This means that data from city dwellers’ devices and their interaction with the physical city will determine how the government allocates resources and even influence the private sector as well. Although major developing smart cities are inspired by technology, old-school construction resources like steel are still required.

Here’s a look at where the next wave of smart cities will emerge and what opportunities lie ahead.

Countries Ripe for Smart Development

The major developing cities to watch are located in India, China and Africa. These areas of the world are ripe for growth, and what they have in common is a vast amount of land. Before modern ICT and IoT were available, it was almost impossible to imagine a way to uniformly connect these large areas into a single city. However, thanks to technology, governments will be able to bring greater numbers of people together and better manage resources for all. And development is already well underway.

India

In India, the “world’s oldest city” is being developed into a smart city. The city is called Varanasi, and it’s a holy place for the Hindu religion. However, its outdated infrastructure has created a demand for rejuvenation, and Varanasi’s renovation plans involve a lot of steel. With plans to outpace Japan as the second largest producer of steel, Varanasi will be rapidly expanding its own production capacity and turning to the global steel industry for material and technological support. Planned improvements to Varanasi include creating more affordable housing, improving the public transportation system and upgrading the sanitation system. All three of these improvements are major undertakings, and all three have roots in steel. Creating new housing structures, rail systems and modern sanitation will boost steel consumption.

SEE ALSO: Revving Up for Growth: India’s Automotive Market is In Full Gear

A model of the planned smart city in Dholera, in southern Gujarat, India. (Source: Cities Digest)

Aside from Varanasi, there were nearly 100 cities considered for smart city development in India, and approximately 20 of those have been approved by the Indian government for funding. The smart cities on India’s shortlist come from a variety of regions. This redevelopment project is part of a larger goal by the Indian government to bring the large country together. By implementing smart city technology throughout the vast country, India will be able to create a better-organized society.

China

China is rapidly developing its smart cities. With plenty of funding and technology to spare, the Chinese government has earmarked 500 cities for smart city development. While the original goal was to complete the transformation for all 500 cities by the end of 2017, more than half of the listed cities are still undergoing development.

So far, Qingdao, Hangzhou and Xiamen cities are ranked at the top for smart city governance according to the National Development and Reform Commission and the China Center for Urban Development. These cities are already equipped with wifi internet service on buses, smart register and pay services and robots that interact with citizens on a daily basis. Hangzhou, in particular, has been a sort of test tube for Alibaba’s City Brain project where they gathered massive amounts of data for artificial intelligence (AI) to process and make decisions with. The technology has drastically improved the city’s efficiency by decreasing traffic and the time it takes to respond to emergencies. As a result, City Brain will be exported to and implemented in other Chinese cities. Although not everyone is sold on the idea because the technology may put citizens’ privacy at risk, it is still expected to speed up smart city implementation all over China.

Tianjin City is one of the cities in China developing into a smart city. (Source: Bosch)

These cities will require support from the steel industry to develop and engineer high-quality, high-traffic amenities with technology at the core. Similar to Varanasi, many Chinese city projects will initially focus on housing and transportation upgrades.

SEE ALSO: Ask an Expert: 3 Managers Explain POSCO China’s Success in Challenging Chinese Market

Africa

In Africa, over 300 cities will transition into smart cities, but many development projects are facing delays getting off the ground. Much of Africa is in need of establishing standard city amenities like city government offices, schools and an open market for privately-owned businesses. Nevertheless, the region presents a tremendous opportunity for growth, and Africa’s smart cities may become some of the most efficient locations around the world.

The Modderfontein Smart City is being developed in Johannesburg by Chinese firm Zendai. (Source: Future Cape Town)

Because there is a lack of complex infrastructure, these smart cities will be built almost from scratch, allowing the people of the city to benefit from a more customized smart-city technology. Instead of working around a historical route or building, African smart cities have the flexibility to transition into smart cities optimized for the exact needs of their developing governments, education systems and business communities.

The construction of African smart cities will start from scratch. (Source: SOFREP)

This is a city planner’s dream come true. And it’s ripe for steel consumption. The steel industry can provide high-quality materials and technologies, ensuring the best construction methods and materials from the onset. Without having to re-engineer structures, African smart cities are expected to be state of the art.

