Sustainability 2021, 13, x. https://doi.org/10.3390/xxxxx www.mdpi.com/journal/sustainability
Analyzing the Adoption Challenges of the Internet of Things
(IoT) and Artificial Intelligence (AI) for Smart Cities in China
Ke Wang 1,*, Yafei Zhao 2, Rajan Kumar Gangadhari 3 and Zhixing Li 4
1 Department of Civil and Architectural Engineering, Qingdao University of Technology, Shandong 273400,
2 Building Information Technology Innovation Laboratory (BITI Lab), Solearth Architecture Research Center,
Hong Kong 999077, China; firstname.lastname@example.org
3 Industrial Engineering and Manufacturing Systems, National Institute of Industrial Engineering,
Mumbai 400087, India; Rajan.Gangadhari.email@example.com
4 School of Design and Architecture, Zhejiang University of Technology, Zhejiang 310023, China;
* Correspondence: firstname.lastname@example.org
Abstract: Smart cities play a vital role in the growth of a nation. In recent years, several countries
have made huge investments in developing smart cities to offer sustainable living. However, there
are some challenges to overcome in smart city development, such as traffic and transportation man-
agement, energy and water distribution and management, air quality and waste management mon-
itoring, etc. The capabilities of the Internet of Things (IoT) and artificial intelligence (AI) can help to
achieve some goals of smart cities, and there are proven examples from some cities like Singapore,
Copenhagen, etc. However, the adoption of AI and the IoT in developing countries has some chal-
lenges. The analysis of challenges hindering the adoption of AI and the IoT are very limited. This
study aims to fill this research gap by analyzing the causal relationships among the challenges in
smart city development, and contains several parts that conclude the previous scholars’ work, as
well as independent research and investigation, such as data collection and analysis based on DE-
MATEL. In this paper, we have reviewed the literature to extract key challenges for the adoption of
AI and the IoT. These helped us to proceed with the investigation and analyze the adoption status.
Therefore, using the PRISMA method, 10 challenges were identified from the literature review. Sub-
sequently, determination of the causal inter-relationships among the key challenges based on expert
opinions using DEMATEL is performed. This study explored the driving and dependent power of
the challenges, and causal relationships between the barriers were established. The results of the
study indicated that “lack of infrastructure (C1)”, ”insufficient funds (C2)”, “cybersecurity risks
(C3)”, and “lack of trust in AI, IoT” are the causal factors that are slowing down the adoption of AI
and IoT in smart city development. The inter-relationships between the various challenges are pre-
sented using a network relationship map, cause–effect diagram. The study’s findings can help reg-
ulatory bodies, policymakers, and researchers to make better decisions to overcome the challenges
for developing sustainable smart cities.
Keywords: Smart cities; Sustainability; Artificial Intelligence (AI); Internet of Things (IoT); Expert
opinions; DEMATEL; Emerging economy
The rapid migration of people to urban areas from rural areas is causing a burden on
big cities. The city councils and local governments are facing issues in managing the es-
sential needs of huge populations. On the other hand, global warming, climate change
and technology’s move towards renewable energy has pushed the revolution of smart
cities, which aim to provide all essential needs to the public without causing many
Citation: Wang, K.; Zhao, Y.;
Gangadhari, R.K.; Li Z. Analyzing
the Adoption Challenges of the In-
ternet of Things (IoT) and Artificial
Intelligence (AI) for Smart Cities in
China. Sustainability 2021, 13, x.
Academic Editor Fadi Al-Turjman
Received: 10 August 2021
Accepted: 28 September 2021
Publisher’s Note: MDPI stays neu-
tral with regard to jurisdictional
claims in published maps and institu-
Copyright: © 2021 by the authors. Li-
censee MDPI, Basel, Switzerland.
This article is an open access article
distributed under the terms and con-
ditions of the Creative Commons At-
tribution (CC BY) license (http://crea-
Sustainability 2021, 13, x FOR PEER REVIEW 2 of 36
negative impacts on the environment. With the rapid development of science and tech-
nology today, technological innovation has become a leading force in driving economic
and social development. These advanced cities must use new technologies to improve
their core systems to maximize optimization in all functions of city management by using
limited energy. As an important carrier of economic and social development, cities are
also the main gathering place of innovation factors, and the role of science and technology
innovation in urban development is becoming increasingly prominent, and is becoming
the engine of future development of cities . Due to the recent industry achievements,
the Internet of Things (IoT) and artificial intelligence (AI) are current popular research
topics, and they have proven to return better results in many disciplines such as automat-
ing factories, public surveillance, asset monitoring, waste management, weather monitor-
ing, etc. Combining IoT and AI is an effective way to intelligently upgrade the existing
Global economic crises can often lead to technological revolutions. For example, the
world economic crisis in 1857 led to the first technological revolution, the world economic
crisis in 1929 led to the second technological revolution, and the economic crisis in 1987
led to the information technology revolution . After the financial crisis in 2008, smart
cities have become a global trending topic (Figure 1) with the iconic report Smart Planet
by IBM. Smart Planet advocates the full use of next-generation information technology in
all industries , thus giving rise to concepts such as smart cities and digital cities. In the
present day, the concept of smart cities is not clearly and statically defined . However,
it is clear through its interdisciplinary development that smart cities are deeply integrated
with information and communication technology (ICT) and IoT . The objective of smart
cities is to enhance the efficiency of resource utilization, optimize city management and
services, and improve the quality of life of citizens . A smart approach with the help of
AI and the IoT can be applied to smart transportation, security, energy, buildings, educa-
tion, health, and more [4,5]. The smart city framework contains a large number of indica-
tors to measure sustainability, such as social and economic sustainability, and AI and IoT
technologies also help to maintain sustainability, so Khan et al. focused on the sustainable
smart city and analyzed the challenges it faces . Treude summarized the definitions
proposed by several scholars for the sustainable smart city. He argued that finding a com-
prehensive, sustainability-oriented definition of a smart city is a complex challenge.
Treude, therefore, proposed a limited definition: a city is smart if it uses smart technolo-
gies to better address 21st-century challenges. If it includes sustainable development goals,
then it represents sustainable urban development .
Figure 1. Impacts on technological revolutions by global economic crises (source: IBM, 2008).
Cities continue to attract new populations, and the United Nations estimates that by
2030, more than 60% of the global population is expected to live in large cities [8,9]. Pop-
ulation migration to large cities has become a common phenomenon worldwide. For
Sustainability 2021, 13, x FOR PEER REVIEW 3 of 36
example, the current resident populations of Beijing, Shanghai, and Shenzhen are all more
than 20 million . Huge population growth brings many impacts and challenges to ur-
ban resources and services . An analysis of public reports and government documents
showed that in recent years, there has been an increasing number of smart city pilot pro-
jects in China (Figures 2 and 3). The increasing trend is indicated in Figure 2, which shows
the number of China’s smart city pilot projects, and summarizes the data from different
years and integrates them into one form. The data for different years were from several
sources, which are listed below the title of figure. They are China MOHURD, China NDRC,
and Forward the Economist. China MOHURD is the Ministry of Housing and Urban–
Rural Development of China. China NDRC is National Development and Reform Com-
mission. Forward the Economist is one of the popular media and academic report analysis
publishers in China. Sources provided by MOHURD and NDRC are government docu-
ments, while sources by forwarding the Economist are public reports. Refs. [11–18] are the
lists of original data published by the cited source that are integrated into the figure. The
original data from the above sources are separate, therefore the figure summarizes them
and verifies the increasing trend.
Figure 2. Number of smart cities with experimental policies in China (data source: China MO-
HURD, 2013, 2015; China NDRC, 2020; Forward the Economist, 2019, 2020, 2021).
Figure 3. Trends for market size and investment spending of smart cities in China (data source:
CCIT, IDC Qianzhan Industry Research Institute, 2019, 2020, 2021).
