It is recognised that a lot of work has already been carried out at European and international level 
and that standards already exist in many of the above areas. Therefore, a survey of existing 
standards will be necessary before work can start on the development of new standards or 
extensions to existing ones. It needs to be ensured that any standardization activities are guided by 
the needs of cities, citizens and other relevant stakeholders so that the most critical standards are 
developed first. Relevant actions under Horizon 2020, Work Programme 2014 – 2015, 10. Secure, 
clean and efficient energy includes calls like SCC 3 – 2015 92: Development of system standards for 
smart cities and communities solutions7 need to be taken into account also. Finding the relevant 
focus areas has to be done in close cooperation between the public and private sector as well as 
organisations directly representing citizens. 

7 http://ec.europa.eu/research/participants/data/ref/h2020/wp/2014_2015/main/h2020-wp1415-energy_en.pdf 

This list of potential actions is far from exhaustive and many other requirements for standards could 
be identified in the different priority areas of the OIP. 

 


10.2.1 Potential Action 1: Development of an interoperability framework for smart city standards 

Context 

A conceptual interoperability framework (rather than a reference architecture) for smart city 
standards should be developed to which relevant (existing) standards can be mapped. This would 
ensure interoperability between smart city systems and entities at many levels, ensuring that data 
and information can be exchanged at the appropriate level. This would further allow the easier 
identification of existing standards that are relevant to smart city applications, and also make it 
easier to identify gaps where new standards possibly need to be developed. 

A good example of the process that could be used as a basis for this activity is the method by which 
the Smart Grids reference architecture was developed by the CEN-CENELEC-ETSI Smart Grid 
Coordination Group. However, an interoperability framework for Smart Cities will be fundamentally 
different to that for Smart Grids: The Smart Grid reference architecture uses a technically focused 
model, whereas many of the key issues for smart cities are around strategies and business 
processes, and about priorities such as: sustainability, wellbeing and socioeconomic development. 
So we need to start at a more fundamental level than reference architectures do and develop an 
interoperability framework that would allow a mapping all of the key issues; developing the 
reference architecture to support this comes only later. 

Goal 

The overall goal would be the exploitation of available standards and the development of new ones 
where gaps are identified. Without an interoperability framework it would be harder to assess 
whether an existing standard meets the requirement or whether a new standard needs to be 
developed. 

Deliverable 

The following deliverable are foreseen: 

i. Standards interoperability framework for smart cities 


Preconditions 

The needs for smart city standards have to come from the action areas identified in the EIP on Smart 
Cities and Communities, which involves representatives from all the key stakeholders. These 
stakeholders should jointly identify the need to set up an interoperability framework for smart cities 
and communities. 

CEN, CENELEC and ETSI are the European Standards Organisations (ESOs) (in accordance with the EU 
Reg. 1025/2012). The ESOs have already set up the Smart and Sustainable Cities and Communities 
Coordination Group (SSCC-CG), and they can have an important role in identifying who is already 
active in developing standards on these topics and co-ordinating ongoing smart city standards work 
so as to ensure that, as far as possible, smart city standards are developed by those standards bodies 
and other agencies most qualified to undertake the work. This coordination group should jointly 
investigate the need and the criteria for setting up a reference architecture for smart cities and 
communities that will enable relevant standards to be easily retrieved by those who need them and 
enable clear specifications to be drawn up for whatever new smart city standards might be useful. 
The ESOs would work with all relevant stakeholders to meet market needs, including supporting 
appropriate agencies, fora and consortia in developing relevant technical specifications and other 
standards. 

Methods and details of implementation 

The interoperability framework could be developed with the involvement of all relevant 
stakeholders. An example of the process that could be used as a basis for this activity is the method 


by which the Smart Grids reference architecture was developed by the CEN-CENELEC-ETSI Smart 
Grid Coordination Group. However, an interoperability framework for Smart Cities will be 
fundamentally different to that for Smart Grids: The Smart Grid reference architecture uses a 
technically focused model, whereas many of the issues for smart cities are centred around strategies 
and business processes. 

The following process could be used to develop an interoperability framework: 

. Agreement on a list of reference cities and case studies on which the interoperability 
framework would be based. 
. Develop a smart city interoperability framework and use this to: 
o Identify the systems, functions, applications and services that need to be 
represented, focusing on the business interoperability layer. 
o Identify the data sources that need to be represented and the data that will be 
required to be exchanged. 
o Identify the APIs and transport protocols that will be needed to meet the data 
transfer requirements. 


