New York s bike sharing program wins a Nordic nod of approval. Innovation, entrepreneurism and sustainability spur Stockholm according to deputy mayor Ulla Hamilton Deputy mayor for entrepreneurism, labor and traffic and previously the environment, Ulla Hamilton has played a leading role in some of the city s greatest successes, including development of Stockholm s broadband network, auto congestion pricing plan and sustainable housing. Here she discusses those and other efforts to keep the city growing and healthy. Stockholm is admired around the world for style, sustainability, and openness. What are Stockholm s greatest achievements? It s a fantastic time because Stockholm is one of the fastest growing cities in Europe. On population, it is bigger than ever and growing. New businesses are springing up and it s a very creative city. It s a big change from 10 or 15 years ago. Is that growth because Stockholmers are having more children or because more people are moving in? Both. More people are coming, and Stockholmers with children used to move away, but now are staying. People are coming from other parts of Sweden, and other countries. What is Stockholm doing right to attract and keep people? We have a lot of interesting companies and interesting jobs. Combine that with the city overall we have good restaurants with great chefs, entertainment, closeness to nature, both in terms of greenery and water. It is a combination of things. What government programs make Stockholm so attractive? It s very important to develop the city in a sustainable way. Also, we developed a broadband network in the mid 1990s, and that has led to a booming ICT industry, the development of game companies like DICE and Spotify. It s a fiber network open to whoever needs to rent capacity. How did Stockholm put in the information and communications spine without it costing Stockholmers anything? I was vice chairman of the company when we discussed how to develop the business idea. It was part of an existing network, a cable network that was developed into a fiber network. We thought that it was important that small companies that couldn t afford to develop a system on their own could hire the capacity they needed to develop their business ideas. So in the late 1990 s Stockholm was very enthusiastic about IT development. And because
Stockholm is one of the fastest growing cities in Europe. New businesses are springing up and it s a very creative city. It s a big change from 10 or 15 years ago. of that, we attracted a lot of companies, both from Sweden and from other countries. Now the network covers more than 90 percent of all real estate in the Stockholm area. All the schools are connected and most of the businesses as well. And the capacity is high 1,000 megabit per second. So this is a case where public investment in infrastructure drove the health of the economy? Yes. And we didn t use any taxpayers money because we kept it affordable. We let companies rent the capacity, and we didn t develop the system until we had customers. It also became a revenue engine for the city? Yes. Do you think investment in infrastructure generally drives growth, or does growth occur and then you invest in infrastructure? I think that investment in infrastructure is very important in order to get growth. What would you do to improve Stockholm further? We should use the tools that we have today to better develop education. We have the game industry. You can use, for example, Battlefield or Minecraft, as a tool to push innovation in education. Young people are used to having smart phones and ICT all around them. You have to have something in education that connects to that, and that might be one way of attracting more people to learn mathematics or physics and so on. Stockholm has done well in Cities of Opportunity for the past three years in areas like sustainability, health and safety, intellectual capital and innovation. What explains Stockholm s excellent standing? On sustainability that goes way back. Stockholm was named the first European green capital in 2010. And that was because we ve been dealing with sustainability for a long time. In the 1920 s, people began to be interested in how to create green areas in a growing city. That interest has continued, and the city has been developed in a green way. The city has been so dependent on clean water, and Lake Mälaren, which surrounds Stockholm, is our drinking water reservoir. So it has always been very important to take care of the environment in Stockholm, and in order to do that, you have to have smart engineering solutions. Beginning in the 1940 s we built a very big water treatment plant, so the water infrastructure is very well developed. We started early to develop the subway, and a big percentage of people use public transport. We developed the district heating system in the early 1950 s. These are engineering solutions., but also environmentally friendly solutions. For example a district heating system based on renewable fuels means you have low CO2 emissions. And if many people use public transport, running on renewable fuels, that also lowers CO2 emissions. You mentioned earlier Fortum Heat, the large biomass facility to turn garbage into energy. How does it work? How do you get Stockholmers