Universidade Técnica de Lisboa

Instituto Superior Técnico

Digital Cities and the Challenges for a

Knowledge-Based View of the Territory:
Evidence from Portugal

Jose Luiz de Araujo Moutinho Neto

Licenciado em Biologia e Arquitectura

Dissertação para obtenção do Grau de Mestre em

Engenharia e Gestão de Tecnologia

Orientador: Doutor Manuel Frederico Tojal de Valsassina Heitor, Professor

Catedrático, do Instituto Superior Técnico, da Universidade Técnica de Lisboa
(Orientador científico)
Co-orientador: Doutor Rui Manuel Leitão da Silva Santos, Professor Auxiliar da
Faculdade de Ciências Humanas, da Universidade Nova de Lisboa

Presidente: Doutor Manuel Frederico Tojal de Valsassina Heitor, Professor

Catedrático, do Instituto Superior Técnico, da Universidade Técnica de Lisboa
(Orientador científico)
Vogal: Doutor Pedro Manuel Barbosa Veiga, Professor Catedrático da Faculdade de
Ciências, da Universidade de Lisboa
Vogal: Doutor Rui Miguel Loureiro Nobre Baptista, Professor Catedrático da
Faculdade de Ciências, da Universidade de Lisboa
Vogal: Doutor Rui Manuel Leitão da Silva Santos, Professor Auxiliar da Faculdade
de Ciências Humanas, da Universidade Nova de Lisboa

12 de Abril de 2005
Index

Abstract ............................................................................................................................... 3

Resumo ............................................................................................................................... 4

Acknowledgments............................................................................................................... 5

Chapter I – Introduction...................................................................................................... 6

The Scope of the Work: Cities and Knowledge Networks ........................................... 11

Early concepts of digital cities: Amsterdam and Kyoto ............................................... 18

Background: Building the information society in Europe ............................................ 21

Building the information society in Portugal................................................................ 35

Chapter II – Selected Case Studies in Portugal ................................................................ 45

C3ities Methodology ..................................................................................................... 46

The Digital Cities Program ........................................................................................... 49

Alentejo Digital............................................................................................................. 55

Aveiro Digital ............................................................................................................... 60

Trás-os-montes Digital.................................................................................................. 66

Bragança Digital ........................................................................................................... 69

Chapter III – Discussion and conclusions......................................................................... 72

Mobilizing the information society with digital cities and regions .............................. 72

Fostering knowledge networks ..................................................................................... 78

Conceptual framework.................................................................................................. 82

Public policies and the social and cultural shaping of ICTs ......................................... 86

References....................................................................................................................... 102

2
Abstract

The development of case studies in selected Portuguese cities and regions which have

been engaged in “digital city and region” projects is considered in this dissertation in

a way to discuss main challenges, and opportunities, for mobilizing the information

society in Portugal. This dissertation grew out of the interest of understanding the

processes of innovation and technology diffusion at a territorial level. It is argued that

knowledge networks have the potential to attract people, energize communities and

make both public administration and markets more effective, but they require

infrastructures, incentives and adequate institutional frameworks. The analysis builds

on the co-evolution of regional development and the endogenous process of technical

change, namely in terms of the diffusion of information and communication

technologies (ICTs). It is argued that the territory is a basic infrastructure that justifies

and invites for the construction of several layers of information, but above all for

communication infrastructures and digital contents well arranged with local contexts.

It is suggested that knowledge networks as particular forms of communities of

practice, interest or proximity are important drivers of larger communities of users.

3
Resumo

O desenvolvimento de casos de estudo seleccionados sobre projectos portugueses de

cidades e regiões são abordados nesta dissertação com o objectivo de discutir os

desafios e as oportunidades para a mobilização da sociedade da informação em

Portugal. Estes casos de estudo são analisados na perspectiva das políticas de

desenvolvimento da sociedade da informação. Propõe-se que as redes de

conhecimento têm o potencial para atrair pessoas, energizar comunidades e aumentar

a eficácia dos mercados e da administração pública, mas requerem infra-estruturas,

incentives e enquadramentos institucionais adequados. A análise é construída a partir

da co-evolução entre o desenvolvimento regional e os processos endógenos de

evolução tecnológica, nomeadamente em relação à difusão das tecnologias de

informação e comunicação (TICs) no território. Os projectos apresentados mostram a

necessidade de serem construídos sistemas interoperáveis e flexíveis que permitam o

suporte a redes de conhecimento, as quais devem ser concebidas de forma holística,

incorporando a mudança e o factor humano com o objectivo de promover a

construção de comunidades de prática, interesse ou proximidade.

4
Acknowledgments

This dissertation would never been completed without the help of many people. My

first acknowledgement goes to my family. All along this study, they shared my

enthusiasm for studying and trying to better understand the world where we live. I’m

also grateful to all the teachers of the Master program for providing information and

sharing their knowledge with me, in particular I would like to express my appreciation

to Rui Santos for his extraordinarily useful comments and criticisms. One very special

word of gratitude goes to Manuel Heitor. Without his deep involvement in this project

and continuous support during the last two years it would be literally impossible to

finish both my Master program and this dissertation. I’m also deeply indebted to a

large number of people directly involved in the Portuguese Digital Cities projects,

namely, Lusitana Fonseca (Aveiro Digital), Armando Marques (Alentejo Digital), Rui

Tocha (Centimfe – Marinha Grande), José Bulas Cruz, Arsénio Reis (Trás-os-montes

Digital), José Adriano and João Paulo (Bragança Digital). They provided me with raw

materials and insightful suggestions upon which I have build this dissertation. I also

would like to thank Jaime Quesado and Pedro Martins from POSI for introducing me

to the details of public funding and letting me work closely with the next generation

of Portuguese Digital Cities. One last word is reserved for my extraordinary friends

from the Master program: not only they helped me to survive the classes, but they

made me feel 20 years younger.

5
Chapter I – Introduction

When I searched for “digital city” at www.yahoo.com on February 25th, 2004, the

result was a list of about 805,000 links. I could add another 160,000 links for “virtual

city” or 517,000 for “virtual community”. The ever growing number of information

published on the Internet confirms the increasing interest on the co-evolution of

territorial development, local community building and the diffusion of information

and communication technologies (ICTs).

Browsing through the results list, right on the top, I’m invited to visit AOL Digital

City (www.digitalcity.com). This is a collection of city guides, privately owned by the

biggest Internet Service Provider in the world, “delivering local entertainment,

commerce, news, community resources, and personal interaction to residents and

visitors in many cities across the USA”. More than 300 regions and metropolitan

areas in 41 US states are covered.

Number two on the list is Digital Bristol (www.digitalbristol.net), promoted by a

public / private sector partnership led by Bristol City Council. It aims to “stimulate the

provision of a sustainable and visually appealing Internet resource which represents

the community that makes up the City of Bristol”, including local information,

opportunities for community and individuals, free Webspace, training to local

community groups, and the electronic provisioning of local government

administrative services. These services include, for example, reporting abandoned

vehicles for investigation and removal, reporting damaged or faulty street lighting for

repair, paying council bills on-line through a secure service, searching catalogues of

many records held by Bristol Record Office, filling application forms for council

6
taxes, housing registering, planning applications, searching the city wide library

catalogue, and finding information about Bristol schools.

Third on the results list, I find the link to the Digital City Kyoto Prototype

(www.digitalcity.gr.jp/index-e.html), one of the most famous and well studied

experiences of digital city projects, that includes, among other ideas, 2D scalable

maps (KyotoSEARCH), 2.5D omnidirectional photorealistic images (TownDigitizing),

and 3D VRML based models (FreeWalk) of the real city (Koda, 2003; Ishida, 2003). I

will have the opportunity discuss that particular project further on in this dissertation.

If I jump over a few redundant links to AOL’s Digital Cities (New York and Chicago),

next on the list is Aruba Digital City (www.arubadigitalcity.com), with “detailed

information about the island of Aruba”. Although the last updated information seems

to be the carnival of 1999 and the election of Miss Aruba 1999, it gives a warm

“welcome to Aruba Digital Community: a place to celebrate culture, network, share

your thoughts, and make a friend”. Promoted by a local cybercafé, Café Internet NV,

this community building website is “a distributor (and not a publisher) of content

supplied by third parties and subscribers. [It] exercises no control over, and accepts no

responsibility for the content of the information passing through Café Internet NV’s

host computers, network hubs and points of presence”.

Further down the list, number five on our counting, as long as I skip more redundant

links to AOL’s city guides (Travel & Booking and MapQuest Maps), I can visit

Kingston upon Hull Digital City (www.hullcc.gov.uk/digitalcity), a local

e-government initiative that is “rapidly transforming [Hull] into a World Class Digital

City. The City has its own telecommunications company, Kingston Communications,

a world-class technology and infrastructure, and a strong commitment across the

7
private and public sectors to take maximum advantage of our unique position. [Their]

vision is to become a world top ten information age city by 2005”. Hull is proud to be

considered "the capital of broadband Britain". BBC is reported to be investing “25

million pounds in Kingston upon Hull to develop its new local digital service Vision".

Not surprisingly, the first five results (Figures 1-6) correspond exactly to the most

common approaches to the development of digital cities (Schuler, 2002). From

bottom-up five basic design patterns can be identified: (a) digital city as a highly

wired territory (Hull Digital City); (b) community network (Aruba Digital City); (c)

3D or 2D representation of physical cities (Kyoto Digital City); (d) local government

portal (Digital Bristol); and (e) commercial city guides (Digitalcity.com). While the

first example concentrates on digital infrastructure, the other four are manifestations

of different aspects of urban everyday life on the Internet. Recombinations as well as

whole new patterns that emulate the vast diversity of real cities are also emerging.

Building on case studies of selected Portuguese cities and regions which have been

engaged “digital cities and regions” projects, this dissertation will go beyond the

patterns above mentioned and it will discuss the main challenges and opportunities for

mobilizing the information society in Europe, with emphasis for the conditions

affecting Portugal. Moreover, it will also explore the convergence of

telecommunications and computers networks within the urban context as a new city

infrastructure supporting everyday life and mobility.

8
 Figure 1 – digitalcity.com Figure 2 – Digital Bristol

Figure 3 – Kyoto Digital City Prototype List Figure 4 - 3D Kyoto (Shijo Area)

Figure 5 - Aruba Digital City Figure 6 – Kingston upon Hull Digital City

In the remaining of this chapter, I will first introduce the present the scope of the work.

Then, I will quickly present the examples of Amsterdam Digital City and Kyoto

Digital City. Probably, expressions like “digital city” will disappear over time, as it

has happened with “industrial city” and “garden city”, but presently, it is important to

9
link these terms, considered here collectively as geography based knowledge

networks, with possible scenarios for the future of our cities and countryside.

The text follows with the discussion of some of the currents concepts of information

society, namely in Europe, and provide a brief comparison between the different

European member states early action plans and agendas for the development of the

information society. There is one important reason to introduce European public

policies in the discussion of digital cities from the very beginning: the mix of the first

projects and initiatives in Portugal was somehow designed and entirely funded by the

Portuguese Government following European policies with the help from European

structural funds. With the benefit of hindsight, it is clear that to understand the context

and the conditions for the development of the first Portuguese digital cities and

regions it is necessary to frame in time and space the beliefs and constraints

surrounding the Internet boom and its expected effects on economy, social behaviors

and politics.

I will close the introductory chapter presenting the research question and developing

some hypothesis to frame the discussion of the research findings and results.

In the second chapter, after introducing the methodology, called C3ITIES, I will

present 4 selected case studies of Portuguese digital cities and regions: Alentejo

Digital, Aveiro Digital, Bragança Digital and Trás-os-montes Digital. Three other

cities (Marinha Grande, Guarda and Castelo Branco) were involved in the first phase

of the Portuguese Digital Cities Program, but except for some very specific initiatives

(e.g. the broadband connection for swapping CAD files among firms in the moulding-

forming industry at Marinha Grande), empirical data wasn’t reliable and/or could not

be obtained.

10
In the last chapter I will discuss the findings and present my conclusions. First, I will

summarize and bring together the main areas covered in the dissertation and then

present the final comments. They will include recommendations for future public

policies as well as suggestions for futures work.

The Scope of the Work: Cities and Knowledge Networks

This dissertation grew out of the interest of understanding the processes of innovation

and technology diffusion at a territorial level. As an architect, I’ve learned that,

throughout the history of mankind, society and technologies co-evolve shaping, and

being shaped by, the places and spaces where we live. The variety and intricacy of

these recombination processes contribute profoundly to the current diversity of spatial

structures and meanings of cities and countryside. Information and communication

technologies (ICTs) afford new scenarios for territorial development and provide a

new kind of networked infrastructure that will have a profound and lasting effect on

patterns and shapes of urban areas.

The analysis builds on the development of human and social contexts at a regional

level and on the endogenous process of technical change, namely in terms of

knowledge networks. The first generation digital cities have shown the need to build

flexible and interoperable technological infrastructures, yet robust and user friendly,

to support information exchange. Yet, new approaches seem to be needed to respond

to the increasing complexity and heterogeneity of users’ expectations, technologies,

and urban environments.

In previous work (Heitor and Moutinho, 2004), digital cities were presented in terms

of a knowledge-based view of the territory to foster institutionally organized

11
metropolitan systems of innovation (Fischer, Diez and Snickars, 2001), and

competence building (Conceição, Heitor and Lundvall, 2003). Mobility technologies

and urban development were also addressed in previous work (Conceição et. al, 2005)

building on the work about mobile regions (Mc Knight et al., 2002). This dissertation

mainly addresses public policies promoting digital cities as a mobilizer for the

construction of the information society in Europe. It is argued that the territory is a

basic infrastructure that justifies and invites for the construction of several layers of

information about cities and regions were people live, visit or do business. Digital

cities schemes may encourage the global legibility of the information architecture of

the territory and promote broad and informed participation in the decision-making

process of the future of its entire influence area and not only within city limits.

Furthermore, Portuguese digital cities projects may become one of the basic building

blocks for competence building and public appropriation of technologies in Portugal

with the ultimate goal of attracting new communities of users and building the

necessary infrastructure for connectivity. Community building and demand creation

for digital services are two of the most important the critical factor for implementing

digital cities, requiring proper incentives and institutional settings (Moutinho and

Heitor, 2004).

Although we are still in a very early and limited stage of what Mitchell (1995) called

‘cities of bits’, it is clear that it has become a “commonplace” to discuss the diffusion

of knowledge, and the information society in general, in close association with the

introduction and use of information and communication technologies (Mansell and

Steinmueller, 2000; Castells, 2001). In this context, the European agenda for the

Information Society aimed to achieve three broad objectives: (a) bringing every

citizen, home and school, every business and administration, into the digital age and
12
online; (b) creating a digitally literate Europe, supported by an entrepreneurial culture

ready to finance and develop new ideas; (c) ensuring the whole process is socially

inclusive, builds consumer trust and strengthens social cohesion. (European

Commission, 2000). The evidence calls for our attention for the critical role of public

funding and the dynamic adaptation and development of the context necessary to

facilitate digital cities.

The scope of this work focus on a specific set of projects developed in Portugal

between 1998 and 2000. Seven projects for the development of digital cities and

regions were submitted to and approved by the Ministry of Science and Technology.

Each one of the 7 projects included a broad range of loosely coupled initiatives

associated with local electronic government, telemedicine, Internet access in schools,

local economy (telework and e-commerce), and accessibility for citizens with special

needs (Veiga, 2005).

As we could hint from the examples mentioned in the first section, there is not a

unified understanding about digital cities. The first Portuguese digital cities projects

were also much diversified. Perhaps, their diverse interpretations reflect the relative

infancy of this concept. Innovations are often fuzzy at the beginning, and it takes a

while before they establish their own evolutionary paths from preexisting ones or

simply fade out. Maybe instead, these varied readings about digital cities simply

mirror the different views about real cities and they will still coexist for a long time.

Architects, urban planners, engineers, economists, politicians, residents, businessmen,

historians, philosophers, sociologists and geographers, each one of them has a

different perspective, sometimes conflicting with others, about the urban phenomenon.