The idea of “smart” is to use information technology to drive the operation of the city,
which includes monitoring, forecasting, and real-time management. The combination of
IoT and AI can replace the traditional means of managers in the past, with IoT mainly
referring to sensors or hardware, and AI mainly referring to back-end algorithms. With
the advancement of technology and the increasing awareness of smart city residents, the
concept of smart is no longer limited to intelligence, but fully incorporates the participa-
tion of residents or users. The mode of engagement includes not only citizen participation,
2013 2014 2015 2016 2017 2018 2019 2020
2014 2015 2016 2017 2018 2019 2020 2021(Est)
Investment Spending (Billion USD) Market Size (Trillion RMB)
Sustainability 2021, 13, x FOR PEER REVIEW 4 of 36
but also decision making. Decisions must be made in a fast and effective manner, often
relying on real-time feedback and behavioral changes from citizens . Decisions are
made by top-down or bottom-up approaches, are technology or community-led, and in-
clude purposeful design or natural evolution. In well-functioning cities, citizens’ decisions
are dependent on multiple types of tools that guide them in their daily decision making
. According to IDC’s Worldwide Smart City Spending Guide released in July 2020,
China’s smart city market spending will reach USD 25.9 billion in 2020, up 12.7% year-on-
year, higher than the global average, and the second-largest spending country after the
United States .
In recent years, due to the improvement of cloud computing technology, computers
have been able to overcome the problems that used to occur due to the lack of arithmetic
power. Artificial intelligence algorithms are being noticed by several industries due to the
development of cloud computing, including the study of smart cities. Software, applica-
tions, and plugins are usually deployed on a cloud server and operated with cloud com-
puting techniques. According to the investigation, for the Infrastructure as a Service (IaaS)
category, the top five companies in the Chinese public cloud computing market are
Alibaba Group (Aliyun), Tencent, China Telecom, Kingsoft, and Amazon Web Services
(AWS). However, for the Platform as a Service (PaaS) category, the top five companies in
the Chinese public cloud computing market are Alibaba Group (Aliyun), Oracle, Amazon
Web Services (AWS), Microsoft, and IBM . Wu summarized that from a functional
point of view, the smart city system can be divided into a perception layer, a network
layer, and an application layer . According to Cohen, there are three stages in the de-
velopment of smart cities: 1.0 Technology-Driven, 2.0 Technology-Enabled, and 3.0 Citi-
zen Co-Creation. Different countries and cities are currently at different stages , and
therefore they have different levels of adoption. The level of adoption reflects the degree
of acceptance of technology in an object. It is a series of driving processes, from awareness
to acceptance to use. This study aimed to examine the challenges hindering the adoption
of AI and the IoT in smart city development by evaluating the current literature using the
PRISMA method and incorporating expert opinions to select the appropriate barriers. Us-
ing the DEMATEL model, we developed cause-and-effect relationships between key AI
and IoT implementation challenges. The findings of the study will be useful to understand
the cause–effect relationships between the challenges that would help policy makers,
practitioners, and researchers to understand the effect of the challenges in building smart
cities in China.
2. Development of AI and IoT for Smart Cities
2.1. The Case for Smart City Development
Singapore is considered a pioneer in the smart city movement (Qi and Shen, 2019).
Emerging technologies of IoT are used for the development of smart cities in smart fleet
management, air quality monitoring, energy management, and smart agriculture needs
with the help of sensors, robots, and other cyber–physical systems. All the generated data
in this process are sent to the cloud (a central platform) for processing, and the output
generated is used to plan smart city strategies .
In the context of Industry 4.0, the combination of smart cities with IoT and AI can
lead to win–win results. Tobias’ research highlighted the importance of monitoring sys-
tems . In New York, for example, the government has upgraded its lighting system to
enable intelligent control of dimming and turn-on times. It is also reducing lighting power
by retrofitting LED installations. An automated meter reading (AMR) system is used to
provide feedback on water usage, and also to monitor potential leaks in real time. Tobias
also described the representative smart waste management, a technology that is also
widely used in Singapore. As part of the smart waste management program, monitors on
the bin lids collect information about the contents and location, and transmit the infor-
mation to the waste team via a central server. The route of the waste collection team can
Sustainability 2021, 13, x FOR PEER REVIEW 5 of 36
then be optimized . In Singapore, the Smart Nation vision was established in 2014 to
harness new technologies to address growing urban challenges. To date, the most devel-
oped smart services in Singapore are the intelligent transport system (ITS), which is more
than 10 years old, and e-government, which has been developed since the early 1980s .
In addition, One Monitoring, developed by the transport department, provides services
to all drivers and vehicle owners in the city, including access to information about cabs on
the road and real-time road information, among other features .
In China, the Premier’s report “Making Science and Technology Lead China’s Sus-
tainable Development” in 2009 opened the era of smart cities. Over the past decade, the
smart city industry chain has involved interdisciplinary and multi-industries, integrating
multilevel technologies. Based on the upstream and downstream industry chains of smart
cities described by [21,27–29], this study integrated the industry ecosystems and technol-
ogy architectures involved in smart cities. Figure 4 illustrates the streams (up, middle and
down) for the integrated structure of industrial chains of a smart city. The vertical axis
shows multiple layers, including upper terminal device, platform service, and the bottom
Figure 4. Integrated structure of industrial chains of a smart city (data source: Qianzhan Industry
Research Institute, 2019, 2020, 2021).
As of 2019, there were more than 700 smart city pilots in China. The market size is
growing by more than 30% per year, reaching RMB 10.5 trillion in 2019. Of these, up to
94% of provincial-level cities and 71% of prefecture-level cities have launched smart city
Hangzhou proposed the City Brain system in April 2016. It is a digital interface for
citizens, including 11 systems and 48 application scenarios such as police, transportation,
cultural tourism, and health, with an average of more than 80 million data points per day
. The City Brain connects and shares data resources that were originally scattered in
various departments and isolated from each other. By establishing a high-speed urban
“CPU”, the government’s service effectiveness is continuously improved . The City
Brain has taken over the signals of 1300 intersections in a 420 km2 area of Hangzhou. The
functions that have been realized to facilitate people’s livelihood include convenient park-
ing, digital tourism, smart environmental protection, vegetable-planting base manage-
ment, convenient access to medical care, and many other application scenarios. Therefore,
the use of cutting-edge technologies such as big data, cloud computing, blockchain, and
artificial intelligence to promote urban management means and management modes is a
way to drive cities from digitalization to intelligence .
Sustainability 2021, 13, x FOR PEER REVIEW 6 of 36
Shenzhen proposed the concept of “Building a Smart Shenzhen” in 2010, and is now
one of the representative smart city models in China. Shenzhen is a mega city with more
than 20 million people, so the scale of data and the way it is processed is very important.
In the dimension of a smart city, “smart” means to have data, and that the data is con-
nected . To improve the efficiency of urban governance and industrial sectors, it allows
the sharing of effective data resources across sectors, industries, and fields, so that these
integrated data and new technologies can improve capacity, output, and efficiency. For
example, the Construction Digital Management Center (CDMC) was developed for metro
construction sites. It enables centralized control of more than 400 construction sites across
the city and uses AI algorithms to identify safety hazards, greatly enhancing work effi-
2.2. Features of the IoT
The Internet of Things (IoT) is a highly integrated and comprehensive use of next-
generation information technology, which is important for a new round of industrial
transformation and green, smart, and sustainable economic and social development .
New IoT applications are driving smart city initiatives around the world. The IoT is based
on the installation of sensors (RFID, IR, GPS, laser scanners, etc.) for everything and con-
necting them to the Internet for information exchange and communication through spe-
cific protocols for intelligent identification, location, tracking, monitoring, and manage-
ment . The IoT and IT are at the core of the hyperconnected society, which is also known
as Machine to Machine (M2M) or Internet of Everything (IoE) . Theodoridis developed
a city-scale testbed for IoT and future Internet experiments . Latre et al.  developed
the City of Things smart city testbed located in Antwerp, Belgium. The platform consists
of a multi-wireless technology network infrastructure and includes an integrated ap-
proach that allows experimentation in three different layers: network, data, and living
labs . Sanchez deployed the Smart Santander project in the city of Santander, a typical
application of the Internet of Things in a smart city .
