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Most Promising Smart City Solution Provider in 2021!

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Have you heard? Last week, CIOReview, a leading technology publication guiding enterprises through the varying business environment with information about cutting-edge solutions and services, announced ESI as their Most Promising Smart City Solution Provider in 2021!

We pride ourselves on creating and delivering cutting-edge models that help explain economic value, ROI, and efficiency of smart city solutions. We have worked closely with various governments, so we understand city leaders concerns, the decision making process, and budgetary processes that cities face. “Our experts have high-level academic and economic knowledge of practical realities that city leaders deal with,” said Steve Wray, ESI SVP. When we start engagements with clients, we work to understand a city or county’s goals, strategy, plan, and budget and incorporate citizens input and opinions. Wray says, “We bridge the gap between citizens’ expectations and government’s expectations to help leaders make informed decisions.

Extensive and Comprehensive Expertise

ESI has worked with the New Jersey Institute of Technology (NJIT), in partnership with the City of Newark and Invest Newark to help them connect citizen’s expectations with their technology goals and objectives. We created a connected plan for Newark – by becoming a connected city, Newark can leverage smart technologies to further interconnect the local government and its citizens. The Connected Newark plan serves as a framework for future policy and investment as Newark progressed along its connected city journey.

Turning to another common need of cities: reliable transportation. ESI has worked with SEPTA to determine the impacts of congestion on the City of Philadelphia. While congestion is in part a signal of success, if not managed properly it reduces the attractiveness of downtown Philadelphia as a business location, limiting job growth and opportunities for Philadelphia neighborhood residents and undermining a key competitive advantage of the city. Further, delays impact buses to a greater extent than cars, deepening existing equity challenges and setting into motion a vicious cycle. We worked with SEPTA to quantify the economic and social losses that congestion engenders. The scale and scope of these impacts demonstrate that there is much to gain from addressing this issue.

We’ve also worked on multiple multi-client studies analyzing and determining how cities around the world are transitioning to becoming “Smart” Cities by creating and using smart technology, energy, and mobility. Our latest multi-client study being Smart City Solutions for a Riskier World, which explores how 167 cities—with diverse populations and economies—use smart innovation and public-private partnerships to drive results.

Let’s Talk!

We want to continue doing work in this space, and the recent launch of our new thought leadership initiative, ESI Center for the Future of Cities will allow us to do that. We continue bringing our expertise in higher education, real estate, economic development, transportation, and government policy to urban ecosystems, because we believe smart cities are not just about investing in new technology, but making sure that technology is integrated into the strategy of a city and improving quality of life.

ESI is eager to deploy our expertise and staff to produce quality thought leadership and advance urban solutions. For more information, please visit our website, or connect with us on LinkedIn and Twitter. You can also contact us to learn how you can join this exciting new effort!

 

Lee Huang, President & Principal | huang@econsultsolutions.com

Lee Huang brings over 20 years of experience in economic development experience to ESI public, private, institutional, and not-for-profit clients. He leads consulting engagements in a wide range of fields, including higher education, economic inclusion, environmental sustainability, historic preservation, real estate, neighborhood economic development, non-profits, retail, state and local government, strategic planning, tax policy, and tourism/hospitality, and is a sought-after speaker on these and other topics.

The Role of Cities in Growing the Renewable Energy Market

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Despite the tumultuous past two years, local governments in the US bought more renewable energy in 2020 than ever before. There was a 23 percent increase from 2019 as nearly 100 cities and counties completed 143 deals and added more than 3,600 megawatts of renewable energy capacity.

On a larger scale, according to CDP, over 100 cities now get at least 70% of their electricity from renewable sources (i.e. hydro, geothermal, solar, and wind). That’s up from 42 cities in 2015, when countries pledged to cut gas emissions in the Paris Climate Agreement. Cities like Burlington, Vermont are showing what it looks like for a city to run on 100% renewable electricity. Burlington is leading the way to building a zero-carbon future in various ways like investing in charging stations for EVs and planting more trees in urban areas.

California and Texas Leading the Charge

In 2020, Houston and Los Angeles signed the largest US city renewable energy deal, ever. According to World Resources Institute, California and Texas accounted for 84% of the total renewable energy purchased by cities between 2015 and 2020. While those 2 states are leading the charge in the US, a lot of progress is being made in other areas as well through community solar projects in Minnesota, Massachusetts, and Washington.

