REUTERS/Rebecca Cook

Global spending on advanced systems for cities is expected to skyrocket in the next five years

Two years ago, a consortium of five Boston-area universities and two tech giants (Cisco and EMC Corp.) decided to invest $168 million in a high-performance computing center in downtown Holyoke, a town of 40,000 situated in a region of western Massachusetts with an abundance of cheap hydroelectric power. The facility is meant to help researchers conduct data-intensive experiments and computations.

It didn’t take long for local civic leaders and the municipality to begin figuring out how to leverage the huge amount of computing power they would soon find in their midst. Eighteen months ago, the City of Holyoke convened an intensive stakeholder consultation to push local colleges, hospitals, emergency providers and not-for-profits to come up with ideas on how they could build and use a high-speed smart city network.

“We’re trying to connect all kinds of services,” says Kathleen Anderson, Holyoke’s director of planning and development. So far, the local college has knitted its two campuses together with a high-definition digital video link designed to enable distance learning. The city’s public housing authority will use a similar technology to stream adult education and tutoring classes into apartment meeting rooms.

Meanwhile, the police and fire departments, hospitals and local schools are installing a specialized digital communications network to allow all these organizations to access a common radio frequency from cell phones and landlines to improve emergency response. The Cisco-designed system is due to launch next month, Anderson says, and will cost the city about $110,000.

Holyoke’s efforts put it on the vanguard of a growing number of communities moving to deploy this sort of smart city technology. Not surprisingly, the global market for this kind of equipment is projected to grow sharply in coming years. A new study by U.K. tech consulting firm ABI Research estimates that global smart city technology purchases will rise to almost $40 billion within five years, up from $8.1 billion in 2010.  

While the definition of smart city remains somewhat amorphous, ABI analyst Joshua Flood, who wrote the study, says many local authorities are looking at investments in municipal wireless networks, e-government initiatives meant to improve access to city departments, and intelligent traffic management systems.

Smart city projects, he says, aim to use network infrastructure to improve economic, social and cultural development, and tap into what he calls “collective community intelligence” to promote effective urban and regional planning and management. But Flood warns that such technologies often come with steep up-front equipment costs.

So far, about 60 percent of the market consists of smart grid power systems and public safety radio revenues. Asia Pacific, according to ABI, is the region that will see the most projected growth, followed by North America and Europe. Within five years, Flood says, the main segment driving growth will be smart transportation technologies that also help generate revenue.

Most of the investments in smart city systems to date rely on sophisticated information technologies, such as radio-frequency identification. A few examples: 

  • Electronic tolls: Toll booths or gantries equipped with digital cameras and other sensors that can detect and record vehicle identification.
  • Electric vehicle charge points: Already deployed in cities like San Francisco, these public chargers allow EV owners to refuel and can also accept credit or debit card payments.
  • Intelligent Transportation Systems (ITS): This class of technologies improve transportation safety and efficiency with advanced communication networks. For example, this year New York pioneered a homemade transportation management system on the Upper East Side that adjusts traffic light intervals based on real-time assessments of traffic flow, drawing data from transponders and cameras.
  • Smart grid/smart meters: This equipment makes the local power grid interactive, allowing rooftop solar energy to flow back into the system. Smart meters linked to rooftop panels can also measure the volume of outbound power, and allow power authorities to manage demand by adjusting corresponding supply rates.

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