Hong Kong was slow out of the gate on smart city development, but a panel of experts at a Chamber seminar on 2 April agreed that things are starting to move in the right direction.

“We have a long way to go to catch up with the leading tech cities in the region,” said Julian Vella. “But the journey has started.”

Vella, who is ASPAC Regional Head – Global Infrastructure Advisory of KPMG China, noted that since the Smart City Blueprint was released by the Hong Kong Government in December 2017, a number of initiatives have been launched including the Faster Payments System. 

“Another good thing is the announcement of increased funding for innovation and technology,” he added. 

For example, Chief Executive Carrie Lam has said that she wants to double Hong Kong’s spending on R&D to 1.5% of GBP. This is welcome news, Vella said, but it still leaves us far behind other jurisdictions such as South Korea, where the figure is around 4%.

Vella also shared the results of a recent KPMG survey of citizens in five cities – Hong Kong, Melbourne, Seoul, Shanghai and Singapore – on smart city development. They chose to gather the views of residents, Vella explained, because smart cities should focus on the needs of citizens. 

“Smart cities are not just about high-tech for the sake of it,” he said. “It has to enhance lives as well.”

Looking at some of the specific results, Vella said it was interesting that Hong Kong residents are concerned with transportation issues. This is despite the fact that the city is already “one of the best jurisdictions in the world in terms of the quality of its transport infrastructure.” Local residents are concerned about increasing congestion and they want more rail and MTR lines. 

To ensure continuing smart city development, we also need to create a “future-focused workforce.” This means more STEM graduates, but also the need to move away from a risk-averse mindset so innovation can flourish. 

“It is not just about technology, it is about creating the culture for people to be innovative,” Vella said. “We need to encourage a culture of innovation where it is OK to try and not succeed the first time.”

There is some good news on this front, as the number of start-ups in Hong Kong is growing, although access to capital remains a sticking point.

Smart cities need to benefit residents, and citizens also need to be at the heart of smart city development. Vella explained that the more citizens use smart technology, the more positive they are about using it. 

“This enhances the smartness of a city, and how smoothly it operates,” he said. For example, drivers that use an app to avoid a traffic jam also help to ease the congestion by not contributing to it.

“A smart city is a city where citizens have been part of the solutions,” Vella said.

Mark Lunt, Group Managing Director of JOS, a Jardine Matheson company, noted that cities like Melbourne, and some in Mainland China and Europe, are already far along the smart city path. But Hong Kong does not have to start from scratch.

“Most of the technology challenges have been overcome,” he said. “The technology exists. The key to the success of smart city progress is going to be people.”

Lunt is optimistic about Hong Kong’s smart city development. “The trend is hugely positive in Hong Kong,” he said, pointing to the increase in the number of start-ups and growing activity in Cyberport and the Science Park. 

He noted that there had been some cynicism about these projects, and admitted that when he had first arrived to Hong Kong eight years ago, Cyberport was “tumbleweed.” 

“That is no longer the case,” he said. “Just in the past few years it has become very busy.”  

He said that cooperation between the Government and private companies was crucial to success, adding that JOS had been working with the Hong Kong Government.  

As part of its smart city push, Hong Kong has launched a number of pilot programmes, such as the smart lampposts and waste bins in Kwun Tong. But many Hong Kong residents will be unaware of such schemes, unless they live or work in the area, something that Clube Ng, Founding Co-Chairman of the Connected City Alliance, pointed out at the seminar. 

“Some citizens have said that the scale of these schemes is too small,” he said, adding that bigger projects would have more of an impact.

“In the past, government pilots were only for one or two streets. In the future, perhaps they should be whole districts.”

He said that smart city development is now moving from 2.0, which was government-led, to 3.0, which will be from the citizen angle. He also agreed that public-private partnerships are the best approach. 

Ng raised two questions about ensuring Hong Kong can successfully improve its smart city operations: “How to get the Government to allocate more resources to smart city development? And how should they allocate resources for I&T?” 

While there is already considerable funding going into The Loop and Cyberport, for example, he said, the Government should invest more in upgrading the wider smart city infrastructure. 

Keith Cheng, Head of the Hong Kong Digitalization Hub at Siemens, also remarked that he had seen solid advances since the Smart City Blueprint was released. 

