The number one business case for smart cities

Smart cities have been the solution for untameable urbanisation for the past two decades. But critics question how much of the smart city model is theoretical, and how much actually feasible.

This article is part of our green innovation and finance series.

In 1800, only 3 per cent of the world’s population lived in urban areas. 250 years later, by 2050, 66 per cent of the world are expected to be urbanites.

As more people have migrated to cities as old as London, Delhi, or New York, centuries old infrastructure is already showing signs of buckling under the pressure of urbanisation. While these cities have expanded – Greater London, Greater Delhi, the burrows beyond Manhattan, for example – meeting the challenges of a population boom and dwindling resources calls for immediate infrastructural boosts. The go-to solution has been to build smart cities, using technology to connect every pillar of city life, including sustainably built infrastructure, water purification and reuse, waste management and clean energy. Even healthcare and education are bundled together in an integrated way within the smart city model. But critics question how much of the smart city model is theoretical, and how much actually feasible.

The three ‘routes’ to building smart cities

Smart cities have been the solution for untameable urbanisation for the past two decades. Intelligent information and communication technology (ICT) and internet of things (IoT) platforms have essential roles to play in setting up smart cities, but what does best practice look like within this model? According to a study commissioned by Nokia, many cities are already leveraging these technologies to ramp up services and infrastructure for growing urban populations. These model cities are already making better-informed decisions and seeing economic returns. Smart cities have also seen greater levels of social interaction and sense of community, which is increasingly difficult as cities grow.

According to ‘The Smart City Playbook’, a strategy report that documents best practices for smart cities, the progress of 22 cities around the world reveals significant differences in the smart city strategies of various cities. Despite different approaches, the report uncovered three distinct ‘routes’ that cities are taking to make themselves smarter.

The ‘anchor’ route involves a city deploying a single application to address a pressing problem (such as traffic congestion), and then adding other applications over time.

The ‘platform’ route involves building the underlying infrastructure needed to support a wide variety of smart applications and services.

‘Beta Cities’, by contrast, try out multiple applications as pilots to see how they perform before making long-term deployment decisions.

“No one said becoming a smart city would be easy. There are lots of choices to be made. The technology and the business models are evolving rapidly, so there are many degrees of uncertainty. Standards are emerging but are by no means finalised. So there is no ‘royal road’ to smartness,” Jeremy Green, principal analyst at Machina Research and author of the Smart City Playbook said.

But there is a right way to travel, he added, “with your eyes open, with realistic expectations, and with a willingness to learn from others. That includes other cities that might face the same problems as you, even if in a different context.

“It includes the suppliers, who may have learned from their experiences elsewhere, including in other verticals. It includes start-ups, who can be great innovators; and most of all, it includes the city’s own inhabitants, who are your real partners for the journey.”

Success within the smart city model

The process of making a city smart is extremely complex, and there are so many different strategies being put forward in the market that choosing the right path for your city can be an enormous challenge, “Osvaldo Di Campli, head of Global Enterprise & Public Sector, Nokia, explained. “Our goal in commissioning this report by Machina Research was to cut through the clutter and identify strategies that are clearly working for cities.”

The study profiled Auckland, Bangkok, Barcelona, Berlin, Bogota, Bristol, Cape Town, Cleveland, Delhi, Dubai, Jeddah, Mexico City, New York City, Paris, Pune, San Francisco, São Paulo, Shanghai, Singapore, Tokyo, Vienna and Wuxi to draw its conclusions.

Successful cities have established open and transparent rules for the use of data (on which all smart cities are dependent) by government departments and third parties, whether shared freely or monetised to cover data management costs.

Many cities that are advanced in their smart city journeys have committed to making both information and communications technology (ICT) and IoT infrastructure accessible to users both inside and outside of government, and have avoided the creation of ‘silos’ between government departments.

Governments (and their third-party partners) that have worked to actively engage residents in smart city initiatives have been particularly effective, most notably those where the benefits are highly visible such as smart lighting and smart parking.

Smart city infrastructure needs to be scalable so it can grow and evolve to meet future needs, and secure to provide certainty that both government and private data are protected.

Cities that select technology partners that can provide the innovation capacity, ability to invest and real-world experience, along with technology platforms that are open to avoid vendor lock-in, will be at an advantage.

Praseeda Nair

Praseeda Nair

Praseeda was Editor for from 2016 to 2018.