What can you expect from your smart city?
Sometimes in the technology sector, we get more excited about how the technology works than the benefits it actually brings. It’s good to remind ourselves, that the real goal of smart cities is not to do cool things with technology. What technology should be doing is connecting people and creating better communities. Informed by data, cities and citizens can arrive at insights that help them to create safer, more sustainable and more vibrant communities.
Unfortunately when looking at the smart city market development, we often seen that cities focused much more on technologies, trialing new ‘fancy’ point solutions that failed to deliver at scale value for the city itself, its citizens or its businesses.
There is need to refocus the conversation on the value of the city digital transformation, the outcomes you can reasonably expect from it, more than on just on the technology. That’s particularly true when you speak with city decision makers, who are not necessarily technical experts, but have a strong vision of where they want to bring their city in the future.
To that end, we at Nokia have been partnering with a group of companies and organizations to sponsor research into what the world’s leading cities are doing to create more value for their communities. What kind of Key Performance Indicators (KPIs) they are monitoring to track it, and what kind of outcome they are able to generate from their smart city initiatives.
We’ve published the results in an eBook called Building a hyperconnected city, which you can download here. We’re also making the data available online in a handy tool, which you can use to explore the research and even compare it to work you might have already done or other similar studies in the area.
The data was generated using an in-depth survey of 100 cities of different size and maturity across the world, that was done by ESIThoughtLab. There is a real treasure trove of insights in this data, but here are some of the key findings on the socio-economical value generated by their digital transformation in different city domains..
Cities are fully embracing IoT. Those surveyed anticipate the doubling of IoT-based environmental monitoring over the next three years. For buildings and public spaces, energy, electricity water and waste, they were anticipating 50 percent growth. They all put IoT at the top of the list for generating useful data that they can use to improve performance.
The amount of data generated is enormous of course, whether it is coming from IoT or traditional administrative data sources, citizen and local business surveys or social media. Managing and filtering the data to find useful, actionable insights can be overwhelming but 80 percent of the cities surveyed are already using AI — and 90 percent anticipate using it within the next three years.
How are they using data? Nearly two-thirds are using it for managing IT infrastructure and telecoms, which is unsurprising given that these areas are by their nature already digital. Around half the cities are using it for managing payment and financial systems, mobility and transportation, as well as physical and digital security. Over one third are using data for managing public safety, health and wellness.
Where cities seem to have some catching up to do is in the area of data-driven management of the environment, governance, energy, education and the management of public spaces and public buildings. Only around 20 percent of cities are using data in these areas. Most surprising, only 12 percent are using data in the area of waste management.
One of the questions that bedevils many urban planners is how to build a business case for the often substantial investment by local governments. The survey results are helpful here as well. The majority of leading cities, over 70 percent, had highly developed business cases and implementation plans. They carefully monitored and documented their results in order to confirm that they had achieved the ROI objectives set out in their plans. This helped to build the case for ongoing investment.
Typically, the leading cadre of cities exhibited the highest ROI. This seems to be because as cities become more hyperconnected, the network effects multiply the results. For instance, in the area of e-governance, cities just beginning to implement hyperconnected solutions see on average a 2.6 percent ROI, whereas leading cities, which have more mature implementations, see 5.6 percent on average.
The survey looks at ROI results across public transit, water, energy and efficiency, public health, traffic management, waste management, public safety and e-governance. The average ROI for leading cities is in the 4-6 percent range, whereas for early implementers it is in the 1–2 percent range. The message seems to be that patience is required. Building a hyperconnected city takes time, but the results are worth it. So, we should stick to it.
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