SMART CITY CLASSIFICATIONS

• According to Metropolitan Intelligence, there are four types of smart cities:
•  Constituent-led smart cities where citizens have taken the lead to help co-design what they want in a smart city.
• Real estate investment smart cities where private sector investors, governments, and developers invest in real estate and "put their own new infrastructure, technology, and policies in place to take a controlling position in a way that they expect will provide value to all stakeholders."
• Private smart cities that are owned by "investors, technology vendors, and real estate developers who install infrastructure, policy, and governance of their own design that does not include government services, support systems, or social programs available in current cities."
• "Do Nothing" smart cities that have leaders with good intentions, but " are out of sync with strategies and programs that could save their city."
• A 2016 Smart Cities Survey identified three types of smart cities:
•  Build-operate-transfer (BOF), which is when the municipality or city planners "work closely with an external private partner, which develops the services and deploys the necessary infrastructure to enable the smart city project."
•  Build-operate-comply (BOC), which is when government entities "provide a platform for smart city development, regulations that the third parties must adhere to, and an initial source of funding."
•  Municipal-owned-deployment (MOD), which is when the municipality or city planners "take full responsibility for the development of the services and deployment of necessary infrastructure as it relates to their smart city project and goals."

SMART CITY REVENUE MODELS

• Based on a smart cities business model survey, 58% of smart cities rely on federal or central government funding, 45% rely on supranational organizations, 23% rely on other public funding, 21% rely on municipal government funding, and 17% rely on funding from the technology provider. This adds up to more than 100% because smart cities rely on more than one source of funding.
• In addition, 42.4% of smart cities have received some sort of grant, 40% have obtained loans, 39.6% received money from other sources, 25% received money from equity, and 13.3% received money from in-kind contributions.
• Some smart cities use advertising as a main revenue stream, including Kansas City, which has "installed kiosks throughout a city with maps and local information for restaurants, attractions, events and shopping." The city sells advertising space on these kiosks.
• Other smart cities are making more government services available online for a small surcharge that generates revenue for the city.
• Smart cities are also using the data obtained by these online services to provide insights at a cost to advertisers and other companies.
• According to Deloitte, the following revenue models are currently employed by smart cities:
•  Financing Model Payments — The city receives payments from the public sector that "match agreed cost (including finance) amounts, allowing full coverage of expenditure and agreed returns."
•  Availability Payments — The city receives payments from the public sector that are "linked with the performance of the private sector operator and availability of the service/asset in line with agreed performance standards."
•  Savings Sharing — The implementation of certain smart services will generate savings for the public sector, which can then "generate a budget to help fund the associated assets/service."
•  Shadow Tolls — The public sector makes payments to the private sector for use of a smart service.
•  User Fees/Charges — Users pay directly for smart services (e.g. road tolls).
•  Rate Type Payments — The public sector "collects revenues from the public and utilizes these to pay the private sector for specific services/assets (e.g., power generation/water utilities)."
•  Pay-As-You-Go — Users are charged for each use of a smart service, which is collected by either the billing system of a mobile operator.
•  Subscription — Users pay a fixed price for smart services regardless of usage amount.
•  Advertising-Based — Revenue is generated by selling advertising space to third-party advertisers rather than collecting it from individual users.

SMART CITIES AND DEPOPULATION

• Kamiyama Town in Japan has a "creative depopulation strategy" that is part of Japan's Future Cities Initiative.
• The European Union is exploring Smart Villages as a way to confront "persistent challenges, such as depopulation and poor quality public services."
• This plan aims to "create habitable villages where people can and want to live, because innovative and digital solutions improve their lifestyle."
• Lapland, Finland's Arctic Smart Rural Community has the mission of stopping "capital outflow from rural areas." With this plan "300 villages are enabling the creation of sustainable resources and boosting industrial development, curbing depopulation and giving the region new economic and social opportunities."