Smart Cities could save over $5 trillion annually by 2022
The implementation of smart city technologies could save enterprises, governments and citizens a total of over $5 trillion globally per year, by 2022, according to a new white paper by ABI research, which has analyzed the scope for cost savings and efficiency as a driver for smart city deployments, smart technologies and the Internet of Things.
As the ongoing tendency for urbanization results in a higher spatial concentration of people and enterprises, smart city and Internet of Things technologies such as automation, artificial intelligence and the use of sensors, data-sharing and analytics, along with new sharing and service economy paradigms, will be key for cities to optimize the use of existing assets, maximize efficiencies, obtain economies of scale, create a more sustainable environment, and, in addition, save costs.
The white paper considers the aggregated absolute cost-saving potential for government, enterprises and citizens in a typical smart mega city of the near future with 10 million inhabitants. The total is based on the yearly savings achievable for 75 of the world’s cities that have a total urban population of more than 5 million.
According to its calculations, city governments could end up saving as much as $4.95 billion annually, with technologies such as street lighting and smart buildings able to yield significant savings. Smart street lights are estimated to cut repair and maintenance costs by 30 percent. Enterprises could save an estimated $14 billion annually by making use of new technologies. For example, the use of more energy efficient options for freight transportation, such as drones, robots or driverless trucks, and the use of smart manufacturing plants for products, can result in significant savings. Finally, citizens could save up to an estimated $26.69 billion per year in areas such as utilities, through the deployment of innovative solutions such as smart meters and micro-grids, or education, with the development of online education systems that supplement physical ones.
Of course, the paper points out that in order for the implementation of smart technologies and the Internet of Things to lead to the future success of smart cities and the aforementioned savings, it is essential that players collaborate and embrace a holistic approach.