This year, the Hong Kong SAR government is expected to release a refreshed “2.0” version of its Smart City Blueprint. The original Blueprint, published in 2017, set out 70 initiatives to transform Hong Kong into a smarter, more liveable, more sustainable city.
As Hong Kong refreshes its “smart development” ambitions for the coming decade, there are a number of global trends as well as internal factors that will shape the city’s ongoing transformation. Understanding and responding to these trends with a focus on technology innovation will be crucial in order to achieve the stated objectives.
Global trends such as increasing empowerment of individuals, demographic factors such as ageing populations, climate change, resource scarcity, economic interconnectivity, the geopolitical climate and rapid technological disruption all present both risks and opportunities to cities.
Local considerations for Hong Kong include amenity and liveability of the city, land use and urban redevelopment, resource and waste management, and the need to boost R&D and innovation. Societal issues must also be addressed, including tackling income inequality and poverty, housing affordability, equipping the workforce with skills needed for the future, and taking care of the city’s growing elderly population.
KPMG’s third annual white paper on Hong Kong’s smart city development, published in cooperation with CLP, Cyberport, HKBN JOS, Smart City Consortium, Siemens, Weave Co-Living and Wilson Group, looks at how effective governance, smart infrastructure and innovation can be used to address the city’s biggest urban challenges. More than 400 executives from corporate enterprises, SMEs, start-ups, government, not-for-profit organizations and academia across a broad range of sectors in Hong Kong were surveyed, and over 20 industry players were interviewed.
Creating a more open data ecosystem
The survey found that further enhancement of Hong Kong’s technology infrastructure is a critical factor to support the city’s development as a smart city by 2030. The development of technology infrastructure was seen as the second most important area in enabling Hong Kong to become a smart city, with 47% of survey respondents seeing this as a top priority. A significant proportion of survey respondents (44%) believe innovation in this area will be insufficient to optimise smart city projects over the next 10 years, compared to only 24% who say it will be sufficient.
A key part of improving the city’s connectivity will be the upcoming rollout of 5G networks, which have higher capacity and speeds and lower latency than 4G, increasing the amount of data that can be collected through an increasing array of Internet of Things (IoT) devices.
Public access to data also forms an essential foundation for smart city projects, providing insights into where improvements are needed and the necessary information to help create solutions. The past year has seen some progress in the availability of data, with more than 80 government departments and bureaus now sharing information through the data.gov.hk portal.
In order to maximise the potential of smart city applications, the government needs to encourage more private companies to share their data, while ensuring all data being shared is anonymised and stored securely to ensure individuals are protected.
Regulatory reform can boost collaboration
Governance also plays an important role in smart city development, due to the collaboration required between the public and private sector. Hong Kong should look at how it can encourage both businesses and citizens to participate in initiatives, removing hurdles that limit opportunities for partnerships.
Survey respondents expressed a strong willingness to collaborate with the government in smart city projects but pointed to a lack of opportunities to do so. Overall, 29% surveyed said their organization is currently partnering with the government on smart city-related projects and initiatives, with corporations more likely to partner as opposed to start-ups or SMEs. Roughly four out of 10 respondents (41%) disagreed with the statement that there are sufficient opportunities to partner with the government on these projects, while only 16% agreed. Further, 62% of respondents said that willingness on the part of government departments and agencies to consider partnerships with the private sector is an important factor to enable smart city initiatives to achieve their objectives.
Flexibility in terms of cooperation models may encourage more co-creation on smart city projects. Establishing “regulatory testing grounds” and “living labs” have been effective to encourage public-private cooperation on smart city projects in other Asian cities such as Seoul and Taipei. Hong Kong’s Smart City Consortium has advocated for a “Fast-Pass” programme that would grant short-term permission for eligible businesses to trial their projects in a defined area under a more relaxed regulatory environment. Such a programme would reduce time-to-market uncertainties caused by potential regulatory hurdles. In addition, it would increase investor confidence in such solutions by allowing companies to demonstrate proof-of-concept in a live environment.
The road ahead
As Hong Kong develops its smart city Blueprint 2.0, the government should maintain dialogue among government, corporates and citizens to validate its priorities. There should also be a strong focus on communication between all elements of society in order to understand the needs of the community and involve it in developing solutions. Residents need to have a clear understanding of the benefits of new technologies, and how their data will be collected and used. We also need to nurture and develop our workforce to ensure it is future ready – with the required digital skills and innovative thinking in order to take full advantage of a new digital era.
Hong Kong should also do more to boost local innovation and build up its advantage as a regional hub for R&D and talent, with a clear road map to enhance cooperation with the rest of the Greater Bay Area (GBA) as well as ASEAN. Targeted policies to streamline tax incentives related to R&D activities across the GBA, for example, would be mutually beneficial to enable companies to quickly prototype, test and scale solutions.
Meanwhile, the city should be ambitious in setting its smart city goals. It is worth noting that while Hong Kong is in the process of rolling out 5G this year, Helsinki is already planning for 6G, and while Hong Kong is encouraging the switch to electric vehicles, Seoul is exploring the use of hydrogen vehicles. Committing to an ambitious agenda will help Hong Kong ensure it can maintain its global competitiveness while meeting the future needs of its residents.