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Smart Cities in the New Service Economy:

Building Platforms for Smart Services
Article in AI & Society November 2014
DOI: 10.1007/s00146-013-0464-0





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Ari-Veikko Anttiroiko
University of Tampere

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AI & Soc (2014) 29:323334

DOI 10.1007/s00146-013-0464-0


Smart cities in the new service economy: building platforms

for smart services
Ari-Veikko Anttiroiko Pekka Valkama
Stephen J. Bailey

Received: 15 October 2012 / Accepted: 23 April 2013 / Published online: 22 June 2013
 Springer-Verlag London 2013

Abstract Recent changes in service environments have

changed the preconditions of their production and consumption. These changes include unbundling services from
production processes, growth of the information-rich
economy and society, the search for creativity in service
production and consumption and continuing growth of
digital technologies. These contextual changes affect city
governments because they provide a range of infrastructure
and welfare services to citizens. Concepts such as smart
city, intelligent city and knowledge city build new
horizons for cities in undertaking their challenging service
functions in an increasingly cost-conscious, competitive
and environmentally oriented setting. What is essential in
practically all of them is that they paint a picture of cities
with smooth information processes, facilitation of creativity and innovativeness, and smart and sustainable solutions
promoted through service platforms. This article discusses
this topic, starting from the nature of services and the new
service economy as the context of smart local public services. On this basis, we build an overall framework for
understanding the basic forms and dimensions of smart
public services. The focus is on conceptual systematisation
of the key dimensions of smart services and the conceptual
modelling of smart service platforms through which digital
technology is increasingly embedded in social creativity.

A.-V. Anttiroiko (&)  P. Valkama  S. J. Bailey

School of Management, University of Tampere,
Tampere, Finland
e-mail: kuaran@uta.fi
P. Valkama
e-mail: pekka.valkama@uta.fi
S. J. Bailey
e-mail: S.J.Bailey@gcu.ac.uk

We provide examples of real-life smart service applications

within the European context.
Keywords Smart city  Smartness  Service economy 
Service platform  e-Platform  Platform governance 
Sustainability  Social inclusion
1 Introduction
A range of contextual changes of public administration,
such as unbundling services from production processes
(servicisation), growth of the information-rich economy
and society (informatisation), the search for creativity in
service production and consumption (creativisation), and
continuing growth of digital technologies (digitalisation),
have changed the preconditions of public service production and consumption. These changes affect among others
city governments, which have a responsibility to provide a
range of infrastructure and welfare services to citizens.
There is a wide variety of city conceptions that have built a
new horizon for cities in their challenging tasks in an
increasingly cost-consciousness, competitive and environmentally oriented setting. Irrespective of whether the
concept is smart city, intelligent city, sustainable city,
knowledge city, creative city, innovative city, ubiquitous
city, digital city or city 2.0 (e.g. Komninos 2002; Aurigi
2005; Carillo 2006; Hollands 2008, 305), they all paint a
picture of a modern city with smooth information processes, facilitation mechanisms for creativity and innovativeness, and smart and sustainable service solutions and
platforms. Such features of envisioned new urban governance imply profound changes in the production, delivery
and consumption of local public services.
Smart service solutions have been discussed from various points of view. Since the late 1990s, the key issue was



digitalisation, which was discussed under the label smart

communities (Caves and Walshok 1997; Caves 2004) and
later also intelligent cities (Komakech 2005; Komninos
2002) and knowledge cities (Carillo 2006). This discussion is relevant to practically all aspects of local government, including service provision, democratic processes,
city planning and development policy.
A new dimension to smart city discourse emerged in the
wake of environmental concerns, especially since the late
1980s. Almost three-quarters of the worlds population are
projected to live in urban areas by 2050 (UN 2011). This
will create very substantial and highly complex human,
societal, scientific and environmental issues, including how
people live, travel around cities and receive services. The
need to utilise technologies to provide information and
facilitate community developments and social cohesion
within increasingly intensive urban environments is
increasingly apparent. Even if the sustainability agenda is
global, and has been primarily addressed within the EU at
both the community and national levels, local and regional
governments have also become active advocates of sustainable development. The hoped-for result is clean air and
a higher quality of life as member states and their local and
regional governments respond to these policy challenges,
some city governments having already developed such
initiatives (Edwards 2011; Schaffers et al. 2011, 434435;
Hollands 2008, 303305). Furthermore, the idea of creative city has also been linked with a broader progressive
agenda, including aspects of sustainability and social
inclusion (Sasaki 2003).
This article develops the idea of smart public services,
starting from the nature of services in the new service
economy as a context for present-day city governments.
The focus is on conceptual systematisation of the key
dimensions of smart cities and their service functions and
on building a conceptual model for smart service platforms.
From this perspective, the aim is to provide examples of
real-life smart service applications from the European
context. Essentially, the article will provide comprehensive
framework for understanding the basic forms and dimensions of smart service platforms and applications. The
social dimension of smart city as a precondition for the
accurate understanding of what smartness means in public
domain beyond instrumentality will also be analysed.

