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Chief Information Officer for the City of Edmonton Chris Moore pictured at the Transportation Monitoring Centre where the flow of traffic in monitored in Edmonton,Tuesday March 8, 2011.

Jason Franson for The Globe and Mail/jason franson The Globe and Mail

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.

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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."

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"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.

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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.

In announcing the partnership, the company's CEO declared that "the network has become the new utility."

Saudi Arabia has already asked Cisco to help plan four new cities of its own, and China is estimated to need at least 500 to house its growing population.

With companies literally building cities around their products, the prospect is emerging that the world could someday be divided between IBM cities and Cisco cities, just as commercials have told consumers they are either Macs or PCs.

Mr. Katz doesn't think that would be so bad, and said one alternative - that cities don't upgrade their information systems at all - is even worse.

"It's not a question of whether or not firms are going to reap the benefits, the real issue for me is how fast can this be adopted," Mr. Katz said.

Chris Moore, Edmonton's chief information officer, was responsible for the city's winning bid to become an IBM Smarter City and agrees that most municipalities have no choice but to upgrade. Right now, he said, Edmonton employs 1,100 different types of software, making effective data sharing within the city virtually impossible.

"For me, if you put it all in an enterprise system it's going to be easier and faster," he said.

The results of streamlining data have already been made apparent in several Canadian cities. A data analytics program adopted by the Edmonton police allowed for crime statistics to be studied in real time, which the force credits with producing an 18-per-cent drop in crime.

"Before we used manual processes, and if you could look at data from a month ago that would be a good thing," said Staff Sergeant John Warden, who led the program. "Now we can deploy resources to hot spots immediately. "

In Cambridge, the city government has applied the same principle to studying its pipes, roads and other physical assets.

It paid IBM a million dollars to implement a software program that would allow it to better understand the Ontario city's $2-billion infrastructure assets, monitoring everything from trip hazards in sidewalks to leaks in underground pipes. Mike Hausser, the city's manager of asset management, said he modeled his program on the operating systems of most Fortune 500 companies.

"It's not just a matter of making a capital investment, producing something - you had to produce it at the right cost. If you weren't able to do that in a private-sector business, you weren't successful. You went out of business very quickly," he said. "Municipal governments are in the same situation."

Officials paid for the new technology through federal gas tax funding, and believe it will help them more efficiently plan for future infrastructure projects. Their water system, for example, is now monitored by robotic cameras, which report problems into a centralized database. In the future, this could mean the difference between replacing one pipe, and replacing all of them.

Bruce Ross, president of IBM Canada, said that introducing this kind of efficiency will be the way cities of the future set themselves apart.

"Why replace a mile of pipe when you can replace 30 feet?" he said. "That level of information is there, you just need the right level of analytics on top of it."

And he doesn't think cities of the future will be categorized by the type of software they use, but by how they choose to employ it.

"I think you'll find that cities will be more solution-oriented. So you'll find one city that provides extremely good customer service and another that becomes incredibly eco-friendly," he said. "Cities will be differentiated not by the technology they have but by the solutions they provide."

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