Read Write Web has an interesting article on the challenges of city management, "Smart cities need banks’ data muscle more than governments". The article states that cities are not likely to be able to manage all the data required to provide modern services in an age of IOT. To solve the data management problem perhaps the banking industry with its expertise in large volume, real time data management is a solution for cities. Given that I think most banks will not survive the coming disruption from distributed networks and related technology, maybe banks should move into data management for cities.
Of course you may have realized that cities and banks share one common characteristic. They are both subject to significant government regulation. Just like healthcare and education, they are also leading industries to be disrupted. Effectively, the artificial boundary of government regulation is now being pierced by new technology.
The point on data got me thinking about whether we should not consider outsourcing more city services than just data management. If we consider cities a stack of software services or perhaps a stack of networks, we realize that every part of the stack is a candidate for outsourcing. In the end, the only service that may remain with the city government is the right to set policy, which is, of course, a basic requirement of a democracy. This notion of the outsourced city government perhaps becomes more interesting when we recognize that power is going to shift away from the national level and back to the cities. Networks and communities are naturally gaining power through the new technology, which will lead to local initiatives that will manifest themselves in the cities and their governance. The networks and the communities are gaining power because comparatively more information is now flowing to the local level through the new technology. Effectively, the individual captures information better than the government, as evidenced by the article that began this post.
The role of information in the shift of power is explained in this Powerpoint, "The Great Convergence". Download .
This is the link to my previous writings on cities and urbanization.