The Numbers are In: McKinsey Measures the Impact of Smart Cities

Source: Smart Cities Connect

By Chelsea Collier

Cities are being asked to do more with less and smart city technology promises increased efficiencies, reduced costs and an enhanced quality of life for residents. But how can city leaders quantify that promise? What are the numbers behind the impact to processes and to people? Historically, those answers have been elusive but no more.

The McKinsey Global Institute just published “Smart Cities: Digital Solutions for a More Livable Future.” This is dense report describes the opportunities associated with smart cities, provides frameworks and most importantly, quantifies the impact in ways that we can all understand and interpret.

The study focuses on the global community with a “snapshot” of 50 cities around the world. No two cities are alike. There are communities with both high and low income, and lots of variety when it comes to factors like density, infrastructure quality, and size.

The most challenged cities have the most to gain from smart city tech

Instead of the usual popularity contest and ranking, the team who compiled the report admits, “our intention is not to crown the world’s smartest city but to show the full sweep of activity under way around the globe.”

They included some of the world’s most cutting-edge cities as well as those who have challenges that seem overwhelming to overcome. The finding is that all cities “have more work to do” and that the cities that seem furthest behind are the ones that could see the most value from integrating technology and data to make better decisions. And that value is quantified in dollars. The McKinsey Report finds “half of the initial investment made by the public sector could generate a positive return, whether in direct savings or opportunities to produce revenue.”

70% of the Sustainable Development Goals can be advanced

The Sustainable Development Goals (STGs) are a framework created and supported by the United Nations (UN) to clarify and quantify the challenges and subsequent progress of global issues like poverty, climate change, healthcare, etc.  This 2017 report provides an update and also highlights a focus on how technology can help move some of these success metrics forward.

The McKinsey Report also supports that technology can create a positive impact in these complex issue ares. Here is a small sampling of the statistics offered in the study:

PUBLIC SAFETY

• Cities that deploy a range of applications to their maximum effect could reduce fatalities from homicide, road traffic, and fires by eight–ten percent.
• In cities that use smart city technology, incidents of assault, robbery, and burglary could be lowered by 30–40 percent.
• Optimized dispatching and synchronized traffic lights could cut emergency response times by 20–35 percent.

HEALTH

• Smart city technology has the potential to reduce Disability-Adjusted Life years (DALYs) by 8 – 15 percent. DALYs are the primary metric used by the World Health Organization to convey the global disease burden.
• Remote patient monitoring systems, which take a proactive and preventive approach to treatment, have the potential to reduce the health burden in high-income cities by more than four percent.
• In low-income cities with high infant mortality rates, data-based interventions focused on maternal and child health alone could reduce DALYs by more than five percent.
• Developing cities can also achieve a five percent reduction by using infectious disease surveillance systems to stay a step ahead of fast-moving epidemics, as public health officials did during the 2016 Zika outbreak that spread from Rio to Miami

ENVIRONMENT

• Deploying a range of applications to the best reasonable extent could cut emissions by 10–15 percent, lower water consumption by 20–30 percent, and reduce the volume of solid waste per capita by 10–20 percent.

CIVIC PARTICIPATION

• The use of digital apps and platforms could nearly double the share of residents who feel connected to the local community, and nearly triple the share who feel connected to local government.

MOBILITY

• Smart city technology results in 15- 30 minutes shaved off the average daily commute.
• By 2025, cities that deploy smart mobility applications could cut commuting times by 15–20 percent, on average.

Can Technology Restore Trust?

“Technology can change the relationship between municipal governments and the people they serve.” This statement is perhaps the most compelling statement in the report, and there are many to choose from.

Technology is great, but it the revised relationship between people that will be the determining factor for the advancement of our society. Trust is at the epicenter and without it, we will continue to have a hard time with this new urban reality.

“Constituents can engage in two-way conversations with public officials and agencies via social media and interactive mobile apps. Cities can use technology to take the pulse of public opinion on a wide range of issues, using public feedback as the basis for making continuous improvements to the system. To that end, smart city efforts need to be transparent and accountable to the public.”

“Technology may have the potential to be alienating, but cities can turn that on its head by actively looking for ways to use it in the service of building real-world community and personal connection.” This statement with all of its hope and promise, is reason enough to keep exploring new innovations and revised approaches to making our cities smarter and more connected.

For a full copy of the report, click here.