Why Data is Key to the Future of Cities

This article was written by Carlos Santiso and Marcelo Facchina.

Technologies are changing people’s lives in cities and how urban centers evolve to meet their needs. The pandemic accelerated this transformation with disruptive force.

It is inconceivable not to consider cities as an integral part of the equation to solve challenges of combating social exclusions, improving public services and reducing insecurity, among others. In this context of disruptions, the ability of local governments to manage urban problems will be paramount to recovery, and the pandemic has helped us understand more clearly the various elements that are missing to govern cities effectively.

A key issue that has surfaced prominently in the public agenda is how data is handled and for what purpose, but also its quality and integrity, as well as the privacy and security guarantees. In other words, we need to consider people’s trust in the way local governments handle their data to improve lives.

A modern local government cannot be sustained without good data governance, secure data infrastructure, and digital talent to extract its true value. Data policy must therefore act as an articulator of transformation strategies, defining the scope, direction, responsibilities and procedures for the path towards more responsive and resilient territories.

To drive strategic initiatives, “delivery units” have gained relevance as instruments for managing change in governments for the implementation of priority initiatives. At the national level, management models led by central governments through delivery units have proven effective instruments for meeting government targets and priority goals and major projects.

This model is now being expanded to subnational governments, as is the case in Colombia. Municipalities play a direct role in providing public services and interact closely with citizens, and such innovations can help improve services. In a recent study, we show how Latin American cities, for example Recife and Rio de Janeiro in Brazil, seek to leverage these innovations in public management as a strategic planning tool, building on New York’s pioneering experience. Another interesting case is Buenos Aires, in Argentina, where systematic monitoring of government commitments by the Compliance Management Unit achieved a significant decrease in the rate of murders (43%) and road accidents (33%) between 2015 and 2019.

The increasingly pivotal role of new technologies and strategic data use by municipal governments can improve delivery capabilities, with agility and intelligently, but also more efficiently and economically. In another study by CAF—development bank of Latin America—, we look at the case of 12 cities in the world, including Boston, Seoul and London, and in the region, Buenos Aires, Medellin, Mexico and Recife, that seek to strengthen their strategic management with more intensive use of data to better meet the growing expectations of their citizens.

For example, the government of the city of Buenos Aires implemented a multi-axis data strategy, including the opening of public data, georeferencing municipal public procurement, and a AI-based chatbot to improve service to citizens.  Bogota createdÁgata, a Data Analytics Agency, to leverage city data more effectively to devise public policies and provide public services that better address users’ needs. For Bogotá’s digital advisor Felipe Guzmán, “consolidating Bogotá as a smart territory implies having the necessary capabilities to manage, secure and leverage the data in the city.”

These data units not only seek to leverage the data generated by cities, but also improve ability to understand people’s real problems. The combination of data intelligence with strategic city management by central governments shows promising results. For example, the City of Los Angeles managed to reduce by about 80% the number of streets considered unclean with systematic monitoring of roads through the city’s geodata portal. In San Francisco, residents have access to more than 80 dashboards reporting municipal performance, and can follow up how the city’s service goals are being met.

But perhaps the most important benefit of delivery units using data science is that they demonstrate that investing in digital innovation at the sub-national level is not only desirable, but essential. While cities of North America and Europe are in an advanced stage, Latin America is still yet to exploit the benefits of this management model.

Accelerating the digital transformation of local governments represents a unique opportunity to improve people’s quality of life, but also to “reactivate local economies through entrepreneurship with business models based on data analytics,” according to Fernando de Pablo, director-general of Madrid’s digital office. For example, the city of Córdoba in Argentina seeks to revitalize its local GovTech startups by creating a fund for the promotion of innovation and data economy, with the help of the city’s lab, Corlab.  

Data governance and the ethical use of artificial intelligence are core challenges for the cities of the future. This fuels the need for multilateral dialogue forums to share experiences, challenges, and opportunities, as is the case among U.S. cities, promoted by Harvard University’s Data-Smart City Solutions, and the What Works Cities network created by Bloomberg Philanthropies. Globally, initiatives such as the G20 Smart Cities Alliance of the World Economic Forum seek to support replicable data strategies at scale and in the dissemination of good practices through ‘leading cities’ models and regional smart city networks.

The proximity to citizens makes municipalities the ideal spaces to start using data to restore trust in governments, which has been eroded in recent years after the increase in citizens’ expectations and recent crises. For Sao Paulo’s digital transformation coordinator André Tomiato, “governments become more digital in response to people’s need and to the extent that they manage to use data broadly and strategically.” Therefore, cities are essential to rebuilding the pact between citizens and institutions for recovery.