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By the end of this year, the city of Kitchener will have a bevy of new "smart" lights illuminating city streets. Over the next several months, the city will install approximately 15,223 LED streetlights at a cost of just over $6.7-million.

It's just the latest city to adopt the smart city trend – numerous municipalities across Southern Ontario are ramping up innovation and making big investments in digital tools and data to learn more about their cities. That information is being used to solve age-old urban problems in new ways – and at a lower cost.

It's also an investment that's expected to generate a healthy return. In Kitchener, the new lights will allow the city to dim the brightness of its street light network to 70 per cent of their full capacity at most times of day – increasing the intensity at 2 per cent per year as the LED output degrades – which will save energy right from the start.

The lights can be dimmed at other appropriate times, too, such as after a snowstorm when reflectivity is high. They could also be turned up if sensors detect pedestrians or cars on the road that need them at night, says Dan Murray, the City of Kitchener's director of technology, innovation and services.

It should take just over eight years to recoup the cost of replacing the old high-pressure sodium street lights, says Mr. Murray, but the new lights will generate $1.2-million annually in energy and maintenance savings after that. "This is one [idea] where the business case doesn't get any better," he says.  It will also save an estimated 500 tonnes of greenhouse gas emissions, a move that's line with Ontario's strategy to reduce emissions to 80 per cent below 1990 levels by 2050.

Kitchener is just one Southern Ontario city making inroads into this space. Toronto has already made great strides – it was recently named the world's eighth most digitally innovative city on a list of 500 cities worldwide, according to the 2016-2017 Innovation Cities Index – but other locales, including Mississauga, are vying to match its pace of digital modernization.

It may not be long before all residents of Southern Ontario have access to free WiFi, while sensor systems that connect city infrastructure to the Internet of Things (IoT) – technology that allows physical devices, everyday objects and buildings to send and receive data – will be used to start managing traffic and utility consumption, Mr. Murray says.

Digital expansion

The Kitchener-Waterloo region, which has the densest collection of tech startups outside of California's Silicon Valley, will also benefit from increased investments in IoT technology. Globally, the economic impact of IoT could total as much as $11-trillion (U.S.) a year by 2025, according to global management consulting firm McKinsey & Co, through reduced staffing, better logistics and the ability to maintain and fix factories and other systems predictively rather than reactively.

Last year, private investors based in Kitchener transformed a former tire warehouse into Catalyst137, a business incubator that has plans to become the largest producer of IoT technology in the world. Its chief tenant is Miovision Technologies Inc., a company that creates intelligent traffic-data-collection technology.

"The IoT area is a huge growth area for us," says Mr. Murray, adding that governments are the second-biggest beneficiary of IoT solutions after factories. The city is also looking at ways of improving access to free WiFi for all its citizens, Mr. Murray says.

Mississauga is pursuing a similar WiFi-for-all strategy, says Shawn Slack, the city's chief information officer and director of information technology. Its public WiFi is already in libraries, arenas, golf courses and other locations, but it will soon be extended to parks, where it will collect data with sensors that detect temperature and air quality. This might tell the city when garbage cans are ready to be emptied, and which areas of the parks are used most often.

Increased WiFi access is only a start, though. Last October, the city approved a plan to use open data to make government more transparent. It released dozens of open data sets on March 4, International Open Data Day, making information such as the real-time location of buses possible through its Transit Real Time Data feed.

It also announced "Tech and the City," an upcoming "hackathon" organized in partnership with the University of Toronto Mississauga (UTM) campus, Sheridan College and Mississauga-based technology company SOTI Inc. that encourages students to use city data to find innovative solutions to municipal issues.

Old cities with new digital solutions

For cities to become smarter, public and private sector organizations need to start seeing the services they offer through a digital lens, says Lance Bialas, a public sector industry expert for SAP Canada.

For instance, cities such as Toronto, Ottawa and Edmonton are moving on to SAP's HANA, an in-memory database and analytics platform, which enables new ways of compiling and visualizing city-related information, from traffic lights to housing to demographics to waste collection. City staff can then find new ways of implementing taxes based on proximity to services, for example, or discover better ways of modelling and predicting problems.

"Every year, the city has to inspect hundreds, if not thousands, of buildings," says Bialas, who works closely with several Southern Ontario cities. "If they see that tax hasn't been paid for a building, or the fire department has been called to a building five per cent more than others, or if it has a high number of resident complaints from 311, then we can tell that it has a far higher likelihood that it's going to be in a state of disrepair."

While it's still early days, all cities across Canada may one day be considered smart. They will have to or risk being left behind.

By harnessing data, Mr. Bialas says, "cities will be able to reimagine and redesign services based on the information in front of them."

Download the IDC report for more information on how Canada is waking up to digital transformation.

This content was produced by The Globe and Mail's Globe Edge Content Studio, in consultation with SAP. The Globe's editorial department was not involved in its creation.