The Internet of Things (IoT) and smart city technology are rapidly growing trends and transforming the way we live. These distinct but overlapping devices and technologies provide convenience for personal, business, and societal functions, but we are increasingly learning to take for granted the ability to perform almost any task by pressing buttons on a mobile device. Let’s look at IoT and smart cities, including what they are, how they differ, and how they are becoming a central part of the world.
Defining Key Terms
IoT is broad and describes devices and appliances that can be controlled via the internet. “Things” in this context may include a variety of devices and systems used in real time by individuals and businesses. It impacts items and sensors connected to communication networks like Wi-Fi, many of which are designed to improve data security, boost citizens’ well-being, and aid in better quality of life such as:
Homes and Businesses
“Smart” options include household appliances you can manage online — such as lights, coffee makers, and entertainment systems — with their devices and functions controlled remotely by computers, tablets, and smartphones. Alarms and home security systems are also crucial components of smart homes and businesses. The popularity of voice-activated assistants such as Alexa, Siri, and Google Voice is helping to drive this trend.
People are embracing all types of wearables that link to other devices and services. For example:
- Fitness trackers
- Smart glasses and AR glasses
Google Glass may have turned out to be a letdown, but many new devices are due to be released in 2021 — including Facebook Ray Ban Smart Glasses.
The term “smart car” or “smart vehicle” also refers to any vehicle with advanced electronic and internet capabilities. These may be built into the vehicle or require an app, but include:
- Fleet management for trucks, delivery vehicles, and other city services
- Self-driving cars. While this is still emerging and controversial, it’s gradually becoming more mainstream.
- Apps that make it easier to park and navigate traffic.
There is also a brand of electric cars called Smart Cars, so be careful not to get these things confused.
Another trend is the demand for smart shopping solutions. Consumers are turning to online shopping more than ever and more frequently tapping into services such as curbside pickup as well, which means retail stores are looking for more efficient ways to serve customers. These include:
- Smart checkout. More stores are using self-checkout to save customers’ time.
- Both online and brick and mortar stores can use IoT to manage inventory.
- Beacons and location-based notifications. Although these aren’t new, they are being used more and more to target shoppers who are in proximity to the store.
- Barcode readers in retail stores, airports, businesses, and elsewhere. These can be used to identify prices, verify someone’s identity, tickets for admission or transportation, and more.
These options will likely only grow and evolve with our reliance on connectivity.
What is a Smart City?
“IoT” and “smart city” are often used interchangeably, but they aren’t quite the same. The latter is an urban area, town, or suburban region that uses the latest technology to collect data and perform many essential functions. Some common examples of smart offerings include:
Being able to use city data to mitigate resource management issues could go a long way toward shortening commutes, reducing waste, and improving sustainability efforts in terms of consumption of natural resources. Examples include:
Traffic management is a major challenge in many cities throughout North America, Europe, and around the world, and smart options can help to manage it. Amsterdam is one city that’s successfully implemented smart solutions to transportation system challenges. Mitigating congestion in cities would have nearly real-time impacts on citizens’ lives, too, as IoT sensors could decrease time wasted at traffic lights, improve public safety, boost air quality, minimize issues with cities’ bus network operations, time street lighting to come on as needed or right at dark, and more.
Smart architecture and infrastructure
This can be seen as implementing IoT on a larger scale, such as in office and government buildings, schools, and other public places. Such options can operate lights, temperature control, security, elevators, and other functions.
Smart meters and energy management
This is another example of IoT being utilized by governments and larger businesses such as utilities. Smart meters track energy consumption and help to more efficiently allocate power. Water management is another timely issue as many regions — such as in the Middle East and in the United States’ West Coast and Southwest — deal with water shortages.
Knowing how that these options can be helpful is the first step, but understanding how they work and what to do with them is just as important.
5 Must-Know Facts About Smart Cities
The main distinction between a smart city initiative and IoT is scale. Smart cities often utilize IoT to better manage resources, but the technology can be used at any level — from an individual buying a smartwatch to a small business setting up a security system. The term “smart city” suggests a big picture outlook where multiple and connected technologies are put in place to improve the quality of life for citizens around larger cities like New York, Hong Kong, and others with city initiatives.
