Just imagine a smart city that notifies you of a traffic jam and sends an alternate route that directs you to one of the few available parking spots downtown relative to your desired endpoint. It identifies that you have an electric vehicle and thus the space has a charging station. You also don't have to fish out coins for the meter because it automatically pays for the spot based on the exact amount of time you actually parked there. Sounds like a futuristic dream come true, right? Well, it's not a dream but a reality for a growing number of cities across the globe.
Smart cities are the wave of the future, as the benefits to municipalities, residents, and entrepreneurs are becoming abundantly clear. These comprehensive smart cities have popped up in urban environment hubs in the past several years but are becoming ever more affordable and applicable to even the smallest municipalities. This article will help you answer the question "What is a smart city?" as well as discover the opportunities it presents to investors.
What makes a city smart?
A smart city is one that uses a network of information and communication technologies (ICT), or a smart grid, to connect city leaders to the residents or visitors. The ICT transmits various data sets, like traffic patterns or garbage collection needs, to the city services via the Internet of Things (IOT). The data from IOT devices is then processed using various apps so that real-time interaction can occur. Smart lighting for example, can alert drivers to empty parking spaces or warn them of traffic congestion ahead. Smart-city development can help municipalities streamline a plethora of normally time-consuming or inefficient analytics for infrastructure, public services, and utilities.
Which cities are considered smart?
Many of the best examples of smart cities are overseas in Europe, the Middle East, and Asia, including cities like Singapore, Seol, London, Helsinki, and Melbourne. Singapore is typically considered the shining example of a smart city. It has been in development since 2014, well ahead of the adoption curve. They have a well-rounded and established system used to monitor the cleanliness of public spaces; test a completely autonomous vehicle system, including public transportation; and even monitor the health and safety of the elderly; among a host of other improvements.
Vienna is another advanced and well-developed model that has removed some of the power the city's leaders and providers typically have in a smart city, instead sharing the input and responsibility with its citizens. Because of the citizen engagement, it emphasizes equality, affordability, and other social issues as crucial to the creation of the overall smart-city development.
But we do have shining examples right here in the United States as well. New York City has a combination of applied systems as well as laundry list of incentive programs to help further develop a comprehensive smart city. They have improved traffic congestion in certain areas by 10% and are looking to beef up cyber security by offering billions in funding for startups and corporations. Boston also has the innovative ecosystem and financial incentives along with support programs and policies to foster its development as a smart city.
What technology do they have?
The digital technology utilized by smart cities is mind blowing. Much of the sci-fi futuristic stuff seen in movies is already a reality plus some. The network usually includes an extensive network of IOT sensors, video cameras, and even interlinked social media platforms. All of this data can be used in various ways to improve environmental impacts, reduce expenses, and generally improve the quality of life in the smart city.
A smart-city project might start by analyzing transportation patterns and real-time flow. Smart transportation can reduce congestion and pollution, help find parking and increase revenues by making parking fees demand based, help determine the quickest bus route, and use movement patterns and usage by citizens to make better city-planning decisions. Smart technology can also help improve water and waste management services or reduce light pollution via street- light dimming when people are not around, in turn cutting costs and energy consumption. It can even extend as far as improving public safety by reporting emergency situations like accidents, fires, and crime more rapidly by using technology rather than people to initiate the call.
Can we prevent our smart cities from getting hacked?
The potential integrations and improvements for cities is nearly limitless. But the looming question many people rightfully ask is whether these technologies can be protected from hacking and other forms of corruption, like data being used for alternative purposes. The answer is not simple and is ever changing. In 2019, there were seven major attacks on municipal computer systems. They were severe enough that the FBI was involved to solve the cybersecurity ransom situations.
There are several components which must be addressed to reduce the likelihood of these occurrences. The most obvious is making sure municipal computers and back-end data processing are secure with the most up-to-date systems available. This includes well-developed firewalls so no one besides the intended recipient can access the information being transmitted. Another critical factor is making sure the citizen on the other end has been verified and authenticated. Without this two way approach, issues can easily arise.
Opportunities for investors in smart cities
Smart cities can greatly improve the lives of residents and the efficiencies of the municipality. But it can also benefit investors and businesses as well. The amount of data that is available in smart cities can help investors make sound business decisions on any number of things from store hours to determining the best market for targeting an available rental. Smart-city solutions can literally translate to economic growth.
The development of a smart city relies on the private sector to bring the technology to the city. And therein lies the opportunity for many investors. You might invest in the companies providing these smart-city services, or perhaps you are already an entrepreneur in an area that will be able to improve efficiency by using some of these smart sensors. A smart building and even smart homes are an important component to a fully functional smart-city ecosystem. Old buildings can be retrofitted and new buildings can come equipped with technology that will adjust heating and cooling systems to conserve energy or notify the owner of needed repairs promptly. Smart-city application can vastly improve urban life but must be embraced by both the city government and its citizens. As an investor, you have the opportunity to capitalize on the wave of the future.