“Two hundred forty-three million Americans crowd together in the 3 percent of the country that is urban. Thirty-six million people live in and around Tokyo, the most productive metropolitan area in the world. Twelve million people reside in central Mumbai, and Shanghai is almost as large... Five million more people every month live in the cities of the developing world and in 2011, more than half of the world’s population is urban”. – E. Glaeser.
Cities are seeing their most extensive population growth since the process of industrialisation began in the early-mid 1800s. As Glaeser states, in 2011 more than half of the world’s population were urban. In the next twenty years this is expected to rise to over two-thirds. Indeed every month rural to urban migration is exceeding five million people globally. The attraction of cities continue to act as honey pots, tempting those from far afield to come and taste their sweet nectar. This can hardly be seen as surprising as cities are the engines of economic growth accounting for 70% of global GDP. Indeed the latest economic data shows that 23% of the GVA of the United Kingdom comes from London alone.
Whilst the growth of cities might be good for the economy, what they are not good for is the people who live and work in them. Most of the world’s city infrastructure was not designed to cater for the large amount of people which have now descended upon them. The energy, healthcare, transportation and telecommunication infrastructure are crumbling under the pressure and city planners are using twentieth century solutions to solve twenty-first century problems. Enter the smart city…
Smart cities are branded as the solution to solve the major problems of twenty-first century urban living. So much so that in his election campaign to be the next prime minister of India, Narendra Modi promised to build no fewer than 100 smart cities and in his first budget allocated more than sixty billion rupees. But what exactly is a smart city and how can one define a city as smart? Is it more than just deploying a few sensors or having a fully automated traffic management system? LA was one of the first cities in the world to install a traffic management system for the 1984 Olympics but surely one would not class that as enough to call LA smart city?
Frost & Sullivan in 2014 stated that “we identified eight key aspects that define a Smart City: smart governance, smart energy, smart building, smart mobility, smart infrastructure, smart healthcare and smart citizen”. That is surely a lot of “smart” things, but really what we mean by “smart” is actually connected devices which can actively predict and respond to the user(s) and the surrounding environment. We have pretty much got the “connected” part sorted especially with 50 billion devices expected to be connected by 2020, but the prediction part is still a major challenge.
50 billion connected devices are going to create a lot of data which will need to be gleaned for useful and intelligent insights if a successful connected city is going to operate. We are already creating 5 exabytes of data a day which amounted to the entire amount of data on the web in 2003. With 11 trillion years of data already online, we have to question where is the value in the data? As cities become smarter, then we need to be smarter in the way we collect, store and use data. Telecom operators around the world are already struggling with the vast amounts of data they have to gain intelligent insights into their networks to improve performance as well as upselling services and improving their customer experience. If they are having trouble now… what problems will they face in 2020 with connected cities and 50 billion devices?
Solving the data analytics problem is critical if smart cities are going to succeed as intelligent data will allow cities to manage their resources and infrastructure much better. Not only will it help with traffic management and healthcare but it will also vastly improve the performance of the utility network and the city’s natural resources. A reduction of 10-15% of electricity usage per household on average can be achieved as well as reducing major water wastage. 30% of all pumped water doesn’t make its final destination due to leakage. The problem city CIOs face is how do they handle these large complex data sets which are too big for them to handle? Many cities see the way forward through public-private partnerships. Indeed Jonathan Reichental, Chief Information Officer, City of Palo Alto, California, stressed the importance of public-private partnerships when dealing with large, complex data sets only recently.
These public-private partnerships present a fantastic opportunity to service providers to work with cities and governments to provide not only the connectivity but also the data handling and intelligent analytics which will power the smart cities. It could prove quite the opportunity, with investment in analytics going from around $2 billion dollars to over $30 billion in North America alone over the next twenty years. Indeed successfully mastering analytics could catapult some services providers far ahead of their rivals not only in the telecom but also in the OTT/internet space.
To take advantage of this massive opportunity, service providers need to become market leaders in this space and to quickly get their own data analytics in order by successfully gaining intelligent insights, removing silos and ensuring end-to-end data security and privacy. Gaining trust and ensuring security and privacy will become just as important as the data insights when securing big contracts for the future.
If service providers don’t act now and grab this fantastic multi-billion dollar opportunity then somebody else definitely will. Now is the time to get your analytics right, not only to deal with the business problems of today, but also those of the future… act now and tap into that multi-billion dollar opportunity.