But I assume that most of them would agree that technology has always transformed

13
somehow urban forms and meanings through history. Sewage systems, motorways,

electric grids, subways, water plumbing, skyscrapers, and now telecommunication

networks have shaped and have been concurrently shaped by urban processes. My

point of view is that the rapid co-evolution of cities and technologies blur all

categorizations, therefore, as innovations become embedded in the routine of urban

life, occasionally even invisible to city dweller, concepts like “digital cities”, as

“industrial cities” or “garden cities” before that, tend to be unfairly consigned to

oblivion.

Mobilization is simultaneously driver and outcome when building the information

society. Cities, and in our case digital cities, are places of dense and energized

crowding, using Kostof’s (1991) image about the urban processes, that can provide an

adequate environment for creativity and innovation, knowledge spillovers, through

intensive virtual or face-to-face contacts and word-of-mouth (O’Sullivan, 2003).

Cities are complex structures that come in all sizes, shapes and configurations. Their

varied forms and functions are the outcome of several urban processes – physical,

social, institutional and economical – that dynamically contribute across time and

space to create dense and heterogeneous concentrations of population and buildings in

particular places. Consequently, there are different perspectives to read the making or

the evolution of the urban life.

Architects and urban planners usually concentrate on form, patterns, structure and

relationships among the various components, living and non-living, of a city (Kostof ,

1991). Engineers mostly give attention to infrastructures, utilities and artefacts that

make cities work. Urban economists prefer to analyze the spatial aspects of decision

making of firms and households (O’Sullivan, 2003). Sociologists and geographers are

14
inclined towards studying interactions among people and communities within the

urban environment and their effect in the production of the urban spaces and places

(Castells, 1898; Valentine, 2001). Most of these perspectives tend to enhance one or

another aspect of urban life to explain or to predict, at least partially, the outcome of

planning, implementation or living strategies. At one point however, most of the

perspectives converge: cities are currently the foci of creativity and innovation that

continuously co-evolve with the economic, social, cultural and political society,

institutions and technology.

Figure 7 – Evolution of world’s urban and rural populations; Source: United Nations, 2002.

For the first time in human history, the urban population is matching the rural

population (Figure 7). While in 1950, 29.76% of the world population lived in urban

areas, this value rose noticeably to 37.95% in 1975, 47.28% in 2000, and is expected

to reach 60.22% in 2030. The total urban population will actually grow more than six

fold from 0.74 billion in 1950 to 4.98 billion in 2030, when about four fifths of city

dwellers will reside in less developed regions. In fact, most of the expected world

15
population increase from 2000 to 2030, which is expected to amount 2.21 billion new

inhabitants, will be concentrated in urban areas, namely on less developed regions,

where it will exceed 2 billion new residents. For the same period, the average annual

growth rate of 1.85% for population in urban areas will almost double the annual rate

for the total population of the world (1.04%). Also, seventeen megacities, exceeding

10 million inhabitants each, can be found in the world today (United Nations,

2002).The image of the city has evolved accordingly, from socially coherent and

spatially circumscribed entities to complex juxtaposition of boundless urban processes

(Amin, 2002). In his seminal book, Peter Hall (2002) renders some theoretical visions

of the urban phenomenon starting with the influential ideas of Ebenezer Howard

(Garden Cities) and Patrick Guedes (Regional City) at the turn of the nineteenth

century and developing contemporary views, including: Corbusier’s cities of towers;

autonomous communities; automobile suburbs; institutionalized land-use planning

and its counterpart; and the city as a machine of wealth creation. But at the end of the

twentieth century, a new paradigm has emerged with Castells’ “Informational City”

(1989). As pointed out by Susser (2002), “the restructuring of capitalism involved,

first the concentration of knowledge as the source of profit and, secondly, the export

of production to increase profitability”, requiring “a flexible organization of

manufacturing and greatly increased subcontracting, so that, as a consequence,

horizontal, loosely connected networks directed by elite experts at the centre replaced

the vertical integration of the industrial era”.

While these visions enhance one or another aspect of the urban daily life, most agree

that cities are characterized by dense and heterogeneous singularities of people and

buildings in a specific place, or as proposed by Spiro Kostof (1991), “cities are places

where a certain energized crowding of people takes place”. And he adds that a city
16
has “nothing to do with absolute size or absolute numbers: it has to do with settlement

density”. This density, among other possibilities, increases the opportunities for social

networking (Breheny, 2001), one of the main enablers of localized innovation and

entrepreneurship. As pointed out by Zook (2001), “despite the space transcending

ability of Internet technology, […] the commercial Internet clustered in a few regions

within the United States during the period from 1994 to 2000. The existence of these

agglomerations runs counter to expectations that the Internet would bring the “end of

geography”.

Figure 8 – Percentage of population living in urban areas for Europe and Portugal for the period
between 1950-2030 (estimates since 1991); Source: (United Nations, 2002).

Portugal explosive urbanization rate, as indicated in Figure 8, linked to the late

development of urban networked infrastructures, e.g. information and

telecommunication infrastructures, may represent an interesting case study to pursuit.

The current Portuguese urban growth pattern of simultaneous metropolization and

overall reduction of population density in urban areas has a significant effect on the

economies of scale of telecommunication services based on cable networks or on fiber,

17
requiring considerable capital investments. Therefore, competitive access to

telecommunication services in these areas is likely to be only provided through the

use of unbundled network elements of the incumbent carrier(s). New business models

and innovative regulation frameworks associated with emerging mobile technologies

can play a disruptive role in pricing and may accelerate the diffusion of new products

and services in the telecommunication market (McKnight, Vaaler and Katz 2002).

Early concepts of digital cities: Amsterdam and Kyoto

The convergence of fresh interpretations of the urban processes and the new promises

of ICTs, particularly those related with virtual communities and virtual reality, created

the necessary background for the development of a novel imagining of the

contemporary city: the “digital city”. This original concept proposes “to build an

arena in which people in regional communities can interact and share knowledge,

experiences, and mutual interests. Digital cities integrate urban information (both

achievable and real time) and create public spaces on the Internet for people

living/visiting the cities” (Ishida, 2002). In this dissertation I will extend this

definition and present a more comprehensive definition of digital citiy.

The first known “digital city” was based on Amsterdam’s well studied community

network experiment in 1994 (DDS – De Digitale Stad), based on the FreeNets and

Community Networks in the USA and in Canada (see Figure 9). The goal was to

provide an electronic space for political discussion and participation in the ten weeks

that preceded local elections. The initial success (10,000 registered users in the first

weeks) quickly transformed a “grassroots and subsidized initiative [...] into a non-

subsidized not-for-profit organization, with a turnover (in 1997) of about $ 500,000,

and employing (in 1998) more than 25 persons (all together filling 17 full time
18
positions)”. The revenues, at that period, came mainly from services like consulting,

hosting, sponsorships, and advertisement. Despite the increasing number of registered

users (150,000 by January 2001), the demand for these services declined steadily due

to, among other factors, the ever growing competition, and, consequently, the

sustainability was threatened. The lack of funding prevented some strategic functional

or technological upgrades and contributed decisively for the downward spiral that

forced some of its most important assets to be either discontinued (content

production) or sold (school portal, Internet access and Web hosting services) until the

DDS became a stripped-down commercial Internet Service Provider in 2001

(http://www.dds.nl/). As brought out by van den Besselaar (2000), “…similar

initiatives were undertaken in the Netherlands. Some of these failed, while others

remained much smaller, less developed, and less visible. This indicates that the

success of the DDS was highly contextual, based on timing, and on the local

Amsterdam cultural setting” (see Besselaar, Melis and Beckers, 2000).

Figure 9 – Example of an interface of Amsterdam Digital City. Source: (Besselaar, 2000)

19
Another very well known early experience was based in the “Kyoto Digital City”

project, as launched by NTT and Kyoto University in 1998 aiming to “create next-

generation systems for digital communities and to explore basic research issues”

(Ishida, 2004). A three-layered model, strongly connected with the real city, was

proposed and consisted of three layers, namely: (a) information layer (real-time data

acquisition and databases); (b) interface layer (2D maps and 3D virtual reality); and

(c) interaction layer (community building and communication). The first phase of the

Kyoto Digital City was developed and housed in the NTT Open Laboratory, aiming to

“promote research without restraint”, and where the subjects “were discovered while

doing it, the research papers were published afterwards” and the “norm was “move

then think”.

Nevertheless, as clearly noted by Ishida (2004), this open environment failed to solve

institutional issues, including research ownership, and “this misunderstanding

terminated the project, which was initially supposed to run for three years, after one

and a half years” (see Figure 10). Then, the Digital City Kyoto Experimentation

Forum was founded in 1999, including universities, local authorities, other

organizations and individuals. Its web presence (http://www.digitalcity.gr.jp/index-

e.html), the “Digital City Kyoto Prototype”, provided 34 services divided in four

categories (information, community, showroom, and laboratory), including personal

websites, a georeferenced city guide (i.e., GeoLink, with more than 5,000 links) and a

virtual representation of shopping streets (i.e., 3D Kyoto). After two years and only

150,000 accesses, this second phase ended in September 2001 (see also Ishida, Aurigi

and Yasuoka, 2004).

20
 Figure 10 - Example of an interface of Kyoto Digital City. Source: (Ishida, 2002)

The two projects mentioned above has influenced over the last decade many city

developments and still guide “digital city” projects over the world. However, context

creation, mobilization, sustainability and adequate organizational and institutional

frameworks seem to be critical while designing, implementing and exploiting digital

cities (Moutinho and Heitor, 2004, 2005) and have raised the process of looking for

best practices. The question is that analysis has shown us to reject the notion of the

“one best way” and that networked places need to be designed holistically, coping

with change and continuously assessed in order to accommodate humanity.

Background: Building the information society in Europe

To understand the circumstances that gave birth to the Portuguese Digital Cities

Program in 1998, it is necessary to follow a series of events and ideas that include a

21
variety of socio-technical aspects included in several political strategies, agendas and

action plans.

The development of the Information Society in Europe – or as currently preferred in

the European Union, the Knowledge-based Society – must be understood, as pointed

out by Barry (2001), in the context of an “era obsessed by a series of interconnected

technological problems: with the maintenance of technological competitiveness and

the improvement of research productivity; with the need to patent and protect

intellectual property; with the dangers posed by the unintended consequences of

technological development; with the public understanding of science; with the

prospects of e-commerce and electronic democracy; and with the need for lifelong

learning in the face of rapid technical change”.

There are several interpretations and connotations for the term “Information Society”

since it was coined by Yoneji Masuda in a futurology study published in 1972 entitled

"The Plan for Information Society: A national goal toward the year 2000” (Finneman,

1999). Therefore, it is important to present at this point the exact meaning used in this

dissertation. But first, some of the most common definitions will be discussed.

Webster (2002) identifies 5 categories of definitions of an information society:

technological, economic, occupational, spatial and cultural. About the first category,

he points out that “is not that this is unavoidably technologically determinist – in that

technology is regarded as the prime social dynamic – and as such an

oversimplification of processes of change. It most certainly is this, but more important

is that it relegates into an entirely separate division social, economic and political

dimensions of technological innovation”. The economic approach considers that the

explosive growth in information activities will quantitatively surpass other economic

22
activities and in a certain point of time “we may speak of an information society.

[Nonetheless,] behind the weighty statistical tables that are resonant of objective

demonstration, there is a great deal of hidden interpretation and value judgment as to

construct categories and what to include and exclude from the information sector”.

The occupational approach is associated with the “decline of manufacturing

employment and the rise of the service sector employment […] interpreted as the loss

of manual jobs and its replacement with white-collar work. The spatial definition

derives from the “emphasis on information networks which connect locations and in

consequence can have profound effects on the organization of time and space”. This

perspective is implicit in most of the digital cities projects. The dialects of “space of

places” and “space of flows” (Castells, 2000), where the constraints of time and space

were challenged, would open up the path for the global networked society. About the

last category, Webster argues, that “from the pattern of our everyday lives, that there

has been an extraordinary in the information in social circulation” creating an

“information environment” and a “media-laden society”.

In fact, it is always possible to add other perspectives, for example, political

(Mattelart, 2001), sociological (Katz and Rice, 2002; Wellman and Haythornthwaite,

2002) or even skeptical views about the information age (May, 2002).

I will consider the definition of information society an open issue in this dissertation

and use a very broad approach to accept as useful most of the meanings and

categorizations above mentioned.

23
European Perspectives on the Information Society

The development of the information society in Europe follows a dual strategy. While

member states are stimulated to address national challenges and opportunities with

local and/or regional initiatives in a bottom-up approach, the European Commission

plays an important role defining top-down strategies, policies and standards for the

European Union as a whole (Dearnley and Feather, 2001). Therefore, to fully realize

the varied aspects of the information society in Europe, it is important to follow both

national and European paths, namely by revising the strategic documents that

establish visions, goals, demonstration projects and respective evaluation frameworks.

At the Lisbon Summit in March 2000, European governments agreed that Europe

should become “the most competitive knowledge-based society in the world by 2010”

(European Commission, 2002). The push towards the institutional development of the

Information Society in Europe started nonetheless much earlier, in 1993, when the

European Commission published a White Paper on “Growth, competitiveness, and

employment: The challenges and ways forward into the 21st century”.

It considered that:

“Throughout the world production systems, methods of organizing work

and consumption patterns are undergoing changes which will have long-

term effects comparable with the first industrial revolution. This is the

result of the development of information and communications

technologies. Digital technologies, in particular, have made it possible to

combine transmission of information, sound, text and images in a single

high-performance system. This will have far-reaching effects on

24
 production structures and methods. It will spell changes in the way

companies are organized, in managers' responsibilities and in relations

with workers. Small businesses will benefit most: the new communication

services will enable them to make savings of, on average, 4% of their

turnover; they will also be very much in evidence on the major markets

opening up. Working conditions will be transformed by the greater

flexibility possible with regard to working hours, the place of work itself

(teleworking) and, inevitably, terms of contract and pay systems.

According to some estimates, six million Americans already work at home.

New data transmission systems will enable companies to globalize their

activities and strategies, forging forms of partnership and cooperation on a

scale never possible before. The need for physical mobility will be

reduced by the availability of products and services combining the

advantages of mass production with consumers' specific, and even

individual, requirements. A new, far richer range of novel services in the

form of information, access to databases, audiovisual, cultural and leisure

facilities will be opened up to everyone. More specifically, it will be

possible to gain access to general information directly, without any

complicated technology, via a portable computer connected, if need be, to

a television set or telephone”.

The white paper reflected the belief that ICTs, when stimulated by political initiatives,

adequate incentives and institutional frameworks, could alone help fighting

unemployment and the social divide. It was followed by another important document,

the “Bangemann Report”, prepared in 1994 for the European Council by Members of

the High-Level Group on the Information Society, urged:

25
 “The European Union to put its faith in market mechanisms as the motive

power to carry us into the Information Age, that actions must be taken at

the European level and by Member States to strike down entrenched

positions which put Europe at a competitive disadvantage:

1. it means fostering an entrepreneurial mentality to enable the

emergence of new dynamic sectors of the economy

2. it means developing a common regulatory approach to bring forth a

competitive, Europe-wide, market for information services

3. it does not mean more public money, financial assistance, subsidies,

dirigisme, or protectionism”.

The Report reckoned that “throughout the world, information and communications

technologies are generating a new industrial revolution already as significant and far-

reaching as those of the past. It is a revolution based on information, itself the

expression of human knowledge. Technological progress now enables us to process,

store, retrieve and communicate information in whatever form it may take - oral,

written or visual - unconstrained by distance, time and volume. This revolution adds

huge new capacities to human intelligence and constitutes a resource which changes

way we work together and the way we live together”. It focused on strengthening

market mechanisms and creating the necessary regulatory framework to foster

entrepreneurship and fair competitiveness in the information and technology

industries. However, that would “NOT mean more public money, financial assistance,

subsidies, dirigisme, or protectionism”, but “concrete initiatives based on a

partnership between the private and public sectors to carry Europe forward into the

information society”.

26
It was particularly significant for digital cities projects in Portugal the areas of

application considered in the report as the building blocks of the information society:

teleworking (more jobs, new jobs, for a mobile society), distance learning (life long

learning for a changing society), network for Universities and research centres

(networking Europe's brain power), telematic services for SMEs (relaunching a main

engine for growth and employment in Europe), road traffic management (electronic

roads for better quality of life), air traffic control (an electronic airway for Europe),

health care networks (less costly and more effective healthcare systems for Europe's

citizens), electronic tendering (more effective administration at lower cost), public

administration networks (better government, cheaper government) and city

information highways (bringing the information society into the home).

