The concept of Smart Cities offers the promise of urban hubs leveraging connected technologies to become increasingly prosperous, safe, healthy, resilient, and clean. What may not be obvious in achieving these objectives is that many already-existing utility assets can serve as the foundation for a Smart City transition. The following is a broad discussion on the areas of overlap between utilities and smart cities, highlighting working knowledge from experience at PG&E.
The world isn’t as flat as we thought: Mobility is key to closing economic divide
Long-term trends will change the global economy, putting unique strains on both large cities and outlying areas. PwC has identified five megatrends actively shaping our world: rapid urbanization, technological breakthroughs, shifts in global economic power, demographic and social change, and climate change. These trends combine to create a geographic and economic divide—booming cities that produce up to 90 percent of US GDP growth but grapple with spiraling housing prices, strained infrastructure, and outlying areas at risk of stagnation and brain-drain.
Mobility—the ease with which people, goods, and ideas can move from one location to another—is a powerful lever that all communities, urban and rural, can use to manage the forces that are fundamentally reshaping states and cities. No matter the population density, mobility is the key to creating a vibrant economic future.
During the early 2000s, many thought that the internet and digital connectivity would make geography irrelevant. The ability to work on just about anything from just about anywhere held game-changing promise—the world would be flat, allowing low-cost areas to compete for high-value jobs. To be sure, we’ve seen a great deal of relocation. Some organizations, for example, have shifted back-office operations from financial centers to less costly smaller cities. And remote work arrangements are increasingly acceptable.
Broadband is crucial for business, but it has not supplanted geography. Many jobs still necessitate the physical presence of their employees. For highly skilled knowledge workers, the benefits of dense networks of innovation and opportunity clearly outweigh the costs, especially when the workers are early in their careers. The push for these networks means workers living in or driving into urban areas that are becoming increasingly expensive.
Faced with this widening economic and geographic divide, how can cities and states keep urban areas accessible and less populated areas vibrant? The answer is in promoting mobility. Giving people, goods, and ideas the means to move to economic opportunity is an essential tool for creating sustainable growth. Increased mobility can boost any economy—local, regional, or national.
What constitutes “mobility,” however, is projected to change radically in the future. Autonomous vehicles, electric vehicles, and app-based, on-demand mobility are all predicted to reshape the landscape. These innovations will create new jobs requiring new skills in design, operations, and maintenance; and eliminate others, or make them more contingent (e.g., drivers). Our changing mobility options will create a new kind of competition between cities and states.
In this dynamic and uncertain future, cities that invest in good strategy and skillful execution to offer real mobility options will capture new economic opportunities. To that end, I want to highlight several important opportunities for governments to lead on this key issue:
Governments increasingly understand the importance of strategic urban planning to solve complex, overlapping issues. For mobility, which spans so many important components, an integrated approach is the key to success. At PwC, we had the privilege of working with the city of Los Angeles on its innovative Sustainable City pLAn to address the environment, economy, and equity. Mobility was a key lever on each of those three goals. Tackling Los Angeles’s infamous traffic challenges, for example, required a cross-departmental approach. We helped the city focus on investments in rail, bus lines, bike-share, and pedestrian and bike safety, while at the same time reducing vehicular travel distances by locating new housing near transit and planning for “complete neighborhoods” where most needs are met nearby. The plan also identified mobility innovation as a source of new jobs, and helped position Los Angeles as a key location for this part of the 21st Century economy. As the city nears the two-year anniversary of the plan, it is on track to meet or exceed most of its short-term goals—integrated planning drives real change.
Think Regionally to Drive Growth and Opportunity
As economic opportunity concentrates itself into urban centers, cities increasingly need to think as regions in order to thrive. It is crucial for rural areas and small- and medium-size cities to link up with larger megacenters if they are to capture economic benefits; the alternative is to risk economic isolation and decline. The future economy is likely to exacerbate low-skill unemployment and contingent employment, but reliable access to jobs, education, and markets can change that. And increasing access to education is directly correlated with a state-level increase in per capita income. At the same time, megacenters can manage infrastructure and price strain by integrating with a larger, more diverse area. Achieving this integration requires new and different deployments of rail, broadband, and emerging mobility types, but the benefits are substantial. Lots of states across the country are considering or expanding mobility links between high and low income areas: for example, Boston is considering linking its expensive jobs center with low-income neighborhoods and post-industrial cities. And many other cities are piloting new forms of mobility, as is the case with Boston, Ann Arbor, Palo Alto, Pittsburgh, and others allowing autonomous vehicle tests. Nonetheless, very few areas truly function as regions, leaving the opportunity for differentiation with a bold, mobility-oriented regional approach.
