China has large and medium technologically advanced companies that when establishing R&D and incorporating European technology centres in Europe can exponentially boost their growth. This type of operations creates a niche in the market that is very interesting both for Chinese and European companies.

In summary, the incorporation into the European technology field of the Chinese technological and productive process is creating great business opportunities at the global scale. Especially, Spain has numerous financial and tax incentives for activities pursued in certain industries deemed to be a priority due to their growth potential and their impact on the Spanish economy as a whole.

 

The concept of ‘Smart Cities’

The whole context of competitiveness in society has been developed as a consequence of a dynamic set of variables. Natural resource management, environmental conditions, industrial policies and economic power have shaped cities and directly influenced modern urban lifestyles. The 20th century has seen the explosion of megalopolises around the globe. Cities have attracted and concentrated a massive number of people, generating new problems of management and creating huge challenges not only for the public sector – in managing limited resources – but also for the private sector by pushing companies to promote continuous adaptation in business to answer the new consumption demands. By 2030 more than 70% of the world’s population is likely to be concentrated in cities, having dramatic impact on our lifestyles. Some countries that are still in process of urbanisation will face mass migration of their population in the coming years. How to promote inclusive and sustainable competitiveness is one of our greatest challenges.

These outstanding transformations in our society are happening in parallel to another rising megatrend: the fourth industrial revolution. In the first industrial revolution, water and steam energy were used to replace manpower and mechanize production. The second revolution brought the concept of mass production through the use of electricity. The third revolution was evidence by the use of information technology and electronic means to automatize the production. The fourth industrial revolution, probably one of the most disruptive, is bringing a new perspective of time and space by combining physical, digital and biological domains.

Against this backdrop, our society is evolving at the pace of rapid technological change in a context shaped by high levels of volatility, uncertainty, complexity and ambiguity. This is transforming the economy into a new, unique format with four main dimensions: the creative economy, the sharing economy, the circular economy and Co-creation.

 

Challenges

As a result of the intense urban migration the world has been facing in the last decades and with the “unplanned” development of our cities, several solutions have been developed and tested in different fields since the eighties. A consequence of this attempt to solve urban problems is the rise of the “Smart city” concept. Around the world old cities have been retrofitted and some brand-new cities are being built  on greenfield land, fully planned and oriented to be smart from their first draft plans. The older and more developed a city is, the more complex it is to retrofit and adapt. Emerging economics such as those in China and India are heavily investing in cities that are forged to be models of sustainable urban life, combining the latest high-end information and communication technologies with state-of-the-art architectural design fully integrated into ubiquitous urban environments. These huge projects are getting global attention and attracting talented professionals, large corporations and massive investments.

Building smart cities is not just a fashion trend, they are needed by the entire civilization as a sustainable solution for urban life. Solutions related to water management, clean and renewable energies, smart grids, intelligent traffic control, electronic government, urban mobility, wireless internet accessibility and waste management are just a few examples that can be highlighted in a long list of problem-oriented proposed solutions. The challenge is not technology per se, but how to design and use technology for the real benefit of citizens’ well-being.

 

Solutions

The core of any evolutionary urban project is no longer technology but people. Cities also embrace ICT as one of the main drivers of successful implementation of Smart City projects. It is important to reemphasize that the old concept of IT (information technology) was upgraded by the addition of “communication”. In this case, communication is related to the capacity not only for one-way flows of information but to creating an interaction between the two sides: one that wants to inform and the other that is using and reacting to the information. And the trend is towards even deeper use of technology of things (IoT) era. Information and Communication technology is being used to connect people to people, people to machines and machines to machines. Items in daily use like home appliances, bikes and cars are being connected. Public lighting is becoming smart and connected, as are water meters, car parking and so on.

With these new paradigms, the whole concept of urban planning and development needs to be adjusted. One of the most radical shifts in the political midset with a direct impact on investments is the new 4Ps approach. This is one of the most popular and most effective tools to promote investment attraction to public projects is the public-private partnership (PPP). These are basically contracts bettwen the government and the private sector, in which a governmental authority allows the private sector to invest in and operate a public service. It is raising now the concept of PPPPs, public-private people partnerships, which go deeper into the idea of citizen-centred approaches.

 

Business Appeal

When we talk about the circular economy, we are also talking about how to combine the advantages of managing different aspects (in this case related to the city) in order to optimise resources and efficiency from the purely economic point of view as well as in terms of results, the environment, etc.

For example, today people are investing very intensively in solid waste management. In fact, they are doing so in such a way that waste is changing form a product that is expensive for municipalities to eliminate to a production of energy that can generate gas through the anaerobic digestion system, which can be sold in canisters for different uses. It can also generate electricity, which is sent to the power grid. Similar techniques are used in biomass plants, where the first plant are currently being built with an innovative gasification procedure for a system where waste will be used as a material to construct roads and urban thoroughfares.

In other words, we can now transform the cost of eliminating waste into an added value that generate energy for the city itself, specifically for lightning, construction, traffic lights and more. This means that there is a large technological sector aimed at city management, from waste management to mobility, lightning, transport and more, as long as it is efficient and profitable. There is an entire emerging technology sector that provides great opportunities for investment around the world, as demand exists Europe, Asia, the Americas and Australia. The city is the core driver for satisfying human needs.

 

Josep Maria Solsona, commercial lawyer at ETL Nexum Abogados.