Smart Cities

Why cities need to become much more efficient – in short: smarter.

Living in the City

Will people’s lives in tomorrow’s cities be healthier, more liveable, and more relaxed than today’s? To accomplish this, cities will need to become much more efficient – in short: smarter.

We live in an age of urbanization. For the past ten years, more than half of the world’s population has lived in cities. Moreover, there’s no end in sight for this migration of people to urban areas. On the contrary, the latest UN forecast predicts that 70 percent of the world’s population will be living in cities by 2050. At that point, the world’s total urban population will be almost equal to the earth’s entire population today. Within a mere century, the number of people living in big cities will have grown from one billion to almost six billion. This trend will also lead to the rise of more and more megacities — cities that have over ten million inhabitants. Whereas there were 28 megacities in 2014, there are expected to be 41 by 2030, and demands on infrastructures will grow accordingly. 


Many cities are already suffering from housing shortages, overstretched infrastructures, and uncertain water and energy supplies. Added to this is the increasing risk of natural disasters resulting from climate change. Emissions from big cities, in particular from the transportation sector, are contributing considerably to this development. 

Clean Air for All

The aim in many cities is therefore to set the stage for clean air instead of smog, and smart public transportation facilities to reduce congestion. As more and more cities move toward these goals, they will rely increasingly on digital resources that will, for example, monitor emissions figures and traffic density and coordinate local public transportation and traffic light switching times with monitoring results. Ultimately, they will also use digital technologies to inform individuals about the best ways to reach their destinations, regardless of whether they are driving their own vehicles, sharing cars, using a public transport system, or combining transport modes. 


The first step toward making a city smart is to increase knowledge regarding the operations of its infrastructures, ranging from water and energy management to traffic, air quality and lighting. In every big city, innumerable sensors and meters collect data from these and other sources. The challenge that cities face is thus to turn this avalanche of data into actionable information. Such information will, for example, enable smart grids to predict – and thus offset – fluctuations in the electricity supply that are caused by changing weather conditions.


Cities are Becoming Smart

Interview with Carlo Ratti

Data: Presenting Cities with a Wider Range of Choices

Tomorrow’s cities will not look dramatically different from today’s, says architect and MIT researcher Carlo Ratti. Nevertheless, urban life will be transformed, he explains, by digital technologies and the pervasive influence of smart data.

You have said that every city can be transformed into a smart city. Is this process already taking place?

Ratti: I would say that it’s not about systemic solutions – it is more like an incremental process that is already being applied in many dimensions. Let me explain this with an analogy. What is happening on an urban scale today is similar to what happened two decades ago in Formula One racing. Up to that point, success on the circuit was primarily credited to a car’s mechanics and the driver’s capabilities. But then telemetry technology blossomed. Cars were transformed into computers that were monitored in real time by thousands of sensors, thus becoming “intelligent” and better able to respond to the conditions of the race. In a similar way, over the past decade digital technologies have begun to blanket our cities, forming the backbone of a large, intelligent infrastructure. 

What kinds of new business opportunities do you foresee from this process?

Ratti: There are many possibilities.  Here is one we are directly involved with. HubCab is an interactive visualization that invites you to explore the ways in which over 170 million taxi trips connect the City of New York in a given year. Studying this data, we demonstrate the vast potential of taxi shareability. And what the data indicates is that the total number of taxi trips in New York City could be reduced by 40 percent, and that fleet operation costs and pollution could be reduced by 30 percent, while overall service and timeliness would remain about the same. Collecting data is actually the basis of city planning. Over a century ago, Élisée Reclus claimed that all planning had to start from surveying and the collection of data. The only difference today is that we have access to a staggering amount of robust, real-time data!

"Progress has always been profoundly marked by the gradual externalization of our functions. This fact, per se, has a liberating effect; technology presents us with a wider range of choices."
Carlo Ratti, Architect

In your opinion, will all of this data tend to improve the quality of urban life?

Ratti: French anthropologist Leroi-Gourhan in his book “Le geste et la parole” underlines how it is possible to draw a curve of human civilization simply by looking at the way tools are used across history. From the Neolithic period to the twentieth century, progress has always been profoundly marked by the gradual externalization of our functions. This fact, per se, has a liberating effect; technology presents us with a wider range of choices.


Carlo Ratti (46) is an architect and engineer by training. He works in Italy and teaches at the Massachusetts Institute of Technology, where he directs the Senseable City Lab. Ratti graduated from the Politecnico di Torino and the École Nationale des Ponts et Chaussées in Paris, later earning his MPhil and PhD at the University of Cambridge, UK. He is a member of the World Economic Forum’s ‘Global Agenda Council for Urban Management.’

Networked City

Smart Data for Smart Cities

The future of smart cities will be shaped by the Internet of Things as a networking technology and by smart data as a resource for forecasting.

MindSphere – a Gigantic Toolbox

For example, it will be possible to coordinate power generation and power demand more precisely than ever before. Such developments will make increasing decentralization manageable, merge the markets for heating and electricity, and integrate industrial facilities, buildings, and vehicles as energy suppliers – and allow citizens to evolve from consumers to active prosumers.


One step in this direction is offered by MindSphere, an open, cloud-based IoT operating system from Siemens that offers both connectivity and a range of industrial applications so that any enterprise, regardless of industry or size, can begin analyzing data to optimize its operations. As a first example, Siemens is working with Singapore to turn the city state into a smart nation. Singapore is the first country worldwide to implement MindSphere on a pilot basis to harvest information from its infrastructures. Siemens supports this process through the creation of a digital information hub, which entered service on July 11, 2017.

New Data-Driven Markets

Global Market for Smart City Solutions

Such developments open up completely new markets for technologies and services. A McKinsey report from 2016 estimates that a total of $49 trillion will have to be invested in infrastructure projects worldwide between 2016 and 2030 in order to reinforce expected economic growth rates. 

This averages out to $3.3 trillion per year, or about 3.8% of worldwide GDP (based on an average GDP increase of 3.3% per year). Approximately 60 percent of these investments would have to be made in emerging markets. This trend is causing the global market for smart city solutions to grow. According to Navigant Research, this market will grow by 10 percent annually, from $40 billion in 2017 to $98 billion in 2026. 

Cities and their residents can be linked together in networks that have the potential for optimizing not only energy use, but transportation, logistics, medical information, entertainment, and much more. Ultimately, however, all of these services are based on data — and that raises concerns about a "big brother" state. Will tomorrow’s cities be the world of George Orwell's 1984? Not at all, says Gerhard Engelbrecht, expert in intelligent information and communications technology (ICT) at Siemens Corporate Technology.  He heads the Smart ICT topic in Austria’s Aspern urban lakeside development project (see picture) on the outskirts of Vienna, where more than 100 households are taking part in a research project, making their data on power consumption, air quality and room temperature available. “We are aware of the sensitivity of this topic and have designed the system accordingly, so only anonymized and aggregated information can be used for research," says Engelbrecht.

Siemens‘ Solutions for smart Infrastructures

Picture Credits: from top: 1. picture getty images, 2. shutterstock, 3. getty images, 4. D.Ratti, 5. picture alliance