For this Present Value post, we asked our research coalition behind Building a Hyperconnected City to offer their perspectives on the future of smart city solutions. Businesses and residents are embracing technological innovation faster than many cities can reach. These professionals and thought leaders span multiple industries and locations across the globe, providing a holistic view to creating an interconnected urban ecosystem.
In your opinion, what do you see as the biggest hurdle for cities to overcome in becoming a smart city of the future?
Nancy MacDonald, Vice President, Interim Director, Stantec’s Urban Places: Many cities around the world have already implemented some form of smart technology, but none have really achieved the perfect harmony of sustainability, affordability, mobility, and economic opportunity. It’s going to require some big thinking, and while technology is an important piece of the puzzle, we need intelligent planning to make our ideas work together and find solutions to urban problems that improve outcomes for the people living in our cities.
Maduabuchi Gerald, Co-founder, Uchald Integrated Ltd: The knowledge gap among investors, regulators, government officials and entrepreneurs. Inefficient business development processes, failure to localize business concepts in line with the people’s culture and social behavior, and inadequate research or studies for workable business plans before business start-ups has resulted in the failure of most business in Africa.
Steve Hamilton, Senior Manager, GPS Risk and Financial Advisory, Deloitte Transactions and Business Analytics LLP: Taxpayers seldom embrace expensive projects whose value they may not recognize, and cities often face budget constraints. The benefits, economic and other, need to be communicated and demonstrated. In communicating the value of these projects, there is tremendous room to experiment with multiple innovative financing models like pay-for-performance, share value capture, social or green impact bonds, various types of public-private partnerships, and data and asset monetization through things like road user charging or smarter curb management. Procurement and innovation models are changing, and we are just beginning to understand both the financial and non-financial opportunities.
Suparno Banerjee, Global Public Sector Lead, Enterprise, Nokia: New challenges and new opportunities will keep emerging. In a digital world, innovation can keep pace with these changes. Unlike previous development models, where new systems were meant to last almost unchanged for a significant length of time, the connected smart city requires that we think of innovation on a continuous basis.
Chungha Cha, Co-founder & Chair, Re-imagining Cities Foundation: Finance is absolutely the biggest hurdle. Governments do not have enough capital to fund many smart city initiatives. This results in a diverse range of small smart city projects in “silos” and, in most cases, have failed to ramp up into larger, impactful projects. Governments need to attract private investors, in the form public-private partnerships into large, impactful projects worth investing in and showcasing to other cities to learn and benchmark. And, in order to attract the attention of large private investors, the size of projects need to be US$50-100 million or more. Lessons learned from a smart cities workshop earlier this year and, hopefully, more detailed workshops to understand how we can build “smarter and greener” without over investing so that we can achieve the investment returns required to attract private capital.
What is the first step cities should take in becoming ‘hyperconnected’?
Joan Ricart, Co-academic Director, IESE: Becoming hyperconnected is a journey that starts with data integration and the development of an open data strategy, followed by the necessary technical infrastructure for connectivity. With this foundation, different steps of collaboration come into play, representing a total reorganization of City Hall.
Nancy MacDonald, Vice President, Interim Director, Stantec’s Urban Places: As an urban planner, I’m trained to listen to communities about their needs and then incorporate their ideas into the solutions we recommend—and that’s often where the best ideas come from. We have to start with the challenges we’re facing, and then think differently about potential solutions. It’s not about technology for technology’s sake. Integrated mobility, adaptable utilities, better buildings, and thoughtfully designed public spaces have the power to change the way we live for the better, but these solutions will be far more effective with input from the community.
Xiao Yang, Researcher, Urban Issues, ANBOUND: The construction of a smart city is not only a project, but also a process. Only by defining the design of the top layer, considering the overall situation and the long-term perspective, can we identify the advantages and disadvantages of a smart city, find a breakthrough point, break the inherent interests of various departments, and achieve optimal allocation of effective resources. Good top-level design will help clarify the staged goals of information digitalization, internet integration, and digital intelligence. In this way, the construction of smart cities can be clearly leveled and promoted in good order. Only then can we strengthen the integration with the surrounding cities, make good use of their experience of smart city construction, existing information, and platform resources, and reduce redundant construction.
