• Smart cities, a necessity

Benefits of managing cities in an intelligent manner far outweigh challenges

Development of smart cities is no more a choice, but a necessity for India. Rapid migration to cities is putting huge pressure on the existing resources and infrastructure. It is necessary, therefore, to deploy innovative solutions to make Indian cities more livable and sustainable for the communities of tomorrow. Developing smart cities can help solve a host of problems being faced by the growing urban population.

Smart city development is a mechanism to use ICT as an ‘enabler’ by linking networks to effectively use data to fuel sustainable economic development and provide high quality of life. Technology can have a profound effect on cities especially in India where they are in a stage of transformation. Mobile penetration and internet connectivity have become indicators for socio-economic growth. Undoubtedly, smart cities will obtain, analyse and distribute data to drive their decisions.

With much being discussed about smart cities in the recent past, the concept has been well understood by stakeholders and now it’s time to translate this into reality. How soon can smart cities be developed? Can all cities become ‘smart’? The uniqueness of the urban fabric of each city seldom allows common solutions to emerge for faster development. But as all cities have certain common objectives, the road towards a smart city can be paved by reflecting upon the success stories of smart cities around the world, adoption of technology and design of a framework accommodating rapid growth. While designing the strategy, the following should be considered:

Identify applicable areas and draw up funding strategy: India’s city governments have been using ICT for a long time. It exists in a dispersed fashion, be it in municipal services or internal processes. The need of the hour is to design a strategy by making the entire city as a technological platform and identifying the applicable areas where smart city projects should be taken up. When Barcelona with a population of 1.6 million can identify over 100 smart city projects, the need for Indian cities to become smarter cannot be overstated.

The central government has allocated over Rs 7,000 crore for development of 100 smart cities in the budget. This is a reflection of the government’s political will to promote the concept. But with an ambitious target of 100 cities, identifying alternate sources of funding is a prerequisite, if investments are to be made for efficient transportation, energy systems/smart grids and the like. How soon will the states gear up to access this funding is a big question, as not many states have clarity and the vision about the use of smart applications. The existing budgets are insufficient to even fund the regular functions of cities.

To supplement traditional means of funding, alternate funding sources like ‘partnership funding’ can be identified where large IT companies invest in identifying a bunch of cities and enable them for efficient delivery by providing them with the expertise to address the critical problems. Companies like IBM are already involved in this initiative (like in Durban) and spend much time and effort on identification of the skill base, job opportunity and creation of economic base. Another example is Rio de Janeiro, which has developed a smart city strategy to urbanise all favelas by 2020 with public finance as the base to address their social challenges.

Make local economic development a focal point: Developing smart cities is generally about interconnecting city systems like transportation, health, education, administration, water, power and safety. While there is consensus on these pre-requisites, there is rare acknowledgement (even among the key stakeholders) for the need to design, implement and weave sustainable local economic development into the urban fabric. Worldover, during the past decade or so, there has been a shift in the way the economic roles of cities are defined and some of these LED strategies, whi-ch are also relevant to India, could be absorbed while developing smart city plans.

Address human capital barriers: Smart cities will witness data-driven city administration to enable the city manage its resources and improve efficiency of response. In future, digital literacy will be much more dispersed. One of the barriers to implementation is human capital. A strategy highlighting capacity creation and development in the city administration should be developed to meet the challenge.

Engage community for sustainability: Smart cities can sustain only with the active involvement of the community, which encompasses not only the people involved with the project but also the people living in it. A strong cultural shift in government departments is required to comprehend and implement smart city strategies.Launch pilots: Testing the identified smart city projects can be best done through the launch of pilot projects considering the limited availability of skills and manpower in city governments/ agencies. Also, pilots will help in testing the concept especially when there are too many uncertainties involved in project rollout. The Chic­a­go city government has seen success in the pilot rollout for their Windy Grid Project and is now being scaled up to cover a larger area. Pilots also help build confidence among investors for scaling up.

Measure impact: Quantifying the impact of this kind of initiative is a tough task. But a key indicator for assessing the impact of investment in smart cities is ‘cost savings’. Similar indicators like reduction in processing time could be developed. These will enable us to have a better insight into operations and efficiency of systems, developed as part of smart city projects.

Conclusion: There will be several challenges like willingness of states, data privacy, attracting private investment, bringing key decision-makers together and the like, but the benefits of managing cities in an intelligent manner far outweigh challenges. Also developing smart cities is a continuous process. We will never be able to say if we have achieved our objectives, because as we get there we will realise that with rapid technological changes, we will need to continuously redefine our objectives.

By Padma Priya, Director, Grant Thornton in India

The article appeared in the Financial Chronicle. The article can be found here.