CONNECTIVITY AND QOL HOW DIGITAL CONSUMER HABITS AND UBIQUITOUS TECHNOLOGY ARE DRIVING SMART CITY DEVELOPMENT IN ASIA PACIFIC
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Connectivity and QoL
How digital consumer habits and
ubiquitous technology are driving
smart city development in Asia Pacific
A white paper in collaboration with2 MIT Technology Review
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 3
Preface
Connectivity and QoL is a white paper by MIT Technology
Review. It is based on research conducted between June and
September 2017. Further insights were gained through in-depth
interviews and are included in this report. We would like to
thank all participants in this research project as well as our
partner, global media and digital marketing communications
leader, Dentsu Aegis Network.
MIT Technology Review has collected and reported on all findings
contained in this paper independently, regardless of participation
or sponsorship.
October 2017
© MIT Technology Review, 2017. All Rights Reserved.4 MIT Technology Review
Contents
1. Asia Pacific’s smart city imperative 5
2. Pervasive personalization 9
3. Cities of clouds 11
4. Smart ... and sustainable 13
5. Towards a collaborative smart city economy 15
6. Livability through connectivity 17
7. Australia 19
8. China 21
9. Hong Kong 23
10. India 25
11. Japan 27
12. Singapore 29
13. South Korea 31
14. Taiwan 33
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 5
1. Asia Pacific’s smart city imperative
A sia Pacific’s rapid development has been a
singular success story in the global economy:
the region’s economies have grown at roughly
that Asia’s cities grew by nearly one billion people
between 1995 and 2015—more than all other
regions in the world combined. 2.1 billion Asians live
twice the speed of the rest of the world for nearly a in cities, 53% of the region’s population, and those
quarter-century, and over that time have seen their numbers grow by over two million a month.
collective GDPs nearly triple in size—to over US$22 Urban growth has also brought challenges—
trillion—in that time. While Asia Pacific’s growth fast-expanding cities have strained transportation,
drivers are multifaceted and difficult to generalize, power and sanitation infrastructure, particularly
they typically have involved strong coordination problematic in Asia Pacific’s poorer cities. Increased
of government and business agendas around energy consumption, deforestation and car
regional and global trade, focused investments ownership in the region has turned Asia Pacific into
in infrastructure, and in particular a willingness to the world’s largest contributors to greenhouse gas.
adopt and develop leading-edge technologies. In its 2017 report, “Trends in Global CO2 Emissions”,
Cities, in this sense, have been at the heart the Netherlands Environmental Assessment Agency
of Asia Pacific’s growth, serving as the catalysts identified seven Asia Pacific countries among the
for the region’s thriving trade, innovation and world’s 10 fastest-growing in terms of increased CO2
opportunity. The United Nations Human Settlements emissions over the last 25 years, led by China and
Program, in its 2016 World Cities Report, estimates India with 355% and 272% respectively.
Connectivity and QoL - Figure 1
GDP & urbanization
12.5% People living in urban
areas above 1m
(2016, in millions)
10% China 350
GDP growth annual avg., 2006-2016
85
India 5
7.5%
Singapore
5%
South Korea
Taiwan Hong Kong
Australia
2.5%
United States
Japan
0%
20% 40% 60% 80% 100% Compiled by MIT Technology
Review based on data from the
% of population in urban areas above 1m, 2016 World Bank, Trading Economics
© MIT Technology Review, 2017. All Rights Reserved.6 MIT Technology Review
Shifts in demographics present additional extensive in-market research and nearly two dozen
emerging challenges for both poor and rich Asian in-depth interviews with senior executives in the
cities. Aging populations in Japan, Singapore, and economic development, communications services,
increasingly China exacerbate strains on growth information technology, and advertising and media
initiatives and place additional demands on industries.
transportation, housing, and healthcare systems Smart cities are usually thought of as cross-
to cater to the needs of growing elderly and less sector initiatives that link the information technology
economically active populations. India, whose platforms of both private and public infrastructure
government is currently overseeing more than and service providers to increase operational
100 distinct smart city programs simultaneously, efficiencies and expand citizens’ access to
hopes that information technology will alleviate the services. They can take many forms, but two things
challenges of providing millions of new urban distinguish Asia’s smart city efforts from most in the
migrants with basic public services while improving rest of the world.
