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Smart cities a good investment says CCI speaker

Don Wall
Smart cities a good investment says CCI speaker

Tech firms are poised to transform the built environment, particularly cities, with radical new ways of problem solving, delegates attending the Canadian Construction Innovations inaugural conference were told recently.

In fact, the presenter making the claim is betting on it. Venture capitalist Jesse Devitte, co-founder of New England-based Borealis Ventures, has for the past two years turned his gaze on construction as the newest sector ripe for transformation by tech innovators.

Devitte was the noon-hour keynote speaker at the Nov. 3 conference held in Toronto, addressing the theme “It is Time for Smart Cities” and was introduced by Susan Viegas, a senior advisor with the City of Toronto and co-chair of the Smart Cities Working Group. She recited the city’s efforts to introduce digital technology into its functions and culture, including hiring a resilience officer and opening a Civic Innovation Office, and concluded by referencing the city’s latest coup, the commitment by Google/Alphabet’s Sidewalk Labs to create an innovation hub on Toronto’s east waterfront.

 

“Toronto is smart but we can become smarter,” said Viegas.

Devitte said the construction sector represents an untapped source of wealth for venture investors that represents 14 per cent of world economic output and $4.3 trillion in annual economic activity in the U.S. alone. Looking ahead to 2030, there will be five billion people living in cities, combined with an estimated need for $54 trillion in global infrastructure investment by that year.

The message is clear, Devitte said: “Increasing demand will require that design, construction and operation of the built environment becomes dramatically more efficient. Technology is the catalyst to drive this quest for efficiency through the entire design-build-operate sequence.

“Digital transformation is the answer.”

Smarter cities will be developed by processes such as Building Information Modeling and lean construction and products such as drones, cloud computing and robotics, Devitte said, and his firm’s portfolio represents these varied pathways.

Borealis Ventures has moved aggressively into the building sector, with half of its investments targeting constructor innovators. One of them, Blokable, founded in March 2016, with a head office in Seattle but a significant presence in Vancouver, is developing low-cost modular apartments called Bloks. Vulcan Inc., backed by Microsoft co-founder Paul Allen, is another Blokable supporter.

“Blokable in particular is poised to make a major impact on advancing the movement to improve affordable urban housing,” Devitte said.

Another startup supported by Borealis, Fieldlens, a developer of project management software, was recently bought by WeWork. Borealis has also invested in New York startup Dandelion, which operates in 11 New York counties and is said to cut the typical cost of home geothermal heating systems by three quarters.

Looking at models for smart cities around the world, Devitte said Toronto with its Sidewalk Labs investment makes a strong case for leadership. The developers are looking for new ways to improve city living with new standards of sustainability through climate-positive energy systems, self-driving transit and new construction techniques that will enable housing affordability. Sidewalk Labs is also touting a new era of citizen equity as a driver and byproduct of its smart cities planning.

Other factors that will transform cities will be the trend towards integrated building lifecycle planning with a free flow of data; the need to accommodate the upcoming onslaught of data centres; and integration of the sharing economy, he said, citing Uber and Lyft.

“There is not a major city around the world that is not thinking about how we will work with that,” said Devitte.

As for data centres, very dense and significant energy users, they will become ubiquitous — “mission critical,” said Devitte — but tech companies are concerned the construction industry is not meeting their needs, he said.

Los Angeles, Chicago, Seattle and New York City, with its new civic connectivity program NYCx, topped recent surveys of American smart cities across a range of metrics, but Devitte prompted laughs when he said there is a lot of hype in the sector that requires judicious analysis, and one trend to be suspicious of was the easy labelling of every function as “smart.”

His choice for a smart city on the rise is the city-state of Singapore, Devitte said. An article he cited noted that Singapore has lots of talent in STEM disciplines, an open data network, committed government leadership, a concentration of startups, a relatively affluent and well-educated population and good infrastructure.

Devitte said a major asset for Singapore is that it has one level of government that enables efficient decisions and leadership. His firm will be watching Singapore closely, he said.

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