Initially outlined as a technological innovation opportunity, smart cities are now showing great potential to foster economic growth in regions spreading beyond major cities. Affecting all sectors and enabling private, public, government and citizen partnerships, the innovation impact of smart cities is a perfect example of potentially disruptive ecosystems being created to regenerate growth while including social and environmental issues in their core priorities.

A multi-faceted opportunity

Cities are with no doubt ahead of alarming challenges which demand a high quality of analytics and decision making. As Andrew Trabulsi reminds for the World Economic Forum, “By 2100, as much as 84% of the Earth’s 10.8bn people will live in cities, according to the UN. Potentially dozens more megacities—cities with populations of 10m or more, 28 of which exist today, will pepper the planet—with developing countries accounting for almost 89% of the growth. Coupled with a world rocked by climate change, however, these megacities may not be the shimmering and delightful Emerald City traditionally envisioned by futurists and science fiction.”

Building smarter cities able to adapt to today’s global challenges is now a market well identified for major Internet players such as Google, who recently launched their start-up Sidewlak Labs. As Steve Lohr explains in his article for The New York Times, “The founders describe Sidewalk Labs as an “urban innovation company” that will pursue technologies to cut pollution, curb energy use, streamline transportation and reduce the cost of city living. To achieve that goal, Mr. Doctoroff said Sidewalk Labs planned to build technology itself, buy it and invest in partnerships.”

Cities themselves start to ask for more power, and more facilities. As Jessica Leber notes for Fast Co-Exist, “At first only private companies offered service to businesses and individuals who could pay a lot. Soon, states and the federal government recognized that everyone should have a basic level of service, and began subsidizing both public and private infrastructure to expand access, opening up service to a number of different business models. Today, the federal government and some states are beginning to think the same way about broadband, such as Minnesota, with a new $20 million fund, or New York, with a $500 million fund, both announced this year.”

There is a business virtue in creating cities that can live in the forefront of their time. As Stockholm shows, according to Zoe Henry from INC, “At large, Sweden is home to six billion-dollar businesses, anchored by giants like Spotify, Klarna, SoundCloud, and Skype. Stockholm alone was a runner-up for the highest percentage exit growth in Europe, according to data recently compiled by the Global Startup Ecosystem Index.”

Smart cities and smart citizens

Smart cities necessitate to invest in smart buildings. As The City Fix explains on Sustainable Cities Collectives, “Buildings are not only the largest physical element in cities, occupying 50 percent or more of urban land area, but are also where people spend most of their time, as the average person in a developed country spends up to 90 percent of his or her life in buildings.”

In fact, both traffic and buildings become intelligent. One example is given by Jon Fingas in his article about the new Density sensor for Engadget. As he writes, “The tiny infrared detector is effectively a smarter, more connected pedestrian traffic sensor: it tells apps how many people are entering or leaving a building at any moment, giving you a good sense of whether that restaurant is packed or blissfully empty. Shops can use that data to their advantage, too. They can offer discounts whenever it gets quiet, or notify you the moment there’s a free seat.”

One potential strategic path has been outlined by Boyd Cohen in his article for Fast Co-Exist. “As the idea has been embraced by governments around the world, I have witnessed a transformation in how some cities manifest the smart cities concept. There appear to have been three distinct phases of how cities have embraced technology and development, moving tech company driven, to city government driver, to, finally, citizen driven. Some cities move from one phase to another. Others have stuck in one throughout their experiments with smart cities.”

Systemic approach, wider impact.

Building smart cities have enabled governments to analyse what are the key components to develop new models and better include citizens in city life. In France, a new report from France Stratégie shows that: “there is a necessary “systemic” dimension to sustainable cities development, which concurrently demands:

• A highly autonomous management of the city
• A global vision for the project, shared across as many stakeholders as possible,
• An innovating approach combining economic dynamism and protection of the environment,
• A wide space to citizens’ participation
• An acknowledgment of social impact.”

Technological projects spread beyond major cities to reach provinces and villages. In her article for Usine Digitale, Geneviève Colonna D’Istria quotes René Souchon, President of Conseil de Région d’Auvergne. In his view, “Digital is an economic, healthcare and cultural development driver. All sectors are impacted. Auvergne was early to seize this opportunity. Thanks to the fiber developments we initiated in 2009, the region is now years ahead of other rural territories in France.”

By outlaying critical requirements and business cases for smart cities, experts and analysts highlight the cross-sector impact these projects generate as well as the inevitable necessity to partner with a vast majority of stakeholders. Although based on advanced technology developments, with the Internet of Things and Big Data as key enabler, there seem to need to combine economic, social, environmental, cultural and human benefits in the shortest time to market possible, while further investigating the costs to develop the infrastructure and knowledge, partnership ecosystem necessary to drive a drastic transformation across a complex variety of sectors and territories.

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