Governance Models for Sharing Cities

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* Paper: GOVERNANCE MODELS FOR SHARING CITIES: SEOUL AND MILAN. When cities enter in sharing mode! By Monica Bernardi, Davide Diamantini.



From the Introduction:

"This paper focuses on the level of the Public Administration (here PA), because if the typologies of the sharing economy are many and diverse, and the actors that waves within it are rising, it becomes mandatory to define a model of management and governance. Such a model is required in order to better capitalize on the potentialities of the sharing economy, giving everyone the possibility to access it with trust and transparency and without triggering perverse effects.


Comparing two case studies: Milan and Seoul. These cities adopted two different approaches: in Milan, the reflection has emerged spontaneously from the bottom and has found in the public administration an attentive listener and a strong supporter; in Seoul, the starting push came from the Mayor and his administration, which launched a wave of innovation that is generating a real ecosystem of sharing. Even if the two cities are different in their culture, features and dimensions, the same rhetoric, labels, epistemic communities and strategies can be detected."


On Milan's Sharing City Policy Strategy

By Monica Bernardi, Davide Diamantini:

"To reply to all these challenges that are common in all Italian and European cities, and to foster innovation promoting social inclusion at the same time, the public administration of Milan has welcomed external incitements on the topic of the sharing economy, evaluating it as an additional strategy with winning potentially, and including it in its agenda, thus becoming the first Italian city to adopt a policy of “sharing”.

The first step, in fact, came from outside the administration, with the birth of Sharexpo11: Milan shared city for Expo 2015, launched by Collaboriamo, Eni Enrico Mattei Foundation, Modacult, Expolab and Secolo Urbano. The starting idea was to make a collective reasoning around the topic of the sharing economy in view of the International Exposition (EXPO MILANO 2015), in order to identify proposals and initiatives useful to tackle the presence of the 20 million visitors expected.

Given the exponential estimated demand growth during the six months of the exposition (and an offer almost static), Sharexpo considered the City and the Province of Milan an ideal testing ground to experiment services and tools of the sharing economy. The process was participatory from the beginning and started with the aim of providing an incentive to the normative design and to innovation in favor of collaborative services, and of overcoming bureaucratic constraints that prevent the effective implementation of these services in the city. The reflection was able to highlight the potential of the collaborative economy in Milan. The project originated in the event Sharitaly held in November 2013, a major convention on the sharing economy and the first Italian event entirely dedicated to this emerging paradigm. It was followed by ad hoc working tables involving startups, large corporations, associations, social enterprises, government agencies, research centers, etc. and represented a way to connect entities working in similar fields, but unware to be part of the same whole. Thanks to careful coordination, a Steering Committee for Sharexpo has been created, with significant contributions and interesting impulses and reflections around the smart city and the sharing economy during the exposition. In July 2014, the Sharexpo official launch document has been presented with a set of specific goals: to analyze the role of a mega event such as Expo 2015 as a potential driving force for Shareable Cities; to identify critical issues and potentialities in five sectors (mobility, hospitality, food, leisure and work); to identify the role of the sharing economy and inflect it in the five identified areas; to evaluate areas for improvement in regulatory, cultural and organizational terms; to develop a strategy for action; and to realize a feasibility report at employment, economic, territorial, cultural and social levels. The impulse for a deep reflection has thus arrived thanks to the international exposition, finding immediately a very fertile ground.

The public administration has supported from the beginning these first solicitations, letting itself getting involved, recognizing the will of commitment coming from the bottom and demonstrating an already rooted sensitivity toward innovations. Considering the citizen incitements in line with its political address, having always promoted social innovation and Smart City, and recognizing the sharing economy as a catalyst in this frame, it has started an internal reflection on the topic and opened an online public consultation19 equipped with a questionnaire. The goal of the consultation and of the questionnaire was to collect, directly from citizenship, information, requests, demands, and ideas on the possibility of pushing on collaborative and sharing services. The consultation highlighted the importance for the PA to become an “enabling platform” 20 of the sharing economy.

