Smart Cities: Who will lead the market?
When speaking at events around the world I always put forward the view that IT companies cannot lead the smart cities market because they are wedded to outdated business models where the ROI is too short and where they still incentivise their sales teams on monthly sales. Instead the market will be led by the Architecture, Engineering and Construction companies (AEC) who have a much longer ROI, the ability to take a lead contractor role and bring in Telco, Utilities and IT as, and when, required but the force majeure is that clients are demanding transformation through advanced digital urban infrastructure.
Smart cities as a market is moving from vision to reality as the ubiquitous connectivity of devices encapsulated in the Internet of Things (IOT) allows data to be turned into information giving insight that leads to impact. AEC companies have always known that BIM and asset management allow them to improve services, maintenance and energy usage resulting in reduced costs. What is new is that residential and retail has moved into the ‘smart’ mix. Housing developers are now being challenged by planners to ‘future proof’ developments and to take more of role in maintaining the stock. This in turn means housing developers have an interest in transport, urban mobility, air quality, parking, smart lighting and waste where before they may have built at lowest cost and moved on.
Following on from the above, I am often asked by both companies and public-sector authorities as to what events they should attend. There is a plethora of smart city events globally and although I have not attended them all, over ten years I have attended a fair few. There are some excellent national and region events but the premier ‘smart city’ global event was always the Barcelona Expo World Congress as pretty much everyone in the tech space in ‘smart’ is there.
However, the market has matured from smart cities to advanced urban infrastructure to be led by Architectural, Engineering and Construction companies (AEC) and where they all meet is MIPIM, Cannes. This is where the rubber meets the road in smart city terms as you have cities and regions with the political remit, land and the need meeting developers with the muscle, expertise and finance. AEC companies are beginning to embrace Proptech and Reed Midem has lately run a Proptech event in New York and run local events around the world, but the Cannes event now attracts cities and regions with London, Dubai, Manchester, Frankfurt, Istanbul et al having a presence in 2017 and 2018 is attracting even more cities. There is a burgeoning interest from developers on what ‘smart’ means for their customers and themselves.
Most of the largest AEC companies have now created a ‘smart‘ innovation practice but change is always slow in such a traditional industry. My experience has been that these internal innovation groups have yet to gain internal influence and power but the direction of travel in this market makes it inevitable that they will have to if companies want to compete and win. I will be speaking on how smart city thinking can be scaled to small countries, smart islands and smart rivers. If you have funds to attend one global event in 2018, this is the one.
Joe Dignan will be at MIPIM 2018 to speak about smart cities!
Click here to join him!
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