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Smart cities: Implications of urban planning for human resource development

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Smart cities: implications of urban

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Mohan Thite
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Department of Employment Relations & Human Resources,
Griffith University, Nathan, QLD, Australia

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 Human Resource Development International
Vol. 14, No. 5, November 2011, 623–631

PERSPECTIVES
Smart cities: implications of urban planning for human resource
development
Mohan Thite*

Department of Employment Relations & Human Resources, Griffith University, Nathan, QLD,
Australia
(Received 27 May 2011; final version received 24 August 2011)
Downloaded by [Griffith University] at 19:48 30 January 2012

This paper looks at creative or smart city experiments around the world that are
aimed at nurturing a creative economy through investment in quality of life which
in turn attracts knowledge workers to live and work in smart cities. It highlights
the need for and broad nature of human resource/talent development initiatives at
the intermediate level, that is regional and city level, as opposed to organizational
and national level. Using the literature on economic geography, it provides a
useful theoretical framework to cross organizational boundaries and look for
factors that influence the decision of knowledge workers in choosing a location to
live and work. The implications of urban planning on the theory and practice of
human resource development are explored.
Keywords: smart/creative city; quality of life; quality of place; urban planning;
economic geography; locational branding

The twenty-first century economy increasingly revolves around knowledge or

creative workers that are seen as a key sustainable competitive advantage (Thite
2004a). It is also a global economy where the intellectual capital can flow freely
anywhere in the world depending on where the knowledge workers believe that they
can achieve optimum work-life balance.
The importance of work-life balance to employee performance and retention is
well established in the literature (Yasbek 2004). However, the literature on employee
motivation, retention and attrition has mainly focused on the job, work and
organization specific factors with very little attention paid to factors beyond the
organizational boundaries. An exception to this trend is the growing literature on the
concept of ‘job embeddedness’ which takes into account both on- and off-the-job
factors. Reflecting the idea of people’s being ‘situated or connected in a social web’,
embeddedness has several key aspects: the extent to which people have ‘links’ to
other people or activities, the extent to which their jobs and communities ‘fit’ other
aspects in their ‘life spaces’, and the ease with which links could be broken, that is,
what they would give up (or ‘sacrifice’) if they left their present settings (Mitchell
et al. 2001; Lee et al. 2004). Some of the off-the-job factors that are considered under

*Email: m.thite@griffith.edu.au

ISSN 1367-8868 print/ISSN 1469-8374 online

Ó 2011 Taylor & Francis
http://dx.doi.org/10.1080/13678868.2011.618349
http://www.tandfonline.com
 624 M. Thite

