US Smart City Market

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US Smart City Market

Civic engagement sees citizens work together for the betterment of the community, addressing any issues of public concern while maintaining the quality of life in the community. Radnor, PA, was recently recognized for the efforts it is undertaking in civic engagement. It has invested heavily in software over the last few years, including Open Finance, a financial transparency platform. Corpus Christi, TX, will observe Martin Luther King Day for the first time in 2020, hoping it will become an annual day of service in the future. San Francisco has been recognized for its smart city initiatives, and in 2019 the Office of Civic Engagement and Immigrant Action was established. There is hope that this will encourage citizens to become more involved. A range of different insights relating to the US smart city market, metrics, civic engagement rates and knowledge, funding models for smart cities, and the types of smart city projects that are being planned and implemented provide an interesting overview of the current smart city landscape in the US.

RADNOR, PA

General Overview

  • Named by Philidelphia Magazine as "The Best Place to Live in the Suburbs," Radnor, PA, is a town of around 31,000, in Delaware County. With Philadelphia on its doorstep, it offers the best of both worlds, the small-town atmosphere, while being only 15 miles from downtown Philadelphia.
  • Founded in 1682, Radnor has a rich history. It has beautiful parks and a bustling downtown, Radnor is home to Cabrini College, with its 112-acre wooded campus and faith-based schools, Eastern and Villanova Universities. There are five other colleges in the surrounding area.
  • Radnor packs a lot into its 13.8 square miles. Its citizens are predominantly white Americans in the middle to high-income brackets. Seven elected directors, one representing each of the seven boroughs, govern the town, with the township manager and secretary responsible for the day to day administration.

Civic Engagement

  • There are a wide range of organizations, boards, committees, and civic participation opportunities for the citizens to become involved in the community. St Katherine's Church, the Saturday Club, Radnor Library, and the League of Women Voters, to name but a few, are examples of civic engagement groups that are community-organized and based.
  • Radnor operates a website that is dedicated to township notifications. All members of the community can subscribe to it. The site provides key information about community events, the opportunities for citizens to engage, crime and police alerts, seasonal information, disaster messaging, and any other community notifications.
  • Citizens can request various actions from the township via the citizen request forms. These forms are filled out online and are a cost-effective way for the community to inform the municipality when things are amiss. Streetlight repair, trail issues, park maintenance, rooms for rent, trash removal, and university development are examples of the issues raised via these forms.
  • Community Voice is a web page designed to encourage community participation. Citizens can post their ideas, feedback, concerns, and issues on a digital board. The township can then respond to these ideas. The categories that citizens can post under are community activity ideas, economic development ideas, housing and neighborhood advancements, infrastructure and environmental improvements, quality of life improvements, or own initiative. An element of gamification is included, with citizens given points for their contributions, and "top voices" recognized.
  • The community has its own community discussion boards, known as Community Connection, where the community can post, not only to the township but each other.
  • Citizens can review the revenue, expenditure, payroll, and payments made by the municipality via Open Finance. The website is updated weekly and is part of a process to ensure total transparency from those in charge.
  • Opinion polls are the first thing that are seen when visiting the Raynor website. The opinion polls change regularly, and canvas the public's opinion on a range of issues. These opinions have a response rate of 86%, and have recently been recognized as one of Smart Iniatitive's 12 most inspiring civic engagement examples.
  • In addition, there are several committees, boards, and councils that make decisions about the community and its future. The meetings are open, with citizens able to attend and have input. They are also able to serve on these committees. Some examples of these groups are the Citizens Audit Review and Financial Advisory Committee, the Citizens Communication Council, the Environmental Advisory Board, the Parks and Recreation Board, and the Design Review Board.

Financing Civic Engagement

  • Civic engagement activities, initiatives, and programs come under the budget of different departments, depending on the area of focus. There is not a single budget for civic engagement.
  • The substantial investment required to invest in technology that fosters civic engagement has been made and paid for, with the towns CivicEngage platform taking the last department live in 2019. Radnor had made provision for this investment with a dedicated fund. $1 million was budgeted for the project. The project came in under budget.
  • The majority of the civic engagement budget comes from the general fund. An additional staff member has been employed to collate information and coordinate different civic engagement activities.
  • Budget allocations in the 2019 budgets that include aspects of civic engagement include miscellaneous, general government, parks and recreation, and finance and administration.
  • Allocations for civic engagement are also made under special projects. The Parks and Recreation Department incorporates aspects of civic engagement under its community events and initiatives, and community projects and programs budgets.

