How Smart is Your ‘Smart City’ and Why Should You Care?

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Dozens of urban development projects, from Malaysia to Siberia, claim to be technologically advanced, comfortable and ‘sophisticated,’ with a cognitive-cultural economy to boot. They all need to sort out what they really are – and whether or not their plans are obsolete.

Not all ‘smart city’ investments are very smart. Today we have billions of dollars being invested in transforming our cities, towns and rural districts into ‘smart cities,’ ‘intelligent communities,’ ‘living cities,’ ‘sustainable cities’ and ‘green cities.’ Even the names are confusing. What’s happening? Why all the fuss and investment? And are the strategies the same in the BRICS nations as they are in developed countries? What about small emerging markets? Can everyone participate and benefit in this new technology-driven urban transformation?

First, what’s happening, and why should you care? Technology transformation and new product innovations have created the rapid growth of smartphones and tablets with more power than the mainframe computers that filled large rooms 50 years ago. But this is just the tip of an iceberg of thousands of new applications that have turned our cars into computers-on-wheels, and disrupted thousands of other products and systems. The camera market is just one example: digital cameras put Polaroid and Kodak out of business.

The room-sized computer now fits on the head of a pin, but who cares? The question is, what are the applications and how can we benefit from them?

It was not until the early 1990s, 20 years ago, that the concept of ‘smart’ or ‘intelligent’ communities was first introduced into the public mind, with the appearance of Singapore’s Intelligent Island, Silicon Valley’s Smart Valley, and Smart Toronto. But like all disruptive innovations, this technology-driven wave of urban transformation has taken time to gestate before coming out in full force to make obsolete those cities and towns that are not innovating to transform themselves and keep ahead of the wave.

Comparisons are drawn with cities and towns in Britain and Europe which prospered when canals were important forms of transportation. They lost their economic power when the railway ran in another direction or when, in the U.S., the new interstate highways bypassed prosperous towns, which then declined.

When engaging in urban transformation or new community development, the high-level goals for a community can generally be categorized as economic, social or environmental. Naturally these are not independent of each other, but all activities and goals usually fit into one or two of those three categories. Transforming towards a new future state requires many things, but innovation is certainly a common theme. The three categories are a useful reference point when discussing the terms ‘smart,’ ‘intelligent,’ ‘living,’ ‘green’ and ‘sustainable.’

Some people use ‘sustainable’ and ‘green’ in the same breath, to mean that communities with more effective green policies will be more sustainable; sometimes the terms are used interchangeably.

The ‘living cities’ movement has its roots in the work of Jane Jacobs and other social pioneers who, in essence, were focused on urban designs that created great places and neighborhoods. They are characterized by plenty of parks, the elimination of high-speed expressways that cut through cities and neighborhoods, great facilities for cycling, and a general focus on the citizens’ socializing and comfort.

‘Smart’ cities have many degrees of smartness. Some people claim they have a smart city when they have automated their traffic lights and installed cameras for increased security. It is interesting that many of today’s smart city automations are following the same dynamic that government and businesses followed 40 to 50 years ago. There was no overarching strategic approach or framework within which the investment in technology was supporting strategic goals. Automation was really viewed as a cost reduction and productivity improvement for a specific application. There is nothing wrong with that approach, but it misses the extra value that is available when you tie automation to an overall strategic framework.

In the late 1980s the concept of ‘strategic alignment’ was introduced by two MIT professors. They used the term to describe the alignment between an organization’s investment in technology and its strategic goals and directions. Strategic alignment seems like an obvious requirement in business and government systems today, but it was mainly ignored for the first 30 years of business automation and it is being ignored today in many smart city initiatives.

So it sometimes seems as if we are starting over in this relatively new area of applying technology to urban life and systems, as we create the ‘Live, Learn, Work and Play’ environment for tomorrow’s citizens.

But an evolution is occurring in the maturing of smart city systems, from the automation of a few specific applications like traffic lights and security features, to systems that do include strategic alignment. To help reduce the confusion of terms it is useful to think in terms of Smart City 1.0 and 2.0 – and now the early stages of Smart City 3.0.

Smart City 1.0 is like those old business and government systems where individual applications were automated without reference to the overall strategy of the organization. Smart City 2.0 has early forms of strategic alignment. Smart City 3.0 includes sophisticated strategic alignment and early forms of intelligence in the applications and communications infrastructure. Naturally there are no hard boundaries, but in general these terms are useful when discussing the differences between applications in various countries and regions of the world, and the difference between a smart city and an intelligent community.

The phrase ‘intelligent community’ was defined in the late 1990s by the New York-based Intelligent Community Forum (ICF). An intelligent community consists of broadband, knowledge workforce, innovation, digital inclusion, advocacy.

For 14 years the ICF has held an annual compe-tition for the Intelligent Community of the Year, based on the mentiond elements. Each year they add an area of focus, like innovation or collaboration. They receive a few hundred applications each summer, narrow them down to 21 semifinalists – the ‘Smart 21’ – and then again down to seven finalists in January. The winner is announced at a gala in New York in June. Singapore, Stockholm, Eindhoven and Taipei are among the past winners of the award.

The main differences between an intelligent community and other designations are the existence of an overall strategic framework, collaboration between all community players in creating that strategy and agreeing goals, and the use of technology in achieving those goals.

For example, if it is agreed that the community wants interactive healthcare services in the home, through communication with a nurse or doctor via camera, then the technology, regulations and processes are implemented to provide the servi­­ce. Technology is not the end goal: it is the enabler, in all cases. All applications and services fit within an overall strategic community framework that is created before the automation investment begins. Smart City 2.0 and definitely 3.0 approach this standard.

So where are we with these urban transformation initiatives in various parts of the world? Really effective and open collaboration between citizens and their governments is generally more prevalent in Western democracies and developed countries. The more autocratic the national and municipal leadership, the less there is community collaboration, and the more the government decides what is required. That difference usually leads to an automation approach characteristic of Smart City 1.0: automation of specific functions, but very little strategic alignment. This is not intended as a comment on the pros and cons of various forms of government; it is merely a statement of fact, as many other factors determine the most appropriate form of government and governance.

As in the case of early business automation, each application or project can still be valuable in terms of cost reduction and/or productivity improvement. In civic terms it may be improved traffic flow with a positive impact on gas emissions and overall efficiency, or improved security in terms of cameras, lighting and sensors. But it is in the Western democracies where we are generally seeing the evolution of Smart City 3.0 and intelligent communities. They are the ones gaining the extra leverage from their investment by connecting it to an overall strategic framework that also includes the power of citizen participation in establishing priorities.

Cities, towns and rural areas around the world have great stories to tell about their efforts to transform themselves. The internet is spreading throughout Africa, and broadband is expanding and increasing in speed everywhere.

On 21 October this year the ICF announced its Smart 21 shortlist for the 2014 Intelligent Community of the Year award. They include one community in each of Kenya, Greece, Brazil and New Zealand, as well as six in Canada, four each in the U.S. and Australia, and three in Taiwan.

Chinese, Japanese and Korean cities have won the award in previous years, but India and Russia have not yet made the list. Having said that, there is an impressive wave of new smart city activity in both countries, and cities in places like Kazakhstan will quickly move up the ranks as a result of their present initiatives.

Bill Hutchison is Executive Director of EY’s Center for Smart City Innovation, Chairman of i-CANADA Alliance.

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