Cities and Urbanization

Where will the world's next smart cities be?

This article is published in collaboration with GE LookAhead

A general view of Dubai is shown at dusk. Image: REUTERS

Elie Chachoua
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Cities and Urbanization

Smart cities used to be the privilege of the West. No longer. By 2025, up to half of the world’s smart cities could be outside America and Europe, according to recent studies from research firms IHS and Frost & Sullivan.

With the Middle East expected to achieve the world’s highest growth rates in both mobile and cloud traffic data by 2018, cities in the region could be well-positioned to join the club. Some, in fact, have already started leveraging connectivity to transform into smarter cities. Tel Aviv, for instance, won international recognition in 2014 for its Digi-tel programme, which delivers personalised city services to citizens using data analytics. Dubai has also been actively pursuing its ambition to become the world’s smartest city by 2017, including through the recent launch of a “one-stop shop” mobile app to access government services and the planned deployment of 100 smart bus stations across the emirate by early next year.

This move towards smarter urban management demonstrates as much a desire to capture a technological opportunity as it does a response to demographic trends. According to World Bank data, population in the Arab world is expected to double by 2050, while urbanisation rates could reach 70% by mid-century. Gulf countries are already above 80% urbanised. The pressure will thus be felt mostly in cities, resulting in problems such as traffic congestion, increased energy use and heightened water stress.

For Middle Eastern cities, therefore, becoming smart is not just an option—it is a necessary shift, one that needs to happen fast. The Gulf Cooperation Council countries have somewhat of an advantage in this regard. The timetables imposed by the World Expo and World Cup provide an important motivation for the UAE and Qatar to show results by 2020 and 2022, respectively. Qatar, for instance, expects to finish replacing Doha’s current electricity meters with smart ones by the end of this year. The tight deadline also suggests that smart-cities initiatives should benefit from the resources and support of high levels of government, an important condition for such initiatives to succeed.

One risk, of course, is that short timelines lead to rushed projects. Efforts to promote smart-government offerings without ensuring that the data provided are machine-compatible can limit the ability to use big-data solutions for smarter urban management, for example.

Another, longer-term issue that cities will have to grapple with is who will be developing the smart-city solutions for them. In the early stages of the transformation, when deployment of networked infrastructure and establishment of operation centres are the main focus, close partnerships with infrastructure providers can be enough for governments to access the necessary level of services needed.

And, with up to $175bn of cumulative investments expected by 2025 in the smart-city market, many providers have started positioning themselves in the sector. Some, like Cisco, have been traditional providers of cloud and IT infrastructure to cities across the world. A recent report from Navigant Research suggests, however, that the competitive landscape is changing rapidly, with telecom companies like Huawei increasingly present and infrastructure providers like GE entering the space as well. The latter, for instance, is currently piloting smart-city lighting systems and working with Masdar to develop waste water technologies that can also feed power back into the grid. For cities interested in becoming smart, such partnerships with international vendors can be a good way to build on international best practices while benchmarking performance against other cities in which the vendor might be working too.

Over time, it will also be important for cities to adopt open-data policies and leverage their local innovation ecosystem. “The first thing we did was open our municipal database. Data is the basis for so many start-ups!” says Mira Marcus, international press director at Tel Aviv Global. In addition to working closely with transport start-ups like Waze on traffic and congestion issues, the city is also co-financing a new start-up accelerator aimed at developing smart-city solutions. Similar developments are also being seen in the Abu Dhabi emirate, with the opening last September of the $1.6m Center of Excellence in Smart, Sustainable and Entrepreneurial Cities at Abu Dhabi University.

To achieve global standing, however, Middle Eastern countries will have to open their data further. “A trend we see in many cities [of other regions] is the move from defining what qualifies as open data to defining what data cannot be open data,” says José Quádrio Alves, global government director, Future Cities Program Leader at CGI. “The assumption now is that, by default, all data should be opened.”

This may be easier said than done in a region where security remains a major preoccupation and where governments are not necessarily accountable to their populations. Still, some have made important progress. A few months ago, for instance, the Dubai emirate issued a law opening non-confidential data to third parties and mandating that government agencies share their data on the platform. Bahrain has made significant efforts as part its e-government initiatives, including setting up an open-data government platform. Most countries of the Middle East, including Bahrain and the UAE, still are in the bottom half of open-data global rankings, however—Israel and Turkey being two notable exceptions.

More efforts will be needed, including in ensuring that open data become a two-way street. “Open data should not only come from the government side but also from the private sector,” says Mr Alves, noting that “for the latter, it is much more difficult to define which data should not be opened”. Even if defined, “it will be very difficult to enforce”, he notes. And it will take time. But then again, this is to be expected: Becoming smart is a journey, not a destination.

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