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)

This paper looks at creative or smart city experiments around the world that areaimed at nurturing a creative economy through investment in quality of life whichin turn attracts knowledge workers to live and work in smart cities. It highlightsthe need for and broad nature of human resource/talent development initiatives atthe intermediate level, that is regional and city level, as opposed to organizationaland national level. Using the literature on economic geography, it provides auseful theoretical framework to cross organizational boundaries and look forfactors that influence the decision of knowledge workers in choosing a location tolive and work. The implications of urban planning on the theory and practice ofhuman 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 orcreative workers that are seen as a key sustainable competitive advantage (Thite2004a). It is also a global economy where the intellectual capital can flow freelyanywhere in the world depending on where the knowledge workers believe that theycan achieve optimum work-life balance.

The importance of work-life balance to employee performance and retention iswell established in the literature (Yasbek 2004). However, the literature on employeemotivation, retention and attrition has mainly focused on the job, work andorganization specific factors with very little attention paid to factors beyond theorganizational boundaries. An exception to this trend is the growing literature on theconcept of ‘job embeddedness’ which takes into account both on- and off-the-jobfactors. 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’ toother people or activities, the extent to which their jobs and communities ‘fit’ otheraspects 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 (Mitchellet al. 2001; Lee et al. 2004). Some of the off-the-job factors that are considered under

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

Human Resource Development International

Vol. 14, No. 5, November 2011, 623–631

ISSN 1367-8868 print/ISSN 1469-8374 online

� 2011 Taylor & Francis

http://dx.doi.org/10.1080/13678868.2011.618349

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the model are ‘links’ with schools and membership in sports/social/religiousassociations, ‘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 employmentdue to non-job related reasons such as families’ inability or reluctance to move toanother location.

Florida (2002a) asserts that access to talented and creative people is to modernbusiness what access to coal and iron was to steel making and it determines wherecompanies will choose to locate and grow, and this in turn changes the way cities cancompete. Increasingly, successful national and regional economies are measured bytheir capacity to generate wealth through innovation and to attract and retain askilled workforce to support the economy. While the firm is central to the model ofcompetition, Porter (1990) clearly enumerated and identified the importance of therole of cities and regions, noting that the bases for advantage are intensely local,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 capitaland city growth. Regions develop competitive advantage based on their ability tomobilize the best people, resources and capabilities required to turn innovations intonew business ideas and commercial products.

As a result, leaders and commentators in public policy around the world havebegun to embrace the idea of ‘smart cities’. Initiatives by local governmentauthorities, as exemplified in the web portal, www.SMART-Cities.net, promotesustainable development by providing an information exchange of best practicesfor 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 ‘Wiredfor Talent’ strategy that is designed to attract talent from around the country(Florida 2002b). At the regional level, the European Union regularly ranksEuropean cities based on six defining characteristics, namely, smart economy,smart mobility, smart governance, smart environment, smart living and smartpeople (www.smart-cities.eu). City Mayors (www.citymayors.com) is an interna-tional think tank for urban affairs and believes that, ‘in this century, metropolitanareas, rather than nation states, will shape the world’s social, cultural,technological and economic agendas. This process will lead to increasedcompetition for human, intellectual and material resources but will also forcecities to cooperate with and learn from one another’. The nexus of competitiveadvantage has thus shifted to those regions that can generate, retain, and attractthe best talent.

