We are finally reaching a point in human history where the concept of the smart city has gone from science fiction to reality. In recent years, technology has made it possible for municipalities to implement smart city infrastructures and technologies fully.

Because smart city technologies are still relatively new, not everyone understands their impact on residents or economies. Are smart cities worth the investment, or will they just create more headaches than they solve?

Luckily, we can find the answer by looking at the many smart city success stories that already exist. We’re able to see the economic benefits of smart cities in action and better understand the promise of future smart city technology.

Let’s take a look at the impact smart city infrastructures have on the economy — and what that means for the future of city planning.

How Smart Cities Boost an Economy

At its most basic level, a smart city is a building block to a better future of connectivity and prosperity. Connectivity between businesses creates greater trade efficiency, and cities with a higher base of technology attract more investment. This helps create more opportunities for strategic initiatives from the private sector, further boosting the economy and benefiting businesses and citizens.

Perhaps the best example is that of Singapore, which launched its Smart Nation initiative in 2014. One of the island city-state’s main goals was to map shipping routes with a geospatial intelligence network. The data gleaned from this effort allowed dynamic route planning to optimize shipping operations, which improved Singapore’s trading economy as a whole.

This is just one example of both the economic benefits of smart cities and how these cities can optimize operations. But the most exciting prospect yet relates to the potential for entrepreneurs and businesses to find new ways to take advantage of secure, continuous connectivity and open data.

Enabling Growth and Spurring Innovation

According to one estimate, smart cities will have a market value of more than $2 trillion by 2025. As a result, businesses and entrepreneurs will enjoy more opportunities — especially related to cybersecurity and data management.

Artificial intelligence has significant potential, too. Many elements of a smart city — from parking to the electric grid to waste management — rely on AI, and the future will only see more unleashed potential. Self-driving cars, robotics, and healthcare continue to evolve with AI, and these elements all fit right into the infrastructure of a smart city. That means big players, like Google and IBM, are much more likely to come to town and bring jobs with them when they do.

The always-on connectivity of a smart city, along with its open data offerings, will allow entrepreneurs to find new ways to innovate and fill previously unseen gaps in the system. With a smart city, enterprising individuals have the opportunity to define the future for themselves.

What the Future Holds

The push to build smart cities is only beginning. In Europe, a number of locations are finding new ways to innovate with smart tech. Amsterdam, for instance, has developed floating residential areas for water recycling and automated services. And Estonia is innovating with blockchain technology, using it to keep track of its people and create secure government services.

That’s not to say the future of smart cities will be without obstacles or errors. The technology is ultimately only going to be as effective as the policies and education that surrounds it. As smart cities have access to more data and gain more insight into people’s lives, there will have to be protections in place to safeguard people’s privacy and protocols that prevent it all from becoming too intrusive. Further, people will need to be informed about their rights and privileges, keeping transparency at the center of everything.

In the right hands, smart technology has the power to transform cities for the better — both economically and personally. As long as the proper protections are in place, smart cities will provide people with opportunities they wouldn’t have elsewhere. These advancements truly offer to potential to put any city on the map.

Are you interested in further exploring the process of smart city planning? Check out this blog post to learn more.