the model are ‘links’ with schools and membership in sports/social/religious

associations, ‘fit’ with type and size of location, its climate, amenities and activities,
and ‘sacrifice’ associated with home, community and geographical location. Often,
employees stay with their employer despite being unhappy with their employment
due to non-job related reasons such as families’ inability or reluctance to move to
another location.
Florida (2002a) asserts that access to talented and creative people is to modern
business what access to coal and iron was to steel making and it determines where
companies will choose to locate and grow, and this in turn changes the way cities can
compete. Increasingly, successful national and regional economies are measured by
their capacity to generate wealth through innovation and to attract and retain a
skilled workforce to support the economy. While the firm is central to the model of
competition, Porter (1990) clearly enumerated and identified the importance of the
role of cities and regions, noting that the bases for advantage are intensely local,
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including the process of creating skills, as the quantity and quality of human capital,
infrastructure and technology vary from region to region. Research by Glaeser,
Sheinkman, and Sheifer (1995) found a strong relationship between human capital
and city growth. Regions develop competitive advantage based on their ability to
mobilize the best people, resources and capabilities required to turn innovations into
new business ideas and commercial products.
As a result, leaders and commentators in public policy around the world have
begun to embrace the idea of ‘smart cities’. Initiatives by local government
authorities, as exemplified in the web portal, www.SMART-Cities.net, promote
sustainable development by providing an information exchange of best practices
for city renewal between Europe and Asia. Cities such as Edmonton in Alberta,
Canada are pursuing a vision for their city as an international smart city through
‘smart research, smart workforce and a smart culture’ (Mothe and Mallory 2003).
Similarly, Austin, Texas in the USA is another city known for its so-called ‘Wired
for Talent’ strategy that is designed to attract talent from around the country
(Florida 2002b). At the regional level, the European Union regularly ranks
European cities based on six defining characteristics, namely, smart economy,
smart mobility, smart governance, smart environment, smart living and smart
people (www.smart-cities.eu). City Mayors (www.citymayors.com) is an interna-
tional think tank for urban affairs and believes that, ‘in this century, metropolitan
areas, rather than nation states, will shape the world’s social, cultural,
technological and economic agendas. This process will lead to increased
competition for human, intellectual and material resources but will also force
cities to cooperate with and learn from one another’. The nexus of competitive
advantage has thus shifted to those regions that can generate, retain, and attract
the best talent.
The above initiatives are essentially planned and lead by local governments in
partnership with local business leaders. The human resource management (HRM)
literature on talent attraction and retention has typically underplayed the role of the
governments in providing an overall life experience that acts as a glue to attract and
retain talent. This paper explores what local governments can do to increase the
attractiveness of a place and improve quality of life that lifts locational branding of a
place and acts as a magnet for knowledge or creative workers to call it ‘home’. By
adopting a theoretical framework found in the literature on economic geography, it
examines the factors that attract people and employment to a place and draws broad
 Human Resource Development International 625

lessons that can be learnt by smart city experiments around the world. It concludes
with broad implications for human resource development.

Why do organizations and people prefer some places over others?

Researchers, particularly in the field of economic geography, have grappled with
the challenge of explaining why and how cities and regions prosper or decline.
Ancient civilizations developed along the banks of the river systems to attain
prosperity in agriculture. In the industrial age, cities such as Detroit, USA
developed as hubs of automobile manufacturing only to decline later as
globalization of manufacturing took hold. The New Economic Geography
(NEG) focuses on ‘economies of scale and spacial development’ to explain how
firms and workers concentrate around areas that bring together producers,
suppliers and markets. On the other hand, the New Neoclassical Urban Economics
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(NNUE) focuses on the ‘optimal preference-satisfying behaviour’ of firms and

individuals in choosing a location to set up the firm or take up residence (Storper
2011). Thus, the growth of Silicon Valley is seen as a ‘self-reinforcing process of
agglomeration’ by NEG whereas NNUE would argue that workers go there to join
others with similar skills and form a community of like-minded individuals and
families and firms go there to seek these workers.
Related to the above discourse is the question, ‘do people go where jobs are
or do jobs go where people are’? Conventional wisdom suggests that people
follow where jobs are and therefore, jobs drive economic development.
Accordingly, government policy makers have traditionally focused on attracting
firms to set up their operations that offer job opportunities. However, researchers
are increasingly focusing on the importance of human capital or knowledge
workers as a primary driver of economic development arguing that those places
that attract talent thrive (Lucas 1988; Glaeser 2000). The human capital has been
measured either in terms of educational attainment of the population or more
broadly, a set of knowledge-intensive occupations that make up the ‘creative
class’, that is, ‘people who add economic value through their creativity’ (Florida
2004).
Several studies have shown that artistic/cultural and technology/innovation
communities that constitute a cultural economy are best able to attract talent and in
turn boost urban growth (Stolarick and Florida 2006; Wojan, Lambert, and
McGranahan 2007). Specifically, places that feature universities, consumer service
amenities and are open to tolerance and diversity have been shown to be the key
factors in attracting and retaining talent (Florida 2002b). Glaeser (2005) also
highlights the importance of ‘skilled cities’ offering cross-pollination of learning
among skilled workers and climatic conditions to explain why people flock to sunbelt
cities or those that offer cultural facilities to offset cold weather. Clarke et al. (2002)
claim that amenities in the form of urban attractions, such as parks, art galleries and
orchestras, drive urban growth in cities that become ‘entertainment machines’. Using
a stage-based model for regional development, Florida, Mellander, and Stolarick
(2008), examined how ‘technology, talent and tolerance’ combine to affect regional
development and find that tolerance and certain occupations such as computer
science, engineering and management services, play a key role.
However, the above approaches that trace urban growth in terms of the
movements of people in search of lifestyle preferences, such as amenities, have been
 626 M. Thite