2 The changing role of cities in the new service

Urban governments have been engaged by increasingly
radical economic transformation as heavy industries and
manufacturing were progressively replaced by service
industries (in proportionate and absolute terms), for


AI & Soc (2014) 29:323334

example, retailing, education, welfare and business, and

financial services.
The emergence and dominance of service sectors in
cities has been quite controversial because many service
industries are characterised by low-paid low-skilled manual jobs. This reflects low productivity of those workers,
wages and salaries tending to reflect productivity, especially in the private sector.
New trends in services have started to change the overall
picture. First, some services can be formalised, codified
and modularised by information and communication technologies (ICTs) and so become more footloose and easily
tradable because global communication and delivery costs
are very low through the Internet. An increasing proportion
of formerly local services can be redefined as global service products and manual services can be digitised and
automated. (Kushida and Zysman 2009; Jorgenson and
Wessner 2007, 276; Rutherford 2002, 393; Zysman 2004,
Second, development of the network economy creates
new models for cooperation in production, delivery and
consumption of services. On the one hand, service enterprises and other service providers can establish different
kind of alliances or consortiums through electronic networks in order to circulate knowledge, share risks and
extend and reformulate value chains. On the other hand,
consumer electronic networks funnel consumer instructions, expectations and understandings, creating opportunities for shared service experiences (de Man 2004, 4;
Bessant and Tidd 2007, 85; Furubotn and Richter 2005,
Third, liberalisation of many service industries breaks
up monopoly power and so creates greater competitive
pressures to be cost-effective and innovative in (re)configuring services (Bailey 2002; see also Bailey 2001;
Valkama et al. 2012).
These perspectives of the new service economy create
both opportunities and challenges for urban governments.
Challenges include how to integrate physical products and
devices with services and how to unbundle manual and
silo-based service packages into digitised and integrated
service systems. Also, the perception of value creation has
changed in the sense that service providers are not conceived as the only parties that deliver value for customers.
Rather, customers have a vital role in the value-creation
process as users who create added value in the consumption process. Client behaviour and producerclient relationships are crucial in order to understand the value-in-use
and value-in-context arising from services. In this perspective, value-in-exchange applied to physical outputs is
too limited a framework to fully understand service consumption and processes because value can continue to be
added to the outcome after the exchange of service.

AI & Soc (2014) 29:323334

In the current discussion about services, a third contextual element is added to the picture besides producers
and customers: the service system. This means that in the
new service economy, values are co-created jointly not
purely by service providers and customers but also within
the context of a wider service system made up of intermediaries and other stakeholders. These conceptions put
the division of labour and patterns of interaction between
the public and private sectors into a new perspective (Paton
and McLaughlin 2008, 79; Vargo et al. 2008; Tien 2007,
6667; Gallaher et al. 2006, 711, 117).
The process of urban economic growth is therefore not
simply one of scaling-up existing activities and structures
to achieve economies of scale and (perhaps) scope. Instead,
it involves endogenous and creativedestructive economic
and social evolution processes via organisational innovation. The prerequisite of productivity improvements in
urban services is increased flexibility of both service production and consumption. This is a vital framing element in
the efforts to build smart services that have multifunctional
and synergistic natures as a one of the most important set of
activities that is supposed to increase our well-being at
individual and collective levels.

3 Smart city: ICTs in a multi-layered setting

The smart city concept reflects a particular idea of local
community, one where city governments, enterprises and
residents use ICTs to reinvent and reinforce the communitys role in the new service economy, create jobs locally
and improve the quality of community life (Eger 2009, 48).
In this sense, it is close to the idea of community informatics (Marshall et al. 2004). Technological solutions lie at
the heart of the idea of smart city. Yet, in all sophisticated
conceptualisations, smartness goes beyond the kind of
intelligence that can be reduced to the application of new
ICTs. This is why both social and ecological dimensions
are essential elements of the smart city concept.
Smart use of ICTs can be seen both as an organisational
issue and as a driver that changes the wider societal environment. Concerning the organisational level, smart cities
utilise state-of-art ICT tools to implement organisational,
managerial and policy innovations. ICT is a means to an
end, not an end in itself: a smart city employs it to make a
difference (Nam and Pardo 2011, 185). Indeed, although
application of modern ICTs is seen as an essential manifestation of smartness of a city in practically all definitions
of this concept, most applications also include wider policy
and governance dimensions required for organisational
innovation and investments in human capital, upgrading
skills of all those who live and work in cities as prerequisites of a better urban society (cf. Carillo 2006).