to sort their garbage? The system to burn waste and produce electricity and district heating is connected to 80 percent of all the houses and apartment buildings in Stockholm. And in order to do that in an environmentally friendly way so you have clean waste to burn, you have to sort the household waste, and that s done by families. The incineration is environmentally friendly with tough environmental rules. It s a very smart way of taking care of the waste. We also have tough legislation regarding plastic packaging. We just recently decided upon a new biogas strategy, where we are collecting food waste to produce biogas. The biogas is used by many buses and taxis. We decided to collect 50 percent of household food waste to produce fuel, and the program will grow over time. 2 Cities of Opportunity PwC
Stockholm entrepreneurs from Spotify to Mutewatch, Vamos, Mozoomi and more join Ulla Hamilton on a trip to Manhattan. You were saying that by making Stockholm environmentally friendly, you attract younger, more environmentally conscious people. We know that people are more and more concerned about environmental issues. We notice since Stockholm was named the European green capital in 2010, people like to boast that they live in a very environmentally friendly city. It is important to tell people what we are doing to be more sustainable in the future. We inaugurated plans for new districts with high environmental goals, and people are proud to be part of a city that s working in a sustainable way. In Sweden, what is the balance of power between the city and regional and national governments? There is always a conflict between the city and the national government, and that goes for every country. But it s important that we as a growing city, thanks to the tax structure, keep much of our tax money. It s a good situation. How will you continue to spur innovation and entrepreneurism in the future? We are lucky in this area, and it s because of several reasons. We have a very interesting mixture of life science companies, ICT companies, clean tech companies, and the entertainment industries. And Stockholm is a fairly small city, so it s easy for executives and innovators to meet one another. And that creates a creative, innovative climate. Also Swedes are very interested in solving problems, and it has become fashionable to start their own companies. In the past five or six years, universities and high schools have become interested in helping students begin their own companies. Before that the universities were more focused on producing academics. Now we have very close cooperation among businesses, the universities, and the city. The atmosphere is totally different today. Considering not just Stockholm, but Malmö, Uppsala,Gothenberg and other cities, what does government do to foster innovation? A politician should try to find arenas where people can meet to exchange ideas. But a politician must know when not to interfere and disturb development. It s very important to understand the government s role. In other words, stand back a little, allow more room to innovate? Yes. Also in Stockholm we have open data resources so companies and Stockholmers as well can develop websites, or apps, or other business ideas. Small businesses created 800,000 jobs in Sweden from 1990 to 2012, over twice what Sweden had in 1990. What explains that and what part is government playing? There has been a big change in Sweden since the present government took over in 2006. PwC Cities of Opportunity 3
The past decade, a voucher system was created for elderly care, healthcare, schools and so on. That led more people to consider starting their own companies rather than just being employees. So it was a combination of things. It s been a tremendous change in the atmosphere and attitudes in Sweden and Stockholm since the 1970 s, where we had a big state, and the attitude was the welfare state should take care of you. Today s voucher system has provided the opportunity for big and small companies to provide services, rather than the government doing so. The competition in the service area brings development and productivity. Rather than building a cradleto-grave government structure, you re letting people play a greater role in it? Yes, and the voucher system is still financed by taxpayers, but it s using the taxpayer s money in a more efficient way. Speaking of public-private partnerships, do you think injecting the profit motive into things like building a hospital is a good thing? The county council in Stockholm is right now building a new hospital. And it s a public-private partnership with the construction company Skanska. That s one example where the public sector and the private sector can work together to find smart, cost-effective solutions. quite a lot of different services that we can t even imagine today. Just look at the growth of the smart phone, for example. You mentioned that Stockholm has 201 different nationalities living there. That s a very big challenge. Historically, it has taken a long time for immigrants to Sweden to be part of the workforce. But we are trying hard to see that immigrants can start working as soon as possible. We have programs where people with academic qualifications can learn Swedish and work at