Smart cities will use technology to transform urban environments. Cities are leveraging internet pervasiveness, data analytics, and networked devices to improve cities’ economic, environmental and social trajectories. This viewpoint examines the trajectory of smart cities, describes their significance to service providers and recommends ways in which service providers can drive growth in smart cities.

Smart Cities: Opportunities for Service Providers

By Zach Cohen

Smart cities will use technology to transform urban environments. Cities are leveraging internet pervasiveness, data analytics, and networked devices to improve cities’ economic, environmental and social trajectories. This viewpoint examines the trajectory of smart cities, describes their significance to service providers and recommends ways in which service providers can drive growth in smart cities.

The Growing Challenge

In 1900, around 15 cities in the world had populations of one million people or more. Today, the number of cities meeting this mark has grown to 450. Cities currently host 50% of the world’s population and by 2050, this percentage will grow to 66%, or seven billion people. The trend toward more populous cities has been accompanied by a trend toward greater urban density.

Cities have always faced economic and social pressures. However, today’s spiking urban populations are overwhelming many traditional solutions. Simply building more housing will not solve poverty and inequality. Simply hiring more teachers will not solve the problems of education. Moreover, uncontrolled use of natural resources is severely harming our environment. Cities need to find better ways to support future urban growth.

Smart City

The Building Blocks of Smart Cities

Pervasive internet connectivity, data analytics and networked devices can support healthier economic, social and environmental urban growth. Cities are epicenters of technology adoption. Over half of all mobile traffic is already in cities and is expected to grow to 60% within two years. Cities can leverage this momentum to strengthen communication among citizens and cities, predict patterns to inform urban planning, incentivize and orchestrate new behaviors and even automate physical infrastructure such as vehicles and transportation systems. Network technologies will transform how cities operate. 

Today, 40% of the world’s population has access to the internet, which can provide a foundation for new forms of information sharing. Cities can use the internet to disseminate information, to engage citizens and to manage city functions. For example, cities can create platforms (e.g., web-based and mobile) that create opportunities for cities and citizens to interact, build relationships and share. These platforms can be used to enhance the sharing economy, expand citizen participation in debating or voting on issues and streamline the management of city functions.

Pervasive Internet Connectivity - Applications

Data can lead to valuable insights about the behaviors and patterns of individuals and groups. Our ability to use data to track, store, analyze, and draw conclusions is stronger than ever and could be used to support the development of smart cities. Data, such as movement patterns, buying behavior, and resource consumption (e.g., use of public spaces and transportation) contains valuable insights that can be used to support the development of smart cities (e.g., new facilities and roads). In addition, findings from the analysis of behavioral patterns can be used to incent behavioral changes in urban behavior and orchestrate resource use (e.g., collection and analysis of transportation data to inform development of a seamless multimodal transportation app). Additionally, cities could leverage data to monitor and charge for use of urban infrastructure (e.g., metering and charging for use of roads). Efforts by governments to increase the availability of open data could support further progress in this area.

Data Analytics - Applications

The breadth of types of networked devices – and applications for them – are expanding rapidly. Companies are developing innovative applications for connected devices in homes, work places, and sources of energy. We can automate technologies and orchestrate the ways in which they behave together (e.g., vehicle to vehicle (V2V), vehicle to infrastructure (V2I) and machine to machine (M2M) connections). We can also use network connections to enhance our ability to participate in activities and collaborate from remote locations (e.g., movement enabled telepresence technologies). This can be used to optimize the delivery of resources and the movement of people for environmental, economic and social benefit.

Networked Devices - Applications

Opportunities for Service Providers

Building smart cities depends on a variety of stakeholders. Network service providers, in particular, can lead the charge. While governments, particularly local governments, are needed to build consensus and coordinate, they lack the resources and expertise to do it alone. The private sector is needed to provide capital, innovation and implementation support. Network service providers can contribute in areas in which other participants in urban development efforts often fall short. To compete effectively, they should proactively identify opportunities that complement their organizational capabilities and goals.  Below are service provider capabilities, as well as examples of how these capabilities can generate revenue while fostering smart city development.

Service Provider Capabilities for Smart Cities

Cartesian estimates that smart cities are a $7.5 billion per year opportunity for technology providers. Private sector participants are recognizing this opportunity and developing strategies to leverage their capabilities to create more technically advanced cities. Developing a focused smart city strategy can help network service providers identify missing assets or capabilities and determine how to bridge gaps through internal investment, partnership or acquisition.<>