Now that the House has passed the Infrastructure Deal, the impact on technology adoption could be profound. And while explicitly picking infrastructure technology winners and losers may be frowned upon since the Solyndra scandal, there are still plenty of unsaid winners and losers in the bill.
One big group of tech losers in the $1 trillion Infrastructure bill: “Smart Cities.” What are the implications of this? If Smart Cities technologies are losers, what are the winners?
In the entire Infrastructure bill, “smart cities” are mentioned only four times. The only dedicated funding for smart cities comes through a $500 million SMART grant program administered solely by the Department of Transportation (for the federal government) and tightly focused on transportation challenges, like connected vehicles, congestion and safety. This is a noteworthy departure from Obama-era policies regarding infrastructure technology, when the Smart City Challenge was a flagship program that was wide-ranging in scope and included several collaborating agencies.
The near-omission in the Infrastructure bill is reflective of three important market trends:
Tech for tech’s sake, without a foundational focus on people and communities, is oftentimes exclusionary and racist, and likely to be at odds with the Biden Administration’s emphasis on addressing systemic racism. (For example, the $1 billion included in the bill to reconnect communities divided by transportation infrastructure.)
Underlying infrastructure problems–notably lack of internet access, cybersecurity and an antiquated electric grid–are preventing greater access to and adoption of game-changing technologies often advanced on small scales in smart cities initiatives. Without addressing these underlying problems, smart cities technologies can actually exacerbate vulnerabilities.
“Smart cities” can be dumb – in its original inception, “smart cities” were cities that collected tons of data from sensors installed on everything. Over the last 10 years it’s become apparent that people and processes matter a lot more than data and technology and “smart cities” initiatives have largely rebranded to reflect that.
These dynamics have been at play for a decade, but the pandemic has brought these issues to the forefront.
If smart cities technologies are out, what’s in? The short answer is technologies that address the market trends above. Those include hardware and software technologies that enable progress on:
- Broadband ($65B included in Infrastructure bill)
- Cybersecurity: ($47B included in Infrastructure bill)
- Resilience to extreme weather and cyber attacks ($50B included in Infrastructure bill)
- Energy technologies, including smart grid technologies and advanced transmission ($73B included in Infrastructure bill)
- EV charging ($7.5B included in Infrastructure bill)
As a market segment, consulting services will continue to grow, simply because there’s so much money coming from the federal government, with limited guidance, that needs to be spent quickly on things state and local governments aren’t used to spending on.
When it comes to GovTech specifically, governments have moved away from flashy tech, having been burned too many times.
Look instead for technologies that:
- Facilitate equitable community participation, like in the City of Lancaster, PA.
- Make progress on existential threats many governments face, including health, climate change and affordable housing.
- Are proven in other markets and are being modified for government.
- Integrate seamlessly with existing and future technology systems.
Look also for companies that:
- Provide great customer support, even for off-the-shelf products.
- Acknowledge local government concerns about data ownership in their business models.
It’s essential to understand how and why the money in the Infrastructure bill is being spent, and on what. The United States is embarking on a once-in-a-generation investment and its impact on technology will inevitably be profound.
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