Following these indications directly emerged from ordinary citizens, businesses, new startups, activists, innovators, creative and experts too, after the consultation, open to anyone who wanted to help, the Municipality organized several public events on the topic. The consultation process has pushed an incredible variety of actors (businesses, associations, movements of consumers, citizens, etc...) to connect directly with the public administration, generating a huge patrimony of input and information, unprecedented for the city and for Italy as a whole, a real collaborative policy making process. In December 2014, the Municipality has approved the Guidelines on “Sharing Economy”, precisely a result of the information collected through the consultation. These guidelines make the administrative purpose and the potential role of the PA clear. As one can read in the resolution guidelines: “In an interinstitutional and multi-governance context, the public Administration can create the conditions so that those who are now potential opportunities for the city become effective opportunities for growth, innovation and inclusion, enhancing existing practices and inspiring new ones that are responsive to the needs of the city”. This statement shows the proactive approach of the PA about the new economy of collaboration and the role that it could play in the urban context.

Among the various actions that the City intends to implement, some steps have already been taken, including the mapping of actors (by November 2015 the Register counts 102 participants, 60 are experts of the topic and 42 are operators, but the registration is still possible since the call will be always open) and the systematization of the most important experiences of the territory along with the support of the communication of such initiatives. The mapping has revealed a social and economic fabric particularly dynamic, diverse and heterogeneous, different from what the mainstream literature on the subject suggests, since it is more focused on territorial localization and on social issues and less on technological innovations (Pais, Milano(è)In series, 07.06.2015).

The PA is also working on the field of the research, promoting the development of research activities on the economic, environmental and social impacts of the sharing and collaborative economy. It has also launched an experimental civic crowdfunding22 with an allocation of over 400 thousand euros seeking to create and let emerge innovative projects and shared social networks related to social gatherings, to develop a more accessible city attentive to the needs of people with disabilities, to the elderly and the families. The Council Member Tajani23 underlines that “thanks to these crowdfunding actions, new innovative projects with a high social content will have a real opportunity to fund them and will favor the development of a more innovative city that looks at the future in a supportive way”.

All these initiatives are part of a more articulated reasoning that the city is carrying on to look at the social innovation as a way—a tool—to favor the social inclusion. The project “Milano(è)In” of the Labor Policies Division, thanks to the support of the innovation and sharing economy’s protagonists in Milan, is activating skills, competences and resources in order to exploit the city’s potential in favor of better social inclusion. See for example the 5 incubators with active participation of the municipality: FabriQ, this year at its second edition, born to promote and incentivize the emergence of new social businesses in marginalized neighborhoods; Alimenta2Talent – oriented to new startups that work in the field of food and life science; PoliHub – created in partnership with the Polytechnic of Milan, offers a program of entrepreneurial empowerment, a network, and spaces and innovative services for startups; SpeedMiUp – an initiative to support employment and entrepreneurship sponsored by the Milan Chamber of Commerce and the City of Milan in consortium with the Bocconi University in charge of executing it; and A.I.R – a business accelerator that aims to support the entrepreneurial activities (profit and no-profit) inside Milanese jails. Beside these initiatives, three more activities will be undertaken in 2016 to reuse spaces in Via D'Azeglio, ex-Ansaldo (just became BASE MILANO) and Smart City Lab. The total monetary investment of the administration is over 18 million euro, set to meet the needs of those who want to do business and innovation. The first space will gift the city with a modern FabLab to provide services for new digital artisans; Ex-Ansaldo space, with its 6000 square meters, will host activities and projects related to the development of cultural creativity and entrepreneurship and the tender will last 21 years (it will host the first Collaborative Week of the city in November 2015); Smart City Lab, realized with the support of Ministry of Economic Development, with its 4000 square meters, will allow the incubation of innovative companies with high technological value and will be equipped with a showroom to exhibit the technologies produced, a co-working room and a conference room. Beside these realities, in the “Casa della Collaborazione - Collaboration House” (Co-Hub) will be opened in Calusca alley, a place for operators of the sharing economy and others to meet, debate and discuss. A public call will define the manager and supervisor actor that together with the network will self-organize to bring forward the networking activity, in collaboration with the public administration. The municipality can and is committed to realizing the promotion of calls for the provision of funds for business ventures and startups dealing with sharing economy. Milan, among other things, includes the highest number of coworking spaces in Italy, and 53 of them have been certified and included in the Official Register of the Municipality. In addition there are 9 FabLab and spaces for the makers. Under the logic of optimizing resources, it has provided vouchers for the use of the accredited spaces.

