A Significant Growth Opportunity
BUT TO BECOME SMART,
CITY SEGMENTS MUST NOT OPERATE IN SILOS
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Today, developed countries are beginning to modernize aging infrastructure while embracing technologies to improve their resource utilization. Meanwhile, in developing nations, regions are undergoing massive urbanization efforts to improve the status of essential infrastructure, such as drinking water transport and storage. However, this urban growth is not without major challenges.
New city technologies are showing promise in their ability to alleviate stakeholder pain-points, but the number of segments which comprise a city create challenges around siloed data. To be a truly smart city, information must be able to travel freely across disparate system architectures, allowing information from related city operations to feed one another (lighting systems and parking), increasing their overall value to the end-customer. Further challenging this need, is the number of solutions from different vendors which makeup a city’s technology architecture which typically lack the interoperability needed to create mutually-beneficial systems.
WHAT TRENDS ARE IMPACTING THE SMART CITY MARKET TODAY?
» Adoption– Smart City adoption is rising, however the vertical nature of city systems, weak ICT Infrastructure, security & data privacy concerns and lack of systems interoperability challenges the market.
» Technology– Key applications being deployed today focus on solving pain-points associated with reducing operating costs, improving citizens quality of life and supporting economic development and competitiveness.
» Players–Nobody can do it alone in the smart city market. Incumbent players have strong smart city portfolios and have demonstrated their capabilities in a variety of global smart city deployments, often playing across many regions. Emergent players bring application-specific expertise to city challenges.
» Regions–Opportunities exist globally, but each region requires a unique approach based on the common funding mechanisms and control points they employ.
» Materials Development–Cities worldwide and across different regions are at various stages in smart city development. Opportunities exist in mature and highly emergent smart cities depending on the number of success drivers, including leadership buy-in, strong corporate involvement, diverse funding streams and strong ICT infrastructure.
WHO ARE THE KEY PLAYERS DISRUPTING SMART CITIES?
The Smart City value chain consists of connectivity & enablement players, equipment & infrastructure manufacturers, network services, middleware platforms and digital city services. Incumbents like Oracle, ThingWorx, and IBM (who launched the Smart Cities campaign in 2013) are actively targeting the market, bringing to market legacy solutions which have been rebranded toward city-stakeholders.
Although incumbents get the majority of market exposure – largely due to the scale of their marketing budgets – many innovators are emerging in the space across smart city verticals. These innovators, such as Parkifi (Smart Parking), are deploying disruptive business models which appeal to risk-averse stakeholders which characterize the Smart City landscape today.
KEY INNOVATION DRIVERS
Harbor has identified three innovation drivers in Smart Cities today, which will act as catalysts to adoption, driving players and stakeholders alike to identify new Smart City applications:
» Smart grids with distributed renewable energy reduce emissions and defer investments in expensive centralized generation assets, ultimately increasing energy efficiency and resiliency of cities.
» Water infrastructure quality and quantity issues are addressed with a smarter management system to reduce resource and energy waste, such as those brought on by leakages.
» There is an ongoing disruption of disparate transportation services in favor of a unified transportation-as-a-service model, blending ride-hailing and ride-sharing services, public transit and rapidly emerging self-driving vehicle technologies.
» Smart parking solutions can alleviate excess time spent searching for parking, reducing road congestion, unnecessary emissions output, in addition to making parking payments more user-friendly.
City-Centric Data Efforts:
» An increasing number of cities are recognizing the value of user collaboration and are putting programs in place to foster smart systems innovation.
» The value of data made available by city governments for collaboration with technology players and citizens drives higher impact solutions. Citizen-centric solutions are not “one size fits all”, and diverse specialist players are emerging to focus on specific use cases.