their access to convenient housing and The first is that Asian governments and
transportation, allowing urban economies to businesses are often more willing to invest in
capitalize on their productivity. experimental models that exploit new technologies,
Despite these challenges, just as Asia Pacific’s business models, and urban planning designs. This
cities have been critical platforms for accelerating approach can involve developing new “greenfield”
economic growth, they are also serving as the smart cities from scratch, with a comprehensively
region’s crucible for innovation on sustainable planned set of technology-enabled applications
growth. This report, from MIT Technology Review to make service delivery more efficient, and often
in collaboration with Dentsu Aegis Network, argues with “anchor” service sectors such as healthcare
that increasingly, smart city initiatives in Asia Pacific that can potentially serve communities outside the
are being developed and driven to improve quality immediate urban area. Korea’s Songdo International
of life for the region’s citizens and consumers, to Business District and the Fujisawa Sustainable
manage cities’ growth sustainably, and to maintain Smart Town in Japan exemplify such designs. It can
their global competitiveness. It is based on also involve redesigning cities, or districts within
Connectivity and QoL - Figure 2
Emissions
60% Emissions in 2015
(millions of tons of
India CO2)
10,000
Change in population, 1990-2015
Australia 5,000
40% 500
United States
20%
South Korea
Europe Taiwan
China
Japan Compiled by MIT Technology
Review based on data from
0% "Trends in global CO2 and total
-50% 0% 100% 200% 300% 400% greenhouse gas emissions 2017"
by PBL Netherlands Environmental
Change in CO2, 1990-2015 Assessment Agency
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 7
them, into smart city R&D labs. Examples include than that they are “smart”. For another, coordination
the efforts to recast East Kowloon as a green, efforts in “old” cities often prove to be extremely
smart-transport-enabled second central business complex project management exercises, particularly
district in Hong Kong, or Canberra as a talent in large and poor urban areas where infrastructure
magnet that benefits from focused investment in is insufficient to begin with, whether or not it is
education technology and connected living services. “smart”. Both these challenges complicate one of
The second distinguishing characteristic of the primary goals of smart cities in Asia Pacific: to
Asia Pacific’s approach to smart cities is in the attract skilled professionals and entrepreneurs to
region’s efforts to engage the private sector in move there—and stay. Yet at the same time, the
their development. Involving private enterprises fact that many economies concurrently pursue
in functions beyond issuing project tenders and both green- and brown-field initiatives means
other traditional forms of civil sector procurement that there are growing ecosystems which could
is challenging, as many smart city initiatives have address smart city challenges across the spectrum:
unclear revenue models—if any at all. Traditional developing both leading-edge apps to address
public-private partnerships (PPPs), where future challenges, and efficiency-creating solutions
government bodies contract companies to provide to tackle current urban infrastructure deficiencies.
critical services in exchange for a percentage of Cultivating comprehensive smart city innovation
earnings, are harder to define in the smart city era, clusters means that Asia Pacific economies will be
as many of the variables are as yet untested. better able to develop urban environments which
Smart cities in Asia Pacific still face some are more compelling for their current and future
development challenges. For one, many “greenfield” knowledge workers.
efforts suffer from a distinct lack of one critical Increasingly, new forms of collaboration are
resource: people willing to live in new developments emerging between governments and leading Asian
that have no established commercial or social technology firms such as China’s Alibaba, Japan’s
infrastructure, or any other perceived benefit other Panasonic, and India’s Reliance Communications.
Connectivity and QoL - Figure 3
Demographics and Connectivity
100%
80%
60%
40%
20%
0%
Australia China Japan India Korea Hong Kong Taiwan Singapore
Smartphone penetration as % of population
Compiled by MIT Technology Review based on data from GSMA, World Bank,
eMarketer, IndexMundi, Vodafone and Ericsson Working age population as % of total
© MIT Technology Review, 2017. All Rights Reserved.8 MIT Technology Review
“As Asia’s cities become more intelligent, they
“As Asia’s cities become will become more livable and more ‘neighborhoody’.”
Location-based services and analytics will bring
more intelligent, they personalized retail and public services to residents
“in ways which enhance (each residential district’s)
will become more livable and identity and community values, and provide
more ‘neighborhood-y’.” consumers with that great leveler: choice.”
Benjamin Milne, Head of Platforms &
Partnerships, Asia Pacific, and Japan MD,
Posterscope
Such firms hope that smart city projects in their Key takeaway
backyard will offer them a way to participate in
the experimentation process, to understand the Asia Pacific economies are using smart
power of analytics in resolving traffic management cities as “innovation labs”.
problems or detecting faults in power or water grids. Willingness to experiment with new
The opportunities to be found in testing and refining “greenfield” smart city sites, and collaboration
concepts—in part to “export” successful ones to with the industry, allows for more forward-
other markets—adds to the natural gravitational looking experiments in smart application
pull of cities rich in technology businesses, such as adoption.
Shenzhen, Hangzhou, or Bangalore.
But the greater opportunity for enterprises and Implications for policy makers:
consumers in Asia Pacific cities lies in the larger Engaging private enterprises keen to
ecosystem of connectivity and collaboration created promote their smart app wares—or use smart
by the platforms and applications that smart cities apps as platforms for consumer engagement
make possible. Using ubiquitous mobile broadband and awareness—will be a powerful
networks, frictionless payment systems, and deep acceleration strategy for smart city initiatives.
analytics fueled by cloud computing, brand owners
and marketers can engage consumers in ways that Implications for marketers:
make cities more sustainable, and city life more Smart city developers and policy drivers are
equitable, for everyone. extremely willing to engage enterprises in
Benjamin Milne, Head of Platforms & collaboration models, if there is an equitable
Partnerships, Asia Pacific, and Managing “value exchange”: branding and messaging in
Director for Posterscope Japan (an out-of-home exchange for enhanced navigation support
communications agency), feels that advanced in public and private transportation apps, for
technology will link consumers to cities in very instance.
fundamental ways:
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 9
2. Pervasive personalization:
The value exchange between cities
and consumers
A number of predictable application areas or
digital capabilities are gaining traction in
smart cities, including healthcare, transportation
“Government-funded
management, and so-called smart grids for utilities, infrastructure lays the
which allow for real-time monitoring of water or
electricity supplies and offer ways to repair faults, foundation, but in order for
correct anomalies, and ultimately create more
efficient distribution and charging systems.
smart cities to blossom, the
All of these rely on the flow and analysis of private sector must take more
information gathered by process controllers and
sensors not only to help municipalities ease traffic responsibility.”
congestion or make public welfare service delivery
more effective, but also to help develop new Arvind Sethumadhavan, Asia Pacific Chief
technologies and processes—artificial intelligence, Innovation Officer, Dentsu Aegis Network
in particular.
