What Smart Cities Get Wrong About Resilience: It's Not Just Sensors and Software

A downtown business district in a U.S. city has been building smart infrastructure for years. Traffic management systems can divert traffic around clogs in real time. Environmental sensors can detect air quality issues before they affect residents. And the smart systems can predict when maintenance is required to prevent failure, such as with the district's water mains.

None of this happened by accident. City planners and Business Improvement District leaders have spent budget cycles and planning meetings building a genuinely capable tech stack, one designed to keep daily life running smoothly for the people who work, shop, and live there. On paper, it looks like a district that has resilience figured out.

Business as usual, for better or for worse, is what smart districts are ultimately trying to protect.

Resilience Was Never Just About Hardware

Because a smart city typically focuses on what can be sensed, measured, and automated, this type of investment often does not include funding for the recovery of a district that has to close for a week, or for the higher costs incurred when an unexpected disruption hits operations.

CIO.com's article on how smart city technology improves resilience and sustainability makes the point that a city's resilience is increasingly tied to the quality of its digital infrastructure, and that resilience is really about continued operations during a crisis, not just physical durability. Operational continuity in a crisis is what matters most.

Building up physical infrastructure to withstand physical impacts is not enough on its own, and that kind of build-out is only half the story when it comes to a city's overall resilience.

The Layer That Rarely Gets Built Alongside the Tech Stack

Most resilience planning focuses on the infrastructure layer and does not really model the disruptions to businesses and property owners in a district resulting from an unplanned closure, a liability claim, or an operational disruption.

This affects not only the physical hardening of a district's infrastructure but also the continuity of operations and the ability of businesses to recover from an unexpected disruption.

And no, a fully planned smart city district need not be "destroyed" by a simple unexpected disaster that has nothing to do with technology. Just as there is no way to predict and plan for every future disaster of a physical nature, there are also many unexpected disasters that impact businesses, properties, and buildings in smart districts, which, in the absence of any pre-planned protection, could potentially undo the value of all the smart work that went into them.

Where Insurance Fits Into the Resilience Toolkit

Smart districts don't have to treat this as uncharted territory. Well-structured crisis management insurance programs can slot into resilience planning the same way redundant power slots in for smart sensors, or backup connectivity slots in for smart traffic systems.

Unexpected events that affect business deserve the same kind of planned-for coverage as infrastructure does. And just as the hardware isn't a single entity but many systems and infrastructure working together, the same is true of crisis management.

Treating insurance as part of the resilience planning toolkit, the same way a district would budget for redundant power or backup connectivity for smart infrastructure, means it gets built into the required structure for the economic layer of the community, rather than treated only as paperwork for a single threat and forgotten in the planning for a crisis.

What This Looks Like in Practice

Some Business Improvement Districts have recently started to think about crisis management insurance as another tool for building resilient smart districts. These forward-thinking districts don't only include smart technology in their planning.

They also look for financial and operational safety nets to cover damage to businesses and properties within a district caused by any type of disruption to normal business activity.

None of this means districts are required to abandon their status as centers of smart infrastructure. What's required, instead, is recognizing the difference between the physical infrastructure of a district and the economic layer of its businesses and property. A network of sensors and software protects the physical layer of a smart district.

A well-structured safety net of financial protection protects the economic layer of a district's businesses and property.

Resilience Means Planning for the Whole District, Not Just Its Systems

The smartest districts are finding ways to incorporate the kind of financial preparedness and operational safety nets that most residents and business owners will never realize exist until the day they're needed.

None of this means giving up the high-tech image of a smart district that took so much time and effort to build. Instead, smart districts can use their high-tech infrastructure as the foundation for a fuller resilience conversation, one that takes every aspect of resilience just as seriously as the rest of the planning.

A smart city is more than a number of deployed sensors. A smart city is one that has planned in full detail for a disturbance of business as usual, and that can continue functioning in every respect once a disruption has occurred.