From the point of view of shared use, as required by the guidelines, the City is committed to providing enabling infrastructure such as physical and virtual spaces of discussion and engagement. For example, the city has assigned more than 22,000 square meters of unused spaces to associations, startups and citizens. It has set up 8 new shared gardens (34 thousand square meters), and realized 24 houses for the solidarity hospitality(co-housing). The mobility sector is then certainly one of the most important sectors of the functioning sharing economy: there are4 carsharing operators with over 2,000 daily users, sharing of scooters and bikes with pedal assistance, in addition to the classic bikesharing that counts 10,000 users daily.

Within the administration, many different divisions are involved in the reflection: Mobility, Labor, Culture, Sport and Urbanistic, in a logic of high engagement, internal comparison and integration of approaches, visions and activities; the interconnection among different divisions is related to a still rooted pro-people orientation. In addition, the municipality has established a group of external consultants, experts on innovation and sharing economy, in order to have professional support, and it has also involved international advisors like April Rinne. Recognizing the need to train staff and to collaborate with experts on the topic is considered one of the basic preconditions to starting a useful discourse on the concept of the sharing city.

The incitements that the City has wisely and skillfully collected run in parallel with its internal address, already voted to social innovation as a means to promote social inclusion. They are in line with broader projects that go under the label of Milan Smart City. In the ranking of Italian Smart City of Forum PA 2015, Milan is in first place and, as seen, the city has all the necessary infrastructure to be regarded as such. Not to mention the PA’s ability to connect institutions, people, universities and associations, through the creation of six thematic working groups corresponding to the six pillars of Smart Cities (a classification of the University of Vienna): Smart Economy, Smart Living, Smart Environment, Smart Mobility, Smart People, Smart Governance, plus a table dedicated to EXPO. The local government believes that only through an ongoing dialogue and exchange with its communities of practice it is possible to create a smart, green and inclusive city. Only through cooperation between the public, private and civic sector can Milan compete at national and European level to become a benchmark for innovation and sustainability. Using the words of Galliano, the city can be considered a Human Smart City, a label that stresses the importance given to the human factor rather than one of technology, which remains an enabling element but not the ultimate goal. At international level, the city is already active member of the major European and global networks dealing with Smart Cities and, at local level, the Municipality and Chamber of Commerce are engaged in the creation of stable partnerships among different realities, in the fields of research, social innovation, business and finance. Milan has recently becomes part of the project “100 Resilient cities”25 promoted by the Rockefeller Foundation (100RC) addressed to help cities around the world to become more resilient in responding to physical, economic and social challenges.

In this paper is not possible to describe or even name all the initiatives that the city is supporting or proposing itself (Green City, 100in1day project, BookCity, Fuori Salone, Expo in Città, etc.). The vibrant dynamism that is going through the municipality, the nonprofit sector, citizens, and innovative businesses fuels an incredible network devoted to participation, collaboration, inclusion, social cohesion, public-private-civic cooperation, strong public engagement, active citizenship, and also perspectives of economic development and hope for a better future." ([email protected])

On Seoul's Sharing City Policy Strategy

By Monica Bernardi, Davide Diamantini:

"The city is aware that, soon, the so-called breaking point will be reached. For this reason, the last and current administration, led by the mayor Park Won-Soon, has started a deep reflection on the best strategies to reply to the current urban challenges. The reflection was based on the existing infrastructures and on the city’s potentialities. Back in 2008, in conjunction with the global economic crises, the city started to talk about the Sharing Economy, but it was not until 2012 that the issue was introduced in its political agenda, as a complementary and experimental way to support the economic development, reduce the environmental impact and strengthen the social cohesion. The incitement came directly from the Mayor, who has a long experience of activism (more than 30 years) and a strong orientation towards citizens and their wellbeing. The previous administration was more focused on infrastructures and technologies, and created the proper landscape that today is allowing the sharing economy’s services to thrive. As underlined by Nan Shil Kwon, a spokeswoman of Creative Commons Korea and member of ShareHub, “the high penetration of IT services and social networks has naturally led to the identification of the sharing economy as an intervention strategy”, facilitating the adoption and dissemination of sharing and collaboration practices and encouraging the development of projects and business associated with them. So the city has embraced the sharing economy declaring itself as a Sharing City for the first time in September 2012, launching the project “Sharing City Seoul” and starting to apply the concept of sharing economy to its urban policies.