The result is “a value exchange between
citizens, governments, and enterprises,” says enhanced connectivity comes with a quid pro quo:
Posterscope Japan’s Benjamin Milne, adding that “Passive advertising is OK, but active ads become
“data is the unit of value”. intrusive,” Milne finds. “Moreover, brand owners
“The role of marketing has changed as a have to provide more relevant ads, along with other
result,” says Arvind Sethumadhavan, the Singapore- services.” Such services, he predicts, might include
based Chief Innovation Officer for Dentsu Aegis augmented-reality displays for wayfinding in the
Network Asia Pacific, observing that whereas the public transportation network.
sales imperative once made brand communication a Sethumadhavan also sees this shift facilitating
one-way transmission, “digital media has made that the delivery of new and enhanced public services,
more of an exchange, and the balance of power has and empowering Asian consumers to boot, as the
shifted.” This has happened, Posterscope’s Milne “fabric of the data surrounding them at all times”
explains, because connectivity has become more makes them aware of the things they need without
pervasive globally, driven in large part by the efforts even searching. He adds, “government-funded
of Internet and telecommunications firms to expand infrastructure lays the foundation, but in order for
their reach, influence, and insight into consumers; smart cities to blossom, the private sector must
Milne points to efforts to broadcast context-relevant take more responsibility.”
ads targeted to consumers based on analysis of Property developers and management firms
license plates in the streets. But the increased looking specifically to harness the data generated
consumer insight advertisers derive from this by smart city efforts are two sectors that could
© MIT Technology Review, 2017. All Rights Reserved.10 MIT Technology Review
take up that mantle. There is growing opportunity
for property managers and developers at the
intersection of technology, economic development,
Key takeaway
geopolitics, and demographics to create tools
Smart cities in Asia Pacific will be built out
and services that allow designed and engineered
of smart “things”.
spaces to use data analytics as a source of insight
From managed fleets of data-collecting
about customers and environments.
sensors, to intelligence embedded straight
Embedding intelligence functions—hardware
into the walls of skyscrapers, the physical
and analytic-enabling software—directly into
space that surrounds urban dwellers will
designed spaces is becoming a critical aspect
collect, analyze and act on data to provide
of building smart cities. This involves extensive
them with better, more customized services.
coordination with urban planners, property
developers, and the government.
Implications for policy makers:
One private property developer deploying
Data is becoming the currency which will
embedded intelligence is actiMirror, a Hong Kong–
fund private-public smart city collaborations,
based startup whose retail infotainment and sales
and governments must tread a fine line
displays offer information for shoppers in store
between facilitating access to that data to
while gathering and analyzing customer data for
enterprises, and maintaining the governance
retailers in real time.
structures needed to maintain privacy and
security for their cities’ residents.
Implications for marketers:
As the essential building blocks of cities
themselves become smart, private firms must
focus on what connectivity and management
services they can provide to link up public
and private data sources, in exchange for
richer sets of contextual data on consumers.
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 11
3. Cities of clouds
C loud platforms have been an important resource
for applications developers and all Internet-
dependent businesses since their inception. The
“Cloud computing
flexibility and cost-effectiveness of cloud-based provides very good
IT resources is now being seen as a catalyst for
innovation in a city’s startup economy. “The cloud technology for tapping into the
allows for development barriers to be lowered
significantly, and creates a resource which local
data in real time and enabling
software industries can [use to] tackle problems deep analytics.”
cheaply and move on to new ones as needs dictate,”
observes Stefan Sjöström, Singapore-based Vice
Dr. Min Wanli, Head of AI projects,
President for Public Sector, Asia, at Microsoft.
Cloud computing provides “very good
Alibaba Cloud
technology for tapping into the data in real time
Connectivity and QoL - Figure 4
Hyperscale Data Centers
(Number of operators per country as of December 2016)
135
24
21
15 15
12 12 12
11 11
9 9 9
6
US
China
Japan
UK
Australia
Canada
Singapore
Germany
India
Brazil
Netherlands
Hong Kong
Other
Ireland
Compiled by MIT Technology Review based on data from Synergy Research Group
© MIT Technology Review, 2017. All Rights Reserved.12 MIT Technology Review
planning has gone into connecting smart cities to
“In Hangzhou, we have their fast-growing (and export-oriented) indigenous
businesses in IT-enabled services and application
been analyzing traffic development. While cloud development is essential,
many in the industry feel that it is happily coinciding
flows in several districts, with more “organic” development of rich Wi-Fi
including precise peak-hour connectivity, in particular 4G (and soon 5G) mobile
data networks, which have long been underway.
analysis, to effect real-time “Smartphones have already made Asia’s cities
smart,” says Bill Barney, CEO of Reliance Telecom,
traffic management, which can who points out that the telecom and IT industries
cut down on emissions, and see smart city applications as more than plumbing,
and as more of a platform for actively increasing
accelerate dynamic, the value and livability of communities. “Building
low-cost information infrastructure is key,” he says.
on-demand bus services.” “If they build cloud computing centers to scale, the
rest, as they say, will come.”