After the report, the European Council, during its meeting at Corfu in 1994,

acknowledge the need for “permanent co-ordination instrument to ensure that the

various parties involved - public and private - are working along the same lines. This

co-ordination instrument, to be set up as soon as possible, should be based on the

appointment in each Member State of a person responsible at ministerial level for co-

ordinating all aspects of the subject (political, financial and regulatory) with a view

inter alia to ensuring a co-ordinated approach in the Council”.

Gibbs et al. (2000) pointed out that “these themes were elaborated upon in the action

plan from the European Commission, “Europe’s Way to the Information Society”,

which summarized information society initiatives already under way, or planned, by

the commission. Developing a new regulatory framework received most attention,

while problems of regional cohesion and balance were only treated in brief. […] The

Commission launched a study of the impacts and benefits of the information society

27
for regional, economic and social cohesion. Besides this, only pilot projects and

specific networks were envisaged in cooperation with cities and regions”. The action

plan (European Commission, 1994) covered four areas:

1. “the regulatory and legal framework, for which new proposals will
be made, in particular regarding telecommunications infrastructure
and services, on the protection of intellectual property rights and of
privacy, on media concentration, as well as the updating of the "rules
of the game" for the free movement of TV broadcast in the
Community;

2. networks, basic services, applications, and content, where there is a

need to bring the parties concerned together in order to stimulate the
development of applications in the areas proposed by the High Level
Group and endorsed by the European Council;

3. social, societal and cultural aspects, including the linguistic and

cultural dimensions of the information society stressed by the
European Council; and

4. promotion of the information society in order to increase public

awareness and support. The Commission invites the Council and the
European Parliament, as well as the Social and Economic Committee
and the Committee of Regions, to debate the issues and give political
backing to the development of this action plan”.

Several other documents were released by the European Commission between 1994

and 1997, e.g. “The information society: from Corfu to Dublin”, “The implications of

the information society for European Union policies - Preparing the next steps” and

“Europe at the forefront of the global information society: rolling action plan”, but the

most influent one was the “Building the European Information Society for us all: final

policy report of the high-level expert group” (European Commission, 1997). It gave a

28
long list of recommendations, including “the death of distance”, meaning pushing

“towards universal community service” and “rethinking regional cohesion policy”.

Gibbs et al. (2000) interpreted that “overall, it can be argued that European

Commission and Council documents on the Information Society pay only limited

attention to the impact of telematics upon the EU’s regions and, while they are

optimistic about the impact, they do not adopt a critical approach to verify this,

although the inauguration of the High Level Group of Experts indicated that an

awareness that problems may exist”.

Table 1 summarizes several strategies and action plans of selected European countries.

They provide a clear view of the European conceptual trends through time and space.

Netherlands 1994 “National Action Programme on Electronic Highways:

From Metaphor to Action”.
Main action points:
1. Liberalization of telecommunication
infrastructures
2. Liberalization of the Media Act
3. Demarcation of the Public Domain
4. Juridical border conditions
5. Example projects in the public sector
6. Initiatives in the market sector
1999 “The Dutch Digital Delta – The Netherlands oN-Line”.
The five pillars:
1. The (tele)communications infrastructure
2. Know-how and innovation
3. Access and Skills
4. Regulatory aspects
5. The use of ICT in the public sector
2000 Contract with the Future
1. New vision for the role of government within the
Information Society under the title “Freedom
through Connectedness”.
2. Implementation of approachable government,
3. Government in Flux: additional actions that were
necessary and useful in preparing the government
for the Information Society.

29
 2003 Modernizing Government
Modern government could be characterized by the
following:
1. A new vision of control;
2. Better embedding of policy implementation in the
policy process;
3. Modernization of accountability, supervision, and
scrutiny;
4. Citizen involvement in policy formation;
5. Better service provision;
6. Modern inter-administration relationships;
7. Impact on the back-office structural organization
of government.
Norway 2000 eNorway
Three basic pre-requisites: access – knowledge –
confidence
1. The Government will contribute to greater
accessibility so that everyone has access to the
new technology.
2. The Government will increase the population's
knowledge in and understanding of the use of
ICT, so that individuals will be able to use ICT as
a tool based on their own needs and desires.
3. The Government will implement measures, laws
and regulations that increase people's confidence
in the technology. The Internet must be secure
and available to everyone – irrespective of his or
her level of expertise.
2000 eNorway 2.0
New challenges in ICT policy:
1. Removal of obstacles to electronic
communication
2. ICT vulnerability
3. Broadband
4. 24-hour access to administrative services
5. VAT Reform
6. ICT-statistics and benchmarking
7. eEurope 2002
2004 eNorway 3.0
Main challenges in respect of IT policy:
1. Online Government
2. Electronic commerce and communications
3. IT, telecommunications and media convergence
4. Norwegian content
5. The ICT industry: A dynamo for growth
6. The disabled
7. Health and social welfare
8. A sustainable information society
9. ICT statistics and benchmarking
10. Individuals, culture and the environment
30
Finland 1994 “National Information Society Strategy”
Five key targets for the strategy:
1. Renewal of business and the public sector through
information technology and information networks
2. Transform information industry into one of
Finland’s most important future businesses
3. Improve competitiveness in information and
communication technology skills
4. Universal access to information society services
and basic skills in their utilization
5. Competitiveness and service capability
1995 “Education, Training and Research in the Information
Society: a national strategy”
The main strategic principles:
1. From instant training towards continuous learning
2. Information society skills for all
3. Professional skills in ICT
4. Teachers have a central role
5. Knowledge products and services must be
developed
6. Research into the information society
7. Information networks of education and research
8. Supportive conditions, such as legal aspects and
standardization
1998 “Quality of Life, Knowledge and Competitiveness:
Premises and objectives for strategic development of the
Finnish information society”
Main objectives for strategic development:
1. Increase welfare and offer jobs and income
2. Provide equal opportunities for the acquisition
and management of information and for the
development of knowledge
3. Improve conditions for entrepreneurship and the
quality of working life and promote
competitiveness
4. Increase opportunities for human interaction and
cooperation
5. Strengthen democracy and opportunities for
social influence
6. Improve security and the individual's data
protection and status as a consumer
7. Develop services and cultural provision and
increase international interaction
8. Boost Finland's attractiveness as a location for
innovative enterprises
9. Alleviate inequality between regions
10. Support the objectives of sustainable
development.

31
Italy 2000 An Action Plan for the Information Society
The Government’s plan will be completed with measures
to stimulate innovation in government services (e-
government), to develop e-commerce and to define rules
and rights with regard to competition, network access and
infrastructure.
Objectives for 2001
1. 15 laboratories and university courses in
economics and information and communication
technology;
2. 5 university-based centres of excellence devoted
to ICT;
3. 40 public multimedia centres for training and
access to ICT. They will remain open during
evening hours;
4. 1 computer for every 25 students at the primary
school level;
5. 1 computer for every 10 students at the secondary
school level;
6. 900,000 hours of training for teachers, organised
at the regional level;
7. Professional ICT training for 150,000 workers,
with 1000 new trainers;
8. Free training courses for the unemployed in
southern Italy;
2000 eGovernment Action Plan
1. Networking infrastructure
2. Extranet of local administrations
3. Information and Service portals
4. Computerization of local government
5. Integration of civic registers
6. Notification of changes in personal data
7. System for interchange between Property
Registers and municipalities
8. Electronic I.D. card
9. Promotion of digital signatures
10. Computerized management of documents
11. eProcurement
12. Training actions
2002 Government's guidelines for the development of the
Information Society
1. Transforming the public administration:
e-government
2. Human capital (Digital literacy and eLearning)
3. Infrastructure (Broadband and digital signatures)
4. Industrial policy (electronic commerce, SMEs,
Teleworking, Telemedicine and Tourism)
United 1995 “Information Society Initiative (ISI)”
Kingdom The ISI was an umbrella for a large number of ICT
activities and programmes. Between 1996 and 2000 there
32
 were 26 component activities / programmes, including:
1. Marketing, Awareness and Delivery Programme
2. Local Support Centres (LSCs)
3. Multimedia Demonstrator Programme
4. The Information Society Creativity Awards
France 1998 “Action Programme for the Information Society
(PAGSI)”
6 priority axes:
1. Computers and Internet access in schools
2. Multimedia contents
3. Modernization of public services
4. Electronic commerce
5. Technological innovation
6. Market regulation
2002 Plan RE/SO 2007
1. Electronic commerce
2. Diffusion and appropriation of new technologies
(ex.video games industry)
3. Telecommunications
Spain 1999 “INFO XXI: an information Society for all”
Three main guidelines
1. providing ICT sector with fresh momentum by
completing the regulation and competition
promotion process
2. improving e-government
3. improving access to information society for both
citizens ad companies
2001 Action Plan INFO XXI 2001-2003
More than 250 actions in 7 axis of development
1. Education
2. Employment
3. Innovation
4. Effectiveness
5. Social cohesion
6. Quality of life
7. Promotion of Spain abroad
2003 España.es
1. Public administration (administacion.es)
2. Education (educaion.es)
3. SMEs (pymes.es)
4. Internet access (navega.es)
5. Contents (contenidos.es)
6. Mobilization (Comunicacion.es)
7. New action plan for R&D
Ireland 2002 Building the knowledge society
Key Messages for Government
1. The Broadband Challenge
2. The Innovation Challenge
3. The Skills Challenge

33
 2003 Ireland’s Broadband Future
These include the commitment to extending open access
MAN (Metropolitan Area Network) infrastructure to all
population centres of greater that 1,500 people, the Group
Broadband Scheme to promote rollout to smaller towns
and rural areas, and the appointment of e-Net as the
Managed Services Entity (MSE) to manage the open
access MAN infrastructure on behalf of government.
2003 eGovernment Report
There is more to e-government than simply putting
services
online. ICT is essentially a tool for better government –
better public services, better information management,
better collaboration across agencies.
Advice to step back from the commitment of putting all
services online by 2005 as an end in itself, and to
prioritize those services that will have greatest impact.
Greece 1999 Greece in the Information Society: Strategy and Actions
1. Open and effective public administration
2. New technologies in education and scientific
research
3. Economic development and competitiveness
4. Employment in the Information Society
5. Quality of life: Health, transport, the environment
2000-06 Operational Programme “Information Society
Action lines:
1. Education and culture
ƒ measure 1.1. equipping and networking schools
ƒ measure 1.2. new technologies in education
ƒ measure 1.3. documentation, management,
promotion of greek cultural heritage
2. Citizens and quality of life
ƒ measure 2.1. government on line: business plans,
studies and pilot projects
ƒ measure 2.2. government on line
ƒ measure 2.3. administration of the structural funds
and transition to the euro
ƒ measure 2.4. regional geographic information
systems and innovative actions
ƒ measure 2.5. training and modernization in the
public administration
ƒ measure 2.6. ICT applications in health and welfare
ƒ measure 2.7. training and organizational reform in
health and welfare
ƒ measure 2.8. ”intelligent transport”
3. development and employment in the digital economy
ƒ measure 3.1. a “digital” environment for the new
economy
ƒ measure 3.2. business in the digital economy
ƒ measure 3.3. research and technological
34
 development for the IS
ƒ measure 3.4. skills upgrading
ƒ measure 3.5. employment promotion for the is
4. communications

measure 4.1. supporting the liberalization process

ƒ measure 4.2. development local access network
infrastructure
ƒ measure 4.3. advanced telecommunications
services for the citizen
ƒ measure 4.4. modernization of postal services
ƒ measure 4.5. training in the communications sector

Table 1 - Information Society strategic and/or action plans in selected European Countries
between 1990 and 2000. Sources: (Chatrie, I. and Wraight, P., 2000; European Institute of Public
Administration, 2003; Kenniscentrum ELO, 2005; Kasvio, 1997; Niemi, 2003; Finnish National
Fund for Research and Development, 1998; UK’s Department of Trade and Industry (DTI),
2003; France’s Comité interministériel pour la société de l'information (CISI), 1999; Greece’s
http://en.infosoc.gr/; Ireland’s http://www.isc.ie/.

Building the information society in Portugal

In April 1997, the “Portuguese Information Society Green Book”, published by

“Information Society Mission” taskforce (1997), created a year earlier, established a

set of key policies for the development of Information Society in Portugal. It

addressed a broad range of issues related with electronic democracy, digital divide,

electronic government, knowledge networks (R&D, Universities and schools), digital

business environments, employment, new economy (software, digital contents,

entertainment, telecommunications), institutional and legislative frameworks, security

and privacy, among others.

The following year, 1998, the Portuguese Digital Cities Program was launched (Veiga,

2000). It proposed four action lines: (a) improve quality of life in cities, mainly

through the provision of electronic local administration services and telemedicine; (b)

contribute to development of peripheral areas; (c) improve local economy and

employment, including access to new markets, teleworking and ecommerce; and (d)

contribute to fight info-exclusion and help citizens with special needs. 7 cities or
35
regions were invited to participate in the program through a diverse mix of

organizations, mainly led local governments, universities or regional agencies.

Nonetheless, the basic content of each project was somehow predetermined by

previous beliefs and only occasionally, notably in the case of Aveiro, local needs and

expectations could be addressed.

Figure 11 - ICT Intensity and Growth (1992-97). Source: OECD, 2000

But to better understand the positioning of Portugal among other European countries

it necessary to focus our attention to the diffusion of ICTs. Figure 11 presents the

intensity of ICT expenditure in 1997 against the growth rate of this intensity from

1992 to 1997. Following recent analysis for knowledge-based industries (Conceição

and Heitor, 2003), the results show that Portugal was the leading OECD country in

the growth rate of ICT expenditure from 1992 to 1997, with a growth rate of more
36
than 10%, and mainly accounted for by increases in expenditures in

telecommunications (about 9%). Expenditures in IT services and software are

particularly low, below 1%, and only Turkey, Greece and Poland have shares of

expenditure on IT software and services below the Portuguese value. The growth in

this category has been equally dismal, below 2% a year.

In terms of my analysis, I would like to argue that the figure shows large variations

associated with countries characterized by small absolute values, exhibiting patterns

typical of latecomer industrialization for Portugal. In addition, the results may

represent indications of the process through which latecomer countries become

engaged in the new techno economic paradigm (Freeman and Louçã, 2002). Most

countries are clustered in the bottom of the figure, with growth rates below 4%. The

levels, as indicated by the horizontal distribution of countries, confirm the perception

that the US is a leading country. The expenditures on ICT as a percentage of GDP in

the US are about 2% above the European average.

Border Midland and Western Region 357.8 €

La Rioja 357.8 €
South Aegean 269.4 €
Ionian Islands 241.4 €
Baleares Islands 238.2 €
Western Greece 151.1 €
Açores 117.9 €
Highlands & Islands 98.4 €
Epirus 83.4 €
Alentejo 44.5 €
Peloponese 43.1 €
Continental Greece 42.8 €
Algarve 42.5 €
Centro 29.9 €
Norte 13.3 €
Southern Scotland 9.2 €
Lisboa e Vale do Tejo 6.8 €
Liguria 2.2 €

Table 2 - Expected ICT Expenditure per capita for selected European Regions, 2000-06; Source:
Tsipouris, 2000

37
The evidence of still low absolute investments on ICT in Portugal is clearly illustrated

in Table 2, which shows values per capita for sample European regions in the census

whose programming documents indicate information society actions and that provide

the necessary financial information (Tsipouris, 2002),. It is clear that the table refers,

above all, to regions that have attracted European structural funds and, on this basis, it

is important to mention the wide diversity of situations and framework conditions for

attracting these funds, which clearly influence any analysis to be considered. But for

the purposes of my analysis, it is interesting to attempt defining the extent to which

the performance of digital networks and cities would depend exclusively on the

limitations of funds, as well as from the capacity to attract them.

Besides large growth rates in ICT investments, the extent to which the Portuguese

society is engaged in the knowledge economy comparatively to other nations can be

analysed making use of the recently established systematic assessment by the World

Economic Forum in collaboration with INSEAD and the World Bank’s infoDev

programme through the “networked readiness”, as represented in Figure 12 for 2002

(Dutta. and Jain, 2003).

