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ASCM Insights

Smart Cities Are within Reach


Imagine living in a city where traffic flows smoothly, crime is almost nonexistent, power is inexpensive and always available, fires are largely prevented, and contagious viruses are quickly identified and contained. Does this sound too good to be true? Actually, these and other benefits are believed to be achievable, once communities transition to smart cities.

A smart city is basically a community that is digitally connected by an information and communication technology system. Thousands of sensors are linked up with edge- or cloud-computing capabilities to generate enormous amounts of data. Artificial intelligence and other analytical tools then convert this data to information that can be used to solve problems in the city, such as poor traffic flow, building security issues and operational inefficiencies for city infrastructure. The data could help police and fire departments respond to emergencies faster or even detect crime before it happens. 

The McKinsey Global Institute has selected 50 cities around the world that it deems as leaders in smart city awareness and applications, including eight in North America, 13 in Europe, six in the Middle East and Africa, 16 in the Asia-Pacific region, and seven in Latin America (Woertzel et al. 2018). (See Table 1.) These cities were evaluated based on the strength of the smart city technology used; the deployment of smart city applications; and combined awareness of, usage of and satisfaction with smart city technologies. Unsurprisingly, developed countries are overall showing more progress than emerging nations. Still, the point values indicate that even the most progressive cities fall far short of the ideal.  

Table 1: Cities with Smart City Programs

­­Source: Woertzel et al. 2018. Only the three leading cities for each category are shown.

Shenzhen North is considered by some as China’s smartest city. Powered by software from Huawei Technologies Co. Ltd. and managed from a central command post, the city uses hundreds of cameras to collect data and manage traffic congestion, pollution and resources. As a result of the vast array of cameras, some citizens consider the city to be safer. It is also expected to be among the first to implement 5G technology that will provide more benefits such as autonomous vehicles and improved access to medical care. The force of the technology has overpowered any objections, although there is some resistance to the use of facial-recognition and -tracking technology. The overall success has enabled Shenzhen officials to help develop master plans for systems in Cambodia, Chile, Nigeria and Sri Lanka (McGregor 2020).

Problem-solving possibilities

Cities will need to get smart to support growing urban populations. The United Nations predicts that 68% of the world’s population will live in cities by 2050 (United Nations Department of Economic and Social Affairs 2018). Marcia Wendorf (2019) writes in an article for Interesting Engineering that there already are 29 cities around the world with more than 10 million people each. Plus, cities use 60-80% of the world’s energy. And lighting alone accounts for as much as 19% of the world’s electricity consumption, she notes. To accommodate these logistics needs, cities will need to invest in smart technology to track energy and water usage, manage traffic and transportation systems, and address other civic infrastructure needs.    

In her comprehensive book “Smart Cities,” Germaine Halegoua (2020) proposes these four key anticipated benefits of smart cities:

  1. Efficient service delivery and optimized infrastructure: Acquiring data about public services will enable administrators to analyze, plan and deliver more efficient services, including public transportation, waste collection and disposal, water treatment and distribution systems, power generation and maintenance, and weather-related disaster relief.
  2. Awareness and responsiveness: Increased data collection through the use of linked data systems, cameras and sensors will enable city managers to deal more effectively address public safety concerns, traffic congestion, job creation and allocation of city resources. For example, cameras can recognize a crash when it happens or building sensors can detect smoke and dispatch emergency response teams to address the situation automatically. Similarly, if traffic sensors detect a high amount of traffic, they can adjust traffic signals to improve traffic flow.
  3. Smart growth and sustainability: Measurement of pollution, water and energy use, waste accumulation, and the effects of rain and temperature changes will enable smart cities managers to confront sustainability issues such as pollution, climate change and competition for natural resources. Integrated technologies will make cities greener, more eco-friendly and more resource efficient. For instance, smart buildings equipped with temperature and humidity controls and automatic light adjustment can help meter energy use (Calderone 2018).
  4. Economic development and job growth in new economies: Smart city development can be justified because it will lead to job growth and the sale of city products and services and attract new businesses to this market. Smart cities will become incubators for digital entrepreneurship and markets for technologies and services developed by those enterprises.

Foggy roads to smart cities

Before these benefits can be realized, city planners will need to address a variety of questions and challenges regarding the transition to smart cities. First, how smart does a city have to be in order to be considered smart? For now, it appears that even attempts to integrate some smart city technologies — including the internet of things, edge and cloud computing, blockchain, autonomous vehicles, control towers and digital twins — is enough. But that will of course change as technologies and smart cities develop. With that logic, it stands to reason that smart cities will never be completed either. They’ll just keep evolving as new technology is developed.    

