Digital and sustainable cities – support for smart cities in the Coalition Agreement

“Germany needs nothing less than a new digital beginning.“ It literally says that in the Coalition Agreement signed by SPD, Grüne and FDP. In it, the term ‘digitalisation’ occurs no less than 226 times in various contexts. What becomes clear is that the ’Traffic Light Coalition’ wants to significantly advance digitalisation in Germany. Michael Pfefferle, head of the Smart City & Smart Region department at Bitkom, takes a closer look at whether the measures are sufficient and what really lies behind the federal government’s digitalisation offensive. His article was first published in the 2/2022 edition of the trade magazine KommunalPraxis.

Competitions for support and municipal pilot projects on the way to becoming a smart city

In 2019, taking as its slogan ’Smart Cities made in Germany’, the previous federal government began providing financial support for model towns on the way to becoming smart cities. Since then, three support categories have been established and 73 model towns were chosen which received a total of 820 million euros for their digital development. In addition, the Federal Ministry of Economics finances the Stadt.Land.Digital initiative – a platform with a focus on smart city topics. The Federal Ministry of Food and Agriculture is also driving digitalisation in rural areas. The Federal Ministry of the Interior provides financial support for the Heimat 2.0 programme for very remote rural regions – one of many federal government support programmes for advancing digitalisation in Germany. At the same time, the federal Lands have various support programmes for digitalisation. According to Pfefferle, what is missing is a clear direction and sense of scale. “Unlike almost any other country, Germany is a land of digital pilot projects, beacon and model projects. The result is that currently an indefinable number of competitions for support, pilot projects and solutions exist, which in some cases overlap. […] Too often, digital applications under the label of innovation receive parallel support in separate municipalities despite products already being available on the market or pilot projects and regular services having already been implemented in many other municipalities. This inefficiency so far must be reassessed in view of public funds being used“, says Pfefferle.

Seven points in the Coalition Agreement pertaining to support for smart cities

• 1. Creation of an infrastructural basis

A basic infrastructure is necessary for a new digital beginning – which is why the Coalition Agreement makes mention of nationwide fibre optics coverage and the latest mobile communications standard.

• 2. Three goals for smart municipalities

1. Improvement in the quality of life in both urban and rural areas

2. Strengthening of municipal administrations and giving municipalities substantial decision-making freedoms.

3. Citizens must be able to rely on public welfare. Development of a more aware society.

• 3. Continuation of the federal Smart City programme and expanding it to cover Smart Regions

The federal ’Smart Cities made in Germany’ programme and the ’Smart City model projects’ are to be linked with urban development and made more flexible. A financial support round is planned for next year.

• 4. Financial support for urban development in order to reach climate targets

Adapting to the climate and reducing greenhouse gas emissions is to become a key pillar of urban development. The focus must be on heavily indebted and financially weak municipalities – thresholds must be lowered and multi-year agreements between the Lands and federal government must be reviewed.

• 5. Further development of the Smart City Scheme

The Coalition Agreement makes mention of further development of the Smart City Scheme. Currently, no federal Smart City Scheme exists. In 2019, the parliamentary group of the FDP in the German Bundestag submitted a motion headed »Smart Cities – with data flows to flourishing cities« and specifically demanded the introduction of a Smart City Scheme, »the results of which shall serve municipalities as a best practice catalogue and roadmap.« It is not clear whether this plan will be developed“, says Pfefferle.

• 6. Establishment of a Smart City Competence Centre

As early as 2018 the German Association of Towns and Municipalities and Bitkom called for the establishment of a competence centre for digital towns and regions. Apparently, this will now come to fruition. The establishment of a Smart City Competence Centre was set out in the Coalition Agreement.

• 7. Simplification of support programmes and relief measures for financially weak municipalities

Measures supporting urban development are to become less bureaucratic and more flexible. Furthermore, within the framework of financial relations between federal government and the Lands, assistance is to be given to solve the problem of old debts.

From planning to implementation

Pfefferle is of the opinion that there will be a big drive to digitalise towns and municipalities during this legislature, in particular because of the links between support for urban development, digitalisation and transport. As a result, the term ’smart city’ will over time become ’sustainable city’. Pfefferle has high hopes for the new Coordination and Transfer Agency. “During this legislature, the Coordination and Transfer Agency must provide evidence that the politics of financing model projects, knowledge transfer and a nationwide rollout is successful.“