This indicator offers an aggregated idea of “the degree of preparation of a nation to

participate in and benefit from ICT developments” and illustrates the still weak

position of Portugal in the European context, only above Greece. The main point to

note is that the results for Portugal and for most of the OECD countries appears to be

dependent from other than the country’s overall wealth (as measured in terms of GDP

per capita). Considering the partial log regression plot included in the figure, Portugal

is in fact entering the cluster of countries where the effect of increasing GDP on

network readiness is less pronounced and other factors, namely at institutional and

38
contextual level, have been shown to particularly influence country’s competitiveness

(Conceição and Heitor, 2003).

Figure 12 - Network Readiness Index versus GDP (PPP) per capita, for 2002, with partial Log
regression. Source: Dutta, S. and Jain,A. (2003)

The challenges associated with latecomer industrialization, as mentioned before, and

the relative positioning of Portugal in the international scenario at the outset of the

21st century can be further analyzed from the sample results of Table 3: it shows

Portugal ranking among the first 25-30 positions but the least performing country in

Europe.

The pattern of small absolute values regarding the mobilization of information society,

but large variations, can be further analyzed making use of a number of typical

indicators to characterize the penetration of ICTs in a country and, for example,

Figure 13 shows values for internet penetration rates, with Portugal getting the highest

position in southern Europe for 2002 (Portugal 42%, while Spain 42%, Italy 40%,
39
Greece 18%, with an EU average of 51%), although far away from typical north

European penetration rates (Eurobarometer, 2003). The relative gap persists in 2004

(UMIC, 2004).

Ranking Networked Information e-Government Financial Times /

Readiness Index Society Index Benchmarking OCDE ranking
Dutta and Jain, 2003 IDC, 2003 U.N., 2001 2001
Finland 1 8 13 10
United States 2 4 1 3
Sweden 4 1 11 2
United Kingdom 7 7 7 9
Denmark 8 5 9 18
Germany 10 15 10 12
Netherlands 11 6 8 5
Austria 16 16 25 16 =
France 19 20 14 16 =
Japan 20 12 27 13
Ireland 21 21 23 4
Belgium 22 19 12 7
Spain 25 24 16 Not included
Italy 26 23 19 20
Luxembourg 27 Not included 20 15
Portugal 31 26 24 25
Greece 42 25 49 Not included

Table 3 - Sample results from recent international rankings

0% 20% 40% 60% 80%

DANMARK
SWEDEN
NEDERLAND
FINLAND
LUXEMBOURG
ÖSTERREICH
UNITED KINGDOM
IRELAND 2000
DEUTSCHLAND 2002
UE 15
BELGIQUE
FRANCE
ESPANA
PORTUGAL
ITALIA
ELLAS

Figure 13 - Internet Penetration Rates in Europe (2000-2002). Source: EOS Gallup Europe, 2002

40
 0% 20% 40% 60% 80% 100%
UE 15
BELGIQUE
DANMARK
DEUTSCHLAND
ELLAS
ESPANA
FRANCE
IRELAND
ITALIA
LUXEMBOURG
NEDERLAND
ÖSTERREICH
PORTUGAL
FINLAND
SWEDEN
UNITED KINGDOM

standard telephone line ISDN line

ADSL Cable Modem
mobile w ireless connection (other...)
(dk/n.a.)

Figure 14 - Internet Access type (2000-2002). Source: EOS Gallup Europe, 2002.

A similar picture could be obtained making use of Internet access in the household in

2000-2002, with Portuguese rates of 31%, as compared with 29% for Spain and 9%

for Greece, while 40% for the EU average and 74% for the USA, although Portugal

exhibits growth rates between 2000 and 2002 considerably larger than the European

average (namely 72% for Portugal, with 81% for Spain and 89% for France, as

compared with 43% for EU average) (EOS Gallup Europe, 2002),. Turning to the type

of telecom infrastructure, the country followed the typical average EU trends, with

standard telephone lines as the most frequent connection to the Internet access at

home (Portugal 74%, EU average 72%), followed by cable modem (Portugal 12%,

EU average 7%). ISDN, ADSL and Wireless connections were still relatively low in

2000 – 2002 (see Figure 14). As we shall see later, the relative gap between narrow

and broadband closed dramatically between 2002 and 2004, being practically even

( UMIC, 2004).
41
For this brief analysis of main figures characterizing the Portuguese context for the

use and application of ICTs in an international perspective, it should also be

mentioned that the country has one of the lowest European usage rates of Internet for

on-line purchases of products or services (9%, but only 1% frequently) and the third

lowest percentage of Internet users that have already contacted the public

administration (EOS Gallup Europe, 2002). These figures are important to set the

context of information networks and clearly call our attention for the need to consider

contextual levels beyond pure infrastructural issues, when considering measures to

foster information networks.

But the figures presented above should be further explored in terms of the main point

of this dissertation, improving our understating of the conditions necessary for digital

networks to succeed. Learning from the conceptualization about information societies

(Mansell and Steinmueller, 2000) it can be said that, fundamentally, the performance

in knowledge-rich competitive environments in terms of innovative performance

depend on the quality of human resources (their skills, competencies, education level,

learning capability) and on the activities and incentives that are oriented towards the

generation and diffusion of knowledge. But beyond human capital, which corresponds

to the aggregation of an individual capacity for knowledge accumulation, developing

a collective capacity for learning is as, if not more important, than individual learning.

Instead of individual or even aggregated human capital, a further important concept

for learning seems to be social capital, as analyzed by Conceição et al. (2000), among

others.

Before going any further exploring social capabilities and related issues associated

with the development of knowledge networks, I will present in the next chapter some

42
empirical evidence from Portuguese Digital Cities Projects and discuss a conceptual

framework for understanding digital cities.

Existing literature on the subject of digital cities often focus in technological

innovations as the main, if not the only driver of social transformation. As the new

digital technologies become embedded in daily life, as an “invisible” infrastructure,

mobilization and the capacity of absorption and diffusion of those technologies seems

to be critical to the development of the information society. Within this context, what

critical factors enable a digital city to mobilize individuals, communities and

organizations for the construction of the information society in Europe? What

sort of public policies must be considered to promote these factors? These broad

questions build on a comprehensive set of data on digital cities presented in previous

work (Heitor and Moutinho, 2004; Moutinho and Heitor, 2004) and on the need to

continuously adapt European and national policies aiming to foster innovation and

competitiveness in information industries. Along this dissertation I will explore the

hypothesis that current broadly target public policies to bridge the digital divide may

not necessarily stimulate the construction of the information society. Focusing on

communities of practice, interest or proximity might give better results in medium and

long term.

I will argue that, although geography based knowledge networks may have the

potential to attract people and mobilize the information society and make public

administration and markets more effective, they require effective infrastructures,

incentives and adequate institutional frameworks across time and space (Conceição,

Heitor and Veloso, 2003). Moreover, communities of practice (CoPs), interest or

proximity may play a critical role for mobilization. Therefore, knowledge networks

43
need to be designed holistically, coping with change and being continuously assessed

in order to accommodate humanity (Heitor and Moutinho, 2004).

44
Chapter II – Selected Case Studies in Portugal

The selected case studies included in this dissertation where chosen among a set of

projects that were part of an integrated initiative, called the Digital Cities Program, set

up by the Portuguese Government through the Ministry of Science and Technology in

1998 and jointly funded by the Portuguese Science and Technology Foundation (25%)

and the European Union (75%). Although there were several simultaneous initiatives

related to the diffusion of ICTs at a national level, e.g. Internet access in schools

(RCTS network), national community building portal (Mosaico / Terra-à-vista), and a

very successful electronic government one stop shop (Infocid), the projects were

chosen not because they were presented as “Digital Cities” but, most important, they

were integrated projects, strongly related to the territory and specifically designed for

the diffusion of ICTs at local level, covering several aspects of society, collective or

individual, public or private.

To help explain the choices made by each region regarding the communities and

content included in each one of Portuguese digital cities and regions, it is critical to

understand the different perspectives that contributed for the overall context and

respective results (Figure 15). I have already discussed some definitions for the

information society and the ideas underlying current urban renewal theories.

In this chapter I will start by explaining the methodology of analysis, called C3ITIES.

Next, two digital city paradigms, Amsterdam Digital City and Kyoto Digital City, will

be discussed. Then I will present 4 case studies of Portuguese Digital Cities.

45
 Figure 15 - Overall Context for the Development of Portuguese Digital Cities and Regions

C3ities Methodology

Digital cities and regions projects, in terms of the co-evolution of ICTs and regional

development, could be approached from different perspectives: technology enabled

communities or social networks (Ishida, 1998; Huysman,Wenger and Wulf, 2003);

urban renewal through the use of new technologies (Downey and McGuigan, 1999),

systems of innovation (Mothe and Paquet, 1998; Kominos, 2002), geography of the

Internet (Zook, 2001), or even the economics of knowledge (Foray, 2004).

Digital cities and regions can also be considered as complex, large-scale Engineering

Systems, emphasizing the socio-cultural context, system life-cycle and change

management as well as dealing with architecture (Crawley, E., et al., 2004),

46
uncertainty (Neufville, 2004), flexibility (Moses, 2004), safety (Levenson et al.,

(2004), and sustainability (Cutcher-Gershenfeld et al., 2004).

The proposed methodology, called C3ITIES, extends the socio-technical approach to

information systems (Laudon and Laudon, 2002), where the dynamic mutual

adjustment of both technology and users determines its final performance, function,

and cost. It considers a holistic approach for designing and implementing regional or

urban information systems as a whole. The context, namely when related to the

territory, provides to both content (existing, needed or planned) and communities their

significance as nodes of knowledge networks or tangible expressions of

multidimensional relationships. These relationships – information flows – must be

mapped to the technological roadmap to determine the amount and the direction of

change needed in the organization, community or society. Technology path-

dependency and usage permanence must be well understood before designing,

implementing or exploiting information systems at a regional level. As a result,

knowledge creation, accumulation and diffusion play a critical role in this process.

Emergent, or initially unintended, properties, often present in complex systems, must

be also optimistically incorporated in the process of building digital cities or regions,

e.g. new business models or usage behaviors.

The framework identified in Figure 16 considers the relative importance of the several

processes for making available or implementing technological infrastructures,

together with the increasingly important role of creating incentives for mobilizing

communities and dynamically adapting institutions towards innovative societies

(Conceição et al., 2003). Under this conceptual approach, I refer to three main levels

of analysis, including infrastructures, contents and context, although there is a

growing body of opinion that balanced information society depends on five mains
47
aspects, namely: infrastructure, access, application and services, digital content

development, and ICT skills development (Tsipouris, 2002). It is argued access and

infrastructure could be joined in a single layer, as well as application and services and

digital content developments into a second layer. In addition, the scope of the so-

called ICT skills development is broadened to include other contextual issues and

local characteristics of communities of practice.

Figure 16 - Framework for the analysis of digital cities, C3ITIES, including the consideration of
the overall context, contents and communities of practice, with a diversified network of
infrastructures and the processes of their implementation. Source: Heitor and Moutinho, 2004

48
The Digital Cities Program

The evidence presented in this section is built on the analysis of sample projects for

digital cities and regions in Portugal, which have been structured around the electronic

provisioning of local government administrative services complemented by some pilot

projects in areas such as e-business and telemedicine.

Figure 5. Identification of main projects for the specific development of digital cities and regions,

established over the period 1998-2001, making use of European structural funds.

The first experiences in Portugal with digital cities started in 1998 through a program

funded by the Portuguese Government and the European Union and involving 5 small

and mid-sized cities (Aveiro, Bragança, Guarda, Marinha Grande, Castelo Branco)

and 2 rural regions (Trás-os-montes and Alentejo), as identified in Figure 5. The main

objectives of the program were to (a) improve the quality of life in cities; (b)

49
contribute to development of peripheral areas; (c) improve local economy and

employment; and (d) fight info-exclusion and help citizens with special needs (MCT,

1997).

The project sites were chosen for reasons which are out of the scope of this

dissertation and I will concentrate my analysis on issues associated with their

effective implementation. Alentejo and Trás-os-montes are remote agricultural

regions, among the least developed in Portugal and Europe, sparsely inhabited by an

aging population. Both projects were designed to create new opportunities for the

local population, mitigate social and economic disparities and promote regional

networking. Aveiro is developing a true innovative and entrepreneurial image, in

particular connection with the local university and the local branch of Portugal

Telecom, which includes important research and development activities. On the other

hand, Marinha Grande is particularly engaged in traditional, labour-intensive

industries and the digital city project has been particularly promoted through the

industrial network associated with the local moulds industry. Both these two projects

invested mainly on local competitiveness and competence building. Bragança, Guarda

and Castelo Branco are peripheral cities with relative regional significance. Their

approach was to support the adoption of information and communication technologies

by individuals, firms, associations and local government and other public

organizations.

In terms of regional penetration, Table 3 shows that the projects listed above covered

about 11,30 % of the total Portuguese population (10,44% of the population under 15

years of age) and about 42% of the total surface of Portugal. All projects involved a

broad range of relevant actors and change agents within each one of the territories

50
being nonetheless always led by local municipalities. Local higher education

institutions were particularly involved only in a limited number of projects (Aveiro,

Bragança, Trás-os-Montes).

Municipality Pop. (%) Pop. < 15 (%) Area (Km2) (%)

Aveiro 69.560 0,67% 12.160 0,73% 208 0,23%

Bragança 32.440 0,31% 4.760 0,29% 1.138 1,23%

Castelo Branco 54.260 0,52% 7.440 0,45% 1.440 1,56%

Guarda 38.560 0,37% 6.230 0,38% 709 0,77%

Marinha Grande 33.370 0,32% 5.050 0,30% 186 0,20%

Alentejo 510.690 4,93% 71.930 4,34% 27.227 29,55%

Trás-os-Montes 431.540 4,17% 65.450 3,95% 11.122 12,07%

Total 1.170.420 11,30% 173.020 10,44% 42.030 45,61%

Table 3. Characterization of digital city projects, in terms of population and area considered in
each city/region Source: INE, 2001

It should be noted that, at least for the initial projects analysed here, the institutional

framework established by the central government was quite flexible and fostering

local voluntary initiatives. It was based on the simple provision of guidelines focused

on providing content and services related to local public administration and to specific

activities with social implications (e.g., healthcare), economic impact (e.g, business-

driven corporate networks for regional competitiveness), and aimed to promote

cultural contents (Aveiro Digital City Coordination Team, 2001a, 2001b; Association

for the Development of Bragança Digital City, 2001). Initiatives to mobilize and

promote the adoption of the Information Society were part of various applications,

although not always considered at the required level, at least beyond that given to the

implementation of infrastructures (Aveiro Digital City Coordination Team, 2001b).

51
Table 4 show sample data in terms of public funds made available to the seven

projects mentioned above, illustrating diversified situations, with levels of funds per

capita raging from low to moderate when compared with those considered within the

overall usage of European structural funds (Tsipouris, 2002). Within the broad range

of digital city projects considered at international level (Tanabe, Besselaar and Ishida,

2002), Aveiro Digital represents an interesting case study in that it has comprised

diversified initiatives promoted and coordinated by an autonomous organization

formed among the local government, the local University and the incumbent

Telecommunication operator, PT Telecom. It represented the result of a long

preparation effort and provided the opportunity to evaluate concepts and dynamically

testing ideas, involving a limited but well informed group of people (Aveiro Digital

City Coordination Team, 2001b).

Bragança Digital focused on creating basic ICT infrastructures and wireless

networking environment for local government buildings, health institutions,

educational institutions, and local employment agency to provide information and

services to local citizens. Other initiatives included the provision of local products

(www.rural.net), health, educational and e-business activities (Association for the

Development of Bragança Digital City, 2001).

Guarda Digital was promoted by and organization formed by the municipality, local

educational institutes, associations” and the incumbent telecommunication operator. It

included pilot projects in healthcare e-business, tele-working and educational

initiatives (http://www.ipg.pt/adsi/).

Castelo Branco Digital aimed to connect all public institutions (municipality, social

security and health institutions) and local associations (sports, culture and business) to

52
provide an integrated information network to citizens and tourists. For example, it has

included the provision in rich media of old Portuguese theatre contents

(http://www.cm-castelobranco.pt/cb_digital/).

Project Pop. (a) Total investment Investment p.c.

