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The smart city concept has been an international trend in the technology sector and urban development for years. This is mainly due to the global development of cities that’s under the permanent analysis of the EY.

By 2050, according to the UN World Population Report, about 70% of people are expected to live in metropolitan areas. Rapid population growth is accompanied by a shortage of space, a backlog in infrastructure and real estate investment as well as environmental effects (including air pollution). At the same time, municipalities have a duty to change the organizational and technological conditions, in order to continue to fulfill their obligations.

Smart cities use emerging technologies to benefit their citizens but require cooperation between stakeholders to develop successfully.

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Two-thirds of the world’s population is expected to be living in urban areas by 2050, according to estimates from the United Nations1. Projections show that the gradual shift of people from rural to urban areas, combined with the overall growth of the world’s population, could add another 2.5 billion people to our cities by 2050. Close to 90% of this increase is expected to take place in Asia and Africa.

This dramatic pace of urbanization presents a unique set of challenges in the areas of governance, organization, and technological advancement. Although emerging technologies are bringing benefits to urban citizens, cooperation and long-term investment are needed to create smart cities that implement these technologies on a wider scale.

What makes a city “smart” and what benefits does it bring?

Broadly speaking, a smart city is one in which data and technology are put to work to improve the lives of citizens and visitors. There is no universal definition of a smart city while the concept varies by city and country, depending on the level of development. At the same time, it is also determined by the willingness and aspiration of citizens and governments to implement change and reform.

At the forefront of a smart city’s development is the adoption of advanced technologies to improve urban efficiency. Artificial intelligence (AI), big data, and 5G are examples of technologies that can bring about large improvements to the quality of life.

The Chinese government is a keen supporter of smart city initiatives. In addition to significant technological advancements in recent years, in November 2019, Chinese President Xi Jinping endorsed blockchain and the opportunities the technology presents. The endorsement from the top is expected to drive China’s public and private sectors to speed up setting the standards for the application development and adoption of blockchain technologies.

Emerging technologies are being used to power smart cities across the globe while their applications are already being put into practice in real-world scenarios. In Amsterdam, a GPS data platform was developed to help traffic controllers use real-time data to improve the flow of vehicles around the city2. This is an example of smart mobility that benefits citizens and facilitates the flow of people.

Another benefit of smart cities is the use of data to run city operations on a larger scale and more efficiently than ever. By utilizing 5G and data, and by installing smart infrastructure, cities can build a network that supplies useful urban information, such as energy readings and weather data. For example, Barcelona has installed nearly 20,000 smart meters to measure energy consumption and improve efficiency.

In South Korea, mobile operator KT has offered augmented reality glasses to help first responders connect directly with doctors and assist them with providing emergency treatment at a disaster scene. However, the digital divide is an issue that becomes more pressing alongside a faster rate of urbanization. Narrowing that divide is about ensuring all citizens have access to the services the city provides while building digital capacity to open up more opportunities for people. The good news is 5G can bridge the gap by connecting people with the city.

Key factors in developing a successful smart city

Several key factors are driving the digital transformation of smart cities so they can make full use of these technologies.

Establish strong leadership and support from the top

Backing from the political establishment and the presence of leaders who act as “spokespeople” for urban development are crucial for smart cities. The development of a smart city requires time, perseverance, and public support, and leaders are needed in order to cultivate a long-term vision.

Grow the talent pool

Attracting and retaining talent is key to applying emerging technologies. Without a strong talent pool, it is difficult to generate innovative ideas and implement new technology solutions.

Keep stakeholder needs at the forefront

A smart city initiative needs to consider the needs of its people and stakeholders. While data can drive new efficiencies, to maximize its potential it is important to communicate effectively and meet the specific needs of various stakeholders.

Emphasize “proof of concept” projects

Running a broad range of “proof of concept” projects makes it possible for citizens to see the benefits that a smart city initiative provides while giving project leaders the opportunity to gather valuable feedback. It also brings people together for collaboration.

Build effective alliances

Private sector collaboration plays a key role in collecting and analyzing data, assisting with creating effective campaigns for the city authorities to implement. Smart city initiatives are implemented on too large a scale for any single party to tackle alone.

What makes a city “smart”?

According to our definition, a smart city is a city that meets its specific challenges with digital and cross-sector solutions. For the purposes of sustainable development, information and communication technologies are used to improve urban processes and services in terms of public service and sustainability.

New technologies are pioneers for such services. Converting previously analog processes into digital processes using modern technology, however, does not do justice to the opportunities presented by digitization. Rather, networking means enabling the exchange of data between previously separate systems. However, this networking at the data level always requires cooperation on an organizational, procedural, commercial, legal, and technical level. The appropriate integration of technologies into the city structure is necessary for the development of a smart city. The smart city is built on five integrated levels: The built city structure (streets and buildings) acts as a basis and first level. This level is followed by an infrastructure network with technical facilities and equipment. The third level collects and combines data. The fourth level includes IT platforms that process third-party data and prepare it for applications. At the last level, the resulting service offers are put in place for the users.

The key to many innovative solutions rests in particular on cross-sector data platforms and IoT networks, customer-oriented and transparent administrative processes, as well as additional services provided by municipal companies and new partnerships between local actors and business.

Smart city applications as a remedy against urban air pollution

Nitrogen oxide pollution in cities is increasing. In 2015, 151 European cities exceeded the limit of 40 mg NO2/m3. The consequences are an increase in particulate matter with a heavy health burden for citizens. Cities face the concrete challenge of optimizing traffic flows while reducing environmental impact.

Parking plays an important role in the development of traffic, as cars are parked on average 23 hours per day. According to the Quantum 2020 study, people looking for parking account for up to 30% of total urban traffic. Today’s parking management has considerable potential for optimization. So-called “smart parking” applications can reduce the effects of parking-search traffic through sensor-based parking guidance systems by up to 30% and reduce maintenance costs and outlays. In “smart parking”, sensors (ground or overhead) collect parking space data in real-time and forward it to a cloud-based data exchange platform. An application on the driver’s smartphone retrieves the data from the platform and navigates to a free parking space. With the help of such applications, not only can NO2 and CO2 emissions be reduced, but higher parking revenues can also be generated by a demand-oriented fee model. As part of a smart city strategy, the parking application thus combines both sustainability goals and economic goals.

Global Trends

In a global comparison, there are very contradictory approaches to the implementation of smart city concepts. Due to different challenges, such as rapid population growth, it is primarily cities in Asia that have to react quickly and efficiently to changing conditions.

“Virtual Singapore” is the example of a city that needs to respond to its strong growth in the shortest possible time. The city-state has about 5 million inhabitants. Measuring digital data with the help of sensors and cameras, the “Virtual Singapore” project summarises the movements of city dwellers and evaluates them for further development scenarios. This project is the world’s largest data collection for a city. At present, it is not yet clearly defined which service offers should be generated from this for city residents. In addition, social aspects in the private sphere, such as the care of elderly people living alone, are taken into account by monitoring with the help of sensors, as well as the more efficient organization of public administration structure.

Each city is individual and, for this reason, must be considered individually in the transformation towards a smart city. Especially in European cities, a top-down approach will not work. Transparent public participation and new forms of cooperation between city administrations and companies are crucial for the further development of a city.

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