Second, what is the appropriate level of integration? Ideally, the smart city concept should be expanded into smart states or smart countries so that every system can be connected to enable efficient service. However, cost and technology limitations make this unattainable for the foreseeable future. Therefore, smart city technology will have to be implemented at a more local level and for specific application types. This means that different cities will have different needs, so a one-size-fits-all tool will be insufficient. Software and hardware companies will need to develop more flexible platforms that adapt to the specific problems of a given community. 

Another key consideration is how the right data will be selected. As with any big data project, smart cities present the challenge of how to manage the data, as well as how to separate the relevant data points from the mundane. Smart city leaders will need to designate desired data categories and create new ones as technologies evolve (PwC 2019). Then, smart city systems will need to be able to organize, standardize, encrypt and analyze the data as it arrives in different formats from different channels. From there, various city stakeholders will need to be granted access to the appropriate data and analysis to fulfill their roles within the community.

People do not like change, so how do we convince citizens to support this transition? They may be suspicious of or even outright reject new technology, particularly if it collects their personal data, invades their privacy or monitors their public activity more, as in the case of internet of people sensors and trackers. One possible solution is to focus on a bottom-up design process that creates smart city technology that directly benefits the citizens. When people see that the technology will make their lives easier — or if they are able to help select and monitor the technology — they may be more likely to support the transition.

Many cities already struggle to offer the basic services communities need on their current budgets, so another question is who will pay for smart cities. In addition, some of the benefits smart city programs are intended to provide — such as less traffic congestion — may be difficult to quantify in terms of monetary savings. Proponents say that, if the benefits from new technologies prove substantial and sufficiently predictable, this could produce cost savings for city services, create new financial flexibility in budgets and lead to lower financing costs. It could cut cities' need for long-term borrowing, boost their creditworthiness and open new paths for generating revenue (Demos 2019). However, transition projects will incur substantial costs before the savings accrue.

These financial considerations become even more challenging in impoverished neighborhoods. These communities may need these technologies even more than affluent communities do, but the updates are unaffordable. Furthermore, some smart city technology could eliminate jobs, such as autonomous buses and cars putting bus, taxi and rideshare drivers out of work. This could push even more people into poverty rather than helping them.

Lastly, how will we protect these connected communities? If smart city technology is implemented piecemeal, cities likely will have disjointed systems to handle different aspects of city life. Because of this, it’s more likely that a variety of third-party companies will manage different pockets of data, which creates more points of entry for cybercriminals. The best way to protect the data from hackers will be to anonymize it before it is stored so that specific data pockets cannot be linked back to private citizens (PwC 2019).

Even more alarming is that cybercriminals could potentially shut down smart cities if they can hack into the appropriate systems. If utilities, traffic, emergency response and other services all are controlled by the internet of things, a hacking incident could bring life to a screeching halt. But smart city interruptions don’t have to be criminal acts; a simple flaw in some program’s code could create interruptions. Communities will have to safeguard their systems and have backup and failsafe plans or redundant systems to minimize interruptions.

Both new property developments and existing cities are relatively blank slates awaiting technology implementation. Planners can strategically build around these challenges to create safe, efficient cities. Understanding and addressing the challenges now will make the path to progress possible.


  1. Calderone, Len. 2018. “Smart Cities are the Future.” Robotics Tomorrow, December 26.
  2. Demos, T. 2019. “'Smart' Technology Could Change the Future of City Finances.” The Wall Street Journal, June 10.
  3. Halegoua, Germaine R. Smart Cities. Cambridge: The MIT Press, 2020.
  4. McGregor, Grady. 2020. “The city that sees it all.” Fortune, February 17.
  5. 2019. “The foundation for smart city success: Seven layers of data governance and management.” PwC.
  6. United Nations Department of Economic and Social Affairs. 2018. “68% of the world population projected to live in urban areas by 2050, says UN.” United Nations, May 16.
  7. Wendorf, Marcia. 2019. “Smart Cities Initiatives around the World Are Improving Citizens' Lives.” Interesting Engineering, July 29.
  8. Woetzel, Jonathan, Jaana Remes, Brodie Boland, Katrina Lv, Suveer Sinha, Gernot Strube, John Means, Jonathan Law, Andres Cadena, and Valerie von der Tann. 2018. “Smart cities: Digital solutions for a more livable future.” McKinsey Global Institute, June 5.

For a list of more than 60 annotated references about this topic, contact the author at

About the Author

Richard E.Crandall, PH.D., CPIM-F, CIRM, CSCP Professor Emeritus, Appalachian State University

Richard E. Crandall, Ph.D., CPIM-F, CIRM, CSCP, is a professor emeritus at Appalachian State University in Boone, North Carolina. He is the lead author of “Principles of Supply Chain Management.” Crandall may be contacted at

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