. Definition of a first interim interoperability framework. 
. Testing of the interoperability framework against specified case studies and pilots. Does it 
allow the entities in the case studies and pilots to be represented adequately? Is it clear 
where interoperability needs to be ensured? 
. Standardisation of the interoperability framework. 


The initiatives from relevant international, European and national stakeholders need to mapped in 
cooperation with standards development organisations at global level (i.e. ISO, IEC and ITU). 

This action could be carried out in conjunction with above-mentioned Horizon 2020 Coordination 
and Support Action. 

Monitoring 

Pilot testing (e.g. plugtests) events should be set up at different stages in the development of the 
interoperability framework to ensure that it is robust and sufficiently extensible to meet the needs 
of future smart city systems and functions. Any correction and maintenance actions could be 
identified in the process. 

 


10.2.2 Potential Action 2: Standards for City Information Platforms 

Context 

This action is a requirement of the 'Integrated Infrastructures and Processes' priority area but would 
also help to meet the needs of the 'Open Data' priority area. Cities presently hold their data in 
multiple silos within each department (of each agency) that operates in the city (and indeed those 
related agencies in regional and national departments as well). This data is naturally of variable 
quality. It is also inconsistently captured between departments and across agencies. The more 
progressive cities have started to open up their data sets – some holding specific events (hackathons 
and competitions) to coax developers to use the data in more innovative ways that add more value. 
This has led to greater visibility for the 'open data' topic – however it has so far not led to 
sustainable value at larger scale. Open data alone will not deliver significant value and the opening 
up of finance data, asset data, etc. needs to be equally considered – data that is normally kept 
behind firewalls. 

All data used should be in a format that complies with open standards8 so that it can easily be re-
used by other agencies in the city. However, this does not imply that such data needs to come for 
free. 

8 An open standard is one that is developed and maintained through an open and transparent process which means a 
collaborative, consensus-driven process that is open to participation by all relevant and materially affected parties and not 
dominated by, or under the control of, a single organization or group of organizations. 

Goal 

To develop standards that will allow city administrations and service providers to open up their data 
to 3rd parties (developing apps, etc.) ensuring that security and privacy concerns are addressed. 

Deliverable 

i. New standards or extensions to existing standards that are necessary to meet City 
Information Platform requirements 


Methods and details of implementation 

The following process could be used to identify any missing standards: 

. Identification of use cases for City Information Platforms; 
. Identification of standards requirements from the analysis of use cases; 
. Identification of existing standards relevant to the requirements; 
. Identification of gaps in standards necessary to meet the requirements; 
. Development of new standards or extensions to existing standards necessary to meet 
requirements. 


All relevant smart city stakeholders must be involved, with methods such as hackathons and 
competitions being used to encourage the development of new standards requirements. 

Preconditions 

The needs for smart city standards have to come from the action areas identified in the EIP on Smart 
Cities and Communities, which involved representatives from all the key stakeholders. These 
stakeholders should jointly identify the need to set up an interoperability framework for smart cities 
and communities. 


10.2.3 Potential Action 3: Standards for M2M Data Exchange 

Context 

This action is a requirement of the 'Integrated Infrastructures and Processes' priority area. It requires 
the development of standards for an M2M (Machine-to-Machine) platform that all relevany data can 
pass over so to provide a ubiquitous data transport capability. A common API to the data transport 
layer is also needed to obtain maximum interoperability between smart city applications and 
functions. 

Goal 

To develop standards that would enable all smart city data to be passed seamlessly between 
sensors, applications, databases and other entities, independent of the underlying communications 
technology being used to link these. 

Deliverable 

i. Requirements of Smart Cities for M2M Data Exchange. 
ii. Extensions to M2M standards that are necessary to implement data exchange in smart 
cities. 
iii. Common APIs to smart city functions. 


Methods and details of implementation 

The following process could be used to identify any standards gaps: 

. Identify use cases for smart city data to be carried; 
. Identify standards requirements from the analysis of such use cases; 
. Contribute any new requirements to relevant standards bodies including oneM2M. 


All smart city stakeholders should be involved in the development of the requirements. 

Preconditions 

The existing data architecture as developed by ISO and CEN should be taken account of (and 
preferably form the basis of) any requirements. 

M2M data exchange standards are being developed in the oneM2M Partnership project, an initiative 
of seven regional standards organisations worldwide. European aspects, including responses to 
standardisation mandates, are being implemented in the ETSI SmartM2M Technical Committee. An 
M2M Service Capabilities layer is being developed which could provide the basis of a common API 
for smart cities functions. 

The requirements of smart cities and communities should be identified and incorporated into the 
work of these bodies to ensure that any resulting platform can support the required data flows. 

