As increasingly more “networked society” cities emerge, the application of information and communication technology (ICT) is set to challenge existing systems and drive change in the way cities work.

A new report, released this week by ICT giant Ericsson, showed “fundamental change” within cities, with people driving urban development, the redefinition of gross domestic product (GDP) growth and collaboration reshaping the core of organisations.

The latest Networked Society City Index predicted that cities’ inhabitants, rather than institutions, would drive urban progress, suggesting a bottom-up urban development.

“With ICT, people have effective tools to turn ideas and new thinking into powerful actions,” the report stated, adding that it often started with a practical need, such as an improvement in living conditions, for concepts to rapidly impact city life.

ICT offered people new opportunities for taking the lead, explained Ericsson head of the Networked Society Lab Patrik Regårdh.

Grassroots initiatives were now expected to drive urban innovation, with a move to a more connected people-centric governance, where individuals participate to a greater extent in urban planning, information sharing and decision-making.

The growing development and application of ICT was set to be a game-changer for people to influence both public and private stakeholders, the report pointed out.

Ericsson Consumer Lab head of research Michael Björn agreed, as he outlined the latest Consumer Lab report, ‘Smart Citizens’, which showed that, as citizens used ICT to keep informed and make smarter decisions, the cities they resided in would also become smarter.

Previous studies showed consumers increasingly leaning on Internet services to alleviate some of the frustrations experienced in urban hubs, which indicated a “powerful” bottom-up push for change.

“We are becoming smart citizens … and, through our changing behaviour, efficient practices and smarter social norms are developing in our cities,” the Consumer Lab report noted.

Citizens wanted to use their smartphones to alleviate concerns about health, improve communication with authorities and navigate urban traffic, Björn explained.

While people were increasingly establishing cooperative initiatives to tackle social problems, the new innovative solutions within the “networked society” would alter the traditional view of what defined GDP growth, Regårdh said.

He predicted that ICT would challenge the traditional definition and calculation of GDP.

GDP would be “redefined” to capture a “new understanding” of sustainable value creation and wealth in cities and nations, as collaborative consumption, or sharing economies, signalled a shift in consumption from ownership to access.

“High-density cities can use network technologies to do more with less by renting, lending, swapping, gifting or sharing products, instead of increasing consumption and production,” the Networked City Society Index report suggested.

Regårdh commented that GDP currently failed to include this type of value creation within a networked society and this left leaders at risk of making poor assumptions of growth.

Meanwhile, organisations would need to “step out” of traditional models and mindsets in a more connected and individualised society.

The application of ICT innovations would drive down a company’s fixed costs, while other structural corporate changes would emerge with the introduction of new cloud-based services and automation, besides others.

Further, innovative ways to communicate would “usher in new collaborations and more dynamic formations that redefined the core purpose and functions of companies”.

“Tomorrow’s networking organisations will be more flexible and efficient; they will have more access to human capital and less need for financial capital; and they will be better equipped to maximise resources,” the report said.

Meanwhile, Stockholm ranked first – out of 40 countries – in the Networked City Society Index, followed by London, Paris, Singapore and Copenhagen.

The Index examined the links between the cities’ ICT maturity and the triple bottom-line, namely social, economic and environmental, and showed how ICT could support sustainable urban development.

Delhi, Mumbai, Lagos, Karachi and Dhaka were the five lowest-ranking cities, while Johannesburg secured a ranking of 29.

The index also showed that cities with a low ICT maturity ranking were seemingly “catching up”, as their maturity growth rate outpaced that of the high-performing cities.

Regårdh pointed out that there was a “clear” correlation between ICT maturity and triple bottom-line development, with ICT offering potential to improve efficiencies and cut costs in current systems, while freeing up resources for application in more productive areas.

The world was entering a new era where the economic and political importance of cities was rising rapidly, with the urban centres becoming increasingly vital for solving major social, environmental and economic challenges.

ICT provided a foundation for “radical innovation”, fundamentally changing how challenges were tackled and needs met.