When the methods of digitization, i.e. the extensive collection and evaluating of data as well as the consistent networking of devices, are applied to an entire city or a district, a so-called smart city is created.

The information obtained is used to manage and optimise transport, infrastructure and other concerns. This benefits both local residents and local businesses – service is constantly being improved, better and more extensive and costs are being saved. The resulting resources can in turn be invested in improved technology or in urban facilities.

The concept of the Smart City is therefore seen by many experts as a solution to the many problems of modern urban planning and management.

Definition of a “Smart City”

The term is not precisely defined, so a definition can vary depending on the source. However, individual aspects are mentioned so often that they can be considered as given. These include in particular:

Data collection and use. Through numerous sensors as well as the information voluntarily transmitted by the residents, a smart city knows what is going on in it. This includes public, private and shared transportation, building and plant use, energy, water, internet use, public services and much more.

The networking of the individual services and the real-time transmission of the current data creates an interactive picture of the processes within the city/district. This information can then be processed in mathematical models and allows process optimization and better resource use.

Exchange between administration and residents. A smart city is characterized by digital participation opportunities and a two-pronged communication between the organizational units and service providers of the city and the residents and companies. In this context, an exchange of information between stakeholders can take place through appropriate applications and platforms, improving mutual understanding and resource use.

The networking of the actors among themselves simplifies decision-making and information policy for the public sector. New ideas and innovations that can better address the specific problems and tasks can also be found through the involvement of the residents. For local residents, on the other hand, it will be easier to draw attention to problems and untapped potentials and to come together, exchange or support each other for a variety of purposes.

A smart city thus clearly follows the two fundamental currents of digitalization, as we perceive them in other areas of our lives:

Digital networking of people and devices enables faster, simpler everyday processes as well as completely new applications. A focus on collecting data and deriveing the relevant insights leads at the same time to better decisions, new insights and technical developments.

Definition of digitization

Digitalization is, quite soberly speaking, simply the transfer of formerly analogue processes to digital ones. Even if we are currently increasingly encountering these and similar terms, this is a very old and simple process, because almost every form of digitization is rewarded with efficiency increases, cost reductions and new, previously unknown possibilities. No wonder we humans have always been very interested in her.

Due to the accelerating technical progress and the mutual support (new technologies enable new technologies …) digitalization has gained so much speed in recent years that it has now penetrated into all areas of our lives and is indispensable from there. This digital transformation is a technological, socio-cultural, economic and intellectual process that brings with it gigantic upheavals.

For companies in particular, digitalization has created unprecedented opportunities – but it also lurks with considerable dangers, especially if it is ignored.

Benefits

A smart city is not an absolute state, but a process within urban development. Even neighborhoods that were planned and built “smart” from the beginning do not achieve this overnight – only in the course of time all aspects come into play. It is therefore not surprising that the many advantages of a smart city also come to light at different times in its development.

One of the directly effective initiatives is the improvement of digital infrastructure. Since without them any further efforts would be in vain, a large investment in this area almost always comes to the starting signal function when plans for a smart city are announced. Residents and businesses usually benefit from this quite quickly – long before in-depth measures begin to take effect.

Access to public services via digital channels is also a change that is usually implemented at the beginning of the transformation process. The aim is to access all services for everyone. One can therefore also speak of an extension of the concept of the “digital city”, which appeared early in the digital transformation.

The improved use of resources, on the other hand, is a advantage that often takes effect later. The incoming data will help to better split services, assets, and workers across city areas and be available in the right places at the right time. A certain start-up time is necessary, especially if it is a smart transformation and not a city model that is planned from the ground up intelligently.

The long-term benefits are above all human, social and economic. Smart cities provide the natural prerequisites for high-tech companies, creative start-ups and entrepreneurs. The (private) association for entertainment, exchange, representation of important concerns, etc. is also promoted. Educational provision will also be improved in order to meet the new requirements.

The high level of investment that must be made by the government into a smart city, as well as the more efficient use of existing resources, significantly increases the standard of living and quality of local residents.

Smart Cities in Reality

The transition from a “normal” city to an “intelligent” is slow and time-consuming. It is often only a political decision on the margins and, much more so, a natural development based on cultural and economic circumstances.

Since there is no plaque, award or official selection committee, and even the definition offers plenty of blurring, the question of whether a city or district is “smart” or merely describes itself as such is only subjective. However, if you look at the usual mentions of smart cities, it quickly becomes apparent that the bank is a city or district that was already particularly high-income and cosmopolitan and formed the economic and innovative center of the respective environment.