Monitoring 

Pilot testing (e.g. plugtests) events should be set up at different stages in the development of the 
M2M standards to ensure that they are able to support the required smart city entities effectively. 
Any correction or maintenance actions could thus be identified. 

 

 


10.2.4 Potential Action 4: Standards to support city level energy management and trading systems 

Context 

This action is a requirement of the 'Districts and Built Environment' priority area. It includes 
standards to support smart lighting, heating, cooling and electricity systems and appliances as well 
as the charging infrastructure for electric vehicles in public and private spaces. 

Standards should enable the creation of a two-way energy chain that balances demand and supply 
dynamically between different energy sources. These include renewable and alternative energy 
sources and traditional (typically hydrocarbon-based) energy sources so that they together can make 
an appropriate and effective contribution to the energy mix. The ability of smart appliances to be 
switched on and off in response to energy availability and dynamic changes in pricing should also be 
taken into account. 

Standards should allow the exchange of energy management data so to achieve this. 

Goal 

To develop standards that will allow all types of energy sources and smart appliances to be 
incorporated into smart city energy management systems. 

Deliverable 

i. Requirements of city level energy management and trading systems; 
ii. Requirements for smart appliances that will be used in cities; 
iii. City-level smart appliance conformance specification; 
iv. New standards to implement energy management in Smart Cities. 


Methods and details of implementation 

The following process could be used to identify any missing standards that would be required: 

. Identify use cases for city level energy management and trading systems, including the 
sources of energy, the appliances that will be supplied, and the trading conditions (contract 
terms, pricing, etc.); 
. Identify the standards requirements from analysis of the use cases; 
. Identify gaps in standards necessary to meet the requirements; 
. Develop new standards or extensions to existing standards necessary to meet the 
requirements. 


Preconditions 

Energy-using and -producing Products (EupP, also called Appliances) are responsible for the 
management of a large part of the energy consumption and production with buildings. To establish a 
market for energy-efficient systems and services, there is a need to standardise the interface to 
these EupP so to guarantee interoperability with Facility Management Systems, Energy Management 
Systems, so-called Energy Boxes and other systems (for example systems linked to home 
automation). Standards for smart appliances are being developed that will allow conformant EupPs 
to get a CE EupP Plug-and-Play label so to promote take-up, deployment and installation. 

 


10.2.5 Potential Action 5: Promotion of the use of Standards for Smart Cities 

Before any of the preceding actions can be effectively implemented it might well be necessary to 
promote the use of standards, as well as standardisation approaches and processes, to smart city 
stakeholders. Not all of these may recognise and understand the benefits derived from standards 
and solutions based on these, or indeed the benefits to stakeholders of being involved in the 
standardisation process. 

Initiatives that might help to achieve this include: 

. Demonstrating the benefits of using and building on common approaches and common 
solutions by showing how they lower costs and reduce development times; 
. Promoting engagement and communication with stakeholders in order to demonstrate the 
benefits of standards in areas where these have not traditionally been used, e.g. in the areas 
of economic analysis, business modelling, funding and financing, or indeed procurement; 
. Promoting participation in European standardisation processes as well as the importance of 
working with international standards bodies to develop standardised solutions that can be 
deployed worldwide. 


Goal 

The overall goal would be to increase the replication and deployment of smart city solutions through 
more effective use and exploitation of standards, including the promotion of European standards 
worldwide. 

Deliverable 

i. Exemplars on use of standards; 
ii. Case studies on the effectiveness of standards; 
iii. Guidelines of good practice to enable easier use of solutions. 


Methods and details of implementation 

The following mechanisms could be used to help promote the use and exploitation of standards: 

. Setting up exemplars that show where standards have been used or are currently being used 
to create innovative systems and applications; 
. Setting up a comparative case study where a standards-based approach is used to the 
development of a function or application, and measure (or at least assess) how this has 
reduced development times; 
. Promoting or setting up workshops to educate smart city stakeholders on the use of 
standards; 
. Requiring all smart city projects funded by the European Commission to prioritise the 
support of the development of standards as a key output. One of the most effective ways of 
ensuring the dissemination of a good practice is to develop that good practice into a 
standard; 
. Promoting the use of standards, including through public procurement and relevant EU 
policies and legislation; 
. Contributing to international standards including ISO/IEC and ITU-T. 


Preconditions 

All smart city stakeholders should buy into the need for this action (even if they remain doubtful of 
the results). 


Monitoring 

The use of standards in smart city systems and solutions should be monitored to see if there is an 
increase in use as a result of this action. 

