July 14, 2020

The succulent reef of exploiting the Smart Cities




Since the beginning of this decade he has swarmed a concept that sounds like an alien to many. «Smart Cities», it is said in English. Smart Cities translated into Spanish. It began as a pilgrim idea to the dawn of new technologies but little by little it is taking shape. No developed country is oblivious to the revolution of its cities; It is such a transversal phenomenon that everything floods it … and companies have a new and succulent reef to connect to.

Its definition is complex and evolves over time, but there are aspects in which all experts agree. Smart cities are -will- those that use the new technologies to provide citizens with better and more personalized services, based on efficiency criteria and sustainability. All very ethereal and, at first glance, very theoretical. Change occurs when the concept lands to the real world. Put yourself in the shoes of the delivery man who has to download packages from a store. First, the merchandise goes up to the van, then it goes on its way … and when it reaches its destination, all the loading / unloading points it finds are occupied. Waste time in search of a site. Well, the «Smart Cities» they are able to anticipate that problem and solve it before it happens; With a city connected, collecting data every second, the driver can be notified of where and when he will have a hole.

«Seven years ago the concept began to work, which comes from the Digital Cities 15 years ago, ”explains Adolfo Borrero, president of the Ametic Smart Cities Commission. The truth is that the application of technologies to mobility, for example, dates back 30 years; The same applies to the supply of water – sprinklers in parks – or energy – lighting of street lamps. The differential factor came a few years ago: «What has changed is the use of the mobile, the smartphone, which puts the citizen in the loop for decision-making, which previously was not done».

It makes sense to focus on citizens if the UN projections are analyzed: in 2050, 68.4% of the world will live in cities worldwide (88% in the case of Spain). «We are increasingly concentrating our lives in the urban environment. And digitalization and globalization are accelerating this evolution. Simultaneously, only innovation and technology, which are the instruments to transform a city, will allow, among other factors, that our quality of life improve, as has happened historically, ”says Cándido Pérez, responsible partner of KPMG Transportation in Spain.

Thus, according to McKinsey & Company, the "Smart Cities" will bring benefits in multiple areas. Crime reduction of 30-40%; Employability increase between 1% and 3%; disease reduction between 8-15%; time savings between 15% and 20%; a decrease in water consumption between 20% and 30%; And so with everything. Beyond that, in monetary terms there is a niche to exploit: transforming relations with the administration of paper to digital would save about 8 euros per procedure, according to the European Commission. However, there is a risk that government, companies and consultants have very present. «These new technologies – artificial intelligence, big data … – will generate a greater digital divide between cities. There will be those who can adopt the disruptions and those who cannot. The technologies have the characteristic that their impact and the value they generate is much more potent than that of traditional processes ”, defends Manuel Márquez, partner of the Public Sector Consulting Area of ​​EY. Benefit for all, and companies lurking.

Now, it's not about moving forward. The latter expert raises a question: what do we want Smart Cities for and what model do we want? In Spain, he says, we were monitoring events without being clear about the objective; millions of data without real use. Now it has begun to analyze the "for what" giving intelligence to that data. "Sometimes you make the mistake of implementing technology and see later the use it can have," says Márquez. Despite this, experts agree that our country is a world reference in «Smart Cities». In fact, Spanish cities are in all rankings. Barcelona and Madrid at the head for its investment capacity and impact on the population, although there are experts – Borrero, from Ametic – who argue that others like Malaga or Santander -also regular lists- are above. This generates, again, two Spain … to the point that there may be a situation where large national cities have more in common with others such as Brussels or London than with Badajoz. “The competition will not be between countries and regions but between mega-cities,” acknowledges the EY partner. Thus, according to a study by KPMG, in 2030 there will already be 41 megacities (more than 10 million inhabitants), compared to just 18 fifteen years earlier.

This is where companies have an incalculable reef. Several studies show exorbitant market value figures of the Smart Cities, but all sources consulted refuse to give a specific figure. For giving a very short-term data: according to KPMG, the "cake" will be 1.33 billion euros in 2020 worldwide. Difficult to predict, but present in all the minds of companies that may be involved: mobility, infrastructure, telecommunications, energy …

Business model

“There are companies that already provide certain types of services and, also, new companies that provide services that do not yet exist. In the case of the former, they benefit from more efficient processes and with the provision of better services. In the case of the latter, depending on the project being implemented, new businesses can be created, ”says Joan Cavallé, head of Mobility at Accenture in Spain, Portugal and Israel. Here is the example of the "riders": if the trend goes further, it may be time for cities to collapse slightly of this type of distribution; the same if orders to Amazon or Alibaba are triggered further. To prevent carriers from being the "owners" of the road and generate traffic congestion, the data collected in the cities can be used for companies to schedule schedules that are less harmful for traffic and more efficient for the companies themselves.

A similar vision is maintained from Ametic, although they believe that it will be more of an evolution of existing businesses, than the creation of new ones. What is undeniable is that the data will be the "gold" of this century. The economy of the data, which is said. A figure to illustrate its importance: in the last two years, 90% of the data of the entire history of mankind. The reason is in mobile. And that will also take advantage of the companies.

Márquez, of EY, is clear that the "Smart Cities" will completely change the urban models. "It is easier to create a Smart City from scratch than to remake it," he says. That is, it is easier for example to implant fiber optic or 5G in a new city than to go from neighborhood to neighborhood doing it in a large metropolis like NY. «The business opportunity opens up in different areas: everything around urban planning will have to be redefined, including regulation. There will also be business in the consultancy because we are the ones who help define the for what, the use cases from which we will extract value. There are, in turn, integration projects, all event monitoring … And finally, entrepreneurship, ”he says. This last case means that many startups will be illuminated in the heat of the development of Smart Cities.

Regulatory need

Thus things, regulation and norms will be and are already an essential factor. Paloma García, Director of Programs and Interest Groups of the Spanish Association for Standardization (UNE), it is clear: «The use of norms that are born in the voluntary field contribute to the intelligent transformation process taking place in an orderly and coherent way. Know what the data will be used for and what advantages I will have. The rules are made to be more competitive and sell more. Here is the same. The rules represent opportunities for a multitude of economic sectors because they know how this deployment is going to take place. They know what needs are in the city. In short, certainty. In addition, they compete on equal terms, which is very important for example in all public tenders ».

For now, governments and companies have already begun to work on this. Worldwide … and especially in Spain. In our country there are already 83 Smart Cities, according to the RECI. There are specific plans to promote projects in cities and regions; in total, according to calculations of the sector, some 2,000 million public euros will have been disbursed in 2020. That only in public funds – with the help of the European Union – because much of the development will also have to come from the private sector. Only in mobility, according to Accenture calculations, in 2040 the market value of electric mobility in Spain will exceed 90,000 million euros. More internationally, according to EY data, by 2050 70% of the infrastructure that will be needed on the globe still does not even exist.

For now, the trend is already moving towards delimiting the "for what" we need the Smart cities. In Spain we have it clear: customize the services for the citizen and improve efficiency and sustainability. The concept, in short. Not forgetting that people are not only the only beneficiaries. Companies are facing their new great economic reef.

. (tagsToTranslate) smart (t) cities (t) spain

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