Urbanization – Smart Cities

The world population is moving from rural to urban locations and the urban populations will grow by an estimated 2.7 billion over the next 40 years. Cities are facing unprecedented challenges as the pace of the urbanization movement is increasing exponentially.

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150.000 new town residents per day

Every day, urban areas grow by almost 150 000 people, either due to migration or births. Between 2011 and 2050, the world’s urban population is projected to rise by 72 % (i.e. from 3.6 billion to 6.3 billion) and the population share in urban areas will grow from 52 % in 2011 to 67 % in 2050. In addition to the increase of city population, due to climate change and other environmental pressures, cities are increasingly required to become “smart” and take substantial measures to meet stringent targets imposed by commitments and legal obligations.

Cities consume 75% of world´s energy

The cities in 2050 are estimated to consume 75 percent of the world’s energy and produce 80 percent of its greenhouse gas emissions. At the same time, the population is ageing and by 2050 the number of people over the age of 60 is expected to triple and will outnumber children under 15 for the first time in history.

Estimated value of global Smart City business

The global Smart City market will be valued at 1.565 billion USD in 2020. Over 26 Global Cities are expected to be Smart Cities in 2025, with more than 50% of these smart cities from Europe and North America. This will urge the change of urban governance as well as governments of Smart Cities are transforming from a traditional model of a silo-based organization to a more collaborative, integrated service delivery model. Cities will collaborate with each other to drive smart city innovation by entering partnerships with each other.

The driving factors for the growth of smart cities market are technological advancements in the field of IoT, cloud, sensors & mobility; growing demographics & hyper-urbanization; government initiatives; growing energy consumption & requirement for optimization of energy usage during peak hours; increasing share of renewable energy and limitations in capacity expansion; recycling industry  and decrease in operational cost for smart building infrastructures.

The exhaustive list above should not leave any company idling in this Smart City segment as there is business for almost every company striving for sustainable business and applications.

Latin America

Latin America has become the most urbanized region in the world.   In 1950, 40 percent of the region’s population was urban, but by 1990 it was up to 70 percent. Today, about 80 percent of the region’s population lives in cities, making Latin America the world’s most urbanized region. (In comparison, the European Union is 74 percent urbanized). The trend indicates that by 2050, the Latin America’s cities will include 90 percent of the region’s population. Brazil and the southern cone may reach this level already by 2020.

Today, 260 million people live in Latin America’s 198 large cities and generate 60 percent of Latin America’s GDP. Brazil and Mexico, the region’s urban leaders, are home to 81 of the region’s large cities. These two countries are projected to contribute 35 percent of Latin America’s overall growth by 2025.

Towards smart cities

Advion Group Ltd. works in the major Smart City business segments in all developing markets. We assist companies to recognize the value chain in the market, develop the production and marketing strategies, establish business plans and make the market entry process effective and successful. There are no low hanging fruits in the markets but the market does require smart solutions and companies providing value added to the lives of people will always have a place in the market place.

Ari Virtanen, MD, Advion Group Ltd.

Ari Virtanen

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