Driving economic growth with smart city innovations
By leveraging technology and data, smart city innovations aim to optimize urban infrastructure and services, making cities more efficient, sustainable, and responsive to the needs of their residents. Not only do smart cities improve the everyday lives of citizens, they also play a major role in driving economic growth. Innovation and creative problem solving attracts new businesses, creates jobs, and generates additional revenue streams - boosting economic development for communities worldwide.
Is smart city innovation worth the investment?
There are many reasons for municipalities to invest significant funds in smart city technology. Much of the focus is on innovation and efficiency, resulting in increased productivity and cost savings for city departments and workers. However, implementing this level of tech to modernize governments requires a considerable financial investment. Yes, government agencies are able to save money by streamlining processes with solutions such as IoT devices and digital services. But will this expenditure be worth the investment?
We believe the answer is yes. In 2018, it was predicted that smart city tech would drive over 5% of incremental GDP, resulting in almost $20 trillion in economic growth over the next decade. With this prediction of more than $20T in benefits for communities, the cost savings and potential for economic growth could far outweigh the initial cost of investment. Tech impact, spin-off effects of public investment, open data platforms, connectivity, and analytics are considered the key drivers for this economic development. The potential is huge — but remember to tread with care. Before implementing any type of smart city tech, municipalities must carefully lay out a strategic plan to assess what results and outcomes will indicate success. What is the smart city ROI? Establishing these key metrics from the get-go will set governments up for greater success.
How does smart city innovation increase economic growth?
Attracting new businesses and industries to the region
Innovation attracts great minds to a city. The development and deployment of smart city technologies can create new job opportunities in areas such as engineering, IT, data analytics, and urban planning. These jobs can help to drive economic growth and support the development of a skilled workforce. National Landing, a smart city initiative in Arlington, Virginia is an excellent example of a cutting-edge tech community of the future that is attracting business and talent to the shores near the US capital. In addition to the tech sector, companies across all industries are increasingly looking to expand into cities that offer a high quality of life and innovative infrastructure. Smart city initiatives such as free public Wi-Fi, smart transportation systems, and green energy solutions can all make a city more attractive to businesses looking to set up shop. This can result in job creation, increased tax revenue, and a more vibrant local economy.
A great place to live is a great place to work
Smart city innovation can enhance quality of life for residents, making a city a more attractive place to live and work. This can lead to increased retention of talent and a more productive workforce that contributes to the local economy. In this day and age, work-life balance is an extremely important factor when people make employment decisions. Smart city initiatives can definitely help people strike this balance by creating a more enjoyable community to live in - think initiatives such as bike lanes with sensor-powered traffic lights or public parks with smart lighting at night. By bringing the best of technology and comfort to a community, citizens can enjoy an improved quality of life compared to places that don’t offer such facilities. Improved public education and healthcare services that are powered by smart city tech also make communities better places to live and work. Better record taking, more organized administration, and development of helpful apps can considerably improve a city’s education and healthcare systems.
Smart city innovation can increase tourism
Smart tourism can be a huge economic driver and a significant source of revenue for cities. By using technology to enhance the visitor experience, cities can attract more tourists and keep them engaged for longer. For example, smart city initiatives such as augmented reality tours, mobile apps, and interactive displays can all make visiting a city more enjoyable and memorable. This, in turn, can lead to increased spending by tourists, increased length of average visits, and an increase in visitation during off-seasons – all leading to a substantial boost to the local economy.
How does smart city innovation reduce government expenditure?
Automation contributes to cost savings
Barcelona, one of the world's smartest cities, is a fantastic example of how implementing smart city technology can help governments build stronger economies by saving on costs in the long run. The Spanish city installed smart lighting systems that can adjust their brightness based on weather conditions and pedestrian traffic, reducing energy consumption and costs. Even as far back as 2014, the city of Barcelona saved more than $75 million euros just by automating certain resources such as water and electricity using IoT solutions. These savings have compounded since, with even more advances. Many other cities around the world have followed suit with this technology.
Artificial Intelligence is revolutionizing city services
Overhauling infrastructure is often associated with large capital expenses that can span decades. Historically, this is a slow and costly process. However, a more efficient and streamlined approach is available these days through innovative solutions. AI and machine learning have the power to upgrade urban infrastructure quickly at a fraction of the cost. For example, Oakland, California has deployed the use of AI to better manage its public transportation and save the city millions per year on fuel costs, delays, expenditures related to traffic accidents, and more.
Positive economic impacts in smart cities around the world
Innovation is intricately tied to efficiency, and there are many examples of improved municipal economics in smart cities as a result of increased efficiency. Copenhagen has implemented a range of smart city solutions to reduce carbon emissions and improve energy efficiency. The city has implemented a district heating system that uses waste heat from power plants and other sources to heat homes and buildings, reducing energy consumption and costs. Denmark is also improving its heat efficiency. Kredsløb, Denmark’s second largest city, has introduced a smart metering solution to optimise their district heating system, which is helping greatly to support a carbon-neutral and energy-efficient future. Dubai has also introduced a number of smart city solutions to improve efficiency and enhance quality of life for residents. For example, the city has implemented a smart transportation system that includes a fleet of autonomous buses and taxis, reducing the need for human drivers and improving traffic flow. Dubai has also implemented smart waste management systems that use sensors and data analytics to optimize collection schedules and reduce costs.
By 2030, more than 60% of the world's population will reside in cities. Is your city smart enough to handle this level of predicted urban growth? Cities that adopt innovative technology allow residents to not only live a more enjoyable, efficient, and productive life but can also boost the local economy in meaningful ways. Start getting ready for this now – a clear, strategic vision combined with carefully-calculated smart city investments can pay off in dividends for your community.