The Rise of Smart Cities

A city with free Wi-Fi in all public spaces. A city where children learn how to program apps in elementary school. Where street lighting is provided on demand. A city that uses smart sensors to tell you where to park your vehicle downtown. That knows when your garbage needs to be collected. That has open data access. That uses smart algorithms to coordinate hospital and vaccination capacities. A smart city takes action in all of these areas based on a strategic and integrated planning approach and a comprehensive and high-quality IT infrastructure.

Sounds too good to be true? Different cities already do each of these things today. But no single city exists that ticks all the boxes. A complete set of smart services is not something the world’s urban centers currently offer. In many cases, it is not even something they are planning to offer in the future. In Roland Berger’s groundbreaking investigation of 87 global cities, Smart city, smart strategy offers the first systematic study of cities’ smart strategies on such a scale, we took a close look at cities from Europe to Africa, from regional centers of less than half a million to megacities of more than 20 million. We examined their official smart city strategies and other strategic policies to discover what they were up to. And we looked at where they are headed in the coming years and decades.

The results took us by surprise. The smart city has been an agenda item for many years now and there is widespread acknowledgment that smart city strategies are of vital importance to the development of urban areas. But the situation on the ground is very patchy. Most cities are simply not taking a broad enough approach: they lack a holistic perspective that covers all parts of society and all relevant facets of urban life. Urban centers need to develop an interconnected, integrated approach, one that brings together areas traditionally viewed as separate: energy and mobility, government and health, education and environment, and so on. Their aim must be to forge a holistic smart city strategy that encompasses every area of citizens’ lives.

Reflected above are the top fifteen cities in the Smart Cities Strategy Index ranking. For the top three cities, the score is further broken down for the three criteria: action fields, strategic planning, and IT infrastructure (Source: Roland Berger, 2018)


In order to capture not just what cities are currently doing on the ground but also what they plan to do, we evaluated their published smart city strategies and other policy papers. We awarded points on the basis of various criteria and calculated an overall score out of 100 for each city — a score of 100 reflecting the utopian city imagined in the introduction. Of course, we cannot be sure that cities will ultimately realize all their published plans. Some cities may simply dream bigger than others. But stated policy aims are the best available guide to what cities plan to achieve within a given timeframe. They fairly accurately reflect the extent of their ambition when it comes to making their cities smart. At the same time, importantly, they provide valuable insight into their approach and mindset.

First, the good news: More and more cities are taking a strategic approach to becoming smart, by which we mean an approach based on a properly thought-through program consisting of integrated actions and carefully planned steps. We identify a strong increase in the number of smart city strategies published each year since 2012. Indeed, more than half of all the smart city strategies publicly available and included in our study have been developed since 2014.

The figures speak for themselves: The average score on the Smart City Strategy Index was just 37 out of 100. High performers are thin on the ground, with just 19 of the 87 cities scoring more than 50 out of 100. A sizeable gap exists between top-performing cities and their peers lower down the ranking, as shown by the sharp fall-off after the top few players. And that’s not all there is to worry about. The quality of cities’ published strategies varies not only when taken as a whole but also when we look at each of the three dimensions of the Smart City Strategy Index individually — action fields, strategic planning, and IT infrastructure. Some cities are doing almost nothing in one or another of these areas and the cities that are doing well in all three areas are few and far between.

When taking a closer look, it becomes obvious that cities’ smart strategies are often narrow in scope. They lack a comprehensive approach, tending to emphasize mobility, energy, and government topics while neglecting the areas of education, health, and buildings.

Of course, digitization is a complex field. Cities need to start somewhere. Digitizing the city transit system, the energy supply, and public access to government services is a very good starting point on the road to building a smart city. But cities also need to keep the overall picture in mind. Focusing too heavily on some areas while not addressing others that may be equally relevant or in some cases even more relevant for stakeholders creates an imbalance in the overall strategy. The result is a lopsided approach.

One key area where cities can improve their smart capabilities is coordination between their different functions. Digitization is a topic that affects all parts of the city administration. Inevitably, this is not easy to coordinate.

Our analysis of the smart city strategies published by municipal administrators often  revealed  a  silo  mentality  — a mindset in which the different functions each take their own approach to digitization. For example, a city’s energy division will develop a smart approach for its operations, the city transit section its own approach, and so on. The result? A collection of isolated projects.


