We Were Promised Smart Cities. What Happened?

Smart cities were supposed to be the future.

Written by Ellen Glover
Published on Nov. 16, 2022
We Were Promised Smart Cities. What Happened?
Image: Shutterstock

About 10 miles southeast of Abu Dhabi, the capital of the United Arab Emirates, sits a city made of glass and terracotta. Beneath a sweltering sun, amid a vast expanse of golden sand, it isn’t quite a mirage, but rather a constantly shifting work in progress.

In 2006, Masdar City was first billed as a massive departure from the region’s oil-based economy — a compact, energy-efficient urban utopia at the center of the fossil fuel industry.

Bolstered by funding from both the Emirati government and Masdar, a subsidiary of the government-owned Mubadala Development Company (now Mubadala Investment Company), the city would be powered entirely by onsite renewable energy harvested at the world’s largest hydrogen plant and a giant adjacent solar panel farm. And the whole city would be raised on a platform, underneath which a fleet of driverless cars would carry any residents who didn’t feel like walking the city’s pedestrian-friendly streets, designed specially to counter the withering desert heat via natural ventilation and cooling wind towers. Meanwhile, a light rail line would connect Masdar City to the Abu Dhabi metro area, the airport and other locations within the city center.

The city was supposed to be a sort of metropolis for green living — a fully functioning city where citizens lived in zero-carbon neighborhoods and companies could experiment and create new greentech ideas. By 2015, there were reportedly supposed to be 50,000 residents and 40,000 commuters. There were supposed to be windmills producing electricity onsite and vegetables growing in smart greenhouses. And it was supposed to be an epicenter for green innovation, with a projected 1,500 new businesses and startups staffed by some 10,000 new employees.

What Is a Smart City?

A smart city is an urban environment that uses the Internet of Things, artificial intelligence and other cutting edge, data-gathering technology to help it run in more efficient and environmentally friendly ways.

The vision for Masdar City is exactly what most of us picture when we hear the term smart city — an urban space that uses cutting edge technology like artificial intelligence and the Internet of Things to help it run in more efficient and environmentally sustainable ways. Tiny, data-gathering computers are placed in everyday objects like traffic lights and garbage cans, and that data is interpreted with AI to make cities greener and more livable.

And, like this fabled concept, Masdar City has not quite lived up to its early promise. Due largely to the global economic crisis in 2008, many of the city’s ambitious projects have either stalled or not met expectations. As of 2020, Masdar has just 1,300 residents living in its small cluster of low-carbon buildings (far from the originally planned 50,000), and some 4,000 people commuting in for work. The entire city is still in phase one of its development, and isn’t expected to be finished until 2030, 15 years after its initial deadline.

“The Masdar City project started out with a lot of ambition, and many of those promises were not realized,” Gökçe Günel, an anthropologist and associate professor at Rice University, told Built In. She wrote a book about Masdar City in 2019, and she attributes a lot of its shortcomings to the project’s over-ambition, as well as its focus on marketing as opposed to its actual financing. “It was basically a mismatch between the kind of master planning strategies and the budgets that were made available.”


Smart Cities: Too Good to Be True?

Masdar is not the only smart city to have fallen short over the years. Google’s sister company Sidewalk Labs promised in 2017 to construct a smart, water-front neighborhood in Toronto, only to kill the project in 2020 amid a political battle between privacy advocates and local developers. In 2016, the city of Columbus, Ohio, won a $50 million grant to implement smart technologies, but has not fulfilled its initial goals due to technical hurdles, the pandemic and shifting attitudes toward some of the tech it was using, particularly when it comes to the balance between privacy and technological advancement.

Meanwhile, Songdo, a completed smart city in South Korea worth about $40 billion on the shores of the Yellow Sea, has not been able to fill its buildings. China’s many smart cities are similarly under occupied, and have since been relegated to pilot projects.

This has been Masdar City’s fate as well. Today, more than 800 companies operate out of there, including Siemens, Honeywell and Mitsubishi. And some of the technology that’s been tested in Masdar has been deployed in other cities, Günel said, calling it a “global introduction into urbanism rather than something that starts and ends at Masdar City.”


Not Smart Cities, But Smart Technology in Existing Cities

These days, while large-scale smart city projects are continuing around the world, the focus has largely shifted toward incorporating smart technology into existing cities as opposed to just building brand new cities on virgin land. It’s essentially become a matter of private entities operating with the permission and support of city or state governments, according to Ellen Goodman, a professor at Rutgers Law School who has written extensively on smart city ethics.

