'Smart' cities key to competitive economies

'Smart' cities key to competitive economies

Summary: Smart cities that integrate ICT, such as Songdo in South Korea, are increasingly important for governments looking to tackle sustainable development and gain an edge.

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Against a backdrop of economic and technological changes caused by globalization and urbanization, cities in Asia are facing the need to focus on both competitiveness and sustainable urban development. This dual-pronged challenge is increasingly making the "smart city" vision important for governments around the world.

Steve Hodgkinson, Asia-Pacific research director of IT at Ovum, noted that there is "definitely" a growing recognition that traditional approaches to urban development in the face of the accelerating urbanization are unsustainable. This realization is leading many countries to not only take a more considered approach to city growth but also explicitly include ICT in the design of new cities in order to improve economic, social and environmental sustainability, he said in an e-mail interview.

In a report titled "Is Your City Smart Enough?", Hodgkinson highlighted that IT is an important enabler of a more sustainable approach to designing, building, and operating cities. Smart cities, he observed, employ digital-city strategies that encompass digitization of infrastructure, processes and services, as well as digital-society initiatives, which empower and rally the community.

The South Korean digital city of Songdo was cited by the analyst as an example of an urban laboratory for developing next-generation smart city technologies.

Songdo's beginnings
Songdo, together with Yeongjong and Cheongna, constitutes the Incheon Free Economic Zone (IFEZ) located in Incheon, a port city in the northwestern part of South Korea.

Amy Cho, managing director of business opportunity bureau at the Incheon Free Economic Zone Authority, told ZDNet Asia that the IFEZ has "actively embraced technology" in its initial stage of development to become a "high-tech, globally competitive, and environmentally sustainable smart connected city". The IFEZ Authority is part of the Incheon government tasked with developing the project and attracting investment.


Credit: Songdo International Business District

According to Cho, Songdo, spanning 53 square kilometers, is the first project to have developed the smart city concept from the "ground level" up. Input provided in the very early stages of the city design has paved the way for technologies to be seamlessly integrated in the initiative, she said.

The project is expected to be fully complete in 2020--the first phase of development was finished in August 2009 while the second stage is slated to be ready in 2014. Cho said that the government has so far invested US$10 billion in Songdo, and will invest an additional US$4.3 billion between 2011 and 2020.

Located within Songdo, is an international business district (IBD), a100 million square feet new city built on 5.7 sq km of reclaimed land along Incheon's waterfront. The IBD development is a US$35 billion private venture led by Gale International, a U.S. real-estate investment and development company.

Intelligent IT city's "brains"
The aim of Songdo and the rest of the IFEZ, noted Cho, is to be an urban living space that is "intelligent, green and self-sufficient", where eco-friendliness and energy savings are key characteristics of the zone.

The intelligent or "ubiquitous city" is a concept which involves having an IT cluster support center to direct manage public services--including transportation, healthcare, environmental protection, security and disaster prevention--and also enhance convenience and eliminate wasteful or inefficient urban functions, she added.

Songdo will be a "connected community" that combines broadband communications infrastructure, flexible, service-oriented computing infrastructure, and innovative services to meet the needs of government agencies, citizens and businesses, the executive added.

This concept incorporates a central data center, akin to the "brains of the city", which manages the underlying Internet protocol platforms and controls everything from the city's power management and traffic controls to an individual apartment's lighting and temperature settings, explained Cho.

For example, when an executive drives into an office building, the computerized parking system is able to recognize from the license plate that the driver is a VIP, and therefore directs the car to an available parking lot and cues the elevator. The executive's access pass enabled with radio frequency identification (RFID) will direct the elevator to the correct level, and the office door is open at the time of his arrival. Finally, the data center remotely configures the office's lighting, climate-control, and workspace systems.

Commitment
On challenges faced in planning and building the smart city, Cho replied the city's hard-wired broadband infrastructure makes development more costly for both the city and individual developers. These infrastructure costs may also translate into more expensive price tags for buildings such as offices, residential or commercial space.

And while the potential of building a smart city is tremendous, there are analysts who suspect that the payoff may take a while, she pointed out. Few expect smart cities to "meaningfully contribute" to revenue anytime soon, given bureaucratic hurdles, reliance on property development schedules and funding, and uncertainty over the willingness of cities to make such an investment.

Hence, the IFEZ Authority continuously stresses the "importance of future development potential and future revenue returns by generating objective industry research and financial models", said Cho. It has also proposed legislation to require the local government to follow up on their obligation to build a smart city in the IFEZ area, she added.

Tom Murcott, director of foreign investment at Gale International, added that for a public sector undertaking, one needs to create value for the private sector to want to be engaged and invest in the real estate.

In a phone interview, Murcott suggested that governments lay down rules and regulations to ensure that stakeholders such as developers and technology providers adhere to a particular standard. That can ensure the quality of what is built, from both an ICT and sustainability standpoint, has economic value, he said.

Consensus
At the end of the day, the core challenge in building up smart cities is not so much about the technology, but in mobilizing the vision and assembling funding for the project, Ovum's Hodgkinson pointed out.

According to him, strong leadership is required to unify diverse stakeholders toward a common view of the city's future and to attract investment from different sources including national, regional and state government agencies, global bodies such as the World Bank and United Nations, non-government organizations and private-sector corporations.

Most smart city projects, he added, require a masterplan to provide the unifying logic for the new city as it is often built over several decades. The main difficulty is finding the catalyst to stimulate recognition of the need for such a masterplan, rather than just carrying on with a pattern of ad-hoc development, and creating a consensus among the key stakeholders around the vision and design for the future city.

Murcott held similar sentiments. "The hardest part [is] really the alignment of interests and commitment to a plan on the outset; getting everybody aligned behind it--[in terms of] what is this level of development going to be, how are we going to ensure all our partners live by the guidelines, and what the anticipated outcomes are."

Topics: CXO, Banking, Data Management, Government, Government Asia, Networking, Software, IT Employment

Jamie Yap

About Jamie Yap

Jamie writes about technology, business and the most obvious intersection of the two that is software. Other variegated topics include--in one form or other--cloud, Web 2.0, apps, data, analytics, mobile, services, and the three Es: enterprises, executives and entrepreneurs. In a previous life, she was a writer covering a different but equally serious business called show business.

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