Cities to spend $141 billion on smart city projects in 2019, study says

A new study shows how cities can go beyond current smart solutions to become “hyperconnected” hubs generating economic, social, and environmental benefits by linking key elements of their urban landscape — including transportation, public health, energy, water, security, and sustainability.

ESI ThoughtLab announced the key findings from its Building a Hyperconnected City program, a year-long global study co-sponsored by Stantec and other industry partners. The survey included 100 metro centers using technology to improve, connect, and secure areas of their urban ecosystem.

Cities surveyed reported that they will spend $141 billion on smart city projects in 2019, which amounts to an average investment of $1.4 billion per city. That investment is projected to rise an average of 14 percent over the next year, the larger portion of which will come from more advanced cities, who will increase their investments by 21 percent.

Central to Building a Hyperconnected City is a roadmap on how to manage urban digital innovation, maximize return on investment (ROI) in new technologies, and ensure benefits reach the business community and citizens. The roadmap compiles practices followed by cities more advanced in project deployment and ROI, which can be adopted by cities at all stages of hyperconnectedness:

• Start with an evidence-based business case and continuously monitor performance in order to calculate ROI.

• Calculate the full benefits of investment including social, business, economic, and environmental payoffs.

• Organize resources effectively within a centralized department and draw on both internal and external staff to operate hyperconnected city programs.

• Create a structure such as an innovation hub to capitalize on technological advancements and prioritize cybersecurity.

• Use the industry ecosystem effectively by partnering with business and academic communities but keep crucial development and implementation tasks in-house.

• Generate more value from data by working with business and other partners, making it accessible to citizens and stakeholders, and guiding data management with well-planned policies.

• Ensure citizen engagement by enabling input and two-way communication and prioritize reaching out to disadvantaged populations.

Cities reported that becoming more connected yields benefits across the urban ecosystem. For example, the research revealed that using technology to interlink different areas of public transit programs increases passenger satisfaction by 38 percent, on-time arrival by 33 percent, and transit ridership by 29 percent. Digital public transit payment systems, used by 72 percent of cities surveyed, are particularly effective, with advanced cities recognizing a 6.5 percent ROI.

More advanced cities also reported a higher average ROI from projects at 5.0 percent, versus 1.8 percent for cities cutting their teeth in digital innovation. This indicates a multiplier effect when it comes to smart city investments — the more connected a city becomes, the greater the benefits of those investments.

Challenges. Cities also reported a number of challenges in efforts to become hyperconnected:

• Chief among them was uncertainty among citizens and other stakeholders wary of new technologies in the urban environment. The study found that cities like Barcelona and Stockholm alleviate this through effective communication and outreach to build citizen trust and engagement.
• Funding for smart initiatives is yet another hurdle, but there are many possible solutions, both public and private, that cities around the world have adopted.

“Good citizen engagement is critical to building healthy, happy, resilient cities,” said Nancy MacDonald, Stantec’s Smart Cities Lead. “Making the case for smart projects and educating the public is the first step. If people in the community feel engaged and see the change as positive, projects will be much more successful. The smartest cities put people first.”

Originally posted on Metro Magazine