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Do Or Die: Cities Face Falling Behind If They Don’t Implement Digital Infrastructure

Smart technology is changing how cities are run, how residents live and how businesses attract employees. For the last decade, cities have been building high-speed internet and using digital technology to expand city services.


Cities implementing these changes will improve the lives of residents, be more attractive to employers, increase real estate values and stand out within the international marketplace.

“Smart cities are much more livable, safer and vibrant and have more economic opportunities and workability,” Smart Cities Council Chairman Jesse Berst said. “It’s really essential for cities that want to compete in the global economy and want to attract jobs and talent.”

Cities that do not make these changes are at risk of falling behind. Even cities in the beating heart of the tech industry, such as San Jose, are running up against the challenge of a city hall with out-of-date technology. But implementation does not happen overnight and takes years of planning and significant financial resources.

How can budget-strapped cities provide much-needed digital infrastructure without the proper funds to do so? Enter public-private partnerships backing smart technology. Without these partnerships, cities run the risk of losing out in the smart city technology race.

Dallas' West End

Dallas’ West End is one U.S. city using public-private partnerships to get smarter. LED street lamps send notifications when bulbs are out. Interactive kiosks provide passers-by with city information and a place to charge phones. In the coming months, the neighborhood will have public WiFi, smart parking where people can reserve spots, trash cans with sensors that monitor capacity and better water management systems.

“Cities that approach this [technology] five to 10 years before they are forced to will really reap dramatic benefits and economic development,” Dallas Innovation Alliance Executive Director Jennifer Sanders said.

The Dallas Innovation Alliance, a public-private partnership among 30 organizations, is leading the implementation of smart technology. The DIA also is testing environmental sensors that can provide granular data on particulate matter in the air, according to Sanders. This data can be used to provide allergen alerts so citizens can adjust their days and lessen allergy symptoms. The organization wants to tackle food deserts and find ways to bring healthy food to more people, such as through on-demand food trucks serving healthy food.

Dallas is not alone in its endeavor to become a smart city. New York, Chicago, San Francisco, San Jose, Boston, Dallas, Los Angeles and Washington, D.C., are among U.S. cities actively pursuing smart city technology. Many more cities around the world are integrating digital infrastructure. While each city is doing things differently, they are all implementing high-speed broadband internet and improving city services.

Barcelona, Spain

The U.S. has a lot of catching up to do. Current efforts are years away from full implementation. Smart Cities Council's Berst said the whole process is a 20- to 30-year journey. U.S. cities are years behind Singapore, Spain, Dubai, Copenhagen, Vienna and several cities in China.

Spain’s first smart city, Barcelona, is among the smartest European cities. It has been building dozens of smart systems, including a smart irrigation system that collects data such as humidity, temperature and sunlight, which allow city landscapers to figure out a water schedule that does not lead to overwatering. Annual water savings is expected to be $555K each year.

Barcelona, which began implementation of its smart city initiatives in the early 2000s, also has one of Europe’s best and cleanest public transit systems with bus stops powered via solar energy, a significant bike-sharing system with at least 6,000 bikes, a trash system that sucks trash below ground, smart lighting and a plethora of apps residents and visitors can use to help them get around.

Source: Surveys conducted 2000-2016. Data for each year based on a pooled analysis of all surveys conducted during that year.

What Is A Smart City And Why Should We Care?

Smart cities start with digital technology to improve urban life, according to Berst. This typically means creating a high-speed broadband or fiber network. Demand for internet will increase, and cities need to find better ways to provide internet for citizens and businesses. The number of people using the internet reached 88% in 2016 compared to 76% in 2010 and 52% in 2000, according to Pew Research Center. Broadband use has skyrocketed within the last decade and nearly three-quarters of Americans have broadband internet.

“People are very mobile today and move to cities that give more economic activity,” Berst said.

Collecting, communicating and computing data are key elements to the deployment of smart city technology. Sensors typically collect data, which is then communicated to the citywide network. Computing uses situational awareness to figure out conditions in a city, such as whether a street is congested. Predictive analytics can determine service schedules. Instead of sending out maintenance every six months to check a power transformer, for example, the system can predict which piece of equipment is most likely to fail and when.

This technology improves services for cash-strapped city budgets. Many of the smart cities are working on better websites and applications where citizens can access city services on a 24/7 basis. Smart cities create an environment that attracts young professionals who prefer to live and work in technologically integrated neighborhoods and keeps residents who benefit from the healthier environment and green technologies.

How Can Property Owners Benefit?

Granite Property's Factory Six03 in Dallas' historic West End

Even though Phase 1 is in the early stages, building owners in Dallas’ West End are already experiencing economic benefits. Sanders said the smart city initiatives are becoming talking points for landlords and rents are increasing.

Crescent Real Estate Vice President of Acquisitions Stephen W. Luik said the smart city initiatives in Dallas’ West End have added to desirability as the developer attracts new prospects into the area.

“Technology continues to play a major role in companies’ office location decisions,” Luik said. “Districts that implement the smart city initiatives will greatly benefit in desirability, and ultimately occupancy and rental rate growth.”

Granite Properties Leasing Manager Burson Homlan said the smart city initiatives have helped attract prospective tenants from the technology industry. BCBS Innovation Labs was the first office tenant to lease at Factory Six03, which is in the West End.

“[Smart city technology] is great for every stakeholder in the area: residents, owners, restaurants and the city,” Holman said.

