Smart Cities – disruptive technology at scale

Smart cities are not the futuristic habitats made popular in 60’s sci-fi movies, they are moving out of realm of science-fiction into reality. Smart Cities are playing a pivotal role in how we mitigate urbanisation, environmental issues and even how communities engage with each other.

It is a well-known fact that Industrialisation precipitated the migration of populations to cities. A report on urban migration produced by the UN in 2018, revealed that during the 19th and 20th centuries, up to 85% of urban growth was due to rural-urban migration. However, the 21st century has seen this substituted with, urban sprawl. intra-urban migration, and reclassification of land from rural to urban. The report also predicted that by 2050, 70% of the world’s population (6.4 billion people) will live in cities and towns – but then there was a global pandemic.  

The question that begs to be asked now, is whether the trend of urbanisation is about to do an about turn? and does this give us a chance to reset the way we think about life and work within city walls?  The design of smart cities has been on the radar of urban designers for decades, and their optimism around the impact of smart design and technology is well founded.

A Smart City is simply a framework that relies on technology to promote sustainable development, and urbanisation challenges. It uses a network of connected devices and cloud based IoT applications to analyse data to help the various stakeholders make more informed decisions that will improve the lives of the people living and working in the city. Currently there are over 400 Smart City projects in progress in 286 cities worldwide, with China leading the charge aiming to have 220 Smart Cities online by 2025.

The pandemic has precipitated an exodus from the cities, and many are debating whether they will function as before and will the efforts being put into the creation of smart cities still be relevant. The short answer is yes, Smart Cities are not only about efficiency and/or ecological sensitivity, they can also aid social cohesion. A simple example of this is the installation of security cameras in crime hotspots to reduce crime.

The way we approach real estate is going to look a lot different than it did before the pandemic. Many industries, not just real estate, are still coming to terms with how a singular event in history could precipitate such an intense pivot in established entities, where previously, their trajectories appeared to be fixed and predictable. The only certainty is change, and a while there is a continued demand for real estate, the focus and distribution will change. On-Demand office space will continue to grow, and remote working will become the norm in many sectors. However, changes in the Smart Cities sector are more substantive and far-reaching. Let’s look at how smart cities will change economies and the impact on real estate.

Cities (Smart or otherwise) operate within the local economy and there are major technological changes that are driving the impetus to make all cities smart. 

Transportation forms the arteries of a city. Older cities grew and are growing around their transport systems i.e., road and mass transit but as they expand, and urbanisation takes hold, these arteries have become clogged and inefficient. With Smart Cities able to apply demand pricing, traffic and congestion will change. Electric vehicles and eventually the greater adoption of Self-Driving vehicles, will reduce congestion and drive down pollution. Cities like LA use roads more than mass transit, so autonomous cars will free up more space as less parking will required due to hop in hop out driverless taxis. In contrast Countries like Japan and South Korea are developed and mountainous, so space will remain constrained. But this does not mean that smart cites will not drive change there. Indeed, it is likely that these two economies may even lead some elements of the smart city revolution. 

Cities are not normally linked to food production, but Smart Cities are already challenging this, for example, Japan’s shrinking population means fewer schools are needed, so they are being converted into for vertical farming units for high value crops like Strawberries. Large-scale fruit production can be achieved with very low water use (95% less than conventional methods) and microgeneration (the generation of electricity or heat on a small scale), can grow crops with no soil, no pesticides and use robots for harvesting. Imagine this technology applied to vertical farms in the middle east, which could become a major exporter of agricultural products. Vertical farming is one aspect of Smart Cities but a good example of how they could change and repurpose the economics of entire economies. 

Many old economic truths will change with Smart Cities. For decades, it was predicted that after “peak oil”, specific areas would slip into decline. For example, it was predicted that life on the Australian Gold Coast would be close to impossible to afford due to oil costs for transportation and energy generation, we now know that this did not transpire. Smart Cities reset this expectation, not just in the hotter climes but also colder locations like Siberia and Northern Canada which also require high energy inputs. Again, Smart Cities turned the economies of these areas on their heads, with the prospect of these former energy consumers becoming energy producers / exporters. 

The adoption of Smart Cities is growing fast and will be on the agenda of many governments for the foreseeable future. As the world rapidly urbanises and populations increase, business leaders in this space will drive the Smart City agenda forward with cutting edge technology to facilitate development. This will lead to ultra-efficient, environmentally friendly cities and hopefully, the benefits will extend past the economics, it should help create a happier, healthier life for the residents and even a respite for the planet.