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Smart cities: driven by policy-makers, companies or consumers?

18Jul Posted by Alex Cook

Smart cities overview

‘Smart cities’ is the trend on everyone’s lips. We are constantly told interconnected technological advances will mean a more efficient, greener environment for our large urban conurbations. 54% of the earth’s population lived in urban areas as of 2014 with that figure set to increase to 66% by 2020, according to the World Health organisation. The scale of this challenge is unprecedented and some say the ‘smart city’ is the only way to combat future issues with sluggish economic growth, air pollution, rapidly increasing energy demand, water depletion and transport congestion.

Benefits of the smart city

The benefits of integrated systems in smart cities are manifold: from increased safety - aggregating data from driverless cars and pedestrian crossings to reduce road accidents, to more effectively managing power by consumers regulating their own energy usage more efficiently through the smart metres connected with their personal mobile and computing devices.

Artificial Intelligence, Electric Vehicles, the Internet of Things, along with other disruptive technologies will holistically be combined to provide big data-driven solutions to many of the current problems our cities face today. The great benefit of many of these technologies is that they can be utilised to achieve social, economic and environmental goals at the same time.

Smart city projections

The roles of different stakeholders

Efficiency will be at the heart of how different stakeholder groups interact with a developing smart city project. It is in the interest of all of these groups to collaborate effectively as governments want an optimal living environment for its citizens, businesses are incentivised by the profits on offer and individuals can improve their financial situation and personal resilience through the increased availability of technology.

From the government perspective, driving smart cities is necessary to replace ageing infrastructure and increase resilience. However, the infrastructure investment required to fulfil these objectives is likely to be $30-40 trillion over the next 20 years. Governments will be unable to invest such huge sums of money directly, so they must work in conjunction with the private sector.

There is some evidence of grass root movements towards more environmentally-conscious consumers, but until the products to make this technology-driven future a reality are more widely available, individual behaviour is unlikely to drive the necessary change at the requisite pace.

Who will drive this change then?

Smart cities will be driven by business, but will need the mass acceptance of consumers with the right regulatory framework from policy-makers to successfully be implemented. Most consumers will only purchase an electrical vehicle, or a smart metre or a solar panel or an IoT product, if the cost is right. Business will only take these products to mass market if the opportunity for scalable profit exists. While we are beginning to see these trends implemented,  EV market share is still below 2% globally and the majority of households, even in the developed world, do not have a smart metre to regulate and feed back energy usage in real time.

Therefore, the direction of travel has to be set by regulators, with business providing the dynamism and innovation to stimulate consumers into action. Policy-makers must also work in conjunction with the private sector to provide the right infrastructure (hyper fast broadband/charging points/recycling plants) to meet the needs of the digital/electricity/sustainable resource revolution that is set to take place in built environments.

Alex Cook
Alex Cook

Alex joined Sermelo in March 2017, having previously worked at the Chatham House. Chatham House engages governments, the private sector, civil society and its members in open debate and confidential discussion on the most significant developments in international affairs. While working there, he gained valuable relationship building skills and developed a nuanced understanding of the needs of corporate clients in guarding against political risk, which feeds directly into his current work in public affairs with Sermelo. Alex graduated from King’s College London with a BA in Classics in 2014. Alex enjoys football (watching and playing), volleyball, reading, theatre and politics.

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