Aveiro 69.560 5,590,000 € (b) 80,39 €

Marinha Grande 33.370 1,200,000 € (c) 35,96 €

Bragança 32.440 1,044,000 € (d) 32,18 €

Castelo Branco 54.260 1,082,000 € (e) 19,94 €

Guarda 38.560 350,000 € (f) 9,08 €

Trás-os-Montes 431.540 1,735,000 € (g) 4,02 €

Alentejo 510.690 1,500,000 € (h) 2,94 €

Table 4. Public Funds Expenditure Per Capita in the first phase of the Digital Cities Program,
1998-2000.

Sources: (a) INE, 2001; (b) PACD, Final Evaluation Report, 2001; (c) ; (d) Associação para o
Desenvolvimento de Bragança, Final Evaluation Report, February 2001; (e) personal communication
http://www.dpp.pt/pdf/info52.pdf; (f) http://www.freipedro.pt/tb/110698/guarda3.htm; (g) personal
communication; (h) http://home.telepac.pt/telepac/net/13/regionalismo_2.html.

Marinha Grande Digital, as managed by the local municipality and the Technological

Centre associated with the moulds and plastic injection industries, focused on creating

an Extranet to provide business-related (mould, plastics and glass) content and

services and on facilitating communication among companies and clients. Other

initiatives included a centre of advanced telecommunications to promote the use of

the Internet (http://www.marinhagrandedigital.com/).

Trás-os-Montes Digital included regionally-based web contents (i.e.,

www.espigueiro.pt), managed by the local University, that aggregates content and

53
services of 31 municipalities. The portal is managed by the local university and

includes business and employment opportunities, geo-referenced information,

healthcare facilities and technologies to coordinate medical services in rural areas

(Morgado, 2003a, 2003b).

Alentejo Digital brought together 47 municipalities and 3 regional agencies to create a

regional information network to provide services and territory-related content to

citizens and local firms through regional web-based contents. The main objective was

to enable local government teams to learn, use and promote new technologies, namely

computer network management and digital content production and publishing. An

Intranet was set up linking all municipalities and regional agencies to enable the

necessary collaborative work environment. About 50 people were recruited, mostly

from local unemployment lists, to work on the project that lasted until July 2001

(http://www.alentejodigital.pt/).

In the next section I will describe in greater detail the cases of Alentejo Digital,

Aveiro Digital, Trás-os-montes and Bragança Cidade Digital. However, before

continuing to the presentation of the case studies, a number of important limitations

need to be considered. First, empirical data provided by the managing teams were

sometimes fragmented and mot of the time unequal among projects. None of the

regions could make available complete information about context, communities,

content, information fluxes, technology roadmaps, information systems and

exploitation models. Following the methodology, I have gathered different types of

information, from raw data (website data logs) to evaluations reports to fill the

information gaps whenever possible. I have also interviewed all managers, except

54
those from Castelo Branco, to check the available information and to get feedback

about my conclusions.

Second, digital cities projects were very dynamic and sometimes it was difficult to

freeze in time and space the scope of the projects. Aveiro Digital and Trás-os-montes

were especially hard to limit in terms of content since it was constantly updated. I had

to rely on interviews to agree on what data was significant within period of the study.

Third, from 1998 to 2000, the expectations about digital cities were very high.

However, data gathering and interviews took place much after the Internet bubble

burst in April 2000. Disbelief in the so called new economy and a profound

technology hangover made it difficult to capture the real feelings of the people

involved in the projects. Most of the system administrators, programmers and content

producers had also already left the projects and weren’t available to explain the reason

of some of the technical decisions.

Alentejo Digital

Alentejo, literally “beyond the Tagus River”, is an agricultural region famous for its

cork plantations. The population density is very low, less than 1/5 of the national

average.Its territory, corresponding roughly to one third of the national area, lies in

the south of Portugal. It is limited to the north by the Tagus River, to the South by the

Monchique mountain ridge and the Algarve and to the east by the Spanish regions of

Extremadura and Andalusia. To the west lies the Atlantic Ocean.

Alentejo Digital was a partnership set up between the public administration (Ministry

of Planning through the Coordination Commission of Alentejo Region, Regional

Delegation of the Institute of Employment and Professional Training, Agency for the

55
Development of the Alentejo Region and Ministry of Science and Technology,

through the Information Society Mission) and the private sector (Portugal Telecom).

Website about the April www.alentejodigital.pt/25deAbril/

25th, ’74 revolution
Northern Alentejo
Development Program
Cante Alentejano (traditional
folk songs)
Education (idea contest)
Compadre (Regional Portal)
Évora District Government
Environmental
Regional Statistics
News from Alentejo
Alentejo Development
Program
Classifieds
Business opportunities
Restaurants
Local government websites
Contents
Business support
Games and puzzles
Table 4 - List of selected websites produced between 1999 and 2000. Source:
www.alentejodigital.pt/avna/
www.alentejodigital.pt/cante/
www.alentejodigital.pt/educacao/
www.alentejodigital.pt/
www.alentejodigital.pt/gcde/
www.alentejodigital.pt/natureza/
www.alentejodigital.pt/ine/
ww.alentejodigital.pt/alentejodigital/internet/
www.alentejodigital.pt/protal/
www.alentejodigital.pt/classificados/cgi/classifieds.cgi
www.alentejodigital.pt/oportunidades/
www.alentejodigital.pt/gastronomia/
www.alentejodigital.pt/concelhias/
www.alentejodigital.pt/conteudos/
www.alentejodigital.pt/ace/
www.alentejodigital.pt/jogos
www.alentejodigital.pt

The project consisted basically of a regional networking infrastructure and a content

management system hosting an aggregation portal of 47 municipalities. The portal

(www.alentejodigital.pt) provided relevant contents and services for inhabitants and

visitors of the Alentejo region. The back-office, supported by an Intranet, was

managed in each one of the municipalities by a mediator who had the responsibility to

gather, edit, publish and update content.

Most of the content was provided by the local administration, but some interesting

websites were also published by local communities. Examples of these websites were

56
social networking (Sopas e Descanso) (Figure 17), environmental associations (Figure

18), folk songs from Alentejo (Cante Alentejano, Figure 19), and games (Figure 20).

Figure 17 - Sopas e Descanso Figure 18 - Environmental Association

Figure 19 - Cante Alentejano Figure 20 – Games

The key targets of the project were (RCCA, 2001):

1. individuals and local communities, namely those related with local or regional

development, as well as local businesses, regional culture and traditions and

handicraft that promote the economical and/or social growth of Alentejo

Region”;

57
 2. Basic and secondary schools, universities and polytechnic institutes, or other

educational or professional training institution;

3. Regional and local administration

Figure 22 - Example of an information flux

between users and mediators with access to the
Intranet (source: RCCA, 2001).
Figure 21 - Typical infrastructure (source:
adapted from http://www.alentejodigital.pt)

The mission of the Alentejo Digital project was to create the necessary conditions for

attracting and retaining people within the region. The use of communication and

information technologies would be one among a variety of instruments to overcome

the chronic tendencies of economic decline, desertification and population ageing.

The objectives included the completion of a regional information portal, the

implementation of a regional data center and a digital network over ISDN lines to

ensure the provisioning of electronic local administration services.

The coordination of the information fluxes by the different points of presence all over

the region was made through an “information, distribution and contribution network”,

58
called “Infopontos” (RCCA, 2001). The infopontos were managed by mediators

linked to the regional Intranet. They would collect, edit and publish content from both

citizens and municipalities (Figure 22).

Hits Total hits 2.794.394

Daily average 18.754
Homepage 77.613
Page views Total Page views 1.527.462
Daily average 10.256
Documents 673.303
Visitors Visitor sessions 50.673
Average session 00:14:19
International visits 9,72%
Unknown orign 53,49%
Origin from Porugal 36,78%
Unique visitors Unique visitors 14.886
One visit 10.238
More than one visit 4.648
Table 5 - Website statistics from October 1999 to February 2000 (source: RCCA, 2001)

The usage statistics (Table 5) shows interesting values: more than a million and a half

page views in less than 6 months, more than 50,000 visitor sessions, averaging about

15 minutes each and bout 15,000 unique visitors.

Despite the growing number of visitors, the system analysis (Figure 23) of the project

would show that several factors contributed for the final shut down. The period for the

planning and implementation of the project, 2 years, was evidently short. There was

no time to discuss and detail institutional arrangements to secure the sustainability of

the project led by the 47 municipalities. Portugal Telecom was a strategic partner at

the inception of the project but swiftly became a provider. As an example, Portugal

telecom designed the topology of the ISDN network (Figure 21) and respective points

of access to minimize costs for the project, but they changed the prices for the

connections even before the network was completely laid down. As a result, the

connection costs almost doubled and added for the high burn-out rate.

59
 Figure 23 - System analysis of the Alentejo Digital

The investments were technology oriented, basically the ISDN network and a content

management system. Even though the mediators were somehow capable of managing

content, the lack of advanced skills in systems management and the inconsistent

content production, together with the end of the funding period, caused the portal to

shut down.

Aveiro Digital

Aveiro is a seaport, located at the Vouga estuary, with a population of approximately

69,560. The city’s innovative and active character, although recent, draws from the

singular institutional framework established in close collaboration between the local

university and the local business environment, mainly driven by the national

telecommunication operator.

Following the launch of the first Digital Cities public funding program in Portugal

(1998-2000), the municipality, the university and the incumbent operator set up a
60
public-private partnership to develop the idea of Aveiro Digital City focusing on (a)

quality of life in the city; (b) democratic participation; (c) extensive access to public

and private digital information and services; (d) local public administration

modernization; (e) inclusive development and sustainable growth; and (f) job creation

and lifelong learning (Aveiro Digital City Coordination Team, 2001a,b; Municipality

of Aveiro, 1998). The complete funding life cycle was expected to be 8 years, with

the first phase of the project starting in February 1998 and lasting until December

2000, totalling an investment of 5,590,000 Euros. The second phase, originally

planned to start in January 2001, has only begun on June 2003 and is planned to last

until December 2006.

a) Aveiro Digital City Centre b) Interactive learning website for kids

(source: http://digipraca.aveiro-digital.net/) (http://www.cidadedamalta.pt/)

Figure 24 - Sample infrastructures and contents provided through Aveiro Digital.

After a troubling start – budget allocation negotiations and bureaucracy caused

lengthy delays, mostly for over than one year, in both the formal approval procedures

and the technical implementation schedule – the first phase included 38 projects

covering several different aspects of the use of information and communication

technologies, as illustrated in Figures 6 and 7. Emphasis was given to infrastructures

and digital contents, including local e-government, e-health, e-business and

entertainment, as listed in Table 6.

61
 Enterntainment,
Community Buiding;
Culture and Arts;
8,05% Community Buiding; 5,41%
18,60% Enterntainment,
e-Government;
Culture and Arts;
13,51%
29,73%

e-Business; 24,54%

e-Government;
Education; 18,92%
20,38% d
Social Cohesion;
3,87%
Knowledge
e-Health; 4,78% e-Business; 16,22% Integrated
Education; 16,18% Communities; 2,70%
Knowledge
Integrated e-Health; 2,70%
Communities;
3,60% Social Cohesion;
10,81%

a) Budget allocation per intervention area b) Number of approved proposals per intervention
areas

Figure 25 - Sample indicators associated with the incentives attracted by Aveiro Digital. Adapted
from Aveiro Digital City Coordination Team, 2001a,b

E-business and education related activities accounted for 35.1% of the total number of

approved projects and 40.7% of the budget allocated. E-government used up to 20.4%

of the available funds. University-based and e-health projects included only two

projects and utilized less than 9% of the total budget. On the other hand,

entertainment, culture and arts accounted for about 30% of the total number of

approved projects, but only received about 8% of the total budget available. In general,

ICT infrastructure – computers, applications, Internet access and basic ICT training –

was the most important component of all projects, while investments in activities

oriented towards the mobilization of the population for the information society were

practically inexistent. Consequently, the evaluation of many activities claims for

reduced levels of public participation, with some of the initiatives falling short from

their original objectives (Aveiro Digital City Coordination Team, 2001a,b). E-

government and other projects involving basic and secondary schools had more

permanent effects, while e-commerce and e-health performed poorly. Budget cuts

62
and uneven financing flows during the implementation phase posed extra difficulties

and increased risk unnecessarily.

Nonetheless, during 1999-2000, Aveiro Digital City made available 446 personal

computers to diverse public and private organizations, published 8 CD ROMs and 32

websites, supplied 73 interactive services, and trained 529 people, as listed in Table 6.

The number of Intranets and Extranets users exceeded 3.000 people in different public

and private organizations and the Aveiro Digital City Website (www.aveiro-digital.pt)

accounted for a monthly average of 4,700 visitors.

The main question raised by local people involved in the project has been consistently

associated with the structure of public financing and the conditions for long term

sustainability, mainly due to the fact that when the limited public funds dried up some

of the projects came to a close, while others kept their presence in the Internet

although rarely updated. Moreover, the funding concentrated mostly on the inputs of a

long change process, namely infrastructures, information systems and ephemeral

content, giving little consideration to the mobilizing the population at large.

Aveiro Digital makes a very interesting case for the requirement of streamlining of

processes for the submission, approval and funding of projects (Figure 26). First, the

excessive bureaucracy postponed the start of the projects more than a year in most

cases. Then, the total public funding agreed with the Portuguese Government was

stretched thin to fund all the projects approved by the coordination team. In average,

the approved incentive was 50% of the amount requested. The reimbursements were

also often overdue. These three factors contributed for cash flow problems in most of

the projects and together with poor management in the first months they created

several technical and operational difficulties.

63
Intervention Areas Activity Related Websites
Digital Community Facilitate to all citizens Internet access and active digipraca.aveiro-digital.net
learning support in basic ICT: 14 centers in local digibairros.aveiro-digital.net
parishes, and 4 in disadvantaged neighborhoods.
www.aveiro-digital.pt
Local Government and Aveiro Municipality geographical and administrative www.cm-aveiro.pt
Public Services information systems
Water, sewage municipal services one-stop shop www.smaveiro.pt
Water quality sensing and monitoring system n.a.
Internet and Intranet services for the Aveiro Judicial n.a
Court;
Schools and School Construction of communities compromised with veraria.aveiro-digital.net
Community education, through training and easiness of the cspveracruz.aveiro-digital.net
communication between families, teachers and membros.aveiro-digital.net/esvir
students www.prof2000.pt/tic-tac
Pedagogical Games and Interactive learning Tictac.aveiro-digital.net
applications for children to play, learn and www.cpj.ua.pt
communicate www.cidadedamalta.pt
University and academic Online biology competence centre in the areas of www.biorede.pt
community vegetal and animal diversity, molecular biology,
local biodiversity and Aveiro estuary ecosystem
Health Services Intranet and Internet services for the D. Pedro V saudenet.aveiro-digital.net
District Hospital and the 20 health centres
functionally dependent of this Hospital,
complemented with ICT training of health
professionals
Social Solidarity Computers, Internet access, ICT training, focused Resea.aveiro-digital.net
online information and services and design and portal.ua.pt/projectos/meu
validation of telework models, for people with bancoalimentar.aveiro-digital.net
special needs portal.ua.pt/projectos/ist
Economic Sector Computers, Internet access and ICT training for 20 www.aida.pt/sicate
SMEs, including basic digital services provisioning
Sea harbour telecommunication infrastructure, www.portodeaveiro.pt
commercialisation and management information
systems. Integrated online services serving various
communities
eCommerce service centre (Internet and public n.a.
access Kiosks) for local shops
On-line shopping mall http://www.aveiromegastore.com
Cattle farming sector internet and intranet services www.anable.pt
for online management, involving 36 farms, with a
national expansion
ELearning and interactive professional training www.ipjc.pt
Culture and leisure Interactive Pay-Per-View Pilot Project n.a.
Online edition and publication of news and Internet www.netpaginas.pt
radio broadcast
Equipments, training for the production of digital art oadgv.aveiro-digital.net
Interactive and pedagogical learning of classical www.orquital.ua.pt
music for all ages
7 Public access information kiosks (City guides) n.a.
History, culture, art and nature from Aveiro aveirana.doc.ua.pt
camarinha.aveiro-digital.net
www.net-moliceiro.inovanet.pt
ciadanca.aveiro-digital.net
www.terravista.pt/copacabana/2800
raphits.netual.pt/

Table 6 - Main digital contents included in the first phase of the Aveiro Digital City Project.
Source: http://www.aveiro-digital.pt

64
Neither time nor money was left to mobilize people, communities and organizations

and the usage was very low. With the help of the university, the main portal was kept

barely alive until 2004 when a new influx of public funds, 22,000,000 Euros, secured

the expansion of the project to additional 11 municipalities. Yet, knowledge networks,

namely related to basic education, continued to operate and provided the necessary

technology infrastructure for social capital building and information exchange.

