“Data drives decision-making and it drives a lot of the services we all consume… It’s a simple example: By publishing the data it allows everyone inside the city and outside to go in and add intelligence and services on top of it. Los Angeles is now rated the number one open data city in the country”. – Peter Marx, Chief Technology Officer, City of Los Angeles
The global smart cities market is set to reach $1.27 billion by 2019 and McKinsey Global Institute predicts that in 2025, 600 cities will continue to generate sixty percent of global GDP, but these cities won’t be the same. “Over the next 15 years, the makeup of the group of the top 600 cities will change as the centre of gravity of the urban world moves south and, even more decisively, east”. Growth is expected to come unsurprising from China, India and Latin America. The rapid growth of these new “mega economic” cities will require them to become “smart” from the offset, which in most cases is much easier than trying to make cities with thousands of years of history “smart”. It isn’t, however, only these new metropolises that need to become smart, large urban centres such as Los Angeles, New York, Atlanta, London, Amsterdam, Barcelona are all now investing in new smart city infrastructure.
Cities are growing fast and it is predicted that by 2050, 70% of the world’s population will be urban. This is going to put huge pressure on aging city infrastructure which wasn’t designed to cope with the huge urban population explosion. Investing in smart infrastructure is a great way to not only deal with this problem, but to also generate new business models and new revenue streams. Samir Saini, CIO for the City of Atlanta recently addresses this issue when talking about Atlanta’s investment in smart infrastructure. Like many cities, Atlanta’s population is growing fast due to the low cost of living, excellent transport connections as well as due to the general urbanisation trend. The city needed to invest in new infrastructure as it had suffered from decades of under investment and was crumbling – some of it was over one hundred years old. The City of Atlanta saw the need for new investment in infrastructure as a huge opportunity to rebuild the city in a “smart” way. Saini stated that Atlanta didn’t become a smart city for the sake of it, but because technology is often the best way to achieve goals related to improving life in the city.
Technology may be the best way to improving life in a city but it has to be more than just creating clever gadgets and apps. For the apps and services to be smart, they need to communicate with each other and use a common data set in order for them to serve the needs of the cities and its citizens. Open data and giving people access to that open data is key for developing and delivering smart services.
The city of Amsterdam teamed up with TomTom to create a smart parking service. Amsterdam owns thousands of datasets and by giving TomTom access to this data, they were able to devise a solution which allows drivers in Amsterdam to access real-time parking advice via their TomTom, saving hours of lost time (and much frustration), whilst also cutting back on carbon emissions and also most importantly reducing traffic congestion. Access to open data can also boost the city economy by attracting a community of app designers and developers. Ron Van der Lan’s, Senior Director for the Amsterdam Economic Board estimates that “Amsterdam [now] boasts a community of around 1,500 app designers. As well as working on smart mobility, Van der Lans sees huge potential for open data in making urban energy more sustainable through smart metering, by allowing energy suppliers to better match supply with customer demand.
There are many challenges with collecting and presenting data which makes it easily “usable” and Van der Lans says that the trick is “to collect such information in one place and present it in a way that is accessible to software developers and app makers”. There are other important considerations that cities need to be made aware of when embarking on crucial open data projects. Releasing data requires financial investment in data management systems which needs to be justified as it is ultimately the tax payer or “citizen” who is paying for this. This in the long term can obviously be justified in the savings that are being made through efficiencies and the environmental impact of lower emissions through smart transportation. As well as cities sharing data, for a true “smart city” to be successful other partners and companies need to be brought on board to add and share their data. This can often be a challenge especially for the larger utilities and enterprises who for them, data is seen as a huge revenue potential, especially for launching and offering new services and insights. There are of course, lots of benefits that they can gain by sharing their data and it will of course open up more business opportunities to them. They just need to see the value from the start. The city of Los Angeles’s mayor, Eric Garcetti requires all of the city departments and agencies to publish all of their data from financial information to transportation, sustainability and public safety which has allowed a number of new apps and services to be launched on the back of that. Once businesses and enterprises see the benefits of that, they will follow by releasing and sharing more of their data. Every city has to start somewhere and by making their own data available it will help push others to follow.
As well as cost savings, open data does allow cities and many other players revenue opportunities. A recent smart city development in Nigbo China, based on open data not only saved the city $163,000 in traffic management and facility maintenance costs and $1.6 million in possible duplicated government spending, it also generated $8.2 million worth of value for businesses creating new job opportunities. All in all, the open data initiative across multiple services saved the city $4.9 million in annual cost saves and generated another $2.3 million in additional revenue for the city government. Cities are therefore going to be investing more and more in smart cities as the business model becomes more and more clear and the benefits can be quickly realised. This creates huge new opportunities and business models across the communications ecosystems, from infrastructure and SaaS providers, to IT management, OSS/BSS, to big data analytics and OTT services. Now is the time to plan what services you will offer to help make cities be smart.