 


11 Priority Area 'Business Models, Finance and 
Procurement' 

11.1 Introduction 

This chapter outlines the business framework to enable economic viability of smart city solutions. 
Given the breadth of scope of this priority area we have provided an exemplar for each of (i) 
business models, (ii) finance and (iii) procurement. Each also includes a list of potential 
implementation actions. 

Within the SIP the following priorities were identified: 

. Create new integrated business models with innovative local partnerships (Local Ecosystem) 
and adapted procurement; 
. Create a European market for innovation that opens up investments. 


This chapter outlines the business framework to enable economic viability of smart city solutions. 
Given the breadth of scope of this priority area we have provided an exemplar for each of (i) 
business models, (ii) finance and (iii) procurement. Each also includes a list of potential 
implementation actions. Smart city solutions have to make an impact within Local Ecosystems in 
which prosumers, local and global industries and governments participate in order to achieve value 
in the built environment, mobility and other city services. However, in terms of achieving scale, 
accelerating uptake in the market and securing return on investments this requires multiple 
implementations on a European or global scale. The right business framework will attract investment 
to create market ‘pull’ and support market ‘push’ trough innovation and stimulation of the industrial 
value chains (e.g. production of new materials; new ICT systems solutions; systems to store energy). 

The approach for the business framework is: 

• Enable cities to create Local Ecosystems for smart solutions; 
• Support the replicability of these solutions; 
• Stimulate an open market across Europe for investments in ICT solutions. 


Striving for broad uptake across Europe of smart city solutions requires in most cases new 
investments in combination with a more efficient use of the currently available resources in cities. 
Citizens’ support is important to get the needed initiatives going and accepted. Innovative solutions 
will only create jobs and growth if the market-pull from cities leads to a broad activation along the 
value chain to supply new materials for mobility and housing, new ICT systems to deal with the large 
amount of data and new energy systems. Combining existing available technologies and solutions is 
not enough. There is a need for a dynamic system of continuous improvement, creating the 
European critical mass for innovation uptake within available budgets and leading to sustainable 
growth and jobs. 

Our challenges are: 

• Balance cities’ individual characteristics and requirements with the need for a modular 
approach which offers economies of scale and therefore cheaper and more broadly 
available technology solutions; 
• Balance city/regional requirements and strategies with national or broad EU policy goals 
(industrial policy); 
• Ensure long-term planning to build trust for (de-risk) investments. 


 


11.2 Potential Actions 

Three potential actions are outlined for: business models; finance; and procurement. 

11.2.1 Potential Action 1: Integrated Business Models 

Key Challenge 

Connecting Local Ecosystems to a European market of smart city solutions to enable the replicability 
of these solutions and help create smart economies of scale. 

Context 

Business models for Smart Cities and Communities have to integrate technologies into a smart city 
concept in order to maximize their impact on the EU economy. It has to consist of and balance i) 
Local Ecosystems, which ii) can be used in cities throughout Europe (replicability); and iii) defines a 
European market for ICT solutions, materials and products. Local Ecosystems are collaborations 
between industry, governmental bodies and citizens to meet specific local goals (see also Appendix A 
and B). 

Goals 

Local Ecosystem 

. Define criteria for projects to evaluate conditions to enable local ecosystems; 
. Define a governance structure for evaluating the project-ideas; 


Replicability/ Demand Aggregation 

. Support the collaboration of cities in finding their smart solutions, in order to promote re-
use; 
. Cover the integration of technologies into an overall smart city concept in order to maximize 
their impact on the whole economy (meeting also the political target of bringing technology 
leadership back to Europe); 


Create open European market 

. Develop a model to aggregate demands, aiming to reduce the variety of solutions, which 
then allows the supply chain to leverage economies of scale; 
. Create long term processes to push innovation and create long term market pull (at least 7 
years); 
. Push innovation across ‘valley of death’ by creating projects to test innovative solutions in 
‘real life’ environment; 
. Specific projects (like energy efficiency improvements) must be integrated into a broader 
package of buildings, streets etc. 


Implementation Actions 

Potential actions in order to deliver on the goals include: 

. Harvest and codify existing successful leading practice examples of business model 
innovation (see also Appendix B); 
. Define guidelines on how to create a working governance entity and viable business model 
(see also Appendix A and B); 
. Create ‘Catalyst Smart Teams’ (CST) by gathering multidisciplinary experts with the objective 
of initiating city policies and business modelling. CSTs will work with local banks and financial 
institutions to design replicable models able to exploit the potentials of distributed ‘small’ 
initiatives (e.g. energy self-consumption at home level, batteries for electric cars seen as 
distributed energy storage capacity, etc.) (see 2.1.6); 



. Enable replicability by creating network of cities to exchange solutions, identify common 
technology approaches between different solution streams or the major challenges (such as 
mobility) and a solutions inventory (technology toolboxes) sorted along cities challenges. 


