Why creating tomorrow’s smart city is about much more than just technology

05 October 2016

By Hazem Galal, Global Leader Cities and Local Government Sector, PwC, and contributor to the U4SSC and the WEF Future of Urban Services initiatives

Accelerated urbanisation is reshaping the world

In the year 2007, humanity reached a remarkable milestone. For the first time in history half of the planet’s population was living in cities.The world’s urban population continues to grow, as cities expand and new cities are born. The vast majority of urban growth is happening in developing countries, increasing the importance of finding the right solutions and institutional arrangements that maximise the benefits of urbanism while tackling the challenges that take new shapes and forms.

World leaders, mayors, the private sector and other stakeholders are getting ready to discuss these urban challenges at Habitat III (Quito, October 2016) and how the New Urban Agenda can help cities and nations address them.

The new urban challenge: a question of balance

Cities worldwide face the challenge of growing economically while balancing the social and environmental side of the city to remain sustainable in the future. These challenges vary depending on a city’s socioeconomic level of development, geographical location and context. A recent survey of global experts conducted by the World Economic Forum (WEF) shows that social issues and migration top the list of challenges faced by European cities, followed by climate change, economic development, demographic change and environment resource management. On the other hand, urban planning tops the challenges facing Asian cities, economic development is most important in South America and climate change is North America’s top priority. Cities in the Middle East and North Africa are most concerned about water scarcity, safety and security.

To succeed in addressing the challenges, cities need to design and execute smart, sustainable initiatives that: have a clear vision and goals, are well managed, and involve a broad range of parties working together effectively. Collaboration is required across city departments, across multiple levels of government, with the private sector, academia, NGOs and enthusiastic citizens.

Planning for smart, sustainable growth

Cities are the engines of economic growth, attracting talent, creating jobs and generating innovation. But with more people also come more potential problems. Providing the essential needs of humans can become more complicated in dense environments.

Finding the right institutional frameworks and technological solutions to support the modern city, in the era of global hyper-connectedness is of enormous importance. The starting point is to clearly define what a city’s priorities are and at which stage it currently stands in its urban development:

Rudimentary: battling to meet demand and supply.

Functional: meeting residents’ essential needs and starting to adopt modern solutions.

Integrated: meeting the aspirational needs of all stakeholders and adopting a holistic approach to urban development.

Scalable: being ready for new challenges that emerge on the horizon and adapting quickly to address these changing scenarios.

Smart cities are not only about technology

There are ongoing efforts led by the International Telecommunication Union (ITU), the United Nations Economic Commission for Europe (UNECE), the International Standardisation Organisation and others to define standards, metrics and methodologies to provide a universal definition and approaches to developing a smart, sustainable city.

Until such offers conclude and the standards are adopted, PwC defines a smart community as a holistic ecosystem of people who are interconnected and contributing towards a common vision, creation of knowledge and exchange of ideas. While technology is a really important enabler, it shouldn’t define what a ‘smart city’ is. We believe a truly smart city should:

integrate technology to enhance ‘liveability’ and create a unique user experience,

• provide safety and security in a manner that corresponds to advancement in technology,

empower citizens to make more informed decisions through access to data about the city, its resources and planning,

encourage building designs that create better neighbourhoods and use green building technologies,

• be resilient in addressing climate, environmental, and local conditions,

• offer best in class educational, health and social facilities and environments,

• allow greater access to its authorities and citizens for a more complete view of their urban environment,

be inclusive and serve everyone– he elderly on foot, children on bicycles, people commuting by public transit to work–not just vehicles,

promote private sector investment and support for achieving smart growth solutions.

A smart city needs to provide a set of integrated services that address the needs of its citizens, businesses, and visitors. These services have to support the city’s vision and their quality/ impact should be clearly measured. A city’s digital transformation will not be driven solely by technology, but by new business models such as offering city advisory as a service to other cities, extending sharing economy concepts to new domains, further leveraging outsourcing and integrating city operations in common platforms (see Figure 1).

Figure 1: Top emerging city service technologies and business models
Figure 1: Top emerging city service technologies and business models

The way forward for smart cities

It is imperative to emphasise that while advanced ICT is vital, the concept of a smart city goes far beyond technological advances. It signifies a new, highly productive, and efficient vision of a modern city as a holistic ecosystem of people thriving with a clear common vision of the future, good governance, stakeholder collaboration, and smart programme management, monitoring, and financing.

Smart cities are not just places where new smart technologies are adopted; they are places where basic safety, security, and environmental needs are met, the economy is productive, educational attainment and knowledge production thrive, and the city is able to maximise its performance across all its building blocks. Only then can cities reach a level whereby they can set new standards for quality of life and prosperity.

All in all, this is a challenging but exciting time for cities. Execution is the key to unlocking the potential of smart cities: a road map must be developed before embarking on the smart city journey so cities can prioritise and strategically manage their investments.

Silos between the different entities delivering the portfolio of smart services have to be broken to ensure a seamless delivery of services. Data governance and ownership, especially across multiple tiers of government, have to be clearly de ned and implemented. Successful smart cities also need to achieve a balance between a ‘pull’ based approach, where they offer services based on the demand of their stakeholders and ‘push’ services driven by innovation. National programmes for smart cities also need to be put in place to encourage sharing, developing regions that integrate smart cities with the surrounding rural areas to create smart regions, and most importantly, take part in the on-going global drive towards creating smart cities/infrastructure standards.

Earlier this year, the ITU and UNECE launched United for Smart Sustainable Cities (U4SSC), a comprehensive and inclusive initiative to advocate for public policy to emphasise the importance of ICTs in enabling the transition to smart sustainable cities. PwC is energised to be among the thought leaders and practitioners that are contributing to this important initiative and several others that advocate the role of the private sector in contributing to urban solutions such as the World Economic Forum, the Global Cities Business Alliance and the World Business Council for Sustainable Development.

A ‘once in 20 years’ opportunity will present itself at the upcoming Habitat III in Quito to engage in an action-oriented dialog and to transform cities around the world to become smarter and more sustainable. We all need to collaborate to seize the initiative and make the most of this opportunity.

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