Will smart cities be the business hubs of the future?

London, Sydney, New York, Tokyo – cities famous around the world for their history, food and architecture, as well as for being centres of international business.

But, have you heard of NEOM, Songdo or Belmont? These names may soon trip off your tongue as easily as the great cities of the past if the investors, planners and architects behind these new greenfield smart cities have anything to say about it.

Currently, more than half the world lives in cities, and one person in 10 lives in a megacity – a city that is home to 10 million people or more. According to some estimates, by 2050, six billion people will live and work in cities.

The challenges posed by such urbanisation are immense – how do you even maintain clean air and water for so many people?

Cities around the world are frantically looking for ways to fix or change existing infrastructure to ensure they can meet the demands of our rapidly expanding world.

But what if you could set up your business in a city built from scratch? Would there be cost savings and productivity gains? Or would you lose your seat at the global business table?

Business-to-business connectivity

With the announcement in November 2017 that a firm owned by Bill Gates had purchased 25,000 acres in Arizona for US$80 million to create a smart city called Belmont, there has been a focus on new city projects – all claiming exceptional ‘green’ credentials in addition to their ‘smart’ ones.

Belmont will include high-speed digital networks and autonomous vehicles, and a spokesperson for the project explained that "envisioning future infrastructure from scratch is far easier and more cost-efficient than retrofitting an existing urban fabric".

Adam Beck, Executive Director at Smart Cities Council Australia New Zealand, agrees. "In Australia, we have substantial greenfield projects. With a blank canvas or clean slate, you can put in the best possible networks from day one, and allow communities to thrive from the very beginning," he says.

"The core function of a smart city is to collect, communicate and crunch data – the smart city doesn’t work without connectivity," continues Beck.

"New cities allow you to bring all businesses together on a single platform." Adam Beck

"This enables direct lines to other businesses on the network but, importantly, it also allows the physical infrastructure, the buildings, to talk to one another. This facilitates predictive analysis and real-time optimisation for things like energy consumption. All the infrastructure starts to act like one organism working together."

Songdo, a 1,500-acre smart city built on reclaimed land 56 kilometres from South Korea’s capital Seoul, has computers, cameras and sensors fitted into homes, streets, traffic lights and office spaces to help streamline and monitor things like traffic flow and energy use.

City planners also claim that, at just 18 minutes from Incheon International Airport, Songdo presents an ideal location for companies newly targeting Asian markets, and that it is only a 3.5-hour flight to a third of the world’s population.

Though still most famous for its appearance in the music video ‘Gangnam Style’, Songdo is one of the world’s first completely connected cities, in every sense of the word.

However, there are some obvious downsides. "All being on the same network makes everyone more vulnerable, and businesses more vulnerable to cyberattack," explains Ian Pearson, a futurologist with an 85 percent accuracy rate.

"People are generally gregarious and want to interact face-to-face," Ian Pearson.

One existing city not heeding this warning is Adelaide in South Australia. This year, it has commenced installation of its ‘Ten Gigabit’ project that will see all the buildings within the city’s CBD connected to a dedicated fibre-optic network, providing access to a range of cloud-based services and 10Gpbs data speeds.

"Adelaide’s ‘Ten Gig’ project means businesses will be able to operate and compete at the next level, embracing new and innovative technologies. Emerging industries in particular, such as the 3D printing sector, need lightning-speed connectivity to operate and, importantly, to attract new talent," notes Beck.

Build it and they will come

"Cities and businesses need to be competitive because they are in competition for skilled people," comments architect Malcolm Smith, the founding director of the Integrated Urbanism unit at Arup, London.

Smith leads the design strategy on a wide range of urban design projects such as the Stratford City master plan in the UK, and the El Hassan Science City in Jordan.

Beck agrees that attracting the best from a global talent pool is a big benefit of new cities. "Smart cities provide options like none other. Emerging generations will want to be part of businesses that are future ready."

But with all this smart technology and connectivity, does your global workforce even need to relocate? Can’t everyone just work from home? And won’t artificial intelligence (AI) mean robots will do most of the jobs anyway?

"People are generally gregarious and want to interact face-to-face," notes Pearson. "I believe the rise of AI will actually mean humans will focus more on the human side of work. Administration and desk-based work will be done by AI, and humans will spend more time on creating better emotional connections as part of business."

Smith places the social and the human at the centre of his work. "Workplaces are a place of colleagues and informal interchange and some things just won’t change. We enjoy relationships; we have a social need for interaction. This should shape workplaces, buildings, streets – everything."

"A place has to ‘feel’ a certain way. People want to know there is a drycleaner nearby, and the closest shop to get a great sandwich," Smith explains.

"While new cities deliver quickly and smartly, they can often feel generic. A city must have authenticity and social infrastructures so you don’t feel like you are in the middle of nowhere. The buildings almost come last in planning, which is how great cities are built."

Rise of the machines

But how ‘human’ can new cities be when there is more AI than people? In October 2017, the Crown Prince of the Kingdom of Saudi Arabia announced the launch of NEOM.

Backed by a US$500 billion investment, NEOM will connect Asia, Europe and Africa, and enable 70 percent of the world’s population to reach it within eight hours.

According to the website, all services and processes at NEOM will be 100 percent "fully automated and handled by robots, which may exceed the population, likely making NEOM’s
GDP per capita the highest in the world".

Pearson believes that humans and AI will work together in the cities of the future. "A lot of administrative tasks have already been taken over by AI – flight and hotel bookings for example. Autonomous vehicles will replace taxi drivers, but new jobs will be created to manage and maintain the autonomous vehicles. Lots of AI will provide new opportunities, and AI will be used to upskill people and level the corporate playing field."

New cities are not to be mistaken for utopias though. There is a lot of concern among planners that many of the new smart cities such as Gates’ Belmont will become havens for the rich.

"A city is only as successful as its most vulnerable," reminds Beck. "If we are still leaving people behind than it’s not ‘smart’."

The full article appears in the May issue of The CEO Magazine, on sale 19 April 2018. Subscribe today.