smart cities


Being smart about smart city solutions

Using technology to improve lives and keep cybersecurity in focus

The best plans for smart city solutions leverage technology to reduce risks and improve lives, all while keeping a sharp focus on privacy and cybersecurity.

The growing smart cities market

The Obama administration has invested $160 million in federal research for smart city solutions, leveraging more than 25 new technologies that reduce traffic, fight crime, manage climate change, and improve the delivery of services. In all, the smart city market is predicted to be worth $1.56 trillion by 2020, according to market research consultant Frost & Sullivan.

But benefits realized from smart city solutions are also accompanied by risks related to:

  • Cybersecurity and privacy
  • Technology outpacing policy
  • City budget constraints that can bring projects to a halt
  • The prospect of leaving entire segments of the population behind

These risks must and will be at the forefront of any smart city planning discussion, and companies have a unique opportunity to play an important role in providing smart city solutions. Striking a balance is key. For leaders, it’s about consciously taking on strategic risks that will create value and managing those risks proactively. This is how risk can power a company’s and, in this case, a whole city’s performance.

“There are a lot of people right now who don’t have regular access to the Internet, and it’s based on economic level. So one of the issues cities have to address is: Are you going to bring people along or are you going to disenfranchise people,” says Michael Hostettler, managing director at Deloitte Transactions and Business Analytics.

Cybersecurity is crucial

Public-private partnerships are key to designing and developing the municipality of the future. But inclusion is not a one-way street. Because smart cities function via sensors, broadband use, and data sharing, accurate data collection is essential, and the more the better, says Jim O’Gara, managing director at Deloitte Transactions and Business Analytics.

"What city governments have realized, and what the private sector has understood since the beginning of the Internet revolution, is the value of data to the governments and the private sector for planning efficiency and the provision of targeted services," O'Gara says.

With all this data collection, however, comes enormous smart city challenges—and an enormous responsibility to maintain system security and keep citizens and their personal information safe. Connecting any system, asset, or device to the Internet introduces inherent risks, including data breaches, disruption of infrastructure, and threats to public safety.

Human errors and delays

Intentional breaches are not the only threat. As governments and companies rush to meet the demand for smart city technology, there’s also the possibility of human error. Without a clear and comprehensive security strategy in place, a city could be left vulnerable to mistakes and liable for the cost of recovering from one.

To minimize the likelihood of human error, contractors must be properly vetted and public workers need significant training in how to monitor and manage smart software and assets. There also needs to be extensive coordination of various city agencies and resources, never an easy feat for a government that lives by compartmentalization. Smart cities should also operate with significant transparency, so that citizens understand how the information they provide is being used and protected.

“There needs to be a certain amount of access to the private information of a city’s citizens,” says Steve Hamilton, senior manager at Deloitte Transactions and Business Analytics. "I think that whole question of governance within a city—the institutions you set up to manage data sharing and privacy, and the alliance partners you work with, how you set up those relationships—are really fundamental to making and transforming these spaces."

But while smart city technology charges ahead, city administrations risk falling behind in developing a regulatory framework for their smart city solutions. Today’s leaders and lawmakers face the unenviable challenge of keeping up with a deluge of new technologies that were unimaginable a few decades ago.

Improving the lives of citizens

Smart city solutions have enormous potential to improve the lives of their citizens, as well as reduce waste and pollution on the massive scale needed to fight climate change and other environmental threats. For example:

  • Borrego Springs, CA, is incorporating renewable energy micro-grids, which reduce greenhouse gas emissions and, because they function independently, don’t go down when the larger, traditional grid fails.
  • Tokyo is monitoring water flows using sensor technology and replacing and upgrading infrastructure to curb the loss of water due to leakage and theft.
  • Amsterdam is designing smart buildings—such as Deloitte’s “The Edge” offices—that use sensors to capture energy-use data, which is analyzed to detect potential issues, predict upcoming maintenance, and optimize a building’s energy systems.

Companies should certainly be aware of the risks and the opportunities they present. But we at Deloitte believe the smart city trend will, in the end, reduce existing risks to the planet and city dwellers, who are expected to make up roughly two-thirds of the world’s population by 2050.

Smart technology will decrease waste and human error, and the area of predictive analytics—based on the wide variety of data available—will identify threats sooner, so they can be mitigated in a more timely way, whether they’re risks to transport systems, catastrophic climate events, or even crime or terrorism.

Infographic: What your smart city can do

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