Blockchain as Key to Vienna’s Digital Future — Interview with Ulrike Huemer, CIO of Vienna, Austria

Austria is Europe’s leader in terms of applying modern day technology to better the all-around welfare of its citizens. Making cities “smart” and digital is a key part of transforming public goods and services in order to reach that goal. Vienna is especially keen on innovation, trying to find new solutions by way of digitization. Easy access and clear-cut benefits are key aspects to finding broad acceptance among Vienna citizens, making them willingly partake and help to better the transformation process.  

To further the breakthrough of digital technologies and make them the backbone of society, Vienna called into existence the so-called “Smart City Vienna” initiative in 2014, which aims to better the lives of its general population. The Smart City project isn’t meant to merely foster technology, though. Rather, the latter is supposed to be a tool, helping to achieve social change and making the city more livable overall. Technology as a servant to humanity, not the other way around.

The Smart City Vienna strategy takes into consideration multiple fields that need to be transformed, such as energy, mobility, real estate and others. Every single aspect of the strategy has well-defined target objectives in order to provide transparency and a sense of urgency. In total, 38 target objectives are set out until 2050, while different milestones are to be met by 2025, 2030 and 2050.

Blockchain is a key factor in realizing these goals. As such, it has been applied to different use cases that pertain to the strategy in one way or another. One of them is the notarization of Open Government Data (OGD) — to facilitate the use of food stamps by local government employees. Electric supplier Wien Energie, which is run by the city administration, has also been exploring the use of blockchain technology for quite a while now, trying to make distribution along its grids more efficient. Last but not least, Vienna is setting up a blockchain-based token that is part of an incentive driven initiative, rewarding citizens for “good behavior.”

In which ways can blockchain contribute to Smart City Vienna further? Will the capital city get its very own cryptocurrency eventually? Why is digitization so broadly accepted among Vienna’s population? Cointelegraph Germany sat down with Ulrike Huemer, the chief information officer of Vienna, to answer these questions and to further elaborate on what’s to come.

Smart City Vienna — the road to digitization

Cointelegraph: What is your vision of Vienna as a “smart” city?

Ulrike Huemer: Vienna does score favorably well in many different rankings already, some of it due to our comprehensive approach to the Smart City initiative, which constantly drives new projects and gets monitored on a regular basis. Our comprehensive approach isn’t just a means to an end, though. It is much rather our guiding principle to cover all our bases when making our city “smart.” It’s not just about technological innovation for the sake of it — instead, we are looking to use it as a vehicle leading us toward social change and environmental sustainability. It’s all about providing the best quality of life to all our citizens, thus we are incorporating every office of city administration, linking them up with companies from the private sector as well, to set up a broad network as a basis for the transformation process.

“It’s all about providing the best quality of life to all our citizens.”

We don’t just emphasize these points toward the general public, we also make sure to reiterate this concept internally to really make it stick. Driving research and development-oriented policies is key, but so is getting everybody on board with what we’re trying to do. Consulting-firm Roland Berger ranked our digital agenda number one in its recent “Smart City Index” publication, especially praising our continued efforts to better the health care system through technological innovation. Open Government Data and our progress in areas such as mobility, environmental sustainability and education put us in the top-spot according to the study. We’re looking to continue to build on this, truly making Vienna a “smart city” indeed.

CT: How well is Austria positioned in terms of the smart city concept? Is Austria in a good starting position for this?

UH: Austria is well positioned to master future challenges due to the various public infrastructure frameworks. The smart city concept can play a key role here. The most important aspect is the implementation and cooperation with relevant actors. The very first thing to ensure when dealing with the smart city topic is to create adoption through a broad process. Civil society, the economy and science must be given the opportunity to state their interests to the city administration so that we get the big picture of a future that is worth striving for by all parties. By integrating all interest groups, we can ensure the holistic nature of this strategy. Finally, to establish such an agenda, political support and an evaluation process that makes successes and potentials visible are needed.

CT: Implementing a smart city is enormously expensive. Who is paying for these digitization measures that are necessary?

UH: There is no direct answer to this question. It’s a fact that, as of now, the city of Vienna does not have an additional budget for the current smart approaches. Therefore, the individual departments and actors have to use their existing budgets and try to innovate their sovereign work themselves. Furthermore, there is some extra funding provided by the European Union or by national co-financing. In recent years, this has brought an additional investment volume of around 15 to 20 million euros to Vienna.

Blockchain solutions for the city of the future

CT: What is blockchain technology‘s role within the Smart City of Vienna?

UH: The city of Vienna has been exploring blockchain technology proactively. We want to use this technology to drive the city’s digitalization and the associated guiding themes of transparency, openness, trust and citizen participation.

We chose to use the technology for our own processes, to proactively shape the development and to support the promotion of it. From the start, we knew the only way to test the blockchain technology‘s potential was by "learning by doing.” This is why we launched pilot projects that were implemented successfully. The pilots‘ primary goal was to build the necessary expertise within the city administration and in our ICT [information and communications technology] municipal department named Magistratsabteilung  01 – Wien Digital.

“From the start, we knew the only way to test the blockchain technology‘s potential was by "learning by doing.”

