Local councils can be the vanguards of smart city reform

Artist’s impression of Sydney Metro Waterloo station.


Alok Patel

Everyone’s talking about smart cities. Local councils are in the enviable position to make them a reality.

Local government is the level of administration closest to the people, and councils are best placed to know what technologies are going to improve the lives of their constituents. In addition, local government areas can be mobilised far more quickly than they can be through the federal or state government to facilitate change.

Now, here’s the rub. Councils are also among the worst to pitch to. They are mired in complex bureaucracy and often have outdated procurement processes that are no longer fit for purpose.

We recently held a series of roundtables to examine the challenges and opportunities that smart cities present. Participants included experts in start-ups, communications, business, construction and local government.

These experts, who were able to offer different perspectives on dealing with all levels of government, named local councils as the great hope of smart cities innovation. But they also pointed to reforms that are needed to realise them.

To begin with procurement, current processes favour project delivery by big corporates (purely due to their financial ability to weather the cost of onerous government compliance and processes), typically resulting in a less innovative approach. Visionary start-ups may not even reach tender stage after being dissuaded by the abovementioned onerous procurement compliance burden.

Dump the thin, bureaucratic straw

In addition to this bottleneck, cutting-edge technology is not being deployed because there is still a central planning mentality rather than an iterative start-up mentality that could more effectively deliver solutions.

Local council hierarchy and procurement processes can slow or even stymie progress. As one participant said, “the current council structure is one CEO, five departments and 2,000 staff, using procurement processes that go back 40 to 50 years”.

While there is investment being made by the private sector in speculative technology,  there is little hope of any of this cash making it through what ends up being a very thin bureaucratic straw.

The way forward is for councils to partner with private enterprise to develop cheap, small, proof-of-concept innovations that can be quickly altered or dumped with little cost in much the same way that John Maxwell recommends that you “fail fast, but forward” – or learn from your mistakes and use what you’ve learned in your next cunning plan.

In this way the private sector can take the risk – meaning the lion’s share of the expense – while councils reap the benefits and no small kudos for improving the lives of their residents; and, importantly, saving them time and money.

Councils already showing the way

One way government could move more quickly would be to embrace the iterative approach discussed above, where technology is proven on a small scale, then picked up in other areas. This type of approach in turn lends itself to creative financing options: investments are no longer so massive that only large corporations can propose a solution.

Instead, smaller players can bid for projects using models that break investments into funding parcels over a 12 to 24-month period, with returns coming within five years.

Already, there are self-contained precincts already being built in New York City, The Hudson Yards, and Yeerongpilly Green in Brisbane, and on a smaller scale, the green space of the Finery in Waterloo, Sydney.

None of these projects would have been possible without the blessing of far-sighted local council pioneers. All are built on top of or near railway stations – the new Waterloo Metro station for Sydney’s Finery and New York City Hall extending the 7-line train in Manhattan to service The Yards.

These are just some examples of how the private sector is teaming up with local governments to create a prototype smart precinct for citizens – or in the case of The Yards, a city within a city with its own microgrid – with green spaces, pools or water features, and high levels of walkability.

While the private sector is coming to the party and acknowledging the way forward to smart cities, it is up to government give a ‘big-picture’ commitment to ensuring quality of life and happiness of its citizens.

Roundtable participants were also excited by the opportunity for smart cities to go beyond social cohesion and improve citizens’ connectedness to the government.

Improving people’s lives today

This call for a vision for the smart city and a commitment to the happiness of the people is a crucial element to come from our roundtables.

This is achievable now. While we should not be daunted by undertaking tasks that will take years to complete, what matters is wellbeing, now. And the financing options outlined above show the way forward.

With the technology we have available, Australia has the ability and the opportunity to build smart cities and improve people’s lives today.

Our goal must be an improved urban space where people can be their best as they live, work, trade and play in comfort and safety.

The avantgarde councils that will pave the way will reap rewards beyond savings, awards, recognition, swank and the glory of seeing scaled-up versions of their advances implemented around the world.

They will improve the lives of their citizens.

Alok Patel is the CEO of Azcende, a venture capital firm in the smart cities space. He is also the author of Habitats for Humans, a white paper that came out of a recent series of roundtables held in Sydney and Melbourne, which is available to download here.


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