The rise of the city as a public-private partnership service model
Bill Gates is setting aside $80 million and over 24,000 acres to build one. Over in India, they're planning to construct over 100 of them. They're smart cities (SC), and they've been in development longer than you might think. This landscape of the future is gaining momentum as it enters the third stage of its evolution: the “city as a service.”
The United Nations predicts a world population of 9.7 billion by 2050, leading to an urban population boom of 63%. Driven by the rise in global population and urbanization, smart cities are set to alter our perceptions of society as technology and big data turn cities into efficient market places for essential services.
How smart got its start
The first ripples of smart cities appeared in post-war America, where as early as the 1950's, Los Angeles had proposed computerized punch cards to analyze the city. The early 1960's saw another proposal for a “Metropolitan Area Fact Bank,” the purpose of which was:
“...to use electromechanical and electronic data processing systems in accomplishment of its day-to-day service rendering tasks...”
Greater strides were made in the late 1960's, when the LA-based Community Analysis Bureau did some pioneering work using cluster analysis, aerial photography, and computer databases. Their goal was to catalog housing quality and residential demographics in the hope of addressing the low standards of living. Theirs was a visionary notion of “data-driven climate control,” and their methods revealed links between the gathered data and social outcomes.
It's here the seeds of the modern smart city were planted: manage and maximize the efficiency of an urban area through data provision and analysis while improving the lives of the citizens.
How smart cities have progressed
Bill Gates' projected civic project intends to supply commercial, office and retail, school, and private residence areas. They'll all operate on technology's cutting edge, boasting autonomous vehicles, logistics hubs, superior manufacturing and distribution and of course, high-speed networks. India's Smart Cities Mission also plans to harness the possibilities of smart cities in a big way, and its focus on elevating the lives of poorer citizens echoes the philanthropy that lay behind 1970's efforts in California.
Bas Boorsma, has recently taken a definitive look at smart cities in his “A New Digital Deal.” He marks the past fifteen years as a period of accelerated change. Stage one of smart city development at the dawn of the millennium was driven by broadband and connectivity. Stage two focused on solutions architectures. The current stage sees smart cities being driven by data and digital services.
The City as a Service is, among other aspects, a consumable metropolis providing those services to its citizens as and when they need them; no more, no less. Boorsma highlights the dynamic ease of such platforms as Airbnb and Uber; on-demand services that can be used as we like. Eventually, there will be almost no good or service that won't be available via this as-required model.
For smart cities to truly succeed, it's this kind of public value that has to be at their heart, a government first initiative – servicing all. Nevertheless, detractors of the concept have reservations about who such a city would really serve. Specifically, who will have the most powerful stake in the venture? A private sector with its own profit-drive agenda? A government with absolute control? A non-profit with no understanding of either?
Realizing the potential of smart cities through public-private partnerships
There are those who question if these ambitions can bring about solutions to the oldest of problems – creating a minimum living standard for all citizens. Boorsma believes that a minimum of public control should be maintained within a smart city, and suggests effectively leveraging public-private partnerships (PPPs) as a collaborative growth solution. PPPs are forged through the need for socially sustainable infrastructure; a need answered by an economic union between government or public agencies and private sector partners.
Every PPP is a unique yet unified entity comprised of its own specialized rights and priorities.
They don't belong to any particular culture, sector, or border. Think of them as super-structure built to develop the platform to get the job done where governments and corporations can't handle the complexity or expense alone (and check out this half-a-billion-dollar development set to begin in 2019). A Smart City PPP should always follow the Design, Build, Operate and Transfer model (BDOT). The pooled resources; public and private, that result from such cooperation can drive smart cities forward through achieving legislative support, out of the box innovation, developing the master plan, and the investment thesis.
Mayors of today strive to make their cities more livable but face the challenge of lack of local innovation and limited interest by the big technology companies.
This challenge is caused by addressing the smart city need with a technology solution, rather than a PPP framework to make their cities more attractive to private sector partners. PPPs benefit the private sector through shared resources, expertise and revenue potential – and perhaps most valuable of all, it enhances a company’s reputation as a provider of civic improvements. The government and the public it serves can benefit via reduced costs, improved infrastructure, more jobs, and a more economical and desirable living space.
The shape of things to come
Smart traffic lights that analyze and efficiently direct traffic flow. Street lights that brighten and dim based on the presence of pedestrians. Smart sensors monitoring air pollution, smart sanitation fleets, and buildings that can monitor their own condition as well as the safety and wellbeing of everyone inside them. Kansas is getting smarter. The streets of San Diego are changing. Boston, Chicago and Atlanta are ready to evolve.
Smart doesn't only mean tech-savvy. A smart city PPP requires defined legal framework and a solid funding mechanism to scale. When executed well, PPPs allow for coordinated, consistent leadership with project transparency and public accountability. They have to address and solve, or at the very least ease, the obstacles to a universally better standard of living and leave no one behind.
Smart cities and the city as a service model hold tremendous promise for improving the lives of citizens around the world, and PPPs will be the legal framework that will help make them happen.
Sergio Fernandez de Cordova, Chairman, Founder and visionary behind P3 Smart City. P3SmartCity invests, develops, owns and operates smart city solutions, structuring Public Private Partnerships (PPP) around smart infrastructure with local, state and federal governments. Presently, he is also the Chairman at PVBLIC Foundation and on the board of PSAG, SDG-Fund at the United Nations, Imperative Fund, and SmartCities NY.
Follow Sergio Fernandez de Cordova on Twitter: www.twitter.com/sfdecordova