Smart Cities Business Model is the Issue

The business case for most “smart cities” initiatives is likely to be poor to negative, in most cases, one can argue. The reasons are simply that incremental revenues to sustain the services are going to be slim to non-existent in a direct sense, even in cases where a positive societal outcome is possible.

In many cases, sustainable operation will only be possible by supporting the apps with tax or user revenues; and some potential savings in energy use. To the extent there are perceived benefits, most will be hard to quantify, as they create a “more livable” city environment, with indirect value in ability to attract and retain business entities and support economic growth.

On the other hand, some “smart city” use cases, such as connected vehicles, might well be underpinned by sustainable revenue models. Some believe it will be possible to create new subscription services, however, for parking or traffic information and other information services.  


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