Smart

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Sm art Regu la tion

Explaining Key Concepts for the City of Tomorrow

Discussion Paper

25, Grand Rue Case Pos tale 320 0 CH 12 11 Geneva 3 Swi tzer land

Fac ebook: /NewCi t ie sFoundat ion Twi t ter : @new cit ies found

www.newc it ie s foundat ion.org

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Please cite this publication as:

New Cities Foundation (2012), Smart Regulation, ‘Explaining Key Concepts for the City of

Tomorrow’ Series, Discussion Paper #1.

http://www.newcitiesfoundation.org

This project was led and co-ordinated by Naureen Kabir (Director, Urban Lab and New Cities Foundation USA).

Berengère de Contenson (Researcher) supervised the project at an early stage. Cristian Santibanez (Program

Associate, Urban Lab and Communications) contributed to the final editing.

Claudio Altenhain, Arslan Bissembayev, Loik-André Bourgeois and Morgan Mouton (researchers from the

Governing the Large Metropolis Master of Arts program at Sciences Po in Paris, France) contributed to the drafting

under the supervision of Dr. Alvaro Artigas Pereira.

The New Cities Foundation would also like to thank Anil Menon, President of Globalisation and Smart+Connected

Communities, Nic Villa, Managing Director, Global Public Sector and Latif Horst, Sales Business Development

Manager, Smart+Connected Communities – all from Cisco Systems for their thought leadership and suggestions on

this project.

Cover and back-cover picture by Cristian Santibanez under Creative Commons License.

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Table of Contents

Executive Summary ....................................................................................................................... 5

Introduction .................................................................................................................................... 6

Part 1: Historical Background

Genealogy of a concept ............................................................................................................................ 10

Looking for more efficient regulation models: the United Nations Development Program focus ......................... 10 From Better to Smart regulation: the European Union’s legal approach .................................................................. 12 Smart Regulation Strategy in Canada .......................................................................................................................... 17

Three key components of smart regulation: embedment, responsiveness, sustainability ................... 18

Embedment ...................................................................................................................................................................... 19 Responsiveness ................................................................................................................................................................. 21 Sustainability ...................................................................................................................................................................... 24 Smart Regulation and Information and Communication Technologies (ICT) .......................................................... 28

Part 2: Case Studies

Towards an operational model of smart regulation ................................................................................. 30 Hospital General de Ciudad Real, Spain ...................................................................................................................... 34 Torre Titanium La Portada, Santiago, Chile ................................................................................................................... 35 Lyon Confluence, Lyon, France ..................................................................................................................................... 36 Vauban, Freiburg, Germany ........................................................................................................................................... 37 CITE City, New Mexico, USA ............................................................................................................................................ 38 Putrajaya-Cyberjaya, Selangor, Malaysia ..................................................................................................................... 39

Smart regulation applied ............................................................................................................................. 41

Conclusion .................................................................................................................................... 46

Literature

Written Material ............................................................................................................................................ 49

Websites ........................................................................................................................................................ 54

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The absence of a viable definition of smart regulation gives rise to multiple interpretations, which

are sometimes contradictory. Taking into account its different social, institutional, and economic

dimensions, this paper, the first in a series by the New Cities Foundation, retraces the concept’s

evolution, encompassing first attempts of good governance and co-regulation as well as the best

practice objectives of better regulation.

Smart regulation draws upon a broad range of policy designs and instrument mixes as it lays

claim to be context-independent and able to efficiently implement optimal practices in any

context. Based on the inclusion of third parties in a multiplicity of institutional fields, the main

innovations of this type of regulation are the endorsement of co-regulation, systematic

cooperation, the establishment of governmental feedback loops and a particular emphasis

brought upon sustainability in terms of economic, environmental and social issues.

Drawing from the existing literature, we propose an accessible conceptual framework based on

three key components: embedment, responsiveness, and sustainability. With the new

possibilities offered by Information and Communication Technologies, this powerful framework

can be used to retrospectively-analyze existing real-estate projects and better understand their

failures and successes.

Drawing upon these criteria, six case studies in the real estate sector are examined to evaluate

whether the proposed framework is consistent with empirical reality. Through this analysis, this

paper aims to determine whether smart regulation is an operational concept that can be

grounded in reality, or whether it is too a broad framework encompassing scattered elements

that cannot be applied to a specific sector.

Executive Summary

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The absence of an established and consensus driven definition gives rise to multiple

interpretations of the term smart regulation: it is a concept that encompasses so many different

social dimensions that it loses meaning. Taking into account its different social, institutional, and

economic dimensions, the aim of this short book is to shed light upon this concept so as to move

from understanding to application.

If the twentieth century established nation states as the fundamental scale for policy of its era, the

twenty-first century is likely to shake and re-draw these lines. All forecasts and academic studies

agree that the twenty-first century’s most important phenomenon will be urbanization. Cities are

growing at an unprecedented pace, and we will have to build them faster and more effectively.

Growing cities, however, are paradoxical spaces: while dense and relatively intense in terms of

land-use, the much more diverse economic fabric and demographics of cities make them

extremely complex political entities to govern. Contrary to nation states, where a city begins and

where it ends is difficult to define, creating tensions between administrative boundaries and

functional boundaries; decision-making processes involve multiple scale stakeholders; resources

are exploited in intensive ways. While cities attract people because of supposed better living

conditions than rural areas, they can often become polluted and congested with lines of grey

buildings, extreme levels of poverty alongside the wealthiest neighborhoods, and high levels of

distrust. Thus, as cities become the focal point of decision-making, this analysis is aimed at

clarifying a new mode of governance – smart regulation – for the benefit of local authorities

and regulators worldwide who play an increasingly central role in governing these ever more

complex metropolitan areas.

Historically, the industrial-age model of regulation – or traditional regulation – developed to a

large extent on the premise of distrust between regulators and regulatees. While the origins of

Introduction

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this distrust are complex, the basic notion is that regulators tend to believe that the entity being

regulated will not deliver on its promised quantity or quality of goods and services if left

unregulated. One of the core contributing factors to this distrust is the lack of accurate, real-time

data that provides the visibility regulators require to ensure that all players are staying

honest. Distrust, to a large degree, is a function of the lack of transparency, which in turn is

related to lack of information and visibility about performance.

In today’s ICT-enabled environment, however, advanced networks make it possible to address

this lack of transparency and visibility directly by generating the kinds of real-time data needed to

keep actors honest, and to keep regulators well-informed. In the era of open data and social

networking, regulatory outcomes are more likely to be achieved, at least partially by end-users

having access to more real-time information about performance as well as the ability through

social media and other tools, to share that information, and if necessary, to launch campaigns of

protest or concern. These advanced networks and technology thus play a central role in

stimulating and facilitating innovative regulatory practices.

From a strictly semantic point of view, smart regulation refers to the simple idea of ensuring that

a system functions correctly and efficiently. However, from a decision-maker’s point of view,

smart regulation is an attempt to involve citizens and communities in the future of their living

spaces by using the vast amounts of information made available thanks to information and

communication technology (ICT). Indeed, such technologies enable the stakeholders to address

some of the trust issues inherent in traditional regulatory systems, which are built on information

scarcity and distrust. ICT, on the other hand, may empower stakeholders to take advantage of

the new conditions of increasingly open data, transparency, and capacity for quickly escalating

grassroot campaigns aimed at holding companies and individuals accountable in ways that

were not previously possible. Traditional regulation can and should thus be refashioned to

benefit from these new conditions.