There is a question of how the ultimate goal of a smart

city should be understood. It may mean better community
informatics, improved functionality of urban life, higher
quality of urban life or achieving sustainability in human
settlements (see Fig. 1). These characteristics may be
complementary and so can be achieved simultaneously
whilst reinforcing each other. Thereafter, they may become
mutually exclusive if improved quality in the short term is
at the expense of sustainability over the long term; for
example, city governments incurring substantial debt by
borrowing to finance better quality services but risking
bankruptcy in the future.
Smart city concepts often appear to approach community development from the point of view of the application
of new technologies, assuming that the implementation of
new ICTs together with organisational innovations promote
viable, improving and tenable urban living conditions. In
practice, though, big cities have to manage a portfolio of
many kinds of innovations and it is not self-evident which
constitute radical breakthroughs. In particular, ICTs make
it challenging for city councillors and other stakeholders to
choose between them because they lack the necessary
technological skills and also because not all ICTs prove to
be effective in terms of their take-up and use by service
users. ICTs may prove to be ineffective because citizens
and service users are often characterised by heterogeneity
of their demographic, socio-economic, racial and other
characteristics (as often are the other stakeholder groups as
well). Hence, smart city policy must be constructed in a
way that recognises the uncertainty that has its roots in the
diversity of community groups, which in turn helps in
dealing with the challenge that chosen technological
solutions carry with them inherent financial, reputational
and social risks.
Another problem may be the much too one-dimensional
perception behind smart city applications in development
policy, for neither the utilisation of ICTs nor the organisational and other innovations necessarily bring the kind of
quantifiable materialistic economic growth strived for by
politicians and developers. A new element to this discussion
has appeared in the form of smart growth, which provides an
alternative rationale for local economic policy. What kind of
growth should we actually strive for? Is all growth good for
our local community or only certain forms of prosperity?
What kind of growth is sustainable? Such questions have
challenged the widely held conventional view that growth is
always good, reflecting the critical view of the growth
machine thesis (Logan and Molotch 1987; Harvey 1989). In
contrast to the one-dimensional growth mantra, for example,
a smart growth policy responds to suburban sprawl to protect
natural habitats and farm land by using real estate planning
controls to increase the density of land use in city centres
(OConnell 2009, 2012; Downs 2005).


Fig. 1 Degrees of smartness in
the smart city concept

AI & Soc (2014) 29:323334





Level of


Social and
human concerns
(quality of life)




Degree of technological embeddedness

Smart city definitions tend to be normative and narrow

in perspective, assuming strong and positive development
effects necessarily result from widespread application of
ICTs to city life. This may not always be the net result,
however, especially if city governments minimise all other
investments in order to rely almost exclusively on ICTs.
Expenditures on ICTs may be at the expense of other forms
of investment that could also have promoted urban development and welfare. Policy makers considering application
of smart city ideas should be aware of the presumption in
favour of ICTs and the alternative investments forgone (i.e.
opportunity cost) when budgets are constrained.

4 Smart city as organisation and governance

The smart city phenomenon is attracting an increasing
attention from urban scientists, combining modern ICTs
with organisational planning and design to unbundle
(dematerialise) economic processes, cut bureaucracy,
streamline service processes and implement organisational
innovations (Toppeta 2010). Indeed, the smart city can be
seen as a conceptual innovation itself which, at the
organisational level, may be called smart, intelligent or a
learning organisation (Ellinger et al. 2002, 20). A growing
number of organisational scientists believe it is possible to
develop learning organisations able not only to create,
acquire, cultivate and transfer knowledge but also to
modify peoples and organisations behaviour based on
new knowledge, insights and brainstorms (ErikssonZetterquist et al. 2011, 246; Garvin 1993). Similarly, city


governments have to become learning organisations before

they can formulate and implement smart city policies to
create smart production and smart consumption of their
services so as to increase the outcome effectiveness of their
policies and services.
The smart city model is a response not only to problems
caused by rapid urbanisation such as pollution, congestion,
scarcity of resources and deteriorating physical infrastructure but also to social and organisational factors such as
conflicting values, heterogeneous stakeholders and fragmented developers. Nam and Pardo (2011) consider the
smart city concept as an urban innovation in city management and urban policy to deal with such urban problems.
The smart city is not a conventional product, service or
process innovation but, instead, is a conceptual or paradigmatic innovation in changing beliefs and creating
understanding of what new ideas have to be adopted in
urban policies. Urban policy makers may use smart city
as a framework when they consider the need for, and
possibilities of, policy changes in different public service
sectors and when they plan city promotion and marketing
activities (Hollands 2008).
Smart governance requires a set of principles to be
adopted by urban governments expressing how to control
and guide city growth and what principles should apply in
internal and external stakeholder relations. Conventionally,
public sector governance has been concerned with how to
manage institutions. However, smart governance also tries
to harness and coordinate the enthusiasm and capabilities of
residents to directly and more accurately represent themselves, rather than depending on the abilities of their representatives to aggregate and articulate their interests. The