These are then set as the target of a Smart City campaign with appropriate celebrations and receive additional funding. This is also associated with an acceleration of economic and technological development. Regular campaigns, in which new, innovative ideas and concepts are sought, are also standard in many smart cities.

Examples of such cities are Amsterdam, Copenhagen and Dublin. They all form extreme focal points of the respective country without a smart city context. In these cases, the current efforts can be seen as a natural evolution, cementing the important position and finding solutions to the problems of modern cities.

Another common scheme is the construction of a technology park or similar area of manageable size, in which modern technology and other necessary building blocks of a smart city are abundant. These areas are usually strongly separated from the rest of the city – both locally and in terms of content.

Hong Kong’s “Cyberport” buildings or Malta’s “SmartCity Malta” are examples of this approach: these state-of-the-art buildings were built in suitable locations and quickly attracted numerous companies and start-ups through their comprehensive range. Since these are new buildings, there was no socio-cultural basis in the form of local residents. This facilitates many aspects of construction and planning; the positive effects for the inhabitants of a smart city can not be applied (due to the lack of similar inhabitants) or only to a limited extent.

From a company’s point of view

Smart cities, whether in the form of a single district or across cities, can be a boon for companies looking for the brightest minds. Due to their beacon for technology, innovation, quality of life and prestige, they attract the best candidates for all highly qualified positions. Since these cities also (almost) always have the best universities in the area and also an otherwise excellent education system, a constant supply is guaranteed. Many high-tech companies are therefore relocating their locations to such smart cities or opening branches.

However, since the “War for Talents” associated with digitalization has long since made employees aware of their own value and are making corresponding demands, there can also be disadvantages for companies. In particular, companies that are not represented in the intellectual centers of smart cities have extreme difficulties in filling such positions. In addition to local branches, connections to the respective educational institutions are also necessary.

The participation and support of the local measures, competitions and projects of the Smart City also pose problems for companies: It is expected that local companies will have a positive contribution to the interests of the district. The days when corporate communications were limited to avoiding scandals and printing pretty business cards are finally over. If you want to compete for new employees, you have to actively participate in the Smart City.

Positive effects, such as cutting administrative red tape or access to excellent infrastructure, also make smart cities interesting for entrepreneurs. Many partners and business needs are also available in close proximity. This makes it easier to make new contacts; professional exchange and cooperation enable extensive growth.

Criticism

While there is little criticism of the concept of the Smart City itself, many aspects of the selection/appointment and its construction are controversial. In particular, local-limited campaigns, i.e. the construction of a smart district, have a reputation for exaimating social difficulties. As these districts attract high-tech companies and the highest-paid jobs, isolated, extremely gentrified enclaves can form, while precarious situations in other parts of the city can intensify. Isolated Smart City campaigns can therefore be disastrous for districts that are not part of the smart area.

Concepts that are too concise are also often criticised. It’s easy for a city council to call a smart city competition and ask residents about their ideas for improvement. Afterwards, a particularly simple proposal can be implemented and the city can describe itself as intelligent.

On the other hand, the investments for the actual digitization of the city, for collecting the necessary data and for making it available to service providers and companies are far higher. Appropriate use of administration and politics is needed to produce tangible success – a commitment that is repelled in many places.

Outside the smart cities

In the context of ubiquitous digitalisation, smart cities are not only becoming more numerous; our “less intelligent” small towns and villages will also adopt more and more elements of this concept. With the increasing maturity of new technologies, an entire arsenal will change the way we live, work and live together.

In the future, the tamper-proof identification via blockchain will allow us to vote online on all matters – from the mayor to the colour of the flowers in the city park. Our smart homes deliver real-time consumption meter data to the service provider to save water bonuses. At the same time, the need for public transport is digitally recorded and the routes and intervals of the buses are adapted.

Many services that are already available today (e.g. ride-sharing services) were devised and tested in smart cities before spreading to entire countries. The systems behind the smart cities, such as the extensive BI software for processing incoming data, are also available to other municipalities for a fraction of the price after they have been brought to market in smart cities.

So while the intelligent cities often lead to a “brain drain” in their surroundings, as they mainly attract young, well-educated people, they simultaneously deliver new technologies and concepts that can also be helpful for residents of the smallest village.

A smart city is therefore not only highly complex in terms of technology, politics and organisation. It is above all the human aspect that plays the most important role in planning and implementation.