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Smart cities: our new infrastructure opportunity

I have been a frequent visitor to China over 30 years. Its continuing transformation and growth is nothing short of remarkable. The country’s far-sighted focus on opening up has supported industrialisation and urbanisation on an unprecedented scale.

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But there is another side to urbanisation. The desirability of living in cities has created a host of challenges including congestion, pollution, land use and essential service planning.

"Digitisation is now the biggest change affecting cities, a change as big as electrification or the development of mass transit systems."

Just as companies need to shift their business models to respond to customer needs and to succeed in a digital world, I believe digital is central to creating more liveable, more efficient and more successful cities.

Although I’m always focused on being a banker, the issue of cities, their infrastructure and their liveability has been particularly on my mind in recent few months. 

Ahead of the G20 meeting in Brisbane this week, I have participated in the B20 Taskforce which has highlighted the importance of high quality economic infrastructure for economic growth.

I have also visited a number of the largest cities in North America and Asia, including Chongqing in China where I had the privilege of acting as the Executive Chairman of the Chongqing Mayor’s International Economic Advisory Council. 

Chongqing is one of China’s mega cities with a population of almost 10 million people and over 30 million in the wider municipality. It’s the gateway to Western China; located at the meeting of the Yangtze and Jialing rivers.

For those who are less familiar with the city, Chongqing makes a quarter of the world’s laptops, half of China’s motorcycles and is the location of Ford’s largest manufacturing plant outside Michigan.

The issues facing large cities exist on a massive scale in Chongqing and solving congestion and environmental concerns have been on the top of the city’s strategic agenda. As Chongqing continues to urbanise, one can imagine a growing city being weighed down by its size and the challenges it presents, a fate which has already befallen some other megacities.

According to research ANZ commissioned from Deloitte, traffic congestion costs are not just direct but they contribute significantly to environmental damage. In one example studied, 12 per cent of the total congestion cost was related to pollution.

Chongqing is focusing on the opportunities technology presents to address these challenges and digitisation and using technology to create a more liveable and more efficient city was the central theme of this year’s Advisory Council meeting. 

In particular, the focus was on how Chongqing will move towards becoming a ‘smart city’. That means cities where tools based on computing power are built into the infrastructure and the governance that supports the city. It‘s something that is increasingly critical to large cities throughout the world, including here in Australia.

We tend not to think of cities as computer networks. We think of them as concrete, steel, glass. But digitisation is now the biggest change affecting cities, a change as big as electrification or the development of mass transit systems.

Building a smart city – one where digital technologies and big data can be used to get the most out of existing physical infrastructure - therefore becomes extremely significant in making cities even more liveable and productive and addressing the challenges of urbanisation including congestion, pollution and public amenity.

As the conversation about infrastructure between government, business and the wider community grows as a result of the B20 recommendations and discussion at the G20, one of my take-outs from Chongqing and my travel is not to think about the infrastructure capacity gap we face just in old economy terms – in terms of concrete, tarmac and steel. 

We need to have a broader conversation about the major opportunity that now exists to further improve the competitiveness and liveability of our cities through the use of big data and the integration of smart technologies. 

To read Mike Smith’s other LinkedIn Influencer posts, follow his profile via LinkedIn.

Photo: Rob d / Shutterstock.com.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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