AI & Soc (2014) 29:323334

focus of smart governance is therefore on participationbased organisational arrangements and democratic institutions (Johnston 2010).
Within an era of heavily constrained local public
finances and associated austerity measures, for example,
these arrangements may involve conversations between
smart city authorities and their local communities to help
decision-makers understand what is happening in those
communities from the viewpoint of different partners and
so to share decision-making with them (Lowndes and
Squires 2012). Such understanding can be used to make
room for socially creative innovations by helping to
encourage emergence of community leaders, to build trust,
to negotiate service outcomes and to promote their
achievement via collaborative arrangements such that city
authoritystakeholder partnerships are integrative rather
thanas has usually been the caseadditive. This can
result in the whole being greater than the sum of the
individual partsa cliche but no less true because of that.
Specifically, these smart partnerships have the potential
to go far beyond the use of conventional partnerships
between overlapping public sector organisations set-up to
reduce duplication and so cut costs. Smart partnerships
can add greater value by designing into the social contract
between state and citizen the creativity that can change the
behaviour of service providers and service users and
thereby improve outcome effectiveness. Financial and
physical capital is reduced by use but human and social
capital can be accumulated by this virtuous circle of creative interaction between local communities and their city
governments, built on a shared analysis and understanding
of the contexts within which local public services are
produced and consumed and of how their outcomes are
The above example makes clear that technological
platforms have to be embedded in social platforms if they
are to achieve smart outcomes. Put simply, cities do not
become smart simply by adopting ICTsbecoming a
smart city is a lot more complex than may be realised by
those promoting all-pervasive and unquestioning adoption
of ICTs. Nevertheless, ICTs can be utilised to develop
horizontal networks between diverse stakeholder groups
and city governments so as to improve governance of
A new perspective on the change in the recent discussion about governance emphasises steering and coordination functions on a non-hierarchical basis in a multi-sector
stakeholder field for the purpose of promoting collective
interests (Anttiroiko 2012). One of the recent concepts
reflecting this change is connected governance built upon
interoperability, that is, the ability of public agencies to
share and integrate information using common standards
(Dais et al. 2008, 377). This change reflects an important


shift, namely the increased role of systems and platforms

that are used to facilitate creative collaboration and contribute to the increase in and utilisation of systemic intelligence. This has given rise to a new methodologically and
technologically oriented idea of platform governance. It
reflects the environment of power shared among interdependent actors faced with wicked problemsfor example, complex financial, security and environmental
issuesthat cross organisational boundaries. A platform
approach to governance offers a framework for supporting
policy informatics, which is supposed to bring changes
notably on two fronts: first, technology can replace structure as a means of control by employing technological
rather than bureaucratic gatekeepers or facilitators; and
second, the platform approach has the capacity to increase
the flexibility and responsiveness of public organisations
involved in governance processes (Wachhaus 2011, 3, 7).

5 Smart service applications

As made clear above, the smart service concept relies on
both behavioural and systemic dimensions that reflect the
two interrelated categories of consumption and production.
In the next discussion, we approach smart services from
these two points of view: (1) individual use and consumption processes, and (2) organisational interaction in
service provision. When these are combined with formal
threefold e-service typologyinformation, interaction and
transaction serviceswe end up with the following matrix
which points to the key aspects of smart services (see
Fig. 2). The idea is that ICTs can be used to facilitate such
human and social systems and processes which bring about
smartness in urban communities, i.e., socially creative
human experience and social engineering related to information, interactive and transaction processes. The fundamental idea behind this scheme is that smart information
and communication systems are needed to build smart
creative social systems, which again are conducive to
sustainable urban life. When applied to services, it builds a
logical connection between service informatics and intelligent and sustainable service systems.
There is a range of smart service solutions that operate
at inter-organisational or community level and facilitate
various information, interaction and transaction processes.
Smart cities develop place-based solutions to urban problems and needs by joining up all resources available in a
locality, for example, health, police and community safety
budgets to promote community well-being. In some cases,
the key is for city governments to give up control by
transferring their assets to the voluntary sector and communities, so they can use and manage them to generate
income to create sustainable small-scale community


