The city of Barcelona has established a reputation as one of Europe’s major industrial cities, with an innovative approach to urban design. Barcelona was already known as the innovation capital of Europe however, there was no formal system in place to channel innovation in the city of Barcelona.  In 2008, Barcelona wanted to encourage SMEs to trial novel ideas that could have a positive impact on the lives of Barcelonians. The question it had to ask itself was: “how can entrepreneurs with ideas to improve urban life test them in a city environment?” 
The answer was Barcelona Urban Lab. The city council “opened up the city as a site for experimentation, enabling entrepreneurs to pilot products and services.” 
The Urban Lab forms part of 22@ Barcelona, a project to revitalise 200 hectares of industrial land in the city centre. It aims to convert El Poblenou into a district that fosters innovation through new collaborations between the public sector, SMEs and not-for-profits.
Urban Lab “is a tool to facilitate the use of public spaces in the city of Barcelona, to carry out tests and pilot programmes on products and services with an urban impact. The idea is to use the city as an urban laboratory”.  It seeks to achieve four main objectives:
- “Foster business innovation in 22@ Barcelona. 
- Enable companies to test innovative products and services so that if they prove their value they can subsequently be commercialised.
- Grow the pipeline of innovative products and services that can be procured by the city.
- Create new products and services that improve urban life for the citizens of Barcelona.”
Urban Lab is a gateway for companies to approach the city council about running pilots or experiments that can improve the city. The selection process is as follows:
- Companies with ideas for a pilot submit a proposal to Urban Lab Board, which comprises staff from 22@ Barcelona and representatives of the city council.
- If selected, Urban Lab identifies places where it can be tested, and pairs the team with the civil servants who manage the locations where the pilot will be based.
The public impact
Since 2008, 80 projects have been presented on a range of topics, a quarter of which have been tested on the streets of Barcelona. Of the projects piloted in the city, Barcelona’s Office for Economic Growth estimates that 90 percent have gone on to develop a business based on their pilot project.
For example, the smart cities firm, Urbiotica, is experimenting with sensors for waste management, installing them in bins along Barcelona’s Avenue Diagonal, to measure levels in public bins and help make waste collection more efficient. This project is in partnership with the city and the provider of waste management.
In 2014, the Urban Lab was chosen as one of the best 20 projects in the world by the i-Teams, a foundation for innovation set up by Bloomberg Philanthropies and the UK’s Nesta. In the same year, Barcelona was recognised as the European Capital of Innovation (iCapital).
This enhanced case study is part of our policymaker interview series. For the series, we talked to policymakers from across the world about their policies, policy-making and life in government. The interviewed protagonist for this case study is Josep Piqué, former CEO of the Office of Economic Growth, Barcelona City Council.
Public Confidence Good
Before the start of the 22@Barcelona project, its objective was also to refurbish the ‘El Poblenou’ district of Barcelona, the population of which had been drastically declining over the last decades. El Poblenou is a neighbourhood that is locally known as the ‘Catalonian Manchester’ for its industrial heritage and old industrial buildings. Between 1970 and 1991 the neighbourhood lost more than 25% of its inhabitants as a direct consequences of the degradation of local industry. Between 1963 and 1990, no less than 1,300 local companies disappeared. The 22@Barcelona project aimed to refurbish the area and bring back 100.000 inhabitants within 10 years. It created more than 60.000 jobs in the area and also respected the unique industrial heritage of more than 134 mid-nineteenth century buildings, all of which was very popular with the local population.  
After the start of the project, the city of Barcelona made an effort to increase transparency and citizen participation that had a direct effect on the 22@Barcelona project. Barcelona launched the Open Governance project, part of which created specific government platforms for citizens to input their ideas. This project played into the interaction of citizens at the 22@Barcelona project. Former director Josep Piqué pointed out that this initiative was specifically important in helping citizens getting involved and defining the challenges the city is facing in the future.  
Stakeholder Engagement Strong
Barcelona Urban Lab’s involved different local stakeholders ranging from local citizens, entrepreneurs as well as the city council and the 22@Barcelona project. It was the responsibility of the city council to promote the initiative and to facilitate the use of public spaces for implementing pilot tests while 22@Barcelona’s purpose was to regenerate the industrial area of El Poblenou.
The city council provides the relatively modest annual funding through its employees’ salaries. “The only direct cost associated with running the Urban Lab is an annual spend of just under £185,000, which funds the staff.”  At the same time, external local stakeholders such as Bitcarrier, Connecthings, Urbiotica and Zolertia carried out their pilot projects on the street of Barcelona itself.
