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The Internet of Things (IoT) is a concept in which pretty much any and everything is connected to the Internet. That means beyond just PCs, laptops, smartphones, tablets and TVs, everything you thought didn’t need any interaction with the Internet will now have it. This concept is what powers the idea and creation of a smart city. A smart city, according to engineering consultant firm Arup, is defined as a city where “the seams and structures of the various urban systems are made clear, simple, responsive and even malleable” through technology and design, with every grid of infrastructure connected and interacting with each other. An interesting question has come up in regards to this technologic marvel: who should run a smart city, the private or public sector?

The public sector (government) has been known for being far behind with technology in the United States, but President Barack Obama has taken steps to change that, making the Presidential Innovation Fellows program permanent back in August. While the private sector can attract the talent needed for the governing of a smart city, the primary goal of these businesses is to create a profit by selling products and services. While social responsibility has become a goal for many private tech companies in recent years, it is secondary to the bottom line, namely because the private sector also has to deal with shareholders, investors and a board of directors (who are all economically powerful), while the public sector is accountable to the public, a much wider range of people with less socioeconomic power individually with varied and competing interests.

The Guardian economics editor Paul Mason warns against the private sector running smart cities, citing privacy concerns, while at the same time,offering a solution to them. Subtly, he also tells the public sector to catch up. “More than 2.5 billion people, mostly urban dwellers, voluntarily wear a tracking device—their smartphone. It can tell you the nearest coffee shop, order you a taxi and even find you a nearby potential sex partner because it knows where you are. Hire a bike and the city transport system knows where you start and finish. The privacy issues here are dealt with by limiting the flow of data between public and private sectors, and by making the individual the center of the information flow,” he said.

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Smart cities would also require a centralized data flow so that the energy grid, communications grid and the IoT can interact with one another. Since many tech companies are in competition with one another, the data is walled off. Mason suggests putting control in the hands of the public sector. “In a smart city, you need data to flow freely across sectors that, in the commercial world, would normally be separate. The energy system needs to know what the transport system is doing. And the whole thing needs to be run like a ‘God game’: the city government, not the individual, must exercise control,” he continues.

Mason cites the city of Madrid as an example of a smart city that isn’t built around automating processes or connecting them, but rather, solving urban problems with technology. “Smart cities and technological structures should always be for citizens,” said Manuela Carmena, the mayor of Madrid. However, she also wanted the private sector to join in on the discussion of creating a smart city. “I am very interested in the participation of private enterprises,” she said. Other major world cities, such as Amsterdam, Barcelona and Stockholm have also begun their transformation into smart cities, namely through traffic management and energy management.

While Mason advocates for the public sector to run smart cities, they could open up a huge market for the private sector and reduce unemployment (especially in the cases of Barcelona and Madrid) as long as it doesn’t dictate what the public sector does. Still, there could be devastating consequences should the private sector seize control. “Smart cities represent a genuine and potentially massive new market for the private sector, breathing economic life into the old structures and patterns of cities. But if faced with somnolent and uninformed local governments, the results are going to be chaotic and unwieldy systems, and an erosion of democracy.”

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