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The emergence of "smart cities" has rapidly captured the imagination of the mass market. But what does a smart city mean for construction firms? Smart cities is a term that defines the convergence of new government policies, emerging Information Communications Technology (ICT) and innovative design in an urban environment. The touch points of these three elements are creating meaningful, exciting and lucrative opportunities for the construction industry worldwide.

Leading indicators to watch to see if a city is following a "smart" path include airports (new or expansions), roads, bridges and tunnels, telecommunication build-outs, water projects and energy projects. These indicators lay the foundation for future innovative projects that will layer on top of the infrastructure. Recent airport projects in Abu Dhabi, Singapore, Shanghai, New York and San Francisco are proving this framework correct, as these cities are consistently cited as leading smart cities in the world today. Additionally, infrastructure projects in Kansas City; Atlanta; Wuhan, China; and Barcelona, Spain, are positioning these cities to join the ranks of smart cities in meaningful and transformative ways.

The first impact of smart cities on the construction industry is in the form of lucrative, leading indicator projects, resulting in jobs and profits.

The second impact of smart cities is the innovative projects that challenge traditional construction firms' means, methods and, potentially, business models. Urban renewal projects are emerging that design ICT solutions into the physical buildings themselves, providing urban dwellers with an interactive experience with their built environment.  Using mobile technologies like the iPhone, iPad and Android, designers are creating interactive walls, kiosks, lobbies, elevators and workplaces that allow people to communicate, coordinate and collaborate in ways that were the stuff of science fiction only a few short years ago. The design community's phrase for this is “Creating the Experience,” but it’s up to the construction sector to understand it, source it and build it.

Construction firms that develop a closer relationship with ICT companies to work together on these innovations will enjoy enormous rewards. ICT leading companies like Cisco already are acquiring companies outside of their core in order to increase market share and market opportunity. Cisco's recent purchase of two energy companies -- Ubiquisys and JouleX -- highlights a path the company is taking to bring its version of smart cities to fruition.

Who will be the first construction industry acquisition by ICT companies like Cisco, IBM, Google or Siemens? The stakes are high and the value is enormous as smart cities programs for ICT companies are global, yet acted upon locally. Look for this to be the beginning of a large “land grab” by the ICT industry. It will be an interesting shuffle of the AEC industry as it is about to be affected in many unforeseen ways by an outside industry (ICT) due to an urban movement (smart cities).

The third impact of smart cities is in the expectations that customers will be setting for construction firms. There will be more interaction with customers as the ease of having mobile video communication increases in urban environments. Video calls from the field are becoming commonplace and the firms that do not perform in this manner will be left out of the next project, surpassed by firms that communicate more effectively and efficiently. The ubiquitous nature of WiFi is now expected in the field, especially in urban projects. Projects that do not operate in a WiFi environment will see lower skilled workers, as WiFi-enabled project sites will get the A Team from their subcontractors.

The key message of this third impact is transparent communication. Communication between citizens and government officials, government agencies and site workers, and among all stakeholders on a construction project are being affected by the policies, technologies and designs that smart cities are providing the market today.

It is no longer a case of whether smart cities will affect construction firms; it is a case of when, and whether the firms will be ready.

Image courtesy of Paul Doherty

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