Smart Cities

Insights , Technology
30/04/2019 Tempo di lettura: 6 minuti

The city of tomorrow thinks along with you

The city of the future is networked, tuned in to the environment, livable. Due to population growth and an exodus from the countryside, there is no getting around this vision of the future. Last but not least, smart cities are also very interesting from an economic point of view. The market for urban development is estimated at 400 billion euros worldwide.


The “best-of” metropolis of Songdo City in South Korea. ©️

Today, about half of the population of the industrialized world lives in cities. And every week about another million people join them there. If this trend continues – and there is nothing indicating that it will not – there will be more than six billion people living in cities by 2050. A millennia-old process is thus almost complete: urbanization, fueled by a massive rural exodus plus rapid economic development in major emerging economies, notably in India and China.

Cities are expected to host about seventy percent of the population, yet they only occupy about two percent of the Earth's surface, making for an enormous challenge when it comes to infrastructure, energy supply and providing for their inhabitants. But already today there are examples worldwide of how the Smart City project can succeed in the future.

"Cities are expected to host about seventy percent of the population, yet they only occupy about two percent of the Earth's surface."

Vontobel Impact - Smart City South korea Songdo City
The “best-of” metropolis of Songdo City in South Korea. ©️

Total networking: Songdo City, South Korea

In South Korea's Incheon Free Trade Zone, the future has already begun. Experts, architects and investors from all over the world have built a model city here: Songdo City, newly built on six square kilometers of land that was reclaimed from the Yellow Sea. Completion of the third and final phase of its construction is planned for 2020. The city itself is a kind of “best-of” metropolis. Its tallest building, the North East Asia Trade Tower, is strongly reminiscent of the Freedom Tower of the new World Trade Center in New York; its Convention Center recalls the Sydney Opera House; and its green lung is called "Central Park". Parks and gardens comprise forty percent of the city’s area.

Songdo has implemented what is an important prerequisite for true smart cities: full support for the Internet of Things – in other words, the networking of all devices with each other, facilitating the ongoing exchange of data between them. In Songdo, apartments, public facilities, industrial buildings – indeed every aspect of public life – are all integrated into a common network, meaning that the residents are permanently providing data for collection. For the 70,000 people who will eventually live here, it is a total network.

Virtually every aspect of public life can be dealt with by using a single keycard, which is a door key, public transport ticket and payment device, all in one. The city uses the data generated to optimize energy usage, educate the inhabitants, and also make them aware of how resources are being used. In the apartments, for example, monitors are installed which praise – or admonish – the persons living there, depending on whether they are reaching ambitious energy saving goals or not. Songdo's objective is to become thirty percent more efficient than any other city.

Green transport policy: Vienna, Austria

Many future smart cities, in contrast to Songdo, have a major disadvantage: they already exist in conventional form. Old cities must therefore find other pathways for becoming smart cities. This is particularly difficult in terms of traffic, because their road networks are mostly a carry-over of structures that date from the Middle Ages. In 2014, Vienna committed to a comprehensive smart city strategy, the central focus of which is the expansion of public transport. However, the city is experiencing strong growth, and simultaneously public transport enjoys a high degree of acceptance by the population. Together, these two factors mean that the transport network is threatened by overloading, so Vienna is combining public transport with the consistent promotion of electromobility and sharing concepts for cars and bicycles. Their ambitious goal is that by 2050, all motorized private transportation within Vienna’s city limits should operate without relying on conventional drivetrain technologies. They are already off to a decent start: by 2020, there will be more than 1,000 charging stations in the city, as planned.

Artificial Intelligence: Hangzhou, China

Nowhere is the population pressure as high as in China. The country is reacting with a smart city offensive. One striking example is the “City Brain” project in Hangzhou, a city of 10 million people. The Chinese online retail company Alibaba has massively invested in its infrastructure: cameras and sensors throughout the city monitor traffic conditions and deliver this data to an AI hub which then controls the traffic lights at about 130 intersections. The initiative has already paid off for commuters, ambulances and other public service vehicles: they can get through the city about fifty percent faster than they did before "City Brain" went into operation.

Omnipresent digitization: London, UK

Nowhere else in the world are there so many pedestrians on the go as at Oxford Circus in London. The city has responded to the crowds by redesigning this square based on intelligent traffic and pedestrian guidance. The amount invested comes to more than four million euros. The old Underground network has also been digitized. In the case of both of these projects, what helped the city was the penetration of smartphones among the population. In the past, the huge flow of tourists and people on their way to work could only be reconstructed with the help of ticket machines. Today, these masses of people supply data that London consistently uses to optimize pedestrian traffic. Above ground at Oxford Circus, for example, sidewalks and street crossings were optimized using digital models. And in the Underground itself, different pathways can be activated, for example, to prevent overcrowding of the train platforms. The city is very open about its use of the data, and even has a name for the program: Smarter London Together.

Environmental protection as an economic factor: Copenhagen, Denmark

The Danish capital is a pioneer in matters relating to environmental protection. It aims to be the first carbon-neutral capital by 2025, for example, and to be completely independent of fossil fuels by 2050. To accomplish this, the city has declared itself a "Living Lab" for sustainable, green technology – a clarion call that has been followed by many innovative companies and start-ups. On every street corner you can see examples of new green technology in action, from solar-powered traffic lights to novel hybrid bicycles that anyone can use via smartphone. Copenhagen also demonstrates the economic potential of smart cities. Cautious estimates suggest that the global market for urban development has a potential of 400 billion euros.

Energy efficiency par excellence: Masdar City, United Arab Emirates

This “test tube city” near Abu Dhabi in the United Arab Emirates is fully geared towards energy efficiency – and in the middle of the desert. There are no cars here; instead, visitors are transported around the city in cabins on rails. In hot countries, however, the biggest problem with energy consumption is the amount of air conditioning generated. When the buildings here were in the construction phase, therefore, everything was designed to achieve as much natural cooling as possible. On their windward side, for example, buildings are set further apart, and some are standing on stilts. There are hardly any windows on their south-facing sides. In the middle of the city is a tower that catches the wind, cools it by means of a steam system, and then makes use of the chimney effect to create a cool breeze blowing through the street. This package of measures is a success: the buildings in Masdar City consume only half as much energy as in the rest of the Emirates. So far only 500 people live here, but in a few years the population should reach 50,000. The findings gained here will travel around the world via technology export. The idea is simple: If it is possible to live sustainably and energy-efficiently in the middle of the desert, then it is possible anywhere.

Who are we? How do we live today? And how will digitization change our lives? How the future will unfold is preoccupying society more than ever, with engineers, doctors politicians – each one of us, in fact – seeking answers. This report from Dominik Schütte is one of many contributions that shed light on the theme “Digitized Society” from a new, inspiring perspective. We are publishing them here as part of our series “Impact”.

Our great sense of curiosity at Vontobel means we are attentively following scientific research in many key areas. This helps us recognize new investment opportunities early on. That’s why our thematic portfolios and thematic investments also reflect megatrends such as digitization, as we consider companies that are making valuable contributions to solving global challenges.

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