The new intelligence of cities derives from two concomitant technological innovations: smart grids and ICT infrastructures overlaid on physical space.
The smart grid. Smart grids technologies embody a radical
enhancement to the basic structure of the electrical power
grid, which has remained fundamentally unchanged for 100
years. Gu¨ngor et al. (2011) assert that
experiences have shown that the hierarchical, centrally controlled grid of the 20th century is ill-suited to the needs of the
21st century. To address the challenges of the existing power
grid, the new concept of smart grid has emerged. The smart
grid can be considered as a modern electric power grid infrastructure for enhanced efficiency and reliability through
automated control, high-power converters, modern communications infrastructure, sending and metering technologies, and
modern energy management techniques based on the optimization of demand, energy, and network availability.
Furthermore, the smart grid relies on two-way flows
of electricity and information, which makes it highly
responsive to a wide array of conditions and events
(Fang et al., 2012).
Smart grids play a crucial role in enabling cities to be
smart. Indeed, it is widely accepted that smart grids serve as
‘‘the backbone of a smart city’’ and create the foundation
for smart city projects (Global Data, 2012). Incidentally,
smart grids are also vital to commercial real estate because
of buildings’ central role in their framework.
Considering that energy consumption for buildings
accounts for 40% of the energy used worldwide, Kolokatsa
(2016) explains that
buildings in the near future should be able to produce the
amount of energy they consume, i.e. become zero or nearly
zero energy buildings [ …] Zero energy buildings are buildings that work in synergy with the [smart] grid, avoiding putting additional stress on the power infrastructure.
With the smart grid, buildings can become energy prosumers (i.e. power producers and consumers).
In addition to fostering renewable energy sources, smart
metering, and zero energy buildings, smart grids that rely
on a smart information subsystem collecting real-time data
from end users (Fang et al., 2012) can also be viewed as
‘‘aggregators of buildings, consumers and communities’’
(Kolokasta, 2016). In that sense, they create a connection
between buildings, residential and non-residential, and the
broader urban environment where the six dimensions of a
smart city materialize.
Pervasive computing and the digital skin of smart cities. Smart
grids alone are not enough to make a city smart. Pervasive
networks are required. Smart cities are literally covered
with a myriad of wireless and connected sensors, mobile
devices, Radio Frequency Identification (RFID), and other
Internet of Things (IoT) systems. Gross (1999) was the first
to compare these pervasive electronic networks with a
‘‘digital skin donning planet Earth.’’ The concept that was
later widely adopted by academic researchers highlights the
ability of smart cities to generate ‘‘a vibrant understanding
of patterns and flows’’ (Ratti and Claudel, 2014b). Thanks
to the digital skin, smart cities have become sources of big
data, being turned in the process into ‘‘sensored and
metered cities’’ (Rabari and Storper, 2015). The skin also
turns urban landscapes into ‘‘info-scapes’’ where city
dwellers become ‘‘hyper-individualized’’ users.
Beyond the technological prowess of the digital skin
which increasingly involves artificial intelligence (RICS,
2017b), there are important sociological implications
from the implementation of such powerful networks in
cities. Batty (2007) stresses their radical impacts on city
Slowly, but surely, a skin [ …] is forming around the globe
which enables instantaneous transmission and access to digital
resources wirelessly from any place to everywhere at any time.
[ … ] Instantly accessible information is unprecedented and is
likely to have radical effects on the way we conduct our affairs
in every aspect of modern life. It is changing the nature of
markets, of retailing, of social contracts and relationships.
Such changes in human ways of life bear significant
implications for commercial real estate which traditionally
enclose these activities.
Concretely, as shown in Figure 1, commercial property
is positioned between the smart grid represented schematically underneath the urban surface and the digital skin
encompassing data analytics (e.g. cloud analytics) and covering all buildings and infrastructures alike.
Thus, the setting for real estate in smart cities is radically
different from the one real estate has been exposed to until
now. With smart cities’ digitally infused space, space is no
longer a passive component of real estate whose measurement is anchored in its physicality (Lecomte, 2018)