Political Commitment Good
Barcelona Urban Lab was strongly supported by the mayor, the city council, and Josep Piqué, former CEO of the Office of Economic Growth, Barcelona City Council, and former director of 22@Barcelona. There has been continued support from political actors for the project and it has been made clear that political actors understand the problems the city of Barcelona will have to tackle in the future. Accordingly, Josep Piqué emphasised that political actors understood ‘it was about having a system to manage the future’. “Politicians are managing the future because they are sending messages, but you have to deliver this future […], you have to create a system to manage any opportunity. […] Innovation means that you understand that you have to manage the present in order to create the future” .
Clear Objectives Good
The objectives were clear: “to foster business innovation; … to enable companies to trial innovative products in a real place; [and] … to learn and create new products or services that are capable of offering improvements to the citizens of Barcelona”. 
The urban regeneration area of El Poblenou is used a testing ground for innovative ideas to enhance the quality of life and the ideas that worked best in practice could then be implemented throughout Barcelona. “The Urban Lab sees itself as a gateway for companies to approach the city council about running pilots or experiments that can improve the city.” 
Barcelona Urban Labs is one of the first projects of its kind. Therefore, the chances of referring to similar projects are slim. The idea to create the Urban Lab came from former CEO Josep Piqué himself, after he discovered that entrepreneurs and SME’s kept on coming to 22@Barcelona, asking to trial their ideas in the city. He said, ‘he discovered a gap’ where innovative technologies create new opportunities that could have a positive impact on the citizen. Usual public procurement process did not allow to test drive these technologies and they were automatically disregarded as a result of ‘not being used to them’. For example, LED lightning for the streets of Barcelona was a new technology at the time but city technicians were reluctant to use a new technology they had never seen before. Accordingly, Josep Piqué said: “I had to create a space between the public procurement and the innovation in order to allow the entrepreneurs to show what they had.” In his own words, he wanted to create a process that allowed the public “to learn before buying and how to apply [new technologies] in the future”. 
The Urban Lab has developed a low-cost model, mobilising the assets of the city to encourage private sector investment in innovation. The only direct cost associated with running the Urban Lab is the annual spend of just under £185,000, which funds the staff. The selection process works well and there are is “a pipeline of innovative products and services that can be procured by the city”. 
The basic system which created this low cost model was driven by a fast ecosystem of involved start-ups. The unique structure of the Urban Labs meant that the start-ups were paying for their technology pilots in the district of El Poblenou as a trial period. This was good for the start up because this ‘test pilot’ meant that the Urban Lab is the potential first customer of a new product for the city of Barcelona. It also creates evidence that a technology is working which resonates well with potential investors in a business start-up.
This structure meant that from the 22@Barcelona there was not a lot of staff involved which brought down costs. During the whole process it is estimated that only a maximum of three to four people would be staffed on the Urban Labs while the start-up ecosystem created a cost-saving environment with new innovations to learn from. 
The programme requires only three direct employees and the direct involvement of the city council, principally the Office of Economic Growth. The selection process is well managed and there is a flow of potential projects to choose from. In addition, it connects the SMEs with the council’s technical staff who can support the logistical aspects of the innovation.
“The Urban Lab measures its impact through the number of pilots it generates [(16 by 2014)], and their duration, public satisfaction with the pilots, the number of pilots purchased in Barcelona or other cities, as well as company performance, such as growth and turnover of employees. The Urban Lab assesses impact using administrative data, user feedback surveys and cost effectiveness analysis.”
Barcelona’s Office for Economic Growth estimates that 90 per cent have gone on to develop a business based on their pilot project.
Although not directly related, the growth in the number of companies and employees in Barcelona after implementing the Urban Lab can also be considered as a yardstick of measurement. By 2010, the number of companies in Barcelona grew by 4.2 percent and the total number of employees by 5.6 percent.
There is close cooperation between the internal and external stakeholders in developing Urban Lab projects. The selection process involved 22@Barcelona, Urban Lab staff and the SME floating the idea. If the project is selected, the Urban Lab identifies locations where it can be tested, and pairs the team with ‘city technicians’, the civil servants who manage the places where the pilot will be based.
In 2014, it was true to say that “none of the businesses [had] become vendors to the city of Barcelona and most [had] left the city to locate in other cities in Spain or internationally. This reflects one of the main challenges of this approach to open innovation”. 
However, this problem has been addressed. “The French company Connecthings, is currently working with Barcelona City Council having participated in the programme in 2013 … It has now installed labels with the emblem contactless on the smart shelters of the city, the ‘bicing’ bicycle stations and some museums through which the public can obtain information by reading the installed codes ... with their smartphones.”