Marketing and Advertising

  • The marketing and advertising budget falls under the Department of Recreation and Community Planning. The marketing and advertising budget for 2020 is $48,700.
  • Marketing and advertising is used to promote programming and services, including seasonal information fliers, seasonal newsletters, maintenance of distribution listings, monthly electronic newsletters, social media communications, promotional segments for community television, and maintenance of the town website.
  • An additional $21,567 is allocated under the administration budget for advertising and printing. This advertising is not marketing. It includes, for example, compliance advertising. A further $5,956 is budgeted for advertising as part of community development budget.

Software Investment

  • The Enterprise Resource Planning (ERP) and Technology Improvements project started in 2014, following frustrations with outdated and non-integrated software programs. Concerns were raised by the Auditor regarding IT security, capital asset accounting, and disaster recovery. The process of updating the software is underway, with the Board of Commissioners, Administration, the Citizens Audit Review, and Financial Advisory Committee (CARFAC) working to evaluate the Board's financial and departmental software options.
  • Market research into the best municipal software vendors narrowed the options to three providers, who provided demonstrations and pricing options. Following this process, Tyler Technologies was selected as the new provider.
  • The project has upgraded technology, improved efficiency, accessibility, and direct access to system functions. The new system also improved security controls and disaster recovery.
  • Before the project began, the Board budgeted $1,000,000 from a one-time business tax settlement. The money was dedicated to the project and the project has come in under budget.
  • Implementation has been underway since 2016 when the finance and accounting upgrade went live, payroll and human resources were upgraded in 2017, while the fixed assets and parks and recreation software was upgraded in 2018. Finally, in 2019 codes, permitting, and work orders all went live with new software, concluding the project.
  • Open Finance was part of the upgrade going live in 2019. It is a web-based financial transparency program. Its weekly upgrades, sourced from the ERP provide stakeholders with access to Radnor's General Ledger, where they can monitor the town's revenue, expenditure, payroll, and vendor payments.

CORPUS CHRISTI, TX

General Overview

  • According to legend, in 1519, a Spanish explorer discovered a semi-tropical bay on the southern coast of what is now Texas, on the Feast of Corpus Christi, and named the future city after the feast. Corpus Christi, TX, has grown since those times. It is now the largest city on the coast of Texas and the sixth-largest US port.
  • Corpus Christi is a home-run government, with a Mayor and council serving as the administration. The city considers itself progressive in updating infrastructure and planning resources for the future. It is one Texas' six smart cities.
  • With a population of nearly 325,000, Corpus Christi is the ninth-largest city in the state. Its population is predominantly made up of white Americans. African Americans are the second-largest racial group, making up just under 5% of the population.

Civic Engagement

  • 20 January 2019 marks the first time Martin Luther King Day will be observed in Corpus Christi. It will be used as a day of service in the future to promote civic engagement.
  • Many of the businesses in Corpus Christi encourage civic engagement on their websites, detailing the steps that the company is taking to meet its civic engagement obligations.
  • Financial information and reports are available online as part of the transparency recommendations made by the Texas Comptroller. Citizens are able to access and review these records. They are updated each financial period.
  • There are a range of different boards, commissions, and committees that deal with various aspects of the city's development that citizens can serve on. Citizens are welcome to attend and participate in meetings. The details are posted on an electronic noticeboard, along with the agenda. Interestingly, unlike Radnor, PA, there is no committee focusing on citizen communication.
  • Citizens can report and request different services through the Corpus Christi Council website. There is minimal opportunity to interact with the council through the website, unlike other towns and cities.

