Smart has become something of a buzz word in the UAE, following the launch in March of a smart cities programme by Dubai’s ruler, Sheikh Mohammed bin Rashid al-Maktoum.

“We are determined to be the world’s smartest city within three years,” Sheikh Mohammed declared. “The country has all the ingredients to achieve this goal. We have capable and specialised national cadres. Our infrastructure and technological basis are solid and advanced, and we have a long experience in providing electronic government services.”

The programme states that by 2017, Dubai will have announced 100 initiatives and 1,000 smart services, although scant detail has been given about what these will entail. In fact, there is still much confusion about what exactly a smart city is.

Technologically connected

Since the announcement, every consultancy or large technology supplier in the emirate has been championing its smart capabilities, but Yasar Jarrar, partner at US-based consultancy Bain & Company Middle East, says smart merely means technologically connected.

“If you accept the main component of smart is technology, then almost everything [must] have a technological aspect”

Yasar Jarrar, Bain & Company Middle East

“The key ingredient of smart is technology,” he says. “You can’t work with governments now without a full understanding of the technological space, what is developing, what is happening; so you can talk about smart education, you can talk about using technology to improve your tools and revenues, you can talk about improving transport and logistics and urban planning. If you accept that the main component of smart is technology, then almost everything we do with our clients that are government, be it public policy or organisational, has to have a technological aspect to it.”

US-based consultancy IHS defines a smart city as “a city that has deployed, or is currently piloting, the integration of information and communications technology solutions across three or more of the following functions: mobility and transport; energy and sustainability; physical infrastructure; governance; and safety and security, in order to improve efficiency, manage complexity and enhance citizens’ quality of life, leading to a sustainable improvement in city operation”.

From this definition, IHS estimates global investment in smart city projects reached slightly over $1bn in 2013, which will grow to surpass $12bn in 2025.

Sector ambiguity

Lisa Arrowsmith, associate director of connectivity, smart homes and smart cities at IHS Technology, says this estimate does not include a lot of investment in smart projects outside those cities defined by her firm as smart. “A smart meter project might be a ‘smart project’, but unless it is deployed as part of a wider project including multiple cross-function elements, it is not counted as a ‘smart city’,” she says.

Further illustrating the ambiguity of the smart city concept, Hazem Galal, partner and cities and local government global leader at London-based consultancy PwC, estimates the market is worth $100bn, while also acknowledging there is no agreed definition. “That is basically in terms of some of the services that we can address; that doesn’t include the rest of the infrastructure built,” he says.

Regional initiatives

Around the GCC, governments and planners are incorporating smart elements into their cities. Dubai and Qatar are the most advanced in terms of upgrading existing infrastructure and new cities such as Masdar in Abu Dhabi and Saudi Arabia’s King Abdullah Economic City (Kaec) are planned to be smart from the start.

“We have got different smart cities in our region, but Dubai is the most forward-looking, or at least the most publicly announced smart city with a connected set of initiatives that is easy to measure,” says Jarrar.

Developing a smart city from the outset can be a far easier task than converting existing infrastructure. In greenfield developments, planners look to build technology into basic services, through initiatives such as intelligent transport systems, smart power grids, networked education and healthcare facilities, and connected homes.

“In older cities, the major challenge often lies in the ageing infrastructure that cannot cope with a city’s urbanisation rates,” says Dima Kandalaft, smart cities leader for the Gulf and Levant at US technology giant IBM. “They then require smarter solutions to help better manage city systems and detect problems before they happen.

“In emerging and fast-growing metropolises, the challenges are slightly different. To accommodate rapid population growth, planning often includes the expansion of the city’s systems physically through more lanes on roads, building more power plants and so forth. In areas where this is not sustainable due to extreme physical limitations, these metropolises also look at implementing technology solutions that can leverage their current infrastructure in a smarter way.”

Upgrading infrastructure

Although the space-age potential of seamlessly integrated new cities is exciting, existing cities are where most progress is being made.

“What we are seeing now is there are a lot of development plans in current existing [big] cities”

Yasar Jarrar, Bain & Company Middle East

“The greenfield projects are obviously the most exciting, but they are the ones that from experience are the slowest to happen and they keep changing a lot,” says Jarrar. “From what we see now, there is a lot of spending going into upgrading current infrastructure, and if you look at cities like Riyadh, like Jeddah, like Abu Dhabi – not just the new part of Abu Dhabi; the older part of Abu Dhabi – they will get a big facelift and they will be smartened up.”

