By Rosa Mendoza, HTTP Executive Director
Everything is smart, from our appliances and phones to our cars. New cars can park themselves and sense cars and pedestrians to avoid accidents. New tablets respond to the pressure of the user’s touch and our phones can share in seconds better quality photos than many cameras are capable of taking. Even my new energy efficient refrigerator has a built-in tablet running the newest Android operating system, which allows me to check my calendar and to order groceries. So with an estimated 70% of the world’s population living in urban areas by 2020 (and accounting for 80% of the global GDP), shouldn’t our cities be smart too?
But what exactly is a “smart city”? There are various definitions, but for the sake of this blog, we will define a Smart City as one that deploys information and communication technology to facilitate better quality of life for its citizens and entrepreneurship though better public services, more efficient use of resources, and streamlined interaction between government and citizens. Some characteristics of smart cities include:
- Integration of telecommunication and information technology to allow public workers to monitor unsafe conditions on roadways, law enforcement to monitor and better control crime activity through gunfire detection applications (for example), and citizens to more easily interact with their government
- Better infrastructure to the point that broadband and WiFi connectivity are as ubiquitous as electricity
- Updated (i.e. smart) city and federal policies to reduce waste and increase innovation and investment
The benefits of these smart cities are significant. In fact, in a publication from McKinsey and Company, thought leaders in management consulting and process improvement, stated
“When you get to a critical mass, the data on the benefits is so compelling: a 50 percent reduction over a decade in energy consumption, a 20 percent decrease in traffic, an 80 percent improvement in water usage, a 20 percent reduction in crime rates. The concept of smart cities really sells itself.”
Smart cities are one way to foster innovation and stimulate economic growth. One of the key ingredients of a smart city, perhaps the most important, is investment in infrastructure. It cannot be denied that there is a positive correlation, in general, between investment in telecommunication infrastructure and economic growth. U.S. wireless companies have understood and responded to this fact by investing $78 billion in broadband in 2014 and since 1996 have invested a total of $1.4 trillion in telecommunications infrastructure. Nowhere else on the planet has this level of commitment to investment been seen. It is clear that the result of this investment is positive and has facilitated significant economic growth and fostered considerable innovation. Broadband expansion and increasing connectivity has helped grow small and large businesses alike and has helped entrepreneurs become successful and maintain that success. Additionally, as stated, smart cities rely heavily on robust infrastructure and reliable broadband access. Without it, the data, communication, and interactivity suffocate.
So how do we continue to foster investment, innovation, and economic growth, generally, and specifically as it relates to smart cities? Enact smart policies. If my refrigerator can be smart, so should the policies that govern broadband and telecommunications. Take for example Title II; in an ever-evolving global information technology and interconnected landscape that changes daily, sometimes hourly, why would we regulate this constantly changing landscape that includes voice over IP (VoIP) using policies enacted to regulate pulse dialing signal technology. The latter being cutting edge technology patented in1892 (yes, we are talking about the rotary phone). That is just one example. We must be proactive in establishing policies that will foster investment and economic growth five or ten years from now, not force retrofit our technological advances to outrageously outdated regulatory polices. If we are not careful, other nations or regions (EU, etc.) will begin to surpass the U.S. in developing new businesses and taking advantage of the evolving software, hardware, and infrastructure needs of our globalized economy. Someone will supply that demand and I for one would prefer that American companies supply it. One sure way to stifle investment is by enacting these ill-equipped policies to regulate this thriving ecosystem. Investment tends to shy away from markets with unsure or overly burdensome regulatory policies. In addition to generally stifling investment, there is also the more specific, and very real, possible scenario that instead of investing in smart cities and the associated infrastructure, they will invest elsewhere due to the unpredictable impact of outdated policies.
We have discussed several aspects of investment and how they impact smart cities. But how does that impact the Latino community? As discussed, smart cities have a tremendously positive impact on entrepreneurs and small businesses. With more efficient use of resources and less overhead costs to do business, entrepreneurs tend to thrive in smarter cities. The U.S. Hispanic Chamber of Commerce indicates that Latinos are three times more likely than the national average to start their own business. There are 4.1 million Latino-owned businesses in the U.S. and they contribute $661 billion annually to the U.S. economy. Additionally, in a previous blog, I noted that Latina Entrepreneurs are one of the fastest-growing groups of small business owners, growing at a rate six times the national average. Furthermore, Latinas’ impact on Latino-owned firms has resulted in at least 36% ownership, 20% of employment and 16% contribution to the revenue generated in these business ventures. So to say that any policy or institution (for example smart cities) that impacts small business growth has a significant impact on the Latino community is an understatement.
To add to that point, Pew found that 44% of Latinos in the United States live in one of ten metropolitan areas (including Los Angeles, New York, Chicago, Houston and others). No one can argue against the fact that Latinos continue to be severely impacted by the digital divide and consequently are not able to take full advantage of the associated resources (educational, health, etc.) Smart cities, and by extension smart policies, can facilitate the narrowing, and hopefully closing, of this divide by improving the lives of Latinos in urban areas and facilitating greater utilization of broadband and thereby to all of the many benefits of the increasingly interconnected, internet-based global society.