The above initiatives are essentially planned and lead by local governments inpartnership with local business leaders. The human resource management (HRM)literature on talent attraction and retention has typically underplayed the role of thegovernments in providing an overall life experience that acts as a glue to attract andretain talent. This paper explores what local governments can do to increase theattractiveness of a place and improve quality of life that lifts locational branding of aplace and acts as a magnet for knowledge or creative workers to call it ‘home’. Byadopting a theoretical framework found in the literature on economic geography, itexamines the factors that attract people and employment to a place and draws broad

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lessons that can be learnt by smart city experiments around the world. It concludeswith 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 withthe challenge of explaining why and how cities and regions prosper or decline.Ancient civilizations developed along the banks of the river systems to attainprosperity in agriculture. In the industrial age, cities such as Detroit, USAdeveloped as hubs of automobile manufacturing only to decline later asglobalization of manufacturing took hold. The New Economic Geography(NEG) focuses on ‘economies of scale and spacial development’ to explain howfirms and workers concentrate around areas that bring together producers,suppliers and markets. On the other hand, the New Neoclassical Urban Economics(NNUE) focuses on the ‘optimal preference-satisfying behaviour’ of firms andindividuals in choosing a location to set up the firm or take up residence (Storper2011). Thus, the growth of Silicon Valley is seen as a ‘self-reinforcing process ofagglomeration’ by NEG whereas NNUE would argue that workers go there to joinothers with similar skills and form a community of like-minded individuals andfamilies and firms go there to seek these workers.

Related to the above discourse is the question, ‘do people go where jobs areor do jobs go where people are’? Conventional wisdom suggests that peoplefollow where jobs are and therefore, jobs drive economic development.Accordingly, government policy makers have traditionally focused on attractingfirms to set up their operations that offer job opportunities. However, researchersare increasingly focusing on the importance of human capital or knowledgeworkers as a primary driver of economic development arguing that those placesthat attract talent thrive (Lucas 1988; Glaeser 2000). The human capital has beenmeasured either in terms of educational attainment of the population or morebroadly, a set of knowledge-intensive occupations that make up the ‘creativeclass’, that is, ‘people who add economic value through their creativity’ (Florida2004).

Several studies have shown that artistic/cultural and technology/innovationcommunities that constitute a cultural economy are best able to attract talent and inturn boost urban growth (Stolarick and Florida 2006; Wojan, Lambert, andMcGranahan 2007). Specifically, places that feature universities, consumer serviceamenities and are open to tolerance and diversity have been shown to be the keyfactors in attracting and retaining talent (Florida 2002b). Glaeser (2005) alsohighlights the importance of ‘skilled cities’ offering cross-pollination of learningamong skilled workers and climatic conditions to explain why people flock to sunbeltcities 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 andorchestras, drive urban growth in cities that become ‘entertainment machines’. Usinga stage-based model for regional development, Florida, Mellander, and Stolarick(2008), examined how ‘technology, talent and tolerance’ combine to affect regionaldevelopment and find that tolerance and certain occupations such as computerscience, engineering and management services, play a key role.

However, the above approaches that trace urban growth in terms of themovements of people in search of lifestyle preferences, such as amenities, have been

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questioned by some on the grounds of their assumptions about human behaviourand lack of attention to geographical dynamics of production and work. Forexample, Storper and Scott (2009, 153–4) argue that these approaches are ‘devoid ofany consistent analytical description of the factors underlying the origins of urbancentres’ as they cannot prove that ‘purported preferences are real . . . and that theyreally underlie the alleged resulting action’. They contend that individuals will not beable to exercise their locational preferences unless those locations offer relevantemployment opportunities. To buttress this point, Storper and Scott (2009, 162)point out that ‘additional semiconductor engineers subsequently gravitated toSilicon Valley, would-be actors and directors to Hollywood, and financial analysts toLondon because that is where their talents could be effectively deployed andrewarded in growing specialized clusters’.

Both NEG and NNUE perspectives as discussed above are not exclusive butcomplementary approaches as the process of urbanization is complex and dynamicand ‘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 thegamut of what much of the literature identifies as being the features of quality of life:

. Social cohesion, indicated by participation, inclusion, belonging, recognitionand legitimacy.

. Human services, including quality and accessibility of health care, communitysupport services and social safety net.

