"Smart cities" do you think there is any potential to invest in them?

Cities play a very important role in the world today. As powerful engines of growth accounting for around 80% of global GDP, cities provide the networks and interactions that make us more creative and productive as a society, which means they are essential for economic development and wealth creation.

Today, about 55% of the world's population lives in cities, but that was not always the case. Over the past few decades, the proportion of the world's population living in cities has risen significantly, and this trend is expected to continue to accelerate. According to UN estimates, urbanization could add another 2.5 billion people to the world's cities over the next 30 years, meaning that by 2050, up to 70% of the world's population could live in cities.

urban direction

Naturally, this urban trend creates a lot of challenges. With the population growing steadily, many cities around the world suffer from issues such as traffic congestion, high energy consumption, and ineffective waste disposal programs. Looking to the future, cities will have to find smarter solutions to improve their infrastructure and provide a better life for their residents.

Specifically, here, technology plays a key role, and today we are witnessing the emergence of “smart cities” that use technology to improve efficiency, enhance sustainability, and enhance economic competitiveness. With the help of advanced technologies such as the Internet of Things (IoT) and artificial intelligence (AI), cities are transforming everything from traffic management to street lighting, to make themselves more adaptable than in the past.

Smart city technology market

The worldwide smart city technology market is so huge, with annual spending expected to reach US$158 billion by 2022. For this reason, we believe smart cities are an investment topic to pay attention to. There is tremendous growth opportunity for innovative companies that are helping to develop the cities of tomorrow, and this in turn creates a number of exciting opportunities for investors.

What is a smart city?

Let's start with the basics. What exactly are smart cities?

Simply put, a smart city is a city that is able to collect and analyze large amounts of data from a wide range of industries – ranging from urban planning to waste disposal – and use this data to become more efficient.

Using a network of interconnected sensors, devices and software, a smart city can harness the power of technology to improve the lives of its residents and visitors by making the city more connected, more productive and more sustainable.

How to invest in smart cities

There are several ways investors can benefit from the smart cities theme.

Among them is investing in individual companies developing smart city technology. However, this approach is not always straightforward as there are literally thousands of companies around the world all developing their own unique technology.

These range from large, well-known technology companies like Google to very small startups that are completely under the scrutiny of most investors.