Special Report Contents

• The challenges to becoming a smart city

• What is a smart city?

• Dubai pursues smart grids

Using a definition that relies on the widespread adoption of data analytics, no city in the Middle East could call itself smart, says Robin de Keyser, head of consulting for Middle East, North Africa and Turkey, at Orange Business Services, a subsidiary of France’s Orange. “What we have are interconnected cities where broadband and smart apps are now available. The complete transformation into a smart city might take 10-20 years for some cities, maybe less, but it will definitely happen,” he says.

De Keyser acknowledges that Dubai deserves recognition for its multiple initiatives across all fronts. It has the key ingredients to make a smart city happen, including the leadership and vision provided by the emirate’s ruler, Sheikh Mohammed bin Rashid al-Maktoum, capital resources, and long-term economic strategy.

Different approaches

In most cities lacking these, their transformation will be driven from the bottom, in contrast to Dubai’s top-down approach. “They will allow vertical sector-driven initiatives, such as those in the transport and healthcare sectors, to develop and mature, and then at the end devise a strategy to connect and integrate all these systems,” says De Keyser. “Whichever approach is chosen, it should ideally bring these cities to their objective of becoming smart.”

The seemingly slow progress being made across the GCC as far as smart city transformation is concerned does not mean there is no progress being made. De Keyser says government stakeholders and developers in the region are strongly engaged, but are very cautious at the same time.

Careful planning now underpins nearly every smart city-related project and most, if not all, cities require consultants to develop a business model that shows a clear path to recovering their investments.

Funding challenge

Once a clear smart city plan is ready, the next issue is funding. The challenge varies according to the type of project under consideration.

For example, city-wide infrastructure is likely to be funded very differently from a smart parking initiative. “An ICT [information communications technology] infrastructural project would likely be supported by a government entity or service provider; however, a smart parking programme could be financed through a public-private partnership,” says Safder Nazir, vice-president of the internet of things and smart cities at Chinese technology firm Huawei’s Middle East division.

Capital allocation is generally less challenging for government entities in the region, because, unlike their European counterparts, they do not have to deal with complex and time-consuming processes such as congressional approvals and budget hearings.

The case for private developers, however, is more challenging, particularly because these projects are less about hard-to-quantify socioeconomic benefits and more about building a business model that will generate revenues over the long term. Developers generally do not possess the expertise to make informed technology decisions, much less to develop a clear smart city-orientated business model.  

Regulatory issues

As well as obtaining funds, smart city projects are often met with regulatory challenges. Sharing data and ICT resources with other entities and the public using an open platform could entail major security and economic risks.

To address this, a new open data law is expected to take effect in Dubai before the end of the year. The law mandates government and private companies to share non-critical data with one another and with the public, not only to provide more efficient public services but to encourage private sector participation in developing smart applications based on those data and services. The law would also define the extent to which these data and services can be used and monetised.

The other GCC states will likely require a similar law to increase the likelihood of success of their smart city strategies.