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A Look at Digital Cities
Stockholm, Sweden
Photo credit: © Mauricio Hora
Stockholm stands on fourteen islands on Sweden’s south-central east coast. The city’s name tells you how it was born: as a fortress made of logs (“stock”) on an island (“holm”) guarding the entrance to lake Mälaren

Encouraging competition with an open-access broadband network

Stockholm has become one of the leading information and communication technology (ICT) centres in the world, offering its citizens groundbreaking services. What is behind the city’s success?

Sweden has been named the world’s most networked economy in the 2010 edition of ITU’s report: Measuring the Information Society. Its levels of household computer and Internet access are very high, with an Internet user penetration of around 88 per cent. Published in February 2010, the ITU report sees Sweden keeping its top ranking and likely to remain a leader in ICT development. For example, Swedish operator TeliaSonera was the first worldwide to launch commercial 4G services in Sweden and Norway in December 2009. The report features the latest ICT Development Index and ICT Price Basket — two benchmarking tools to monitor information society developments worldwide. The Index ranks 159 economies.

A report published in March 2010 by the World Economic Forum (WEF) also ranked Sweden the world’s most connected economy. The WEF report ranks 133 countries for their ability to leverage ICT services to achieve sustainable economic growth and promote innovation and education for its citizens. “It happens to us a lot,” says Torbjörn Bengtsson, head of ICT promotion for Stockholm’s investment promotion agency, on learning that his country had also topped the rankings in WEF’s Global Information Technology Report.

“We are leaders in many ways for example in usage of technology and if you look at mobile infrastructure, we are always up there.” It is no surprise to Mr Bengtsson and his colleagues at Stockholm Business Region Development because Sweden has been a pioneer in ICT development since the mid-1970s, realizing great benefits for its citizens through access to groundbreaking services.

Before these reports, Sweden’s capital Stockholm was recognized by the United States think-tank, the Intelligent Community Forum, as one of the “Top seven” intelligent communities of 2009. To gain a place among the “Top Seven”, communities undergo an intensive analysis of their strategies, programmes and results in five categories: broadband deployment, the ability to create and sustain a knowledge-based workforce, digital inclusion, innovation, marketing and advocacy. They have to excel in all of these areas. This makes them the most compelling models of best practice in economic and community development worldwide, according to the Intelligent Community Forum, which studies the impact of broadband and related ICT on communities.

In that same year (February 2009), Stockholm was named the first Green Capital of Europe by the European Commission. The city was appointed for its “holistic vision that combines growth with sustainable development and includes the ambitious target of becoming independent of fossil fuels by 2050”.

Sweden’s broadband strategy

Sweden’s Ministry of Enterprise, Energy and Communications announced in November 2009, that 90 per cent of all households and businesses in the country should have access to broadband at a minimum speed of 100 Mbit/s in 2020, with 40 per cent expected to have this access by 2015.

A strategy statement on the ministry’s website says that it is important that Swedish businesses and households in all parts of the country are able to benefit from the opportunities that access to powerful broadband gives in order to change traditional working methods, enable development of new services and business models and new patterns of behaviour.

The statement goes on to add that “all households and businesses should also have good opportunities to use electronic public services with broadband access. As more and more services in society become digital, everyone must be given the opportunity to be connected. Everyday life should run smoothly. It is, in essence, a matter of democracy and rights.” According to Sweden’s broadband strategy, it is for market players to invest in infrastructure. And “the government’s task is to strive for well- functioning markets and give market players good business conditions through suitable regulation”.

The Stokab ICTmodel — A success story

Key to Stockholm’s success has been the ICT model established in the capital where one out of every eleven Swedes lives. In the early 1990s, Sweden liberalized the market for telecommunication services. In order to sustain strong competition, the Stockholm government decided to build a network, which would be open to all on an equal basis. To support the operations of both the public and private sectors — as well as to offer better opportunities to individual citizens — the Stockholm government set up a company called Stokab in 1994 to build a fibre-optic network throughout the municipality as a level playing field for all operators.

Stokab dug up the streets just once, installed fibre everywhere and began offering transmission capacity to competing carriers for less than it would cost them to build their own networks. “The city was going out and asking for good offers for telecommunication services, but because Telia (the national incumbent operator then) had all the infrastructure, they could set the price they wanted. So, the city decided that if it could create infrastructure for everyone on equal terms, it would be good for competition,” says Anders Broberg, Director of Communications at Stokab.

