Key Insights

Smart City Funding Requires Creative Approaches


Cities want to modernize through IoT technology. But getting the funding for smart city projects can be challenging.

While cities want to become smart cities, that moniker takes dollars. And dollars can be difficult for the public sector to come by.

American cities want to modernize, reduce costs, become safer and more efficient and responsive. In this effort, they often turn to Internet of Things(IoT)-connected devices, which gather information about their environment to manage traffic lights and optimize traffic, conserve water, or help public transit vehicles navigate their route. But IoT projects need funds to pay for the necessary technology resources—and to sustain these projects over time.

“Many cities simply don't have pockets deep enough to pay for needed improvements, enhancements and expanded services that citizens demand and growing populations require,” the Smart Cities Council noted in a recent brief.

IT pros on the ground affirm the smart city funding problem. “Anybody that tells you they live in a smart city is lying to you,” said Bob Bennett, chief innovation officer for Kansas City, Mo., in a panel discussion on smart city projects at the IoT World 2018 conference.

But, Bennett said, “there is money to do things in a city”—especially when city governments join forces with the private sector.

Public-private partnerships key to smart city funding

Cities like Kansas City have enlisted private-sector partners to achieve their initiatives. In June 2015, for example, Kansas City brought in the telecom Sprint to help build out and support city connectivity.

“We made it economically feasible for Sprint to own and operate that network,” Bennett said. Sprint, in turn, tapped Cisco to supply routers, switches and other hardware. “That’s when the partnership truly began with Sprint, Cisco, Kansas City and 11 other partners, including startups, which became part of this grand coalition. And it’s worked,” Bennett recalled.

In November 2017, Cisco also introduced the City Infrastructure Financing Acceleration Program to help cities find band together with private companies to garner funding for smart city initiatives. Cisco pledged $1 billion to help cities accelerate and ease the journey for smart city projects.

Now that it has seen firsthand the benefits of public-private partnerships, Kansas City will partner with other corporate sponsors for long-term smart city funding. Bennett said the city is embarking on a “flip,” of sorts, of the Department of Transportation’s Smart City Challenge, which in 2015 recognized several American cities for their work on smart city projects. Kansas City was one of the finalists. In a matter of weeks, Bennett said, the city will review request for proposals from various vendors who will bid to become a longtime smart city partner in Kansas City.

“Welcome to Kansas City, corporate America,” Bennett said. “We don’t want you to serve as a vendor. We’re looking for partners . . . for someone to build out this ecosystem not just in name . . . but to operationalize what that ecosystem does,” he said.

In the spirit of partnership, Bennett said, the private-sector partner selected will be embedded in the project and the city, even having a desk at city hall. The smart city funding is estimated to cost somewhere between $180 million to $500 million.

“Together we are going to collaborate on how we’re going to operationalize the strategy. And this agreement won’t last for a year or two years but for 10 to 30 years.”

Bennett discussed a few of the many projects Mayor Sly James has approved for smart city funding that will require a programmatic partner:

  1. Revitalization of city areas. According to Bennett, Kansas City sports some of the smartest 54 blocks in the country. The city will take the template it has used on Main Street to revitalize Prospect Avenue, a historically hard-hit area of town.
  2. City Wi-Fi project. While the city needs to extend Wi-Fi coverage, there are certain areas where it won’t introduce Wi-Fi. “You can’t put Wi-Fi everywhere in Kansas City; it’s stupid,” Bennett said. The city wants a partner that understands how to map out extending capability, such as by refraining to put Wi-Fi indiscriminately in rural areas, where animals outnumber people.
  3. Smart parking. “Parking isn’t very sexy,” Bennett said. “It’s incredibly boring, but it means the world to the city. The quicker I can get you into a parking space, that’s time I can get you ordering coffee or visiting a second shop and doing more shopping and I’m reducing greenhouse gas emissions,” he said. Bennett noted that smart parking also enables the partner to recoup some of its investment: revenue from smart parking as well as revenue from the data generated from sensors in water metering projects.

Bennett said that despite the public sector’s reputation for being slow or less responsive, the smart city project was designed to work with the pace of business. “We will guarantee you the ability to manage it the way you manage all your other businesses,” Bennett said. Kansas City has also worked extensively to incubate innovation through the Innovation Partnership Program, which hosts three-month pilot projects in the city that are developed in conjunction with startups.

The public-private partnerships in Kansas City help keep smart city projects front and center without having smart city funding get in the way. We get to “make that vision smarter, more efficient, more responsive to civic needs and more effective in terms of delivery of services,” Bennett said. “Awesome.”

Lauren Horwitz

Lauren Horwitz is the managing editor of, where she covers the IT infrastructure market and develops content strategy. Previously, Horwitz was a senior executive editor in the Business Applications and Architecture group at TechTarget;, a senior editor at Cutter Consortium, an IT research firm; and an editor at the American Prospect, a political journal. She has received awards from American Society of Business Publication Editors (ASBPE), a min Best of the Web award and the Kimmerling Prize for best graduate paper for her editing work on the journal article "The Fluid Jurisprudence of Israel's Emergency Powers.”