Impact 

The potential added value for cities, citizens, the society and EU competitiveness include: 

. Efficient use of budget (value for investments); 
. Create sustainable jobs along industrial and service value chains; 
. Improve private investments in Cities surroundings; 
. Implementation and broad conceptual approaches by unleashing the innovation potential in 
Europe along value chains from materials to Cities; 
. Gain critical mass to lower prices and allow business investments; 
. Ensure broad impact of lighthouse projects in Europe (replicability); 
. Definition of business framework to support replication. 


Monitoring 

Result based indicators 

. Viable solutions: Quantity of type of solutions in a local environment with a viable business 
model, that is used in cities in more than two different countries; 
. Implementation of solutions: number of times that the solution has been replicated; 
. European open market: quantity of companies investing in the solution; 
. European market size: amount of turnover and employees working on a specific solution; 


Indicators to check the creation of local ecosystems and replicability 

. Number of cities that have created a local governance entity for energy, mobility or built 
environment; 
. The number of cities that participate in a network of cities to exchange solutions; 
. The readiness of guidelines (check list) and engineering for financial models to combine 
public-private funding of larger scale projects, structural funds and European Investment 
Bank for demonstration projects. 


Indicators to check the development of a European market 

. Structured dialogue between value chain and cities to develop a ‘technology tool box’ for 
challenges; 
. Public-private cooperation in establishing EU wide criteria for tenders and terms of 
reference; 
. De-risk investments by long term planning and criteria; 
. One KPI on use of Local Ecosystems. 



11.2.2 Potential Action 2: Financing 

Key Challenge 

A key challenge concerns public funding of smart city solutions in Member States at a time when 
public budgets are under austerity pressures. 

Context 

The economic crisis is forcing a major downsize of public funding at both the local and regional level. 
Infrastructures are getting older and older and need refurbishment. At the same time, roll-out of 
innovations for smart city performances requires new systems, devices and networks. Investments 
are therefore necessary but money is often lacking. The organization models of local bodies (e.g. 
Municipalities, Provinces, Departments, etc.) are often unfit to cope with current challenges posed 
by technologies and society evolution. Investments availability for new smart energy infrastructures 
is high though. Innovative bankable business models can be the basis for economic growth. 
Attractive bankable energy-based business models must rely upon a bottom-up approach involving 
and integrating clusters of stakeholders. Cities can be seen as one of the stakeholders. By 
participating in Local Ecosystems cities can use their financial resources more efficient. 

The financing of smart city solutions depends on the viability of the business model of the Local 
Ecosystem, the replicability on European level and the open market that is created by aggregating 
demand and defining a stable long-term perspective for investments in innovation. The basic 
mechanisms for the business case of smart solutions are: 

. Investments in assets and as a consequence lowering the operational expenditure, e.g. 
energy producing building that lower the daily cost of energy; 
. Combining investments of stakeholders and by doing that lower the total investment, e.g. 
communication infrastructure used for different types of solutions; 
. Lowering cost per implementation, by creating a European market for replicable solutions 
(aggregated demand) and ensure long-term perspective for investments. 


Goals 

. Reduce real and perceived risks of the investments (speeding-up procedures and permits, 
making them schedulable); 
. Attract long term investors; 
. Mobilize public funding resources from European, national, regional and local level for 
smart city solutions; 
. Develop Stakeholder aggregating mechanisms to create bankable initiatives (need for 
integrated governance); 
. Attract private funds through Public-Private Partnership (PPP). 


Preconditions 

. Cities must be able to use their planned operational expenditure for investment in assets; 
. Combined funding models between EC, national and regional funding are required; 
. Rules and budget for participating in revolving fund and guarantees. 


Implementation Actions 

Potential actions in order to deliver on the goals include: 

. Define evaluation criteria for viable smart city solutions in local ecosystems, including risk 
reduction. For the approved solutions financing can be done by commercial banks, revolving 
funds and crowd sourcing; 