Collaboration is Key

Some city and governments are establishing public-private partnerships with other local institutions to buy clean electricity. One example of this includes the City of Nashville partnering with Vanderbilt University to join the Tennessee Valley Authority’s green tariff program, to construct 100 megawatts of solar power energy to help mitigate climate change. By teaming together, the City and Vanderbilt were able to support each other through the procurement process and leverage their collective buying power to help efficiently meet climate goals.

Solar Power

Governments and cities have purchased solar energy the most between 2015 and the beginning of 2020, with solar accounting for 89% of the total renewable deals purchased by local governments. While the amount of solar energy a city gets varies by its location and weather, it’s the best suited source for both large and small projects and is distributed across the US more than other renewable energy sources. Wind follows behind solar, having a stronger presence in the South and Midwest.

What’s Next?

As renewable energy prices decline, and resources become more available, local governments will need to enter the US renewable energy market to have access to growing opportunities. Cities will need to create clean energy plans that combine several types of projects and partner with each other to purchase energy together. Governments can use their strategies to expand renewable energy for their entire communities by looking into initiatives with an emphasis on minority and low-income neighborhoods. By working both strategically and in partnership with the private sector and institutions, cities have the potential to change electricity usage in the US and play an important part in growing the renewable energy market for our future.

 

Lindsay Durkalec, Senior Business Development & Marketing Associate | durkalec@econsultsolutions.com

Lindsay Durkalec is a Senior Business Development and Marketing Associate at ESI, where she supports the business development team. 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.

Economic Insecurity and Cities

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The COVID-19 pandemic has highlighted the fragile economic situation faced by millions of American households in an era of growing income inequality. At the same time, the government response to the pandemic has demonstrated the ability of policy to impact income security, with aggressive fiscal policy tools leading to a material decrease in the poverty rate and an increase in savings despite elevated levels of unemployment.

Direct income support in the forms seen during the pandemic (stimulus checks, an enhanced child tax credit, business relief programs, etc.) are typically a tool available at the federal rather than the local government level. Despite a more limited policy toolbox, the economic security of residents has huge implications for the community, economic and fiscal health of cities.

“Economic insecurity” can be defined in different ways in different contexts. In general, it refers both to the lack of resources to meet basic needs and to participate fully in the economy, as well as to the perception of economic fragility and risk that may impact household decision making and have adverse effects on mental health. Issues like housing insecurity, consumer spending and fragility to unexpected shocks impact the vitality of neighborhoods, and the investment and demand needed to support healthy commercial corridors and stabilize and refresh the housing stock.

Household financial insecurity also has meaningful budgetary impacts for cities. An Urban Institute study of ten US cities found that families with even small amounts of savings are less likely to be evicted, miss a housing or utility payment, or receive public benefits when income disruptions occur. Revenue impacts from missed utility or property tax payments alone can result in millions in financial losses for cities.

Savings buffers become even more relevant in the context of retirement. By itself, Social Security typically provides insufficient income for retirees to retain their standard of living and fully participate in the economy. In partnership with organizations like the Georgetown University Center for Retirement Initiatives and the Pew Charitable Trusts Retirement Savings Project, ESI has contributed to the body of research on the gaps in workplace access to retirement savings among private sector workers and the potential policy solutions to increase access and savings. With federal proposals towards more universal coverage largely stalled, action has been taken at the state and local level to develop publicly administered savings options that private sector firms can leverage to give their employees opportunities to save.

Coverage challenges around savings and other benefits that contribute to financial security (such as health care, sick leave, and family leave) are further complicated by the rise of the freelance or gig economy. A greater share of the job base has become disconnected from a traditional employee-employer relationship. This trend could be accelerated by the rise of remote work, which may prove well-suited to freelance arrangements. These developments may have positive implication for better matching between workers and tasks they are suited for, reducing locational constraints. However, the policy architecture currently relies heavily on the traditional employee-employer relationship to deliver “employee benefits” such as access to health care and retirement savings, and a degree of income security through the unemployment insurance system. As the gig economy grows, the policy thinking needs to address ways that these workers can plug into existing or new systems to pool risk and increase economic security for these workers.