If cities are to practice smart regulation, it is necessary to have a clear understanding of its

meaning and consequences. So let’s begin by taking a look at the two largest attempts to use

this term as a policy concept:

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Smart regulation is about delivering effective results in the least

burdensome way (…). It involves efficient mechanisms to monitor results

collecting evidence, and using it to inform political decisions (…). It

requires a broader approach that systematically identifies all

opportunities to improve the efficiency and effectiveness of legislation

throughout the policy cycle. (European Union, 2010a)

Smart Regulation is both protecting and enabling (…). It is about making

regulation as effective as possible – and making sure it is never more

complicated or costly than it has to be. Smart Regulation is more

responsive regulation (…). This also means giving regulatees more

flexibility in terms of how results are achieved, as long as high standards

are upheld and the appropriate accountability measures are in place.

Smart Regulation is governing for the public interest (…). It is realizing

that the regulatory system is part of a complex global system which

requires governments and government departments and agencies to

work together towards common goals. (External Advisory Committee on

Smart Regulation, 2004)

Smart regulation draws upon a broad range of policy designs and instrument mixes as it

attempts to be context-independent and able to efficiently implement optimal practices in any

setting. Based on the inclusion of third parties in a multiplicity of institutional fields, the main

innovations of this type of regulation are 1) the endorsement of co-regulation1, 2) systematic

cooperation, 3) the establishment of governmental feedback loops 2 , and 4) a particular

emphasis on sustainability in economic, environmental, and social terms.

1 “Co-regulation” is normally used as a generic term for co-operative forms of regulation that are designed to achieve public authority objectives. Source: http://www.obs.coe.int/oea_publ/iris/iris_plus/iplus6_2002.pdf.en 2 A mechanism that allows stakeholders and end-users to provide feedback to the regulating body, which can in turn adapt and adjust regulations based on this feedback continuously.

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To fully grasp the complexity of the concept of smart regulation, this paper will begin by

focusing on the historical roots of the term, identifying why it might be understood in a particular

way in certain contexts. Reviewing its genealogy will also help us distinguish smart regulation

from other close relatives, such as good governance or better regulation, and also understand

why it is a much more interesting and powerful policy framework.

Once these elements are reviewed in the broader literature, we will classify the main

components of smart regulation that scholars, businesses, and public authorities have identified

around the categories of embedment, responsiveness and sustainability, three

features our research proposes as key pillars of smart regulation. By focusing on these

common features rather than on conceptual discrepancies of the term, our goal is to craft a useful

operational definition that can be clearly distinguished from other regulation-related policy tools.

The final step of our contribution to the literature on smart regulation is its application to a

specific realm of urban life: the built environment. We will conduct an analysis of selected real

estate projects based on the analytical lines developed in the study. Through their comparison,

we will highlight the relevance of smart regulation and its importance in the implementation

process.

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Genealogy of a concept

Smart regulation combines multiple dimensions and conveys several meanings. Understanding

the origins of how the term was used as well as by whom will enlighten current definitions and

uses of the concept.

Looking for more efficient regulation models: the United Nations Development

Program focus

Before the emergence of the expression smart regulation, what concepts were mobilized to

convey the idea of a more efficient form of governance? The first was the notion of good

governance. Historically, this concept rose in the 1980s in discussions around economic

development. According to John Graham et al. (2003), most of the United Nations Development

Program (UNDP) definitions of good governance revolve around five core-principles: 1)

legitimacy and voice 2) direction, 3) performance, 4) accountability, and 5) fairness. These core-

principles are detailed in Figure 1. These principles lay the basis upon which further attempts at

constructing more efficient regulatory frameworks have been developed including, by extension,

the framework of smart regulation.

Par t 1: Histor ical Background

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The Five Good Governance Principles The UNDP Principles and related UNDP

text on which they are based

1. Legitimacy and Voice

Participation – all men and women should have a voice in decision-making, either directly or through legitimate intermediate institutions that represent their intention. Such broad participation is built on freedom of association and speech, as well as capacities to participate constructively.

Consensus orientation – good governance mediates differing interests to reach a broad consensus on what is in the best interest of the group and, where possible, on policies and procedures.

2. Direction

Strategic vision – leaders and the public have a broad and long-term perspective on good governance and human development, along with a sense of what is needed for such development. There is also an understanding of the historical, cultural and social complexities in which that perspective is grounded.

3. Performance

Responsiveness – institutions and processes try to serve all stakeholders.

Effectiveness and efficiency – processes and institutions produce results that meet needs while making the best use of resources.

4. Accountability

Accountability – decision-makers in government, the private sector and civil society organizations are accountable to the public, as well as to institutional stakeholders. This accountability differs depending on the organizations and whether the decision is internal or external.

Transparency – transparency is built on the free flow of information. Processes, institutions and information are directly accessible to those concerned with them, and enough information is provided to understand and monitor them.

5. Fairness

Equity – all men and women have opportunities to improve or maintain their wellbeing.

Rule of Law – legal frameworks should be fair and enforced impartially, particularly the laws on human rights.

Figure 1 – Five Principles of Good Governance

Source: Graham et al. (2003)

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Another ancestor of smart regulation is the notion of co-regulation, that is, the idea of greater

participation of business actors and civil society in the regulatory process (see Scott, 2006;

and also EESC, 2004). The assumption behind co-regulation is that, due to an asymmetry of

information, the state may not always be the most suitable actor when it comes to steering

regulatory processes. Hence, private actors, experts or corporations in a given sector could be

more effective in framing regulations due to their greater knowledge of that sector. Following this

logic, one potentially better way of achieving regulatory optima would be to give these entities

enough freedom and independence for the creation of their own ad-hoc institutions. The state

would oversee what is being achieved in the field, and set objectives in terms of regulation, but

would not take part in the regulatory process itself. In other words, this regulation framework calls

for a more inclusive way of regulating, with the involvement of private actors of a given sector,

an idea that is often associated with the smart regulation discourse. Supported by the

multiplication of private actors in governance systems – notably with the rise of public-private

partnerships (PPPs) around the world – our understanding of smart regulation draws upon the

literature on co-regulation to provide a concept of governance that fits today’s changing realities

and relies on the innovations brought about by ICT.

From Better to Smart regulation: the European Union’s legal approach

In October 2010, Dr. Marianne Klingbeil, Director of the Better Regulation Project for the

Secretariat General of the European Commission, delivered a presentation titled, Smart

Regulation. Herein, she presented smart regulation as the natural extension of the former Better

Regulation concept that the European Commission developed in the previous decade. The

website dedicated to the promotion and application of this notion defines better regulation as

follows:

Better Regulation strategy is based on three key action lines:

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Promoting the design and application of better regulation tools at the

EU level, notably simplification, reduction of administrative burdens and

impact assessment.

Working more closely with Member States to ensure that better

regulation principles are applied consistently throughout the EU by all

regulators.

Reinforcing the constructive dialogue between stakeholders and all

regulators at the EU and national levels.

