Sidewalk Labs, the urban innovation arm of Alphabet, had grand ambitions to create a prototype smart city in Toronto, filled with a smart power grid, underground tunnels for freight, and countless other shiny innovations. But the project was significantly scaled back as concerns about tech’s ethics and use of personal data have become more prominent, and because of how Sidewalk Labs has interacted with the city itself.

The saga shows that companies entering new markets without consulting local communities open themselves up to severe risks. Failure to bring the public into public innovation immediately surfaces the possibility of citizen activism that impacts profits and project timelines, the development of local regulations that aim to curb specific business models in question, and the exposure of practices that vault companies into the public spotlight. If you have any doubts, just look at the turbulent rise of Uber (and ridesharing, in general), the retreat of Amazon from Queens, and the sharp decline of WeWork. Social equity must become central to every project that taps data-hungry tech to deliver citizen services, address critical local issues, rethink infrastructure, and improve the quality of life in a place.

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Citizens must have a leading role in innovation planning

Innovation can drive inequality. Entire demographics can be left behind—or specifically targeted—when physical technologies, mobile apps, and digital platforms roll out to address urban issues from transit congestion to climate change to criminal justice. Further, governments and private industry stakeholders often introduce innovations to local communities without bringing previously marginalized communities into the fold, by accident or by design. That practice needs to end.

That said, there are some positive examples from cities around the world looking to use tech for good. In Barcelona and Amsterdam, the DECODE project provides tools that put individuals in control of whether they keep their personal data private or share it for the public good. In London, the Open Data Institute and the city have partnered to create solutions to civic challenges, while maintaining the privacy and security of Londoners. Unfortunately, these are more the exception than the norm. More cities that want to embrace innovation must take people into account from the beginning.

Governments need to deepen tech literacy and invest in data governance capacity

Big Tech’s efforts to drive innovation at the local level often masquerade as noble promises to improve the status quo. Companies like Amazon, Uber, and Sidewalk Labs introduce full-scale civic projects that aim to put autonomous vehicles on the streets, overhaul transit options, deliver flexible architecture, and engineer outdoor microclimates. High-speed networks, futuristic algorithms, and a vast array of sensors power their local advances, often without consent from local leaders and communities. Consequently, municipal governments still find themselves rethinking everything from regulatory oversight to public realm data privacy to the complex dynamics of public-private infrastructure projects in response to Big Tech movements, instead of in concert with them.

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At the same time, public sector leaders around the world still have plenty more work to do to hold tech companies—and themselves—accountable for responsible practices that ensure data transparency and security. Officials in charge of innovation-focused regulation and oversight must embrace diversity of people, cultures, and perspectives in order to make cities welcoming places powered by ethical technology. They must expand the number of voices at the table in order to properly address local issues, like public transportation and economic disparity, that divide people within communities. That process begins with taking steps to educate current leaders and staff about the importance of strong data governance, opening clear lines of communication with local communities, and allocating budget toward hiring top technology talent with both the moral compass and technical knowhow to go toe-to-toe with private sector actors. This is what Toronto has learned from the Sidewalk experiment.

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