The big challenge in the ongoing digital revolution is to create a Canadian advantage – how do we use our talent and research to create jobs and companies that make a difference? Government can help a lot. But ultimately it depends on businesses that take the lead in recognizing opportunity and putting all the pieces together for useful new products and services that the rest of the world wants to buy.

This is why the Smart Cities Sandbox is so important. It’s a partnership of leading Canadian companies that collectively are seeking ways to create a Canadian advantage in one of the greatest challenges of the 21st century – how to use digital technologies, from artificial intelligence and the cloud to 5G and the Internet of Things – to build livable cities at a time when more and more of the world’s growing population is concentrating in urban environments. Another 2.5 billion people are likely to live in urban environments by 2050, so that 68 per cent of the world’s population would live in urban areas, compared to 55 per cent today.

The sandbox – a smart cities centre of excellence – is located in the heart of Toronto, and is led by IBI Group, a Canadian multinational firm with expertise in intelligent systems, sustainable buildings and efficient transportation and other infrastructure, with plans to offer its growing software capability as a service on the cloud. With customers around the world and about 2,500 employees (about 1,500 in Canada) it has annual revenues in the $350 million range (about 55 per cent in Canada, 30 per cent in the U.S. and 15 per cent in the rest of the world). Its markets include emerging economies such as India where it helped an Indian city, Bhubaneswar, win that country’s smart city challenge.

The five sandbox partners plan to work on projects jointly and to support new or emerging tech companies with smart cities potential. They include, as well as IBI, property developer Slate Asset Management, construction giant Ellis-Don, Pelmorex Corp (it owns the Weather Channel and has a growing data services division), and Ontario Power Generation. The technical partners are Microsoft, with its Azure cloud system, and the Ontario Centers of Excellence, which will help the partnership identify small and mid-size companies, or start-ups that have smart cities potential. Early next year, the sandbox partnership will identify the first companies it will work with and support. Indus.ai, a Toronto-based 3-D project management start-up in which IBI has an interest, is the kind of company the sandbox wants to work with.

As Scott Stewart, CEO of IBI, explains its new high-tech strategy, the company recognizes that the digital world is radically changing how cities can improve services and bring a better quality of life. Moreover, the Toronto region provides a great base for the testing and development of smart city solutions, just as Toronto’s leadership in computer-based traffic control systems enabled IBI in the 1980s to first spread its global wings.

The Greater Toronto Area is one of the fastest-growing urban regions in North America and its population is expected to add about 2.7 million people, to reach 9.4 million people, by 2040, about 52.6 per cent of Ontario’s population. This will present huge infrastructure challenges not only to make up for a past deficit in infrastructure investment and to upgrade aging infrastructure but also to build new infrastructure to accommodate future growth. It’s potential as a test bed for smart city technologies is enormous.

The other advantage is that the region is a hot-spot of digital entrepreneurs and top universities that can help build smart city strengths in mobility and transportation, the design and construction of smart health centres and hospitals, colleges and universities, the provision of clean water and sanitation, inclusive housing and urban environments, energy efficiency and a pollution-free environment. Toronto also is a centre for infrastructure financing with its expertise in public-private partnerships and as the head office location of Canada’s new infrastructure bank.

Stewart decided to pursue the partnership with like-minded businesses after first checking out the region’s tech centres, such as MaRS in Toronto and Communitech in Waterloo. While they were doing exciting work in areas such as fintech, they were not focused on IBI’s interest in urban systems. Hence the decision to form the sandbox partnership. As part of its smart city strategy, IBI is also creating a new Office of Innovation in Toronto, to be headed by Deepak Darpu, who is moving from India to advance IBI’s cloud-based plans. And last year, IBI joined the Smart Cities Council, a global body of world-leading companies engaged in smart city strategies.

If Canada is to succeed in the digital revolution, it will need creative business leadership and new business models since we lack the corporate giants found elsewhere. The smart cities sandbox, a partnership of like-minded businesses, is a Canadian solution that has the potential to build a Canadian advantage in one of the greatest challenges the world faces – how to build livable cities that work. It’s a reason to be optimistic about Canada’s potential in the digital world.

David Crane can be reached at crane@interlog.com.