From Future Vision to Urban Reality An urban playbook for driving sustainability, resilience, prosperity, and digital change ThoughtLab Sponsored by Contents Introduction 3 Research background 5 Urban challenges on the road to future-readiness 9 What future-ready cities do differently 14 Building a future-ready operating model 21 Harnessing the power of technology 34 The next frontier: AI and digital twins 42 Best practices across urban domains 53 Methodology appendix 65 Sponsors and advisors 71 ThoughtLab From Future Vision to Urban Reality 2 Introduction Background Urban Challenges Future-Ready Cities Operating Model Technology AI & Digital Twins Urban Domains Methodology Sponsors Introduction ThoughtLab From Future Vision to Urban Reality 3 Cities are in the throes of transformation as they come to grips with profound environment, social, and technological shifts. To learn about their progress, in mid-2022, ThoughtLab conducted a pioneering study of 200 cities around the world to analyze how they planned to adapt to citizen needs and expectations heightened by the pandemic. At that watershed moment for cities, all urban leaders surveyed were actively developing or busy rewriting future-ready plans to become more sustainable, resilient, inclusive, and digitally enabled. These plans outlined how their cities would meet new citizen and business expectations, reinvent and optimize urban domains, and weather future unexpected shocks and urban pressures. While the plans were visionary, the road map was unclear. To gain greater insight into how cities are achieving their social, sustainability, and economic goals, we conducted a follow-up survey of a wider set of 250 cities in the second quarter of 2024. That survey examined the progress that cities have made in operationalizing their future-ready plans across five urban domains: environment and sustainability; urban infrastructure; mobility and transportation; safety, security, and resilience; and citizen living, health, and trust. In addition to our quantitative analysis, we conducted interviews with 15 city leaders and held three advisory board meetings with government, corporate, and academic leaders in the city space. The result of this research is this eBook, which can serve as an operational guide to becoming a future-ready city. We give special thanks to our sponsors, Axis Communications, Deloitte, FTI Consulting, GM, Intel, Itron, ServiceNow, and Wireside Communications. Without their support, this research would not have been possible. Introduction From Future Vision to Urban Reality 4 Introduction Background Urban Challenges Future-Ready Cities Operating Model Technology AI & Digital Twins Urban Domains Methodology Sponsors Research background From Future Vision to Urban Reality 5ThoughtLab The study covered progress across five urban domains: (1) environment and sustainability, (2) urban infrastructure, (3) mobility and transportation, (4) safety, security, and resilience, and (5) citizen living, health, and trust. A rigorous benchmarking study of 250 cities in 78 countries In the second quarter of 2024, we conducted a rigorous study of 250 cities in 78 countries to analyze the progress they made in operationalizing their future-ready plans. Valuable insights into practices To provide city leaders with an actionable playbook, the study examined the most effective strategies and digital solutions used by cities to achieve their future goals, along with the challenges they face in achieving results. It also explored investments and implementation steps planned over the next three years. A rich set of city benchmarking data To facilitate rigorous benchmarking, our 2024 study analyzed cities across all regions, with a combined 734.2 million residents—or 9% of the world’s population. This makes it is one of the most comprehensive studies of smart cities ever conducted. 250 Cities 78 Countries 734.2 million residents 9% of global population Cities surveyed by region 67 North America 50 Asia Pacific 50 Europe 27 MENA 31 Latin America 25 Africa From Future Vision to Urban Reality 6 Introduction Background Urban Challenges Future-Ready Cities Operating Model Technology AI & Digital Twins Urban Domains Methodology Sponsors The survey analyzed a diverse set of cities To ensure a balanced perspective, ThoughtLab surveyed a range of cities varying in size, location, and level of economic development. Our sample included cities of different population sizes, ranging from 50,000 to over 37.1 million. Forty-five percent of the cities had less than one million inhabitants, and 55% had over one million residents. The cities also varied by level of economic development: 46% were in developing markets and 54% in advanced markets. In addition, the sample included a cross-section of cities by income level. We surveyed a mix of respondents, all of whom had intimate knowledge of their cities’ future- ready plans. About a third worked in the mayor’s office, and another third filled management, strategy, planning, and operating roles. The rest were involved in technology, innovation, sustainability, and finance. Developing 46%Advanced 54% $3.4 billion Average FY2024 operating budget Number of cities by population 84 28 103 21 14 