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Photo: iStock
Photo: iStock

Making smarter cities, connected cars in 2016

Here are some trends that herald the making of smart cities around the globe

Government leaders and policy makers the world over have begun acknowledging the importance of developing smart cities as a means to enhance the quality of life of citizens. This trend is expected to continue in 2016 with many more cities seeing the delivery of newer technologies and next-generation services.

At least 20 of the world’s largest countries are expected to introduce national smart city policies to prioritize funding and document technical and business guidelines by 2017, according to research firm International Data Corp. (IDC). Here are some trends that herald the making of smart cities around the globe, including India.

Big data, IoT as enablers

Experts believe that big data, analytics, mobility and Internet of Things (IoT) will become the pillars of smart cities. According to an analyst from research firm Frost and Sullivan, Anirudh Bhaskaran, “Big data, especially, will emerge as a more valuable delivery model owing to affordable upfront costs and lower resource usage." Local governments’ focus on technology, policy, economy and infrastructure will lend further momentum, leading to their evolution into smart cities in the coming years, he says.

Rajarshi Sengupta, senior director, Deloitte Touche Tohmatsu India Pvt. Ltd, said, “The smart city concept, clearly a confluence of IoT and big data, holds promises for more efficient management of city services, innovative energy, water and transport services, and a deeper engagement with citizens—all leading to a rejuvenation of cities with sustainable economic development and a better quality of life."

He states that smart cities are not just about smart systems and technologies; they are a combination of digital, business and civic innovation. “It is the new data platforms, business models and engagement models that are creating city-wide digital ecosystems," he said.

The accelerated penetration of smart city technologies, meanwhile, will ramp up demand for IoT devices to 1.6 billion units next year, up 39% from this year, according to research firm Gartner Inc., which predicts that smart homes as a part of smart city projects will consume 21% of total demand for IoT devices in 2016 and will record rapid growth in the next five years.

According to Bettina Tratz-Ryan, research vice-president, Gartner Research, commercial and industrial buildings will benefit significantly from the introduction of IoT technologies as they provide integrated management based on big data collected from sensors in the facilities. “Especially in large sites such as industrial zones, office parks, shopping malls, airports or seaports, IoT can help reduce the cost of energy, spatial management and building maintenance by up to 30%," she said.

Making homes smarter

Gartner expects smart homes will exceed smart commercial buildings in terms of IoT device demand by 2018. “Smart commercial buildings will be the highest user of (IoT) until 2017, after which smart homes will take the lead with just over 1 billion connected things in 2018," said Tratz-Ryan, who sees that despite such efforts, most of these projects are still pilots since “there is a lack of citywide strategy at the level of guidelines for implementations".

Gartner predicts that in 2016, 90% of cities worldwide will lack a comprehensive set of policies on the public and private use of drones, sensors and devices, which will result in increased privacy and security risks.

Towards connected cars

If General Motors has made a big bet on high-speed wireless connectivity throughout its vehicle fleet, luxury cars such as BMW, Mercedes and Audi are also becoming digitally enabled so that in the next few years, they become as mainstream as smartphones of today.

Technology companies such as Google Inc., Hewlett-Packard Inc., and Apple Inc. are aggressively experimenting with both software and hardware, in different ways like self-driving cars and Apple CarPlay. “With more and more cars having embedded sensors and communication capabilities, car makers can design new services built around the ability of the car to interact with other vehicles and the surrounding infrastructure," said Gaurav Bajaj, director, Audi Approved: plus, Kolkata.

The vast amounts of data that the connected car produces is only increasing and generating analytics-driven insights and new revenue streams. Research conducted by Accenture Plc. estimates that connectivity will rise to 98% by 2020 and five years after that, all new cars will be connected.

An article in The Economic Times on 13 August states the internet-enabled car represents a $30 billion market in India. That figure is expected to grow six times as large by 2020. Today, only a small fraction of cars are web-enabled but in less than a decade, that number will grow significantly.

A March report by McKinsey & Co., however, notes that at a time when customer data is becoming the new profit centre, consumer privacy will remain a focal point of interest for consumers themselves as well as most likely for regulators.

Meanwhile, countries like India still have a long way to go. For a country with choked city roads and slow speeds, hybrid vehicles are the ideal vehicles because they are more fuel-efficient. Recognizing the need for innovation in the hybrid vehicle space, the Indian government has launched a national plan with the goal of getting 6-7 million hybrid and electric vehicles on the road by 2020.

Two companies, KPIT Technologies Ltd and Bharat Forge Ltd have jointly developed hybrid kits that can convert an existing vehicle into a hybrid and have patented the technology across the world.

Seeking RoI from smart cities

According to Rakesh Kaul, partner, government and public services at consultancy firm PwC India, the smart cities concept is built on four pillars— physical (infrastructure), social (health, education and entertainment), institutional (municipalities and city managers) and economic (ease of doing business in India). “The initiatives should be commercially viable, socially inclusive and maintain ecological balance," he said.

Prashant Pradhan, director, smarter planet business, IBM India and South Asia explained that it will be important to measure the return on investment (RoI) in smart cities. “Where are smart cities heading? Are they going to solve the challenges that can inhibit business growth, such as unsafe neighbourhoods, traffic congestion and a lack of workers with certain skill sets? Will the city continue to invest in areas of success like cultural events, car or bike sharing initiatives, clean parks, and resiliency plans for severe weather events? These questions first need to be addressed," Pradhan said.

Initiatives like Make in India can entail significant job creation in the manufacturing, automation sectors in the coming year. The plan to create 100 smart cities is expected to fuel the job growth further, believe experts.

“Year 2016 will bring a large number of jobs in Tier-II cities with Digital India and Smart city initiatives and industries like manufacturing which has been struggling and competing with import pricing competitiveness will now have major boost and will be the largest job creator in India," said GlobalHunt India Pvt. Ltd managing director Sunil Goel. He said sectors like IT, ITES, e-commerce, BFSI, logistics and transport will become support systems for the manufacturing sector and create more jobs avenues.

This article is in association with CXOtoday.com, a property of Trivone.

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