The main peculiarity of Sharing City Seoul is the great commitment of the Seoul Metropolitan Government (SMG) and therefore the strong public engagement. Seoul aims to bring the sharing economy to all its citizens, expand the sharing infrastructures, promote businesses that are already dealing with sharing, incubate new companies, put underutilized public resources back into and provide greater access to data and digital services. Overall, it aims to create an ecology where the sharing economy can develop in an autogenous way, a “Sharing Ecosystem” based on a “Sharing Culture”, with a new sensitivity towards sharing, cooperation, exchange, collaboration.

The measures on which it has worked are mainly:

1. Preparation of laws and systems to promote sharing. After declared itself a “Sharing City” in September 2012, on December 31 of the same year, the “Seoul Metropolitan City Sharing Promotion Ordinance” was enacted, thanks to a series of public hearings that allowed the local government to collect information and opinions from sharing economy activists and citizens. The newly enacted ordinance establishes the rules for implementing the project and dictates the support of the city in the vitalization of sharing not only in the public sector, but also in the private sector. In fact, the project includes companies and organizations able to act on specific social problems, recognized as “sharing companies/organizations” and supported by the government, and new startups that can count on a public guarantee (the logo of the project, the blue peanut - Alimteo, marked the selected organizations). The ordinance called also for the creation of an internal division voted to the management of the project: the Social Innovation Division. In addition another political act has been drawn up, the “Seoul Metropolitan Government Act for Promoting Sharing” (January 2014), which provides the legal framework to support non-profit organizations that work in the sharing economy field while committing the necessary infrastructures for the promotion of the Sharing Economy. In the first phase of the project, 20 new sharing enterprises were selected through the Youth Business Startup Incubation program, providing offices and workspaces, advisory services and a total of 240,000 dollars to 10 startups. The total investment has been 450,000 dollars in 27 sharing organizations or businesses. Among these, there are online platforms that facilitate house sharing, like AirBnb (Kozaza, BnB Hero…), baby clothes exchange (Kiple), parking lot sharing and other exchanges of goods, knowledge and skills.

2. Establishment of a policy execution body under private-public governance. The cooperation between the private and public sector is publicly considered a key element of the project. In February 2013, the city established the Sharing Promotion Committee, composed of 15 members, 12 coming from the private sectors of IT, CSR and social innovation and 3 from the public administration (a city councilor and officials). The committee deliberates on the selection of ‘sharing companies’ and suggests diverse opinions on their business operation, and monitors and evaluates their work. As suggested by the professor Jihoon Jeon, member of the Committee, “the local government has addressed in first instance to the services providers rather than the customers because if the city is able to provide good services and at the same time to spread awareness of the potential of these new forms of economy, citizens naturally will follow and enter in the process”. Also, as Botsman and Rogers believe, if there is a system that facilitates sharing, reuse and participation, the society will adopt it (2010).

3. Opening of an online sharing information portal (SHARE HUB). is the gateway to the Sharing Economy in the city, the bridge that connects citizens, businesses and local government. Created thanks to cooperation with private organizations, Creative Commons Korea38 (and managed by it), the web portal gathers all the information and experiences of sharing and collaborative consumption of the city. It also introduces overseas sharing activities; connects of people, businesses, government and NGOs interested in a better sharing; and supports networking with companies and organizations related to sharing. The Seoul Metropolitan Government provides administrative and financial support, cooperating on some aspects such as management and advertising of the sharing companies. As underlined by Mr. Hak Young-Song, project manager of the Social Innovation Division, “through the portal citizens are always informed on the organized events and can express their opinion” generating an ongoing exchange of ideas. The byword is “Sharing is the way of life for sustainable tomorrow”.

4. Seoul Metropolitan Government, promoter of the sharing economy. The main role that local government is playing makes it an enabling platform for advertising events and sharing services, for deploying a strong sensitivity on the topic and for supporting companies based on sharing values. The city does not handle businesses directly but helps startups who work in sharing to find a place in the market, provides programs of entrepreneurial support, advice and mentoring sessions with senior entrepreneurs and experts, and also advertises events, initiatives and platforms (SMG, 2014a, 2014c). One example is the “Sharing Economy Startup School”, today in its third edition, that aims to enhance understanding of the sharing economy and to support startups by developing specific sharing economy business models (the schools was addressed to member of no-profit organizations, community activists, those preparing for venture startups, etc.)..