questioned by some on the grounds of their assumptions about human behaviour

and lack of attention to geographical dynamics of production and work. For
example, Storper and Scott (2009, 153–4) argue that these approaches are ‘devoid of
any consistent analytical description of the factors underlying the origins of urban
centres’ as they cannot prove that ‘purported preferences are real . . . and that they
really underlie the alleged resulting action’. They contend that individuals will not be
able to exercise their locational preferences unless those locations offer relevant
employment opportunities. To buttress this point, Storper and Scott (2009, 162)
point out that ‘additional semiconductor engineers subsequently gravitated to
Silicon Valley, would-be actors and directors to Hollywood, and financial analysts to
London because that is where their talents could be effectively deployed and
rewarded in growing specialized clusters’.
Both NEG and NNUE perspectives as discussed above are not exclusive but
complementary approaches as the process of urbanization is complex and dynamic
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and ‘no social science theory can completely endogenize all causes of change’
(Storper 2011, 340).

What attracts people to a place?

Quality of place and life
Donald (2001) identifies eight quality of life indicators which appear to cover the
gamut of what much of the literature identifies as being the features of quality of life:

. Social cohesion, indicated by participation, inclusion, belonging, recognition

and legitimacy.
. Human services, including quality and accessibility of health care, community
support services and social safety net.
. Learning, including education and skill levels, quality of public education and
quality of public research institutions.
. Community safety, indicated by levels of crime.
. Affordable housing, availability and accessibility.
. Public transportation, availability and accessibility.
. Environmental quality.
. Culture, recreation and lifestyle amenities.

A KPMG survey (cited in Memphis 2000) of more than 1200 tech workers examined
factors that made a job attractive and found that ‘community quality of life’ was the
second most important factor after salary and more important than proximity to
family and friends, benefits, stock options and established company. Similarly,
Arthur Anderson’s Best Cities survey of 1433 senior executives worldwide found that
a city’s suitability to business is more dependent on the local availability of
professionals and entrepreneurial activity and not just tax incentives and cheap land
(Borden 2000).

Regional sustainability
Markusen’s (1996) concept of ‘Sticky Places in Slippery Space’ which relates industry
structure to prospects for sustained competitive advantage of industrial regions
provides one of the most illuminating frameworks for assessment of smart cities.
 Human Resource Development International 627

‘Stickiness’ refers to a region’s ability to retain competitive advantage by ensuring

that its industries do not move to lower cost locales or to more innovative regions –
the slippery space of global production. This stickiness is determined by a number of
factors, such as the type of work a region undertakes in a particular sector—high
value and innovative work versus low-end cost-based work, and the structure of
local firms—external or local, among others.
In order to survive in the new environment, communities need both magnets and
glue (Kanter 1995). ‘Magnets’ refer to the factors that attract a flow of external
resources such as new companies and new people to renew and expand skills, and
contribute to the economic health of the region. ‘Magnet factors’ typically include a
healthy and well-educated workforce, clean environment, vibrant business climate,
and a solid social and cultural infrastructure. But communities also need ‘glue’ to
hold them together. In addition to the physical infrastructure that supports daily life
and work (such as roads, sewers, electricity and communications systems),
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communities require a social infrastructure to solve problems and promote the

economic and social well-being of all their members. Interestingly, many factors that
comprise the magnets of a local region especially the solid social and cultural
infrastructure also effectively comprise its glue. However, we need to recognize that
local governments alone cannot make a place ‘cool and hip’ as sometimes
overregulation can kill (LaFaive and Weislak 2003).

