Smart Cities

1 March 2017 ‘Smart cities’ is the infrastructure world’s favourite buzz phrase. But away from the rhetoric and science fiction dreams, what are the real opportunities for the infrastructure community, asks Marina Formoso

Popular culture has long been awash with the imaginings of a dystopian future world of mega-cities, interactive technologies and huge television screens beaming down on everyone – usually with a side helping of an overcrowded population, rubbish everywhere and otherworldly plastic clothes. Take Blade Runner, for example, which described a city much like this, based in 2019.

So far, cars are still running on the ground and we’re still wearing jeans, but one thing the Hollywood future does have in common with many parts of the developed world today is the reliance on and importance of rapidly changing technology. Today, cities’ management of energy, waste and pollution need to be addressed with a smart solution, especially if predictions of everincreasing urbanisation prove to be accurate.

Singapore has been at the forefront of this evolution. “Singapore’s smart city project was launched in 2014 as a response to the challenges it was facing. To meet the increasingly complex challenges of urbanisation, Singapore decided to adopt an integrated approach to urban solutions,” says Ignatius Hwang, partner at law firm Squire Patton Boggs.

The city is perhaps the ideal test-bed for meeting the challenges that many in the world will face in the years to come. In roughly 719 square kilometres – half the size of London – this island has to house 5.4 million people and all the equipment expected from a sovereign state, such as airports, seaports and utilities – not to mention housing, schools and hospitals.

To approach these challenges, the city-state established an infrastructure plan that was based on data collection called ‘Everyone, Everything, Everywhere, All the time’. Started back in the 1970s, this programme formed the central plank of Singapore’s long-term plan – to be revised every five years – implementing ICT technologies, a network of sensors, cameras, GPS devices and broadband for everyone.

By 2014 this had given Singapore an excellent basis to start its smart city project, or iNation Master Plan. This aims to turn the city into an ‘intelligent nation’ within 10 years. To fulfil the scheme the government has called stakeholders and technology builders to use the city as a “living lab” to try new proposals.

Its principal smart city projects have involved delivering e-government, traffic motoring for citizens to check the condition of the roads, a parking guidance service and energy efficiency in buildings through smart meters.

However, some of the biggest projects, which will involve some significant infrastructure changes, still need to be undertaken. Water and waste storage facilities are among the most urgent.

And experts believe there will be a range of opportunities for infrastructure investors and developers through the smart cities agenda across the globe. Siemens’ Modelling private sector finance adoption for SmarterStart cities report, for example, has highlighted several initiatives currently financed through assetfinancing arrangements. These run from social schemes such as health, through to transport opportunities. Examples include building controls to improve energy efficiency; improved medical technology; GPS technology to speed up transport; low energy streetlighting; and replacing the bus fleet with hybrid or electric alternatives.

“Often it’s beneficial for cities to act in partnership with telecommunications operators, developers, transport authorities, technology suppliers, energy utilities and others, to create an integrated value chain that benefits everyone,” says Michael Stevns, partnership manager at Siemens. “This integrated approach to operating infrastructure is expected to have significant potential for value creation in the next decade based on global growth in software, hardware, data analytics skills and employment, and new services.”

“The public sector will need private sector expertise and finance to deliver these smart solutions,” adds Mick Krupa, a director at financial advisory Deloitte. “Smart infrastructure solutions in transport, housing, energy and social care will be areas requiring PPP solutions. These are also the biggest issues for local authorities in the UK and smart solutions can play a big role in tackling these.”

Developing opportunity

Experts believe that cities in developing countries in particular will find new opportunities in smart technologies to leapfrog places like Singapore that have been at the forefront of the initiative to date. For example, the adoption of solar energy technologies in developing countries and distributed energy systems means that cities can ‘jump’ directly into the sustainable energy age.

“Developing countries have the opportunity to deliver the most efficient and effective smart city infrastructure solutions,” explains Krupa. “They are not hampered by legacy infrastructure and services which are often not the most appropriate fit in the modern world.”

“The advent of the mobile phone helped India transform its telecommunications industry overnight without having to develop costly telecommunications networks as many developed countries had done,” adds Alan Mitchell, executive director of KPMG Canada’s Cities Global Center of Excellence. “This quantum shift meant that they could think creatively about a new solution without having to make the costly investments in landlines.”

However, stability and a clear vision have been the main ingredients that have helped Singapore to develop and continue developing its strategic plan. The problem facing many developing countries is that their cities often do not have this sort of stability – or anything like the strength in their economies to pay for all this technology.

According to Hwang, a stable political climate, political will, a strong and efficient public sector and good fiscal position is the best recipe for a city to be successful – alongside the sort of long-term vision and commitment to a development plan that Singapore has shown.

“I believe that cities’ struggle to be successful with smart city innovations can be attributed to not seeing plans from a broad perspective,” explains Mitchell. He points to a recent example where a dedicated wireless network for capturing automated meter readings was being implemented. “Why would you not have looked further than your own department to see opportunities across the city for such a wireless network solution?” he asks.

Stevns adds that neither cities nor companies should be afraid of using advanced technology for their projects.

To tap into this opportunity, cities need to mobilise the private sector to work with them, and to do this, there needs to be an investable business case. “Providing a clear business case can be challenging for new innovations for which little historic evidence is available,” warns Stevns. “Concerns might rise due to the perceived additional risks. However, these risks should be viewed in comparison with the risk of not innovating and being left behind in an emerging and evolving market.”

Krupa believes that understanding the value of data and how it can be best applied will be a big challenge. “The movement in the UK towards devolution and combined authorities could be a big driver of this and help smart solutions in areas such as social care, health, safety and energy to be structured in the right way,” he says.

The most important part of a smart city development is the capacity to collect data and use it to the benefit of citizens, so that they can be provided with day-to-day information such as where to park, when the roads are less busy or whether it is quicker to take a bus. It can also change people’s behaviours by providing them with data on the amount of energy they use and how to control waste and water usage.

A city doesn’t get smart by itself: this is a trip that citizens, governments and companies have to take together.

“Overall, the smart city model can foster a better culture of innovation in cities that can be good for businesses and citizens alike,” concludes Krupa.  

This page was last updated on:
2 May 2017.

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