Financial insecurity is also situated within the broader discussion of income inequality and racial inequity. Evidence has consistently shown that racial disparities in wealth are far greater than disparities in income. This differential is tied to historic inequities and is also connected to the ways in which greater economic security can provide households with opportunities for wealth accumulation (through investments and through appreciation of assets like housing) that are less accessible to households living paycheck to paycheck.

Amidst these challenges, cities and local governments have limited tools for income redistribution efforts or major infrastructure investments that are typically implemented with federal and state funding. Nonetheless, several aspects of local policy can play an important role in the economic security of residents.

Housing is the largest cost for most households and can be a major driver of economic insecurity. Local investments in affordable housing, the stabilization of the existing housing stock, and policies enabling new housing supply all contribute to housing affordability and stability.

Transportation is also a major cost driver for low-income households, particularly when they need to rely on private vehicle ownership to reach their workplace. Policies that reduce the need for auto ownership in turn reduce household transportation costs. Local policy can influence the provision of high-quality transit service, the management of the streetscape to support non-auto uses (biking, walking, etc.) and land use patterns that encourage density in areas with good mobility alternatives.

Cities can also influence the conditions under which their residents are able to access benefits or funding available to them. Philadelphia’s innovative approach to emergency rental assistance funds has become a national model, and has encouraged a rethinking of the service delivery model beyond an emergency period. As the federal policy discussion explores investments in the care economy, human capital, child care and other household-oriented policies as part of our core economic infrastructure, implementation questions will be crucial to maximizing the impact on household economic security.

Cities have served for centuries as centers of economic opportunity and innovation, and their essential economic role will endure even as technology changes. Managing cities in ways that address economic fragility and enable more residents to participate fully in the economy can enhance the dynamism that cities rely on.

 

Ethan Conner-Ross, Senior Vice President & Principal
conner-ross@econsultsolutions.com

Ethan Conner-Ross is a Senior Vice President and Principal of ESI. Mr. Conner-Ross joined ESI in 2014 as a Director. His practice areas include public policy, transportation, tourism, economic development, and strategic planning. He is an experienced project leader who brings cross-disciplinary skills and a public sector perspective to his engagements.

What Can Jobs Tell Us About Equity in Cities?

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Cities are having a bit of a renaissance. If you need proof, look no further than the most recent decennial Census numbers. The 10 most populous incorporated places grew by an average of just about 7% over the last 10 years. While most cities welcome population growth, especially older cities that are coming out of periods of population decline, what does it look like for a city to grow equitably?

One key barometer of equitable cities in the future will be jobs. Not just how many jobs cities are able to create, but the types of jobs and where they are located. Some of the key indicators we are keeping our eyes on at ESI are:

  • Which sectors are adding the most jobs. Lowered-skilled sectors are slated to add the greatest number of jobs in cities. High-wage jobs are predicted to grow in cities as well, but the net total number of jobs is not as large, and these opportunities are only available to those who are also highly educated for the most part. In Philadelphia, middle-wage employment lagged behind overall job growth since the Great Recession and the full impacts of the pandemic still remain unknown.
  • Spatial (mis)match of jobs to residents. Job sprawl, when jobs are spread out over a metropolitan area instead of densely concentrated in an urban city center, presents problems for communities of color and low-income communities who spend a higher proportion of their income on commuting costs. If cities are committed to growing in an equitable manner, one action within their power is to incentivize job creation in transit-accessible locations, enabling a city’s most marginalized populations’ access to jobs.
  • Availability of jobs with equity. Millennials and GenZ increasingly want an equity stake in their work. Perhaps that is part of the reason why business startups grew 24 percent, from 3.5 million in 2019 to 4.4 million, in 2020.
  • Support for small businesses. Small businesses, with under 500 employees, make up the majority of US employer firms. Supporting these businesses with small business loans will be critical to supporting a thriving economy of jobs. Loans made to Minority, Women, and LGBTQ Business Enterprises support employers, such as Black owned businesses, who have smaller financial cushions and weaker long-term banking relationships.
  • Jobs with paths to increased economic mobility. Lower skilled sectors are adding the greatest number of jobs in cities, but these jobs can be a major boom to cities if they provide economic mobility. Jobs that include easy on-ramps into an entry level position and the ability to advance in title and pay without training/credentialing barriers will be key to moving some city dwellers into higher economic rungs. These jobs also offer resilience against job elimination due to automation or inaccessibility of ongoing training/credential

