Smart city projects are plagued by inefficient city administrations
Summary
Since inefficient and cash-strapped local governments don’t have resources to monitor smart city projects, companies can put their interests above those of citizens.
Future smart city projects must be customised to individual countries, beneficial for citizens, and a solid investment for city administrations.
Private smart city projects such as Google’s initiative or the new smart city built by Bill Gates are seen as ‘showrooms’ unable to contribute to the common good.
Moscow’s administration claims its Our City app helped solve 1.9 million public issues.
ABI Research’s report claims that smart city solutions could “lead to cost savings of $5 trillion by 2022”.
Many cities are becoming smarter every day. Thousands of sensors, cameras, apps, and other pieces of clever technology are making our lives easier. And as we enjoy these benefits, investments are pouring in. According to the Smart America Challenge, a White House Presidential Innovation Fellow Project, cities across the world will spend around $41 trillion in the next 20 years to upgrade their capabilities. But as people celebrate this technology, serious problems linger.
Indeed, smart cities projects have revealed the weaknesses of private companies and local administrations, and it became apparent that many cities didn’t rise to the challenge as they “tend to be both siloed (so departments don’t work on solutions together ... ) and strapped for cash,” writes Harvard Business School's John Macomber. And since most local governments lack experts to vet and monitor these projects, companies can place their own interests above those of citizens. The end result is messy and inefficient projects in dire need of reform.
But despite that, private companies and cities must work together. This time, however, they need to follow some rules, and smart city solutions need to adapt to the country in which they’re being deployed – what works in China might not work in Iceland. Second, each project must clearly show how it improves the lives of citizens. And finally, smart city advocates must explain how the investments in their projects will pay off to cities. Only then can such initiatives be beneficial for citizens and not mere displays of the latest, greatest technologies.
Showroom projects
As people grow increasingly suspicious, they doubt certain projects can contribute to the common good. Consider, for example, Google’s initiative to redevelop an 800-acre waterfront area in Toronto. The new neighbourhood would be built from scratch, filled with the latest sensors and optic fibre cables, and ready to host Google’s offices. Or think about Bill Gates investing $80 million to build Belmont, a new smart city in Arizona that will use autonomous vehicles, data centres, and a range of other smart city tech. As Macomber notes, “many of these projects seem more like showrooms than replicable models.” They’re expensive experiments that most cities can neither afford nor justify. That’s because while they reflect the state-of-the-art, in many instances, the high-tech improvements showcased by the likes of Google don’t bring a meaningful impact to citizens’ daily lives. Instead, citizens would prefer their tax money to be spent on projects that deliver concrete benefits.
For example, many cities need sensors and apps that detect leakage or contamination in water systems. Smart meters can help citizens reduce energy consumption in apartments, while health apps that enable video chat with doctors could save time. And when people have to travel, road sensors, smart traffic systems, and GPS could navigate them to avoid congestion. As the benefits of the smart city concept become evident, heated debates in city councils reveal what motivates politicians to support this technology.
What connects New Orleans, Moscow, and Beijing?
“New Orleans stands at the edge of a technological frontier ... And how we respond will either make us a true 21st century city or leave us in the wake of this advanced technology as a backwater laggard. The choice is ours,“ says Jason Williams, a councilman in New Orleans. He and other members of the city council instructed the administration to investigate what smart city technologies could be deployed, and at what cost. They hope this will also attract skilled workers. As the former US Energy Secretary Ernest Moniz told members of the city council, “there are economic advantages, and issues of attracting high-tech talent.” But these motives aren’t unique to American politics, and identical reasons motivate local authorities across the world.
Beijing and Moscow are examples of two large cities that deployed a set of smart city apps to modernise their services and connect with citizens. The administration of the Chinese capital uses this tech to improve trash collection, fight pollution, and reduce congestion. At the same time, Moscow’s authorities use the Our City app to enable citizens to report problems with public services. This helped resolve a staggering 1.9 million issues in the city. Also, citizens can propose their ideas on the city’s future development. But not every metropolis can pay for this technology, and the issue of cost is critical.
How to find the money?
Members of the New Orleans’ city council were shocked to hear that $75 million is needed just to install smart meters in the city’s electricity grid. And their case isn’t unique, as the high cost of smart city tech remains an obstacle for many governments. But what smart city advocates suggest is to look at the savings.
A report from ABI Research claims that smart city solutions could “lead to cost savings of $5 trillion by 2022”. For example, smart street lighting and smart buildings could save around $5 billion annually for cities with more than five million residents. Smart transportation could reduce the operational cost of companies by $14 billion, while smart meters and an improved educational system could save up to $26.69 billion for ordinary citizens. And as these savings might justify even greater spending, it’s vital to ensure scrutiny over these projects.
People must see the benefits
Investments in smart city technology are increasing, but rapid growth in this sector must not harm the quality of projects. In fact, experts warn that corporations use inefficient local administrations to promote private, instead of public interests. At the same time, citizens want to have concrete benefits from this technology. To guarantee that they do, local authorities and companies must form a partnership that will produce affordable, timely, and tailor-made solutions. Only in that case can smart city technology deliver on its promise of a solution to 21st century problems.
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Meaning of trend
Growing investments in smart city projects are an opportunity to modernise cities across the world. But the inability of cash-strapped local governments to carry out these projects responsibly puts the interests of citizens at risk. The cooperation of private companies and city administrations must be guided by new principles that will ensure the delivery of affordable, timely, and tailor-made solutions.
Expert Opinion
“New Orleans stands at the edge of a technological frontier ... And how we respond will either make us a true 21st century city or leave us in the wake of this advanced technology as a backwater laggard. The choice is ours,” says Jason Williams, a councilman in New Orleans.
“While smart cities technologies offer multiple benefits, very significant direct cost savings represent a key incentive to embrace urban innovation for city governments, citizens and enterprises alike; this allows building stronger business cases with faster ROI, facilitating project approval and accelerating deployments,” argues Dominique Bonte, the vice president of ABI Research.
This article was originally published in 2019 on Provada.