Big data highlight openness and connectivity , and the combined application with
IoT can moreover stimulate the value behind it. Chen et al. proposed a cloud platform
architecture for building energy management based on big data and distributed technol-
ogy using machine learning and environmental real-time analysis to provide technical
support for building operations . Zhang et al. summarized common data mining tech-
niques, such as association mining, multivariable linear regression modeling, classifica-
tion, clustering, and neural networks, and analyzed the data-mining techniques and the
methods and trends of applying various data-mining techniques in the field of building
energy efficiency . Shi et al. used the SSIS algorithm with SQL to store historical data
on energy consumption, and used Visual Studio as a development tool based on the
ASP.NET MVC framework to establish an energy consumption management platform
and energy consumption management software . Yang et al. proposed a data-mining-
based method for processing energy consumption data from public buildings, including
building data sets based on historical data and classifying them according to different en-
ergy use patterns .
2.3. Implementation of AI in Smart Cities
As an important part of the smart city process, the construction industry plays a piv-
otal role. Technologies based on IoT and artificial intelligence algorithms have greatly ac-
celerated the development of the construction industry. Artificial intelligence algorithms
are a means of bulk problem solving . At the same time, intelligent energy simulation
tools combining parametric methods, BIM technologies, or computer programming tech-
niques have emerged based on the architectural design perspective .
A smart city refers to a regional scale that aggregates multiple buildings. Therefore,
the shared data of each building form the interconnection system. Building performance
Sustainability 2021, 13, x FOR PEER REVIEW 7 of 36
simulation technology can be used to rationalize or reduce the energy consumption of
buildings. This method is called sensitivity analysis or parametric simulation. The combi-
nation of optimization algorithms to analyze changes in building energy consumption by
changing several parameters simultaneously is called building performance optimization
. There are two main methods used to predict energy consumption in buildings, the
data-driven approach and the physical modelling approach . Due to the development
of cloud computing and algorithms, the data-driven approach has received increasing at-
tention in recent years. The common machine learning algorithms are support vector ma-
chines (SVMs), artificial neural networks (ANNs), and decision trees.
Amasyali et al. reviewed the research on data-driven building energy prediction
models, with a particular focus on reviewing the prediction scope, data attributes, and
pre-processing methods in conjunction with machine-learning algorithms. Their study
proposed future research directions in the field of data-driven building energy prediction.
A brief overview of existing review studies on data-driven building energy prediction was
presented by considering building type, time granularity, predicted energy consumption
type, data type, element type, and data size . For the machine-learning algorithms
used to train energy consumption prediction models, the mainstream ANNs, SVMs, and
DTs occupied 76% of the distribution, while 24% of the studies used other statistical algo-
rithms, and some scholars also conducted comparative studies between two or more al-
gorithms to derive similarities and differences in energy consumption prediction (Table
1). Nearly half (47%) of the studies focused on the prediction of overall building energy
consumption . A combination of multiple algorithms can be used to efficiently solve
the problem of building energy consumption in smart cities. The below table summarizes
the literature on building performance simulation and prediction in smart cities based on
Table 1. Summary of algorithms mentioned by previous researchers for improving building performance management in
smart city projects.
Algorithms or Models
Sadeghi et al. 
Predicting residential building energy perfor-
Dong et al. 
Predicting residential electricity energy con-
Combination of ANN, SVR, LS-SVM, GPR,
Li et al. 
Predicting building electricity consumption
Ahmad et al. 
Forecasting building electric energy con-
Daut et al. 
Analysis of building electrical energy con-
Mixture of SVM and SI
Turhan et al. 
Comparative study of building heat load esti-
Combination of KEP-IYTE-ESS and ANN
Qiu et al. 
Simulation of vacuum photovoltaic glass and
building energy consumption
Coupling ANN with light harvesting
Zhong et al. 
Prediction of energy consumption in office
Roldán-Blay et al. 
Prediction of building electric energy con-
ANN and temperature profile model
Goyal et al. 
HVAC zone control for occupancy
Williams et al. 
Predicting monthly residential energy con-
Massana et al. 
Short-term energy consumption forecasting
for nonresidential buildings
MLR, MLP, SVR
Sustainability 2021, 13, x FOR PEER REVIEW 8 of 36
Shi et al. 
Forecasting energy consumption in office
Jovanović et al. 
Forecasting heating energy consumption for
FFNN, RBFN, ANFIS
Bourhnane et al. 
Smart building energy consumption forecast-
ing and planning
Abbreviations: Adaptive Neuro-Fuzzy Inference System (ANFIS), Artificial Neural Network
(ANN), Deep Neural Network (DNN), Echo State Network (ESN), Feed Forward Neural Network
(FFNN), Multivariate Adaptive Regression Splines (MARS), Multilayer Perceptron (MLP), Multi-
ple Linear Regression (MLR), Model Predictive Control (MPC), Principal Components Analysis
(PCA), Radial Basis Function (RBF), Swarm Intelligence (SI), Support Vector Machine (SVM), Sup-
port Vector Regression (SVR).
3. Literature Review and Challenges to IoT and AI Adoption in Smart Cities
The arrival of new technologies is always accompanied by opportunities and chal-
lenges. Although the concept of smart cities was only created less than 20 years ago, the
rapid iterations and upgrades have brought about many challenges as well. This section
identifies and summarizes influencing factors from a systematic literature review of pub-
lished papers and studies. Preferred Reporting Items for Systematic Reviews and Meta-
Analyses (PRISMA) was applied in the review process. PRISMA is a commonly used
method that clearly presents the process and reasons of document identification, screen-
ing, inclusion, or exclusion, which can improve the accuracy of reviews and meta-analysis
reports . The initial source data was collected from major English and Chinese aca-
demic search engines, including Web of Science, Engineering Village, Scopus, Google
Scholar, CNKI, and Wanfang Data. By using the identified keywords “IoT/ Internet of
Things”, “AI/ Artificial Intelligence”, and “Smart City/ Smart Cities”; and “adoption”,
“challenge”, “barrier” and their relative Chinese translations with Boolean structured
searching methods, a total of 439 initial papers were collected. Then, 128 duplicated arti-
cles were removed. After reading the title, abstract, and keywords of those collected pa-
pers and determining whether they were aligned with the research topic, 87 of them that
did not meet the criteria were removed. Then, a second measurement was done to check
if the main content of those papers met the criteria, and whether they were articles, re-
views, degree theses, or conference proceedings. After this step, 171 articles were included
for further categorizing (see Figure 5). The final 171 articles selected based on the above
bibliographic research were studied carefully to identify the potential challenges of AI
and IoT adoption for smart city development. After analyzing the content of these articles,
10 influencing factors (challenges) were identified, and the supporting literature is pre-
sented in the Table 2. The roles and interrelationships of the identified challenges were
established using DEMATEL by considering the experts’ opinions.
Sustainability 2021, 13, x FOR PEER REVIEW 9 of 36
Figure 5. Literature search results using the Preferred Reporting Items for Systematic Reviews and
Meta Analyzes (PRISMA) method
Table 2. Ten key challenges identified in the literature, with sources.
