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Where's the return on investment?

Delivering a return on investment for smart cities requires a three dimensional change, writes Itai Dadon, head of smart cities and IoT, Itron.


A great deal is expected of our cities and communities, both today and in the decades ahead, as their infrastructures come under continual pressure from expanding populations and expectations. The United Nations statistic predicting that two-thirds of the world’s people will live in urban areas by 2050 is a much-used headline-grabber but its significance should not be under-estimated.


Cities share an imperative desire to improve quality of life by addressing major local issues such as air and water quality, resource scarcity, traffic congestion, public health and safety, as well as digital inclusion. Cities are also stepping up as key leaders in environmental sustainability.


Today’s pandemic environment adds even greater complexity to this picture. Preserving public health is the most fundamental responsibility of local government. Yet the essence of what makes a city thrive – the density and clustering that facilitates dynamic economic and cultural relationships – is unfortunately one of the key drivers spreading the disease. Shelter-in-place restrictions and wide scale business closures have shrivelled tax receipts, putting unprecedented pressure on the municipal budgets that fund smart city programs.

"The essence of what makes a city thrive is one of the key drivers of spreading Covid-19"

Adapting to this new reality will require substantial changes to the way people live, work and move around cities. Whether it’s the re-discovery of the bicycle as the future of urban transport, the rapid evolution of transit systems to accommodate for social distancing or the widespread embrace of remote work, cities must evolve to restore economic vitality.


If cities are to achieve all of this, they must become more agile, collaborative, and resilient organisations that can react and flex to the needs of citizens and businesses. The emergence of the internet of things (IoT) provides cities with a diverse range of solutions to modernize operations.


Defining a vision for transformational change


Delivering a three-dimensional ROI requires transformational change–not only in terms of technology, but also how cities and their private sector partners think and operate. They need to move away from the traditional siloed way of working and foster closer collaboration across key stakeholder groups and services.


The immediate challenge for communities is maintaining continuity of essential services while reducing the need for on-site personnel, utilising IoT and cloud-based services to facilitate remote work. Leading cities are doubling down on solutions that deliver operational efficiencies to conserve financial resources while they cope with the pandemic.


Cities now recognise that becoming a ‘smart city’ is not a defined end state. A broader strategy requires embracing new processes, facilitating information sharing across city departments and creating the organisational framework to continuously evolve and iterate city services.


The key is being able to balance strategic vision with a practical plan that delivers near-term results while bolstering public support for more comprehensive investments in modernisation.


Building a flexible path forward


There is a huge amount of detail and complexity involved in building smarter organisations. The coronavirus pandemic will have a dramatic impact on the future of work, mobility and commerce. People are opting-for remote, web-enabled services and limiting in-person activities to essential services.


All of these tectonic changes will impact how residents, businesses and visitors interact with city services. For example, the rapid shift towards commuter cycling highlights how consumer preferences can lead to bottom-up policy changes. Likewise, the adoption of remote work practices has led to substantial changes in the demand profile for electricity.

"Cities need to invest in infrastructure to enable real-time visibility and control"

Cities that have the data to identify these changing behaviours and macro trends quickly can make smarter decisions for how to re-allocate resources. This requires an investment in new infrastructure to enable real-time visibility and control for all essential city services.


With a plethora of technology vendors competing for mindshare, cities should have a structured, yet flexible, process for evaluating solutions. It is a big ask for any city but the key to finding the right solution is as much to do with visionary leadership as choosing the right solution and partner.


Multi-purpose platform


As the long-term trend toward urbanisation continues apace, cities should embrace a multi-faceted approach that delivers economic returns while accelerating environmental and social initiatives. New technologies should be accretive towards a long-term strategy to connect, digitise and optimise city services. The investment in the initial smart city application must be viewed as part of a multi-purpose platform that enables the bigger picture modernisation initiative.


Wastewater monitoring, for example, has proved to deliver social, economic and environmental benefits because it helps to prevent sewer overflows that threaten public health and local ecosystems while also helping the utility save money through automation and more efficient field operations.


Achieving the smart city vision requires a commitment to improving each of the three pillars of social, environmental, and economic benefits. This requires a holistic platform approach to digital transformation that leverages open standards and an ecosystem of partners to ensure continuous innovation and evolution.


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