Some €627 billion. That’s what the global smart cities market is estimated to be worth by 2023. According to research published this month, the market is set to see explosive growth from a base of €269 billion in 2018.[i] While Asia Pacific is predicted to see the most intensive commercial growth, many of the blue- chip giants well-placed to drive the market forward are European. Germany’s Siemens, the Dutch company Phillips and the UK’s BT are all well-placed to make game-changing interventions in the smart city space in the decades ahead.

Europe is at the crucible of smart city innovation, and yet Europeans are still yet to access the full benefits of innovative new technologies. Europe accounts for just five percent of global eBike sales, while nine-in-ten are sold in China.[ii] Around the world city authorities are installing smart lampposts at a pace, yet most of Europe’s streetlighting is old and has been in place for a quarter of a century or more.[iii] Electric cars are being touted as the answer to chronic air pollution in European cities, but last year accountants EY warned of a slowing down of eVehicle sales growth across the EU.[iv]

Europeans are hungry for change. Who could be anything but intensely depressed by the steady stream of dire warnings about cities’ toxic air and gridlocked streets? Citizens, addicted to the immediacy afforded by smartphones, expect their cities to match the slickness and immediacy that has become expected as standard in the modern digital economy. Technological barriers are constantly being broken, and citizens expect their leaders to share the same spirit of boundless innovation. They want technology put to use for the public good, making the streets much safer, less-polluted and easier to navigate.

Operating in a challenging financial environment, in which the immediate demands of funding vital public services leaves little for long-term strategic planning, city authorities are working to deliver what citizens expect of them. Tasked with dealing with a whole host of challenges from an ageing population to growing pressure on schools and hospitals, today’s city leaders face no small a task. Cities are increasingly being asked to do much more with much less.

There is a clear and pressing need to think radically when it comes to how cities use technology in the service of citizens. Directing significant capital investment to smart city technologies in the context of an increasingly tight fiscal environment is a luxury that some say European cities can’t afford. But a wealth of evidence points to the short and long-term returns open to cities that commit capital to developing urban smart city infrastructure.

Last year extensive analysis conducted by my team at EU smart cities programme Sharing Cities revealed that the European taxpayer could stand to benefit to the tune of more than €2 billion if it upgraded its ageing streetlight network with smart lampposts.[iv] These funds could be redirected away from street-lighting and put towards funding vital health and social care services.

Some 35 percent of the EU’s buildings are more than 50 years old and almost three-quarters of the building stock is energy inefficient. Retrofitting buildings with high-tech energy efficiency measures could quickly slash the EU’s total energy consumption by more than five percent – a saving equivalent to hundreds of millions of Euros annually.

Delivering targeted investment in smart city technologies represents a golden opportunity for European leaders and the people they are elected to serve. With tightening budgets, worsening congestion, and pervasive air pollution, municipalities should not pass over on the tantalising returns offered by Europe’s smart city revolution.

Nathan Pierce is Head of Smart London and Programme Director of Sharing Cities – one of 12 Horizon 2020 Smart Cities and Communities and Lighthouse Projects.