SMART INCENTIVIZATION TOOLKIT FOR ENSURING SUSTAINABLE CITIES

Context

Incentives offer a unique and promised opportunity for cities & citizens to shift towards sustainable lifestyle by leveraging the best practices of behavioral economics, fintech platforms & SDGs global to local philosophy.Team FinTech of the India Smart Cities Fellowship pioneered a framework to provide customized citizen benefits in the form of monetary and non-monetary incentives.Involving diverse stakeholders such as municipal leaders, merchants, citizens, system integrators and private sector, the team mapped the aspirations of citizen groups and curated targeted incentives through local market alliances to nudge citizens towards responsible social behavior. The citizens of city receive a plethora of financial benefits such as cash backs, merchant discounts, vouchers, & reduction in premiums. Simultaneously, the citizens were also nudged through non-financial incentives such as social media recognition and awards from municipal leaders thus increasing their sense of community ownership. Using these initiatives, the city increased public transport usage, reduced pollution, improved municipal revenue and boosted citizen responsiveness towards government initiatives.  

Problem Statement

“Team Fintech intended to prove that incentives, monetary as well and non-monetary, are effective tools to nudge good citizen behavior and unify citizen-municipal-private interactions via a seven-pronged nudge approach”

Objective

 Since tThe project was exploring the intersection of Incentivisation based behavioural economics, fintech based platform approach and sustainability of cities in form of SDG compliance, the Team worked on first defining major objectives and then mapping those with the stakeholder specific aspiration scenarios.The broad intended outcomes that Team sought to achieve were:

  • Creation of an incentives (monetary / non-monetary) strategy that cuts across departments supporting sustainable shift in cities.
  • Increase adoption of non-motorized transport, drivecitizen engagement, improve waste cycling, health information system, increasing tax collections, reducing resource consumption and improving youth connect with the government led programmes.
  • Reduction in underwritten costs in the form of discounts and rebates due to a unified incentivization program by involving local economy players
  • Increased sense of ownership and imbibing a culture of sustainable practices in citizens.
  • Creation of appropriate KPIs for gauging citizen's sustainable behavior via micro tech & Open API linkages with the city app or platform.
Project Developement

a. Pilot City Identification:

Thane Smart City was chosen to implement the lighthouse "Fintech" Project cutting across the themes of citizen engagement, policy implementation & behavioral change by leveraging monetary & non-monetary incentivization mechanisms to create positive citizen partnerships and social impact. 

While the team visited Chandigarh, New Delhi MC, & Pimpri-Chinchwad, Thane was ultimately chosen on a set of parameters which favored the project deployment, viz.:-

  • Thanes focus on SDG & sustainability: It aspired to become first SDG compliant City
  • City IT Infrastructure: Digi Thane served as the foundational layer which could be leveraged.
  • High digital maturity, financial & literacy: Thane had high digital property tax, literacy levels and engaged citizenry.
  • Citizen User base was engaged with various Thane MCs initiatives
  • Institutional Support: Leadership was actively involved and staff were equipped to handle the project.

b. Project Development and Implementation

Team combined a top-down management consulting approach for problem structuring with a bottom-up understanding of the governance ecosystem for designing solutions, while leveraging data and technology to enableimplementation of solutions, with the objective of making governments accountable and deliver with minimum delays and maximum efficiency. 

 

Given below is the snapshot of the approach that the team undertook while navigating its way through the project journey: -

Expected Outcomes

 Team FinTech pioneered a framework to provide customized citizen benefits in the form of monetary and non-monetary incentives. Involving diverse stakeholders such as municipal leaders, merchants, citizens, system integrators and the private sector, the team mapped the aspirations of citizen groups and curated targeted incentives through local market alliances to nudge citizens towards responsible social behaviour.Seven-pronged approach undertaken to ensure the incentive-based transformation for sustainable cities included:

  • increasing non-motorized transport by incentivizing green transport option such as cycling
  • reducing electricity consumption by demand side incentivization
  • instilling youth volunteering programs by incentivizing participation
  • improving tax collection by gamification of discounting mechanism
  • increasing citizen participation by incentivizing engagement
  • decreasing wastage by leveraging local economy to create discount hubs
  • strengthening health information systems by incentivizing voluntary informed disclosures
Actual Result

 

The citizens of Thane received a plethora of financial benefits such as cash backs, merchant discounts, vouchers, & reduction in premiums. Simultaneously, the citizens were also nudged through non-financial incentives such as social media recognition and awards from municipal leaders thus increasing their sense of community ownership.  A brief of seven pilots, along with learnings and approach, is provided below: -

(Pilot: I) " Increasing cycle adoption as a shift towards NMT transport"

To promote cycling team asked the city app to collaborate with a major cycling partner "Coo rides" for incentivising the data driven cycling usage and # of km travelled by bicycle shared via open API linkage. The Incentive ranged from:  

  • Appreciation Certificate and interaction of Cycle Ambassadors with the CEO, TSCL and rewarding Cycle Ambassadors with DigiThane merchant GVs
  • Rewarding Cycle Ambassadors with free ride for 6 months at COO rides. 
  • Capturing Video feedback to capture inspiring stories of different age groups that can help in promotion of cycling amongst citizens.

