Smart cities to get smarter

Joe Dignan/Ovum
01 Aug 2012

Developers are increasingly moving from behind their master plans to embrace the world of IT. Even the traditionally Luddite construction industry now blithely speaks of a new age of construction 2.0, and it is the £35 billion ($55 billion) smart cities market that is whetting its appetite.

Developers can drive the market

The smart city market is at a tipping point. Having been led by IT industry stalwarts such as IBM and Cisco for the last five years, it needs a fresh injection of ideas to take it to the next level. Ovum believes that the developer community will add the required impetus.

One of the key discussion points at Ovum’s recent Smart Cities in Europe 2012 event, which was held in conjunction with Imperial College London, was the impact that developers are having on the smart city market. On the developer panel were representatives from the Urban Land Institute, Quintain, Balfour Beatty, and Buro Happold, while other global players, such as Arup, were present in the audience.

There are three main reasons why developers are so important to the smart city debate.

  • The IT industry cannot live with the 5–10-year ROI models inherent in smart cities, but the developer community can.
  • The possession of physical infrastructure means that developers work at the junction between the key smart city metrics of sustainability, quality of life, and competitiveness. In comparison, IT is the connective network that sits on top of this framework.
  • There is precious little capex currently available to governments. However, developers have years of project financing experience, and a comprehensive understanding of the financial instruments required. All of the top international development companies are scoping their value propositions, which has resulted in the emergence of some interesting consortia.

Although developers and the IT industry have always had common interests, the “smart” part of smart cities assumes a level of IT technology that has not been seen before.

Cisco and international developer Gale have been leading the development of the South Korean smart city Songdo for the last five years. Arup and Accenture have collaborated on a number of publications on smart cities alongside the Climate Group, while Quintain has been engaged with Living-PlanIT. Buro Happold, Atkins, and a number of other players worked on the London Olympic village, and are poised to take their experience from this project to develop a smart city offering for the marketplace.

Another key skill of developers is their ability to bring order to chaos. However, while developers embrace complexity through their master planning skills, they need to understand the new IT paradigms of cloud, Internet of Things, Big Data, and “bring your own device”.

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