A rendering of the Gramercy District "smart city" in Ashburn

Developers are pursuing projects that integrate smart technologies. 22 City Link is planning a high-tech, 2.5M SF development in Washington, D.C.’s Gramercy District. In New York, Related Cos. and Oxford Properties’ 28-acre Hudson Yards development is sustainable and resilient with decreased electricity costs and improved efficiencies. In Denver, Panasonic and L.C. Fulenwider are partnering with the city to create a large mixed-use development chock full of smart technology as well.

“Smart grids and buildings save an enormous amount of money,” the Smart Cities Council’s Berst said.

He said building owners who install new thermostats or LED lights to reduce energy costs pay themselves back over 10 to 15 years. Investing in conveniences like smart parking and personalized climate controls increases the value of real estate and tenants end up paying more for these additional amenities, he said.

Building owners save money by using renewable energy, according to Berst. Microgrids also make buildings and neighborhoods more resilient during a natural disaster. These grids can still run power even if the rest of the city’s power goes out.

Improving City Services

San Jose Chief Innovation Officer Shireen Santosham

Cities are looking for ways to increase access to services while saving time and money. Smart Cities Council is working on improving digital city services so citizens can access city services 24/7 via a smartphone. Offering self-service is far cheaper and saves city resources. Berst said when Albuquerque launched its open data portal for city services, call volume to the 311 system dropped by half a million calls per year.  

In San Jose, the population is expected to grow 40% by 2040 and have an additional 470,000 residents, according to San Jose Chief Innovation Officer Shireen Santosham. This type of growth will stretch city services to the limit.

“We simply are not going to be able to keep up with that growth without taking innovative steps to the way we work,” Santosham said.

San Jose is known as the capital of Silicon Valley, but its city hall has been using outdated technology and computers, making it more difficult for residents to navigate city services. San Jose is beta testing a new app that will allow residents to take a picture of a pothole or abandoned vehicle and send the picture to the city, according to Santosham. Then, crews can be deployed more quickly instead of residents calling in and sitting on hold for an extended period of time.  

 “We would really like to have the city feel like the center of Silicon Valley when you arrive,” Santosham said.

San Jose City Hall

San Jose’s airport has robots that help incoming travelers, and the city recently launched efforts to have companies pitch autonomous vehicle technology. The transit corridor from the airport to Diridon Station is expected to become one of the largest hubs west of the Mississippi, which makes this tech even more of a priority. Google’s proposed massive 6M SF to 8M SF campus also could drive more visitors and workers into this section of the city.

The development of autonomous vehicles can help change commuting behaviors and move toward shared electric vehicles that can share data. The end goal would be to have a system of cars that talk to each other and to the traffic lights and help with traffic flow.

“Ultimately, we’ll have to find these solutions at a regional level,” Santosham said. “Traffic is not a city problem. It is a regional problem.”

New York also is using technology to improve city services. It is working to improve its 311 system and with IBM Watson, according to New York Chief Technology Officer Miguel Gamino. The installation of an affordable high-speed internet infrastructure is key. Without access to internet, residents and visitors would not be able to access city applications.

Having this technology also allows New Yorkers across the spectrum of incomes to participate in the future tech economy by promoting skill development.

“Most people I talk to in the industry rank talent at the top two or three in terms of priorities and the things they need to grow their business,” Gamino said. “Talent is a tremendous asset that New York has already and is investing in.”

Gamino has been working on interconnectivity of various agency efforts to make sure different agency systems are sharing data.

Implementation Challenges?

Dallas Innovation Alliance Executive Director Jennifer Sanders

The success of smart city initiatives will rely heavily on private investment. A lot of the technology can carry a hefty price tag and city resources are very limited. As a public-private partnership, the DIA is a freestanding entity that can move more quickly and does not use up city resources, according to Sanders.

“We’re going to continue to see the growth of public-private partnerships take different forms that will be really advantageous to getting this [technology] done across broadband and roadways,” Sanders said.

Because technology moves so quickly and construction of parking structures and other buildings does not, some cities may run into a problem with deploying a technology that is already outdated, according to Sanders. She said one city developed a smart parking request for proposals, but it took them 18 months to procure the technology. By the time it was deployed, the technology was two versions behind and the city could not buy the new tech due to contractual obligations.

“Technology is moving toward open source and software platforms with contracts written to include tech updates,” Sanders said.

With so many devices expected to be interconnected, issues of privacy and cybersecurity also are on the minds of city staff and smart city organizations. San Jose recently passed its first cyber security safeguards for the city, according to Santosham. New York is taking cybersecurity and the Internet of Things seriously and incorporating it into the design of its systems as well.

San Jose is using the tech talent within its backyard to find better ways to provide smart technologies. The city is partnering with Facebook to test and deploy wireless internet to provide a free gigabit of speed in downtown and other parts of the city, according to Santosham.

Other partnerships with local tech companies will be considered, especially since public-private partnerships will help the city save money.

“We have been very successful in creating innovative public-private partnerships,” Santosham said. “It gives us a little bit more flexibility to test pre-tech and allows companies to donate equipment and use the city as a platform.”

San Jose Mayor Sam Liccardo

San Jose is openly engaging with tech and encouraging entrepreneurs to use San Jose as a test ground.

“We are being very intentional in using our city as a laboratory for innovators who want to test their latest tech or demonstrate it to the rest of the world,” San Jose Mayor Sam Liccardo said. “We know we need to be extroverts in how we engage with companies.”

The city began an Unleash Your Geek initiative to challenge students and tinkerers to help solve urban challenges. One challenge was how best to deal with graffiti under freeway overpasses, which usually costs about $60K to get a worker with a truck to clean it up. A better way of doing that could be a drone or mechanized robot to clean up. The city challenged teams to create a prototype that can do this job instead.

“We want to encourage a relationship between the innovators and public sector in a new way,” Liccardo said.