In Stockholm, they needed to reduce rush-hour traffic. Cambridge, Ont., wanted to replace one pipe without ripping out its entire sewer system. In Budapest, a school system required an environmentally friendly lighting solution, while in China, they just need somewhere new for people to live.
Creating smart infrastructure for cities around the world has become the new frontier of urban planning, a global business estimated to be worth as much as $122-billion over the next two years.
City governments faced with growing populations, aging infrastructure and dwindling budgets are desperate for modern solutions, but instead of turning to visionary new mayors, or vying for cash from other levels of government, municipal leaders are increasingly turning to such private companies as IBM, GE, Oracle and Cisco to overhaul city systems, applying high-tech business solutions to issues such as public transit and water management.
And in the process, tech companies are emerging as a new form of public-private utility, one that may soon have a monopoly over how our cities are run. Toronto-based urban designer Ken Greenberg even compared IBM to the companies that built the Canadian railways, and dubbed such public-private partnerships the new “nation builders.”
“Multinational corporations have discovered cities and it’s probably one of the biggest market trends in the world, frankly,” said Bruce Katz, founding director of the Metropolitan Policy Program at the Brookings Institution in Washington.
On Wednesday, IBM will announce the winners of its Smarter Cities Challenge, a global contest that invited cities to apply for $50-million in free technology services.
The City of Edmonton is the sole Canadian name among the list, which ranges around the globe from Chiang Mai, Thailand, to Bucharest, Romania and Milwaukee, Wis.
The contest is part of the company’s Smarter Planet program, a core part of its business that aims to sell technology to cities rather than individual consumers.
Although the majority of IBM’s work with cities is straight-up, charge-by-the-hour consulting, IBM has positioned the business as a form of high-minded charity, asking city residents to imagine “safe neighbourhoods, quality schools, affordable housing, traffic that flows.”
At the recent Greater Toronto Summit, IBM’s vice-president of strategy and business development Michael Littlejohn described the company’s information analytics service as the “new government ecosystem.”
“Under the old regime, there was government, and there was everyone else. We’re talking about a new world order,” he said. “We’re very bullish on information analytics changing cities.”
Mr. Greenberg, who was also on the panel, acknowledged that cities may not be in the position to think about the long-term ramifications of inviting private enterprise into city hall.
“Cities are often so far behind and overwhelmed that they can’t even think about big-picture stuff,” he said. “A lot of this is born out of the fact that municipalities have their backs against the wall.”
It doesn’t take a business degree to recognize that being backed against a wall is not a strong bargaining position. But the potentially monopoly-forming future of “smarter city” initiatives has less to do with retrofitting old cities than the possibility of creating entirely new ones.
While companies such as IBM and GE focus on helping Stockholm introduce congestion pricing, and building wastewater treatment plants in Victoria, governments in the Eastern Hemisphere are building new cities from scratch, and technology companies are getting in on the ground floor.
Last November, India and Japan unveiled a plan to build 24 “green cities” with clean energy supplies and waste recycling systems, all of which will be built by Japanese companies such as Hitachi and Mitsubishi.
In South Korea, construction has begun on New Songdo City, a $35-billion instant metropolis that will grow from a man-made island in the Yellow Sea. The city will have technology built into every brick, building and streetlight, with everything from water to traffic wired through a single Internet-enabled utility, courtesy of Cisco.
