Treat Smart City Tech like Sewers, or Better
Smart cities, like many things, took a beating in 2020. Alphabet, Google’s parent company, pulled its Sidewalk Labs subsidiary out of a smart-city project in Toronto. Cisco killed its plans to sell smart-city technology. And in many places, city budgets will be affected for years to come by the pandemic’s economic shock, making it more difficult to justify smart-city expenses.
That said, the pandemic also provided municipalities around the world with reason to invest new technologies for public transportation, contact tracing, and enforcing social distancing. In a way, the present moment is an ideal time for a new understanding of smart-city infrastructure and a new way of paying for it.
Cities need to think of their smart-city efforts as infrastructure, like roads and sewers, and as such, they need to think about investing in it, owning it, maintaining it, and controlling how it’s used in the same ways as they do for other infrastructure. Smart-city deployments affect the citizenry, and citizens will have a lot to say about any implementation. The process of including that feedback and respecting citizens’ rights means that cities should own the procurement process and control the implementation.
In some cases, citizen backlash can kill a project, such as the backlash against Sidewalk’s Toronto project over who exactly had access to the data collected by the smart-city infrastructure. Even when cities do get permission from citizens for deployments, the end results are often neighborhood-size “innovation zones” that are little more than glorified test beds. A truly smart city needs a master plan, citizen accountability, and a means of funding that grants the city ownership.
One way to do this would be for cities to create public authorities, just like they do when investing in public transportation or even health care. These authorities should have publicly appointed commissioners who manage and operate the sensors and services included in smart-city projects. They would also have the ability to raise funds using bond issues backed by the revenue created by smart-city implementation.
For example, consider a public safety project that requires sensors at intersections to reduce collisions. The project might use the gathered data to meet its own safety goals, but the insights derived from analyzing traffic patterns could also be sold to taxi companies or logistics providers.
These sales will underpin the repayment on bonds issued to pay for the technology’s deployment and management. While some municipal bonds mature in 10- to 30-year time frames, there are also bonds with 3- to 5-year terms that would be better suited to the shorter life spans of technologies like traffic-light sensors.
Even if bonds and public authorities aren’t the right way to proceed, owning and controlling the infrastructure has other advantages. Smart-city contracts could employ local contractors and act not just as a source of revenue for cities but also as an economic development tool that can create jobs and a halo effect to draw in new companies and residents.
For decades, cities have invested in their infrastructure using public debt. If cities invest in smart-city technologies the same way, they could give their citizens a bigger stake in the process, create new streams of revenue for the city, and improve quality of life. After all, people deserve to live in smarter cities, rather than innovation zones.