Smallest Small Medium Large Mega Cities by level of economic development Respondents by title City manager/administrator 20% Finance/budget 15% Mayor 15% Deputy mayor 12% Technology 11% Smart cities/innovation 6% Chief of staff/deputy 5% Chief operating officer 5% Director of urban planning 4% Environment/sustainability 4% Director of policy/strategy 2% Other 1% Smallest: 50K to 600K Small: 600K to 1M Medium: 1M to 5M Large: 5M to 10M Mega: 10M to 37M 2.95M Average population From Future Vision to Urban Reality 7 Introduction Background Urban Challenges Future-Ready Cities Operating Model Technology AI & Digital Twins Urban Domains Methodology Sponsors We created a model to assess the future-readiness of cities 1. Self-reported survey data We used data from two survey questions to assess each city’s future-readiness: Q6: How much progress has your city made in preparing the five urban domains for the future? Q18: Which best describes your city’s stage of digital transformation in the following areas? • Digital-ready organization and skills • Digitized processes, experiences, and security • Use of latest technologies and data 2. Performance data from Numbeo We combined survey data with objective city data from Numbeo, a trusted global database gathered from user contributions, official statistics, and crowd-sourced data: • Pollution index • Traffic index • Healthcare index • Safety index We normalized the indexes and then averaged the values to set a score for each city. 3. Future-ready maturity rankings We combined the self-reported data with the performance data to determine a maturity score for each city. We then classified the cities into three groups: Future-ready: Top 20th percentile Progressing: 21st to 80th percentile Beginning: Bottom 20th percentile As part of our research, ThoughtLab economists created a maturity model to show the progress that cities are making in becoming future-ready across key urban domains. We drew on self- reported data on their progress in future-proofing urban domains and in laying the foundation for widescale digital transformation. To ensure the objectivity of our rankings, we combined the survey statistics with data from objective secondary sources that reflected each city’s performance in reducing problems around pollution, traffic, health, and safety. That allowed our economists to develop an overall future-readiness score for each city and to classify them into three categories: future-ready, progressing, and beginning (see Methodology appendix). By comparing future-ready cities to others, we were able to identify best practices and create a future-ready roadmap. From Future Vision to Urban Reality 8 Introduction Background Urban Challenges Future-Ready Cities Operating Model Technology AI & Digital Twins Urban Domains Methodology Sponsors ThoughtLab Urban challenges on the road to future-readiness From Future Vision to Urban Reality 9 Cities face persistent urban challenges… Our current study shows that cities still face most of the same challenges they did in 2022. With the clock ticking for the planet, climate change continues to be the most pressing urban imperative, followed by public health, and housing shortages. Since 2022, some challenges have receded. The pandemic-related public health crisis has subsided. Cities also have made considerable headway in finding new funding and addressing sustainability issues, such as climate change and homelessness. Yet other urban difficulties persist, and some, like inadequate transportation and infrastructure, have grown worse and new problems have emerged. New challenges on the radar One growing urban worry is coping with the refugee crisis. Conflicts in the Middle East, Eastern Europe, and Africa are displacing over 100 million people, now seeking safety in worldwide urban areas. Cities, such as Berlin, Athens, Stockholm, Melbourne, and Chicago are rising to the occasion, taking steps to foster integration, education, and social support. But the influx of refugees, combined with increased migration, is adding to housing, public health, and funding troubles. These challenges can be daunting: Over a third of cities feel they are not well prepared to overcome them in the future. This is especially true for poorer cities, such as those in Africa. If left unsolved, these challenges can prevent cities from achieving their future goals. Q5. Which are the biggest challenges for your city over the next three years? Q5a. Overall, how prepared is your city to overcome these challenges? Not well prepared: 62% of low-income cities 52% of cities in Africa 42% of cities in emerging markets From Future Vision to Urban Reality 10 Many cities are not well prepared to overcome these challenges 66% 34% Well/very well prepared Not well prepared % of respondents % pt change from 2022 Climate change 88% - 6 Public and mental health 45% - 16 Affordable housing, homelessness 43% - 6 High crime 35% + 1 Aging infrastructure 28% + 2 Weak economic/business conditions 27% + 1 Inadequate transportation 25% + 6 Funding shortages 24% - 11 Data security and privacy 23% - 1 Income inequity 21% - 3 Skills gap in public sector 18% - 10 Demographic change, migration 13% - 2 Insufficient digital technology 10% n.