The world population continues to grow at a steady pace. Experts around the globe have predicted that the world’s urban population will be doubled by 2050. This constant pressure of increasing population burden on the existing cities and the awareness regarding reduction of carbon footprint have pushed the governments around the world to provide better quality of life to the urban population. To overcome this challenge, the governments have turned toward smart cities to find new ways to handle complexity, increase efficiency, and reduce expenses.
“Smart City” as a concept relates to increasing the efficiency of Information and Communication Technologies (ICT) by using energy and resources efficiently. In other words, smart cities have the ability to solve problems through innovation and use of ICT. Smart cities are differentiated in terms of their governance, technologies, economic, and social environment. Smart technologies which are the engines of smart cities are environment friendly, as they reduce CO2 emissions and energy costs and provide operational ease.
Smart cities include various components such as smart transportation, smart security, smart energy management, smart homes, and smart water management. The most important components of smart cities are smart transportation, smart security, and smart energy management. The global smart cities market is expected to grow from $580.73 billion in 2013 to $1,266.58 billion by 2019, at a Compound Annual Growth Rate (CAGR) of 14.1% from 2012 to 2019. At present, there are around 102 smart city projects, with Europe leading the market share with 38 projects followed by North America (35), Asia-Pacific (21), Middle East and Africa (6), and Latin America (2).
Need for smart cities and smart city infrastructure
Due to resource depletion, many cities around the world are realizing the benefits of using smart technologies to enhance areas as diverse as healthcare, communication, crime prevention, and energy utility. The use of smart technologies such as smart metering, sensors, communication network, HVAC (Heating, Ventilation, and Air Conditioning), home health (sensors), and software and hardware (distribution management system, demand response management system) can help in creating a more sustainable living environment for the future. Also, smart and efficient infrastructure such as smart transportation and smart homes can increase the amount of leisure time which is one of the important drivers for innovations in urban cities. Nowadays, governments are looking out for more interoperable communications for better public safety, disaster management, and emergency management. Projects such as Amsterdam EcoMap and Seoul, South Korea are a few selected projects that have significant government backing for new technology development.
But a major restrain that can slow down the growth is the low amount of funding and capital expenditure on the development of smart cities due to the lack of budgetary allocations.
The major players that lead the global smart cities are ABB, Accenture PLC, and Alcatel-Lucent.
- ABB is planning strategic acquisitions to improve its global footprint by acquiring companies like Thomas & Betts.
- Accenture plans to enhance environment performance by launching Accenture life safety solutions to create a safe environment for employees.
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