“The focus has been on smart cities, or smart urbanism, or urban tech because cities have these frontline responsibilities for so many services where there is a lot of money to be made in the tech. There’s a lot of ground to be covered that tech can help you cover,” she told Built In. “Aspirationally, it’s using technology, in a way, to improve the provision of services.”

“Aspirationally, it’s using technology, in a way, to improve the provision of services.”

Singapore, London and Barcelona are among the cities at the forefront of this effort. Barcelona adopted smart trash bins that signal when they are full and ready to be emptied, and a smart irrigation system to water its public plants. In the Netherlands, people ride smart bikes that measure air pollution and weather, as well as the bike’s speed, location and battery voltage, to help riders choose the cleanest and fastest routes. And Santander, Spain, is kitted out with thousands of parking sensors connected to the IoT, which alert drivers when spaces are empty in an effort to reduce carbon emissions and traffic congestion. 

Over the years, U.S. cities like Chicago, San Francisco and Las Vegas have rolled out their own projects; and Portland, Oregon, is reportedly on track to be the smartest U.S. city. Essentially, these cities buy the technology created by private companies, and implement it in their infrastructure.

Further Reading17 Ways IoT Gives Us a Glimpse Into the Future of Transportation


The Implications of Smart City Technology

Cities allowing private companies to gather the data of its citizens, though, can lead to its fair share of concerns. These companies control a vast amount of data. And this data is not only used to provide the service that it is offering, but it is also sold off to other companies for a profit — and how that data is used by the recipient is entirely out of the initial company (and the given city government’s) control.

“Even beyond privacy [concerns], there are ways that can be harmful for citizens,” Goodman said. It can also make the city “dependent” on that initial company because it’s so “embedded in all of their systems,” she continued. “In some cases, the city sort of gives up its own custodianship of that data and relies on the vendor as the data custodian.”

And then there’s the matter of discriminatory or biased AI, which can cause huge issues when it is implemented into everyday life. Goodman argues that it’s one thing when it is used in the private sector for things like hiring, but when it’s applied in things only the government can control — think policing, building codes, low-income assistance programs like food stamps — it should be “of particular concern.”

“The tendencies that this tech has to be deployed in unanticipated ways, or to be built into things that are dormant until they get turned on, just seem to be characteristics of technology that are not seen elsewhere,” Goodman said.


Either Sustainability or Flexibility

But Rice University’s Günel says these issues are about “the institutions that run those smart cities more so than the technologies themselves.” For instance, one of the smaller projects she studied at Masdar City was about producing an energy-based currency called ergos. The idea was that ergos would correspond with a chosen unit of energy so that the total amount of ergos issued would equal the energy supply of the community. Ergos would be distributed to city residents, workers and visitors on a subscription basis, and could be surrendered in exchange for the energy content of a particular service.

The goal was to promote energy efficiency. But, in order to implement this project well, the city would require a fairly significant surveillance infrastructure so they could see how, when and where people were using the kilowatt hours they earned.

“There’s either sustainability or flexibility, you can’t have both at once.”

“When I asked the people who were working on these infrastructures what they thought about the social-political implications of this, they said ‘Well, we know we’re building a technocratic dictatorship, but we have to build a technocratic dictatorship because that’s the only way in which we can mitigate climate change,’” Günel said. “There’s either sustainability or flexibility, you can’t have both at once.”

This, Günel continued, is part of the much larger belief that complex issues (like climate change) can be distilled into technical problems and solved with the click of a button. “Technology has become appealing because it’s something you can buy. You just buy it, you put it in your city, and then, OK, you did your job,” she said. “[This] allows us to believe that the status quo is actually something that we can conserve. That we can actually expand [upon] the status quo, if only we had the right kinds of appliances.”

Of course, this isn’t at all the case. Poverty, food scarcity, substandard education, inefficient transit, high crime rates and bad policing — all long standing issues in our world’s cities — cannot be fixed with an IoT-connected traffic light or a smart trash can.

Still, this technology is largely accepted as a step in the right direction by cities, who are continuing to pay billions of dollars for it. One study predicts that the global smart city market will have a value of more than $1,380 billion by 2030. So, whether we like it or not, smart cities appear to be a permanent fixture in our daily lives.

“That notion of ‘You’re a smart city’ or ‘You’re not a smart city’ is done,” Goodman said. “This is not a choice. You really don’t have a choice about whether or not data about you is being collected.”

