The possibilities are endless. Although a cliché phrase, it really is true when it comes to cities adopting rapid, open and secure technologies. Cities can improve the delivery of services to citizens by embracing the latest technologies – be it by connecting bins to sensors, or by monitoring and tracking everything in real time enabling a city to accurately predict when and where services are required. The outcome is happier citizens.

To understand just how much connected technologies can improve our cities, we first need to understand what the current landscape of our cities looks like.

Today, Londoners spend 74 hours stuck in traffic congestion per year, on top of their usual commute time. As traffic grows heavier, delays get longer and air quality gets worse, each minute generates more pollution in our cities.

By the year 2050, 70% of the world’s population will be living in cities, according to UNICEF. As populations grow, so do the list of impacts from badly designed cities including; health and safety, crime, and environmental concerns.

A paper by the Brookings Institution, “Benefits and Best Practices of Safe City Innovation,” highlights that one of the biggest difficulties in improving our digital infrastructure is in sourcing funding.

So, how can municipalities transform themselves into smart, smooth-running digital cities? And where does the money come from? Governments around the world are discussing this and, in one case, a technology association found a unique solution: let someone else pay for it.

Last summer, German IT association Bitkom held a competition to find a city in Germany that would be the ideal model digital city. In total, 14 mid-sized cities across Germany applied for the title. Among the top five contestants were Darmstadt, Heidelberg, Kaiserslautern, Wolfsburg and Paderborn.

The Hessian city of Darmstadt won. As a result, areas such as the transport sector, energy supply, schools and healthcare are being equipped with the latest digital technologies. In addition, the public administration will add innovative online applications and intelligent delivery services.

Telecommunications networks are also to be expanded and improved. Intelligent traffic control, 5G networks, governmental e-services for citizens, smart hospitals and autonomous driving projects will all be implemented in Darmstadt over the next two years.

Darmstadt has the unique opportunity to implement a data platform that will monitor, control and analyse various processes linked to its administrative duties. And its citizens will profit from a range of new digital services, making living in the city easier and more comfortable. This is the greatest innovation project in Germany to date and the digital transformation of this city will become a lighthouse project for Europe.

Multimodal e-mobility will become a reality: There will be a free choice between all kinds of public and individual transportation systems, ensured by close cooperation between energy providers, public transport providers, vehicle manufacturers and rental car companies.

Darmstadt will receive innovative technology products worth more than €20 million from the sponsors of the competition, which include software and telecommunications companies, as well as financial support from the State of Hesse. It is a win-win for Darmstadt, as well as the sponsors – who will gain not only knowledge and experience but also bragging rights if the project is a success.

But not every project can be paid for with other people’s money. Experts estimate that cities around the world will invest a total of about $41 trillion over the next 20 years to upgrade their infrastructure to benefit from the network of connected devices (IoT). But, the question remains, where will this money come from?

Up-front funding will inevitably remain a challenge, but the return on investment should make it more appealing for governments and investors.

One way or another, once cities find the money to build their connected smart, responsive infrastructures, it will pay off. Operational efficiencies save cities money by better managing resources such as water and electricity. E-government services can be delivered to citizens, faster, and at a lower operating cost. Smart traffic and parking management enable improved productivity and help to attract more businesses to the area. Data collected from IoT devices, such as weather and traffic sensors, can be sold for profit.

The benefits to becoming a digital city are undeniable. But, ultimately, the biggest benefit we can reap from embracing smart technologies for smarter buildings, infrastructure and life – is the chance to live in a truly smart city. It’s easier, faster, cleaner and just generally more pleasant. Despite funding problems, the possibilities of an effective smart city are endless.