The utopian ideal of smart cities anchored by futuristic technologies such as robots and flying cars has been replaced by the idea that technology should be used to enrich society and the lives of people in ways that are practical and relatable. Global engineering, consulting and construction services firm Black and Veatch’s 2016 Strategic Directions: Smart City/Smart Utility Report, released this month, underscores the growing popularity of data analytics in which hardware and software enable important changes.

A hallmark of smart systems is the union of data and action. Information gathered by sensors and smart devices is sped across high-speed networks and crunched by sophisticated software, it notes. The result is information that spurs cities, utilities and customers to knowledgeably take action.

Fortunately, technology advances are making it easier for governments, municipalities and utilities to engage with their constituents and stakeholders on their terms. Not only can they better understand resource use, but some applications also encourage community members to become part of the solution. Examples include social media and online communities, interactive street kiosks and bus shelters, crowdsourcing and more, according to the report.

The report, however, also shows that the numerous advantages of the smart city and smart utility models are tempered by some familiar factors: tight budgets, justifying return on investment (RoI), and the challenge of managing the scope, scale and security of smart systems. These learnings are crucial to a country like India which announced the first 20 (out of 100) cities that were chosen as part of the government’s smart cities programme.

Ten important learnings from the survey:

1) Nearly all respondents understand that the smart city concept applies to both new and existing infrastructure systems. Although there are some greenfield smart cities being built from the ground up, the great majority of projects are upgrades or additions to existing infrastructure. Yet, all too often, municipal leaders overlook the obvious, the report notes. They view smart city initiatives as new line items on the budget rather than viewing each existing project as an opportunity to add smart segments that ultimately build towards a more cohesive whole.

2) Nearly 80% of respondents said cities should prioritize projects that have longer-term benefits and not high-profile initiatives designed to generate support in the short term.

3) The traditional mindset of initiatives being determined by municipal officials based on their knowledge and priorities—and who believe that smart city initiatives should primarily be led from the top-down instead of from the grass-roots level—points to the need for a paradigm shift to one where citizens are embraced as part of the solution and decision-making team. Here again, more education and best practice sharing would be beneficial.

4) For municipalities, implementing first-to-market innovations requires a new mindset. With the speed of technological progress being made, business models for end-users need to evolve to address the realities, risks and benefits of being a first mover in the smart city transformation.

5) Deployments of smart meters, sensors and data analytics are allowing communities to change the way they communicate and consume energy and water. But the importance of planning for these changes is taking on new significance. Adoption of smart city initiatives have kept at bay many cash-strapped cities whose leaders believe smart integrated infrastructure changes are up to a decade away.

6) Questions of cost appear to be dividing most smart city initiatives into two camps. Some communities with leaner budgets, but deep interest in smart infrastructure efficiencies are opting for incremental add-ons—such as street lights, digital kiosks or electric vehicle charging stations—that produce quicker results.

Other cities, meanwhile, are pursuing some form of root-level master planning, which puts communities on a broad, years-long path and envisions a thorough rethinking of how a city uses its energy, water, communication and transportation systems.

7) Nearly 70% of government respondents, and 44% of smart service providers, labelled budget constraints as an acute inhibitor of smart city initiatives. Concerns also linger over whether governments can, in the future, attract the kind of workforce required to implement and sustain smart initiatives over the long term.

8) The highest priority among government respondents to the Black and Veatch survey was high-speed data networks, which are crucial to moving data collected from system sensors that can be analysed in the cloud and used to adjust consumption patterns and behaviours. Smart energy management systems, which can be critically effective in regulating power-hungry buildings, also rank high.

9) Master planning offers a more holistic approach, and communities are increasingly pondering that strategy in their bid to become more efficient, green and resilient. For instance, the City of Chula Vista, California, has a long-term, citywide vision and recently embarked on its journey with the Bayfront project. An initial phase is focused on energy efficiency, renewable generation and smart infrastructure for its Bayfront properties, but the long-term plan centres on citywide energy efficiency and smart devices, data analytics and software to revamp the city’s critical infrastructure. The plan includes high-performance buildings and city infrastructure that incorporates energy efficiency, demand response and clean energy generation technologies.

On the other hand, the Digital Roadmap created by Kansas City, Missouri—through a public-private partnership that includes Cisco Systems Inc., Sprint Corp., Black and Veatch and other providers, offers another example of long-term blueprinting that can scale up and widen. Smart lighting, digital kiosks, smart water and other systems are being designed to take advantage of high-speed data deployed in the city’s urban centre. Such a layered master plan gives communities a road map that conveys to all stakeholders the city’s long-term vision. It transparently projects costs and funding sources well in advance of adoption.

But perhaps the biggest advantage, notes the report, is a kind of future-proofing in which smart infrastructure upgrades and technologies are designed to work together as the plan ages and scales. Master planning is inclusive and anticipates future systems. It arguably carries the biggest pay-off.

10) The fundamental question is, “Who pays for this?", the report underscores. Compounding this, the overall cost and RoIs are not broadly understood. These are technology investments that often require pilot projects and testing while competing for funds against more mundane capital and operating projects. Siloed organizations often cannot look beyond their own department budgets. Black and Veatch has witnessed that there are certain kinds of smart city developments that have a demonstrable RoI using conventional valuation techniques; these are often the projects cities look to first when implementing smart city initiatives.

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