Digital Infrastructure for Cities Leads to Big Savings

It's not only enterprises that need to make the digital transition; the public sector must do so as well. Citing Houston, Stockholm, Barcelona and Oslo, a Cisco report says $2.3 trillion can be saved in the public sector by 2024 if cities build out new digital infrastructures.

Nearly half of the savings can be realized by giving city workers the digital tools and applications they need to support their work, particularly those who spend most of their time outside the office, such as building inspectors, social workers, even garbage collectors, said the Cisco authors of the report in an interview.

The report, Digital Cities: Building the New Public Infrastructure, was written by Joel Barbier, Kevin Delaney and Nicole France, and is available for download here. A graphical summary of its conclusions is also available here.

The trio attempted to sum urban experiments in digital efficiency around the globe, citing a combination of energy and hours saved, costs avoided and city revenues gained through a more efficient, digital operation. "The item you tend to see on the books is cost savings," noted Barbier during an interview with the three authors. But cost avoidance and new patterns of urban service delivery produce major savings as well.

Want to see how cities can help make public networks more secure? How Smart Cities Can Minimize the Threat of Cyber Attacks.

New forms of urban activity, such as ride sharing through Uber and Lyft, are not directly public sector savings. But they lead to new traffic efficiencies that relieve congestion, demand on parking and crowded public transit. In the public sector, something like networked street lighting based on LED bulbs would result in a lighting system that could be turned up or turn down, based on the amount of activity in the street and how dark it is.

Networked employees with the ability to use advanced tools and smart phones would require less office space. Barbier recalled a visit to the French Ministry of Environment and Industry in which it seemed to him that every other office was empty. If unused office space were redesigned as open office collaboration space, the number of printers and other appliances and amount of power consumed could be shrunk, he predicted. The amount of empty office space in many city buildings is probably significantly less than half, he acknowledged.

Networked employees with tele-meeting tools might require less meeting space and still be able to work effectively, added France. Well-equipped city employees with good network connections represent a $1.1 trillion savings in operations in cities around the world, the report claimed.

The comment brought up a recurring theme. Before cities can leverage gains from digital operations, they need a widely installed broadband and WiFi infrastructure. Workers in the field with instant links to the office will be more efficient than those who must report to the office to make out reports. "Think of a pothole inspector with a tablet linked to his office," said Barbier and precise geographic positioning information.

Cisco has set a goal to so equip its employees with digital tools that the number of pages an employee needs to print each year will number less than 1,000. Digital-oriented companies accomplish tasks with an application; traditional companies typically consume a piece of paper per task accomplished; government offices consume 28 pieces for a similar task. The authors said the average French public sector employee prints 20,000 pages annually.   

"The elimination of printing wasn't our idea of a cost driver going into the study," said Barbier. It's such a large cost that significantly reducing it helps fund the next stage of building out the digital infrastructure, he claimed.

The authors interviewed Bob Bennett, chief innovation officer in Kansas City, for the report. He noted how the addition of Wi-Fi and broadband networking along the city's light rail corridor allowed the city to monitor traffic and keep electric street cars moving. Cameras were installed along the route, giving rail managers constant feedback. The networking also seemed to spur many types of economic activity along the corridor, leading to a 58% increase in sales tax revenue derived from businesses along the route. That outcome allowed the city to keep the electric street cars available for free for city users, when the plan had been to start charging for rides.  

Delaney said many digital initiatives in cities occur as stand-alone projects. City sewage workers in Los Angeles pointed out that it rains infrequently in the city, but when it does, the run-off causes the sewage system to overflow. If the city had a network of sensors on where the runoff was building up, it might be able to better manage its releases into the ocean.

Delaney said a stand-alone, storm sewer network to report sensor data might be prohibitively expensive. But the authors found a city network already existed. one that had been built for the police. The authors don't know if the city considered it practical to piggyback the sensor data on the police network. "Sometimes the city pays for digital infrastructure but doesn't always reap the potential benefit," he said.

Public WiFi and broadband networks will not be useful unless they are built with security in mind. The City of San Diego built a broadband network but found it was the target of "incessant, daily attacks, robo attacks" numbering 500,000 a day, said Barbier. Being prepared and protected from them meant $1.3 billion in savings as citizen network use avoided being compromised. It wasn't made explicit over what time period the savings accrued. If networks were similarly protected worldwide, the savings would amount to $29 billion.

Smart meter use in Houston lead to 100 million minutes of electricity outage avoided between 2011 and 2016. Similar use of smart meters in cities around the world would lead to a $401 billion savings, the report said.

With an interconnected street light system, Oslo is saving 20% in electricity costs off its older system, or $1.1 million annually. If cities around the world followed suit, the savings would amount to $240 billion, the report said.

Stockholm implemented congestion charging based on sensor data on drivers coming into the heart of the city, leading to a 20% reduction in traffic and a 2-3% increase in the use of public transit. Implemented worldwide, congestion charging would save cities $188 billion in costs according to the authors.

In Barcelona, kiosks allow citizens to see traffic congestion, learn public transit schedules and public safety information and offer feedback on city conditions to city departments. The resulting efficiencies would be worth $147 billion worldwide, the report claimed.

Schools in Miami-Dade County saved half of their electricity costs by allowing the lighting system to shutdown lights in empty rooms and otherwise align lighting to building needs. If applied to lighting, heating, and cooling in cities around the world the move would save $66 billion, the report said.

France said the pay-off occurs when solid digital infrastructure can be established and digital services start generating information and feedback that can be used to improve each other. "We're looking at these investments as related to each other," she said. Not all the possibilities for savings or interrelated services have been discovered at this early stage of public-sector digitization, she said.