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Category Science Radar
07 November 2022

Smart City: Self-provisioned networks more important than cost savings

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Tag Research
Tag Digitalization

Smart City: self-provisioned networks more important than cost savings

TUM scientists publish study on communication technologies for Smart City

A team led by Prof. Joachim Henkel, Chair of Technology and Innovation Management at the Technical University of Munich, and study director Lucia Baur surveyed 107 German cities on the topic of “Smart City.” The study focuses on the backbone of digitalization in cities: the communication technologies that make data flow possible in the first place. This technological spine makes a decisive contribution to network stability, security, and ultimately also to the availability and scalability of smart offerings in the city. When selecting the appropriate communication technology, it is particularly important for cities to be able to design and manage these networks themselves. Financial aspects play a subordinate role, also in the objective of smart city engagement: the reputation as an innovative and livable city and efficient urban processes for the benefit of the citizens are more important to the cities than economic aspects.

 

How far advanced are German cities in implementing smart city concepts? Which communication technologies do they use and how do they choose them? And do they prefer – if they can choose – external network providers or operate their networks themselves? Is it the hoped-for cost savings, economic promotion at their own location, or the reputation as an innovative city and efficiently organized administration that drive cities to deal with Smart City? And what role do citizens and their participation play?

 

The paper explores these questions around communication infrastructure, citizen participation, and use cases in the smart and digital city. It builds on findings and hypotheses from nearly 20 interviews conducted last year by the study team with German cities, districts, municipal utilities, and their external service providers. Between February and April, the team collected the responses of 115 experts from 107 cities in an online survey. The survey was mostly answered by representatives of the administration, but occasionally also by their technology service providers or the city’s own municipal utilities. The participants received a personalized version of the study report on request. The general report is now publicly available.

 

Independence from third parties as a central criterion in technology selection  

“When we talk about technology selection, we classically think of criteria that primarily describe technical performance factors. So, in the case of communication technologies, for example, the data rate, transmission speed, or error rate,” explains Baur, and adds, “but our interviews in advance have already indicated that in the context of Smart City it is very important who operates the networks and how much the city can do itself.” In fact, the study shows a clear picture: the top criteria for technology selection are IT security, low energy consumption, and independence from third parties (80 percent of all answers rate this point as important or very important). For cities, operating a network themselves or through their own municipal utilities offers the advantage of being able to easily connect all properties themselves, for example even district heating shafts that are difficult to access. However, this requires knowledge and experience and often also an emergency service around the clock.

 

Low-power wide-area networks (LPWANs): LoRaWAN as clear favorite

The paper looks in particular at the area of low-power wide-area networks (LPWANs). These networks are of great importance for urban applications, as sensors can operate for years on a single battery, only a few base stations are needed to cover the urban area, and the costs for such networks and sensor technology are comparably low. Three technically very similar technologies are prominent in this area and exactly one of them – LoRaWAN – allows cities to operate the technology themselves. The study shows that almost half of the participating cities (53 out of 107) are already using LPWANs. Consistent with the high prioritization of independence from third parties as a selection criterion, this shows that LoRaWAN is already in use in 40 cities and another 12 have planned to implement it. Narrowband-IoT, a network based on LTE provided by large telecommunications companies, is less popular and is used in seven cities. Sigfox, the network of the company of the same name headquartered in France, is much less common, with only three cities. The German smart city therefore generally relies on LoRaWAN and the approach of operating the network itself clearly dominates; external providers are only used in eight cities.

 

Citizens before profitability: cities focus on reputation and location attractiveness

But what do cities hope for from Smart City? When asked about possible pricing, it becomes clear that cities would like to provide the LoRaWAN network free of charge – or already do – at least for their own purposes (100 percent), within the city group (62 percent), and for citizens (65 percent). The majority of cities believe that companies should pay for the use of the network (59 percent). Nevertheless, on the whole, the majority of the cities see the statement “Smart City generates additional revenue for our city” critically – only 25 out of 93 agree here. Financial aspects are therefore not the benefits that cities primarily hope for from Smart City. Instead, they see above all an improved external image (90 percent agreement), a livable city (89 percent agreement), and a better execution of urban tasks as positive effects of the implementation of Smart City. Cities that are already advanced in the implementation of smart cities usually work closely with citizens. This is precisely where the study offers starting points for cities that are at the beginning of implementation: for example, less than half of all participating cities have so far taken advantage of the opportunity to exchange information with local IT initiatives (only 45 out of 107, or 42 percent).

While network infrastructure is of course a technical issue at its core, its political impact should not be underestimated: how much influence do cities and citizens have on the local network? The study shows that cities are well aware of the political dimension of this technology choice, as also shown by the dominance of LoRaWAN. “However, we also see that a wide variety of approaches exist side by side in terms of possible user groups, marketing, and the technical setup of the local LoRaWAN. We expect experimentation here in the coming years until it becomes clear which approaches are actually successful in the long run,” summarizes Baur, the study director. When it comes to the practical implementation of smart cities, many actors can learn from the most progressive cities. Some questions are still completely open and need to be clarified in the public discourse, for instance the necessity and practical implementation of open data.

 

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Further information and links:

Prof. Dr. Joachim Henkel has been Chair of Technology and Innovation Management at the Technical University of Munich (TUM) since 2004, where he is also Vice Dean for Research and Innovation at the Faculty of Economics. His research focuses on digitalization, open and user innovation, as well as patent management and standards. Prof. Henkel has been a visiting scholar at the MIT Sloan School of Management, Harvard Business School, University College London, and Singapore Management University.

Lucia Baur has been working on her doctorate at the Chair of Technology and Innovation Management at the Technical University of Munich (TUM) since 2020. Her research focuses on low-power wide-area networks, the Internet of Things and Smart City. Baur studied industrial engineering at the Karlsruhe Institute of Technology as well as the Universitat de Barcelona and the Federal University of Santa Catarina in Brazil. She then worked for over two years at the strategy consultancy Boston Consulting Group (BCG).

Master’s students Niklas Karlin and Valentin Mayer as well as master’s graduate Sven Leeger also contributed to the study.

Download the study at: https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4245680  

 

On Thursday 17 November at 3 p.m., the study will be presented online in German language and questions will be answered.

Publications in the scientific press are in progress.

Press contact: Lucia Baur, Study Director, lucia.baur@tum.de

 

Topic: Vorstellung der Studie "Smart Cities in Deutschland 2022 - Technologien, Anwendungsfälle und Partizipation

Time: Nov 17, 2022 15:00 Amsterdam, Berlin, Rome, Stockholm, Vienna

 

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