Better Funding - Draft Action 13: Co-creating a business model approach for cities

  • Cristina (Commu... profile
    Cristina (Commu...
    5 February 2018 - updated 3 months ago
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From the city perspective, urban digital transition involves addressing not only the creation or selection, but also, continuous provisioning and utilisation of digital services for citizens and other stakeholders with appropriate – scalable, adaptable and sustainable – business models. Originally, business model was developed as a tool to design, visualise and communicate novel digital business and service concepts in an efficient manner and direct strategy implementation. In order to exploit the opportunities of digital transition, cities need a business model approach that could help them to expand from traditional closed service business models, meaning that the digital services are provided by the cities themselves or outsourced from a single service provider, to selected or co-created collaboration-based open or mixed business models. New services are often selected from a variety of earlier developed alternatives or co-created with companies, researchers and citizens, and questions such as how to carry out the selection/creation, experimentation and validation of the new services and respective business models may arise. In addition, the development contexts for new services and their respective business models may vary from Living labs to Incubators, Think tanks, NGOs, Universities, Companies and Cities themselves. In these kind of contexts, existing off-the shelf products and services flux with city-generated or user-generated content, highlighting the differences in cities’ and companies business models, functioning and cultures, resulting in challenges such as ownership, control and accessibility issues, balancing the competitive and collaborative tensions between stakeholders, prioritisation of users and usage of various data, or dependency on a single supplier.

Although smart city initiatives often seek to address urban context such as open innovation platforms, knowledge in practice is still largely in silos, and vertical structures dominate in the public sector. Digital transition challenges existing city services, processes, structures, policies and regulations. Therefore, we see that cities themselves need to understand why and how to utilise business model approach and what kind of business models could help them guide digital transition. Hence, business models can be considered as an umbrella approach to digital transition for fostering better use and spread of knowledge that emerges in the city context, across different vertical and horizontal domains, and for accelerating urban growth by breaking the silos.


Objective of the action: Developing knowledge and experience on business model approaches for cities which will help cities to use more effectively their current budgets and generate new revenue sources. 

Main goal the action is implementing: Goal 2 Systematic adoption of business models in urban digital transition.

Level of governance: Local.

There is an increasing need for innovative ways to explore and exploit opportunities for digital transition in the urban context. In digital transition, the cities themselves need to build and take into use an appropriate business model approach through action learning based co-creation. This co-creation would take place best between peers, cities with similar enough challenges and objectives for digital transition. To facilitate learning from co-creation, however, the peers should also represent enough variation in their profiles, regulative domains, and co-created business models. Specifically, we propose co-creating a city-specific business model approach to facilitate the selecting/creating, experimenting, validating and provisioning of digital city services.


  • A business model approach for cities includes co-creating a business model framework and approach that cities can apply for.
  • Assessment, development and selection of existing or currently available services for ensuring their scalability, adaptability and sustainability in digital transition.
  • Exploration and co-creation of new RDI ideas and concepts, demand-driven solutions, and new digital services to be made available for the citizens and other stakeholders through digitalisation.
  • Exploitation and commercialisation of prototypes or pilots of currently used digital city processes and services.


Co-creation takes place best through action learning, where various stakeholders come together to learn, share and co-create. To co-create a business model approach for cities, the relevant stakeholders should be selected utilising the quadruple helix thinking, keeping the inter-city collaborations as the core of action.

Dissemination of the outcomes could take place through existing networks, platforms and public initiatives.

Development of the business model approach will be developed as expert work, and piloted and implemented in collaboration with relevant the city networks.

This action is closely related to Action 6 and Action 7.


  • Preparation: 2018 Q1 & Q2 Involving stakeholders/partners.
  • Implementation: 2018 Q3 – 2019 Q3.
  • Assessment: 2019 Q4.

Action leader

Eindhoven and Oulu.


Helsingborg, Eindhoven, Lyon, Urbact, Eurocities, Sofia.

We are looking for smaller cities who are looking to co-create with us. What is needed?

  • Funding for preparations, facilitation and support of the process, and actual co-creation participating cities.
  • Involvement and commitment of the key decision-makers in the cities to root the developed business model approach to the cities.
  • Network for disseminating the business model approach the city-specific examples.

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