Lack of Infrastructure
Insufficient Funds or Capital
Cybersecurity and Data Risks
Smart Waste and Hygiene Management
Lack of Professionals
Managing Energy Demands
Managing Public Health and Education
Lack of Trust in AI and IoT
3.1. Lack of Infrastructure
Smart cities need the latest very advanced infrastructure, and every piece of equip-
ment should be connected to the Internet to monitor it. In smart cities, connected IoT de-
vices collect data from the physical medium to optimize decisions to improve urban ser-
vices for citizens . The growth of the population requires the need for housing, edu-
cational institutes, hospitals, and entertainment facilities. AI and the IoT should address
the needs of infrastructure for all the people living in smart cities that will become part of
the IoT infrastructure . Artificial intelligence has important implications for achiev-
ing sustainable development, which is directly related to infrastructure development in
emerging economies . In addition, AI and the IoT should take care of utilizing and
connecting the old (existing) infrastructure for multiple purposes. IoT technologies have
contributed significantly to most of the detailed aspects of smart city technologies and
infrastructures. As the basic concepts and ideas of IoT technologies are shared with smart
city technologies and infrastructures, there are substantial business opportunities and ex-
tensive growth potential .
3.2. Insufficient Funds or Capital
A study showed that funds and budget were the main factors to begin any project
[74,270]. The government or local authorities should have sufficient funds to design, de-
velop, and continue smart city planning. Unavailability of funds delays the implementa-
tion of projects, which again causes an increase in project costs. Abdalla considers the lack
Sustainability 2021, 13, x FOR PEER REVIEW 10 of 36
of investment and capital funding as the main threat to smart city strategies . AI and
IoT techniques should help in prioritizing the projects based on the severity, requirements,
timelines, and other parameters, and optimally allocate the budgets using the best opti-
mization techniques [272-274]. To effectively address this issue, the government may need
to obtain additional funding from entities in the private sector that are interested in these
smart city projects .
3.3. Cybersecurity and Data Risks
Smart cities’ interconnective networks create huge amounts of data containing rich
information; bring innovation; and connect governments, industries and citizens. The
data create a foundation for operating cities that will make them more effective and sus-
tainable. Sharing and storing large amounts of actionable data also raises many concerns
and challenges. This might include data related to citizens private information, govern-
ment documents, and the information of all private organizations. On the other hand,
cyber insecurity raises concerns about data privacy and threats to smart city systems
[273,274]. For example, there was a cyber attack on a top US pipeline network company,
and the company was forced to shut down its operations for few days and paid a huge
amount to the hackers to resume its operations . On 20 August 2021, China passed a
new personal data privacy law that will take effect on 1 November 2021 . This law
requires that separate consent be obtained from individuals for the processing of sensitive
personal information such as biometric, medical health, financial accounts, and wherea-
bouts. It also prohibits the collection of sensitive information from individuals in certain
special cases of writing, such as facial information and biological information. This might
create challenges for the tech giants to handle the information without mismanagement
and misuse. Due to the increasing volume of sensors and their data, robust connectivity
technology is a requirement for success.  Without powerful citywide coverage, the
success of such a project is more than unlikely. Smart cities will house millions of people,
and managing the people data, analyzing it, and preventing cyber-attacks is a challenge
for AI and IoT. Therefore, an integrated approach is needed to deal with data security,
user privacy, and trust in smart cities . Meanwhile, the challenge of cybersecurity and
data risks and the associated responsibilities must be shared by all parties involved in the
smart city process, including city managers, residents, and the society itself. Cybersecurity
and data risks comprise various types, and a cyber attack is one of the aspects. Therefore,
effective measures have to be taken for smart cities to elaborate methods to detect attacks.
Pasqualetti et al. have designed a centralized and distributed attack detection and identi-
fication monitor by describing monitoring limitations . At the same time, they pro-
posed a framework for cyber–physical systems, attacks, and monitoring. Carl et al. ex-
plored the capabilities of DoS attacks by analyzing denial-of-service attack detection tech-
niques, including activity-based analysis, change-point detection, and wavelet-based sig-
nal analysis . They argued that the detectors used for testing do not solve the problem
independently, and that a combination of methods could produce better results in the
future. Salem et al. surveyed insider attack detection and solutions in the literature .
Their approach was to classify insider attack detection cases. By summarizing the current
common methods and techniques for insider attack detection, future research directions
were proposed. Data security is particularly important in the medical field, and Liag et al.
developed an attack detection model for medical surveillance systems using Internet Pro-
tocol (IP) virtual private networks (VPNs) over optical transport networks. They proposed
a multilayer network architecture and a lightweight implementation of the procedure that
enabled remote access to medical devices .
3.4. Smart Waste and Hygiene Management
There is a growing interest in the potential application of these technologies in man-
ufacturing systems and municipal services to ensure flexibility and efficiency .
Sustainability 2021, 13, x FOR PEER REVIEW 11 of 36
Handling waste still remains a major concern for many countries. Waste management
from inception to disposal is one of the key challenges faced by municipal companies
worldwide . With the current phase of living styles in which most of the food and
other items are wrapped with plastic or paper packaging, handling the waste produced
by millions of people is a huge task. Waste collection must be completed within a specified
time frame, as cities generate waste at an alarming rate and need to collect it more smartly
. Some waste management companies have developed AI-enabled waste segregation
techniques that automatically separate different kinds of waste (e.g., paper, plastics, glass-
ware, metals, etc.) automatically without human intervention. AI and the IoT should ad-
dress the issues associated with collection, transportation, treatment, recycling, and dis-
posal in waste management. For example, the intelligent disposal process was achieved
through Ant colony optimization (ACO) technology. The entire process can be monitored
centrally, thus providing high-quality services to the citizens of smart cities .
3.5. Lack of Professionals
The adoption of AI and the IoT require highly skilled professionals. Without proper
experience and knowledge, organizations always misunderstand the benefits of these
technologies. One of the current challenges facing smart cities is the lack of professionals
with knowledge of computer technology and knowledge of different fields [141,142]. The
unavailability of skilled professionals lags behind the adoption of AI and the IoT in sus-
tainable smart city development . Novák et al. provided a detailed analysis of the
lack of professionals in the Middle East, Amsterdam, and Hungary [284-286]. The attrac-
tion and adoption of professionals will be particularly important in the post-pandemic era.
The epidemic has already had an economic impact on the city, and if there is a chronic
shortage, this will make it difficult to achieve intelligent urban management, and will af-
fect the efficiency and quality assurance of smart city operations. For the construction of
smart cities, the knowledge of professionals helps to achieve desired goals .
3.6. Managing Energy Demands
Smart devices are integrated and converted from everyday objects with advanced
computing algorithms, and become the intelligent terminals that transfer data with a
cloud server or other devices . Thus, it requires a huge amount of energy to maintain
the smart city . Providing energy for a city’s needs is a challenging task, and with
increasing attention shifting towards renewable energy sources, several cities have strug-
gled in migrating to renewable energy sources, On the other hand, energy demand and
costs are increasing over time . Domestic energy consumption is exponentially in-
creasing due to the use of modern televisions, air conditioners, washing machines,
smartphones, and computers. The technological advances and changes in consumer hab-
its are leading to higher energy demands , and now the energy producers are looking
for help from AI and the IoT to optimize the distribution of energy demands through
methods such as automating streetlights, increasing unit electricity prices during peak
times, and updating old equipment with modern equipment. AI implies new rules for
organizing activities. There is a need to improve the design, deployment, and production
of energy infrastructure to meet multiple challenges . One solution to this challenge
is to install solar power generation facilities for homes to help alleviate the energy con-
sumption problem. Modern homes can also help boost the value of fixed assets by in-
stalling auxiliary solar power systems. Since solar panels do not generate electricity at
night, homes will begin to draw power from the main grid as usual after the sun goes
down. The Mississippi Power Company has announced a partnership with Tesla to create
the world’s first smart community with a Tesla residential solar+storage system .
Anbari argues that the combined use of solar and wind resources in a smart city environ-
ment can help energy companies to be able to meet the energy needs of cities . North-
field argues that there is a need to maximize the use of the regional grids powered by solar,
Sustainability 2021, 13, x FOR PEER REVIEW 12 of 36
wind, or hydro energy so that the growing energy demands can be met locally instead of
relying on a central supply line .
