COVID-19 Effect: What is Smart City’s Direction?

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While market forecasts paint a rosy picture of smart city investment, many municipalities around the world are slashing their budgets as the economic fallout from the COVID-19 pandemic continues. 

One of the latest smart-city casualties was networking equipment giant Cisco’s Kinetic for Cities software, a dashboard for governments to manage data from their local smart-city projects. Cisco said in December that it would kill the product. Instead of pushing its software, Cisco plans to work with city governments on other efforts involving Internet connectivity. 

Just a few years ago, smart cities had major buzz. The idea was to use machine learning to crunch data collected across cities to, for example, minimize traffic delays and reduce pollution, according to However, some smart city projects had been focused on fixing problems that are no longer as pressing. Reducing traffic and parking now in many cities isn’t as important because many workers no longer commute to downtowns because of shelter-in-place rules.

Now, city governments see “security and safety” as a priority, and have reallocated some of their budgets to solve the problem, Forrester analyst and smart city expert Michele Pelino asserts. She is unsure when more ambitious projects, like using machine learning to optimize traffic lights, will be reinstated. “Where is the money going to come from?” Pelino said.

So what is the new direction of smart city policies? To adapt to the budget shortfalls resulting from the COVID-19 pandemic, smart city efforts must be more strategic, said Ruthbea Yesner, vice president of Government Insights and Smart Cities at IDC Government Insights,  an IT market research firm.

“..The question becomes what are the foundational tools that you need to start to think about for resiliency — and let’s take away contingency planning, disaster recovery, backup plans, redundant data centers, having a readiness response, a risk management response. I think that’s all what everyone thinks of when they think of business continuity. You have plans to continue operations if there’s an emergency. What does that mean in light of COVID?”

According to IDC, during the COVID-19 crisis, cities focused on network and collaboration tools, digital communications platforms and rapid upskilling to get employees up and running in virtual environments. The following phases in the continuum are economic slowdown, budget reductions, a return to growth and the next normal. That last phase involves cloud and infrastructure optimization, as-a-service deployments and data analysis to help drive forward-looking decisions.

Cities must assess which stage they are in to determine what IT will best get them to the next phase so they can achieve that next normal, Yesner said, according to In crisis mode, cities focus on business continuity, but the economic slowdown calls for cost optimization, and the budget reductions phase focuses on resiliency. Returning to growth spotlights innovation and targeted investment.