President of Detect Genomix, Digital Strategist, Innovator and Business Ecosystem Builder
The global smart cities market is estimated to surpass $2.5 trillion by 2025, according to PwC. As reported by several organizations, cities must rebuild new digital urban ecosystems that are viable in the post-pandemic economy and the next industrial revolution. The design of these smart cities built for smart citizens of the digital era must focus on the quality of life, economic competitiveness and sustainability, as highlighted in a recent report by Deloitte. Looking beyond the impact of the pandemic-related global policy reforms and governmental stimulus packages, people must focus on robust business investments and urban infrastructures. These can only be achieved by designing and deploying novel business models that are dynamic as well as adaptable to a highly globalized economic environment.
There are numerous complex drivers of global economic growth, and some also act as catalysts for the digital economy. In recent reports by the United Nations and The World Bank about the global economic outlook, the current major drivers highlighted are debt and inflation levels, pandemic recovery, urban mobility, logistics, need for robust social safety networks, as well as focus on sustainability and resilience in managing ecological resources. As emphasized in a comprehensive publication by UNCTAD, the state of our global digital economy, it is essential for key stakeholders to focus on cross-border technological interoperability, enhanced digital intelligence and bridging the digital divide.
Smart cities are one of the solutions that can address the digital divide by creating a state-of-the-art technology infrastructure. By increasing smartphone adoption, optimizing access to the internet or higher internet speed, offering 5G or 6G broadband, enabling cloud markets and data centers, securing satellite-powered data communications or facilitating e-commerce via neobanking solutions, people can stimulate the digital economy and improve the overall quality of life for citizens.
Challenges And Opportunities
However, the digital era also poses new challenges that need to be overcome when designing and building smart cities. In addition to the legal, regulatory and socio-economic factors that exist in many regional markets, key stakeholders will also have to address cybersecurity, data stewardship and ownership, interoperability and cross-border portability, as well as prove their ESG-consciousness with reliable metrics. Business leaders will also have to adapt to this new, highly volatile, higher risk, hyper-connected and hyper-virtualized economic landscape by developing new business models that can meet the new demands of the digital era. Traditional business models will no longer suffice when aiming to design future-ready sustainable urban living for the next generations.
In addition to developing strategies that allow people to overcome barriers in the quest to build smart cities, they must direct their efforts toward the opportunities created by this global post-pandemic crisis. Even prior to the pandemic, they were witnessing an exponential increase in emerging technology adoption, science-driven innovation and digital transformation. These have now been accelerated and may facilitate a reconfiguration in the strategic planning and deployments for smart cities. Experts are noticing a higher emphasis on impact investing and the attainment of the United Nations Sustainable Development Agenda 2030, as well as a profound disruption in the global workforce due to high degrees of automation, digitization and hybrid intelligence-enablement.
New Business Models
Within the smart cities, global market solutions will account for 69% and services for 31%, according to the same PwC study, while professional services related to planning smart cities developments are likely to represent the majority within the services domain generating an estimated economic value of $277 billion. New business models are critical for long-term success and will leverage mobile applications, marketplaces, exchanges, open networks and multichannel platforms with an emphasis on the digital consumer experience.
There are several innovative business models that can be deployed to gain competitive advantage or avoid being disrupted in this digital era, and these include data-driven, digital economy-driven, partnership-driven, purpose-driven or sustainability-driven business models. Each one of these offers unique benefits, and I believe they should be considered when planning state-of-the-art smart cities deployments in order to attain long-term success.
Through global collaboration among all key stakeholders such as governments, not-for-profit agencies, policy-makers, compliance experts, academicians and business leaders, people can further their research into what business models will be most suitable and afford the highest agility to pivot when faced by unexpected new socio-economic crisis they might encounter as a society.
Perhaps abundance-driven or global ecosystem-driven mindsets for key global indicators could lead to viable solutions when drafting the global smart city business canvas. A carefully crafted balance among resources utilized, environmental impact, social benefits and risks and economic benefit will be essential for future generations of smart citizens to thrive in smart urban ecosystems. Engaging in alternative funding models, revenue sharing initiatives, leveraging multi-city deployments and public-private partnerships must be at the core of their efforts.
While crafting new business models is crucial, it is also their duty to educate, train and employ the smart digital citizens that will live, learn and work in the smart cities of the digital era. According to one report, it is expected that 70% of the human population will live in urban areas by 2050. Only by adopting a human-centric approach grounded in the principles of design thinking can you be successful in building the Digital Era Metropolis that embeds information and communication technologies into its DNA.