3.7. Managing Transportation
As a noteworthy part of today’s economy, transportation accounts for 6–12% of a
country’s GDP that can be created. Although transportation has greatly improved our
lives, many excessive problems remain unresolved . Transportation has become the
second-largest carbon-emitting sector due to inefficiencies. Current transportation meth-
ods are heavily dependent on crude oil products such as petroleum, diesel, etc. Electric
cars are a good alternative to combat the emissions-related problems. Electric vehicles
generate the necessary power for driving using a battery pack and electric motors. The
charging requirements of electric vehicles can be met if existing fuel stations are upgraded
to hybrid modes that provide petroleum products as well as e-charging stations. To avoid
traffic congestion, it is important to design a city to minimize the public daily transporta-
tion requirement that can bridge the gap to reduce residents’ travel times. One of the main
branches of smart cities is smart transportation . There is no smart city without a
reliable and efficient transportation system. This necessity makes intelligent transporta-
tion systems (ITSs) a key component of any smart city concept . This affects not only
smart transportation, but also the environment . Saroj et al. developed a real-time,
data-driven smart transportation simulation for smart cities. This simulation model was
used to evaluate and visualize the feasibility of network performance metrics to provide
dynamic operational feedback in a real-world, big data environment . The machine-
learning techniques that are an integral part of AI should be capable enough to analyze
the past data from public and private transportation activities to analyze the root where
frequent congestion occurs or where most accidents occur, the reasons for the accidents,
and preventive measures to address these issues. In China, besides the smart taxi dispatch
system for automobiles, there are also smart systems for bicycles, which is known as the
shared bicycle. To improve the efficiency of shared bicycle use, the algorithm will propose
a reasonable scheduling plan based on real-time road conditions, after which it will be
carried out manually. Bicycle sharing is a solution to the “last mile” problem for residents,
as many users choose to ride bicycles as an alternative to walking short distances.
3.8. Environmental Risks
Cities are becoming increasingly vulnerable to environmental risks and climate
change . In July 2021, several European countries and China experienced severe
floods that caused millions of dollars of property damage and loss of people’s lives
[207,301]. Smart cities should have highly responsive and agile disaster management sys-
tems such as weather monitoring, and alerting people regarding preventive measures to
reduce pollution levels. Due to the increase in the number of inhabitants, there is a con-
stant need to support economic growth to the point of creating environmental risks .
Large population concentrations also result in an increase in pollution from transportation,
single-use plastics, and other types of waste, which largely contributes to environmental
pollution . Large-scale housing needs also pose several threats to the environment
[305,306]. AI and IoT can be used in the design phase to minimize environmental risks.
Automated drones have been used in various fields such as environmental risk detection
and capture, traffic regulation, and air pollution monitoring. Air quality sensors on pub-
licly accessible online platforms can support the measurement of environmental risks
[305,306]. Urban environments improve competitiveness and respond to environmental
risks to make cities smarter .
3.9. Managing Public Health and Education
By 2020, 86% of health-related companies will spend an average of USD 54 million
on artificial intelligence and healthcare . In China especially, which is home to the
Sustainability 2021, 13, x FOR PEER REVIEW 13 of 36
world’s largest population, providing healthcare facilities to all people is a challenge. It is
difficult to provide the necessary medical requirements to all age groups without as-
sessing their past health conditions. AI should learn to assess the health condition of a
patient using their past medical records and present physical situation. The digitalization
of medical records on a central server will help governments to assess the data anytime
and anywhere in the country. This would help medical staff to investigate the patients
and treat them carefully. Besides using a central server to store the medical records, there
are also alternative methods using blockchain. Holbl et al.  have studied the applica-
tions of blockchain in healthcare, and marked it as an enabler for decentralized healthcare
management. Kong proposed an AI-based model for online triage in sustainable smart
city hospitals . IoT-enabled medical equipment such as operation theatres, diagnostic
tools, and smart equipment should assist in managing health. For example, during the
COVID-19 pandemic, countries adopted measures for effective protocols for sharing
health data. Allam argued that only by designing different smart city products to support
standardized protocols that allow seamless communication between them can better ur-
ban structural risk management decisions be provided . The flip side of the sensible
use of new technology is the misuse of personal health data. Measures involving data
collection and use all inevitably trigger data breaches or misuse. The examples include
personal journeys during the COVID-19 pandemic or records of visits for difficult medical
conditions, which can compromise the rights of patients or even the general population.
A new law enacted in China in August 2021 also prevents such incidents from occurring.
Education is also a primary need for the citizens. AI should help in the design and
development of educational programs according to industrial and academic needs. Con-
tinuous revision of syllabi, assessment of student skills, and analyzing the industrial job
requirements of developing skills in students are some examples in which AI can play a
role. In this era of data abundance and exponential growth of new knowledge develop-
ment, IoT is challenging institutions to rethink teaching and learning in the global mar-
ketplace . The use of IoT can exchange and utilize information in very appropriate
ways to facilitate student engagement and interaction with their peers and teachers.
Mahmood explored the applicability of Raspberry Pi development boards or single-board
computers in teaching enhancement, IoT technologies, and environments, and proposed
a low-cost, efficient, and flexible educational platform . Nuseir focused on entrepre-
neurial intentions in smart cities and elucidated the relationship between entrepreneurial
competencies, entrepreneurial self-efficacy, and entrepreneurial intentions .
3.10. Lack of Trust in AI and IoT
Trust is generally located at the level of interpersonal relationships. In modern life,
more particularly in smart cities, trust between people is increasingly systemic trust .
The lack of trust in AI and the IoT might slow their implementation in smart city devel-
opment. As mentioned by researchers in [313,314], building the trust AI models that can
transform social, political, and business environments and can help people in decision-
making processes will remove any negative opinions about the usage of AI and IoT tech-
nologies. Government agencies should try to create awareness by spreading positive news
about using AI in sustainable practices, maintaining transparency, and publishing some
case studies that might improve the trust. The report “Artificial Intelligence and Life in
2030: One Hundred Year Study on Artificial Intelligence” by Stone et.al analyzed in detail
how AI could impact a typical North American city in 2030 . Each of these chapters
and predictions for the next 15 years reflect the different AI impacts and challenges. Ex-
amples include the difficulty of creating secure and reliable hardware, the challenge of
gaining public trust, and the social and societal risks of reduced human interaction. Poola
mentioned simple tasks that AI can perform, such as facial recognition and car driving, as
well as complex tasks such as developing a super AI that improves itself and triggers an
intelligence explosion. It is also possible to use advanced technologies to eradicate poverty
while also developing appropriate precautions for AI . Kamble et.al provided an
Sustainability 2021, 13, x FOR PEER REVIEW 14 of 36
overview of AI and its applications in human life . For example, they explored the
current use of AI techniques in cyber intrusions to protect computers and communication
networks from intruders. In the medical field, technologies are used to improve hospital
inpatient care. Smart city data management systems provide the collected data and gen-
erate revenue, but the system should also maintain people’s trust while doing so .
Managing and building people trust is a key challenge in sustainable smart city develop-
ment. Data- and citizen-centric smart city governance is essentially built trust . How-
ever, Falco proposed the concept of participatory AI, and he argued that engaging the
public will not only increase community trust in AI . Hwang analyzed the evolution
of smart cities in Korea. He argued that many Koreans have lost trust in smart city devel-
opment due to their experiences with u-City . However, the birth of new technologies
can change this situation to some extent. The contribution made by the AEC (Architecture,
Engineering, Construction) industry is indispensable to the process of building smart cit-
ies. Solearth and Zhao proposed the discipline of AEC-IT that integrates the AEC industry
with advanced Information Technology in the era of the AI age . Solearth and Zhao
proposed a new view that currently, the stage of the AEC industry or architectural design
sector is in the second half of the industry cycle, comparing with hundreds of years' de-
velopment. AI and IoT play important roles in the process of AEC enterprises, from the
original purely design service to DBOB mode (Design, Build, Operate, Brand) .
