Choosing a Smart City for Business Expansion

    This week Qualcomm held its Smart City event in San Diego, California. The company made a compelling case for smart cities, but should businesses favor them as locations for headquarters or distribution centers?  If so, how should they choose between the cities they are considering? 

    What is a Smart City?

    A smart city is a highly instrumented city where decisions are based on the data being gathered. The future is developed from that data along with the use of aggressive simulation. Smart cities should have lower traffic, better access to resources, and be safer and cheaper to operate in than cities that aren’t automated. It should also:

    • Advise a business on the ideal location in that city for that business. 
    • Be data-intensive and  have strong policies protecting privacy
    • Work aggressively to integrate every service with the related innovative technology that will optimize that service.  
    • Be more economically feasible for a business than a city that isn’t smart.  
    • Have better living conditions, more balanced housing, and more informed operational management.  
    • Be better prepared for disasters and should have eliminated those disasters that fall within a city’s resource envelope.  

    Also read: 5 Digital Transformation Hurdles and How to Get Over Them

    How Can You Tell if a City is Smart?

    It is pretty easy at the moment because there aren’t any truly smart cities yet.  However, there are several cities worldwide racing  to more efficiently use the limited resources available to them.  

    Have a CTO

    The first check is in technical competence; if the city does not have a CTO, they likely will not implement smart city technology successfully. They may have a CTO, but that CTO may not be qualified to do the job; many appointments are passed to the mayor’s donors or friends, and that approach often does not result in competency.  An incompetent CTO is arguably worse than not having one because they’ll have the authority to do far more harm than good, and may resist competent advice. I’d rank a bad CTO behind no-CTO.  

    Have a plan

    Do they have a detailed plan for the future based on data that aligns with what you need as a company?   Establishing a factory, warehouse, office, or headquarters takes time and money.  A site may seem attractive initially, but plans may make that site undesirable.  If the city doesn’t have a detailed, long-term plan or conflicts with what your company wants to do, it should be avoided, but you won’t know of these conflicts until you do your due diligence.  

    Political considerations

    Political stability is also essential when assessing a city. If it shifts between parties, then long-term plans are at risk, and you won’t be able to trust the city’s promises. This problem can be mitigated with enforceable contracts, but generally, it is safer to pick cities where leadership is stable and reliable. 

    I’ve watched several companies fail because of governmental changes that weren’t in evidence when the business started.  If the city has stable and solid leadership, it has a redundant consistent succession plan to keep promises.  

    Be data-driven

    Finally, is the city data-driven in its decision making or is it operating more on gut decisions?  It will do no good to have the capabilities of a smart city if executive management constantly ignores the data when making decisions.  

    Also read: Best Decision Making Tools & Software 2021

    Smart Cities are the Future

    Most cities are exploring smart technology to deal with many problems like homelessness, understaffing, reduced tax income, and climate change.  Done right, a smart city can help locate the business efficiently, lower operating and transportation costs, and better work with the business to assure success. 

     Done wrong, the misapplication of technology will create new problems for the city and waste funding that would have been better spent on more critical activities.  You could also have issues with privacy, demonstrations, and timely access to critical resources.  

    These potential adverse outcomes are why it is essential to understand the smart city effort and make sure the city you are considering will be advancing in ways that will enhance rather than hinder your future. Companies like Qualcomm, Cisco, and IBM are heavily invested in smart city developments and may be able to provide informed guidance while considering your choice.  

    Utilities, access, transportation, housing, security, political disruption, technical competence, a well-defined plan for the future, and a demonstrated history of data-based decision-making are elements of a successful smart city.  If they aren’t evident, you’ll need to factor in related existing and future problems.  Also, you may want to make sure the planning commission is up to speed on current sustainable building technologies and capable of providing you with the assistance you’ll need when building out your site.  

    Finally, it would be wise to review the plans for the cities where you have offices to assure plans exist and that they will be beneficial rather than harmful to your business’s future. Forewarned is forearmed, and we are entering a period of very rapid change. Most cities are not prepared for this change and likely should be avoided until this shortcoming is addressed, while those few cities that are well-staffed and have decent smart city plans should be favored as you map your future.  

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    Rob Enderle
    Rob Enderle
    As President and Principal Analyst of the Enderle Group, Rob provides regional and global companies with guidance in how to create credible dialogue with the market, target customer needs, create new business opportunities, anticipate technology changes, select vendors and products, and practice zero dollar marketing. For over 20 years Rob has worked for and with companies like Microsoft, HP, IBM, Dell, Toshiba, Gateway, Sony, USAA, Texas Instruments, AMD, Intel, Credit Suisse First Boston, ROLM, and Siemens.

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