Dr. Min Wanli, Head of AI projects,
Alibaba Cloud
Key takeaway
and enabling deep analytics,” says Dr. Min Wanli,
who oversees AI projects at Alibaba Cloud. Alibaba The outlook for Asia Pacific is cloudy.
works with local governments in its hometown Investment in cloud computing platforms
of Hangzhou and elsewhere in China to connect and capabilities is high in the region, and this
multiple data centers and sources of public data will provide the foundation for cost-effective
for purposes of data analysis. In Hangzhou, it has smart city innovation.
been analyzing traffic flows in several districts,
including precise peak-hour analysis, “to effect Implications for policy makers:
real-time traffic management, which can cut down Continuing to support data center and
on emissions, and accelerate dynamic, on-demand cloud computing resources will be critical
bus services.” He points out, “All this would be for fostering an ecosystem of smart city
unimaginable without the cloud.” Hangzhou, Dr. Min application developers.
notes, is serving as a test-bed for Alibaba, which
is looking to roll out a data platform that combines Implications for marketers:
a relational database of public data sources and
As governments increasingly provide the “raw
machine-learning resources; the company already
materials” for smart city development—open
has an agreement with Macau to pursue a similar
data, and on-demand cloud resources—
platform.
firms taking advantage of these resources
Developing the underlying communications and
must be ready to reciprocate with their own
data center infrastructure is central to the “smart”
contributions to the value exchange.
aspirations of many Asia Pacific cities, particularly in
India and China, where a good deal of national-level
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 13
4. Smart … and sustainable
A s has been discussed, most smart city efforts
in Asia Pacific have efficiency improvement
as a core driver—and “efficiency” usually means
Most smart city efforts
concerted efforts to rein in energy or water in Asia Pacific have
consumption, either directly, by monitoring and
metering utility delivery, or indirectly, by managing efficiency improvement
the buildings and roads that contribute to electricity
and fuel consumption. In this way, sustainable
as a core driver
energy consumption has been a hallmark of Asia’s
smart city efforts, whether it manifests in green
and intelligent building design in Hong Kong and communication between fast-proliferating intelligent
Singapore, or focused smart grid deployments in devices. Two areas of particular concern have been
Australia and India. in payment systems and Internet of Things (IoT)
But there is another facet to sustainable management platforms.
development in Asia Pacific’s smart city designs: The latter is particularly concerning for industry
establishing and promoting interoperability observers, given the critical importance placed
among the applications and platforms that govern on digitizing consumer and citizen transactions
Connectivity and QoL - Figure 5
China: Mobile payment Gross Merchandise Value (GMV) through
third parties
Billion Yuan
35,357
36,000
28,486
24,000 21,930
15,725
12,000 10,171
5,992
1,220
80 151
0
2011 2012 2013 2014 2015 2016e 2017e 2018e 2019e
Compiled by MIT Technology Review based on data and forecasts from iResearch GMV
© MIT Technology Review, 2017. All Rights Reserved.14 MIT Technology Review
Shenzhen, the Key takeaway
hometown of Chinese Openness is the real key to the smart city.
Internet giant Tencent, has Interoperability—particularly in IoT
management—and support of open source
been practically transformed inputs will allow Asia’s smart cities to thrive
and sustain their development.
into a near-cashless economy
over the last two years Implications for policy makers:
Governments must be vigorous evangelists
for open-source application development
and interoperable standards for device
to increase efficiency, security, and convenience management and payment systems,
in smart cities. “Things used to be simple—we to accelerate smart city application
had cash and cards,” says Tobias Puehse, Vice development and integration.
President of Innovation Management for Digital
Payments & Labs, Asia Pacific, at Mastercard. He Implications for marketers:
says the rise of multiple payment infrastructures, Collaboration and aggressive adoption
and smartphones and other devices with competing of emerging standards and open source-
payment applications, has meant that “too many based tools and applications will be critical
options have been created, which have added for maintaining influence in the smart city
complexity.” Puehse argues that rigorous adoption ecosystem.
of open platform systems is essential to overcome
this problem. While such systems (such as Hong
Kong’s Octopus card platform) do exist elsewhere
in “pre-smart” urban environments, Puehse
believes the real game-changer is the introduction
of “frictionless” payment systems embedded
in mobile and other smart devices. These, he
believes, will have the most substantial impact on
a city’s payment infrastructure, paving the way for
touchless digital payment systems that span cities
and eventually countries.
In other cases, good old-fashioned market
forces have begun to create market leaders with
overarching reach, giving rise to de facto standards.
Ironically, given the Chinese government’s penchant
for coordinated control of technology adoption,
WeChat’s payment platform in China has emerged
as a global leader in digital payments; Shenzhen,
the hometown of Chinese Internet giant Tencent
(WeChat’s parent company), has been practically
transformed into a near-cashless economy over
the last two years, as high-end retailers and noodle
stall owners alike have adopted WeChat’s QR-
code-based value transfer application for a sizable
percentage of their sales.
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 15
5. Towards a collaborative smart
city economy
I t is sometimes difficult to coordinate the efforts of
municipal government smart city developers with
those of private investors and technology firms. One
“Smart city developers
has improving public services as a motivation; the have spent a lot of time
other, revenue objectives. As has been mentioned,
private firms have found ways to approach smart considering how data
city development in ways that align with their
own goals—either by investing directly in the
technology can aid smart cities,
development and management of such projects (as but not as much time thinking
with Panasonic’s efforts in Fujisawa) or by utilizing
them as R&D labs (as with Alibaba in Hangzhou). about what the potential
But while these new public-private
collaborations are gaining traction, many believe
applications in the next 10 years
that even forward-looking planners may not be will be.”
looking far enough into the future. Smart city
developers “have spent a lot of time considering
Benjamin Milne, Head of Platforms &
how data technology can aid smart cities, but not
Partnerships, Asia Pacific, and Japan MD,
as much time thinking about what the potential
applications in the next 10 years will be,” says
Posterscope
Posterscope’s Benjamin Milne, observing that even
if some such applications seem futuristic—“space
ports, for instance”—they could very well be realities
by the time current smart city initiatives fulfill their
roadmap objectives.
