Siemens: A city-savvy corporate

Author: Greg Clark

Urbanisation and globalisation are changing the way that businesses look at cities.  Cities are becoming more interesting places for businesses to locate in, sell to, and engage with, and businesses are re-organising their relationship with cities in an effort to generate advantage and move with the times. Siemens, along with other engineering and technology firms such as GE, IBM and Cisco, has been a particular pioneer in this area, and is one of the first truly city-savvy corporates.

Bruce Katz and I recently observed:

“The growth of cities—and their middle classes—has developed larger markets for the consumption of advanced goods and services, causing corporations to become city savvy and pursue distinctive strategies. Rather than having a “China strategy” or a “US strategy,” corporations are customizing their growth plans for a Chengdu versus Chongqing or a Phoenix versus Pittsburgh. Rather than spending time with prime ministers or the heads of national ministries, they focus on work with mayors and local business chambers and universities.” [i]

Siemens, the global engineering and electronics conglomerate, is engaging with cities. One of the first indicators of its city-focus was an internal re-organisation in 2011 which created a new Infrastructure & Cities division – a sector with 87,000 employees and annual revenue of €16.5 billion.[ii]  Clearly cities are serious business.  As Roland Busch, head of the Infrastructure & Cities sector explained “Cities are a key growth market for the future. By establishing the Infrastructure and Cities Sector we’re clearly gearing ourselves to this market.”[iii]

Busch is not mistaken. Business consulting firm Booz Allen Hamilton estimates that the world’s cities will have to spend around €27 trillion over the next 25 years to modernize and expand their infrastructures.[iv]  Arup estimates that the global market for smart urban systems for transport, energy, healthcare, water and waste will amount to around US$400 billion per annum by 2020.[v]

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So how is Siemens gearing itself to these markets and promoting its expertise to potential city customers?

Perhaps the company’s most unusual and remarkable initiative has been the construction of the ‘Crystal’ – a £30 million exhibition and conference centre based in London’s Victoria Docks. Opened in 2012, the Crystal is home to the world’s largest exhibition focused on urban sustainability and is a centre for ‘dialogue, learning and discovery’ about the world’s cities.  The building itself showcases Siemens’ credentials in sustainable design – it was the first building in the world to achieve top rankings in both the LEED and BREEAM certification standards and forms the centrepiece of London’s Green Enterprise Zone.  The Crystal certainly appears to be playing its part in raising Siemen’s profile as a company interested in cities – it has attracted more than 100,000 visitors to date.

Siemens’ engagement with cities is centred around a ‘brand’ of sustainability: its key promise and offer is that it can assist in the creation of sustainable cities.  Its technical collaboration with the C40 Cities Climate Leadership Group is an extension of this branded offering: Siemens helps the C40 (a network of global cities committed to combatting climate change) to measure, plan, and mitigate their greenhouse gas emissions.

The company is also keen to show itself to be a thought leader at the forefront of dialogue about the future of cities. It has partnered with the Economist Intelligence Unit to publish robust cities-based research material, notably the Green City Index – a benchmark which assesses and compares more than 120 cities worldwide in terms of environmental performance. It also sponsors conferences such as the World Cities Summit and Global Cities Summit.

Siemens’ engages with those interested in cities across the full range of media.  It publishes a regular customer magazine ‘UrbanDNA’ which provides ‘visionary and sophisticated stories’ about cities from all over the world, as well as a ‘Toolkit for Resilient Cities’.  It sponsors the Sustainable Cities Collective – an online forum for leaders of major metropolitan areas, urban planning and sustainability professionals – and @SiemensCities even has its own Twitter feed.

Clearly, Siemens is a fast mover and an innovator in forging new relationships between cities and businesses.  But other companies should take note – those that are too slow to follow suit will find it difficult to reposition and rebrand in time to reap the bountiful rewards.

[i] Forget Big Suburban Campuses, Innovative Corporations are Moving Downtown
[ii] Singh (2012) New Mega Trends: Implications for Our Future Lives
[iii] Siemens.com, Infrastructure & Cities Sector
[iv] Huge Growth Market for Green Urban-Infrastructure Solutions
[v] UK Government, Smart Cities Background Paper, October 2013

About the Author

Greg Clark has spent more than two decades putting his passion for cities to good use, by advising and mentoring global cities, firms and institutions. He has worked with over 100 cities around the world and holds senior advisory roles at international bodies including the OECD, Brookings Institution, ULI, and the Future Cities Catapult. A prolific author, Greg has published ten books to date on cities and investment practices, with three more in the pipeline for 2016-17. And as Chairman of The Business of Cities research and intelligence group, Greg leads a small high calibre team that advises and reports on global trends and changes in cities. In his academic life Greg is Hon Prof of City Leadership at UCL and co-chairman of the UCL City Leadership initiative, Visiting Professor at Strathclyde University, and Global Fellow at LSE Cities. He has received international awards for his work from cities as far afield as Barcelona, Brisbane, London, and Toronto and in 2016, Greg was honoured by HM Queen Elizabeth II with a CBE for his services to city and regional economic development. Meanwhile, outside of the day jobs, Greg is an avid tennis player, wine enthusiast, and lifelong follower of Arsenal FC.

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