Financing Civic Engagement

  • There is no single budget for civic engagement activities in Corpus Christi. A large portion of the budget required comes from the general fund.
  • Street reconstruction and repair of infrastructure has received an increased budget allocation to fund new projects in the area. The new projects have come about as a result of civic engagement initiatives. Taxpayers approved a 2% increase in city taxes to fund the project in part.
  • Community safety concerns have resulted in an increase in the police budget, meaning several more recruits can be hired and trained.
  • The budget itself is an exercise in civic engagement, with four different meetings for feedback or input having been held in the community to ensure it met the requirements of the city's population, prior to approval.
  • Included in the budget for 2020 is a section that details the city priorities for 2020. Civic engagement contributes to these priorities, with the participation of locals being key in determining what the community considers the top priorities for the year.
  • Two additional staff in the budget department have been allocated. They will deal with civic engagement with a customer information officer and project information manager, adding substance to the current team.
  • A portion of the role performed by the communication department encompasses a civic engagement aspect, with the department responsible for positive communication between the public and various departments.
  • The planning department will incorporate civic engagement information into its processes when making planning priority decisions.

Marketing and Advertising

  • Despite a comprehensive analysis of the Annual Financial Report, the complete budget for marketing and advertising was not located. It is likely that marketing and advertising been given a different name in the budget.
  • Three line items for marketing are mentioned in the 2018-2019 budget, though it is not clear if this the total of the marketing budget for the city: Gas Marketing - $597,600; Museum Marketing $50,000; and Arena Marketing/Co-Promotion - $7,002,085

Software Investment

  • Typically software investments are the responsibility of the IT department who "provide services such as wired and wireless networks, phone systems, data center operations, shared enterprise applications, departmental business applications, end-user support and enterprise project management to the entire City including Public Safety. In addition, IT provides risk identification and remediation, conducts investigations, and raises cybersecurity awareness to improve the overall security posture of the City."
  • Information technology requirements are typically funded from the fund of the same name. This funding source is used for "automation of processes and the provision of wired and wireless data, voice, and video communications." Any required software is funded out of this money.
  • In 2020, $16.3 million of IT expenditure will be funded in this manner. In 2019, $4.6 million was spent on software investments, which came out of the information technology fund.
  • In addition to the information technology fund, several other funds can be accessed for software spending. The Capital Project Fund is one of the available funding sources for expenditure of this nature.
  • The IT initiatives fund will replace equipment at the end of its life, and equipment that presents a security risk. The replacement of the police in-car video system, consolidate the data center, and cloud-based infrastructure improvements will be funded from the general liability fund.

SAN FRANCISCO, CA

General Overview

  • San Francisco, CA, has an estimated population of nearly 865,000, growing to 8.7 million when the Bay area is included. The city has experienced significant growth in recent years, which has contributed to infrastructure issues, especially regarding the number of vehicles on the road. Initiatives to rectify these issues saw San Francisco named a finalist in the US Smart City Challenge in 2015.
  • Home to the 49ers, San Francisco, is a popular destination for tourists, with the Golden Gate Bridge spanning its landscape. From a local's perspective, San Francisco is an expensive city to live in with rents more than 2.5 times higher than the national average. Downtown San Francisco has the highest concentration of wealthy people in the US. Its easy access to the tech capital of the US, Silicon Valley, has contributed to its wealth. Homes sell for more than four times the national average.
  • The Mayor and board of eleven supervisors are responsible for the administration of the City of San Francisco. San Francisco is home to a population made up of white Americans (51%), Asians (21%), Hispanics (12%), and African Americans (5%).

Civic Engagement

  • San Francisco addresses civic engagement on its website. It considers civic engagement as "the ability to access and navigate critical services, the capacity to participate in relevant and meaningful ways, and the motivation and opportunity to give back to one's community and country."
  • Civic engagement comes under the jurisdiction of the Office of Civic Engagement and Immigrant Affairs (OCEIA). This office was the first to go live in May 2019 when the government upgraded their software. The office wanted to ensure that the key information needed by citizens was easily accessible. This related primarily to the different services available.
  • The digital services team is currently upgrading the SF.gov website, and it is the job of the OCEIA to monitor feedback and ensure users are not lost in the process. The office will also take responsibility for incorporating the new census data into relevant government documents and policies.
  • National studies have shown that the citizens of San Francisco are the least likely to be involved in religious groups but most likely to participate in children's organizations. Independents registered in San Francisco have high rates of participation. Perhaps understandably, those that are not registered to vote have the lowest levels of engagement even when it is not related to political activities.
  • There are declining levels of participation in California, and the Public Policy Institute of California has recommended that San Francisco look to introduce initiatives to improve engagement.
  • The Muni Service Equity Strategy will evaluate specific transit issues with community outreach, in an attempt to increase engagement in 2020.
  • The Code Enforcement Outreach Program will fund two outreach programs in 2020. They will attempt to engage tenants. This will enable them to act on damaged properties, code violations in low-income communities. They hope to engage the communities.
  • A biennial survey of the residents is conducted by the administration to promote community engagement. Demographic data is collected, but the survey also collects information on the communities' mood, the provision of facilities and programs, infrastructure, and their opinion on the city. This is a civic engagement initiative that has been running for several years.

