For the first time in history, more people live in Cities around the world than in rural areas. According to estimates, we crossed that threshold in 2007. And if the projections are correct, we will double that population in the next 50 years! Why are so many people moving into cities? For jobs For education For healthcare For the culture (music, arts, etc) For all of the various opportunities that they expect to find in cities. But this rapid growth is coinciding with significant changes in our economy that cause cities to think differently The majority of new jobs are not in industries such as agriculture or manufacturing. Instead, the largest job growth is occurring with “knowledge workers.” Knowledge workers are a unique group. First, they tend to be very flexible on location, and can often move easily to a new city. Second, because they can bring income from around the world into the city, their presence can increase the overall GDP of the city, which means more opportunities for all of the residents. With this much flexibility, cities around the world are competing for knowledge workers in the same way that they competed for tourists previously. Both can bring new revenue and increase the quality of life and prosperity for all involved. Helping cities compete for smart growth is very important.
Another important challenge for cities is the inefficiency of most city infrastructures. Water is a very important resource for cities. However, municipalities can lose 20% of their water through leaks in the infrastructure. In some cities we have seen this amount reach nearly 50%! Transportation causes significant problems. Each year American drivers waste an estimated 3.7 billion hours, the equivalent of five days, sitting in traffic burning 2.3 billion gallons of fuel. And in Europe, traffic congestion costs the European Union over 1 percent of GDP, or over 100 billion Euros per year. In China we saw a 60 mile long traffic jam that lasted 10 days. Finally energy is a critical part of city infrastructure supporting the entire population. Today cities consume an estimated 75 percent of the world's energy, emit more than 80 percent of greenhouse gases. With population growth, we can expect this consumption to increase straining our grid infrastructure and potentially causing more blackouts. We need better ways to generate and use energy. These issues are not only important because they show waste and inefficiency. But they also require significant amounts of city time and resources to manage… time and resources that could be spent improving the quality of life and helping the city compete more effectively.
In order to learn more about the problems that city leaders are facing around the world, IBM has organized a number of major conferences around the world. These were not technology conferences, but rather discussions with mayors, city leaders, and thought leaders about the competing pressures in our cities and how we can think differently. We began in Berlin, Germany in 2009. At the time, we didn’t know how many people would be interested in this topic. But we saw over 250 enthusiastic city leaders come to our very first conference. And that interest and momentum has continued to grow at each of our major global events with over 800 leaders from across Asia coming to our Shanghai event earlier this year. In addition to these large global conferences, we have also held over 100 local discussions, engaging local leaders around the world. From all of these discussions we have developed two key, important conclusions.
The first conclusion is: Even though there are so many problems across cities, the primary objective of our city leaders is to increase the prosperity for everyone in their cities. They want to establish great centers of business and culture. With strong education and health services. That are both growing dynamically, and are increasingly sustainable. Yes, the city leaders know they have to repair the leaking water infrastructure. But it’s extremely important that all of us focus on how we help these cities to become more competitive and sustainable. These are significant challenges. And they will take creativity and innovation to accomplish.
The second conclusion that we gathered from our Smarter Cities conferences is that technology can help with this challenge of increasing prosperity. We can address this goal in two ways. First, we can use technology to gather and make use of all of the information that’s surrounding us today. When city leaders use the right information, they can make better decisions and have more insight into the impacts of their decisions. But truthfully, the majority of our cities have more information than they no how to use. Without the right technology to support their decision making, they are often making important choices without all of the available insight. Second, we can use technology to integrate and coordinate the different parts of the city to deliver better outcomes. A City is a very complicated system. In fact, some would call it a system of systems, relying on the interactions of different departments and individuals both within and outside of the city structure. Often, these groups need to work together. For example, a problem with flooding or sewer overflow may cause a power outage in part of the city. This power outage could, in turn, shut down traffic lights causing transportation problems, which require assistance from the police and public safety officials to maintain productivity. That’s at least 4 different departments working together. There are many more examples, all of which show the importance of collaborating to reduce the impact of challenges. When departments are not integrated, the city needs to spend more money and time than is necessary. The result? Fewer resources available to thelp the city improve prosperity and quality of life.
In Smarter Cities across the world today, city leaders understand all of these trends. The understand that they have opportunities to leverage technology to help increase the prosperity of their residents. They are: Using information to make more insightful and better decisions Predicting problems to resolve their causes proactively Coordinating all of the city resources to operate more effectively All of these things are possible today, because we live on a Smarter Planet. Let’s talk about how our planet is changing and how cities can take advantage of these changes.
Sources noted in Appendix 8 Sam Palmisano speech, November 12, 2008 9 2006 FERC Survey and 2008 FERC Survey