This definition focuses on two elements: cutting red tape, and engaging in deeper cooperation

with different stakeholders. The European Union view of smart regulation draws on these two

aspects and develops a discourse that has been widely accepted by the EU business sector. For

example, the European Council for Chemical Industries (CEFIC) defined a general agenda that

includes a program on Legislation and Institutional Affairs, which addresses the idea of better

regulation (see CEFIC website). Similarly, Eurochambres – the Association of European

Chambers of Commerce and Industry – has been a strong advocate of better regulation, calling

for its “acceleration and reinforcement”. These two business organizations are key strategic

partners for European policy-makers (see Eurochambres and CEFIC network presentation) and

their backing of better regulation is an important factor in explaining why this concept was

heavily supported by the European Commission.

Better regulation also appeared within a national context. As early as 1997, the United

Kingdom established a Better Regulation Commission that aimed at reducing administrative

obstacles to economic growth (see the presentation page of the Commission). Today, this

Commission has been dissolved, but the U.K.’s Department for Business, Innovation and Skills

has kept similar objectives.

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The extension of the EU’s better regulation agenda is the smart regulation agenda. EU partners

have been seeking efficient ways to effectively implement a common legal framework. According

to the EU (2010b), “Smart Regulation is not about more or less legislation.”3 This point is

important, for it is easy to find commentators that criticize the concept for being just another way

of promoting deregulation and free markets that help businesses develop their activities without

protecting consumers. The EU’s focus is slightly different: it is about making sure regulation is less

burdensome so that results can be achieved.

The ideas conveyed by the better regulation agenda and the smart regulation agenda have

traveled beyond Europe, most notably to Australia. The Australian government established a

Better Regulation Office in 2007, which published a Guide to Better Regulation Requirements

and annual reports on the Australian government’s regulatory efforts (see their website for

resources). Additionally, the Organization for Economic Co-operation and Development (OECD)

joined the EU in an initiative through the EU 15 Project, a program launched in 2008 aimed at

evaluating the regulatory capacities of fifteen EU countries using the framework of better

regulation (see their website). The published reports were made public to all OECD members,

thereby spreading the notions beyond regional boundaries.

Even though better regulation was successfully promoted, the European Union now uses the

expression “smart regulation”. The reason behind this semantic change was due to the

European Commission’s agreement to develop a concept of good governance that would

surpass the dimensions of administrative simplification and stakeholder consultation. Smart

regulation, as defined by the European Union, builds upon better regulation, but includes a

new dimension: impact assessment. Thus, by adding the element of evaluating policy, European

and national institutions can theoretically improve their policies, take into consideration the social

impacts of their actions, and more effectively identify the variety of stakeholders that should have

3 Note: not bold in the original text.

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a voice in regulation. By ensuring data sharing and real-time performance evaluation, ICT

constitutes a key tool enabling impact assessment. Thus, by adding the element of evaluating

policy, European and national institutions can theoretically improve their policies, take into

consideration the social impacts of their actions, and more effectively identify the variety of

stakeholders that should have a voice in regulation.

The support of business associations in Europe was renewed after this initiative. CEFIC produced

a Manifesto for Smarter Regulation in 2010 while Eurochambres gave recommendations to the

Commission for the implementation of the project. This support allowed the President of the

European Commission to set smart regulation as a priority in his second term.

Joining the European Commission in this initiative, the OECD renewed a partnership with the

European Union through the Sigma Project. This project aims at offering expertise and evaluation

on governance to the member countries, and it is notable that the concept of smart regulation is

fully integrated and promoted by the organization (see the project’s website for more

information). Such signs point towards a semantic and institutional concretization of smart

governance and its embedment into most European policy-making practices. The European

Commission has set a deadline for the second half of 2012 to produce a report on the

implementation of smart regulation, which will allow for future evaluation of the success of these

endeavors.

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Figure 2 – Intellectual origins of smart regulation

Source: New Cities Foundation

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Smart Regulation Strategy in Canada

While the EU developed a regulation agenda to simplify legal processes and achieve results

more quickly and efficiently, across the ocean, the Canadian government created an External

Advisory Committee on Smart Regulation in May 2003 whose goal was to “provide an external

perspective and expert advice on how federal government needs to redesign its regulatory

approach for Canada in the 21st century”. Canada’s interest in smart regulation stems from the

recognition of accelerating changes in the world: the increasing speed of modern society, the

rapid flow of commerce and instant access to information, the shift towards a knowledge-based

economy, increasingly complex policy issues, and increased expectations from citizens. As a

response to these concerns, the External Advisory Committee coined the term smart regulation to

clearly state that existing regulation frameworks need to:

support both social and economic achievement – providing citizens with

the protection they need to feel safe, supporting the transition to

sustainable development, encouraging a more dynamic economy and

creating opportunities for Canadians and a model regulatory excellence in

the world. (External Advisory Committee on Smart Regulation, 2004)

The Canadian government’s approach to smart regulation is based on five principles: 1)

effectiveness, 2) cost-efficiency, 3) timeliness, 4) transparency, and 5) accountability and

performance. In this sense, while also concerned with legal issues, the smart regulation

approach undertaken by the Canadian government is a more encompassing one. Eventually, if

the European and Canadian approaches are to be distinguished, while the EU seems to pay

particular attention to legal issues so as to enhance decision-making processes for its institutions,

the Canadian government approach seems to be driven by economic factors, that is, with

establishing a more economic growth-friendly environment as a main policy goal.

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Three key components of smart regulation:

embedment, responsiveness, sustainability

The EU and the Canadian government are the two largest contributors to the idea of smart

regulation. However, other organizations have also used the concept of smart regulation in

different contexts, often in the absence of a clear definition to support the term, thereby

expanding its definitional boundary while contributing to its vagueness.

Upon critically examining the discourses by business and government as well as the evolution of

existing definitions of smart regulation, our research identifies three key components that form

the structural axes needed to decipher the various usages of the term: embedment,

responsiveness, and sustainability. Additionally, these components provide the foundation upon

which policy tools and strategies can be developed. This section explores each of these

dimensions in turn.

Figure 3 – The Smart Regulation Triangle

Source: New Cities Foundation

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Embedment

Smart regulation is about embedded actors, sectors, policy issues, and also embedded

implementation. When discussing regulation, embedment refers to the interrelation and

interaction of different stakeholders in an environment that encompasses all social spheres and

sectors. A key common feature of the smart regulation concepts is their claim to be

comprehensive, that is, to comprise and to link up different parts of policy-making that hitherto

lacked connectivity. Thus, during a regulatory policy conference held at the OECD in 2010, the

Director for Better Regulation at the European Commission claimed that “smart regulation focuses

on closing the policy gap” by “investing more in policy evaluation and simplification”. Similarly,

a communication from the Commission to other European institutions states that “smart regulation

is about the whole policy cycle – from the design of a piece of legislation, to implementation,

enforcement, evaluation and revision”.

The U.S. Food and Drug Administration refers to smart regulation when explaining the

“enhanced systems across all […] programs” that they are putting in place “to ensure both the

prompt and responsive engagement that these companies need and deserve and clearer

guidance about what we expect from them and why (…). This is smart, responsive, regulation”.

The preceding examples illustrate how visions of smart regulation tie together different

dimensions of the decision-making process, the management, and the social spheres in complex

comprehensive systems.