  • (Pilot: II) " Increasing responsiveness online SDG Campaign & Understanding Citizen Aspiration Mapping"

    The team was asked to design incentivisation strategy to increase the citizen engagement and responsiveness in the online SDG campaign driven by the Thane Municipal Corporation.

    Incentives, while effective in peaking interest, lead to increased participation and engagement by the citizens when discounts & coupons are provided in designed fashion. Gamification of the incentive structure further increased engagement in Thane.

    (Pilot: III) "Decreasing wastage by leveraging local economy to create discount hubs" 

    There is an active demand from local business to sell the unutilized inventory at discounts. Real time discounting on city app can work in deriving value from perishables and surplus food for business by selling to other consumers. Indirect way of marketing leading to drop in cost of customer acquisition and accessing large pool of citizen. Panchavati Gaurav (partner local vendor) was able to sell (2/50, 3/50 & 7/50) thali on display on three days of the pilot via digital discount coupons downloaded via city platform in the time period from 7-11 pm. Model can be easily integrated into any city platform, is sector agnostic, citizen friendly and leads to resource efficiency for local merchants

    (Pilot: IV) "Improving tax collection by gamification of discounting mechanism"

    The team explored the possibility of gamifying the incentivization of property tax to increase collection. Explained below is the brief way in which it was executed as excel heavy data and SQL models could not be shown here due to constraints of space and medium. In addition to municipal discounts, merchant-based discounts were also provided which helped merchants increase their reach and helped increase collection. Property tax discounts for collection

     

    were not given a flat discount, but instead it was gradually reduced to create a sense of urgency. Regular communication with regular messaging worked to nudge the behaviour.

    (Pilot: V) " Incentivising for strengthening health system and citizen wellness"

    Team was asked by health department to increase the consciousness of checking ones health by the Thane municipality. The team designed an incentive-based health check-up campaign by incorporating range of monetary & non-monetary incentives to those people who went for health check-up post intervention. Further, team ran a voluntary blood donation digital information campaign wherein the blood groups of citizens were taken. Those citizen groups which did not respond initially were provided incentives to share voluntarily.

    (Pilot: VI) " Reducing Electricity Consumption by demand side incentivisation"

    At Thane the team sought to reduce the electricity demand by designing an incentivisation campaign.  As a consequence, a city-wide reduction in monthly bill challenge was launched to give a bevy of monetary & non-monetary benefits to the people who contributed most to the demand reduction.

    It was incentivized by social media recognition, certification, local merchant discount & coupons in a form of city-wide challenge on city app platform by sharing the bill.

    (Pilot: VII): "Institutionalising 'Youth for SDG' Incentivisation based Volunteering Initiative" 

    The "Youth for SDG" program was envisaged as an institutional way of engaging with the young professionals from diverse background to come together and co-create solutions for promoting the sustainability of the cities. It was a one of a kind experiments at the municipality level wherein youth worked on diverse problems ranging from providing support to the TMC in the implementation of SDG goals by indulging in ra

  • nge of activities ranging from data analysis, social research, documentation and ideation for solving sustainable issues facing the city.

  • Deliverable of the first batch of "Youth for SDG" volunteers were released by Thane Municipality. Their work spanned across the themes of sustainable lakes, creek rejuvenation & solving the menace of MLP plastic in Thane.

     

Conclusion

 

Based on our work, we are optimistic that utilizing the seven-pronged smart incentive approaches spanning across mobility, citizen engagement, waste cycling, health information system, tax collections, electricity reduction and youth volunteering would ultimately enable the partnering cities to achieve robust and enduring long-term sustainable lifestyle shifts. The team has prepared a best practice SOP handbook, based on learnings received during seven pilots, for other cities to undertake similar activities in order to make their cities sustainably smart.

Further as a next step forward, the team believes that a centralized incentive platform - “Good Citizen Rewards Bank”- owned by MoHUA in partnership with 100 smart cities would be the logical step in ensuring the incentive-based transition towards sustainable cities in addition to the seven-pronged approach undertaken by the team. 

This would unlock partnerships by bridging the gap between Incentive Providing Institutions viz. Development agencies, Financial institutions, government agencies, industries and citizens whose behavioral shifts could be quantified by agnostic data driven platforms on a common city app owned via open API linkages. Further the incentivization ecosystem can be used for promoting digital payments, financial inclusion, cross selling of financial products like pension, insurance etc. Lastly, creation of municipal level "Good Citizen Score" methodology would help administrators in making citizens agents of change.

City
Thane