To Find Big Opportunities in Smart Cities, Go Small
The smart city is a global phenomenon driven by a confluence of rapid urbanization, aging infrastructure, and advances in information technology, which are all super-charged by the imperatives of the ever increasing need for government austerity. Globally, it is a trillion dollar market with multi-billion dollar companies supplying multi-million dollar solutions to cities with swelling populations and shrinking budgets. The good news for the industry is there are a lot of cities in this situation, all needing better, smarter solutions. By 2025, there may well be more than 100 cities around the world that are fully “smart,” or on the road to becoming that way.
Most competitors in this space understandably target the low-hanging fruit of the biggest cities with the biggest budgets. But these big sales are often complex transactions of complex solutions. Typically, smart city solutions are designed according to a systems-of-systems approach (represented in the figure below). All the layers of the domains of a city – transportation, energy, public safety and security, buildings, healthcare, education and social services, water and waste – are meticulously analyzed and teased apart only to be stitched back together again into new solutions that are scalable, efficient, functionally optimized, future-proof and, most of all, cost-effective.
Whenever we are dealing with the public purse, implementing these large-scale projects can pose a host of challenges technically, financially and politically.
Yet with most of the focus on the large and medium sized cities, the beauty of small is most often overlooked. I believe there is also a wealth of opportunity in applying smart city solutions to smaller metropolitan centers. There are a 100 obviously big city centers, but there are thousands of not-so-obvious small cities.
The Advantages of Small
Rather than being a disadvantage in the smart city world, small areas have numerous advantages when it comes to planning, implementing and operating smart city infrastructure and service projects.
- More social cohesion and sense of local identity. Large metropolitan areas are literally an amalgamation of diverse populations with sometimes conflicting priorities. Social cohesion and feelings of being more connected to the community can be stronger in local communities than in larger cities. There is evidence that citizens of small communities develop a strong common identity and will act to support community goals, which could make developing, approving and funding smart city programs easier.
- Remoteness from the center leads to need for greater access. As a number of small areas are distant from large urban centers, many of these populations suffer from lack of access to critical services that are readily enjoyed by their big city counterparts, such as advanced medicine or world-class education. To empower citizens and businesses in these small areas, there is strong need to bring these services to remote areas.
- Potential for easier planning, approval, and funding decisions. Decision making is often far less complex and faster in smaller, simpler administrative structures than in cities with large, siloed bureaucracies.
- Stronger need to outsource extended capabilities. Small areas are more likely to have fewer internal technical capabilities and financing tools available to them. This implies a greater need to outsource social infrastructure projects to third parties. Similarly, they may be more inclined to embrace public-private-partnerships (3P models) to implement and operate smart city programs. In fiscally austere times, this can be a significant market driver.
In small communities, systems aren’t as big and all encompassing as they are in larger cities. Moreover, a stronger sense of community identity can also help align citizens around smart city solutions. This suggests that small areas may likely adopt smart city solutions faster than their large city counterparts. With strong community engagement in the designing and building of new solutions, post-implementation, and the rate of adoption, satisfaction and, ultimately, success may also be higher than in larger cities.
There is currently very little written about “small, smart city” opportunities. However, a paradigm can be developed that enables us to measure these opportunities, organize our thinking and create strategies to implement small smart city solutions. For instance, consider the following three types of small urban areas.
Micropolitan Statistical Areas
Micropolitan statistical areas, or “micros,” were created as a new census category by the U.S. Office of Management and Budget (OMB) in 2003. Broadly defined, they are catchment areas based around a central urban cluster of 10,000 to 49,999 with a substantial dispersed population surrounding them. Those living outside of the central cluster commute into it for jobs, shopping, medical appointments, schools, etc.
A seminal paper by Robert E. Lang and Dawn Dhavale in 2004 outlined the characteristics typical of these areas in the U.S.:
- Micros tend to be between 1.5 and 2 hours driving distance – each way – from big cities (and big city services), with some being more than 9 hours away
- In the Eastern U.S., micros tend to be lower density fillers between larger cities, whereas in the west, they tend to be stand-alone economic centers surrounded by rural spaces
- Micros can range in population from 13,000 (2000 census figures) to just under 190,000, but the smallest of them tend to be very remote from big cities and some are steadily losing population
Although this is a description of typical micros in the United States, micropolitan areas with varying qualitative and quantitative characteristics exist all across the planet in the thousands. This makes for a very large opportunity. There are approximately 570 micros in the U.S. and 160 in Canada. However, population profiles in other regions of the world suggest the potential is exponentially larger in even more populous regions such as China, Europe, India, South America and Africa.
Neighborhoods: Building Pockets of Smart
Another type of small urban area is the neighborhood. Neighborhoods typically have a unique character and distinct identity that defines them from other parts of the city. Many have active citizen groups dedicated to supporting and improving the welfare of their residents, businesses and visitors.
The opportunity here is to look at building smart communities at the neighborhood level. Compared to designing an “all-things-to-all-people” solution for an entire large city, a smart neighborhood can work at a molecular level, involving targeted capabilities and then connecting them with other smart neighborhoods. The unique composition of a neighborhood, and even groups of buildings within it, could implement better neighborhood safety with smart information sharing, or build microgrids to enable energy self-sufficiency at the neighborhood level.
These smart neighborhoods could subsequently connect with backbone city infrastructure, such as transportation or energy grids. They could also connect with adjacent smart neighborhoods or specialized, complementary districts (e.g., education and medical, “eds and meds”) to enhance the “smart-ness” in both areas.
The sheer number of neighborhoods in cities around the world – and there are at least 4,400 cities with populations of more than 150,000 by one count – suggests a possible market for smart neighborhoods in the tens of thousands. This further adds to the potential for smart in small.
Still another type of small, smart opportunity is the academic campus. Ranging from large, land-grant universities to liberal arts colleges, many campuses are essentially cities unto themselves. They often have dedicated physical plants, police forces, transportation systems, and administrations, functioning in many ways like a small city. And, in many of these campuses, smart city solutions may find an ideal environment for adoption and innovation. Approximately 7,500 universities globally (according to Greentech Media, Inc.) represent a sizeable segment to pursue.
The Big Opportunities for Small
Improving infrastructure and services in small urban areas and remote communities may no longer be a nice-to-have, as evidence suggests they are becoming a need-to-have. In many nations, small towns are opting to dissolve and amalgamate with larger entities to form stronger micropolitan areas. Springhill, Nova Scotia, a small Canadian town of 4,000 recently did just this. As the town’s mayor stated, “this is going to be a trend within the next three, four, five years. You’re going to see a lot of amalgamation… small towns just can’t survive anymore.” (Listen to the full interview here.) Consolidation, increasing efficiency, extending capabilities and boosting socio-economic attractors of a region are becoming critical to the survival of many of these smaller communities.
Targeting micros, neighborhoods, and university campuses with smart solutions can be a promising new horizon in smart cities. With fewer barriers to implementation coupled with the sheer size of the potential market, smaller projects can represent an attractive option for solution developers, city administrations and citizens alike. Ultimately, the success of a smart city isn’t in the technology, but in the concrete differences it makes in the lives of its citizens. “Small” can be big – we only need the right lens to see it.