Powered by technologies like data analytics, artificial intelligence and internet of things, ‘Smart City’ of yesteryear is metamorphosing into a “hyperconnected city”. According to an Oracle sponsored study by ESI ThoughtLab – these new Hyperconnected Cities aim to create new business opportunities, increase the efficiency of government processes, and improve public safety and health. The reports maintain all these benefits will be accompanied with noticeable return on investment, which will increase with increasing connectivity. However, it is quite surprising that even with huge technology investments, these hyperconnected cities admit their unpreparedness to face any cyberattacks.

The current report is an extension to the report that was released last year titled “Smarter Cities 2025: Building a Sustainable Business and Financing Plan” in which the research agency covered smart city initiatives of 135 municipalities in 55 countries. The report spoke with city leaders, businesses and citizens, incorporated data from secondary sources, and tapped third-party experts for analysis.

In the new report “Building a Hyperconnected City”, the focus was narrowed down to 100 cities including cities like Athens, Warsaw, Bratislava, Washington DC – which are spending close to $141 billion on various connectivity projects in 2019, which turns out to be $1,220 per citizen. One third of these cities are in developing countries with population ranging from less than 2,00, 000 to more than 24 million. These 100 cities were then categorized as: “implementers” (25 cities), “advancers” (50), and “leaders” (25).

The first report established the importance of data – acquiring, aggregating and analysing as much data as possible from every possible source using a sophisticated data management platform. The report also established the need for modern technologies like cloud computing, mobile applications, and IoT sensors and networks. It also reiterated the importance of data. A majority i.e. 57% of the respondents said that they tap non-government sources for data, these sources include businesses, academia, and social media. The percentage rises to 80% for “leader” cities. Almost 76% of these leaders consider their cities as “advanced” in collecting data and in culling out actionable insights from them. However, 68% informed that they use a data management system to integrate the data.  

One of other important findings in the new research is the growing importance of data analysis.  Connected Cities analysed data to secure insights into IT infrastructure (64%), payment and financial systems (56%), mobility and transportations systems (49%), and physical and digital security (46%). A staggering 90% of these cities use cloud, Wi-Fi, and mobile technologies, another significant chunk (82%) saw extensive use of AI tools, especially in connection with public safety and governance initiatives. IoT is another technology which reported widespread use by 91% of cities and this percentage is predicted to touch 97% in next three years.

In the new study, the cities reported an average return in the range of 3% and 4%, though the ‘leaders’ reported the average ROI of 5%. The discrepancy was also been reported in specific municipal efforts, for example, leaders reported ROI of 7.1% from digital tax filling systems, whereas the   complied average ROI was 5.2%.  

Digital public transit applications are one of the most often used and popular connectivity projects. 36% of cities that had deployed modern public transit applications reported increased customer satisfaction. 40% of cities that deployed water related systems reported improved public health.

The ability to generate ROI estimates helped 68% of cities to create detailed business cases for all their smart city projects and 64% of cities are now working on demonstrating a positive ROI before working on such projects. These percentages point towards the critical importance of data and analytics in smart city projects.

The study also indicated caution against cyberattacks, skill gaps and privacy and regulatory issues. Less than half of the countries surveyed considered themselves “well prepared” to face such attacks. This suggests that the cities are realising that increasing connectivity is also resulting in increasing vulnerability. Last year, municipal bodies reported loss worth $3.4 million and this amount has increased to $10 million this year. Leader cities have pegged the loss amount at $6.2 million. Majority of these cities (82%) are planning to increase their budgets for cybersecurity.   

Another big challenge facing smart cities is talent shortage. Only 46% of these 100 cities felt that they workforce had the requisite skills in data analytics, strategic thinking, and problem-solving to advance their projects. There are innumerable theories and questions raised on data quality and veracity of sources being used to collect data. Bio metrics and automation are making ways into our personal and professional lives. Almost half of the cities surveyed said that regulatory measures can take a toll on their ability to gather and analyze data.  

That said, Municipal agencies will increase the spending on hyper-connectivity initiatives. The study disclosed that the increase will be up to 14%. Implementors will be increasing their investments by 21% almost. Public transport and traffic will get the most investments, to be closely followed by public safety and public health.

Blockchain technology appears to be the most favoured emerging technology, as two-thirds of cities are already investing in it. This investment is set to increase over the next three years – in areas of governance, funding, construction and maintenance. Other than blockchain, cities also showed interest in   5G mobile networks, robots, drones, and augmented reality.

Last year, the study revealed a disconnect between the challenges the authorities were trying to address as opposed to those that were called out as challenges by citizens and businesses. The new study shows this gap is narrowing down. 52% of cities surveyed are enjoying support from their citizens and other stakeholders. Almost a third of the leaders have appointed ‘a chief citizen experience officer’ – responsible for maintaining clear communication with the citizens via all modern communication modes.

The new study showed that all the efforts are just the means to an end. Successful hyperconnected smart cities will optimize their relationships with businesses, improve interactions with citizens, and ultimately elevate their constituents’ quality of life.

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