Government Funding in the US Continues to Grow in Support of Smart City Innovation

With a renewed focus on improving aging infrastructure coming out of Washington, DC over the last few months, we’re seeing more and more investments being made in Smart City and Smart Region projects across the US.

In December 2015,  the US Department of Transportation (DOT) launched  their  Smart  City  Challenge, “asking  mid-sized cities across America to develop ideas for an integrated, first-of-its-kind smart transportation system that would use data, applications, and technology to help people and goods move more quickly, cheaply, and efficiently.”

78 applicant cities shared the challenges they face and ideas for how to tackle them, and seven finalists worked with DOT to further develop their ideas, and began awarding grants to the winning city (Columbus, Ohio) as well as others, leveraging nearly $350 million in public and private funds for smart city and advanced transportation technologies.

Through the Smart City Challenge, the department committed up to $40 million to Columbus, while all participating cities leveraged an additional $500 million in private and public funding to help make their Smart City visions real.

A year later the department announced an additional $65 million in grants to support community-driven advanced technology transportation projects in cities across America, including 4 of the finalists in the Smart City Challenge.

This is just one government agency’s Smart City program; many others outside the transportation domain are providing financial support to drive progress, and combining technology into physical infrastructure projects to make cities cleaner, safer, friendlier and more inclusive.

Here’s a “City Guide” to Smart City programs that have received funding, and how they are progressing as a result:

Columbus, Ohio

As the top winner of the DOT awards, Columbus has driven forward projects for three years, and most recently put together its “Smart Columbus Playbook,” an online collection of case studies, strategies, and other related information, including contracts, RFPs, as well as “Concept of Operations” and “System Requirements” documents for the city's various projects. As part of their $40 million Challenge grant to create a smart transportation system, and a $10 million gift from Vulcan Inc., Columbus is reducing greenhouse emissions and shortening commute times for its citizens.

Denver, Colorado

Denver Smart City began in 2015, also as one of the winners of the DOT’s Smart City Challenge. The city was also galvanized by Panasonic’s move to 61st and Pena which included a subsequent public-private partnership to accelerate the creation of technology solutions that the city believes “neither industry nor government can complete on their own.”

Las Vegas, Nevada

This booming city has budgeted $500 million to find ways to connect the entire city by 2025. Projects include the reduction of CO2 emissions through traffic congestion management, using sensors and streetlights to track traffic patterns and control stoplights. Pedestrian safety is another goal, critical for a city which welcomes millions of visitors each year; sensors detect movement in intersections and can immediately change traffic lights to red to slow and stop oncoming traffic. Other projects are underway, many of them funded by the 2018 Readiness Challenge, awarded by the Smart Cities Council, providing a year’s worth of free mentoring, products and services.

Portland, Oregon

Supported by a National Institute of Standards and Technology (NIST) Replicable Smart City Technologies Cooperative Agreement grant, Portland has implemented a network of sensors attached to city streetlights and traffic signals; the pilot project provides information about air quality based on more efficiently managing traffic, and is expected to be rolled out across the city based on the success of implementations at major intersections.

Kansas City, Missouri

Local funding of nearly $4 million for Smart City projects in Kansas City was matched with private financing for an addition $12 million and enabled 25 kiosks for citizens to connect to the Internet and get information about the city and it services. The city expects to recoup the investment by selling advertising as part of the kiosk experience, with a unique revenue sharing model that will pay back the private sector partners for their upfront capital and ongoing operating expenses.

The Federal Government is continuing to announce funding for new projects, including a more recent DOT funding program with up to $60 million for autonomous vehicle (AV) demonstration projects.  The money will go toward multiple projects that test the safe integration of AVs onto U.S. streets and their transportation systems, and covers AV research and development, including identifying and addressing potential challenges to AV integration, with a focus on safety. Only public entities — not companies or private universities — including local, state and tribal governments as well as transit agencies and public research institutions were eligible to apply.

And just last month, the U.S. Economic Development Administration’s (EDA) i6 Challenge program awarded 26 grants nationally from more than 140 applicants. Overall, the program gave out $17.5 million in grants, which will be matched by $20.1 million in investment from public and private sources.

The Northern Virginia Smart City Initiative, which received a $750,000 three year grant, will graduate more than 45 companies from the intensive 90-day business acceleration program offered by Smart City Works, launch 30 new smart city products and services, train 60 apprentices and, in five years, create over 180 new jobs.

Smart City Works is a next-generation business accelerator focused on improving life and infrastructure in cities, and Refraction is a leading nonprofit innovation hub; together these two non-profit organizations are building a regional smart infrastructure innovation program for Northern Virginia.

“This type of support is transformative,” said Robert Mazer, co-founder of Smart City Works. “The EDA’s grant allows our group to continue to lead and innovate in the emerging ecosystem of mature businesses, startups, universities and governments in the region.”

“We are excited to receive this recognition from the federal government of our mission to advance the smart city tech cluster at a time when addressing infrastructure challenges is key to the future of our region and country,” said Esther Lee, CEO of Refraction and former director of the Office of Innovation and Entrepreneurship at the U.S. Department of Commerce.

Thom Jordan, Managing Director of Rocket Wagon Venture Studio’s Network+Telecom studio said innovation is the first place much of the funding is going, with an emphasis on developing new technologies which can be implemented in pilots, then scaled. He also believes Public Private Partnerships will continue to flourish.

“Smart City IoT projects are the technological tip of the spear for the interconnected cyber-physical world,” Jordan said. “In the years to come, they will transform the communities, business and economies the same way the deployment of the national highway system transformed the country half a century ago.”

Jordan went on to say that, now as then, local and state governments can’t completely deploy smart city transformations themselves.  “They usually lack the funds and needed technical resources for running such transformative projects. That’s where public-private partnerships come in.  Typically, a PPP will include a private entity or group (investors, corporations, donors) to help fund smart city projects, or certain components of them. Upon completion, the smart city project is transferred from the private entity to the respective municipality at no cost. Often the private entity retains some aspects of the PPP for a set time, usually in the form of a lease. An example would be were the private entity retains a license to manage and retain parking meter revenues for a few years after the PPP deployed a Smart Parking Meter system in a city.”

Jordan also believes as projects grow, in size and scope, telecom companies will step in with faster, more secure connectivity options, including 5G and NB-IoT as well as other flavors of IoT communications protocols. “This is an ideal opportunity for the largest communications service providers, already serving urban areas, to create new services and revenue streams; innovation will be key as Smart City and Smart Region deployments are much larger than machine-to-machine models of the past. The stakes are high, with concerns about security, privacy and resiliency, especially when networks are connecting so many different and related systems.”