Are Smart Cities An Answer To The World’s Infrastructure Challenges?

There is a close connection between infrastructure and quality of life, which we only really become aware of when something does not work as it should. Anyone who has experienced a power outage or has been stuck in a traffic jam knows that. Increasing urbanization does not make it any easier. Week by week the number of city dwellers increases by 1.5 million people. While nearly one-third of the world’s population lived in large cities in 1950, by 2050 it will be more than two-thirds. Against this background, the approach to building and managing infrastructures in metropolitan areas is now more important to global economic and social development than ever before.

Much of this infrastructure has not arrived in the information age yet. In many respects, trains, energy systems, buildings, buses and roads are still largely in the same old state. Although there are various digital systems, the development of the potential of a fully digitized, electrified and information-based intelligent infrastructure is only just beginning , But this will be essential to meet current and future challenges related to sustainable development. Siemens offers comprehensive infrastructure solutions that make our cities more efficient, sustainable and resilient. We help our clients master the challenges of urban planning of the future. Given the fact that more than half the world’s population in living cities, there is no doubt the fact that urbanization, the dominant theme is and the global challenges of the 21st century in the urban areas are.

The vision of the Smart City is multifaceted

The origin of the term “Smart City” goes back to the rapid development of new information and communication technologies (ICT) in connection with the establishment of the World Wide Web in the 1990s. More recently, the term has grown in importance, especially in Western and East Asian cities. In Europe, numerous examples of corresponding model projects are documented, especially in large cities. But there are also activities in smaller cities, such as municipal utilities or in the context of economic development.The reason for the great interest is the increasing attractiveness of ICT-based solutions, existing cities’ datacentres, as well as infrastructures, can now be networked in a way that was previously unthinkable. Big Data or Smart Systems are ciphers for comprehensive data transfer as well as for the optimized control of urban systems.

If you look at the activities of the economy, research and politics around a typical Smart City, it is noticeable that the vision combines very different ideas and interests. In terms of economic policy, the smart city is seen as a future market that promises significant growth potential for companies operating in the ICT sector. Closely related to this, the Smart City is seen as a technological innovation field that will fundamentally revolutionize urban processes (feasibility vision). However, the Smart City is also seen as a solution to existing energy and resource problems, through which it should be possible to largely reduce the energy and material flows (sustainability vision). At the same time, the novel services associated with the Smart City should make a significant contribution to improving the quality of life and social change (social vision). A further understanding of the Smart City goes in the direction of changed control and coordination processes in the interaction of various actors from politics, administration, business and civil society (governance vision). The latter finds its expression also in so-called Labs as spatially located laboratories for learning in concrete experiments and cooperative planning in the circle of different actors. Business and civil society (governance vision). The latter finds its expression also in so-called Labs as spatially located laboratories for learning in concrete experiments and cooperative planning in the circle of different actors. Business and civil society (governance vision). The latter finds its expression also in so-called Labs as spatially located laboratories for learning in concrete experiments and cooperative planning in the circle of different actors.

Smart City between planned plans and practical applications in built-up areas. In a global perspective, the topic of Smart City will be driven by the urbanization trend, especially in emerging markets. The number of people living in cities is growing rapidly and there is a significant need for innovative solutions for infrastructure and services. Against this background, ambitious concepts of urban future are being developed, which are reflected in the development of new planned cities and districts. However, these are not transferable to the existing structures of a European city either materially or procedurally. What is needed on the ground is intelligent and locally adapted solutions for the renewal and conversion of structural and infrastructural structures, for example when it comes to reconciling the heat supply of individual quarters with the goals of energy efficiency and the expansion of renewable energies. Smart City ICT technologies can help to better harmonize energy production and consumption and provide the corresponding energy services.

Between regulation and participation

The efforts of national standardization organizations to enforce smart city standards are problematic. Here more or less bluntly interests of global corporations are pursued. The explanations given for these activities refer to the international drive for harmonization of standards on the part of the driving actors. Its aim is to remove barriers to international competition and to ensure the transferability of technological innovations to other countries. The targeted standardization roadmap is geared to the feasibility of technologies. Cities alone are understood as the marketplace of technology application. Apart from the contentwise one-sided orientation of these activities, their legitimacy must be called into question. While various “stakeholder groups” have been invited to participate in the process, such “governance” lacks democratic attachment. The intention of implementing seemingly voluntary standards threatens ultimately to miss the interests of the people living in the cities, especially as the general public hardly knows about these activities.

Smart City as a new urban development policy model?

It is disputed to what extent the Smart City can or must be based on a new urban development policy model. In a European comparison, cities use the term in very different ways. In Germany, the top municipal associations and not least the German Association of Cities, against the background of the outlined economic policy interests, see Smart City as a guiding concept. In terms of area, Smart City has not yet gained acceptance as a model of urban development. Rather, it finds itself as a label for urban development areas, in which novel supply solutions or locations for innovative technology providers in the spotlight. Smart City is a collective term for describing various fields of action. Whether it is about novel solutions for intelligent and multi-functional city-technical infrastructure, new forms of intermodal mobility, improved data coordination between administrative areas or citizen services in terms of eGovernment: Elementary is the combination of these areas, which is why the realization of the Smart City is only in the process of a integration and coordination of urban development. We live in a world that is increasingly networked. We have become accustomed to modern technologies in our everyday lives long ago. Sometimes we do not realize that because digital offers are taken for granted. This practice is ubiquitous in urban areas, where more and more people live and work in confined spaces in a smart city. In the following article, we take a closer look at the concept of Smart City and reveal what this term is all about.

Opportunities for investors

The interest in smart cities stems from their collective benefits – they support local governments, expand business opportunities and / or enrich the lives of local residents.For investors, smart cities offer a wealth of opportunities and opportunities. Funding for Smart Cities is on the rise, and the approach is constantly refining. The focus has historically been on specialized, private investment vehicles targeted at companies developing smart solutions to the challenges of increasing urbanization, but today this pattern of investment is changing rapidly.

With the all-embracing nature of smart cities of the future, investors can now focus on investments focused on:

  • Establishment and construction of the city and its intelligent infrastructure
  • Operating the Smart City and its everyday functions
  • Services of the city and its inhabitants

However, investing in large-scale projects involving a range of different stakeholders brings with it its very own problems. In the Economist Intelligence Unit’s report, experts explain the reasons why private investment has often played a subordinate role: smart cities require the active participation of local governments, and different rules and regulations can put pressure on the financial structure of projects.

However, the report also notes that by “combining best practices worldwide with local know-how, especially in emerging markets,” investors will be able to “take risks” irrespective of whether they invest in projects be guided by the city itself or in companies that deliver smart city technology “.