Here’s what you need to know about such options right now:
1. It’s being used to address environmental and energy-related challenges.
Energy consumption is rapidly growing. The International Energy Agency predicts worldwide energy consumption will increase by 37% by 2040. Along with population growth, this is likely to bring about energy shortages. Smart cities can help to regulate energy usage and maximize efficiency. Smart City Press describes how smart technology is being implemented in cities around the world — including Sydney, Lisbon, and Berlin — to save energy and help introduce renewable energy alternatives.
2. Cybersecurity is a major focus.
While smart cities are helping to solve many critical problems such as traffic jams and energy waste, they come with certain challenges. Cybersecurity is one of the most pressing, because hackers pose a threat to entire communities. The COVID-19 pandemic forced many businesses and organizations to work with remote teams, for example, which brought certain security risks as off-site workers who use their own devices and work in public places as well as at home created network security gaps. Those dealing with sensitive business or governmental information thus put that data at increased risk.
3. The smart tech and cybersecurity industries need more diversity.
Society is increasingly aware of the need to include citizens from all backgrounds, races, and genders in business, government, and other positions of influence. Industries such as cybersecurity have traditionally been lacking when it comes to hiring women, people of color, and other minorities. As awareness of such issues increases, it’s necessary to look for ways to make emerging areas such as IoT and smart cities more diverse.
4. Edge computing is an emerging trend for IoT and smart cities.
When people think of smart cities and IoT, they often associate it with cloud computing. These technologies typically store data in the cloud, but edge computing is a new development that promises greater efficiency and security. Edge computing isn’t distinct from cloud computing, but allows for greater control as it places resources closer to the devices they manage. Data is still sent to the cloud, but edge computing helps reduce traffic on the cloud as well as providing for greater security.
5. Analytics and big data play a key role.
Data is fundamental to smart technology. Whether a city is looking for ways to cut down on traffic, improve energy efficiency, or implement better waste management systems, data is key to tracking and measuring results. Artificial intelligence (AI) and machine learning (ML) are helping to improve the speed and accuracy of data management, which is essential to identifying problems as well as to tracking the effectiveness of solutions.
What to Know When Investing in Smart City Tech
IoT and smart city applications provide promising investment opportunities. As demand for these services quickly expands, we can expect new and existing businesses to explode. At the same time, it’s important to learn as much as you can before investing. Here are some tips to keep in mind:
Diversify your investment portfolio.
Diversification is a fundamental strategy of savvy investors and is especially important in the tech sector. It’s hard to predict which companies and technologies will succeed, so it’s best to hedge your bets.
Look past the hype.
Just because people are excited about a trend in the media doesn’t mean it will survive in the long-term. Look for possible flaws and limitations — such as competing trends, laws, and regulations that could slow it down — as well as practical barriers, like cost of manufacturing or scarcity of resources.
Study the fundamentals of any company.
Look closely at the history, assets, management team, and plans of a company before investing. Do the leaders have a good track record? Do they have a clear vision for the future? Are they solvent?
Focus on growing and essential industries.
The IoT and smart city options are growing in many crucial industries such as transportation, logistics, healthcare, cybersecurity, and others. These are areas that provide essential services and are likely to continue growing.
As quickly as technology is progressing, investing in these areas shouldn’t be seen as a way to get rich overnight. As with any investments, there are likely to be ups and downs, spikes, and pullbacks. Look for investments you can hold onto for at least a couple of years, and don’t react to every blip in the market.
IoT and smart cities are more than popular buzzwords. They are becoming integral to how we live, and are already well-established in everyday life. If you have smart devices in your home or use a navigation system in your car, you are well versed in IoT. The only thing that will change in the coming years is that these technologies will advance and become even more embedded in our lives.
Contact Option3Ventures today to speak with an expert about any smart city or IoT investing questions you might have.