. Learning, including education and skill levels, quality of public education andquality 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 examinedfactors that made a job attractive and found that ‘community quality of life’ was thesecond most important factor after salary and more important than proximity tofamily and friends, benefits, stock options and established company. Similarly,Arthur Anderson’s Best Cities survey of 1433 senior executives worldwide found thata city’s suitability to business is more dependent on the local availability ofprofessionals 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 industrystructure to prospects for sustained competitive advantage of industrial regionsprovides one of the most illuminating frameworks for assessment of smart cities.

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‘Stickiness’ refers to a region’s ability to retain competitive advantage by ensuringthat 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 offactors, such as the type of work a region undertakes in a particular sector—highvalue and innovative work versus low-end cost-based work, and the structure oflocal firms—external or local, among others.

In order to survive in the new environment, communities need both magnets andglue (Kanter 1995). ‘Magnets’ refer to the factors that attract a flow of externalresources such as new companies and new people to renew and expand skills, andcontribute to the economic health of the region. ‘Magnet factors’ typically include ahealthy and well-educated workforce, clean environment, vibrant business climate,and a solid social and cultural infrastructure. But communities also need ‘glue’ tohold them together. In addition to the physical infrastructure that supports daily lifeand work (such as roads, sewers, electricity and communications systems),communities require a social infrastructure to solve problems and promote theeconomic and social well-being of all their members. Interestingly, many factors thatcomprise the magnets of a local region especially the solid social and culturalinfrastructure also effectively comprise its glue. However, we need to recognize thatlocal governments alone cannot make a place ‘cool and hip’ as sometimesoverregulation can kill (LaFaive and Weislak 2003).

Learning cities

The idea of learning organizations has been around for some time. But the idea oflearning towns and regions is a newer concept. In 1996 – the European Year ofLifelong Learning – both the Organisation for Economic Cooperation andDevelopment (OECD) and the United Nations Educational, Scientific and CulturalOrganization (UNESCO) released their major reports on lifelong learning and agrowing 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 andacross 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 comingfrom 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 andthe Emilia-Romagna region in Italy have created models for industries to emulate.However in the most recent research, social capital and the kind of entrepreneurialingredients that have been identified above are critical factors for the success ofregions and towns (Wolfe 2000).

Conceptually, industry clusters have become the sine qua non of economicdevelopment policy in many parts of the world (Rosenfeld 2002). Clustering providesfirms with access to more suppliers and specialized support services, experienced andskilled labour pools and the inevitable knowledge leakage that occurs where peoplemeet and talk about business. The advantages of place draw not only similar but alsocomplementary enterprises and, as a result, clusters become a breeding ground fornew clusters.

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Lessons from smart city experiences

Nurture a creative economy

According to UNCTAD (2004), ‘globally, creative industries are estimated toaccount for more than 7 per cent of the world’s gross domestic product and areforecast to grow, on average, by 10 per cent a year’. To create an environment inwhich people and businesses can succeed, a stable macro-economic environment isan essential condition. Upon that foundation we can create the conditions for supplyside success: high levels of education for people of all ages, first-class transport andtelecommunications infrastructure, a favourable regulatory and tax framework.

To attract talented workers regions need to welcome and reach out for theinclusion of newcomers. Regions also need to seek out, nurture and reward a broadrange of talent including artists, entrepreneurs, technology workers and innovators.Just rewarding one group or a small subset of groups stifles the creative energy thatsustains smart cities. For instance, Austin, Texas in the USA sponsors ‘Biobashes’and stages 360 Summit to encourage artists, entrepreneurs, technology workers tomeet and share work. Young talented people in Pittsburgh created movement theycall ‘Ground Zero’. It is an open network of doers, makers and creative people whocollaborate 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 toprosper 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 mindsetabout 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 peopleare hungry to acquire knowledge (Thite 2004b). In many Asian economies, parentsare eager for their children to learn science, maths and technology and devotesubstantial part of their meagre income for educating their children. It is thisintrinsic determination and motivation of parents and children to learn seeminglyunexciting but important subjects that shape our future.

