By 2030, more than two thirds of the world’s population will live in cities. Without artificial intelligence the collapse of these complex urban agglomerations seems unavoidable.
At the beginning of the 19th century, just two percent of the world’s population lived in cities. Currently, it is already 55 percent and, according to a recent UN report, in 2050 two thirds of the 9.7 billion inhabitants of planet Earth will live in urban agglomerations.
If you look at megacities with populations in excess of ten million, such as Lagos and Jakarta, for example, the prospects are horrendous. Unchecked growth that is not controlled will lead to serious ecological, infrastructure, and social problems. To come to grips with this, we need intelligent solutions such as smart cities. With integrated, digital infrastructures, they stand for climate protection, sustainable resource management, and adaptation to demographic change and changing social requirements. The aim is to create a more attractive living environment for everyone and to keep the economy competitive.
In addition to personalized healthcare, robotics, advanced driver assistance systems (ADAS) and decentralized energy production, artificial intelligence (AI) is one of the technological cornerstones of a future smart city. After all, data is the lifeblood of modern cities. And no human analysis skills can handle an “urban” data flood. This is why AI is the key to acquiring knowledge from this data and information. With enormous effects on traffic and parking lot management, public safety, healthcare, criminal prosecution, and municipal services.
Good business in the smart city
Cities have always been places where business is carried out. According to a recent study from Frost&Sullivan, by 2025, smart cities will open up business opportunities worth more than USD 2 trillion. The smart energy sector will grow the fastest in the Asia-Pacific region. China will lead this movement with revenues of USD 320 billion. North America will be just behind this with many tier-2 cities, such as Denver and Portland, where the market for smart buildings with smart sensors, systems, hardware, controls, and software will grow to a total value of USD 5.64 billion by 2020.
However, due to the involvement of the European Union, most investments in smart-city projects globally take place in Europe. For example, the European market for app-based taxi and ride sharing services (e-hailing) alone currently generates USD 50 billion. By 2025, this will rise to 120 billion according to the analysts from Frost.
Urbanity in Germany
According to a study by eco and Arthur D. Little, revenue in German smart cities will more than double from about EUR 20.4 billion last year to EUR 43.8 billion in 2020. This corresponds to an average annual increase of 16.5 percent. But German companies must start getting suitable products and services on to the market with test customers and reference projects. This is necessary for them to be in with a chance in the mega projects that are already being carried out internationally. However, only those who are proactively open to cooperating with companies in many different segments will find opportunities in the smart-city ecosystem.
The study predicts that modern mobility strategies, such as those that have already been partially implemented in Vienna and Dubai, will also be implemented in Germany in the future. The transportation and logistics industry will continue to generate the largest market volume. Smart parking systems, smooth interlinking of different traffic systems, and smart traffic management are just a few of the services from this segment. High investments can also be expected in the areas of IT security and network infrastructure. Together with the physical security sector, which includes audiovisual surveillance, intelligent access control systems, identity management, and building automation, the growth areas will account for over 65% of the total smart city market in 2017 (approx. EUR 3.5 billion).
With annual growth of around 27%, the education market segment will grow particularly strongly. Admittedly, digitization of educational institutions is still in its infancy. But in the next few years, high expenditure on hardware, software, and services such as cloud platforms as well as digital teaching content are expected in this area.
The study also predicts growth in healthcare infrastructure. Mobile health devices, such as portable blood glucose meters will drive the trend. The aging population will increasingly benefit from digital patient records and personal health management.
Much of the public infrastructure that our cities will need by 2050 at the latest still has to be implemented. Therefore, decisions made today must already take account of new technological possibilities and future services. Besides, today’s smart-city solutions do not yet consist of networked data silos. However, integrated systems that unite all vertical industries on one single platform are needed. After all, the IoT already shows us the way.
eco and Arthur D. Little: “The German Smart City Market 2017 to 2022. Facts and figures”. eco members can receive the study free of charge by sending a request to email@example.com. Non-members can obtain a management review at no charge or purchase the complete study for EUR 149.
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