Back in 2009, Chattanooga was like many small cities in the US. While its downtown had high-speed internet, people and businesses in its wider territory had no access to broadband. EPB, the city’s electrical utility company, realized that it could change that by offering fibre broadband from the fibre network it would install alongside its grid upgrade. That forward-looking move, done in collaboration with the city government and without the need for taxpayer support, made Chattanooga the first city in the country to boast a city-wide gigabit per second. Chattanooga, or “Gig City” as it is becoming known locally, has gained $2.2bn in incremental value from investment, a ratio of more than 4:1 compared to its cost.

The distinctive example of Chattanooga's initiative to enable fibre broadband access in service of the public and the early-stage technology venture community provides a compelling story of the governance, financial and technical challenges necessary to address such projects. Chattanooga's persistent efforts to modernize infrastructure help grow the city's economic competitiveness, while also improving access to the essential service the internet has become.

When the COVID pandemic hit in 2020, that fibre network proved critical to the city’s pandemic response. Internet connectivity became more important than ever, particularly for school students forced to stay at home, and about 45,000 students did not have internet access and could not attend class. To address this, the city quickly erected 98 hotspots in outdoor public spaces. But this was not a long-term solution.

With its fibre network in place, Chattanooga’s local authorities were able to partner with private sector and non-profit partners to provide high speed internet access to its population of economically disadvantaged students across the county through its HCS EdConnect programme. By November 2021, more than 8,000 families had been connected through the programme.

The benefits of digitally enriched infrastructure in cities can be difficult to obtain, yet its importance is broadly recognized by the public, government, business and the non-profit sector in addressing a range of social and environmental issues. These infrastructure projects, often spearheaded by municipalities, are notable examples of innovation that can help cities to achieve better outcomes, even if the results are not perfect. So what is stopping cities from doing more with this opportunity?

Barriers to smart city partnerships

The challenges associated with the design, development and maintenance of digital urban infrastructure are substantial and have to balance the needs and incentives of both public and private stakeholders. While proofs of concepts and test-beds have been tried and are often successful, scaling these to city scale has been challenging for a number of reasons:

• Scope. There is too often a focus on solutions that address narrow aspects of the city’s needs.
• Capital requirements. Many cities do not have adequate capital for deploying solutions at scale and might struggle to attract investment from the private sector.
• Procurement. Procurement models favor vendor-buyer relationships as opposed to multi-year, multi-enterprise, complex partnerships.
• Time scales. Some of the most pressing challenges that cities face will need multiple years to address. These complex journeys need partnerships that can withstand the pressures of time, budgets and expectations.
• Data. A nuanced understanding of public concern over data sourcing and use can be critical for a successful public-private collaboration. These dynamics contribute to the unique challenges and opportunities for smart city public-private collaborations that range from intelligent street lighting to broadband access.

In recognition of these challenges, the World Economic Forum’s G20 Global Smart Cities Alliance assembled a taskforce to look for best practices and model policies in the area of public-private collaborations in 2021. That taskforce, comprised of experts and officers from cities, companies and institutions deeply involved in smart city projects, compiled case studies, insights and feedback from across the sector. As members of that taskforce, we are happy to provide a distillation of these resources in the form of our new Primer for Smart City Public Private Collaborations.

Successful public-private collaborations consider the needs of both parties. Image: World Economic Forum

Towards a framework for smart city collaborations

Our new primer is a starting point for aspirations to provide a thoughtful policy framework to guide public-private collaboration considerate of mutual interests and potential conflicts between government, business and the non-profit sector. It is a necessary milestone in the public sector-led innovation to improve the likelihood of publicly beneficial smart city projects that also maintain appropriate incentives for private sector participation.

Frameworks should consider the distinctive challenges of digital urban infrastructure public-private collaborations. Projects of this nature may be distinctive from other forms of public-private infrastructure partnerships because of the treatment of data as an underlying asset being created, stored and consequently governed in the project. Developmental processes must account for the legal, technical and testing phases of these projects, including taking into consideration pilot initiatives that should inspire public and private confidence to enable scaling.

A response to those challenges can be partly informed by practitioner experiences in other data-oriented projects that needed to align the interest of business, government and in some cases, the non-profit sector. Those considerations include:

• Establishing a shared understanding of the business case for participation in the project. This should be considerate of both private sector needs and public sector values, incentives and conceptions of success.
• Ensuring transparency and clarity on how data will be sourced, used in decision-making, and shared.
• Facilitating integration into broader city planning and policy to support sustainability across political life cycles.
• Operating with principles that support trust-building and concern for public awareness and participation in the project.
• Defining a vision of success that includes agreement on performance indicators and their measurement methods.

These considerations are further expanded upon in the primer, where 13 considerations for effective smart city developmental processes were agreed upon by our taskforce.

Advancing support for global smart city collaboration

As part of our review process, the Primer for Smart City Public Private Collaborations was presented to the G20 Global Smart Cities Alliance working group of policy experts. The working group, composed of dozens of smart city experts from around the world, recommended that further guidance would need to be developed in specific parts of the public-private collaboration process. They highlighted, among other areas, more work to be done in innovative procurement frameworks, data-sharing and governance agreements, and viable funding models for public-private collaboration.

As the G20 Global Smart Cities Alliance begins work in these areas, the World Economic Forum is in parallel increasing its investment in work to accelerate public-private collaboration in cities. In June of this year, the World Economic Forum and UN-Habitat announced at the World Urban Forum (WUF11) the establishment of a Global Partnership for Local Investment to accelerate public-private collaboration and resourcing of urban initiatives that advance the 2030 Agenda for Sustainable Development. The goal of the Global Partnership will be to forge and mobilize a coalition of industry leaders, investors, cities and international institutions to serve as first movers and pioneers for joint planning and co-investment in cities; curate successful models of public-private collaboration that can be scaled globally; and develop new tools, forums and platforms to catalyze, support and showcase these new models of collaboration and co-investment.