Fig. 2 Individual and
organisational dimensions of
smart services

AI & Soc (2014) 29:323334

and community

Information process
facilitation in
organisations actions

Interaction process
facilitation in
organisations interaction

e.g. Community safety

budget; local crime GIS;
information sharing

e.g. Planning 2.0; Forum

Virium Helsinki

Information process
facilitation in individual
use or consumption

Interaction process
facilitation in civic or
consumer interaction

Transaction process
facilitation in civic or
individual transactions

e.g. Smart Santander

project; Community

e.g. Pre-paid Oyster

Card; Befriending

e.g. M-payment (Cityzi)

Transaction process
facilitation in
e.g. Timebank;
collaborative ventures

Level of analysis
use and

Information services

Interactive services

Transaction services

Types of e-services

infrastructure and services more appropriate to community

needs. This approach has been adopted in Stockholm,
Sweden, where the city government has relinquished certain powers whilst still ensuring the strategic direction of
services (Department of Health 2010).
It was noted above that, in order to be smart by radically
redesigning and reconfiguring their services, city governments need to better understand citizens lives and how
they behave. This requires local communities to have much
greater influence on the reshaping of city services, holding
them to account and even running services themselves.
This proactive form of engagement is not the same as city
governments offering service users a passive choice from a
menu of alternative service configurations. Instead, service
professionals work with users (e.g. families) to co-design
and perhaps co-produce services to meet users preferences
and needs as far as is consistent with promoting achievement of public policy objectives. Engaging usersindividuals, families and communitiescan unleash users
energy and initiative, changing city governments focus
from simply doing what is statutorily required to also doing
what is needed by city residents to improve their wellbeing. Communities become partners with the local state
rather than simply passive recipients of services, building
social capital and creating sustainable and resilient local
In Finland, the city of Helsinki is running a cooperation
cluster called Forum Virium Helsinki (2012) to provide a
platform to develop ICT-based services in cooperation with
enterprises, public authorities and citizens as end-users.
The platform has concentrated on five project areas, one of
them being a smart city initiative focusing on the development of mobile phone services to facilitate urban travelling and living. It also opens up public data so that
companies and citizens can create new services by combining and processing the data in innovative ways. This
resembles the LivingLab movement that has spread across


Europe in the 2000s (The European Network of Living

Labs at http://www.openlivinglabs.eu/).
Organisational and community level transactions can be
facilitated in various ways. One such example is a time
bank. Time banks may be part of community reward
schemes, issuing credits to people actively participating in
supporting their communities, those credits being exchanged for use of leisure services and events provided free of
charge by local service providers in both the public and
private sectors (See the Web site of Timebanking United
Kingdom at http://www.timebanking.org/).
There is still a general absence of joint planning by city
governments with utility providers (e.g. water, in respect of
environmental sustainability) and other public services
(e.g. health care). Cultural barriers include commercial
confidentiality, whereas social media user groups work
with open data systems, causing problems for joint working
of cities with the private sector. This may create problems
for collaborative ventures between city governments and
businesses, and even with other public sector agencies, as
well as with voluntary and community organisations.
Nevertheless, collaborative ventures are developing, for
example, in the United Kingdoms West Midlands region
where a consortium of 13 organisations (including two
cities, three universities and motor vehicle companies) are
testing low-carbon electric vehicles as part of the CABLED
project (http://www.cabled.org.uk/).
Beside time banks, social capital initiatives in the United
Kingdom include creative councils (http://simpl.co/nestacreative-councils), community catalysts (http://www.com
munitycatalysts.co.uk/) and building community capacity
(http://www.thinklocalactpersonal.org.uk/BCC/) schemes,
focusing on complex social needs, social care and aspects
of health care related to physical and mental illness and
Many smart service applications facilitate individual
consumption or service use. In the area of information

AI & Soc (2014) 29:323334

services applied to such situations, for example, the Smart

Santander project enables people to receive real-time
online information on traffic flows, levels of pollution, etc.,
cities in countries other than Spain also being involved
(http://www.smartsantander.eu/index.php/testbeds/item/132santander-summary). Another example is the community
navigator scheme (http://simpl.co/Birmingham-City-Council)
and more interactively oriented befriending projects in
which volunteer befrienders offer supportive relationships with people who are socially isolated, be they
children, families, senior citizens, mentally ill or disabled
Other examples of applications of ICTs to urban life
include smart payment systems utilising ICTs to allow easy
use of transport systems, such as Londons prepaid Oyster
Cards. In France, Nice has become the first European city to
use the same near-field communication (NFC) technology to
enable payments via smart mobile phones, not just on trams
and buses but also in shops, museums and galleries. People
signed up to Cityzi can receive real-time updates of timetables, maps and information about their local area, as well as
purchase tickets for trams and buses (Balaban 2010).
It could be expected that further development of smart
city initiatives in the United Kingdom and other EU
countries will be hampered by the current austerity measures as governments try to reduce government borrowing
and debt as shares of gross domestic product (GDP). Paradoxically, however, increasingly severe restriction of
public finance may promote smart thinking to increase
efficiency by improving the use of scarce resources. The
possibility of creative engagement of smart cities with their
communities was considered above. Initiatives much less
dependent upon community engagement include development of multi-agency infrastructure projects to share fixed
costs (e.g. of buildings), digitisation of access to public
services to provide virtual rather than real service points,
recycling waste hot water to heat public buildings so as to
reduce energy costs and using mobile phones to pay for
public services such as car parks to reduce staffing costs.
Such smart city developments are not usually supported by
coherent policy framework, but in the United Kingdom, for
example, there is an indication of the formation of a broader
central government policy to create powerful, innovative
cities that are able to shape their economic destinies, with
civic and private sector leaders freed to look outwards to
businesses and communities rather than upwards to central
government for solutions (Cabinet Office 2011, 1).

