Where smart city projects are still pushing ahead

While some smart cities projects hitting hurdles, China’s are racing to the front of the pack

November 05, 2020

About 130 kilometers from Beijing, a new brand-new city will soon be under construction. It’s due to sport apartments with drone-friendly terraces for deliveries, shared 3D-printing facilities, and buildings that recycle water and produce their own energy.

On the waterfront in Shenzhen, construction is set to start this year on the 2-million-square meter Net City, which will feature buildings with solar panels on rooftops and sensors that watch for threats like flooding. 

China, bolstered by a centralized approach to technology, is turning out to be one of the most fertile test beds for creating so-called smart cities, which aim to infuse technology and sustainability into daily life. The country has initiated more than 500 smart city projects since 2017.

“There is no lack of scale and ambition for China and Chinese firms when it comes to implementing their vision for smart cities,” says Jordan Kostelac, director of proptech at JLL Asia Pacific.

Elsewhere, many such projects are being put on hold or cancelled due to the economic downturn. Google in May abandoned its Sidewalk Labs project in Toronto. A report by market intelligence firm S&P Global estimates that smart cities projects in the U.S. will shrink 7 percent in 2021 and remain flat in the next few years. The pandemic and ensuing budgetary constraints are cited as culprits.

China: full steam ahead

China isn’t the only country creating smart cities, a concept that has gained traction over the last decade. Chicago, Austin, Barcelona, Seoul and Singapore are all frontrunners in global smart cities rankings.

But where China appears to have a leg-up is how its approach to technology allows for more centralized systems of transparency where access to information, enterprises and technologies can be made available to policymakers and regulators, Kostelac says.

“This is why government authorities are able to undertake and support Chinese firms in such massive smart city projects,” he says.

For instance, when COVID-19 broke out in China, tech companies such as Alibaba and Baidu immediately heeded the call of the government to develop health-related innovations. The former even created a new AI algorithm that could analyse CT scans for signs of the virus. It was adopted by 26 hospitals across 16 provinces and municipalities.

The country is also charging ahead in terms of digitalising its infrastructure. It has set aside US$1.4 trillion to boost its technological standing in all areas from automating factories to backing a pilot for a 5G-based transport system in the city of Changsha.

Private players are taking a leaf from the government’s direction. According to a JLL survey of real estate firms in China, 47 percent of them plan to increase their proptech budget to digitalise their assets– particularly in the areas of Internet of Things, big data and artificial intelligence – compared to over 30 percent two years ago. 

“The ubiquitous use of technology, a generous amount of open data and data gathering as well the country’s ability to push through these projects is a sign of its strong state capacity coupled with the citizens’ general trust in their government,” Kostelac says.

Staying on track

Smart cities projects elsewhere remain on track despite the coronavirus and economic downturn.

In Vietnam, Ho Chi Minh launched an open-source database last November, with data on projects, schools, health facilities and land administration to be made publicly available and urged state-owned companies to contribute to it.

In Japan, smaller regional cities are responding to the government’s call of smart cities to tackle problems such as an ageing population and natural disasters. Aizuwakamatsu in Fukushima, for instance, is allowing its citizens to volunteer their data and build an understanding of smart city technology so more will choose to do so. To date, about 20 percent of its population have registered for some form of smart cities and the aim is to hit 70 percent for the system to have gain the citizens’ trust.

In Europe, countries like Finland, its successful smart cities projects – such as the high tech Kalasatama neighbourhood where data for its buildings is freely circulated to the public – have been attributed to the high social trust and trust in government.

“Smart cities and data will gain increasing traction in a post Covid world,” says Kostelac. “Different countries are choosing how the use of data will look in their own versions of Smart Cities. Cities in China may be blazing ahead in these areas, but it is also worth paying attention to what is happening in other cities charting different courses.”