5 Ways Smart Cities Are Increasing Revenue Generation
Smart cities are not just a vision for the future. In many places around the world, they’re the reality of today. And cities and communities are getting smarter all the time, thanks to innovative technologies driven by the Internet of Things – a world in which billions of connected devices are in constant communication, often with no human intervention at all. Implementing a smart infrastructure can help cities save money over time, but this kind of digital makeover can be costly. Now, some smart cities are finding innovative ways to not only save money with the tools of IoT, but also to use these tools to generate new revenue.
What is a Smart City?
“Smart” cities are communities that use a combination of constantly connected devices, cloud platforms and artificial intelligences to collect and share data from all over the area. These innovative digital technologies work together to make city services run more efficiently and improve safety and residents’ quality of life.
The smart city framework is made possible by the technologies of the Internet of Things, a name given to the current digital age. In the world of IoT, devices of all kinds can share data at all times, thanks to connectivity with cloud based data storage. Powered by artificial intelligence algorithms, these “smart” devices can learn to make decisions and take actions without human operators. In a smart city, devices ranging from sensor-equipped garbage cans to water meters and traffic monitoring cameras can be seamlessly integrated into citywide platforms that can be accessed and managed from anywhere, at any time.
Smart city infrastructures provide a significant return on the city’s investment. They promote more efficient use of city resources and save energy. They can also keep cities safer, with better traffic management and faster emergency response times. Smart cities can be greener, too. But implementing a city wide digital infrastructure capable of achieving this kind of transformation requires a considerable investment of time and resources. New technologies need to be purchased and installed, and existing ones must be either modified or scrapped.
Managing a new digital ecosystem also requires training everyone involved in using those technologies, or hiring new staff. Given the scope of that investment, cities often see success in the return on their investment, or the savings achieved by the new system. But along with recouping the initial costs of going smart, these digital tools also hold the keys to generating new revenue from strategies such as selling services, data and access to essential city functions.
IoT Tools Sell Local Services
Research reveals that smart cities can improve residents’ overall quality of life in multiple ways. Easier access to essential city services can narrow income gaps and promote equal opportunities for everyone. To support those goals, some cities are using IoT technologies to offer their own version of high speed Internet, Wi-Fi and cable services – a move that makes the Internet available to more households and adds a new revenue stream in the form of subscriptions.
Advertising and Sponsorships Add Revenue
IoT technologies make it possible to share information anywhere, at any time, and some cities are using that feature to make money from third party advertising and support. Kansas City, Missouri recently installed kiosks in public areas to provide information about local attractions, driving directions and other city amenities. But the city also made the kiosks available for advertising. Companies could also sponsor an entire kiosk carrying their message. Constantly updated, smart highway signs can also generate advertising revenue.
Convenience Fees for Online Services
IoT makes it possible to offer an array of city services online, saving residents the time and effort of doing things like renewing auto registration or paying utility bills in person. Moving more services online, or offering online alternatives, can generate revenue. Some cities are generating revenue from these online portals by charging convenience fees for transactions, generating documents and other services people can access from home.
Smart Parking and Traffic Management
A number of cities use smart parking technologies to alert users when spaces are available and to manage parking meters. That helps reduce congestion and keep traffic flowing smoothly, but smart parking technologies can also generate more parking fees. Better traffic and parking management using AI-powered sensors can also help to support local businesses, which then return revenue in the form of taxes and fees.
Smarter Route Planning for Public Transit
IoT tools such as sensors at intersections and other high traffic areas allow city planners to manage traffic flow and patterns, and these tools can also help public transit vehicles such as buses and subways run more efficiently. Insights from traffic sensors can reveal patterns in bus or metro routes so routes can be modified to serve more passengers, more quickly. That adds revenue in the form of bus fares or bus card subscriptions.
Smart Resource Management for New Revenue
With the tools of IoT, cities can leverage existing resources such as energy in new ways to generate revenue. Utility management has been hailed as a major moneymaker for both small and large cities. Smart apps that control street lighting or utility metering can help to save energy, and the fees charged for managing those services create an ongoing revenue stream. Installing charging stations for electric vehicles can also generate new revenue from existing resources.
The world of IoT is also the world of “Big Data” – massive amounts of information collected from digital transactions of all kinds. And some cities are generating revenue from these data resources, too, by selling insights gleaned from AI-powered data processing to third parties for advertising or providing new services.
The smart technologies of the Internet of Things can help cities everywhere to run more efficiently and use resources more intelligently, and that leads to considerable savings over time. But smart cities are also leveraging those digital tools to create innovative new income streams alongside those savings – and that’s a smart thing to do.