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Lack of smart investment slows smart city benefits

UK cities spend 6% of total expenditure each year on IT - on average £23m each - yet do not tend to have the governance structures in place to join up investments across different city silos.

As a result, despite this significant investment, cities may not be reaping the full benefits they should from their technology.

However, according to new research, Delivering the Smart City, cities do not need to start from scratch financially in order to become 'smart' - rather, existing technology budgets and investment can be re-focused on 'smart' opportunities.

"Our research shows that cities are comparatively ahead of the curve in viewing IT as an essential part of their annual expenditure," said report author, UCL STEaPP Research Associate Dr. Ellie Cosgrave. "Although this is very positive, we also see that cities aren't benefitting fully from their existing investments in smart technology and could improve this through more strategic oversight. This can be achieved by sharing innovative ideas and lessons learnt within and between cities, and by creating governance structures that enable efficient cross-department working."

Lean Doody, Smart Cities Lead Consultant at Arup, said: "Smart city initiatives need to be about more than creating a few apps or a city information portal, but the techno-utopian ideal often portrayed is an unrealistic view of what we can, and need, to achieve.

"Cities need to be interconnected and information rich and IT is the enabler of this. City authorities need to approach investment in smart technologies and IT strategically and tie that investment to the long term vision of their cities."

Doody added, "Smart technology does not need to be a new cost item on the balance sheets of city governments. Rather than adding to the city's existing technology expenditure, smart technology can enable cities to get more value from their IT investment. Cities do not need to start from scratch to realise the opportunity of smart."

The new report by UCL STEaPP Research Associate, Dr Ellie Cosgrave and Arup reveals that UK city authorities spend an average of £23 million a year each on IT, which is 6% of their total expenditure.

It identifies seven principles for smart city investment 'that all cities should by cognisant of when developing their programmes':

  • Clarify the opportunity
  • Take ownership
  • Engage
  • Prepare
  • Act
  • Check & reflect
  • Repeat & share learning

Produced on behalf of the Smart City Expo World Congress, 'Delivering the Smart City' was researched by UCL and Arup with support from open data research consultancy, Spend Network. It analyses the spending patterns of eight major UK cities to gain an understanding of how much money cities are paying for technology, as well as considering whether this expenditure is 'smart'. It found that IT spend is almost double the amount the utility (3.6%) and transportation (3.6%) sectors are spending, and comparable to the amount spent by the financial services sector.

It also explores a further eight global cities, including Rio, Barcelona and London, to assess the challenges faced by city governments. The report takes learning from these case studies to outline its seven principles for smart city investment that provide city authorities with key indicators on how to successfully spend, monitor and manage their technology to create more liveable cities.

Read the full report 'Delivering the Smart City' (pdf)


What makes a Smart City 'smart'? And can 'places' or 'communities' be 'smart' too?

The Local Digital Campaign wants to know what digital and technology elements make a smart city or region 'smart' - and whether that smart technology approach can be applied to create healthier, safer, smart 'places' to improve both the efficiency of all our local service organisations and the lives of our citizens. And if the answer to that is yes, how far along the journey to being a smart place are local service organisations today?
Click here to tell us your views on Smart Places Today in this short online survey:

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