Embedment, therefore, refers to the idea that smart regulation encompasses all policy regulation

processes at the highest level of decision-making – as the EU declarations highlight – but also all

dimensions of policy implementation when moving down to the sector level, including private

actors, local communities, and other stakeholders. Smart regulation requires mechanisms that

embed these actors deeply within the policy-making and implementation process.

Concepts of smart regulation take this extended range of actors as a point of departure to

improve processes of communication and coordination, thus creating a more coherent and

reliable context for policy-making and outcomes. These aims require a high degree of

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responsiveness particularly on the part of governmental institutions, an aspect that will be further

developed in the next section.

The objective of embedment does not only concern the coordination of different actors, but also

of policy instruments4 and institutions, according to Gunningham and Sinclair, two prominent

scholars in this field: “the best means of overcoming the deficiencies of individual instruments,

while taking advantage of their strengths, is through the design of combinations of instruments”

(Gunningham and Sinclair, 1998). Nevertheless, the authors caution against a kitchen sink

approach to policy design; instead, a few practical guidelines for instrument combination are

highlighted, of which the “instrument pyramid” is the most essential (see Figure 4).

Originally introduced to illustrate different levels of law enforcement, the authors make use of the

pyramid as a means to demonstrate the parsimonious5 rationality behind smart regulation: the

bottom line is always to start with the least interventionist measure deemed necessary to

attain a policy goal. This does not only hold true for the state, but also for the private sector and

the third sector, NGOs and civil society. Consequently, the instrument pyramid has three faces,

each with different levels of regulatory escalation; to achieve satisfactory outcomes, it may be

necessary to combine different faces and different levels depending on the specific policy

context. In this environment, government takes on a new role acting primarily as a facilitator of

regulatory initiative and a warrantor of a free flow of information.

4 ‘Policy Instrument’ is the term used to describe some methods used by governments to achieve a desired effect. The two basic types of policy instruments are regulatory and economic instruments. Source: http://dwb.unl.edu/teacher/nsf/c09/c09links/www.casahome.org/policy.htm 5 Parsimony: extreme unwillingness to spend money or use resources (Oxford Dictionary)

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Figure 4 – The Instrument Pyramid

Source: New Cities Foundation

In other words, the embedment dimension of smart regulation calls for a shift in policy-making

focus towards a more solution-oriented policy design process where all those who are concerned

by a specific issue, whatever their sector or position, are invited to contribute to the design

process.

Responsiveness

The second axis, responsiveness, deals with a major question inherent in most readings of smart

regulation: what configuration of actors and instruments can guarantee that regulation is

dynamic enough to fulfill their intended purposes without unnecessarily complicating the

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regulatory process? A responsive framework is one where errors, issues, and/or failures trigger

reactions, whether these reactions were explicitly asked for or not. Two key elements for a

responsive framework are the actors involved – in particular, end-users – as well as the

information available to all field players.

In this sense, multiple feedback loops seem to provide a satisfactory answer to the constant

danger of regulating too much or not sufficiently. Multiple feedback loops, that is, the possibility

for stakeholders and users at many different levels to trigger reactions when regulations fail, can

keep this danger at bay through a regime of perpetual monitoring and auto-observation which,

ideally, allows for a custom-made combination of measures and instruments for every scenario. In

the EU context, the principle of responsiveness clearly underlies an ‘end-user centered’ approach

to regulation – that is to say, the possibility for end-users to participate in the regulation design

process while signaling regulation failures:

Keeping end-users – employees, consumers, businesses and other

organizations – in mind during policy-making is the only way to consistently

create smart regulation. End-users are key to highlighting where there is a

problem and judging whether an intervention will be effective. Getting

them involved at every stage of the policy-making process – from choosing

how the Commission should intervene, to developing a policy, to the

Council and Parliament deliberating upon it and Member States

implementing it – means that interventions will be thought through more

clearly and better implemented from the beginning. It is the policy makers’

responsibility to involve the end-users, just as it is the end-users’ and Member

States’ responsibility to contribute to the process. (Jensen et al., 2010)

The literature breaks down the attributes of responsiveness into three major blocks: opportunities

for participation, reliable governance mechanisms, and an effective information policy, as shown

in Figure 5.

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Figure 5 – Proposal for an “end-user” focused EU legislation

Source: Jensen et al. (2010)

Concerning the concept of responsiveness, the third aspect is the most important: if effective

feedback loops are to be established, it is crucial to endow not only governmental institutions but

equally all subjects of regulation with the knowledge they need to assess regulation frameworks

and, if necessary, act upon them. As previously illustrated with the instrumental pyramid,

regulatory design flows do not have to – though they can – be government-centered: smart

regulation implies that if those who are regulated can auto-regulate to achieve positive

outcomes, then they should do so. Hence, the role of the government is slightly different from the

role it traditionally holds; it still, in fine, writes laws and regulations, and also should be held

responsible for regulation failures. However, public authorities no longer need to be the linchpin

of regulation design flows, but rather can act as referees, ensuring that regulation functions as

intended and that all stakeholders have access to the design process and to the same relevant

information. This shift in government’s role in the regulatory process can be linked to the role of

ICT which, by enabling open data and enhancing transparency, allows the establishment of a

more trustful relation between the regulator and regulatees. Smart regulation thus remodels

traditional regulatory systems marked by information scarcity and distrust by fostering data

sharing and real-time performance evaluation. Indeed, transparency is a frequently mentioned

feature in relation to definitions of smart regulation – as in the following report written for the

Canadian government:

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The accessibility and transparency of the regulatory system must be

maximized to promote learning and information sharing and to build public

trust at home and abroad in the quality of Canadian regulation and the

integrity of the process. Policy objectives should be clearly defined.

Regulators must explain their priorities and decisions, show why and how

these decisions are in the public interest, and be subject to public scrutiny.

Information on regulatory programs and compliance requirements should

be readily available in print and electronic formats. The regulatory system

should be more predictable to provide certainty to those being regulated.

Citizens and business should participate through active consultation and

engagement. (External Advisory Committee on Smart Regulation, 2004)

Thus, smart regulation definitions are prone to extend the concept of responsiveness beyond

closed information circuits, connecting government and society towards a multiplicity of feedback

loops that encompass all kinds of different actors and levels. End-users and information are key

for responsive smart regulation attempts to work: while smart regulation implies involvement of

all parties, as illustrated with the idea of embedment, it is also about all those involved in the

regulation design process providing feedback to improve and adjust for changing realities.

Sustainability

The third axis, sustainability, relates to a unique feature of smart regulation – at least at the

discursive level. Embedment and responsiveness are both concepts whose features appear in

other regulatory approaches. On the other hand, what makes smart regulation distinct and

innovative is its association with a concern for social and environmental sustainability.

Few policy papers that discuss smart regulation and/or projects that claim to be smart neglect

to establish a correlation with sustainability, defined as the simultaneous observance of

economic, environmental, and social benchmarks that do not compromise future resources.

Whereas the necessity of cutting red tape still figures prominently, environmental and social

concerns play a more central role than before. Compared to the relatively “humble” aim of better

protecting the environment, contemporary uses of smart regulation and sustainability are far

Smart Regulation

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more ambitious insofar as they aim to foster economic growth while at the same time ensuring

social equity and conservation issues. Because in practice it is difficult to balance these three

often competing objectives, the inclusion of sustainability into smart regulation agendas has

opened the arena for claim-makers from non-economic contexts, such as environmental groups.