Cities are in a pivotal moment. Population shifts are in full swing, perhaps even expedited due to the pandemic. Without an equity focus, cities will not be able to provide a better quality of life for its residents, economic productivity, and environmental benefits that are held up as the hallmark characteristics of city living. Cities that want to thrive in the future must begin to think about equitable growth, because an equitable city is an attractive place for all.

Melissa Wright, Associate Director | wright@econsultsolutions.com

Melissa is an Associate Director at Econsult Solutions, Inc. Prior to joining ESI, Melissa worked for Teach for America as the Director of Performance Measurement and Evaluation. In this role, she led the facilitation of learning experiences for teams and clients that focused on building skills and knowledge of outcome measurement and improvement

How Has COVID-19 Impacted the International Student Experience

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Higher education is a critical contributor to the US economy and culture, attracting billions of international talents every year. The market size of higher education in the US is roughly $580 billion and 2.6% of US GDP. International students are 4% of the total student population, yet they bring in $41 billion to the economy, accounting for 7% of the market while creating and supporting nearly 460k jobs in 2019. Federal and state funding have been substantial— 3.98 trillion and 78 million respectively in 2017– in supporting the operation of public college and universities through e.g., research funding and financial aid. However, international students often bring in their own funds. Most international students (62%) came to the country with major funds from sources outside of the nation, including those from personal earning, family, home government, and universities.

However, the COVID-19 pandemic has unavoidably created a shock within higher education, especially for international students. Most institutions closed their campuses and moved their courses online while navigating varying safety and health standards, as well as taking on increased technical and organizational challenges. While executive orders, detrimental regulatory actions and xenophobic rhetoric from the US government prevailed, in addition, international students have had to deal with issues such as travel restrictions, reduced visa services, and delay or suspension of test scores required for application, to hate speech that is emotionally devastating. Consequently, despite that most schools have been working hard to update protocols and make digital transitions, there was an overall drop in international student economic value in two decades evaluated by NAFTA. As international students search for new opportunities, more than 42k jobs and $1.8 billion are lost in the economy. One may recall that, meanwhile, the State has also been struggling to provide enough funding for public colleges and universities since the Great Recession in 2008.

So how are higher education institutions coping with the shock of the pandemic and the shadow of the Great Recession? Nationally, the tuition has been raised by $2,484 annually between 2008 and 2017 per students to mitigate the lack of government funding. Higher education institutions, surveyed by IEE during the pandemic, have been supportive to students by offering:

  1. Options for independent or remote study;
  2. Options to take absence and resume study in the next quarter/semester;
  3. Options to take classes online;
  4. Options to study abroad;
  5. Friendly protocols for recruitment, e.g., extended application period, waived GRE, virtual events tailored to local recruitment, etc.

One prominent example is Wellesley College which offers remote classes in both partner school campuses, and foreign locations for study abroad. Working with Fudan University in Shanghai, China, Wellesley offer admitted Chinese students remote classes as well as courses prepared by Fudan. Wellesley also offers weeks-long study/research abroad programs, where students can learn from the best in local universities but also take classes with Wellesley through virtual portal.

US higher education institutions are positive and strategic about reopening and committed to internationalization. An overwhelming majority of institutions have decided to bring students back to campus for Fall 2021, however, each institution has its own decision to make on how to safely do so. Some institutions have mandated vaccination (e.g., Cornell University in New York, St-Edward’s University in Texas), while others strongly recommend vaccination (e.g., Pennsylvania State University, Harvard University in Massachusetts). Students who have already moved back into student housing are asked to be frequently tested, e.g., University of Illinois, Champaign offers free tests at the campus twice a week. A recent article published by Nature has also highlighted a potential in internationalization: that international research collaboration contributes significantly to new discoveries, that a good partnership starts often in face-to-face, and side-by-side interaction.

