Thoughtnomics
Summer Edition | 2019
Dear readers,

Our groundbreaking research program, Building a Hyperconnected City , is well under way and providing important insights into the business models, use cases, and performance metrics of smart cities - urban areas that adopt game-changing technologies and data solutions to transform and interconnect their urban ecosystem. The study of 100 worldwide metro centers found that most cities are seeing major economic, financial, and social benefits from their investments in smart technologies, but also higher cyber risks.

According to the study, public Wi-Fi, Internet of Things, cloud, and mobile technology have become ubiquitous urban tools, now used by more than 9 our of 10 cities in our study. Other commonly used technologies include biometrics (83% of cities) and Blockchain (66%).

Other preliminary findings our study include:

  • Cities are employing new technologies for a variety of purposes. For example, of the cities investing in AI, 60% are using it to drive IT infrastructure initiatives, 43% for mobility, and 42% for physical and cybersecurity.
  • Smart city leaders aim to deliver myriad benefits to their stakeholders. These benefits include attracting and retaining businesses (39%), filling significant talent gaps (35%), allaying public health concerns (32%), mitigating security risks (29%), and addressing income inequality (28%).
  • Smart initiatives are paying off. For instance, 38% of cities deploying smart mobility solutions have bolstered customer satisfaction and 32% have increased productivity and delivery times for business. Likewise, 45% of cities deploying smart environmental and energy initiatives have improved citizen health, 44% have reduced pollution, and 43% have stabilized energy prices. 
  • Smart programs provide tangible gains in terms of ROI. Except for predictive policing, all 62 smart city initiatives in our study showed positive investment returns. The highest returns came in the mobility and transportation area: curb management (4.5%), and congestion charging (4.3%). 
  • If not managed effectively, these initiatives can expose urban areas to increased cyber risks. For cities in our survey, the total cost of cyber loss events over the last year averaged $3.4 million, with 10% suffering losses between $10m and $20m.  
  • Over half of the cities said that they were not well prepared for cyberattacks. The biggest vulnerabilities cited were financial and payment systems (54%), IT infrastructure and telecoms (51%), and mobility and transportation (40%). To cope with rising cyber risks, 82% of cities plan to increase their cybersecurity budgets next year, 39% by more than 10%. 


The study is based on a rigorous benchmarking survey conducted over the summer of 2019 by ESI ThoughtLab and a cross-industry coalition of sponsors, including Deloitte, Oracle, Stantec, Pennoni, Eaton Lighting, NTT Group, Nokia, Cognizant, Visa, and Microsoft. The sample consisted of 100 worldwide cities engaged in smart city initiatives. Cities varied in size  from 123,000 to over 24 million residents and represented a range of income levels, regions, and stages of economic development.    

The full results of our study, including the ranking of cities overall and by specific areas of connectivity, will be publicly available in late November, after being officially unveiled at the Smart City Expo World Congress in Barcelona, Spain. We look forward to your thoughts on our current progress and to sharing the full results with you later this year. 


Sincerely,
Lou Celi,
Chief Executive Officer
ESI ThoughtLab
Continuing the conversation on smart cities
Our coalition partners for Building a Hyperconnected City provided valuable expertise for our research. Below are some of their insights. The full article can be found here .
In your opinion, what do you see as the biggest hurdle for cities to overcome in becoming a smart city of the future?
"Many cities around the world have already implemented some form of smart technology, but none have really achieved the perfect harmony of sustainability, affordability, mobility, and economic opportunity."

-Nancy MacDonald, Vice President, Interim Director,
Stantec's Urban Places
What is the first step cities should take in becoming hyperconnected?
"Becoming hyperconnected is a journey that starts with data integration and the development of an open data strategy, followed by the necessary technical infrastructure for connectivity. With this foundation, different steps of collaboration come into play, representing a total reorganization of City Hall."

-Joan Ricart, Co-academic Director, IESE
What are you most excited to see/looking forward to seeing in smart cities of the future?
"We see digital payments as one of the ways that cities can get creative and innovative in their smart city approach, which in turn helps to attract more business investment, residents, and visitors. It really opens up a new frontier for cities all around the world."

-Wayne Best, Chief Economist, Visa
Cutting-edge insights through economics
What makes a hyperconnected city?
ESI ThoughtLab Senior Economist Rebecca DeJoseph provides a definition for the hyperconnected city of the future, and gives a sneak preview of the Smart City Index our team is currently working on.

Click here to watch the webchat.
Jobs of the Future Quarterly Index continues to rise, but moderately
As the US economy sets the record for its longest period of uninterrupted expansion, digitally enabled jobs continue to be in high demand. However, the overall pace of growth in job openings slowed in Q2 compared with the same period a year earlier.


