While smart technologies are praised far and wide, City decision makers know it is not easy to start urban innovation projects without reliable financing sources. When City councils are left alone to pick up the expense, the cost of setting up and maintaining a network infrastructure, its components and applications can simply be prohibitive.
As reported by the ASEAN Post, about 49% of pilot projects under the ASEAN Smart Cities Network are covered with public funds, be they local, regional or state grants, or a mix of these. In a budget-savvy perspective, there are some opportunities that it might be worth considering.
High capital costs – the one-time expense of planning, engineering design, purchasing the equipment, implementing the technology and have it up and running – is often mentioned as the main hurdle in getting Smart Cities off the ground. But we need to acknowledge that future proof technologies generate such benefits that they pay for themselves. Look at the experience of the City of San Leandro (California, US): in 2016, the City Council installed USD 5.2 million in energy and water saving equipment, asking for a guarantee that savings would cover 100% of the costs of the improvements and related debt services. Moreover, they calculated that the entire investment will generate USD 8 million saving over 15 years through strategic reductions in energy and water use, and USD 1.5 million in positive cash flow over that time.
Innovative procurement is also an option to boost urban innovation, as well as public-private partnerships to catalyse bankable projects with private organizations, and secure funding and support to key initiatives. When smart projects contribute to create local business and job opportunities, the collaboration of public bodies and private companies can really become the ultimate driving force behind innovation.
Finally, don’t forget the possibility to leverage data generated by urban devices and applications to design new revenue streams for Cities. The background for any data monetization program is the availability of a perfectly safe and accountable urban infrastructure, where data are fully transferrable and assignable thanks to blockchain technologies.
A platform such as PE Smart Urban Network allows data generated by urban devices to be shared and tokenized, hence transformed in tradeable assets. This means data streams can be easily sold and bought through a secure digital marketplace. Parking-related data can be used for instance to design mobile apps to check free car lots in real time, reserve and pay them via smartphone; live environmental data can be leveraged to monitor the impact of traffic-mitigation measures and dynamically manage restricted traffic zones; and so on. Start ups and local businesses might design and provide applications mashing-up different data to create their own services.
The future for Cities is smart – and the challenge of paying for smart projects should not prevent them from innovating, and investing for the good of their people and communities.