Smart cities make for smart economies

For several years now, city planners across the world have been investing in urban infrastructure to make their cities smarter.  The World Urbanisation Prospect, a study conducted by the UN in 2014, found that 54% of the earth’s population lives in urban areas, and that number was expected to rise to 66% by 2050.

Cities are undoubtedly getting larger, especially in developing countries. This increase in size accelerates the consumption of resources and adapting will no longer suffice, they must develop sustainable economic strategies. To achieve this, a strong investment in human capital, social capital, urbanism and ICT infrastructure must be made.

All over Europe start-ups are partnering up with governing bodies to innovate city infrastructure. Among others, this includes the smart use of data acquired by tech companies and by the government, improved mobility, energy efficiency and advanced connectivity, more commonly known as Internet of Things (IoT).

Towards a smarter economy

A smarter economy is a crucial aspect to the Smart City movement. The notion has a broad meaning however Smart Cities Berkeley break it down into three different components; how Smart Cities technologies are changing urban commerce, the Smart City as an economic driver and the economics behind Smart Cities.

There is a lot of buzz at the moment about digitalising our economy, starting with payments. A clear illustration is the recent emergence of bitcoin or more broadly, mobile payments and e-wallets. Furthermore, there is a rise in the use of QR code technology or NFC (near field communication) for point of sale transactions. Indeed, mobile payments are at the heart of improving areas such as mass customisation retail, personalised tourism, enhanced mobility as well as peer to peer interactions. The end-game is to have a solution which digitalises the entire customer experience seamlessly.

A notable player in this movement is MasterCard and the 100 Resilient Cities organisation who have launched a Smart Cities initiative in order to educate governments on the risks involved in a cash-based economy and to demonstrate the benefits of a digital economy. Harnessing their own technology and experience to help cities create their own sustainable strategies. A number of countries have benefitted from this initiative including, . However, MasterCard’s partnership with Transport for London to introduce contactless payment on all public transport is the most notable achievement to date.

Bridging the gap

Contactless adoption has been hit and miss since its deployment, the UK was very quick to adopt contactless cards and is now leading the way with 153 million transactions recorded in April 2016, according to Visa Europe. On the other hand, France for example had a much slower adoption rate, and with new digital payment solutions on the rise, some countries may even jump straight to mobile payments and e-wallets.

However, despite the numerous innovations in the payment sphere there is still some work to be done to bridge the gap between mobile applications and payments.

In order for NFC and QR technology transactions to go viral there needs to be a number of other mobile services integrating digital payments.

Some progress has been made with apps for cities, transportation, government  as well as online application forms and e-signatures but we are not quite there yet.

Luxembourg labelled a Smart City

Luxembourg is making a name for itself as a digital pioneer, a start-up hub (especially in fintech) and as a Smart City. In fact, Luxembourg’s first initiative toward a smarter city dates back to 2002 with the e-City strategy. The three pillars of this strategy were; the education of citizens in the use of new technology; the development of electronic and mobile services; and making those services available anywhere and everywhere.

A study on 77 Smart Cities with a population between 100 000 and 500 000, ranked Luxembourg number 1 for Smart Economy in 2007, 2013 and 2014. Today though, the prime focus is on Sustainable Urban Mobility, which is Luxembourg’s main pain point due to the high number of workers who come from the bordering countries on a daily basis as well as the longstanding cultural habits for the use of individual cars.

A significant success spurred by the e-City strategy is Hot-city. The latter refers to city’s free public Wi-FI, which is one the best in the world, equipped with its own fibre optic network and a high density of antennas across the city. Other projects in the pipeline include opening up data to the public, Wi-Fi on public transport and a augmented reality tourism application.

On the payments side, SMS technology was introduced for bus tickets and parking however since then the city has stalled on digital commerce. Cash is still a distinctive favorite in retail industries, therefore it is down to the city’s organising bodies and our tech human capital to lead the way in educating the population about the benefits of integrated solutions and smarter payment options.

Given the city’s smart economy, strong connectivity and forward thinking people as well the nation’s digital drive, let’s hope we will see some true progress in the payments sphere soon.

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Emily Cooper

Emily Cooper

Emily studied film and media production, she has worked in Film, Events and Marketing in both London and Luxembourg. At the Blue Hub; Emily holds the fort, keeps the staff happy and manages Koosmik’s community and marketing.

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