Learn MoreOnline Privacy: A Guide to How Your Personal Data Is Used


Smart Cities, Redefined

The proliferation of smart cities doesn’t have to be a bad thing, however. More than a decade after IBM is said to have first coined the term, innovators are continuing to reimagine what a “smart city” can actually be.

Günel pointed to burgeoning new communities like the one economic development platform Próspera is building in Roatán, Honduras, which aims to combine sustainable building practices, technology and a people-first approach to create its own community. Referred to as “economic development hubs” by the company, they have semi-autonomous governance and regulation, their own bill of rights, low taxation and baked-in environmental protections.

This phenomenon of private tech companies buying land in developing nations to create their own idyllic communities could create a new precedent or “legal template,” she said. “It will be interesting to see what kind of legal template that generates. And whether those legal templates will circulate in the same way that smart technology has circulated.”


Enter Blockchain technology

Meanwhile, in the United States, tech entrepreneur Scott Fitsimones isn’t focusing on tech like IoT or AI at all. Rather, he is at the helm of a new movement to recreate cities with blockchain technology. More specifically, decentralized autonomous organizations, or DAOs — member-owned, self-governing online communities whose members work together to accomplish a shared mission, independent of third-party intermediaries. Most DAOs pool cryptocurrency in a sort of treasury, and members vote on how it is used. 

Blockchain technology is inherently transparent and peer-based. DAOs established on this technology, according to Fitsimones, have the potential to give autonomy and power back to citizens, making the cities they live in smart in a different kind of way. A DAO creates a sort of “crypto co-op,” giving average residents a chance to participate in the management of their city, and share in the potential upside of the city’s success, he explained in a recent TED Talk. Permits, budgets, laws and records — all of the things that keep cities working — can exist on a blockchain for all to see and have input on, and they can be handled in a matter of seconds with the help of smart contracts.

“There are some people that see smart cities as, like, they installed IoT sensors at every stoplight or something,” Fitsimones told Built In. But he would prefer smart cities to be more centered on “fundamentally questioning how all these city services and stuff work,” he continued. “I don’t want to just accept that bureaucracy is inevitable and that we won’t be able to innovate and make our cities better.”

“I don’t want to just accept that bureaucracy is inevitable and that we won’t be able to innovate and make our cities better.”

He came up with the idea for CityDAO about a year ago when he was building his first company, Air Garage, a site that allows people and organizations to list their spare parking spaces for rent. During the three-month process of trying to onboard a particular parking garage in San Francisco to the platform, Fitsimones grew frustrated with all of the permits, red tape and general bureaucracy bogging the growth of the company down.

“There’s a lot of enthusiasm for throwing blockchain at a problem. But I saw cities and land and taxes and all this stuff as actually a no-brainer for what blockchain should actually be doing,” he told Built In. “Keeping track of who owns what piece of land, keeping track of what taxes have been paid — these are things that should be on a blockchain because its transparent, its incorruptible.”

Around this same time, Wyoming passed a bill allowing DAOs to form LLCs — essentially recognizing organizations formed on blockchain technology as legal entities. In general, LLCs can sign contracts, buy land, and more, so this legislation — a global first — meant that DAOs could now buy property together in Wyoming. From there, Fitsimones created CityDAO, and was among the first to hop on the bandwagon and actually buy a parcel of land.

“We saw this as really an experiment. We didn’t necessarily have a strong agenda besides just pool some money, buy land together, and see how it goes,” he said.

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The NExt Phase of Smart Cities

As of right now, CityDAO’s future is unclear. Fitsimones said the organization has a bunch of different subgroups that are forming and making proposals about what the group should do next. This includes pitching a budget outline and milestone updates as they prove out their projects.

Eventually, though, he would like CityDAO to serve as a mechanism for experimenting with ideas and validating their success so they can eventually be replicated in established cities. Fitsimones believes CityDAO’s proposal process and overall decentralized nature could be replicated in cities to make their democratic processes run more efficiently. It could be an avenue for citizens to propose funding ideas and get them off the ground, or a way for taxpayers to audit how their local governments function and allocate certain funds.

“I think it kind of paves the way for more bottom-up involvement,” he said, adding that he sees a lot of these ideas as “inevitable.”

Until then, what smart cities will look like in the next 10 years is being built right now. And it will likely be different than what exists today, especially as our relationship with the technology that comprises it continues to change.

“There is a historicity to this kind of project. … There’s a movement from one kind of framing to the next,” Günel said. “I’m curious to see what kind of logic will follow.”

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