IHS: Number of Smart Cities to Quadruple Within 12 Years (7/30/14)
Wednesday, July 30, 2014 | Comments

The number of smart cities worldwide will quadruple within a 12-year period that started last year, proliferating as local governments work with the private sector to cope with a multitude of challenges confronting urban centers, according to a new report from IHS Technology.

There will be at least 88 smart cities all over the world by 2025, up from 21 in 2013, based on the IHS definition of a smart city. While the combined Europe, Middle East and Africa (EMEA) region represented the largest number of smart cities last year, Asia Pacific will take over the lead in 2025. In all, Asia Pacific will account for 32 smart cities in nine years’ time, Europe will have 31, and the Americas will have 25.

“Smart cities encompass a broad range of different aspects, but IHS has narrowed the definition of the term to describe cities that have deployed — or are currently piloting — the integration of information, communications and technology (ICT) solutions across three or more different functional areas of a city,” said Lisa Arrowsmith, associate director for connectivity, smart homes and smart cities at IHS. “These functional areas include mobile and transport, energy and sustainability, physical infrastructure, governance, and safety and security.”

City projects in the Americas are typically somewhat narrower in scope than those found in Europe, the report said. Unlike broad projects underway in cities like Vienna or Amsterdam, U.S. projects will often focus on a single functional area, such as mobility and transport.

Under the smart city definition of IHS, annual investment on smart city projects reached slightly over $1 billion in 2013, and will surpass $12 billion in 2025. Smart city projects are typically deployed via partnerships between the public and private sectors. The main business models include build-operate-transfer (BOT), build-operate-comply (BOC) and municipal-owned-deployment (MOD). The most common model is BOT, where city planners work closely with an external private partner that, in turn, develops the services and deploys the necessary infrastructure. The third party is also responsible for the operation and continued management of the infrastructure, until such time when it is transferred back to the city.

The findings are available in the report, “Smart Cities: Business Models, Technologies and Existing Projects,” from the Information Technology service of IHS Technology.

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