Figure 26 - System analysis of Aveiro Digital

The time frame of the project and the extent to which public funds were continuously

available at the early stage appear to be critical conditions, namely to guarantee the

evolution of a process of gradual competence building. This is a major issue learnt

form the Aveiro project and here I refer to competence as skills and capacities, both

individual and collective. It is important to stress that new skills are part of the

competence foundation, but I’m not necessarily arguing that technological change is

skill-biased. It often maybe, but there are also cases in which it is not. When
65
competences are considered, the focus is on generic skills, including higher levels of

education (who can ever be against more education?) but also on capacities that are

more generic, such as creativity, risk-taking, and initiative (Conceição et al., 2003)

Trainees Technical 28
Teachers 108
Students 47
IS promoters 51
Project Managers 38
Public servants 257
Total 529
Users Internal 3020
External To be estimated on the basis of
4,700 unique visitors/month of the
main website
Other indicators Institutions involved 76
Persons involved in the execution 422
of the 38 projects
Temporary Jobs Created 43
Definitive Jobs Created 3
Table 6. Number of trained people, users and other indicators in the first phase
of the Aveiro Digital City Project.
Adapted from [14]

Trás-os-montes Digital

Trás-os-montes, literally “behind the mountains”, is a remote region in the

northeastern corner of Portugal, one of the poorest in Europe, riddled with

desertification, aging population and socio-economic exclusion. Its population is

largely rural and sparsely disseminated. Both agriculture and industry are still

underdeveloped. Accessibility is difficult and public transportation is infrequent.

There is a noticeable lack of institutions involved in R&D, technical training,

education or technology support, as well as regional business networks or associations.

66
Therefore, there are very few opportunities for employment in technology or

information industries (Marques, 2004).

Within this context, the University of University of Trás-os-Montes e Alto Douro

(UTAD) started in December 1999 a pilot project called Cooperative Extension

Service in Trás-os-Montes e Alto Douro, later renamed “Trás-os-Montes

Digital/SCETAD”. The idea behind the project was to adapt and contextualize a

particularly successful model of agricultural extension services in the USA to

simultaneously provide access to and promote public awareness about the benefits of

information and communication technologies (Morgado et al., 2003,1). The USA

Cooperative Extension Service (CES), created in 1914 by the Smith-Lever Act, was

“a collaborative effort between the U.S. Department of Agriculture (USDA) and the

land-grant colleges. The primary functions of the service were to disseminate

information and make educational opportunities available to people not enrolled in the

colleges. The general structure of the system enlisted the land-grant colleges to

coordinate outreach and the dissemination of the research conducted at experiment

stations through such media as workshops, demonstrations, and field-days” (Cash,

2000).

The pilot phase involved 10 municipalities, 20 local parishes, the Regional

Agriculture Directorate, 3 hospitals and more than 80 basic schools. The program

focused on setting-up the technological infrastructure for the data center (hardware,

software and networking), launching 20 public Internet access points, building

competences in application development, webdesign and service support, publishing a

portal (http://www.espigueiro.pt) and preparing the next phase that would start in

December 2000 (Cruz, 2002).

67
The network of public access points distributed in, preferably remote, 20 local parish

offices, called GAC (Gabinetes de Apoio ao Cidadão – Citizen Support Offices).

GACs were equipped with a 64kbps ISDN dial-up connection, a multimedia computer,

an ink jet colour printer, a scanner and an electronic payment terminal. Every GAC

was managed by a Mediator, who provided technical assistance for users whenever

necessary. The GACs were articulated through the Extension Agents with the

Municipalities Extension Offices (GEA – Gabinete de Gestão Autárquica). Extension

Agents role was to “monitor, support and develop the mediators activities and act as

liaison between them and the Coordination Team at the University of Trás-os-Montes

e Alto Douro. All these elements, together, form[ed] the Operational Team”.

Institutional, bureaucratic, logistic and administrative issues were constantly

influencing the location and the operation of GACs (Morgado et al., 2003b).

Figure 27 – Model of the operational team. Source: Cruz, 2002

Unlike the Mediators, who had to stay continuously at the GACs, the Extension

Agents were in close contact with local people and acted as campaigners for the

diffusion of ICTs in everyday life. On the other hand, they received constant feed-

back from users and often proposed new services or additional functional

68
requirements for the Coordination Team. They became the pivot on which revolved

users, GACs, Coordination Team and local authorities. Therefore, recruiting and

training Extension Agents was considered a critical success factor.

Figure 28 - Examples of activities developed Figure 29 - Example of activities for kids

Bragança Digital

Bragança Digital City project, led by the local government and the local Technical

Institute, promoted several initiatives that included basic ICT infrastructure, local

e-government one-stop shop, Internet access in public schools, telemedicine and a

very successful e-commerce website for local products (i.e., “RuralNet”). Several

public service buildings were connected (local government, health institutions,

schools and local employment agency) through a Wireless MAN, as schematically

represented in Figure 30 (Amaro and Lopes, 2001). The municipality implemented a

management information system and a geographical information system that

supported the provisioning of digital services by the Internet. Other projects included

an agricultural information network for the local irrigation perimeter and activities to

attempt mobilizing young people for the use of the Internet.

69
 a) RuralNet (source: http://www.ruralnet.pt/) b) Wireless MAN (source: http://rdc.bcd.pt//)

Figure 30 - Sample digital contents provided trough Bragrança Digital

RuralNet was aimed to improve the competitiveness of rural SMEs by providing local

firms with (a) innovative marketing ideas supported by efficient e-commerce

technologies; (b) knowledge sharing environments and (c) new opportunities and new

markets for their products and services. It mobilized several local manufacturers of

high quality traditional goods – wine, olive oil, sausages, cheese and handcraft among

others (totaling 46 firms) – to sell their products and services through the Internet

(www.ruralnet.pt). The digital contents were developed at the local Polytechnic

Institute in 1998 and were integrated in the Bragança Digital City project in 2000.

The period of incubation of the project can de derived from the statistical information

of Figure 9, which shows a lengthy, but significant process of market penetration.

Although it involved about 40 providers of local products, 5 firms of smoked sausages,

cutlery and cheese, had more than 50% of the total 1999 sales. Local clients

accounted for only 25,6% of total number of orders, while orders from Lisbon

(25.7%) and Porto (9.0%) together summed up almost the same number of orders as

those from the rest of Portugal (34.4%). International sales totaled 5.3%.

70
Usually, local traditional manufacturers are very focused on production and lack the

necessary competences and resources to address the needs of a global market.

RuralNet makes available to local firms a new sales channel, but also a new marketing

tool to expand local markets. It also provides training for all the partners and follows-

up closely the information and communication technologies adoption process.

Number of Orders and Sales - Rural Net (1999)

140 7.000 €

120 6.000 €

100 5.000 €
Number of orders

Sales (Euros)
80 4.000 €

60 3.000 €

40 2.000 €

20 1.000 €

0 0€
J F M A M J J A S O N D
Month

N. of orders Sales

Figure 31 - Monthly evolution of orders and sales during the first year of operation of
“RuralNet”

71
Chapter III – Discussion and conclusions

I will now turn to the analysis of the empirical evidence provided above and start by

discussing necessary framework conditions for the success of digital cities. Then, I

will come again with the suggestion that knowledge networks are drivers of larger

communities of users and mobilizers of the information society. Under this context, I

will continue my analysis by identifying critical factors in order to discuss a

conceptual framework for digital cities. I will conclude by presenting main policy

implications derived from my conceptual understanding of digital cities.

Mobilizing the information society with digital cities and

regions

But before continuing with the analysis, it should be mentioned that the emphasis will

be on the conditions favoring the mobilization of the information society in less

favored regions (LFRs) in Europe, which have been shown to lag behind the adoption

of measures as rapidly or intensively as were the core regions of Europe. In fact the

type of structural funds used to support the projects discussed before derive from

increasing awareness of that growing disparity in the European scenario, based on

three arguments, namely. (a) LFRs tend to get little new hardware and applications

because of the weakness of their markets (lack of scale and agglomeration

economies); (b) most LFRs have no track record of intensive interaction leading to

innovation or new ways of learning and, therefore, most LFRs put their efforts into

catching up, as opposed to proactive capacity building for the information society; and

(c) although the deregulation process and much of the hardware infrastructure may be

72
national jurisdiction, applications and content are vital in regional terms (Tsipouris,

2002).

Looking first at infrastructures in general, in the neoclassical view, they are related

with the existing amount of labor, capital, and natural resources. The new growth

theories bring to stage other important factor inputs, in particular human capital, and

R&D expertise embodied in firms, universities, and laboratories (Conceição, Heitor

and Veloso, 2003; Conceição, Heitor and Lundvall, 2003). Thus, infrastructure will

encompass, in addition to labor and capital, what it is called technology infrastructure,

or technostructure. Tassey (Azariadis and Drazen, 1990) has proposed a definition

that suits the present discussion: technostructure consists of science, engineering, and

technical knowledge embodied in human and organizational forms. In the context of

my analysis, I consider these three types of infrastructures in two main terms, namely

physical infrastructures and web-based contents (or non-physical infrastructures), on

which most of the sample projects considered in this dissertaion have concentrated

their investments. Table 7 provide the results of a brief analysis of main activities

considered in the various digital city projects discussed above and list typical

infrastructures that have been considered.

Turning to incentives, current understanding of knowledge-driven activities based on

endogenous growth theories are based on the existence of dynamic externalities and

imperfect markets, and require a careful understanding of the structure of competition.

On the one hand, because of the nature of knowledge, investment of private agents

often fails to acknowledge spillover effects, or may not be able to anticipate the full

extent to which there is further learning potential in a new technology. On the other

hand, incentives to invest in new knowledge depend on the existence of some degree

73
of monopolistic rents. These rents may not exist in latecomer countries exposed to

international competition, if they are solely adopting foreign technology.

Projects Physical Infrastructures Content (non-physical infrastructures) Context (e)

Networking and Connectivty Information Systems Information Services Interactive Services

(a) (b) (c) (d)

Aveiro Local health institutions Local public City guide; e-business, Community
communication network; administration Entertainment, Arts & Agriculture; Job building based on
Internet access in public management culture initiatives; opportunities; city metaphores
schools; People with information systems; Local government Environment;
special needs Justice court website Teleworking
Intranet; GIS

Bragança Municipality communication Municipality City guide; Local e-business;

network; Internet access in management government website
public schools information systems; Telemedicine;
GIS Agriculture

Guarda Internet access in public Local government e-business;

schools website Telemedicine;
Teleworking

Marinha Advanced Local industries Mobilization of

Grande telecommunication Knowledge network firms and public
demonstration centre; (Glass, moulding institutions for the
Internet access in public and plastics) use of ICT
schools

Castelo Municipality communication City guide; Local

Branco network; Internet access in government website;
public schools Art & culture

Trás-os- Internet access in public Content Regional Portal Telemedicine;

montes schools management Agricultural Network;
Digital platform Job opportunities

Alentejo Intranet for 47 Content Regional Portal Job opportunities

Digital municipalities management
platform

Table 7 - Main initiatives developed within the Digital Cities Program in Portugal (1998-2000)

(a) Networking and connectivity includes communication networks and Internet access; (b)
Information Systems includes technological components that store and process data like data bases,
electronic mail, ERPs, management information systems, content management, application serves and
business intelligence software; (c) On-line presence or downloadable forms; (d) Electronic form
submission or interaction through the web; (e) Mobilization and context building initiatives

As a result, Conceição, Heitor and Veloso (2003) call our attention that private

investment levels (which result from the incentive structure provided by the market to

economic agents) in activities with learning or spillover potential tend to be lower

than the social optimum, and may even generate what is known in the literature as

“low-level equilibrium traps”. In principle, these shortcomings of the market

74
mechanism call for some sort of government intervention. Governments are

concerned with making sure that societal costs and benefits are endogenized in the

decisions of private firms. In a learning environment this may mean subsidizing

specific activities, investing in education, or protecting infant industries (Chandler,

and Hikino, 1996; Lundvall and Johnson, 1994. But government intervention must

balance the potential distortions on competition that may come from intervention with

the needs to “correct market failures”: artificial restraints on competition can also

divert profits to activities other than building technological capabilities.

Against the background of the conditions described above, it is clear that digital cities

cannot be promoted independently of an innovation policy fostering capacity and

connectivity and that in turn innovation determines and is determined by the market.

However, it is also clear that it will require an effective mix of public support

mechanisms that take a relatively long-term perspective, taking into consideration

specific regional and thematic aspects, thus promoting a diversified environment.

But still focusing on the issues of incentives and looking at their relation with the

operational effectiveness of digital infrastructures, applications and services, Figure

32 shows that the most important web contents associated with the digital city projects

discussed before and summarized in were available to the public domain only for the

time public support was also available. Besides the notable exception of the Aveiro

Digital and Trás-os-montes Digital, this result may be obvious for the local promoters

of those projects, but should be acknowledge as a major issue for public policies

fostering the information society. I argue that early stage developments, as those

considered throughout this dissertation, do require continuous support, together with

adequate monitoring and evaluation procedures, in order to acquire the necessary

75
strength for their sustainable development. The evidence is that market mechanisms

do not necessarily work at the level of the issues associated with digital cities, namely

in less favorable zones, where incentives structures should de effectively designed and

adapt over time.

Figure 32 - Timeline of public funding to the projects of Table 7 - Main initiatives developed
within the Digital Cities Program in Portugal (1998-2000), versus the availability of updated web-
contents

(a) 10 Municipalities; 20 “Juntas de Freguesia”; Regional Agricultural Agency; Hospitals of Vila Real,
Chaves e Macedo de Cavaleiros; 80 basic and secondary schools; Trás-os-Montes and Alto Douro
University (UTAD). The second phase started in January 2001 and it will end on October 2003 (source:
SCETAD, Trás-os-Montes Digital Presentaion, Vidago, November 20-21, .2002); (b) Only 8 out 47
municipalities were connected during the first half of 1999 (source: http://www.alentejodigtal.pt); (c) A
very limited pilot project of Telemedicine started in April 1999 (source: http://www.ipg.pt/adsi/); (d)
Most of the projects started in February 1999. RuralNet Started on January 2000 (source: Associação
para o Desenvolvimento de Bragança, Final Evaluation Report, February 2001); (g) Projects
submission and evaluation started in July 1998. The Projects were approved on October 1998, but only
started implementation in May 1999 (source: PACD, Final Evaluation Report, 2001).

Although incentives and infrastructure greatly inform our understanding of economic

development, they do not tell the whole story about the differences across the various

76
projects discussed before. This is because both incentives and infrastructure do not

operate in a vacuum, being shaped by and shaping the particular context where they

operate. In the scope of this analysis, the city or region must have embedded a set of

social capabilities that define the context under which digital cities evolve.

Consideration of contextual issues in building-up network societies have not always

been considered in many different situation throughout the world, as acknowledged

by Castells (2001), among others, and Table 7 shows that specific measures to

promote adequate contexts in the projects considered in this dissertaion have also

been scarce.

If one considers the broad social and economic context under which digital cities may

be facilitated, the conditions for integrated learning processes are a critical success

factor. This has led Conceição, Heitor and Lundvall (2003) to build on Lundvall and

Johnson’s (1994) learning economy and to discuss the learning society in terms of

innovation and competence building with social cohesion. They view innovation as

the key process that characterizes a knowledge economy understood from a dynamic

perspective, while competence is the foundation from which innovation emerges, and

which allows many innovations to be enjoyed. In other words, it contributes both to

the “generation” of innovations (on the supply side of the knowledge economy) and to

the “utilization” of innovations (on the consumptions side of the knowledge economy).

