The NY Times has a long piece about IBM's new business as it supplies "Command Centers" for mayors of cities around the world. The article suggests that each Mayor seeks to be a benevolent leader (think of Ike during WW II) but that due to transaction costs was unable to know in real time how a particular crisis was playing out across the city's geography. By providing real time information to the "leader", IBM is helping cities to cope with new news and shocks.
I agree with all of this but the reporter downplays the main benefit of providing high quality information in cities. Individuals (not mayors) now make better choices and in aggregate the city is healthier and more robust in the face of shocks. You don't have to be Hayek to believe that the real payoff of the IBM technology is to allow the government to play the role of impartial data provider and then allow individuals to make their own best choices of how they want to adapt and cope with new news. If crime is rising in a certain slum in Rio, rental prices will adjust --- people will no longer move there and will choose to locate in a different part of the city.
As economists have shown in many cases such as Smog Alerts and restaurant public health ratings, individuals change their behavior as they are provided with new information and they change their behavior so that to reduce their exposure to risk and disamenities.
It is of course the case that a Mayor who has real time information about a crisis may allocate resources more effectively but I do not believe in a Superman theory of history. The reporter appears to believe that Mayors are benevolent paternalists who seek to protect their citizens but lack information about the real time challenges they face. I wish we lived in that world.
In truth, decentralized twitter updates are likely to provide pretty close to the same services (for free!) that IBM is supplying at a price of billion of dollars. People such as Guru Banavar at IBM should explain under what conditions would his "smart grid" for the Mayor outperform twitter?
For decentralized twitter to be equally effective as IBM, all Twitter would need is an aggregator that allows you search tweets based on subject and date such as "storm, Rio, March 22nd 2012" .