Investment in quality of life

Clearly talented workers are attracted to quality environments. There is the need forgovernments to promote a range of quality life experiences. For instance, promotingpeak experience like outdoor activities, such as surfing, hiking, bungy jumping,trekking, cycling, rock climbing, canoeing and kayaking, have worked in someregions. 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

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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 getbranded. A concerted effort is needed to convey a powerful, compelling andconsistent message of the ‘smart city’. The state of Victoria in Australia highlightsthe importance of branding. Brand Victoria and ‘Victoria – The Place to Be’ aredestination-marketing tools that aim to build a strong and meaningful identity forMelbourne and Victoria by positioning the state as a destination of choice forinternational students, investors, skilled migrants and tourists. It is a creativesolution and brand strategy that provides common brand values, key messages and aunique brand mark and visual identity (Victoria 2010).

The best promotion for attracting people to a smart city comes by word of mouthfrom those who have decided to relocate. It is important that a smart city identify alltouch points with new hires and ensure that all the images and messages arecompelling and relevant. Managing the impressions of new workers may be one ofthe best promotion tools for any place. Smart workers are networked not only withfamily and friends but also with colleagues around the world who may also thinkabout relocating.

Locational branding has a major impact on employer branding strategy adoptedby 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 isknown 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 literaturehas paid scant attention to the contribution from economic geographers and urbanplanners who recognize the importance of human capital and use the framework ofcreative economy and smart/creative cities to explore how to develop and sustain urbangrowth and development. It is important to recognize the view point of economicgeographers as knowledge workers typically tend to concentrate around cities andregions. This paper attempts to fill this gap. It is also important to look at the theoryand practice of HRD at the intermediate level, that is city or regional level, ascompared 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 humanresources (HR) practitioners in the backdrop of ageing population, critical skillshortages and increasing global mobility of labour pool. The factors that influencetalent attraction and retention are multi-faceted and include both on- and off-the-jobfactors. While employers have primary responsibility to improve the overall workenvironment within the organization, they also need to be mindful of the ‘location’factors, particularly in creating an employer brand aimed at projecting ‘a compellingplace to work’. Here, the location branding that alludes to the positive elements ofworking in a particular job location becomes quite important and includes civic

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amenities, such as educational facilities, cultural activities that cater to a diversepopulation, infrastructure, housing affordability and cost of living, that determine thequality of life.

While employers have no direct influence on urban planning and locationbranding, they have a vested interest in actively collaborating with local governmentagencies, political leaders and community welfare groups in improving theattractiveness of a place. A smart city requires a smart workforce. Therefore, bothurban planners and employers need skilled workers. This common need requiresboth to work together in improving social capital and enhancing locationalbranding. Quality of life in a place depends on the overall life experience of itscitizens which can augment the ‘stickiness’ of a place in the slippery slope ofglobalization. The concept of industry clustering also refers to the development of a‘community of knowledge workers’ where the knowledge and skills of peoplereinforce each other creating a multiplier effect and a highly ‘networked’ community.

In this context, the industry associations can play a pivotal role to influencegovernment policy and decision making on urban planning and development on behalfof their member organizations. Another important element of industry–communityengagement is academia–industry partnerships in curriculum development, internshipsand research collaboration as continuous learning is a key strategic weapon in aknowledge economy. Further, as part of corporate social responsibility, firms need tobroaden and deepen their commitment to the community they serve by helpingdisadvantaged groups to gain access to learning and employment opportunities. Forexample, the information technology enabled services industry in India activelycollaborates with local educational institutes and government bodies to updatecurricula 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 andsocial/intellectual capital can truly develop and flourish and not just remain a catchyslogan. When we see human resource development as part of city/region/nationbuilding endeavour, new insights emerge helping HR practitioners to widen theirhorizons and see their function in a much broader, socially inclusive andcommercially sustainable perspective.

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