U.S. Infrastructure Bill to Drive Smart Cities Deployment

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1Q 2022 | IN-6450

With more than 50% of the budget set for transportation, the US$1.2 trillion Infrastructure Investment and Jobs Act (H.R. 3684) promises to be a landmark piece of legislation for the United States. The opportunities for smart city vendors are becoming clearer as further funding details are released.

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What Is in the Bill?

NEWS


In November 2021, the U.S. Congress signed a US$1.2 trillion Infrastructure Investment and Jobs Act (IIJA) that contains US$550 billion of new federal spending. The spending will be allocated over the next five years across more than 350 different programs. These programs are aimed at three areas: (1) transportation; (2) climate, energy, and the environment; and (3) broadband. A once-in-a-generation investment, the IIJA expands beyond the traditional definition of infrastructure to include items such as broadband and cybersecurity. With over 50% of the budget set to be spent on transportation, this could be a pivotal moment for the adoption of technology in the United States.  

Why Is This Good News for Smart City Vendors?

IMPACT


This bill is incredibly good news for smart city investors and vendors as it affords many opportunities for greater smart city investment. Several of the programs will directly or indirectly affect a smart city’s and community’s ecosystem. There are opportunities across different sectors, including smart infrastructure, broadband connectivity, sustainability and electrification, autonomous vehicles, smart grids, microcities, and rail. The technologies that could benefit from this bill include embedded sensors (roads, bridges, etc.), roadside infrastructure (vehicle to everything), the Internet of things (environmental sensors, smart grids, smart water infrastructure, etc.), and smart streetlights. Some key areas for opportunity from the bill are as follows:  

  • Broadband: There is a major focus on digital inclusion and equity throughout the bill. The improvement and extension of broadband connectivity could be a significant enabler on which smart city and community projects can build. There is US$64 billion reserved for broadband connectivity, including for middle mile and digital inclusion.
  • Electric Vehicle Infrastructure: The electrification of U.S. transit will be a long process, but this bill could be a pivotal moment as it funds various aspects of supportive infrastructure that is required for the transition to be successful. For example, there is US$7.5 billion for 500,000 electric charging stations that could encourage cities and states to further invest in electric cars, especially as they are becoming more popular in the United States.
  • The SMART Grant Program: The most obvious program for smart city innovation is the US$500 million Strengthening Mobility and Revolutionizing Transportation (SMART) program. SMART runs over five years (US$100 million available for each year) as a competitive grant to provide funds for various smart city projects. These projects include connected vehicles, intelligent-sensor-based infrastructure, and coordinated automation. The U.S. secretary of transportation will split the funds 40–30–30 among large communities, midsized communities, and rural communities. The notice of funding is due in the second or third quarter of this year. SMART is just an example of the type of competitive grants available for smart-city-related projects.  
  • The Carbon Reduction Program: This US$6.4 billion formula grant found in the resilience section of the bill provides funding for projects that support the reduction of transportation emissions. It could support a wide range of smart city technologies such as traffic management systems and micromobility.  

These are just four examples from the bill’s expansive list of programs.

Cybersecurity is also included in the IIJA. US$1 billion is allocated for a state and local cybersecurity grant program. It is included as a part of select programs in areas such as energy, water, and transportation; US$100 million has also been set aside for a general cyber response and recovery fund for public and private entities to support response and recovery from cyberattacks.  

The Impact of the IIJA

RECOMMENDATIONS


The IIJA promises to accelerate the adoption of smart mobility and related information and communication technologies; however, the lack of a concrete long-term strategy is some cause for concern. Coupled with the siloed approach and a lack of expertise at the local and city government level, it is possible that this could result in misused or wasted resources. However, it may be an opportunity for consultants and suppliers to assist cities in their digitization or “smart” journeys.

Smart city vendors in the United States should be looking at the various programs and states that could benefit from their products and have implementation plans to ensure that stakeholders are aware of the opportunities. The incredible amount of money being invested should also help trigger further funding from cities and states and encourage public-private partnerships. Some estimates have claimed that the bill will create up to 800,000 new jobs and help boost the U.S. economy over the next five years. The knock-on effects of the bill could have even more of an impact than the bill itself.  

The White House recently published A Guidebook to the Bipartisan Infrastructure Law that provides details for all programs. Further updates for the guidebook will be released as program grant methods and requirements are finalized throughout this year. This book details existing resources and funding opportunities, such as the Coronavirus Aid, Relief, and Economic Security Act and the American Rescue Plan that includes US$30.5 billion to support public transportation systems.

 

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