‘Smart city’ is not a concept with a simple and clear-cut definition. It is not, strictly speaking, a sector, but a horizontal activity that involves a variety of different sectors, bonded together by multiple ad hoc links. But we can point out its defining characteristics: smart city projects entail the massive data collection of an activity of the city (water supply, energy supply, mobility, etc.) and its deep and real-time treatment by means of information technology, to increase the efficiency of these activities. Smart city projects are also characterised by their big scale, affecting at least whole neighbourhoods, and the involvement of citizen communities in their use, design and management.
The global size of the smart city market
Common smart city projects refer to mobility issues (public transport, traffic management), eGovernment (online procedures, transparency, open data portals, citizen participation), energy efficiency (smart grid), water use (supply, irrigation) and many more. They are commissioned by the corresponding municipality and, depending on their complexity and the variety of the sectors that are involved, executed by a single company or a consortium.
According to consulting firm markets&markets the smart city global market will grow at an annual rate of 22.5%, going from a turnover of 411,000 million dollars in 2014 to more than 1.13 billion in 2019. Not in vain, it is estimated that 54% of the world population in 2014 lived in cities of over 500,000 inhabitants.
Programmes like 100 Smart Cities from India –launched in 2015 with 15.000 million euros– or Plan Vive Digital 14-18 from Colombia –where the citizens participate online in the definition of its goals– together with examples of cities such as Paris, Grenoble, Espoo or Groningen, are just some examples of cities that are demanding new services.
Smart cities in Spain
How is the Spanish market for smart city activities? It is a very interesting market, due to the following reasons:
- Dimension: Spain is a high-income country in which there are 144 cities with over 50,000 inhabitants.
- Future progress: most of these cities lack a comprehensive strategy for smart cities and only have a few projects, or none at all. There still is a lot to be done.
- Example: cities such as Santander, Malaga or Barcelona are innovative leaders worldwide, acting as great models for other cities.
- Attitude: government attitude is open and positive, with initiatives such as the National Plan for Smart Cities and the existence of the Spanish Network of Intelligent Cities.
- Current need: there is great awareness of the need for projects that increase the efficiency of public administrations and reduce their cost.
- Financing options: there is a variety of programmes and European funds for the innovation and financing of projects.
In contrast with this potential, the Spanish market has an important limitation in the short run: given the severity of the economic crisis, many municipalities are in a very delicate financing situation, taking care only of regular expenditure as they try to cut anything they consider dispensable, without considering new investments.
Opportunities
But the ultimate proof of the Spanish market potential is the fact that a lot of large global companies with activities in the smart city sector are already present in Spain and are participating in innovative projects. Among many others, we can mention Philips, Siemens, Schneider Electric, Nissan, Vodafone, IBM, Microsoft, Veolia, Deloitte, Huawei, Cisco, in cities ranging from the big capitals (Madrid, Barcelona, Valencia) to mid-sized cities with innovative projects (such as Bilbao, Logroño, Santander, La Coruña, etc.).
Foreign companies with a strong service based on cutting-edge technology will find a positive business climate in Spain. The interest of relevant authorities is strong: the National Network for Intelligent Cities (Red Española de Ciudades Inteligentes, RECI) is a joint institution formed by a lot of municipalities, with a cooperation model that is recognized as unique in the world, that collaborates in research activities, standardization, lawmaking and diffusion. The Spanish authority for technical standards (AENOR) is working in providing rules and certifications for the common activities related to smart cities. European funds finance a lot of experimental implementations of urban technology, and Spanish cities such as Barcelona, Santander or Valladolid are leaders in several programmes.
Smart City Expo, that takes place in Barcelona every November, in an excellent showcase of the sector in Spain, together with other events like Foro Tikal-Greencities (in Málaga, October).
In Gedeth Network, we want to encourage and help foreign companies to build a better life for Spanish citizens and profit of the many opportunities our market offers. Our research, our experience in trade fairs like the latest Smart City Expo (and the imminent Mobile World Congress 2016), the smart city events we have organized and our contact with the companies, all make us very confident about the potential of smart cities in Spain and for Spain. Our services for foreign investors are open to any company.
