• To be successful, smart cities must be able to deliver a range of benefits to residents and businesses.
  • Integrated cities derive value from data, which must be governed and managed securely, with consent and anonymity.
  • A strong foundation is critical, and can be created by following seven best-practice steps.

The golden rule of smart economics could be this: the more high quality data that goes in, the more value it creates. Yet, as our report, The foundation for smart city success: Seven layers of data governance and management, reveals, not all data — and therefore not all smart cities — are created equally.

Currently, many smart cities are really just isolated smart projects: services that are valuable — such as LED street lights or pothole reporting — but without an integrated ecosystem, these point services lack the granular data and sources that lead to exponential value growth. When initiatives are connected, and data shared between them, more sophisticated systems become feasible. For example, using the data from smartphones, smart transit cards and facial recognition-enabled payment mechanisms as part of a city-wide payment system roll out.

But whether building a smart point of service, or a smart ecosystem, data governance and management is becoming increasingly imperative. No longer just a good idea, it may amount to the critical difference between an initiative that wins stakeholder support, and one that becomes mired in delays and controversy. A top-notch data strategy, however, can deliver new profits for businesses, new revenue streams for government, a more fertile environment for innovation, and better services for residents and local businesses; all in support of sustainable growth. 

Seven layer
city success

Analysis of global best practice indicates that the most successful strategies for public and private entities are built on seven layers of data governance and management. Using this model, smart cities — and the companies that help build and operate them — can achieve a digital ecosystem where data is properly prepared, processed for consent, securely collected, anonymised and stored, and offers a platform for rapid, innovative monetisation. In brief, the seven layers are:

  1. Data Categories — Smart cities will ingest data from multiple systems, from traffic sensors to mobile phones, IoT to electrical grids. This data will form many categories, some that are still to be imagined. Smart city stakeholders must build data governance and management that is ready for all categories of data, not just the ones in their current projects. This means assessing current and future categories and building a scalable, flexible, modular design that can treat categories differently as needed.
  2. Consent — Most smart city projects today don’t tell people what data they are collecting, for whom, or what will be done with it. Informed consent is a challenge. Citizen-centric data governance and management needs to offer individuals an easy way to understand their data’s use, benefits and ability to opt-in and out (which should be encouraged at regular intervals). 
  3. Collection — Data must be categorised, but also standardised, verified, encrypted and analysed — even as it arrives in different formats and from different channels. Many IoT devices currently lack the ability to parse data before transmission or the bandwidth to robustly encrypt it. Smart data strategies will need to address technology requirements for today and tomorrow. Powerful and sophisticated data architecture will be needed to deal with immense amounts of information that will come from networks such as 5G.
  4. Anonymisation — With more connection comes more risk of cyber intrusion. To deal with this risk, the best way to protect data is to anonymise it. Anonymising data by design, from the source before it is stored, is a necessity, especially in a world of AI where patterns can be detected in large amounts of seemingly unrelated data. Anonymising from the start will help keep privacy intact and reassure citizens. 
  5. Storage — No matter how data is stored, be it in the cloud or otherwise, cities will need to be able to retain and fully secure the right parts while eliminating the rest. Policies on data retention and elimination need to meet operational needs and comply with local regulations. Storage of data will also need to be protected by a strong business continuity plan and resiliency/recovery programs in case of disaster or outage.
  6. Access — Given the size and complexity of a smart city, it’s rare that one stakeholder owns all the relevant data. Management models will need to offer secure access to different groups (such as residents, research firms, public sector entities, etc.) Different types may need different access parameters. 
  7. Monetisation — As mentioned above, good data in should translate to good value out. Governments and companies will need the above six layers in place and advanced analytics capability to ensure that they don’t miss out on valuable intellectual property opportunities. To support innovation, cities will need a data monetisation framework and structures in place to rapidly assess the risk of use cases, and grow their value. A citizen-centric lens to monetising will win the greatest buy-in.

Using these seven layers, public and private stakeholders will be able to create a strong base to build smart cities on. To do so, roles and mandates must be transformed to turn data into value and win public support. Local and federal authorities, such as privacy commissioners, will need to be engaged, as will smart infrastructure providers, and external data governance and privacy experts. Critically,  the public must be rigorously consulted through digital and physical means. 

A tale of
two cities

Cities have two potential futures when it comes to proceeding with their smart build. A flawed data governance and management strategy can cripple smart city initiatives — leaving significant value on the table and increasing the potential for a public or regulatory backlash which could end the project altogether. Declining services and falling revenue bases will lead residents and businesses to flee to places with better quality of life and ease of commerce. 

On the other hand, with smart infrastructure and superior services that are set up according to best practice — like the seven steps above — cities can look forward to happy residents, low taxes and a light environmental footprint. Sustainable growth and an environment that attracts growing and innovative businesses along with top talent will inevitably follow. 

These cities will realise their potential benefits, both financially and in the quality of life of their inhabitants, but to do so they need the critical foundation that will allow them to be fully realised: a high-quality data governance and management strategy. 

The smart course is clear. 


For real world examples of smart cities that have successfully implemented best-practice data governance and management, download the full report, The foundation for smart city success.

 

Contributor

Greg Chiasson

Greg is a principal in PwC US’ Capital Projects and Infrastructure (TMT) team.

More About Greg Chiasson

Contributor

Michelle Holland

Michelle is a director in PwC Canada’s Consulting & Deals team.

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