Smart city initiatives are sprouting across the globe, with the aim of creating truly connected cities for life and work.
In January 2020, Japanese car manufacturer Toyota revealed plans to build an entire city from scratch near the foot of Mount Fuji. Named for its integrated design, Woven City will not be large, but it will be smart. Around 2,000 residents will live and work in the 175-acre site initially, surrounded by some of the most sustainable and connected technology currently available.
Woven City streets will hum with the sound of electric and driverless vehicles. Renewable energy will power its sustainably designed homes. Everything – people, vehicles, buildings – will be digitally connected, with inhabitants acting as the pampered lab rats of a real-world experiment in ultraefficient, AI-assisted urban living.
“With people, buildings and vehicles all connected and communicating with each other through data and sensors, we will be able to test connected AI technology, in both the virtual and physical realms, maximising its potential,” said Akio Toyoda, Toyota’s president.
PRESSURE ON INFRASTRUCTURE
The concept of a smart city is not new, but growing concerns about climate change and overpopulation are driving ever-more ambitious projects. Scores of nations around the world are piloting their own interpretations of smart urban design, as authorities react to growing pressure on public amenities and city infrastructure.
The Netherlands, for example, has adopted a nationwide Smart City Strategy, with the aim of developing projects that will create healthier, greener, more liveable urban environments. Paul Mencke, partner at Govers Accountants/ Advisors, UHY’s member firm in the Netherlands, says the need is obvious.
“The ambition of the government arises from global developments such as urbanisation, climate change, labour participation, digitisation, mobility and natural resources becoming rare. These global developments have a disruptive impact on societal systems, and they put pressure on cities to create new business models,” he explains.
Paul cites the example of his own city, Eindhoven, which is creating a 32-kilometre-long cycle loop around and through the city, currently in its final stages of construction. “The route is an example of a sympathetic initiative that has a positive combined impact on mobility (reducing congestion), the reduced use of fossil fuels, public health and parking problems,” he says.
Dubai, meanwhile, has long embraced the concept of technology-driven urban living. Now, its Smart City 2021 initiative boasts the ambition of demonstrably improving happiness. It aims to embed technology into every element of public life, helping to create more satisfying interactions between inhabitants, businesses and government bodies. There are currently 545 planned or ongoing smart city initiatives, harnessing AI, blockchain and paperless technologies to drive efficiency.
“The basic premise for smart city adoption is to ensure every aspect and transaction of daily life in the city adds to the happiness quotient of its residents, from a smart technology standpoint,” says James Mathew, CEO and managing partner of UHY James, based in Dubai, United Arab Emirates.
While smart city technologies do not have to be digital – the Eindhoven cycle track is a case in point – many inevitably are. Dubai is a leader in blockchain adoption, for instance, with a blockchain community 5% larger than the global average. And innovation does not stop there, as James explains:
“By 2030, Dubai is set to have the first smart police station with 25% of its workforce being ‘robocops’,” he says. “The first robot officer was launched in 2017 to patrol Dubai streets.”
TECHNOLOGY FOR LOCAL NEEDS
Around the world, cities are promoting smart technologies that best meet their specific needs. According to Sunil Hansraj, joint managing partner, Chandabhoy & Jassoobhoy, Mumbai, India’s Smart Cities Mission was created to help ease overcrowding in the country’s biggest cities. “Its aim is to provide the burgeoning middle class with an aspirational lifestyle in their own hometowns, rather than have a large population continually migrate to the larger cities – which are bursting at the seams,” says Sunil.
Overcrowding is not unique to India, of course. Combined with overall population growth, urbanisation is likely to add another 2.5 billion people to cities globally over the next three decades. But a number of India’s cities have reached saturation point already, accelerating the need for smart city initiatives. The aim is to improve quality of life in India’s biggest urban centres, while at the same time making smaller towns and cities more economically viable, slowing the pace of internal migration.
