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Ensure the economic sustainability of local investments in digital infrastructures


The financing of local digital infrastructures is not merely about finding public investments; it is rather a question of economic sustainability. Local public authorities need to assess the extent to which digital infrastructures can become sustainable without continued public investments.

Rallying key digital stakeholders for the sustainability of local investments in digital infrastructures

The mobilisation of all layers of governments and financial institutions is critical to achieve these smart investments. Development agencies, Local banks and private investors, financial Institutions and NGOs, have to be mobilised to co- finance the creation of technological infrastructures. A lot of European, national and local funds for regional development remain often little-known or unexploited. Local public authorities should leverage on them to finance their digital infrastructure needs.

New business models to support  local economic sustainability

The rise of the sharing economy is  highlighting the underutilization of  resources within cities or regions. Many  innovative business models are trying to  tackle this issue by making sure the  resources are fully exploited.  Apart from the famous Airbnb or Uber,  other examples now exist. Peerby.com is  a website and mobile app enabling  consumers to borrow products by asking  around in their neighborhood. Similarly,  office sharing brings new revenues to  companies which own or manage an  office, and wish to rent out redundant  office space as workstation.  Beyond underutilization of resources,  new business models can also have a  positive impact on the citizen’s quality of  life. This is the case of the circular  economy, which provides opportunities  to reuse, recycle and upcycle. Further,  the example of car sharing illustrates  how new services can reduce traffic and  pollution, thus improving the livability of  the city.

Hackathons in Espoo

The city of Espoo is launching several  initiatives to accelerate the digital  transformation of the city. 3D city  model hackathons are for instance  used to activate the local community  and to enable Espoo residents to solve  societal challenges. These week-end  long hackathons are framing the  regional and local challenges behind  the need for innovation and therefore  act as a key enabler for citizen  engagement in the digital  transformation process.


Digital investment to improve utility management

Investment in digital infrastructure can  improve the management of utilities.  Electricity, water, traffic are all subjected  to severe peak use. It is estimated that  20% of capacity sits idle for much of the  time to cope with demand peaks. Digital  technologies along with innovative  pricing structures can help limiting these  peaks and thus improve the overall  efficiency of the utility network.

An infrastructure development strategy  strongly linked with the level of  development of the city/region

The digital transformation or replacement  of existing infrastructures require  an in depth-analysis of citizen’s needs  and is highly dependent on the  development stage of the territory.  Catching up cities and regions often  consider technological infrastructures as  secondary investments needs and  usually favour investments in social  infrastructures.

The Łódź Special Economic Zone

In Poland, special economic zones are  widely implemented as to attract  investments and investors to Poland.  Their objectives are to act as a  catalyst for the economic  development of cities or regions.  A special economic zone is defined as  a separate, uninhabited part of the  country’s territory where business  activity may be conducted under  preferential conditions defined in the  Act on Special Economic Zones of 20  October 1994.²⁸  To attract investors, tax allowance  consisting in a corporate income tax  exemption are offered. Investors  running their business in an SEZ can  also benefit from real estate tax  exemption.  Today, The Lodz Special Economic  Zone occupies an area of 1302  hectares. 50% of operating companies  are SMEs. Large companies active in  the zone include Fujitsu, Infosys, Dell,  Gillette, P&G, ABB, Indesit, Whirlpool,  Kellogg’s.