Smart city development comes with inherent challenges

31 October 2021
The virtues of smart cities are well known - yet the barriers to implementation make it a challenging endeavour
This week, Expo 2020 presents its Urban & Rural Development Week, discussing smart cities, sustainable urban development and innovative solutions. Learn more here.

The benefits of smart cities are well described. Studies have shown that a smart city runs more efficiently through the use of data-driven decision-making, ensures positive citizens and government engagement, lowers crime rates, and optimises the use of public utilities.

And with a United Nations report forecasting that 68 per cent of the world’s population will live in cities by 2050, the time to transform our cities is now here.

With so many clear advantages as well as reasons to bring about change, the question that then begs to be asked is – why is the adoption of smart cities not more widespread?

This is because smart city development is not without its share of challenges.

The biggest and most obvious challenge is funding. Solutions such as smart street lighting, traffic monitoring systems or digitising public services all cost money.

Even at the best of times, municipalities are often faced with tight budgets. But post-pandemic, purse strings have been further tightened. Cities therefore need to identify business models that can help overcome this challenge.

A recent Deloitte report titled the Challenges of Paying for Smart City Projects states that the most popular solution is public and private funding, with 41 per cent of municipalities globally relying on this.

Other solutions include using a mix of public funds and state grants, regional funds and so on. Only 10 per cent of smart city projects are purely privately financed, according to the report. In the future, this could change, as we are now seeing a growing number of private equity firms interested in investing in smart city opportunities. 

With so many clear advantages as well as reasons to bring about change, the question that then begs to be asked is – why is the adoption of smart cities not more widespread?

Implementing smart city initiatives calls for a high level of integration amongst various government departments.

For example, the municipality may install sensors along roads to collect information about vehicle congestion which is then relayed to the traffic department so they can make changes to ease the flow of traffic. Aligning multiple city departments, enabling interoperability and sharing of data among them is not always a smooth and seamless process and this siloed mindset is one of the main problems governments and system integrators must overcome.

Another challenge is digital security. The success of smart cities lies in data collection and analysis and the use of advanced technologies.

 Creating an artificial intelligence ecosystem

Data is collected from residents and their devices through the use of sensors, cameras, RFID chips, smart metres and more. Facilitated by the internet of things (IoT), this data is then fed into systems that analyse and make decisions that can improve residents' quality of life.

Despite the benefits, large-scale data breaches, cyberattacks and privacy infringements are a huge concern. Therefore, it is essential to secure smart cities and have in place governance and regulations to safeguard citizens while improving the quality of life.

The risk of disparate development

Given that investment in technology plays a big role in the development of a smart city, how do emerging nations stack up? Quite often, smart city technologies are purpose-built for wealthy cities and are far removed from the realities of the developing world. Worse, they could potentially reinforce the digital divide and benefit only a privileged minority.

Studies show that many developing nations seek low-cost and high-impact smart solutions to address urban development challenges. The need of the hour therefore are solutions which effectively address these needs.

In addition, more than 90 per cent of all future urban population growth through 2050 will occur in Africa, Asia and Latin America – areas which today have least access to smart city technologies while needing them the most.

In the future, we are likely to see ideas and technologies emerge from companies and think tanks targeted at solving complex problems in fast-growing, low-income, low-infrastructure cities. For financing, international development organisations or IDOs could support emerging nations by offering concessional finance products, such as equity investments, low-interest loans and so on.

Smart cities and climate change

No discussion on smart cities is complete without a look at climate change.

Today, cities are responsible for 70 per cent of global greenhouse gas emissions, according to a new report from the United Nations Development Programme (UNDP). This is hardly surprising, given that more than half of the world’s population already lives in cities, and this is set to rise even further.

When cities aim to become smart, they can mitigate many of the impacts of climate change.

Studies show that many developing nations seek low-cost and high-impact smart solutions to address urban development challenges. The need of the hour therefore are solutions which effectively address these needs.

For example, connected vehicles help traffic management improve flow, reduce journey times, and therefore decrease emissions. Water wastage from leaks and pipeline faults could be prevented through the use of flow and sound sensors in water infrastructure. Smart grids that use AI can manage energy consumption in buildings more efficiently. The possibilities are endless.

For several years now, the UAE has actively stated and promoted its ambition to become the world’s first ‘true’ smart city. The goal stems from the Vision 2021, an ambitious plan to make the UAE amongst the best countries in the world.

Under Vision 2021, the UAE Government is well on its way to ensuring sustainable development, preserving resources, growing the contribution of clean energy, and providing smart services.

 District 2020 aims to build a 'people first' environment

Masdar City in Abu Dhabi is one such smart sustainable city in the UAE, and among the first in the Middle East region. It uses several technological innovations such as solar power, low-flow showers, and smart water meters to realise greener, more sustainable urban living. 

Elsewhere, Saudi Arabia has recently launched the Line, a 170km linear development of hyper-connected AI-enabled communities powered by 100 per cent clean energy. Located in Neom, a region in northwest Saudi Arabia, The Line will be entirely powered by renewable energy. It will serve as proof of how clean energy can change urbanisation and offset climate change.

With Expo 2020 focussing on Urban and Rural Development all this week, now is a good time to re-imagine the cities of the future and work on ways to make them smarter, safer, and greener – a blueprint for our urban future.

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