In practice, sustainability as a key pillar of smart regulation implies that the regulatory framework

has to create incentives for pro-sustainable solutions and punishment mechanisms for non-

sustainable practices. The inclusion of these issues within the regulatory framework echoes

currently debated issues on how to account for externalities within the behavior-determining

equations of economic actors playing in a specific field. The most efficient and widely tested

solutions for factoring in externalities point towards highly complex monitoring systems that rely

on ICT systems such as smart meters, or pricing mechanisms such as the carbon markets. This

concern for best practices in sustainable growth and the possibilities offered by ICT solutions is

underlined in a statement by EUROCITIES (2012), Europe’s largest network of major European

cities, as a response to the EU’s follow-up communication on smart regulation:

City representatives were invited to participate in the advisory group of ‘ICT

for Sustainable Growth’, coordinated by the Information Society and Media

Directorate-General of the European Commission. Input to this work

included shaping the Commission’s recommendation on mobilising ICTs to

facilitate transition to an energy-efficient, low-carbon society (C2009/7604).

Because of this input, recommendations to member states now include

integrated actions that take full advantage of the resources and

knowledge that already exists in cities in different areas such as public-

private partnerships at local level or engaging with citizens for changes in

energy consumption.

In the EU’s case, the importance of sustainability in all its policy initiatives – and in the design of

a smart regulation framework in particular – stems from the desire to have “a high quality

regulatory framework that helps the EU to achieve the aims of its Europe 2020 strategy: smart,

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sustainable and inclusive growth” (European Union, 2010a). Similarly, the Canadian External

Advisory Committee on Smart Regulation (2004) also stresses the newness of sustainability as a

central concern for regulatory policies, and explains:

While many reform efforts originally focused on the enhancement of

productivity, competitiveness and other economic issues, their scope has

recently been broadened to include sustainability and environmental

impacts (…). International regulatory practice has led to an increased

emphasis on the rigour of impact analyses, leading to such innovations as

peer review of relevant science (U.S.) and emphasis on small business and

sustainable development (Australia, EU).

While environmental stakeholders are invited to take part in the design process based on the

principle of embedment, and to provide feedback within the responsive regulatory framework

established, when addressing issues of sustainability, the state plays the key role. Sustainability is

both the filter through which solutions must be evaluated before being implemented, and the

constraint that the overall regulatory framework should establish as a standard. The state is the

responsible actor, prior to the implementation of the regulatory rules, for filtering and identifying

practices or issues that might threaten environmental, social, and/or economic sustainability, and

for establishing the overall limits of what is possible.

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Figure 6 – Smart Regulation: A Sustainable, Responsive, Inclusive, Regulatory Framework

Source: New Cities Foundation

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Smart Regulation and Information and Communication Technologies (ICT)

Now that the primary axes of smart regulation are defined, it is important to understand what

phenomenon enables these principles to be put in practice in a real world setting. The research

points to information technologies as a key driver at the core of the smart regulation framework.

Why is ICT an integral part of the smart regulation discourse? When moving from

conceptualization to practice, ICT is the enabler that allows for the successful implementation of

smart regulatory frameworks at scale. ICT allows for the collection and dissemination of the types

of information needed to allay the distrust inherent in traditional regulation. Moreover, the

challenges of globalization and technological progress, in particular, call for a more flexible

mode of regulation. In this sense, ICT is the oil that allows the widgets of the smart regulatory

machine to move and work together effectively.

At the core of smart regulation concepts and at the confluence of the three axes discussed

earlier, lie the possible uses and impacts of ICT and big data analysis. Embedment-related issues

can be complex and the idea of the polycentric governance6 model that accompanies them

requires highly developed monitoring systems that are costly, or alternatively, the use of ICT to

develop cost-effective auto-regulatory systems. Similarly, the multiplicity of feedback loops,

needed for dynamic and self-adjusting regulatory systems, can draw upon ICT networks to

provide easier access to multiple sources of information and create new spaces for discussion

and exchange of information. In both cases, ICT can provide the conditions of transparency and

information required that both regulators and regulatees need to trust that the other party is

adhering to the rules of the game. Finally, as smart grid or smart meter examples around the

world illustrate, ICT opens a vast window of opportunities for more eco-friendly and sustainable

technologies to be applied in citizens’ everyday lives.

In sum, as a result of ICT solutions, it becomes more simple and cost-effective from a regulatory

point of view to aggregate the many dimensions related to a specific policy issue, while also

involving multiple stakeholders. Additionally, ICT allows users to provide real-time feedback, for

example, through crowd-sourcing tools. Such advances give citizens the tools to communicate

with the regulator, who, in turn, can develop flexible polycentric systems that are able to respond

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more quickly to citizens’ concerns. The three axes of embedment, responsiveness, and

sustainability are thus connected due to the opportunities offered by ICT, while the role of the

regulator changes from a top-down designer and implementer to a horizontal referee and

coordinator, one that is still ultimately responsible for the efficiency of the regulatory system, but

that does not need to be the initiator of all regulations. Thus, as illustrated in Figure 6, our

conceptual framework’s practicality lies in the power of current and available technologies

around the world.

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Towards an operational model of smart

regulation

To determine how smart regulation can be understood in a real world urban context, we

examined its application in the built urban environment, specifically in real estate development

projects. It is important to clarify that our analysis required retroactively examining whether or not

projects that have been qualified as ‘smart’ presented characteristics of smart regulation in their

design, implementation processes, and physical characteristics. Hence, the question posed for

the purposes of this study was: do the features recognized as successes in these different projects

echo the principles identified as key to smart regulation systems?

To examine this question, a simple analytical model was developed encompassing the following

four underlying principles, derived from the three axes of smart regulation outlined earlier:

1. Inclusive Project Design: The project includes all stakeholders that can

contribute to its success. In doing so, policy-makers must take into

consideration different points of view regarding infrastructure

deployment, and to adopt a long-term vision of the project. The idea

behind inclusiveness is linked to the involvement of stakeholders: the

embedment of the project within the broader context of its

neighborhood and of those interested in it.

2. Communication: The project involves infrastructure that is designed to

ease communication and collaboration between different actors

involved in the building work and in the regulation process, for example,

Par t 2: Case Studies

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based on ICT networks, adaptive technologies, or collaboration

schemes with neighboring buildings. The idea behind this principle is to

identify the responsiveness mechanisms set up as part of the regulation

of the project.

3. Spatial layout: The project is spatially designed to allow for interaction

between inhabitants and businesses, and takes into consideration the

notion of social sustainability. Concretely, it involves the creation of

public spaces – specific venues for the entertainment and functional

needs of the population – or a cap on real-estate prices so as to

maintain a social mix.

4. Environmental layout: The project is sustainable and respects the

principles of biodiversity preservation, energy efficiency, and limiting

greenhouse gas emissions. Beyond that, it creates an environment that

favors sustainable lifestyles through the encouragement of public

transportation use, or, for instance, through technologies that allow a

better monitoring of energy consumption, thereby factoring in the

environmental sustainability axis of smart regulation.