Financing Civic Engagement

  • Unlike the other two examples, San Francisco has an office that deals specifically with civic engagement, the Office for Civic Engagement, and Immigrant Access. The work done in civic engagement ensures that the requirements of the language access ordinance are complied with.

Marketing and Advertising

  • Despite a comprehensive analysis of the Annual Financial Reports, the budget for marketing and advertising was not located. It is likely that marketing and advertising been given a different name in the budget. Alternatively, it may be a subcategory of another budget allocation that has not been detailed. The budget could be spread across multiple departments and allocated accordingly, with a portion coming from several sources.
  • However, using the OpenBook feature from the San Francisco government portal, suppliers can be searched. This feature allows the determination that the city uses 15 companies designated with the search term "marketing". The total spent YTD in 2018-2019 with these 15 vendors was $24,902,114. This data is provided as a proxy value for the annual markting budget.

Software Investment

  • The Information Technology Fund is used to cover capital expenditure in this area.
  • In 2019, $43.87 million was spent on software licensing fees by the San Francisco administration. A significant upgrade of the website and civic engagement software was included in the upgrade.
  • The information technology investment projection assumes that annual projects over the next five years will be partially funded by the City's Information and Communication Technology Plan.
  • The Information and Communications Technology Budget for one-off costs have been set at $15.5 million for the 2020 year. Part of this budget will be used for software specific to the area. There will be a $4.6 million increase in IT spending in 2020.
  • Planned investment in technology over the next year includes software purchases concerning the tax property tax database and public safety radio system. The computer-aided dispatch system, which includes software and hardware, is budgeted for $30 million. The property tax system is a software upgrade worth $68 million. There is also $74 million being spent on the public safety radio replacement, which will have a software component.

SMART CITY INSIGHTS

US Smart City Market

  • The US smart city market is very fragmented. At the current time, 100 cities in the US are undertaking at least one smart city related plan.
  • Only 14% of medium-sized US cities have announced smart city-related product involvement. All large-sized US cities have involvement with at least one smart city-related project. 8% of small cities have implemented a smart city-related project.
  • Technology providers are attempting to capture the small city market by adopting a modular approach to software. This means that the capital expenditure upfront is reduced, and the city can gradually add for services over time.

Civic Engagement

  • International Researcher Gartner has said, "citizen engagement and the enhancement of services and experience will be critical to the success of smart cities." Research Vice President, Bettina Tratz-Ryan went on to say, "The way forward today is a community-driven, bottom-up approach where citizens are an integral part of designing and developing smart cities, and not a top-down policy with city leaders focusing on technology platforms alone."
  • Gartner recommends city administrations identify and prioritize the issues that impact citizens before applying technology to find solutions. There is still a digital divide, with not all citizens being proficient with IT. Cities need to remember this when gathering information.
  • Given the personal nature of data, cities need to have policies in place around transparency. Guaranteeing access to the data for any interested citizens is a minimum requirement. Tools like performance indicators should be used to keep the public engaged in progress.

