The coming decades hold great promise for Hong Kong's continued development as a smart and sustainable city. The rollout of 5G connectivity across the territory, combined with strengthened capabilities in artificial intelligence, big data, blockchain, cloud and edge computing will enable a new generation of digital-enabled urban applications.
These have the potential to bring a myriad of benefits for cities, such as reducing traffic congestion, creating more energy-efficient buildings, designing more liveable public spaces, and improving delivery of healthcare and other services.
Hong Kong's Connected Future is the fourth annual study on Hong Kong's ongoing smart and sustainable city development produced by KPMG China. The report analyses Hong Kong's current smart and sustainable city planning and policy initiatives, providing citizen and business perspectives on the conditions and characteristics needed to create an optimal ecosystem.
Key policy drivers for Hong Kong's smart and sustainable development
The Hong Kong SAR Government's Climate Action Plan 2050 announced in 2021 presents an urgent imperative for the Government, businesses and citizens to work together to combat the global threat of climate change. In addition, the Government's Roadmap for the Popularisation of Electric Vehicles published in 2021 further sets the stage for the phase out of fossil fuel cars and accelerated development of EV infrastructure. Further, the Government's planned construction of a next-generation government cloud infrastructure and big data analytics platform announced as part of its Smart City Blueprint 2.0 brings the potential for heightened data sharing between departments and enhanced deployment of digital government services.
As technology-driven initiatives are rolled out, there is a need to ensure that solutions sufficiently meet the needs of Hong Kong's residents, and maximise collaboration between the public and private sector so that development is inclusive. As more data is generated, coordination on cybersecurity initiatives is also increasingly critical to secure infrastructure and provide adequate data protection.
The COVID-19 pandemic has positively affected attitudes towards digital transformation, tech adoption and data sharing
The study found that the pandemic has transformed the macro business environment and consumers' attitudes to technology. There has also been a significant increase in the take-up of both government and private sector digital services among consumers, amid the implementation of anti-pandemic measures. This increased adoption of digital services is likely to be a permanent shift, according to respondents polled.
Seven out of 10 respondents say they are using digital payments and e-wallets more frequently, with 72% expecting this change to be permanent, while 70% of respondents are purchasing more goods and services online, a change that 65% expect to continue. Meanwhile, 67% of respondents have accessed public services and information online since the pandemic began. Again, two-thirds of these people expect these changes to be permanent.
Placing community needs at the heart of Hong Kong's smart city vision will accelerate its development
The study suggests that Hong Kong can gain an edge over other jurisdictions through unique smart city positioning that closely aligns with the needs of residents and defines priority focus areas and sectors to achieve this alignment. 52% of respondents across the seven Asian markets surveyed say a safe living environment is the most important quality of a smart and sustainable city, followed by convenient public transport and manageable traffic at 47%.
In terms of societal needs, respondents in Hong Kong highlighted having access to affordable housing as the top concern with 53% citing it as a priority, while access to affordable quality healthcare was considered a key issue by 40% of respondents, followed by addressing poverty and inequality at 38%. These findings highlight the need to build more inclusive cities.
Hong Kong's property and transport sectors present significant opportunities to reduce the city's carbon footprint
Hong Kong's buildings and vehicles represent a significant proportion of the city's carbon emissions. Despite this, only 25% of respondents surveyed in Hong Kong think efforts to create carbon-neutral buildings are sufficient, with just 19% of people thinking enough is being done to promote carbon-neutral vehicles. Meanwhile, Hong Kong's efforts to repurpose underused buildings are considered to be sufficient by just 14% of survey respondents.
To meet the city's targets to become carbon neutral by 2050, existing buildings will need to be retro-fitted to make them more energy efficient and reduce their carbon emissions, creating significant opportunities for businesses. Buildings also need to be used to generate electricity, such as through the installation of solar panels. In addition to retrofitting buildings, there is also a role for repurposing existing and obsolete buildings to give them new uses and enhance the communities in which they are situated.
The Hong Kong Roadmap on Popularisation of Electric Vehicles released by the Government in March 2021 is expected to accelerate the city's shift towards clean energy cars. However, individual and private sector adoption of electric vehicles (EVs) will be crucial to meeting the city's goals, with EVs currently making up only 2% of privately-owned cars on the city's streets.
Data sharing and access to collaborative tools needed to optimise smart city innovation
As Hong Kong and other cities in the region continue to roll out new smart city applications powered by 5G connectivity, they will need to manage the vast new amounts of data being generated. This data needs to be properly structured, stored, shared and analysed to optimise the benefits for end users. Open source platforms present great promise to facilitate large-scale data sharing between the public and private sectors.
As these platforms are being developed, a data sharing governance framework should be implemented to ensure that data assets are consistent. New modes of collaboration between the public sector, private companies and citizens are also needed. In Hong Kong, survey respondents identified cooperation between the Government, the private sector and citizens as the most important factor to ensure smart city solutions are impactful. This study points to "sandboxes" – virtual environments for software developers to test new applications and gather data and feedback on them – as an important area for further development and expansion across multiple sectors.
Continuous improvement of data security governance is needed to safeguard Hong Kong's digital ecosystem
Data security is another area that requires attention. Although citizens polled showed an increased willingness to share their data, more than half of respondents in Hong Kong (55%) mentioned data security and privacy as a top-three factor to consider when cities implement new initiatives. It was also seen as a key consideration by those in Mainland China Greater Bay Area (GBA) cities and other Asian cities.
These findings highlight the need for enhancement of Hong Kong's cybersecurity regulations, to protect both individuals' data and critical government infrastructure from cyberattacks. There is also a need for the city to develop a set of industry-wide security standards for Internet of Things devices and projects.
Opportunities for Hong Kong to develop best practices for the rest of the GBA and ASEAN
As Hong Kong continues to develop smart city solutions, it is in a strong position to develop use cases that can be applied to other markets in the GBA and ASEAN. The city's status as a logistics hub and financial centre enables innovation in the areas of logistics and digital supply chain, and fintech, regtech and sustainable finance, while its dense urban landscape offers opportunities for the development of proptech solutions.
Hong Kong's Connected Future is an annual report produced by the KPMG China Smart City Group in partnership with Autotoll, CGI, CLP, Cyberport, DLA Piper, JLL, Lenovo, MTR, Siemens, Signify, Sino Group, Smart City Consortium and theDesk. It includes a citizen survey of 4,096 residents in seven Asian markets and interviews with corporate, academic, start-up, public sector and NGO leaders. To read the full report, including next steps and suggestions for policymakers and the private sector, please visit:
https://home.kpmg/cn/en/home/insights/2022/01/hong-kong-s-connnected-future.html