1 © The Economist Intelligence Unit Limited 2016

Smart and sustainable cities: opportunities and challenges

IntroductionInterest in the potential for “smart,” “intelligent,” or “sustainable” cities—the terms are often used interchangeably—has risen rapidly in the past few years in line with technological developments that can enable them, notably online government services, big data, open data, cloud computing and the Internet of Things (IoT), among others. In 2014, for example, the city-state of Singapore launched its Smart Nation initiative and is now considered a world leader in this area.1

Urbanisation is a key underlying driver in the creation of a smart city. This is also the case in East Asia & the Pacific where the urban population (as a % of total population) rose from 22% in 1960 to 57% in 2015; in South Asia it increased from 17% to 33% in the same timeframe.2 It is perceived that smart city initiatives can help offset this migration challenge by providing more efficient services and enhance quality of life for people in these metropolises.

In part based on a five-member advisory board, The Economist Intelligence Unit (EIU) identified 20 emerging smart cities in the Asia-Pacific region and conducted a survey of 100 local citizens in each to gauge the effect that their city’s smart transformation is having on their work and life plans. About 8 in 10 (82%) of the 2,000 citizens surveyed say their city should create more smart city initiatives, although perception of the challenges ahead differed between experts and locals.

OpportunitiesThe development of smart cities serves two purposes. First, smart infrastructure, such as smart water meters and electricity grids, can reduce usage and costs by raising awareness among individuals about how much they are using, but also by automatically reducing consumption at times of limited demand. For instance, in Mumbai, India, about one-half of water was wasted until recently due to poor infrastructure; however, after installation of “smart” metering technology the amount of lost

1 http://www.pmo.gov.sg/mediacentre/transcript-prime-minister-lee-hsien-loongs-speech-smart-nation-launch-24-november

2 http://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS

Read more about smart and sustainable cities in ASEAN at http://startupmycity.economist.com.

Smart and sustainable cities:opportunities and challenges

2 © The Economist Intelligence Unit Limited 2016

Smart and sustainable cities: opportunities and challenges

water decreased by one-half, according to an article from the Center for Data Innovation, a leading think-tank studying the intersection of data, technology and public policy.3

Secondly, smart infrastructure can also improve a city’s environmental sustainability, affordability, business climate and general “livability” as in quality of life. When asked about the main benefits in making their city smart, Asia-Pacific citizens also cited the environment, e.g. reducing vehicular emissions or increasing recycling waste (46%) as a top priority, followed by higher quality of education (41%), a safe and secure environment (39%), easier access to government services (36%) and more job opportunities (35%). (Figure 1)

3 https://www.datainnovation.org/2015/02/how-to-finance-a-smart-city/

Leading smart city benefits(% of respondents)

More job opportunities

Reduced vehicular emissions orincreased recycling rates

Higher quality of education

Safe and secure environment

Easier access to government services

Figure 1: Green, smart and safe

39

41

46

35

36

“[Smart cities] are born out of a mixture of paranoia and opportunities,” explains Dr Vivian Balakrishnan, Singapore minister for foreign affairs and minister-in-charge of the Smart Nation Programme Office.

Main challenges citizens face in taking advantage of smart city initiatives (% of respondents)

Lack of information about existingsmart city initiatives

Lack of information about new smartcity initiatives

Lack of useful initiatives for me

Affordability

To my knowledge there are no smart initiatives in my city

Figure 2: Smart initiatives, poor communication

39

49

65

66

30

“We believe in the next 10-20 years 30-40% of jobs are at risk.” Reflecting the sentiments of citizens, he adds that the second and third priorities for a smart city are indeed quality of life and services as well as a societal need for a strong sense of a community.

ChallengesAccording to the survey conducted for this research, however, there is a lack of awareness at a user level. On the one hand, citizen demand was only cited by one advisory board member as an obstacle towards a smart city. On the other hand, citizens themselves cited a lack of information regarding existing smart city initiatives (66%) and a lack of information regarding new smart city initiatives (66%) as the main challenges in taking advantage of smart city initiatives. (Figure 2)

3 © The Economist Intelligence Unit Limited 2016

Smart and sustainable cities: opportunities and challenges

Another challenge is funding for implementation, which was cited by three board members with two of them also citing affordable solutions. Smart city infrastructure is expensive but Dr Balakrishnan points out that fixed-line fiber-optic connectivity, wireless solutions and public Wi-Fi are fundamental building blocks towards smart city development.

On the back-end, a 2016 article in The Economist also noted that government computer systems tend to reflect their fragmented nature but that they need to be integrated in order to take advantage of data. Three advisory board members agreed that data integration is a main challenge in creating smarter cities. One solution may be open data, standards and platforms, which Dr Balakrishnan, an advocate, cites as key

to the foundation of trust and transparency in the development of a smart city.

The way forwardIn the survey conducted for this research, almost one-third (31%) of citizens do not think their city’s smart initiatives will have an impact on their daily lives. One particular challenge seems to be awareness of user needs: technology skills among staff was cited by two advisory board members as a main challenge in creating smarter cities; however, technology skills among citizens was not a consideration. “You have to look at it from the perspective of a citizen or end-user or consumer,” advises Dr Balakrishnan. “From a citizen point of view you want it to be available, affordable and you want it to be safe.”