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Removing the roadblocks to smart city ROI

Overarching strategies, funding approaches and business models all need to be adjusted if cities are to see a genuine return on their investment in smart city tech, says Itai Dadon, global head of smart cities at Itron.

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This article is in partnership with Itron.

 

Ahead of speaking at the SmartCitiesWorld roundtable event at Smart City World Expo Congress on November 20 in Barcelona, Itai Dadon, global head of smart cities at Itron, highlights some of the challenges standing in the way of smart cities.

 

SCW: What applications are cities tending to roll out first after smart lighting?

ID: The areas where we are seeing a lot of traction are resiliency, safety and security, and transportation, but it really depends on the most critical challenges for that specific city.

 

Cities like Miami in the US and Copenhagen in Denmark, for instance, suffer from repetitive floods almost every year and using technology to help solve this problem is a major focus. By leveraging distributed networks of flood-level sensors and water quality sensors, cities and utilities can provide real-time visibility to detect flooding events and monitor pollution in real-time.

 

On the transportation side, Vision Zero has galvanised a coalition of cities around a common vision – that people have a right to safe mobility. These cities are looking carefully at how they can utilise smart solutions to enhance their ability to enforce speed limits, monitor activity at traffic lights, and improve visibility for pedestrians and cyclists.

 

Cities seeking to modernise their transportation systems are taking an integrated approach to mobility, which incorporates a range of solutions including smart parking, electric vehicle charging infrastructure, traffic-monitoring sensors and traffic signal controllers.

 

With distributed networks of air quality sensors, cities will be able to track local pollution trends at a much more granular level.

 

More importantly, cities worldwide have embraced their role on the frontlines in the fight against climate change and have set very ambitious objectives to reduce carbon emissions and encourage environmental sustainability.

 

The challenge is the same, though: cities need to modernise their infrastructure systems and adopt new modes of operating in order to meet the needs of their citizens and improve quality of life.

 

SCW: What are the biggest challenges to achieving three-dimensional return on investment in smart city applications?

 

ID: Cities should have a holistic vision for digital transformation. This helps to break down the silos between departments, encourage collaborative problem-solving, and coordinate smart city programmes towards shared objectives.

 

From a technology perspective, this enables cities to leverage common infrastructure to reduce the cost and complexity of delivering innovative smart city services. Here, the economic benefits are well understood. However, cities continue to grapple with the challenge of how to capture the social and environmental benefits of many applications.

 

If we take air quality sensors as an example. We clearly understand the environmental benefits and, as an extrapolation of that, the social and quality of life benefits but cities have a difficult time capturing these benefits, particularly since many of these emerging applications are deployed at limited scale.

 

Cities need to modernise their infrastructure systems and adopt new modes of operating in order to meet the needs of their citizens and improve quality of life.

 

However, as we install more sensors and get more data, we will start discovering new insights that we’ve never had before and will start to learn how we can use them.

 

For example, with distributed networks of air quality sensors, cities will be able to track local pollution trends at a much more granular level, enabling them to pinpoint problem areas and develop and stop a polluting source much more quickly. This could have huge economic, environmental and social benefits for cities.

 

SCW: Does the siloed approach to data and city operations further compound this?

 

ID: Yes, we need to find ways to fuse data from different sensors into a common data platform that will enable multiple departments to leverage shared infrastructure to deliver integrated smart city services.

 

Increasingly, smart city solutions will incorporate multiple device types and communication networks, all seamlessly connected in a unified platform. This dynamic ecosystem will enable sensors to collaborate, so we could have an application deployed and paid for by different departments that would create value in new ways.

 

For instance, smart parking is a great example of what could be achieved when data is shared across multiple city departments and applications. Today, searching for parking accounts for approximately 30 per cent of traffic on certain city streets.

 

Utilities have a very important part to play in the smart city industry because they are already serving every home and they want to better serve their communities.

 

A smart parking solution, when viewed in isolation, can improve quality of life by reducing congestion. But if the department of health also deploys air quality sensors in these areas, they can see the impact of these investments on local air quality, which increases the return on investment by improving public health and accelerating progress towards sustainability goals.

 

If departments continue to work in isolation, however, they will not get the insights and understanding of how these benefits accrue.

 

SCW: What future trends do you see emerging in the smart city space?


ID: The role of cities and utilities is interesting to watch. Utilities have a very important part to play in the smart city industry because they are already serving every home and they want to better serve their communities. Consumers want more information, not just about their energy usage but about the environment and they increasingly want it at a more granular level and on-demand.

 

At the moment, for instance, because of the wildfires in California, there is a real interest in information on air quality at a hyper-local level. Could utilities help cities provide this because in many ways they sit at an intersection between the two? Utilities also have a crucial part to play in any smart city initiatives linked to areas such as renewable energy, decarbonisation and providing more reliable and resilient services.

 

SCW: Do you see new funding models emerging?


ID: We need to find out how we can adjust the public-private partnership (PPP) for smart cities because the current approach isn’t creating the acceleration that the industry was expecting.

 

It is proving too difficult for cities to adopt it as a model. Part of the problem is that there is a lack of compatibility between the expectations of private investors and what cities are capable of accepting in terms of risk. We are still working hard to find the right formula with our partner cities and financial institutions to evolve this model.

 

The key is to look to the early adopters who are demonstrating the benefits of smart city investments, which reduces risk and paves the way for others to follow.

 

SCW: Aside from funding, what are the major smart city stumbling blocks that still remain?


ID: While technology can always improve, most of the tech that is required to make cities smart is already here and a lot of it is ready to be deployed. What needs to evolve are the business models and the ability to adapt them for a municipal customer.

 

SCW: What else can hold a smart city back from fulfilling its aspirations?


ID: Not wanting to be the first. Many cities have delayed smart city investments because of the perceived risk around certain technologies. In reality, the technical barriers are minimal. The key is to look to the early adopters who are demonstrating the benefits of smart city investments, which reduces risk and paves the way for others to follow. The more data we generate to provide evidence-based business cases the better.

 

Itai Dadon will be speaking at the Smart Cities: Where’s the ROI? roundtable event, organised by SmartCitiesWorld, in association with Itron, at Smart City World Expo Congress 19 in Barcelona on November 20. Find out more about this free event and register here.

 

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