6 Design of e-platforms for smart services

In a generic sense, a platform is any physical, technological
or social base on which socio-technical processes are built.


It provides a structured and enabling environment for

technologies, applications or social processes (Anttiroiko
2012). The first widely discussed platform issue in the field
of e-enabled public governance and services revolved
around government Web sites. The next phase was the
discussion about portals, which became a buzzword in the
late 1990s. At that time, the global benchmark cases such
as the citizen-centric portal of Singapore and FirstGov.gov,
the single point of access to the US Federal government
launched in 2000, opened new horizon in platform design.
Thereafter, platform thinking began to pervade governance
discourse through such ideas as joined-up government and
collaborative government, which offer solutions to problems of how to facilitate the collaboration of government
agencies. More radical perspectives appeared since the new
ideas of Web 2.0, which set a completely new agenda for
platform thinking in governance. When this is added to
ubiquity and intelligence, we may have the core elements
of the platform discourse that is currently in the making
(Anttiroiko 2012).
A platform orientation in public governance allows
public organisations to manage policy informatics and
interactive processes in a coordinated manner. A platform
is not only a tool for managing information but also in a
wider sense a framework within which to involve key
stakeholders in governance processes and to seek solutions
to complex social problems. It makes it possible to extend
the collaborative dimension of governance in the form of
co-design, co-creation, and co-production (Wachhaus
2011; see also Bailey 2011).
Useful perspectives for the design of service platforms
are the open innovation marketplace created by InnoCentive (https://www.innocentive.com/about-us/open-innovation-marketplace) and co-design platforms developed in
the open innovation context (Antikainen et al. 2010;
Ahonen 2011). There is also a plethora of free open-source
platforms and content management systems for social
networking and content sharing (Pligg, NewsCloud, Drupal, Dolphin, Elgg, Mugshot, etc.), free e-commerce platforms (Magento, osCommerce, Zen Cart, VirtueMart etc.),
Web 2.0-based marketplaces and B2B sites (e.g. Freelancer
at http://www.freelancer.com/), innovation network sites
(e.g. Global Innovation Network, InnovationXchange), and
social network aggregation platforms based on API applications or OpenID, which provides inspiration for the
shape of future service platforms. They give a hint of how
e-enabled platforms may serve as engaging platforms,
which enhance the involvement and participation of citizens, service users and other stakeholders for the benefit of
whole community and society (Ramaswamy and Gouillart
In service platforms, major functions include access,
creativity, sharing and integration, as illustrated in Fig. 3.



AI & Soc (2014) 29:323334

Table 1 Major functions of Web 2.0 tools in public service provision



Main functions

Examples of Web 2.0 Examples of public

services and
service 2.0 applications

1. Communication
and short

MSN, Yahoo, AIM



Fig. 3 Major functions of service platforms (Adopted from Anttiroiko 2012)

RSS feeds, Twitter

Live Chat feature in

government Web site
or portal
Use of RSS feeds and
Twitter in public
YouTube and blogs
utilised in public

