With 70% of the world’s population expected to live in urban areas by 2050, the allure of the urban lifestyle is making cities the place to be. Like other historical migrations, it’s causing a wave of disruption followed by new challenges and social consequences.
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At the top of the list are extraordinary burdens placed on city infrastructure and limited financial resources to deal with them. Population booms are also forcing cities to face greater competitive pressures for investment, talent and opportunities.
Like their tech-savvy residents, cities are choosing smart technology to improve their prospects. They’re investing in smart highways, bridges, buildings, water systems, transportation and streetlights. Navigant Research predicts the global market for smart city solutions and services will skyrocket from $40.1 billion in 2017 to $94.2 billion by 2026.
Massive improvements in the performance and price of technologies like the cloud, processing power, storage and bandwidth have left a fertile landscape for smart city projects. With a growing appetite for data from the physical world, the number of IoT devices will soar from 11 billion today to 80 billion by 2025, according to IDC.
Promising new sources of data outside traditional urban domains are now available to city planners from non-governmental organizations, local businesses and technology firms. Like an artist with a giant canvas and an endless palette, they have an abundance of data at their disposal to design smart cities that were unimaginable until recently.
A perfect storm of enabling technologies. Diverse sources of data. Overburdened infrastructure. Competitive pressures. The conditions for building smart cities have never been more promising.
Yet, there may be a colossal disconnect with the citizens who stand to benefit.
Here’s why: The proliferation and faster adoption of digital technology over the past decade has conditioned consumers to think and behave differently. While most citizens are avid consumers of digital technology, the appeal of the latest innovation for them is changing. It’s no longer just about the latest gadgets, but rather their potential to improve how they experience their digital and physical worlds. (Which they now perceive as one, thanks to their constant interactions with their favorite brands.)
Not long ago, buying and learning new technology was a big deal for consumers. Besides coming with a high price tag, products like PCs and software packages required a steep learning curve before delivering meaningful benefits.
Today, the way we experience technology is vastly different. Low-cost or free innovations, such as smartphone apps powered by augmented intelligence, are ubiquitous, easy to use and constantly enhanced. Embedded technology is so tightly woven into our everyday lives we don’t notice it. We seamlessly adopt new technology across our digital and real worlds because the complexity is largely hidden. Benefits like finding the best price on a pair of shoes or expanding our social network are immediate, tangible and measurable.
This instant gratification we’ve grown to expect from smart technology is causing an interesting social phenomenon. It’s conditioning us to desire and expect specific outcomes and experiences instead of acquiring things that promise them.
This shift to wanting — and immediately expecting — rewarding experiences is sometimes called the outcome economy. It’s generating growth in sectors associated with immediate experiences, like dining and travel, but negatively impacting others, such as traditional retail.
In this context, the goal of smart cities is to help citizens take advantage of the positive outcomes they’ve grown accustomed to experiencing as consumers across their unified digital and physical worlds.
Consider Airbnb. It’s not just selling rooms for rent. It’s offering richer, more satisfying and personalized travel experiences — such as violin making in Paris or hunting for truffles in Tuscany. Through experiences with Airbnb, consumers interact with multiple brands that comprise an ecosystem of value within easy reach.
To survive and thrive, cities need to reach further, too.
Around the world, there’s an influx of smart city technology in urban environments — public transportation, utilities, parks, arenas and recreational spaces — with much more planned. So, why can’t citizens get the same great experiences from their city that they do from their favorite consumer brands?
Urban leaders could start by learning from successful consumer brands. Instead of promoting products, they’re obsessed with meeting the rising expectations of today’s empowered consumer with great experiences. For cities, this means putting citizens at the heart of smart city strategies to meet the higher expectations and logical outcomes they expect.
To do so, public sector leaders must open their eyes to the potential of data from across and even outside of traditional urban domains to deliver better, more holistic experiences for citizens — like making cities feel safe and welcoming. This requires treating citizens like the unique consumers they are, truly understanding their wants, needs and expectations.
Cites should assume the role of savvy marketer: capturing insights from diverse data sources, analyzing them in real time, and constructing highly personalized offers and opportunities as part of a larger ecosystem of value that citizens welcome and expect. In such a city:
- A water main break will automatically alert citizens taking the bus along affected routes, immediately sending new travel options that save them time by analyzing real-time water and transportation data in unison.
- City residents will feel safer after an automobile accident because streetlights will brighten automatically to enhance public safety, even notifying first responders when crowds gather.
- Tourists will feel welcome in foreign cities despite visiting during peak congestion periods. They’ll be guided by personalized journeys based on real-time data from environmental sensors, transportation data, crowd movements and major city events in progress.
- Employees working the night shift will feel a sense of well-being and security on their commute because streetlights will automatically brighten in areas with rising crime rates.
As more cities embrace an outcome-based approach to their smart city strategies, citizen expectations will rise. Like smart businesses, cities will compete to offer the winning experiences citizens expect.
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