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Smarter cities

06 August 2019
3 Minute Read
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As the world’s urban population continues to swell, city planners are counting on new technology to help avert a potential crisis.

Across the long span of human history, the world’s population has lived almost exclusively in low density, rural settings. Even as late as 1600, fewer than 5% of our forebears called a city home.

By 1950, 30% of the world’s 2.5 billion people lived in urban areas. Today, more than 55% of us live in cities, a proportion that’s expected to increase to 68% by 2050 – even as the earth’s population swells from 7.7 billion to some 10 billion by mid-century.

China, India, and Nigeria will account for more than one-third of that projected growth, which does not mean that residents of cities like London, New York and Paris can rest easy. This unprecedented migration will continue to put ever-greater strain on infrastructure, including transportation and sanitation, as well as general quality of life.

Managing the environmental impact of urbanisation is a vast challenge in itself, as cities everywhere will struggle to provide clean air and water as populations expand and the mercury inexorably rises. Human ingenuity – powered by information and communication technology – is our best hope to manage this looming crisis. So-called ‘smart cities’ are already popping up all over the global map. Led by early adopters like Amsterdam and Barcelona, city planners are increasingly embracing ICT to enhance the quality and performance of urban services such as energy, transportation and utilities in order to reduce resource consumption and waste, while also better managing costs.

Think of the following simple example of a smart city at work: By placing real-time measurement sensors on garbage bins, local authorities know when collection is required – and when it’s not –increasing efficiency and lowering expenses.

How many times have you struggled to find a parking space in a big city? To cite another very practical example, imagine a smartphone App that directs you to the nearest available space, which is updated in real time by smart sensors.

Based on the same principles, traffic can be better managed – including through flexible pricing that reflects congestion and pollution levels – while energy efficiency can be improved via smart LED streetlights that are only activated when they detect movement.

From Chicago to Copenhagen, and from Singapore to Shanghai, more and more cities are investing in a dizzying range of initiatives to improve life for their residents, creating a vast new market opportunity. Some €72 billion was invested in smart-city projects last year, according to the International Data Corporation, which forecasts total spending to top €140 billion by 2022.

At the same time, concerns are increasingly being raised about the use – and potential misuse – of this ceaseless data flow. In future, in crowded cities the world over, expect a hard-fought battle between the state’s need for such surveillance and the individual’s inalienable right to privacy.

Cyrique Bourdon // Asset Allocation Strategist

Cyrique joined Brown Shipley as an Asset Allocation Strategist in our Investment Office and is responsible for leading the asset allocation process. With 15 years of investment experience, Cyrique previously worked for Morningstar Investment Management Europe Ltd and prior to this, spent several years at Merrill Lynch Wealth Management.