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7 Key Reasons Smart Cities Are More Likely to Emerge in Developing Markets

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Smart cities have become a buzzword in the urban planning sector, promising a futuristic blend of technology and urban life. The concept is far from just a trend; it’s a necessary evolution as our world becomes more connected and populous. Justin Kettle, the Managing Director of Kettle Consulting believes that emerging markets may have an advantage when it comes to rolling out smart cities. In this article, he sets out why these regions could potentially outpace developed cities in adopting this transformative concept based on his first-hand knowledge of supporting South African cities with ambitions of achieving this newfound paradigm.

Emerging Markets a Tabula Rasa: An Unwritten Slate

Emerging markets often lack the ingrained infrastructure and systems that can be found in many developed cities. While at first glance this might seem like a disadvantage, it provides these cities with a unique opportunity. Without existing infrastructures, there’s less need to retrofit or replace, effectively you have a blank canvas to write your own story. New smart technologies can be implemented from the ground up, allowing for more efficient and streamlined integration.

Toward Smart Cities: Rapid Urbanization

Many emerging markets are experiencing rapid urbanization. According to data provided by the United Nations, as of 2018, 55% of the world’s population lived in urban areas, a proportion that was expected to increase to 68% by 2050. The fastest urban growth is happening in Asia and Africa. As populations shift and grow, there’s a pressing need to accommodate this influx. Smart city technologies can address many of the challenges that come with rapid urban growth, such as traffic congestion, energy usage, and waste management. For developing cities, it’s an adaptive response out of necessity.

Economic Benefits of Smart Cities

The potential economic gains of developing a smart city from scratch are enormous. Not only can these cities attract international investment, but they can also position themselves as hubs of innovation. This can lead to job creation in sectors like IT, infrastructure development, and green technologies. Saudi Arabia through its Smart City, NEOM, is attempting to to transform the country’s economy and decrease its reliance on oil revenues. NEOM represents Saudi Arabia’s ambitious aspirations for a post-oil future. By creating a cutting-edge city that combines innovation, business opportunities, lifestyle, and sustainability

Lessons from Developed Smart Cities

Emerging markets can observe the successes and failures of smart city projects in developed nations. This can provide valuable insights into what works and what doesn’t, allowing them to avoid certain pitfalls and capitalize on best practices. Barcelona is a good example, while many of the implementations were successful, concerns were raised about data privacy and the implications of surveillance. Furthermore, the drive for tech-led tourism and urban development led to concerns about gentrification and the city becoming less affordable for its original residents.

Greater Flexibility in Regulation

Developed cities often operate within stringent and established regulatory frameworks which can hinder innovation and rapid change. Emerging markets, on the other hand, may have more flexibility in adapting or creating regulations that favor the establishment of smart city initiatives.

Partnerships and Funding

Many international organizations, tech companies, and investors are eyeing the potential of smart cities in emerging markets. As such, there’s a wealth of partnerships and funding opportunities available for developing nations willing to embrace this future vision. Private-sector tech companies play a crucial role in the inclusive growth of smart cities through Public-Private Partnerships (PPPs). By collaborating with governments, these companies can bring innovative technologies, expertise, and funding that might otherwise be beyond the reach of public budgets. From developing intelligent transportation systems to implementing data-driven energy management, private companies can tailor solutions to meet a community’s unique needs, ensuring that smart city initiatives are not just about cutting-edge technology but also about improving the quality of life for all citizens. In addition to financial investments, private sector participation can foster innovation, efficiency, and sustainability, aligning the interests of the government, business, and community to create cities that are not only smarter but also more equitable and responsive to the needs of all residents. By aligning goals and sharing risks, PPPs can create a synergistic environment where both sectors work together to achieve inclusive growth.

Embracing Innovation

The need to address pressing challenges can be a strong motivator for embracing innovative solutions. Emerging markets, driven by a desire to improve quality of life and ensure sustainable growth, might be more willing to take risks and adopt new technologies. Dholera, located in the Indian state of Gujarat, is a prime example of a smart city’s transformative potential in an emerging market. Designed from the ground up, Dholera focuses on efficient infrastructure, clean energy, and digital connectivity. This initiative, championed by the Indian government’s Smart Cities Mission, has drawn both national and international investments. Through its comprehensive urban planning, Dholera boasts an integrated water management system, expansive green spaces, and state-of-the-art ICT (Information and Communications Technology). Residents benefit from real-time public transportation data, improved waste management, and reduced energy costs, leading to an enhanced quality of life. Moreover, the city’s business-friendly environment, backed by its infrastructure, has generated employment opportunities, significantly improving livelihoods and setting Dholera as a beacon of sustainable and inclusive urban development in emerging economies.

While the notion that smart cities might find easier implementation in emerging markets might seem counterintuitive, there’s a compelling argument to be made. The combination of a fresh start, rapid urbanization, economic incentives, lessons from early adopters, regulatory flexibility, partnerships, and a strong drive for innovation sets the stage for transformative change in the developing world.

Insight by:

Justin Kettle

Managing Director

Kettle Consulting (PTY) Ltd

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