Rapid Urbanization Creates “Smart” Opportunities

For the first time in history, there are more people living in urban than rural areas and that trend is expected to continue – with 1.4 million people added to the urban population every week1. Today, nearly 54.5% of the world’s population lives in cities2, and it’s expected to grow to 70% by 20503.   People are drawn to cities for a number of reasons – job opportunities, stronger education resources, exposure to arts and culture and a more diverse environment, to name a few.

But for all the richness of cities, urban living can be filled with challenges, from traffic jams to taxed energy systems to overcrowded sidewalks and transit. Many of these difficulties are rooted in dated infrastructure – so as the number of people living in cities continues to rise, investing in and modernizing city infrastructure becomes critical.

The ultimate goal? Creating a “smart city” – one that leverages technology to improve quality of life for its residents, and creates better systems and structures to support it. One that looks ahead to future generations and starts the work now to meet those needs.  Investing in the “smartness” of a city not only modernizes it, but creates a stronger, more sustainable place to live and work.

The good news is that the challenge of creating a smart city presents great opportunities. In fact, the smart city market could grow from an estimated US$1 trillion in 20174 to US$3.5 trillion by the mid-2020s5. This means opportunities for companies, investors and, of course, the residents themselves. How do you uncover those opportunities? Step one is imagining what it might be like to live in a “smart city”.

THE INTERSECTION OF TRANSPORTATION & TECHNOLOGY

Logic dictates that as urban populations continue to swell, the strain already felt by public transit systems, roads, bridges, etc. will increase exponentially. But technology can and is having an impact: autonomous and electric vehicles, the smart power grid, and real-time travel behavior analysis are improving mobility. 

For example, Columbus, Ohio is experimenting with the concept of a rapid transit service consisting of semi-automated and autonomous vehicles, bikesharing and ridesharing services, and connected kiosks that provide scheduling information. The system will employ sensors, special lanes, and smart traffic signals to increase efficiency on the city’s bus system as well. The hope—based upon the premise that a lack of adequate public transportation is at the heart of many cities’ socioeconomic inequality issues—is that these updates will ultimately connect people in underserved communities to job opportunities and healthcare facilities. Ultimately, these innovations can have an even broader benefit, reducing carbon emissions, and solving ubiquitous challenges around the daily commute.

A NETWORK OF CONNECTIVITY

Leveraging technology alone doesn’t automatically make a city “smart”. One of the key practices that today’s smart connected cities follow is “collect, communicate, and crunch6.” This approach involves 1. The collection of data—things like pedestrian flow, weather conditions, and traffic patterns—via smartphones or other devices, 2. Communication among a network of such devices, and 3. Data analysis that produces actionable insights and even predicts what could happen next.

These street lights do much more than just give off light

This type of connectivity, supplemented by the Internet of Things (IoT), is no longer arriving—it’s already here. Today’s cities are transitioning to modern platforms in which every system from emergency response to water storage operates in harmony.

Cities around the world are already integrating their infrastructures through connectivity. Rio de Janeiro, Brazil has a massive “smart operations” center, which collects and analyzes information from more than 30 local agencies. The city can predict conditions like where floods will occur if there are dangerous storms.  In Santander, Spain, more than 10,000 sensors have been installed  into city street lamps, poles, parking lots, and building walls to collect data about weather and pedestrian behavior—and an app gives citizens access to this data for transit and event schedules. And in Singapore, the Smart Cities Programme Office employs sensors, cameras, and GPS devices to implement “congestion pricing,” which assigns tolls based on real-time traffic patterns.

CROWDED DOESN’T HAVE TO MEAN IMPERSONAL

Even unseen, sensors are tracking residents and helping cities make commutes better.

Smart cities don’t adhere to a cookie-cutter template – creating an environment that’s comfortable and adaptable to the needs of its many residents is essential. In the smart cities of the future, things such as train platforms, sidewalks, and office buildings will offer a spectrum of data-powered personal comfort preferences. From individualized temperature and lighting controls to customized shopping experiences, virtually no experience of city life is likely to be 100% identical in the future.

 Accessibility can and should include assistance we’ve never imagined – and will open up the urban ecosystem to people of all ages and abilities. Voice assistants, “smart” signage, and responsive street technology will be capable of adapting to individuals’ mobility needs. One concept for “responsive street furniture” (from British designer Ross Atkin in partnership with Marshalls) is already being developed: Users register with a smartphone app and specify their needs (brighter street lights, audio information, a few more seconds to make it across the street) – while they’re walking.

This will be critical, as already today, 25% of the residents in the 100 largest US cities are over the age of 65 or living with disabilities7.

 

WHERE DOES IT ALL LEAD?

The road to arrive at the cities of our tomorrow isn’t short – but we’ve traveled it before.  In fact, it wasn’t that long ago that we installed the first streetlight or turned on the first computer or unveiled the first transit system. What can seem daunting is actually a compelling opportunity for community leaders, companies and investors alike.

Traditional organizations – telecom, construction, transportation, and local governments as examples – will play critical roles, as will relatively nascent industries such as renewable energy, artificial intelligence, cleantech, and cybersecurity.  All will be needed to shape the cities of tomorrow.

And making the investment is worthwhile. Cities are the #1 contributor to GDP – the world’s 600 largest cities are expected to comprise nearly 65% of global GDP growth in the next 10 years8. And a smart city does that in the most efficient and innovative way possible. But the chance to build truly inclusive communities – where technology opens up the ecosystem to all residents may in fact be the most remarkable opportunity of all.

DATA SOURCES

  1. UN 2014
  2. UN DESA 2015
  3. UN World Urbanization Prospects, The 2014 Revision
  4. Smart Cities Council 2016
  5. Persistence Market Research 2017
  6. Smart Cities Council Readiness Guide
  7. U.S. Census Bureau, 2014 American Community Survey: 1-Year Estimates of Metropolitan areas in the U.S.
  8. McKinsey 2016