This section uses a systematic literature review approach to discuss the use of AI and
IoT in smart cities. A total of 10 challenges were identified in the literature using the
PRISMA method, and the number of articles published in the academic field and the num-
ber of smart city pilot projects were found to be increasing in the last few years. This
growth pattern also was in line with the evolution of new technologies combined with the
development and exploration of traditional industries. Moreover, the importance of algo-
rithms, especially artificial intelligence algorithms, in this process can be reflected by com-
bining the definition and use of smart devices. Therefore, how to develop efficient and
secure algorithms is another hot research area that requires more attention. The im-
portance of smart devices and algorithms is reflected by the fact that they are relevant to
each of the influencing factors. Whether it is infrastructure, or water management, or
health education, they are all relevant. The acquired influences and challenges will be in-
vestigated and analyzed later to determine the case of adoption.
4. Research Methodology
This section discusses the research methodology used in the study. We applied the
Decision-Making Trial and Evaluation Laboratory (DEMATEL) method to analyze and to
identify the interrelationships between the challenges that are hindering the adoption of
AI and the IoT in sustainable smart city development. DEMATEL was first employed in
1976, and it has managed to solve many global complex problems by considering experts’
attitudes, and has become a widespread technique in decision-making problems [321,322].
DEMATEL is widely used in analyzing the barriers, challenges, and enablers in multiple
disciplines. Recent studies have used DEMATEL for analyzing barriers in smart sustain-
able buildings , adoption of IoT , online food consumption [325,326], and sup-
ply-chain risk management [322,327]. The above literature emphasized the importance of
DEMATEL in analyzing relationships between the challenges in various industries
Figure 6 shows the various steps of the proposed methodology. There were three
stages in the methodology. In stage 1, challenges for adoption of AI and IoT adoption in
smart city development were identified using an extensive literature review according to
the PRISMA method; in stage 2, industry experts having knowledge about the smart cities
were contacted for collecting information about the challenges; and in stage 3, the col-
lected data were analyzed, and the inter-relationships and ranking of the challenges are
presented using the DEMATEL technique. Table 3 presents the profile of industry experts
contacted in this study. A total of 10 experts from industries, government organizations,
Sustainability 2021, 13, x FOR PEER REVIEW 15 of 36
and universities were consulted for the data collection process. The data collection sheet
was prepared in Microsoft Excel, and printed copies of the sheet were supplied to the
experts. In some cases, the data sheet was sent over email to obtain the responses. The
data analysis was done on a Windows-operated computer with an Intel i5 8th-generation
processor with 8 GB of RAM and a 1 TB hard disk. The experts’ selection was done based
on a convenience sampling method. Experts with a bachelor’s degree and at least two
years of experience in domain knowledge of the environment, architecture, and IT roles
in government and private organizations were considered. Experts with research publi-
cations and research interests in AI, smart cities, IoT technologies, and a willingness to
share information were given preference. The data was collected from July 2021–August
Figure 6. Roadmap of the research methodology.
Table 3. The linguistics evaluation for the assessments of the responders.
Years of Experience
Position in Organization
Type of Industry
PhD in Architecture
Master of Education
Master of Science
Bachelor of Economics
Bachelor of Information Systems
Master of Engineering
Master of Engineering
Bachelor of Science in Environ-
Bachelor of Art
Bachelor of Engineering
Various Steps in DEMATEL Methodology (Stage 3)
In the present study, 10 key challenges, including “Lack of infrastructure (C1)”, “In-
sufficient funds or capital (C2)”, “Cybersecurity and data risks (C3)”, “Smart waste and
hygiene management (C4)”, “Lack of professionals (C5)”, “Managing energy demands
(C6)”, “Managing transportation (C7)”, “Environmental risks (C8)”, “Managing public
health and education (C9)”, and “Lack of trust in AI and IoT (C10)”, in the hindering of
AI and IoT in the evolution of long-lasting smart cities were pointed out by reviewing
substantial literature, as depicted in Table 2. A DEMATEL method (see Figure 5) was uti-
lized to establish and analyze the causal linkages between the challenges.
Sustainability 2021, 13, x FOR PEER REVIEW 16 of 36
We approached 10 industry experts (see Table 1 for profile details) to obtain infor-
mation regarding the challenges to AI and IoT adoption for smart city development, and
created a direct-relation matrix, M1, using the experts’ inputs and computing it according
to the formula presented in Equation (1). The causality effect of one variable (challenge)
on the other variable was collected using the matrix provided in Equation (1). For our
convenience, the words, “challenge” and “variable” were interchangeable in the study.
$ %&' %&( %&) %&* + %&,
%'& $ %'( %') %'* + %',
%(& %(' $ %() %(* + %(,
+ + + + + + +
%-,. &/& %-, .'/' %-, .(/( + + $ %-,. &/,
%,&%,'%,( + + %,-, .&/ $ 0
where Ap represents the complete matrix information collected from one expert, N repre-
sents the number of challenges, and P represents the number of experts (10) contacted for
Based on the scale provided in Table 4, the experts were asked to provide their rec-
ommendations in the given format. A five-point scale running from 0–4 was used by ear-
lier studies [316,317] for analyzing the barriers using DEMATEL. This scale ran from 0 to
4 (0—no influence, 1—very low influence, 2—low influence, 3—high influence, and 4—
very high influence), as depicted in Table 4. We computed the pairwise effect of each chal-
lenge with the other using this influence scale. For example, to determine the influence
between “Insufficient funds or capital (C2)” on “Lack of infrastructure (C1)” all 10 of the
experts’ inputs from the data collection table were extracted, and the values were 4, 1, 0,
4, 1, 4, 3, 4, 4, and 4, respectively. When computing an arithmetic mean of all experts’
opinions, we get
#$ 3 '45
, and this value was confined to a cell (1,
2) of a direct relation matrix (DRM), which is represented in Table 5. The value 2.9 indi-
cated a significant effect of lack of funds on lack of infrastructure. Similarly, the influence
between “Managing transportation (C7)” and “Insufficient funds or capital (C2)” could
be calculated as
#$ 3 (46
, and was confined to a cell (2, 7) of the
direct relationship matrix in Table 5, which also implied a significant effect of transporta-
tion management and the availability of funds. For another computation that showed the
influence between “Managing public health and education (C9)” and “Insufficient funds
or capital (C2)”, we get
#$ 3 &4(
, which was specified in cell (2, 9)
of DRM, and indicated a low or moderate relationship between the variables. As the same
challenge could not have an effect on its own, all diagonal elements in the DRM were set
to zero. Using the above procedure, all cells of DRM were calculated, and the results are
shown in Table 5.
Table 4. The scale used for data collection for DEMATEL.
Please Put a Suitable Value in the Matrix Based on Your Experience
Very High Influence
Step 1: Formation of a direct relationship matrix (DRM).
Table 5. The direct relationship matrix (M1).
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Step 2: Formation of a normalized direct relation matrix (NRM).
To prepare the data for the DEMATEL analysis, an NRM was prepared. The normal-
ized direct-relation matrix “M2” (see Table 6) was constructed using the data based on the
original direct-relation matrix. Each cell was divided by the sum of all cell values in that
corresponding row. For example, for the DRM in row 1, the summation of all values (2.6,
2.3, 2.6, 2.5, 2.7, 2.6, 2.8, 2.7, and 2.8) equaled 23.6. Each cell in row 1 of Table 5 was divided
by this corresponding row total of 23.6. Then, the normalized values were obtained. Sim-
ilarly, for all rows of the DRM, the normalization is done to obtain the NRM, which is
shown in Table 6.
