The business of Smart cities grows worldwide: $873.7 billion by 2026. In Italy, Florence, Milan, Bologna and Rome are the smartest

  • The study, carried out in collaboration with Legambiente and TSCAI, reconfirms northern and central Italy as the most virtuous areas in terms of eco-sustainability, sustainable mobility and environmental impact reduction projects;
  • None of the 102 cities analyzed by Legambiente in the Mal’Aria (2022) report falls within the parameters set by the WHO, not even the smartest cities;
  • By 2026, the global smart cities market is estimated to reach $873.7 billion, with a compound annual growth rate (CAGR) of 13.8 percent for the forecast period;
  • The global smart buildings market will grow 150% by 2026, reaching 115 million units compared to 45 million globally today;
  • Covid and War demonstrated the importance of developing a new culture of climate prevention, as well as achieving digital maturity in order to close the remaining gaps;
  • By 2030 and 2050, the EU intends to raise greenhouse gas emission cuts to 50-55% and establish a European law for climate neutrality;
  • According to FORUM PA’s ICity Rank 2021 – Smart Cities Italia report, the cities most on track toward a Green and Digital Transition are Florence, Milan, Bologna, and Rome Capitale. Southern areas still occupy the lowest positions.

Rome, June 15, 2022. Rome Business School has published the study, “Smart cities and air quality. Italian urban centers between sustainable growth and good mobility practices.” Edited by: Francesco Amendola, Program Director of Rome Business School’s Specialized Master in Data Science and Executive Master in Data Science; Raffaele Gareri, Co-founder of TSCAI (The Smart City Association); Mattia Lolli, Volunteer Manager at Legambiente Onlus; and Valerio Mancini, Director of the RBS Research Center. The study sheds light on how the pandemic and the current war in Ukraine, have accelerated the need to implement cities with green and technological solutions in order to mitigate air pollution and foster a sustainable economy. It is crucial for Italy to take advantage of support from European funding under the Next Generation EU program earmarked for post-Covid restart, in order to project its cities toward smart and sustainable urban planning that does not leave behind the most vulnerable territories and social groups.

Italian smart cities: an analysis by city

The research analyzes how Italy is still not very green in terms of air quality: according to the latest annual assessments of the European Environment Agency (EEA 2022), Italy needs to drastically decrease the levels of PM10, PM2.5 and nitrogen dioxide (NO2) and take concrete steps toward an Ecological and Smart Transition of urban centers, particularly through effective interventions on sustainable mobility and the use of public space.

Data from FPA’s ICity Rank 2021 – Smart Cities in Italy report see an Italy divided in two: cities in the north and center of the country are committed to advancing the EU’s green perspective, which aims to regenerate public spaces and address the climate crisis; southern regions continue to lag behind in environmental performance such as air pollution, water loss, mobility, public transport, and waste collection, and show a clear lag in digital transformation. At the top of the ranking of the 107 smartest cities in progress are Florence, Milan, Bologna and Rome. Nevertheless, the levels of Fine Particulate Matter and Nitrogen Dioxide of the 102 cities analyzed by Legambiente in the Mal’Aria (2022) report, for which data is available, none currently fall within the parameters set by the WHO, not even the smartest cities. Levels are particularly worrisome in the areas of Cremona and Venice, which will have to reduce concentrations by 79 percent, Milan by 74 percent, Rome 70 percent, Ferrara 69 percent, and Bologna 66 percent, to fall within the limits.

Northern and central Italy reconfirms itself as the most advanced areas in green projects. This is demonstrated first and foremost by the city of Milan, which in the global ranking of smart cities (IMD Smart City Index) ranks 22nd, along with Bologna (18th) and Rome (77th).The Lombard capital remains one of the most dynamic and forward-looking examples in our country: it continues to build new kilometers of bicycle lanes, improve public transportation and urban green spaces. The latter in particular is a key factor in curbing air pollution in urban centers: the strategic placement of trees in urban areas can cool the air by up to 8°C, reducing air conditioning needs by 30 percent.

Prominent among them are cities such as Bergamo and Genoa, which in the overall ranking of smart cities in Italy (ICity Rank 2021) are ranked 4th and 15th respectively, increasingly attentive over the years to green transformation and the implementation of innovative projects aimed at protecting bees.

The metropolitan city of Roma Capitale, in 4th place tied with the cities of Modena and Bergamo, on the other hand, offers several green initiatives through startup projects such as the Palugica Foundation, for example, which uses biotechnology to defend urban decorum and redevelop the territory, with interventions in the capital’s most important areas such as the Colosseum, Circus Maximus, and Aventine Hill.

The Emilia Romagna region is the most virtuous in all of Italy in the area of separate waste collection. With the Regional Waste Plan 2022-2027, the region sets the ambitious goal of reaching 80 percent for separate waste collection and 66 percent for waste recycling, and to reduce urban waste per capita to 120kg per inhabitant per year by 2027, so that it can mitigate the damage of greenhouse gas emissions from landfills, which account for 10 percent of global emissions.