“Last year there was a lot of talking. This year, I see a lot of doing,” he said. For example, there is now a track at the Science Park that is being used to test autonomous vehicles. 

He explained that Siemens is a big global company, but it had set up Siemens MindSphere as a creative arm to encourage and enable innovation. “Our CEO in Germany said that instead of just having one large boat, he wants to have speedboats.”

Siemens MindSphere does not invest in R&D, but rather uses the technology that is already available to develop solutions. To do this, it needs to collect and analyze data. 

Hong Kong has been criticized because there has been a lack of big data available for technology companies and innovators to use. But Cheng said that the situation is changing and more information is now being made available.

Patrick Lee, Convenor of the Chamber’s Smart City Working Group and moderator of the seminar, noted that Hong Kong is now waking up to technology investment, including by family investors and private offices. 

Such shifts in mindset recently, added to the Government’s renewed I&T drive, suggest that the ingredients are now coming together for Hong Kong to become a smarter city.

Moving Forward on Our Smart City Journey

With new pilot schemes and initiatives, and the increasing availability of big data, Hong Kong is entering the next stage of smarter development, reports Albert Wong

Globally, governments, businesses, academics and citizens are increasingly recognising the role of innovation and technology (I&T) in enhancing all areas of urban life and addressing urban challenges. Hong Kong is no exception to this. 

The journey of Hong Kong formally commenced in 2016 when the then Chief Executive shared an ambitious plan to transform Hong Kong into a Smart City during his policy address. This was followed by a strategic consultancy study. The Smart City Blueprint, based on the findings and recommendations of the consultancy study, was issued by the Government in December 2017.

Hong Kong’s progress

The Smart City Blueprint has more than 70 initiatives covering six themes – Smart Mobility, Smart Living, Smart Environment, Smart People, Smart Government and Smart Economy. By far, Smart Mobility has the most initiatives at 23 in total. This is in alignment with international experience that mobility is one of the key urban challenges that most cities have to deal with. 

Some key initiatives supporting the implementation of Smart City include:

• Launching the Common Spatial Data Infrastructure into full operation by the end of 2022 and releasing the high-quality 3D digital maps of the whole territory in phases, which facilitate sharing of geo-spatial data for organizations in the public and private sectors;
• Establishing a Smart Government Innovation Lab to facilitate collaboration between the industry and the public sector on I&T applications, and to complement the E&M InnoPortal led by the Electrical and Mechanical Services Department; and
• Formulating and publishing the Government’s annual open data plans.

Citizens can expect to see some of these initiatives implemented within the next few years. In addition, the Government is preparing for three smart city infrastructure projects, including:

• Undertaking a pilot scheme on the Multi-functional Smart Lampposts, with an initial rollout of some 50 smart lampposts in Kowloon East for use before mid-2019;
• Providing an electronic identity (eID) for all Hong Kong residents, to facilitate them to use a single digital identity and authentication to conduct government and commercial transactions online; and
• Enhancing government cloud services and building a big data analytics platform. 

Lessons learnt from overseas experience

Hong Kong is not alone in its journey to becoming a Smart City. Some lessons from overseas jurisdictions, which have gone through a similar development process, can be drawn as reference for Hong Kong:

• All leading cities will have to set their visions with a particular focus on being citizen-centric rather than technology-centric. It is the combination of an innovative application of technology and service models and an ability to create an innovation ecosystem that will make a city smart (and innovative).
• An authoritative figure will act as a champion signifying the importance attached to the commitment to realisation of the desired future state for the city. A high-level agency will be set up to coordinate Smart City initiatives across a wide spectrum of stakeholders. 
• There is no “one-size-fits-all” approach for Smart City development. This highlights the need for each city to cater to local circumstances. The local context drives the types (and mix) and implementation schedule of smart city initiatives. 
• An appropriate regulatory framework facilitating Smart City development has to be in place. Examples include regulations related to data and privacy protection, cybersecurity, electronic transactions, e-procurement, open data and disclosure of public sector information. 
• Digital infrastructure is a critical component and forms the “infrastructure backbone” of Smart City development. 
• Open data should be made available to the public to foster innovation and drive economic growth. 
• Cross-sector collaboration – the public sector, private sector, academic institutions and the general public – covering conceptualisation of ideas, R&D, feasibility analysis as well as construction, operations and maintenance of Smart City projects and services, is key for successful Smart City development.  

