Why U.S. cities are lagging behind Europe's smart cities

Wed, 2014-04-23 06:00 -- Jesse Berst

 
New York Times article earlier this week suggesting Europe remains a step ahead of the U.S. in creating smart cities garnered a lot of attention on Twitter and elsewhere. Even though Europe was hard hit by the recent financial crisis, the Times cites analysts who say cities like Barcelona, Copenhagen and Hamburg are keeping the continent on the smart cities forefront.

And they're doing it by enlisting the private sector's help and taking advantage of technologies like smartphones and tablets.

“Europe has embraced the [smart city] concept more than the U.S.,” said Bas Boorsma, a director at Council Global Partner Cisco Systems who helps cities upgrade their infrastructure. “It will always require partnerships between the private sector and government, and Europe does that better.”

As the NYT story points out, infrastructure upgrades have led to agreements between European cities and some of the world’s largest technology companies, including Council Global Partners IBM and General Electric.

"By deploying their technology in citywide pilot projects, these companies say they can test new business models and other services that might have worldwide appeal," the Times reports.

In the Council's Smart Cities Readiness Guide, public-private partnerships are described as part of the "secret sauce" that turns the idea of a smart city into reality. As the Guide notes, too often cities consider only a single “traditional” method to finance the technology it needs. In some regions, that method may be funding from the central government. In other parts of the world, it may be municipal bonds. But in an era when so many municipal budgets are already strained, cities need to explore the widest possible range of funding mechanisms – and public-private partnerships should be at or near the top of that list.

The Council's recently released Smart Cities Financing Guide also discusses the merits of public-private partnerships as one of 28 municipal finance tools cities should consider to pay for smart technologies. As the Financing Guide points out, public-private partnerships are probably the most complicated financing tool available to cities, but one that more and more cities are embracing. These partnerships can take many forms, but they generally seek to balance responsibilities, risks and rewards among all parties involved, aligning the public good with commercial objectives designed to enhance the private sector’s bottom line.

Both the Smart Cities Readiness Guide and the Financing Guide are available for download with a free, one-time registration. Register now >>

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Jesse Berst is the founding Chairman of the Smart Cities Council. Click to learn about the benefits you receive when you join the Council for free.