In 2017, Sidewalk Labs — the urban innovation subsidiary of Alphabet — announced a partnership with the city of Toronto to develop a twelve-acre stretch of the waterfront into a model smart city district. Sensors would track pedestrian movement, heating and cooling systems would respond in real time to occupancy patterns, autonomous vehicles would navigate purpose-built infrastructure. The project attracted global attention as a demonstration of what urban technology could achieve at scale. In 2020, Sidewalk Labs withdrew. The official reason was economic uncertainty due to the pandemic. The real reason was simpler and more instructive: the residents of Toronto did not trust the company with their data. They had not been adequately consulted about what data would be collected, who would own it, how long it would be retained, and what it would be used for. The technology was ready. The governance was not. The city was not smart enough to know what questions to ask before signing.
Songdo, the purpose-built smart city in South Korea, is a different kind of failure — quieter, more insidious. The city was built from scratch on reclaimed land near Incheon, with sensors embedded in every road, every building, and every piece of public infrastructure. The data flows. The systems work. And the city is largely empty. After two decades of development and tens of billions of dollars in investment, Songdo's occupancy remains far below projections. The problem was not the sensors. The problem was that no one wanted to live in a city that was designed as a data collection experiment. People choose to live in cities because of jobs, social networks, cultural institutions, history, and proximity. None of those things are solved by sensors.
The governance-first argument
The lesson I draw from both cases is not that smart city technology is wrong. It is that the sequence is wrong. The conventional smart city project begins with a technology procurement decision: what sensors to install, what platform to use, what data to collect. The governance questions — who owns the data, how citizens consent to collection, what happens if the technology vendor goes bankrupt or changes its terms of service — are treated as afterthoughts to be resolved after the infrastructure is in place. This is precisely backwards. Governance must precede technology, because the technology becomes the enforcement mechanism for whatever governance framework exists at the time of deployment. If there is no governance framework, the technology defaults to serving the interests of whoever controls the data — which, in most smart city projects, is the technology vendor, not the city's residents.
"A city is not a network of sensors. It is a network of agreements — between residents, institutions, governments, and the physical infrastructure that mediates their interactions. Trust is the operating system."Nasreddine Bouteraa
This is directly connected to what we are building with Sanad. The co-economy thesis is that trust is infrastructure — that before you can build financial instruments, before you can build data systems, before you can build any system that depends on cooperation between strangers, you need a trust layer. The daret — the North African rotating credit circle — has worked for centuries without banks, without contracts, and without enforcement mechanisms because it operates on a trust layer that is maintained through social accountability. The smart city has the same requirement. Before you deploy the sensors, you need to build the consensus: what the city is for, who it serves, and what the rules of data ownership are. Only then does the technology become useful rather than threatening.
What would a trust-first smart city look like in practice? It starts with data governance before hardware procurement. A city that wants to install occupancy sensors in public spaces must first answer: who owns the data? For how long is it retained? Can it be subpoenaed? Can it be sold? Can it be used for purposes other than those stated at the time of collection? These questions should be resolved in public, with citizen participation, and encoded in binding agreements before a single sensor is installed. The technology then becomes the implementation of a governance decision, rather than a fait accompli that generates governance problems after the fact. Algiers has the opportunity to build this governance layer before the technology layer — not because it is behind, but because it has not yet made the mistakes that Toronto and Songdo made. That is an advantage that should not be wasted.