Who Participates in Civic Engagement

  • People with higher socioeconomic statuses and fewer family or work commitments are more likely to participate in civic engagement. If someone has an extensive social network, they are more likely to engage in political activism.
  • There is an element of respectability and consistency that comes with being involved in civic activities. This appeals to some people.
  • To increase civic engagement, cities need to first understand the motivations for involvement from different members of the population.
  • Despite technology, the majority of citizen engagement still occurs at a traditional town hall event. Typically, the people that choose to engage at events of this nature are not representative of the population.
  • The people that are most under-represented in civic engagement are those with little time, education, and resources are often unable to participate. As a result, their perspective is usually never heard. Some barriers to participation are "time, access, trust in government, agency responsiveness, cultural misunderstandings, and opportunity costs."
  • Engagement programs that attempt to engage citizens beyond the typical demographic are more costly in terms of energy and required resources.

Civic Engagement Metrics

  • Contrary to claims by some media outlets, civic engagement has not increased during Trump's Presidency. The American public remains disengaged with a record low turnout in the most recent Los Angeles Mayoral Election in 2017.
  • Civil knowledge and engagement are at an all-time low, with only 26% of Americans knowing what the three branches of government are. Only 18% of the public trust the government.
  • In an attempt to improve civics knowledge, 16 states currently require a student to pass a civics examination before graduating from high school.
  • The state with the highest voter participation rates in the 18-24-year-old age group is Virginia, with 54% participation. Virginia is followed closely by Kentucky with 51.1%, and Nebraska with 50.1%.
  • The states with the lowest voter participation rates in the 18-24-year-old age group are Hawaii (20.4%), Texas (27.3%), and Tennessee (29.9%).
  • When it comes to the volunteerism rate among this demographic, Nevada (14.3), Louisiana (15.7), and South Carolina (15.8) are on the bottom, while the top states are Wisconsin (32.3%), Maine (31.1), Kansas, and South Dakota (both 30.0).

Project Types

  • The three most common project types, based on the number of projects implemented are governance (92), mobility and transport (85), and energy and resource efficiency (75).
  • The three most common project types, based on the number of projects planned are governance (118), mobility and transport (117), and energy and resource efficiency (99).
  • Healthcare projects are the least implemented and least planned of all project types. Safety and security and physical infrastructure are the other least implemented project types.
  • If mobility and transport are not addressed, there is an adverse flow-on effect on sustainability. This is why mobility and transport feature highly in project types.

Funding Models

  • Large cities are more likely to adopt a public-private partnership model of funding, while medium and small cities tend to look to public funding.
  • The risk is often loaded toward the private investor in public-private partnerships. A global financing instrument is used, particularly with infrastructure projects. The financial risk assumed by private investors in US smart cities is higher than that of their European counterparts. This is because the European Union has a funding stream that is focused on innovation and research.
  • Social Impact Bonds are a new source of funding. They are described as "pay-for-with the pay-out contingent on agreed social outcomes." Smart city healthcare and criminal justice projects are particularly amenable to this type of funding.

Research Strategy

We identified the cities used for the case studies by reviewing a range of industry publications, media articles, and scholarly research. Several cities were identified. We evaluated each city individually and attempted to get a cross-section of different characteristics of each municipality. The features we considered included incomes, geography, size, and documented civic engagement.
Once we had identified the cities, we reviewed the precompiled information from their websites, financial reports, and budgets to determine the civic engagement landscape, financing of civic engagement, marketing and advertising budgets, and software investments, In the case of Radnor, all the information required was contained in these sources. The financial records of Corpus Christi and San Francisco were somewhat more complicated and lacked the detail of Radnor. Unfortunately, not all the required information was available from these sources. We had considerable difficulty locating any information regarding marketing and advertising for San Francisco and Corpus Christi.

We next reviewed a range of media articles and press releases, as often information regarding budget allocations are available in these sources. While other budget announcements, including San Francisco's first $12 billion budget, received extensive coverage, there was nothing that mentioned the marketing and advertising budgets.

Social media is one of the primary marketing sites for many organizations, often announcements around marketing and advertising are made on these sites. We reviewed the social media accounts of Corpus Christi and San Francisco, but the information was not publicized in these mediums. There was a substantial amount of information about a range of different marketing activities but no budgets. We have therefore concluded this information is either incorporated with other expenditures or labeled differently in the relevant budgets.

By reviewing a range of industry publications, media articles, smart city presentations, and expert opinion, we were able to determine a variety of different insights that are relevant to the US smart city market.


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