Conceptually, the foundations for the relationship between learning and economic

growth have been addressed in the recent literature (Conceição and Heitor, 2002),

with learning being reflected in improved skills in people and in the generation,

diffusion, and usage of new ideas (Lamoreaux, Raff, and Temin, 1999).

77
As it was emphasized earlier, learning can occur in many shapes and forms, some of

which are informal, some formal. The institutional framework that comprise the

national and regional systems of innovation formalize the technological infrastructure

critical to generate the learning processes for individuals, firms, and nations, that

ultimately lead to long-term development. Thus, looking at a particular set of

organizations, their capabilities and related institutions, provides important lessons for

development. This is the reason for the need to combine adequate infrastructures and

incentives with institutions, to foster the necessary context for digital cities to succeed.

Fostering knowledge networks

The evidence of the projects discussed above show the need to extend the analysis

from a technocratic paradigm of technical change and look at broader system design

fostering societal developments. In particular the experience of projects such as those

developed in the cities of Marinha Grande and Aveiro clearly shows the important

mutual relationships that specific project-based communities have on the facilitation

of network societies, but also the fact that the implementation of digital cities may

significantly improve the efficiency of those communities. In the following

paragraphs, I extend this evidence and argue that the success of digital cities rely on

the specific development of communities of practice (CoPs), interest or proximity,

namely those integrating knowledge networks.

I refer to knowledge-centric, project-based communities, oriented to specific social

and economic goals, that will benefit, and gain from, digital networks if particularly

challenges by knowledge-based activities. In the case of Marinha Grande the evidence

is that economically-oriented networks based on mould-forming companies has

particularly launch business networks, which still require long-term processes and

78
continuous funding, as well an adequate institutional setting. In this case, it should be

noted the role of the related industrial association and technology centre in promoting

the necessary links and networking facilities, which again support previous discussion

about the need to consider basic framework conditions.

In a different scale, but also using relatively reduced level of incentives, namely at an

international scale, the evidence provided by the RuralNet Project developed in the

city of Bragança also shows the critical importance of project-based mechanism to

support and sustain digital cities. But of specific interest in our context, are some of

the activities developed in Aveiro, in that knowledge-based activities could promote

and sustain digital networks well beyond the period under which public incentives

were made available.

The reason why knowledge-based activities are particularly prone to foster and sustain

digital networks is because they will increasingly rely on “distributed knowledge

bases”, as a systematically coherent set of knowledge, maintained across an

economically and/or socially integrated set of agents and institutions, as discussed by

Smith (2000) and Conceição et al (2003), among others. The relevance of considering

distributed knowledge bases across economically and/or socially integrated set of

agents and institutions leads us to the concept of social capital. In the broadest sense,

social capital is associated with the “social capabilities” (Lamoreaux, Raff and Temin,

1999), that allow a country or region to move forward in the process of development.

In a more sophisticated treatment, Coleman (1988) states that social capital is “a

variety of different entities, with two elements in common: they all consist of some

aspect of social infrastructure, and they facilitate certain actions of actors—whether

personal or corporate actors—within the structure.” The relationship of social capital

79
for the economic performance of nations was recognized by Olson (1982) and North

(1990), in broad descriptions of the process of development.

Referring again to the evidence provided by some of the projects discussed above,

namely those at Aveiro, the role of higher education institutions appear to be

particularly important in fostering network activities, namely in the form of

knowledge-based communities. Following the analysis of Castells and Hall (1994), “it

takes a very special kind of university, and a very specific set of linkages to industrial

and commercial development, for a university to be able to play a role it often claims

to play in the information-based economy”. Definitely, those technical universities

that are pure teaching factories, or work under a bureaucratic structure, are unlikely to

act as generators of advanced technological milieu. Again, this recalls our attention to

the role of institutions in planning digital cities and promoting their impact.

Still in this context, Bill Mitchell (2003) argues that the most obvious advantage of

digital networking is that it provides an efficient way of “aggregating specialized

expertise” through “common access to project databases, compatible software tools,

and advanced telecommunication capabilities”. But, he emphasizes that “it does little

about the problems of creating trust and confidence, and of building intellectual and

social capital for the long term”, requiring the development and maintenance over

weeks and months of “project-based learning communities” looking at a common and

complex target. Long term collaborations can provide a more permanent framework

of online resource-sharing, and examples of such an initiative shows the need to bring

scale and diversity, beyond time. Based on this example, Mitchell concludes that we

should look beyond the popular idea of learning communities and seek to produce

communities that “motivate and sustain creative discourse yielding original

80
intellectual products such as architectural and engineering designs”, the so-called

“creative communities”.

A final remark associated with the form and role knowledge networks may play in the

process fostering network societies, should be discussed in terms of the evidence

provided by the Program “Ciência Viva” in Portugal, namely in association with some

of the projects discussed above (http://www.ucv.mct.pt/home/). It refers to specific

networks formed among basic and secondary schools with university groups and

research centers through project-based activities oriented to promote a culture of

learning.

Driving factor Sample Experiences Remarks

Scientific Biorede - Biology knowledge network
about local biodiversity, molecular
biology and estuary ecosystems launched
at Aveiro (www.biorede.pt )
Education / “Engineering in Portugal”, providing
Training historical data and information for Basic
and Secondary Schools, as well as
university students
(http://www.engenharia.com.pt/ )
Public Health Health information and communication
network of the Bragança Digital City
extension services
(www.espigueiro.pt/servico_cooperativo/
servico_coop_puh.html )
Managing Water quality monitoring and public
Public Risks diffusion system (www.simoqua.pt )
Corporate Marinha Grande local-industry (molding,
strategy and plastics and glass) network
competitiveness (www.marinhagrandedigital.com/ )
Website developed and managed by
Research Centre
Learning materials and information
exchange between experts, teachers
and students;
Website managed by Research Centre
Portable computers and Internet access
to foster the communication and
information exchange between doctors
and patients
Raise public awareness about water
quality, flooding and other public risks
Extranet managed by Technological
Centre

Table 8 - Typical experiences fostering knowledge networks as identified in the various digital
city projects analyzed and other sample initiatives

Beyond the critically important role of this type of activities, as explained by Ziman

(2000), among others, taking Pine and Gilmore’s contentions (1999) about what they

termed “the experience economy” and the role experiences play in building stronger

and more personal relationships in the corporate world, it is argued that schools, and

81
universities in particular, must deliver authentic experiences to build and encourage

sustainable and entrepreneurial growth. Pine and Gilmore explore the idea of

experiences as a fourth economic offering, as distinct from services as services are

from goods, but one that has until now gone largely unrecognized.

While services may be considered as a set of intangible activities carried out on behalf

of a person, experiences are memorable events that engage that person in an

individual way, so that they determine and guide transformations. Experiencing

entrepreneurial processes at the school (and the university, in particular) thus sets the

stage for the societal transformations required to progress successfully towards

innovative societies.

From the analysis above, it is clear that knowledge-integrated communities may

develop over different institutional, thematic and social frameworks and Table 8

summarizes the evidence provided by the various projects analyzed.

Conceptual framework

The previous paragraphs provide empirical evidence on specific digital city projects

developed in Portugal in the recent past, as well as on particular framework conditions

for their success, but now I turn to the discussion of a conceptual framework required

to improve our understanding of digital cities and networks.

It is clear that focusing on digital cities, I must consider the conditions that foster

innovation and the related processes of knowledge sharing in local contexts.

Traditional neoclassical approaches in industrial economics have emphasized the

analysis of the microeconomic behavior of firms and built theories specialized in the

American and Anglo-Saxon systems and related market dynamics. Following the

82
analysis of Conceição et al (2003), it provides an excellent context to understand

incentive structures and outcomes, but ignores most of the remaining issues associated

with learning discussed above. Evolutionary economics focuses on routines and

capabilities rather than incentives to improve our understanding of learning processes

and the role of institutions in economic development. Nevertheless, they have not

addressed the specific historical context of any region, namely those characterized by

late industrialization Cooke and Morgan, 1998). Building on the evolutionary

approaches and in system theory, the concept of “national system of innovation”

(Nelson, 1993; Lundvall, 1992; Edquist, 1997), has led to numerous studies of

individual countries, but there is still a long way to go in order to assess the specificity

of metropolitan systems or late industrialized regions.

The importance of the learning dynamics of firms and regions has been increasingly

considered as key to the processes of knowledge accumulation, innovation and growth

Nelson and Winter, 1982). In this respect, “firm competencies” affect the ability of

firms to innovate and shape their technology trajectories. Building on this idea,

Conceição, Heitor and Lundvall (2003) discuss the need to consider the systemic

nature of innovation together with processes of competence building.

At the same time, the spatial patterns of innovation and the related geographical

dimension of economic and social development have witnessed a renewed and

increasing interest in the literature (Cooke and Morgan, 1998; Storper, 1998), but

attention is to be focused on the ability to build social capital, including interactive

learning, local externalities, and networks among institutions (Swann, Prevezer and

Stout 1998). This focus on relational assets is part of the “institutional turn” in

regional development studies, as a result of the relative failure of classical approaches

83
which sought to privilege either “state-led” or “market-driven” processes, regardless

of time, space, and milieu.

Figure 33 - Schematic representation of a possible framework for the development of digital cities

In conceptual terms, I would like to explore features in the seminal work of Nelson

and Winter (1982), for which organizations know how to do things through simple

rules and procedures (routines) which represent the knowledge memory of the

organization. Even firms in the same industry differ in the sense that they accumulate

and develop idiosyncratic routines, which form the basis of the firms’ distinctive

capabilities. Fundamental to the idea of skills and routines is that they are constituted

essentially by tacit knowledge and are thus not easily replicated. Replication of

routines is thus possible only as a costly, time-consuming process of copying an

existing pattern of productive activity.

84
The dynamics in the theory is brought about by the processes of searching for new

routines and creating variety and mutations amongst firms, which are then subject to

selection processes. The combined interaction of search and selection processes form

the basis of the evolutionary approach and relate Nelson and Winter’s approach to the

theories of organizational learning and population ecology respectively. The routines

are thus seen as the knowledge genes of the organization, being transformed by

organizational learning and innovation. Although Nelson and Winter’s work provided

a conceptual foundation for a knowledge-based view of the firm, an essential

development was a deeper understanding of what constitutes knowledge, which it is

attempted to extend for a territory base. Figure 33 attempts to provide a schematic

representation of a possible framework of analysis considering main functions to

satisfy the knowledge-based view presented here.

Digital cities should be built from edge to core. The civil society is considered – not

only in terms of an organized and institutionalized civil counterpart of government,

but also including individuals and informal associations – as the origin and the fate.

To mobilize people to participate in the construction of a city, it is necessary,

In this context, a knowledge-based view of the territory assumes that individual, firms

and organizations operate in dynamic environments, where markets and technology

are changing fast and in unpredictable ways, as discussed by Eisenhardt and Santos

for the open discussion of emerging theories of strategy (Santos and Eisenhardt, 2002).

It also assumes a highly competitive setting, with those agents operating within

ecologies of learning, interacting and adapting to the environment. In this framework,

organizational capabilities or competencies are understood as clusters of knowledge

sets and routines that are translated into distinctive activities. Dynamic capabilities are

85
those that enable individuals and firms to build, integrate and reconfigure internal and

external competencies. The knowledge that is embedded in capabilities is a complex

and dynamic combination of tacit and explicit knowledge. Individuals operate within

organizational contexts in order to be able to share and use their specialized

knowledge. As a result, digital cities should consider communities of users and build a

context favourable to their increasing participation over time.

Extending this concept for the collective dimension typical of the territory, the

absorptive capacity should be largely a function of the level of the regions’ prior

knowledge (which emphasizes the cumulative nature of knowledge) and is also

history or path dependent (which emphasizes the importance of earlier decisions). The

level of absorptive capacity is heavily dependent on the level of absorptive capacity of

each actor (individuals and organizations) in the territory, but is different form the

sum of the parts. It not only depends on the interface with the environment but also

involves the internal transfer and communication of knowledge. This concept calls

attention to the internal channels of communication, to the diffusion of knowledge in

the region, and to the pattern of investments.

Public policies and the social and cultural shaping of ICTs

The discussion is framed within three main levels of analysis, namely infrastructures,

contents and context, which are comparable with those schemes that consider five

mains aspects, namely: infrastructure, access, applications and services, digital

content development, and ICT skills development (Tsupouris, 2002). In fact, the

evidence provided by Lena Tsipouri throughout Europe leaves us to jointly consider

the first two levels under infrastructure, as well as to join application and services and

digital content developments into a single level of analysis. In addition, the scope of
86
the so-called ICT skills development is broadened to include other contextual issues

and local characteristics of communities of practice.

In previous papers, the analysis was focused on the type of incentives and institutions

required to allow the mobilization of ICTs (Moutinho and Heitor, 2004; Heitor and

Moutinho, 2004; Moutinho and Heitor, 2005). In this dissertation the analysis focus

on the role of public policies and on the cultural and social shaping of these

technologies. This is because although incentives and infrastructure greatly inform our

understanding of economic development, they do not tell the whole story about the

differences across the various projects discussed above. Both incentives and

infrastructure do not operate in a vacuum, being shaped by and shaping the particular

context where they operate. In the scope of my analysis, the city or region must have

embedded a set of social capabilities that define the context under which digital cities

evolve. Consideration of contextual issues in building-up network societies have not

always been considered in many different situation throughout the world, as

acknowledge by Castells (2000), among others, and evidence shows that specific

measures to promote adequate contexts and mobilize people in the projects considered

in this dissertation have also been scarce.

Following the seminal work of Mansell and Steinmuller (2000), the evidence supports

the critical need for adequately managing those uncertainties and shows the necessity

of effective infrastructures, incentives and adequate institutional frameworks to be

promoted over time and across space.

But the implementation of complex technology-enabled infrastructures typical of

digital cities calls for a broader approach where social and cultural aspects are

integrated in early design phases to mitigate uncertainties, such as sustainability,

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flexibility and scalability. Moreover, digital cities may develop other unexpected

properties, or emergent properties, “developed by users of a system” and “often

unbeknown to the system designer” (Moses, 2003). Being so, the stakeholders

involved in the co-evolution of urban areas and ICTs would be better off if, as

proposed by Cooley (2000), “the current mechanistic paradigm of technological and

societal development [would be substituted by] human-centered systems [that would]

provide a powerful alternative philosophy for system design and a broader educational

and societal development”. He adds that “[this philosophy] regards the social and

cultural shaping of technology as central to the design and development of future

technological systems and society as a whole”, in terms of “knowledge-based

adaptive human-centred environments” (Cooley, 2000).

Expanding this conceptual framework to the entire city or even whole regions in order

to consider the way millions of people interact with information and communication

technologies in their daily life, it is clear that the initial approach to design digital

cities described in chapter II above need to be reconsidered. Table 9 describes main

implications and requirements of emerging trends, so that the vast majority of

potential late adopters are inclusively considered in future digital city projects. As

Dertouzos (2001) argues, we can avoid “drowning in information overload and

computer complexity only by throwing out last century’s model for computing and

adopting – indeed, demanding – a new computing philosophy, a new master plan, that

lets people interact naturally, easily, and purposefully with each other and the

surrounding physical world”. And he adds, “to put it in action requires three big steps:

changing the mind-set of users and designers; ensuring that our machines are easier to

use and make us more productive; and insisting that new technology reach many more

people”.
88
Layer of Analysis From To Implications and requirements

Conspicuous objects Invisible Embedding ICT infrastructures in

infrastructure urban daily life, fostering human-
centered systems
Infrastructure/access
Fixed access Roaming Competitive mobile services and
improved regulatory framework for
increased individual participation

One-way On-line Specific knowledge of institutional

distribution of collaboration and local contexts in order to help
information and participation developing interactive contents
Content/ services
Web functionalities Networked New competences in content and
Activities services development, enhancing
user activities and networks

Technology supply Mobilization of Mobilizing “change agents” to

users foster communities of practice,
CoP´s, and user involvement
Human and social
Context Standards Interoperability Building individual and social
competences through knowledge-
based adaptive human centred
environments

Table 9 - Emerging trends in the mobilization of the information society, towards a new
generation of “Digital Cities”.