. Define evaluation criteria for replicability of solutions and mechanisms for aggregation of 
demand to create confidence for long-term investments on a European level; 
. Develop concept and guidelines for combined funding models for pilot projects (e.g. SET 
plan, Horizon 2020, EIB loans, structural funding plus private funding to complement); 
. Develop alternatives to loans (such a specific bonds to finance major investments) (could 
attract SMEs); 
. Develop concept and “to do ´s” for crowd funding from small lenders; 
. Design and implement a series of ‘Stakeholders oriented investment areas’ (SOIA), where 
many categories of stakeholders (including citizens) are given opportunities to invest money 
and measure outcomes; 
. Develop innovative financial mechanisms (e.g. purpose bonds, crowd funding, smart bonds, 
etc.) as alternatives to loans. This will attract SMEs and enable citizens’ involvement; 
. Create international and cross border ‘Financial Investigation Teams’ (FIT) -composed by 
local banks and other financial institutions- to study innovative loans able to fund distributed 
‘small’ initiatives (e.g. energy self-consumption at home level). This initiative is worth billions 
euros at EU level, when combined with energy incentives; 
. Define approaches to cluster Municipalities to get the right scale for optimization in 
processes like public lighting, remote heating, etc. Design sustainable business models based 
upon clusters (Covenant of Mayors may be interested?); 
. Create rules and budget for participating in revolving funds and guarantees; 
. Financial contribution to smart city solutions from member states (national and regional 
funds): i) member states pool financial resources to enable transnational smart city 
initiatives in line with the ideas of this EIP; ii) member states work on a combination of 
national public funding for smart city demonstration and structural funding for smart city 
solutions (e.g. via the Joint Programming Initiative of Urban Europe or the Smart City 
Member States Initiative). 


Impact 

The potential added value for cities, citizens, the society and EU competitiveness include: 

. Industry, local government and citizens will increase investment but lower operational 
expenditure; 
. Cities can do more with less financial resources; 
. The innovation capacity of the EU will increase; 
. Risk-reduction in early financing phases. 


Monitoring 

. Percentage of leverage of public investments with private funds; 
. Dissemination and application of combined funding models (e.g. SET plan, EIB, regional and 
local in cities). 


 


11.2.3 Potential Action 3: Procurement 

Key Challenge 

The key challenge is to make a strategic switch from simply procuring solutions which are often 
implemented din an isolated manner at city level towards procuring solutions which actually address 
and solve interlinked city issues. 

Context 

Given the size of the public procurement budgets, procurement can have the potential to drive 
innovation along the value chains into smart cities by creating local ecosystems, stimulating 
replicability and creating a European market. However, procurement procedures are tending to 
isolated, short term buying of proven technology for specific questions. 

Goals 

. Stimulate cities to participate in local governance entities with joint ventures and joint 
investments; 
. Cooperation between cities and aggregating targets and requirements across Europe; 
. Focus on long-term impact (e.g. life-cycle efficiency and sustainability) or on long-term 
certainty (e.g. innovation implies risk-taking); 
. Stimulate systematic dialogue between solutions suppliers and Cities as customers or as co-
investors; 
. Bridge scarcity of national public funding and severe delays in payment in several EU 
member states due to economic crisis. 


Implementation Actions 

Potential actions in order to deliver on the goals include: 

. Define the possibility for cities to participate in an aggregation structure to combine 
information needs, procurement and solutions (e.g. via PCP/PPI in Horizon 2020 and/or 
ESIF). The use of the ~12 characteristics models (e.g. EuroCities concept) might be helpful, as 
well as a set of quality criteria for cities and suppliers for selection of public procurement 
along 12 key characteristics along cities categories; 
. Develop a set of tender criteria for ‘innovation procurement’ (e.g. special emphasis on 
tackling risks); 
. Explore and exploit the new possibilities foreseen in the revised EU Public procurement 
directives 9 10, in particular: i) the new criterion on the ‘Most Economically Advantageous 
Tender (MEAT)’, which allows for full life cycle costing; ii) the “innovation partnerships”, 
which enable a public authority to enter into a structured partnership with a supplier with 
the objective of developing an innovative product, service or work, with the subsequent 
purchase of the outcome; 
. Define a network of Cities and industry for systematic and structured dialogue; 
. Information (education) to get smart institutional buyers, e.g. characteristics for position of 
Chief Technology and Sustainability officer to be created in cities administration; 
. Deploy training set 11 for procurement professionals on challenges (e.g. mobility, housing, 
data handling) and promotion of good practice 12 13 for EU added value; 


9 http://www.europarl.europa.eu/news/en/news-room/content/20140110IPR32386/html/New-EU-procurement-rules-to-
ensure-better-quality-and-value-for-money 

