How cities can unlock up to $60 billion in ROI


Research firm ESI ThoughtLab has published the results of a study conducted to understand how cities can benefit from massive investments in improved, connected and resilient connectivity systems.

The study was conducted within a period of one year across 100 cities, using technology to improve, connect, and secure all areas of their ecosystem.

The study shows how cities can go beyond current smart solutions to become “hyperconnected” hubs to optimise transportation, public health and security, government operations and consumer services.

According to the study:

Cities could collectively enjoy a return on investments of as much as $60 billion if they were to become fully hyperconnected.

The average return on investments on smart city initiatives ranges from 3% to 4% or from $19.6 million per city for hyperconnected beginners to $83 million per city for hyperconnected leaders.

For cities to become hyperconnected, they need to:

  • Craft an evidence-based business case and continuously monitor performance—analysing ROI systematically with the right metrics.
  • Calculate the full benefits including social, business, economic, and environmental benefits.
  • Capitalise on advanced technologies—particularly various forms of AI—while also bearing in mind the importance of cybersecurity.
  • Generate more value from data by gathering, integrating, and monetising it in a responsible way, as well as sharing it with stakeholders as appropriate.
  • Organise resources within a largely centralised department and drawing on both internal and external staff to operate hyperconnected city programmes.
  • Use the ecosystem effectively, partnering with business and academic communities, but keeping crucial development and implementation tasks in-house.
  • Ensure all citizens are engaged and connected by seeking input from stakeholders and reaching out to disadvantaged populations.

Factors hindering cities from becoming hyperconnected include:

  1. Uncertainty among citizens regarding the effects of new technologies on health, privacy and other interests
  2. The unavailability of funding for smart initiatives
  3. Policy and regulatory barriers—such as those around procurement

Lou Celi, CEO of ESI ThoughtLab, said: “The real value comes not just from using technology to link assets within urban areas, such as mobility, safety, energy, and sustainability, but also from connecting city stakeholders, including governments, citizens, businesses, and academia. When these are all aligned, cities can reap the greatest economic, business, and social rewards.”

The report is available for download here.