A city of many parts: smart cities and ecosystems

Urbanization is a fact of modern life. Around half of the world’s population already lives in cities, generating more than 80% of global GDP, and urbanization looks set to continue shaping the trajectory of global growth in unique ways.

Smart cities, with their technology-powered enhanced living and working environments, will be at the forefront of this transformation. Urban environments that leverage data and digital to create efficiencies, improve sustainability, drive economic development, and improve quality of life will become the new normal.

A smart region committed to the future

The Middle East and North Africa region (MENA) is recognized at a global level for being a hotbed of smart city projects. Since 2017, when Saudi Arabia announced plans for its $500 billion Neom smart city project, initiatives have accelerated: 2017 also saw Kuwait announce $4 billion to create the ecofriendly Saad Al-Abdullah city, and others soon followed.

In MENA, smart cities and the Internet of Things (IoT) are growing hand in hand. According to the GSMA, IoT revenues in MENA are forecast to reach $55 billion by 2025, and IoT will benefit MENA’s GDP to the tune of $18 billion by 2025. In its report The Rise of Smart Cities – Digital Transformation in the Public Sector, KPMG has forecast that the MENA smart cities market will double in value from $1.3 billion in 2018 to $2.7 billion by 2022.

Why are smart city ecosystems so important?

Smart cities in MENA are holistic ventures – the whole is more than the sum of its constituent parts. Designing, building and running a smart city effectively requires all the right planning, strategy and partners to be in place to maximize a project’s chances of success. A smart city might be built on technology, but it is focused on outcomes.

The Institute of Electrical and Electronics Engineers (IEEE) describes a smart city as a place that “brings together technology, government and society to enable the following characteristics: a smart economy, smart mobility, a smart environment, smart people, smart living, smart governance.” To deliver on that, you need to incorporate people, organizations and businesses, policies, laws and processes, all integrated together and working towards desired outcomes. That is your ecosystem.

Getting it right

To avoid wasting time and money, the entire ecosystem must work together from day one. It should comprise the city stakeholders, who define and plan the smart city project and source the funding to finance it. Then there are real estate organizations like architects, building contractors, construction companies, controllers of districts and public spaces. In addition to them, there are the city operating entities themselves, the bodies responsible for street furniture, lighting, traffic lights, transportation and so on.

Your smart city is a technology-powered entity, so your ecosystem must also comprise technology providers. These include telecoms companies and vendors, hardware and software manufacturers who develop turnkey mobility, energy, security, building and infrastructure solutions. In addition, include startups and disruptors able to bring local level talent and digital innovation to the table.

One of the key priorities for a smart city is the effective and efficient management of this complex ecosystem. You need to ensure that your ecosystem dynamic matches your initial business case set-up. It can provide city managers with a single point of contact to drive adjustments and changes where needed. City leaders need to rely on each ecosystem member’s expertise in their respective industry: utilities, waste and recycling, telecommunications, automotive, travel and transportation, healthcare, engineering and construction. All these elements combine to create the whole.

Think about new roles

Within your smart city ecosystem, you might want to appoint a chief data officer (CDO) to oversee data and its exploitation. All those IoT connected objects and sensors are gathering vast amounts of data, data you want to leverage to create valuable new services from instant insights. According to Gartner, by 2021 CDOs will perform a vital role, on the same level as IT, business operations, HR and finance in 75% of large enterprises.

In a smart city ecosystem, the role of CDO should be to work with assorted stakeholders to drive citizen engagement, ensuring your ecosystem partners and citizens enjoy a mutually beneficial relationship. In the U.S., more than 20 smart cities have appointed CDOs, including major projects like New Orleans, Philadelphia and San Francisco, while over 100 smart cities projects in India have done the same. MENA smart cities could surely benefit.

Steps to success

Orange has extensive expertise in establishing ecosystems to drive smart city success. The best principle I can recommend when it comes to smart city success is to remember that you cannot achieve it all by yourself. You need partners, with different skill sets, working together. You need to identify and engage with the right smart city partners and stakeholders and you must source the appropriate funding for your project – more often than not a public private partnership (PPP). Think about working with a master systems integrator (MSI) who has expertise in managing multiple suppliers across different disciplines.

With a defined strategy and plan in place, complete with business case and desired outcomes, the right ecosystem partners can help you deliver on your intentions. ABI Research has forecast that smart city technologies could drive more than $20 trillion in additional economic benefits by 2026. MENA smart city projects that continue along the mutually beneficial ecosystem path will continue to thrive.

If you would like to talk about the topics covered in this blog or anything else to do with digital transformation in MENA, please contact me on: sahem.azzam@orange.com.