Learning cities
The idea of learning organizations has been around for some time. But the idea of
learning towns and regions is a newer concept. In 1996 – the European Year of
Lifelong Learning – both the Organisation for Economic Cooperation and
Development (OECD) and the United Nations Educational, Scientific and Cultural
Organization (UNESCO) released their major reports on lifelong learning and a
growing number of European nations launched learning city and regional initiatives.
Faris (2006, 3) reports that, ‘two success determinants of learning cities are emerging,
namely the community’s ability to learn to build and sustain partnerships within and
across all community sectors, and to foster participation of all community members,
including the most disadvantaged’.
The concept has emerged as companies and regions try to pool their resources,
expertise and learning strategies in the context of globalization (OECD 1998).
Research indicates that the highest levels of technological innovation are coming
from areas in which firms are clustered together around related products and ideas.
Famous regions such as Silicon Valley, Route 128 in Massachusetts in the US and
the Emilia-Romagna region in Italy have created models for industries to emulate.
However in the most recent research, social capital and the kind of entrepreneurial
ingredients that have been identified above are critical factors for the success of
regions and towns (Wolfe 2000).
Conceptually, industry clusters have become the sine qua non of economic
development policy in many parts of the world (Rosenfeld 2002). Clustering provides
firms with access to more suppliers and specialized support services, experienced and
skilled labour pools and the inevitable knowledge leakage that occurs where people
meet and talk about business. The advantages of place draw not only similar but also
complementary enterprises and, as a result, clusters become a breeding ground for
new clusters.
 628 M. Thite

Lessons from smart city experiences

Nurture a creative economy
According to UNCTAD (2004), ‘globally, creative industries are estimated to
account for more than 7 per cent of the world’s gross domestic product and are
forecast to grow, on average, by 10 per cent a year’. To create an environment in
which people and businesses can succeed, a stable macro-economic environment is
an essential condition. Upon that foundation we can create the conditions for supply
side success: high levels of education for people of all ages, first-class transport and
telecommunications infrastructure, a favourable regulatory and tax framework.
To attract talented workers regions need to welcome and reach out for the
inclusion of newcomers. Regions also need to seek out, nurture and reward a broad
range of talent including artists, entrepreneurs, technology workers and innovators.
Just rewarding one group or a small subset of groups stifles the creative energy that
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sustains smart cities. For instance, Austin, Texas in the USA sponsors ‘Biobashes’
and stages 360 Summit to encourage artists, entrepreneurs, technology workers to
meet and share work. Young talented people in Pittsburgh created movement they
call ‘Ground Zero’. It is an open network of doers, makers and creative people who
collaborate on projects focused on urban environment and culture (Memphis 2000).

Investment in social capital

Investment in education and associated infrastructure is crucial for any smart city to
prosper in the knowledge economy (Hargreaves 2003). Such investment includes

(1) access to quality education for all people, including the disadvantaged;
(2) education and career pathways to people of all ages for lifelong learning; and
(3) improving technical infrastructure, such as broadband and video conferen-
cing for remote areas.

It needs to be noted that more than the infrastructure, it is the people’s mindset
about learning that is critical in the success of any investment in social capital.
Knowledge thrives even in places where there is low environmental support if people
are hungry to acquire knowledge (Thite 2004b). In many Asian economies, parents
are eager for their children to learn science, maths and technology and devote
substantial part of their meagre income for educating their children. It is this
intrinsic determination and motivation of parents and children to learn seemingly
unexciting but important subjects that shape our future.

Investment in quality of life

Clearly talented workers are attracted to quality environments. There is the need for
governments to promote a range of quality life experiences. For instance, promoting
peak experience like outdoor activities, such as surfing, hiking, bungy jumping,
trekking, cycling, rock climbing, canoeing and kayaking, have worked in some
regions. For others promoting lifestyles that value arts and culture are important.
Indeed some regions showcase arts and culture, develop and support local bands,
indigenous music, local arts and music festivals, and offer authentic ‘Root’
experiences. Still other regions use their diversity as a magnet for talent. For
 Human Resource Development International 629

instance, some areas rely on multicultural experiences such as a range of cuisines,

festivals and concerts.