In addition, there is a very important cultural factor underpinning effective Smart City implementation – which is the extent to which stakeholders can embrace failure and learn from it. A culture that seeks to condemn failure and avoid risks at all costs is unlikely to be innovative. 

Trends and implementation considerations 

Going forward, governments and stakeholders should take the following factors into account when charting the journey and milestones of their Smart City implementation: 

• Accelerated pace – Governments have to keep pace with global Smart City development and trends in order to remain competitive for FDI and talent;
• Business case – Governments and businesses are looking for promising use cases and business models that present a clear path to financial sustainability;
• Coordination – Vision is just the start, delivery is the hard part. At present, Governments are facing challenges like too much choice and too many cooks. Cities need to have an effective mechanism to coordinate and govern the approach to and contents of Smart City implementation;
• Differentiation – Technologies are increasingly affordable (and commoditised) and cities can no longer compete on “hardware” alone. Cities have to look for ways to differentiate themselves and stand out from the crowd, implying a need for a holistic view of what a city can offer and its branding;
• Ecosystem – A vibrant and complete ecosystem is key to the development of I&T and, in particular, development and retention of talent; and
• Financing – Governments are findings ways to effectively leverage the financing capabilities of the private sector that help accelerate the implementation of multiple smart initiatives concurrently.

Opportunities for Hong Kong

The upsides for Hong Kong in becoming a Smart City are obvious. Benefits include the ability to address urban challenges, effective measures to ensure sustainable economic development, a platform to inspire continuous city innovation and the means to enhance Hong Kong’s attractiveness to FDI and talent. 

There are two specific opportunities worth further discussion – Artificial Intelligence and being a Living Lab for the Greater Bay Area (GBA): 

• AI – Benefitting from the advancement of computing power, storage capacity and data availability, AI is making inroads into our urban life – from customer acquisition, healthcare services, manufacturing, banking services and autonomous driving to public services. In her 2018-19 Policy Address, Chief Executive Carrie Lam earmarked $10 billion to support the establishment of  two research clusters. This is a key initiative that will drive I&T competitiveness and underpin Smart City implementation. 

According to research conducted by PwC, AI is a game changer that can transform the productivity and GDP potential of the global economy – a prize of US$15.7 trillion of potential contribution to the global economy by 2030 from AI. This is predicated on having sufficient strategic investment in different types of AI technology as well as a conducive regulatory environment and (re)training programmes that help maximise the benefits from AI and mitigate the risks in terms of accountability and impacts on jobs and income inequality.

In addition to being one of the leading centres for AI research, Hong Kong could also leverage its reputation of high professional standards to assume an instrumental role in AI standard setting, testing and certification. 

• Living Lab – A city can leverage its city environment as a testing ground for new technologies. Hong Kong is well placed to serve as a “living lab” for showcasing use cases (and relevant data) of the application of I&T solutions to address urban challenges in the GBA (to extend the concept from a Smart City to a Smart GBA Region). 

As a highly urbanised city, Hong Kong’s experience would be very relevant to start-ups and companies who are interested in developing algorithms and innovative services and products to serve urban cities. Through being a Living Lab, Hong Kong can demonstrate a variety of smart initiatives that: 

• Aim to be citizen-centric and solve problems facing residents; 
• Connect existing platforms and infrastructure to maximise value;
• Promote collaboration among the public sector, private sector and citizens; 
• Ensure data is easily accessible for innovation and operation purposes, accounting for appropriate security and privacy measures; and
• Embed the spirit of innovative thinking into the design and operation of the city.

Conclusion

Smart City promises great opportunities for all relevant parties to co-create solutions that address urban challenges and improve the quality of life. The competition between global cities to become a leading Smart City will only become more intense. As innovative technology becomes a commodity, every city will likely have a similar set of “smart city hardware.” Therefore, Hong Kong will need to demonstrate its innovative capabilities through its ability to integrate I&T with urban life, a high quality of life for citizens and the completeness of the innovation ecosystem. This will also help position Hong Kong as the Living Lab for the GBA.

In order to materialise the full potential of Hong Kong as a Smart City, it is necessary to ensure all basic elements exist and are functioning smoothly together. These include an environment that grows, attracts and retains talent; an effective governance arrangement that monitors and reviews progress; an interoperable digital infrastructure to facilitate secured information sharing; a robust legal framework that strikes a balance between the need for innovation and interests of stakeholders; and a framework that enables continuous innovation and development of the ecosystem in Hong Kong.