Suparno Banerjee, Global Public Sector Lead, Enterprise, Nokia: The first step for a city is to clearly define top priorities, so they will know where to focus their resources. Then key and relevant stakeholders can be brought together around the same table. Their work will include identifying which KPIs will define success, establishing ways to align for common and mutual success, beginning to build a platform that will allow onboarding of innovations and services that can improve the way the city operates and, overall, defining a roadmap of service delivery.
Chungha Cha, Co-founder & Chair, Re-imagining Cities Foundation: We strongly believe that the first step is to understand “WHY”… so why does any city want to get “hyperconnected”? We strongly agree with ESI ThoughLab that, “by making cities smarter—not just in using technology but in all that they do—government leaders hope to drive competitiveness and growth, while making massive social, business and environmental improvements. But without a clear playbook for the future, cities run the risk of falling behind their peers.”
So, we believe the first step should be to come up with a masterplan. After finance, the next biggest hurdle is knowledge and manpower to effectively “develop, implement and manage” a holistic smart city masterplan. We like what Orlando did by issuing an RFP to engage experts in the private sector to help develop a masterplan together.
What can residents do to move the conversation further on smart city solutions?
Bill Baver, Go to Market Leader, Smart World team, NTT Data: Residents have a key role in defining and validating the outcomes from smart city solution implementations. Residents should actively communicate with their elected officials and encourage others to get involved and attend in-person town hall meetings to be a voice for a smart city innovation. Residents should also actively utilize new technologies being implemented and provide feedback on the smart city solutions.
Kathleen O’Dell, Principal, Deloitte Consulting LLP: Residents can be an important source of data generation, solution development, and testing for both governments and businesses. They increasingly play the role of “prosumers” in smart cities—producing and consuming the data for better decision-making. For instance, with the growing ubiquity of wearable and connected devices, citizens can co-create data itself like reporting of potholes and helping to identify homeless people. Citizens can take a proactive role as co-creators in shaping smart city policies and initiatives. They can also be conscious and vocal about the change that smart city transformation will entail.
Maduabuchi Gerald, Co-founder, Uchald Integrated Ltd: Residents can create forums that will enlighten the public on the importance of having smart cities. This rise in awareness can create pressure on government to consider the option to deploy it within the cities. Forums can be online based, social media based, etc.
Wayne Best, Chief Economist, Visa: The best thing that residents can do is to engage and participate. Gain a level of understanding of the benefits and balance them against any concerns (security, privacy or otherwise) so that they are contributing to the process.
How important will cybersecurity be in ensuring trust in hyperconnected systems?
Joseph Viscuso, Senior Vice President and Director of Strategic Growth, Pennoni: Cybersecurity may be one of the most important aspects when implementing hyperconnected systems. As cyber attacks have become common, the public expects security measures to be in place, and that will extend to technologies throughout hyperconnected systems.
Suparno Banerjee, Global Public Sector Lead, Enterprise, Nokia: Cybersecurity will be absolutely essential to both protect citizens’ privacy and ensure that critical city services (such as public transportation, energy and public safety systems) can run smoothly and securely, twenty-four hours a day, every day.
Nancy MacDonald, Vice President, Interim Director, Stantec’s Urban Places: Data protection is a paramount consideration any time we look at deploying technology in our infrastructure. There are a lot of ways that data can be anonymized, and those discussions are happening around the world.
At the end of the day, technology is a means to building better communities, and it rests on a foundation of trust. Fostering community engagement is a great way to keep these trust levels high.
Wayne Best, Chief Economist, Visa: It will be crucial. At the core of a hyperconnected system is data that is aggregated, processed, and analyzed to deliver insights about consumption, movement and changing trends across a city. Data can be very powerful when applied to anticipate needs in real time as well as provide cities with insight that can help with future planning.
Typically data is quite segmented and decentralized across multiple city agencies, so creating a safe and reliable security design and process of governance to manage privacy concerns across a multi-stakeholder ecosystem is what will ultimately ensure trust in the system.
What are you most excited to see/looking forward to seeing in smart cities of the future?