There is equal investment in both greenfield and brownfield smart projects, according to Jarrar, but he says those in established cities will progress more quickly. “What we are seeing now is there are a lot of development plans in existing [big] cities. While the greenfield cities are exciting, very few of them have yet materialised on the ground.”

Despite the rhetoric and proliferation of smart projects, neither IHS nor PwC would yet classify any GCC metropolis a true smart city.

“Dubai is pretty well-positioned to take the lead,” says Galal. “Abu Dhabi has already done it in certain areas around security and transportation. Some of the greenfield cities in Qatar, such as Lusail, are really driving hard. In Saudi Arabia, Kaec and the economic cities in general also have had good infrastructure installed and they are thinking very hard about some of the regulatory and implementation issues.”

True integration

To become truly smart, the region’s cities must tie up their projects, breaking silos so initiatives cross sectors and owners coordinate with one another. Galal uses the Riyadh metro project as an example of how this would work in practise, tying in with the rest of the city’s transport network.

 “When people get up in the morning, they know exactly which mode of transportation they are better off taking,” he says. “Is it the best day today to take the metro, and if that is the case, what’s the estimated commute time? Or is it not a good day to take the metro; is it a better day to take an alternative mode of transportation like a bus? And to get to the station, you would need to drive the car; and this is where you park.” He calls this integration ‘a day in the life of’.

The problem is government agencies are not always prepared, or able, to talk to one another, particularly when some operate at a city or emirate level, while others are federal.

This is also a challenge for contractors. While some projects can be planned, designed, executed and even operated by single contractors, for the implementation of truly intergrated, major smart city megaprojects, the task would be just too big for any one solution provider to carry out.

“You [are often] required as a city or a master developer to deal with at least two or three technologies or solution providers, and often that requires a lot of programme management capabilities,” says Galal.

State motivation

Uptake of smart initiatives can be driven by ‘push’ or ‘pull’ factors, says Galal. With push, governments see the needs of their citizens, create smart solutions and then incentivise people to use them. With pull, they provide services according to the demands of residents.

In the region, there is more push since, unlike democratic states, the population has less leverage on the government, and the government is less accountable to its citizens and residents.

To realise a day-in-the-life vision, government bodies must start to use all the available services, yet the GCC has one of the lowest rates of technology expenditure in the world, says Jarrar.

One reason is because there is a ready stream of cheap immigrant labour, leaving less motivation for governments and companies to invest in technology to replace expensive manpower. There is also a dearth of government incentives for the private sector to spend on technology, compared with the tax cuts and grants afforded in many other regions.

Workforce repositioning

One of the drivers behind smart initiatives is to reduce the number of people involved in menial work, such as ticket-collecting, meter-reading and equipment inspection, and replace them with automated, machine-to-machine systems, where devices communicate with one another without human intervention. However, with 1 million unemployed GCC nationals, governments are also on a drive to generate jobs in the region.

Jarrar says smart projects will create different employment opportunities.

“The efficiencies smart initiatives and technologies deliver to cities, governments and companies will invariably lead to some low-skilled work being lost, and that is something you cannot deny,” he says. “However, when you do get into this space, you are creating new sectors from scratch that never existed before, that require high-end jobs.

“Look at the example of e-gates and the e-border control for the UAE’s Interior Ministry: we need fewer people stamping passports, but we potentially need a similar number of people, but with higher skills, who can manage this complex system.” With smart initiatives in education, technological literacy will also rise.

Social drivers

The drivers behind smart cities are not only economic – making cities more efficient – but also social. Smarter cities are smoother run and easier to live in. They attract a higher calibre of expatriate workforce as well as making life better for nationals, who become better educated as well as more efficient.

Some initiatives – smart parking meters, for example – are a clear opportunity for public-private partnerships, but others are not; the payback time on initiatives such as smart electricity meters, or even a capital-intensive project such as a metro, are better suited for government-led expenditure.

Whichever funding and operational models are used for the projects in the region, the opportunities for companies are growing as the GCC gets smarter.