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ESI ThoughtLab study finds that cities could unlock a combined $60 billion in returns by becoming fully hyperconnected

ESI ThoughtLab study finds that cities could unlock a combined $60 billion in returns by becoming fully hyperconnected

Today, ESI ThoughtLab announced the key findings from its Building a Hyperconnected City program, a year-long global study of 100 cities using technology to connect all areas of their urban ecosystem. The study, supported by a coalition of industry leaders, shows how forward-looking cities can generate a virtuous cycle of economic and social benefits by linking key elements of the urban landscape—from buildings to roads, cars, and street lights, to police departments and citizens, to government, businesses, and universities. ESI ThoughtLab economists estimate that, worldwide, cities could collectively enjoy a return on investment of $60 billion if they were to become fully hyperconnected.

The findings were officially announced at the Smart City Expo World Congress in Barcelona, Spain during a keynote speech by Lou Celi, CEO of ESI ThoughtLab. According to the research, the average return on investment on hyperconnected initiatives ranges from 3 percent to 4 percent. As cities become more interlinked, their ROI grows. Returns in dollar terms can range from $19.6 million per city for hyperconnected beginners to $83 million per city for hyperconnected leaders—and $45 million each for the average city. This is on top of the sizable social, quality of life, health, and environmental benefits.

However, to achieve those gains and unlock the full value from technology, hyperconnected urban centers must follow these best practices:

  • Craft an evidence-based business case and continuously monitor performance—analyzing ROI systematically with the right metrics.
  • Calculate the full benefits including social, business, economic, and environmental benefits
  • Capitalize on advanced technologies—particularly various forms of AI—while also bearing in mind the importance of cybersecurity.
  • Generate more value from data by gathering, integrating, and monetizing it in a responsible way, as well as sharing it with stakeholders as appropriate.
  • Organize resources within a largely centralized department and use both internal and external staff to operate smart city programs.
  • Use the ecosystem effectively, partnering with business and academic communities, but keeping crucial development and implementation tasks in-house.
  • Ensure all citizens are engaged and connected by seeking input from stakeholders and reaching out to disadvantaged populations.

“The real value comes not just from using technology to link assets within urban areas, such as mobility, safety, energy, and sustainability, but also from connecting city stakeholders, including government, citizens, businesses, and academia. When these are all aligned, cities can reap the greatest economic, business, and social rewards,” said Celi.

To become hyperconnected, cities must also overcome a series of roadblocks. Backlash from citizens and other stakeholders who feel their health, privacy, or other interests will be compromised by new technologies is one of the thorniest. The study found that cities like Moscow, Barcelona, and Stockholm alleviate this pushback through effective communication and outreach to build citizen trust and engagement. Funding for smart initiatives is yet another hurdle, but there are many possible solutions, both public and private, that leaders around the world have adopted. Cities must also overcome policy and regulatory barriers—such as those around procurement—to get where they are going. And they must pay close attention to cybersecurity, since the costs of not doing so can mount into the millions.

“Getting past these roadblocks may not be easy,” said Celi. “But the journey to hyperconnectivity will provide tremendous dividends to all city stakeholders—from citizens rich and poor, to residents young and old, to workers skilled and unskilled, to businesses large and small.”

To access the findings and publicly available materials from the study, visit: https://econsultsolutions.com/esi-thoughtlab/hyperconnected-city/