The Smarter Cities Challenge

The Smarter Cities Challenge is IBM’s largest philanthropic initiative, deploying the expertise of top talent from the company to address critical challenges faced by cities around the world. Through a competitive process, Amsterdam emerged as one of 16 cities to be awarded the grant in 2015, and in early 2016, a team of experts worked in the city for three weeks to investigate key issues. The specific challenge, as posed by Mayor Eberhard van der Laan, was to “help the City of Amsterdam proactively create opportunities for its citizens, businesses and community, with an emphasis on the start-up ecosystem.”

Recommendations for Amsterdam

According to the report, Amsterdam is “widely believed to be one of the most desirable European cities to live in” and “strongly positioned to embark on a new golden age.” However, the report states, it can only do so if it stays ahead of major shifts in the labour market and weathers current industry disruptions. These shifts and disruptions are caused by accelerated innovation and digital interconnectivity. Examples are challenges to the hospitality industry by the sharing economy, changes in the workweek and labour distribution caused by the gig economy and disruption of the banking sector by Fintech startups. The report forecasts a widening skills gap and increased unemployment if the city fails to stay ahead of these developments.

Startup ecosystem: management and governance

The report states four recommendations for the City of Amsterdam. The first of these is to establish a data-driven management and governance framework for tracking the start-up ecosystem. According to the report, such a system would allow all stakeholders to monitor their KPIs, expose dependencies across ecosystem partners and enable informed decision-making; it would therefore be crucial for improving the ecosystem.

Dynamic training and education

The report’s second recommendation is to create a dynamic learning environment. This applies to two separate aspects: firstly, the City must make it easier to retrain those affected by the changes in the job market; and secondly, tech skills should be part of the core education system, as well as becoming more prominent and engaging for pupils.

Strengthening entrepreneurial talent

According to the report, Dutch startups embrace collaborative working and have the aim to improve societies by creating positive change for citizens. However, they also have a “mindset that fears failure, is risk-adverse and lacks the ambition to go global.” This can limit their success, and thus the report’s third recommendation is that the City develop “an umbrella awareness campaign that fosters mindsets that are willing to embrace change, take risks and be open to potential business failure.” Measures to this end include showcasing entrepreneurial skills in public forums, creating an environment that is more accepting of failed businesses, emboldening entrepreneurs to take risks to scale their startups and encouraging improvement in bankruptcy processes to enable faster recovery of new businesses.

Cooperation and competition

The report’s fourth and last recommendation relates to Amsterdam’s relationship to other cities, in which the Dutch capital is encouraged to “adopt a strategy of coopetition.” This means it should collaborate with large hubs, for example to establish Amsterdam as a launching pad for London startups into continental Europe, and to compete with smaller cities with similar characteristics, such as Copenhagen, for exactly that position of launchpad. Other Dutch cities should also be approached with a spirit of collaboration, to share best practices and learn from one another.