By Kevin Wilcox
Municipal leaders are becoming more familiar with data-driven infrastructure technologies and are seeking those that will offer the best return on investment.
Austin, Texas, has recently hired a chief innovation officer to help guide it in adopting smart city technologies. Wikimedia Commons/Nandkishore Kotipalli
May 30, 2017—Municipal leaders are becoming familiar with the interconnected web of technologies that create a "smart city" and are more likely to see a role for themselves in leading the charge to unleash this "transformational power," according to new research by Black & Veatch, an engineering, consulting, and construction company headquartered in Overland Park, Kansas.
Smart cities use sensors and computers to obtain information from various facets of their infrastructure. This level of connection promises to greatly enhance efficiency. For instance, sensors in water systems could detect leaks from small pressure changes, technology embedded in streetlights could provide real-time traffic data that emergency responders could use to find faster routes, and a smart utility grid could seamlessly integrate energy from such decentralized alternative sources as rooftop solar photovoltaic panels. (Members of ASCE can read a feature on smart city technologies, "Tomorrowworld," in the June 2015 issue of
Black & Veatch's research, presented in a publication called
2017 Strategic Directions: Smart City/Smart Utility Report,
began with an online survey last year conducted between October 19 and November 4. The survey contained questions about the concept of smart cities, possible funding sources, hurdles to implementation, and which sectors—such as data networks, water systems, public safety, or street lighting—are considered the best for a city's initial investments.
Clinton Robinson, P.E., M.ASCE, the director of state and local government affairs for Black & Veatch and a coauthor of the report, wrote that the findings reinforce lessons learned in the past year. "Although governments and municipalities believe strongly in the smart city model, they continue to struggle to fund these efforts," he wrote.
Indeed, budgetary considerations were cited by 71.8 percent of respondents as the biggest hurdle they face, followed by lack of expertise and other resources, at 57.3 percent. Policy hurdles constituted a distant third, at 34.6 percent, but such hurdles are by no means insignificant for some governments, especially those that are considering public-private partnerships for the first time. In fact, this type of partnership was seen as the leading potential funding source for smart city projects by both municipal leaders and smart services providers, at 74.5 percent. However, the providers were much more confident of the source, at 83.8 percent, than were the municipal leaders, at 67.6 percent. About 52 percent of both groups see government grants and subsidies as the second most promising funding option.
"It didn't surprise me to see that the vendors were ahead of the municipal section in regard to private funding," Robinson says. "Smart service providers are already marketing to nonmunicipal clients. And they are funding themselves. That's how they got started."
Municipal leaders are more likely to focus on traditional funding methods, including a mix of tax revenues, bonds, and grants. "Frankly, they don't access the private market well yet," Robinson notes. Robinson says municipal leaders may want to explore these traditional funding methods first, especially in view of the low rates that characterize today's bond market.
However, he adds, "I do think there is not as much money to go around in the public sector as there used to be, and so finding alternative partners and means of financing is becoming more critical to the success of projects."
One possible funding source for smart city innovations is the massive volume of data the systems produce, as selling these data to interested third parties could be quite lucrative. However, this would probably raise privacy concerns, and municipal leaders would have to be careful to safeguard the personal details of citizens. Cities would be vulnerable to harsh criticism in the event of a computer system breach by hackers.
"That's a real concern, and we hear that a lot," Robinson says. "Every client needs to understand the risk and exposure from data and then select a system and select data that best protect the citizens that they are working for. Data can be very specific, or it can be aggregated and more general in nature. A lot of what we are doing in the infrastructure world is focused on aggregated and not specific data."
Robinson says cities such as Austin, Texas, and Kansas City, Missouri, have hired chief innovation officers. These leaders become "prominent voices in the smart city ecosystem," he explains. "It's a new role within government to help guide them down this new path."
In the four years that Black & Veatch has studied smart cities, it has seen city leaders move beyond wanting to invest in the latest technology to wanting to invest only in those technologies that offer the greatest return on investment. "Leaders are learning that smart isn't ancillary," Robinson says. "It is integrated into every capital improvement project they work on. So, if you would go to a city leader now, you might hear them respond to you that in addition to looking at the capabilities of the engineering and the construction they are also looking for recommendations to make sure it is smart, sustainable, and resilient.
"It's not an upper layer," he says. "It's an embedded functionality that city leaders are looking for—smart, sustainable, and resilient projects."