By degrees, digital technology is finding its way into city operations, and making cities more efficient and more sustainable. Statistics bear this out. IDC calculates nearly a half of European cities are in some phase of digital transformation into a smart city, and U.S. cities are making rapid progress at last, too. The new momentum in the market has come as certain barriers have come down.
The pathway to funding is now clearer. The European Union’s Horizon 2020 program was established to drive innovation and secure the region’s global competitiveness, prescribing €80 billion to cities in the years 2014-2020. In the U.S., centralized funds have started to be released, supplemented also by local bonds. Notably, the U.S. government made available $160 million for smart city projects in late 2015, topped up with a further $80 million last September.
In between, the Department of Transportation (DOT) offered $50 million to seven mid-sized U.S. cities to develop smart mobility projects. A feature of these disbursements, on both sides of the Atlantic, has been their focus on public-private partnership (PPP) to foster collaboration between cities and enterprises, with academia plugged in as well.
The market has been carried forward recently as this model has become established, and also as digital technology has become more sophisticated. Indeed, the technology is the easy part, now; it is joining it together and making it pay that is hard. Here, we consider five enduring challenges for smart cities, even as the market moves beyond traditional barriers of funding and technology.
Cultural interoperability
There is a culture clash between city governments and private enterprises that continues to undermine progress in the smart city space. Technology vendors have struggled to understand the city condition, and cities have struggled to communicate it. “No company working in the space can say, categorically, they understand what the city wants – and cities don’t really know how to ask for it,” says Nick Chrissos, head of innovation technology for Cisco in the UK and Ireland.
This cultural divide has meant that, too often, connected smart city technologies have missed their mark. Indeed, in the first phase of smart city development, technology has tended to create as many problems as it has solved. Francesca Bria, chief technology and digital innovation officer for the City of Barcelona, says the traditional “technology push” has failed.
“That is the agenda that has been pushed by vendors, and pioneered by most cities. And because you put the technology first, you end up solving technology problems – around silos and systems that don’t talk to each other. You forget about the problems you set out to solve at the start,” she says.
The technology market has changed, of course, with the rise of open source software; the slower-moving tech establishment – which has served city administrations, and is positioned to transform them with new digital technologies – must brush up on its collaborative gameplay, suggests Bria.
“The old style technology lock-in doesn’t work any more. We need these big technology vendors, but we need them to understand this new way. We are moving to a more agile market place – from contractual relationships to partnership-based ones, where the provider better understands the city’s challenges, and how to share knowledge.”
Data governance
A major part of the cultural divide between cities and enterprises is to do with control: who owns the data, and how is it managed? The first part of this conundrum has been solved, already. In Barcelona, for example, data sovereignty and data privacy are now mandated in its supplier contracts. “This is very important – not just to preserve privacy and security, but to acknowledge all this data belongs to citizens, and they have rights over it,” says Bria.
The second part, about data governance, is less clear. “The question is how cities act on this data,” explains Bria. “The answer is to restructure operations. Because the technology is not the point, actually – it is always about the culture.”
The prevailing culture within city administrations must be attuned to deal with the dynamism of new data privacy laws and security threats, in particular, as data breaches become familiar and regulators show their teeth. This culture will only cope if cities train and recruit the right talent, to guide policy-making and system controls.
Cities cannot be masters of their own digital futures if they hand over data and expertise to external parties, as they tended to do so far. “If you have very complex technology, and you continue to take the knowledge out, without creating internal capabilities, then you will never be a smart city,” says Bria.
Citywide integration
This is the big one, the holy grail, and the enduring challenge for cities, academics, and enterprises – how to integrate technology across a broad spectrum of civic functions to create a citywide platform that is inter-connected, and which gives rise to new intelligence and innovation, and delivers on technology’s promise of urban sustainability. As yet, the market is nowhere near a final solution.
Cisco says it has reviewed “every smart city experiment in the world” in its pursuit of the definitive smart city business model, and has not seen anything that gets close. “We’ve looked at Tokyo, we’ve looked at Singapore, we’ve looked at Rio,” says Chrissos at Cisco. “The truth is, when you lift the covers, these places are only putting together a cluster of solutions and calling it a smart city.”
There is progress, however. San Diego has hung a programmable and upgradeable sensor network off 3,200 street lights in its downtown area; each node features acoustical, optical and environmental sensors to capture data from its surrounds. The project unites a number of related city functions. “Smart cities allow us to create windows and doors between organizations, and inside of them. Technology forces collaboration between departments,” remarks David Graham, the city’s deputy chief operating officer.
San Diego’s street lights illuminate the way ahead, but there is a long road before the market arrives at its seminal vision of citywide integration, intelligence, and sustainability. “You can create isolated solutions, which bring a return on investment and streamline processes, but if you are looking for this ultimate smart city project then you need something that has the ability to scale, and to touch everything,” says Chrissos.
Commercial scalability
This is the elephant in the room – the fact that, except for a few clever point solutions, smart cities cannot pay their way. As yet, there is no sensible business case for them, applicable anywhere in the world, much beyond garbage, parking and lighting – and general appeals about global sustainability. If the pathway to start-up funding is clearer than ever, commercial sustainability is a sketchy concept in the smart city market.
“There is no commercial model today that says how much a smart city will cost in a language the city understands,” explains Chrissos at Cisco. “The truth is that, at the moment, the biggest hurdle for smart cities is not the technology, nor even the integration; it is how cities will buy it.”
Cisco is attempting to solve the twin challenges of technological integration (see above) and commercial sustainability at once. Its CityVerve pilot in Manchester, in the U.K., has the ability to map every network asset in the city in a common geo-spatial language and create the illusion they are part of a unified smart city network. Cisco has dubbed it a “platform of platforms”.
But it remains an experiment, funded by Cisco and the U.K. government. It will shut down eventually if Manchester City Council does not take it on as a commercial engagement. CityVerve is bold in its scope, and breaks new ground, but the story of smart cities is characterized by its halting progress, and this latest chapter has a long way to run.
Collaborative engagement
For smart cities, collaborative engagement represents the start point, the journey, and the destination. It underpins most of the PPP funding mechanisms used to get projects off the ground in the first place. It is the principle of the triple helix model that carries most smart city projects through, buoyed by the intellectual capital of academia, the wealth creation of industry, and the democratic authority of government.
The latest thinking says collaboration with citizens should be enabled at every turn, as well. This is the way Barcelona has done it, for example. The city council designated 115 blocks in the industrial district of El Poblenou in the early 2000s for start-ups and innovators, under the neighborhood brand 22@ Barcelona. “We need more competition and more innovation, and more opportunities for local businesses,” says Bria.
The objective is the same for other progressive smart cities, like Guadalajara in Mexico, San Diego in the U.S. and Manchester in the UK, which feature in the Enterprise IoT Insights editorial report and webinar, ‘The building blocks of a smart city’. “Part of moving down the road with these technologies is also to create a sustainable economic development cluster in your city,” remarks Graham in San Diego.
Smart cities start and end, then, with collaborative partnership – their biggest barriers are the funding mechanisms to start out, the cultural cooperation to carry on, and the commercial models to finish up. In each case, cities find a way through with partnership. It is both the first solution and the final endgame.
For an in-depth look at the evolution of smart cities, check out this report and accompanying webinar.
