Should Your Business Set up Shop in Bill Gates's Smart City? Commercial space will likely be a hot commodity in Belmont, but the benefits are many.
By Baruch Labunski Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
You've probably heard that Microsoft founder -- and well-known 1-percenter -- Bill Gates plans to build a futuristic "smart city" in Arizona. More precisely, one of the billionaire's investment companies, Cascade Investment, invested $80 million in a high-tech development planned in the Arizona desert.
The smart city will be designed with high-speed digital networks, data centers, autonomous vehicles, logistics hubs and new manufacturing technologies. Belmont Partners, a subsidiary of Cascade Investments, leads the project and says the smart city, located just outside of Phoenix, will ultimately be home to about 180,000 people.
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"Belmont will create a forward-thinking community with a communication and infrastructure spine that embraces cutting-edge technology, designed around high-speed digital networks, data centers, new manufacturing technologies and distribution models, autonomous vehicles and autonomous logistics hubs," Belmont Partners said in a news release.
Tentative plans for Gates's smart city, to be named Belmont, are ambitious. The digital infrastructure will include high-tech public schools and spaces, as well as 80,000 residential units spread over 25,000 acres. But, Belmont is far from the first smart city.
In 2014, India announced its goal to accommodate its burgeoning population with 100 high-tech cities built from the ground up. Likewise, Saudi Arabia officials recently announced plans to build a mega-city spanning three countries that will serve as an innovative global hub that will be the model of future civilization. Google's parent company Alphabet has also pledged $50 million to establish a smart neighborhood in Toronto. In fact, the number of global smart cities is expected to quadruple by 2025.
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But, can entire futuristic cities be built for $50 billion, $80 billion or even $500 billion?
"Envisioning future infrastructure from scratch is far easier and more cost-efficient than retrofitting an existing urban fabric," Belmont spokesman for the venture said in the statement.
What is a smart city?
Tech jargon aside, just what is a smart city? These futuristic urban areas use electronic data sensors to compile information on residents, transportation, health, pollution and other aspects of city management. The data is then analyzed to make improvements and offer enhanced services in avenues including public utilities, hospitals, power grids, waste management, law enforcement and schools, to name just a few.
"Smart cities encompass a broad range of different aspects ... to describe cities that have deployed -- or are currently piloting -- the integration of information, communications and technology (ICT) solutions across three or more different functional areas of a city," Lisa Arrowsmith, associate director for connectivity, smart homes and smart cities at IHS Technology, said in a press release announcing a new report looking at current smart city trends. "These functional areas include mobile and transport, energy and sustainability, physical infrastructure, governance, and safety and security."
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Smart city business benefits
Of Belmont's 25,000 acres, 3,800 will be designated for office, retail and commercial space. And with its advanced technological grid, commercial space won't be inexpensive. But, the smart city still promises to be a draw for companies, for a variety of reasons, including:
1. Internet of things
The internet of things (IoT) refers to the network of physical devices -- vehicles, home appliances, smart phones, watches, etc. -- that are embedded with sensors, software and other electronics that can interconnect and exchange data. Experts estimate that IoT will consist of as many as 50 billion objects by 2020.
And by using IoT, businesses can better track and manage their inventories, reducing the number of employees needed to manage the same information. Better access to IoT also enables customers to be smarter consumers, which ultimately will boost their purchasing power. Since smart cities like Belmont will already feature these important censors and networks, businesses will be better equipped to benefit from IoT.
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2. Efficient energy use
A particular benefit to businesses that set up shop in smart cities is reduced operating costs. As previously discussed, businesses can use IoT to reduce the need for employees to gather and analyze data, but the savings go far beyond reduced manpower.
According to one study, the global business community will spend more than $18 billion installing smart technology into buildings this year alone, but spaces in smart cities like Belmont will already be equipped. And some of that technology will drastically reduce energy consumption. Smart windows, for example, can save up to 26 percent on cooling costs and up to 67 percent on lighting.
3. Data monetization
Sensors installed throughout a smart city can supply an enormous amount of data on its residents' behavior and needs. And a smart city with an open data policy, in which some of this information is shared with local commerce, can only improve economic development. Where is the best location to place a particular type of business? During what hours is the area most active? Where is the best place to advertise? How often did pedestrians search for "lunch," "shoes" or "pizza" on a particular street?
"To the extent that we can monetize the data, we can make that available to small businesses, local startups, entrepreneurs, to actually start to generate something of value to benefit our constituents," Jim Loter, Seattle's director of digital engagement, said at the Smart Cities Week conference in Washington, D.C. in October.
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4. Improved transportation
Many vehicles already can monitor and collect data within them: speed, engine hours, driver behavior, fuel efficiency, etc. But, once those same vehicles are connected to a city's infrastructure, the possible benefits are practically endless. Sensors can monitor road conditions to prevent potential dangers such as icy roads or upcoming accidents. And in the greater scheme of transportation, integrated traffic control centers can ease overall road congestion.
Thus, companies that rely on fleet vehicles can benefit greatly from a smart city's technology. Drivers can take the safest and quickest routes, reducing drive time and accidents -- both saving the company money. And over time, this increased efficiency can lead to reduced insurance costs and better compliance processes.
5. Secure connectivity
The search for Wi-Fi or loss of signal aren't issues in smart cities like Belmont. Smart cities provide free, city-wide Wi-Fi that enhance the experience of visitors, residents and commercial entities. Companies won't need to concern themselves with the availability of broadband in certain locations, since it will be equally available throughout the city's borders.
Connectivity enhancements are not only a convenience to businesses, but Romanian researchers found that enhanced internet connectivity boosts tourism and business. By providing free, citywide Wi-Fi, the ancient city of Alba Iulia saw its promise as a tourist destination increase, and it became a more competitive location for major events.
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6. Attracting top talent
It's a competitive world out there, for companies as well as job seekers. Businesses that establish in Belmont will have a hand up on the competition when it comes to recruiting the best and the brightest. After all, who -- particularly recent grads in the expanding tech field -- wouldn't choose to live in a smart city over a run-down community with an outdated grid?
Simply being located in Belmont will be an added perk above and beyond any compensation package. Because for all the benefits a smart city offers companies, the municipal benefits to residents are even greater.
7. Access to capital
Think locating your business to a smart city like Belmont is beyond your means? Think again. So many initiatives are supporting the growth of smart cities; plenty of capital is available to businesses that choose to operate in them.
Programs such as the Smart City Export Initiatives through organizations such as the International Trade Administration provide funding, financing and support services for smart infrastructure projects. Funding is available from agencies such as the U.S. Trade and Development Agency and the World Bank alongside strategy, marketing and planning services to support the efforts.
8. Reputation
Of course, in today's global society, much business success relies on customers far beyond a city's borders. And we all know that reputation can make or break a company. Simply setting up shop in Belmont, which could easily become the most famous of smart cities, will cement a brand's reputation as an advanced and socially conscious company. Calling Belmont home could be a claim to fame for any company, and draw customers from around the world.
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