Smart Cities: Benefits And Challenges

by CXOtoday News Desk    Dec 11, 2014

smart city


The definition of Smart City may have changed over the years, but what has essentially remained constant is the need for ICT services to make it happen.

The number of urban residents is growing by nearly 60 million every year. In addition, more than 60 percent of the world’s population will be living in cities by 2050, according to the ICT in Urban Governance Survey.

The adoption of technology is growing at a rapid pace and there are endless efforts to bring in sophistication into devices. The same is true with smart cities, which businesses are aiming at to create innovative and sustainable solutions to ensure better infrastructure, health facilities, transporation and energy efficient housing.  

This uptick in technology and machine-to-machine communcation offers huge opportunities for businesses. Indian government’s Smart City project is a growth avenue for enterprises, which are optimistic about leveraging newer technologies like IoT. The government plans to develop 100 smart cities at Rs 7060 crore by 2022. 

According to Cisco, the IoE (Internet of Everything) total value at stake in India is USD 511 billion over the next 10 years. Of the total IoE at stake, public sector value at stake is USD 116 billion, which includes creating smart cities and citizen services such as health and education.

 Wim Elfrink, chief globalization officer at Cisco, writes in a McKinsey report: “When you get to a critical mass, the data on the benefits is so compelling: a 50 percent reduction over a decade in energy consumption, a 20 percent decrease in traffic, an 80 percent improvement in water usage, a 20 percent reduction in crime rates. The concept of smart cities really sells itself.”

Technology and service providers are upbeat about offering seamless integration of technology for the ’smart life’ projects.

Anil Chaudhry, President and Country Head, Schneider Electric India, said, “The major benefits from ICT adoption would be efficiency and transparency, with majority of civic agencies mentioning this. Around 84% of survey respondents believe costs savings and promoting citizen participation would be the other benefits.”


Service providers would see huge requirement for broadband, but there are other requirements that enterprises need to look into. “Implementation of Smart City requires technical resources and skillsets,” says Dinesh Malkani, resident, Cisco India and SAARC.

A major challenge to the Smart City project is the broadband availability. India ranks 122 in the world for broadband penetration (The Broadband Commission) and its average Internet speed is 1.5 Mbps, the lowest among Asia Pacific region. Only 4.9 per cent of Indians have access to speed higher than 4 Mbps. (Source: Akamai Technologies).

The ICT in Urban Governance Survey says capacity constraints and integration of legacy data are major challenges in ICT implementation.

Limited capacity at the city level was one of the biggest management concerns, as per about 70% of civic agencies.

Other major hurdles are lack of technical knowhow and change management, while some cities say coordination among various departments and delay in administrative approvals would be a challenge.

 Low IT outlays, lack of customization, limited IT personnel as well as lack of administrative and political will would be the other challenges.