So how can higher education institutions stay competitive in the post-COVID world? ESI and ANBOUND specialize in thought leadership for universities and higher education institutions. Though their primary mission is education, research, and care, universities and hospitals must express the economic impact they represent as major employers, procurers of goods and services, initiators of capital projects, and magnets for students/patients/visitors. ESI helps its institutional clients articulate those impacts and reinforce that these economic impacts occur because of a focus on education, research, and care, which in addition to supporting jobs and tax revenues today also produce long-term regional economic competitiveness.

Joyce Liu, Analyst | JoyceLiu@econsultsolutions.com

Joyce Liu is an analyst at Econsult Solutions, Inc. (ESI). Joyce was a research assistant with ESI before joining the firm full-time. She graduated from University of California, Los Angeles with a B.S. in Biology in 2018 and completed her M.S. in City Planning from the University of Pennsylvania in 2020. Joyce provides expertise in geospatial analysis and literature research. She also has programming and design experience in ArcGIS, SQL, HTML, R Studio, JavaScript, and Adobe for statistical analysis and multimedia design.

City Scenarios for a Post-COVID Future

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One thing is clear: More than ever, people and firms are re-evaluating where they live and work. The choices they make will have a major impact on the future shape of our communities. The policies we choose will shape the location decisions that are made.

Even before the pandemic, digital technologies supporting online retail, virtual meetings, delivery logistics, ridesharing, and car-sharing were available, well-developed, and changing the economic landscape. With the notable exceptions of ridesharing and car-sharing, the pandemic dramatically accelerated the acceptance of these technologies and expanded the industries they supported. Health risks, uncertainty, and government restrictions resulted in a boom in online retail product delivery and development of telemedicine. Business survival and the need to earn a living led to widespread use of virtual meetings. These changes have had serious impacts on many sectors of the economy

Future of Cities

Although it is virtually impossible to forecast the future that flows from the unprecedented effects of the pandemic in the context of rapidly changing uses of digital technology, it is instructive to examine the characteristics, consequences ,and early evidence of three alternative plausible scenarios: declining urban density; return to a new normal; and smart and connected city expansion. All three of these scenarios have significant implications for the future of cities.

Scenario 1: Declining Urban Density

The scenario of declining density is one that many people seem to expect, primarily as a result of permanent adoption of practices and changes necessitated during the pandemic. The basic economic forces that drive this scenario are:

  • Face-to-face interaction is perceived as less valuable than it was pre-pandemic
  • Cities are perceived as more risky from a health perspective
  • Agglomeration benefits of cities are eroded by better communication technology
  • Lower-cost and more decentralized locations are better able to successfully compete for people and firms

Declining urban density would have negative aggregate economic impacts for cities if the lower agglomeration economies are not fully offset by virtual meeting technologies. Because agglomeration benefits will be further reduced as density declines, there is a potential of a negative vicious cycle. Several adverse outcomes would be associated with this scenario:

  • Diminished value of existing public infrastructure in less dense cities
  • Substantial need for new infrastructure investment in expanding locations
  • Diminished urban land value and built asset-value including stranded assets
  • Increased congestion for a given level of economic activity as transit is underutilized
  • Competition for remote work becomes global for many, and US residents may find themselves in direct competition with low-wage labor across the globe

Scenario 2: Return to “Normal”

The expression of the “new normal” is common in discussions of post-pandemic America. First note that cities are constantly evolving —there is no “normal” per se, but for the purposes

of this scenario, the “new normal” is one with substantial adjustments enabled by new digital technologies. The virtual technologies increase flexibility of in-the-workplace and at-home arrangements, but these gains are offset by the declining agglomeration economies resulting from declining density and new infrastructure costs. Further this scenario does not envision the possibility of greater global competition in the labor market.