Click here to access Cognizant's latest quarterly analysis.
The Jobs of the Future Index was developed by the Cognizant Center for the Future of Work, supported by ESI ThoughtLab.
The Cybersecurity Imperative: Pulse survey results are out!
From April to May 2019, ESI ThoughtLab and WSJ Pro Cybersecurity surveyed 467 firms to gain insight into the latest cybersecurity perspectives, plans, and practices. The survey revealed that, on average, CISOS are increasing their cybersecurity war chests by 34% in the next fiscal year, after raising investments by 17% the previous year.

These increases come in the face of growing annual losses from cyberattacks, which for companies surveyed, averaged $4.7 million in the last fiscal year, with more than one in ten firms losing over $10 million. That average loss equates to 0.114% of revenue across all firms surveyed. Losses are more severe for mid-sized companies than for large and very large companies. Other findings of the study include:

  • Many executives believe that their cybersecurity investments are paying off. Firms report a decline in the impact from untrained staff, social engineers, and unsophisticated hackers over the last nine months.
  • Although the impact from certain types of attacks has fallen, the survey shows a rise in others, such as incursions through company supply chains and ecosystems.
  • The research shows that to combat risks, companies need to take a proactive, multi-layered defense. Firms are responding by allocating the biggest share of their budgets to technology, while seeking the right balance between investments in people and process. They are also focusing more on risk identification to address merging vulnerabilities and are investing more in resilience to ensure they can respond quickly to successful attacks.

Click here to see the full analysis of the survey, and here to see WSJ Pro Cybersecurity's white paper on the study.
How do you build value when clients want more than wealth?
Across industries, consumers worldwide are changing where they shop, how they discover products, and what they ultimately buy. Thanks to new technologies, innovative business models, and disruptive brands, the wealth management industry is acutely experiencing these trends. As value perceptions of their clients shift, service providers are faced with new challenges along with opportunities.

To help wealth managers navigate the changes in the marketplace and to deliver enhanced value, ESI ThoughtLab, on behalf of EY , conducted interviews with executives at leading wealth management firms around the world to understand how they are rethinking their value propositions and business strategies.
Upcoming research
We are now launching our Driving Cybersecurity Performance program
Cybersecurity continues to rise as a a top of mind concern for business and government. Our newest study will build on last year's research and will include an updated database and benchmarking platform that will help executives compare their performance with that of peers and to communicate the business case for cybersecurity to senior management.

Our sponsor coalition continues to grow and includes Checkpoint, EY, Fiserve, KnowBe4, Optiv, and Verizon, along with media partners Edelman and WSJ Pro Cybersecurity.
If you would like more information on this program and ways to get involved, please contact Barry Rutizer , Corporate Director and Vice President of Client Relationships.
Cognizant and Deloitte join the Driving ROI Through AI program
We are proud to announce that Cognizant and Deloitte have signed on to sponsor our latest thought leadership program, Driving ROI through AI: Best practices, investment plans, and performance metrics of AI leaders .

Artifical Intelligence is spurring the next wave of the digital revolution. For many firms, AI is more than a technology. It is a new way of doing business, managing risks, and driving top- and bottom-line growth.

ESI ThoughtLab's team of economists will analyze six areas for driving corporate performance and will offer a robust analytical platform to help benchmark AI practices and results.


If you would like more information on this ground-breaking research and how to get involved, please contact Barry Rutizer , Corporate Director and Vice President of Client Relationships.
Recent think pieces
What Do Jobs of the Future Look Like?

By Chen Gong, Sidney Wong, and Steve Wray

The Value of Automation to Businesses

By Lou Celi

ESI ThoughtLab in the news
Axios has covered Cognizant's Jobs of the Future Index, which we supported, looking at the state of affairs for US tech jobs.

Our 2018 cybersecurity study and our analysis of the cybersecurity maturity stage of companies was discussed by consulting.us

Forbes notes that the biggest cybersecurity threat for companies is its people, citing our cybersecurity report.

Reuters discusses how wealth managers are addressing customers' evolving expectations, based on our wealth management survey conducted for EY.

Wealth managers struggle to relate to younger investors, says The Financial Times , citing our survey for EY.
Trendsetters in evidence-based thought leadership
ESI ThoughtLab is the thought leadership arm of Econsult Solutions, Inc. (ESI) , a leading economic consultancy headquartered in Philadelphia, PA. ESI ThoughtLab specializes in analyzing the impact of technological, economic, and demographic shifts on industries, cities, and companies. Our in-house team of over 40 thought leadership, economic, and subject matter specialists, along with our global network of experts, excels at creating valuable decision support that sits at the intersection of visionary thinking, analytical excellence, and innovative content formats.
Fresh thinking to stay ahead of the curve