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Innovation

Smart city tech to grow 5X, surpass $39 billion by 2016

The global market for technologies related to "smart city" projects will grow to more than $39 billion by 2016, according to new research. Is it fueled by hype, or something greater?
Written by Andrew Nusca, Contributor on

Cities: hype or not, there's a growing economy surrounding their development.

The global market for technologies related to "smart city" projects will grow fivefold in the next five years, from $8 billion in 2010 to more than $39 billion in 2016, according to new research.

Market intelligence firm ABI Research says that the next half-decade will see $116 billion in spending on these programs, on applications such as municipal wireless networks, e-government initiatives, intelligent public transportation systems, waste and recycling initiatives and environmental impact reduction efforts.

What is a "smart city" program, you ask? A few defining characteristics:

  • A networked infrastructure via information and communication technologies. (Key point: open standards.)
  • Community intelligence that improves urban and regional planning and development as well as management processes.
  • Social and environmental sustainability initiatives through citizen participation in city processes.

But it's a wonder whether the investment is coming because of the hype surrounding cities or the actual population shift to them -- and whether the former is reinforcing the latter.

In a survey of new cities-themed non-fiction titles, from Ed Glaeser's Triumph of the City to John Kasarda and Greg Lindsay's AerotropolisNick Lemann wrote in the New Yorker last week about exactly this topic.

His question: has the celebration of cities gone too far?

He writes:

The new urban optimism leaves a lot of questions unanswered. First, why are cities so economically successful?

[...]

A second unresolved question about cities: is there really a huge pent-up demand to move from the suburbs to the city, just waiting to be released by wiser government policies?

[...]

Can this great tide really be reversed just by raising gas taxes and easing urban building codes, or should we figure that sprawl is here to stay, and focus on managing it better?

In his lengthy essay, Lemann's central point is thus: it's unclear whether the city will be any more important than its surrounding region in the future. Yet investment is already underway, according to ABI.

Which begs the question: will this focused investment make cities more important, return them to balance with the suburbs or merely continue to a long-standing trend under a different name?

The firm's $4,500 report looks at 50 smart city projects around the world, from economic work in Nanjing, China to governance initiatives in Wilmington, N.C. But if you're feeling a bit frugal, you can read previous cities coverage on SmartPlanet instead.

This post was originally published on Smartplanet.com

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