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Posted by Andy Price PM | on Thu, 21/02/2013 - 15:04  3939

Smart Cities are "biggest market for IT" says Ovum analyst

Ovum's chief analyst for the public sector Joe Dignan has said that smart cities are the "biggest market for IT in the world."

Talking at a roundtable discussion organised by business management software company SAP, Dignan talked about the importance of cities in the future economy.

"Cities are the economic engines," he said. "The 19th and 20th centuries were about nation states - but cities have been around much longer".

Dignan also described the current buoyancy surrounding the smart cities market, saying that it was certainly moving, estimating that depending on the definition of smart city, the value of the market is anything from £60 billion, through to trillions of pounds - noting the significance for the IT industry.

Retrofitting smart cities

Part of the reason for the strong market, was that it was global. And if anything, developing or new cities are the bread and butter because of the ability to retrofit the infrastructure.

The older cities of Europe may struggle because of architecture, age, and overall difficulty to install modern infrastructure within existing, highly built up cities.

However - smart city thinking can be applied to more than just cities. The market is expanding, explained Dignan. It could include oil rigs, which he said can often be small towns on stilts.

Other outside factors, including environmental issues will also drive the adoption of smart technology. "Natural disasters are getting more frequent," he said. 

"Government needs to get things back up again ASAP - they need a Cloud-based, government in a box."

This widening market would open up the technology to a number of other industries that would want to be part of the smart city movement, such as the banks, utility companies, IT companies, telecommunications companies and others.

The four horseman of the IT apocalypse

But why is the smart city market moving while so many aren't?

The benefits would be reason enough, but experience shows that investment, even if it will pay off, doesn't always happen - particularly in the public sector.

Dignan described the reasoning behind the market growth as being a 'perfect storm' - the arrival of the technology and current austerity measures means that governments don't have a choice but to adopt this type of technology.

The widening industry involvement will also help - the private sector is starting to see demand from citizens and government for smart technology.

It's also assisted by the "four horseman of the IT apocalypse", as Dignan explained - it's recent buzz-technology and buzz-phrases that have exploded the potential of the IT market. These are:

  • Cloud - the arrival of scaleable and cost-effective technology has increased the scope specifically for these types of technology.
  • The 'Internet of Things' - a widening internet has offered a much bigger opportunity for online innovation.
  • Bring your own X - BYOD, BYOT - and any other 'bring your own' scheme has led to a widening audience for smart city technology.
  • Economy - austerity, stagnant growth has increased the demand for this technology to cut costs and make more use of the value of data.

Dignan also states the importance of embedding this IT from the earliest stage possible, for both the project to be a success, and for the benefit of the IT industry.

How to increase demand for smart city tech

Who's that? The Minister for Cities, that's who.

However, smart cities are far from a new topic. The market is moving, and the majority agree with the benefits of these technologies - but what can be done to get it moving further?

"We need someone pushing it," said Dignan. "Do you know who the minister for cities is? It's Greg Clark. Ever heard of him? No one knows him."

"We need to put more power behind it - at risk of using a horribly overused word, a Tsar for cities."

When questioned on whether a Tsar was necessary - why not just mayor Boris Johnson, using London as an example, Dignan stressed the importance of freeing up financial power.

"The trouble is, he can't sign a cheque. It needs to be someone in government."


Should the UK government put someone in place that's responsible to pushing a smart city initiative?