While there are plenty of opportunities for local councils to create cost savings – especially by cutting through their internal silos and using ICT and infrastructure technologies on a sharing basis across the various city systems – the problem remains that before these cost savings can be made significant ICT investments are needed, and the reality is that most cities are unable to provide the upfront investments for this.
Nevertheless the city (its local council) can be a catalyst and there is significant value in utilising its current assets, data sets and its community leadership to provide the right platform to encourage outside investments.
With a smart council in place (no silos, and open government, transparent, open data, open systems) local councils are well-positioned to utilise their soft power and influence to create smart city projects for which sound business models can be developed.
For this to happen an important shift will need to be made within local councils. Rather than developing these systems themselves they should consider to develop the services they need in cooperation with industry in this way many of these platforms can be provided on a service basis (city-as-a-service).
With the right foundations in place a council could outsource some of its assets to an organisation that can develop this further, into a smart city platform that will become the smart hub for the city and from which most projects can be developed.
Connected infrastructure can not only be used for the current projects councils are involved in; at the same time it will be the platform from which new services can be built and launched. This is not something council should be directly involved in but they can facilitate it, and through this facilitation it can attract private investment that would profit both the council and the private companies involved.
By having this industry platform at arms-length of the city the smart city hub can investigate broader sharing of the platform in order to reduce the overall costs. The city then buys these projects back in the form of services that will be developed on the platform.
In this way council moves from a capex model to an opex model and thus overcomes one of its major investments problems.
Such a platform can also be used to look for other investment and financing opportunities from state and federal governments, financial institutions, superannuation funds, and so on. At this point in time many of the smart city projects will start funding themselves.
There will be internal opposition to such models but the reality is that there are very few other financial options left for councils to successfully invest in large-scale smart city systems.
Paul Budde