Connecting cities Building successes

One cannot shut eyes to people’s social needs, the demands associated with jobs and living environment, the issues of technological development, the spread of means and channels of info-communication. Digitalisation has growing influence on people’s everyday life.

Mariann Majorné Venn have asked Béla Kézy and David Bartók, representatives of the URBACT TechTown project, how these issues are at play in Nyíregyháza (HU). They tell us about the influence of digitalization on the local communities, on economy and jobs and about the potentials to exploit.

The Municipality of Nyíregyháza is located in the North-Eastern region of Hungary, in Central Nyírség and 240 km from the Capital Budapest. The borders of three countries (Slovakia, Ukraine and Romania) are within a distance of less than 100 km.

National URBACT Point (NUP) Hungary: How did digital economy come into view in Nyíregyháza?

BK: Digital economy is in the centre of attention in several cities, and this is no accident. According to the estimates of the European Commission digital economy is responsible for 8 % of the GDP of the G20 groups comprising the world’s 19 largest economies and the European Union, and this ratio is going to grow fast further in the future. In 2011 the McKinsey Consultants study on Big Data pointed out in their study that during the previous five years the internet was responsible for 21 % of GDP growth in the advanced countries. The European small and medium size businesses which adopt digital technologies grow two or three times faster than the average.

Although it is a usual assumption that digital economy is restricted to businesses involved in software or website development or e-commerce, in fact the sphere of digital economy is much broader. Digital technologies are adopted by traditional industries too at the same rate as by high-tech firms. It is also emphasized in the above mentioned McKinsey study that over 75 % of the added value is contributed by traditional industries. While we feel the presence of digitalisation in every sphere of our life, it is only the beginning! It is argued that the rate of impact of digitalization on productivity and innovation may be similar to the one produced by the spread of the use of electricity at the turn of the 19^th-20^th centuries.

While the growth of digital economy opens huge potentials, the risk for a city of dropping behind in this race is just as huge. The statistical data indicate that there is much to do in Hungary to catch up. According to the Digital Economy and Society Index of 2017 Hungary is at the 21^st place among the EU member countries, that is, Hungary is among the low performing member states.

The city of Nyíregyháza has recognized the challenges and potentials. They began to set the foundations of digital economy several years ago. Under a sub-program of the national programme for Digital Hungary the following investments, at 1.7 billion HUF, were realized in 2015.

1. Development of broad-band infrastructure providing access to internet services for every household;
2. Development of digital community and economy: development of institutional infrastructure supporting the use of electronic services;
3. Improvement of digital skills: introduction of learning and skills training programs, provision of the necessary tools needed for the improvement of digital competences of socially disadvantaged students;
4. Extension of electronic administration: spread of online public services.

The sources and ideas were thus available, but practical experience in this area was limited. At this stage an invitation arrived for the city to join the TechTown project with the aim to promote digital economy in small and medium size cities.

NUP Hungary: Who were the partners?  Have you identified some concrete, adaptable initiatives in the work practice of the partner cities?

BK: In the TechTown project 11 partner cities worked together for more than two years. They were: Barnsley (UK) ­– lead partner, Basingstoke (UK), Cesis (Latvia), Clérmont-Ferrand (France), Dubrovnik (Croatia), Gävle (Sweden), Limerick (Ireland), Loop City – network of small cities around Copenhagen), Nyíregyháza (Hungary), San-Sebastian (Spain), and Syracusa (Italy).

The project focused on 4 main areas of digital development:

1. Better understanding of digital development – to be capable of developing digital economy the city needs to understand the issue, dispose of data, know the stakeholders and clarify the obstacles of the process of digitalisation.
2. Provision of digital workplaces – in this respect four themes were selected by the TechTown partnership: (1) provision of new digital workplaces – the role of start-ups; (2) provision of digital workplaces through the digital transformation of existing firms; (3) smart city solutions and new workplaces; (4) role of spaces and squares in the strengthening of digital communities.
3. To recognize, identify, develop and retain talents – how the cities can attract and retain talented young people.
4. Role of local governance and local authorities in the process of digital transformation.

The partner cities were exploring concrete solutions in these areas by means of common reflection and learning from each other. During the project we found several solutions, which Nyíregyháza is willing to adopt in the future for fostering digital economy.

Below are some examples:

1. Under their program entitled Kick-start the city of Gävle (SE) has carried out quick screening of the conventional large enterprises to identify the most important potentials to be mobilized by means of digitalisation;
2. The LearnIT, an extra-curricular course for the development of digital skills, which we have learned from the city of Césis (LT) program, is a useful means for the fostering of STEM (Science, Technology, Engineering and Mathematics) and digital abilities.
3. It was also during our visit of the Césis program that we saw a start-up centre set up in a formerly abandoned school, converted by means of minimal investment and plenty of voluntary community work, which now houses several promising new start-ups.
4. The Digital Media Centre – DMC in Barnsley is an excellent example for the establishment and operation of a complex institution of enterprise development. The building, the physical infrastructure is only one (and not the most important element) of the intricate system.

