Shaping the Future of Small and Medium-Sized Cities Through Digital Transformation

Published in The Fourth Leap (Jul - Sep 2022)

Urban cities are places where the nexus of people, places and economies take place. Often chosen for locations convenient for trade (e.g. on the coast or at the intersect of major land routes), cities have expanded over time as they attract workers in search of opportunity and better lives for their families. But whilst the major cities like New York and Tokyo draw the most attention, there is an understated yet significant role that small and medium sized cities (SMCs) have in the advanced world.

According to the European Union, an SMC is defined as having a population density between 300 and 1,500 inhabitants/km2 and/or between 50,000 and 5,000 inhabitants. In Western Europe for example, there are 850 larger cities, 8,414 small and medium sized towns and more than 69,000 very small towns. Roughly a quarter of the population live in SMCs and a fifth in the smaller towns.

Typically judged by the size of their populations and GDP, SMCs play an important part in regional development, territorial cohesion and execution of national policy. In general, SMCs tend to exhibit higher productivity rates than some of the bigger cities due to the presence of local economic clusters that complement urban hubs without the disadvantages of congestion, bureaucracy and high costs of living. In addition, more people in SMCs work in industry sectors than service sectors and tend to enjoy lower unemployment rates than their larger counterparts.

However, significant challenges face SMCs such as flight of talent as younger workers migrate to the larger cities coupled with ageing workforces; the problem is exacerbated by lack of investment into important areas like infrastructure (particularly transport) and overburdened social services.

Digital technology, namely information, communication and technology or ICT, has the potential to change the paradigm for SMCs. The advantages of ICT to enable smart cities have long been espoused, namely efficiency, better use of both public and private resources, responsiveness to changes, better understanding of user needs and improvements in social innovation. However, based on a study done by the World Economic Forum on SMCs in China, Japan, Brazil and Singapore, key obstacles have been identified, which include small size of government digital teams, limited financial resources, insufficient education and skills and the lack of digital talent. Furthermore, intra- and intercity interoperability issues in services are also a concern. McKinsey consultants liken the success rate of digital transformations to be as low as 30%.

But not withstanding these challenges, SMCs can still harvest the benefits of ICT where digital has a pivotal function in making SMCs smart and sustainable. The United for Smart Sustainable Cities initiative (U4SSC), coordinated by the International Telecommunication Union and UN-Habitat helps support the development of institutional policies and strategies to encourage the use of ICT to facilitate digital transformation and ease the transition to smart sustainable cities. U4SSC provides a list of 90 city specific key performance indicators along with practical solutions to improve the data collection process.

Examples of these include:

?????????????The use of Intelligent Transport Systems that reduce congestion as well as the provision of smart access to public transport like online bus route schedules and train times and micro-transit systems (such as bike sharing and transit on demand) to address the last mile challenge for commuters in order to make mobility easy and less time consuming for SMCs.

?????????????Many SMCs have an interface with rural areas and hence use blue green design (e.g. porous paving, bioswales and open spaces) as well as conserving spaces for natural habitats to encourage native flora and fauna species thereby enhancing natural capital and biodiversity. Digital mapping of natural areas as well as villages, heritage sites, rural settlements and nature-based landmarks allows access for citizens and serves to promote liveability.

?????????????Infrastructure too can benefit from ICT.?Water systems and distribution networks can be optimized and integrated with AI sensors to detect leaks and minimize non-revenue water. The use of common utilities tunnels where pipes and cables are housed in well laid out ducts rather than in random trenches can also assist in the deployment of ICT to better manage utility systems.

?????????????In the light of climate change challenges, many cities have committed themselves to achieving net zero carbon emissions by a certain date. Whilst SMCs do not have the same advantages of economies of scale possessed by larger cities, nonetheless they can reduce their carbon footprint through ingenuous ideas around the use of renewable energy such as solar and wind power together with energy recovery and efficiency. Ultimately, these systems can be aligned through a smart grid which balances energy demand and supply amongst transport and building users together with the application of energy storage arrangements.

There are many other applications of ICT that can lead to the digital transformation of SMCs. But a critical point to make is that digital technology is more than just improving efficiency. Like larger cities, SMCs must build resilience to short-term and long-term disasters.?

COVID 19 is a good example of a disaster that struck and overpowered the world’s health resources in a short space of time. Responding to a pandemic is incumbent on any city let alone SMCs in order to protect citizens and ensure continuity. But SMCs do hold certain advantages in terms of having less complex governance systems, and faster decision-making processes and response times to cope with the spread of a pandemic. Recovery should hopefully be quicker as well. Digital systems can be used in preparing for and responding to such disasters. In another example, cities that face climate disasters like severe typhoons and hurricanes, flooding and bush fires can utilise digital modelling to forecast weather changes and adapt infrastructure and other defence systems accordingly.

For SMCs, building this type of resilience – whether dealing with disease or climate change - can be accomplished through robust digital and ICT systems but this often depends on the amount of investment that can be afforded from city budgets.

Lastly, digital transformation must bear in mind the question of social equity. Too often, digital projects are designed to favour certain communities and can end up exacerbating the digital divide between the groups that have and those that do not have access to ICT.?As SMCs evolve and grow, it can be seen that some marginalized groups may not have access to the same opportunities as others in terms of quality of housing, jobs, neighbourhoods, community services, utilities and more.

Digital transformation should offer many opportunities for societies and it is important to ensure that everyone has the means and digital literacy to access them. It is incumbent hence that, as part of the transformation, there is equitable distribution of outcomes to alleviate economic and social distress so that positive legacies are in place for future generations to come.