While doing some online research I stumbled on an interesting report about smart cities. The IMD Business School started publishing an annual Smart Cities Index in 2019 and I was reviewing the 2020 edition. I expected to see several U.S. cities in the top 10 but surprisingly, there was only one: New York, of all places. And out of the top 50? There are a total of 12 U.S. cities, with yet another surprise: tech-centric San Francisco dropped down from 12th to 27th.
Instead of finding a chunk of the U.S. taking up much of the top 50 cities, Europe and Southeast Asia make up the bulk of the list. Admittedly, it’s probably my U.S.-centric view of the world that set me up for this. Even so, why is the list the way it is? After some deep thought, I have some ideas.
One data point used for the survey isn’t what you’d expect
I figured some analysis was done to rank the cities. And some was done. But citizens were also asked about perceptions of their own “smart city”:
The Smart City Index ranks cities based on economic and technological data, as well as by their citizens’ perceptions of how “smart” their cities are.
Given these parameters, I can see why cities in Europe and Southeast Asia would still rank higher. Here in the U.S., we might think we’re the technological capital of the world. But the reality is when used as proxies, certain technologies are more advanced overseas.
Go to Singapore, the number one ranked “smart city” in the report and you’ll see average broadband speeds of 252.68 Mbps according to SpeedTest’s global rankings. That’s good for the second spot in those rankings while the U.S. is 12th on the list, averaging speeds of 195.45 Mbps. If you ask someone from each country about how “smart” their cities are, I’m sure broadband speeds and other similar factors will heavily impact their perceptions.
Cities higher in the ranking care more about infrastructure
What do Singapore, Helsinki, Zurich, Auckland, and Oslo all have in common? Besides being the top five smart cities in the 2020 report, they’re all known for robust, modern urban infrastructure. The U.S.? Not so much although there are few exceptions here and there.
Looking at public transportation, for example, a 2018 McKinsey report highlighted 24 cities around the world as the best (free account registration required). The results are based on 80 questions around these five attributes: Availability, affordability, efficiency, convenience, and sustainability.
In the top 12, there are two U.S. cities: Chicago ranked 9th and New York grabbed the 11th spot. Looking at the remaining 10, I see that most of them are high on the “smart cities” chart from the IMD Business report. Singapore is again number one with technology-forward cities such as Hong Kong, London, Madrid, and Seoul also in the top rankings.
Sure, every country (and even every city) has different priorities and budget constraints; it’s not about the politics here. This is simply about which regions invest more in public infrastructure. And I think public transportation is one of many infrastructure segments that influence the perceived level of technology. Again from the McKinsey report:
…many cities surveyed continue to develop rail infrastructure, and enhance travel comfort and intermodality as part of their transport strategies. Other positive changes such as in electronic services, ticketing systems, and shared transportation are driven by rapid technology development.
Pricing and the carriers
Here in the U.S., an IoT sensor is likely to be paired up with a cellular carrier. You’re going to get great coverage of course, but it’s going to cost you. The least expensive LTE Cat-M1 from AT&T is $2.99 up-front and $0.99 per month. That’s a cost of roughly $15 a year, per device for 500 Kb monthly. A similar plan from Verizon? It’s $1.50 for the LTE CatM-1 SIM card and $1.50 per month per device. That doubles your usable bandwidth to 1 MB of data over AT&T and it costs $19.50 for the first year.
Over in Europe, there’s another option from Sigfox, which is a proprietary IoT messaging network. And you can see by the Sigfox coverage map, it’s widely rolled out in Europe to compete with carriers as opposed to U.S. options:
Simply put, this lower-priced option isn’t widely available in the U.S. And that’s a shame because it’s cheaper. After currency conversion, you could pay $13.17 per device for 140 daily messages with Sigfox. Does your smart city sensor only need 50 or fewer daily messages? You can drop your monthly cost by a third.
I’m not suggesting that Sigfox is the best IoT network to consider or that we don’t have non-carrier options in the U.S. But there are more choices in non-U.S. cities as the carriers here want to follow the same business model they did with mobile broadband for phones and tablets: Lobby hard and keep competition outside of the carrier space. And if you’re building a smart city in the U.S., how does that help you make the effort cost affordable?
It doesn’t, which is why I hope smart city developers look at non-carrier options such as Amazon Sidewalk, general LoRaWAN implementations, and Twilio, to name a few. The less expensive it is to connect thousand or even tens of thousands of smart city devices in the U.S., the more likely smart city projects can actually be deployed.
Perhaps is simply because there is little or no ROI. And that there are far more pressing physical infrastructure needs to be addressed.
Ken Schleede says
It appears the report is a large number of factors which you don’t list and some that are speculative in connection to user perceptions. Since some of the speculation is by the McKinsey company I highly question their conclusions. McKinsey is a company that is highly leveraged by SE Asian countries. The London and Oslo comparisons are interesting. Singapore is an odd situation and not easy to compare to the US. It is a city-state and hemmed in by natural borders that enforce a high population density and clear “in or out”. New York and Chicago on the other hand are cities but in surveys anyone anywhere near them are lumped into them and not distinguished. So, you get a lot of comparisons that are not valid. Trains and IOT and things that work well in a high-density market don’t make as much sense in the medium and low density regions. If you could show us more of the questions that might tell us more.
Fazal Majid says
A city can certainly deploy LoRA routers throughout to support any IoT deployment, in fact they would be insane to leave themselves to the tender price-gouging mercies of the cellcos.
Unfortunately if the IoT is to support public safety, e.g. shutgun detectors, they will probably be forced to use the grotesquely overpriced Project 25 standard (where the government in its infinite wisdom did not think to cap royalties on the proprietary voice codec mandated by the standard, thus giving that company a license to print money).
More generally, US local government suffers from cost disease, where any kind of public infrastructure costs 2x to 3x what it would in our European or Asian peers, in part due to entrenched unions, a legal system that is overly attentive to NIMBYs or others interested in blocking progress, and other factors.
It’s not surprising in an era of constrained budgets with entrenched constituencies vigorously guarding their turf, there is little room to fund innovative projects. Any progress will have to come from the private sector, but most Smart City projects do not have obvious monetization paths to support such.
Lawrence K says
I don’t think we Americans really care about “smart cities” in the slightest. We don’t even want to share our internet with a neighbors key chain at the end of the sidewalk. We would rather save money than spend it on Gigabit internet if we really only need 50mb for the latest episode of See.
Smart Cities are like Soccer matches. We could care less if we cared at all.
Lawrence K says
Not to mention American’s don’t even trust our own tech companies and carriers. Its not like we are rushing out for the newest gadget. We refuse to let one smart speaker in our homes because it might be listening while we praise another company for exploiting all our other data.
Maybe the survey is skewed in the wrong direction. American cites are the smartest because we have the least technological intrusions.