Funding Major Obstacle In Smart City Initiatives
The term “smart city” seems to be popping up all over our news feeds. From the Smart City Challenge to Smart City Operation Centers — it’s pretty clear that the buzzword isn’t going anywhere anytime soon. But the term that lacks a clear definition has some serious issues in its tracks: funding. For many cities aiming to be dubbed as a ‘smart city’, most are willing to move towards smart city initiatives, however, lack the funds to execute their plan. This poses a major problem, especially since the efforts require handing over a large chunk of dollar bills.
According to the 2017 Strategic Directions: Smart City/Smart Utility Report, only 16% of cities can actually self-fund their initiatives. Although the report tracks a variety of topics, it still manages to show that funds are few and far between, especially for those attempting to smart city status. For Fred Ellermeier, VP and managing director of Black & Veatch’s smart integrated infrastructure business, money is one of the main contributors to the lack of execution for cities. “Just over half of respondents say efficiency and cost reductions are the major reasons to do these kinds of projects, and yet three-quarters say they don’t do them because they don’t have enough money,” said Ellermeier. “So we see a real contradiction there.”
Without the cash, is there really hope for these cities?
Maybe, but not many make it by self-funding. Another grey area is the fact that city officials are not entirely sure of the return on investment for smart city initiatives. However, structural changes could play an integral part in actually backing these initiatives. The creation of more government data roles could play a significant part in “moving the [smart city] needle”. But with the public and private sectors, what’s the best way to go about becoming a smart city?
Forward-thinking leaders believe there needs to be a mix of both public and private (AKA the “secret sauce”) partnerships to help cities fund their proposals. With public-private partnerships (P3s), cities can join forces with private operators to not only support their plans, but help pay for them. It’s a win-win for both parties, and that says a lot. For the transportation industry, this will completely transform how people move. With smart technology, the possibilities are in fact endless. Take smart street lights. To save energy, street lights can be off unless there is movement from a car or person. Take parking, for example. Smart tech will greatly influence parking too. “The ability to know that they can get a parking space downtown leads directly to people coming into the city and spending money,” said Ellermeier. “In that sense, the technology directly impacts the vibrancy of the city, and that has economic benefits.”
Take Passport’s mobile parking app, for instance. Parkers have the ability to pay, park, and extend their parking session entirely through their smartphone. Passport’s product is not only bringing a technology platform to cities, but it’s helping them get one step closer to being deemed a smart city. Being able to pay by phone for parking, as well as extend and manage your session will completely change mobility. The mix between public and private will give municipalities and businesses an advantage, as they embark on their partnership to transform their community into a connected one.
As more and more cities aim to become smart, there’s one constant in the term that lacks a definition — funding. Without funding, obstacles will be hard to steer clear from, and without a generous mix between public and private sectors — partnerships will never survive…