The subject of smart cities (“Smart City”) has been under discussion for many years, but most cities still lack connected, end-to-end thinking towards a growing billion dollar market.

Roland Berger’s new innovative study – Smart City Strategy Index – seeks to address this issue through a detailed analysis of 87 cities in the world. The study points to encouraging aspects such as the fact that more and more cities are undertaking a strategic approach to digitization, as more than half of the strategies analyzed in the study have been developed since 2014. However, it draws attention to the lack of a holistic approach in city strategies to implement digitalization solutions. From a maximum of 100, the average was 37, and only 19 out of 87 cities scored more than 50.

The whole is greater than the sum of the parts

The study analyzes three areas: action areas, strategic approach and IT infrastructure, and top-performing cities such as Vienna (73 points), Chicago and Singapore (72 points) achieve good results in all three segments. A digitization strategy ideally covers 6 interconnected areas of governance / public administration, health, education, energy and the environment, buildings and transport / mobility.

The focus is usually on transport / mobility, energy and public administration, and even if these areas are a good starting point, the disadvantage is that the health system, education system and buildings are often neglected.

The top-performing cities are not necessarily extremely big or rich – they are smart. For example, the capital of Austria has a well-structured digitization strategy, differentiating itself through clear objectives to be met in the short, medium and long term. The envisaged measures include the transfer of public services more and more into the online space, and the city actively encourages companies to engage in smart city activities with pilot projects developed in partnership for demonstration purposes both for the city and for the national economy.

The second-ranked city, Chicago, has also a well-defined approach, with an emphasis on the education system, seeking to increase digital literacy among its inhabitants through a network of 250 IT laboratories and digital skills training centers available for free to the general public. But relatively small cities, such as Santander in Spain, are implementing very well-balanced digitization strategies. Although richer cities tend to develop better digitization strategies, there are examples of cities with more limited economic power, such as Rio de Janeiro, which have developed effective strategies.

In Romania, cities still lack an integrated digitalization vision, although most major urban centers have a relatively well developed IT infrastructure in some aspects, such as high-speed Internet access. A positive element is the fact that Romanian cities have begun to deploy pilot projects for the implementation of smart city elements, including public administration digitization, intelligent traffic management programs, intelligent air monitoring, smart parking and lighting systems.

Szabolcs Nemes, Principal in the Roland Berger office in Bucharest, points out that “the involvement of private companies is essential in this process”, as could be seen in the various digitization solutions of Alba Iulia, “and represents a significant opportunity for players or groups of players who will be able to deliver holistic solutions that are adaptable to local needs. Moreover, funding programs for smart-city initiatives available from the European Union are also an opportunity for interested cities in Romania”.

The economic outlook is positive at global level, with the demand for city digitization solutions rising everywhere and it is expected to double to 28 billion dollars globally by 2023.

10 key pointers for developing comprehensive, integrated smart city strategies

For developing comprehensive, integrated smart city strategies, Roland Berger identified 10 key pointers.

The first step is to reassess the role of the city and of its administration, anticipating the needs of citizens. It is also essential to understand their wishes. In addition, a holistic approach to services should be developed and cross-sectoral activities should be stimulated. „We encourage the encouragement of initiatives and contributions from the private environment, as well as the development of incubators to support innovation”.

It is also important the adoption of an open approach to public information and, at the same time, ensuring data security. The involvement of infrastructure managers in the design, funding and implementation of initiatives can make a key contribution. Achieving political support and involving public opinion are also important, and to ensure successful implementation from the early stages it is necessary to create a dedicated coordination body and a dedicated planning system.