2. Content sharing

YouTube, Slide.com,
Flickr, Multiply

3. Social

Facebook, MySpace,
Tagged, Netlog,
hi5, Friendster,
Orkut, PerfSpot,

Utilisation of Facebook
and other social
networking sites in
service provision

4. Crowdsourcing

Wikipedia, 7tipson,
Patient Opinion
(UK), Delicious

User-oriented sections
of government Web
Collaborative e-services

All these aspects can be seen to be a part of what we may

call governance informatics (Wachhaus 2011; Koliba et al.
Concerning access, platforms are supposed to provide
easy access to service processes. In this field, new technologies have a key role to play. The increased use of
ubiquitous technologies especially has a potential to cause
major changes in such processes (e.g. Murakami 2003).
As noted above, another function for service platforms is
to support creativity and innovativeness, which provides
new ideas about local development, service delivery and
solutions to various policy problems. Idea generation is an
important process especially if there is a need for radical
change, like a reengineering service delivery system or
rethinking the role of government (Anttiroiko 2012).
Platforms are also useful when we want to communicate
with each other, share our ideas and collaborate with
stakeholders. Such functions, which revolve around the
idea of sharing, are typically associated with the Web 2.0
trend. Paradigmatic Web 2.0 platforms are social networking or content sharing sites hosted by some social
media or software companies (Steins 2009; Brabham 2009)
(Table 1).
Due to increased fragmentation and complexity in
modern societies, there are increasing needs for system
integration and coordination, the basic rationale behind the
very idea of service governance. An answer to such a
problem is an integration platform developed by Dais et al.
(2008). In their theoretical scheme, it has two main interfaces, one for citizens (user profiles) and one for public
agencies (integrated registry). The idea of such platform is
to ensure a single sign-on access to cross-organisational
services. Citizens are able to create their own profiles as


Wikis in service design

Applied from Anttiroiko 2012

members of their community and as service users, and

progressively arrange their private spaces by integrating
the services provided by public agencies. This implies that
the user profile serves as the point of interaction for the
public agencies to interact (Dais et al. 2008). Currently,
most portal solutions are only aggregates of public service
organisations and build on principles of government-centric perspectives without genuine integrative functions.
This approach is based on a belief that public service
delivery may be developed by an improved use of public
sector resources, whereas the suggested integration platform emphasises personalisation as an important integrative element of platform design and utilises ideas of
citizen-to-citizen contacts and community networks (Meijer 2011, 598c). Accordingly, the key perspective on
integration in service processes and user democracy should
be built on intelligent personalised solutions (Anttiroiko
Regarding the types of processes to be facilitated with
technologically assisted service platforms, a basic question
is what kind of knowledge processes we are supposed to
facilitate. The fundamental distinction is usually made in a
knowledge management (KM) framework between wellstructured routine problems, semi-structured problems and
at the other end of the continuum, wicked problems that
are ill-structured or unstructured and highly ambiguous
(Koliba et al. 2011). To systematise the picture further, we
may distinguish four types of knowledge processes

AI & Soc (2014) 29:323334

associated with the governance of service processes that

require different facilitation tools (Lenk et al. 2002, 71):

Routine processes
Individualised decision-making
Democratic deliberation.

A service informatics platform supports decision-making especially for semi-structured or unstructured problems
through a computer-based information management system
(Koliba et al. 2011). Routine processes require easy and
simple platform features. Individualised decision-making is
usually associated with user democracy and the use of
public services. It requires easy-access service portals,
which allow user-oriented service integration. Negotiations
have a critical role in in-sourcing and outsourcing and, in
general, in taking care of B2B transactions and partnership
agreements. This requires platform features that provide
case-specific information and a support system for contracting. Lastly, democratic deliberation in service context
is a type of process in which varying opinions and interests
are articulated and aggregated and which provides legitimate decisions and actions as the outcome. Such user
democratic processes need facilitation tools that support
deliberation and help the community to reach the best
possible solutions to complex service-related policy design
and implementation problems (Anttiroiko 2012).
When these are combined with the emerging technology
trends, we can build a matrix of social computing and
service platform design. Some aspects of this model are
meta-level changes and some are more phenomenon-level
changes, referring to actual functions and services provided
by the platform. Generally speaking, technological
dimension is relevant to all major aspects of service design
and implementation (see Table 2).
The most important message behind the discussion
above (and Table 2) is that different technologies provide
tools to support different aspects of smart service production, delivery and consumption. This requires that new
technologies are socially embedded and utilised in a
selective way to support different functions that build up
smartness in service systems.

7 Beyond instrumentality: towards the inclusive smart

Let us return to an important issue that has been referred to
only briefly above. It is the need to avoid instrumentalism,
reductionism and technological determinism in the interpretation of smart city concept. A positive dimension of the
smart city discourse is that it stimulates discussion about

