The world is progressing towards the development of smart cities, and with each passing day, the role of digital technology is increasing. Innovations in science and technology are becoming increasingly in frequency, and as gradually this tech reaches a level of development at which it is commercially viable.
These innovative technologies have the power to transform our lives, not to mention the way we interact with our surroundings and affect our urban environment. Take, for example, Elon Musk, the eccentric inventor who founded Tesla. Initially, he was not taken seriously, but now ‘smart’ electric vehicles are commonly accepted as the future of transportation, and this will have profound effects on the urban area.
A smart city is a broad term, applying to a wide spectrum. But there is no better way to define a smart city than by using the definition of the Smart City Council. According to the Smart City Council, a smart city uses digital technology to enhance the livability, sustainability, and workability of the city. The city itself should be built keeping in mind the demands of the future.
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Smart City Trends
Recently, the Economist Intelligence Unit (EUI) surveyed a number of people in Southeast Asian cities. This survey shed light on the needs and trends that embody a smart city, helping to clarify what the masses envision for the future and the present day.
• Creating a smart city is turning into a necessity
Smart cities aren’t something of the distant future. And the next generation won’t be the one creating it. The wheel is turning, and smart cities have become a present day reality. With a growing population, the threat of climate change, technological advancements, and the expansion of urbanization, needs and attitudes are changing. More and more, people are looking to develop and live in smarter cities.
• Connectivity is the heart and soul of a city
What makes a city smart, according to the people? Connectivity. It’s the life blood of a city. Gone are the days where people are fine with limited connectivity. Now, they wish to be connected to the internet at all times. Initiatives like smart transportation, free Wi-Fi, and e-learning tools are sought after.
• The conservation of the environment is imperative
Smart cities have become a sought-after way of life because of the benefits associated with it. The largest being the positive effect it will have on the environment. As the world moves towards digital platforms, the carbon footprint of companies will decrease.
The Role of Startups in Smart Cities
How do startups fit into the picture? They’re seen as a way to achieve smarter cities, delivering solutions that are far advanced to the technologies that we know today.
Developing a smart city is no easy feat. The support and encouragement of startups is a start, as economies are partly dependent on local innovation. And this will create a ripple effect. For a city to be smart, there must be a given standard of living, in part, that means employment opportunities. And a future which is driven by technology and innovation will help provide jobs and increase GDP.
Creating a Startup, is it Enough?
What type of startup makes a city smarter, and do all types of startups suffice? A locally innovative startup has the potential to make a city smarter. Businesses will be more likely to invest in technologically innovative products.
Remember, the cities of today, with their current level of development, also resulted in urban pioneers deciding to introduce novel concepts and measures. Let’s take Paris as an example. The city didn’t just evolve haphazardly. Instead, people like Baron Haussmann, a French entrepreneur who renewed Paris in the 1800’s, modernized the city completely.
Before we think about achieving the true definition of a smart city, we too must lay the founding pillars. Let’s just say startups that encourage investment in technology are the founding pillars. The private sector has a huge role to play in encouraging such startups, and whilst not all startups may bring the same level of benefit to a city, the development of a startup unicorn within a city can have profound effects beyond mere the job creation and taxation benefits.
Role of Private Sector
It isn’t easy to begin a start-up. It requires a lot of financial backing, and startups have up to 90% chance of failing. This may be because of poor goal development or a lack of funds. Partnering with a private sector company makes sure that a startup is able to channel through the first few years.
You might wonder, why would a private sector company invest in a start-up? It’s obvious that the deal would be beneficial for the small business. But what do big companies have to gain from it? As mentioned in ‘The Complete Guide to Partnerships for Startups & Corporations’, big companies also profit from such deals.
There are various startup success stories that have taken a huge chunk out of the pockets of private companies. Whether it’s Uber or Airbnb, such startups are digitally advanced as well as in high demand.
These are the types of startups that pave way for smarter cities and disrupt industries. By missing out on the chance to own a chunk of these disruptive companies, private companies lose both profit and business. By partnering with them, they are able to retain their market share.
There are different ways that a private firm may choose to partner with a startup. This includes the following:
• Giving funds (venture capitalists).
• Offering corporate accelerator features to startups.
• Delivering platforms for their operations.
• Collaborating via startup competitions and thought leadership.
Types of Startups that matter
Partnership with the private sector? Check.
Providing jobs to the growing workforce? Check.
What else goes into ensuring that a startup contributes towards or benefits a smart city? The sector a startup works in matters greatly. As mentioned, those which invest in technology and innovation are where the future of our smart cities lie.
Here are just some of the niches highlighted by dataconomy that have the power to transform a city:
The city of tomorrow won’t be phased by slow-moving traffic. You won’t be stuck hailing for a cab, and following traffic information won’t be as big of a hassle as it is now. For this to happen, we need startups to focus on digitalizing the various aspects of transport. A company which helps in collecting traffic information in real-time and then telling commuters which route to take can make all the difference.
Such measures have already begun. In Manchester, which is already on its path of being converted into a smart city, you can now find ‘talkative bus stops’. It is a given that such technology needs both funding and human capital. While startups might have the latter, the public or private sector can help with the former.
Have you ever seen overflowing bins in your area? A smart idea and investment in technology can guarantee that such an incident never happens in the future. Digitalizing bins can allow the refuse collectors to know which bins are full. This can help them in ensuring the cleanliness of the city. Let’s face it, no city can be smart if it is not able to maintain sanitation.
The city of the near future should use energy efficiently. This makes sure that we have a bright future for the generations to come. Startups can work on delivering energy saving solutions. Glasgow has already started adopting this. Their smart city plan, with 24 million pounds in funding, involves connecting the energy grid of the city to smart technology to monitor the energy consumption of the city and make the required changes. For example, escalators and lights in different areas are only activated when people use them. Someone needs to deliver such solutions. A startup can do so.
Has the transformation begun?
It is true that startups do have the potential to transform any city into a smart one. But, have they been able to put the money where their mouth is? Are there any examples of startups that have delivered a solution in any of the key areas?
There are a few examples that are available. Startups are currently delivering solutions to governments in an effort to make them smarter and more efficient. Ideas like SmartProcure, MuniRent, and NextRequest are just a few examples.
While NextRequest helps in coordinating public records, Munirent allows for easy transferability of heavy-duty equipment with other public offices and agencies.
It is safe to say that startups are one of the ways to realize the dream of creating a smart city. It is high time private and public sectors come together with small businesses to make a difference.
The future potential for cities is immense, and there is in doubt that with time, our cities will function in a way that is far superior to the systems we know today.
Written by: Jurij Radzevic
Growth hacker with experience in digital marketing and SEO. Graduated from The University of Southern Denmark with a master’s degree in Marketing, Globalization, and Communication. Currently working as a Head of Digital Marketing at Valuer.ai in Copenhagen.