Huge cost savings could be made through the adoption of smart city technologies, new research suggests.
A whitepaper by ABI Research says that smart city technologies could save enterprises, governments and citizens around the world over $5tn (£3.74tn) annually by 2022.
According to the report, Smart Cities and Cost Savings, as more and more people live and work in cities, smart city and Internet of Things (IoT) technology — along with new sharing and service economy models — will be key for cities to optimise the use of existing assets, maximise efficiencies, obtain economies of scale and ultimately create a more sustainable environment.
Automation and Artificial Intelligence (AI), along with sensors, data-sharing and analytics, will all be critical in helping cities save costs, the authors of the report believe.
The report was commissioned by mobile technology company InterDigital on behalf of its smart cities-focused business, Chordant, in partnership with CA Technologies.
It says that in a typical smart mega city of the future (i.e. in the next five years) with 10 million inhabitants:
– Governments could save as much as $4.95bn (£3.7bn) annually. For example, smart street lights are expected to cut repair and maintenance costs by 30%.
– Enterprises could save an estimated $14bn (£10.48bn) thanks to cost-saving opportunities including more energy efficient freight transportation (such as drones, robots, or driverless vans and trucks) and smart manufacturing plants.
– Citizens are estimated to save up to $26.69bn (£19.97bn) in areas such as utilities, through the deployment of smart meters and micro-grids, and in education with the development of a hybrid education system (physical and online).
“While smart cities technologies offer multiple benefits, very significant direct cost savings represent a key incentive to embrace urban innovation for city governments, citizens and enterprises alike; this allows building stronger business cases with faster ROI, facilitating project approval and accelerating deployments,” explained Dominique Bonte, vice president of markets at ABI Research.
“We understand the important role of smart cities for our future, and this report further reinforces how much these will contribute in both economic and social terms,” added Jim Nolan, executive vice president of Chordant. “But the true potential of smart cities won’t be realised if governments, enterprises and citizens don’t work together in harmony. Doing so will promote the emergence of smart city marketplaces and open platforms, where third-party players are able to ensure seamless integration of new smart city technologies into legacy platforms and systems.”