City currencies place people at the heart of smart cities

A quick glance at recent headlines shows that cities today are facing growing challenges. Berlin, like many other cities, is suffering from poor air quality, attributed to the growing use of private vehicles; Milan and Chicago are struggling to find solutions to periods of extreme temperatures. UK cities face the rapid decline of high streets which erodes important public spaces and exacerbates elderly loneliness. This snapshot reminds us that while every city is different, each one is facing complex, often similar challenges.

Increasingly, cities are turning to technological solutions to find remedies to these pressing issues. The innovation in the field is admirable. However, the success of these technologies rests upon the extent of their adoption by residents. Too often, city planners and developers lose sight of the fact that a smart city solution must be used by an actual person, integrated into their daily routine. If not, then even the ‘smartest’ technology will have limited impact. In a city looking to reduce traffic, ordinary people must decide amid their busy morning routine, to forgo their cars and use alternatives. In a city attempting to increase recycling rates, everyday residents must opt to separate their trash into separate bins at the end of a hectic day.

It is our role as solution architects to keep people and their everyday city lives in mind when we design products and services. In order to make a meaningful impact we must complement technological solutions with the ability to engage with residents and gently nudge them to do the right thing. Given that the end result depends just as much on people as technology, their contribution to the community and their city must be acknowledged and their positive actions rewarded.

In other words, smart solutions need to touch people. They must follow a human-centric design approach. They have to be agile and dynamic enough to successfully adjust to the developing challenges of the city. The good news is that as much as cities are changing, so is technology. Tools already exist which can accommodate city evolution and more closely connect the various stakeholders that together make cities tick–residents, businesses, institutions and more.

One prominent example is the use of a digital city currency. The concept of a local complementary currency as a medium of exchange is not new, with examples documented back at least to 1930s Austria. Some well-known recent examples include the UK town of Bristol and the borough of Brixton. However, going digital is a potential game-changer–it opens the door to any resident or small business with a mobile phone, makes the circulation of the currency easier and more widespread, and generates liquidity while building a network of trust. More importantly, a digital city currency can act as the fuel of a city-wide reward scheme. Firstly, it can be awarded to residents for any number of activities which benefit the city. Secondly, it can then be used for payment at local businesses, thus further nourishing the local economy and creating what economists refer to as the “local multiplier effect.”

Most recently, Belfast City Council and the Municipality of Tel Aviv-Yafo, both part of the Rockefeller 100 Resilient Cities network, partnered with Colu Technologies, to introduce a city currency. The currency will be used to encourage residents to shop at local businesses, adopt a healthier and more sustainable lifestyle and take action to strengthen their community. However, the possible use-cases for a platform fuelled by this type of currency are almost endless; encouraging volunteering, the use of public transport and participation in civic initiatives are just some examples.

In addition to these practical benefits, creating an ecosystem of city partners around a city currency also brings with it another contribution to city life, which is no less important or valuable. By their very nature, the everyday transactions fuelled by a city currency require ‘give and take’ between those who use it. And it is this reciprocity and mutual cooperation among local people, businesses and institutions. which strengthens the unseen bonds lying at the very heart of the community.

Dr Dana Heller is the Chief Strategy Officer at Colu, a technology company using a unique digital currency to strengthen cities.

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