This concern is echoed by Tomohiko Miyahara,
Panasonic’s Representative Director of the
Fujisawa SST Management Company. Panasonic’s
master plan for Fujisawa—a 19-hectare sustainable
community intended for 3,000 residents, based on
an old manufacturing site—was developed
in a traditional fashion: “smart infrastructure
and buildings were first planned, upon which
applications were designed, and services on
top.” But the company found things to be more
complicated in the execution, not least because
a large undertaking with various government
stakeholders and 18 separate companies
participating in shared technology development
created a project management challenge. “We had
to continuously ask ourselves what ‘smart life’
would actually be like in the future—and needed
© MIT Technology Review, 2017. All Rights Reserved.16 MIT Technology Review
Smart urban spaces can become magnets for
The need to fuse the creativity, talent, and innovation—making them more
globally competitive. Smart cities in Asia Pacific
commercial motivations have set their sights far beyond basic efficiency
gains, to increasing their competitiveness as an
of the private sector with the economy overall.
civic responsibilities of the state
will continue to be a challenge
of coordination Key takeaway
Collaboration now—and forever.
Private enterprises and governments need to
to look at defining the functions we thought the invest more in thinking through future modes
infrastructure would have to support over a much of smart city operations.
longer period of time,” Miyahara says, pointing out
that “a new generation inhabits a city” every 30 Implications for policy makers:
years, necessitating a “century vision” to anticipate While “greenfield” smart cities do not often
future requirements. offer solutions to existing urban management
The need to fuse the commercial motivations challenges, they provide important sources
of the private sector with the civic and governance of “future-proofing” innovation—and
responsibilities of municipal governments and entice private enterprises keen to develop
the state will continue to present a coordination applications with export potential.
challenge.
Implications for marketers:
Greenfield smart city activities may currently
be less attractive to marketers, as few
“We had to continuously consumers currently live in them—but they
present great opportunities to “export”
ask ourselves what branding and messages.
‘smart life’ would actually be like
in the future—and needed to
look at defining the functions we
thought the infrastructure would
have to support over a much
longer period of time.”
Tomohiko Miyahara, Panasonic’s
Representative Director, Fujisawa SST
Management Company
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 17
6. Livability through connectivity:
Common drivers across successful
smart cities in Asia Pacific
E ach of the Asia Pacific economies approaches
smart city development with a unique mix of
policies and “natural resources”—technology sector
No two markets in
talent, existing industry clusters, and communications Asia Pacific have
and Internet infrastructure assets. In the following
pages, the smart city development efforts of eight planners and enterprises
leading economies across the region are examined,
and their emerging best use cases are analyzed.
employing the exact same mix
While no two Asia Pacific markets have the of strategies and assets
exact same mix of strategies and assets, most of
the planners and enterprises profiled below are
working to achieve two sets of goals simultaneously: Other markets with considerable indigenous
addressing immediate infrastructure or service IT and digital device industries, such as Taiwan
delivery challenges while “future-proofing” for and South Korea, promote development
challenges on the horizon. Asia’s most innovative efforts around open-source technologies to
smart city efforts also open themselves up to speed up interoperability in IoT or security
collaboration with the private sector, both to build management. All these strategies harness the
the enabling platforms and to create potentially power of startup clusters and established firms,
exportable technologies and applications. and innovators from multiple disciplines, to
Comparing these smart city initiatives across accelerate smart city innovation.
the region, several significant common themes • Consumer-driven application development:
emerge when it comes to specific technology areas, Creating open “sandbox” environments is a key
businesses, and collaboration models: to creating and prototyping applications that a
city’s residents would actually find useful. Many
• Leveraging the cloud: As mentioned earlier, of these will involve the augmenting of existing
ITC infrastructure that enables fast and services like public transportation “powered”
cost-effective application development is an by advertising, and the data collected in that
essential foundation for smart cities. Mainland process: “We are deploying 100 Uber-like
China and Hong Kong have long invested in autonomous vehicles in Dubai for the Road
cloud platforms, and India is fast joining them Transportation Authority,” says Paul Doherty,
in support of its massive IT-enabled service President and CEO of smart city solutions firm
economy. The Digit Group, whose team has determined
• Creating “open” ecosystems: Sydney, that “the demographic data alone allows for
Australia, has been a leader in the promotion sufficiently precise targeted marketing in those
of public data as a common resource for vehicles to be profitable enough to offer the
smart city developers, as has Singapore. transportation service for free.”
© MIT Technology Review, 2017. All Rights Reserved.18 MIT Technology Review
• Mixing “greenfield” and “brownfield” of public utilities (China, Singapore, and
experiments: Centrally planned economies Australia) are investing heavily in sensor- and
in the Asia Pacific, China chief among them, device-based management to detect leaks,
often have the luxury of building smart cities theft, or security breaches. In so doing, they
from scratch. Others, notably Japan and are creating a deeper fabric of data that will
Korea, have seen private-public partnerships eventually facilitate better, more personalized
emerge to create new, “purposely smart” services for all consumers.
suburban developments, and to experiment • Cashless economies: Efforts to migrate
with new technologies and revenue models transaction payment to mobile platforms or
for delivering such services as health care and frictionless card- or chip-based applications
transportation. These efforts rarely take place are emerging in Singapore, Taiwan, and India
in isolation; infrastructure in different existing and are growing particularly fast in China,
urban centers is repurposed or enhanced with driven by pervasive and powerful social
smart technology simultaneously to achieve media applications like WeChat. Beyond the
immediate consumer benefit. efficiencies that cashless payments create
• IoT and sensor-based platforms: Here, both in accessing smart city services, digitizing
established technology and device exporters transactions generates consumer data that
(chiefly Korea, Japan, and Taiwan) and is key to the virtuous cycle of value exchange
economies seeking to transform the efficiency characteristic of smart cities.