Via the DigitalCity.Wien-Blockchain.Initiative, we are connecting key areas such as identity, education and research with the blockchain community in Vienna, thereby strengthening both the stakeholders and Vienna as a blockchain location.

CT: The city of Vienna provides open data and e-government for its citizens. How does blockchain improve the administration?

UH: In December 2017, a unique solution was published in Europe where Open Government Data was secured using blockchain. The City of Vienna’s first blockchain pilot dubbed "Open Data Notarization" was focused on the acquisition of knowledge on blockchain technology. The city of Vienna‘s OGD checksums are stored publicly on blockchains and are available to the public. Thus, anyone can view and check the authenticity and history of the data themselves, eliminating the need for middlemen.

The solution is being used now and is set to encompass all data records of Austria‘s administration located on Austria’s data portal in the following weeks.

CT: Wien Energie is researching the use of blockchain technology, also collaborating with the city of Vienna on Smart City concepts. Are there any blockchain solutions regarding sustainable energy you could tell us about?

UH: Blockchain technology allows us to scale innovative energy solutions. Let’s use microgrids as an example: These small and decentralized networks are completely autonomous, connecting supplier and consumer in the shortest way possible, reducing the loss of power to a minimum. On top of that, they eliminate the need to expand the main grid, which can be quite expensive.

We’re also exploring so-called energy-sharing via blockchain. In order to do so, we are setting up a blockchain infrastructure in the “Viertel Zwei” research district, connecting it to the existing power supply.

CT: The city of Vienna is using blockchain as part of the so-called “City Token Initiative,” which got started in collaboration with the research institute of the crypto economy at the Business University Wien (WU). Could you please specify what the initiative is all about?

UH: Sure! At its core is the idea to get people engaged, making them care about their surroundings and setting incentives for them to contribute to the betterment of the city. We created the so-called “Culture Token” to foster this idea, acting as a reward for any type of good behavior as defined by the initiative. In return, citizens can use the token to get access to arts and culture around the city. As an example, we are looking to reduce carbon emissions by rewarding citizens for leaving their car behind, having them take a walk instead and earning tokens in the process.  

“The core idea of our ‘Culture Token’ is, to get people engaged [...] setting incentives for them to contribute to the betterment of the city.”

CT: How are these “Culture Tokens” set up?

UH: The “Culture Token” exists in digital form only, being made available on mobile phones and tablet computers. It is set up as a reward system, but stands in stark contrast to the Social Credit System run by the Chinese government. The city of Vienna is keen to exclusively use technology to the benefit of its citizens. It is supposed to simply reward people for volunteer work, for doing good in many ways. We are trying to broaden the scope of the token, too — not only tying it to arts and culture, but establishing it as a true means of payment for many different services instead. That way, it wouldn’t merely be a “Culture Token,” but much rather a “Vienna Token,” which really is the long-term goal.

CT: Are there any further plans to use blockchain in the context of the Smart City initiative?

UH: We’re looking to make use of our findings from the aforementioned “Open Data Notarization” project. In collaboration with our partners, we want to establish a notarization service that can be applied in many different fields. For example, helping to notarize city government documents or to further “machine learning.” Another important topic is self-sovereign identity, which is concerned with being in full control of one’s own data — blockchain technology can be of assistance here, as well. There is an abundance of use cases, though, like the Internet of things (IoT) and related applications. We will most likely integrate blockchain into different devices and supply chains, too, wherever we see fit.

CT: Is the city of Vienna looking to issue its very own cryptocurrency?

UH: No. As a city, we are merely acting as an observer. At some point in time, blockchain technology might be used as a means of payment, though, since it can help to improve financial transactions considerably.

Creating dialogue

CT: What is the role of big technology companies in the city of Vienna? The Smart City initiative could be of great commercial use for them, especially in combination with blockchain, artificial intelligence, IoT and big data, couldn’t it?

UH: All our partnerships are supposed to provide mutual benefits to either side — technology companies are no exception. As such, the Smart City initiative does indeed establish a framework to strengthen existing partnerships through technological advancements. The overarching goal is to better the quality of life in Vienna, though, which is our main premise.

The “DigitalCity.Vienna” initiative is aiming to establish Vienna as a European leader for digitization, and we are looking to market the city accordingly. The DigitalCity.Vienna initiative has an open format, accessible to all parties interested. We are doing our best to connect all parties involved, helping them to find common ground along the way. In regularly scheduled events, we’re sitting down major companies, ascending startups, the city government, public authorities and academic institutions in order to create a running dialogue in the digital ecosystem.

“The ‘DigitalCity.Vienna’ initiative is aiming to establish Vienna as a European leader for digitization, and we are looking to market the city accordingly.”

CT: What kind of government assistance does Vienna need in order to stay ahead in the global race for blockchain adoption?

UH: We want to strengthen existing partnerships in this area, while attracting further blockchain projects to Vienna in order to benefit from their expertise in the long term. Intricate knowledge is crucial when it comes to blockchain, that is why we are adamant about building it up and retaining it. A prime example is the Austrian Blockchain Center, which is doing research on many different blockchain use cases. The research center recently settled down in Vienna, and we intend on keeping it here, providing some of its funding as well. It will take these kinds of projects, plus government assistance and close collaboration with the private sector, to make Vienna a major international blockchain city.