Prepare For New Needs in a Digital Future
Many emerging forms of mobility, such as self-driving and connected cars or app-based ride-hailing, rely on digital access. Reaping the full benefits of these technologies requires substantial upgrades to digital infrastructure. These upgrades are needed in cities, where existing infrastructure is stronger but still insufficient and often inequitably distributed, as well as in outlying areas, where existing infrastructure is often patchy at best. Because digital access is unequal both within cities and across regions, new transportation modes that merely follow existing infrastructure will exacerbate existing problems such as traffic and economic inequality. For example, autonomous transport is most likely to be introduced in and serve high-income commercial districts. In order to make the most of the mobility future, cities and states need creative, comprehensive approaches to develop digital infrastructure in ways that promote more equitable access. Los Angeles, San Jose, and New York are looking at street light poles, schools, and other equitably distributed city assets as city-wide connectivity enablers. Bringing existing light poles online would require low capital outlay, create revenue potential, and, if managed properly via policy frameworks, equalize digital access. In rural areas, digital infrastructure improvements will allow for more economic opportunity, reducing some of the pressure on the mobility system in the first place. There is also potential, even in this tumultuous political climate, for bipartisan consensus on much-needed physical infrastructure spending on rail, bridges, and roads.
Compete For Talent and New Types of Jobs
The mobility economy will create whole new industries, including data platforms, equipment-servicing centers, recreation, advertising, and others that we struggle to imagine. High-salary jobs are likely to cluster in a few innovation centers (and several regions including Detroit, Silicon Valley, and Israel, are vying for this niche). But the service portion of technology-enabled mobility will be more broadly distributed and will also require new skills. Technicians, operators, and support staff will all need digital literacy and 21st-Century adaptability to engage with technologies that have not yet been invented. Public sector entities that foster an educated and resilient populace are well-positioned to harness the future of mobility, improve their citizen’s lives, and earn a disproportionate share of these new jobs to their region.
Don’t Forget Air Travel
Mobility discussions often become narrowly focused on commuting, but strong air links remain an important economic driver. Our recently released report, Future-ready airports, shows how airports catalyze regional economic growth by connecting people and cities. A global manufacturer recently announced it was leaving its long-time home in a small city for a major metropolis, citing access to mobility, and global air links in particular, among its key motivations. And yet, national investment in airport infrastructure and services is projected to fall short by a whopping $75.7 billion by 2019. By viewing airports as an economic asset and planning accordingly, cities, states, and businesses can realize significant gains, including job creation and increased business interactions, trade, and cross-sector investment.
Mobility is a central lever for achieving the difficult, interconnected goals of cities and states: economic opportunity, global competitiveness, and “a good life” for residents. The economic pressures to divide America will only intensify, but forward-thinking approaches can help regions thrive for the next century. Improving mobility is neither simple nor easy, but it is well worth it to deliver the benefits to residents, communities, states, and our country as a whole.
On June 20, 2017, 120 mobility and climate leaders will convene in Cambridge, Massachusetts, to discuss the future of mobility in the face of climate change in the Boston region. This summit aims to harness the ingenuity and innovation already underway in the Commonwealth as well as the expertise of invited global thought leaders with best practices directly applicable to Boston’s challenges. If you are interested in attending this invite-only summit, please fill out this application: http://meetingoftheminds.org/events/boston. Please note that the summit is full and only waitlist spaces are still available.
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Spotlighting innovations in urban sustainability and connected technology
When the idea of smart cities was born, some ten to fifteen years ago, engineers, including me, saw it primarily as a control system problem with the goal of improving efficiency, specifically the sustainability of the city. Indeed, the source of much of the early technology was the process industry, which was a pioneer in applying intelligent control to chemical plants, oil refineries, and power stations. Such plants superficially resemble cities: spatial scales from meters to kilometers, temporal scales from seconds to days, similar scales of energy and material inputs, and thousands of sensing and control points.
So it seemed quite natural to extend such sophisticated control systems to the management of cities. The ability to collect vast amounts of data – even in those pre-smart phone days – about what goes on in cities and to apply analytics to past, present, and future states of the city seemed to offer significant opportunities for improving efficiency and resilience. Moreover, unlike tightly-integrated process plants, cities seemed to decompose naturally into relatively independent sub-systems: transportation, building management, water supply, electricity supply, waste management, and so forth. Smart meters for electricity, gas, and water were being installed. GPS devices were being imbedded in vehicles and mobile telephones. Building controls were gaining intelligence. Cities were a major source for Big Data. With all this information available, what could go wrong?
If you want a healthier community, you don’t just treat illness. You prevent it. And you don’t prevent it by telling people to quit smoking, eat right and exercise. You help them find jobs and places to live and engaging schools so they can pass all that good on, so they can build solid futures and healthy neighborhoods and communities filled with hope.