Joseph Viscuso, Senior Vice President and Director of Strategic Growth, Pennoni: Improved mobility. As the population has increased with an influx of baby boomers and millennials, ride sharing has become more common in our urban centers to combat increased congestion. Implementing smart solutions centered around improved mobility will be a tremendous asset to our urban environments and improve the lives of city residents.
Rana Sen, GPS Managing Director, Deloitte Consulting LLP: How smart city initiatives deliver human outcomes and help solve social problems. The smartest cities can become more inclusive through service design, infrastructure planning, and mobility solutions, driving economic growth for everyone. It would be great to see how smart cities can enhance livability and drive more sustainable development for all.
Chungha Cha, Co-founder & Chair, Re-imagining Cities Foundation: Over the past several years, investments in property technology, referred to as “proptech” has skyrocketed to almost US$20 billion in 2018 and cumulatively approximately US$70 billion. Large real estate players are starting to invest in and adopt proptech to help enhance the performance of their assets. We see proptech as one of the key accelerators toward better buildings and smarter cities.
Xiaoqi Fang, Researcher, Urban Issues, ANBOUND: We hope that through the construction of smart cities, we can leave a wealth of digital assets for the history of human development. Cultural and artistic information is also in the process of rapid digitization. These are valuable urban digital assets that are relevant to future generations. Promoting a city’s history and cultural digital assets will enrich the most critical content platform of smart cities. It will also maintain the vitality of cultural assets in the digital and information age. In the future, smart cities should focus more on the city’s digital assets as a key value point, making them shine in the fields of culture, tourism and urban value.
Bill Baver, Go to Market Leader, Smart World team, NTT Data: Investments in smart technologies that enable less energy usage, reduce pollution and making the environment healthier for ourselves and the generations to follow will significantly help improve citizen health and reduce associated healthcare costs for individuals, employers and cities.
Wayne Best, Chief Economist, Visa: We see digital payments as one of the ways that cities can get creative and innovative in their smart city approach, which in turn helps to attract more business investment, residents and visitors. It really opens up a new frontier for cities all around the world.
How can businesses and government work together to provide the solutions that will generate substantial ROI (financial impact and social impact)
Raul Garcia Rodriguez, Regional Director of Operations, Bogaris: Governments should cover the financial gap for businesses to take on the SDGs until the moment they realize that sustainability is, in itself, increasing the ROI in the mid-long term, while the “traditional” model focuses more on the short-mid term ROI, which is no longer sustainable.
Rana Sen, GPS Managing Director, Deloitte Consulting LLP: Whether in mobility, energy, or any other domain, delivering the promise of a smart, hyperconnected city will require a true ecosystem of participants. Neither governments nor the private sector can do it alone. While private players gain more business, governments gain greater cost-efficiency and expertise. Leveraging private sector expertise, asset reuse, unlocking data value are some of the ways businesses and governments can generate a return on investments. The key, again, is to keep the constituent at the center of these initiatives.
Joseph Viscuso, Senior Vice President and Director of Strategic Growth, Pennoni: Cities that are not “smart” will not attract the best and brightest workforce, which in turn will not invite the most innovative existing and new business ventures. Additionally, cities are no longer competing within their own region, state or country, they are competing with cities around the world. Government must be educated that the old methodical ways of procurement will not serve them well in this movement.
Joan Ricart, Co-academic Director, IESE: Business and government need to find organizational mechanisms to co-create solutions and to implement and manage them through Public-Private Partnerships. Collaboration is the name of the game!
Successful thought leadership is a team sport, requiring close collaboration with our clients and the right blend of analytical, editorial, and marketing skills. Econsult Solutions and ESI ThoughtLab would like to give special thanks to our research coalition and participating cities committed to Building a Hyperconnected City.
Mike Daly is a senior business development and marketing associate at ESI, and communications specialist for ESI ThoughtLab. Mike is responsible for enhancing ESI’s brand and work through traditional and social media, content development for the web, and managing the ESI blog, Present Value.
Lindsay Durkalec is a business development and marketing associate at ESI. In addition to assisting with proposals, Ms. Durkalec is responsible for enhancing ESI’s brand and work through traditional and social media, content development for the web, and managing the ESI blog, Present Value.