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 19
7. Australia
A big country uses smart city planning to increase intimacy in its
communities and enhance urban livability
U rban sustainability in every sense–economic,
environmental and societal—is an increasing
priority for the Australian government. The
The Australian government’s
Smart Grid, Smart City
Department of the Prime Minister and Cabinet, (SGSC) project addresses load
Cities Division, notes that, with more than three shedding and blackouts along
quarters of Australia’s population living in cities the world’s longest interconnected electricity
which in turn generate more than 80% of the network by using IoT-enabled sensors to
country’s GDP, a federally-coordinated smart city improve demand forecasts. Concerns about
development effort is essential to maintain its energy security are also driving innovation in
power storage—Tesla was recently awarded a
unprecedented quarter-century of uninterrupted
contract in South Australia to develop a 100mw
economic growth. lithium-ion storage facility, dubbed the “world’s
National efforts to support smart cities biggest battery”. Other utility grids are following
revolve around infrastructure investment, suit. For example, South East Water is testing
policy coordination and targeted promotion of an IoT-based meter management platform in
sustainability applications. This work is increasingly collaboration with Vodafone Hutchison Australia
carried out through so-called “City Deals”– and China’s Huawei.
collaborative MOUs between federal and local
governments and private investors focused on
smart application programs. Townsville, Queensland
and Launceston, Tasmania have signed City Deals
in the last year, and a West Sydney deal is in the
works.
While national-level support of local smart city
efforts is crucial to their success, some top-down
initiatives have been slow to benefit Australia’s
municipalities. For example, The National Broadband
Network (NBN), an open-source infrastructure plan
to bring fiber access to 98% of premises in the
Adelaide has long
punched well above its
weight as a home for globally-
minded innovative firms and
projects like Tesla’s giant battery
© MIT Technology Review, 2017. All Rights Reserved.20 MIT Technology Review
information and location apps instead of creating
“Environmental its own. The federal government earmarked
A$50 million (US$39.2 million) last year to seed
efficiency is not the development programs for citizen service apps on a
national level.
underlying driver for Australia’s Consumer-centric approaches to smart app
smart cities—it is community- development can help Australian cities’ longer-
term economic development goals. Canberra,
building, and connecting for example, is attempting to use a network
of connected neighborhoods and application-
people to services.” enhanced personal and private transportation
networks to create two “smart from scratch”
Erik Hallander, Managing Director, Isobar suburbs. These would serve as magnets for highly-
Australia skilled talent.
“Australia’s a funny market—both densely
urban, but with a lot of space for new development,”
country by 2021, has struggled through a decade Hallander observes. He predicts that more cities
of political, financial and legacy technology issues. likely will roll out smart exurbs, and capitalize on
Having only reached its halfway completion point that space to build new models to deal with urban
in July 2017, many smart city observers claim the congestion and community management.
NBN’s slow progress toward alleviating the country’s There are also less-technological foundations
broadband bottlenecks is also impacting the pace for Australia’s smart city aspirations. Tim Harcourt,
of development for smart applications. Somewhat JW Nevile Fellow in Economics at UNSW Business
more successful smart infrastructure efforts have School, points to the social and economic values
been focused on smart metering for utilities (see underpinning Australian communities such as
box on previous page). Adelaide as key factors driving sustainable
Australia’s smart grid efforts are extensive, development. These “combine entrepreneurship
and highly “sticky” focal points for infrastructure with social justice, democratic rights with property
development. But Erik Hallander, Managing rights, the right for a Fair Go with the right to have a
Director of digital agency Isobar Australia, says: go, and a strong sustainable economy with equally
“Environmental efficiency is not the underlying strong social institutions is created.” He notes that
driver for Australia’s smart cities—it is community- Adelaide has long punched well above its weight
building, and connecting people to services.” He as a home for globally-minded innovative firms
argues that “commuting apps and smart parking and projects such as Tesla’s aforementioned “big
initiatives are anchored to enhancing residence battery”, and that this institutional platform has
convenience, and less so about sustainability.” created a strong base for a number of “smart parks”
Hallander notes that this imperative is present in in the City of Prospect.
both existing “brownfield” Australian smart city
projects, and increasingly in new “greenfield” efforts.
However, efforts to increase consumer access to
services do not always require strategic investment
on the government’s part. Instead, they can create Key takeaway
the conditions for the ecosystem to take over
development and promotion. Australia’s smart grids may revolutionize the
Transport for New South Wales, the statutory efficient delivery of utilities, but the country’s
board that oversees public transportation in real smart city opportunity lies in creating
Sydney, opened up its data sets so that application more livable, innovative communities.
developers can build consumer-facing schedule
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 21
8. China
Shenzhen, China’s traditional economic transformation “R&D
lab” combines central planning with market entrepreneurialism,
which may define the country’s smart city development
W ith the welfare of over 700 million urban
residents in the balance, China’s smart city
efforts are critical to the country’s economic and
Many of Shenzhen’s smart
initiatives unfold along familiar
societal development. There are more than 100 themes for Chinese cities: resource
Chinese cities with populations in excess of one management and connectivity,
in collaboration with leading technology firms. The
million, and Demographia, a consultancy, estimates
Shenzhen Water Group has contracted Huawei
that some 10% of the country alone lives in China’s and China Telecom to develop a NarrowBand IoT
10 largest urban areas. China’s quarter-century of management solution involving some 100,000 smart
rapid economic expansion has resulted in pollution water meters across the municipality. China Telecom
and congestion in its cities, along with growth and is also developing a fiber optic-based “Gigabit City”
progress. broadband network with Huawei to connect nearly a
China’s National Development and Reform million residences. The AirFuel Alliance, a global wireless
power distribution consortium involving Qualcomm,
Commission (NDRC) has cemented smart city
ON Semiconductor and others, is developing its first
development initiatives into the country’s 13th resonance-based wireless charging platform for
Five-Year Plan. These focus on IT infrastructure, smartphones in Shenzhen’s public spaces.