Table 2 Technology-based service concepts

Main social dimension

of given technology

Functions of technologies
in service platforms


modifiability and

Open platform design,

platform features that
support openness and

Web 2.0

Short messaging,
social networking,
content sharing and

Broad citizen and

crowdsourcing and coproduction


Geographic and
information and

Locational aspects of
governance and policy


solutions, flexible
access, mobility,
systemic intelligence
and remote control

Access to governance
processes, networks and
platforms anywhere and

Adopted from Anttiroiko 2012

future visions underpinning urban policy choices and

generates new development ideas which can be utilised in
strategic city planning. These discussions raise the level of
awareness of urban policy stakeholders to the increasingly
complex human, societal, scientific and environmental
issues. Smart cities need an eclectic mix of visionaries,
engineers, business leaders, policy makers, proactive citizens and communities. They can facilitate more smart
behaviour in response to growing urban problems, utilising
new technologies and platforms, which stimulate contentform, individual-system and functionality-sustainability
It has also been made clear that city governments have
to move away from a topdown approach to service
delivery and lead from behind the bottomup development of a smart ecosystem that becomes increasingly rich
in its complexity as it evolves into a multifaceted and
diverse urban system based on open access to integrated
information systems and self-sustaining growth of social
capital within an increasingly joined-up world that is
smarter and more environmentally friendly whilst, at the
same time, facilitating access (often remotely) to improved
and more responsive public services that attain improved
outcome effectiveness.
City and community governments may increasingly lead
from behind but they will still need vision in developing
long-term strategic plans to invigorate the local economy,
improving the well-being of citizens, and guaranteeing
sustainability of the community. This means that smart city
governments will no longer simply be service providers



and enabling bodies: their role is much more holistic and

ambitious in stimulating innovative thinking with businesses and communities through partnerships. From this
perspective, city developers prefer such smart city concepts
which are adaptable and developable so that they can
promote new types of processes of social inclusion in
growing and resourceful metropolitan communities.
The stereotype of the public sector as heavily bureaucratic, characterised by a silo-mentality and short-termism,
lacking scope for productivity improvements and also
inflexible and unresponsive appears to be increasingly
outdated. That stereotype fails to recognise the increasing
diversity of smart city initiatives within the increasingly
unbundled but joined up and coordinated new service
economy. Post-industrial cities developed as service centres and are now developing new economic, social, institutional and technological platforms to cope with
increasingly complex and profound social issues, especially in the large metropolises.
Although there is much commonality, not all cities are
becoming smart in the same way, at the same speed, or to
the same extent. In part this reflects the different requirements and capabilities of their populations, in part their
utilisation of localism agendas (e.g. in the United Kingdom) and in part their take-up of new technologies within
the different age, social and ethnic groups. The ICT
foundations of smart cities are obviously stronger the
greater the computing power within the palm of citizens
hands and the greater the resulting Internet connectivity.
Ubiquitous ownership and 24/7 use of such increasingly
low-cost technologies can facilitate social capital through
real-time connectivity.
Smart solutions clearly do not fit within the conventional
supply side versus demand side policies for regeneration
and growth of urban economies, which have been dominating approaches to economic policy. Instead, smart policies are much more integrative and inclusive of social
potential. Rather than identifying the problem as constrained supply or insufficient demand, smart city policies
identify innovation as the required response to the urban
imperative. This is not innovation in terms of improving
productivity of producers and their production functions.
Instead, it is innovation improving the sustainability and
resilience of communities within increasingly dense and
complex urban environments.
Here, innovation is not part of Schumpeters process of
creative destruction within the competitive market process
creating private value but, instead, part of a process of
creative collaboration and coordination through increased
interconnectivity of social groups and social and economic
institutions creating public value through social and governmental processes.


AI & Soc (2014) 29:323334

The role of governance is much broader in collaborative

creation than in competitive destruction, not only because
of the greater number of stakeholders but also because
creative mutuality and cooperation is more difficult to
manage than destructive rivalry. Thus, the smart city concept is radically different not only from the traditional
hierarchical line management approach to inputs and processes of the conventional bureaucratised city, but represents also a significant step beyond the New Public
Management-oriented market-enabling cities of more
recent times.

8 Conclusion
Smart city is an important future-oriented concept, which
has potential to integrate new technologies, social systems
and ecological concerns. Yet, this requires an integrative or
holistic approach to the very idea of smart city in order to
become a reality. We have discussed this matter in respect
of one special aspect of smart citythat of smart public
services. The first step in their development is the development of smart solutions for individual services but the
real potential lies in the second step, which is about service
governance and integrative functions which require some
kind of service platforms.
Our discussion has shown just what a multi-layered and
multidimensional issue is the smart city and its smart services. The new service economy creates opportunities for
organising unbundled local public services in a pluralistic
and complex environment through the development of
technological and social platforms. New technology trends
provide opportunities for sophisticated applications to
support service informatics and integrative service platforms. Social and ecological dimensions nuance this
evolving technological scenario by incorporating into it the
potential of creative partnerships to add greater social value
than can be provided by those technological solutions
The more integrative holistic approach outlined in this
article is necessary if we wish to conceptualise smartness
properly, i.e., in a way that takes into account not only the
technological and formal complexity of smart systems but
also the human and ecological context with which these
systems are supposed to operate and to which they are
ultimately supposed to bring added value in the form of
fair, rich, healthy, secure and sustainable life in a wider
community and global setting. Building such smart cities is
certainly a challenging task in facing technological, social
and financial risks but their construction is certainly within
human capability.

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