Norman (1998) noticed that, in fact, technological systems tend to increase internal

complexities exponentially to meet the continuous evolution of users needs, but its

interfaces are likely to be constantly simplified to perform specific activities to a

broader base of users. The opportunities and possibilities of the co-evolution of urban

development and ICTs are so vast that this strategy, “edge to core”, would be more

appropriated to implement the next generation of digital cities. It starts by finding out

the critical interfaces between city dwellers and its supporting ICT infrastructure and

only then developing objective technology-enabled services to meet existing or

potential demand.

On the other hand, the number of potentially connected nodes within urban

environments has significantly increased in the last couple of years (see Figure 34),

and includes GSM/GPRS wired PDAs, Wi-Fi enabled laptops, 3G mobile phones,
89
ADSL connected game consoles and entertainment PCs, Bluetooth tablet PCs,

Videophones, Interactive TVs, real-time environment sensors (e.g. air and water

quality), large databases (corporations, libraries, museums, public administration),

GPS oriented cars, and GPS traceable trucks and buses. On the other hand, new layers

of territory-related data and information are been created in a daily basis, like

municipal geographic information, Internet city guides, interactive maps and routes,

and 3D worlds. To cope with this increased complexity, a new technology must add

another layer of distributed computing and data management to the current Web based

information distribution paradigm. In fact, as computers and networks become

ubiquitous and interlinked, they will turn out to be another invisible urban

infrastructure, like electric grids and sewage systems that will sustain daily life.

Figure 34 - Grid resources linked together in a “Digital City” infrastructure

Grid computing, as described by Berman et al. (2003), can be the “computing and

data management and infrastructure that will provide the electronic underpinning for a

90
global society in business, government, research, science and entertainment. Grids,

integrate networking, communication, computation and information to provide a

virtual platform for computational and data management in the same way the Internet

integrates resources to form a virtual platform for information. [They] are intrinsically

distributed, heterogeneous and dynamic”. Grid computing was shaped by the same

early driver that has pushed the scientific communities of practice to build the Internet

and the World Wide Web: the construction of a virtual collaborative environment for

scientific research. The main objective still is, as it was before, to share networked

resources for creation, accumulation and diffusion of knowledge.

Figure 35 - Layered architecture of a semantic grid enabled Digital City; modified from Berman
et. al., 2003)

The current grid model has a 4-layered architecture that includes (Figure 35):

1. hardware resources, such as computers, networks, data storage, sensors

and other devices that weave the underlying fabric;

91
 2. interoperable protocols, services and applications that virtualize and

secure the access to the grid;

3. common grid middleware, tools and services, such as resource allocation

and monitoring;

4. Grid applications.

The vertical layers represent new devices, and institutional arrangements to create

common policies, grid economy and a open global-area networking (Foster, 2003). It

is argued that on top of the current model, an activity-based, human-centered layer of

services should be added to help the mobilization process (as a complementary

vertical layer). This territory-related additional layer could be enabled by specific

knowledge-driven ontology (Fensel, Harmelen and Horrocks, 2003), natural language

(Lenci, Calzolari and Zampolli, 2002) and/or the semantic web capabilities for

“handling and support for knowledge processing” (Roure, Jennings and Shadbolt

2003).

If one considers the broad social and economic context under which digital cities may

be facilitated, the conditions for integrated learning processes must be considered.

This has led Conceição, Heitor and Lundvall (2003) to build on Lundvall and

Johnson’s learning economy (1994) and to discuss the learning society in terms of

innovation and competence building with social cohesion. They view innovation as

the key process that characterizes a knowledge economy understood from a dynamic

perspective, while competence is the foundation from which innovation emerges, and

which allows many innovations to be enjoyed. In other words, it contributes both to

the “generation” of innovations (on the supply side of the knowledge economy) and to

the “utilization” of innovations (on the consumptions side of the knowledge economy).
92
Conceptually, the foundations for the relationship between learning and economic

growth have been addressed in the recent literature (Bruton, 1998), with learning

being reflected in improved skills in people and in the generation, diffusion, and usage

of new ideas (Conceição and Heitor 2002).

Learning can occur in many shapes and forms, some of which are informal, some

formal. As described before, the institutional framework that comprise the national

and regional systems of innovation formalize the technological infrastructure critical

to generate the learning processes for individuals, firms, and nations, that ultimately

lead to long-term development. Thus, looking at a particular set of organizations, their

capabilities and related institutions, provides important lessons for development.

The analysis above is broad in scope and considers network societies as wide social

and economic processes, which it is argued occur across time and space and require

the dynamic adaptation of infrastructures, incentives and institutions, in a way that

calls our attention for the need to foster learning societies. However, the evidence of

the projects discussed in this presented in this dissertation shows that it is necessary

extend the analysis to other aspects of the information society. This is because the

experience of projects such as those developed in the cities of Marinha Grande and

Aveiro clearly shows the important mutual relationships that specific project-based

communities have on the facilitation of network societies, but also the fact that the

implementation of digital cities may significantly improve the efficiency of those

communities.

Within this perspective, my analysis calls for policies that consider long term

approaches of dynamic environments, which require to be continuously monitored

and evaluated. Specific incentives for infrastructures should continue, but articulated

93
with the need to foster knowledge-based adaptive human centered environments as

drivers of larger communities of users. This requires a continuous pubic effort, but

also a better understanding of the effectiveness of the mix of public support

mechanisms and private incentives for the development of digital cities.

Conclusions

This study was set out to determine which critical factors enable a digital city to

mobilize individuals, communities and organizations for the construction of the

information society in Europe and the nature of public policies that should be

considered to promote these factors. It has given an account of 4 Portuguese Digital

Cities projects developed between 1998 and 2000. To frame the analysis of these

projects, I have presented a broad overview of other digital city projects – Amsterdam

and Kyoto – as well as a brief introduction to selected European and member states

strategic guidelines and/or action plans for the information society. The first

Portuguese digital cities and regions became the most important experiment of

regional appropriation of ICTs and implementation of national policies for the

development of the information society. They left a lasting legacy as an example of

integrated projects that could link European and central government policies to the

final users (individuals, communities and organizations, both public and private) and

promote territorial competitiveness and competence building.

The experience of Aveiro and Trás-os-montes set an example for the other projects

that followed under a new funding program. Today the Digital Cities Program in

Portugal includes 25 cities and regions and covers about 85% of all municipalities and

95% of the population. The current mix of infrastructures and content is broader –

community networks, regional data centers, regional portals, business portals and

94
related knowledge networks, broadband Internet access – including the necessary

incentives for context creation and mobilization of people, communities and

organizations.

European and Portuguese action plans for the information society defined the content

and the mix of applications of services included in the 4 cases studied and European

and national funds were also the only source of investment. Therefore, the submission,

approval and evaluation of these projects would be necessarily coupled to top down

strategies for the development of the information society.

The most obvious finding to emerge from this study is that consistent public policies,

innovative regulatory systems and large investments are needed to create over time

the conditions to catch up with more developed societies and mitigate the uncertainty

associated with the adjustment process. The second major finding was that specific

incentives for infrastructures should continue, but articulated with the need to foster

knowledge networks – communities of practice, interest or proximity – to mobilize

individuals, communities and organizations for the information society. This requires

a continuous long-term pubic effort, but also a better understanding of the

effectiveness of the mix public support mechanisms and private incentives necessary

for the development of digital cities. Market mechanisms do not necessarily work at

the level of the issues associated with digital cities, namely in less favourable zones.

As an example, one of the most important critical success factors in Trás-os-montes

Digital was the focus on specific communities related to agriculture, education and

health. Supporting communities – GACs, GAEs and application developers – were

also critical for building competences and mobilization for the information society.

They could also sustain the project volunteering in situations of uneven cash flow.

RuralNet can be considered another good example of mobilization for the information
95
society through business and knowledge exchange within a very particular community

of regional products.

In early stage developments, digital cities have demonstrated that they also call for

specific initiatives, together with monitoring and evaluation procedures, for the

mobilization of individuals, communities and organizations. This is one of the most

critical factors to be considered in the design, implementation and exploitation of

digital cities. They cannot be promoted independently of an innovation policy

fostering competence building and connectivity to knowledge networks.

Aveiro and Trás-os-montes, supported by the local universities, could build a large

base of competences for the development of applications and contents. Other cities or

regions, the case of Alentejo and Bragança, could not secure the necessary

endogenous competences and had to shut down their portals as soon as public funds

were discontinued.

Bridging the digital divide to promote social cohesion – both national and European –

was the main rationale to support these seven projects. Knowledge networks have the

potential to make both public administration and markets more effective, which helps

promoting learning trajectories for the inclusive development of society and bridging

the digital divide, but they require effective infrastructures, incentives and adequate

institutional frameworks. Returning to the hypothesis posed at the beginning of this

study, it is now possible to state that the main policy implication to draw from this

study is that incentives for Portuguese digital cities should be mainly concentrated in

providing context, connectivity and content for local knowledge networks.

Knowledge networks can be considered as knowledge-centric, project-based virtual

communities. Virtual communities are defined by Rheingold (1993) as “communities

[that] use words on screens to exchange pleasantries and argue, engage in intellectual
96
discourse, conduct commerce, exchange knowledge, share emotional support, make

plans, brainstorm, gossip, feud, fall in love, find friends and lose them, play games,

flirt, create a little high art and a lot if idle talk. People in virtual communities do just

about everything people do in real life, but we leave our bodies behind”. When

embedded in daily life routines, knowledge networks can be simultaneously

mobilizers for the information society and drivers for change.

Household size Type of locality

% of households Total
1 2 3 4 +5 Metro Urban Rural
TOTAL EU 53 32 42 61 71 69 56 54 50
Belgium 51 19 29 63 78 79 49 51 54
Denmark 70 47 73 89 90 89 71 68 70
Deutschland 50 24 35 68 79 75 50 50 50
Greece 33 25 19 32 44 38 40 37 23
Spain 49 24 30 54 66 65 55 51 46
France 43 23 35 58 66 63 49 36 42
Ireland 47 23 35 51 58 58 50 50 43
Italia 47 23 27 52 67 63 47 48 47
Luxembourg 69 41 48 81 91 87 72 66 70
Netherlands 77 67 78 78 92 98 77 81 72
Austria 51 30 39 71 78 81 51 50 52
Portugal 34 10 18 41 52 38 30 41 31
Finland 52 30 48 75 79 84 63 55 44
Sweden 80 62 79 93 96 97 82 81 79
United Kingdom 62 29 55 73 82 81 61 62 63
Table 10 – Penetration of personal computers in Europe - 2004. Source: IPSOS, 2004

Public policies for the development of the information society in Portugal have often,

sometimes only, focused on providing universal Internet Access and delivering public

administration services. This strategy has fallen short to place Portugal among the

most developed countries in Europe. Portugal has consistently occupied the last

positions in the European rankings (IPSOS, 2004) for the penetration of personal

computers in households (Table 10) and proportion of households with personal

computers that have internet access (Table 11).

97
 Household size Type of locality
% of households Total
1 2 3 4 +5 Metro Urban Rural
TOTAL EU 15 39 24 32 46 54 50 43 41 36
Belgium 40 13 20 51 66 63 36 40 46
Denmark 58 33 62 76 83 76 59 59 56
Deutschland 39 19 27 53 64 59 39 39 39
Greece 18 13 10 20 24 20 25 19 12
Spain 28 15 17 29 40 39 35 31 25
France 28 15 22 37 43 39 34 20 24
Ireland 37 21 29 43 45 41 42 35 36
Italia 36 16 21 42 51 44 36 38 35
Luxembourg 56 29 39 64 78 71 59 51 58
Nederland 65 65 52 85 81 55 64 64 68
Austria 39 22 29 58 58 58 42 39 37
Portugal 16 4 7 19 29 17 14 21 14
Finland 39 16 38 59 67 65 50 39 34
Sweden 73 52 71 87 89 91 77 71 69
United Kingdom 50 20 44 59 68 64 47 50 52
Table 11 - Internet access at home in Europe - 2004. Source: IPSOS, 2004

Household size Type of locality

% of households Total
1 2 3 4 +5 Metro Urban Rural
TOTAL EU 15 12 9 10 14 15 16 17 14 8
Belgium 32 11 13 42 50 55 31 30 35
Danmark 30 16 31 41 44 49 30 36 25
Deutschland 6 3 4 9 11 7 6 7 6
Ellada 0 0 0 0 0 1 0 0 0
Espana 12 6 7 13 14 20 16 16 9
France 10 6 7 14 15 12 16 6 2
Ireland 0 0 1 0 1 0 0 1 0
Italia 3 2 2 5 4 5 0 4 4
Luxembourg 7 4 4 6 10 10 6 7 7
Nederland 36 37 26 52 45 37 33 36 40
Österreich 10 7 8 16 17 8 20 11 5
Portugal 7 2 3 9 9 7 6 10 5
Finland 14 6 14 23 19 24 29 14 7
Sverige 25 19 23 30 31 33 34 26 14
United Kingdom 13 5 10 15 18 18 15 15 7
Table 12 - Broadband Internet access at home, Europe - 2004. Source: IPSOS, 2004

Broadband access, the most recent layer in public policy strategies (Table 12),

although critical for the development of more advanced applications and usage

behaviors, has shown a smaller impact than expected on the attraction of new users in

Portugal and may be mostly substituting narrow band users lately (UMIC, 2004).

98
Knowledge networks may also mitigate uncertainties related to (a) the level of

dematerialization and disintermediation of social and economic activities; (b) user

preferences, usage behaviors or acceptance/resistance patterns of digital goods; and

(c) and the unpredictability of demand, and therefore the risk associated with the

supply of digital goods (Mansell and Steinmueller, 2000).

Several studies about Internet usage and behaviors (Katz and Rice, 2002; Wellman

and Haythornthwaite, 2002; Compaine, 2001) suggest that public policies focused on

deploying digital infrastructures and providing universal access to the Internet may,

on the one hand, ignore the usual asymmetric patterns of diffusion and adoption of

new technologies across time and space, and, on the other hand, increase costs for

innovators and early adopters slowing down market performance. Actually, the digital

divide seems to fade in time and the Internet usage and behaviors tend to replicate

contextual issues like gender, age, income, education, etc.

Unless governments diversify public programs and incentives for the development of

the information society and also target the four-layered structure of the culture of the

Internet – the techno-meritocratic culture, the hacker culture, the virtual

communitarian culture and the entrepreneurial culture (Castells, 2001) – the full

benefits of the information society in LRFs will not be attained. As Castells (2001)

argues, “these cultural layers are hierarchically disposed: the techno-meritocratic

culture becomes specified as a hacker culture becomes specified as a hacker culture

by building rules and customs into networks of cooperation aimed at technological

projects. The virtual communitarian culture adds a social dimension to technological

sharing, by making the Internet a medium of selective social interaction and social

belonging. The entrepreneurial culture works on top of the hacker culture, and on the

99
communitarian culture to, to diffuse Internet practices in all domains of society by

way of money-making. Without the tecno-meritocratic culture, hackers would simply

be a specific countercultural community of geeks and nerds. Without the hacker

culture, communitarian networks in the Internet would be no different from many

other alternative communes. Similarly, without the hacker culture, and communitarian

values, the entrepreneurial culture cannot be characterized as specific to the Internet”.

The analysis led me to suggest that while the role of public policies needs to be re-

examined, the cultural and social shaping of information technologies requires the

specific development of human-centered systems to support community building

activities. I refer to “edge to core” strategies for the next generation of digital cities.

The reflections were based on the need to consider uncertainty in the mobilization of

ICTs, which requires individuals, firms and organizations to operate in dynamic

environments, where markets and technology are changing fast and in unpredictable

ways. This calls for the need to combine flexible infrastructures and adequate

incentives with institutions, to foster the necessary context for digital cities to succeed.

The new paradigm of semantic grids can help ICT complexity to be alleviated and

become an invisible infrastructure embedded in urban daily life.

This research has thrown up many questions in need of further investigation. First, the

scope of the information society is yet to be determined. It is necessary to outline a

more precise definition for the information society to frame strategies, action plans

and evaluation programs. Second, the probable transformation of computer grids in

urban utilities will need further research on business models and new public policies

to promote competition, standardization and universal availability from the beginning.

Third, studies about the social consequences of the Internet are still rare in Europe and

100
non existent in Portugal. To build the information society is necessary to understand

how people behave and what sort of recombinations between territory, technology and

people will be embedded in daily life.

101
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