Our rapidly urbanizing world faces an enormous demographic imbalance. Over the next few decades, Europe, and to some extent the United States and China, will be aging and shrinking, even as India, Africa, and the Middle East see their populations expanding. At the same time, we still have three billion people in the world who have no access to water, electricity, health care, and education. And we are moving from a global population of seven billion to nine billion.
Clearly cities are the key to whether we successfully meet this massive transition challenge and achieve growth that is both sustainable and inclusive. And the critical enabler is going to be technology. What was once a visionary notion is now the new normal: technology is really as essential as the three utilities—water, gas, and electricity. If you want to revitalize an old city, or if you are erecting a new greenfield city, technology has to be built in. Today many leading cities have a ten-year plan that includes a master information and communication technology (ICT) plan. A city without an ICT master plan is simply not relevant anymore.
The goal, of course, is to view technology as part of a holistic, services-oriented approach to revitalizing cities. Right now, in most places, whether you move into a new apartment or buy an old one, you have to rip the ceiling out to get wireless in and buy various devices. But imagine what would happen if everywhere you went, as with electricity or water, that technology were simply built in? Suddenly the only thing to worry about would be how to provide the new services that consumers will increasingly demand: assisted living for the older population, safety and security, parking services, medical services (we already know that 80 percent of doctor visits don’t require physical interaction), and access to public services in general. When you get to a critical mass, the data on the benefits is so compelling: a 50 percent reduction over a decade in energy consumption, a 20 percent decrease in traffic, an 80 percent improvement in water usage, a 20 percent reduction in crime rates. The concept of smart cities really sells itself.
How can we accelerate this transition? Here’s a statistic that underscores both the problem and the potential: worldwide spending on infrastructure and construction is about $2 trillion a year, and ICT spending is just 1.5 to 2 percent of that. But over the next decade, we will continue with advances in cloud computing, big data, and open data, and we will see 50 billion devices connected through machine-to-machine communication, which will foster the industrialization of the Internet. Intel predicts that in a decade, the Internet of Things will be a $1.5 trillion-a-year business—just from a technology point of view. But on top of that there will be another $2 trillion annually in new services. So we don’t need to increase ICT’s share of global infrastructure spending from today’s levels to reap the benefits. We just need to ensure that our investments are smarter and move technology from being an afterthought to having it embedded in our urban master plans.
That said, we still face huge hurdles. Politicians face short-term election cycles, while the benefits of this kind of investment are longer term. Hence, in addition to articulating the vision for their cities, politicians need to score quick wins and generate budgets for the parts of their vision that demonstrate immediate benefits. Construction is one of the world’s most conservative industries. It’s the only vertical industry that hasn’t really made any productivity improvements over the last 30 years. There are too few global standards. Look at electricity with the longstanding variation between 110 and 220 volts and multiple outlets. We still can’t agree on a common standard. We need better protocols and global open standards, like those that enabled the growth and connectivity of the Internet. We need to create new ecosystems, in effect whole new industries to enable some of these benefits. Consider parking. In Paris, as in many cities, the average citizen spends four years of his life trying to find a parking place. But what if you could drive in off the highway, and your navigation system would guide you to a free parking place? It would reduce congestion and carbon emission. That is beginning to happen in cities like San Francisco and Chicago. But getting these projects off the ground requires the right regulatory framework and collaboration among a lot of industries in order to provide everything from the sensors in the street to the apps in your car or mobile device.