Figure 7 – Understanding Real Estate Projects Through Smart Regulation: Four Criteria Derived from the Smart Regulation Triangle

Source: New Cities Foundation

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Drawing upon these criteria, we analyzed a set of case studies by applying the principles above

to evaluate whether our proposed framing of smart regulation is consistent with empirical reality.

Our model should be understood as an ideal-type, that is, a set of features fundamental to smart

regulation. Our approach in selecting the case studies was to identify projects that either

explicitly mentioned taking a smart regulation approach, or projects that have been recognized

as innovative in terms of how they were regulated. Through this analysis, we aim to determine

whether smart regulation is an operational concept that can be grounded in reality, or

conversely, whether it is too a broad framework encompassing scattered elements that cannot be

applied to a specific sector.

Based on these principles, the examples of two standalone buildgins were considered first: the

hospital of Ciudad Real in Spain and the Torre Titanium in Santiago de Chile. Smaller real estate

projects are characterized by fewer stakeholders, a feature that can have a significant impact on

the implementation process. Indeed, while smart regulation calls for the involvement of

additional parties, multiplying the number of stakeholders creates more potential obstacles to

project implementation. The impact of the size factor in the applicability of smart regulation

principles is worth noting in this regard. Secondly, the two buildings are both branded as “smart

buildings”, which provides an additional point of analysis in relation to whether the concept of

smart regulation coincides with the notion of smart buildings. The question is to determine

whether new technologies are, in fact, supporting broader objectives of social interaction and

sustainability, or are mere branding tools designed for the attraction of investment. Stated another

way, our research will examine whether ICT in our case studies is a key factor allowing complex

forms of embedment, responsiveness, and/or sustainability within the regulatory framework.

Next, the neighborhood projects of Lyon Confluence in France and Vauban in Germany were

examined. Both were praised for their innovative forms of regulation and were designed to have

mixed functions – residential, commercial, and centers for entertainment, thereby complicating

the question of their regulation.

Finally, to change the scale of analysis further, new urban projects were taken into consideration,

namely, Putrajaya-Cyberjaya in Malaysia and CITE City in New Mexico, USA. There are

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33

several reasons for this. Firstly, new cities have to be placed in a particular context: they answer

a vision, they are an experiment, and they are expected to foster innovation. In other words,

new cities are good environments for experimenting and for the development of attempts to foster

original forms of governance. They are, therefore, a good field for the application of smart

regulation principles. In addition, they offer a double advantage: they tend to be well

documented, and the fact that they were created ex-nihilo allows for better monitoring of

regulatory innovations.

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Hospital General de Ciudad Real, Spain

The hospital was inaugurated in 2005 and serves as a major health center

for the whole region of Castilla-La Mancha. Its medical laboratories have

hosted several award-winning research projects. According to the

consultancy company IASIST, it ranks amongst Spain’s twenty best hospitals.

Dates: 1998-2005

Costs: 26.8 Million Euros

Size: 100,000 square meters

Stakeholders involved: Instituto Nacional de la Salud (INSAM), Gobierno de

Castilla-La Mancha, Servicio de Salud de Castilla-La Mancha (SESCAM),

Consultora de Hospitales Internacional (CODEH) S. A., AFA Arquitectos, FCC

Construcción

Legal framework: Cooperation of public actors on the national, regional

and local level with private consultancy and construction agencies.

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Torre Titanium La Portada, Santiago, Chile

Titanium La Portada is a 194m high building constructed in a financial

district of Santiago de Chile, “Sanhattan”. It was built following the

principles of energy efficiency and includes top-level technologies to

improve its environmental performance.

Project: Titanium La Portada

Dates: 2007 - 2010

Cost: US$120 millions

Size: 129,500 m2 of space, on 55 floors

Stakeholders: Inmobiliara Titanium S.A. (Deka Bank Group, Deka Immobilien

Investment, Sencorp S.A., Bethia S.A.), WestInvest Gesellschaft für

Investmentfonds Jegal Project & Construction Management, Accura

Systems, Dow Corning, Sirve Seismic Protection Technologies, b2bpakistan

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Lyon Confluence, Lyon, France

La Confluence is a redevelopment project located at the very center of

Lyon conceived as the extension of the historic city-center.

Project: Lyon Confluence

Dates: 1st phase, 1999 – 2010; 2nd phase, launched in 2010.

Cost: First phase of the project, €1.15 Billion.

Size: 400,000 m2 (phase 1) + 420,000 m2 (phase 2)

Stakeholders: This project takes the form of a public-private partnership,

where the private sector finances up to 65% of the project, and the

different administrative levels finance the remaining 35%. The main actors of

this partnership are: SPLA Lyon Confluence (Municipality of Lyon, the

metropolitan government (Grand Lyon), Conseil Général and Conseil

Régional), Sytral, Vinci Construction, Nedo (Toshiba), Unibail-Rodamco.

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37

Vauban, Freiburg, Germany

The neighborhood is frequently dubbed one of the greenest urban projects

of the past decade. Built upon the remains of a former French barracks, it is

now home to almost 5,000 habitants and the whole district is virtually car-

free. The two major aims behind the new neighborhood were to provide

urban living space for young families and to prevent urban sprawl. In 2002,

Vauban received the UN Dubai Award as an outstanding example of urban

best practices.

Dates: 1993-2006

Costs: 90 Million Euros

Size: 41 hectare

Stakeholders Involved: Freiburg City Council, Forum Vauban (neighborhood

association), several grass-roots building initiatives

Legal Framework: Public urban development project with a strong

emphasis on civic participation

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38

CITE City, New Mexico, USA

The Center for Innovation, Testing and Evaluation (CITE) is a project

planning the building of a testing and evaluation facility for new and

emerging technologies, especially renewable energy technologies.

Project: “The Center” – New Mexico

Location: Pegasus Holdings will be building the town on 15 square miles just

west of Hobbs, which has a population of around 43,000.

Year: Operational in 2014

Stakeholders: Pegasus Global Holdings, the State of New Mexico (non-

financial support including resources, open space and workforce)

Expected cost: The CITE City will require an initial investment of around $400

million and considering the added value of jobs, research grants and

private customers, and the possibility of selling some of the energy the

facility will produce, the total investment will eventually cost around $1

billion to complete.

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39

Putrajaya-Cyberjaya, Selangor, Malaysia

Putrajaya and Cyberjaya were developed as pioneering green technology

townships in Malaysia. They embody the Malaysian Government’s

commitment to environmentally-sound and sustainable practices.

Project: Putrajaya-Cyberjaya Digital Green City 2025

Year: 1995

Stakeholders: Government of Malaysia (Ministry of Energy, Green

Technology and Water), leading Malaysian research institutions and

Putrajaya Corporation, private companies and non-governmental

organizations.

Experts associated: Kyoto University, Okayama University, National Institute

for Environmental Studies (NIES), Asia-Pacific Integrated Team, Universiti

Teknologi Malaysia (UTM), Malaysian Green Technology Corporation and

others.