Today, the 1.2 million kilometre network has more than 90 operators and 450 enterprises as primary customers. The Stokab infrastructure is used by the city’s administration and by 100 000 students and schoolchildren in the Stockholm area. What sets Stokab apart is that because it is owned by the City of Stockholm, its aim is to benefit citizens and businesses directly. “The goal for the owners is not to make a profit but to create a good environment for companies,” says Mr Broberg. Profits are always reinvested in the network. “Between 1994 and 2008, we invested EUR 300 million in the network,” adds Mr Broberg. Stockholm’s Mayor has set a goal of connecting 90 per cent of all households to fibre by 2012. Stokab has begun the expansion of its network to the remaining blocks of flats in the city.

Online services for all

It is this type of innovation and investment in infrastructure development that has pushed Sweden to the top of ICT rankings. Having established the infrastructure through Stokab, Stockholm’s city government announced a programme in 2007 to invest USD 72.2 million over four years to develop e-services for citizens. The city now provides an impressive list of online services. For example, citizens can follow City Council meetings online and view the associated documents. Applications can be made for parking permits. Couples can make an appointment for a wedding ceremony at City Hall — and nine out of ten couples now do so via the web. Among parents, the same percentage applies online for a child’s place at a kindergarten.

It is also possible for family members to view information about the city’s care for elderly people. The online system saves money by managing municipal operations at all levels, and by automating routine administrative tasks while fostering collaboration among agencies and the savings made allow each project to be self-financing.

The success of the Stokab model — providing essential communication infrastructure that can be used by all — is one that has been noted around the world, including in Australia, Singapore and the United States.

Kista Science City

A further element to Stockholm’s successful development of ICT services has been the growth of its science city at Kista, a district in the northwest of the capital. Kista is particularly prominent in mobile and wireless communications, multimedia and broadband systems. This is complemented by strong growth in several fields that make intensive use of ICT, such as biomedical and environmental engineering, as well as nanotechnology.

What was originally a science park has become a thriving community with 120 000 residents, 4653 companies and 30 000 employees together with 5000 students in research institutes. “What is so special about Kista is that generally, science parks are developed around universities but ours was developed around companies,” says Anette Scheibe, CEO of Kista, which is dubbed a science city because it provides the infrastructure for residents as well as the employees. “Some 3000 more apartments will be built within the next five years and there will be a new light rail within three years,” adds Ms Scheibe.

In 1976, Ericsson moved its Svenska Radioaktiebolaget (SRA) unit to Kista district. This was not just a routine move. “It laid the foundation for what would be called Sweden’s Silicon Valley, although at that time, mud was more common than silicon.” Ericsson now employs a third of all employees in Kista and has helped attract a wealth of suppliers, partners and competitors. Because of their proximity, established firms and newcomers find it easy to exchange business ideas and to grow. Public-sector organizations and research and educational institutions are also present in Kista, including the computer science department of the University of Stockholm as well as a branch of the Royal Institute of Technology.

“Kista is important for us as the entire business sector is there,” says Fredrik Nyström CEO at PlusFourSix, which produces mobile applications. “We can find like-minded entrepreneurs in Kista.”

The entrepreneurs look to the researchers to provide the technology for start-ups or new product launches and research students become the talent which the companies hire to develop their products. The dominance of the Nordic region in ICT with Nokia and Ericsson means that Kista’s proximity to the airport has attracted many international names such as IBM, Intel, NEC, Huawei, Philips and Oracle.

“From Stockholm’s Arlanda airport, it takes less than an hour’s flying time to reach 80 per cent of the world’s market for 3G-net infrastructure,” says Jim Bowes of Anritsu, the Japanese company which manufactures testing and measuring equipment for communications.

The Kista model attracts a lot of interest from other cities to develop similar technology parks with over 150 visits a year from what Ms Schiebe calls non-technical tours. One of the reasons is that the model is economically robust with subsidies only forming 20 per cent of the science city’s turnover. “We are trying to create projects and applications that are interesting enough that companies will pay for them,” says Ms Scheibe.

As well as stimulating economic and social development of its own citizens, Stockholm is now looking beyond its own territory to assist developing economies with its ICT experience. For Ms Scheibe, one of the key focuses for Kista’s companies in the future will be the development of applications for mobile phones so that healthcare advice and financial services can be delivered to citizens in developing economies. As she put it: “We in Europe are using cell phones for Facebook and networking, but in developing countries when people get connected through a cell phone, there is genuine welfare available for those people.”


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