10 http://www.innovation-procurement.org/about-ppi/legal-framework/ 

11 http://www.innovation-procurement.org/training/ 

12 http://www.innovation-procurement.org/exchange/procurement-forum/ 


13 http://www.innovation-procurement.org/exchange/experience-exchange/ 

14 http://www.buildup.eu/ 

15 http://www.innovation-procurement.org/resources/search?resource_id=611 

16 http://cordis.europa.eu/fp7/ict/pcp/docs/faq-v9.pdf 

17 http://www.innovation-procurement.org/about-ppi/legal-framework/ 

18 http://cordis.europa.eu/fp7/ict/pcp/docs/faq-v9.pdf 

19 http://ec.europa.eu/research/horizon2020/pdf/contributions/during-
negotiations/netherlands/philips_position_on_the_commission's_proposals_for_horizon_2020.pdf 

20 http://cordis.europa.eu/fp7/ict/pcp/ 

21 https://www.innovation-procurement.org/ 

22 http://cordis.europa.eu/fp7/ict/pcp/docs/pcp-newsletter-201401_en.pdf 

23 http://cordis.europa.eu/fp7/ict/pcp/docs/23jan2014-synergies-h2020-esif.pdf 

. Toolbox for technology solution blocks and cities ratings (having already installed such 
technology building blocks (EU level portal on some aspects of Smart Cities already exist (e.g. 
Build-up site 14 and Innovative Lighting 15); 
. Develop strategy for multiphase tender process 
o Phase 1 develop and validate, 
o Phase 2 traditional ‘commercial’ tender, 
o Phase 3 implementation, 
o Phase 4 Evaluation (e.g. “Flanders in Action 2020”, learn from EU Lead market 
Initiatives successes and failures; companies must be allowed to participate at all 
stages (not only in framing of innovation and then be excluded from later phases); 


. New tender models to consider value chains, origin of goods (local, EU) – while observing 
applicable regulations 16 17 – and LCA (Energy reduction in life cycle, solar panels produced 
from coal or hydropower); 
. Develop model for licensing (e.g. as in PCP 18) to ensure longer term engagement and 
covering of costs by private side. Define structures for local markets, based upon licensing 
instead of procurement. This should lead to flexible solutions in combination with 
requirements for government /pricing and evaluation models. Cities must be able to invest 
in these models. 
. Remove impediments for private-sector involvement in Smart City Calls of Horizon 2020 by 
seeking clarification on the issues 19 of the applicability of the non-profit principle and the 
need for public tendering. 


Impact 

The potential added value for cities, citizens, the society and EU competitiveness include: 

. Use of procurement budgets to create innovative solutions; 
. Increase of investments by governmental bodies and decrease of operational expenditure; 
. Create economies of scale based on these aggregate demands (at regional level, incl. cross-
border macro-regions); 
. Testing of solutions (materials, solutions, broader solutions in real life at TRL level 6-8 in 
certain cities environment (target for EU public-private projects, e.g. in Horizon 2020)); 
. Strengthen ‘innovation’ procurement in relation to ‘traditional’ procurement to increase 
opportunities for innovative SMEs and big companies by making good use of the possibilities 
of Pre-Commercial Procurement of R&D (PCP 20) and Public Procurement of Innovative 
Solutions (PPI 21) (e.g. in Horizon 2020 22 and/or ESIF 23); 
. Long term articulation of industrial and service value chains for Smart City solutions in a 
dynamic eco-system. 



Monitoring 

. Uptake of individual projects across the EU (replication); 
. Percentage or numbers of more-than-one country projects to develop and test aggregate 
solutions; 
. Percentage or numbers of SMEs and midcaps to participate in tenders and EU public-private 
projects; 
. Measurement of impact in cities against policy targets (like) energy reduction (needs 
baseline at city level to measure success); 
. Number of cities with SRA score above defined thresholds (introduce assessment capacity 
for ‘Smart Readiness and Awareness’ (SRA) -at cultural, technical, administrative, 
organizational and ethical level- to be applied to public contracting authorities and public 
bodies, resulting in a scoring system to find priorities in terms of success chance 
(attractiveness for investors)). 


 


12 General Implementation Modes 

12.1 Introduction 

The Smart Cities and Communities EIP's Strategic Implementation Plan underlines the need to 
accelerate actions; create scale; and deliver demonstrable evidence of the gains of working in 
collaboration across sectors and cities to develop common solutions. 

