The transition to “smart cities”

Europe is making good progress in getting urban areas into the digital age. A survey in 10 EU member states found that 88% of cities have started their digital transformation and that 69% were planning to invest in tech solutions in the next three years. Molly Killeen discusses latest developments in an article on the EURACTIV website.


Cities look to a greener, digitalised future but key obstacles remain

68% of the world’s population is projected to live in urban areas by 2050, according to the UN, a significant increase from the 56% who did in 2020, but the rates and success with which cities are incorporating digital technologies into their fabrics vary substantially.

Many EU city-level policymakers favour transitioning to “smart cities” as their jurisdictions move forward, increasing the digitalised nature of urban life while welcoming benefits such as increased sustainability, better mobility and expanded data sharing.

Smart cities are also projected to achieve broader policy goals, including the EU’s twin transition objectives, the European Green Deal and the Commission’s aim of ensuring 100 climate-neutral smart cities by the decade’s end.

However, significant challenges remain in the deployment of smart cities, including existing issues already embedded in urban areas, which could impede or be exacerbated by the greater use of tech, and external obstacles to the roll-out of digital solutions, such as regulatory or funding constraints.

75% of EU citizens currently live in cities, according to data from the World Bank, and the contributions of these urban areas to overall greenhouse gas emissions are high, meaning that improving their sustainability and energy efficiency will be crucial to ensuring that national and EU climate targets are met.

A report looking at accelerating smart city adoption across 10 European countries, released by Vodafone earlier this month, found that 88% of cities have started their digital transformation and that 69% were planning to invest in tech solutions in the next three years. However, the report also identified various challenges facing cities seeking to digitise.

On the social front, while tech solutions could offer benefits such as increased mobility, well-being and smoother services, ageing populations, urban segregation and accessibility issues were all identified as potential negatives.

When it comes to the economic impact of smart cities, increased employment opportunities, greater competitiveness for businesses and enhanced returns on investments in tech solutions were found by Vodafone to be key benefits, but a lack of affordable housing and a potential increase in vectors for cyberattacks were among the biggest complications noted.

Finally, in terms of the environmental repercussions of urban digitalisation, more sustainable networks, reductions in pollution and emissions and more efficient use of services were found to be the main advantages of such a transition.

However, high rates of consumption in urban areas, along with the need for more effective waste management systems were outlined as the main issues.

While these problems could arise as a product of implementing smart cities, there are also several obstacles in place with the potential to obstruct their roll-out in the first place.

As part of its research, Vodafone found that lack of funding was the most frequently cited barrier to deploying innovative solutions. This issue grows more acute the smaller the city.

Legislative, regulatory or policy issues were identified as the next most significant problem, with a quarter of cities citing this as a critical problem.

In contrast with financial issues, however, this was regarded as worse in larger cities, which also felt a lack of adequate infrastructure more substantially than places with smaller populations.

At an event held to mark Energy Efficiency Day on Thursday (13 October), stakeholders emphasised the importance of funding and systems integration in ensuring the success of digitalised cities.

“Financing energy efficiency is one of the big challenges to delivering this agenda,” noted Luigi Petito, Head of the Secretariat at the European Alliance to Save Energy.

Part of the issue, it was noted, is the fact that digitalisation and sustainability-oriented refurbishments of cities often happen district by district and to varying degrees.

Ralf Goldmann, head of division at the European Investment Bank, noted that this was reflected in its financing, which occurs mainly via separate structures rather than holistically.

Something that would need to be reflected upon, he added, is “how we can bring the agenda forward on both the technical side and political communication side, and then how we can bring the finance to the right people, which could also be a reflection on what type of business models to develop”.

Highlighted repeatedly during the discussion was the need for collaboration across sectors for digitised solutions to work. “

You need to collaborate”, concluded Oliver Kraft, executive vice president of Siemens. “It’s not about technology, it’s about how we apply, how we use and how we identify the technology.”

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