Tech & Innovation
Obstacles And Opportunities For Smart Cities

It is estimated that by the year 2050, 66 per cent of the world’s population will live in urban areas. In Europe, that figure is already higher, with 73 per cent of people residing in cities. “We need to build smarter cities to cope with larger populations, who are living longer and more densely, as well as remaining economically and socially competitive in an increasingly globalised market,” says Simon Beswick, CEO of law firm Osborne Clarke.

Osborne Clarke has published a report that outlines the four key components of smart cities — smart grids, energy storage, intelligent transport systems, and building efficiency — as well as some of the fundamental challenges in bringing them to fruition.

1. Bridge The Funding Gap

According to the report, investment, or lack thereof, is the number one obstacle to the rollout of smart technologies in Europe. “In the public sector, the reality is that significant year-on-year cost cuts of up to 20 per cent and 30 per cent are necessary, so there is limited capital budget available for smart investments such as energy efficiency,” says Mark Stokes, Managing Director of Utilyx Asset Management.

The majority of survey respondents believe that project finance and public-private partnerships will be the most effective way to fund smart infrastructure programmes in the next three years.

2. Update Laws


There are also complicated regulatory concerns involved in implementing smart technologies. For instance, the huge amounts of data that will be generated in a connected city require a unique new set of privacy laws.

“The complexity of transforming into a smart city largely comes with the difficulty in harmonising the myriad infrastructure elements involved into one big information technology family,” says ReadWrite’s Donal Power, reporting on the challenges facing smart city initiatives in India.

“This complexity poses a headache for city leaders and legal experts who will likely find it too difficult to create over-arching legislative frameworks to cover the entire smart city. Instead they will probably end up tweaking the existing state and municipal laws.”

3. Communication & Collaboration

In addition to the financial and legal issues, fostering an environment of clear dialogue and feedback between entrepreneurs and city planners is another essential step. “Collaboration is also essential in developing the right technologies,” says Beswick. “That is why many cities implementing smart initiatives have prioritised engagement with technology companies to ensure that the right solutions are developed.”

For example, Innovate UK runs a series of competitions to encourage tech companies to develop and demonstrate prototypes which can easily deliver infrastructure solutions and services. “One of our competitions asked 30 of the UK cities involved in the Future Cities Demonstrator what solutions they want to buy that they can’t find in the marketplace,” explains Richard Miller, Deputy Director of Innovation in Industry. “We were then able to contact the innovative community of companies we work with and give them the challenge and define the market opportunity.”

4. Smart Food


And if building efficiency is one of the cornerstones on which a smart city is built, then we need to look at more sustainable means of food production and distribution, as the existing supply chain becomes increasingly convoluted and expensive.

Donal Power points out that the amount of fossil fuel energy expended in the transportation of one cauliflower from farm to table can be as much as 36 times greater than the energy which the vegetable itself provides to the consumer. “Just like energy, food should be grown where it is consumed,” writes the Business Standard’s Saahil Parekh in a piece on urban farming. “The idea of smart cities is incomplete without smart food.”

“These challenges are faced by all cities no matter their stage or development or what continent they are on,” says Beswick. “Equally, no single city, country, government, economic bloc, or company can build a smart city alone. It’s going to require rallying expertise around some pretty big ideas and then collaborating to overcome the challenges, sharing best practice, which, in turn, will enable innovation and accelerate the development of smart cities.”

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