Firms concerned: Putrajaya Holdings, Loh & Loh Corporation Berhad, Hibikii

LED, Malay-Sino Chemicals Industries Sdn. Bhd and others

Current costs: $ 8.1 billion

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Figure 8 – Smart Regulation and selected real estate projects:

a graphic summary of the analysis Source: New Cities Foundation

Smart Regulation

41

Smart regulation applied

Regarding the first criterion characterizing smart regulation of the built environment, inclusive

project design, the role of the regulator is crucial to ensure the embedment of all different

stakeholders in the project. In this matter, the examples of Lyon-Confluence and Vauban are

instructive: because those projects had to respect and engage with an existing landscape, the

public authorities showed a great willingness to embed different stakeholders into the regulatory

process. Acting as a coordinator between private developers, inhabitants and several local and

international NGOs, the public authorities worked on assimilating the different visions of the

project into concrete realizations, thereby fostering the embedment of all actors into the project.

The scale of these mid-sized projects and their leadership by public authorities constitute the key

to the success of their inclusive project designs.

Indeed, in larger-scaled projects led by public authorities, such as Putrajaya, the number of

stakeholders and the amount of capital involved is large, making coordination between the

different participants’ interests a delicate issue. Even though smart cities like Putrajaya pursue a

well-defined aim (to establish a center of knowledge-based innovation, thus triggering growth

within the national economy), the relationship between conceptual means and economic ends is

often not well articulated, that is, many developers seem to rely upon the beneficial means of

clustering high tech industries, elite universities and a well-educated workforce without

considering the possibility that this concept may not be a panacea for success if the right

stakeholders are not included in the planning process (i.e. the right level of embedment is not

attained).

Moreover, because they gather a relatively small number of stakeholders, more modest projects,

such as Torre Titanium and Ciudad Real’s hospital seem to be more focused on coordinating the

actors of the project rather than adopting a more global vision, and therefore seem to exclude

third actors from the regulatory process that might be essential for the project’s vitality and

sustainability. Indeed, by not embedding environmental experts in the construction phase, the

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42

Torre Titanium is being criticized for its high carbon emissions and other environmental

disruptions. By not embedding any actor specialized in sustainable development, Ciudad Real’s

hospital also does not comply with the sustainability requirements of smart regulation. Therefore,

both the scale and the nature of the regulator constitute a key factor in determining successful

inclusive project designs.

Let us now examine the next feature of smart regulation in the context of the built environment:

communication. Many of the projects reviewed draw upon elaborate ICT networks that ensure

or incite communication. In principle, three different contexts can be identified. First, there are

ICT networks that serve a range of objectives, which result from the daily routines of an existing

institution. Such is the case with Ciudad Real’s new hospital: since the operational procedures in

most hospitals are highly standardized, the margin of innovation is comparatively low in this

setting; improving ICT infrastructures mostly means an incremental adaptation to the daily needs

of the medical staff.

Second, ICT networks serve the goal of auto-observation and regulation, mostly in the context of

environmental sustainability. Examples can be found in Lyon-La Confluence and Putrajaya-

Cyberjaya, where inhabitants can draw upon monitoring technologies to observe and evaluate

the environmental impact of their daily activities – with the incentive to promote more sustainable

behavior. The feedback loop thus established can be understood as an example of smart

regulation as defined in the present report, particularly since it draws upon the citizens’ voluntary

self-evaluation instead of governmental programs of command and control. However, these new

schemes of ICT-based environmental policies have yet to prove their effectiveness.

Finally, ICT networks are also being implemented to stimulate innovation, such as in Putrajaya-

Cyberjaya. Here, the technical diversification of feedback loops does not serve previously

defined goals such as a more efficient workflow or reduced carbon emissions, but rather to meet

the objective of developing new ideas. Putrajaya-Cyberjaya and CITE City embrace the notion

that by integrating many different actors in a common network for exchange and communication,

they can foster innovation. While this idea is not baseless, the relationship between

communication infrastructure and concepts such as innovation and creativity is far from clear. In

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43

this context, the concept of smart regulation reaches its limits for the simple reason that the

degree to which innovation can be planned is restricted.

However, if ICT constitutes a fundamental tool for data sharing and real-time performance

evaluation, the presented case studies allow us to distinguish two different uses that the projects’

regulators make of these technologies. Indeed, while projects such as CITE City, Torre Titanium

and Ciudad Real’s hospital perceive ICT as a tool designed to significantly increase the quantity

of data shared amongst the stakeholders, other projects such as Lyon Confluence and Putrajaya

view ICT as a crucial support mechanism for enriching the quality of the project’s governance on

a daily basis. In these cases, ICT networks facilitate closing the feedback loop between the

regulator and the regulatees. Responsiveness can thus be ensured in the built environment not

only by convening a project’s stakeholders in workshops, consultations and local commissions,

but also by using ICT networks to increase the quality of the exchanges on a daily basis, thereby

ameliorating the project’s transparency and contributing to the establishment of a trustful

environment between various stakeholders.

In terms of spatial layout, the third feature in smart regulation of the built environment, one may

discern a similar difficulty concerning the relation between cause and effect: how, precisely,

does a certain spatial layout contribute to specific modes of social interaction? There are

important differences not only in the actual spatial layouts of the projects reviewed, but also in

terms of the functions they were intended to fulfill.

There is a clear correlation with the projects’ varying scales: in the examples of Torre Titanium

and Ciudad Real’s new hospital, form (i.e. spatial layout) mostly follows function and the scope

for truly innovative solutions is limited. The medium-sized projects analyzed here represent a clear

contrast in this regard: since La Confluence and Vauban cannot be reduced to one particular

function and because they incorporate many different stakeholders with strong elements of civic

participation, their spatial layout was more open for contestation from the beginning of the

planning process. Not surprisingly, in both cases, the participatory approach to planning

decisions has helped generate a living environment that mostly satisfies the habitants’ needs and

desires. For example, in Vauban a ban on cars was achieved through civic participation despite

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initial resistance from the municipality; today it is counted among the major features that make

the neighborhood worthwhile for living and stimulating for social exchange and civic

engagement.

Concerning the new cities of Putrajaya-Cyberjaya and CITE City, it is as yet unclear whether

their respective spatial infrastructures will stand the test of time. In some respects, they represent

amalgams of the projects discussed above insofar as they try to combine the well-defined spatial

necessities of research and production with the polymorphic potentialities of sharing a social

space. In doing so, both of these projects deliver some sophisticated proposals, but they still face

a major challenge: social space cannot necessarily be pre-determined, but rather is organically

appropriated by its inhabitants over time. It remains to be seen whether the new cities attract or

generate the strong communities able to achieve this vital task.

The fourth and final principle of smart regulation as it applies to the built environment,

environmental layout, represents a common claim of all projects reviewed in the present study.

This is due to the fact that sustainability – one of the axes of smart regulation and mostly

understood as an eco-friendly project design – has become a buzzword which lends itself to

multiple purposes. However, the six case studies differ widely in terms of their actual and

potential degree of environmental sustainability. Starting with Torre Titanium and Ciudad Real’s

new hospital, neither project paid much attention to aspects related to sustainability when it

would have been crucial to do so, that is, during the planning and construction phase. While

some positive details can be highlighted, neither of the two buildings can be described as

landmarks of green urbanism. However, both cases make only moderate use of the sustainability

rhetoric. Measured by their own standards, both projects thus perform fairly well.

