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The Australian Smart Cities landscape continued to mature in 2019

Public sector leaders of our cities and regions are continuing to turn talk into action, experimenting with new technologies and collaborating with diverse stakeholders to improve the quality of life for their communities.

This year saw a sharpened focus on the human experience of Smart Cities

Governments sought to co-create solutions with communities to address local challenges, celebrate places and empower communities with the skills and tools they need to thrive in an uncertain future.

In this report we present the key trends, insights and case studies captured during the 2019 Smart Cities Series by KPMG and the Public Sector Network.

In 2019, we saw local government leaders increasingly looking beyond their own jurisdictional boundaries, collaborating with neighbouring councils and a range of other partners to maximise impact for their communities and multiply return on investment.

Katherine Tobias
Smart Cities Lead, KPMG Australia

Key findings

  

Smart Cities Key findings infographic

Top tips

  

Smart cities top tips infographic

Where are we on the Smart City journey?

While the majority of councils are in the strategy development phase, the growing share of local governments in the implementation phase reflects the increasing maturity of the Smart Cities movement in Australia. It reflects the shift from talking about Smart Cities to making Smart Cities a reality.

21%

of local governments are piloting smart city projects
(up from 11 percent in 2018)

  • This helped to lift the number of local governments implementing projects, either in the form of pilots or in the form of operational roll outs, to over a third.
  • It reflects a slight reduction in respondents stating they were in the process of developing a Smart City strategy – from 46 percent in 2018 to 42 percent this year.

What are the priorities?

The roll-out of smart communications networks, such as the Internet of Things, is no longer a novelty. The focus now is on how to extract maximum value from the data collected across the networks. That’s where platforms play a critical role.

Top 3 priorities

1. Platform projects

2. Smart infrastructure

3. Communications networks

If communications networks are the nervous system of cities, platforms are the brain – collecting, integrating, analysing and transforming data into actionable insights.

The sharper focus on platforms, up from 14 percent in 2018, is enabling local governments to gain a single view of their customers and deliver more efficient, responsive and personalised services.

Data platforms also play a significant enabling role for the increasing collaboration we are seeing across regions, sectors and levels of government.

What are the key challenges local governments are facing?

‘Finding the funding’ topped the chart this year of challenges facing local governments around Smart City initiatives, closely followed by a ‘lack of clear leadership’ and ‘availability of resources’. These were the same top three challenges in 2018.

Key challenges

1. Finding the funding

2. Lack of clear leadership

3. Availability of resources

Many conference participants also spoke of the need for greater investment in upskilling programs to enable staff to leverage new technologies and deliver better outcomes.

As technology rapidly evolves, the availability of people with the required skills to execute Smart City transformations is becoming a critical obstacle for local governments. According to the Local Government Workforce and Future Skills Report published in 2018 by LGNSW, ’86 percent of councils in NSW were experiencing a skill shortage and 69 percent were experiencing skill gaps’.

Case study: Planning for disruption – the 5G opportunity and challenge

Australians expect to interact with governments in the same way as they do in every part of their life. Digital – anytime, anywhere. But technology is changing rapidly and while no one can predict which technologies will emerge next, local governments are preparing for disruption by strengthening their ability to respond and adapt to new technologies to deliver impactful outcomes for citizens.

We are certainly seeing this in the case of 5G. Faster download speeds, larger data transfers, virtual and augmented reality – these are just some of the promises of 5G that will go live in Australia from March 2020 onwards.

However, it’s not merely a matter of flicking the switch on a shiny new network. Deploying a 5G network comes with new challenges. For example, the physical infrastructure requirements of 5G in the urban realm – think small cells on top of light poles and buildings – are estimated to be much greater than 4G.

5G will create great opportunities for our local businesses and citizens to connect with faster and more innovative services. City of Melbourne’s 5G and IoT Testbed allows us to work with local businesses and residents to ensure that these benefits are delivered in a way that is inclusive and respects city amenity.

Michelle Fitzgerald
Chief Digital Officer, City of Melbourne

The City of Melbourne established Australia’s first local government-led 5G and IoT Testbed in March 2019 to trial emerging technologies and how they can benefit Melbourne and its local businesses and residents. Twenty-six partners have joined the testbed, which will examine three challenges:

1. Infrastructure placement and design: Designing 5G and IoT infrastructure that develops connectivity without the clutter, minimising the impact on the public realm.

2. Data collection, sharing and storage: Establishing protocols that enable data sharing between private and public stakeholders.

3. Governance: Defining the framework of rules, relationships and systems for the testbed, with the intention to inform future testbeds as well as longer term municipality planning in order to effectively balance industry, city and community needs in the rollout of future technologies.

Think big, start small

In the early days of Smart Cities, vendors tended to sell ‘smart city in a box’ solutions which were typically marketed as having large scale, municipality-wide applicability as soon as they were switched on. However, as the Smart Cities landscape has matured, local governments are recognising the value of setting out a clear vision, aligning with overarching Council strategy, starting small with pilot solutions, iterating, learning and scaling up.

Aligning with the broader strategic context

Local government participants at this year’s Smart Cities Series spoke of the risk of pilot projects being seen as a ‘nice to have’, rather than as a key part of a council’s broader strategic plan for the city or region.

Aligning projects with the broader strategic plan will help gain support for projects, and help leaders maximise limited resources to deliver on strategic priorities.

We need to embed Smart City thinking into everything we do, so it’s not seen as an add-on.

Rebecca McKenzie
CEO, City of Glen Eira

Case study: City of Casey

In 2017, the City of Casey in Victoria started with a one-page Smart City strategy with three main goals: improve quality of life, increase the competitiveness of local business and set the city on a sustainable path.

