In this column I have been writing about how servitization is an important trend for industrial companies and beyond and how IoT services are creating an outcomes-based economy that benefit tech suppliers and end users alike. Perhaps that’s why it makes a lot of sense to extend the discussion and take a closer look at smart cities and how IoT (Internet of Things) services will play a role in helping cities prepare for a huge upcoming shift—urbanization.

According to the UN (United Nations) Dept. of Economic and Social Affairs, 55% of the world’s population currently lives in urban areas. By 2050, that percentage is expected to increase to 68%—that’s nearly seven out of every 10 people worldwide living in an urban environment. In addition to this shift from rural to urban areas, the world’s population is also going to be growing at a rapid rate.

These two factors combined—global population growth and urbanization—could result in another 2.5 billion people living in urban areas by 2050. There is no question 2.5 billion more people is a lot, and you better believe this will require some planning and, most likely, some technology to help this shift go smoothly.

Perhaps the better question is, what exactly is going to happen when more than half of the global population resettles in urban centers? This is a question so many people are asking, from city planners and other government officials to transportation executives and farmers, growers, and producers, as well as tech providers and integrators.

Sustainable urban development is going to be so important, and many different stakeholders are going to need to work together to make sure the cities of tomorrow can accommodate a growing citizen base.

Some of the factors that will need to be considered include housing and employment, transportation, energy systems, and infrastructure in general, alongside key services like education and healthcare.

Smart-city services are going to be an important part of how we solve the urbanization puzzle. From smart buildings and smart grid to connected transportation and connected infrastructure, IoT technology that provides decision-enhancing data will support city growth throughout the next several decades.

One foundational element of the smart city will be the transformation of urban energy, which, according to Navigant Research, will include the implementation of smart grids, a shift to renewable energy, community energy programs, and new energy market structures.

Navigant Research has some good numbers that are worth noting. The firm did some research on a slice of the smart-city sector, intelligent-building services, and predicted that revenue for utility-offered value-added services for smart buildings could reach up to $1.2 billion in North America alone by 2026.

The IoT can enable a whole new world of energy-management capabilities on the customer side of the meter in commercial buildings. This threatens the traditional utility model, but utilities can still take advantage of the demand for smart buildings by deploying value-added services that support customer engagement and satisfaction.

In China, smart-utility services are addressing problems like accurate billing for electricity consumption and outage detection. China Mobile has rolled out AMR (automated meter reading) service pilots for electric utilities that leverages NB-IoT (narrowband IoT) connected smart meters and a cloud-based application for energy management.

Utilities are deploying the solution in intelligent buildings and industrial parks in order to collect realtime data, such as voltage, current, power consumption, and more. The pilots have delivered some really important benefits to utilities and cities, making them smarter and more efficient.

For instance, compared to existing meter reading services available to Chinese utilities, NB-IoT smart meters are simpler to install and maintain—and they eliminate the need for manual meter reads.

The meters allow issues like power outages to be more quickly identified and taken care of, improving reliability and, with it, utility customers’ experience. It’s nice to hear about successful pilots like this, because it shows how the IoT is making life and business easier all over the world, not just here in the U.S.

Beyond energy, there are several categories in which a city can leverage the IoT to deliver key outcomes, like improved quality of life, including mobility, health, safety, and productivity.

Juniper Research recently ranked the top smart cities in the world according to these four categories, and found Singapore to be the top global smart city according to its performance and project deployments in all four areas.

The top ranking U.S. cities, in case you’re wondering, are San Francisco, which ranks second in the mobility category, New York, which ranks second in the safety category, and Chicago, which ranks third in the safety and productivity categories.

By my definition, a smart city delivers services that provide positive outcomes for its citizens, and outcomes are what we’re increasingly talking about when we consider the value of the IoT.

There are so many ways IoT technology can create positive outcomes for citizens.

The IoT has the capability to create new ways for governments to engage with its citizens. Critical city functions like first response, transportation, and healthcare also stand to gain tremendously from IoT-enabled data and data analytics, which can lead to value-added services that encourage citizen engagement, citizen feedback, and, ultimately, citizen satisfaction.

Think urbanization. The IoT will be called upon to help those who adopt it to do more with less.

As more people move to cities in the next few decades, cities will need to invest in IoT devices, solutions, and services to make their buildings and other physical infrastructure, their utilities, their first response systems, and their hospitals work smarter for the benefit of all. If they do, they’ll take an important step toward future-proofing themselves against the inevitable tides of change.

Want to tweet about this article? Use hashtags #IoT #M2M #assets #servitization #manufacturing #industrial #IIoT #analytics #services #data #sensors #artificialintelligence #machinelearning