Citizens and communities at the center of the digital revolution

The recent pandemic has set in motion a true digital revolution, demonstrating how even people less accustomed to technology can be positively stimulated by new forms of engagement, through the use of apps, chatbots, and virtual realities. Nevertheless, there have been many pilot projects and digital experiments adopted that have not turned into ordinary services for citizens. Among the reasons: these have been vertical solutions on a specific domain with poor levels of interoperability with other application worlds; tenuous link between individual project and spatial strategy (e.g., communication, data governance). While it is true that the DESI 2021 index (Digital Economy and Society Index) shows a strongly growing Italy recovering positions and rising from 25th place to 20th in the space of a year, on the other hand, under the heading of “Human Capital,” i.e., digital skills: Italy has a score of 35.1 against an EU average of 47.1, which puts it in 25th place (this is the worst figure for Italy on the index).

In light of the data Raffaele Gareri, among the authors of the study, says, “Never as in this period is there a widespread conviction that we all need to converge together on a common goal, with differentiated responses for each community but within a national and European program that sees in the digital transformation of the processes of our lives an essential step to redesign the new balances of communities and new models of development for our businesses.”

New trends in Italy and the world

Smart cities and digital transformation in city services are now a global phenomenon. Among the main growing trends are: the adoption and refinement of various forms of public-private partnerships to speed up the diffusion of innovative services that transform life in urban communities (among the most virtuous cities are Copenhagen and Amsterdam); open innovation promoted by government agencies, in Italy for example, Mise supports the development of “Houses of Emerging Technologies” through the approved and co-financed projects of Matera, Turin, Rome, Bari, Prato and L’Aquila to facilitate the integration between universities, institutions, startups and industrial players; data governance and data-driven policies, in this forerunner in Italy the Municipality of Trento, which to better manage the shared electric scooter service has developed an ad hoc platform to collect data, manage the service and plan its evolution.

Next Generation EU e il futuro dell’Italia

Italy’s main challenge therefore remains to bridge the remaining gaps in terms of green policies and energy efficiency, taking advantage of funding from the Next Generation EU program. It is necessary to plan as best as possible the process of green conversion of the Italian economy so that a national digital maturity is achieved, but also to mitigate the combined problem of the movement of citizens from rural to urban areas, and thus of sustainable mobility, with that of the fast growth of the world population. In this sense, it is estimated that the percentage of citizens residing in large urban centers could increase from 55 percent to a net 68 percent of the global population by 2050 (UN DESA), stressing even more the need for a radical redesign of business models. Moreover, it is clear that urban centers, which are responsible for 70 percent of greenhouse gas emissions, must drastically reduce levels through smart services accessible to all community members. For Valerio Mancini, director of the Rome Business School Research Center and co-author of the research, “Those who still think of fantastic cities where technology will be the end to achieve the goal, are out of touch with reality, as they have not understood that smart cities are created for society, where technology is simply the tool that will help us achieve the desired results and face future challenges.”

A new mobility concept: the Mobility-as-a-Service

In fact, the recent pandemic crisis and the current crisis in Ukraine have had a direct impact in both economic and social terms, accelerating the need for a collective responsibility that includes smarter and more sustainable mobility; in parallel, the ever-growing market for apps dedicated to green mobility has increasingly accentuated the need for a single, shared and accessible tool for all: MaaS (Mobility-as-a-Service). This, in particular, is now Italy’s strong market for implementing the Green and Digital Transition, with 40 Million Euros allocated by the National Recovery and Resilience Plan (PNRR) for its development.

It is also true that Italy will have to continue to work hand in hand to mitigate the socioeconomic inequalities that the process of socioeconomic reconversion is likely to exacerbate. The south is today experiencing strong growth: Naples, climbs the ICity Rank 2021 by 11 places, gaining 26th thanks to improvements in municipal apps and green mobility in municipalities bordering the urban center; Messina rises from 89th place in 2020 to 62nd today. In summary, it is necessary that even the most distant and vulnerable territories and social groups are not neglected, but rather are the starting point for the achievement of a digital maturity that makes Italy more efficient and resilient.

In this sense, it is necessary to consider the development and implementation of smart cities as an inevitable process to make continuously overcrowded urban areas sustainable. A recent MarketsandMarkets report estimates that the global smart cities market will reach $873.7 billion by 2026, with a compound annual growth rate (CAGR) of 13.8 percent for the forecast period. This transitive process must be directly related to socioeconomic and therefore technological evolution: fortifying collective responsibility through short- and long-term sustainable projects will be incumbent in order to align with the ambitious goals the EU has set for 2030 and 2050, such as raising greenhouse gas emission cuts to 50-55% and establishing a European law for climate neutrality. And not only that, as the growth of services in the city passes mainly through the development of digital platforms, there is a growing need for national and local communities to pay more and more attention to regulation: “the new smart cities and communities will have to preside with firm and constant political and administrative action to guide all other areas of development and generate a positive impact in real terms of inclusion, sustainability and quality of social life,” Gareri says.

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