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Smart cities – but are they cities for smart investors?
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New research, unveiled at Munich’s ExpoReal, on Europe’s so-called ‘Smart Cities’ offers some fascinating insights for property investors.
It’s the first ranking of its kind that looks at a new way of categorising the success of what are categorised as ‘middle-sized cities’ – those with populations under 500,000 and not clearly satellites of major conurbations.
Scientists from the Technical University of Vienna , along with colleagues at the University of Ljubljana along with the TU of Delf, have produced what they describe an interactive tool that allows ‘the potentials of currently 70 smart cities’ and makes them comparable for the first time.
Where the smart cities are
This ranking suggests that the so-called smartest cities are in Finland, Denmark, Austria, Germany and Benelux.
‘Middle-sized cities are a fascinating focus group, ‘ said Smart Cities project manager, Professor Dr Rudolf Giffinger from the TU of Vienna.
‘120 million people, i.e., not quite 40% of all of Europe’s city dwellers live in about 600 cities of that size. They have an enormous potential but are often in the shade of the metropolises.
‘It is difficult for them to position themselves, sometimes they have to fight image problems, and they are overlooked by investors. But they have a major advantage: due to their size they are flexible and can pick up points with smartness.’
Obviously, before we can rate how useful these rankings are (and we reckon they do have a great deal of potential albeit in a slightly different form), we need to define what is meant by ‘smart’ – and does it matter to property investors anyway?
Actually, this is where we run into a little trouble with the rankings as they are right now.
What is smart?
The academic team gathered data from each location relating to six categories for 70 middle-sized cities, measuring economy, people, governance, mobility, environment and living.
‘A middle-sized city is considered to be a smart city if it demonstrates forward-looking development in the six characteristics on the basis of a combination of local circumstances and activities carried out by politics, business and the inhabitants.’
Right away, though, the survey stripped out a whole raft of cities that may have winning potential for property investors simply because the data relating to the researchers’ categories wasn’t available, or couldn’t be gathered. So, out of 256 cities of between 100,000 and 500,000 people, the academics reduced the number of locations to 70.
Relevant categories
Our main problem with the research is that it includes weighting for categories that don’t necessarily have much to do with property investment – although, to be fair to the research team, they weren’t specifically developing a tool for property investors!
We could go further and say some of the categories are clearly politically loaded. Here’s one – a measure of smart people is categorised as ‘cosmopolitanism/open-mindedness’ and the measure used – ‘Knowledge about the EU’!
One measure of ‘Innovative spirit’ is ‘patent applications per inhabitant’. Great for R&D maybe, but a measure of a financial centre?
Smart people also get points for ‘social and ethnic plurality’ and the measure of this is ‘share of foreigners’, and ‘share of nationals born abroad’. Smart people are also measured in terms of ‘participation in public life’ and one of the two measures used is ‘participation of voluntary work’.
All commendable stuff, but vital for a thriving property market based on inward migration (not measured), FDI and a booming economy? Not so sure about that.
Having said all this, with a few of the categorisations stripped out, and others weighted differently, this ranking could be an extremely helpful indicator of those cities that are setting themselves up to attract investment, people in search of a desirable lifestyle AND the best jobs. And these, of course, are the basic drivers of property markets.
For more details see the Smart Cities website
Meanwhile, here’s the Smart City ranking. The question we’d ask straight away, though, is ‘Who on earth’s moving to Luxembourg?!’
1 Luxembourg
2 Aarhus
3 Turku
4 Aalborg
5 Odense
6 Tampere
7 Oulu
8 Eindhoven
9 Linz
10 Salzburg
11 Montpellier
12 Innsbruck
13 Graz
14 Nijmegen
15 Groningen
16 Gent
17 Ljubljana
18 Maastricht
19 Joenkoeping
20 Brugge
21 Enschede
22 Goettingen
23 Umeaa
24 Regensburg
25 Dijon
26 Nancy
27 Trier
28 Clermont-Ferrand
29 Poitiers
30 Maribor
31 Cork
32 Erfurt
33 Magdeburg
34 Kiel
35 Zagreb
36 Cardiff
37 Leicester
38 Portsmouth
39 Aberdeen
40 Tartu
41 Pamplona
42 Plzen
43 Valladolid
44 Usti Nad Labem
45 Trento
46 Coimbra
47 Nitra
48 Rzeszow
49 Trieste
50 Oviedo
51 Ancona
52 Perugia
53 Bialystok
54 Kosice
55 Timisoara
56 Banska Bystrica
57 Bydgoszcz
58 Patrai
59 Kaunas
60 Larisa
61 Gyor
62 Szczecin
63 Sibiu
64 Kielce
65 Pecs
66 Liepaja
67 Miskolc
68 Craiova
69 Pleven
70 Ruse
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POSTED BY
ROBIN BOWMAN
ON
MON 15TH OCTOBER
AT
15:00 GMT
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TAGS:
UK Property, European Cities, Smart Cities, Investment Locations
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SMART CITIES – BUT ARE THEY CITIES FOR SMART INVESTORS?
Hi Robin - I agree that this is a great idea - but not one that is perfectly executed!
Investors would focus more on these cities if they could understand (and pick) the winners!
Clearly, 120m people is a lot!
My main gripe with the ranking is that it promotes those cities with a technical bent (ie patents get you a higher ranking) but does nothing on the issue of tax or job creation?
I beleive that the success of a city is measured by its ability to attract (and generate)
a) people
b) investment (or money)
Smart cities are one's that will do this best. These would also, then be my pick of the cities in which to invest in the property markets.
Cheers
Neil
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POSTED BY
NEIL LEWIS
ON
MON 15TH OCTOBER
AT
18:04
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