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The Potential of Smart Cities

Every year, The Economist Intelligence Unit publishes a Global Liveability Index. The Index ranks 140 cities based on stability, health care, culture, environment, education and infrastructure.

Vienna scores a near-perfect 99.1 out of 100, putting it just ahead of cities like Melbourne, Sydney, Osaka, Calgary, Vancouver and Toronto. U.S cities are behind, with no U.S cities ranking in the top 20.

According to the report, cities that falter lack stability, safety and feature dismal air quality. New Delhi in India, Cairo in Egypt and Dhaka in Bangladesh all suffer appalling air quality.

By contrast, Sydney in Australia has increased its focus on combating and mitigating the impacts of climate change, which has helped it move up in the ranking.

This raises a fundamental question: What can help city governments to meet the challenges of urban governance, to improve urban environments, and to address sustainability and environmental concerns?

To help prevent and manage these challenges, cities need to operate in an innovative way and embrace new technological innovations.

The term smart city is not new – it has evolved to mean almost any form of technology-based innovation in the planning, development, and operation of cities. For instance, the deployment of services for plug-in electric vehicles in a city is an example of a smart city at work.

The application of information technology in smart cities can produce various benefits. For instance, smart cities can reduce resource consumptions, like energy and water, hence contributing to reductions in CO2 emissions.

They can also improve the utilization of existing infrastructure capacity, hence improving quality of life and reducing the need for traditional construction projects.

Technology can yield fruitful outcomes for smart cities. The widespread use of digital sensors and digital control systems for the control and operation of urban infrastructure can help create better cities. These include traffic sensors, building management systems, digital utility meters, and more.

Smart cities are a way of investing in the future, and they have the potential to vastly improve the quality of life of those who reside in urban areas.

Smart cities need private investment to realise their smart city goals. Given the nature of smart city projects and their payback periods, traditional financing models may not work well.

Cities can influence the pace and type of smart development by creating an environment —through regulation and subsidies — that supports private-sector development. That’s how we create the cities of the future.


[1] M. Gascó, "What Makes a City Smart? Lessons from Barcelona," 2016 49th Hawaii International Conference on System Sciences (HICSS), 2016, pp. 2983-2989, doi: 10.1109/HICSS.2016.373.

[2] Harrison, Colin, and Ian Abbott Donnelly. "A theory of smart cities." Proceedings of the 55th Annual Meeting of the ISSS-2011, Hull, UK. 2011.

[3] Smart Cities: Investing in the Future. Economist Intelligence Unit


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