4.1 Smart innovation and enterprise
Smart city opportunities
Cities present great opportunities for both suppliers and users of smart technologies and data. And yet the global market for smart city technology is difficult to define as its component parts are not entirely clear.
In general, smart city products and services use digital technologies to tackle sustainability issues. Some smart city solutions combine physical infrastructure with digital infrastructure, and others just use digital infrastructure. A report for UK Department of Business, Innovation and Skills estimated the global smart city market at $408 billion by 2020 (UK Department of Business, Innovation and Skills, 2013). This included solutions such as smart energy, smart water, smart transport, smart waste and assisted-living technologies. MarketsandMarkets, publisher of widely respected annual market research reports, has estimated the market at over $1 trillion by 2019 (MarketsandMarkets, 2015).
Where’s the downside? Well, there are technological, institutional, financial and legal considerations that constitute barriers to smart city market growth. Examples in practice include the availability of public financing, under-developed business models, concerns about security and privacy, and organisations not willing to invest in solutions that have been piloted at only a small scale.
Despite its relative newness, the smart city market involves many public- and private-sector organisations. It’s helpful to characterise a city as an ecosystem of these organisations working together. A smart ecosystem map is a tool for exploring what’s happening in a city, in order to identify gaps and opportunities. Your work this week on a smart city ecosystem map will help you with the next few stages of the design thinking process, where you ideate, prototype and test potential solutions to your smart city problem.