieu du désert, le mirage de Masdar ; [7]; [8] Philippe Mesmer (2017), Le Monde, Songdo, ghetto de riches; [9] Sibylle Vincendon (2017), Libération, A Songdo, en Corée, une ville « techno » au cordeau ; [10] Philippe Mesmer (2017), Le Monde, Songdo, ghetto de riches ; [11] Toute l’Europe : Article du 24/11/2015 Conso Globe : Article du 06/11/2016; [12] Nesta: 10 people-centred smart city initiatives: []; [13] Rapport au Premier ministre sur l’avenir des smart cities par Luc Bélot d’avril 2017

Prof. Laurence de Carlo, Joaquim Martin, Thomas Nivet, Quentin Riblier

Laurence de Carlo is a Professor in the Public and Private Policy Department at ESSEC Business School and Chair holder of CONNECT (CONsultation, Negotiation, Environment, Conception and Territories) Center. Her Master in Management elective course on the energy transition stakes brings students into contact with representatives of companies, local authorities, and NGOs, each of the latter presenting the energy transition stakes in their sectors and their organisations followed by interaction and debate. In parallel, Prof. de Carlo coaches each student group on the problematization of a subject linked to the energy transition that interests them. The content generated by the work of each group is collated in a collective report that has been published every year since 2015.   

Learn more about the Council on Business & Society

The Council on Business & Society (The CoBS), visionary in its conception and purpose, was created in 2011, and is dedicated to promoting responsible leadership and tackling issues at the crossroads of business and society including sustainability, diversity, ethical leadership and the place responsible business has to play in contributing to the common good.  

Member schools are all “Triple Crown” accredited AACSB, EQUIS and AMBA and leaders in their respective countries.

The Council on Business & Society member schools:
- Asia-Pacific: Keio Business School, Japan; School of Management Fudan University; China; ESSEC Business School Asia-Pacific, Singapore.
- Europe: ESSEC Business School, France; IE Business School, Spain; Trinity Business School, Ireland; Warwick Business School, United Kingdom.
- Africa: Stellenbosch Business School, South Africa; ESSEC Africa, Morocco. 
- South America: FGV-EAESP, Brazil.

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