Boston, February 21, 2012 — Amsterdam, Stockholm, Colorado's SmartGridCity and Portugal's PlanIT Valley initiative are among the most replicable models for countries scrambling to accommodate an additional 2.7 billion people in the world's cities by 2050, according to a Lux Research report.
Policy and technology must go hand in hand in order to drive the development of efficient future cities as urban population grows to 6.3 billion, or 70 percent of the world's population, by the middle of the century. Today, 52 percent of the global population, or about 3.6 billion, live in cities.
"Technology companies need to understand the variety of models under which future cities develop so they can tap the widest channel to market in each case," said Ryan Castilloux, Lux Research Analyst and the lead author of the report. "Cities like Singapore, Stockholm, Masdar, Incheon Free Economic Zone, and PlanIT Valley are structured to ensure integration and interoperability of technologies and systems across the urban value chain." he added.
Lux Research established a framework of eight urban development models and found that technologies must cost-effectively maximize convenience, connectivity, energy efficiency and environmental sustainability while accommodating rapidly growing urban populations in the decades to come. Among their findings:
* Brownfield and Greenfield cities will need to go hand in hand. By 2032, over $40 trillion will be required to retrofit and expand dated urban infrastructure in Brownfield cities globally. However, with an additional 2.7 billion people expected to populate the world's cities by 2050, Greenfield efficient future cities like Masdar in Abu Dhabi and Songdo in Korea will need to be built, but at affordable costs.
* Technology is key to efficient future cities. The efficient future city market will favor well-known technology leaders such as IBM, Cisco, Microsoft, Hitachi, Siemens, and Philips that have already converged on the efficient future cities market and, in some instances, are collaborating on initiatives like Amsterdam and PlanIT Valley. The private companies will make sterling contributions and leverage their preexisting core competencies to maximize market share.
* Government incentives will drive early adoption. For innovative technologies priced above the end-user's willingness-to-pay, government incentives will be needed to spur early adoption. For example, technologies like onsite combined heat and power generators become competitive with top-of-the-line water boilers when government incentives are factored in. Other incentives in the form of tax breaks, subsidies, feed-in tariffs and attractive financing options will be critical for the success of efficient future city technologies.