The medium-sized examples of La Confluence and Vauban constitute positive examples of

sustainable urbanism: both neighborhoods developed original ideas to save energy, prevent

emissions and to motivate sustainable behavior amongst its residents. Both projects have been

certified by independent environmental agencies and are frequently cited as best practices in

terms of urban sustainability. However, it is unclear to what extent these experiences can be

replicated elsewhere. For instance, Vauban is accepted as an almost car-free district not least

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because it is well served with public transport systems and bicycle lanes. The experiences of La

Confluence and Vauban are evidence that the construction of participative and environmentally

sustainable urban districts is possible under real-life conditions, and that they can be affordable.

Finally, the new cities depict a somewhat paradoxical scenario. Putrajaya-Cyberjaya and CITE

City, apply the vocabulary of green and/or sustainable urbanism with high ambitions, drawing

heavily upon technological support. However, the solutions proposed still appear somewhat

fragmented – for instance, neither case includes a comprehensive project for public

transportation. Finally, the enterprises and research centers that will settle in these new

developments are not always compatible with standards of environmental and/or social

sustainability. Thus, if one applies a notion of sustainability that extends beyond the cities’

material fabric and includes the impact of their major stakeholders’ economic activities, the

image of smart urbanism becomes somewhat questionable.

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One central question, which cannot be answered fully at this stage, is what distinguishes a

successful case of smart regulation from a failed one. In the development of the concept, it has

become increasingly difficult to establish comprehensive measures of success; as the plethora of

actors, tools and institutions involved becomes ever more extensive, classical schemes of

command and control give way to institutional regimes in which knowledge and power are more

dispersed than was previously the case An essential point in the literature on smart regulation is

that it is a public authority that sets the standards, assures the free flow of information and enacts

penalties where necessary. However, as explained, the role of public actors changes as the

regulatory processes become more decentralized. Moreover, ICT is a key element of smart

regulation: these technologies enable efficient information sharing and real-time performance

evaluation, which allows existing regulatory systems built on traditional notions of information

scarcity to be retooled. As such, public authorities at the local level must fully embrace the

available technologies and mechanisms by which information can be gathered and analyzed to

establish effective regulatory systems, including crowd-sourced data from citizens via social

networking and other big data analysis tools. As urban populations grow and cities become

increasingly important centers of decision-making, local authorities should not just familiarize

themselves with the implications of using advanced technology networks, but should take an

active part in redesigning the regulatory process to enable the embedment, responsiveness and

sustainability inherent in smart regulation. (Of course, the same notions of smart regulation

apply at state and national levels – and should be encouraged – in terms of adopting the

methods and technologies necessary to promote regulation adapted for the twenty-first century.

However, it is at the local levels where new forms of regulation may begin to see the most

impact).

Conclusion

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The varied facets of smart regulation leave many open questions. The reasons for this ambiguity

are manifold: first, smart regulation has been positioned in the context of an entire genealogy of

new approaches towards public administration, one whose origins can be traced back to the

1970s. Thus, smart regulation is conceived of as the latest offspring of good governance

theories, and its conceptual boundaries within this genealogy are necessarily blurred.

Second, smart regulation has been used in very different contexts, which can be organized

roughly along a state-market distinction: while in certain cases, smart regulation advocates

demand a simplification of market access and a leveling of trade policies, in other contexts, the

term is used to promote new modes of cooperation between public and private actors, which

are not so easy to label. Both conceptual strands – the market- and the state-centered – are vital

to develop an adequate understanding of smart regulation’s possible implications.

Third, smart regulation is a concept developed to instruct political decision-makers and,

therefore, implies a broad range of normative assumptions about “good” and “bad” outcomes of

regulation. This study did not engage with these underpinnings, but it should be noted that the

bulk of literature dealing with or articulating models of smart regulation avoids the effort to

develop a sound normative foundation. Therefore, interested actors may appropriate the concept

selectively.

Through a systematic approach of examining the historical roots and development of the term,

this book has attempted to extract the most salient and common points from the varied discussion

of smart regulation to identify the key axes that form its pillars. By developing this framework,

our goal has been to provide the tools necessary not just to analyze, but also to operationalize

smart regulation. Finally, the idea of applying the framework to the built environment and a

broad range of different real estate projects – in terms of scale and in terms of their respective

objectives and stakeholders – was to expose the operational definition to a robustness check.

Thus, the analysis in this study has aimed to provide the clarification and conceptual boundary

that the term, smart regulation, requires – a critical element if different cases are to be analyzed

and compared with each other.

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As the twenty-first century’s urban population increases at a rate of two people per second, the

staggering pace of urbanization requires a new approach to ensuring that cities are well

governed and that all sectors are efficiently regulated. In a new era where partnerships across

the public, private, and non-profit sectors will be essential to developing and implementing the

solutions needed to address challenges of rapid urbanization, smart regulation is at the core of

what will allow these partnerships to succeed. An inclusive, responsive, flexible and up-to-date

regulatory framework that guides new models of collaboration among the city’s various

stakeholders is paramount to achieving a shared vision and outcomes for its citizens. Thus, the

importance of the term cannot be overemphasized; understanding the foundations upon which

smart regulation is built and especially how it can be applied in the urban context brings us

closer to this goal, firmly establishing the concept’s usefulness and importance for the city of

tomorrow.

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Written Material

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regulation-WSPO-8YHCJX Last View: 10/11/2012]

Cisco (2011), Connected Public Spaces: Securely Connect People and Objects Throughout the

City, Cisco corporation solution overview [Online:

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Othman, A.; Tze Wee, W. (2011), Putrajaya Green City 2025, Power Point presentation from The 16th

AIM International Workshop [Online: http://www-

iam.nies.go.jp/aim/AIM_workshop/16thAIM.html Last View: 10/11/2012]

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Largest Tech Testing and Evaluation Center, Pegasus Global Holdings press releases [Online:

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evaluation-010911.html Last View: 10/11/2012]

Polese, M. (2011), “Urban-Development Legends: Grand theories do little to revive cities” in City

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Mumford, P. J. (2010), Enhancing Performance-Based Regulation: Lessons From New Zealand’s

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Websites

Australia’s ‘Better Regulation Office’ website: http://www.betterregulation.nsw.gov.au/ [Last View

10/11/2012]

Center for Innovation, Testing and Evaluation (CITE) website: http://www.cite-city.com/ [Last View:

10/11/2012]

Eurochambres website: http://www.eurochambres.eu

European Chemical Industry Council (CEFIC) website: http://www.cefic.org/ Last View: 10/11/2012

European Commission’s ‘Better Regulation’ website:

http://ec.europa.eu/governance/better_regulation/index_en.htm Last View: 10/11/2012

UK’s Department for Business Innovation and Skills ‘Better Regulation Commission’ presentation (this

page is a snapshot taken on 04/03/2010 by the National Archivres):

http://webarchive.nationalarchives.gov.uk/+/http://www.berr.gov.uk/whatwedo/bre/revie

wing-regulation/commission/page44086.html Last View: 10/11/2012

OECD and EU ‘Better Regulation in Europe – The EU 15’ project website:

http://www.oecd.org/gov/regulatorypolicy/betterregulationineurope-theeu15project.htm

[Last View 10/11/2012]

“Putrajaya – City in the Garden” blog post by probyte2u:

http://probyte2u.hubpages.com/hub/Putrajaya-City-in-the-Garden [Last View: 10/11/2012]

Support for Improvement in Governance and Management (SIGMA) project website:

http://www.oecd.org/site/sigma/