The ambition of this OIP is to help stimulate the next wave of successful initiatives for smart city 
action to deliver real value across the EU. For context: 

. ‘Wave I’ EU projects involve fund disbursement on an individual project level, including 
multiple and oftentimes small projects. 
. ‘Wave II’ EU projects have successfully established more collaborative solutions that are 
explicitly focused at EU-wide issues. This includes such vehicles as the Large Scale Pilots 
(LSPs) under the 7th Framework Programme for Research of the EU. These are still largely 
financed through public grants and geared towards the early stages of the innovation cycle. 
. ‘Wave III’ seeks to introduce initiatives that: 
o Increase collaboration between public and private sectors towards greater 
deployment of innovative action, and certainly increase the interest and involvement 
of the private sector. 
o Increase the level of private co-financing of public funds and trigger private 
investments (commensurate with the ambition of ’scale’) beyond public sector 
o Are city-needs-led, more than city-led; so all parties are focused on delivery of the 
customer’s end needs 
o Focus on replicability of solutions – indeed aggregation of demand. This does not 
mean a ’one size fits all’ approach to city building, however it does infer more 
common logical designs for particularly information-centric elements of the solution, 
which will help pooling of projects up to a scale where it becomes attractive to private 
investment sources to engage (greater mass, greater ability to hedge risks), and that 
can then deliver earlier benefits 
o Seek to create schemes for funding that makes it easier to plan implementation and 
decrease bureaucracy (streamlining of rules, reporting, evaluation etc.) 




The Strategic Implementation Plan for this EIP proposed the concept of “Lighthouse Initiatives” to 
capture the need for large-scale demonstration and replication at city system level. These can be 
introduced much more systematically across the EU – the limited financial scope of H2020 and its 
"Lighthouse Projects" can be enlarged by supporting Lighthouse Initiatives through national funding 
programmes and systematically attracting private investment sources through the provision of risk 
guarantees. 

“Lighthouse Initiatives” have the following characteristics: 

i. Involve a limited core group (6-10) of progressive organisations working together with the 
ambition to optimise the extent of common innovation and related design 
ii. Seek to attract multiple replicator cities –and related (local implementation) partners 
iii. Seek to rapidly scale up known technologies, as well as support innovation 
iv. Access funds from commercial lenders; national and city public funds; EC Structural Funds; 
Industry research / investment resources; research and innovation funds from domain EC 
Directorates (energy; mobility, ICT), and DG Research 
v. Will operate with pragmatism according to set of operational principles that will help to 
reduce administrative burden 



12.2 Implementation Tools 

A number of implementation tools can support those ambitions. These are outlined below; each 
addressing (i) the context, description and goals, (ii) rationale and method of implementation, (ii) 
monitoring and sustainability. 

“Implementation Tools” include: 

i. Cross-cutting content management 
ii. Stakeholder coordination 
iii. Country Smart City Landscaping and Bench-learning 
iv. ‘Kitemark’ recognition 
v. Events and Marketing 
vi. Progress Monitoring 
vii. Funding 


These all serve to build a platform for implementation of the EIP 

12.2.1 Cross-Cutting Content Management 

The SIP laid out a 3-by-8 matrix of themes, consistent with the philosophy that better outcomes will 
be achieved by dealing with the interdependencies between these topics – a change from present 
‘incremental actions within silos’. 

It is recognised that there will be stronger and weaker affinities between these various themes, and 
there will be other related themes (e.g. public security, healthcare etc.) that can also be logically 
addressed in association with the (3x8) core SIP content. But utilising such a matrix approach will 
help city authorities to not lose sight of inter-linkages and inter-dependencies and check how 
proposed actions link up. 

Specifically, 

i. Such a matrix scheme could be made an important part of eligibility criteria for funding 
schemes, e.g. proposals should be required to utilise such a systemic approach to city 
planning and management (both the quality of action, and the extent to which they deal 
with inter-dependencies) 
ii. A means to articulate the logical synergies and inter-dependencies between city systems, 
cities should support ongoing activities to develop or adopt standards and protocols (e.g. the 
emerging urban anatomy work of the City Protocol Society24) to support and inform the 
above 


24 http://cityprotocol.org/ 

12.2.2 Stakeholder coordination 

The example initiatives in this OIP convincingly demonstrate the need to involve multiple 
stakeholders in the successful implementation of smart city action. The table below provides an 
indication of this: 

Actor 

Key Role(s) 

European Institutions 

- Convening action 
- Setting and supporting policy and regulation where adequate 
- Supporting standardisation 
- Providing funds for research, innovation and large-scale deployment 





through intelligently combining Horizon 2020, COSME, ESIF funds 
and other financing tools 
- Promoting awards, competitions, dissemination, learning 


Member State and 
Regional Governments 

- Providing supportive legislative, policy and regulatory environment 
- Establishing innovation programmes 
- Supporting (national/regional) city competitiveness / competitions 
- Providing funds, and supporting the establishment of funding 
vehicles 
- Risk management 
- Market development activities (e.g. international trade missions) 


Investors 

- Commercial models that support collaboration and common 
solutions 
- Funds that enable the OIP ambitions of early scale 


