The Effect Of Smart Cities on The Business Community in 2019 by Nathan Sykes

Is the phrase “smart cities” divisive? Some of us, right now, are picturing utopic skylines and others are thinking “1984.” The truth about smart cities lies somewhere between the two. There are one or two cities pushing back against one or two types of technology, which we’ll talk more about in a moment. But for the most part, when judged on the merits, smart city infrastructure is a net positive for city dwellers and visitors alike.

Business owners have a slightly different set of worries, though. So what about the effects of smart cities on the business community?

Smart Cities Have Better Traffic Management

The effects of smarter traffic management — through internet-connected infrastructure and smart cars communicating with each other — is obvious for pedestrians and drivers: it becomes easier and safer to get around. But improved traffic flow on city streets pays dividends for businesses, too.

It’s not uncommon for businesses in some districts to lose foot traffic because parking is difficult to find or things are regularly snarled up by deliveries. But, according to one report, 11% of cities had a “smart parking system” in 2018, meaning 11% of metro-area businesses were reaping the benefits of safer and more conveniently walkable streets and an uptick in foot traffic. Smart parking uses digital technologies to help drivers find parking when they need it.

Along with smoother traffic patterns courtesy of connected intersections, smart parking will make cities much more pleasant places to call home and help defeat many of the longstanding issues that get in the way of walkability and convenient access by automobile — not to mention business growth. According to WeForum, city dwellers spend about 15% of their journeys in congestion and a further 20% in search of parking. Smart traffic management in tomorrow’s cities will ensure much more of our time is spent at shopping destinations and wherever else life takes us, instead of seeing us sitting in limbo halfway between.

Smart Cities Are More Competitive Cities

In each previous industrial revolution, centers of urban activity helped us organize our talents and resources in search of economic development, technological breakthroughs, and social progress. Cities are still the beating heart of world commerce and innovation. Not surprisingly, the “smarter” a city gets, the more attention and investment it earns for itself, the more business owners relocate there, the more jobs it supports, and the more appealing — and competitive — that city becomes for human activity in general.

Increased competition is a double-edged sword for business owners, for obvious reasons. But according to the World Bank, by 2025, the top 600 cities in the world will make up about 60% of the entire world’s GDP. They might be hives of competition, but they’re also gold mines. Moreover, the World Bank says that cities which make themselves more competitive sites for business development have higher productivity across the board, have their incomes rise faster, and have a richer talent pool to draw on for continued growth. From productivity and shared prosperity to a reliable talent pipeline, smart cities are great places for companies to call home.

Yes — having one’s city become more walkable, convenient, synergistic, connected and (most importantly) appealing, and running on the latest technology, might mean business rivals introduce themselves to the area as well. But the opportunities brought on by a happier and more productive population, and a more successful and thriving city, outweigh worries about potential business rivalries.

Smart Cities Offer Excellent Social and Physical Infrastructure

In addition to a thriving economic climate, business owners also want to know that the city they call home is making smart decisions about physical and social infrastructure. Physical infrastructure is things like fibre internet, public transportation, clean and efficient electricity and water delivery, modern drainage systems, and more. Social infrastructure is things like parks and public areas, hospitals, schools, and green spaces.

City planners in smart cities use all of the data at their disposal to make sustainable decisions about new construction, urban sprawl, and balancing green and open areas against the needs of the business community.

Gathering and acting on data is the key to continuing maintenance for social and physical infrastructure, too. Smart cities and buildings use the Internet of Things to continually monitor things like water pressure in pipes, electricity usage, rate of emissions, peak demand for public services, and more, to plan preventive maintenance, enforce city codes and generally protect the health of the public.

By 2021, there could be as many as 36 billion internet-connected devices in the world, and smart cities will host many of them in the forms of physical and environmental sensors. Think of the IoT in smart cities as an invisible network that helps us keep our systems running smoothly, our communities healthy, and our employees and customers in good spirits.

Data collection in civic planning and maintenance also means businesses can count on smart cities to be more resilient when it comes to power outages, better prepared for natural disasters, and emergency events, and more likely to have robust communication and internet infrastructure.

Smart Cities Have Privacy Implications

As mentioned earlier, there’s been some pushback in U.S. cities against some types of technology. In 2019, San Francisco became the first city to ban the public use of facial recognition technology. None of the features we’ve looked at here requires that kind of tech, but it’s still an important line in the sand.

As cities, automobiles and mobile devices get smarter, they’ll need better ways to talk with one another and the surrounding infrastructure and share data so the city can function more smoothly. Cars and traffic lights will coordinate with one another for smoother intersections. City planners will use demographic and location data to plan future developments and see in real-time how cars and people traverse the city.

This is part of the reason why several cities are implementing their own data protection laws based on Net Neutrality and/or GDPR. Governments will also have to work closely with technology companies to come up with security-minded APIs and software to help city infrastructure work harmoniously with various smart car and smartphone manufacturers. The smart city is the city of the future, but it’s clear we’ll need a lot of cooperation to get there

Nathan Sykes is the founder of Finding an Outlet, where he writes about the latest in technology and business news and advice.

You can read more articles by Nathan here.