Governments, businesses and citizens could save over $5 trillion every year with help of smart city tech, claims Chordant report.
Smart city technologies could save enterprises, governments and citizens globally over US$5 trillion annually by 2022, according to new research published by Chordant, a newly launched business unit focusing on smart city developments and part of mobile technologies specialist Interdigital.
With higher concentrations of people and businesses located in urban areas, smart city and IoT technology will help cities get better use from existing assets, operate more efficiently and create more sustainable environments, says the report, Smart Cities and Cost Savings.
But IoT and smart technologies can only work, it warns, where a “holistic approach” is taken to collecting data from sensors, sharing it and analysing it effectively.
Read more: Analysis: Connected streetlights illuminate path to smart cities
The report, which was conducted on Chordant/InterDigital’s behalf by market analyst firm ABI Research, goes on to consider the aggregated absolute cost-savings potential in a smart city of 10 million inhabitants over the next five years. These sums, apparently, are based on the yearly savings already achievable for 75 of the world’s cities with a total urban population of more than 5 million. The report claims that:
- Governments could save as much as $4.95 billion annually, with street lighting and smart buildings representing two areas with the biggest potential to yield savings. Smart street lights alone might be expected to cut repair and maintenance costs by 30 percent, the report says.
- Businesses operating in smart cities could save $14 billion in areas such as freight transportation, by using more energy-efficient transport options including drones, robots or driverless vans and trucks, and through operating smart manufacturing plants.
- Citizens could achieve savings of up to $26.7 billion per year in areas such as utility bills, through the deployment of smart meters and microgrids, and in education with the development of a hybrid education system that mixes online learning with physical classrooms.
Read more: Juniper Research names UK’s top ten smart cities
Much to think about
Internet of Business spoke to Jim Nolan, executive vice president at Chordant about the findings. The potential for cities to save money looks great, we said, but what steps should municipal authorities be taking today to be more sure of reaping those rewards by 2020?
“Key steps would include thinking through their smart city strategy before committing to proof of concept projects [PoCs] with a focus on aggregation of data,” he said. “Most cities, towns, and regions already have significant data sources that are not leveraged or are siloed. Currently, many single function PoCs, [such as] smart garbage bins, smart lighting, environmental sensors and so on, don’t create lasting value as they don’t offer a large, aggregated suite of data sets that can be used to create solutions that save capex, opex and improve the quality of life of citizens – for example, by reducing congestion or environmental impact.”
If cities create multiple, single-focus PoCs with no ability to federate data, he added, these gains will be lost. But, he added, the smart city opportunity isn’t confined to sprawling urban conurbations. Small cities, towns, even villages, he said, can benefit, too, because “the ability to leverage aggregated data doesn’t end at local regional boundaries and integration across towns to broader regional areas creates additional value.”
Read more: Cisco announces $1 billion smart cities fund