BCG Henderson Institute

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This is the third article in a multipart series.

Long before the arrival of COVID-19, cities around the world had started to reinvent themselves through “smart city” initiatives. Beset by growing populations, aging or insufficient infrastructure, and the rising cost and difficulty of meeting the needs of residents, cities were investing in technology to address environmental sustainability, traffic congestion, public transit, and public health, all while facing budgetary pressures.

The pandemic has intensified the need for intelligence and insight as cities struggle to assess the effectiveness of response measures and compliance in real time. Meanwhile, increasing reliance on e-commerce and the shift to remote working are stripping cities of two of their core functions—as places to shop and places to work. Public services are being strained by rapidly growing demand. New challenges, such as the rising volume of last-mile delivery trucks, are adding to the stress.

To develop innovative solutions to problems old and new, many cities are aggregating and sharing more and more data, establishing platforms to facilitate private-sector participation, and holding “hackathons” and other digital events to invite public help. But digital solutions carry their own complications. Technology-led innovation often depends on access to data from a wide variety of sources to derive correlations and insights. Questions regarding data ownership, amalgamation, compensation, and privacy can be flashing red lights.

Smart cities are on the leading edge of the trend toward greater data sharing. They are also complex generators and users of data. Companies, industries, governments, and others are following in their wake, sharing more data in order to foster innovation and address such macro-level challenges as public health and welfare and climate change. Smart cities thus provide a constructive laboratory for studying the challenges and benefits of data sharing.

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