AI readiness fails to guarantee city delivery

Cities with sophisticated artificial intelligence strategies are not necessarily the most effective at putting the technology into practice, according to Boston Consulting Group’s (BCG) inaugural Intelligent Cities Index.

The study found that some cities with strong institutional readiness remain slow at turning their capabilities into deployed services, while others with more modest foundations have achieved meaningful implementation.

“We have seen a clear difference between cities that push a very strong strategy, but then things stagnate or slow down when it comes to execution,” said Akram Awad, Managing Director and Partner in BCG’s Dubai office and one of the index’s authors, told Cities Today.

The findings suggest that strategies, dedicated teams and governance structures provide no guarantee of delivery unless cities can move projects beyond planning and experimentation.

The index assesses 61 cities across 39 countries using 35 indicators. These cover five domains: outcomes, strategy, adoption, ways of working and enablers.

Its ways of working domain examines institutional AI readiness, including whether a city has a dedicated central government unit for intelligent city programmes and how many public-private partnerships support its work.

Cities with stronger government readiness generally deploy more AI-enabled use cases, according to the report. However, readiness alone does not determine results, with some well-prepared cities struggling to move into implementation.

Awad said effective governance begins with clearly identified leaders and an agreed division of responsibilities.

“It is very important that governments unlock the potential of technology, including AI, in the city by having a clear driver or drivers with very clear mandates split between them,” he said. “There needs to be clarity on governance towards execution.”

Cities must also establish structures that allow successful projects to progress beyond planning and experimentation.

“There needs to be a clear appetite and supporting governance to push things beyond initial strategising or initial proofs of concept to actual execution and scale,” Awad said.

The index ranks London first overall with a score of 85, followed by Dubai, New York City, Washington and Amsterdam, each with 80. However, no city leads across all five domains.

New York City ranks among the strongest performers for ways of working, alongside Singapore, Seoul, London, Berlin, Dubai, Barcelona, Boston, Dallas and San Francisco. Berlin is highlighted for having a dedicated unit overseeing smart city initiatives and several partnerships between the public and private sectors.

Awad said city governments should determine when programmes can be delivered internally and when other organisations are better placed to take responsibility. Effective partnerships could both accelerate implementation and reduce the financial burden on city authorities.

Regulation can also become an obstacle when responsibility is distributed across different departments or public bodies.

“We have seen governance working well when there are agile regulatory vehicles that get all the relevant entities together to unlock any hurdles towards successful use cases or deployment of the technology,” said Awad.

Measuring the effect of deployments is another important distinction between genuine delivery and readiness that largely exists on paper, he added. This creates accountability among government departments, technology providers and other organisations involved in implementation.

“The most effective cities are those that are driven by impact and doing what really matters, rather than just pushing for more and more technology,” Awad said.

The index identifies several routes through which cities can improve. Some leading cities have developed balanced capabilities across strategy, governance, adoption and enablers, while others have concentrated on one or two priority areas.

Awad said this variation demonstrates why technology strategies should be judged by implementation and results rather than ambition alone.

“Technology is a key part, but only one part of what makes cities intelligent,” he said. “For some cities, despite significant investment and deployment of technology, it is probably still going to take a few years until that translates into real outcomes, both in the social and economic aspects of the city.”

Main image: BCG