There is a rapidly growing global market out there that you may not yet be thinking about. It is expected to be worth more than $2 trillion p.a. by 2030. It has an insatiable appetite for innovation of all types, but has no dominant incumbent players to block your access. It will require innovation of every type from new materials to new business models, and at every scale from individual components to whole systems.
And what is this exciting market opportunity? It is the cities of the future.
Cities are undergoing rapid change. In 2008 for the first time in human history, more than half the world’s population lived in urban areas. By 2050 nearly 70% of a much larger population will live in cities and towns. Over the next few decades urban growth will absorb all the global increase in population, and will continue to draw people into urban centres from the rural areas.
We are inexorably becoming an urban species, and cities must work effectively for their citizens.
Cities are machines that enable people to do things together that they cannot do separately. Historically they have provided safety and security, a concentration of resources both human and material, and the opportunity to specialise. Cities have been hotbeds of creativity and innovation from the beginning.
Cities remain the economic engines of the world. Compared to the average for their host country they have:
- higher GDP per capita
- higher levels of education
- greater productivity growth
- greater rates of innovation and patent filing
- more business start-ups
80% of global GDP is already generated in cities
To succeed cities must provide a strong economy, so that people have jobs and a place to trade. They must support well-being and provide a good quality of life; otherwise the very people that you need for the strong economy will move to more congenial places. And cities must do all this in a way that is flexible, resilient and adaptable to environmental, social and political shocks.
There is an interesting mirroring between a city’s need to balance well-being, resilience and the economy, and the demand for a sustainable future to balance people, planet and profit.
The very success of cities brings challenges. A previous UK Government Chief Scientific Advisor talked about the global threat of the ‘perfect storm’ of population growth, climate change and multiple resource crunches. These pressures have direct impacts on cities. Cities face difficulties from:
- air quality – it is estimated that there are 50,000 early deaths a year in the UK attributable to poor air quality, and all of the 20 largest cities in the world breach WHO air quality standards
- heat islands – In the heat wave of 2030 there were 50,000 additional deaths in cities across Europe due to heat stress
- congestion – leading to wasted resources, higher air pollution and increased energy consumption
- water – too much, too little, or in the wrong place at the wrong time
- crime and security – doubling the size of a city increases GDP per capita by 15%, but also increase crime rates by 15%
- bringing resources to the city and getting waste out
Thinking of a city as a system of systems
global market for integrated city systems worth more than $250 billion p.a. by 2030
How can cities deliver all the benefits whilst limiting the downsides of size and growth? It will require us to learn how to build, operate and maintain our cities and their critical systems in new ways.
The scale of the transformation of our urban environment is immense. $57 trillion will need to be invested in global infrastructure between 2013 and 2030. Innovation will be required everywhere, from individual components that make our buildings more energy efficient, to re-imagined transport systems that cut pollution and congestion whilst creating new niches for innovative businesses.
For rapidly growing cities facing the pressures of environmental change, population shift, and resource crunches of all kinds, it is vital that we both improve the individual city systems and integrate those systems to radically improve city performance.
New solutions to the challenges are being underpinned by the digital transformation of society. The internet of things, big data, sensor networks and ubiquitous computing are the key building blocks for the idea of ‘smart cities’.
This is big business. The global market for integrated city systems alone is expected to be worth more than $250 billion p.a. by 2030.
But the large-scale deployment of all our digital capability to create smart cities is necessary, but not sufficient. What matters is the new approaches and solutions it makes possible. How that capability is turned into innovations that support well-being, resilience and strong economies in cities.
The new capabilities will enable us to think about cities in a new way. To not only improve and optimise individual systems, such as energy or water supply, but to look at the way all these different systems interact. To be able to think about a city as a system of systems, and to explore how they can work cooperatively to meet the needs of citizens.
Cities require new solutions
The $250 billion market for integrated city systems unlocks a much bigger market for innovation within the different infrastructure systems
Cities will require new solutions based on the latest developments in materials, manufacturing, electronics, computing and biosciences, to improve hundreds of different city systems and the way they work together.
The future is being created in the world’s cities, and they are your future market.