The Master Plan: Cisco Brings New Songdo To America.

(reposted from Fast Company)

Cisco signed a deal on Wednesday with Holyoke, Massachusetts to transform the onetime mill town into a “Smart+Connected Community” over the next six-to-twelve months. Cisco has moved aggressively into the smarter city business in the last year as it chases IBM, which started the vogue for wired cities just as the world’s governments were earmarking billions of dollars in stimulus funds for infrastructure. (See “Cisco’s Big Bet On New Songdo: Creating Cites From Scratch” from the February issue.) The strategy has paid off handsomely for both companies thus far—public sector sales are IBM’s strongest, while Cisco considers SC+C one of its most promising new lines of business.

The Holyoke deal is significant in that it represents Cisco’s first attempt to rewire an existing city rather than simply build one from scratch, as it’s doing across Asia and the Middle East. This puts Cisco in direct competition with IBM for the first time, as Big Blue has been content to sign contracts for discrete services in established cities (such as congestion pricing systems for auto traffic in London and Stockholm). The choice of Holyoke mirrors IBM’s announcement last fall that it will retrofit Dubuque, Iowa as its first fully integrated smart city. Dubuque and Holyoke are similar in size (60,000 residents vs. 40,000), and both have been tapped for computing centers.

It’s perhaps only fitting that Holyoke turn to a corporation for its downtown’s salvation. Holyoke was one of the first planned industrial communities in America, built by the paper mills which flocked to the city in the 1880s for the cheap electricity powered by dams along its canals. (In a twist of fate, that’s what attracted Cisco as well.) On a conference call announcing the deal, Mayor Elaine Pluta described her city as “the first smart growth community” in America, with the classic, walkable downtown of a 19th century factory city. Unfortunately, Holyoke never really recovered after the mills left; as of December, the unemployment rate was 12.2%, and more than a quarter of its residents live below the poverty line.

The Cisco partnership came about after the city received a state grant for “re-envisioning” of its urban core. On the call, Pluta recited a list of urgent needs so long it actually earned laughs: “creation of jobs, workforce training, higher education, selectively removing blight,” and so on, including “promoting green power, green industry, and green identity.”

From Cisco’s point of view, the question is “how are we going to fundamentally create sustainability in an existing neighborhood, and what role is technology going to play?” according to chief globalization officer Wim Elfrink. He and his lieutenants will put their heads together with city officials in the coming days to select a neighborhood as the pilot district for its services. How Cisco expects to make money is still being determined—not in Holyoke, but in New Songdo, South Korea, where it hopes to learn what residents want and what they’re willing to pay. The stakes, according to Elfrink, could not be higher: “we predict the competition will be between cities – between neighborhoods” – for communities “that want a sustainable future.”