Barriers to Innovation and Entrepreneurship in Smart City

The concept of smart city is about utilising the combined intelligence, skills and resources that a city possesses from the heterogeneous stakeholders that work together to find solutions to the city’s problems. Part of becoming a smart city is the ability to be more open and encouraging for opportunities for new business models and entrepreneurship. Yet, many city municipalities struggle to embrace the “openness” in their practice of smart city. A study identifies the most prevalent barriers that city governments encounter in the pursuit of improving their innovative and entrepreneurship quality. 

The first barrier to smart innovative cities is the risk aversion characteristics of public government, due to limited resources and awareness of public and political opinion. This also relates to the differing working culture between public governments and other stakeholders, which includes different communication, administrative or coordination styles that may lead to conflict and misunderstandings. In the implementation of smart cities, often there are also lack of formal rules & responsibility, as well as a fragmented city planning vision and strategies that hinders the continuity of a smart city project. Lack of resource, whether it is financial or human resource, in addition to lack of data are another two barriers that impede the development of relevant smart city solutions that support public value creation of that local municipality. Lastly, rigid regulation may disincentive smart city innovators to participate and less attracted to be involved in creating smart city solutions. 

Reference:

Ferraris, A., Santoro, G., & Pellicelli, A. C. (2020). “Openness” of public governments in smart cities: removing the barriers for innovation and entrepreneurship. International Entrepreneurship and Management Journal, 16(4), 1259-1280.

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