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This is a re-post from Onvia's State, Local and Education (SLED) Procurement Snapshot for Q4 - 2015

As reported in Onvia’s recent blog, the global smart cities movement is expected to generate a total of $41 trillion in new spending over the next 20 years (averaging $2.05 trillion per year) - transforming how government makes investments in technology and infrastructure.

Smart cities seek to apply technology and innovation to various infrastructure-related services to increase efficiency, capacity and sustainability. This includes the internet-of-things (IoT) revolution of using sensors to manage intersections, lighting, vehicles, equipment, etc. A variety of innovations are being pioneered in a number of functional areas from transit to garbage collection, which solve problems and help public agencies scale their systems without requiring nearly as much new capital investment.

Onvia believes this represents a significant opportunity for many businesses selling into the government market. In order to help readers better understand these trends as well as their market implications, Onvia interviewed the Chairman of the Smart Cities Council, Jesse Berst, for this quarter’s special feature.

Defining "Smart Cities"

Smart Cities - Onvia

What is the mission of the Smart Cities Council?

We educate and support cities to help them with their transformation. Collectively, our members and advisors have worked on more than 11,000 smart city projects of one kind or another. We’re trying to share the best practices that have been developed over many years.

What are the primary goals of the smart cities movement?

At the Smart Cities Council, we summarize it as “livability, workability and sustainability.” We think it is very important for governments to strive for all three simultaneously. Some early efforts have emphasized one at the expense of others. Economic development (workability) at the expense of sustainability, for instance, or sustainability at the expense of livability.

Drivers of Growth

What would you say is driving the growth and adoption of smart cities solutions nationally?

We see several important market drivers:

  • Aging infrastructure: If you are going to upgrade anyway, building it smart is the obvious choice.
  • Urban influx: Growing cities need infrastructure and services. If you need to support growth, it makes sense to implement smart solutions.
  • Sustainability: More cities are standing up to fight climate change. But a sustainable city needs to be smart. Smart grids, buildings, transportation, etc. all make big contributions to lowering energy intensity and reducing emissions.
  • Resilience: While we do our best to slow climate change we must also adapt. We must make our cities resilient to natural and manmade disasters. Again, that requires smart technology.
  • Digital citizen services: Consumers can access almost everything via a browser or smart phone. They want the same kind of convenience from city hall. If done right, it often costs LESS to deliver city services digitally. I call it “happier for less:” Agencies spend less to make their citizens happier.

Profile of Buyers

Smart Cities - Onvia

Many of the case studies for smart cities are from the largest cities, but what about the smaller communities?

Some of the most clever, creative ideas are coming from smaller cities. What’s more, the advent of cloud computing means that smaller cities can make use of enterprise-class software, security and scalability, and just pay for what they use. They no longer have to build their own data center and stock it with IT experts and data scientists.

Are you seeing adoption of these solutions by other levels of government such as state agencies, counties, special districts or school districts?

Yes, in addition to cities, we see these same technologies improving things for all the categories you mentioned.

Greatest Challenges

What are some of the obstacles that cities face when adopting these solutions?

There are several key issues or challenges that buyers of these solutions will need to address:

  • Technology: What do they select?
  • Financing: How do they pay for it?
  • Citizen engagement: How do they bring all stakeholders along as partners?
  • Policy: How do they unleash the full potential and encourage economic development while still safeguarding citizens and privacy?

How difficult is it for buyers to find funding for these projects?

It’s not as hard to find the financing as you might expect, as long as a city is willing to consider creative options beyond just municipal bonds. For instance, many venues are turning to public/private partnerships.

How Businesses Can Get Involved

For a business that may not be a corporate giant but is interested in pursuing opportunities in smart cities, how do you suggest they get started?

Vendors should pursue partnerships with the global firms, who eagerly seek innovative companies and local/regional installation partners. The Smart Cities Council has become a hotbed of collaboration between companies all over the world.

 

About the Smart Cities Council:

Smart Cities

The Smart Cities Council is the world’s premier consortium of smart city practitioners and experts, who have worked on over 11,000 smart city projects. The Council is an advisor to government, creating a global hub to arm city leaders with tools to plan effectively, buy confidently and ensure interoperability. It also assists companies in marketing and implementing these solutions, offering advocacy and action.

Learn about partnering with the Council