Albert Wong, Director, Public Sector Consulting, PricewaterhouseCoopers

Expert View: Focus to Find Smart Solutions

Although Hong Kong tends to underperform in smart city surveys, this is partly a problem of awareness. For example, how many residents know that the Hong Kong Airport Authority uses AI to manage trolleys in the baggage claim area?

 However, Hong Kong’s geography gives us an advantage as we work to catch up. Since we are so small, we can use the whole city as a “Living Lab.” To achieve this, we need to take action in a number of areas. This includes identifying early adoptors and innovators, and encouraging them to be promoters of Hong Kong’s smart city development. 

We also need to involve district councils, to ensure that the adoption of smart solutions to solve real problems is welcomed by residents. Breaking down the challenge into 18 “Smart Districts” will also help focus innovators to develop solutions that will really make a difference in each district. 

 We should also publicize the progress (or lack of) of the various smart initiatives. For example, more than 70 initiatives have been announced, but we have not yet seen a report on their progress. 

The Government should play the role of leader and enabler. As a leader, it should help citizens to visualize Hong Kong’s smart city future, which is key to the success of this type of project. If you search for “Singapore Smart City” videos online, you will find plenty of examples demonstrating the city’s plans. 

As an enabler, the Government should identify and prioritize the pain points and bottlenecks that are slowing the speed of innovation. It also needs to ensure that our education system is preparing workers for the future. The recent emphasis on science, technology, engineering, and mathematics (STEM) is a step in the right direction, but the Government also needs to set standards to ensure quality control. 

The business community can play super-connector and investor roles. Hong Kong is an important world trade hub, and we have already connections with international businesses. Take 5G as an example: the business community should broadcast our ambition to be among the “First English Speaking 5G Ready” cities, and invite global companies to introduce their latest products and services to Hong Kong.   

As investors, there are opportunities for all. Established businesses should embrace smart city-related innovation as they move to the “new economy.” SMEs can take advantage of Government funding to develop new products and services. This would also be a fantastic launching pad for them to enter Mainland Chinese and international markets, as they will have the successful example of helping Hong Kong become smarter as their testimonial. 

Patrick Lee, Convenor, HKGCC Smart City Working Group

Expert View: Developing a Clear Vision

If we look at the various smart city rankings, we have to admit that Hong Kong is a little bit behind its main rivals. In the Cities in Motion Index, for example, Hong Kong was ranked ninth, behind Singapore’s sixth place. However, different surveys have their own dimensions, and Hong Kong ranks highly in certain areas such the number of wireless access points, social media users and mobile phones per capita. 

Hong Kong is an international finance and trading centre and has quickly adopted advanced technology in the past. However, in the era of 5G and the new economy, many global cities are focusing on how they can better incorporate innovative technology – including Internet of Things, big data, cloud computing, AI and blockchain – to enhance the quality and performance of urban services. 

No-one can deny that technology such as smartphones and social media sites like Facebook have changed how we live. These are also a fundamental part of city development as a means to make urban living more efficient. For example, online check in and facilities to remotely track baggage when flying not only saves time, but makes travellers less concerned about losing their baggage. 

Hong Kong has well established digital infrastructure and I believe we can catch up to become a leading global smart city. However, the competition from nearby cities is high. We need to use a more innovative mindset to develop a clear vision of what type of smart city Hong Kong wants to become, and how we can achieve this goal. 

The Smart City Blueprint includes over 70 initiatives, some of which have already been put into practice. As the pilot district for Hong Kong’s smart city development, Energizing Kowloon East Office completed eight initiatives.  

Looking to the future, Hong Kong needs to think more creatively about how to streamline the road map for smart city development. While looking at the top-ranked smart cities globally – such as Copenhagen, Helsinki and New York – we also need to look at our weak spots. For instance, our scores in programmes to encourage private sector involvement, and people-first design, are low. 

The Government should have a more open mindset to encourage more cooperation with the private sector and strengthen partnerships with overseas countries. This would facilitate more co-design, co-development and co-implementation, and help nourish a real smart city ecosystem for Hong Kong.

Clube Ng, Founding Co-Chairman, Connected City Alliance