Asia is currently leading the world in implementing wholesale smart city change – the integration of multiple information and communication technology (ICT) solutions in a secure fashion to manage a city’s assets, such as schools, libraries, transportation systems, hospitals, water supply networks, and other community services.
The Hong Kong government has identified the Internet of Things (IoT) as a potential new economic driver, but is still in the early stages of developing a so-called smart city blueprint. It will soon commission a study to map smart city development plans up to 2030, and start-ups are encouraged to engage in those plans.
Plans and blueprints are good, of course, but Hong Kong needs to innovate more – and faster - to become a truly smart city. The Octopus card is now 15 years old, and in the intervening years no other truly innovative product has appeared.
In Shenzhen, no one carries cash anymore; everyone uses their mobile phone to make purchases. In Hong Kong, fintech has yet to take off, despite there being lots of investor and government buzz about it. Becoming, and remaining, a smart city is a process rather than a 'one and done' event.
In this context, there are opportunities for brands to add value in Hong Kong, but they do face hurdles, such as inflexible regulations. The SAR must take a holistic and open approach in developing itself along these lines.
Meanwhile, according to a story in the 22 June, 2016 edition of the
South China Morning Post
, Hong Kong faces a potential challenge from Singapore in attracting start-ups in the emerging IoT and connected devices markets.
Singapore is poised to become the world’s first smart nation with free, nation-wide Wi-Fi, crowd-sourced public transport and autonomous medical support. The Lion City is actively supporting entrepreneurs to develop ideas for its “Smart Nation” plans, which Singapore Prime Minister Lee Hsien Loong announced in 2014.
Earlier this year, the Singapore government dedicated US$13.9 billion to research and development, including support for smart cities technology. And just this week (27 June) it has announced a plan to run the city on APIs, with an app called 'One Service' that allows citizens to report municipal issues through a single unified interface, where queries and complaints about anything from pest control to construction sites get routed directly to the right department.
In point of fact, Hong Kong already has resources that it can use to develop itself into a smart city. It is next door to Shenzhen, China’s Silicon Valley and a tech manufacturing powerhouse. Start-up tech companies in Shenzhen can easily tap into Hong Kong, a more mature economy with a capitalist system and a world-class stock market, to secure funding and marketing to launch their brands in the IoT space.
Private brands, as well as public systems, can spearhead change and drive innovation. For instance, private brands have been almost entirely responsible for accelerating the current smart transportation revolution: City Mapper for public transport, Uber for ride-sharing, and Waze/Google Maps for private transport.
Given the momentum behind smart cities, brands should be asking themselves how they can capitalise now. However, consumer cynicism (especially for potential buzzwords like smart cities), concerns over data privacy, and increasing awareness of cyber-risk, make this a more complex prospect than just jumping on the bandwagon.
Examples of brands that have leveraged the momentum behind smart cities and thrived include Philips and MediaTek. Philips looked beyond lighting, connecting with telecom partners to repurpose traditional streetlamps as Wi-Fi hubs. This initiative worked because ordinary citizens benefit from high-quality, city-wide Wi-Fi. Councils benefit from reduced maintenance costs and more broadly, everyone benefits from reduced energy usage.
To help educate consumers about the power of smart cities, chipmaker MediaTek invited consumers to explore the benefits of their IoT technology by creating a virtual ‘Everyday Genius’ world – a prototypical smart city complete with driverless cars, weather-predicting fish and food that knows when it’s going off.
Examples of brands that have not so successfully leveraged the smart cities momentum include Ford and Nest. This year Ford unveiled the FordPass, which it promised would “change how the world moves and make people’s lives easier.” The reality was a parking app and a removable fuel-level checker. The less than kind media response proves that while smart city rhetoric is easy, delivering against the resulting expectation is a serious challenge.
Earlier this year a bug in a Nest software update caused thermostats to shut down, leaving houses cold. Nest apologised and issued a nine-step solution, but not before angry owners flooded social media. While a mobile bug may cause you to lose a few photos, bugs in smart appliances have much greater consequences. At the level of smart cities, cyber-risk becomes a significant threat and thus cyber-security a significant concern.
So how can brands stake a relevant, credible and differentiating claim in the smart cities space?
They must bring relevant innovation to urban challenges, including increasing urban density, ageing populations, increasing energy usage and ageing infrastructure, as well as consumer needs, and marry them both to technological possibilities such as mass connectivity, artificial intelligence, and converged IoT.
At Prophet, we believe that relevant and feasible ideas for new initiatives sit at the intersection of three driver sets: urban challenges, consumer needs and technological viability.
When these three areas align, the utopian smart city vision can become a reality, and practical initiatives that address both significant long-term issues and current consumer needs can be found.
Collaboration between multiple stakeholders is needed to ensure success: the brands that manage to position themselves in this space will be able to achieve long-lasting engagement with public agencies and citizens while ensuring their promises can be backed up with action.
David Brabbins is associate partner at Prophet in Hong Kong.