OPTIMIZED SYSTEMS

Smart Cities Investments to Skyrocket

R. Colin Johnson | Date: 07-11-11 | Comments

A new study on the growth of smart cities estimates that investments will increase fivefold over the next five years.

Time was when smarter city efforts were confined to affluent municipalities with forward-looking constituents, but according ABI Research, smart city technologies will expand across the board, to more than $39 billion annually by 2016.

During the recession, many cities faced budget crises, which prompted them to cut services, firing teachers and running impassioned public relations campaigns to pass bond issues and gain support for other supplemental funding sources. As cooler heads prevail of late, more and more cities are realizing that smarter management and modernization of their infrastructures can reap long-term savings not attainable today from tax-weary voters.

Harnessing the same analytics that businesses are increasingly using to boost productivity and efficiency in operations, cities are increasingly implementing smarter strategies to cut costs without cutting services or firing employees. Simultaneously, these smarter cities are improving the quality of life in their locales, generally making their everyday urban environment a better place to live and work.

According to ABI, more than $8 billion was invested globally into making cities smarter in 2010, but over the next five years more than $116 billion more will be spent, ending in an annual expenditure of over $39 billion per year for smarter cities by 2016.

"Certain technologies are in wide use among most smart-city projects and programs, including communication-based technologies, such as broadband, WiFi, and RFID," said ABI Research practice director Larry Fisher. "Others target improved energy efficiency through the incorporation of smart meters and the smart grid. Some municipalities are deciding to utilize elements of intelligent transportation and information systems, to maximize transportation efficiency and reduce traffic delays, cutting fuel waste and carbon emissions."

According to ABI, smarter cities are sharing their modernized network infrastructure, information and communications technologies with local businesses, enabling business intelligence and analytics to pervade the private and public sector as well as spreading out the capital expenditure burden. Projects range from collective community intelligence based on smart growth projections and the planning of regional development, to social and sustainability efforts that balance benefits to citizens against the protection of valuable natural resources.

"Due to city-by-city project differences, a one-size-fits-all approach cannot be applied to smart cities," said Fisher. "In the long term, the adoption of open standards will be of paramount importance as the basis for technology choices underpinning any smart city development."

More details can be obtained in ABI Research's "Smart Cities: Municipal Networking, Communications, Traffic/Transportation and Energy" report, which analyzes 50 ongoing smart-city projects, providing up-to-date data worldwide.