healthcare services and the management of But Shenzhen’s real smart city drivers come from the
energy and water. The NDRC will require private organic cycle that has arisen from being a technology
and state investment of RMB500 billion (US$75.5 hub which attracts China’s best and brightest technology
billion) annually through 2020. Some 500 cities talent, with the appetite and demand for smart city
applications. No fewer than a half-dozen bike-sharing
nationwide have initiated smart city development
companies, including China’s increasingly international
projects with domestic and multinational Internet, giant Mobike, vie for market share among the dozens of
communications and technology firms. campus-based business districts in which Shenzhen’s
Tech-centric cities like Shenzhen (see box) millions of knowledge workers commute. Local Internet
or Hangzhou have an advantage over more giant Tencent has revolutionized mobile payments in
economically diversified markets like Shanghai, Shenzhen with the peer-to-peer payment functionality of
according to Dr. Min Wanli, AI project head at its popular WeChat social media application.
Shenzhen, where noodle carts on every corner have
Alibaba Cloud. “Hangzhou and other cities are using
smartphones taped to them brandishing “Tenpay” QR
smart cities to attract talent,” he says. “The smart codes, was ranked first in China in terms of cashless
city project itself is an exciting opportunity for talent transactions and consumer willingness to not carry cash
in and of itself – but increasingly the overall working in a recent report published by Tencent, in association
and living conditions will provide opportunity.” As with the Chongyang Institute for Financial Studies at
technology talent accumulates in smart cities, Dr. Renmin University, to commemorate the company’s
Min reckons that municipal governments will benefit annual “Cashless Day” on August 8.
from a “think tank” effect.
Tremendous adoption of mobile technology has
been a primary boost to China’s smart city efforts,
according to Jane Lin-Baden, CEO, Isobar Asia
Pacific. “Connectivity has been essential to making
China a cashless economy.
© MIT Technology Review, 2017. All Rights Reserved.22 MIT Technology Review
technology companies looking to develop scale
Tech-centric cities like and best practices across cities. Alibaba’s Dr. Min,
who works with local governments in the company’s
Shenzhen or Hangzhou hometown of Hangzhou and elsewhere in China to
build cloud-based analytic platforms for public data,
have an advantage over more observes: “Analyzing the data of urban migrants
economically diversified from city to city allows us to develop comparative
understanding of citizens. City government can
markets like Shanghai: they then start to use past behavior (from other cities)
to employ predictive, preemptive management of
are using smart cities to attract personalized public service offering. But we also
talent need to do local data analysis if, for example, a city
uses wind as a green power input: We will monitor
the local power grid to keep its energy supply
stable.”
Implementing mobile payments has increased
consumer convenience and customer insight
visibility, eased tax collection burdens and service
delivery for the government.”
By the end of 2016, 600 million daily mobile
payment transactions were being conducted by
WeChat’s more than 900 million active users. In Key takeaway
that year, Chinese spent US$2.3 trillion annually via
mobile payment platforms nationwide. Most of the China’s government is using smart cities
hundreds of smart city efforts in China, including as levers to transform its economy, its
those in Shenzhen, largely run on their own environment and its society. On China’s
administrative steam. However, these nationwide city streets, however, real transformation is
programs are slowly being knitted together. happening through consumer adoption of
This is a largely organic process driven by private mobile commerce applications.
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 23
9. Hong Kong
Hong Kong’s own smart city efforts lack strong coordination, but
will benefit from future integration into the Pearl River Delta’s “Big
Bay” to become a primary node in China’s first “Smart Region”
H ong Kong’s smart city aspirations are rooted
in efforts to make the Special Administrative
Region more sustainably livable, mainly through
Hong Kong’s most comprehensive
smart city program is in East
green urban planning initiatives in building design, Kowloon. The Energizing
geographic information system (GIS) applications Kowloon East Office (EKEO)
was set up in 2012 to transform a 488-hectare site,
and traffic congestion management. Hong Kong’s
which includes the city’s old Kai Tak airport and
leadership, however, has only the broadest smart Kowloon Bay, into Hong Kong’s second Central
city goals. While there is a smart city office Business District. This has provided an economic boost
within the government’s technology directorate for an estimated 30,000 firms, sustaining more than a
(the Office of the Government Chief Information quarter of a million jobs. Again, true to the Hong Kong
Officer, or OGCIO) its function is limited. The few government’s laissez-faire philosophy, the EKEO’s role
projects being implemented are delegated and in smart application development is more of an advisory
than an implementation one. However, it does actively
distributed among local departments and private
invest in pilot efforts focused on livability initiatives in
entities (such as in East Kowloon—see box). Two an attempt to make East Kowloon a green, walkable
ongoing feasibility studies from consultancies have district.
only recently released results, which are more The country’s efforts have involved a number of
conceptual than tactical. intelligent building projects and, in particular, smart
There is a growing gap between the parking application development. EKEO has invited
implementation speed of Hong Kong’s smart developers to work with a Parking Vacancy API
it commissioned, and has collaborated with the
city plans and the expectations of its citizens
government-linked R&D center ASTRI to build an
and consumers. In a recent survey of 1,000 indoor and outdoor GIS-enabled IoT management
consumers conducted by Nielsen and Google, 81% system to gather real-time vacancy data for private
of respondents self-identified as digitally savvy, vehicles. Moreover, the EKEO is keen to promote
and a similar percentage expected Hong Kong’s branding and design application development, in a nod
economy to undergo fast digitization in the next two to the development of a technology-enabled
years. However, only 20% reported that they were creative economy cluster in Hong Kong.
currently “highly satisfied” with their current digital
experiences in Hong Kong.