Locational branding
In the global war for talent, enterprises face a stark choice: create a brand or get
branded. A concerted effort is needed to convey a powerful, compelling and
consistent message of the ‘smart city’. The state of Victoria in Australia highlights
the importance of branding. Brand Victoria and ‘Victoria – The Place to Be’ are
destination-marketing tools that aim to build a strong and meaningful identity for
Melbourne and Victoria by positioning the state as a destination of choice for
international students, investors, skilled migrants and tourists. It is a creative
solution and brand strategy that provides common brand values, key messages and a
unique brand mark and visual identity (Victoria 2010).
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The best promotion for attracting people to a smart city comes by word of mouth
from those who have decided to relocate. It is important that a smart city identify all
touch points with new hires and ensure that all the images and messages are
compelling and relevant. Managing the impressions of new workers may be one of
the best promotion tools for any place. Smart workers are networked not only with
family and friends but also with colleagues around the world who may also think
about relocating.
Locational branding has a major impact on employer branding strategy adopted
by individual firms. While promoting the company as a ‘compelling place to work’,
employers can also promote a place as a compelling place to live if the location is
known for its quality of life, including civic amenities. Therefore, government–
industry partnership is essential for a successful branding strategy.

Implications for human resource development

So far the HRM/human resource development (HRD)/talent management literature
has paid scant attention to the contribution from economic geographers and urban
planners who recognize the importance of human capital and use the framework of
creative economy and smart/creative cities to explore how to develop and sustain urban
growth and development. It is important to recognize the view point of economic
geographers as knowledge workers typically tend to concentrate around cities and
regions. This paper attempts to fill this gap. It is also important to look at the theory
and practice of HRD at the intermediate level, that is city or regional level, as
compared to organizational or national level. The increasing growth of mega-cities,
particularly in the emerging economies, adds further importance to this perspective.
This paper provides some preliminary thoughts in this direction for future research.
Employee attraction and retention are seen as key challenges in HRD by human
resources (HR) practitioners in the backdrop of ageing population, critical skill
shortages and increasing global mobility of labour pool. The factors that influence
talent attraction and retention are multi-faceted and include both on- and off-the-job
factors. While employers have primary responsibility to improve the overall work
environment within the organization, they also need to be mindful of the ‘location’
factors, particularly in creating an employer brand aimed at projecting ‘a compelling
place to work’. Here, the location branding that alludes to the positive elements of
working in a particular job location becomes quite important and includes civic
 630 M. Thite

amenities, such as educational facilities, cultural activities that cater to a diverse

population, infrastructure, housing affordability and cost of living, that determine the
quality of life.
While employers have no direct influence on urban planning and location
branding, they have a vested interest in actively collaborating with local government
agencies, political leaders and community welfare groups in improving the
attractiveness of a place. A smart city requires a smart workforce. Therefore, both
urban planners and employers need skilled workers. This common need requires
both to work together in improving social capital and enhancing locational
branding. Quality of life in a place depends on the overall life experience of its
citizens which can augment the ‘stickiness’ of a place in the slippery slope of
globalization. The concept of industry clustering also refers to the development of a
‘community of knowledge workers’ where the knowledge and skills of people
reinforce each other creating a multiplier effect and a highly ‘networked’ community.
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In this context, the industry associations can play a pivotal role to influence
government policy and decision making on urban planning and development on behalf
of their member organizations. Another important element of industry–community
engagement is academia–industry partnerships in curriculum development, internships
and research collaboration as continuous learning is a key strategic weapon in a
knowledge economy. Further, as part of corporate social responsibility, firms need to
broaden and deepen their commitment to the community they serve by helping
disadvantaged groups to gain access to learning and employment opportunities. For
example, the information technology enabled services industry in India actively
collaborates with local educational institutes and government bodies to update
curricula and hold job fairs to fill skill gaps of its workforce (Gurjar 2009).
It is only when all the stakeholders join hands together that smart cities and
social/intellectual capital can truly develop and flourish and not just remain a catchy
slogan. When we see human resource development as part of city/region/nation
building endeavour, new insights emerge helping HR practitioners to widen their
horizons and see their function in a much broader, socially inclusive and
commercially sustainable perspective.

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