“Accordingly, the purpose of the Smart Cities Mission is to drive economic growth and improve quality of life by enabling local area development and harnessing technology, especially technology that leads to smart outcomes,” says Sunil.
“Growth and development will enable smart cities to use technology, information and data to improve infrastructure and services.”
Mexico, meanwhile, has seen the creation of ‘smart zones’. “They are ‘little cities’ in or near a major city,” says José Carlos Villegas, partner at Mexican member firm UHY Glassman Esquivel y Cía. “In addition, the Mexican technology firm Netcity is creating smart initiatives in Mexico City.”
These smart zones are testbeds for technology that might eventually be rolled out across the country and, again, are aimed at helping to solve some of Mexico’s most pressing urban challenges. “With technology, we hope we can improve security systems, communication and telecommunication, electricity provision and clean water supplies,” says José.
Smart city initiatives aim to improve quality of life, and by doing so confer real economic benefits. For a start, they make doing business easier. A connected network of Internet of Things (IoT) sensors could alter traffic light timings in response to changing needs, making commutes quicker and smoother. Sensors on lampposts might guide vehicles to free parking spots.
At the same time, blockchain technology could be used to speed up bureaucratic processes and cut red tape, while data gleaned from thousands of IoT devices could lead to better evidence-led business decisions. Smart buildings, meanwhile, can reduce energy costs while maintaining optimum conditions for creative work. And truly digital cities make home and remote working easier and more productive.
Even before the first IoT sensor has been installed, the creation and management of smart city initiatives offers a significant opportunity for companies in a range of sectors. Telecoms providers, software firms, construction companies and component manufacturers are all scrambling to be involved in the first wave of smart city projects. Some forecasters estimate that the global smart cities market could exceed USD 2.5 trillion by 2025. That is an enormous figure, and the excitement around smart cities is real.
SLOW PACE OF CHANGE
For the moment at least, hype might be outpacing reality. While mega projects like Woven City create interest and publicity, in many cases the push towards smart cities is piecemeal, local and relatively small scale. In India, Sunil points out that the Smart City Mission was first discussed in 2014. Six years later, only 50% of the budget for projects has been allocated, of which about 75% has been released and an even lesser proportion utilised. “There is still some distance to go before the physical benefits will be visible,” he says. “The Covid-19 crisis is not going to hasten the progress of these projects and so for now the smart cities concept may remain just that – a great concept.”
In Mexico, too, government inertia is slowing the pace of change. “For example, despite the fact that businessmen and investors are aware of the importance of clean energy initiatives and are willing to invest, the government is less proactive in promoting the use of clean energy,” says José.
Paul says the current situation in the Netherlands is also a scattered picture of sympathetic initiatives. “While there are quite a lot of projects, they seem to be on a local level, and relatively small in size.”
A CONNECTED FUTURE?
Nevertheless, while the development of smart cities is haphazard at best, the direction of travel is set. Increasing pressure on urban environments will force authorities to act. Big business is eyeing an opportunity. Few cities are as far down the path to a fully connected future as Dubai, and the city is already seeing economic benefits.
“Smart technology initiatives are expected to account for savings worth almost USD 1.2 billion through shared government infrastructure and services,” says James. “And Dubai has become a playing field for startups – the smart initiatives provide startups with a platform to scale their business and demonstrate their capabilities to contribute to the futuristic vision of Dubai.”
Retail is a major contributor to Dubai’s economic success, and James says the city’s move to enhance data collection and analytic capabilities is providing the sector with new and valuable information. “The end objective of leveraging data and analytics in the retail sector is to gauge retail trends, analyse the performance of the sector and improve the environment for doing business in the city,” he adds.
Dubai’s high-end retail sector may be unique, but it is one example of what smart initiatives can do for business when targeted at local needs. In the meantime, the fully connected city may be some way off, but it is on the way. When companies like Toyota start building entire neighbourhoods from scratch just to test their technology, you can be certain that the momentum behind the adoption of smart city initiatives is only going to increase.