Table 6. The normalized direct-relation matrix (M2).
Step 3: Calculation of the total relation matrix (TRM).
Further, by taking into account the normalized direct-relation matrix (M2), a total-
relation matrix (M3) was calculated by using the following equation:
7 3 89-: . 8/)#
where T represents the notation for TRM, X denotes NRM, and I denotes the identity ma-
trix. Then using the procedure mentioned in , threshold values (α), D, and R were
calculated, where D represents the sum of the values in a row, and R represents the sum
of values in a column. Equations (3)–(5) were used to calculate the values D, R, α values:
; 3 <=**>+×# 3 ?@ =*-A
B 3 ?CA#×+ 3 ?@C*-A
Sustainability 2021, 13, x FOR PEER REVIEW 18 of 36
D 3 E4
where i and j are the respective values for the rows and columns in the TRM, and n is the
number of challenges in the study. The threshold values were used to determine the im-
portant and inconsequential challenges based on the threshold value. The
obtained as 0.9752, and the cell values in the TRM matrix that were smaller than the
threshold α value (0.9752) were replaced with the value “zero (0)” in the α-cut TRM (see
Table 7), and were ignored for further DEMATEL processing. The α value of challenges,
which was equal to or greater than the threshold value, was updated in a new matrix
called α- cut TRM (Table 8).
Sustainability 2021, 13, x FOR PEER REVIEW 19 of 36
Table 7. The total direct-relation matrix (M3).
Table 8. The α-cut total direct-relation matrix (M4).
The α-cut total DRM was prepared by removing the matrix values less than the
threshold value (0.9752), all the values that were less than α were assigned a 0 value, and
all the values other than zero shown in Table 8 were considered to build the directed graph
(digraph). The arrows in the digraph (see Figure 7) indicate the relationships between
Figure 7. Directed graph showing the relationships between the challenges.
Sustainability 2021, 13, x FOR PEER REVIEW 20 of 36
. For example, the cybersecurity risks category is in the rightmost corner of the map,
and it has only one arrow pointing towards it, which indicates that the challenge “lack of
professionals (C5)” influenced “cybersecurity and data risks (C3)”. In addition, “cyberse-
curity and data risk (C3)” has two outgoing arrows towards “managing public health and
education (C9)” and “lack of trust in AI and IoT (C10)”. The overall network graph anal-
ysis concluded that the other challenges had much less influence on the cybersecurity risks.
The bidirectional arrows represent the dual relationship between the given set of chal-
lenges. The findings of R and D corroborated the degree of relationship effect among each
critical challenge. While D + R represents the significance of a particular challenge, D-R
shows the net influence of the provided challenge. The D + R score is plotted on the X-
axis, and the D-R score is plotted on the Y-axis to plot the cause–effect challenges on the
scatter plot. For instance, for computations of D + R and D-R for challenge C1; the score of
D was 10.462 and the score of R was 9.0393, so adding them together (D + R) equaled
19.50125, whereas subtracting them (D-R) equaled 1.4226752. The challenges with high D-
R values had a high importance, and were named as the “cause” group or causal chal-
lenges, and the challenges with low D-R scores were less significant and influenced by the
cause group challenges, and were named as the “effect” group challenges. All results are
presented in Table 9.
Sustainability 2021, 13, x FOR PEER REVIEW 21 of 36
Table 9. Prominence and relation results obtained by using the DEMATEL method.
D + R Score
Lack of infrastructure
Insufficient funds or capital
Smart Waste and hygiene management
Lack of professionals
Managing energy demands
Managing public health and education
Lack of trust in AI, IoT
As shown in Table 9, the barrier with a D–R value less than zero was identified as an
effective group, while a barrier with more than the D–R value fell under the cause group.
Based on the DEMATEL results as shown in Table 9 and Figure 8, the causal interactions
and the degrees of influence among the AI and IoT adoption challenges in the smart city
development are explained as follows. The challenges “C1, C2, C3, C10” were the main chal-
lenges affecting the implementation of various challenges for adoption of AI and the IoT in
sustainable smart city development. Figure 8 displays the differentiation between the cause
and effect groups. The challenges above the horizontal axis fell under the “cause” group,
while the challenges below the horizontal line fell under the “effect” group.
Figure 8. The cause–effect diagram.
Figure 7 displays the relationship between the cause–effect challenges; whereas the red
colored solid lines show the strong relationship between the challenges, the red colored
dashed lines indicate a moderate relationship, and the black colored dotted lines show the
weak relationships. Researchers and organizations should assign prime importance to
strong relationships, as understanding the connection between the challenges will help to
overcome issues associated with the adoption of AI and the IoT in smart city development.
To understand the relationships between the various challenges, we used NRM (see Figure
7), which displayed the weak, moderate, and strong causal linkages between all 10 chal-
lenges. The cause–effect relationships and their importance is explained in Section 5.
5. Results and Discussion
Sustainability 2021, 13, x FOR PEER REVIEW 22 of 36
The following section summarizes the findings based on the causal diagram (see Fig-
ures 6 and 7). As shown in Table 9, the challenges with a D–R value less than zero were
identified as the “effect” group, while challenges with more than the D–R value fell under
the “cause” group. The challenges, including Lack of infrastructure (C1), Insufficient
funds or capital (C2), Cybersecurity risks (C3), and Lack of trust in AI, IoT (C10) were
classified into the cause criteria group, while affecting the remaining challenges, which
included Smart Waste and hygiene management (C4), Lack of professionals (C5), Manag-
ing energy demands (C6), Managing transportation (C7), Environmental risks (C8), and
Managing public health and education (C9). Because cause variables have an impact on
the effect group criterion, they should be given more attention while planning AI and IoT
technologies in smart city development. The effect group challenges, although they had
less dominance over the other challenges, were highly influenced by the cause group chal-
lenges. As mentioned in [328,329], cause group factors will have a strong relationship and
high prominence. The factors that fall under the cause group are driving factors. The fac-
tors directly linked with cause group factors will have a high influence on these variables,
and they have a strong relationship and low prominence. The factors (barriers) that are
not connected to other factors will have no influence on or prominence in other factors.
The most important challenge in adopting AI and the IoT to achieve a large compet-
itive factor in a sustainable smart city was “Insufficient funds or capital (C2)”, with the
greatest D-R score of 1.422, implying that (C2) should be given greater emphasis in the
entire system of IoT and AI implementation when designing an advanced city. This find-
ing held true because recent studies have identified the unavailability of funds or financial
resources as a major constraint for smart city transformation projects [69,332]. Further-
more, Table 9 reveals that the important effect degree of (C1) was 10.462, which ranked
second-highest among all causative factors. In general, (C1) was a major element that re-
quires further consideration during the implementation phase, and this finding also was
supported by the literature . With the second-greatest D-R value, “Lack of trust in
IoT and AI (C10)” had a substantial influence on the other challenges. Lack of trust creates
a barrier for building trust and promoting the use of AI and the IoT in smart city projects.
One more important challenge identified from the analysis was “Cybersecurity risks (C3)”,
with a D-R value of 0.3352, which also held in the context of smart city development. The
interconnection and speed of the Internet and availability of vast public data makes smart
cities vulnerable to cyber security attacks. An example of such a cyber security attack in
the USA  was discussed in the introduction section of this study.
