The smart city market moving towards 2018

Back in 2001 I initiated the very first smart city event in Australia. In all some 75 representatives of Australian local councils gathered in Brighton-Le-Sands in Sydney.

The focus of that event was the broadbanding of local communities around the country. This was seen by the local councils as one of the most important elements needed to create a smart city.

Nothing much has changed since then. Now, more than 15 years later, broadband – in this case the NBN – is still very high on the agenda of local councils. Most council areas are now seeing an improvement in broadband access, but those who are unlucky enough to get only the fibre-to-the-node version will continue to have a broadband headache for the next decade or so, until that old technology is finally replaced with a proper fibre-based network.

Strategic developments

In the meantime, however, the smart city discussion has moved on, and over the last two years in particular the discussion has become far more sophisticated.

Apart from digital infrastructure a range of other issues has come to the fore: climate change/sustainability, smart energy, transport/mobility, affordable housing, healthcare, education, migration and refugees. All of these issues are, first and foremost, felt in the cities and local communities around the country.

But there is a massive disconnect since most of the policies in relation to the above are formulated by politicians in Canberra, where partisan politics, indecisiveness and conflicting strategies are the norm. If one party develops a new policy according to a political perspective, the other party will object and even abolish whatever has been done when it comes into power. Communication, energy and climate change are prime examples of a total failure of policy-making at a federal level.

The funding structure for cities is another key problem area;  85% of the national taxes are flowing into the coffers of the federal government, 13% is going to the states, with a meagre 2% ending up with the cities. However, as mentioned, it is in the cities that all of those national, and indeed international, developments are coming together.

A lack of leadership, partly at federal and state level but also at a local council level, has led to what we have coined ‘death by pilot’. Millions of dollars have been largely wasted in small-scale pilots and projects, initiated by visionary and willing people who lack the support of solid strategy and leadership from the top. Most of these projects were successful, but in the absence of any ongoing strategic plan they were simply mothballed or terminated. None of these projects received the financial support to scale them up.

The smartest cities

However, over the last two years we have seen a major change. The leading smart cities in Australia, and indeed around the world, now have strategic plans in place; they have leadership support from the mayor (in relation to politics and communication with citizens and local businesses); and they have a smart council in place that works across silos under the leadership of the CEO/General Manager.

Out of the 500+ local councils in Australia only a handful have either reached that strategic stage or are close to it. These include Adelaide, Bendigo, Canberra, Newcastle, Lake Macquarie, Ipswich, Sunshine Coast and Moreton Bay.

Sydney, Melbourne and Brisbane are also very much in favour of smart city strategies, but it is far more difficult for metropolitan cities, especially when they consist of a large number of individual local councils, to create a holistic smart city strategy. Sydney is trying to at least partly overcome this by means of the Greater Sydney Commission, which is in fact making significant progress in this direction.

Furthermore, around the country, there certainly are also a number of runners-up who have started smart city projects and who at a minimum understand that they will have to develop a strategic plan, and they have sound potential to grow into full-blown smart city strategies.

From the above it can be seen that it is the mid-tier cities that fit into the smart city sweet spot. It is much easier for these cities to develop holistic plans and strategies and engage effectively with their citizens.

Federal support

While there are serious problems with some the federal policy as mentioned above, at the same time one of the most successful policies launched by the current government has been its National Smart City Plan launched in 2016. It now has three City Deals on the table – Townsville, Launceston and Western City – as well as a Smart Communities and Suburbs program, with start-up or seeding money for councils that are providing strategically sound smart city plans and projects. It also has a program in place to assist local councils that still have to embark on a strategic mission toward smart cities.

While the money element is important, the fact that the federal government has shown leadership and put smart cities on the table has resulted in nearly all the local councils around the country starting their own discussions in relation to their own smart city journey.

The most important policy assistance the government can give is to solve the inflexible procurement and investment models under which cities are forced to operate. These work entirely against holistic strategies and collaboration models. It will be interesting to see if different funding models developed e.g. by Ipswich and Bendigo will provide positive examples on how we can proceed from here.

Collaboration is the key

During 2016 and 2017 I took the initiative to develop a collaboration model for smart cities. It is clear that cities on their own will not be able to develop smart cities. This requires business models and funding that will have to be supported by private industry, as well as being strongly supported by the R&D and university community – the latter especially in relation to standards, interoperability, data analytics, cyber security and privacy issues.

Furthermore there has to be effective collaboration between all three levels of government; this is also something strongly supported in the National Smart City Plan (and a key element of the City Deals). Under the umbrella of the Australian Smart Communities Association (ASCA) I have developed a Smart City Industry Board (30 companies), an R&D Group (12 universities), and organised the inaugural Smart City Mayors Meeting under the leadership of the Lord Mayor of Adelaide. The eight leading smart cities in Australia have also begun to investigate collaboration between themselves; the aim here is to learn from each other, share information and investigate joint projects.

 Last but not least, I have started with a plan to establish state-based platforms between the state governments and the leading smart communities and cities in each state to develop state-based policies and projects to push the movement deeper into the communities. ASCA itself has a strong membership base among local councils and Regional Development Australia organisations (RDAs). They are ideally positioned to stimulate collaboration.

Citizens are left, right and centre in any smart city

All of the above needs to be in place to enable a structural and strategic approach, but in the end the reason we want to build smart cities is to create better communities that are connected and empowered to participate in the digital society and economy; to create a community where people are happy and where they can see improvements to their lifestyle and to the liveability of their suburb, neighbourhood, community, town and city.

With the abovementioned structures in place cities are the right platform to allow empowered citizens to lead and participate in what their smart community should look like, to co-develop projects, and in general to create in-depth and ongoing engagement between local government and the citizens, as well as between citizens themselves. Smart cities based on innovation and collaboration are also going to provide the jobs of the future, which will mainly be based on efficient and effective SMEs and professional people.

The reality, however, is that without a smart council in place it is impossible to build a smart city that moves beyond the ‘death by pilot’ syndrome.

Building smart cities and communities will take decades. In fact, the process will never end – it will be ongoing. So it is never too late to start. However the early leaders will benefit from their foresight. People will increasingly base their decision about where they want to live and work on the issues that cities need to solve. These will be the flourishing cities of the future, so it is important that all cities and communities start on this journey and discuss how they would like their community to look in 5, 10 or 20 years’ time.

The collaborative structures that are now in place, in combination with the initiatives from the federal government, will see real advances for the smart city movement in 2018.

International collaboration

In parallel, I have also started on international collaboration. The eight leading cities in Australia have joined the Global Smart City and Community Coalition (GSC3). This alliance is bringing together cities all over the world that are working on similar projects, facing similar issues, or seeing similar opportunities. The aim is to launch collaborative projects on an international basis, which will help those involved to learn from each other, to share insights and outcomes, and even to develop joint projects where certain elements are tested in one city and others in another city.

All of these developments and all of the major initiatives that are currently taking place in Australia are covered in this report.

Paul Budde

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