The term smart city has caused various controversies at some point, but with the development of the Internet of Things, the existing cities in the world will need to become smarter.
A brand new metropolis, using technology-driven starting from top-level design
All cities can use the Internet of Things technology to improve the provision and development of urban services—not just to build smart new cities from the beginning like Konza Technopolis in Kenya. For example, a smart city may simply be a city with improved capacity planning and management. By analyzing public transportation data, a “flow” model can be established to predict the usage at a specific time and help transportation companies prepare for peak periods in advance.
The transformation of small cities can also be called smart. Smart street lighting systems using dim LED bulbs are both sustainable and helping cities save costs. At the same time, smart meters and digital power grids can help cities achieve emission reduction targets.
Global Data’s special research on smart cities predicts that by 2024, the market will grow to 231 billion U.S. dollars. The smart city market is divided into five components. The largest growth part comes from smart metering, followed by smart city platforms and smart buildings, while smart signs and smart payment systems constitute the rest of the market.
From the first quarter of 2019 to the fourth quarter of 2020, global smart city-related transactions totaled US$17.24 billion, a year-on-year increase of 123.48%. These include risk financing, acquisitions, equity issuance, private equity, debt issuance, partnerships and asset transactions and other completed transaction factors.
Global Data has tracked and recorded 151 transactions of completed transactions around the world in the past two years, of which 80 and 71 transactions were recorded in 2019 and 2020, a year-on-year decrease of 11.25%.
Trading activity has declined across all continents, but not necessarily by country/region. Over the past two years, there has been almost no difference in trading activities between China and the United States. The United Kingdom is the country with the largest decline, with a 73.33% reduction in completed transactions, from 15 in 2019 to only 4 in 2020.
Data analysis: global IoT deployment
Smart city transactions are usually related to several different departments, such as artificial intelligence and big data. Most of the smart city transactions recorded by Global Data are related to the Internet of Things, with 316 completed in 2019 and 325 in 2020, a total increase of 2.84% year-on-year, with a difference of US$6.58 billion. The topics of digitization, big data, and entertainment media declined with the reduction of smart city transaction activities, but artificial intelligence increased by 6.89%. Last year, there were 58 to 62 related transactions, with a total value of 7.14 billion US dollars in two years.
Use Global Data’s IoT deployment tracker to see how smart city projects in 2019 and 2020 will utilize the IoT. Of the 1,349 IoT projects announced in recent years, 131 will be deployed for smart city implementation, accounting for 9.71% of the total global projects.
Of the IoT smart city deployments announced in 2019 and 2020, approximately 90.8% belong to the field of civil infrastructure, with government as the main vertical field, in addition to communications, construction, retail, transportation, tourism, education, and public utilities. Interestingly, although North America has strong spending power on various topics, 48.8% of these announced deployments are in Europe, and the rest are in the Americas, Asia Pacific, Middle East, and Africa.
Although the market is huge, the number of deployments announced in Europe dropped by 47.6% in the past two years. In fact, the number of IoT smart city deployments announced globally has dropped by 51.1%, from 88 in 2019 and 2020 to 43 respectively.
In this regard, all regions have experienced a decline. Compared with Europe and North America, the Asia-Pacific region has the smallest decline (26.3%).
The current state of smart cities
An analysis by City Monitor earlier this year indicated that the impact of the epidemic is the reason for the slowdown in the region outside of China and the United States. The report believes that this decline in growth rate has existed before the epidemic. Due to budget and income uncertainty, projects have been postponed or cancelled, and the city government has shifted its priorities to economic recovery and people’s livelihood business.
Another possible explanation can be found in Verdict’s recent research report on smart cities. Although large investments go hand in hand with big technology, it also means that the community is concerned about the processing of public data.
This concern led to the demise of Google’s parent company Alphabet’s Sidewalk Labs project in Toronto, Canada. David Bicknell, the principal analyst of GlobalData’s subject research team, told Verdict: “The failure of (Sidewalk Labs) casts a shadow over other outstanding smart city projects. This is a high-profile project. Data privacy issues will affect other cities and citizens.”
Sidewalk Labs has always insisted, including in the email to Verdict, that it stopped the project because of the uncertainty of the global epidemic, not because of highly public data privacy issues.
Twin cities are the future
The business perspectives of smart cities are diverse. Sources told City Monitor that startups are more successful than large companies when it comes to selling products and services to local governments. Smaller companies tend to provide highly targeted solutions to very unique and often urgent problems that arise during the epidemic. On the other hand, unless tailored to specific and urgent needs, smart sensors will become less attractive to local authorities.
The report emphasizes that the lack of an epidemic prevention and control plan is a problem, but there may be a solution: digital twins.
A digital twin is a digital representation of a physical asset that promises to provide a single source of truth, and can be combined to build an in-depth view of the entire system, from traffic to the impact of construction and road works. Singapore is one of the most advanced adopters of digital twins through its virtual Singapore project, but most smart cities in the world are developing digital twin applications.
Helsinki uses its digital twin project as a tool to mitigate climate change and improve energy efficiency. Other examples include Portland in the United States, which has a digital twin using residential cellular data, and Dubai, which has a digital twin project focused on user experience. A report shows that 15 provinces, cities and regions in China can enjoy economic benefits of more than 200 million yuan using the digital twin of the smart grid.
In terms of reducing the spread of infection, Cardiff University’s digital twin may pave the way for smart cities to “perceive” the spread of disease. Its Computational Urban Sustainability Platform (CUSP) is a digital twin model used to capture, monitor, analyze and predict real-time epidemic infections in Cardiff, Wales.
With the support of the Internet of Things, its Cardiff digital twin uses sources such as social media and health data to track and predict epidemic hotspots, enabling authorities to obtain general intelligence at the user, space, building, street, city, and regional levels.
5G and smart cities
The bright future of smart cities may depend on the full emergence of the Internet of Things. The Internet of Things may be a more common technology than today’s computers and mobile devices, but judging from the current situation, there is still a long way to go before it is fully popularized.
The large-scale adoption of 5G is needed to achieve the next stage of popularization of the Internet of Things. The resulting “large-scale Internet of Things” will require the use of low-cost sensors and long-life batteries in smart meters, cities, buildings and homes, as well as large-scale traffic management, rather than the localized 5G coverage currently enabled.
But before all this happens, the Internet of Things also needs a unified global network security standard. This is because with the increase in the number of connected devices, huge security vulnerabilities also increase, and the possibility of network attacks is also increasing.
Cities around the world, whether smart or “stupid”, are the targets of cybercriminals. With the use of insecure IoT, large-scale cyber attacks such as the temporary closure of Atlanta in 2018 may become easier.
The multi-layered nature of the Internet of Things creates a huge attack surface, whether through devices, connections, data, applications, or services. In response, the EU’s “General Data Protection Regulation” and other regulatory measures are slowly emerging. At the same time, more and more manufacturers are designing IoT devices with pre-built network applications, while also providing users with necessary software updates to patch security vulnerabilities.
“If your PC is attacked by a network, it will be really troublesome,” as its report said, “but if your connected car is attacked by a network, it may kill you.”