IT can make cities smarter, but key obstacles remain



The world’s cities face pressing needs to modernize in ways that will involve collecting and managing massive amounts of data, thus creating a large new market opportunity for information and communications technologies providers. Solution providers of all types are pursuing this opportunity with an array of offerings and projects. Some are centrally planned, or “top down,” and others more grassroots, or “bottom up.” However, as we discuss in a new report, Opportunity and Innovation in Smart Cities, and will explore further at an Ovum-hosted event next month in London, the market’s potential is being inhibited by factors such as immature standards, rigid and siloed infrastructures, limited budgets, and fragmented and politicized decision-making. Unless these impediments can be overcome, urban solutions may not emerge quickly enough to keep pace with cities’ growing needs, and this potentially lucrative market may not achieve its full potential.

Vendors are avidly pursuing a range of opportunities

Today’s digital city solutions fall into two main categories. First are large-scale, centrally planned, top-down projects, driven primarily by public authorities and developers, and attracting the biggest names in IT, such as Cisco and IBM. Complementary to such projects are smaller, more spontaneous, bottom-up solutions, aimed at making cities more efficient and livable, for example by improving social interaction and creating new urban services. IBM plays in this arena too, with a free, web-based platform called City Forward that hosts public data sets on topics such as crime, education, and labor, and allows users to experiment with them to identify patterns and trends that may lead to new solutions. Other sources of grassroots innovation are companies such as InnoCentive, which uses crowdsourcing and competitions to find solutions to business, government, science, and health challenges; Citymart, an online marketplace that showcases hundreds of applications and services from a variety of sources; a closely associated not-for-profit organization called Living Labs Global, which is supported by more than 160 organizations worldwide and maintains an online showcase; and the Planetary Skin Institute, a global research and development organization that grew out of a collaboration between Cisco and NASA.

The market faces numerous inhibitors  

Top-down and grassroots smart cities initiatives can complement, and even amplify, each other, if the conditions are right. In reality, however, there are numerous impediments to such complementary innovation. Cities and other public sector organizations often have patchworks of antiquated, poorly integrated IT systems, with data sets isolated from each other in silos and incompatible formats. Many forward-thinking initiatives are hampered by a lack of good baseline data. Lack of communication and organization lead to duplicative efforts as multiple teams working in isolation reinvent the same kinds of solutions, and sometimes this redundancy is exacerbated by developers and administrators distrusting solutions that they didn’t build themselves. Such immaturity, fragmentation, and lack of coordination inevitably mean that although the market for smart city solutions is growing, it is growing more slowly than it would if these issues could be addressed.

More initiatives are needed to overcome these hurdles

Various efforts are under way to address the inhibitors. They include the C40 Climate Leadership Group, a group of 40 cities around the globe that have implemented some 29 projects and have dozens more in the works that are designed to reduce the drivers of climate change. The C40 group’s efforts are described in a recent report by The Climate Group, a London-based non-governmental organization, which also points out progress in the area of “open APIs” that facilitate development of applications and services based on public data.

But such efforts moving in the right direction have not yet achieved anything close to adequate scale. Both solution providers and their urban customers must address these challenges together to solve issues of data collection, standardization, and availability and closer communication among stakeholders. Only through such collaboration can a foundation be laid that will derive maximum value from both top-down and bottom-up smart cities initiatives.

An upcoming Ovum event will explore these issues further  

Ovum is hosting Smart Cities Europe 2012 on June 19–20, in association with Imperial College London. The two-day event, held at the Lancaster Hotel in London, will explore how to digitally link utilities and services within a city, enabling new technical and business opportunities. Smart Cities Europe 2012 will also draw on the expertise of Ovum analysts and invited speakers, delivering the world’s leading cross-sector forum for the exchange of knowledge related to digital cities.



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