If the value of D-R was negative, the perspective belonged to the impact group (ef-
fects), and they were heavily influenced by cause group challenges. Furthermore, in terms
of notable effect degree, (C6) and (C8) were highly influenced by the cause group chal-
lenges. Similarly, the remaining challenges C4, C7, and C9 had low D-R values, which
implied a significant low importance of these challenges in the smart city development in
the context of AI and IoT adoption. In this study, “Environmental risks (C8)” had an R
value of 10.641, the highest out of all challenges. Furthermore, when contrasted with other
variables in the effect group, its D-R value was quite high (−1.2071). To understanding this
trade-off clearly, a cause–effect diagram was used. In Figure 8, it can be observed that the
challenge regarding environmental risks fell on the right side of the graph, which implied
that even though the C8 challenge fell under the effect group, it had a substantial influence
on the other elements. The D + R for “Managing transportation (C7)” was the second-
largest in the entire procedure. Its D-R value was quite low, but “Managing energy de-
mand (C6)” and “Managing public health and education (C9)” had the second- and third-
highest R values of 10.359 and 10.292, respectively, as well as the second- and third-high-
est D-R values of −1.122412 and −0.8052, respectively. Both also can be considered on a
priority basis. However, their D+R scores were lower than the other effect group criteria.
The other components had mediated R values, indicating a high degree of effect. “Lack of
professionals (C5)” had a negative influence on the system, since its D-R value was −0.0624.
Sustainability 2021, 13, x FOR PEER REVIEW 23 of 36
Other challenges had a major influence on it. The digraph of net cause and effect is shown
in Figure 7, and it was used to demonstrate the relationship.
In addition, based on the M4 matrix results displayed in Table 6, we created a causal
inter-relationship graph of the implementation of AI and IoT challenges in the develop-
ment of the smart city and the interaction among these; key challenges are shown in Figure
7. The arrow-headed lines indicate the causal interactions among each pair of challenges.
The red-colored labels are causal challenges, and the blue-colored labels represent the ef-
fect group challenges. It was found that “Lack of professional (C5)” had strong interac-
tions with another challenge, “Managing energy demands (C6)”, while “Managing trans-
portation (C7)”, “Environmental risks (C8)”, and “Managing public health and education
(C9)” were further related by highly influencing, or having more interactions with, other
challenges to the implementation of the IoT and AI in the development of a smart city (see
According to this study, “Lack of infrastructure (C1)”, “Insufficient funds (C2)”,
“Cyber security risks (C3)”, “Lack of trust on AI, IoT models (C10)” were highly dominant
challenges that affected the other challenges. The organizations that are planning to im-
plement AI and the IoT in smart city development should focus on these challenges first,
as overcoming these challenges will facilitate the adoption process. The findings of the
study will help to identify important challenges, and the relationship and influence of
challenges also can be extracted. As a result, researchers and policymakers researching
sustainable smart city development must address the major challenges to implementing
IoT and AI.
6. Conclusion and Future Discussion
The concept of smart cities is becoming important to providing sustainable living
conditions to people. Achieving sustainability is difficult due to the involvement of mul-
tiple factors. AI and IoT technologies can transform challenges and offer potential solu-
tions to the issues perceived by society and regulatory bodies. This study aimed to identify
and analyze the effect of important challenges that are hindering the adoption of AI and
the IoT in sustainable smart city development. Initially, the challenges were extracted
from an extensive literature review, then the DEMATEL method was used to analyze the
relationship of causes–effects between the identified challenges. Data were collected from
experts in diverse industries familiar with smart cities. Due to the rapid urbanization
worldwide, cities are becoming overcrowded and are facing issues such as water scarcity,
pollution, soil contamination, etc. On the other hand, unavailability of funds; global
warming; and providing food security, basic health, and education are the key issues fac-
ing government bodies. Previous studies elaborated that AI and IoT technologies were
useful in analyzing the optimization of resources using accurate data collection processes.
Developing plans for sustainable smart cities is a major challenge for emerging economies.
Some countries (e.g., Singapore, Denmark, etc.) have leveraged the benefits of the AI and
IoT techniques to measure and track various activities such as pollution levels, weather
monitoring, energy distribution and management, traffic and transport management, wa-
ter distribution and sewerage monitoring, etc. All the data collected by various sensors,
cameras, videos can be sent to a central platform to perform an analysis to identify the
issues and possible solutions using analytics. For example, the benefits of AI in traffic
management to improve pedestrian safety is followed in Singapore , and Copenha-
gen uses an AI-enabled solutions lab to optimize energy usage and weather monitoring
. However, the majority of the smart city development is occurring in developed
countries, whereas emerging economies such as China, India, and Brazil are still strug-
gling to overcome the challenges in developing smart cities. The huge population and
rapid urbanization rates are causing these emerging economies to design and develop
sustainable smart cities at the present time.
Using the data from experts’ opinions, the identified challenges were analyzed using
the DEMATEL method. The challenges were grouped into cause types and effect types
Sustainability 2021, 13, x FOR PEER REVIEW 24 of 36
based on their importance as determined by the experts. Using the findings, we aimed to
explore the relationships between the challenges and how they influenced the adoption
of AI and the IoT in sustainable smart city development. Among all challenges, Lack of
infrastructure (C1), Insufficient funds or capital (C2), Cybersecurity risks (C3), and Lack
of trust in AI, IoT (C10) were the most prominent factors influencing the adoption of AI
and the IoT in smart city development. Therefore, researchers and regulatory bodies
should give importance to these challenges while planning a smart city project. In the
causal loop diagram, it was observed that Smart waste and hygiene management (C4),
Lack of professionals (C5), Managing energy demand (C6), Managing transportation (C7),
Environmental risks (C8), and Managing public health and education (C9) were highly
affected by the other factors. The relationships influencing these challenges can help us to
understand the limitations and uncertainties associated with the other challenges. The re-
sults of this study can help academicians, industry practitioners, and policymakers reach
an overall understanding of the inter-relationships between the challenges that are hin-
dering the adoption of AI and the IoT in sustainable smart city development. The data
were collected from experts from diverse industries and organizations, which made this
study unique for emerging economies. A summary of the highlights of this study follows.
• We identified challenges for adopting AI and the IoT for sustainable smart city de-
velopment using a systematic literature review method (PRISMA);
• Ten key challenges were identified using the PRISMA method, and a total of 171 ar-
ticles were studied;
• Ten experts having experience in smart city development were contacted, and their
opinions were evaluated using DEMATEL;
• The study findings revealed that lack of infrastructure, lack of trust in AI and the IoT,
cyber security and data risks, and insufficient funds were the major barriers that are
affecting the adoption of AI and the IoT for sustainable smart city development;
• The results of this study can be used as a basis for understanding various inter-rela-
tionships between the barriers, as the study was based on data from China and de-
veloping countries such as India, Brazil, and Malaysia can observe the findings as
useful while adopting AI and the IoT for smart city projects.
Despite many efforts taken to carefully design the study, there were some shortcom-
ings. We did not use a Grey scale to measure the accuracy of opinions of experts about the
challenges, so in future research, Grey-DEMATEL with a greater number of challenges
can be explored to achieve good results in this domain. ANP, AHP, or ISM can be used to
present the hierarchical interrelationships more robustly. In addition, the consultation
with experts with great experience in this domain can help reach possible solutions to
overcome the challenges hindering sustainable smart city development.
Author Contributions: Conceptualization, K.W.; methodology, R.K.G.; software, R.K.G.; validation,
K.W., Y.Z., and R.K.G.; formal analysis, K.W.; investigation, K.W. and Z.L.; resources, K.W.; data
curation, K.W. and Z.L.; writing—original draft preparation, R.K.G. and Z.L.; writing—review and
editing, K.W. and R.K.G.; visualization and formatting, Z.L.; supervision, K.W.; project administra-
tion, Y.Z.; funding acquisition, Y.Z. K.W., Y.Z., and Z.L. contributed equally to this work. All au-
thors have read and agreed to the published version of the manuscript.
Funding: This research and the APC were funded by the University-Enterprise-Partnership Pro-
gram of Solearth Architecture (grant number DOU- 315324C-KGT).
Institutional Review Board Statement: Not applicable.
Informed Consent Statement: Not applicable.
Data Availability Statement: Not applicable.
Conflicts of Interest: The authors declare no conflict of interest.
Sustainability 2021, 13, x FOR PEER REVIEW 25 of 36
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