There are a number of pressing trends that call for technological innovation in cities.
Mass urbanization, for example. The majority of the world´s population lives in cities, which need to provide and maintain infrastructure to deliver services to their citizens.
According to the World Health Organization
, in 2014, around 54 percent of the world´s population lived in cities, compared with 34 percent in 1960. This shift puts more stress on ageing urban infrastructure that all too often has not been significantly upgraded.
Another pressing trend is that of finite natural resources. Cities consume the majority of the planet's natural resources and account for roughly 70 percent of greenhouse gas emissions
globally. New solutions are needed to ensure that, over the long term, cities provide the quality of life that citizens either aspire to, or have become accustomed to, while at the same time reducing the consumption of resources.
The innovation imperative
In order to make the best decisions about improving city infrastructure (including energy, water, waste, mobility, communications) we need to collect and analyze information from these systems. The internet of things (IoT) is the name given to the growing trend for consumer and industrial devices being connected to the internet, enabling information-gathering and control functions to increase efficiency.
While much progress has been made in establishing the tangible value of IoT for cities, most stakeholders are poorly equipped to handle this evolution. Many strategies focus on consumer electronics rather than on solving long-term challenges such as improving the resilience of city infrastructure. Solutions require a unified ICT infrastructure platform that enables the collection and analysis of real-time data in cities, to improve traffic flow for example.
A number of tech companies are creating solutions to global challenges through new technology models enabled by an ICT platform. Digital infrastructure now allows technologies that previously worked in separate silos to be integrated, thereby increasing their efficiency within the broader system.
For example, a city’s surplus solar energy can be used to pump water into a container at a higher altitude, which can then on a rainy day be released downhill through a micro-hydroelectric system, generating further energy to power the city. This energy infrastructure requires sophisticated data analytics in order to run optimally. The ICT platform collects data about historical and live weather patterns to determine when to pump, hold or release water. These types of developments have the potential to transform financial models, city planning and also mindsets regarding what is possible.
The use of these new technological models
in cities will grow. According to research by Bosch, an engineering and electronics firm, the financial opportunities around IoT solutions could be worth €596bn by 2022
, and opportunities in the connected utilities market alone are estimated at €44bn.
This article is part of a series managed by The Economist Intelligence Unit for AkzoNobel.