Hong Kong does have a well-developed and
intensively competitive telecommunications industry.
It also boasts other relevant smart city “natural
resources”, such as one of the world’s foremost
cloud infrastructure platforms and data center co-
location clusters. Some 43 colocation data centers
are in Hong Kong and the Asian Cloud Computing
Association rates Hong Kong as Asia’s most “cloud
ready” market. The World Bank places Hong
Kong within the top 20 markets for international
bandwidth, and it is the only city in the rankings
© MIT Technology Review, 2017. All Rights Reserved.24 MIT Technology Review
supplemented with communications and technology
“The Big Bay” is Hong connectivity, and this should speed up Hong
Kong’s development,” a regional CEO of a global
Kong’s chance to be engineering firm says. “The Big Bay is Hong Kong’s
chance to be part of what could be the world’s most
part of what could be the transformative smart region.” There are growing
world’s most transformative signs of policy makers and investors responding to
this opportunity. Hong Kong’s government has been
smart region coordinating cloud computing resource-investment
with the Guangdong provincial government, and
a former Hong Kong Financial Secretary, Antony
(only mainland China and Japan have more capacity Leung, has been advocating the need for Hong
in Asia). Developing cloud resources has been a Kong to leverage cooperation with Shenzhen and
major policy plank for Hong Kong’s government. other Big Bay cities to extend its technology and
Through a hybrid public-private cloud platform skills base.
known as GovCloud, it offers dozens of public
cloud service providers and over 300 public cloud
services. However, these resources largely stand
untapped by smart application developers.
While Hong Kong’s smart city aspirations Key takeaway
arguably lack Singapore’s coordination and vision,
its position in the Pearl River Delta—now known When Hong Kong’s smart city “natural
as “the Big Bay”—may afford it a more substantial, resources”—deep cloud computing
and longer-term, smart platform. There have capabilities, digitally savvy consumers—
been numerous efforts to boost transportation are integrated with the greater Pearl River
links between Hong Kong and Big Bay cities Delta’s technology innovation ecosystem, it
such as Shenzhen and Dongguan, and the newer could jump-start its relatively slow smart city
special economic zones of Nanshan, Hengqin and efforts.
Qianhai. “This ‘literal’ connectivity will soon be
© MIT Technology Review, 2017. All Rights Reserved.Connectivity and QoL 25
10. India
By making its cities compete for state attention and resources,
India hopes to fast-track a nationwide smart city program
P rime Minister Narendra Modi’s aspirations for
India’s economic modernization are fundamentally
bound to the country’s Smart City Mission. The
Beginning in January 2016, India’s
Smart City Mission began
program is one of the world’s largest and most awarding investment funds to
comprehensive efforts, marshaling public resources various municipalities—a mix of
state capitals, commercial hubs and tourism centers—
and the extensive “natural resources” of India’s
which have submitted plans for smart city development.
IT-enabled service economy and Internet startup These have been evaluated and ranked according to
ecosystem to overcome systemic lack of critical the quality and detail of their planning processes, and
infrastructure. By doing so, it intends to leapfrog also the level of impact these plans will have on future
urban development to attract technology-intensive economic growth and quality of life. Twenty cities were
industry investment and entrepreneurial talent. selected in the first round. They were led by Odisha
Drawing on the approaches central planners state capital city Bhubaneswar, an up-and-coming
technology hub of one million people. Bhubaneswar’s
use in China, Singapore and elsewhere in Asia
smart city plan, developed with global property firm
to transform urban spaces economically and Jones Lang LaSalle, recently won the American
sustainably, Modi announced a plan to launch 100 Planning Association’s International Planning Award. It
smart cities soon after taking office in 2014. Ninety was recognized for its vision of a centralized technology
of these have already been commissioned as of management center supporting diverse smart city
September 2017. While inspired by its neighbors’ applications, and a quality of life-centric design ethos
efforts, India’s particularly crushing infrastructure that aims to make its town center not only efficient,
but family-friendly. In keeping with India’s attempts
deficits and strained resources have required it to
to leverage regional best practices, Bhubaneswar
employ different techniques. awarded its first design contract to Surbana Jurong,
India is unable to devote precious cash and a Singaporean firm that has long been active in
technology to build completely new smart city developing “smart city in a box” solutions based on its
experiments, and also lacks sufficient public utility backyard experience.
and transportation infrastructure upon which to The latest tranche of 30 smart cities, awarded
layer smart solution improvements. Therefore, in September 2017, was led by Kerala’s capital
Thiruvananthapuram. It also included a number of
Modi’s Smart City Mission has had to encourage
smaller cities, in an attempt to diversify the impact of
India’s cities to embark upon a mixture of “old” and some 574 billion rupees (US$8.8 billion) in state funds
“new” city development programs, establishing nationally. While inclusion in the ranks of India’s Smart
guidelines for brown- and green-field development City Mission is important for focusing attention on cities’
projects of at least 50 hectares and 250 hectares efforts, it is not a prerequisite (Mumbai reportedly did
respectively. Smart technology and apps support not participate in the last round). The Mission, which
the development of efficient water and energy has evaluated applicants based on aspirations rather
than results, is seeking to redress this—with yet another
distribution, and manage traffic, security, and
contest, which rewards cities that have made the
transport services. The government has also most progress on achieving their goals.
injected a sense of inter-municipal competition in
order to prioritize investments (see box).
While India’s city modernization efforts often
have more rudimentary infrastructural objectives
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