Since then, the city has focused on deploying a number of demonstration projects to test the impact and scalability of Smart City ideas and solutions. These include a Low-power wide-area network (LoRaWAN) and a virtual cognitive assistant called Amelia providing 24/7 customer assistance. In addition, the City formed a Smart Cities Advisory Committee, comprising community members, councillors and staff, in order to ensure demonstration projects are grounded in evidence and geared to the opportunities and challenges unique to the City of Casey.

Through this approach we hoped to cultivate a mindset for innovation and an appetite for change, so we could get past the perception that this is just a cost.

Jennifer Bednar
Director Customer and Business Transformation
City of Casey

The approach proved effective for the municipality, with pilots aligned to three distinct propositions:

1. Reducing operational costs

2. Investing in local expertise and business

3. Redressing the digital divide

These laid the groundwork for a new, long term strategy and have demonstrated the value of Smart City transformation for Casey.

Design for the human experience

The days of operating under the assumption of ‘build it and they will come’ are gone. Instead, government leaders are adopting a people first approach to Smart City transformation. They are increasingly consulting with their communities, to understand the human experience of their cities from diverse perspectives of the people who live, work, learn and play there each day.

Employing this human centred design approach enables cities to define problems and gather evidence in order to inform choices of technology solutions, rather than starting with a technology product and searching for a problem to solve.

An outcomes focused approach is essential in the Smart Cities space. If we want people to embrace, own and implement smart solutions it is essential to make sure what we are delivering is relevant to their identified needs.

Ally Dench
Executive Director Community and Corporate
Wollondilly Shire Council

This approach shifts the focus from ‘being an expert’ to one of facilitating a shared understanding of people’s needs and preferences. Humanising the experience of Smart Cities is also critical to redress the growing digital divide and ensure we create inclusive, equitable cities.

Celebrate people and place

  

Three phases of smart cities

While it would be unrealistic to claim that Australia’s cities and regions are all adopting the third generation approach to Smart City creation, it is encouraging to see a growing focus on adapting the Smart City paradigm to meet the unique challenges in a local context. This approach is being pursued by co creating solutions with local communities, who are the experts of their contexts, rather than seeing the Smart City paradigm as a one size fits all solution.

As part of this approach, many cities are looking at how they can embed smart thinking into what they already have, instead of looking to undertake major overhauls.

Being smart means doing things differently with existing infrastructure and assets.

Marion Fulker
CEO, Committee for Perth

The Smart City agenda has also become a mechanism for renewed celebration of local places, environments, cultures and people. During the Melbourne leg of our conference, Matthew Swards, Manager Business Improvement at Ballarat City Council, laid out the City of Ballarat’s Smart City journey which focused on deploying technology to celebrate the region’s indigenous heritage, culture, nature and identity.

The City has deployed a number of smart pilots. For example, Visualising Ballarat is an interactive mapping platform that enables anyone to virtually explore the ‘DNA’ of the region, including its topography, historic and contemporary-built environment, open spaces and gardens as well as intangible dimensions such as social and cultural practices and historic sites.

We’re excited to see this trend continue as new technologies are applied to enable cities and regions to celebrate their unique identities, address local challenges and empower their communities to thrive.

A cybersecurity blind spot?

Cybersecurity was ranked as the lowest challenge facing government leaders this year, as was the case last year with only 1 percent of the respondents citing cyber as a challenge. So despite the serious risks posed by expanding the surface area for a cyber-breach, cybersecurity considerations have largely remained an afterthought.

The increasing complexity and sophistication of cyber-attacks, however, call for far greater attention and resources to be invested in building cyber-resilient environments that support the secure, trusted delivery of Smart City outcomes.

As we connect a greater number of elements of the physical environment to data platforms, the value of the data will increase as will the need for more robust cybersecurity protocols and safeguards.

Collaborate with a diverse ecosystem

The value of adopting an integrated, collaborative approach to Smart City transformation was a key theme which wove through the entire Smart Cities Series, again reflecting the growing maturity of the landscape in Australia.

Overcoming silos within an organisation by adopting a systems approach is fundamental to realising the outcomes promised by Smart Cities.

The complexity involved in developing a Smart City can only be effectively tackled when a diverse range of stakeholders collaborate and share their expertise, experience and resources. Standards play a critical role in enabling the interoperability required for co creation and exchange of data between these diverse stakeholders and their systems.

While we still lack consensus regarding a single nationally or globally recognised Smart City standard, the standard ‘ISO 37106: Sustainable cities and communities – Guidance on establishing smart city operating models for sustainable communities’, created by the International Organisation for Standardisation provides a framework and is being increasingly adopted as a guide to Smart City strategic development.

Smart City thinking needs a whole of organisation mindset. We need to pivot our thinking and shift from operating in silos to ‘infuse’ innovation horizontally across an organisation.

Andrew Chesterman
CEO, Redland City Council

Spotlight: Western Sydney City Deal

As the single largest planning, investment and delivery partnership in Australia’s history, the Western Sydney City Deal presents a unique opportunity to showcase the significant impact, global competitiveness and return on investment that can be gained from successful collaboration. The City Deal brings together the eight local councils in the Western Parkland City, the New South Wales State Government and the Australian Federal Government under the common 20 year vision for ‘A thriving future focused city that is highly connected, innovative and liveable’.

A key component of the City Deal is the Smart Western City Program which aims to embed interoperable smart and secure technology into new infrastructure as it is rolled out, ensuring that digital smarts are built in by design.

The City Deal is a vehicle that creates the opportunity for meaningful partnerships between all three tiers of government.

Simon Hunter
Executive Director Smart Places & Cluster Infrastructure Priorities
NSW Department of Planning, Industry and Environment

How KPMG can help