The Business Case for Smart Cities
Smart Cities: Hype vs. Reality
Imagine a world where:
• Americans still waste $120 billion a year sitting in traffic;
• Thirty percent of the congestion in cities is caused by people looking for a parking space;
• Cars burn one gallon of fossil fuel to drive to a service center for an emissions test;
• 33,000 Americans still lose their lives in traffic accidents every year;
• And where 200 million cars in the U.S. alone have no connectivity whatsoever.
Unfortunately, this is not the stuff of urban legend, but in reality reflects the world where we live, work and play – not great news considering that by 2040, more than two-thirds of the world’s population will live in urban areas, which will further tax our aging infrastructure. Municipal leaders are under enormous pressure to get this right and cities that adopt new technologies quickly and with more agility are more likely to experience higher growth.
"The cities that adopt new technologies quickly and with more agility are more likely to experience higher growth”
Enter the Internet of Things
The good news is that innovations in machine-to-machine (M2M) technology—essentially, the Internet of Things—wireless networks and cloud computingin a secure environment are helping public and private organizations gain greater insight into the needs of their communities in order to drive better business outcomes and societal innovation.
Equipped with accurate and near real-time information, cities and their surrounding communities, will be able to develop strategies to improve their infrastructure, plan for long-term growth, create more energy-efficient environments and keep people safe. Navigant Research estimates that global spending on smart cities technologies will surpass $27.5 billion by 2023. To fully realize the potential of these new technologies, city leaders must be able to adopt them without increasing management burdens or going over budget.
Barriers to Adoption
Despite the continued hype for the tens of billions of connected devices that will comprise the Internet of Things by 2020, today adoption rates for machine-to-machine deployments remain relatively small and confined to a narrow set of early adopters. Consider these factors:
A fragmented ecosystem: When you look at the various systems that serve a community— from government, energy, utilities, transportation, building management, healthcare providers, retailers and financial institutions— they have operated more or less independently, making it difficult to view or determine logical ways to improve overall efficiencies.
Complexity: it's overwhelming for city leaders, CTOs, CIOs and urban planners to get their arms around the many pieces required; and the wide-range of organizations both in the private sector and public sector that need to come together even to implement and deploy a relatively simple solution. A strong partner ecosystem is absolutely essential to solving these problems.
Well understood business cases: We break it down into revenue-generating opportunities for things like parking enforcement. For example, it’s not a very efficient model to have municipal personnel manually reading parking meters to fine residents and visitors. In many large cities, the parking enforcement is less than 10 percent.
Smart parking solutions increase the ability for municipalities and traffic enforcement personnel to know: when you parked, how long you've been there, how long you paid to be there so they can do a better job of enforcing it. Information for available parking spaces can also be made available to the driver making it convenient for people to go into the core urban areas for entertainment which is also directly related to sustainable urban growth.
Regulatory requirements: As a direct result of several fatal rail accidents between 2002 and 2008, Congress enacted a bill that required, among other things, that all rail freight carriers enable their systems with improved safety mechanisms. The most notable was the mandate requiring positive train control (PTC) technology to be installed on most of the railroad network by 2015. Railroads are an incredibly complex system. For example, it can take up to 200 man hours to install equipment such as new electronics and radios in just one locomotive in order to fully optimize communication with that locomotive’s operation center. Today, most Class 1 railroads operate thousands of locomotives over more than 100,000 miles of track, which makes the time needed to install new communications systems and electronics increase exponentially.
Keeping people at the center of societal innovation: A smarter city isn’t just about the technology. In fact, it’s designed to consider the human factor. Solutions can help simplify many common, day-to-day activities for people. They can also help keep citizens safe and informed when they’re on the go, which, in the past has proven to be challenging.
Wide-ranging ecosystem: City leaders want to add smart cities solutions to their municipalities, but the expanding number of developers and other service providers in the space continue to add to the complexity.
Security: From a security standpoint, the device is always a concern, but it's a little misguided if the security focus is on the device only because vulnerabilities can quickly move to a different part of the overall ecosystem. In reality, it’s about the secure device that is connected to a secure network that is in a secure cloud infrastructure that is in a secure computing firewall environment. Security should be included in every layer of the ecosystem and every element should be protected. That's why it's so challenging.
Solutions driving growth
Whether you help oversee a major metropolitan area or a small town, your challenges might be unique but the goals you can achieve are the same. Here are three smart cities solutions that are driving growth and creating better places for people to live, work and play.
Smart Parking: Develop wireless payment processing for public services, such as parking meters, bus and rail, and toll roads. A custom app for smart phones and tablets can also securely accept credit card payments.
Intelligent Street Lights: Install intelligent lighting that not only provides energy-efficient, on-demand light levels, but facilitates multi-functional communication. Concealed speakers supply emergency alert notifications and evacuation routing information, while image sensors provide ongoing video surveillance.
Water Management: Create remote protocols to help reduce manual meter reads by 50 percent and decrease water loss by 50 percent
The ability to conserve vital resources and control the various costs of providing services will make municipal programs and initiatives more sustainable, now and in the future. Smart technology can help city leaders and other key decision makers scale resources and services in response to changing community demands. Moreover cities that adopt smart technology are better able to compete in the global market as well—attracting citizens, consumers, investors, and businesses that value the convenience and reliability of a supportive infrastructure.