The smart city has been an agenda item for many years now and there is widespread acknowledgment that smart city strategies are of vital importance to the development of urban areas


A solution to this challenge is to set up a central function or office with responsibility for coordinating and cross-linking digitization activities. Many cities have already appointed a Chief Information Officer (or CIO) to deal with IT topics. This function needs to be developed into a Chief Digital Officer (or CDO) role, a function that encompasses not only IT issues but also smart city applications and their coordination and deployment. The CIO or CDO should be positioned high up in the hierarchy, close to the mayor.

Our research shows that cities that have appointed a CIO or CDO — Vienna, Amsterdam, and Seoul, for example — reap considerable benefits. Having a central individual or office looking after digitization makes it much easier to coordinate the various smart initiatives in areas such as traffic, health, and education, for instance.

Which cities are getting it right, and why? Who are the leaders and what can we learn from them? At the top of the list is the Austrian capital Vienna, at 73 points out of 100. It is closely followed by Chicago and Singapore, both scoring just one fewer point, at 72 out of 100. The rankings for the remainder of the top fifteen are given in parentheses on the world map, from London (ranked no. 4), Santander (5), and New York (6), down to Bristol (13), Rio de Janeiro (14), and Seattle (15).

What is immediately noticeable from the breakdown of points is that high-scoring cities by and large achieve good results for all three criteria of action fields, strategic planning, and IT infrastructure. Their strong performance is based on a balanced approach and a clear commitment to all relevant areas. This reflects a degree of end-to-end, holistic thinking behind their strategy.

A closer look at each of the top three cities sheds light on the sorts of things that these cities are getting right. Vienna, a city of 1.74 million inhabitants, has a well-structured smart city strategy. It also focuses on digitization in other governmental guidelines and directives, such as its strategic land-use plan and its transportation plan. The city lays out clear short-term, medium-term, and long-term goals for digitization. Steps include investing in glass fiber and the latest generation wireless networks while maintaining already highly advanced digital infrastructures. Public services are being comprehensively shifted online and Wi-Fi expanded throughout the city in collaboration with schools, universities, and community colleges. The city actively looks for companies to sponsor smart city activities, with pilot projects run in partnership with ICT companies as showcases for the economy of both the capital and the country as a whole.

Chicago, which comes joint second in the ranking, sets out its vision for the future in The City of Chicago Technology Plan, which it describes as “a roadmap to drive Chicago to its aspirations of opportunity, inclusion, engagement, and innovation for all”. The 2.7-million-strong city is no stranger to social problems. But it boasts a particularly proactive approach to smart education, including improving citizens’ digital literacy with training and opportunities for hands-on experience, targeting young people and their use of technology through collaboration with public schools and city colleges, and making educational and creative material available to residents. For example, the city organizes the Civic Innovation Summer, a summer jobs program empowering teenagers to “use the latest digital tools to amplify their voices and take positive civic action using open data”. Chicago has also established five demonstration sites or neighborhoods to demonstrate digitization in an urban context. Public access to computers and support is provided by Connect Chicago, a network of 250 free-of-charge computer labs and digital skills training centers spread across the city.

Cities tend to focus their smart activity in the areas of mobility, government, and energy and environment (Source: Roland Berger, 2018)

Singapore, with 5.4 million inhabitants (the largest of the top three cities), shares second place with Chicago. Singapore is particularly good at forging strong public– public and public–private partnerships in all different action fields. On the public–public side, common platforms bring government bodies together and data is managed by a coordinating arm. A joint laboratory exists with the Land Transport Authority (LTA) to develop a next-generation transportation network, and collaboration with the National Healthcare Group (NHG) is taking place to set up an innovation laboratory for safer treatments. On the public– private side, there is cooperation between government and key stakeholders on every level. For example, joint innovation laboratories have been launched with large corporations as well as with small and medium-sized enterprises and technology start-ups. Singapore is also working in partnership with top universities around the world, including the Massachusetts Institute of Technology and the Swiss Federal Institute of Technology in Zurich, to generate new smart city solutions.

One thing clearly demonstrated by the Index is that top-performing cities come in all shapes and sizes. You don’t have to be big to be beautiful — or at least, to be smart. Smaller cities such as Santander and Parramatta have exemplary, well-balanced strategies despite their size: both have fewer than 200,000 inhabitants but are in the top 10 in the Index. Some of the biggest cities in the Index rank in the Index’s bottom third.

So, if size doesn’t matter, what about money? We made sure that our sample included both wealthy and not-so- wealthy cities. The results show that, in general, wealthier cities do come up with better strategies: A positive correlation exists between the economic performance of a city and its position in the Index. But being rich is not a prerequisite for success. Some cities with more modest per capita GDPs have also published very good strategies — cities such as Rio de Janeiro in Brazil, and Bhubaneswar, the capital of the state of Odisha in Eastern India.


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