According to a study by Dataflog, urban centers are now home to 82.3% of the US population and around 50% of the world’s population. This number continues to rise, as the same study predicts that by 2050 three-quarters of the world will live in an urbanized space. As the global headcount rises dramatically and more and more people head to the bright lights, it puts an enormous strain on these cities’ technology and resources to support the expanding population. Providing enough energy needed to power these megacities is a huge task for example, and even finding enough water will become increasingly difficult for a number of urban spaces. The strain on the infrastructure is also a major concern for many cities. This has led to the rise of ‘smart cities’, urban spaces using computerized, data-driven methods and software to solve the crises.
In 2009, Caragliu and Nijkamp stated that ‘a city can be defined as ‘smart’ when investments in human and social capital and traditional (transport) and modern (ICT) communication infrastructure fuel sustainable economic development and a high quality of life, with a wise management of natural resources, through participatory action and engagement.’ For the individuals living in smart cities, the benefits are clear: a higher standard of living that’s more comfortable and efficient and in which their needs are taken into account. Environmentally and economically, they also make a lot of sense. But what are the benefits for businesses operating in the smart cities of the future?
Smart Buildings. Smart cities are generally made up of smart buildings: homes, industry and office spaces where smart IoT devices can communicate with each other and the users to streamline how these spaces are used. Offices that are located in smart buildings will see an increase in the efficiency of the workplace. For example, small radio sensors could monitor the occupancy of office spaces, gathering information on who is working in a particular room at any given moment and providing data on room usage which can be displayed on office signs. A more streamlined office will reduce frustration and time that is currently wasted setting up the technology and effort devoted to organizing the office. Smart buildings can make the workplace considerably more comfortable for its workers too, with smart devices streamlining lighting, temperature and even music. It’s common knowledge that happy workers are more productive workers. The efficiency of devices such as smart lighting or heating also reduces costs for the company. Additionally, locating your business in a smart building can also significantly increase the security of your workplace, as CCTV footage can be linked to mobile devices, allowing the company to monitor who is coming in and out of a workplace. But a smart building does not only improve security in terms of physical access but can also improve cybersecurity infrastructure, reducing the risk of a breach damaging your business. The increased internet speeds in a smart building also allows the business to respond quicker or build technologies that can harness an increased data velocity, giving them a vital edge on their competition.
Increased Sustainability. In a world where population growth is barrelling rapidly towards disaster, sustainability is at the heart of the development of smart cities. Obviously the resources that cities use up has an impact on the environment, and a smart city seeks to reduce this damage. Keeping a smart city going means constantly looking to find sustainable solutions to the challenges the area faces as it grows. A secondary benefit to this is that the businesses operating within a smart city will also fit into this sustainable model. This means a sustainable approach to issues such as disposing of waste responsibly, a heightened concern to conserve energy and focusing on the ethical treatment of employees and those in the supply chain. A 2015 study by Nielson found that 66% of respondents would pay more for a product or a service if the company was committed to positive social and environmental change. The kind of social and environmental change that is the lifeblood of a smart city. Consumers’ demand for sustainability is only on the rise, so businesses operating in a smart city model will see improved relations with customers and boosted profits as a result.
Driving Innovation. For a smart city to remain at its most efficient, most sustainable and most effective self, the technology and strategies used to implement its goals need to be perpetually updating. With constant demand for new technologies to be developed across a wide range of industries, as more urban spaces become smart cities they will be the driving force behind innovation. This will be especially apparent for tech and IoT enterprises, who will respond to the increased demand by developing effective technology to ease smart cities development. New tech and businesses will directly spring up from smart cities, creating thousands of jobs and business opportunities.
A Smart Economy. The new technology and enterprises created to support smart cities will inevitably prove to be a huge boost to the economy. In addition, the symbiotic relationship between companies and the smart city is ripe to be capitalized on. Businesses will be able to leverage the data being collected by the smart city to better understand their target demographic and the space itself to provide a more succinct service. For example, Citymapper use TFL’s data to help plan journeys in London, which makes it easier for passengers to find the quickest route throughout the city. The tourism industry can take advantage of the data produced by their visitors to help identify patterns in wait times and mass-transit delays. According to Navigant Research, the global market for smart city solutions and services is expected to grow from $40.1 billion in 2017 to $97.9 billion in 2026.
Increased Efficiency in Travel. Updating a city’s infrastructure is a crucial part of a smart city’s step towards efficiency and sustainability. According to Dataloq, globally, large cities could save $800 billion annually by installing smart transport systems, as well as making roads safer and reducing congestion. Transport is a huge strain as population increases in urban areas, according to WeForum the average city dweller spends 15% of their driving time sat in congestion and 20% looking for a parking space. Optimizing travel with smart traffic lights or even using smart, self-driving cars will reduce wasted time and energy. The result for businesses will be that employees will avoid being delayed on their journey to work. Employees will also be able to travel much easier throughout the city with less time wasted in traffic or delayed public transport, easing travel and meaning their time can be used more efficiently.
Smart cities have huge potential to drastically improve the experience of living and working in the city, and the ripple effects for business will be by-and-a-large positive. Organizations will inevitably see an increase in their profits, sustainability, and efficiency, causing a boost to the economy and many industries overall.