5. Installation of an information exchange window with the world. The city of Seoul really cares about international relations and perspectives exchanges with foreign experts. It is always well informed on the development of the sharing economy abroad and aims to reinvigorate its project thanks to the comparison. For this reason, among the first initiatives, a Sharing Economy Advisory Group has been created composed of international experts: Joe Gebbia, AirBnb co-founder, Rachel Botsman director of Collaborative Lab, April Rinne, CSO of Collaborative Lab, Herald Heinrichs, professor at the Lüneburg University, and Neal Gorenflo, co-founder of Shareable. The group meets periodically to provide information on the trends of the sharing economy abroad and give ad hoc advice.

Recently the SMG has created another entity to guarantee the transparency of the process: the Sharing Facilitation Committee to solve potential tensions among sharing business e current laws (Johnson, 2015). The Municipalities strictly believes on the importance of correcting obstructing status or systems by maintaining a cooperative relationship with the central government while supporting sharing companies/organizations. For this reason he recently started a legislative review in cooperation with the National Assembly and the Central Government to ensure better institutional support to the sharing economy. The activities of the Sharing Facilitation Committee are related to the consultation started in April 2015 among various internal departments to discuss the possible problems related to the sharing economy.

The project “Sharing City Seoul” is focusing on new sharing economy businesses able to reply to some of the biggest social problems facing the citizens (such as meetings between generations, recycling, reducing isolation, creating community, creating new jobs, providing funding and specific advisory programs with experts in communications, marketing and social business, organizing meetings not only for the selected organizations but also for future entrepreneurs and for all those who have an idea of sharing business). Within the project the public administration intends to raise awareness among citizens around the concept of sharing, encouraging its practice, with specific local events (such as the Sharing Seoul City Fair, the Sharing Market), courses (Sharing Economy Startup School) and meetings in schools (Sharing Economy Clubs, Schools Sharing) in order to let know people what, when, and how they can share in the city. In addition, the Municipality is opening its public spaces to citizenship, allowing companies and citizens to organize events and opening these areas during usually closed hours. The attention to young people is a relevant element, not only inside the project but also in the general city agenda. The public administration is encouraging youth to consider the potential of the sharing economy to create new jobs opportunities, to reduce isolation and social exclusion, to create communities, and to live in a sustainable way. For this reason, it has favored the opening of special spaces for young people, such as YouthZone and YouthHub. Moreover, it is facilitating the use of private and public empty and unused spaces for parking (parking lots) and encouraging the shared use of cars (with 5 carsharing companies and 400,000 users). Thanks to this open attitude, to date 63 sharing companies have been selected and supported, and by 2018 the aim is to get to 300 (in order to cover more sectors and reply to the needs of different targets of people in an inclusive perspective). The chosen companies are so divided: 25 offer space-sharing services, 15 goods sharing services, 16 are companies devoted to the sharing of skills, experience and time and 7 companies work on the field of content sharing. In addition, more than 23,000 groups of people have used shared spaces provided by the municipality, generating over 9,000 opportunities for shared use of the spaces. Within the same SME, the Citizens Hall has been created, a place for sharing open to all citizens, providing resources, spaces for discussion and proposals, opportunities of gathering, exchange and cooperation. In this frame, the citizen is always at the center, since the SME has a precise inclination to the human dimension and, as it declares, points to a real paradigm shift that affects the daily lives of its citizens. The option to select “Sharing villages” and to promote good business models inside them falls into this logic of supporting citizens as main actors of the city system.

As for the case of Milan, also in Seoul, the initiatives of the project “Sharing City Seoul” are part of a broader framework of policies that the city is carrying out to improve the quality of life of citizens and make the city more sustainable. The strategy “Smart Seoul”, as seen, is the first frame from which the sharing city originated; it is divided in three steps: build Smart infrastructures (2011-2012) based on existing ICT projects, provide Smart Services (2013-2014), and improve Smart services (2015)." ([email protected])

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