the same time. We also have programs where, for example, engineering companies connect with trained engineers who recently moved to Stockholm. people as possible leaving their cars at home when they go to work. To do that, you have to give more space for buses, for example, and give more space for bicycles and pedestrians. And that s what we re working with right now. You have to take away some parking spots for cars. And, hopefully, more people will choose the public transport systems, and also ride bicycles more. Their own bicycles as in Amsterdam or rental bicycles? Both. It s very popular, and the number of people using the bicycle has at least doubled during the last 10 years. Can bike lanes and rental bikes work in an aggressive, non-bike environment like New York? Sustainable development is very important in Stockholm s attractiveness. We also developed a broadband network in the mid-1990s, and that has led to a booming ICT industry. It can work, but it has to be made quite clear for car drivers and buses that bicycles are a part of the infrastructure. It s very important that different travelers accept each other, or there will be a lot of conflict. This is hard and it will take time. Different travelers have to behave in a polite way. Eightyfive percent of Stockholmers live close to where they work, so it s easier to use bicycles. Stockholm is growing. Immigrants are coming and Swedes are doing their duty making more Swedes. Is there a threat of unemployment as technology makes many jobs obsolete? No. Technical development also leads to development of services. So I don t see that as a threat. Actually the risk is that the city doesn t grow. In a growing city you will always have development of new businesses. I m absolutely sure of that. Five years from now we will have That makes it easier for immigrants to become part of Swedish society, but it is still a big challenge. What is Stockholm doing to ease traffic congestion? The challenge is that the city is built on islands. Whether your city is big or small, there are ways to make traffic easier, but you have to regulate to avoid chaos. In Stockholm, we are promoting bicycling and walking as the best ways to move around the city, and having as many A few years ago I was told Hammarby Sjöstad and the Royal Seaport were models of sustainable housing that were exportable beyond Stockholm. How are those projects going? The Royal Seaport area is developing quite well and the area is one of 18 programs in the Clinton Climate Initiative. We have very good cooperation between business and the city to fulfill the tough environmental goals. The retrofitting program for the city-owned apartment buildings is also going quite well, and the energy use in apartments has been halved. That s a very interesting program 4 Cities of Opportunity PwC
We have a very interesting mixture of life science companies, ICT companies, clean tech, and entertainment companies. And Stockholm is a fairly small city, so it s easy for executives and innovators to meet one another. because most of the buildings involved are older, and the energy use is high. Three quarters of all the apartment buildings built in Europe after the Second World War are similar to the buildings that we ve been retrofitting in Stockholm. So we learn from the experience. Is the retrofitting paying for itself in terms of energy and other savings? Yes, during some years. But from the city point of view this is an investment in the future What is your thinking on the future of Stockholm in terms of growth? Is it good? Is it bad? And, what would you like to see happening? It s good because the alternative is very bad. To be competitive, to be creative and innovative, it s crucial that the city grow. But we have to grow in a sustainable way. We have to have green areas, and people like the closeness to nature. This helps to attract people to Stockholm. It s a tough challenge for the city and the larger Stockholm area, because we will have constructed 140,000 apartments by 2030. But the alternative to growth is much worse. It seems that there are more leading women in business and government in Scandinavia than in other places. It has to be so and it has to come in other countries, too. In an open society, in a transparent world, women should be part of leading positions as well. If you were to leave Stockholm, among the 30 cities next year in Cities of Opportunity, where would you go, and why? There are a lot of nice cities, so it s a tough choice. Buenos Aires has a lot of challenges, but the climate is nice and they have a lot of opportunities. San Francisco is also a very nice city. I would pick Buenos Aires. It s a city with a lot of potential. But the traffic situation is quite interesting, and they also have quite a lot to do to develop a waste management system. Overall, the, environmental issues are very important, but there are great opportunities to develop the city by learning from Stockholm. www.pwc.com/cities www.pwc.com 2014 PwC. All rights reserved. PwC refers to the PwC network and/or one or more of its member firms, each of which is a separate legal entity. Please see www.pwc.com/structure for further details. This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PwC Cities of Opportunity 5