Crossroads: To Fund or Not To Fund?

Covid-19’s Impact on Financing Smart Sustainable Cities.

By: Lal Bhatia, PhD

If there is one thing the saddening calamity of 2020 has taught us…is that we were simply not ready. Humans are social beings; hence, when the subject of not being that very thing (i.e., social) came into play, most of us had to ‘work hard to live in the socially distant environment.

But as they say – sometimes it pays more to work ‘Smart’ than to work hard. This unprecedented crisis is forcing us to make decisions faster and prioritise sustainability and innovation to make supply chains and business models more efficient and resilient to future shocks, such as pandemics, climate change, or trade restrictions.

Smart cities as a concept came into being a while back, but the value of intelligent design and social data has become the need of the hour. With the right technology and environment-friendly concepts, smart cities are a platform to create a better tomorrow, one which is better prepared to adapt to circumstances.

But smart cities, in addition to the apparent benefits, can also prove to be very financially viable. From energy savings to the production of natural byproducts, the value and funding motivators for even the most skeptical investors are too many to mention.

Smart Cities – Smarter funding ideas

Although in the last decade, smart cities as an idea have been actively highlighted as it seems the best possible solution to take people towards a better tomorrow. Many funding programs have been introduced, and as of late, US President Joe Biden announced a $2 trillion package for the development of smart cities. Similarly, the European Union also pledged a 1.8 trillion Euro fund towards smart cities. These investments are a surefire indicator of the importance of smart cities and their need for the present and the future it leads to.

Funding plays a crucial role in the fruition of any concept, and smart cities are no different.

What we don’t often discuss is how smart cities through their financial self-reliance can become bankable projects thus gaining access to, including, but not limited to grants and investments supporting a transition to a green sustainable economy, with the project benefiting from the explicit support of host government, and as such presenting a competitive advantage to interested investors.

Any novelle concept requires an equally new strategic plan that clearly communicates the opportunity to investors and presents a holistic business model. It all boils down to sources of revenue, business models for attractive ROI, and value growth which need to be as innovative and smart as the cities they are meant for.

While many cities and municipalities are looking to upgrade their infrastructure through innovative technologies, many are looking towards developing new smart extensions to existing cities. But funding such projects is a mammoth task and requires unconventional approaches, including but not limited to Public-Private Partnerships.

Innovation leads to Innovation.

Several reports talk about some new developments transforming smart city funding. While unconventional financing policies are aiding cities around the world to reshape vision into reality. Here are some commonalities amongst most of them:

Public Sector Funding: While metros are looking for new ways to fund and improve infrastructure and services with additional support by the governments. One such example is City Leap in Bristol, UK, a public-private alliance that aims to raise £1 billion ($1.3 billion towards Bristol becoming a zero-carbon smart city by 2030.

Private Sector Smart Investment: The number of private equity firms considering smart city opportunities seems to be growing for obvious reasons. The concept involves working with cities and other stakeholders to develop new forms of public-private partnerships for smart city investment.

Asset-Based Value Creation: Using a city’s infrastructure and services to create new value to support essential smart features is another way of addressing the financial aspect. From creating advertising opportunities to seamless citywide internet…the possibilities are endless.

Platform Innovation: The Internet of Things (IoT) is a framework being used and further considered for multiple service options and cross-sector collaboration between various municipal stakeholders and the city’s population.

These and many more are the approaches being considered for mapping the future of our existing and future cities. In my and the view of many – smart cities should be designed similar to a fruit-bearing plantation…one that can support its upkeep, and more.

About the Author

A global thought leader, disruptor, and innovator with an entrepreneurial flair, Lal Bhatia, has conceptualized and developed new business models in the most challenging environments.

Bhatia’s has invested 33 years kick-starting New-Ventures, Building Teams, Managing Change, Developing Brands and Businesses, and Strategizing Digital Transformation. Lal has a vast network of clients and professionals in every corner of the globe, which he believes in cross leveraging for the task at hand.

Lal Bhatia is the Chairman of the Hilshaw Group.

www.hilshawgroup.com

20 thoughts on “Crossroads: To Fund or Not To Fund?

  1. Thank you for the sensible critique. Me and my neighbor were just preparing to do a little research on this. We got a grab a book from our local library but I think I learned more clear from this post. I’m very glad to see such great info being shared freely out there.

  2. Hey there would you mind letting me know which hosting company you’re utilizing? I’ve loaded your blog in 3 different browsers and I must say this blog loads a lot faster then most. Can you suggest a good web hosting provider at a honest price? Thank you, I appreciate it!

  3. Thank you for all your efforts on this blog. My niece take interest in participating in internet research and it is easy to understand why. Almost all hear all about the powerful way you create important suggestions through this website and boost response from others on that subject then our favorite princess is certainly starting to learn so much. Have fun with the rest of the year. Your conducting a wonderful job.

  4. I think this is among the most significant info for me. And i am glad reading your article. But should remark on some general things, The web site style is ideal, the articles is really nice : D. Good job, cheers

  5. A powerful share, I simply given this onto a colleague who was doing a bit of analysis on this. And he the truth is purchased me breakfast as a result of I discovered it for him.. smile. So let me reword that: Thnx for the treat! But yeah Thnkx for spending the time to debate this, I feel strongly about it and love studying more on this topic. If doable, as you turn out to be experience, would you mind updating your weblog with extra particulars? It is highly helpful for me. Massive thumb up for this weblog submit!

Leave a Reply

Your email address will not be published.