Smart technologies were up to now seen as tools for becoming more efficient behind the scenes. Sensors and data promised to deliver a new way to manage and automate the infrastructure, used by city leaders. Over the past years, technology is developed directly into the lives of residents in which smartphones function as keys to cities, providing a flow of instant information about traffic, health services, and safety alerts into millions of hands. The “smartness” of cities started with the correct use of technology and data purposefully to make better decisions and deliver a better quality of life. Creating smart cities involves good management from municipal governments as well as residents and companies. These newly organized cities take the advantage of digital intelligence to face unprecedented pressures as populations boom. This article will examine the progress of smart cities around the world.
The definition of smart cities
The overall goal of smart cities is to improve the quality of life with the use of data and digital technologies. (Real-time) data makes it possible for municipalities, governments, and agencies to understand changing demand patterns to which they react more quickly. Governments, employers, and residents can find new ways from an unprecedented volume of data points to optimize existing systems and reducing the costs of gathering information. People are encouraged to use less energy and water, change their traffic routes and reduce strains on the healthcare system to make the city more livable and more productive for all people and companies.
Smart cities consist of three layers:
Figure 1: Smart City Applications. Source: McKinsey Global Institute
According to the analysis of McKinsey Global Institute, 50 cities worldwide are ranked on all three layers, identifying the ‘smartest’ cities in the world. This analysis includes both low- and high-income locations as well as cities with different infrastructure quality and size. If we look at the first layer, the most advanced technology bases are in Singapore, New York, Seoul, Stockholm, and Amsterdam. Even as with the application layer, New York, Singapore, London, Seoul, and Amsterdam are highly ranked.
The unrealized potential of smart cities is noticeable in all various quality-of-life dimensions: safety, cost of living, jobs, social connectedness, and civic participation, environmental quality, health and time, and convenience. MGI gathered evidence of the effectiveness of these data-based technologies. In the figure below, you see the improvement of some key quality-of-life indicators.
Besides, the connected feeling between residents in communities is increased because of these digital apps and platforms. Before using these applications, just 13% reported feeling connected to their local government, according to an analysis of McKinsey Global Institute. The analysis suggests that the use of digital apps and platforms could nearly double the share of residents who feel connected to the local community.
Cities need to start using these advanced technologies in form of Artificial Intelligence, Internet of Things, Cloud Computing, and platforms. Getting smart doesn’t happen by the cities themselves. Cities should follow New York, London, and Amsterdam by experimenting, learning, and testing those technologies.
Not only technology firms but also other businesses benefit from smart cities and technologies, creating new business opportunities. Companies are forced to adapt their current approach to working. These include for example real estate companies using technologies to automate their asset management, or hospitals using AI to provide patients with higher quality care through improved diagnosis, treatments, and monitoring and prevent diseases before they occur. Companies can track their assets on a real-time basis, can get insights from many data points, and can obtain explosive growth. The industries have to adapt and should use the available data to stay effective and create a competitive advantage over others.
Cities are starting their transformation with inherent advantages, such as existing high-tech industries, wealth, etc., but even places lacking these things can also become smart. Cities need to start small with the use of technologies in all various institutions and levels. Starting with digital platforms to manage their processes better and more efficiently and from there slowly develop more so that it influences all different domains.
Do you want to learn more about smart cities, and how we can help you with this digital transformation? Or how your government can become digitalized using digital platforms? Please contact us.
Source: McKinsey Global Institute. (2018). DIGITAL SOLUTIONS FOR A MORE LIVABLE FUTURE.
Whatever challenges you have, we are happy to help!
Do not hesitate to contact us or request a free demo.