Tech: The head of urban development at Siemens tells us why investors are growing more interested in smart cities (SIE)

Smart cities are no longer a fantasy. Large enterprise technology vendors and network operators like AT&T and Cisco are lining up behind smart-city projects.

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Smart cities are no longer a futuristic fantasy. Large enterprise technology vendors and network operators like AT&T, IBM, Cisco are all lining up behind smart-city projects in one way or another.

Additionally, legacy industrial companies like GE, Siemens, and Schnieder Electric that have long helped cities build physical infrastructure are playing a central role in this developing market by connecting that infrastructure with sensors and software. Business Insider Intelligence recently spoke with Martin Powell, head of urban development at Siemens, about the company's plans and the broader smart-city landscape.

Powell explained that large-scale smart-city projects are no longer cost-prohibitive. In the wake of the 2008 financial crisis, depressed tax revenue meant cities typically couldn’t fund smart-city initiatives alone. At the time, bringing in private investors proved difficult, Powell said, but now investors' appetite for these sorts of long-term investments is growing, as the economy has improved and some smart-city applications have matured. This is further evidenced by the increase in public-private smart-city partnerships last year.

Additionally, smart-grid projects are now outpacing those focused on smart transportation use cases, according to Powell. Smart-grid solutions that allow cities to monitor power and water usage, and predict infrastructure maintenance requirements, have clear cost-savings benefits, and, as a result, are often among the first smart-city applications to be built.

If a portion of the grid goes down, for instance, and millions of residents lose power, it can lead to millions of dollars in lost economic activity and government resources. Transportation applications like automated train signals or vehicle-to-infrastructure (V2I) communication technologies are usually more costly, can require shutdowns in public transportation services, typically require cooperation from private building owners, and still don't have the visible cost-savings needed to persuade city officials they need to be built right away, Powell said.

Legacy industrial companies like Siemens are well positioned to leverage their large technology portfolios and diverse backgrounds to accelerate smart city adoption around the world. Siemens offers both hardware and software stacks for smart-city projects, including various sensor suites and its cloud-based MindSphere platform, which allows city officials and private companies to write applications specially designed for smart-city management. MindSphere also allows them to store and analyze data on water and energy usage and the movement of vehicles, pedestrians, and trains. Moreover, Siemens can leverage its sizeable financial services arm to offer the necessary debt financing to step in when private investors cannot, and make these projects a reality.

Smart cities are cities that leverage internet of things (IoT) devices like sensors, smart lights, and smart meters to gather data that can be analyzed to gain new insights regarding their infrastructure, population, and public services.

The smart cities segment has enormous potential as a market for IoT solutions, but it is also an inherently slow-moving market. However, many cities are starting to address these challenges, and smart-city development around the world is accelerating.

Jonathan Camhi, research analyst for BI Intelligence, Business Insider's premium research service, has compiled a detailed report on smart cities that:

• Details the different types of smart-cities technologies and applications that have become most prevalent in different markets around the world.
• Provides examples of some of the top smart-city projects in different regions that address transportation, energy, crime, and other issues.
• Explains how unique social, political, and economic factors are impacting smart-city development in different regions.
• Details factors that could help jump start smart-city development in the Americas, Africa, and other parts of the world that have lagged behind comparable markets.
• Explains the unique barriers to smart-city development in different parts of the world, such as data-privacy concerns in Europe and lack of support from the federal government in the US.

Smart cities are no longer a fantasy. Large enterprise technology vendors and network operators like AT&T and Cisco are lining up behind smart-city projects. Read Full Story