Based on limited and early evidence several patterns have emerged:

  • Cities have lost population, but not dramatically
  • Economic activity is recovering as vaccination reduces risk and fear
  • Auto travel is increasingly dominant as Vehicle Miles Traveled are increasing and transit use remains depressed
  • The competitiveness of dense cities is somewhat eroded by the decline of transit

The return to the “new normal” is a middle-of-the-road scenario that likely will have middle-of-the-road consequences. Market adjustments that will probably occur will increase the likelihood that this prediction will best represent the future outcome. Some challenges arise in this case that will require deft and insightful public policy to prevent potential downsides from occurring, specifically in preserving high quality-of-life in urban areas, investing in new infrastructure to support moderate changes in physical location, and supporting innovations in the transit industry to accommodate the needs of households with more flexible travel patterns. Overall this scenario implies:

  • Less dense areas do a little better
  • Declining values of existing public and private urban assets
  • More congestion and greater infrastructure need
  • More climate-related challenges
  • Economic growth is a little worse or a little better, depending on the extent of agglomeration loss, infrastructure and congestion costs, and climate issues

Scenario 3: Smart and Connected City Expansion

In this scenario, Cities have evolved into knowledge and innovation hubs that benefit from face-to-face interaction. As long as those interactions generate significant positive economic and social benefits, technologies that allow remote work simply expand the reach of innovative businesses in accessing labor for non-innovative tasks. This could give rise to increasing dominance of smart and connecter cities that provide high quality of life for the innovative class. These successful cities will have businesses with a global reach in the talent market, as well as citizens with work options all over the world.

For all cities, technology advances provide flexibility that alleviates expensive infrastructure constraints. It lowers peak demand on roads, transit, and sidewalks for any given level of economic activity. This allows full utilization of existing built infrastructure, leading to higher levels of economic output with lower physical infrastructure costs. The ability to access lower labor costs while at the same time generating large agglomeration economies with lower

Infrastructure costs may result in winner-take-all growth of policy- and tech- savvy cities.

Not enough time has elapsed to see whether the new technologies will further feed the growth of large cities as they have in the past, or whether this time it really will be different. If it is not different, there are potential large gains that may be made but also significant challenges ahead in ensuring that those gains are equitably shared

  • There is little threat of declining urban value or stranded assets, at least in large cities
  • Increasing agglomeration economies generates the greatest productivity income and wealth
  • Environmental and climate challenges are more easily managed since dense cities are less resource-intensive on a per capita basis

There will be three major challenges that need to be addressed:

  • Housing affordability is a problem in virtually for every successful city as competition for space in dense areas drives up prices
  • The potential for mega winners at the expense of others poses challenges in equitably distributing the income and wealth of macro economies
  • Successful, dense, diverse communities may find themselves in conflict with virtual homogeneous communities

Implications for City Leaders

As we have seen for the past 18 months, making predictions about “post-Covid” life is fraught with uncertainty. Yet looking at the future through a scenario lens like posed here allows city leaders to understand the potential range of outcomes that could lie ahead, and prepare policies and strategies that position a community for success no matter which direction is realized. Modeling the potential impacts of each scenario can help a city understand what it may need to do to either seize an opportunity or avoid a potential problem.

If you are interested in exploring these ideas further or have your own thoughts on potential scenarios or implications of our new realities, connect with us to see how we can work together. The ESI Center for the Future of Cities is actively exploring all of these ideas, and is available to help you understand how your city or organization will be impacted by these transformational changes. Contact Steve Wray or Dick Voith for more information on how we can work together.

 

Richard Voith, Co-Chair | voith@econsultsolutions.com

As Co-Chair of the Econsult Solutions (ESI) Board of Directors, Dr. Richard Voith provides expertise to clients in real estate economics, transportation, and applied microeconomics. Dr. Voith served as President since the firm’s inception and is now guiding strategic planning and development of the company. As a Principal of ESI he continues to provide insight and analysis in the firm’s transportation, real estate, litigation, and international business activities. In addition to his roles at ESI, Dr. Voith is Research Fellow at the University of Pennsylvania’s Institute for Urban Research.

 

Steve Wray, Senior Vice President & Principal | wray@econsultsolutions.com

Steve Wray is a Senior Vice President and Principal at Econsult Solutions, Inc. (ESI). In this role, Steve focuses on the development and implementation of programs and projects that support ESI’s vision and short- and long-term plans. He leads the work of the firm’s principals and senior staff in developing new partnerships, expanding and building on existing practice areas, and integrating the firm’s strengths in economic analysis and thought leadership. Mr. Wray joined ESI in 2017 as a Director and was promoted to Vice President, Strategic Initiatives in 2019.