Engel & Völkers
  • 3 min read

Market trend: smart cities

Smart city: an elegant and catchy expression, which nevertheless has a not inconsiderable polarising potential. Below, we try to explain why. With the arrival of the new millennium, the English term 'smart' has become widely used in areas such as business, politics and even building design. Translated as 'smart, talented, effective', the word has a decidedly positive connotation, thus drawing more and more attention to itself. Initially, the concept mostly indicated a way of reacting to the social challenges of the time. These included managing the financial crisis, demographic change, ecology, environmental protection and resource recovery.

Smart home in a small way

Today, the term 'smart city' immediately recalls another concept, that of 'smart home', which for many is already part of everyday life. A smart home is characterised by the installation of interconnected technological systems within one's own home, which can be managed either directly or remotely, in order to significantly improve the quality of living and dwelling. Fundamental conditions for the proper functioning of such tools are constant progress and digitisation at various levels. It is these aspects that make interconnection possible. We thus have the opportunity to coordinate, based on the evaluation of our usage data, all systems according to our habits and needs.

Smart city in a big way

In a broader perspective, this is the goal pursued by the 'smart city' trend. This general concept in fact indicates the desire to make urban space more habitable, with better and more sustainable living. The implementation of such a strategy takes place on the one hand through the development of existing areas and on the other hand through the intelligent planning of new living areas.

An example of this is Berlin, which has initiated a pilot project in one of its suburbs. The area consists of prefabs and high-rise buildings with green spaces and large car parks for the inhabitants' cars. The latter have been revitalised through aggregation and leisure initiatives. In the course of the day, they are no longer used as parking spaces, thus making the entire neighbourhood much more liveable.

Munich is also undergoing a transformation towards smarter management. The general concept of the smart city also includes the aspect of administration. Progressively, efforts are being made to unite more and more areas of private and public life. Through participation initiatives, in the capital of Bavaria, municipal employees as well as individual citizens are given the opportunity to actively participate in the transformation of the city. This approach awakens interest and ensures a broader consensus for the implementation of initiatives.

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Common use and private sphere

The previously mentioned phenomenon of polarisation arises from the fact that at the centre of data collection is the individual person. What processes and habits punctuate his or her life' At what times does he or she need resources and of what kind? Through data analysis, each of us can benefit from the advantages of artificial intelligence, but at the same time we must be prepared in some way to make ourselves available to it. Understandably, no one wants to sacrifice too much of their private sphere. And with increasing digitisation not only in Germany, but worldwide, the fear of data misuse is growing.

A good strategy passes through openness and transparency, guaranteed by companies and parties involved in the use of data. In this respect, it is necessary to foster people's trust in data protection measures. Even the German Federal Data Protection Act has clear provisions for the handling of personal data. Smart city projects require large amounts of information in order to make valid analyses. What is needed, however, is not personal data, but other types of anonymous data.

Interconnection is the real vision

A key component of the data needed concerns housing. But since it is not only the quantity but also the quality of data that plays a role, the combination of the most diverse sources is crucial for forward-looking housing planning. In this way, it is possible not only to optimise key issues such as quality of life, resource use and energy efficiency, but also to integrate mobility offers. schools, hospitals and all city infrastructures.

However, as safe and targeted as some developments seem, data analysis carries a speculative risk. This is because at the centre is always the person in his or her changeability. The year of the pandemic has shown us how quickly things can change. The emergence of new habits and the shift in values due to deeper knowledge processes therefore show how crucial our personal skills are in managing change, and with them, the ability to adapt to smart solutions.

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