While opportunities are vast in this new arena of development, many of the top steel companies have already signed contracts with developing countries to assist with smart city production. But that doesn’t mean all of the work has been assigned. With thousands of cities slated to go smart within the next five years, the steel industry will have many opportunities and play a large role in the redevelopment of these communities. Steel companies that have an eye for technology and the highest quality products will be highly sought after in the years to come.

Cover photo courtesy of IoT India Magazine.

The 2008 Financial Crisis was a blow to the global automotive industry and its suppliers. It took years to recover, but the economy did start showing signs of growth. McKinsey&Company’s 2013 report, The road to 2020 and beyond: What’s driving the global automotive industry, painted a positive picture of the global automotive market with profits projected to reach EUR 79 billion by 2020, up from EUR 54 billion in 2012, with China responsible for 60 percent of profits.

Their 2016 report, Automotive revolution – perspective towards 2030, offered a similar outlook. Overall global car sales will continue to grow, but at about a 2 percent growth rate, down 1.6 percent from the last five years. New market trends such as electric/autonomous vehicles, shared mobility and stricter environmental regulations will disrupt the market with new challenges and opportunities, but what remains constant is that the majority of growth in global automotive sales will be lead by the rising middle class of emerging markets, namely in India and China.

Thousands of vehicles are scrapped in the Chinese government’s efforts to reduce emissions. (Source: The Daily Mail)

Subsequently, China reached record vehicle sales in 2016. However, in April 2017, it recorded the lowest number of sales in the past two years for passenger cars, down 3.7 percent from 2015. This follows a national sales tax rise early in 2017 to 7.5 percent, coupled with a general decrease in demand for cars as consumption is reaching a plateau. Moreover, China’s sales tax will increase again to 10 percent in 2018.

India’s Booming Automotive Industry

Unlike China, India’s automotive market shows little signs of slowing down. India is now the world’s fastest growing economy as their GDP is projected to increase by 7.2 percent from 2017 to 2018. Their middle class is estimated to triple by 2025, reaching 89 million households.

The government of India is looking to the automotive industry to lead India’s economic growth, as outlined in its Automotive Mission Plan for 2016-2026 and “Make in India” initiative. Under such plans, the government will work towards creating an additional 65 million jobs in the automotive market and a 500 percent increase in vehicle exports by 2026.

A full parking lot of Renault cars reflects the massive automotive market in India. (Source: The New York Times)

It’s no surprise that Foreign Direct Investment (FDI) is pouring in. From 2000 to 2016, India’s automotive industry alone attracted USD 15.79 billion in FDI. For investors, India’s growing middle class of consumers is as attractive as their vast and low-cost labor.

POSCO Maharashtra in India

POSCO Maharashtra is one automotive supplier that is echoing the growth of the Indian automotive market. Their 2Q17 unaudited earnings report showed significant growth from just a year before in 2016. The reported revenue was USD 331.7 million, compared to USD 174.7 million in 2016. The company’s operating profit was USD 32.6 million, up from USD 3.5 million in 2016. Finally, their net profit was USD 22.9 million, another significant increase from USD 15.9 million in 2016.

*Earnings figures were converted from Korean won to U.S. dollars using August 22, 2017, exchange rates.

The POSCO Maharashtra Plant in India

In May of this year, POSCO Maharashtra signed a MoU with Essar Steel to supply 1.1 million tons of flat steel products during the 2017 fiscal year. This is the second year of partnership between the two companies, but the volume of steel POSCO Maharashtra will supply is 30 percent higher than in 2016.

The growing business reflects the work philosophy of POSCO Maharashtra employees: “If [we] supply quality material, they’ll come back again and again. So that’s what we’re doing right now. Although our products might be priced a bit higher in the Indian market, we are supplying quality material and our customers continue to be loyal because they understand that value.”- Chetan Waghchoure, sales representative for POSCO Maharashtra. Read the full interview here.

POSCO Maharashtra’s Chetan Waghchoure during an interview with The Steel Wire

POSCO Maharashtra is taking full advantage of the thriving automotive industry in India and continues to expand its business by reducing production and inventory costs, increasing performance and efficiency and planning to incorporate AI technology into their future production processes.

Market indicators point to India to drive the profitability of the automotive industry. India’s growing consumption of vehicles, open business environment and vast labor force will continue to attract foreign investment and new businesses. The best part is that India is not even close to being fully developed, meaning brighter prospects for future growth and good news for manufacturers and suppliers.