How the cities of Saxony can get even smarter

How the cities of Saxony can get even smarter

Implementing smart city approaches isn’t always easy. But there are successful examples where cooperation between the private sector and the state works. A place for guests.


4 min

Professor Thomas Lenk and Oliver Rottmann.
© Matthias Foerster

By Thomas Lenk and Oliver Rottmann

Infrastructure must become “smarter”. However, carrying out projects in municipalities is not easy. However, according to a current study by the University of Leipzig, in which 103 cities and districts from Saxony and East Germany participated, they are planning to become a “smart city”.

This is financially and conceptually challenging. Furthermore, global trends have a direct effect down to the municipal level: climate protection, urbanization, digitalisation, demographic change or the current geopolitical situation – all of which put pressure on the supply of infrastructure. Furthermore, the corona pandemic has put a strain on municipal life and thus also the implementation of smart city concepts. Different areas were becoming more and more interconnected.

However, as is well known, digitization is still not working sufficiently, even in rural areas. In some regions of Saxony there is a lack of basic infrastructure such as broadband expansion nationwide. However, there are other approaches to smart infrastructure transformation. Ultimately, this will result in massive structural change, especially for the Free State, as can already be seen today, for example, in the open cast lignite mining areas in central Germany and the Lausitz mining area.

Smart City means making cities more efficient, technologically advanced, environmentally friendly and socially inclusive. Attempts to define a smart city have focused on the intelligence that IT provides for managing various functions of the city. A strategic general concept is needed here. Additionally, there are municipal investment backlogs or digital and sustainable requirements for infrastructure projects.

Our author: Dr. Oliver Rottmann (r.) Is managing director of the Competence Center for Public Economics, Infrastructure and Services of General Interest (KOWID) at the University of Leipzig.

Our author: Dr. Oliver Rottmann (r.) Is managing director of the Competence Center for Public Economics, Infrastructure and Services of General Interest (KOWID) at the University of Leipzig.
© PR

Why the financial situation is key: After total municipal tax revenues in Saxony increased continuously until 2019, there was a significant collapse in 2020 due to the crown pandemic, but this was offset by measures taken by the federal government and from Free status such as trade tax refund could be offset for the most part. However, the pandemic is still putting a strain on municipal budgets, which is having an impact on municipal investment activity.

As the municipal level also plays an important role in climate protection, additional investment needs in mobility or building renovation are foreseeable, requiring adequate funding. Tax revenue per capita is significantly higher in the three major Saxon cities than in the rest of the state, although there are also significant differences here. The municipalities with relatively low tax revenues are mainly found in Lusatia, the Ore Mountains and the district of North Saxony.

Demographics also play a role, particularly in the Free State: While Dresden and Leipzig have experienced significant population increases over the past decade, the population in the eastern and southern parts of the state has declined.

This means that the future design of services of general interest faces problems, especially in rather sparsely populated and peripheral regions, which also affects the corresponding challenges for smart cities. However, the study results make it clear that smart city approaches are already part of integrated urban development in many municipalities. Here, however, there is often a lack of so-called smart city managers, where “the threads” come together.

Our author: Prof. Dr. Thomas Lenk (left) is the director of the Institute for Public Finance and Public Management of the University of Leipzig.

Our author: Prof. Dr. Thomas Lenk (left) is the director of the Institute for Public Finance and Public Management of the University of Leipzig.
© Matthias Foerster

External service providers are also still used to a relatively small extent. Participants in the study see the areas of broadband provision, mobility, citizen services and administrative services, energy supply and health, education and social services as particularly suitable for smart approaches. Up to now projects of this type have been carried out and planned mainly in the administrative field.

All municipalities usually argue that the goal of smart infrastructures, in addition to the fundamental trend towards greater digitalisation, is above all the increase in citizens’ demands for administrative effectiveness and climate protection. The quality of the place, the operational efficiency of the infrastructure and sustainability play a role here, as does more intense public participation.

The latter is essential in regions of structural change in order to create livable and economically sustainable approaches. To digitize not only municipalities, but also to make them smarter and more liveable, we need above all company settlements, innovation clusters, the necessary digital and physical infrastructures, tailor-made financing programs and strong local services of general interest. Here Saxony is conceptually challenged, especially in view of the brown coal processing regions.

The “Development of Partnership and Smart City Infrastructure” study was created by KOWID with the support of the German Association of Cities and Municipalities.

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