Challenges and limitations of urban digital solutions
Digital solutions are not a silver bullet for all urban issues. They are tools that should be used alongside other strategies that address economic, social and political factors as well. They should be seen as part of a broader approach to addressing challenges, rather than a standalone fix. No single technology can resolve systemic issues on its own, since they must be paired with policies, community engagement, and capacity-building efforts. For example, an early warning system is only effective if the community knows how to respond and has the resources to act. The true impact of digital solutions comes when they are combined with thoughtful planning and collaboration.
Despite providing huge potential, digital solutions might come with significant challenges that need to be addressed in planning, implementation and operation:
- Inclusivity: Digital technologies are not yet accessible to everyone, nearly 3 billion people remain digitally unconnected, the majority based in low- and middle-income countries (World Bank Group 2024). Additionally, gaps within a country or city might be huge, due to socio-economic segregation. Consequently, digital technologies could exacerbate inequalities if not being planned adequately. Internal disparities within urban environments also play a role in how and who have access to digital solutions, particularly in rapidly expanding cities or informal settlements.
- Security: Digital systems are vulnerable to cyber-attacks (Argyroudis et al. 2022). Potentially limiting their functionality, next to raising questions of data security. The increasing dependence of urban systems, such as intelligent traffic management systems, on digital technologies renders them vulnerable to cyber-attacks and a target for cyberwarfare, thus making them a security risk.
- Privacy & ethics: Digital solutions in urban spaces can pose challenges in the form of risks to citizens’ privacy, especially in the context of the prevalence of misinformation (Argyroudis et al. 2022) and misuse of data. Finally, technologies such as artificial intelligence can come with ethical challenges as they can be based on models that are incomplete and reflect “priorities, prejudices, and perspectives of their creators and the wider society in which they are developed and used.” (GFDRR et al. 2021). Consequently, any use of digital technologies requires an adequate regulatory framework to prevent data abuse and protect citizen rights.
- Transferability: Digital solutions differ hugely in scale and complexity. Finding the right mix of digital solutions for a given city will differ, as it depends on factors like an enabling environment in place (including acceptance and willingness of formal actors involved), technical preconditions such as stable electric grids) and economic means to initiate and sustain the implementation. Hence a simple transfer from one place to another might not be the best-suited approach.
- Technology: The implementation of digital solutions might depend on technologies that have to be in place to exploit the full potential. In addition, digital solutions can face technical challenges and limitations due to their reliance on a stable electrical grid and consistent power supply (Argyroudis et al. 2022), hence their applicability might be limited and needs to be checked before planning.
Finally, the utilisation of digital solutions can contribute to climate change as it causes the emission of greenhouse gases (GHG). Most emissions come from digital connectivity infrastructure (telecommunication networks), data management infrastructure (data centers), and end user devices (such as smartphones and computers) (World Bank Group 2023). Current estimates of the digital sector’s GHG emissions range from 1.5 to 4 percent of global GHG emissions (World Bank Group 2023; BEREC 2022; Freitag et al. 2021), which is predicted to increase further (World Bank Group 2023).
Digital technologies also require the use of limited resources and raw materials, water and chemicals, and cause e-waste, much of which is not yet recycled adequately (Nižetić et al. 2020). Hence, the introduction of digital solutions needs to be well-planned to avoid them doing more harm than good.
For more comprehensive information on these challenges and limitations, see the Principles for Digital Development, the Global Digital Compact, as well as Mejias and Couldry (2024).
In order to identify and mitigate such human rights risks within KfW-financed projects, KfW, GIZ and the Danish Institute for Human Rights have jointly developed the KfW Human Rights Check for Financial Development Cooperation, which we highly recommend you to use during project preparation and implementation.
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