NUP Hungary: How did the city manage to cooperate with various stakeholders and to capitalize together with them from the project experience?

BK: At the local level the mobilizer and central element of the project is the URBACT Local Group (ULG) comprising those organisations of Nyíregyháza, which are involved in the various areas of the development of digital economy or are concerned with the development of digital economy, and who – when they were informed on the objectives of the project – expressed their willingness to take active part in the work of the ULG. The ULG comprises representatives of the mayor’s office of course, and of the university, the public services and the chamber as well as the representatives of the local enterprises involved in digitalisation. A most important result of the ULG contribution is that the issue of the development of digital economy is now on the agenda in the city, and the various stakeholders are involved in active dialogue.

ULG members who can communicate in English took part in the transnational partner meetings. The owner of a local enterprise reported in a lecture in Barnsley on his plan for a community space in their office block, which offers meeting space for students, experts and businessmen who are interested in informatics and digitalisation. A professor of the University of Nyíregyháza took part in the study tour in Tallin (ES) and had the opportunity to see what is behind the Estonian digital wonder.

NUP Hungary: What are the most important measures of the completed action plan, and how will they be implemented?

BK: In the analysis of the state of affairs it was pointed out that the low level of digital skills and awareness hamper the development of digital economy in the city.

Therefore the main objective of the action plan is ground preparation, the improvement of skills and knowledge needed for the development of digital economy. In this direction four priorities have been identified:

1. Awareness raising for the local decision makers and business leaders. The main protagonists, stakeholders must be made aware of the potentials offered by digital economy and the risks of dropping off.
2. Retaining, attracting, developing talents – several complex interventions are proposed in the action plan for this purpose.
3. Improvement and development of digital/STEM skills and knowledge.
4. Linking talents and enterprises – promotion of local networks, cooperative actions and cooperative attitudes.

An important feature of the approach characterizing the action plan is that it builds upon the progress and further plans of the city in economic development and jobs. While the action plan proposes several new measures, there is an emphasis on the enrichment of the on-going and planned interventions by adopting the experience gained during the URBACT project and the lessons derived from the new practices. The majority of the new measures build on the implemented and on-going initiatives and projects. The action plan proposes to capitalize from the financial resources obtainable from the existing programs (for instance the employment pact and the local Community Led Local Development project) especially for the small scale soft developments.

A good example of the endeavour to attain synergy is a measure in the action plan for the establishment of an innovation centre offering services to new tech and digital enterprises. This development can be financed from a brownfield rehabilitation project financed from the European Regional Development Fund.

NUP Hungary: What have you gained from the URBACT Programme, what are your further plans, why do you recommend others to participate in URBACT?

BK: The most important outcome of the URBACT project may be that the issue of digital economy is stabilized on the agenda of the city. Furthermore, the TechTown partnership gave a unique opportunity for the staff of the local organisations engaged in economic development to gain first-hand information from the practitioners and experts of similar European cities about innovative solutions and good practices in the development of digital economy.

What is most important, we managed to lay the foundations of long-term cooperation. Its several concrete steps are already emerging.  Nyíregyháza received invitation to participate in TechRevolution, a new URBACT transfer network. Thereby the city will get the opportunity to work out a sustainable operational and business model of the innovation centre to be established in the framework of the EU co-financed project for brownfield rehabilitation and improve the policy of enterprise development. Moreover, the city has recently submitted an INTERREG Europe application for the digital development of local public services in cooperation with the earlier TechTown partners and some new partners.

This is only the beginning! Participation in the URBACT programme has opened new possibilities for Nyíregyháza, which are particularly important for the long-term development of the city. The city has gained access to a unique knowledge base and interconnections, which are reliable in case of any urban development challenge. And there are new projects too – as mentioned before.

With regard to all these we can sincerely recommend to participate in the URBACT projects to any city which is open and responsive to innovative solutions. However, it is important to understand that the results of the participation in transnational projects are usually not short term and not direct.

If you think that the outcome of a project is only acceptable if it is concrete, tangible – in form of bricks and mortar and concrete and iron if possible – you should forget about transnational projects. If you think that you have no need for learning and getting new ideas, because you know best what to do, and you have no need for the advice of others – you should not think of such projects either. But if you are willing to learn from the good practice or failure of others, and if you are willing to explore and contemplate together with the experts of other European cities and with the various stakeholders of your own city, and if you are brave enough to test innovative solutions – you are the one for whom the URBACT programme has been invented.

NUP Hungary: Thank you for the interview!